/raid1/www/Hosts/bankrupt/CAR_Public/070405.mbx
C L A S S A C T I O N R E P O R T E R
Monday, April 2, 2007, Vol. 9, No. 65
Headlines
ANDRX CORP: Discovery Ongoing in Fla. Securities Fraud Lawsuit
BANK OF CANADA: Court Certifies Class in Pensioners' Litigation
BROCADE COMMS: Still Faces Calif. Consolidated Securities Suit
CABLEVISION SYSTEMS: Sued Over Dolan Family's 2006 Buyout Offer
CABLEVISION SYSTEMS: N.Y. Court Okays Suit Over Special Dividend
CABLEVISION SYSTEMS: N.Y. Lawsuits Over Stock Grants Stayed
CALIFORNIA: Alameda County Sued for "Illegal" Strip Searching
CARFAX INC.: Consumer Group Objects to Fraud Suit Settlement
DISTRICT OF COLUMBIA: Lawsuit Over Release of Inmate Certified
FINCORP GROUP: Investor Suit Planned After Administration
FLEETWOOD ENTERPRISES: "Brodhead" Consumer Suit Still Stayed
LEVEL 3: Still Faces Rights of Way Litigation in Ill., Idaho
LIFECELL CORP: Faces Suit Filed by Transplant Patient in N.J.
MARTHA STEWART: May 29 Hearing Set for $30M Securities Suit Deal
MASSACHUSETTS: Franklin County Officers Sued Over Strip Searches
MENU FOODS: Pet Food Recall in Canada Leads to Calif. Lawsuit
MOLINA HEALTHCARE: Parties Voluntarily Dismiss Securities Suit
NPS PHARMACEUTICALS: Utah Securities Suit Over PREOS Amended
PILGRIM'S PRIDE: Ala. Managers Sued Over Alleged Illegal Hiring
PRIME GROUP: Faces Litigation in Md. By Series B Shareholders
SINA CORP: Dismissal Order in N.Y. Securities Suit Now Final
SOUTH CAROLINA ELECTRIC: Post-2008 Trial Expected in "Collins"
SOUTH CAROLINA ELECTRIC: Post-2008 Trial Expected in "Gressette"
TELLABS INC: Ruling in "Makor" Could Set Precedence, Groups Warn
TORONTO-DOMINION: Sued in Ontario for Allegedly Holding Deposits
VERMONT: Motorcycle Club's Civil Rights Suit Gets Class Status
WATSON PHARMACEUTICALS: 9th Circuit Mulls Securities Suit Appeal
WELLS FARGO: Sued in Calif. Over "Hidden" Credit Card Fees
WINSTAR COMMS: N.Y. Securities Suit Deal Gets Final Approval
XM SATELLITE: D.C. Court Dismisses Securities Fraud Litigation
* Labaton Sucharow Weighs Tellabs, Credit Suisse Suits' Effects
New Securities Fraud Cases
ACCREDITED HOME: Charles H. Johnson Announces Securities Lawsuit
COAST FINANCIAL: Brower Piven Announces Securities Fraud Suit
USANA HEALTH: Brodsky & Smith Announces Securities Fraud Lawsuit
USANA HEALTH: Schatz Nobel Announces Securities Fraud Lawsuit
*********
ANDRX CORP: Discovery Ongoing in Fla. Securities Fraud Lawsuit
--------------------------------------------------------------
Discovery is ongoing in a purported securities fraud class
action filed against Andrx Corp., a subsidiary of Watson
Pharmaceuticals, Inc., in the U.S. District Court for the
Southern District of Florida.
On Oct. 11, 2005, Jerry Lowry filed a class action complaint on
behalf of purchasers of the Andrx's common stock during the
class period March 9, 2005 through Sept. 5, 2005 against the
company and its then chief executive officer, Thomas Rice.
The complaint seeks damages under the U.S. Securities Exchange
Act of 1934, and alleges that during the class period, Andrx
failed to disclose that its manufacturing facilities were not in
compliance with current Good Manufacturing Practices.
The complaint further alleges that Andrx's failure to be cGMP
compliant led to the U.S. Food and Drug Administration placing
Andrx on Official Action Indicated status, which resulted in not
being eligible for approvals of Andrx's Abbreviated New Drug
Applications.
On July 24, 2006, the defendants moved to dismiss the action.
On Dec. 8, 2006, the court granted in part and denied in part
the defendants' motion to dismiss.
Discovery is ongoing, according to Watson's March 1 Form 10-K
filing with the U.S. Securities and Exchange Commission for the
quarterly fiscal year ended Dec. 31, 2006.
The suit is "Jerry Lowry, et al. v. Andrx Corp., et al., Case
No. 05-CV-61640," filed in the U.S. District Court for the
Southern District of Florida under Judge William P.
Dimitrouleas. The plaintiff firms in the litigation are:
(1) Dyer & Shuman, LLP, 801 East 17th Avenue, Denver, CO,
80218-1417, Phone: 303.861.3003, Fax: 800.711.6483, E-
mail: info@dyershuman.com;
(2) Federman & Sherwood, 120 North Robinson, Suite 2720,
Oklahoma City, OK, 73102, Phone: 405-235-1560, E-mail:
wfederman@aol.com;
(3) Law Offices of Bernard M. Gross, 1515 Locust Street,
2nd Floor, Philadelphia, PA, 19102, Phone: 215-561-
3600, Fax: 215-561-3000, E-mail:
bmgross@bernardmgross.com; and
(4) Law Offices of Charles J. Piven, P.A., World Trade
Center-Baltimore, 401 East Pratt Suite 2525, Baltimore,
MD, 21202, Phone: 410.332.0030, E-mail:
pivenlaw@erols.com.
BANK OF CANADA: Court Certifies Class in Pensioners' Litigation
---------------------------------------------------------------
The Court of Appeal for Ontario allowed Bank of Canada
pensioners, seeking to reclaim CA$12 million the bank's pension
account paid in administrative fees and expenses since 1993, to
sue as a group, The Toronto Star reports.
In a March 30 ruling, Ontario's highest court overturned a lower
court's denial of class-action status to the plaintiffs, saying
federal lawmakers wanted to reduce the burden that would be
imposed if each member of the group had to sue individually.
Originally the suit was filed by Alan Potter of Vernon, B.C.,
Joseph Bouchard, and Ken Eng of Ottawa, all three are
pensioners.
The three had asked the court to certify a class action against
the bank to include about 2,886 participants in the pension
plan.
According to pensioners, the bank began charging the fund for
administrative fees and expenses in 1993 in effect changing a
policy that dated from the fund's inception in 1936 under which
the bank had paid the fees. However, pensioners argued that the
change was not allowed under the rules of the plan.
The plaintiffs' statement of claim revealed that administrative
fees and expenses rose to $3.2 million in 2003 from $265,000 in
1993.
The bank would later turn over management of the fund to the
CIBC Mellon Trust Co., which is also named as a defendant in the
case.
Plaintiffs are demanding $30 million for breach of trust,
including punitive damages.
BROCADE COMMS: Still Faces Calif. Consolidated Securities Suit
--------------------------------------------------------------
Brocade Communications Systems, Inc. remains a defendant in a
consolidated securities fraud class action pending in the U.S.
District Court for the Northern District of California.
Beginning on or about May 19, 2005, several securities class
action complaints were filed against the company and certain of
its current and former officers.
