/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/061027.mbx C L A S S A C T I O N R E P O R T E R Friday, October 27, 2006, Vol. 8, No. 214 Headlines ALLSTATE INSURANCE: Rehire Policy Discriminatory, Court Rules AURELIAN RESOURCES: Faces Claims Over 2003 Private Placement BALLARD'S FARM: Recalls Egg Salad Over Listeria Contamination BELO CORP: Fired Workers File Suit Over ERISA Violations in Tex. BETESH GROUP: Recalls Cookie Monster Toys For Choking Hazard BURLINGTON NORTHERN: Appeals Court Affirms Lower Court's Order CALIFORNIA: Suit Over NCAA Cap on GIA Gets Class Certification CANADA: Quebec Appeals Court Bans "Multiple-Defendant" Practice CENTENE CORP: Parties Seek Consolidation of Mo. Securities Suits DAIMLERCHRYSLER: Former Wis. Chrysler Worker Takes Case Online EQ INDUSTRIAL: Judge Protects N.C. Plant Explosion Evidence ENRON CORP: Former Chief Gets 24 Years in Jail for Stock Fraud EXELON CORP: Faces Race Discrimination Lawsuit in Pennsylvania EXPRESS SCRIPTS: Wary of Drug Prices Revamp, First DataBank Deal UNITED STATES: Judge Halts MNG Reimbursement Suit Pending Talks NASUTRA LLC: Recalls Dietary Supplement Over Undeclared Content NORTHROP GRUMMAN: Faces ERISA Violations Lawsuit in C.D. Calif. OWENS CORNING: Tex. Couple Files Suit in Ohio v. 401(k) Overseer REX ENERGY: Bridgeport Families File Air Pollution Suit in Ill. REYNOLDS AMERICAN: CFO Says "Lights" Case Could Cost Firm $125M STARBUCKS CORP: Recalls 8-Cup Coffee Brewers Due to Fire Hazard SONY ENERGY: Recalls Laptop Computer Batteries For Fire Hazard TRAVEL COS: Nassau County Tax Remits Suit Names 17 Defendants UNITED STATES: Groups Ask Judge to Release Immigrants in Calif. VIRGINIA: Confident in Settling Mental Patients' Voting Lawsuit VITESSE SEMICONDUCTOR: Consolidated Stock Complaint Due Nov. 30 WAITING ANGELS: Faces RICO Violations Lawsuit in W.D. Michigan XCELERA.COM INC: Discovery Continues in Mass. Securities Lawsuit XETHANOL CORP: Securities Fraud Litigation in N.Y. Without Merit XM SATELLITE: Consolidated Complaint in D.C. Stock Suit Filed YUKOS OIL: N.Y. Court Dismisses Securities Fraud Litigation Asbestos Alert ASBESTOS LITIGATION: Royal Philips Increases Accrual to EUR398M ASBESTOS LITIGATION: Court Favors Webers in Suit v. John Crane ASBESTOS LITIGATION: Two Men Sue 129 Defendants in W.Va. Court ASBESTOS LITIGATION: Cytec Records $2.2M Charge for Liabilities ASBESTOS LITIGATION: Travelers Sues Honeywell Over NARCO Claims ASBESTOS LITIGATION: Honeywell Records $1.469B Liabilities at 3Q ASBESTOS LITIGATION: Honeywell Has $33M Charge for Bendix Claims ASBESTOS LITIGATION: Honeywell Records $1.94B for 3Q Liabilities ASBESTOS LITIGATION: Honeywell Estimates $1.6B for NARCO Claims ASBESTOS LITIGATION: Honeywell Notes 60,253 Bendix Claims in 3Q ASBESTOS LITIGATION: PPG's Claims Settlement Reaches $561M in 3Q ASBESTOS LITIGATION: PPG Industries Has $90M Net Income in 3Q06 ASBESTOS LITIGATION: Revised UK Rules to be Enforced on Nov. 13 ASBESTOS LITIGATION: Okla. Man Sues 30 Defendants in Ill. Court ASBESTOS LITIGATION: Mass. Bay Authority to Pay $230T for Breach ASBESTOS LITIGATION: BNSF Railway Claims Decrease to 2,138 in 3Q ASBESTOS LITIGATION: ENSCO Has Multi-Party Suits in Miss. Courts ASBESTOS LITIGATION: WR Grace Liability Remains at $1.7B in 3Q06 ASBESTOS LITIGATION: Hercules Records $9.5M Assets, Liabilities ASBESTOS LITIGATION: American Standard Has 111,014 Claims in 3Q ASBESTOS LITIGATION: Discovery on ASD Suit Extended to Sept. '07 ASBESTOS LITIGATION: American Standard Cites $387.8M Receivable ASBESTOS LITIGATION: Crane Ordered to Pay $2.15M in Norris Suit ASBESTOS LITIGATION: U.K. Widow to Claim GBP150T in Compensation ASBESTOS LITIGATION: Saint-Gobain Reports 2T New Claims in 3Q06 ASBESTOS LITIGATION: Berkshire Hathaway Takes on Equitas Claims ASBESTOS LITIGATION: Lehmann Kin Wins Compensation Suit v. ACC New Securities Fraud Cases XETHANOL CORP: Federman & Sherwood Announces Stock Suit Filing ********* ALLSTATE INSURANCE: Rehire Policy Discriminatory, Court Rules ------------------------------------------------------------- A federal court ruled in a nationwide lawsuit that Allstate Insurance Co.'s one-year moratorium on rehiring its former sales agents had an adverse impact on older agents, according to the U.S. Equal Employment Opportunity Commission. Judge E. Richard Webber, of the U.S. District Court for the Eastern District of Missouri in St. Louis, granted the EEOC's motion for summary judgment on the issue of whether Allstate's rehire policy affected workers 40 years of age or older disproportionately. Filed under the Age Discrimination in Employment Act (ADEA), which prohibits discrimination against persons over 40 years of age, the case will now be heard by a jury to decide whether the rehire policy falls under an exception to the ADEA. According to that exception, any action based on a "reasonable factor other than age" is not unlawful. The EEOC charged in its lawsuit that in 2000 Allstate terminated its sales agents, offered to make them independent contractors, and refused to rehire them in other positions as employees for one year. Because more than 90% of the agents were 40 years of age or older, the EEOC said that the rehire policy violated the ADEA. Judge Webber decided that the EEOC, "has provided sufficient evidence to show a disparate impact on the protected group" of agents 40 years of age or older. Allstate argued that the court should dismiss the case without a trial because its rehire policy had no disparate impact and was based on a reasonable factor other than age. Judge Webber denied the company's motion and ordered that a jury would decide the reasonableness issue. "This decision is an important landmark in the further development of age discrimination law," said Robert Johnson, the EEOC regional attorney for the St. Louis District. "Since the Supreme Court ruled last year that the ADEA does extend to disparate impact cases, this is one of the first court decisions applying that ruling to a new case." Felix Miller, senior trial attorney for the EEOC, said, "Even when there is no intentional age discrimination, an employer violates the ADEA if its policy has an adverse impact on older workers and the policy was not based on a reasonable factor other than age. We fully expect to be able to prove to a jury that Allstate's policy was unreasonable." This lawsuit is the second national lawsuit filed by the EEOC concerning Allstate's 2000 reorganization from employee agents to what the company considered independent contractors. In 2001, the EEOC filed suit claiming that Allstate unlawfully required its agents to release any employment discrimination claims if they wished to continue working as agents after the reorganization. In that first lawsuit, brought in U.S. District Court in Philadelphia, the court held that the release requirement was unlawful retaliation, but the case awaits further rulings before final resolution. The second lawsuit is a purported class action filed in August 2001 was filed by several former employee agents alleging retaliation and age discrimination under the Age Discrimination in Employment Act, breach of contract and Employee Retirement Income Security Act violations (Class Action Reporter, Sept. 5, 2005). The suit is "Equal Employment Opportunity Commission v. Allstate Insurance Co., Case No. 4:04-cv-01359-ERW," filed in U.S. District Court for the Eastern District of Missouri under Judge E. Richard Webber. Representing the defendants are: (1) Khara A. Coleman at Kirkland and Ellis, 200 E. Randolph Drive, Chicago, IL 60601, Phone: 312-861-2000, Fax: 312-861-2200, E-mail: kcoleman@kirkland.com; and (2) Donald R. Livingston at Akin and Gump, 1333 New Hampshire Avenue, N.W., Suite 400, Washington, DC 20036, Phone: 202-887-4242, Fax: 202-887-4288, E-mail: dlivingston@akingump.com. Representing the plaintiffs are Robert G. Johnson and C. Felix Miller, Jr., EEOC, 1222 Spruce Street, Room 8.100 St. Louis, MO 63103, Phone: 314-539-7910, Fax: 314-539-7895, E-mail: robert.johnson@eeoc.gov or felix.miller@eeoc.gov. AURELIAN RESOURCES: Faces Claims Over 2003 Private Placement ------------------------------------------------------------ Timothy Yee, on his own behalf and on behalf of all persons residing in Alberta, Canada who purchased warrants in Aurelian Resources Inc. in 2003, (Yee Class), have filed a Statement of Claim in the Court of Queen's Bench of Alberta, on August 25, naming Aurelian as defendant. Aurelian received the claim on Oct. 17, 2006. Also, Timothy Gallagher, on his own behalf and on behalf of all persons residing in Ontario who purchased warrants in Aurelian in 2003, (Gallagher Class), have filed a Statement of Claim in the Ontario Superior Court of Justice, on October 16, naming Aurelian as defendant. The Claims surround certain common share purchase warrants issued by Aurelian on June 6, 2003 as part of a private placement of 6,000,000 units at $0.50 per unit for gross proceeds of $3,000,000. Each unit was comprised of one common share and one Warrant. Each Warrant entitled the holder to purchase one common share at $0.60 per share during the first year from the date of issuance and $0.75 per share during the second year. The terms of the Warrants provided that they would expire in June 2005 unless, prior to that time, Aurelian became listed on Tier 1 of the TSXV or on the TSX in which case Aurelian would petition the applicable exchange for an additional two-year extension to the Warrants. The Classes allege that Aurelian did not use "best efforts" to obtain the necessary approvals to extend the term of the Warrants to June 6, 2007. Accordingly, the Yee Class is claiming that they are entitled to be issued the 400,000 common shares that would have been issued to the Yee Class on the exercise of their Warrants had the term been extended to June 6, 2007 upon the payment to Aurelian of $400,000 or in the alternative, $12 million plus costs and interest. The Gallagher Class is claiming that they are entitled to be issued the estimated 1,660,000 common shares that would have been issued to the Gallagher Class on the exercise of their Warrants had the term been extended to June 6, 2007 upon the payment to Aurelian of $1,660,000 or in the alternative, $40 million plus costs and interest. Aurelian Resources Inc. -- http://www.aurelian.ca-- is a publicly-listed junior resource company engaged in the business of exploring, discovering and developing mineral wealth in Ecuador. The Condor Project properties are located in southeastern Ecuador and consist of 38 mining concessions totaling approximately 95,000 hectares. BALLARD'S FARM: Recalls Egg Salad Over Listeria Contamination ------------------------------------------------------------- Ballard's Farm Sausage, Inc. of Wayne, West Virginia, is recalling its Ballard's 12 oz. egg salad, Food City 12 oz. egg salad and Valu Time 11 oz. egg salad -- because of contamination with Listeria monocytogenes. This organism can cause serious and sometimes fatal infections in young children, frail or elderly people and others with weakened immune systems. Although healthy individuals may suffer only short-term symptoms such as high fever, severe headache, stiffness, nausea, abdominal pain and diarrhea, Listeria infection can cause miscarriages and stillbirths among pregnant women. The recalled egg salads were distributed in West Virginia, Ohio, Pennsylvania, New York, New Jersey, Virginia, North Carolina, South Carolina, Tennessee, Georgia, Michigan, Kentucky, Indiana, Alabama, Delaware, Illinois and Florida. The recalled products are sold in a clear plastic cup with the description cleared displayed on the side of the cup. All of the egg salad items being recalled, the Ballard's 12 oz. egg salad, Food City 12 oz. egg salad and the Valu Time 11 oz. egg salad, will have on the side of the cup a "Best if used by 11/7/06" description. At this time no illnesses have been reported in connection with this contamination. The contamination was noted after routine testing by the North Carolina Department of Agriculture. This test revealed the presence of Listeria monocytogenes in egg product. The production of the product has been temporarily suspended while the company continues to investigate the source of the problem. Consumers are urged to return the egg salad items with the identification of "Best if used by 11/7/06" to their location of purchase for a full refund. Consumers with any questions may contact the company at 800-346- 7675. BELO CORP: Fired Workers File Suit Over ERISA Violations in Tex. ---------------------------------------------------------------- The Dallas Morning News and Belo Corp. are facing a class action in the U.S. District Court for the Northern District of Texas over alleged violations of the Employee Retirement Income Security Act (ERISA), The Fort Worth Star Telegram reports. The suit, filed by 18 of 65 editorial employees terminated by The Dallas Morning News in a 2004 cost-savings move, alleges targeting workers older than 40 in the 250 layoffs that came after Belo's circulation fraud was revealed and it had to refund $23 million to advertisers. Plaintiffs claim that the Belo Corp. flagship paper announced their posts were being dropped only to fill them later with younger journalists. The terminated workers are seeking back and future wages and benefits, as well as civil penalties for ERISA violation. One plaintiff is also seeking $9,200 that the suit claims he was entitled to under the paper's severance plan. Making the discrimination lawsuit somewhat unusual is its allegation that the newspaper, Belo Chief Executive Robert Decherd and News Publisher James Moroney, III, conspired to commit fraud by withholding information about inflated circulation figures long before publicly acknowledging the problem in August 2004, the report said. The circulation scandal hurt Belo stock and, in turn, the value of employee benefit plans, which are subject to federal pension law, it claimed. The paper spent $23 million repairing damaged relations with advertisers. Belo hired a law firm to mount an internal investigation, which found no wrongdoing by top management. In 2005, angry shareholders against Belo filed a class action, and in April of that year, the Dallas County district attorney subpoenaed documents linked to the circulation scandal, but no criminal charges have been filed. Belo spokesman Carey Hendrickson said the complaint is without merit and that the company intends to defend against it vigorously. The suit is "Powell et al v. The Dallas Morning News, L.P. et al., Case No. 3:06-cv-01960," filed in the U.S. District Court for the Northern District of Texas under Judge Jane J Boyle. Representing plaintiffs are: (1) Howard C. Rubin and Lisa Catherine Tulk both of Kessler & Collins, 2100 Ross Ave., Suite 750, Dallas, TX 75201, Phone: 214-379-0722, Fax: 214-373-4714, E-mail: hrubin@kesslercollins.com or ltulk@kesslercollins.com; and (2) Karen Shropshire of Law Office of Karen G Shropshire, 8117 Preston Rd., Suite 300, Dallas, TX 75225, Phone: 214-706-9250, Fax: 214-706-9251, E-mail: kshropshire@abttx.com. BETESH GROUP: Recalls Cookie Monster Toys For Choking Hazard ------------------------------------------------------------ The Betesh Group of New York, in cooperation with the U.S. Consumer Product Safety Commission, is recalling about 31,000 units of Baby Cookie Monster plush toys with DVD. The company said the small felt fabric cookie attached to the plush toy's hand can be removed easily and ingested by young children, posing a choking hazard. No injuries or incidents have been reported. This recall involves the Baby Cookie Monster plush toy packaged with certain Sesame Beginnings Make Music Together DVDs. The blue plush toy has a small, felt fabric cookie attached to its hand. The plush toy and DVD are packaged in a yellow and green box with the words "Sesame Beginnings" and "Make Music Together" printed on the front. The product is labeled for children ages 6 months and up. These Baby Cookie Monster plush toys with DVD were manufactured in China and are being sold exclusively at Wal-Mart stores nationwide from March 2006 to July 2006 for about $15. Pictures of the recalled Baby Cookie Monster plush toys: http://www.cpsc.gov/cpscpub/prerel/prhtml07/07009a.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml07/07009b.jpg Using scissors, consumers are advised to immediately remove the felt cookie and its connecting thread from the plush toy. Once detached, the felt cookie and thread should be disposed of immediately. For additional information, contact Sesame Workshop at (800) 986-1619 between 9 a.m. and 5 p.m. ET Monday through Friday, or visit Sesame Workshop's Web site: http://www.sesameworkshop.org/recall. BURLINGTON NORTHERN: Appeals Court Affirms Lower Court's Order -------------------------------------------------------------- The Texas Court of Appeals affirmed the order denying class certification for the lawsuit, "Ray Ridgeway, et al. v. Burlington Northern Santa Fe Corporation and The Burlington Northern and Santa Fe Railway Company, No. 48-185170-00," which was originally filed in the District Court of Tarrant County, Texas, 48th Judicial District. The plaintiffs' causes of action include alleged breach of contract, negligence, and breach of fiduciary duties with respect to a special dividend that was paid in 1988 by a Burlington Northern Santa Fe Corp. (BNSF) predecessor, Santa Fe Southern Pacific Corp. (SFSP). The complaint alleges that SFSP erroneously informed shareholders as to the tax treatment of the dividend "specifically, the apportionment of the dividend as either a distribution of earnings and profits or a return of capital," which allegedly caused some shareholders to overpay their income taxes. The plaintiffs assert, through their expert's report, that SFSP had essentially no accumulated earnings and profits and that the entire dividend distribution should have been treated as a return of capital, rather than the approximately 34 percent that SFSP determined was a return of capital. On July 8, 2005, the court entered a final order denying the plaintiffs' requests to certify a class action. On Aug. 24, 2006, the Texas Court of Appeals affirmed the order denying certification. Plaintiffs' motion for rehearing of the order of the Texas Court of appeals was denied, and plaintiffs are expected to seek review by the Supreme Court of Texas, according to the company's Oct. 24, 2006 Form 10-Q filing with the U.S. Securities and Exchange Commission for the period ended Sept. 30, 2006. Fort Worth, Texas-based Burlington Northern Santa Fe Corp. (NYSE: BNI) -- http://www.bnsf.com/-- through its subsidiaries is engaged primarily in the rail transportation business. The rail operations of BNSF Railway, BNSF's principal operating subsidiary, comprise the railroad systems in North America. BNSF Railway operates over a railroad system consisting of approximately 32,000 route miles of track (excluding second, third and fourth main tracks, yard tracks, and sidings), approximately 24,000 miles of which are owned route miles, including easements in 28 states and two Canadian provinces as of Dec. 31, 2005. CALIFORNIA: Suit Over NCAA Cap on GIA Gets Class Certification -------------------------------------------------------------- The U.S. District Court for the Central District of California granted plaintiffs' motion