/raid1/www/Hosts/bankrupt/CAR_Public/070320.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, March 20, 2007, Vol. 9, No. 56
Headlines
AIRLINES: Enters Mediation in Suit Over Fuel Surcharge Hikes
AMERICAN EXPRESS: Faces Amended Suit Over Blue Cash Card Rebates
AMERICAN EXPRESS: $75M Deal in Suit Over "Hidden" Fees Appealed
AMERICAN EXPRESS: Continues to Face N.Y., Calif. Antitrust Suits
AMERICAN EXPRESS: Court Denies Appeal of Certification in "Ross"
BIOVAIL CORP: Hearings Over Banc of America Documents Continue
BOSTON SCIENTIFIC: No Hearing Set for ERISA Litigation in Mass.
BOSTON SCIENTIFIC: Mass. Court Hears Motion to Dismiss Lawsuit
BOSTON SCIENTIFIC: Still Faces Lawsuit Over Guidant Acquisition
BROOKS COLLEGE: "Thurston" Plaintiffs Seek Leave to Amend Suit
CALIFORNIA: County Sued Over Policy on Medical Marijuana Use
CAMERON INTERNATIONAL: Settles Tex. Underground Pollution Suit
CAREER EDUCATION: Discovery Begins for "Nilsen" Case in Calif.
CAREER EDUCATION: No Trial Date for "Outten" Lawsuit in Calif.
CAREER EDUCATION: Seeks Dismissal of Ill. Securities Fraud Suit
CLAIRE'S BOUTIQUES: Recalls Necklaces with High Lead Content
CROWLEY MARITIME: Reaches Settlement in Del. Shareholders Suit
DELPHI CORP: Judge Rosen Grants Investors Access to Delphi Docs
E-COMMERCE EXCHANGE: Calif. Court Stays TCPA Violations Suit
E-COMMERCE EXCHANGE: Calif. Consumer Suit Conference Set May 10
FORD MOTOR: Seeks to Junk Classes in Suit Over "Flaky" Paint
GTC BIOTHERAPEUTICS: Stock Options Suit Deal Hearing Set April
GUIDANT CORP: Dismissal of Ind. ERISA Lawsuit Under Appeal
GUIDANT CORP: No Hearing Set for Ind. Securities Fraud Lawsuit
IKANOS COMMS: Faces Multiple Securities Fraud Lawsuits in N.Y.
INTERLOCK INDUSTRIES: Roofer Settles Consumer Suit for $1.2M
INTRALASE CORP: Settles N.Y. Litigation Over Unsolicited Faxes
KENDLE INTERNATIONAL: Faces Lawsuit Over Unpaid Federal Taxes
LEAPFROG ENTERPRISES: Seeks Dismissal of Calif. Securities Suit
LIFE CARE: 13 Calif. Nursing Homes Sued Over Elder Abuse, Fraud
MANNATECH INC: Plaintiffs Amend Consolidated Securities Lawsuit
MERCK & CO: Asks N.J. Supreme Court to Review "Sinclair" Ruling
MERCK & CO: La. Court Refuses to Certify Class in Vioxx MDL
MICROSOFT CORP: March Hearing Set for $224M Antitrust Agreement
NATIONAL MONEY: B.C. High Court Certifies Payday Loans Lawsuit
PILGRIM'S PRIDE: Clarke County Workers File FLSA Violations Suit
PILGRIM'S PRIDE: Workers File Ga. FLSA Suit Over Depressed Wages
RUBIO'S RESTAURANTS: Settles Calif. Labor Lawsuit for $7.5M
TOWER AUTOMOTIVE: Wants to Make Initial ERISA Settlement Payment
ULTRASOUND TECHNICAL: Md. Court Orders Discovery in "Sanders"
WINFIXER: Additional Defendant Named in Security Software Suit
* Experts Predict Slew of Lawsuits Against Subprime Borrowers
New Securities Fraud Cases
ACCREDITED HOME: Lerach Announces Securities Fraud Suit Filing
MONSTER WORLDWIDE: Schatz Nobel Announces Securities Suit Filing
NEW CENTURY: Shepherd, Finkelman Files Securities Fraud Lawsuit
RADIOSHACK CORP: Lerach Announces Securities Suit Filing in Tex.
WORLDSPACE INC: Glancy Binkow Files Securities Fraud Lawsuit
*********
AIRLINES: Enters Mediation in Suit Over Fuel Surcharge Hikes
------------------------------------------------------------
Lawyers for British Airways plc and Virgin Atlantic Airways
disclosed at a hearing before a judge in San Francisco that they
had entered "mediation" in a class action seeking compensation
to passengers for losses suffered over alleged price-fixing by
the companies, The Australian reports.
Authorities in Great Britain and the U.S. are investigating the
companies for possible collusion to raise fuel surcharge added
to ticket prices in May 2004.
No figure for the suggested compensation has been disclosed, but
the maximum level of the surcharge under dispute was GBP35 ($85)
for each flight, according to the report.
The negotiation could benefit passengers who have flown on a
longhaul flight with either airline since May 2004. But it
could exclude those travellers who may have flown on a ticket
purchased in Australia.
If found guilty, British Airways could be fined up to GBP850
million, which represents 10% of its annual turnover, the report
said.
AMERICAN EXPRESS: Faces Amended Suit Over Blue Cash Card Rebates
----------------------------------------------------------------
Plaintiffs in a putative class suit brought against American
Express Co. in the U.S. District Court in New Jersey over
alleged misleading and fraudulent advertising related to cash
rebates for the company's Blue Cash card have filed an amended
complaint.
In June 2006, a putative class action, "Homa v. American Express
Co. et al.," was filed. The case alleges, generally, misleading
and fraudulent advertising of the "tiered" "up to 5%" cash
rebates with the Blue Cash card.
The complaint initially sought certification of a nationwide
class consisting of "all persons who applied for and received an
American Express Blue Cash card during the period from Sept. 30,
2003 to the present and who did not get the rebate or rebates
provided for in the offer."
On Dec. 1, 2006, however, plaintiff filed a First Amended
Complaint dropping the nationwide class claims and asserting
claims only on behalf of New Jersey residents who "while so
residing in New Jersey, applied for and received an American
Express Blue Cash card during the period from Sept. 30, 2003 to
the present."
Plaintiff seeks unspecified damages and other unspecified relief
that the court deems appropriate.
The suit is "Homa v. American Express Co. et al., Case No. 2:06-
cv-02985-JAP-MCA," filed in the U.S. District Court for the
District of New Jersey under Judge Joel A. Pisano with referral
to Judge Madeline C. Arleo.
Representing the plaintiffs is Gary S. Graifman of Kantrowitz,
Goldhamer & Graifman, Esqs., 210 Summit Ave., Montvale, NJ
07645, Phone: (201) 391-7000, E-mail: ggraifman@kgglaw.com.
Representing the defendants is Louis Smith of Greenberg Traurig
LLP, 200 Park Avenue, Florham Park, NJ 07932, Phone: (973) 360-
7900, E-mail: smithlo@gtlaw.com.
AMERICAN EXPRESS: $75M Deal in Suit Over "Hidden" Fees Appealed
---------------------------------------------------------------
Certain parties are appealing to the U.S. Court of Appeals for
the 11th Circuit the $75 million settlement between American
Express Co. and thousands of cardholders who contended in a
class action that they paid hidden transaction fees for charges
made in foreign currencies.
Initially, the company was named in several purported class
actions in various state courts alleging that the company
violated the respective state's laws by wrongfully collecting
amounts assessed on converting transactions made in foreign
currencies to U.S. dollars and/or failing to properly disclose
the existence of such amounts in its Cardmember agreements and
billing statements.
The plaintiffs in the actions seek, among other remedies,
injunctive relief, money damages and/or attorneys' fees on their
own behalf and on behalf of the putative class of persons
similarly situated.
In December 2005, the U.S. District Court for the Southern
District of Florida granted final approval of a nationwide class
action settlement to resolve all lawsuits and allegations with
respect to the company's collection and disclosure of fees
assessed on transactions made in foreign currencies in the case,
"Lipuma v. American Express Bank, American Express Travel
Related Services Co., Inc. and American Express Centurion Bank,"
which was filed in August 2003.
The settlement approved by the court calls for the company to:
-- deposit $75 million into a fund that will be used to
reimburse class members with valid claims, make certain
contributions to charitable organizations to be
identified later and pay attorneys' fees; and
-- make certain changes to the disclosures in its
Cardmember agreements and billing statements regarding
its foreign currency conversion practices (which it has
already done).
The company had previously established reserves to cover the
payment that will be made to reimburse class members and pay
attorneys' fees.
The court's approval order enjoins all other proceedings that
make related allegations pending a final approval hearing
including, but not limited to these cases:
(1) Environmental Law Foundation, et al. v. American
Express Co., et al., Superior Court of Alameda
County, California (filed March 2003);
(2) Rubin v. American Express Co. and American Express
Travel Related Services Co., Inc., Circuit Court of
Madison County, Illinois (filed April 2003);
(3) Angie Arambula, et al. v. American Express Co., et
al., District Court of Cameron County, Texas, 103rd
Judicial District (filed May 2003);
(4) Fuentes v. American Express Travel Related Services
Co., Inc. and American Express Co., District
Court of Hidalgo County, Texas (filed May 2003);
(5) Wick v. American Express Co., et al., Circuit Court
of Cook County, Illinois (filed May 2003);
(6) Bernd Bildstein v. American Express Co., et al.,
Supreme Court of Queens County, New York (filed June
2003);
(7) Janowitz v. American Express Co., et al., Circuit
Court of Cook County, Illinois (filed September 2003);
(8) Paul v. American Express Co., et al., Superior
Court of Orange County, California (filed January
2004); and
(9) Ball v. American Express, et al., Superior Court of San
Joaquin, California (filed August 2004).
However, several attorneys purporting to represent the interests
of objectors to the settlement have appealed the court's
approval of the deal to the U.S. Court of Appeals for the 11th
Circuit, according to the company's March 1 Form 10-K filing
with the U.S. Securities and Exchange Commission for the fiscal
year ended Dec. 31, 2006.
American Express Co. on the Net:
https://home.americanexpress.com/.
AMERICAN EXPRESS: Continues to Face N.Y., Calif. Antitrust Suits
----------------------------------------------------------------
Plaintiffs in some of the dismissed class actions in which
American Express Co. are accused of violating various state and
federal antitrust laws have appealed an arbitration ruling in
their respective cases, according to the company's March 1 Form
10-K filing with the U.S. Securities and Exchange Commission for
the fiscal year ended Dec. 31, 2006.
Initially, several cases were filed against the company:
-- "Cohen Rese Gallery et al. v. American Express Co.,
et al.," U.S. District Court for the Northern District
of California (filed July 2003);
-- "Italian Colors Restaurant v. American Express Co.,
et al.," U.S. District Court for the Northern District
of California (filed August 2003);
-- "DRF Jeweler Corp. v. American Express Co., et
al.," U.S. District Court for the Southern District of
New York (filed December 2003);
-- "Hayama Inc. v. American Express Co., et al.,"
Superior Court of California, Los Angeles County (filed
December 2003);
-- "Chez Noelle Restaurant v. American Express Co., et
al.," U.S. District Court for the Southern District of
New York (filed January 2004);
-- "Mascari Enterprises d/b/a Sound Stations v. American
Express Co., et al.," U.S. District Court for the
Southern District of New York (filed January 2004);
-- "Mims Restaurant v. American Express Co., et al.,"
U.S. District Court for the Southern District of New
York (filed February 2004); and
-- "The Marcus Corp. v. American Express Co., et
al.," U.S. District Court for the Southern District of
New York (filed July 2004).
Plaintiffs in these actions seek injunctive relief and
unspecified amount of damages. Upon motion to the court by the
company, the venue of the Cohen Rese and Italian Colors actions
was moved to the U.S. District Court for the Southern District
of New York in December 2003.
Each of the above-listed actions (except for Hayama) is now
pending in the U.S. District Court for the Southern District of
New York, consolidated as "In re American Express Merchants'
Litigation."
On April 30, 2004, the company filed a motion to dismiss all the
actions filed prior to such date that were pending in the U.S.
District Court for the Southern District of New York, and on
March 15, 2006, such motion was granted, with the court finding
the claims of the plaintiffs to be subject to arbitration.
Plaintiffs asked the court to reconsider its dismissal. That
request was denied. The plaintiffs have appealed the court's
arbitration ruling.
In addition, during the pendency of the motion in the U.S.
District Court for the Southern District of New York, the
company had asked the California Superior Court hearing the
Hayama action referenced above to stay that action pending
resolution of such motion.
The company also filed a motion to dismiss the action filed by
the Marcus Corp., which was denied in July 2005.
American Express Co. on the Net:
https://home.americanexpress.com/.
AMERICAN EXPRESS: Court Denies Appeal of Certification in "Ross"
----------------------------------------------------------------
The U.S. Court of Appeals for the 2nd Circuit denied an
interlocutory appeal of the certification of an injunction class
in the case, "Ross, et al. v. American Express Co., American
Express Travel Related Services and American Express Centurion
Bank."
Originally, the suit was filed on July 2004 in U.S. District
Court for the Southern District of New York. It alleges that
Amex Life Assurance Co. unit, which the company sold in 1995,
conspired with Visa, MasterCard and Diners Club in the setting
of foreign conversion rates and in the inclusion of arbitration
clauses in certain of their cardmember agreements. The suit
seeks injunctive relief and unspecified damages.
The class is defined as:
"all Visa, MasterCard and Diners Club general purpose
cardholders who used cards issued by any of [multidistrict
litigation] Defendant Banks...."
American Express cardholders are not part of the class. In
September 2005, the court denied the company's motion to dismiss
the action and preliminarily certified an injunction class of
Visa and MasterCard cardholders to determine the validity of
Visa's and MasterCard's cardmember arbitration clauses.
American Express filed a motion for reconsideration with the
court, which motion was denied in September 2006. The company
has filed an appeal from the District Court's order denying its
motion to compel arbitration.
On Feb. 14, 2007, the U.S. Court of Appeals for the 2nd Circuit
denied plaintiffs motion to dismiss that appeal. The company
had also asked the appellate court to entertain an interlocutory
appeal of the district court's certification of an injunction
class.
On Dec. 19, 2006, that appellate court denied that request,
according to the company's March 1 Form 10-K filing with the
U.S. Securities and Exchange Commission for the fiscal year
ended Dec. 31, 2006.
American Express Co. on the Net:
https://home.americanexpress.com/.
BIOVAIL CORP: Hearings Over Banc of America Documents Continue
--------------------------------------------------------------
Banc of America Securities LLC, a unit of Bank of America Corp.,
is asking U.S. District Judge Richard Owen in New York District
Court to block Biovail Corp.'s suit against it in New Jersey.