These actions were filed on behalf of purchasers of the
company's stock from February 2001 to May 2005. They came on
the heels of the company's restatement of certain financial
results due to stock-based compensation accounting issues.
On Jan. 12, 2006, the court appointed a lead plaintiff and lead
counsel. On April 14, 2006, the lead plaintiff filed a
consolidated complaint on behalf of purchasers of the company's
stock from May 2000 to May 2005.
The consolidated complaint alleges, among others, violations of
sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5 promulgated thereunder.
It generally alleges that the company and the individual
defendants made false or misleading public statements regarding
the company's business and operations and seeks unspecified
monetary damages and other relief against the defendants.
The company reported no material development in the matter in
its March 7 Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarterly period ended Dec. 31,
2006.
The suit is "Prena Smajlaj, et al. v. Brocade Communication
Systems, Inc., et al., Case No. 05-CV-2042," filed in the U.S.
District Court for the Northern District of California under
Judge Charles R. Breyer.
Representing the plaintiffs are:
(1) Kaplan Fox & Kilsheimer, LLP, (San Francisco, CA), 100
Pine Street, 26th Floor, San Francisco, CA, 94111,
Phone: 415.772.4700, Fax: 415.677.1233, E-mail:
info@kaplanfox.com;
(2) Nix Patterson & Roach, LLP, 205 Linda Drive,
Daingerfield, TX, 75638, Phone: 903.645.7333, Web site:
http://www.nixlawfirm.com;and
(3) Patton, Roberts, McWilliams & Capshaw, LLP, Century
Bank Plaza - Suite 400; 2900 St. Michael Drive,
Texarkana, TX, 75503, Phone: 903-334-7000, Fax: 903-
334-7007, E-mail: website@pattonroberts.com.
Representing the company are Steven Guggenheim, Caz Hashemi and
Cameron Powers Hoffman of Wilson Sonsini Goodrich & Rosati, 650
Page Mill Road, Palo Alto, CA 94304-1050, Phone: 415-493-3900
and 650-320-4827, E-mail: sguggenheim@wsgr.com,
chashemi@wsgr.com and choffman@wsgr.com.
CABLEVISION SYSTEMS: Sued Over Dolan Family's 2006 Buyout Offer
---------------------------------------------------------------
Shareholder suits relating to an October 2006 offer by the Dolan
Family Group to acquire all of the outstanding shares of
Cablevision Systems Corp. are pending against the company in New
York Supreme Court, Nassau County.
In October 2006, a number of shareholder class actions were
filed against Cablevision and its individual directors relating
to the Oct. 8, 2006 offer by the Dolan Family Group to acquire
all of the outstanding shares of Cablevision's common stock,
except for the shares held by the Dolan Family Group.
These lawsuits allege breaches of fiduciary duty and seek
injunctive relief to prevent consummation of the proposed
transaction and compensatory damages. The trial court ordered
expedited discovery, which began in November 2006. On Jan. 12,
2007, the Special Transaction Committee of Cablevision's Board
of Directors received a revised proposal from the Dolan Family
Group to acquire all of the outstanding shares of common stock
of Cablevision, except for the shares held by the Dolan Family
Group.
On Jan. 16, 2007, the Special Transaction Committee delivered a
letter to Charles F. Dolan and James L. Dolan, rejecting as
inadequate the revised proposal. This litigation is pending,
according to the company's Feb. 27 form 10-k filing.
CABLEVISION SYSTEMS: N.Y. Court Okays Suit Over Special Dividend
----------------------------------------------------------------
The New York Supreme Court for Nassau County approved
a proposed settlement of a suit filed against Cablevision
Systems Corp. in relation to a special dividend proposed by the
Dolan Family Group.
In June and July 2005, a number of shareholder class actions
were filed against Cablevision and its individual directors in
the Delaware Chancery Court and the New York State Supreme Court
for Nassau County relating to the Dolan Family Group proposal to
acquire the outstanding, publicly held interests in Cablevision
following a pro rata distribution of Rainbow Media Holdings.
On Oct. 24, 2005, Cablevision received a letter from the Dolan
Family Group withdrawing its June 19, 2005 proposal and
recommending the consideration of a special dividend. On Nov.
17, 2005, the plaintiffs filed a consolidated amended complaint
in the New York Supreme Court action to relate to the special
dividend proposed by the Dolan Family Group.
On Feb. 9, 2006, the plaintiffs filed a second amended complaint
adding allegations related to the Dec. 19, 2005 announcement
that the board had decided not to proceed with the proposed
special dividend, and the Jan. 31, 2006 announcement that the
board was expected to begin reconsideration of a possible
special dividend at its regularly scheduled meeting in March
2006.
The amended complaint sought, among other things, to enjoin the
payment of the special dividend proposed by the Dolan Family
Group. The Nassau County actions were subsequently dismissed
following settlement by the parties. The Delaware Chancery
Court action is pending.
On Dec. 28, 2005, a purported shareholder derivative complaint
was filed in the U.S. District Court for the Eastern District of
New York alleging that certain events during 2005, including
those relating to the proposed special dividend, constitute
breaches of fiduciary duty.
The action was brought derivatively on behalf of Cablevision and
names as defendants each member of the Board of Directors. The
complaint sought unspecified damages and contribution and
indemnification by the defendants for any claims asserted
against Cablevision as a result of the alleged breaches. The
Eastern District of New York action was dismissed following
settlement of the Nassau County actions.
On March 27, 2006, Cablevision entered into a memorandum of
understanding with respect to the settlement of the actions
pending in the New York Supreme Court for Nassau County relating
to a proposed special dividend. On April 7, 2006, Cablevision's
Board of Directors declared a special cash dividend of $10.00
per share which was paid on April 24, 2006 to holders of record
at the close of business on April 18, 2006.
A hearing on the proposed settlement was held on Sept. 25, 2006.
On Jan. 5, 2007, the court signed an order approving the
settlement and terminating these actions.
CABLEVISION SYSTEMS: N.Y. Lawsuits Over Stock Grants Stayed
-----------------------------------------------------------
Shareholder lawsuits pending against Cablevision Systems
Corp. in the Eastern District of New York action and New York
State Supreme Court for Nassau County over stock option grants
and stock appreciation rights (SARs) are stayed.
The company announced on Aug. 8, 2006 that, based on a voluntary
review of its past practices in connection with grants of stock
options and SARs, it has determined that the grant date and
exercise price assigned to a number of its stock option and SAR
grants during the 1997-2002 period did not correspond to the
actual grant date and the fair market value of Cablevision's
common stock on the actual grant date.
The review was conducted with a law firm that was not previously
involved with the company's stock option plans. The company has
advised the U.S. Securities and Exchange Commission and the U.S.
Attorney's Office for the Eastern District of New York of these
matters and each has commenced an investigation.
The company received a grand jury subpoena from the U.S.
Attorney's Office for the Eastern District of New York seeking
documents related to the stock options issues. The U.S.
received a document request from the SEC relating to its
informal investigation into these matters. The company
continues to fully cooperate with such investigations.
In August, September and October 2006, purported derivative
lawsuits, including one purported combined derivative and class
action, relating to the company's past stock option and SARs
grants were filed in:
-- New York State Supreme Court for Nassau County,
-- the U.S. District Court for the Eastern
District of New York, and
-- Delaware Chancery Court for New Castle County,
by parties identifying themselves as shareholders of Cablevision
purporting to act on behalf of Cablevision.