for class certification in a lawsuit against the National Collegiate Athletic Association (NCAA). The suit alleges that the NCAAA violated the federal antitrust laws through an unlawful agreement with its member schools to restrict the amount of athletic financial aid or "grant-in-aid" (GIA) student-athletes can receive. In February, three former college athletes filed an antitrust suit in the federal district court in Los Angeles against the NCAA (Class Action Reporter, Feb. 23, 2006). The lawsuit challenges an agreement under which the NCAA and its member schools have imposed a maximum cap on the amount of athletics-based financial aid, support available to student athletes competing in major college sports. Under this agreement, the amount of the GIA is artificially fixed at an amount that falls far short of the full "cost of attendance" (COA) at NCAA member institutions. The lawsuit alleges that this agreement is an unlawful restraint of trade in violation of the federal antitrust laws. Athletic scholarships, known as "grants-in-aid" or "GIAs," are currently subject to an NCAA bylaw, which caps scholarships at an amount below the student-athletes' full cost of attendance at their schools. Plaintiffs allege that this bylaw prevents member schools from providing student athletes with athletic-based financial aid sufficient to cover the costs of attending school, such as travel expenses, clothing, health insurance, and school supplies. The class includes all current and former NCAA Division IA football players and men's Division I basketball players (in the major and "Mid-Major" conferences) who received GIAs at any time between February 2002 and the present. The plaintiffs are seeking damages and an order from the Court "restraining the NCAA from enforcing its unlawful and anticompetitive agreement." In September, the court denied the NCAA's motion to dismiss the plaintiffs' complaint. In that ruling, the court noted that the Plaintiffs had adequately alleged that: "the GIA cap ... forces student-athletes to bear a greater portion of the cost of attendance than they would have borne if the GIA cap had not been in place." The named plaintiffs and class representatives are: -- Jason White, who played football at Stanford; -- Brian Polak, who played football at UCLA; and -- Jovan Harris, who played basketball at the University of San Francisco. The suit is "Jason White et al v. National Collegiate Athletic Association, Case No. 2:06-cv-00999-RGK-MAN," filed in the U.S. District Court for the Central District of California under Judge R. Gary Klausner, with referral to Judge Margaret A. Nagle. Representing the defendants are: (1) David M. Balabanian, Nora C. Cregan, Farschad Farzan, Christina Marie Wheeler and Frank M. Hinman all of Bingham McCutchen, 3 Embarcadero Ctr, Ste 1800, San Francisco, CA 94111-4067, Phone: 415-393-2000, E-mail: david.balabanian@bingham.com or frank.hinman@bingham.com; (2) Gregory L. Curtner, Atleen Kaur, Kimberly K. Kefalas and Robert J Wierenga all of Miller Canfield Paddock & Stone, 101 N Main St., 7th Fl., Ann Arbor, MI 48104, Phone: 734-668-7697 or 734-668-7663 or 734-668-7629 or 734-663-2445, E-mail: curtner@millercanfield.com or kaur@millercanfield.com or kefalas@millercanfield.com or wierenga@millercanfield.com. Representing plaintiffs are: (i) Maxwell M. Blecher of Blecher & Collins, 515 South Figueroa St, 17th Floor, Los Angeles, CA 90071, Phone: 213-622-4222, E-mail: mblecher@blechercollins.com; and Courtney A. Palko of Blecher and Collins, 611 West Sixth Street, 20th Floor, Los Angeles, CA 90017, Phone: 213-622-4222, E-mail: cpalko@blechercollins.com; (ii) Stephen E. Morrissey, Marc M. Seltzer and Steven G. Sklaver all of Susman Godfrey, 1901 Avenue of the Stars, Suite 950, Los Angeles, CA 90067, Phone: 310- 789-3103 or 310-789-3100, E-mail: smorrissey@susmangodfrey.com or mseltzer@susmangodfrey.com; and Tibor Nagy of Susman Godrey, 1000 Louisiana Street, Suite 5100, Houston, TX 77002-5096, Phone: 713-651-9366, E-mail: tnagy@susmangodfrey.com. CANADA: Quebec Appeals Court Bans "Multiple-Defendant" Practice --------------------------------------------------------------- Quebec's Court of Appeal banned the controversial practice of "multiple-defendant" class actions, in which plaintiffs seek damages from entire industry sectors, not just the companies with which they have done business, according to Beppi Crosariol of The Globe and Mail Update. Hailed by corporate defense attorneys, the decision severely curtails the powers of injured parties to launch lawsuits against businesses. The decision is seen as a boon, especially to companies that deal in major consumer products such as automobiles. It will also help the insurance, securities and pharmaceuticals sectors, which have borne the brunt of such lawsuits. It also reverses what many defense attorneys regarded as a perverse development over the past five years, which has helped earn Quebec the dubious distinction as the most plaintiff- friendly jurisdiction for class action in North America. Marie Audren, regional leader of the Montreal class actions group at national law firm Borden Ladner Gervais, LLP, commented that with the decision Quebec might lose its reputation as "the class-action paradise." Ms. Audren who recently published a study on industry-wide lawsuits with colleague Emmanuelle Rolland also adds, "It is a big, big turning point." The landmark decision came in a case that involved allegations of unjust enrichment by dairies for allegedly short-changing consumers on the fat content of their milk. Andr, Bouchard, the plaintiff in the case, had sought $89 million in damages against Agropur Cooperative and 11 other dairies, even though he had purchased milk from only one of the dairies. Mr. Bouchard claims that about half the milk sold as either 1 per cent, 2 per cent or whole milk (which carries a 3.25-per- cent fat content) fell slightly short of the mark on fat content, sometimes by as much as 0.03 per cent. According to attorneys, the implication was that the dairies had been skimming the fat for use in cheese production. However, Mr. Bouchard's allegations were said to be unfounded and thus in a 2004 judgment, Quebec's Superior Court sided with the dairies, on the grounds that the shortfalls were within the calibration limits of their measuring equipment. In fact, the court noted that much of the milk exceeded the advertised levels by a similar margin of error. The recent appeals court ruling not only upheld the trial court's key findings, but also took the unusual step of weighing in on the much-debated multiple-defendant issue. The appeals court declared that Mr. Bouchard's case could not have been certified as a class action against the dairies he did not buy milk from in any event, since he did not have a cause of action against them. That cause-of-action principle is considered sacrosanct in most other jurisdictions in North America and has been upheld in several landmark cases, both in the U.S. and in other provinces. A 1967 U.S. district court decision and a 2000 Ontario decision involving the tobacco industry and a fire ignited by a cigarette are such examples. However, attorneys say that in the legal solitude of Quebec, an anomalous trend began in 2001. In that year the province's Superior Court surprisingly granted class action status to a claim launched by a consumer, alleging that three auto insurers had been repairing damaged vehicles with generic instead to original-equipment parts. That consumer had only done business with one of the insurers. That claim, eventually settled out of court in 2005, was ultimately signed by 77 insurers and opened the floodgates, according to attorneys. Although the province doesn't break down statistics on multiple- defendant cases, dozens of similar class actions were subsequently launched, many of which are still pending before the courts. They include a suit against property insurers stemming from Quebec's devastating ice storm of 1998. Another one involves 19 mutual fund companies that were alleged to have taken part in a market-timing scandal that benefited some investors over others. "Our firm alone is involved in a dozen cases in which this decision will have a huge impact," says Yves Martineau of Stikeman Elliott LLP in Montreal, who represented one of the dairies in the milk case. Mr. Martineau and others say the pace of multiple-defendant suits accelerated after 2003, when Quebec passed controversial class-action amendments that generally lowered the bar for plaintiffs. Among those changes, which were aimed at improving access to justice, was the removal of the right of defendants to cross- examine plaintiffs on the veracity of their allegations prior to class-action certification. David Stolow, a litigator with Davies Ward Phillips & Vineberg LLP in Montreal, says, "Our rules are the most plaintiff- friendly in Canada, if not North America." The decision is expected to send defense attorneys scurrying to demand courts dismiss actions against their clients. Among the first in line will be Guy Lemay, a partner at Lavery de Billy SENCRL on Montreal. Mr. Lemay is representing Toyota in a class action certified last year against 19 carmakers for allegedly failing to fully disclose a $46 registration fee on the price of each vehicle. Mr. Lemay says multiple-defendant suits explode the cost of lawsuits, since defendants will usually choose to hire separate counsel, in part to safeguard potential trade secrets. Not all attorneys though agree with the ruling. Some firms that specialized in plaintiff work are even saying that the move will force injured parties to launch actions against each firm accused of wrongdoing. Essentially, the ruling, these attorneys argue, will place a financial hardship on victims and is likely to clog the courts. Pierre Sylvestre of Montreal litigation boutique Sylvestre Fafard Painchaud asked, "We are going to be forced to file 10 class actions instead of one, and then what are the courts going to do?" He pointed out that the ruling would only result in more class actions, more defendants, and more legal fees. CENTENE CORP: Parties Seek Consolidation of Mo. Securities Suits ---------------------------------------------------------------- Centene Corp. and plaintiffs are both seeking to consolidate the securities fraud class actions filed against the company in the U.S. District Court for the Eastern District of Missouri. Two class action lawsuits were filed against the company and certain of its officers and directors, one in July, and one in August. Both were filed on behalf of purchases of the company common stock from June 21, 2006 through July 17, 2006. The suits allege that the company and certain of its officers and directors violated federal securities laws by issuing a series of materially false statements prior to the announcement of our fiscal 2006-second quarter results. According to the suits, these allegedly materially false statements had the effect of artificially inflating the price of our common stock, which subsequently dropped after the issuance of a press release announcing our preliminary fiscal 2006-second quarter earnings and revised guidance. All parties have sought consolidation of the suits, according to the company's Oct. 24, 2006 Form 10-Q filing with the U.S. Securities and Exchange Commission for the period ended Sept. 30, 2006. The first identified complaint is "Larry Elam, et al. v. Centene Corporation, et al., Case No. 06-CV-1142," filed in the U.S. District Court for the Eastern District of Missouri. Plaintiff firms in this or similar case: (1) Brower Piven at The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202, Phone: 410/986-0036, E-mail: hoffman@browerpiven.com; (2) Federman & Sherwood, 120 North Robinson, Suite 2720, Oklahoma City, OK, 73102, Phone: 405-235-1560, E-mail: wfederman@aol.com; (3) contact Roy Jacobs & Associates, Phone: 1-800-347-1236, E-mail: classattorney@pipeline.com; (4) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT, 06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail: sn06106@AOL.com; 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. DAIMLERCHRYSLER: Former Wis. Chrysler Worker Takes Case Online -------------------------------------------------------------- Kim Franke, a Janesville, Wisconsin resident started a Web site in hopes of to drumming up interest in filing a class action against DaimlerChrysler for hiring workers under what she feels were false pretenses, Alex Gary of The Rockford Register reports. According to the 37-year-old single mother of two teenage daughters, she quit a solid job in Janesville to work at Chrysler's assembly plant in Belvidere this summer for what she thought was a full-time permanent position. Ms. Franke said that she didn't learn it was a temporary position until employee orientation, a charge Chrysler officials deny, and that by then it was too late to get her old job back. She is one of the about 600 workers who were hired under two- year contracts to work at the Belvidere plant, according to the company. The temporary positions have caused quite a stir among auto-industry experts as they offer fewer benefits than other workers at the same plant. The contracts started at about the same pay as in the past, $18 an hour. However, they don't include automatic increases and take eight months for reduced insurance benefits to kick in. They also do not guarantee continued employment when it ends. In addition, it permits the company to terminate employment at any time during the two years. Ms. Franke learned of the last part the hard way. According to her, the company let her go on Sept. 16, just three months into the contract. The Web site http://www.enhancedfight.comwas started by Ms. Franke in an attempt to reach other enhanced temporary workers, as the company classifies them. She also launched a Yahoo.com chat room for fellow temporary workers to vent. Ms. Franke says that she and other like her quit jobs under the assumption they were bettering their lives. She alludes that never once in the hiring process did the words "temporary" or "enhanced temporary" ever come up. She added that she knows of people who gave up jobs they'd had more than 10 years to work (at the assembly plant) and that there's no way they would have done that for a temporary job. Since she was let go by the company, Ms. Franke has been unable to find work in Janesville. She's looking for a job at a time when the area is filled with former General Motors workers who took buyouts from the Janesville GM plant where vehicles the Yukon, Yukon XL, Tahoe and Suburban are assembled. Rockford attorney Jim Pirages, who handles workplace issues, pointed out that Ms. Franke would encounter difficulties in making a case. He pointed out that it's going to be a "factual case," wherein Ms. Franke will have to prove the company misrepresented itself. Mr. Pirages also doubted the possibility of Ms. Franke's complaints making it into the courts, since DaimlerChrysler has a negotiated contract with the United Auto Workers (UAW) and disputes are usually handled through an agreed-to grievance process. However, Ms. Franke said she would still try to gather support for a class action, since the UAW has been no help. She explains, "They collected our union dues but did nothing when we were being pushed around and then let go. We kept being told 'the international is getting involved' or 'it's going to the (National Labor Relations Board).' " There's no indication so far that either group is getting involved. Greg Ramsay of the NLRB in Peoria, which handles the Rock River Valley area, said no charges have been filed from the Belvidere plant since October 2005. Roger Kerson, a spokesman for the international UAW, said he was going to check on whether any grievances had been filed over Chrysler's hiring or treatment of temporary workers, but no the results were forthcoming. EQ INDUSTRIAL: Judge Protects N.C. Plant Explosion Evidence ----------------------------------------------------------- U.S. District Court Judge Terrence Boyle issued an order stopping the cleanup at a waste disposal site owned by EQ Industrial Services and EQ Holding in Apex, North Carolina, Associated Press reports. The order was issued after four Apex residents in a class action lawsuit asked the judge to stop work to protect evidence of an explosion at the site and to allow defense experts to enter the EQ property. EQ Industrial and EQ Holding are facing a class action filed in U.S. District Court for the Eastern District of North Carolina, Raleigh Division on behalf of thousands of individuals and businesses who suffered damages due to the explosion. The law firms of Parker & Waichman, LLP, Greg Jones & Associates, PA, Neblett, Beard Arsenault, Becnel Law Firm, LLC, and The Law Offices of Ronnie G. Penton filed the suit. It alleges that the explosion and massive fire at the facility was a result of the company's negligence, which needlessly endangered the safety of thousands of people, damaged property and interrupted business activity. The lawsuit alleges that EQ's negligent actions caused a massive chemical explosion, resulting in chlorine and other hazardous materials to enter the air and surrounding community. Chlorine gas is highly toxic and was used as a chemical weapon during World War I. Residents and businesses in Apex, North Carolina, and surrounding areas, suffered injuries and damages, and will continue to suffer substantial losses into the future. The suit seeks remedies for claims involving personal injury, property damage and business interruption. On Oct. 5, a chemical explosion occurred at EQ's waste storage plant in Apex, North Carolina causing a fire that forced the evacuation of thousands of nearby residents. EQ Industrial Services and EQ Holding Co. were previously warned about unsafe conditions at the facility. EQ was cited and fined in March 2006 for violating North Carolina regulatory waste regulations due to its failure to properly contain hazardous waste materials on its property. The suit is Case No. 5:06-cv-00400-D filed in the U.S. District Court for the Eastern District of North Carolina under Judge James C. Dever. Plaintiffs' counsel: (1) Jason Mark, Esq. and Melanie H. Muhlstock, Esq. both of Parker & Waichman, LLP, Phone: (800) LAW-INFO or (800) 529-4636 Toll-free, E-mail: info@yourlawyer.com, Website: http://www.yourlawyer.com;and (2) Gregory L. Jones of Greg Jones & Associates, PA, Phone: 910-251-2240, Fax: 251-1520, E-mail: greg@gregjoneslaw.com. ENRON CORP: Former Chief Gets 24 Years in Jail for Stock Fraud -------------------------------------------------------------- U.S. District Judge Sim Lake sentenced Jeffrey Skilling, Enron Corp.'s former chief executive, to 24 years and four months in prison for his role in the securities fraud at the energy company, reports say. Judge Lake refused a federal request for his immediate jailing, and recommended that he start his prison term in Butner, N.C. at a date to be set later. Judge Lake, meanwhile, has vacated the conviction of former Enron Corp. chief executive, Kenneth Lay, and dismissed the indictment that was filed against him in 2004. Mr. Lay, 64, died of coronary artery disease in July more than a month after he and another former Enron chief executive, Jeffrey Skilling, were found guilty of hiding financial troubles