Banc of America is a witness in a class action against Biovail
in New York. In January, Judge Owen, who is presiding over the
case, said the company used confidential documents turned over
by Banc of America to Biovail as the basis for its New Jersey
lawsuit against Banc of America. He ordered Biovail to return
the documents and to remove from its New Jersey case any claims
derived solely from those documents.
At a March 16 hearing in Manhattan federal court, lawyers for
Banc of America asked Judge Owen to block Biovail from going
forward with the case in New Jersey, Bloomberg News reports.
The suit claims Banc of America Securities and hedge funds drove
down the price of the drugmaker's shares to profit from trades.
"Biovail should not be permitted to benefit from this conduct,"
Banc of America lawyer Gary Svirsky said, according to the
report. The proceeding is a continuation of hearings focused on
whether individual lawyers violated Owen's 2005 order declaring
that the Banc of America documents were confidential.
The New York case is "In Re Biovail Corp. Securities Litigation,
03-cv-8917,' filed in the U.S. District Court, Southern District
of New York.
BOSTON SCIENTIFIC: No Hearing Set for ERISA Litigation in Mass.
---------------------------------------------------------------
The U.S. District Court for the District of Massachusetts has
yet to set a hearing date for a consolidated class action
against Boston Scientific Corp. that is alleging violations of
the Employee Retirement Income Security Act of 1974.
On Jan. 19, 2006, George Larson, on behalf of himself and all
others similarly situated, filed a purported class action
complaint in the U.S. District Court for the District of
Massachusetts on behalf of participants and beneficiaries of the
company's 401(k) Retirement Savings Plan (401(k) Plan) and
Global Employee Stock Ownership Plan (GESOP).
The plaintiff alleges that the company and certain of the
company's officers and employees violated certain provisions
under the ERISA and Department of Labor Regulations.
On Jan. 26, 2006, Feb. 8, 2006, Feb. 14, 2006, Feb. 23, 2006,
and March 3, 2006, Robert Hochstadt, Jeff Klunke, Kirk Harvey,
Michael Lowe and Douglas Fletcher, respectively, on behalf of
themselves and others similarly situated, filed purported class
action complaints in the same court on behalf of the
participants and beneficiaries in the company's Plans alleging
similar misconduct and seeking similar relief as in the Larson
lawsuit.
On April 3, 2006, the court issued an order consolidating the
actions and appointing Jeffrey Klunke and Michael Lowe as
interim lead plaintiffs.
On Aug. 23, 2006, plaintiffs filed a consolidated complaint that
purports to bring a class action on behalf of all participants
and beneficiaries of the company's 401(k) Plan during the period
May 7, 2004 through Jan. 26, 2006 alleging that the company, its
401(k) Administrative and Investment Committee, members of the
Committee, and certain directors violated certain provisions of
ERISA.
The complaint alleges, among other things, that the defendants
breached their fiduciary duties to the 401(k) Plan's
participants.
It seeks equitable and monetary relief. Defendants filed a
motion to dismiss on Oct. 10, 2006. Plaintiffs filed their
opposition memorandum on Dec. 15, 2006, and defendants filed
their reply on Jan. 16.
A hearing has yet to be scheduled, according to Boston
Scientifics' March 1 Form 10-K filing with the U.S. Securities
and Exchange Commission for the fiscal year ended Dec. 31, 2006.
The suit is "In re: Boston Scientific Corp. ERISA Litigation,
Case No. 1:06-cv-10105-JLT," filed in the U.S. District Court
for the District of Massachusetts under Judge Joseph L. Tauro.
Representing plaintiff Jeff Klunke are:
(1) Milberg, Weiss, Bershad & Schulman LLP, One
Pennsylvania Plaza, New York, NY 10119, Phone: 212-594-
5300, Fax: 212-868-1229, E-mail:
lfeldman@milbergweiss.com; and
(2) Nancy F. Gans at Moulton & Gans, P.C., 55 Cleveland
Road, Wellesley, MA 02481, U.S., Phone: 781-235-2246,
Fax: 781-239-0353, E-mail: nfgans@gmail.com.
Representing the defendants is Stuart J. Baskin at Shearman &
Sterling LLP, 599 Lexington Avenue, New York, NY 10022, U.S.,
Phone: 212-848-4000, Fax: 212-848-7179.
BOSTON SCIENTIFIC: Mass. Court Hears Motion to Dismiss Lawsuit
--------------------------------------------------------------
The U.S. District Court for the District of Massachusetts heard
arguments on a motion seeking the dismissal of an amended
complaint in a consolidated securities fraud class action
pending against Boston Scientific Corp. and certain of its
officers.
On Sept. 23, 2005, Srinivasan Shankar, on behalf of himself and
all others similarly situated, filed a purported securities
class action in the U.S. District Court for the District of
Massachusetts on behalf of those who purchased or otherwise
acquired the company's securities during the period March 31,
2003 through Aug. 23, 2005, alleging that the company and
certain of its officers violated certain sections of the
Securities Exchange Act of 1934.
On Sept. 28, 2005, Oct. 27, 2005, Nov. 2, 2005 and Nov. 3, 2005,
Jack Yopp, Robert L. Garber, Betty C. Meyer and John Ryan,
respectively, on behalf of themselves and all others similarly
situated, filed additional purported securities class actions in
the same Court on behalf of the same purported class.
On Feb. 15, 2006, the court ordered that the five class actions
be consolidated and appointed the Mississippi Public Employee
Retirement System Group as lead plaintiff. A consolidated
amended complaint was filed on April 17, 2006.
The consolidated amended complaint alleges that the company made
material misstatements and omissions by failing to disclose the
supposed merit of the litigation between the company and
Medinol, Ltd., the company's stent supplier, and Department of
Justice investigation relating to the 1998 NIR ON Ranger with
Sox stent recall, problems with the TAXUS drug-eluting coronary
stent systems that led to product recalls, and the company's
ability to satisfy U.S. Food and Drug Administration regulations
concerning medical device quality.
The consolidated amended complaint seeks unspecified damages,
interest, and attorneys' fees. The defendants filed a motion to
dismiss the consolidated amended complaint on June 8, 2006.
A hearing on the motion was held on Jan. 30, according to Boston
Scientifics' March 1 Form 10-K filing with the U.S. Securities
and Exchange Commission for the fiscal year ended Dec. 31, 2006.
The suit is "Shankar v. Boston Scientific Corp., et al., Case
No. 1:05-cv-11934-JLT," filed in the U.S. District Court for the
District of Massachusetts under Judge Joseph L. Tauro.
Representing the plaintiffs are:
(1) Carolyn G. Anderson of Zimmerman Reed, PLLP, Suite 501,
651 Nicollet Mall, Minneapolis, MN 55402, US, Phone:
612-341-0400, Fax: 612-341-0844, E-mail:
cga@zimmreed.com; and
(2) Gregg M. Fishbein of Lockridge Grindal Nauen, P.L.L.P.,
Suite 2200, 100 Washington Avenue South, Minneapolis,
MN 55401, US, Phone: 612-339-6900, Fax: 612-339-0981,
E-mail: gmfishbein@locklaw.com.
Representing the defendants are:
(1) Miranda Hooker, William H. Paine and Monika A. Wirtz of
Wilmer Cutler Pickering Hale and Dorr, LLP, 60 State
Street, Boston, MA 02115, Phone: 617-526-6000 and 617-
526-6896, Fax: 617-526-5000 and 617-526-5000, E-mail:
monika.wirtz@wilmerhale.com,
miranda.hooker@wilmerhale.com and
william.paine@wilmerhale.com; and
(2) Timothy J. Perla of U.S. District Court, 1 Courthouse
Way, Boston, MA 02210, Phone: 617-526-6696, Fax: 617-
526-6000, E-mail: timothy.perla@wilmerhale.com.
BOSTON SCIENTIFIC: Still Faces Lawsuit Over Guidant Acquisition
---------------------------------------------------------------
Boston Scientific Corp. remains a defendant in a purported class
action filed in the U.S. District Court for the District of
Minnesota by a senior citizen who is seeking to stop the company
from acquiring Guidant Corp.
On Jan. 26, 2006, Donald Wright filed a purported class action
complaint in the U.S. District Court for the District of
Minnesota against the company and Guidant on behalf of himself
and all other senior citizens and handicapped persons similarly
situated seeking a permanent injunction to prohibit the company
from completing its acquisition of Guidant, alleging violations
of the Minnesota Fraudulent Transfers Act and Consumer Fraud
Act.
The complaint seeks restitution on behalf of those persons who
suffered injury related to Guidant's cardiac pacemakers and/or
defibrillators. It also seeks monetary damages and injunctive
relief.
Mr. Wright filed an amended complaint on Feb. 21, 2006, dropping
his claim for monetary damages.
The company reported no material development in the case at its
March 1 Form 10-K filing with the U.S. Securities and Exchange
Commission for the fiscal year ended Dec. 31, 2006.
The suit is "Wright v. Boston Scientific, et al., Case No. 0:06-
cv-00363-DWF-AJB," filed in the U.S. District of Minnesota under
Judge Donovan W. Frank with referral to Judge Arthur J. Boylan.
Representing the plaintiffs is Benjamin S. Houge of Houge Law
Office, 13481 N. 60th St., Ste. 201, Oak Park Heights, MN 55082,
Phone: 612-868-1947, Fax: 651-439-3742, E-mail: bshmih@aol.com.
Representing the defendants are:
(1) Stuart J Baskin of Shearman & Sterling, LLP, 599
Lexington Ave., New York, NY 10022, Phone: 212-848-
4974, E-mail: sbaskin@shearman.com;
(2) Boris Feldman of Wilson Sonsini Goodrich & Rosati, 650
Page Mill Rd., Palo Alto, CA 94304, Phone: 650-320-
4944, E-mail: boris.feldman@wsgr.com; and
(3) Marianne D. Short of Dorsey & Whitney, LLP, 50 S. 6th
St., Ste. 1500, Minneapolis, MN 55402-1498, Phone: 612-
340-2600, Fax: 612-340-2807, E-mail:
short.marianne@dorsey.com.
BROOKS COLLEGE: "Thurston" Plaintiffs Seek Leave to Amend Suit
--------------------------------------------------------------
Plaintiffs in "Thurston, et al. v. Brooks College, Ltd., et
al.," seek to amend their complaint and add as defendant Career
Education Corp. to their case, which is currently pending in the
Superior Court for the State of California, County of Los
Angeles.
On March 21, 2005, a purported class action complaint was filed
in the Superior Court for the State of California, County of Los
Angeles, against Brooks College, one of Career Education Corp.'s
schools.
The complaint was purportedly filed on behalf of all current and
former attendees of Brooks College. The complaint alleges that
Brooks College violated the California Business and Professions
Code and Consumer Legal Remedies Act by allegedly misleading
potential students regarding Brooks College's admission
criteria, transferability of credits, and retention and
placement statistics, and by engaging in false and misleading
advertising.
Plaintiffs seek injunctive relief, restitution, unspecified
punitive and exemplary damages, attorneys' fees, interest,
costs, and other relief.
On June 24, 2005, the court ruled that this action was related
to the case, "Outten, et al. vs. Career Education Corp., et al."
Brooks College filed an answer to the complaint on May 31, 2006.
The parties are engaged in pre-trial discovery.
Plaintiffs have filed a motion for class certification, which
the company intends to oppose. Plaintiffs are seeking leave to
amend their complaint to add Career Education Corp. as a
defendant, according to the Career Education's March 1 Form 10-K
filing with the U.S. Securities and Exchange Commission for the
fiscal year ended Dec. 31, 2006.
Career Education Corp. on the Net: http://www.careered.com/.
CALIFORNIA: County Sued Over Policy on Medical Marijuana Use
------------------------------------------------------------
The County of San Diego was named as a defendant in a lawsuit
being spearheaded by a man badly burned in the Cedar Fire about
four years ago and is wanting to use marijuana to alleviate his
pains.
Rudy Reyes, who suffered severe burns across his face and body
in the 2003 fire, filed the suit back in September 2006. But,
he amended his complaint on March 1 to include constitutional
issues and to seek class-action status for the case.
Generally, Mr. Reyes accuses defendants of violating patients'
rights under the Americans with Disabilities Act by their
refusal to regulate the use of medical marijuana.
He argues that the county has "unconstitutionally denied" the
right to improve the quality of life for people who have severe
injuries.
The federal government doesn't recognize marijuana as a legal
medication, however, under Proposition 215, the 1996 initiative
approved by 56 percent of voters that permitted the medical use
of marijuana, the state of California does.
Proposition 215 is one of several medical-marijuana laws that
permit qualified patients to smoke and grow pot. It essentially
requires the county to issue identification cards that would
protect patients from prosecution.
The county has thus been forced to choose sides, but so far, it
has sided with federal authorities, arguing that federal law
banning marijuana supersedes Proposition 215.
Mr. Reyes has said that marijuana is the best medication for him
and added that his doctors agree. In his amended complaint, Mr.
Reyes pointed out that he has recently had problems getting his
hands on the drug.
The lawsuit seeks to include as plaintiffs anyone who has a
state-issued ID card for medical marijuana and those who have
applied for the permit.
If the case succeeds, the number of plaintiffs likely will be in
the thousands, and the lawsuit would pose a much greater
financial risk to the county, according to the report.
Asked for comment on the case, an attorney representing the
county called it a frivolous lawsuit since "the county has no
program, service or activity related to providing medical
marijuana to anyone. For a litigant to invoke the ADA to seek
personal access to his or her drug of choice appears to be
misuse of the statute."
CAMERON INTERNATIONAL: Settles Tex. Underground Pollution Suit
--------------------------------------------------------------
Cameron International Corp. has settled early in 2007 a class
action filed in relation to the migration of contaminated
underground water from its former manufacturing site in Houston
under an adjacent residential area.
The settled case is "Valice v. Cameron Iron Works, Inc. (80th
Jud. Dist. Ct., Harris County," filed on June 21, 2002.
Pursuant to the settlement, the homeowners who remained part of
the class will be entitled to receive a payment of approximately
3% of the 2006 appraised value of their property or
reimbursement of any diminution in value of their property due
to contamination concerns at the time of any sale. There were
21 homeowners who opted out of the class settlement.
The other suits pending regarding this matter have been filed by
a number of homeowners who have opted out of the class action
settlement. "Moldovan v. Cameron Iron Works, Inc. (165th Jud.
Dist. Ct., Harris County," was filed Oct. 23, 2006 by six
homeowners who opted-out of the class settlement.
CAREER EDUCATION: Discovery Begins for "Nilsen" Case in Calif.
--------------------------------------------------------------
The Superior Court of the State of California, County of Santa
Barbara, overruled the defendants' motion to strike a portion of
a third amended complaint in the suit, "Nilsen v. Career
Education Corp., et al."