These lawsuits named as defendants certain present and former
members of Cablevision's Board of Directors and certain present
and former executive officers, alleging breaches of fiduciary
duty and unjust enrichment relating to practices with respect to
the dating of stock options, recordation and accounting for
stock options, financial statements and SEC filings, and alleged
violation of Internal Revenue Code 162(m).
In addition, certain of these lawsuits asserted claims under
Sections 10(b), 14(a), and 20(a) of the U.S. Securities Exchange
Act of 1934 and Section 304 of the Sarbanes-Oxley Act. The
lawsuits sought damages from all defendants, disgorgement from
the officer defendants, declaratory relief, and equitable
relief, including rescission of the 2006 Employee Stock Plan and
voiding of the election of the director defendants.
On Oct. 27, 2006, the Board of Directors of Cablevision
appointed Grover C. Brown and Zachary W. Carter as directors
and, on the same date, appointed Messrs. Brown and Carter to a
newly formed special litigation committee (SLC) of the Board.
The SLC was directed by the Board to review and analyze the
facts and circumstances surrounding these claims, which purport
to have been brought derivatively on behalf of the company, and
to consider and determine whether or not prosecution of such
claims is in the best interests of the company and its
shareholders, and what actions the company should take with
respect to the cases.
The SLC, through its counsel, filed motions in all three courts
to intervene and to stay all proceedings until completion of the
SLC's independent investigation of the claims raised in these
actions.
The Delaware action subsequently was voluntarily dismissed
without prejudice by the plaintiff. The actions pending in
Nassau County have been consolidated and a single amended
complaint has been filed in that jurisdiction. Similarly, the
actions pending in the Eastern District of New York have been
consolidated and a single amended complaint has been filed in
that jurisdiction.
Both the Nassau County action and the Eastern District of New
York action assert derivative claims on behalf of the U.S. as
well as direct claims on behalf of Cablevision shareholders
relating to the company's past stock option and SAR grants. On
Nov. 14, 2006, the trial court in the Nassau County action
denied the SLC's motion for a stay of proceedings and ordered
expedited discovery.
The Appellate Division of the New York State Supreme Court
subsequently stayed all proceedings in the Nassau County action,
including all discovery, pending the SLC's appeal of the denial
of its stay motion. The SLC's appeal has been fully submitted
but has not been scheduled for oral argument. In the Eastern
District of New York action, the trial court has issued a stay
of all proceedings until May 1, 2007.
CALIFORNIA: Alameda County Sued for "Illegal" Strip Searching
-------------------------------------------------------------
The County of Alameda, California along with several other
agencies and officials, were named as defendants in a purported
federal class action over alleged strip searches of people
arrested for misdemeanor.
The suit, which seeks class-action status, was filed in the U.S.
District Court for the Northern District of California on March
28.
It was brought on behalf of three youths who say they were
subjected to group strip-searches before detention hearings at
Alameda County Juvenile Hall between 2003 and 2005, even though
they were arrested for misdemeanor offenses.
The three youths, whoa are all claiming that they were strip
searched in groups, are Lisa Suon, Jeffrey Pay, and Andy Mean.
Besides the county, other defendants that the three youths --
represented by Sacramento-based attorney Mark E. Merin -- named
in their lawsuit, include:
-- Alameda County Probation Department;
-- Alameda County Chief Probation Officer Donald H.
Blevins;
-- Alameda County Assistant Chief Probation Officer Sheila
L. Foster;
-- Alameda County Assistant Chief Probation Officer
Richard A. Muench; and
-- Alameda County Deputy Chief of Juvenile Facilities
William E. Fenton.
In general, the suit claims that the act of strip-searching
juveniles not arrested for drug, violence or weapons violations
before their detention hearings, and without reasonable
suspicion that a search will reveal contraband, violates their
minors' rights. It is also claimed Alameda County's group
strip-searches were unlawful.
The complaint defines the eligible class members as any
juvenile, or those who were juveniles within two years, and who
received either a pre-detention hearing strip search without
having reasonable suspicion the searches would reveal contraband
or a group search.
Though the complaint does not specify damages, it does allege
that more than 20 juveniles are illegally searched at the hall
daily.
The suit is "Suon et al. v. County of Alameda et al. Case No.
3:07-cv-01770-EMC," filed in the U.S. District Court for the
Northern District of California under Judge Edward M. Chen.
Representing the plaintiffs is Mark E. Merin, Esq. of The Law
Office of Mark E. Merin, 2001 P Street, Suite 100, Sacramento,
CA 95814, Phone: 916-443-6911, Fax: 916-447-8336, E-mail:
mark@markmerin.com.
CARFAX INC.: Consumer Group Objects to Fraud Suit Settlement
------------------------------------------------------------
Public Citizen lawyers Gupta, Allison Zieve and Brian Wolfman
with Ronald Frederick as local counsel in Ohio filed objections
to a proposed nationwide settlement of a class action against
Carfax, Inc. in the Court of Common Pleas Trumbull County, Ohio.
The lawsuit alleges that consumers are being deceived by
Carfax's claim that its vehicle history reports are based on
searches of its nationwide database, when in fact the database
does not include police accident data from 22 states and the
District of Columbia.
The objections to the settlement were filed on behalf of 17
individual class members and the nonprofit Center for Auto
Safety.
Statement by Public Citizen
Although the complaint asked the court to award damages to
Carfax customers and to require Carfax to disclose the specific
limitations of its database, the proposed settlement would do
neither.
Instead, it would primarily benefit Carfax, which would obtain a
release from all similar claims by all former customers
nationwide, and the plaintiff's lawyers, who would receive
$556,000 in fees.
"Carfax should be held accountable for misleading its customers
-- it should not benefit from this settlement that adds insult
to injury," said Public Citizen President Joan Claybrook.
The settlement defines the class of consumers bound by its terms
to include anyone who purchased a Carfax vehicle history report
prior to Oct. 27, 2006.
However, individual notice of the proposed settlement was sent
only by e-mail and only to customers who bought Carfax reports
during the one year preceding the settlement. As a result, the
majority of class members got no notice of the settlement.
"Not only will the notice fail to reach most of the class, but
even those consumers who hear about the settlement will receive
almost no benefit for releasing their claims," said Deepak
Gupta, an attorney at Public Citizen who runs the organization's
Consumer Justice Project. "If the settlement is approved, class
members who know about the settlement will receive coupons that
are worthless to most of them."
The settlement allows class members to choose between a coupon
for another Carfax report or a coupon for $20 off a car
inspection by the company SGS S.A. The report coupons expire in
two or three years, while the inspection coupons expire in six
months, rendering them useless to any class member who is not
buying a used car during those time periods.
"The settlement would do nothing to force Carfax to inform
consumers of the deficiencies of its reports," said Clarence
Ditlow, executive director of the Center for Auto Safety
Instead, the settlement would require Carfax to state on its Web
site that it "may" not have the complete history for every
vehicle, when, according to the complaint in the case, the
company knows for certain that it does not have a complete
history for a large number, perhaps even most, of its vehicles.
Although the complaint specifies 23 jurisdictions from which
Carfax does not get police accident data, the settlement would
not require Carfax to identify which ones are missing from its
database.