at Enron. Mr. Lay and Mr. Skilling are defendants in a class action brought by Enron shareholders and employees. Case Background On April 8, 2002, Lerach Coughlin Stoia Geller Rudman & Robbins, LLP filed a consolidated class action against Enron Corp. in the U.S. District Court in Houston. The suit seeks relief for purchasers of Enron publicly traded equity and debt securities between Oct. 19, 1998 and Nov. 27, 2001. The consolidated complaint charges certain Enron executives and directors, its accountants, law firms, and banks with violations of the federal securities laws and alleges that defendants engaged in massive insider trading while making false and misleading statements about Enron's financial performance. Shareholders in the company lost billions after Enron revealed in late 2001 it would incur losses of at least $1 billion and would restate its financial results for 1997, 1998, 1999, 2000, and the first two quarters of 2001, to correct errors that inflated Enron's net income by $591 million. On Dec. 2, 2001, Enron filed for Chapter 11 bankruptcy. The suit against Enron is "In Re: Enron Corp Securities, et al. (4:02-md-01446)" filed in the U.S. District Court for the Southern District of Texas under Judge Melinda Harmon. Representing the defendants are: (1) J. Mark Brewer of Brewer and Pritchard, Three Riverway, Ste. 1800, Houston, TX 77056, Phone: 713-209-2950, Fax: 713-659-5302; E-mail: brewer@bplaw.com; and (2) William S. Lerach of Lerach Coughlin et al., 655 West Broadway, Ste. 1900, San Diego, CA 92101, Phone: 619- 231-1058. EXELON CORP: Faces Race Discrimination Lawsuit in Pennsylvania -------------------------------------------------------------- Exelon Corp. faces a class-action complaint in the U.S. District Court for the Eastern District of Pennsylvania claiming it discriminates against black workers in hiring, promoting, retention, evaluation and compensation, the Courthouse News Service reports. Named plaintiffs are: -- Media, Pennsylvania lawyer Vilna Gaston, -- senior computer analyst Virginia George, -- Philadelphia lawyer Stacey Barnes, -- electrical engineer Peter Singh, -- electrical engineer Tracey Woods and -- James Lary. The suit alleges, among other things, that in wholly subjective evaluations by managers, which are directly tied to annual bonuses, black employees are regularly given "B-minus" ratings, decreasing their bonus, although B-minus is not one of the choices listed in Exelon's rating system. Plaintiffs claim the entire rating system allows managers to discriminate against black workers, and they do this, and retaliate against those who complaint. Plaintiffs seek: -- class certification under Federal Rules of Civil Procedure 23(b)(2) and/or (b)(3), as appropriate, designate the named plaintiffs as representatives of the class and their counsel of record as class counsel; -- for the court to adjudge, decree and declare that Exelon has engaged in illegal systematic race discrimination against African-American and that the practices of Exelon complained of herein are violative of the rights secured to plaintiffs and members of the proposed class; -- for the court to issue a permanent prohibitory injunction prohibiting Exelon and its officers, agents, employees, and successors from engaging in any further unlawful practices, policies, or customs or racial discrimination and retaliation complained of; -- for the court to issue a permanent mandatory injunction requiring that Exelon adopt policies and practices that ensure equal treatment of all African-American employees and applicants and that eliminate opportunity for its managers and supervisors to violate the requirements of Title VII and 42 U.S.C. Section 1981; -- for the court to order Exelon to provide appropriate job relief to plaintiffs and class members in the form of promotions for persons who should have been in higher- level jobs at the time of judgment and any other job relief determined appropriate; -- for the court to enter judgment in favor of plaintiffs and against Exelon for all available remedies and damages under law and equity, including, but not limited to, back pay, front pay, and past and future mental anguish and pain and suffering in amounts to be determined at trial; -- for the court to order Exelon to pay punitive damages to plaintiffs in amounts to be determined at trial; -- for the court to order Exelon to pay attorneys' fees, costs and expenses and expert witness fees of plaintiffs associated with this action; -- for the court to grant such other and further legal and equitable relief as may be found appropriate and as the court may deem just or equitable; and -- for the court to retain jurisdiction until such time as the court is satisfied that Exelon has remedied the unlawful and illegal practices complained of and is determined to be in full compliance with the law. A copy of the complaint is available free of charge at: http://ResearchArchives.com/t/s?13fd The suit is "Gaston et al. v. Exelon Corporation, Case No. 2:06- cv-04762-BWK," filed in the U.S. District Court under Judge Bruce W. Kauffman. Representing plaintiffs is Robert T. Vance, Jr. of the Law Offices of Robert T. Vance, Jr., 100 S. Broad St., Suite 1530, Philadelphia, PA 19110, Phone: 215-557-9550, Fax: 215-772-0600, E-mail: rtvance@aol.com. EXPRESS SCRIPTS: Wary of Drug Prices Revamp, First DataBank Deal ---------------------------------------------------------------- Express Scripts Inc. stated in a quarterly report filed with the U.S. Securities and Exchange Commission that possible changes in pricing benchmarks for prescription drugs could hurt its bottom line, according to MarketWatch. According to the company, recent events have raised uncertainty about whether the prescription-drug industry will continue to use drug average wholesale prices as a calculation. The SEC filing specifically noted that First DataBank, Inc., one of several companies that report prescription drug price data, was sued. That suit was tentatively settled with First DataBank agreeing to lower the reported average wholesale price of certain drugs by 4%, the filing said. As part of the settlement, filed on Oct. 5, 2006 in the U.S. District Court for the District of Massachusetts, First DataBank, a unit of Hearst Corp., has agreed to eventually stop publishing its controversial list of wholesale medicine prices that several critics have blamed for driving up drug costs (Class Action Reporter, Oct. 11, 2006). Lowering the average wholesale prices will reduce the spread between what pharmacies pay for drugs and what health plans pay pharmacies. Essentially, the smaller spread means lower prices for health plans. The company noted that the U.S. District Court for the District of Massachusetts has not given preliminary or final approval to the settlement of the civil class action, "New England Carpenters Health Benefits Fund et al. v. First DataBank et al." However, Express Scripts, a pharmacy benefit management (PBM) company pointed out that that the proposed reduction could have a material adverse effect on the margin it earns on home delivery transactions. The company added that the price change could also disrupt its retail networks due to the "adverse impact" on average wholesale price-based retail pharmacy pricing. The Maryland Heights, Missouri-based PBM though noted that its contracts with clients and retail pharmacies have terms that will enable it to mitigate the adverse effect of the proposed reduction in First DataBank's reported average wholesale price. Case Background Filed on June 2, 2005, the suit alleges that the First DataBank, which produces a list of the average wholesale price of numerous drugs, conspired with drug wholesaler McKesson Corp. to manipulate the price of medicines to benefit that company's customers. McKesson Corp. is not part of the settlement. In a press statement, it maintains that it did not conspire with First DataBank to raise the published average wholesale prices of drugs. The suit is "New England Carpenters Health Benefits Fund, et al. v. First Databank, Inc., et al., Case No. 1:05-cv-11148-PBS," filed in the U.S. District Court for the District of Massachusetts under Judge Patti B. Saris. Representing the plaintiffs are: (1) George E. Barrett of Barret Johnston & Parsley, 217 Second Avenue, N. Nashville, TN 37201-1601, Phone: 615- 244-2202, E-mail: gbarrett@barrettjohnston.com; (2) Jennifer Fountain Connolly of The Wexler Firm, LLC, 2000 One LaSalle Street, Chicago, IL 60602, Phone: 312- 346-2222, Fax: 312-346-0022, E-mail: jfc@wtwlaw.us; (3) Barbara Mahoney of Hagens Berman Sobol Shapiro, LLP, 1301 Fifth Avenue, Suite 2900, Seattle, WA 98101, US, Phone: 206-623-7292, Fax: 206-623-0594, E-mail: barbaram@hbsslaw.com; and (4) Spector, Roseman & Kodroff, P.C., 1818 Market Street, Suite 2500, Philadelphia, PA 19103, Phone: 215-496- 0300, Fax: 215-496-6611, E-mail: classaction@srk-law.com, Web site: http://www.srk-law.com. UNITED STATES: Judge Halts MNG Reimbursement Suit Pending Talks --------------------------------------------------------------- U.S. District Court Judge Richard G. Stearns has stayed a purported class action filed by four Massachusetts National Guardsmen against the government, MassLive reports. Judge Stearns is giving the National Guard time to agree with soldiers regarding claims within 60 days. If the parties fail to reach a resolution, Judge Stearns will rule on two motions: dismiss the lawsuit or transfer it to the U.S. Court of Federal Claims; or broaden it into a class action. Four soldiers filed the lawsuit in U.S. District Court for the District of Massachusetts in January. They are claiming that they were denied reimbursement for meals, travel and lodging while guarding potential targets after the Sept. 11, 2001 terrorist attacks. The suit named as plaintiffs all U.S., Massachusetts, Army and Massachusetts National Guard officials; and as defendants, leaders at the Massachusetts National Guard Command Center who denied the reimbursements (Class Action Reporter, Jan. 20, 2006). Specific plaintiffs named are Wayne R. Gutierrez, of New Bedford, Mass., Sgt. Steven M. Littlefield, and Joseph P. Murphy, a specialist at Camp Edwards. The lead plaintiff in the case, Sgt. Louis Tortorella, of New Hampshire, died in March 2006 of heart attack. It seeks $73 million in compensation and argues there could be as many as 1,000 Massachusetts National Guard soldiers who deserve reimbursements. Defendants had motioned to dismiss the lawsuit, but Judge Stearns ruled in August that he was going to defer his decision on the request until after the Guard completed an audit designed to fix the pay discrepancy. The plaintiffs moved for an injunction, but Judge Stearns reaffirmed his opinion to wait for the result of the audit. The audit includes a review of more than 500 sets of orders, room receipts and duty logs. The National Guard has proposed a 60- day time frame to complete the process. The suit is "Tortorella et al. v. U.S. of America et al., Case No. 1:06-cv-10054-RGS," filed in the U.S. District Court for the District of Massachusetts under Judge Richard G. Stearns. Representing the plaintiffs are: (1) John R. Shek of Weston, Patrick, Willard & Redding, PA, 84 State Street, 11th Floor, Boston, MA 02109-2299, Phone: 617-742-9310, Fax: 617-742-5734, E-mail: jrs@wpwr.com; and (2) Constance A. Driscoll of Stevens Law Office, 127 Mountain Road, P.O. Box 1200, Stowe, VT 05672, US, Phone: 802-253-8547, Fax: 802-253-9945, E-mail: constance.driscoll@stowelawyers.com. Representing the defendants are: (i) Mark T. Quinlivan, United States Attorney's Office, 1 Courthouse Way, Boston, MA 02210, Phone: 617-748-3606, Fax: 617-748-3969, E-mail: mark.quinlivan@usdoj.gov; and (ii) Brian M. Donovan, Office of the Attorney General, Room 1813, One Ashburton Place, Boston, MA 02108, Phone: 617-727-2200, Fax: 617-727-3076, E-mail: brian.donovan@ago.state.ma.us. NASUTRA LLC: Recalls Dietary Supplement Over Undeclared Content --------------------------------------------------------------- Nasutra, LLC, in cooperation with the U.S. Food and Drug Administration, is conducting a voluntary nationwide recall of all the company's dietary supplement product that is sold under the brand name Nasutra. Finished product from several lots of Nasutra was tested and preliminarily found to contain an analogue of an ingredient in an FDA-approved drug. Analytical tests conducted by the Food and Drug Administration (FDA) of Nasutra samples from two lots concluded that the products contained acetildenafil. Acetildenafil is an analogue of sildenafil. Sildenafil is the active pharmaceutical ingredient in Viagra, an FDA-approved drug that is used to treat erectile dysfunction (ED). Acetildenafil is close in structure to sildenafil and is expected to possess a similar pharmacological and adverse event profile. This poses a threat to consumers because acetildenafil may interact with nitrates found in some prescription drugs (such as nitroglycerin) and lower blood pressure to dangerous levels. Consumers with diabetes, high blood pressure, high cholesterol, or heart disease often take nitrates. ED is a common problem in men with these conditions, and they may seek products to enhance sexual performance. Additionally, acetildenafil, like sildenafil, may cause side effects, such as headaches and flushing. The company is taking this voluntary action because it is committed to providing accurate information on the label of its products and because it is always concerned with the health of persons who have consumed this product. The company is reviewing the procedures and policies of all firms involved with the manufacture of the product to ensure that there will be no future issues with regard to Nasutra's composition and labeling. The company is working closely with the FDA in the recall process and is committed to the quality and integrity of its products. It sincerely regrets any inconvenience to consumers and its other customers and the incomplete Nasutra labeling information. Customers who have this product in their possession are advised to stop using it immediately and contact their physician if they have experienced any problems that may be related to taking this product. The company is advising consumers to return any unused Nasutra, for a refund of the full purchase price, to the retail location from which it was purchased or to the company directly if it was purchased from the company as a part of its Direct Response Program. Consumers can call 1-800-568-3374 to receive instructions for returning the product. Additional information is provided on the company's website: http://www.nasutra.com/recall. NORTHROP GRUMMAN: Faces ERISA Violations Lawsuit in C.D. Calif. --------------------------------------------------------------- Northrop Grumman Corp. is a defendant in the purported class action, "Waldbuesser, et al. v. Northrop Grumman Corporation, et al.," which accuses the company of mismanaging workers' 401(k) plans, according to its Oct. 24, 2006 Form 10-Q filing with the U.S. Securities and Exchange Commission for the period ended Sept. 30, 2006. On Sept. 28, 2006, various individual plaintiffs filed the class action in U.S. District Court for the Central District of California, against the company, certain of its administrative and Board committees, all members of the company's Board of Directors, and certain company officers and employees. The lawsuit alleges two alternative counts of fiduciary duty breaches under the Employee Retirement Income Security Act of 1974 with respect to alleged excessive, hidden and/or otherwise improper fee and expense charges to the Northrop Grumman Savings Plan and the Northrop Grumman Financial Security and Savings Plan (each of which are 401(k) plans). Among other things, the lawsuit seeks unspecified damages, removal of individuals acting as fiduciaries to such plans, payment of attorney fees and costs, and an accounting. Specifically, the 45-page complaint accuses the corporation, its savings plan administrative committee, its investment committee and 16 individuals of "breach of fiduciary duty," (Class Action Reporter, Oct. 10, 2006). It specifically stated that the plan sponsor is accused of failing to fulfill its fiduciary duty to make certain that the 401(k) plan operates with appropriate expenses. According to the suit, the most certain means of increasing the return on employees' 401(k) savings is to reduce the fees and expenses employees pay from their 401(k) accounts. It also stated that unlike generalized market fluctuations, employers could control these fees and expenses with federal law requiring them to do so. The suit is also alleging that the plan is filled with "shadow index funds" that are collecting the much higher fees of managed funds. In effect, according to the suit, workers are paying for something -- active management -- but not getting it. And that, the suit asserts, is where the company and its executives have breached their fiduciary duty. According to the lawsuit, all of the company's nine fund offerings that claim active management have scored as shadow index funds over the last six years. As a consequence, the suit contends, corporate management may have set employees up to pay two or three times as much in fees as management's fiduciary duty would dictate. The suit is "Waldbuesser, et al. v. Northrop Grumman Corporation, et al., Case No. 2:06-cv-06213-R-JC," filed in the U.S. District Court for the Central District of California under Judge Manuel L. Real with referral to Judge Jacqueline Chooljian. For more details, contact Mary L. Perry and Jerome J. Schlichter of Schlichter Bogard and denton, 100 South Fourth Street, Suite 900, St Louis, MO 63102, Phone: 314-621-6115, E-mail: mperry@uselaws.com and jschlichter@uselaws.com. OWENS CORNING: Tex. Couple Files Suit in Ohio v. 401(k) Overseer ---------------------------------------------------------------- The Owens Corning-appointed committee that oversaw an employee 401(k) savings plan faces a purported class action that was filed by a Texas couple that formerly worked for the Toledo- based company, The Toledo Blade reports. The suit was filed in the U.S. District Court for the Northern District of Ohio and comes just prior to the Fortune 500 firm's emergence from Chapter 11 bankruptcy. Filed on Sept. 1, 2006, no hearings have been set for the case. It alleges that the company's rules kept their savings tied up in company stock that dropped in value and cost them thousands of dollars in retirement savings. The case, filed by Britton C. and Sandra K. Brown, of Canyon, Texas, seeks class action status for all former and current company employees who may have suffered similar losses. The Browns had both worked for Owens Corning and participated in the company's 401(k) plan. Before the company filed for bankruptcy protection in October 2000, the value of the firm's stock plunged, but employees' sales of company stock in their own 401(k) accounts were restricted. According to Greg Porter, the couple's Washington, D.C.