On Feb. 4, 2005, three former students of Brooks Institute of
Photography, one of Career Education Corp.'s schools, filed a
purported class action complaint in the Superior Court of the
State of California, County of Santa Barbara, against the
company and Brooks Institute. The action was purportedly
brought on behalf of all students who attended Brooks Institute
from Feb. 4, 2001, to the present.
Plaintiffs' third amended complaint states causes of action for:
-- violations of the California Education Code;
-- violations of the Consumer Legal Remedies Act;
-- fraud;
-- false advertising in violation of California Business
and Professions Code Sections 17500, et seq.; and
-- unfair competition in violation of California Business
and Professions Code section 17200, et seq.
The plaintiffs primarily allege that Brooks Institute violated
the California Education Code, the California Consumer Legal
Remedies Act, and California's Unfair Competition Law by
allegedly misleading potential students regarding Brooks
Institute's placement rates and by engaging in false and
misleading advertising.
The plaintiffs seek injunctive relief, disgorgement of profits,
punitive damages, interest, and attorneys' fees and costs.
On Oct. 11, 2006, the court overruled the defendants' demurrers
and motion to strike a portion of the Third Amended Complaint.
Plaintiffs filed their motion for class certification on Feb.
14. The company is initiating discovery of the class
representatives and intend to oppose the class certification
motion, according to Career Education's March 1 Form 10-K filing
with the U.S. Securities and Exchange Commission for the fiscal
year ended Dec. 31, 2006.
Career Education Corp. on the Net: http://www.careered.com/.
CAREER EDUCATION: No Trial Date for "Outten" Lawsuit in Calif.
--------------------------------------------------------------
A trial date has yet to be scheduled for the purported class
action, "Outten, et al. v. Career Education Corp., et al.,"
which is pending in the Superior Court of the State of
California, County of Los Angeles, against the company and
American InterContinental University, one of its schools.
The operative complaint, which claims to have been brought on
behalf of present and former students of American
InterContinental, alleges that the university violated the
California Unfair Competition Law (California Business and
Professions Code), the California Consumer Legal Remedies Act,
and the California Education Code, and engaged in common law
consumer fraud by purportedly misleading potential students
regarding the university placement rates.
The plaintiffs, on behalf of the putative class, seek injunctive
relief, restitution, unspecified punitive and exemplary damages,
attorneys' fees and costs, interest, and other relief.
On March 10, 2005, defendants filed an answer to the second
amended complaint as well as a cross-complaint against one of
the named plaintiffs for unpaid tuition.
On June 24, 2005, the court ruled that this action was related
to another action captioned, "Thurston, et al. v. Brooks
College, Ltd., et al."
The parties are engaged in pre-trial and class-related
discovery. A hearing on plaintiffs' motion to certify a class
was scheduled March 14.
No trial date has been set for this matter, according to Career
Education's March 1 Form 10-K filing with the U.S. Securities
and Exchange Commission for the fiscal year ended Dec. 31, 2006.
Career Education Corp. on the Net: http://www.careered.com/.
CAREER EDUCATION: Seeks Dismissal of Ill. Securities Fraud Suit
---------------------------------------------------------------
Career Education Corp. is seeking the dismissal of a
consolidated securities class action pending against it in the
U.S. District Court for the Northern District of Illinois.
The consolidated case represents the consolidation into one suit
of six purported class actions filed between Dec. 9, 2003, and
Feb. 5, 2004, in the U.S. District Court for the Northern
District of Illinois by and on behalf of certain purchasers of
the company's common stock against Career Education and two of
its executive officers, John M. Larson and Patrick K. Pesch.
The suits purportedly were brought on behalf of all persons who
acquired shares of the company's common stock during specified
class periods.
The complaints allege that in violation of Section 10(b) of the
U.S. Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder, the defendants made certain material
misrepresentations and failed to disclose certain material facts
about the condition of the company's business and prospects
during the putative class periods, causing the respective
plaintiffs to purchase shares of the company's common stock at
artificially inflated prices.
The plaintiffs further claim that John M. Larson and Patrick K.
Pesch are liable as control persons under Section 20(a) of the
U.S. Exchange Act. The plaintiffs ask for unspecified amounts
in damages, interest, and costs, as well as ancillary relief.
Five of these lawsuits were related to the first filed case,
"Taubenfeld v. Career Education Corp. et al., Case No. 03 CV
8884)," and were reassigned to the same judge.
On March 19, 2004, the court ordered these six cases to be
consolidated and appointed Thomas Schroeder as lead plaintiff.
On April 6, 2004, the court appointed the firm of Labaton
Sucharow & Rudoff LLP -- http://www.labaton.com-- which
represents Mr. Schroeder, as lead counsel.
Subsequently, the court issued an order changing the caption of
this lawsuit to "In re Career Education Corp. Securities
Litigation."
On June 17, 2004, plaintiffs filed a consolidated amended
complaint. On Feb. 11, 2005, defendants' motion to dismiss was
granted, without prejudice.
On April 1, 2005, plaintiffs filed a second amended complaint.
On March 28, 2006, defendants' motion to dismiss the second
amended complaint was granted, without prejudice.
On May 1, 2006, plaintiffs filed a third amended complaint.
Defendants filed their motion to dismiss the third amended
complaint on Aug. 2, 2006.
Plaintiffs filed their response to defendants' motion to dismiss
the third amended complaint on Oct. 18, 2006. Defendants' filed
their reply brief in support of the motion to dismiss on Dec.
15, 2006, according to the company's March 1 Form 10-K filing
with the U.S. Securities and Exchange Commission for the fiscal
year ended Dec. 31, 2006.
The suit is "In re: Career Education Corp. Securities
Litigation, Case No. 1:03-cv-08884," filed in the U.S. District
Court for the Northern District of Illinois under Judge Joan
Humphrey Lefkow.
Representing the company are Karl Richard Barnickol, Mary Ellen
Hennessy, Joni S. Jacobsen, David H. Kistenbroker, Katten Muchin
Zavis Rosenman, 525 West Monroe Street Suite 1600 Chicago, Il
60661-3693 Phone: (312) 902-5200.
CLAIRE'S BOUTIQUES: Recalls Necklaces with High Lead Content
------------------------------------------------------------
Claire's Boutiques Inc., of Hoffman Estates, Illinois, in
cooperation with the U.S. Consumer Product Safety Commission, is
recalling about 58,000 children's necklaces.
The company said the recalled necklaces contain high levels of
lead. Lead is toxic if ingested by young children and can cause
adverse health effects. No injuries have been reported.
The recalled children's necklaces have metal pendants shaped as
monkeys, dolphins, and frogs holding colored marbles, a fleur de
lis painted in various colors, a silver and black fairy, silver-
colored letters "BFF" with rhinestones, and tiny handcuffs
painted in various colors. The pendants hang from silver-
colored chains. "Claire's" or "Claire's best friends forever"
is printed on the packaging.
These recalled children's necklaces were manufactured in China
and are sold exclusively at Claire's retail stores nationwide
from December 2005 through December 2006 for between $5 and $11.
Pictures of recalled children's necklaces:
http://www.cpsc.gov/cpscpub/prerel/prhtml07/07128a.jpg
http://www.cpsc.gov/cpscpub/prerel/prhtml07/07128b.jpg
Consumers are advised to immediately take this recalled jewelry
away from children, and return the recalled jewelry to any
Claire's store for a full refund or a free replacement product.
For additional information, call Claire's Boutiques Inc. toll-
free at (866) 859-9281 between 9 a.m. and 5 p.m. ET, Monday
through Friday, or visit http://www.claires.com.
CROWLEY MARITIME: Reaches Settlement in Del. Shareholders Suit
--------------------------------------------------------------
Crowley Maritime Corp. reached a proposed settlement in the
suit, "Franklin Balance Sheet Investment Fund v. Crowley," a
purported class action and derivative complaint filed against it
in Delaware.
Filed on Nov. 30, 2004, the complaint was brought against the
company and its board of directors, alleging breaches of the
fiduciary duties owed by the director defendants to the company
and its stockholders.
Among other things, the complaint alleges that the defendants
improperly spent corporate funds on certain split-dollar life
insurance policies to advance a corporate policy of entrenching
the company's controlling stockholder, Thomas B. Crowley, Jr.,
and certain members of his family. Thus, plaintiffs seek
damages and other relief.
On Feb. 25, 2005, the defendants filed a motion to dismiss the
complaint. The motion was briefed and heard on Sept. 30, 2005.
Before ruling on the company's motion to dismiss, the court, on
Jan. 19, 2006, ordered that motion stayed pending resolution of
two motions filed on Dec. 27, 2005: one motion to amend filed by
the plaintiff, and a second motion to intervene filed by a
purported stockholder.
These motions were briefed and a hearing on the plaintiffs'
motion to amend was held on June 9, 2006. The Court granted
these motions and ordered the plaintiffs to promptly file their
amended complaint.
Plaintiffs filed their amended complaint on Oct. 24, 2006. On
Nov. 7, 2006, the company moved to dismiss the Amended Complaint
in its entirety (Class Action Reporter, Dec. 11, 2006).
Earlier, Crowley Maritime announced plaintiffs have agreed to
its dismissal if they and the other unaffiliated holders of
Crowley common stock have the opportunity, through a tender
offer, to sell their common stock for $2,990 per share in cash.
To this end, Crowley Newco Corp., a company formed by Thomas B.
Crowley, Jr., chairman and president of Crowley, announced that
it has commenced a tender offer to purchase all of the Crowley
common stock that it does not beneficially own for $2,990 per
share in cash, net to the seller.
The Purchaser is also making the tender offer as part of its
goal of acquiring the entire equity interest in Crowley not
beneficially owned by it.
If the tender offer is successful, the Purchaser intends to
merge with and into Crowley as soon as practicable. In the
merger, each issued and outstanding share of capital stock of
Crowley (other than shares held by the Purchaser and shares held
by stockholders who have properly exercised appraisal rights)
would be converted into the right to receive, in the case of
common stock, cash in the amount of $2,990 per share and, in the
case of Series A Convertible Junior Subordinated Preferred
Stock, cash in the amount of $249.16 per share (plus all unpaid
cumulative dividends thereon to the date of the merger).
Crowley will be the surviving entity in the merger.
After the merger, Crowley will be owned of record and/or
beneficially exclusively by the persons who have committed to
contribute their capital stock of Crowley to the Purchaser in
exchange for capital stock in the Purchaser and would no longer
be a public company.
DELPHI CORP: Judge Rosen Grants Investors Access to Delphi Docs
---------------------------------------------------------------
The Honorable Gerald Rosen of the U.S. District Court for the
Eastern District of Michigan has permitted Delphi Corp.
shareholders to examine sensitive documents, which Delphi
provided to the U.S. Securities and Exchange Commission, the
Department of Justice, and other federal agencies in connection
with numerous financial fraud lawsuits filed against the company
and certain of its former executives, Margaret Cronin Fisk of
Bloomberg News reports.
The Delphi shareholders filed a class action in the Michigan
District Court against Delphi and its officers and directors in
March 2005 after the company reported a $200,000,000
overstatement in 2000 cash flow from operations and a
$61,000,000 overstatement in 2001 pre-tax income. Among the
Delphi executives charged by the shareholders were former Chief
Executive Officer J.T. Battenberg III and former Chief Financial
Officer Alan Dawes.
Delphi spokeswoman Lindsey Williams told Bloomberg News that the
company "will abide by the terms of the order and provide the
necessary documents." No timetable for Delphi to provide the
documents has been set.
Troy, Mich.-based Delphi Corporation (OTC: DPHIQ) --
http://www.delphi.com/-- is the single largest global supplier
of vehicle electronics, transportation components, integrated
systems and modules, and other electronic technology. The
company's technology and products are present in more than 75
million vehicles on the road worldwide. The company filed for
chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case
No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq.,
and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, represent the Debtors in their restructuring efforts.
Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A.
Broude, Esq., at Latham & Watkins LLP, represents the Official
Committee of Unsecured Creditors. As of Aug. 31, 2005, the
Debtors' balance sheet showed $17,098,734,530 in total assets
and $22,166,280,476 in total debts.
The Debtors' exclusive plan-filing period expires on July 31,
2007. (Delphi Corporation Bankruptcy News, Issue No. 58;
Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
E-COMMERCE EXCHANGE: Calif. Court Stays TCPA Violations Suit
------------------------------------------------------------
A purported class action pending in the Los Angeles County
Superior Court, State of California against E-Commerce Exchange,
Inc., a subsidiary of iPayment, Inc., is stayed pending a formal
ruling on a motion to dismiss.
The suit is "Bruns v. E-Commerce Exchange Inc., et al., Orange
County Superior Court, State of California, Case No. 00CC02450
(coordinated under the caption 'TCPA Cases,' Los Angeles County
Superior Court, State of California, Case No. JCCO 43500)."
In February 2000, plaintiff Dana Bruns filed a lawsuit on her
own behalf and on behalf of a purported class of persons in
California who during the five years prior to filing the
lawsuit, allegedly received fax transmissions from third-party
defendant, Fax.Com and its advertisers, including the company's
subsidiary E-Commerce Exchange, Inc.
Plaintiff initially filed her complaint in Orange County
Superior Court pursuant to case number 00CC02450. Currently
this matter is proceeding pursuant to plaintiff's fifth amended
complaint filed in Los Angeles Superior Court, Central Division
pursuant to case number J.C.C.P 4350 (coordinated TCPA
proceedings).
The complaint as amended alleges that the defendants sent "fax
blast" transmissions to telephone facsimile machines in
violation of the provisions of the Telephone Consumer Protection
Act of 1991 and seeks relief, under the TCPA, and/or under
California's Unfair Competition Act, Business & Professions Code
and for negligence, including for injunctive relief, damages and
monetary relief, attorney's fees and costs of suit and other
relief deemed proper.
In December 2006, E-Commerce Exchange and other defendants filed
a motion for mandatory dismissal of the lawsuit, based on the
failure to bring the case to trial within five years after the
action commenced (pursuant to California Code of Civil
Procedure).
A hearing on the motion was conducted on Jan. 25, and concluded
with the court taking the motion under submission, requested
supplemental briefing of certain matters at issue, and stayed
the entire case until a formal ruling is issued on the motion to
dismiss.
Consequently, the case is stayed in its entirety. E-Commerce
Exchange filed its supplemental brief on Feb. 7, 2007. The
court has not issued its ruling.
No trial date has been set at this time, according to iPayment's
March 8 Form 10-K filing with the U.S. Securities and Exchange
Commission for the fiscal year ended Dec. 31, 2006.
iPayment, Inc. on the Net: http://www.ipaymentinc.com/.
E-COMMERCE EXCHANGE: Calif. Consumer Suit Conference Set May 10
---------------------------------------------------------------
A status conference in a purported class action pending in the
Superior Court of Orange County, California against E-Commerce
Exchange, Inc., a subsidiary of iPayment, Inc., is set May 10.