"When I bought a subscription to Carfax reports in 2005, I had
no way of knowing that the reports did not have accident
information from neighboring places like Delaware, Washington,
D.C., Pennsylvania and Virginia," said Gwynneth Anderson, a
Maryland resident and an objector to the settlement who bought a
2005 Nissan Sentra after researching the car through Carfax.
"The proposal for coupons and an inspection voucher are
worthless to me now. But for future buyers, Carfax should be
required to let them know exactly what's missing from its
reports."
Case Background
In 2004, the law firm of Federman & Sherwood filed the complaint
alleging violations of the Ohio Sales Practices Act and Common
Law (Class Action Reporter, Aug. 11, 2004).
Plaintiff claims that Carfax violated the consumer protection
laws of all fifty states by not properly disclosing terms and
conditions for, and limitations of, Carfax Vehicle History
Reports.
The complaint further alleges that Carfax engages in unfair,
misleading and/or deceptive sales practices in connection with
the automobile database services that it offers to the public.
The class period is from October 1998 to the present.
The suit involves a nationwide scheme devised and implemented by
defendants to market Carfax's Vehicle History Reports concerning
used automobiles in a manner which is unfair, false, deceptive
and materially misleading.
Carfax purports to conduct accident report searches for used
vehicles on a nationwide basis in order to determine for
consumers whether a specific used car has been involved in a
collision.
CarFax, however, failed to disclose to consumers that it does
not have the ability to access and search public accident
records in more than 23 states in the U.S.
In January, Carfax settled the lawsuit, denying all of
plaintiff's claims of wrongdoing (Class Action Reporter, Jan.
16, 2007).
Under the settlement, class members can claim:
-- a Voucher good for $20.00 off a vehicle inspection by a
designated third party within six months of final
approval of the settlement,
-- a Voucher good for two free Carfax Vehicle History
Reports from Carfax within one year of final approval of
the settlement,
-- a Voucher for one free Carfax Vehicle History Report
from Carfax within two years of final approval of the
settlement, or
-- a Voucher for 50% off an unlimited number of Carfax
Vehicle History Reports (for personal, not commercial
use) over 30 consecutive days within three years of
final approval of the settlement.
A hearing on the motion for approval of the settlement is
scheduled for May 11 in Warren, Ohio. Deadline to file claims
is May 27, 2007.
The Settlement on the Net: http://www.westcarsettlement.com.
A copy of the Objection is available at:
http://ResearchArchives.com/t/s?1c45
The suit is "West v. Carfax, Inc., Case No. 04-CV-1898," filed
in the Court of Common Pleas, Trumbull County, Ohio under Judge
Andrew D. Logan.
Representing plaintiffs are William B. Federman of Federman &
Sherwood, 10205 North Pennyslvania, Oklahoma City, Oklahoma
73120; and Curtis J. Ambrosey of Ambrosey & Fredericka, 144
North Park Avenue, Suite 200, Warren, Ohio 44481.
Defendants are represented by Christopher M. Mason of Nixon
Peabody LLP, 437 Madison Avenue, New York, New York 10022; and
Hugh E. McKay of Porter Wright Morris & Arthur LLP, 925 Euclid
Avenue, Suite 1700, Cleveland, Ohio 44115.
DISTRICT OF COLUMBIA: Lawsuit Over Release of Inmate Certified
--------------------------------------------------------------
Judge Royce C. Lamberth of the U.S. District Court for the
District of Columbia denied on March 26 a motion by the District
of Columbia government to dismiss a case filed by a jail inmate
claiming the D.C. jail is failing to release inmates on time,
Jim McElhatton of The Washington Times reports.
Judge Lamberth granted the suit class-action status in favor of
plaintiff, jail inmate Carl A. Barnes. The suit claims there
are "hundreds if not thousands" of inmates who were detained too
long or illegally strip-searched in the state's jail.
The judge wrote in his ruling, "...the issue is the prisoner's
absolute right to freedom." He said, "...the only societal
interests that justify delay are ensuring that prisoners are not
released if they have other detainers or warrants..."
He noted in his opinion that in August, 2005 the District
adopted a policy to keep inmates set for release in a holding
area while officials processed their paperwork, however, by
December, there are inmates who were entitled to release but
were returned to the jail.
In court records, the district has denied having any systematic
policy of keeping inmates too long, according to the report.
The suit is "Barnes et al. v. District of Columbia, Case No.
1:06-cv-00315-RCL," filed in U.S. District Court for the
District of Columbia under Judge Royce C. Lamberth.
Representing the plaintiff is William Charles Cole Claiborne,
III at 717 D Street, NW, Suite 210, Washington, DC 20004-2813,
Phone: (202) 824-0700, Fax: (202) 824-0745, E-mail:
law@claiborne.net.
Representing the defendant is Denise J. Baker at the Office of
the Attorney General for the District of Columbia, 441 4th
Street, NW, Room 6S028, Washington, DC 20001, Phone: 202-442-
9887, Fax: 202-727-0431, E-mail: denise.baker@dc.gov.
FINCORP GROUP: Investor Suit Planned After Administration
---------------------------------------------------------
The law firm Slater and Gordon is considering launching a class
action over the collapse of the Fincorp Group, according to
reports.
Fincorp went into administration with AU$290 million in debt of
which AU$200 million were owed to investors and AU$90 million to
external financiers (Troubled Company Reporter - Asia Pacific,
March 27, 2007).
David Winterbottom was appointed as administrator together with
Mark Korda and Lachlan McIntosh, partners at corporate recovery
firm KordaMentha.
Fincorp Group has reportedly been struggling under heavy inter-
company debt loads and negative cashflow.
Fincorp Group -- http://www.fincorp.com.au/-- in its current
structure was established in July 2005. The company is a
boutique funds management and property development business that
focuses on mortgage-backed and property products. It is based
in Grosvenor Place, Sydney, with 40 employees across New South
Wales, Victoria, and Queensland and 7800 investors.
Slater & Gordon on the Net: http://www.slatergordon.com.au/.
FLEETWOOD ENTERPRISES: "Brodhead" Consumer Suit Still Stayed
------------------------------------------------------------
A stay has yet to be lifted on a purported class action
"Brodhead et al. v. Fleetwood Enterprises, Inc.," which is
currently before the U.S. District Court for the Central
District of California.
Filed on June 22, 2005, the suit states a claim for damages
growing out of certain California statutory claims with respect
to alleged defects in a specific type of plastic roof installed
on folding trailers from 1995 through 2003.
Plaintiffs have further clarified and narrowed the class for
which they are seeking certification, which now encompasses all
original owners of folding trailers produced by Fleetwood
Folding Trailers, Inc. with this type of roof but not including
original purchasers who received an aluminum roof replacement
and did not pay for freight.
The subject matter of the claim is similar to a putative class
action previously filed in California state court, entitled,
"Griffin et al. v. Fleetwood Enterprises, Inc. et al."
The California trial court denied class action certification in
the Griffin matter on April 28, 2005, and the state of
California Court of Appeal upheld the denial in a ruling issued
on May 11, 2006. Plaintiffs did not appeal the Court of Appeal
ruling in "Griffin."
Proceedings relating to the class certification in the Brodhead
matter had been stayed pending the outcome of the state court
certification in "Griffin."
The company reported no development in the matter in its March 8
Form 10-K filing with the U.S. Securities and Exchange
Commission for the fiscal year ended Dec. 31, 2006.