-based attorney, it wasn't filed sooner because earlier lawsuits focused almost exclusively on shareholder lawsuits, and responsibility for retirement accounts "was sort of off the radar." The 401(k) plan allowed workers to invest some of their salary, along with a partial match by the company, into a deferred retirement account. Named as defendants are: -- the company's investment review committee, -- the company's benefits review committee, -- company officials involved in the process, -- the company's savings and security plan, and -- Richard C. Tober, the plan's administrator during and prior to 2000. The Browns contend that the savings plan restricted employee's ability to shift savings into less risky investments than company stock. In 1999, 100 percent of all matching contributions by the company and 50 percent of all profit sharing were in company stock. The suit alleges that the money, in the form of stock, was "locked up" and unavailable to workers unless they were terminated or had reached age 65. In January 2000, restrictions were eased to allow employees to invest future company matches in other things beside company stock. And in February, workers could redirect elsewhere a third of their pre-2000 earnings. Employer contributions were still locked up by Sept. 29, 2000, when many restrictions were lifted. However, the suit contends that by that time, company stock had dropped to $2.75 a share, from $19.31 in January. The couple contends that they and other employees suffered "substantial losses" to their accounts because of breached fiduciary responsibilities. The Browns asked to have their losses restored. The suit is "Brown, et al. v. Owens Corning Investment Review Committee, et al., Case No. 3:06-cv-02125-JZ," filed in the U.S. District Court for the Northern District of Ohio under Judge Jack Zouhary. Representing the plaintiffs is Gregory Y. Porter of McTigue & Porter, Ste. 350, 5301 Wisconsin Avenue, NW, Washington, DC 20015, Phone: 202-364-6900, Fax: 202-364-9960, E-mail: http://www.mctiguelaw.com. REX ENERGY: Bridgeport Families File Air Pollution Suit in Ill. --------------------------------------------------------------- Rex Energy Operating Corp. of State College, Pennsylvania faces a purported class action in the U.S. District Court for the Southern District Illinois over allegations that it knowingly polluted the air with poisonous gas. Two Bridgeport, Illinois area families filed the lawsuit on Oct. 17, 2006. It is alleging that oil wells operated by Rex Energy throughout the Bridgeport area in Southeastern Illinois are polluting the families' homes and community, and endangering their health, by emitting "dangerous" levels of a chemical known as hydrogen sulphide (H2S). H2S is a poisonous gas categorized as an "extremely hazardous substance" under federal law. Exposure to high levels of hydrogen sulphide can cause death. Exposure to lower levels can cause permanent neurological injury, as well as respiratory, cardiac and other serious health problems. Attorneys who filed the class action hope to eventually represent the entire city of Bridgeport. Residents will find out exactly what kind of chemicals are in the air at a public meeting next week. The suit came after several residents living near the oil wells brought complaints to the mayor of being sick. As those complaints piled up Congressman John Shimkus got involved and asked the Centers for Disease Control and Prevention to take a look. Later, the Agency for Toxic Substances and Disease Registry also got involved. According to attorney Shawn Collins of Chicago, the federal government had been here doing testing over the summer, and has found very high levels of H2S all over town. Mr. Collins is representing Lisa Thompson and Julia Leib in the class action against Rex Energy, the company that operates the oil wells. He says the level of H2S gas, that's naturally emitted from these wells, is so high that it can't be measured by standard equipment. The lawsuit says not only has the company been careless, but also they have been willfully wanton, reckless about what's happening, according to Mr. Collins. It currently seeks: -- a court order to stop Rex from continuing this contamination; -- the establishment of a fund to monitor and treat local citizens for ill health affects caused by hydrogen sulphide exposure; -- a monetary award to the families for injury to their property use; and -- punitive damages against Rex for their "willful and wanton" behavior. In a press statement, Ben Hulbert, company spokesperson for the company, said that they would vigorously defend itself against the lawsuit. He said that plaintiffs' allegations that the oil company has created serious risks to human health are false. Mr. Hulbert maintains that the case represents a distortion of the results of monitoring activity that was conducted recently by the U.S. Environmental Protection Agency and the Agency for Toxic Substances and Disease Registry. A copy of the complaint is available free of charge at: http://researcharchives.com/t/s?1410 The suit is "Leib et al v. Rex Energy Operating Corp., Case No. 3:06-cv-00802-JPG-CJP," filed in the U.S. District Court for the Southern District of Illinois under Judge J. Phil Gilbert with referral to Judge Clifford J. Proud. Representing the plaintiffs are: (1) Shawn M. Collins, The Collins Law Firm, 1770 N. Park Street, Suite 200, Naperville, IL 60563, Phone: (630) 527-1595 x 221, E-mail: smc@collinslaw.com, Web site: http://collinslaw.com/Bridgeport.html; (2) Norman B. Berger of Varga, Berger, et al., Cook County 224 South Michigan Avenue, Suite 350, Chicago, IL 60604, Phone: 312-341-9870, Fax: 312-341-2900, E-mail: nberger@vblhc.com; and (3) Richard A. Green of Feirich, Mager, et al., Generally Admitted, 2001 West Main Street, P.O. Box 1570, Carbondale, IL 62903, Phone: 618-529-3000, E-mail: rgreen@fmgr.com. REYNOLDS AMERICAN: CFO Says "Lights" Case Could Cost Firm $125M --------------------------------------------------------------- A class action related to the marketing of light cigarettes could cost Reynolds American, Inc., about $125 million, mostly in 2007 and 2008, says Dianne M. Neal, its Chief Financial Officer, MarketWatch reports. Smokers of light cigarettes, including lead plaintiff Barbara Schwab, allege the largest tobacco companies misled the public by marketing light cigarettes as a safer alternative to regular cigarettes. Together, these smokers are seeking more than $200 billion in damages. The suit seeks economic damages, rather than compensation for death or disease caused by smoking, of between $120 billion and $200 billion. Named defendants in the suit are: -- Altria Group Inc.'s Philip Morris USA unit; -- Reynolds American Inc.'s R.J. Reynolds tobacco Co.; -- Loews Corp.'s Lorillard Tobacco unit; -- Vector Group Ltd.'s Liggett Group; and -- British American Tobacco Plc's British American Tobacco (Investments) Ltd. On Oct. 3, 2006, Philip Morris USA and other defendants asked the U.S. Court of Appeals for the Second Circuit to stay all proceedings in the Schwab class action and to allow an immediate appeal of the class certification ruling in the case by Judge Jack Weinstein of the U.S. District Court for the Eastern District of New York (Class Action Reporter, Oct. 23, 2006). Last month, Judge Weinstein certified "Schwab" as nationwide class action, making it the biggest legal threat facing the tobacco industry. Other defendants in the case include Altria Group Inc.'s (MO) and Philip Morris USA. Unless a stay is granted in the case, the trial is scheduled to begin on Jan. 22, 2007. On Oct. 24, 2006, the U.S. Second Circuit Court of Appeals issued a temporary stay in all proceedings in the Schwab class action until the three-judge panel reviews the issues involved on Dec. 5, 2006 (Class Action Reporter, Oct 26, 2006). In discussing the third-quarter results, Ms. Neal pointed out that a shortage in packaging materials resulted in inventory issues. In a conference call, she says, "The inconvenience this has caused wholesalers and retailers is regrettable. Ms. Neal added, "There's still some issues with a few remaining SKUs (stock keeping units) but they are being resolved quickly - in fact, we expect to have this behind us in the next few weeks." According to Ms. Neal, tobacco-related ballot initiatives, such as proposed smoking bans and cigarette taxes, are too close to call. The company has spent $40 million to campaign against such proposals. Earlier, the Winston-Salem, North Carolina-based tobacco company posted third-quarter results, with profit up 45% over the year- earlier period, and raised its full-year earnings guidance - both beating Wall Street expectations. Shares of Reynolds' rose 2.9% in recent trading, up $1.87 to $66.27. The company said third-quarter net income rose 45% to $309 million, or $1.05 a share, from $213 million, or 72 cents a share, in the year-earlier period. Adjusted earnings rose to $1.09 a share from $1.08 a share. Revenue in the third quarter rose to $2.19 billion from $2.15 billion. Analysts surveyed by Thomson First Call forecast third-quarter earnings of $1.02 a share and revenue of $2.16 billion, on average. A copy of Judge Weinstein's 540-page Memorandum & Order and the Motion for Immediate Stay, are available free of charge at: http://ResearchArchives.com/t/s?1252 http://ResearchArchives.com/t/s?13bc The suit is "Schwab v. Philip Morris Inc. et al., Case No. 1:04- cv-01945-JBW-SMG," filed in the U.S. District Court for the Eastern District of New York under Judge Jack B. Weinstein with referral to Judge Steven M. Gold. Representing the defendants are: (1) Mark A. Belasic of Jones, Day, 901 Lakeside Avenue, North Point, Cleveland, OH 44114, Phone: (216) 586- 3939, Fax: 216-579-0212, E-mail: mabelasic@jonesday.com; (2) Peter A. Bellacosa of Kirkland & Ellis, Citigroup Center, 153 East 53rd Street, New York, NY 10022-4675, Phone: (212) 446-4800, Fax: (212) 446-4900, E-mail: peter_bellacosa@ny.kirkland.com; or David M. Bernick of Kirkland & Ellis, 200 East Randolph Drive, Chicago, Il 60601, Phone: (312) 861-2148; (3) Judith Bernstein-Gaeta of Arnold & Porter, 555 Twelfth Street, N.W., Washington, D.C. 20004, Phone: (202) 942- 5000, E-mail: judith_bernstein-gaeta@aporter.com; or Anthony D. Boccanfuso of Arnold & Porter, 399 Park Avenue, New York, NY 10022, Phone: (212) 715-1000, Fax: 212-715-1399, E-mail: anthony_boccanfuso@aporter.com; and (4) Frances Bivens of Davis Polk & Wardwell, 450 Lexington Avenue, New York, NY 10017, Phone: 212-450-4000. Representing the plaintiffs are: (i) Benjamin D. Brown of Cohen, Milstein, Hausfeld & Toll, P.L.L.C, 1100 New York Avenue N.W. West Tower, Suite 500, Washington, DC 20005, Phone: (202) 408-4600 and (888) 347-4600, Fax: (202) 408-4699, Web site: http://www.cmht.com/;and (ii) William P. Butterfield of Finkelstein Thompson & Loughran, 1050 30th Street, NW, Washington, DC 20007, Phone: 202-337-8000, Fax: 202-337-8090, E-mail: wpb@ftllaw.com. STARBUCKS CORP: Recalls 8-Cup Coffee Brewers Due to Fire Hazard --------------------------------------------------------------- Starbucks Coffee Company, of Seattle, Washington, in cooperation with the U.S. Consumer Product Safety Commission, is recalling about 73,000 units of Starbucks Barista Aroma Stainless Steel 8- Cup Coffee Brewers. The company said the coffee brewer has defective electrical wiring that can result in overheating, smoking, burning and melting, posing a possible fire hazard. Starbucks has received 23 reports of melting in the plastic housing of the brewers. No injuries have been reported. This recall includes the Starbucks Barista Aroma 8-Cup Coffee Brewer only. "Starbucks Barista Aroma" is embossed on the front of the brewer and the brewer has silver control panel buttons and a chrome finish. The Starbucks Barista Grande 12-Cup Coffee Brewer and Starbucks Barista Solo Coffee Brewers are not included in this recall. These coffee brewers were manufactured in China and are being sold at Starbucks company-owned and operated stores nationwide between March 2005 and September 2006 for about $100. Picture of the recalled coffee brewer: http://www.cpsc.gov/cpscpub/prerel/prhtml07/07006.jpg Consumers are advised to stop using the recalled coffee brewers immediately and contact Starbucks for a full refund. Consumers will receive a postage-paid package along with instructions on how to return their brewer. Starbucks is also offering a coupon (valid through 1/31/07) for a free pound of coffee as an incentive to return the recalled machine. For more information, contact Starbucks' Barista Aroma recall hotline at (800) 453-1047 between 9 a.m. and 9 p.m. MT (11 a.m. and 11 p.m. ET), or visit the company's Web site: http://www.starbucks.com. Consumers may also write to Starbucks Coffee Company at Customer Relations, Starbucks Coffee Company, mailstop S-RC1, P.O. Box 3717, Seattle, WA 98124-3717. SONY ENERGY: Recalls Laptop Computer Batteries For Fire Hazard -------------------------------------------------------------- Sony Energy Devices Corp., of Japan, in cooperation with the U.S. Consumer Product Safety Commission, is recalling about 340,000 rechargeable, lithium ion batteries containing Sony cells used in Fujitsu Computer Systems Corp. Gateway Inc., Sony Electronics Inc., and Toshiba America Information Systems Inc. notebook computers and an additional 3,080,000 battery packs sold worldwide. The company said these lithium ion batteries can overheat, posing a fire hazard to consumers. There have been 16 reports of notebook computer batteries overheating, causing minor property damage and two minor burns. All of these reported incidents and injuries have been associated with earlier recalls of notebook computer batteries containing these Sony cells. There have been no incidents involving batteries sold by the notebook manufacturers participating in this announcement. These lithium ion batteries were sold with, or sold separately to be used with, the following notebook computer models: Computer Computer Model Battery Model Manufacturer Fujitsu LifeBook: P1510, P1510D, CP229720-01, P7120, P7120D, S7020, CP229725-01, S7020D, C1320D, Q2010, CP234003-01, T4210 CP234019-01, CP255100-01, CP255108-01, CP267910-01, CP267915-01, CP283030-01, CP293420-01 Gateway Gateway: CX200, CX210, 916C4610F, E100M, M250, M255, M280, 916C4720F, M285, M465, M685, MP8708, 916C4730F, NX260, NX510, NX560, 916C5010F, NX860, NX100, MX1025, W230 MX6918b, and MX1020j Sony Sony VAIO: VGN-FE550G, VGP-BPS3A, VGN-FE570G, VGN-T240P, VGP-BPS2B VGN-T250, VGN- T250P, VGN-T260P, VGN-T270P, VGN-T340P, VGN-T350, VGN-T350P, VGN-T360P, VGN-T370P Toshiba Portege: M300, M400/M405, PA3191U-4BRS, S100/S105 PA3356U-2BRS, Qosmio: G35 PA3475U-1BRS, Satellite: R10/R15 PA3191U-5BRS, Tecra: A2, M3, M4, M5, M6, PA3356U-3BRS, and S3 PA3476U-1BRS The battery model can be found on the battery's label. These lithium ion batteries were manufactured in Japan, China, Taiwan and Malaysia and sold directly by Fujitsu Computer Systems Corporation, Gateway Inc., Sony Electronics Inc., and Toshiba America Information Systems Inc. and through authorized distributors as part of a notebook computer. The computers sold for between $500 and $3000 and the batteries were also sold separately for between $75 and $200, during the following dates: -- Fujitsu - from June 2005 through October 2006. -- Gateway - from September 2005 through October 2006. -- Sony - from December 2004 through October 2006 -- Toshiba - from September 2004 through October 2006. Pictures of the recalled lithium ion batteries: http://www.cpsc.gov/cpscpub/prerel/prhtml07/07011a.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml07/07011b.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml07/07011c.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml07/07011d.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml07/07011e.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml07/07011f.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml07/07011g.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml07/07011h.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml07/07011i.jpg Consumers are advised to remove the affected batteries from notebook computers until they contact their computer manufacturer and receive further instructions. Batteries covered by this program will be replaced free of charge. Consumers should use only batteries obtained from their computer manufacturer or from an authorized reseller. Customers are advised to contact the manufacturer of their notebook computer to determine if their battery is covered by this program and to request a replacement battery. The contact information for the participating manufacturers is: -- Fujitsu - Phone: (800) 8FUJITSU, Website: http://www.computers.us.fujitsu.com/battery -- Gateway - Phone: (800) 292-6813, Website: http://www.gateway.com/battery -- Sony - Phone: (888) 476-6972, Website: http://esupport.sony.com/battery -- Toshiba - Phone: (800) 457-7777, Website: http://www.bxinfo.toshiba.com TRAVEL COS: Nassau County Tax Remits Suit Names 17 Defendants ------------------------------------------------------------- Nassau County Executive Tom Suozzi filed a lawsuit in the U.S. District Court for the Eastern District of New York against 17 online hotel-booking operators for shortchanging the county millions of dollars in tax receipts, Newsday.com reports. Named defendants in the suit: -- Hotels.com, LP, -- Hotels.com GP, LLC, -- Hotwire, Inc., -- Trip Network, Inc., -- Cendant Travel Distribution Services Group, Inc., -- Expedia, Inc., -- Internetwork Publishing Corp., -- Lowestfare.com, Inc., -- Maupintour Holding, LLC, -- Orbitz, Inc., -- Orbitz, LLC, -- Priceline.com, Inc., -- Site59.com, LLC, -- Travelocity.com, Inc., -- Travelocity.com, LP, -- Travelweb, LLC, and -- Travelnow.com, Inc. The suit the travel companies are paying the county hotel tax based on a wholesale price for hotel rooms, yet charging customers tax based on a higher retail price. It states those extra tax receipts are due to the counties and states (Class Action Reporter, Oct. 25, 2006). Though declining to divulge details on how much money the county is losing in tax revenues, Mr. Suozzi pointed out that taxpayers of Nassau County are being "ripped off by these companies." However, hotel-booking agencies dismissed Mr. Suozzi's charge as baseless, the report said. Art Sackler, Executive Director for Interactive Travel Services Association, which represents a handful of the defendants, said similar lawsuits have been filed in jurisdictions including Los Angeles and Miami, but hotel-booking operators have yet to pay any settlements or damages. The suit is labeled a "class-action complaint," though it would ultimately be up to a federal judge to determine whether other government entities can join the suit as plaintiffs, according to the report. Mr. Suozzi said he hopes New York City and other government entities in the state will seek to join the lawsuit. He adds that the City of New York will be excited about the action to recoup the money. In 2004, the New York State Department of Taxation and Finance issued an advisory opinion stating that online travel companies are not required to collect hotel taxes. The hotels themselves, according to the ruling, are obligated to collect and remit tax to state and local governments. Mr. Sackler said the hotels determine locally how much tax the online operators charge, with the online outfits then returning the tax to the hotels, which are then expected to turn it over to the county. The suit is "County of Nassau, New York v. Hotels.com, LP et al., Case No. 2:06-cv-05724-ADS-WDW," filed in the U.S. District Court for the Eastern