On Feb. 2, 2005, Robert Aguilard and nine other named
plaintiffs, filed the suit against:
-- E-Commerce Exchange, Inc.,
-- A-1 Leasing LLC (third party), and
-- Duvera Billing Services (third party)
The Civil Action No. 05CC02794 was brought on behalf of the
plaintiffs, and as private attorneys general pursuant to
California Business and Professions Code Sections 17204 and
17535, on behalf of all persons similarly situated, and on
behalf of the general public, as a "class action."
On April 8, 2005, plaintiffs filed a first amended complaint,
which alleges as to all defendants, a single cause of action for
"unfair competition" (including "unfair business practices"
pursuant to California Business and Professions Code Sections
17200), arising out of certain alleged transactions relating to
alleged marketing activities of E-Commerce Exchange in providing
various credit card processing services and products to
merchants for "internet" commerce business and related lease
transactions for "payment gateways" allegedly marketed by E-
Commerce Exchange under the names "Quick Commerce" and
"Wonderpay."
Plaintiffs assert that the lease transactions and leases are
"unlawful," "fraudulent" and unfair" and seek:
-- an order certifying the action as a "class action";
-- for a declaratory judgment;
-- for a preliminary and permanent injunction to restrain
and enjoin defendants from continuing to engage in such
actions;
-- an order requiring defendants to provide an accounting,
restitution, disgorgement of defendants profits from
the "unfair competition" activities, interest, attorney
fees, costs of suit, and other relief as may be proper.
E-Commerce Exchange filed its answer on Feb. 6, 2006, in which
it denies all of the allegations in the first amended complaint
and asserts twenty-seven affirmative defenses.
On April 10, 2006, Plaintiffs amended its first amended
complaint, adding, Applied Merchant Systems, Inc., Vandalay
Venture Group, Inc., and Commerve Technologies Corp., as named
defendants to the action.
Extensive discovery has been conducted by the parties, continues
to be ongoing, and is expected to continue for the foreseeable
future.
A status conference was held on Jan. 10, and a succeeding one
was set for May 10. Plaintiff has not filed a motion for "class
certification" and no trial date been set at this time,
according to iPayment's March 8 Form 10-K filing with the U.S.
Securities and Exchange Commission for the fiscal year ended
Dec. 31, 2006.
iPayment, Inc. on the Net: http://www.ipaymentinc.com/.
FORD MOTOR: Seeks to Junk Classes in Suit Over "Flaky" Paint
------------------------------------------------------------
Madison Circuit Judge Andy Matoesian will take up at a hearing
on March 30 a motion to decertify classes of plaintiffs in a
class action against Ford Motor Co. over paints at some of its
vehicles.
The suit was filed on behalf of a Lakin Law firm secretary,
Joyce Philips, in 1999, who claimed Ford did not disclose a risk
that paint in its vehicles would delaminate and peel away.
Daniel Schopp later joined the suit. In 2003, former Madison
County Circuit Judge Phillip Kardis certified the two as
representative of separate classes of people: those whose top
coat delaminated and those whose clear coat delaminated.
After Judge Kardis retired, the case was assigned to Judge
Matoesian. Last year, Judge Matoesian allowed Ms. Phillips to
withdraw.
Robert Schmieder of the Lakin Law firm is now seeking to certify
Norma Maag, Joseph Gulash, Peter Yaciuk and Beverly Breder as
class representatives.
Ford Motor Co. seeks to decertify both classes, arguing that
they are inadequate class representatives. Ford attorney Peter
Herzog of St. Louis opposed certification of the new plaintiffs
in February.
Judge Matoesian has not set a hearing on the adequacy of the
plaintiffs. First he will take up the motion to decertify at a
hearing March 30, according to the report.
Robert W. Schmieder, II is associate at The Lakin Law Firm,
P.C., 300 Evans Avenue, P.O. Box 229, Wood River, Illinois
62095-0229 (Madison Co.), Phone: 618-254-1127, Telecopier: 618-
254-0193.
Peter W. Herzog, Jr. is member at Herzog Crebs LLP, 515 N. 6th
Street, Suite 2400, St. Louis, Missouri 63101 (Independent
City), Phone: 314-231-6700, Fax: 314-231-4656.
GTC BIOTHERAPEUTICS: Stock Options Suit Deal Hearing Set April
--------------------------------------------------------------
A tentative April 2007 fairness hearing is scheduled for the
proposed settlement of a purported class action filed against
GTC Biotherapeutics, Inc. in the Court of Common Pleas for
Philadelphia County, Pennsylvania.
On Nov. 13, 2001, two employees of one of the company's former
subsidiaries filed the action seeking damages, declaratory
relief and certification of a class action relating primarily to
their GTC stock options.
The claims arose as a result of the company's sale of Primedica
Corp. to Charles River Laboratories International, Inc. in
February 2001, which plaintiffs believe resulted in the
termination of Primedica employees' status as employees of GTC
or its affiliates and the termination of their stock options.
The plaintiffs contended that the sale of Primedica to Charles
River did not constitute a termination of their employment with
GTC or its affiliates for purposes of the company's equity
incentive plan and, therefore, that the company breached the
company's contractual obligations to them and other Primedica
employees who had not exercised their stock options.
The complaint demands damages in excess of $5 million, plus
interest.
The court certified the case as a class action, with the class
including employees of Primedica who, at the time GTC sold it,
had GTC options that had not been exercised.
On Feb. 15, the parties agreed to settle these claims under
terms, which provide that the company's insurer will pay
$175,000 in cash, and the company will deliver $225,000 of its
common stock.
The number of shares of common stock to be issued in the
settlement will be determined based on the per share market
value of the common stock on the date of issue after the court
concludes a fairness hearing regarding the settlement, which is
expected to occur in April 2007.
GTC Biotherapeutics, Inc. on the Net:
http://www.transgenics.com/.
GUIDANT CORP: Dismissal of Ind. ERISA Lawsuit Under Appeal
----------------------------------------------------------
Guidant Corp., a recent acquisition of Boston Scientific Corp.,
has yet to report on the decision of the U.S. Court of Appeals
for the 7th Circuit regarding plaintiffs appeal against the
dismissal a consolidated suit alleging Employee Retirement
Income Security Act violations by the company.
In July 2005, a purported class action complaint was filed on
behalf of participants in Guidant's employee pension benefit
plans.
This action was filed in the U.S. District Court for the
Southern District of Indiana against Guidant and its directors.
The complaint alleges breaches of fiduciary duty under the ERISA
Act 29 U.S.C. Section 1132.
Specifically, the complaint alleges that Guidant fiduciaries
concealed adverse information about Guidant's defibrillators and
imprudently made contributions to Guidant's 401(k) plan and
employee stock ownership plan in the form of Guidant stock.
The complaint seeks class certification, declaratory and
injunctive relief, monetary damages, the imposition of a
constructive trust, and costs and attorneys' fees. A second,
similar complaint was filed and consolidated with the initial
complaint. A consolidated, amended complaint was filed on Feb.
8, 2006.
The defendants moved to dismiss the consolidated complain, and
on Sept. 15, 2006, the Court dismissed the complaint for lack of
jurisdiction.
In October 2006, the plaintiffs appealed the court's decision to
the U.S Court of Appeals for the 7th Circuit.
The appeal is still pending, according to Boston Scientifics'
March 1 Form 10-K filing with the U.S. Securities and Exchange
Commission for the fiscal year ended Dec. 31, 2006.
Boston Scientific Corp. on the Net:
http://www.bostonscientific.com.
GUIDANT CORP: No Hearing Set for Ind. Securities Fraud Lawsuit
--------------------------------------------------------------
A hearing has yet to be scheduled on a Motion to Dismiss filed
by defendants in a corrected consolidated securities complaint
brought against Guidant Corp. in U.S. District Court for the
Southern District of Indiana.
On Nov. 3, 2005, a securities class action complaint was filed
on behalf of Guidant shareholders in the U.S. District Court for
the Southern District of Indiana, against Guidant and several of
its officers.
The complaint alleges that the defendants concealed adverse
information about Guidant's defibrillators and pacemakers and
sold stock in violation of federal securities laws. It seeks a
declaration that the lawsuit can be maintained as a class
action, monetary damages, and injunctive relief.
Several additional, related securities class actions were filed
in November 2005 and January 2006, and were consolidated with
the initial complaint filed on Nov. 3, 2005.
The court issued an order consolidating the complaints and
appointed the Iron Workers of Western Pennsylvania Pension Plan
and David Fannon as lead plaintiffs.
Lead plaintiffs filed a consolidated amended complaint. In
August 2006, the defendants moved to dismiss the complaint.
A hearing has yet to be scheduled, according to Boston
Scientifics' March 1 Form 10-K filing with the U.S. Securities
and Exchange Commission for the fiscal year ended Dec. 31, 2006.
The suit is "In re Guidant Corp. Securities Litigation, C.A. No.
1:05-cv-01658," filed in U.S. District Court, Southern District
of Indiana under Judge Sarah Evans Barker.
Representing the plaintiffs are:
(1) Mary K. Blasy of Lerach Coughlin Stoia Geller Rudman &
Robbins, LLP, 655 West Broadway, Sutie 1900, San Diego,
CA 92101, Phone: 619-231-1058, Fax: 619-231-7423, E-
mail: maryb@lerachlaw.com; and
(2) Scott D. Gilchrist of Cohen & Malad, LLP, One Indiana
Square, Suite 1400, Indianapolis, IN 46204, Phone:
(317) 636-6481, Fax: (317) 636-2593, E-mail:
sgilchrist@cohenandmalad.com.
Representing the defendants is Keith E. Eggleton of Wilson
Sonsini Goodrich & Rosati of 650 Page Mill Road, Palo Alto, CA
94304, Phone: (650) 320-4893, Fax: (650) 565-5100, E-mail:
keggleton@wsgr.com.
IKANOS COMMS: Faces Multiple Securities Fraud Lawsuits in N.Y.
--------------------------------------------------------------
Ikanos Communications, Inc. was named as a defendant in several
purported securities fraud class actions filed in the U.S.
District Court for the Southern District of New York, according
to the company's March 6 Form 10-K filing with the U.S.
Securities and Exchange Commission for the fiscal year ended
Dec. 31, 2006.
In November 2006, three putative class actions were filed
against the company, its directors, an executive officer and a
former executive officer.
These lawsuits allege certain misrepresentations by the company
in connection with its initial public offering in September
2005, the follow-on offering in March 2006, and thereafter
concerning its business and prospects. The lawsuits seek
unspecified damages.
Although the company has been served with the initial
complaints, the company is aware that the plaintiffs will be
filing a consolidated amended compliant in the near future,
which could contain new allegations of which the company is not
presently aware.
The first identified complaint is "Panther Partners Inc., et al.
v. Ikanos Communications, Inc., et al., Case No. 1:06-cv-12967-
PAC," filed in the U.S. District Court for the Southern District
of New York under Judge Paul A. Crotty.
Plaintiff firms in this or similar case:
(1) Abraham, Fruchter & Twersky, One Pennsylvania Plaza,
Suite 1910, New York, NY, 10119, Phone: 212.279.5050,
Fax: 212.279.3655, E-mail:
JFruchter@FruchterTwersky.com;
(2) Law Offices of Bruce G. Murphy, 265 Llwyds Lane, Vero
Beach La, FL, 32963, Phone: 561.231.4202;
(3) Lerach Coughlin Stoia Geller Rudman & Robbins, LLP,
(Melville), 58 South Service Road, Suite 200, Melville,
NY, 11747, Phone: 631.367.7100, Fax: 631.367.1173;
(4) Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San
Diego), 655 West Broadway, Suite 1900, San Diego, CA,
92101, Phone: 619.231.1058, Fax: 619.231.7423;
(5) Schiffrin & Barroway LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com; and
(6) Wechsler Harwood LLP, 488 Madison Avenue 8th Floor, New
York, NY, 10022, Phone: 212.935.7400, E-mail:
info@whhf.com.
INTERLOCK INDUSTRIES: Roofer Settles Consumer Suit for $1.2M
------------------------------------------------------------
Former Honolulu roofing contractor Interlock Industries Inc. and
owner Mark Wenzel, agreed to pay $1.2 million in cash and to
disburse some $15,000 to $17,000 a month for the next eight
years to settle a class action filed by clients in Hawaii, the
Honolulu Star-Bulletin reports.
In 2001, the Hawaii Regulated Industries Complaints Office,
which enforces professional licensing laws in this state, began
investigating Interlock Industries after the company closed its
Hawaii office shortly after 9/11.
A state order found that Interlock Industries and the Wenzels,
who installed some 2,700 roofs in Hawaii from 1997 to 2001,
failed "to maintain a record or history of competency,
trustworthiness, fair dealing and financial integrity."
Consumers said Interlock left them with leaky roofs and useless
lifetime warranties when it closed its Hawaii office. It also
left them with bad credit and pursued liens on homes when some
owners defaulted on high-interest, in-house financing deals.
In a 2005 hearing, the state Department of Commerce and Consumer
Affairs found Interlock and Mr. Wenzel, to have violated several
state laws "by failing to maintain a record or history of
competency, trustworthiness, fair dealing and financial
integrity." It thus revoked their licenses and served them with
a $205,000 fine (Class Action Reporter, May 16, 2005).
The state found that Interlock Industries, which installed
approximately 2,700 roofs in Hawaii from 1997 to 2001, failed to
report address and telephone number changes to the state
contractors license board, engaged in unfair or deceptive acts,
refused to complete work and failed to provide contracts to
customers as well as obtain bonding for roofing projects.
Subsequently, Kailua-based attorney Buck Ashford of Ashford &
Associates filed a class action against Interlock Industries as
well as Ivor Wenzel and Mark Wenzel, the father-and-son team who
oversaw the company's Hawaii operations.
The suit, filed on behalf of a class of about 1,000 people,
sought to prevent Interlock Industries from ever again
contracting in Hawaii to install roofs with lifetime warranties
without complying with state requirements.
Parties in the suit are seeking restitution as well as general,
special, compensatory and punitive damages.
According to Mr. Wenzel, claims against Interlock in Hawaii and
elsewhere have been greatly exaggerated, claiming his company
only installed 740 roofs during its tenure in Hawaii.
A hearing to approve the settlement is scheduled for April 20,
said Kailua attorney George Ashford Jr., who represents the
class.
George W. Ashford Jr. is with Ashford & Associates, 1050 Auloa
Rd., Kailua, HI 96734-4605, Phone: (808) 261-5707.
INTRALASE CORP: Settles N.Y. Litigation Over Unsolicited Faxes
--------------------------------------------------------------
IntraLase Corp. settled a class action filed in the U.S District
Court for the Eastern District of New York alleging that the
company violated the Telephone Consumer Protection Act by
sending unsolicited fax advertisements, according to the
company's March 7 Form 10-K filing with the U.S. Securities and
Exchange Commission for the fiscal year ended Dec. 31, 2006.