The suit is "Kenneth Brodhead et al. v. Fleetwood Enterprises
Inc., Case No. 2:05-cv-04560-GPS-Mc," filed in the U.S. District
Court for the Central District of California under Judge George
P. Schiavelli with referral to Judge James W. McMahon.
Representing the plaintiffs are:
(1) Edward M. Gergosian and Robert J. Gralewski, Jr. of
Gergosian and Gralewski, 550 West C Street, Suite 1600,
San Diego, CA 92101, Phone: 619-230-0104, E-mail:
ed@gergosian.com; and
(2) Eric H. Gibbs, Karen Lee Hindin and Jonathan K. Levine
of Girard Gibbs & De Bartolomeo, 601 California St.,
Ste. 1400, San Francisco, CA 94108, Phone: 415-981-
4800, E-mail: ehg@girardgibbs.com; klh@girardgibbs.com
and jkl@girardgibbs.com.
Representing the company are:
(i) Howard B. Golds of Best Best & Krieger, 3750 University
Ave., Ste. 400, P.O. Box 1028, Riverside, CA 92502-
1028, Phone: 951-686-1450, E-mail: hbgolds@bbklaw.com;
and
(ii) Lee Ann Anand and Richard K Hines, V of Nelson Mulins
Riley & Scroborough, 999 Peachtree Street, NE, Suite
1400, Atlanta, GA 30309, Phone: 404-817-6000, E-mail:
leeann.anand@nelsonmullins.com and
richard.hines@nelsonmullins.com.
LEVEL 3: Still Faces Rights of Way Litigation in Ill., Idaho
------------------------------------------------------------
Level 3 Communications, Inc. remains a defendant in several
purported right of way class actions in Illinois and Idaho,
according to its March 1 Form 10-K filing with the U.S.
Securities and Exchange Commission for the quarterly fiscal
ended Dec. 31, 2006.
In April 2002, Level 3 Communications, Inc., and two of its
subsidiaries were named as a defendant in "Bauer, et al. v.
Level 3 Communications, LLC, et al.," a purported class action
covering 22 states, filed in state court in Madison County,
Illinois.
In July 2001, Level 3 was named as a defendant in "Koyle, et al.
v. Level 3 Communications, Inc., et al.," a purported two-state
class action filed in the U.S. District Court for the District
of Idaho. In November of 2005, the court granted class
certification only for the state of Idaho, which decision is on
appeal.
In September 2002, Level 3 Communications, LLC and Williams
Communications, LLC were named as defendants in "Smith et al. v.
Sprint Communications Co., L.P., et al.," a purported nationwide
class action filed in the U.S. District Court for the Northern
District of Illinois. In April 2005, the Smith plaintiffs filed
a Fourth Amended Complaint, which did not include Level 3 or
Williams Communications, Inc. as a party, thus ending both
companies' involvement in the Smith case.
On Feb. 17, 2005, Level 3 Communications, LLC and Williams
Communications, LLC were named as defendants in "McDaniel, et
al., v. Qwest Communications Corp., et al.," a purported class
action covering 10 states filed in the U.S. District Court for
the Northern District of Illinois.
These actions involve the companies' right to install its fiber
optic cable network in easements and right-of-ways crossing the
plaintiffs' land.
In general, the companies obtained the rights to construct their
networks from railroads, utilities, and others, and have
installed their networks along the rights-of-way so granted.
Plaintiffs in the purported class actions assert that they are
the owners of lands over which the companies' fiber optic cable
networks pass, and that the railroads, utilities, and others who
granted the companies the right to construct and maintain their
networks did not have the legal authority to do so.
The complaints seek damages on theories of trespass, unjust
enrichment and slander of title and property, as well as
punitive damages.
Level 3 Communications, Inc. on the Net: http://www.level3.com/.
LIFECELL CORP: Faces Suit Filed by Transplant Patient in N.J.
-------------------------------------------------------------
LifeCell Corp. remains a defendant in a purported class action
filed in the U.S. District Court for the District of New Jersey
relating to certain human tissue-based products, according to
its March 1 Form 10-K filing with the U.S. Securities and
Exchange Commission for the quarterly fiscal year ended Dec. 31,
2006.
Initially, the company along with Biomedical Tissue Services,
Ltd. and many other defendants were named in several lawsuits,
which purport to serve as class actions for persons receiving
transplants who are not physically injured, but instead seek
medical monitoring and/or damages for emotional distress. All
of these cases were sent to New Jersey as part of a Multi-
District Litigation.
The company has been successful in obtaining a voluntarily
dismissal of every such class action, with the exception of one
case, "Watling et al. v. Biomedical Tissue Services Ltd.," which
purports to only involve LifeCell products. Anita Watling filed
the suit on Jan. 9.
The suit is Case No. 2:07-cv-00116-WJM-RJH filed in the U.S.
District Court for the District of New Jersey under Judge
William J. Martini with referral to Judge Ronald J. Hedges.
Representing the plaintiffs is Brian C. Allen of Anderson &
Horne, PLLC, 517 W. Ormsby Avenue, Louisville, KY 40203, Phone:
502-587-0599.
Representing the defendants is Alice B. Herrington of Woodward,
Hobson & Fulton, LLP, 101 S. Fifth Street, 2500 National City
Tower, Louisville, KY 40202-3175, Phone: 502-581-8111.
MARTHA STEWART: May 29 Hearing Set for $30M Securities Suit Deal
----------------------------------------------------------------
The U.S. District Court for the Southern District of New York
will hold a fairness hearing on May 29 at 3:00 p.m. for the
proposed $30 million settlement in the class action, "In Re
Martha Stewart Living Omnimedia, Inc. Securities Litigation,
Master File No. 02-CV-6273 (JES)."
The court will hold the settlement fairness hearing at the U.S.
District Court for the Southern District of New York, the Daniel
Patrick Moynihan U.S. Courthouse, 500 Pearl Street, New York,
New York 10007-1312.
The settlement covers all persons and entities that bought
shares of Martha Stewart Living Omnimedia, Inc. common stock
between Jan. 8, 2002 and Oct. 2, 2002.
Any objections or exclusions to and from the settlement must be
made on or before May 15. Deadline for the submission of claim
forms is on June 23.
Case Background
On Feb. 3, 2003, the company was named as a defendant in a
consolidated and amended class action complaint filed by
plaintiffs purporting to represent a class of persons who
purchased common stock in the company between Jan. 8, 2002 and
Oct. 2, 2002.
The consolidated suit is, "In re Martha Stewart Living
Omnimedia, Inc. Securities Litigation, Case. 02-CV-6273 (JES)."
Besides the company, it also names Martha Stewart and seven of
its other present or former officers, Gregory R. Blatt, Sharon
L. Patrick, and five other company officers, as defendants.
All such individuals other than Martha Stewart are collectively
referred to herein as the individual defendants. The action
consolidated seven class actions previously filed in the
Southern District of New York.
The claims in the consolidated class action complaint arose out
of Ms. Stewart's sale of 3,928 shares of ImClone Systems stock
on Dec. 27, 2001.
The suit asserts violations of Sections 10(b) (and rules
promulgated thereunder), 20(a) and 20A of the U.S. Securities
Exchange Act of 1934.
Plaintiffs allege that the company, Ms. Stewart and the
individual defendants omitted material information and made
statements about Ms. Stewart's sale that were materially false
and misleading.
They also allege that, as a result of these false and misleading
statements, the market price of the company's stock was inflated
during the putative class periods and dropped after the alleged
falsity of the statements became public.