District of New York under Judge Arthur D. Spatt with referral to Judge William D. Wall. Representing the plaintiffs are: (1) Peter James Clines, Chief, Bureau of Affirmation Litigation, Office of the Nassau County Attorney, 1 West Street, Mineola, NY 11501, Phone: 516-571-3056; and Lorna Goodman, Nassau County Attorney, Office of the Nassau County Attorney, 1 West Street, Mineola, NY 11501, Phone: 516-571-3056, E-mail: lgoodman@nassaucountyny.gov; (2) Paul Kleidman and Joseph Lipofsky both of Zwerling, Schachter & Zwerling, LLP, 41 Madison Avenue, 32nd Floor, New York, NY 10010, Phone: 212-223-3900, Fax: 212-371-5969, E-mail: pkleidman@zsz.com or jlipofsky@zsz.com; and Robert S. Schachter of Zwerling, Schachter & Zwerling, LLP, 990 Stewart Avenue, Suite 600, Garden City, NY 11530, Phone: 516-832-9600, Fax: 516-832-9605, E-mail: rschachter@zsz.com. UNITED STATES: Groups Ask Judge to Release Immigrants in Calif. --------------------------------------------------------------- The American Civil Liberties Union of Southern California, the ACLU Immigrants' Rights Project, and the Stanford Law School Immigrants' Rights Clinic asked a federal judge to put an immediate end to the illegal detention of four immigrant detainees who are being held indefinitely in Southern California. "These people have been kept away from their families, their communities, and their lives for years -- as many as four years or more -- without even a hearing to determine if their prolonged detention is justified," said Ahilan Arulanantham, an ACLU of Southern California staff attorney. "Many of them are refugees, and others are immigrants with U.S. citizen spouses, children, and full lives in Southern California. Yet they are being indefinitely detained while they fight their immigration cases. This is not what America stands for." On Oct. 6, the ACLU asked U.S. District Judge Terry Hatter to order the release of the four detainees, or provide them individual hearings, after filing a class action September 25 on behalf of people who have been held arbitrarily for years while fighting their immigration cases. In the lawsuit, "Mussa v. Gonzales," the ACLU noted that both the U.S. Supreme Court and the Ninth Circuit Court of Appeals have ruled that indefinite detention is prohibited. "Six years after the Supreme Court effectively banned unreasonably prolonged and indefinite detention in the immigration context, the government continues to engage in a policy of de facto indefinite detention," the lawsuit stated. One detainee, Reverend Raymond Soeoth, is a Chinese Christian who fled Indonesia with his wife in 1999 to escape persecution for practicing his faith. He was initially allowed to work in the United States while applying for asylum, and eventually became the assistant minister for a church in the Riverside area. However, when his asylum application was denied in 2004, the government detained him. Rev. Soeoth is seeking to reopen his asylum case based in part on concern that he will face persecution from Indonesia's new government. The 9th Circuit Court of Appeals has prevented his removal until his case is decided, but the government refuses to release him from Terminal Island Federal Detention Center in San Pedro, where he has been held for two years with no end in sight. "I came to this country because it is a land of human rights and freedom, but now I have been inside this jail for two years, even though I have never committed any crime," Rev. Soeoth said. "This is very hard for my wife and for my parish. I hope the government will let me out." "It is illegal for the government to incarcerate immigrants for months on end without even a hearing. Immigration cases can take years to resolve. Prolonged incarceration deprives immigrants of their freedom, contact with their families, and the ability to earn a living," said Jayashri Srikantiah, associate professor and director of the Immigrants' Rights Clinic at Stanford Law School. Attorneys for the ACLU have successfully won the release of nearly a dozen people arbitrarily detained for years. Most were released once the ACLU filed individual lawsuits, but because many other people remain detained and do not have lawyers to challenge their unlawful detention, a class action lawsuit was necessary, Arulanantham said. One detainee plaintiff in "Mussa v. Gonzales," has already been released since the lawsuit was filed. "The government's detention policy is not only unlawful and inhumane, it is also irrational," said Judy Rabinovitz of the ACLU Immigrants' Rights Project. "The government is spending millions of dollars locking up people whose detention serves no purpose. These individuals are ready to comply with conditions of supervision, and even electronic monitoring if necessary. There is no reason for them to be locked up for years while their cases make their way through the courts." The suit is "Mussa v. Gonzales et al., Case No. 2:06-cv-02749- TJH-JTL," filed in U.S. District Court, Central District of California under Judge Terry J. Hatter, Jr. with referral to Jennifer T. Lum. Representing the petitioner are: (1) Ahilan T. Arulanantham, ACLU Foundation of Southern California, 1616 Beverly Boulevard, Los Angeles, CA 90026, E-mail: aarulanantham@aclu-sc.org, Phone: 213- 977-9500; and (2) James M. Toma at Greenberg Glusker Fields Claman Machtinger & Kinsella, 1900 Avenue of the Stars, 21st Fl, Los Angeles, CA 90067-4590, Phone: 310-553-3610. Representing the respondents are: (i) Victor M. Lawrence, Office of U.S. Immigration Litigation, Civil Division U.S. Department of Justice, P.O. Box 878, Ben Franklin Station, Washington, DC 20044, Phone: 202-305-8788; and (ii) Robert I. Lester, AUSA - Office of U.S. Attorney, Civil Division, 300 N Los Angeles St., Ste 7516, Los Angeles, CA 90012, Phone: 213-894-2434, E-mail: USACAC.Civil@usdoj.gov. VIRGINIA: Confident in Settling Mental Patients' Voting Lawsuit --------------------------------------------------------------- Virginia officials are confident that they will soon resolve a legal dispute with two people who say they were denied the right to vote in November because they are mentally ill, Greg A. Lohr of Style Weekly reports. In Oct. 2, 2006, David Harvey and King D. Monroe, residents of Central State Hospital in Dinwiddie County, filed class action lawsuit against state officials, including Gov. Tim Kaine, Viola Baskerville, secretary of administration, and several members of the State Board of Elections and the Dinwiddie County Electoral Board. The Virginia Office for Protection and Advocacy (VOPA) brought the suit, which was filed in the U.S. District Court for the Eastern District of Virginia, on behalf of the two men (Class Action Reporter, Oct. 5, 2006). The suit is alleging that a state law surrounding absentee ballots unfairly restricts the mentally disabled, stripping those confined to mental hospitals of voting rights. The disputed state law essentially states "any person who is unable to go in person to the polls on the day of election because of physical disability or physical illness" can vote via mail-in, absentee ballot (Class Action Reporter, Oct. 16, 2006). According to VOPA, the law doesn't extend to those with mental disabilities or illnesses who can't reach the polls because they are confined. The group contends that the law violates the federal Americans with Disabilities Act and the men's Constitutional rights. VOPA, the state's watchdog agency for disability rights, is thus seeking for a revision of the law. Aside from a revision of the law, attorneys for Messrs. Harvey and Monroe also filed a motion for a preliminary injunction in an effort to obtain the absentee ballots in time for Election Day. A hearing on that motion was scheduled for Oct. 24, 2006. The State Board of Elections though has modified its policy on providing absentee ballots. The board decided on Oct. 6, 2006 to grant those with mental illnesses the same right as those with physical impairments. In essence, they were given the chance to vote by absentee ballot, providing they are otherwise eligible to vote and cannot make it to the polls. David Clementson, a spokesman for Attorney General Bob McDonnell pointed out that the policy had been "in the works" by the board and the state Attorney General's Office even before the lawsuit was filed. In addition, Mr. Clementson added that the Dinwiddie registrar mailed an absentee ballot to Mr. Monroe on Oct. 6 and that the other plaintiff, Mr. Harvey, has not requested a ballot for the November election, contrary to his filed complaint. The two sides met Oct. 18 for a settlement conference with a federal magistrate, according to Mr. Clementson. He maintains that the parties are confident that they'll reach a resolution to the litigation, shortly. However, Jennifer Mathis, deputy legal director at the Judge Bazelon Center for Mental Health Law in Washington, D.C., said that the issue was resolved years ago throughout the country. Ms. Mathis explains that most states have recognized that people in hospitals and nursing homes need to be accommodated to allow them to vote, and they can't be denied the right to vote simply because they're living in an institution. She reiterates, "We haven't seen a lawsuit of this nature or a problem of this nature for many years, so it was surprising to see it resurface now." The suit is "Harvey, et al. v. Kaine, et al., Case No. 3:06-cv- 00653-HEH," filed in the U.S. District Court for the Eastern District of Virginia under Judge Henry E. Hudson. Representing the plaintiffs are Julie Colemon Kegley, Steven Michael Traubert and Jonathan Gerald Martinis of Virginia Office for Protection and Advocacy, 1910 Byrd Ave., Suite 5, Richmond, VA 23230, Phone: (804) 225-2042. VITESSE SEMICONDUCTOR: Consolidated Stock Complaint Due Nov. 30 --------------------------------------------------------------- Lead plaintiffs in the consolidated securities fraud suit filed against Vitesse Semiconductor Corp. have until Nov. 30, 2006 to file their consolidated complaint. On May 2, 2006 an investor sued Vitesse Semiconductor in federal court, accusing the company of securities law violations. The class action was filed in the U.S. District Court for the Central District of California and seeks damages for violations of federal securities laws on behalf of all investors who acquired Vitesse securities from Oct. 23, 2003 to April 26, 2006, inclusive. The lawsuit claims that Vitesse and three individual defendants violated Sections 10(b) and 20(a) of the U.S. Securities Exchange Act of 1934, 15 U.S.C. Sections 78j(b) and 78t(a), and SEC Rule 10b-5, 17 C.F.R. Section 240.10b-5, promulgated thereunder. Vitesse engages in the design, development, manufacturing, and marketing of integrated circuits for systems manufacturers in the communications and storage industries. According to the complaint, Vitesse and three individual defendants violated the federal securities laws by issuing materially false and misleading statements during the class period that artificially inflated the company's stock price. Specifically, the defendants: -- failed to properly account for credits issued to or requested by customers; -- failed to properly apply payments received to the appropriate account receivable; and -- failed to properly account for the stock options granted to senior officers and directors. On April 18, 2006, Vitesse disclosed that its board of directors had appointed a special committee to conduct an internal investigation into past stock option grants, the timing of such grants and related accounting and documentation. The day after the announcement, on April 19, 2006, Vitesse's shares plunged more than 32% to open at $2.35 (from a prior close of $3.11) and closed that day at $2.48, down $.63. On April 26, 2006, Vitesse announced that its previously reported financial statements for the three months ended Dec. 31, 2005 and the three years ended Sept. 30, 2005, and possibly earlier periods, should not be relied upon. The company further stated that the Management Report on Internal Control over Financial Reporting as of Sept. 30, 2005, and the Report of KPMG LLP relating to the effectiveness of the company's internal controls over financial reporting and management's assessment, both included in the company's Form 10- K for the year ended Sept. 30, 2005, should not be relied upon. Vitesse also disclosed that the company's ongoing internal investigation had uncovered evidence that its accounts receivable and revenues may have been misstated. Following this disclosure, on April 27, 2006, Vitesse's shares sank 23.5% to $1.92, and closed that day at $1.83, down $.68. On June 30, 2006, Judge Margaret Morrow consolidated all related securities cases into one class action, entitled "Grasso v. Vitesse Semiconductor Corp., C.A. No. 06-02639." On July 3, 2006 competing motions for the appointment of lead plaintiff and lead counsel were filed with the court. A hearing on these motions was held on Sept. 18, 2006 and on Sept. 26, 2006. Judge Manuel L. Real would later issue an order appointing lead plaintiffs and lead counsel. Pursuant to a Sept. 28, 2006 Stipulation and Order, lead plaintiffs have until Nov. 30, 2006 to file their consolidated complaint. The suit is "Grasso v. Vitesse Semiconductor Corp., C.A. No. 06- 02639," filed in the U.S. District Court for the Central District of California under Judge Manuel L. Real. Case Contact: Lesley Ann Hale, Phone: 415-433-3200. WAITING ANGELS: Faces RICO Violations Lawsuit in W.D. Michigan -------------------------------------------------------------- Waiting Angels Adoption Services and certain of its officers are facing a purported class action, alleging fraud, in the U.S. District Court for the Western District of Michigan, The Courthouse News Service reports. The suit specifically alleged violations of the federal Racketeer Influenced and Corrupt Organization (RICO) statute, 18 U.S.C. Section 1961, and various other Michigan statutes and common law doctrines. It was filed against: -- Waiting Angels Adoption Services, a Michigan-based for- profit adoption agency; -- Waiting Angels President Simone Boraggina; and -- Waiting Angels Secretary and Treasurer Joseph Beauvais. The suit alleges the adoption agency defrauds vulnerable, would- be foster parents by demanding extra money for unspecified fees, and threatening they will never get their babies unless they pay. Named plaintiffs in the suit are: -- Anthony and Jill Casassa both U.S. citizens residing in Minnesota; -- Toni Flenniken, a U.S. citizen residing in California; -- Amanda and Reece Heinrich both U.S. citizens residing in Michigan; -- Jon and Regina Lundy both U.S. citizens residing in Alabama; and -- Michael and Philly Tavolilla both U.S. citizens residing in New York. Lead plaintiffs Amanda and Reece Heinrich claim that in addition to the $12,000 adoption fee they agreed to pay, defendants demanded an additional $1,200 "escort fee," $4,900 for an "adoption facilitator," $441 for unspecified services, and asked for more money to bribe Guatemalan officials. The suit claims plaintiffs requested itemized statements, but defendants never responded. Other plaintiffs make similar claims. Plaintiffs demand judgment from the court as follows: -- to award damages against defendants, jointly and severally, for a sum of money equal to the amount of damages and/or losses plaintiffs have sustained or will sustain; -- to treble the amoung of said damages pursuant to 18 U.S.C Section 1964(c) and/or M.C.L. 600.2919(a); -- to award prejudgment interest on the amount of damages and/or losses that plaintiffs have sustained; -- to award all costs of litigation incurred by plaintiffs, including their reasonable attorneys' fees and experts' fees, pursuant to 18 U.S.C. Section 1964(c); -- to award exemplary damages in an amount in excess of $75,000 resulting from defendant's intentional and malicious actions; and -- to award such other and further relief as the court deems just and equitable. A copy of the complaint is available free of charge at: http://ResearchArchives.com/t/s?1400 The suit is "Heinrich et al v. Waiting Angels Adoption Services, Inc. et al., Case No. 5:06-cv-00168-RHB," filed in the U.S. District Court for the Eastern District of Pennsylvania under Chief Judge Robert Holmes Bell. Plaintiffs are represented by Joni Marie Fixel of the Fixel Law Offices PLLC, 4990 Northwind Dr., Ste. 121, E Lansing, MI 48823, Phone: (517) 332-3390, Fax: 517-351-7025, E-mail: JFixel@Fixellawoffices.com. XCELERA.COM INC: Discovery Continues in Mass. Securities Lawsuit ---------------------------------------------------------------- Discovery is ongoing in the securities fraud lawsuit filed against Xcelera.com, Inc. in the U.S. District Court for the District of Massachusetts. A class action was filed against Xcelera.com, Inc. on Aug. 23, 2000. The action seeks damages for violations of the federal securities laws on behalf of all investors who purchased Xcelera common stock between April 1, 1999 and Aug. 8, 2000. The complaint charges Xcelera and certain of its officers with violations of the U.S. Securities & Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On April 1, 1999, defendants issued a press release announcing that Xcelera had acquired Mirror Image, Co., and made positive statements in this and subsequent press releases regarding the acquisition without disclosing that Xcelera shareholders could have their interests significantly diluted. The complaint further alleges that Xcelera misled investors by failing to inform them that another corporate transaction involving Mirror Image could cause them to incur significant tax liabilities. These materially misleading statements caused Xcelera's common stock to be artificially inflated throughout the class period. Meanwhile, Xcelera insiders took advantage of the inflated price to sell approximately 1.6 million of their own shares. When the truth was revealed, the price of Xcelera's stock collapsed to $11.75 per share, dramatically below its class period high of $112.50. Cases were originally filed against Xcelera in four different federal district courts. The parties are awaiting a decision by the Judicial Panel on Multidistrict Litigation ordering the transfer of all cases for pretrial coordination and consolidation to one jurisdiction. On Oct. 10, 2000, certain plaintiffs filed a motion for appointment of Lead Plaintiffs and for approval of their selection of Lead Counsel. On Jan. 31, 2001, the court appointed lead plaintiffs and approved their selection of lead counsel, including Berman DeValerio Pease Tabacco Burt & Pucillo (http://www.bermanesq.com/). On April 2, 2001, the lead plaintiffs filed their consolidated amended class action complaint, which Xcelera moved to dismiss on May 31, 2001 and plaintiffs opposed on July 16, 2001. On Oct. 3, 2001, the court held a hearing on defendants' motion to dismiss, and Judge Rya Zobel issued an order granting in part and denying in part defendants' motion on March 8, 2002. Defendants filed their answer to the amended complaint on April 9, 2002. Judge Rya Zobel issued an order granting class certification on Sept. 30, 2004. In early March of 2005 the defendants sought to appeal the class certification order. On Dec. 13, 2005 the First Circuit Court of Appeals affirmed Judge Zobel's September order certifying the class and the insider trading