Ari Weitzner M.D., P.C., a Brooklyn ophthalmologist, filed the
suit on May 24, 2005, seeking statutory damages, costs and
attorneys fees. The TCPA provides for statutory damages of $500
per violation, $1,500 if knowing and willful.
On Dec. 19, 2006, the Weitzner action was dismissed with
prejudice pursuant to a settlement agreement between the parties
under which, without admitting any wrongdoing, the company
agreed to comply with the requirements of TCPA in connection
with the sending of faxes. The settlement did not require any
payment by the company.
The suit is "Weitzner v. Intralase Corp., Case no. 1:05-cv-
02529-NGG-KAM," filed in the U.S. District Court for the Eastern
District of New York under Judge Nicholas G. Garaufis.
Representing the plaintiff is Todd C. Bank, Law Office of Todd
C. Bank, 119-40 Union Pike, Fourth Floor, Kew Gardens, NY 11415,
Phone: 718-520-7125, E-mail: TBLaw101@aol.com.
Representing the company is Glenn Charles Colton and Randollph
Gaw of Wilson Sonsini Goodrich & Rosati, 12 E. 49th Street, 30th
Floor, New York, NY 10017, Phone: 212-999-5800, Fax: 212-999-
5899, E-mail: gcolton@wsgr.com.
KENDLE INTERNATIONAL: Faces Lawsuit Over Unpaid Federal Taxes
-------------------------------------------------------------
Monongalia County, West Virginia-based clinical and
pharmacologic research company Kendle International is named
defendant in a class action claiming the company failed to pay
federal taxes for its employees, the West Virginia Record
reports.
The suit was jointly filed by employees:
-- Michael Loss,
-- Ann Sandor,
-- Susan Jenkins,
-- Carol Strang, and
-- Tammy Hunnell
It was filed on behalf of people who are presently working for
Kendle, or have worked for Kendle in the past five years and are
or were allegedly being treated as independent contractors.
According to the suit, the employees were treated as independent
contractors for employment tax purposes. The company allegedly
did not pay federal taxes, such as Federal Insurance
Contributions Act or Federal Unemployment Tax, which made the
employees have to pay them, in violation of the West Virginia
Wage Payment and Collection Act.
The suit contends failure to pay their share of employment taxes
requires plaintiffs and other similarly situated to forego a
portion of their wages to pay the share of these employment
taxes that are ordinarily paid by the employer.
The suit also says the company failed to pay some overtime wages
at time and a half for those who worked more than 40 hours,
which is violation of the Fair Labor Standards Act.
"As a result of the defendants' wrongful treatment of the
plaintiffs and members of the class as independent contractors,
the plaintiffs and members of the class have been deprived of
their full wages by defendants' failure to pay the employer's
share of employment taxes, thereby forcing the plaintiffs and
members of the class to forego a portion of their wages to pay
the employer's share of these taxes," the suit says.
Plaintiffs seek an injunction against Kendle and an award to the
class members for damages for overtime pay and taxes.
Representing plaintiffs Jane E. Peak of Allan N. Karlin and
Associates, 174 Chancery Row, Morgantown, WV 26505, Phone: (304)
296-8266, Fax: (800) 540-2159.
LEAPFROG ENTERPRISES: Seeks Dismissal of Calif. Securities Suit
---------------------------------------------------------------
LeapFrog Enterprises, Inc., is seeking dismissal of the
consolidated securities class action filed against it in the
U.S. District Court for the Northern District of California.
In December 2003, April 2005 and June 2005, six purported class
actions were filed in the U.S. District Court for the Northern
District of California against the company and certain of its
current and former officers and directors alleging violations of
the U.S. Securities Exchange Act of 1934.
These actions have since been consolidated into a single
proceeding captioned, "In Re LeapFrog Enterprises, Inc.
Securities Litigation."
On Jan. 27, 2006, the lead plaintiffs in this action filed an
amended and consolidated complaint. This complaint purports to
be a class action seeking unspecified damages on behalf of
persons who acquired the company's Class A common stock between
July 24, 2003 and Oct. 18, 2004.
The complaint alleges that the defendants caused the company to
make false and misleading statements about the company's
business and forecasts about the company's financial
performance, that certain of its individual officers and
directors sold portions of their stock holdings while in the
possession of adverse, non-public information, and that certain
of the company's financial statements were false and misleading.
On March 27, 2006, the company filed a motion to dismiss the
amended and consolidated complaint, and on July 31, 2006, the
court issued an order granting the company's motion to dismiss
the complaint, with leave for the plaintiffs to amend and
refile.
On Sept. 29, 2006, plaintiffs filed a second amended
consolidated class action complaint. This second amended
complaint seeks unspecified damages on behalf of persons who
acquired the company's Class A common stock during the period
July 24, 2003 through Oct. 18, 2004.
Like the predecessor complaint, this complaint alleges that the
defendants caused LeapFrog to make false and misleading
statements about the company's business and forecasts about the
financial performance, and that certain of the company's current
and former individual officers and directors sold portions of
their stock holdings while in the possession of adverse, non-
public information.
The company has filed a motion to dismiss the second amended
consolidated complaint, and a hearing on that motion was set
March 16.
Discovery has not commenced, and a trial date has not been set,
according to the company's March 7 Form 10-K filing with the
U.S. Securities and Exchange Commission for the fiscal year
ended Dec. 31, 2006.
The suit is "In Re LeapFrog Enterprises, Inc. Securities
Litigation, Case No. 5:03-cv-05421-RMW," filed in the U.S.
District Court for the Northern District of California under
Judge Ronald M. Whyte with referral to Judge Patricia V.
Trumbull.
Representing the plaintiffs are:
(1) Patrick J. Coughlin of Lerach Coughlin Stoia Geller
Rudman & Robbins, LLP, 100 Pine Street, Suite 2600, San
Francisco, CA 94111, Phone: 415/288-4545, Fax: 415-288-
4534, E-mail: patc@lerachlaw.com; and
(2) Julie Juhyun Bai of Berman DeValerio Pease Tabacco Burt
& Pucillo, 425 California Street, Suite 2100, San
Francisco, CA 94104-2205, Phone: 415-433-3200 x241,
Fax: 415-433-6382, E-mail: jbai@bermanesq.com.
Representing the defendants are Leo Patrick Cunningham and
Daniel W. Turbow of Wilson Sonsini Goodrich & Rosati, 650 Page
Mill Road, Palo Alto, CA 94304-1050, Phone: 650/320-4573, Fax:
650-565-5100 and (650) 493-9300, E-mail: lcunningham@wsgr.com
and dturbow@wsgr.com.
LIFE CARE: 13 Calif. Nursing Homes Sued Over Elder Abuse, Fraud
---------------------------------------------------------------
Thirteen Southern California skilled nursing and long-term care
facilities owned and operated by Life Care Centers of America,
Inc., are the subject of a class action filed in Orange County
Superior Court on March 13, 2007.
The nursing homes and their locations:
Life Care Centers of America, Inc. Barstow
dba Rimrock Villa Convalescent Hospital
Life Care Centers of America, Inc.
dba Bel Tooren Villa Convalescent Hospital
Life Care Centers of America, Inc. Corona
dba Life Care Center of Corona
Escondido Medical Investors Lmtd. Escondido
Partnership dba Life Care Center of Escondido
Garden Grove Medical Investors, Ltd. Garden Grove
dba Orangegrove Rehabilitation Hospital
El Toro Medical Investors Lmtd. Partnership Lake Forest
dba Lake Forest Nursing Center
Life Care Centers of America, Inc. La Habra
dba La Habra Convalescent Hospital
Life Care Centers of America, Inc. La Mirada
dba Imperial Convalescent Hospital
Life Care Centers of America, Inc.
dba Mirada Hills Rehab & Convalescent Hospital
Life Care Centers of America, Inc. Norwalk
dba North Walk Villa Convalescent Hospital
San Gabriel Medical Investors LLC San Gabriel
dba Life Care Center of San Gabriel
Life Care Centers of America, Inc. Sun City
dba Sun City Convalescent Center
Vista Medical Investors Lmtd. Partnership Vista
dba Life Care Center of Vista
The suit alleges unlawful business practices, unfair and
fraudulent business practices, violations of health & safety
codes, and violations of the Consumer Legal Remedies Act
The suit was filed on behalf of Consuelo Deburger, by and
through her Successor in Interest Bernadette Strobel, and on the
behalf of the thousands of other citizens of the State of
California who did or have resided in a Life Care facility
between March 15, 2003 through March. 15, 2007.
The essence of the complaint's allegations is that Life Care
skilled nursing and long-term care facilities have a long
history of providing substandard care to residents, as well as
violating their rights, as demonstrated by the facilities'
chronic violations that consistently earns them multiple notices
of deficiencies by the California Department of Health Services.
For instance, the complaint alleges that the Life Care Center
facility in La Mirada, the Mirada Hills Rehab and Convalescent
Hospital, received 25 notices of deficiencies from Sept. 1, 2005
to Nov. 30, 2006, while the Orange Grove Rehabilitation Hospital
in Garden Grove earned itself 13 citations of deficiency during
the same time period.
The lawsuit further alleges that in spite of promising
residents, patients and their families specific medical and
therapeutic care, the reality is that Life Care shaves the
budgets of their facilities so that they are unable to provide
the level of patient staffing and quality of care required, at
the very minimum, by the State of California. This results in
Dept. of Health Services citations and an indicator of the
conditions in which residents and patients are forced to live.
"And to add insult to injury," says Long Beach attorney Stephen
M. Garcia of The Garcia Law Firm "Life Care not only doesn't
provide what patients are promised, but individuals, their
private insurance companies, and government sources, such as
MediCare and MediCal, are billed as if the corporation has been
providing the care promised. We believe this company is making
huge profits at the detriment of their patients, one of the most
vulnerable segments of our society."
"I believe that California is ready to stand up and say to
operators like Life Care that we are no longer going to permit
our elderly relatives' and friends' value to be determined by
how much money operators can make off of them," says Mr. Garcia.
"Every company has the right to make a profit, but not an
unlawful one made off the pain and agony of our parents and
grandparents."
The suit is filed in Orange County Superior Court, Case
#07CC01225.
For more information, contact Geri Wilson of the Garcia Law
Firm, Phone: (800) 281-8515 or +1-626-403-6741, Mobile: +1-626-
487-2235, E-mail: gerij9@yahoo.com, Website:
http://www.lawgarcia.com.
MANNATECH INC: Plaintiffs Amend Consolidated Securities Lawsuit
---------------------------------------------------------------
Lead plaintiffs in a consolidated securities class action
against Mannatech, Inc. filed an unopposed motion for leave to
file amended consolidated class action complaint for securities
fraud, the company said in a March 16, 2007 Form 10-K filing
with the U.S. Securities and Exchange Commission for the period
ended Dec. 31, 2006.
The Amended Consolidated Complaint proposed by the lead
plaintiffs is substantively similar to the Consolidated Class
Action Complaint filed on March 3, 2006.
Lead plaintiffs allege the company violated Sections 10(b) and
20(a) of the U.S. Securities Exchange Act of 1934, and Rule 10b-
5 promulgated thereunder, by artificially inflating the value of
the company's common stock by knowingly allowing independent
contractors to recklessly misrepresent the efficacy of the
company's products during the purported class period.
The Amended Complaint expands the class period, as alleged in
the Consolidated Class Action Complaint, to Oct. 27, 2006, and
also adds new allegations against the company based on news
reports of potential regulatory or enforcement actions by the
State of Texas involving the company's selling and promotional
activities.
Originally, three securities class actions were filed against
Mannatech. On Aug. 1, 2005, Mr. Jonathan Crowell filed a
putative class action against the company and Samuel L. Caster,
chief executive officer. The suit was filed in the U.S.
District Court for the District of New Mexico on behalf of Mr.
Crowell and all others who purchased or otherwise acquired the
company's common stock between Aug. 10, 2004 and May 9, 2005,
inclusive, and who were damaged thereby.
On Aug. 30, 2005, Mr. Richard McMurry filed a class action
against the company, Mr. Caster, Mr. Terry L. Persinger, the
company's president and chief operating officer, and Mr. Stephen
D. Fenstermacher, the company's chief financial officer.
On Sept. 5, 2005, Mr. Michael Bruce Zeller filed a class action
against the company, Mr. Caster, Mr. Persinger, and Mr.
Fenstermacher.
The allegations in these class actions are substantially
identical. The complaints allege the company violated Section
10(b), Rule 10b-5 and Section 20(a) of the Securities Exchange
Act of 1934, alleging that defendants artificially inflated the
value of the company's common stock by knowingly allowing
independent contractors to recklessly misrepresent the efficacy
of its products during the purported class period.
On Dec. 12, 2005, the court granted a motion to consolidate the
three putative class actions. These lawsuits have been
consolidated into the civil action as, "In re Mannatech,
Incorporated Securities Litigation."
Also, on Jan. 4, 2006, the court granted a motion in the
consolidated putative class action to appoint "The Mannatech
Group," consisting of:
-- Mr. Austin Chang,
-- Ms. Naomi S. Miller,
-- Mr. John C. Ogden, and the
-- Plumbers and Pipefitters Local 51 Pension Fund,
as lead plaintiffs.
The Jan. 4, 2006 court order also appointed the law firms:
* Lerach Coughlin Stoia Geller Rudman & Robbins LLP as lead
counse;, and
* Freedman Boyd Daniels Hollander & Goldberg, P.A. as
liaison counsel, for the putative class.
On March 3, 2006, the plaintiffs in the consolidated cases filed
a consolidated class action complaint for securities fraud.
On April 4, 2006, the company filed a motion to transfer venue
to the U.S. District Court for the Northern District of Texas.
On April 11, 2006, the court granted the parties agreed motion
for joint continuance and briefing schedule, which was filed
April 6, 2006.
On May 25, 2006, the lead plaintiffs filed their response in
opposition to the motion to transfer and on June 27, 2006, the
company filed its reply in support of the motion.
In addition, on June 28, 2006, a Notice of Completion of
Briefing was filed.
On Jan. 29, 2007, the Court in the District of New Mexico
granted the company's motion to transfer venue to the U.S.
District Court for the Northern District of Texas, Dallas
Division.
On March 9, 2007, an unopposed Motion for Leave to File Amended
Consolidated Class Action Complaint for Securities Fraud was
filed by lead plaintiffs for the putative class.
The court has not yet entered a scheduling order and the company
anticipates it will file a motion to dismiss the Amended
Complain within the next 60 to 90 days.
The suit is "Crowell v. Mannatech Inc. et al., Case No. 3:07-cv-
00238," filed in the U.S. District Court for the Northern
District of Texas under Judge David C. Godbey.