Plaintiffs further alleged that the individual defendants traded
MSO stock while in possession of material non-public
information, but as explained below, all such allegations have
been dismissed.
The consolidated class action complaint seeks certification as a
class action, damages, attorneys' fees and costs, and further
relief as determined by the court.
The suit is "In re Martha Stewart Living Omnimedia, Inc.
Securities Litigation, Case. 02-CV-6273 (JES)," filed in the
U.S. District Court for the Southern District of New York under
Judge John E. Sprizzo.
Representing the plaintiffs are:
(1) Robert Craig Finkel of Wolf Popper, LLP, 845 Third
Avenue, New York, NY 10022, Phone: (212) 759-4600, E-
mail: rfinkel@wolfpopper.com;
(2) Salvatore Jo Graziano of Milberg Weiss Bershad &
Schulman, LLP, (NYC), One Pennsylvania Plaza, New York,
NY 10119, Phone: 212-554-1538, Fax: 212-554-1444, E-
mail: SGraziano@blbglaw.com; and
(3) Mark David Smilow of Weiss & Yourman, 551 Fifth Avenue,
Suite 1600, New York, NY 10176, Phone: (212) 682-3025,
Fax: (212) 682-3010, E-mail: msmilow@weisslurie.com.
Representing the defendants are Gregory Arthur Markel and Martin
L. Seidel of Cadwalader, Wickersham & Taft, LLP, (NYC), One
World Financial Center, New York, NY 10281, Phone: (212) 504-
6112 and 212-504-5643, Fax: (212) 504-6666 and 212-504-6387, E-
mail: greg.markel@cwt.com and martin.seidel@cwt.com.
For more details, contact In re Martha Stewart Living Omnimedia,
Inc. Securities Litigation Settlement, c/o Gilardi & Co. LLC,
Claims Administrator, P.O. Box 990, Corte Madera, CA 94976-
0990, Phone: 1-800-447-7657, Web site: http://www.gilardi.com.
MASSACHUSETTS: Franklin County Officers Sued Over Strip Searches
----------------------------------------------------------------
Franklin County Sheriff Frederick B. Macdonald and Forbes E.
Byron, superintendent of the county jail, were named as
defendants in a purported federal class action over strip
searches.
Gregory D. Garvey, 53, filed the suit in the U.S. District Court
for the District of Massachusetts on March 28. He claims that
he was twice unconstitutionally strip-searched following his
arrest in January.
Mr. Garvey claims that he was strip-searched after being taken
to the old jail in Greenfield following his late-night arrest on
Jan. 30 on a warrant for a traffic violation.
According to Mr. Garvey, who is represented by attorney Howard
A. Friedman of Boston, he was searched again before his
appearance the next day in Greenfield District Court, where the
traffic violation case against him was dismissed.
In his complaint, Mr. Garvey described the searches as "very
embarrassing, degrading, and it bothers me." He does not seek a
specific amount in damages, reiterating that money is not the
most important part of the case.
The suit, which was assigned to U.S. Magistrate Judge Kenneth P.
Neiman, states that there was no reason to suspect Mr. Garvey
had any weapons or contraband when he was brought to jail. It
also states that hundreds of people were subjected to
unconstitutional strip searches at the jail.
The suit is "Garvey v. MacDonald et al., Case No. 3:07-cv-30049-
KPN," filed in the U.S. District Court for the District of
Massachusetts under Judge Kenneth P. Neiman.
Representing the plaintiff is Howard Friedman of The Law Offices
of Howard Friedman, 90 Canal Street, 5th Floor, Boston, MA
02114-2022, Phone: 617-742-4100, Fax: 617-742-5858, E-mail:
hfriedman@civil-rights-law.com.
MENU FOODS: Pet Food Recall in Canada Leads to Calif. Lawsuit
-------------------------------------------------------------
The law firm of Milberg Weiss & Bershad LLP announces the filing
of a nationwide class action on behalf of purchasers of "cuts
and gravy" style cat and dog food recalled by Menu Foods Income
Fund based in Ontario, Canada.
The class action, "Howe v. Menu Foods," was filed in the U.S.
District Court for the Central District of California. The
complaint alleges Menu Foods was negligent in the manufacture
and continued widespread sale of its "cuts and gravy" style pet
food products.
Menu Foods allegedly knew of contamination problems in late
February, but did not initiate a nationwide recall until March
16, 2007. New York state health officials identified
aminopterin, a banned toxic substance used to kill rats in other
countries, as the contaminant on March 24, 2007.
The complaint seeks compensation, including veterinary and other
expenses, for all those who purchased any of the 95 brands
subject to the recall, regardless of when they were produced.
The nationwide recall includes popular brands such as Iams,
Nutro, and Eukanuba and private-label brands sold by retailers
Wal-Mart, Safeway, Petsmart, and others. Veterinary
professionals estimate thousands of pets across the nation will
die of kidney failure or become very sick with similar symptoms
as a result of consuming the contaminated products.
To see complete list of recalled products:
http://www.menufoods.com/recall.
Milberg Weiss & Bershad LLP on the Net:
http://www.milbergweiss.com.
MOLINA HEALTHCARE: Parties Voluntarily Dismiss Securities Suit
--------------------------------------------------------------
Parties in a consolidated securities class action pending
against Molina Healthcare, Inc. in the U.S. District Court for
the Central District of California voluntarily dismissed the
case, according to the company's March 14 Form 10-K filing with
the U.S. Securities and Exchange Commission for the fiscal year
ended Dec. 31, 2006.
Beginning on July 27, 2005, a series of securities class action
complaints were filed on behalf of persons who acquired
company's stock between Nov. 3, 2004 and July 20, 2005.
The class action complaints were consolidated into a single
consolidated action, Case No. CV 05-5460 GPS (SHx), and a lead
plaintiff later appointed.
On March 13, 2006, the lead plaintiff filed its consolidated
complaint. The consolidated complaint purports to allege claims
against the company, J. Mario Molina, John C. Molina, and Joseph
W. White for alleged violations of the U.S. Securities Exchange
Act of 1934 arising out of the company's announcement of its
guidance for the 2005 fiscal year.
On May 1, 2006, the defendants filed a motion to dismiss the
consolidated complaint for failure to state a claim upon which
relief can be granted, and the motion has been fully briefed by
the parties.
On July 27, 2006, the federal court judge vacated the hearing on
the motion and took the motion under submission.
On Nov. 17, 2006, the federal court granted the defendants'
motion to dismiss the lead plaintiff's consolidated complaint
without prejudice.
Parties then filed a dismissal stipulation, which provided for
the immediate dismissal with prejudice of the case against the
defendants as to the lead plaintiff, thereby ending the class
action.
Defendants did not make any payment to the lead plaintiff or any
other party in connection with the dismissal stipulation, and
each party agreed to bear its own costs and attorneys' fees
arising from the class action.
The dismissal stipulation followed the district court's Nov. 17
order. Under Federal Rule of Civil Procedure 41(a), the
Dismissal Stipulation became immediately effective upon its
filing with the court.
The suit is "William G. Hunt v. Molina Healthcare Inc., et al.,
Case No. CV 05-5460 GPS (SHx)," filed in the U.S. District Court
for the Central District of California under Judge S. James
Otero with referral to Judge Stephen J. Hillman.