subclass. Discovery is ongoing. The suit is Case No. 1:00cv11649 filed in the U.S. District Court for the District of Massachusetts under Judge Rya W. Zobel. Case Contact: Patrick T. Egan, Phone: 800-516-9926. XETHANOL CORP: Securities Fraud Litigation in N.Y. Without Merit ---------------------------------------------------------------- Xethanol Corp. says that a lawsuit filed against it in the U.S. District Court for the Southern District of New York is without merit. Earlier, Kahn Gauthier Swick, LLC, filed a class action the U.S. District Court for the Southern District of New York, on behalf of shareholders who purchased, exchanged or otherwise acquired the common stock of Xethanol Corp. between Jan. 31, 2006 and Aug. 8, 2006 (Class Action Reporter, Oct. 25, 2006). The a biotechnology driven ethanol company and certain of its officers and directors are charged with issuing a series of materially false and misleading statements in violation of Section 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder. The complaint alleges that Xethanol: -- misrepresented management's experience and standard of ethics; -- omitted disclosing a series of related party transactions and association with investors who had alarming records of stock fraud and related shareholder abuses; -- materially overstated the company's profitability by under-reporting the true costs associated with completing a biomass to ethanol production facility, and by failing to make proper adjustments to the company's financial reports; -- lacked any reasonable basis to assert that the company was operating according to plan or could achieve the near-term commercialization of biomass ethanol production, or achieve the guidance sponsored and/or endorsed by the company; and -- caused plaintiffs and other Class members to purchase Xethanol common stock at artificially inflated prices. According to Louis Bernstein, Xethanol Corp.'s President and interim CEO, not only are the allegations and insinuations baseless, but also the case apparently has no lead plaintiff. The allegations contained in the law firm's press release are very similar in nature to those made in August of this year by an on-line web newsletter whose owner admitted to having shorted the shares of Xethanol in advance of the publication of its negative article about the company. Xethanol Corp. has already responded to those allegations and demonstrated that they are without foundation. "Xethanol remains focused on our business priorities and executing our strategy as we grow and move forward with plant construction in Iowa and other locations as opportunities arise, as well as our collaborative research and development programs in cellulosic ethanol," said Mr. Bernstein. Plaintiffs' counsel is Kahn Gauthier Swick, LLC, Phone: 1-866- 467-1400, ext., 100, or 504-648-1850, E-mail: lewis.kahn@kglg.com. XM SATELLITE: Consolidated Complaint in D.C. Stock Suit Filed ------------------------------------------------------------- Lead plaintiffs in the consolidated securities fraud class action pending against XM Satellite Radio Holdings, Inc. in the U.S. District Court for the District of Columbia filed their consolidated class action complaint on Sept. 26. On May 8, 2006 an investor sued XM Satellite seeking damages for violations of federal securities laws on behalf of all investors who acquired XM securities from July 28, 2005 through and including Feb. 15, 2006. The lawsuit claims that XM and Hugh Panero, its president and chief executive officer, violated Sections 10(b) and 20(a) of the U.S. Securities Exchange Act of 1934, Sections 78j(b) and 78t of the U.S. Commerce and Trade Code, and U.S. Securities and Exchange Commission Rule 10b-5, 17 Code of Federal Regulations Section 240.10b-5, promulgated thereunder. According to the complaint, Washington-based XM and Mr. Panero violated the federal securities laws by issuing materially false and misleading statements during the class period that artificially inflated the company's stock price. Specifically, the complaint says defendants led the market to believe that XM would grow its subscriber base to 6 million by year-end 2005, while lowering two of its "key metrics:" Subscriber Acquisition Costs and Cost Per Gross Addition. In reality, however, the company was allegedly well aware that costs, especially SAC and CPGA, would skyrocket in the fourth quarter of 2005 due to a $25 million promotional campaign to combat the debut of the popular "Howard Stern Show" on Sirius Satellite Radio, XM's chief competitor. On Feb. 16, 2006, the company announced a net loss of $268.3 million for the fourth quarter of 2005, compared with $188.2 million a year earlier. For the full 2005 year, XM's net loss was $666.7 million, compared to $642.4 million in 2004. In addition, the company announced that both SAC and CPGA were much higher than the market had been led to believe. The market reacted swiftly to those revelations, sending the price of XM's common stock down 5.03%, from a close of $25.25 per share on Feb. 15, 2006, to $23.98 per share the next day. The company's stock price fell a further 10.05% to $21.57 per share at the close of trading Feb. 17, 2006, the complaint says. According to the complaint, Mr. Panero and other insiders engaged in highly suspicious stock sales during the class period, with Mr. Panero selling approximately 413,334 shares, or 98.71% of his personally held XM stock, for approximately $8,841,161. Collectively, company insiders sold approximately 2,769,516 of personally held XM stock during the fourth quarter of 2005, reaping proceeds of approximately $73,325,009. On June 7, 2006, Judge Ellen Huvelle signed a Consolidation Order, consolidating all related cases into one class action as "In re XM Satellite Radio Holdings Securities Litigation, C.A. No. 06-0802." On July 3, 2006, competing motions for the appointment of lead plaintiff and lead counsel were filed with the court. On Aug. 1, 2006, Judge Huvelle issued a Memorandum Opinion and Order appointing lead plaintiffs and lead counsel. On Sept. 26, 2006, lead plaintiffs filed their consolidated class action complaint. Defendants have until Nov. 14, 2006 to file their response to this complaint. On Aug. 31, 2006, the company said it received a letter from the staff of the SEC requesting that the company voluntarily provide documents to the Staff regarding the company's subscriber targets, costs associated with attempting to reach those targets, and related matters during the third and fourth quarters of 2005. Representing the plaintiffs are: (1) Kimberly Anne Chadwick of Doherty, Sheridan & Persian, 8408 Arlington Boulevard, Fairfax, VA 22031, Phone: (703) 698-7700, Fax: (703) 641-9645, E-mail: kchadwick@dsp-law.com; (2) Donald J. Enright and Karen Jennifer Marcus both of Finkelstein Thompson & Loughran, 1050 30th Street, NW Washington, DC 20007, Phone: (202) 337-8000, Fax: (202) 337-8090, E-mail: dje@ftllaw.com or kjm@ftllaw.com; (3) Burton John Fishman of Fortney & Scott, 1750 K Street, NW, Suite 325, Washington, DC 20006, Phone: (202) 689- 1200, Fax: (202) 776-7801, E-mail: fishman@fortneyscott.com; (4) Nancy M. Juda of Lerach Coughlin Stoia Geller Rudman & Robbins LLP, 1100 Connecticut Avenue, NW, Suite 730, Washington, DC 20036, Phone: (202) 822-2024, E-mail: nancyj@lerachlaw.com; (5) Gary Edward Mason of The Mason Law Firm, 1225 19th Street, NW, Suite 500, Washington, DC 20036, Phone: (202) 429-2290, Fax: (202) 429-2294, E-mail: gmason@masonlawdc.com; (6) Arthur L. Shingler, III of Scott & Scott LLC, 600 B Street, Suite 1500, San Diego, CA 92101, Phone: (619) 233-4565, Fax: (619) 233-0508, E-mail: ashingler@scott-scott.com; and (7) Daniel S. Sommers and Steven J. Toll both of Cohen Milstein Hausfeld & Toll, PLLC, 1100 New York Avenue, NW, West Tower, Suite 500, Washington, DC 20005, Phone: (202) 408-4600, Fax: (202) 408-4699, E-mail: dsommers@cmht.com or stoll@cmht.com. Representing the defendants are Charles Edward Davidow and Michael A Mugmon both of Wilmer Cutler Pickering Hale & Dorr LLP, 1875 Pennsylvania Avenue, NW, Washington, DC 20006, Phone: (202) 663-6241 or (202) 663-6101, Fax: (202) 663-6363, E-mail: charles.davidow@wilmerhale.com or michael.mugmon@wilmerhale.com; and Christopher J. Herrling of Wilmer Cutler Pickering Hale & Dorr LLP, 2445 M Street NW, Washington, DC 20037-1420, (202) 663-6000, Fax: (202) 663-6363, E-mail: CHERRLING@WILMER.COM. YUKOS OIL: N.Y. Court Dismisses Securities Fraud Litigation ----------------------------------------------------------- Judge William H. Pauley, III, of the U.S. District Court for the Southern District of New York dismissed the purported class action, "In Re Yukos Oil Company Securities Litigation," The Associated Press reports The suit alleged that the Russian company concealed from the investing public the potential risk from its tax strategies and from the political activities of its top executive. Named defendants in the suit: -- Yukos Oil Company, -- Yukos Universal Limited, -- Group Menatep Limited, -- Scott A. Ziegler, -- Mikhail Khodorkovsky, -- Platon Lebedev, and -- Bruce Misamore. The suit claimed that Yukos employed an illegal tax-evasion scheme since 2000 and that the political activity of Yukos President Mikhail Khodorkovsky, exposed the company to retribution from the Russian government. The securities-fraud complaint had sought class-action status for purchasers of Yukos securities between Jan. 22, 2003, and Oct. 25, 2003. In March, the judge allowed the claims over its tax strategies to proceed, but dismissed the other allegations. According to the report, in 2003, the Russian government arrested Mr. Khodorkovsky and seized his 44 percent equity stake in the company, charging him with fraud, embezzlement and evasion of personal income taxes. He is serving an eight-year sentence in a prison camp. The Russian Ministry of Taxation also concluded the company had used an illegal tax-evasion scheme between 2001 and 2003, underpaying its taxes by more than $27.5 billion. The Russian government eventually confiscated Yukos' main production facility and billions of dollars in its bank accounts. The suit is "In Re Yukos Oil Company Securities Litigation, Case No. 1:04-cv-05243-WHP," filed in the U.S. District Court for the Southern District of New York under Judge William H. Pauley, III. Representing plaintiffs are: (1) Eric James Belfi of Labaton Rudoff & Sucharow LLP, 100 Park Avenue, 12th Floor, New York, NY 10017, Phone: (212) 907-0790, Fax: (212) 883-7579, E-mail: ebelfi@labaton.com; (2) Thomas James Kennedy and Brian Philip Murray both of Murray, Frank & Sailer, LLP, 275 Madison Avenue, Ste. 801, New York, NY 10016, Phone: (212)-682-1818, Fax: (212)-682-1892, E-mail: tkennedy@murrayfrank.com or bmurray@murrayfrank.com; and (3) David Avi Rosenfeld, Robert M. Rothman and Samuel Howard Rudman all of Lerach, Coughlin, Stoia, Geller, Rudman & Robbins, LLP, 58 South Service Road, Suite 200, Melville, NY 11747, Phone: 631-367-7100, Fax: 631- 367-1173, E-mail: drosenfeld@lerachlaw.com or rrothman@lerachlaw.com or srudman@lerachlaw.com. Representing defendants are: (i) Robert Allen Horowitz of Greenberg Traurig, LLP (NYC), 200 Park Avenue, New York, NY 10166, Phone: 212-801- 2194, Fax: 212-224-6114, E-mail: horowitzr@gtlaw.com; and (ii) Jeffrey S. Jacobson of Debevoise & Plimpton, LLP (NYC), 919 Third Avenue, New York, NY 10022, Phone: 212-909- 6479, Fax: 212-909-6836, E-mail: jsjacobs@debevoise.com. Asbestos Alert ASBESTOS LITIGATION: Royal Philips Increases Accrual to EUR398M ---------------------------------------------------------------- A subsidiary of Koninklijke Philips Electronics N.V., which does business as Royal Philips Electronics N.V., increased to EUR398 million its asbestos-related accrual for loss contingencies asserted through 2016. The subsidiary was unnamed in the Company's latest Quarterly Report filed on Form 10-Q with the U.S. Securities and Exchange Commission. The EUR398 million represents the undiscounted estimate of indemnity costs at Sept. 30, 2006. This resulted in a pre-tax charge to earnings of EUR331 million at the end of the 2006-3rd quarter. In the 2006-3rd quarter, the amount of related insurance recoveries recognized in pre-tax earnings totaled EUR66 million, reflecting agreements in place with insurance carriers. Judicial proceedings have been filed in the United States relating to the subsidiary's activities prior to 1981, involving allegations of personal injury from alleged asbestos exposure. Historically, the subsidiary has established an accrual for loss contingencies with respect to asserted claims for asbestos product liability. In the 2006-3rd quarter, a third-party expert provided the Company with a projection of the subsidiary's liability for pending and unasserted potential future asbestos-related claims, and provided the projection through 2016. Based in Amsterdam, The Netherlands, Royal Philips Electronics N.V. makes consumer electronics, which accounts for about a third of its sales. It also makes light bulbs, electric shavers and other personal care appliances, picture tubes, semiconductors, and medical systems. ASBESTOS LITIGATION: Court Favors Webers in Suit v. John Crane ---------------------------------------------------------------- The California Court of Appeal, First District, reversed the judgment of an asbestos-related lawsuit in favor of Joseph and Sheila M. Weber against John Crane Inc. The Panel, comprised of Presiding Judge Marchiano, Judges Swager and Stein, handed down the decision of Case No. A111421 on Oct. 18, 2006. On Sept. 29, 2004, the Webers sued manufacturers, suppliers and contractors, alleging that Mr. Weber developed mesothelioma from asbestos exposure while working as a machinist, equipment operator, and laborer for many employers at different sites. The Webers named John Crane a defendant. The Webers alleged that Mr. Weber had been exposed to asbestos-containing products made, sold or supplied by John Crane from 1960 to 1964, when he worked on or around naval vessels. Mr. Weber died on May 10, 2006. Mrs. Weber has been appointed his successor-in-interest. On Jan. 6, 2005, John Crane moved for summary judgment, asserting there was no triable issue of fact. John Crane contended Mr. Weber's testimony showed that the Webers could not establish that John Crane was a cause of Mr. Weber's mesothelioma. The Superior Court of San Francisco County granted John Crane's motion for summary judgment, pointing out that Mrs. Weber could move for reconsideration if she had new deposition testimony linking John Crane to Mr. Weber's injuries. Mrs. Weber's subsequent motion for reconsideration was denied. The Appeals Court ruled that the evidence did not meet John Crane's initial burden showing that Mr. Weber did not possess evidence that John Crane was a cause of Mr. Weber's injuries. The Appeals Court reversed the Trial Court's judgment. Philip A. Harley and Deborah R. Rosenthal, of Paul, Hanley & Harley LLP, represented Sheila M. Weber. Philip S. Ward, Robert L. Nelder, and Richard G. Katerndahl, of Hassard Bonnington LLP, represented John Crane Inc. ASBESTOS LITIGATION: Two Men Sue 129 Defendants in W.Va. Court ---------------------------------------------------------------- Neil Reddington and Lowell Kitzmiller, on Oct. 10, 2006, filed separate asbestos-related lawsuits in Kanawha Circuit Court in West Virginia, The West Virginia Record reports. Mr. Reddington alleged that asbestos exposure, while working in West Virginia, was to blame for his lung disease. Mr. Reddington's suit names 15 defendants, of whom two are state corporations, Vimasco of Nitro and Wheeling Rubber Products. The suit said that Mr. Reddington worked as a bricklayer from 1963 to 1979 in the state, specifically the Virginia Electric Power Plant in Mt. Storm, W.Va. and the Hatfield Power Plant in Masontown, W.Va. The suit added that he worked in St. Mary's, Moundsville, Huntington, Charleston, Institute, and Wheeling. The four-count complaint seeks compensatory damages. Craig Coleman of Pittsburgh, Pa. firm Caroselli, Beachler, McTiernan, and Conboy represent Mr. Reddington. In the second suit, 60-year-old Mr. Kitzmiller said he contracted mesothelioma and asbestosis from years of asbestos exposure. He said he worked as an insulator at various jobsites, including the Mt. Storm Power Station. Mr. Kitzmiller's suit lists 114 defendants. His wife, Karen, seeks compensation for loss of consortium. The Kitzmillers seek punitive damages. Huntington, W.Va.-based attorney Timothy Eves represents Mr. & Mrs. Kitzmiller. Kanawha Circuit Court Case Nos. 06-C-2089 and 06-C-2092 have been assigned to a visiting judge. ASBESTOS LITIGATION: Cytec Records $2.2M Charge for Liabilities ---------------------------------------------------------------- Cytec Industries Inc. recorded a US$2.2 million pre-tax charge, US$1.6 million after-tax or US$0.03 per diluted share, related to the completion of an update of its asbestos contingent liability, according to a Company press release dated Oct. 19, 2006 filed with the U.S. Securities and Exchange Commission. James P. Cronin, Executive and Chief Financial Officer said, "While claims against us have dropped significantly since our last detailed review in 2003, our average settlement values have increased which, when forecasted forward to estimate the ultimate liability, necessitated an increase in our reserve of approximately US$9 million. "Partially offsetting the increase was a corresponding increase in our receivable for insurance recoveries of approximately $6.7 million reflecting an overall improved insurance position as well as reflecting the applicable insurance receivables on the increase in the reserve. "As of Sept. 30, 2006 our total asbestos related contingent liabilities and related insurance receivables were US$54.6 million and US$29.5 million, respectively." The Company's net earnings for the 2006-3rd quarter were US$25 million, or US$0.51 per diluted share on net sales of US$863 million. Headquartered in West Paterson, N.J., Cytec Industries Inc. produces building-block chemicals from which it makes engineered materials, specialty chemicals, and additives used in treating water and in industrial processes. ASBESTOS LITIGATION: Travelers Sues Honeywell Over NARCO Claims ---------------------------------------------------------------- Travelers Casualty and Insurance Co., in the 2006-2nd quarter, sued Honeywell International Inc. and other insurance carriers, disputing obligations for North American Refractory Co.