Representing plaintiffs are:
(1) Roger F. Claxton and Robert J. Hill, both of Claxton &
Hill, 3131 McKinney Ave., Suite 700 LB 103, Dallas, TX
75204-2471, Phone: 214/969-9029, Fax: 214/953-0583, E-
mail: claxtonhill@airmail.net;
(2) David J. George and Robert J. Robbins, both of Lerach
Coughlin Stoia Geller Rudman & Robbins - Boca Raton,
120 E Palmetto Park Rd., Suite 500, Boca Raton, FL
33432, Phone: 561/750-3000, Fax: 561/750-3364, E-mail:
dgeorge@lerachlaw.com or rrobbins@lerachlaw.com;
(3) Lionel Z. Glancy and Michael Goldberg, both of Glancy
Binkow & Goldberg, 1801 Avenue of the Stars, Suite 311,
Los Angeles, CA 90067, Phone: 310/201-9150, Fax:
310/201-9160, E-mail: lglancy@glancylaw.com; and
(4) Raynard Struck of Ronald Bell & Associates PC, 610
Seventh NW, Albuquerque, NM 87102, Phone: 505/242-7979.
Representing defendants are:
(1) Joseph Goldberg of Freedman Boyd Daniels Hollander
Goldbert & Ives PA, 20 First Plaza, Suite 700,
Albuquerque, NM 87102;
(2) Edward S. Koppman, Akin Gump Strauss Hauer & Feld -
Dallas, 1700 Pacific Ave., Suite 4100, Dallas, TX
75201-4618, Phone: 214/969-2846, Fax: 214/969-4343, E-
mail: ekoppman@akingump.com; and
(3) Kurt Wihl of Keleher & McLeod, PO Drawer AA,
Albuquerque, NM 87103, Phone: 505/346-4646.
MERCK & CO: Asks N.J. Supreme Court to Review "Sinclair" Ruling
---------------------------------------------------------------
Merck & Co. Inc. has petitioned the New Jersey Supreme Court to
review an Appellate Court's decision reversing a dismissal of a
proposed class action filed against it on behalf of people who
took the Merck & Co. Inc.'s painkiller Vioxx and want the
company to pay for medical monitoring.
The suit was filed by Phyllis Sinclair and Joseph Murray in
Superior Court of New Jersey, Law Division, Atlantic County. It
was brought on behalf of the plaintiffs and others resident in
New Jersey or, alternatively, in the U.S., who had taken the
drug Vioxx in any dose for at least six consecutive weeks at any
time between May 20, 1999 and Sept. 30, 2004.
Complaint and Relief Sought
The complaint raises claims of negligence, breach of the Product
Liability Act and the Consumer Fraud Act, breach of warranty and
an alleged entitlement to punitive damages.
Plaintiffs claimed that as a result of their direct and
prolonged exposure to Vioxx, they have an enhanced risk of
sustaining serious, undiagnosed and unrecognized myocardial
infarctions (UMIs) that, in turn, would subject them to the risk
of further, significant, long-term cardiovascular harm.
As a consequence, they sought as relief the establishment of a
court-administered medical screening program, funded by Merck,
"to provide for and/or reimburse medical and diagnostic tests
for each member of the Class to detect [UMIs] and other latent
or unrecognized injuries and, if such injuries are detected and
diagnosed, to educate Plaintiffs about available treatment
strategies."
They also sought to compel a Merck-funded follow-up
epidemiological study of former Vioxx users as compared to
nonusers to further evaluate postcessation risk, as well as the
retention of jurisdiction by the court to enable it to decide
whether the findings of the study justified screening for
"unrecognized or latent injuries" other than UMIs.
Although plaintiffs claimed no present physical injury, they
alleged that the cost of diagnostic testing represented an
ascertainable economic loss for which they were entitled to
compensation.
An order of May 19, 2005 dismissed on the pleadings a proposed
class action complaint. The judge ordered the dismissal of
plaintiffs' complaint on failure to state a cause of action for
such monitoring.
Plaintiffs appealed. The viability of plaintiffs' medical
monitoring claim was the sole focus of Merck's motion to dismiss
and the trial court's opinion, and it is the sole issue on
appeal.
Appellate Court's Ruling
In a decision issued on Jan. 16, the appellate court reversed
the dismissal and remanded the matter for further proceedings
(Class Action Reporter, Jan. 17, 2006).
The court stated in an order: "In doing so, we express no
opinion as to the ultimate viability of plaintiffs' action.
However, as we will explain, we find the dismissal to have
prematurely terminated plaintiffs' opportunity to establish the
existence of a legally cognizable claim."
"...plaintiffs' pleadings... do not allege the non-existence of
injury, but instead allege that the two named plaintiffs have
not filed claims for personal injury from exposure to Vioxx and
have not had a diagnostic EKG since commencing to take the drug.
Plaintiffs thus must be accorded an opportunity to demonstrate
"harm" cognizable under the Product Liability Act before the
portions of their suit premised on that Act can be dismissed as
legally insufficient."
A copy of the court ruling is available for free at:
http://ResearchArchives.com/t/s?1892
Merck & Co. has petitioned the New Jersey Supreme Court for
review of the Appellate Division's decision, according to the
company's Feb. 27 form 10-K filing with the U.S. Securities and
Exchange Commission for the fiscal year ended Dec. 31, 2006.
The case is Docket No. A-5661-04T5 in the appellate court and L-
3771-04 in the lower court.
MERCK & CO: La. Court Refuses to Certify Class in Vioxx MDL
-----------------------------------------------------------
District Judge Eldon E. Fallon denied a motion filed in a
Multidistrict Litigation against Merck & Co. Inc. to certify a
nationwide class of all persons who allegedly suffered personal
injury as a result of taking Vioxx.
Individual and putative class actions have been filed against
the company in state and federal courts alleging personal injury
and/or economic loss with respect to the purchase or use of
Vioxx.
All such actions filed in federal court are coordinated in a
multidistrict litigation before Judge Fallon in the U.S.
District Court for the Eastern District of Louisiana.
A number of such actions filed in state court are coordinated in
separate coordinated proceedings in state courts in New Jersey,
California and Texas, and the counties of Philadelphia,
Pennsylvania and Clark County, Nevada.
As of Dec. 31, 2006, the company had been served or was aware
that it had been named as a defendant in approximately 27,400
lawsuits, which include approximately 46,100 plaintiff groups,
alleging personal injuries resulting from the use of Vioxx, and
in approximately 264 putative class actions alleging personal
injuries and/or economic loss.
Of these lawsuits, approximately 8,300 lawsuits representing
approximately 23,700 plaintiff groups are or are slated to be in
the federal MDL and approximately 16,800 lawsuits representing
approximately 16,800 plaintiff groups are included in a
coordinated proceeding in New Jersey Superior Court before Judge
Carol E. Higbee.
On Nov. 22, 2006, Judge Fallon denied a motion filed in the MDL
to certify a nationwide class of all persons who allegedly
suffered personal injury as a result of taking Vioxx.
MICROSOFT CORP: March Hearing Set for $224M Antitrust Agreement
---------------------------------------------------------------
The Circuit Court of Wisconsin, Milwaukee County will hold a
fairness hearing on March 30, 2007 at 11:00 a.m. for the
proposed settlement in the matters:
-- "Spence v. Microsoft Corp., Case No. 00-CV-003042,"
-- "Capp v. Microsoft Corp., Case No. No. 05-CV-011127,"
and
-- "Bettendorf v. Microsoft Corp., Case No. No. 05-CV-
010927."
The hearing will be held in the Milwaukee County Courthouse,
Room 403, 901 North 9th St., Milwaukee, WI 53233.
Objections and exclusions to and from the settlement was due
Feb. 13, 2007. Proof of claim forms must be submitted by June
30, 2007.
Plaintiffs in the lawsuits claim that the company violated
Wisconsin's antitrust and unfair competition laws and thereby
overcharged consumers for some of its software.
The settlement was reached on behalf of Wisconsin consumers and
businesses that acquired Microsoft software from Dec. 7, 1993
through April 30, 2003, for use in Wisconsin, and not for
resale.
The software included is: Microsoft's "Windows" and "MS-DOS"
operating system software; Microsoft's "Office" productivity
suite software; Microsoft's "Excel" software; Microsoft's "Word"
word processing software (including "Home Essentials" and "Works
Suite").
The settlement will provide up to $223,896,000, in vouchers,
which people and businesses can use toward the purchase of
computers, computer products, and software.
For more details, contact:
(1) Microsoft-Wisconsin Settlement, P.O. Box 1626,
Minneapolis, MN 55440-1626, Phone: 1-800-598-3050 and
1-866-494-8399, Web site:
http://www.microsoftWIsuit.com;and
(2) Ben Barnow of Barnow and Associates, P.C., One North
LaSalle St., Suite 4600, Chicago, IL 60602, Phone: 312-
621-2000, Fax: 312-641-5504.
NATIONAL MONEY: B.C. High Court Certifies Payday Loans Lawsuit
--------------------------------------------------------------
Justice Brenda Brown of the Supreme Court of British Columbia
certified a class action accusing National Money Mart Co. of
charging illegal payday loan fees in contravention of the
Criminal Code, the Vancouver Sun reports.
The judge also certified Kurt MacKinnon and Louise Parsons as
class representatives.
On Jan. 29, 2003, two proposed class proceedings were filed in
the Supreme Court of British Columbia that claims the company
issued short-term "fast cash advance" loans that charged an
illegal annual interest rate exceeding 60 per cent.
These actions seek to recover monies Money Mart has collected in
excess of the maximum rate permitted under the Criminal Code on
behalf of all persons resident in British Columbia who borrowed
a payday loan from Money Mart.
In March 2005, the suit was denied certification, which
plaintiffs appealed in July.
The judgment said Money Mart estimates that there are
approximately 127,900 potential class members.
For more information, contact Hordo and Bennett - Barristers and
Solicitors Litigation Counsel, 1801-808 Nelson Street, Box
12146, Nelson Square, Vancouver, British Columbia V6Z 2H2,
Phone: (604) 682-5250, Fax: (604) 682-7872, E-mail:
moneymart@classcounsel.ca.
PILGRIM'S PRIDE: Clarke County Workers File FLSA Violations Suit
----------------------------------------------------------------
Pilgrim's Pride Corp. is facing a class action complaint in the
U.S. District Court for the Middle District of Georgia brought
pursuant to Fair Labor Standards Act Section 216(b) on behalf of
current and former production employees of the company at its
Athens, Georgia, facility located in Clarke County.
The complaint alleges Pilgrim's Pride uniformly denies hourly
wages and overtime premium pay to its employees by requiring
them to perform "off the clock" work in violation of federal
laws set out in the FLSA.
Specifically, the complaint alleges plaintiffs perform mulitple
tasks, but are victims to the same illegal policy and practice
of failing to pay workers for all time worked, including unpaid
but compensable break periods, unpaid hourly wage times and
unpaid overtime premium wage times.
The complaint contends that under Pilgrim's Pride's wage
compensation system, it pays plaintiffs and other similarly
situated employees only regularly scheduled time that they are
on the production assembly line or in production areas under a
system known as master time, master key, line time or gang time.
In addition, defendant allegedly does not pay employees for time
spent waiting at the line prior to the line start up.
Plaintiffs are allegedly required to report to duty before the
start of the master time clock and required to continue work
after the master time clock has stopped.
Plaintiffs further allege they are owed compensation for the
walk time prior and after unpaid breaks, the time spent donning
and doffing clothing and equipment pre- and post-break
respectively, and the time spent washing and/or waiting to wash
themselves and their equipment.
Questions of law and fact common to the class include, without
limitation, the following:
-- whether plaintiffs were compensated for time spent
clearing security and time spent walking from security
to their changing areas and from changing areas to
security;
-- whether the security activities at issue are integral or
indispensable to defendant's business activities;
-- whether plaintiffs were compensated for time spent
donning and doffing clothing and protective gear,
washing, and walking to and from his job posts;
-- whether the donning, doffing and washing activities at
issue are integral or indispensable to defendant's
business activities;
-- whether plaintiffs were entitled to compensation for
time donning and doffing, washing activity time, and
walking time to and from "the line";
-- whether plaintiffs' donning, doffing, washing activity,
and walking time is integral and indispensable to their
principal activities;
-- whether defendant failed to pay employees for unpaid
breaks that were effectively compensable;
-- whether defendant's compensation policy and practice
accurately accounts for the time plaintiffs are actually
working;
-- whether defendant's compensation policy and practice is
illegal;
-- whether defendant had a policy and practice of willfully
failing to record and compensate employees for all time
worked; and
-- whether defendant failed to accurately record all
compensable time, resulting in a failure to compensate
plaintiffs and other similarly situated employees of
regular hourly wages and overtime pay, in violation of
defendant's policies and procedures and the mandate of
the FLSA.
Plaintiffs pray that the court grant the following relief:
(a) at the earliest possible time, issue and Order allowing
Notice or issue such court supervised Notice to all
similarly situated current and former Pilgrim's Pride
hourly employees, working at the Athens, Georgia
location in the last three years) of this action and
their rights to participate in this action. Such notice
shall inform all similarly situated current and
qualified former employees of the pendency of this
action, the nature of this action, and of their right
to "opt in" to this action if they worked "off the
clock" for times not paid, including time that may be
paid at overtime rates;
(b) issue an Order, pursuant to the Declaratory Judgment
Act, 28 U.S.C. Sections 2201-2202, declaring Pilgrim's
Pride's actions as described in the complaint are
unlawful and in violation of the FLSA and applicable
regulations and are and were willful as defined in the
FLSA;
(c) issue an Order directing and requiring Pilgrim's Pride
to pay plaintiffs and all other similarly situated
employees damages in the form of reimbursement for
unpaid hourly and premium overtime wages (past and
future) for all time spent performing compensable work
for which they were not paid pursuant to the rate
provided by the FLSA;
(d) issue an Order directing and requiring Pilgrim's Pride
to pay plaintiffs and all other similarly situated
employees liquidated damages pursuant to the FLSA in an
amount equal to, and in addition to the amount of wages
and overtime wages owed to them;
(e) issue an Order directing defendant to reimburse
plaintiffs and other similarly situated employees for
the costs and attorneys fees expended in the course of
litigating this action, pre-judgment and post-judgment
interest; and
(f) provide plaintiffs with 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?1ba1
The suit is "Allen et al. v. Pilgrim's Pride Corp., Case No.
3:07-cv-00019-CDL," filed in the U.S. District Court for the
Middle District of Georgia under Judge Clay D. Land.
Representing plaintiffs are Richard Celler of Morgan & Morgan,
284 South University Drive, Fort Lauderdale, FL 33324, Phone:
877-435-9243, Fax: 954-333-3515, E-mail:
Richard@cellerlegal.com; and Hezekiah Sistrunk, Jr., 127
Peachtree Street, N.E., Suite 800, The Candler Building,
Atlanta, GA 30303, Phone: 404-222-9922, E-mail:
hez@sistrunklaw.com.