Representing the plaintiffs are:
(1) Christopher Kim and Lisa J. Yang of Lim Ruger & Kim,
1055 W. 7th St., Ste. 2800, Los Angeles, CA 90017,
Phone: 213-955-9500, E-mail: lisa.yang@lrklawyers.com
and christopher.kim@lrklawyers.com;
(2) Richard A. Maniskas and Marc A. Topaz of Schiffrin &
Barroway, 280 King of Prussia Road, Radnor, PA 19087,
Phone: 610-667-7706; and
(3) Tricia L. McCormick of Lerach Coughlin Stoia Geller
Rudman and Robbins, 655 West Broadway, Suite 1900, San
Diego, CA 92101, Phone: 619-231-1058, E-mail:
triciam@lerachlaw.com.
NPS PHARMACEUTICALS: Utah Securities Suit Over PREOS Amended
------------------------------------------------------------
NPS Pharmaceuticals, Inc. remains a defendant in a consolidated
securities fraud class action filed against it and certain of
its officers in U.S. District Court for the District of Utah,
according to the company's March 14 Form 10-K filing with the
U.S. Securities and Exchange Commission for the fiscal year
ended Dec. 31, 2006.
Initially several suits were filed. They are:
-- "Roffe v. NPS Pharmaceuticals, Inc., et al.," filed on
July 12, 2006;
-- "Baird v. NPS Pharmaceuticals, Inc., et al.,"
-- "McCormick v. NPS Pharmaceuticals, Inc. et al.," and
-- "Skubella v. NPS Pharmaceuticals, Inc. et al."
All lawsuits contain substantially identical allegations and
allege that between August 2005 and May 2006, the defendants
made false and misleading statements concerning the company's
market prospects for its proprietary drug, PREOS(R), in
violation of federal securities laws. PREOS is for the
treatment of osteoporosis.
By order dated Sept. 14, 2006, the court consolidated the four
separately filed lawsuits into one action. By order dated Nov.
17, 2006, the court appointed lead plaintiff and counsel for the
proposed class.
On Jan. 16, the lead plaintiff and its counsel filed a
consolidated amended complaint asserting two federal securities
claims on behalf of lead plaintiff and all other shareholders of
the company who purchased publicly traded shares of company
between Aug. 7, 2001, and May 2, 2006.
The consolidated complaint asserts two claims:
-- a claim founded upon Section 10(b) of the U.S.
Securities Exchange Act of 1934, or the 1934 Act, and
-- SEC Rule 10b-5 promulgated thereunder, which is
asserted against all defendants, and a claim founded
upon Section 20(a) of the 1934 Act, which is asserted
against the individual defendants.
Both claims are based on the allegations that, during the class
period, the company and the individual defendants made false and
misleading statements to the investing public concerning PREOS.
The consolidated complaint alleges that false and misleading
statements were made during the class period concerning the
efficacy of PREOS as a treatment for postmenopausal
osteoporosis, the potential market for PREOS, the dangers of
hypercalcemic toxicity as a side effect of injectable PREOS, and
the prospects of U.S. Food and Drug Administration approval of
NPS's New Drug Application for injectable PREOS.
The complaint also alleges claims of option backdating and
insider trading of stock during the class period. The
consolidated complaint seeks compensatory damages in an
unspecified amount, unspecified equitable or injunctive relief,
and an award of an unspecified amount for plaintiff's costs and
attorneys' fees.
The suit is "Roffe v. NPS Pharmaceutical, et al., Case No. 2:06-
cv-00570-PGC," filed in the U.S. District Court for the District
of Utah under Judge Paul G. Cassell.
Representing the plaintiffs are:
(1) Jeffrey S. Abraham and Jack G. Fruchter of Abraham
Fruchter & Twersky, LLP, One Penn Plaza, Ste. 2805, New
York City, NY 10119, US, Phone: (212) 279-5050; and
(2) Scott A. Call of Anderson & Karrenberg, 50 W. Broadway,
Ste. 700, Salt Lake City, UT 84101, Phone: (801) 534-
1700, E-mail: scall@aklawfirm.com.
PILGRIM'S PRIDE: Ala. Managers Sued Over Alleged Illegal Hiring
---------------------------------------------------------------
Two managers of a Pilgrim's Pride Corp. facility in Alabama were
named as defendants in a purported federal class action, which
alleges that they knowingly hired illegal workers.
Jennifer Hall of Muscle Shoals, who is an employee at the
Russellville poultry processing plant, filed the suit on March
15 in the U.S. District Court for the Northern District of
Alabama.
Ms. Hall is claiming that Paul White, operations manager at the
Russellville plant and Phyllis Thomas, complex manager, violated
the Racketeer Influenced and Corrupt Organizations Act by hiring
illegal immigrants who earn depressed wages at the facility.
The suit defined as plaintiffs all hourly paid workers, legally
to be employed in the U.S., who have been employed by Gold Kist,
Inc. and/or Pilgrim's Pride at each of the companies' facilities
nationwide.
Though neither Pilgrim's Pride nor Gold Kist are specifically
named in the case, Ms. Hall's attorney, Howard Foster of Chicago
accused the companies of knowingly hiring illegal employees in
an effort to save money.
The suit is "Hall v. White et al., Case No. 3:07-cv-00484-CLS,"
filed in the U.S. District Court for the Northern District of
Alabama under Judge C. Lynwood Smith, Jr.
Representing the plaintiffs are:
(1) Howard W Foster of JOHNSON & BELL LTD, 33 West Monroe
Street, Suite 2700, Chicago, IL 60603, Phone: 312-372-
0770;
(2) Jeffrey L. Bowling of BEDFORD ROGERS & BOWLING, PC, 303
North Jackson Avenue, PO Box 669, Russellville, AL
35653, Phone: 1-256-332-2880, Fax: 1-256-332-7821, E-
mail: jeffbrbpc@bellsouth.net;
(3) Marshall Lawson of TOMPKINS & MCMASTERS LLP, 1333 Main
Street, Suite 225, Columbia, SC 29201, Phone: 803-799-
4499, Fax: 803-252-2240, E-mail: jml@tmmlaw.com; and
(4) R. G. Methvin, Jr. of MCCALLUM & METHVIN, PC, 2201
Arlington Avenue, South Birmingham, AL 35205, Phone:
205-939-3006, Fax: 205-939-0399, E-mail: rgm@mmlaw.net.
PRIME GROUP: Faces Litigation in Md. By Series B Shareholders
-------------------------------------------------------------
Prime Group Realty Trust, which was acquired by an affiliate of
The Lightstone Group, LLC, is a defendant in a purported class
action that was brought on behalf of holders of the company's
Series B Share, according to the company's March 19 Form 10-K
filing with the U.S. Securities and Exchange Commission for the
fiscal year ended Dec. 31, 2006.
On Dec. 4, 2006, Prime Group received a copy of a class action
complaint and demand for jury trial filed by The Jolly Roger
Fund LP and Jolly Roger Offshore Fund Ltd. against The
Lightstone Group and the company.
The suit was filed in the Circuit Court of Baltimore City,
Maryland, Civil Division on Nov. 16, 2006. It seeks
certification as a class action and compensation for alleged
damages resulting from an alleged plan by the company to
liquidate its assets and wind up its business without the
payment to the holders of the Series B Shares of the $25.00 per
share liquidation preference provided in the company's articles
of amendment and restatement.
Additionally, the complaint also requests the disgorgement of
dividends that the plaintiffs claim were improperly paid to
Lightstone that should have been paid to the holders of the
Series B Shares in the form of the liquidation preference.