-related asbestos claims under high excess insurance coverage issued by Travelers and other insurance carriers. About US$370 million of coverage under these policies is included in the Company's NARCO-related insurance receivable at Sept. 30, 2006. The suit was filed in the Supreme Court of New York, County of New York. The Company said it believed it is entitled to the coverage at issue and has filed counterclaims in the Superior Court of New Jersey seeking declaratory relief with respect to this coverage. Headquartered in Morristown, N.J., Honeywell International Inc.'s largest business segment, Honeywell Aerospace, makes products like turbofan and turboprop engines and flight safety and landing systems. The Company operates in three other segments: Automation and Control, Specialty Materials, and Transportation Systems. ASBESTOS LITIGATION: Honeywell Records $1.469B Liabilities at 3Q ---------------------------------------------------------------- Honeywell International Inc., as of Sept. 30, 2006, had US$1.469 asbestos-related liabilities, compared with US$1.549 billion as of Dec. 31, 2005, according to the Company's quarterly report for the period ended Sept. 30, 2006, filed with the U.S. Securities and Exchange Commission. As of June 30, 2006, the Company's asbestos-related liabilities were US$1.491 billion. (Class Action Reporter, July 28, 2006) The Company defends in asbestos-related personal injury actions. The Company did not mine or produce asbestos, nor did it make or sell insulation products or other construction materials that have been identified as the primary cause of asbestos related disease in most of the claimants. As of Sept. 30, 2006, the Company's insurance recoveries for asbestos-related liabilities was US$1.140 billion, compared with US$1.302 billion as of Dec. 31, 2005. As of June 30, 2006, the Company's insurance recoveries for asbestos related liabilities were US$1.139 billion. (Class Action Reporter, July 20, 2006) For the nine months ended Sept. 30, 2006, the Company recorded US$100 million in insurance receipts for asbestos-related liabilities. For the nine months ended Sept. 30, 2006, the Company recorded US$134 million asbestos-related liability payments, compared with US$110 million for the same period in 2005. The Company's asbestos-related litigation charges, net of insurance, for the three months ended Sept. 30, 2006, was US$33 million, compared with US$32 million for the same period in 2005. The Company's asbestos-related litigation charges, net of insurance, for the nine months ended Sept. 30, 2006, was US$110 million, compared with US$46 million for the same period in 2005. Headquartered in Morristown, N.J., Honeywell International Inc.'s largest business segment, Honeywell Aerospace, makes products like turbofan and turboprop engines and flight safety and landing systems. The Company operates in three other segments: Automation and Control, Specialty Materials, and Transportation Systems. ASBESTOS LITIGATION: Honeywell Has $33M Charge for Bendix Claims ---------------------------------------------------------------- Honeywell International Inc., in the 2006-3rd quarter, recognized a charge of US$33 million for its Bendix friction materials business, according to the Company's quarterly report, on Form 10-Q, for the period ended Sept. 30, 2006 filed with the U.S. Securities and Exchange Commission. Included in the US$33 million charge were defense costs incurred during the 2006-3rd quarter, net of probable insurance recoveries. In the 2006-2nd quarter, the Company recognized a charge of US$49 million, mainly for Bendix asbestos claims filed and defense costs incurred during the period, including an update of expected resolution values with respect to claims pending as of June 30, 2006, net of probable insurance recoveries. The asbestos related charge also included the net effect of the settlement of certain North American Refractory Co. related pending asbestos claims and a Bendix related insurance settlement. In the 2006-1st quarter, the Company recognized a charge of US$28 million for Bendix related asbestos claims filed and defense costs incurred during the period, net of probable insurance recoveries. Headquartered in Morristown, N.J., Honeywell International Inc.'s largest business segment, Honeywell Aerospace, makes products like turbofan and turboprop engines and flight safety and landing systems. The Company operates in three other segments: Automation and Control, Specialty Materials, and Transportation Systems. ASBESTOS LITIGATION: Honeywell Records $1.94B for 3Q Liabilities ---------------------------------------------------------------- Honeywell International Inc., for the nine months ended Sept. 30, 2006, recorded US$1.940 billion asbestos liabilities, of which US$313 million was related to the Company's Bendix friction materials business and US$1.627 billion was related to former unit North American Refractories Co. The Company owned NARCO from 1979 to 1986. NARCO produced refractory products like high-temperature bricks and cement that were sold to the steel industry in the East and Midwest. For the six months ended June 30, 2006, the Company had US$2.011 billion asbestos liabilities, of which US$302 million was for Bendix claims and US$1.702 billion was for NARCO claims. (Class Action Reporter, July 28, 2006) For the nine months ended Sept. 30, 2006, the Company recorded US$1.272 billion insurance recoveries for asbestos liabilities. Of the US$1.272 billion, US$274 million was for Bendix claims and US$998 million was for NARCO claims. For the six months ended June 30, 2006, the Company's insurance recoveries for asbestos liabilities was US$1.293 billion. Of the US$1.293 billion, US$273 million was for Bendix claims and US$1.020 billion was for NARCO claims. (Class Action Reporter, July 28, 2006) Headquartered in Morristown, N.J., Honeywell International Inc.'s largest business segment, Honeywell Aerospace, makes products like turbofan and turboprop engines and flight safety and landing systems. The Company operates in three other segments: Automation and Control, Specialty Materials, and Transportation Systems. ASBESTOS LITIGATION: Honeywell Estimates $1.6B for NARCO Claims ---------------------------------------------------------------- Honeywell International Inc., as of Sept. 30, 2006, estimated US$1.6 billion as settlement liability on pending and future North American Refractory Co. asbestos claims, compared with US$1.8 billion as of Dec. 31, 2005. The Company owned NARCO from 1979 to 1986. NARCO produced refractory products like high temperature bricks and cement that were sold to the steel industry in the East and Midwest. Less than two percent of NARCO'S products had asbestos. As of June 30, 2006, the Company estimated its settlement liability of pending and future NARCO asbestos claims to be US$1.7 billion. (Class Action Reporter, July 28, 2006) When the Company sold NARCO in 1986, it agreed to indemnify NARCO with respect to personal injury claims for products that had been discontinued prior to the sale. On Jan. 4, 2002, NARCO filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. As a result of the NARCO filing, all of the claims pending against NARCO are automatically stayed pending NARCO's reorganization. Moreover, the bankruptcy court enjoined both the filing and prosecution of NARCO-related asbestos claims against Honeywell. The US$1.6 billion estimated liability for current claims is based on terms and conditions, including evidentiary requirements, in definitive agreements with about 260,000 current claimants, and an estimate of the unsettled claims pending as of the time NARCO filed for bankruptcy. Substantially all settlement payments with respect to current claims are expected to be completed by the end of 2007. About US$90 million of payments due under these settlements are due only upon establishment of the NARCO trust. As of Sept. 30, 2006, the Company recorded a US$998 million insurance receivable corresponding to the liability for settlement of pending and future NARCO-related asbestos claims, compared with US$1.1 billion as of Dec. 31, 2005. Headquartered in Morristown, N.J., Honeywell International Inc.'s largest business segment, Honeywell Aerospace, makes products like turbofan and turboprop engines and flight safety and landing systems. The Company operates in three other segments: Automation and Control, Specialty Materials, and Transportation Systems. ASBESTOS LITIGATION: Honeywell Notes 60,253 Bendix Claims in 3Q ---------------------------------------------------------------- Honeywell International Inc., for the nine months ended Sept. 30, 2006, recorded 60,253 unresolved asbestos-related claims for its Bendix friction products business, compared with 79,502 claims for the year ended Dec. 31, 2005. For the nine months ended Sept. 30, 2006, the Company recorded 3,366 Bendix claims filed and 22,615 Bendix claims resolved. For the year ended Dec. 31, 2005, the Company recorded 7,520 Bendix claims filed and 4,366 Bendix claims resolved. For the six months ended June 30, 2006, Bendix had 72,174 asbestos-related claims. (Class Action Reporter, July 28, 2006) Bendix made automotive brake pads that had chrysotile asbestos in an encapsulated form. From 1981 through Sept. 30, 2006, the Company has resolved about 100,000 Bendix asbestos claims including trials covering 122 plaintiffs, which resulted in 116 favorable verdicts. Trials covering six individuals resulted in adverse verdicts. However, two of these verdicts were reversed on appeal, a third is on appeal, and the remaining three claims were settled. About 45 percent of about 60,000 pending claims at Sept. 30, 2006 are on the inactive, deferred, or similar dockets established in some jurisdictions for claimants who allege minimal or no impairment. The average of 60,000 pending claims also includes claims filed in jurisdictions like Texas, Virginia, and Mississippi that historically allowed for consolidated filings. In the nine months ended Sept. 30, 2006, about 16,000 cases were dismissed. More than 85 percent of these dismissals occurred in Mississippi as a result of judicial rulings relating to non- resident filings and venue. The Company currently has about US$1.9 billion of insurance coverage remaining with respect to pending and potential future Bendix asbestos claims, of which US$274 million, at Sept. 30, 2006, and US$377 million, at Dec. 31, 2005, are reflected as receivables in the Company's consolidated balance sheet. The Company has recorded insurance receivables equal to about 50 percent of the value of the underlying asbestos claims recorded. The Company estimates that the cumulative recoverability rate could decline over the next five years to about 40 percent. Headquartered in Morristown, N.J., Honeywell International Inc.'s largest business segment, Honeywell Aerospace, makes products like turbofan and turboprop engines and flight safety and landing systems. The Company operates in three other segments: Automation and Control, Specialty Materials, and Transportation Systems. ASBESTOS LITIGATION: PPG's Claims Settlement Reaches $561M in 3Q ---------------------------------------------------------------- PPG Industries Inc.'s current settlement for asbestos-related claims, as of Sept. 30, 2006, was US$561 million, compared with US$472 million as of Dec. 31, 2005, according to a Company press release, dated Oct. 19, 2006, filed with the U.S. Securities and Exchange Commission. As of June 30, 2006, the Company's current settlement for asbestos-related claims was US$560 million. (Class Action Reporter, July 28, 2006) As of Sept. 30, 2006, the Company's long-term asbestos-related settlement was US$327 million, compared with US$385 million as of Dec. 31, 2005. As of June 30, 2006, the Company's non-current settlement for asbestos claims was US$321 million. (Class Action Reporter, July 28, 2006) For the three months ended Sept. 30, 2006, the Company recorded net asbestos settlement of US$6 million, compared with US$4 million for the same period in 2005. For the nine months ended Sept. 30, 2006, the Company recorded net asbestos settlement of US$23 million, compared with US$16 million for the same period in 2005. Headquartered in Pittsburgh, Pa., PPG Industries Inc. makes coatings and sealants. The Company also makes glass and chemicals. PPG operates nearly 110 manufacturing facilities in more than 20 countries worldwide. It also operates more than 350 paint retail centers in the United States. ASBESTOS LITIGATION: PPG Industries Has $90M Net Income in 3Q06 ---------------------------------------------------------------- PPG Industries Inc., for the 2006-3rd quarter, reported a net income of US$90 million, or US$0.54 a share. The Company also reported record sales of US$2.8 billion, surpassing 2005-3rd quarter record sales by 10 percent, according to a Company press release, dated Oct. 19, 2006, submitted to the U.S. Securities and Exchange Commission. Net income included after-tax charges of US$4 million, or US$0.02 a share, to reflect the net increase in the current value of the Company's obligation under its asbestos settlement agreement first reported in May 2002. Net income for the 2006-3rd quarter compared with 2005-3rd quarter net income of US$157 million, or US$0.92 cents a share, which included after-tax charges of US$3 million, or US$0.02 a share, to reflect the net increase in the current value of the Company's obligation under its asbestos settlement agreement. For the first nine months of 2006, the Company recorded net income of US$554 million, or US$3.33 a share, which included after-tax charges of US$14 million, or US$0.08 a share, to reflect the net increase in the current value of the Company's obligation under the asbestos settlement agreement. For the first nine months of 2005, the Company recorded net income of US$483 million, or US$2.81 a share, which included after-tax charges of US$10 million, or US$0.06 a share, to reflect the net increase in the current value of the Company's obligation under the asbestos settlement agreement. Headquartered in Pittsburgh, Pa., PPG Industries Inc. makes coatings and sealants. The Company also makes glass and chemicals. PPG operates nearly 110 manufacturing facilities in more than 20 countries worldwide. It also operates more than 350 paint retail centers in the United States. ASBESTOS LITIGATION: Revised UK Rules to be Enforced on Nov. 13 ---------------------------------------------------------------- The Control of Asbestos Regulations 2006, which was laid in the United Kingdom's Parliament, would be enforced on Nov. 13, 2006, according to a Health & Safety Executive press release dated Oct. 20, 2006. The revised regulations would strengthen overall worker protection by reducing exposure limits and introducing mandatory training for work with asbestos. The regulations would also simplify the regulatory regime and implement revisions to the European Union Asbestos Worker Protection Directive. Minister for health and safety, Lord Hunt of Kings Heath said, "These new provisions will help prevent around 6,500 occupational deaths from exposures to asbestos over the next 50 years." The revised regulations would introduce the following changes: -- Single control limit of 0.1 fibers per cu. cm. of air for work with all types of asbestos; -- Specific mandatory training requirements for anyone liable to be exposed to asbestos; -- Requirement to analyze the concentration of asbestos in the air with measurements in accordance with the 1997 World Health Organization recommended method; -- Practical guidelines for the determination of "sporadic and low intensity exposure" as required by the E.U. Directive; and -- Replace three existing sets of Asbestos Regulations. Most work with asbestos will still need to be undertaken by a licensed contractor but any decision on whether particular work is licensable will now be determined by the risk. More details of what work is licensable, what training is necessary and how to undertake work with asbestos containing materials can be found in the Approved Code of Practice "Work with materials containing Asbestos." The full text of the Control of Asbestos Regulations 2006, SI 2006/2739, can be viewed at http://www.opsi.gov.uk/si/si200627.htm ASBESTOS LITIGATION: Okla. Man Sues 30 Defendants in Ill. Court ---------------------------------------------------------------- Randy Stone's estate, represented by his son Harold Stone, sued 30 defendant corporations in an asbestos-related lawsuit filed in Madison County Circuit Court, Ill. on Oct. 20, 2006, The Madison St. Clair Record reports. The younger Mr. Stone seeks at least US$250,000 in damages for negligence, willful and wanton acts, conspiracy, and negligent spoliation of evidence among other allegations. The suit claimed the elder Mr. Stone was exposed to asbestos while employed as a laborer, pipe-maker, machinist, and quality control manager from 1950 to 2005. According to the complaint, the elder Mr. Stone died on Jan. 4, 2005, from mesothelioma. He was diagnosed five days earlier. In the suit, the elder Mr. Stone was an Oklahoma resident. He worked in Illinois at a point in his career, but the suit does not specify when or where. The suit claimed the elder Mr. Stone's exposure to asbestos was completely foreseeable and could or should have been anticipated by the defendants. The suit also claimed the defendants did not exercise ordinary care and caution for the elder Mr. Stone's safety by including asbestos in their products even though it was completely foreseeable that people working with and around asbestos would inhale, ingest or otherwise absorb the substance. The younger Mr. Stone claimed the defendants included asbestos in their products when they knew asbestos would have a harmful effect on the health of people absorbing them. The defendants included asbestos in their products when substitutes were available. The suit also alleged that the defendants failed to warn people working with or around asbestos and failed to conduct tests on asbestos products in order to determine the hazards to workers. The younger Mr. Stone claimed his father was obligated to spend money on medical expenses and experienced great physical pain and mental anguish, which prevented him from pursuing his normal course of employment. Nicholas Angelides, John Barnerd, and Perry Browder of SimmonsCooper in East Alton, Ill. represent the estate of Mr. Stone. Circuit Judge Daniel Stack has been assigned the case. ASBESTOS LITIGATION: Mass. Bay Authority to Pay $230T for Breach ---------------------------------------------------------------- The Suffolk Superior Court in Massachusetts ordered the Massachusetts Bay Transportation Authority to pay at least US$230,000 for failing to clean asbestos and other hazardous materials from the former South Boston Power Plant, the Associated Press reports. A ruling in favor of the Massachusetts Department of Environmental Protection calls for the MBTA to pay US$130,000 to the South Boston Community Health Center's Asthma Program. DEP acting commissioner Arleen O'Donnell said, "Mass DEP wanted to ensure that the South Boston community would receive a direct environmental benefit from this agreement." MBTA would also have to pay the state a US$100,000 penalty, which will increase to US$326,000 if it fails to stick to a newly established clean up schedule. The DEP said that, in 1997, conditions at the former site of the South Boston Power Plant were brought to its attention. Officials found oil, asbestos and other hazardous materials being released into the environment. According to the DEP, the MBTA failed to notify it about the conditions and did not properly clean or restrict access to the area. By 2004, the asbestos had been safely removed from the site and the MBTA was allowed to begin demolition of the buildings. MBTA is currently cleaning groundwater and soil on the property. The MBTA was also ordered to submit a final outcome report to the state by 2008. ASBESTOS LITIGATION: BNSF Railway Claims Decrease to 2,138 in 3Q ---------------------------------------------------------------- Burlington Northern Santa Fe Corp., at Sept. 30, 2006, recorded 2,138 