PILGRIM'S PRIDE: Workers File Ga. FLSA Suit Over Depressed Wages
----------------------------------------------------------------
Pilgrim's Pride Corp. is facing a class action complaint in the
U.S. District Court for the Middle District of Georgia over
alleged violations of the Fair Labor Standards Act of 1938, 29
U.S.C. Section 201, et seq.
Plaintiffs allege violations of defendant's statutory obligation
to pay for all work performed during the work day, and, where
such work hours exceeded 40 hours per week, for mandated
overtime premium for all work performed by employees that are
covered by the FLSA.
Specifically, plaintiffs allege that defendant has willfully
engaged in the practice of inducing, permitting, or requiring
its employees to work "off-the-clock" in excess of 40 hours per
week without recording the time for all work performed or
compensating them with appropriate payment for such work.
Plaintiffs bring this action on behalf of themselves and all
current and former employees employed by defendant in its
Elberton Plant who have held non-exempt positions at any time
during all or any part of the period beginning three years
before the filing of the complaint to the present.
According to the complaint, the FLSA requires that covered
employees be compensated for every hour worked in a workweek.
It also requires that covered employees receive overtime
compensation "not less than one and one-half times" the
employee's regular rate of pay for all hours worked over 40 in a
workweek.
The suit claims defendant has violated the FLSA with respect to
plaintiffs and the class by, inter alia, failing to compensate
plaintiffs and the class for all hours worked and, with respect
to such hours, failing to pay Plaintiff and the class the
legally mandated overtime premium for such work on those
occasions where the work exceeded 40 hours in a workweek.
Further, defendant has violated the FLSA with respect to
Plaintiffs and the class by, inter alia, failing to make, keep
and preserve records of Plaintiffs and members of the proposed
class showing all time it permitted or required Plaintiffs and
members to work.
Plaintiffs seek the following relief on behalf of themselves and
all others similarly situated:
-- an order permitting this litigation to proceed as a
collective action pursuant to 29 U.S.C. Section 216(b);
-- prompt notice, pursuant to 29 U.S.C. Section 216(b), of
this litigation to all potential class members;
-- an injunction prohibiting Defendant from engaging in
future violations of the FLSA;
-- compensatory and back pay damages to the fullest extent
permitted under federal law;
-- liquidated damages to the fullest extent permitted under
federal law;
-- litigation costs, expenses, and attorneys' fees to the
fullest extent permitted under federal; and
-- such other and further relief as this Court deems just
and proper.
A copy of the complaint is available free of charge at:
http://ResearchArchives.com/t/s?1b9e
The suit is "Brown et al. v. Pilgrim's Pride Corp., Case No.
3:07-cv-00024-CDL," filed in the U.S. District Court for the
Middle District of Georgia under Judge Clay D. Land.
Representing plaintiffs are:
(1) Preyesh K. Maniklal, 4360 Chamblee Dunwoody Road, Suite
428, Atlanta, GA 30341, Phone: 404-875-0630, E-mail:
preyeshmaniklal@gcmdlaw.com;
(2) David H. Moskowitz of Moskowitz & Caraway, P.C., P.O.
Box 501417, Atlanta, GA 30350, Phone: 404-321-4060; and
(3) Tisha R. Tallman, Suite 428, 4360 Chamblee Dunwoody
Road, Atlanta, GA 30341, Phone: 404-875-0630, E-mail:
tishatallman@gcmdlaw.com.
RUBIO'S RESTAURANTS: Settles Calif. Labor Lawsuit for $7.5M
-----------------------------------------------------------
Rubio's(R) Restaurants, Inc. reached an agreement to settle a
previously disclosed class action related to how the company
classified certain employees under California overtime laws.
The settlement agreement, which is subject to court approval,
provides for a settlement payment of $7.5 million payable over
three installments. The first $2.5 million installment is due
65 days after final approval of the settlement and dismissal.
The second $2.5 million installment is due 18 months after the
date of the final approval and dismissal. The third and final
installment of $2.5 million is due 36 months after final
approval of the settlement and dismissal.
Financing charges of 3% simple interest equal to $337,500 will
also be due and payable 36 months after final approval and
dismissal.
On June 28, 2001, a former employee, who worked in the position
of general manager, filed a class action complaint against the
company in Orange County, California Superior Court.
A second similar class action complaint was filed in Orange
County, California Superior Court on Dec. 21, 2001, on behalf of
another former employee who worked in the positions of general
manager and assistant manager.
On May 16, 2002, these two cases were consolidated into one
action. These cases currently involve the issue of whether
employees and former employees in the general and assistant
manager positions who worked in California units during
specified time periods were misclassified as exempt and deprived
of overtime pay.
The consolidated complaint also asserts claims for alleged
missed meal and rest breaks. In addition to unpaid overtime,
Cthese cases seek to recover waiting time penalties, interest,
attorneys' fees and other types of relief on behalf of the
current and former employees that these former employees purport
to represent.
On Nov. 9, 2005, the court certified a class of assistant
managers and on March 22, 2006 the court certified a class of
general managers.
Plaintiffs have stipulated to the decertification of a meal and
rest break class and that class has been decertified.
A May 14, 2007 trial is scheduled (Class Action Reporter, Nov.
24, 2006).
The settlement will result in a one-time pre-tax charge of $8.4
million in the fourth quarter of fiscal 2006 which includes the
settlement amount, interest and estimated legal costs to be
incurred related to this agreement. The company denies the
allegations in the complaint.
"I am pleased that we are able to put this litigation behind
us," said Dan Pittard, Rubio's president and chief executive. "I
look forward to focusing on growing the Company."
TOWER AUTOMOTIVE: Wants to Make Initial ERISA Settlement Payment
----------------------------------------------------------------
Tower Automotive Inc. and its debtor-affiliates (Companies) seek
permission from the Honorable Allen L. Gropper of the U.S.
Bankruptcy Court for the Southern District of New York to make a
$2 million provisional settlement payment as part of a
settlement of an Employee Retirement Income Security Act Class
Action.
The companies previously obtained approval from Judge Gropper to
advance up to an aggregate of $1,500,000 in legal defense fees,
costs and related expenses incurred by the Debtors' current and
former officers, directors and employees to defend alleged
violations of the Employee Retirement Income Security Act Class
Action.
The companies maintain that resolution of the ERISA Litigation
is an important aspect of their efforts to reorganize.
The companies and the individual defendants have been
negotiating a settlement of the Class actions that resolves all
potential liability of the Debtors or the Individual Defendants,
Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York,
relates.
While the Settlement will be subject to review and approval by
U.S. District Court for the Southern District of New York, the
Debtors come before Judge Gropper seeking authority to make a
provisional payment pursuant to the Settlement, Mr. Cieri notes.
If the request is granted, the companies would execute a fully
documented settlement agreement and make the Provisional
Settlement Payment.
The salient terms of the Settlement term sheet provides that:
(a) Upon approval of the Settlement by the District Court,
the companies will deposit $2,000,000 in a segregated
account;
(b) The stipulated liability under the ERISA Litigation will
be capped at $14,000,000, which is within the policy
limits under the ERISA Policy;
(c) The companies and the Individual Defendants would agree
to assign to the plaintiffs in the Class actions the
right to pursue the Debtors' and the Individual
Defendants' claims against Federal Insurance Company --
the companies' insurance carrier -- up to $14,000,000,
at the Plaintiffs' sole expense; and
(d) If the Plaintiffs prevail against Federal in the
Coverage Litigation, the first $4,000,000 of any
recovery would go to the Plaintiffs, the next $2,000,000
would go to the Companies to reimburse them for the
Provisional Settlement Payment, and the balance of any
recovery would go to the Plaintiffs. Thus, so long as
there is more than $6,000,000 in coverage for the ERISA
Litigation, the Companies will be entitled to a full
refund of the Provisional Settlement Payment upon the
Plaintiffs' receipt of funds from Federal.
The Companies submit that the Settlement is beneficial to their
estates and creditors, fair and equitable, and falls well within
the range of reasonableness.
Mr. Cieri also notes that in exchange for the Provisional
Settlement Payment, the Companies will receive several important
benefits from the Settlement, including that:
(1) The Companies will realize significant savings by not
continuing to fund the litigation costs associated with
the Coverage Litigation and the ERISA Litigation. The
Coverage Litigation and the ERISA Litigation are both in
relatively early stages, and given the tenor to date,
would be very costly to conclude, and would likely
involve significant appellate litigation;
(2) The Settlement will provide much needed certainty to the
Companies and the Individual Defendants at a crucial
time in the Companies' Chapter 11 cases. The ERISA
Litigation and the Coverage Litigation have been a
distraction for the Companies and for the Individual
Defendants, and the Companies believe that their
reorganization efforts would benefit from putting an end
to this distraction and allowing the Companies and the
Individual Defendants to more fully focus on the
considerable challenges at hand related to the
Companies' planned emergence from Chapter 11;
(3) The Settlement will remove a significant obstacle to the
Companies' ability to retain the services of the
Individual Defendants going forward. The Companies
expect that the future owners of, or investors in, their
businesses, whomever they may be, may want to retain
some or all of the Individual Defendants, and that the
ERISA Litigation could be a barrier to that goal; and
(4) The Companies and the Individual Defendants will receive
a full release of all claims arising out of, or in any
way related to, directly or indirectly, any or all of
the acts, omissions, facts, matters, transactions or
occurrences during the Class Period that are, were, or
could have been alleged, asserted or set forth in the
ERISA Litigation related to alleged violations of ERISA.
The release is significant because there's a risk that
if the Individual Defendants were held liable in the
ERISA Litigation, their liability would be as agents of
the Companies, exposing the Companies to both vicarious
liability under the theory of "respondeat superior" and
the risk of being collaterally estopped from denying
liability for the actions of the Individual Defendants.
Responses
(a) Silver Point
Silver Point Capital Fund, L.P., asserts that it neither takes
issue with the economic structure of the Settlement nor
maintains that the Settlement falls outside the "range of
reasonableness."
However, Silver Point believes that consideration of the request
should be deferred until a better understanding of the
Companies' ability to fully satisfy the claims of their senior
creditors -- specifically, the Second Lien Lenders -- in cash
can be ascertained.
James C. Tecce, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in
New York, argues that the [Companies]' bankruptcy cases have
reached a critical point, and paying junior creditors'
prepetition claims outside of a Chapter 11 plan before the
satisfaction of the Second Lien Lenders' claims simply is
inappropriate.
"This is especially true when the $2 million provisional payment
will not be used to satisfy claims asserted against the
[Companies]," Mr. Tecce argues.
Mr. Tecce adds that at best, the Companies may be obligated with
respect to indemnification claims asserted by the Individual
Defendants relating to the ERISA Litigation. These claims would
arise under the Companies' by-laws and employment agreements,
and relate to alleged prepetition misconduct.
Accordingly, Silver Point asks Judge Gropper to sustain its
objection and defer consideration of the Companies' request.
(b) Creditors Committee
The Official Committee of Unsecured Creditors asks the
Bankruptcy Court to deny the Companies' request because:
* The Plaintiffs' claims arose from the sale of securities,
and the Bankruptcy Code mandates that the claims be
subordinated to the claims of general unsecured creditors.
Thus, payment of the Settlement, without a guarantee of
insurance coverage, will in essence elevate the
plaintiffs' claims above all other claims; and
* The Settlement Payment will constitute the payment of a
prepetition claim outside of a confirmed Reorganization
Plan. Courts have consistently held that payment of those
claims should only be approved where it is essential to
the companies' reorganization efforts.
The Bankruptcy Court must not allow the Debtors to end run
around the bankruptcy priority scheme, and favor the Plaintiffs'
subordinate claims to the detriment of all other claimants, Ira
S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP, in
New York, emphasizes.
Under Section 510(b) of the Bankruptcy Code, courts must
subordinate bankruptcy claims "for damages arising from
purchases and sales of securities of a debtor," including claims
for "reimbursement or contribution" based on those claims, Mr.
Dizengoff notes.
According to Mr. Dizengoff, even if the Plaintiffs' claims are
not subordinated pursuant to Section 510(b), they are still
merely general unsecured claims that should be paid pursuant to
a confirmed Plan. Multiple provisions in the Bankruptcy Code
envision and demand that similarly situated creditors receive
equal treatment.
Moreover, as required by the Bankruptcy Court's prior orders,
the Companies must be directed to seek reimbursement from
Federal of all amounts advanced, including amounts already paid,
to the Individual Defendants if the Debtors prevail in the ERISA
Coverage Litigation, Mr. Dizengoff argues. It is premature to
allow the Debtors to pay any more amounts, including the
Settlement Payment, if there is no basis to recover those
amounts from Federal, he says.
Mr. Dizengoff maintains that the Companies should know first if
they can recover the Settlement Payment -- plus the amounts
previously paid -- from Federal. If the Companies or their
assigns are successful in the ERISA Coverage Litigation, then
the proposed Settlement would have no impact on the estate.
Headquartered in Grand Rapids, Michigan, Tower Automotive Inc. -
- http://www.towerautomotive.com/-- is a global designer and
producer of vehicle structural components and assemblies used by
every major automotive original equipment manufacturer,
including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda,
Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products
include body structures and assemblies, lower vehicle frames and
structures, chassis modules and systems, and suspension
components. The company and 25 of its debtor-affiliates filed
voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y.
Case No. 05-10576 through 05-10601). James H.M. Sprayregen,
Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz,
Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP,
represent the Companies in their restructuring efforts. Ira S.
Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP,
represents the Official Committee of Unsecured Creditors. When
the Debtors filed for protection from their creditors, they
listed $787,948,000 in total assets and $1,306,949,000 in total
debts.
The Debtors' exclusive plan-filing deadline is extended to
March 21, 2007, pending a hearing on that date. (Tower
Automotive Bankruptcy News, Issue No. 54; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
ULTRASOUND TECHNICAL: Md. Court Orders Discovery in "Sanders"
-------------------------------------------------------------
The U.S. District Court for the District of Maryland has ordered
for discovery to begin in the purported class action, "Laronda
Sanders, et al. v. Ultrasound Technical Services, Inc. et al."
On March 15, 2006, 12 former students of the Landover, Maryland
campus of Sanford-Brown Institute, one of Career Education
Corp.'s schools, filed a class action complaint, on behalf of
themselves and all others similarly situated, against Career
Education and Ultrasound Technical Services, Inc., one of the
company's subsidiaries. The suit was filed in the Circuit Court
for Prince George's County, Maryland.
The complaint alleges that the defendants made fraudulent
misrepresentations and violated the Maryland consumer fraud act
by misrepresenting or failing to disclose, among other things,
details regarding instructors' experience or preparedness,
availability of clinical externship assignments, and estimates
for the dates upon which the plaintiffs would receive their
certificates and be able to enter the work force.