asbestos-related claims filed against subsidiary BNSF Railway Co., compared with 2,204 claims at Sept. 30, 2005. At June 30, 2006, the Company recorded 2,153 asbestos-related claims filed against BNSF Railway. (Class Action Reporter, July 28, 2006) For the three months ended Sept. 30, 2006, the Company noted 88 claims filed and 103 claims settled, dismissed, or resolved. For the same period in 2005, the Company noted 234 claims filed and 150 claims settled, dismissed, or resolved. For the nine months ended Sept. 30, 2006, the Company noted 449 claims filed and 432 claims settled, dismissed, or resolved. For the same period in 2005, the Company noted 719 claims filed and 441 claims settled, dismissed, or resolved. The Company faces personal injury claims filed by employees and non-employees who may have been exposed to asbestos. The heaviest exposure for BNSF Railway employees was due to work conducted in and around the use of steam locomotive engines that were phased out between 1950 and 1967. However, other types of exposures, including exposure from locomotive component parts and building materials, continued after 1967, until they were eliminated by 1985. For the three and nine months ended Sept. 30, 2006, the Company's accrued obligations for asserted and unasserted asbestos matters were US$314 million, compared with US$332 million for the three and nine months ended Sept. 30, 2005. Of the Sept. 30, 2006 obligation, US$255 million was related to unasserted claims while US$59 million was related to asserted claims. At Sept. 30, 2006, US$21 million was included in current liabilities. It is expected that unasserted claims will continue to be filed through the year 2050. BNSF Railway projects that about 50 percent of the future unasserted asbestos claims will be incurred within the next 10 years, 70 percent within the next 15 years, and 90 percent within the next 25 years. Headquartered in Fort Worth, Tex., Burlington Northern Santa Fe Corp., through its main subsidiary, BNSF Railway Co., operates as a railroad and running through tracks through 28 states in the West, Midwest, and Sunbelt regions of the U.S. and in two Canadian provinces. ASBESTOS LITIGATION: ENSCO Has Multi-Party Suits in Miss. Courts ---------------------------------------------------------------- ENSCO International Inc. and certain subsidiaries were named as defendants in three multi-party lawsuits filed in various Mississippi courts, involving other companies as co-defendants. The suits were filed in the Circuit Courts of Jones County, Second Judicial District, and Jasper County, First Judicial District, in Mississippi. Filed on August 2004, the suits seek an unspecified amount of monetary damages on behalf of individuals alleging personal injury or death, including claims under the Jones Act, resulting from exposure to asbestos on drilling rigs and associated facilities during 1965 through 1986. The suits are still at a very preliminary stage. Following the recent lapse of a period of time granted by the Special Master appointed to oversee the litigation, all plaintiffs were required to prepare and submit "Fact Sheets" to facilitate the determination of issues or facts like: -- Whether the plaintiffs have a proper cause of action, -- Which defendants are the focus of a certain plaintiff's claim, -- By whom a plaintiff may have been employed and the period(s) of employment, -- Where a plaintiff resides and whether the Mississippi courts have jurisdiction over their alleged claim, and -- Venue, assuming the Mississippi courts have jurisdiction. Headquartered in Dallas, Tex., ENSCO International Inc. operates as a drilling contractor. The Company does most of its domestic drilling business in the Gulf of Mexico, but also operates in the North Sea, offshore West Africa, Indonesia, Trinidad, and in the Asia-Pacific region. ASBESTOS LITIGATION: WR Grace Liability Remains at $1.7B in 3Q06 ---------------------------------------------------------------- W.R. Grace & Co.'s long-term asbestos-related liability, for the quarter ended Sept. 30, 2006, remained at US$1.7 billion; the same as for the quarter ended Dec. 31, 2005, according to a Company press release dated Oct. 24, 2006. For the quarter ended June 30, 2006, the Company's long-term asbestos-related liability was US$1.7 billion. (Class Action Reporter, Aug. 4, 2006) For the quarters ended Sept. 30, 2006 and Dec. 31, 2005, the Company recorded US$500 million asbestos-related insurance. For the quarter ended June 30, 2006, the Company's long-term asbestos-related insurance stood at US$500 million. (Class Action Reporter, Aug. 4, 2006) Headquartered in Columbia, Md., W.R. Grace & Co. has restructured from six product groups into two major units. Grace's Davison Chemicals unit makes silica-based products, chemical catalysts, and refining catalysts that help produce refined products from crude oil. Its Performance Chemicals unit makes concrete and cement additives, packaging sealants, and fireproofing chemicals. ASBESTOS LITIGATION: Hercules Records $9.5M Assets, Liabilities ---------------------------------------------------------------- Hercules Inc.'s net asbestos-related assets and liabilities, for the nine months ended Sept. 30, 2006, was US$9.5 million, compared with US$17.8 million for the nine months ended Sept. 30, 2005. For the six months ended June 30, 2006, the Company's net asbestos-related assets and liabilities was US$6.5 million. (Class Action Reporter, Aug. 4, 2006) Headquartered in Wilmington, Del., Hercules Inc.'s pulp and paper division supplies water-treatment and functional performance chemicals and services to the pulp and paper industry. Its Aqualon unit makes thickeners for water-based products such as latex paints, printing inks, and oral hygiene products. ASBESTOS LITIGATION: American Standard Has 111,014 Claims in 3Q ---------------------------------------------------------------- American Standard Companies Inc., as of Sept. 30, 2006, reported that it faced 111,014 open asbestos-related claims filed against it, compared with 120,880 open claims as of Dec. 31, 2005. As of June 30, 2006, the Company reported that it faced 114,669 open asbestos-related claims filed against it, compared with 128,197 claims as of Dec. 31, 2005. (Class Action Reporter, July 28, 2006) The Company has been named as a co-defendant in lawsuits alleging asbestos-related personal injury claims arising from its historical sales of boilers and railroad brake shoes. Many of these suits involve multiple claimants, do not specifically identify the injury or disease for which damages are sought and do not allege a connection between any Company product and a claimed injury or disease. As a result, many suits have been placed, and may remain on, inactive or deferred dockets, which some jurisdictions have established. As of Sept. 30, 2006, the Company recorded 3,380 new claims filed, 545 claims settled, and 12,701 claims dismissed. As of Dec. 31, 2005, the Company recorded 10,953 new claims filed, 945 claims settled, and 12,368 claims dismissed. At Sept. 30, 2006, the total asbestos liability was estimated at US$678.5 million, compared with US$686 million at Dec. 31, 2005. The asbestos indemnity liability decreased by US$7.5 million during the first nine months of 2006 due to claims payments made during the year. The asbestos indemnity liability decreased by US$13.4 million in 2005, from US$699.4 million as of Dec. 31, 2004 to US$686.0 million as of Dec. 31, 2005. From receipt of its first asbestos claim to Sept. 30, 2006, the Company has resolved 55,674 claims. The total amount of all settlements paid by the Company and by its insurance carriers is about US$71.9 million, for an average payment per resolved claim of US$1,292. The average payment per claim resolved during the nine months ended Sept. 30, 2006 was US$580, compared with US$924 during the year ended Dec. 31, 2005. The Company's long-term portion of asbestos liability, as of Sept. 30, 2006, was US$630.7 million, compared with US$631.6 million as of Dec. 31, 2005. The Company's long-term asbestos receivable, as of Sept. 30, 2006, was US$381.8 million, compared with US$384 million as of Dec. 31, 2005. For the nine months ended Sept. 30, 2006, the Company's net asbestos indemnity liability was US$5.3 million, compared with US$3.5 million for the nine months ended Sept. 30, 2005. Headquartered in Piscataway, N.J., American Standard Cos. Inc. makes air-conditioning systems, plumbing products, and automotive braking systems. Deriving over half of sales, the Company's air-conditioning division makes consumer and commercial systems under the Trane and American Standard brand names. ASBESTOS LITIGATION: Discovery on ASD Suit Extended to Sept. '07 ---------------------------------------------------------------- The Superior Court of New Jersey, Middlesex County, on Sept. 12, 2006, issued an order extending through Sept. 21, 2007 the discovery of an asbestos-related suit filed by American Standard Companies Inc. against various insurers. The Company is in litigation against certain carriers whose policies it believes provide coverage for asbestos claims. The insurance carriers named in this suit are challenging the Company's right to recovery. In April 1999, the Company sued several of its primary and lower layer excess insurance carriers, seeking coverage for environmental claims. The suit was later expanded to also seek coverage for asbestos-related liabilities from 21 primary and lower layer excess carriers and underwriting syndicates. On Sept. 19, 2005, the Court granted the Company's motion to add to the suit 16 more insurers and 117 new insurance policies. The Court also required the parties to submit all contested matters to mediation. The Company and the defendants in the suit have engaged in several mediation sessions since Jan. 18, 2006. With the addition of the parties and policies, the suit would resolve the coverage issues with respect to about 94 percent of the recorded receivable. The remaining six percent of the recorded receivable comes from policies as to which the Company has not sought resolution of coverage. Headquartered in Piscataway, N.J., American Standard Cos. Inc. makes air-conditioning systems, plumbing products, and automotive braking systems. Deriving over half of sales, the Company's air-conditioning division makes consumer and commercial systems under the Trane and American Standard brand names. ASBESTOS LITIGATION: American Standard Cites $387.8M Receivable ---------------------------------------------------------------- The asbestos receivable of American Standard Companies Inc., at Sept. 20, 2006, was US$387.8 million, compared with US$390 million at Dec. 31, 2005, according to the Company's quarterly report, on Form 10-Q, for the period ended Sept. 30, 2006 filed with the U.S. Securities and Exchange Commission. During the first nine months of 2006, the asbestos receivable decreased by US$2.2 million. Cash receipts from insurance companies have driven the decrease, offset by the recoverable portion of incurred legal expenses and refinements to settlements of US$8.4 million. In February 2005, the Company settled with Equitas Ltd. for US$84.5 million to buy out the participants of certain underwriters in pre-1993 Lloyd's, London policies included in the Company's insurance coverage. Through Sept. 30, 2006, US$17.1 million of this amount was received by the Company to cover asbestos and environmental costs, and US$67.4 million remains in a trust expiring Jan. 3, 2007. Headquartered in Piscataway, N.J., American Standard Cos. Inc. makes air-conditioning systems, plumbing products, and automotive braking systems. Deriving over half of sales, the Company's air-conditioning division makes consumer and commercial systems under the Trane and American Standard brand names. ASBESTOS LITIGATION: Crane Ordered to Pay $2.15M in Norris Suit ---------------------------------------------------------------- A California Court, on Oct. 10, 2006, ordered Crane Co. to pay US$2.15 million in an asbestos-related lawsuit filed by Joseph Norris, according to the Company's current report, on Form 8-K, filed with the U.S. Securities and Exchange Commission. With the US$2.15 million, the Court ordered the Company to pay interest thereon at the rate of 10 percent per annum until paid. A U.S. Navy veteran, Mr. Norris was exposed to asbestos while he served as a gunner's mate onboard the U.S.S. Bremerton in the mid-1950s. The Court handed down the ruling of the Norris case on Sept. 15, 2006. The Company said it does not believe that the evidence supported the verdict. Moreover, the Company said that procedural irregularities prevented an appropriate determination of the Company's alleged responsibility for plaintiffs' injuries. Based in Stamford, Conn., Crane Co. makes industrial products, including fluid handling equipment, aerospace components, engineered materials, merchandising systems, and controls. The Company serves the power generation, general aviation, commercial construction, food and beverage, and chemical industries. ASBESTOS LITIGATION: U.K. Widow to Claim GBP150T in Compensation ---------------------------------------------------------------- Edna Harrison, a 78-year widow of Brookfield, Preston in the U.K., is claiming up to GBP150,000 in damages after her husband John was exposed to asbestos at work, Lancashire Evening Post reports. Mrs. Harrison lost her 77-year old husband to mesothelioma, a lung disease caused by exposure to asbestos. Manchester, U.K.-based solicitors, Anthony Coombs, has filed a writ to the High Court on her behalf. The solicitors are claiming between GBP100,000 and GBP150,000 from Invensys International Holdings Ltd., formerly known as BTR Industries Ltd. ASBESTOS LITIGATION: Saint-Gobain Reports 2T New Claims in 3Q06 ---------------------------------------------------------------- Compagnie de Saint-Gobain said about 2,000 new asbestos-related claims were filed against the Company in the United States, sharewatch.com reports. The 2,000 claims brought the 2006 nine-month total to about 6,000, or about half the claims made during the same period in 2005. The average cost per claim over the last 12 months was US$2,800, and the number of outstanding claims was 86,000. Headquartered in Courbevoie, France, Compagnie de Saint-Gobain is a glass producer, which controls more than 1,000 companies in five sectors: Building Distribution, Construction products, Flat Glass, Packaging, and High-Production Materials. The Company makes 30 billion glass containers a year and provides insulation for 20 percent of U.S. homes. ASBESTOS LITIGATION: Berkshire Hathaway Takes on Equitas Claims ---------------------------------------------------------------- Berkshire Hathaway Inc. signed a landmark deal to accept up to US$7 billion of asbestos-related risks held by former investors in Lloyd's of London, baltimoresun.com reports. The Company took on potential claims that once threatened the London insurance market's existence. The Company will take over the operations of Equitas Ltd., an affiliate created by Lloyd's in 1996 to save the market and its investors from policies sold before 1992. Equitas has paid more than US$17 billion in asbestos claims to companies like General Motors Corp., Halliburton Co., and Honeywell International Inc. The deal may end more than a decade of concern that Equitas, which represents 34,000 private investors with personal liability at Lloyd's, would be unable to pay potential claims. From 1988 to 1992, insurers in the Lloyd's market lost GBP8 billion on a series of asbestos, natural disasters and pollution claims. Fitch Ratings said it may raise the financial strength rating on Lloyds from A, and Standard & Poor's changed its outlook on the rating to positive from stable as a result of the deal. Lloyd's will contribute about GBP90 million pounds, US$169 million, to limit asbestos liabilities for former private investors. Warren Buffet, Berkshire Hathaway's owner, has made other asbestos bets. In 2006, Berkshire boosted its stake in USG Corp., which emerged from bankruptcy in 2001 after being sued over asbestos-related illnesses. Headquartered in Omaha, Nebr., Berkshire Hathaway Inc. is 40 percent owned by Warren Buffett. The Company owns insurance firms like National Indemnity, GEICO Corp., and General Re. The Company also owns McLane Co., Dairy Queen, Clayton Homes, and MidAmerican Energy Holdings. In 2006, the Company acquired Business Wire, Applied Underwriters, Russell, and 80 percent of Iscar Metalworking. ASBESTOS LITIGATION: Lehmann Kin Wins Compensation Suit v. ACC ---------------------------------------------------------------- After three years, the family of the late Ross Lehmann has finally won its compensation battle against New Zealand's Accident Compensation Corp., Times Newspapers Online reports. A landmark Court of Appeal ruling has overturned a previous High Court decision which saw ACC order some families to give back compensation paid out to workers suffering the effects of asbestos exposure on the job. The Lehmanns were included in those ordered to give back compensation. In 2003, Mr. Lehmann died of asbestos-related cancer, 40 years after working as a fitter and welder in Penrose. A compensation appeal Mr. Lehmann made to ACC was accepted in early 2003, but he died days after being offered weekly compensation of NZD67.72 in November 2003. In August 2004, the Court awarded Mr. Lehmann's estate nearly NZD100,000 compensation. The award was later appealed by ACC on the grounds of establishing the legality of lump sum payouts. The High Court ruled in favor of ACC's appeal, leaving Mr. Lehmann's wife and son John in limbo as ACC investigated if the payout should be returned. In May 2006, the Council of Trade Unions launched a campaign for fair compensation for victims of workplace asbestos exposure. New Securities Fraud Cases XETHANOL CORP: Federman & Sherwood Announces Stock Suit Filing -------------------------------------------------------------- Federman & Sherwood announced that on Oct. 23, 2006, a class action was filed in the U.S. District Court for the Southern District of New York against Xethanol Corp. (XNL). The complaint alleges violations of federal securities laws, Sections 10(b) and 20(a) of the U.S. Securities Exchange Act of 1934 and Rule 10b-5, including allegations of issuing a series of material misrepresentations to the market which had the effect of artificially inflating the market price. The class period is from Jan. 31, 2006 through Aug. 8, 2006. Interested parties may move the court no later than Dec. 26, 2006, to serve as a lead plaintiff for the class. For more details, contact William B. Federman of Federman & Sherwood, 10205 North Pennsylvania Avenue, Oklahoma City, OK 73120, E-mail to: wfederman@aol.com, Web site: http://www.federmanlaw.com. ********* A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the Class Action Reporter. Submissions via e-mail to carconf@beard.com are encouraged. Each Friday's edition of the CAR includes a section featuring news on asbestos-related litigation and profiles of target asbestos defendants that, according to independent researches, collectively face billions of dollars in asbestos-related liabilities. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Glenn Ruel Senorin, 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 * * *