Plaintiffs further allege that defendants failed to maintain
accurate attendance records, and that the defendants negligently
or deliberately dropped students without justification. The
complaint also alleges that defendants breached the enrollment
contract with plaintiffs by failing to provide the promised
instruction, training, externships, and placement services.
Plaintiffs seek actual damages, punitive damages, and costs.
Defendants removed the action to the U.S. District Court for the
District of Maryland, Greenbelt Division, and filed a motion to
dismiss significant portions of the complaint. Plaintiff moved
to remand the action to state court.
On Sept. 18, 2006, the court denied plaintiffs' motion to
remand. The court also granted defendants' motion to dismiss
the common law and statutory fraud counts of the complaint, with
leave to amend.
On Oct. 17, 2006, plaintiffs filed an amended complaint. They
also filed a motion for partial summary judgment, which
defendants have opposed.
On Feb. 21, the court denied defendants' motion to dismiss the
amended complaint and plaintiffs' motion for partial summary
judgment.
In addition, the court also issued an order directing that
discovery proceed in this case, according to Career Education's
March 1 Form 10-K filing with the U.S. Securities and Exchange
Commission for the fiscal year ended Dec. 31, 2006.
The suit is "Sanders et al. v. Career Education Corp. et al.,
Case No. 8:06-cv-01031-PJM," filed in the U.S. District Court
for the District of Maryland under Judge Peter J. Messitte.
Representing the plaintiffs is George Wadie Hermina of Hermina
Law Group, 8327 Cherry Ln., Laurel, MD 20707, Phone:
13012063166, Fax: 13014907913, E-mail: law@herminalaw.com.
Representing the defendants are:
(1) Stephen Lawrence Agin of DLA Piper US LLP, 203 N.
LaSalle St., Ste. 1900, Chicago, IL 60601, Phone:
13123684076, Fax: 13126307342, E-mail:
stephen.agin@dlapiper.com; and
(2) Eric A. Kuwana of Katten Muchin Rosenman, LLP, 1025
Thomas Jefferson Street, NW Washington, DC 20007,
Phone: 202-625-3705, Fax: 202-298-7570, E-mail:
eric.kuwana@kattenlaw.com.
WINFIXER: Additional Defendant Named in Security Software Suit
--------------------------------------------------------------
The plaintiff in a class action over a purported Internet
security software Winfixer has added as defendant James Reno of
Ohio, who ran a Web hosting company with a postal address in
Amelia, IDG News Service reports.
The suit was filed by attorney Joseph M. Bochner in September in
California Superior court in Santa Clara County on behalf of
Beatrice Ochoa against Marc J. Cohen of Florida. The plaintiff
paid $39.95 for the software that allegedly eventually destroyed
her computer's hard drive. The suit counts another 100
anonymous who were allegedly victims of fraud.
Mr. Cohen was named for his connections with vipfares.com, a
now-defunct travel Web site, Mr. Bochner said. At one time, the
Winfixer software would hijack the user's browser and suddenly
show vipfares.com, he said.
Mr. Reno was added to the suit after a support number for
Winfixer also rang through to ByteHosting, a company he runs.
According to the report, Mr. Cohen's attorney, Judy Silverstein,
appeared on a San Francisco TV news program on Feb. 26, denying
wrongdoing by his client.
The case seeks compensation and an injunction against the
distribution of Winfixer, among other remedies.
According to the report, Winfixer has been a moving target for
security experts, at times going by the names ErrorSafe,
WinAntiSpyware, WinAntiVirus, SystemDoctor and DriveCleaner.
* Experts Predict Slew of Lawsuits Against Subprime Borrowers
-------------------------------------------------------------
Mortgage lenders that cater to risky borrowers may face a wave
of class actions for conducts that led to the defaults of many
subprime borrowers, according to Martha Graybow of Reuters.
Legal experts also expect class action plaintiffs to eventually
target other possible defendants such as the auditors and
bankers of the lenders.
Subprime lenders that are currently facing class actions include
New Century Financial Corp. and Novastart Financial Inc. and
their top executives. The companies are accused of committing
securities fraud, misleading investors about the companies'
finances, and failing to implement stricter guidelines for
approving mortgages for borrowers with poor credit histories.
The government is examining whether any wrongdoing occurred
among subprime lenders.
The hard part in pursuing the suits, according to experts, is in
proving these cases because plaintiffs need to clearly establish
that the lenders intentionally deceived investors, the report
said. Also, for suits against auditors and bankers, plaintiffs
have to prove that the outside parties directly participated in
a scheme to defraud.
New Securities Fraud Cases
ACCREDITED HOME: Lerach Announces Securities Fraud Suit Filing
--------------------------------------------------------------
Lerach Coughlin Stoia Geller Rudman & Robbins LLP announces that
a class action has been commenced in the U.S. District Court for
the Southern District of California on behalf of purchasers of
Accredited Home Lenders Holding Co. common stock during the
period between Nov. 1, 2005 and March 12, 2007.
The complaint charges Accredited and certain of its officers and
directors with violations of the U.S. Securities Exchange Act of
1934. Accredited operates as a mortgage banking company in the
U.S. and Canada.
The complaint alleges that during the Class Period, defendants
issued materially false and misleading statements regarding the
company's business and financial results. As a result of
defendants' false statements, Accredited stock traded at
artificially inflated prices during the Class Period, reaching a
high of $58.45 per share on May 11, 2006.
On Feb. 14, 2007, the company issued a press release announcing
disappointing profitability. Then, on March 12, 2007, after the
market closed, the company issued a press release announcing
that the company was exploring various strategic options. The
company reported that it had paid approximately $190 million in
margin calls on its facilities since Jan. 1, 2007.
In addition, Accredited was seeking waivers and extensions of
waivers of certain financial and operating covenants under its
warehouse and repurchase facilities. On March 13, 2007,
Accredited's stock collapsed $7.43 per share to close at $3.97
per share, a one-day decline of 65% on volume of 41.9 million
shares, 20 times the average three-month volume.
According to the complaint, the true facts, which were known by
the defendants but concealed from the investing public during
the Class Period, were as follows:
(a) the company lacked requisite internal controls, and, as
a result, the company's projections and reported
results issued during the Class Period were based upon
defective assumptions and/or manipulated facts;
(b) the company's financial statements were materially
misstated due to its failure to properly account for
its allowance for loan repurchase losses;
(c) given the deterioration and the increased volatility in
the sub-prime market, the company would be forced to
tighten its underwriting guidelines which would have a
direct material negative impact on its loan productions
going forward; and
(d) given the increased volatility in the sub-prime market,
the company had no reasonable basis to make projections
about its 2007 results.
As a result, the company's projections issued during the Class
Period about its 2007 results were at a minimum reckless. As a
result of defendants' false statements, Accredited's stock price
traded at inflated levels during the Class Period.
However, after the above revelations seeped into the market, the
company's shares were hammered by massive sales, sending them
down more than 65% from their Class Period high.
Plaintiffs seek to recover damages on behalf of all purchasers
of Accredited common stock during the Class Period.
For more information, contact William Lerach or Darren Robbins,
both of Lerach Coughlin Stoia Geller Rudman & Robbins LLP,
Phone: 800-449-4900 or 619-231-1058, E-mail: wsl@lerachlaw.com,
Website: http://www.lerachlaw.com.
MONSTER WORLDWIDE: Schatz Nobel Announces Securities Suit Filing
----------------------------------------------------------------
The law firm of Schatz Nobel Izard, P.C. announces that a
lawsuit seeking class-action status has been filed in the U.S.
District Court for the Southern District of New York on behalf
of all persons who purchased or otherwise acquired the publicly
traded securities of Monster Worldwide, Inc. between May 6, 2005
and June 9, 2006, inclusive.
The complaint alleges that Monster and certain of its officers
and directors violated Federal Securities laws by issuing a
series of materially false and misleading statements.
Specifically, during the Class Period, Defendants granted stock
options to themselves and to other Monster officers and
directors on dates that Monster stock had reached its lowest, or
next-lowest price in weeks or months. These grants almost
invariably preceded share gains, and or followed significant
drops in the company's stock price. In public disclosures,
however, Defendants falsely claimed that the grants were dated
and priced as of the date of the actual grants.
On June 12, 2006, The Wall Street Journal published an article
titled "Monster Worldwide Gave Officials Options Ahead of Share
Run-Ups." The article stated that Monster may have backdated
option grants, and reported that there was a one in nine million
chance that the grant dates of the options The Wall Street
Journal examined were selected at random.
That same day, Monster issued a press release announcing the
receipt of a subpoena from the U.S. Attorney for the Southern
District of New York, relating to the company's stock option
granting practices.
On this news, shares of Monster fell to a close of $38.60, down
$3.40 from the prior trading day.
Interested parties may move the court no later than May 14, 2007
for lead plaintiff appointment.
For more information, contact Wayne T. Boulton and Nancy A.
Kulesa, both of Schatz Nobel Izard, P.C., Phone: (800) 797-5499,
E-mail: firm@snlaw.net, Website: http://www.snlaw.net.
NEW CENTURY: Shepherd, Finkelman Files Securities Fraud Lawsuit
---------------------------------------------------------------
The law firm Shepherd, Finkelman, Miller & Shah, LLC filed a
lawsuit seeking class-action status in the U.S. District Court
for the Central District of California, on behalf of all persons
who purchased the common stock of New Century Financial Corp.
(Pink Sheets: NEWC) between April 7, 2006 and Feb. 7, 2007,
inclusive.
The Complaint alleges that New Century, Brad A. Morrice, Robert
K. Cole and Edward F. Gotschall (the company's three co-
founders), and officers Patti M. Dodge and Taj S. Bindra
violated Sections 10(b) and 20(a) of the U.S. Securities
Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by
issuing a series of materially false and misleading statements
to the market throughout the Class Period that had the effect of
artificially inflating the market price of the company's stock.
The Complaint further alleges that Defendants misrepresented
and/or omitted to disclose, despite a duty to do so, that the
company, among other things, was under-reserving for loan losses
while conditions in the sub-prime market were deteriorating, had
failed to properly value residual interests in loan
securitizations in 2006 and earlier periods, lacked adequate
internal controls, and that New Century's financial statements
were not prepared in accordance with Generally Accepted
Accounting Principles.
It further contends that these false statements caused New
Century's stock to trade at artificially inflated prices during
the Class Period, which the company's insiders took advantage of
by selling large quantities of their own shares of New Century
stock.
The Class Period ends on Feb. 7, 2007, when New Century
announced, after the market had closed, that it would have to
restate its financial results for the first three quarters of
2006 because of accounting violations.
On this news, New Century's stock plummeted 36% on Feb. 8,
closing at $19.24 per share. Since then, the company has
announced that it received a grand jury subpoena regarding its
accounting treatment and insider sales, and that it is the
subject of an investigation by the U.S. Securities and Exchange
Commission.
On March 13, 2007, New Century's stock was delisted from the
NYSE, and the last reported share price was $1.66. The company's
shares now trade on the Pink Sheets.
Interested parties may move the court no later than April 10,
2007 for lead plaintiff appointment.
For more information, contact James E. Miller, Esquire or James
C. Shah, Esquire, both of Shepherd, Finkelman, Miller & Shah,
LLC, Phone: +1-866-540-5505, or +1-877-891-9880, E-mail:
jmiller@sfmslaw.com or jshah@sfmslaw.com, Website:
http://www.classactioncounsel.com.
RADIOSHACK CORP: Lerach Announces Securities Suit Filing in Tex.
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Lerach Coughlin Stoia Geller Rudman & Robbins LLP announces that
a class action has been commenced in the U.S. District Court for
the Northern District of Texas on behalf of purchasers of
RadioShack Corp. common stock during the period between Jan. 14,
2003 and June 7, 2006.
The complaint charges RadioShack and certain of its officers and
directors with violations of the U.S. Securities Exchange Act of
1934. The company primarily engages in the retail sale of
consumer electronics goods and services through the RadioShack
store chain and non-RadioShack branded kiosk operations.
The complaint alleges that defendants issued highly positive but
false statements about RadioShack's inventory wireless business,
new store format and the company's future prospects.
Defendants' false statements inflated RadioShack's stock price
from about $20 per share just before the start of the Class
Period on Jan. 14, 2003 to over $30 per share by mid-November
2003 and then to a Class Period high of $35.41 on Feb. 19, 2004.
Further, the complaint alleges that defendants took advantage of
this artificial inflation and sold over 500,000 shares of the
RadioShack stock they owned at an average price of $31 per share
for illegal insider proceeds of over $17 million.
It contends that defendants knew that their positive statements
were false because, among other things, the company was
knowingly carrying millions of dollars worth of excess and
obsolete inventory. RadioShack stock declined to about $15 per
share as the truth leaked into the market.
Plaintiff seeks to recover damages on behalf of all purchasers
of RadioShack common stock during the Class Period.
For more information, contact William Lerach of Lerach Coughlin
Stoia Geller Rudman & Robbins LLP, Phone: 800-449-4900, E-mail:
wsl@lerachlaw.com, Website: http://www.lerachlaw.com.
WORLDSPACE INC: Glancy Binkow Files Securities Fraud Lawsuit
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The law firm Glancy Binkow & Goldberg LLP has filed a class
action in the U.S. District Court for the Southern District of
New York on behalf of a class consisting of all purchasers of
the common stock of Worldspace, Inc. pursuant or traceable to
the company's initial public offering commencing Aug. 4, 2005.
The Complaint charges Worldspace and certain of the company's
executive officers, among others, with violations of federal
securities laws.
Among other things, plaintiff claims that defendants' material
omissions and dissemination of materially false and misleading
statements concerning Worldspace's operations and financial
performance caused the company's stock price to become
artificially inflated.
The Complaint alleges that defendants made materially false and
misleading statements to the investing public and misrepresented
or failed to disclose that expired subscriptions were included
in the company's subscriber count for as many as 90 days
following expiration of an initial three-month promotional
period, causing the company's stock price to become artificially
inflated, inflicting damages on investors.
Plaintiff alleges that subscribers who declined to continue or
to pay for a subscription were not timely removed from the
company's subscriber count; rather than report these
subscriptions as expired, or "churned," defendants continued to
include these subscriptions in the company's subscriber count
for an additional 90 days.
At the time these facts and their effects on the company's
operating results and future business prospects were fully
disclosed, the price of the company's common stock declined,
inflicting damages on investors.
Plaintiff seeks to recover damages on behalf of Class members.
Interested parties may move the court no later than May 15,
2007, for lead plaintiff appointment.
For more information, contact Michael Goldberg, Esquire, or
Lionel Z. Glancy, both of Glancy Binkow & Goldberg LLP, 1801
Avenue of the Stars, Suite 311, Los Angeles, California 90067,
Phone: (310) 201-9150 or (888) 773-9224 (Toll Free), E-mail:
info@glancylaw.com, Website: http://www.glancylaw.com.
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