Prime Group Realty Trust on the Net: http://www.pgrt.com/.
SINA CORP: Dismissal Order in N.Y. Securities Suit Now Final
------------------------------------------------------------
A dismissal order by the U.S. District Court for the Southern
District of New York in a securities class action against SINA
Corp. is now final and unappealable.
In February 2005, multiple purported securities class action
complaints were filed against the company and certain officers
and directors of the company in the U.S. District Court for the
Southern District of New York following the company's
announcement of anticipated financial results for the first
quarter of 2005 ending on March 31, 2005.
The complaints sought unspecified damages on alleged violations
of federal securities laws during the period from Oct. 26, 2004
to Feb. 7, 2005.
They alleged violations of the federal securities laws through
the issuance of false or misleading statements during the class
period covered.
On July 1, 2005, Judge Naomi Buchwald consolidated the cases
under the caption, "In re SINA Corp. Securities Litigation," and
appointed as lead plaintiff:
-- City of Sterling Heights General Employee's Retirement
System;
-- City of St. Clair Shores Police and Fire Retirement
System; and
-- Charter Township of Clinton Police and Fire Retirement
System (collectively the MAPERS Funds Group).
The MAPERS Funds Group filed an amended consolidated complaint
on Sept. 9, 2005. The complaints sought unspecified damages on
alleged violations of federal securities laws during the period
from Oct. 26, 2004 to Feb. 7, 2005.
On Sept. 25, 2006, Judge Buchwald issued an order granting the
defendants' motion to dismiss the amended consolidated complaint
in its entirety, without leave to amend.
In the dismissal order, Judge Buchwald held that "the complaint
altogether fails to support the conclusion that [SINA] acted
with intent to deceive or defraud the public or that they were
reckless in this regard."
The MAPERS Funds Group filed a notice of appeal from the
dismissal order on Oct. 24, 2006. On Dec. 12, 2006, plaintiffs
voluntarily withdrew their notice of appeal.
The time for appeal has now passed, and the court's dismissal of
the case is now final and unappealable, 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 SINA Corp. Securities Litigation, Case No.
1:05-cv-02154-NRB," filed in the U.S. District Court for the
Southern District of New York under Judge Naomi Reice Buchwald.
Representing the plaintiffs are:
(1) Samuel Howard Rudman and Mario Alba, Jr. of Lerach,
Coughlin, Stoia, Geller, Rudman & Robbins, LLP, 58
South Service Road, Suite 200 Melville, NY 11747,
Phone: 631-367-7100, Fax: 631-367-1173, E-mail:
srudman@lerachlaw.com and malba@lerachlaw.com; and
(2) Robert I. Harwood and Samuel Kenneth Rosen of Wechsler
Harwood, LLP, 488 Madison Avenue, 8th Floor, New York,
NY 10022, Phone: 212-935-7400, Fax: 212 753-3630, E-
mail: rharwood@whesq.com and srosen@whesq.com.
Representing SINA Corp. and its directors and officers are
Robert P. Varian and Jonathan B. Gaskin of the law firm of
Orrick, Herrington & Sutcliffe LLP.
SOUTH CAROLINA ELECTRIC: Post-2008 Trial Expected in "Collins"
--------------------------------------------------------------
A post-2008 trial is expected for a purported class action,
"Collins v. Duke Energy Corp., Progress Energy Services Co., and
South Carolina Electric & Gas," pending in South Carolina's
Circuit Court of Common Pleas for the 5th Judicial Circuit.
Since its filing back in Aug. 21, 2003, the plaintiffs have
dismissed defendants Duke Energy and Progress Energy and are
proceeding against SCE&G only.
The plaintiffs are seeking damages for the alleged improper use
of electric transmission and distribution easements but have not
asserted a dollar amount for their claims.
Specifically, the plaintiffs contend that the licensing of
attachments on electric utility poles, towers and other
facilities to non-utility third parties or telecommunication
companies for other than the electric utilities internal use
along the electric transmission and distribution line right-of-
ways constitutes a trespass.
It is anticipated that this case may not go to trial before
2008, 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.
South Carolina Electric & Gas Co. on the Net:
http://www.sceg.com/.
SOUTH CAROLINA ELECTRIC: Post-2008 Trial Expected in "Gressette"
----------------------------------------------------------------
The South Carolina Supreme Court overruled a dismissal by the
Court of Common Pleas for the 9th Judicial Circuit of a
purported class action, "Douglas E. Gressette, et al., v. South
Carolina Electric & Gas (SCE&G) and SCANA Corp."
The case alleges the SCE&G made improper use of certain
easements and right-of-ways by allowing fiber optic
communication lines and/or wireless communication equipment to
transmit communications other than the company's electricity-
related internal communications.
Plaintiff asserted causes of action for unjust enrichment,
trespass, injunction and declaratory judgment. He did not
assert a specific dollar amount for the claims.
The company believes its actions are consistent with governing
law and the applicable documents granting easements and right-
of-ways, it stated in a regulatory filing.
The court granted the motion to dismiss and issued an order
dismissing the case in June 29, 2005. The plaintiff appealed to
the South Carolina Supreme Court.
The Supreme Court overruled the court in October 2006 and
returned the case to the court for further consideration.
It is anticipated that this case may not go to trial before
2008, 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.
South Carolina Electric & Gas Co. on the Net:
http://www.sceg.com/.
TELLABS INC: Ruling in "Makor" Could Set Precedence, Groups Warn
----------------------------------------------------------------
The National Conference on Public Employee Retirement Systems
(NCPERS), which represents pension funds with approximately $3
trillion in assets, and the National Association of Shareholder
and Consumer Attorneys (NASCAT), warned that the case, "Makor v.
Tellabs, Inc.," could result in "nearly insurmountable" barriers
to investors seeking to recover fraud losses if the Supreme
Court finds in favor of the company and its chief executive
instead of in favor of investors.
Statement by NCPERS and NASCAT
In a particularly alarming development, the U.S. Securities and
Exchange Commission and the U.S. Department of Justice filed a
"friend of the Court" brief favoring the defendants who are
accused of fraud in a securities fraud class action brought by
shareholders of Tellabs, Inc.
They took this action despite their roles as the federal
government's primary investor protection and law enforcement
agencies. The SEC and DOJ, in representing the Bush
Administration, seek to impose a pleading standard for investor
lawsuits, which the law does not require, and which is at odds
with the traditional manner in which allegations of a complaint
are viewed by a court.
"The Supreme Court will in effect be deciding whether or not the
securities fraud class action remedy will survive as the primary
vehicle for investors to recover legitimate fraud losses,"
explained Hank H. Kim, executive director and counsel, NCPERS.
"As if the restrictions already put in place by the heightened
pleading standards in the Private Securities Litigation Reform
Act of 1995 (PSLRA) and subsequent tightening of federal
procedural rules governing class actions were not enough, now
the Supreme Court petitioners and Administration ask the Court
to impose yet another procedural barrier -- this one, nearly
insurmountable -- on the ability of private investors to deter
corporate wrongdoing and recoup some of their fraud losses."
(a) Role of Juries Would be Pre-empted
"Petitioners and the Administration are essentially urging the
Supreme Court to endorse a mini-trial before a federal judge on
factual allegations at the early pleading stage of a case before
plaintiffs have been afforded the benefit of any formal
discovery," explained Kevin P. Roddy, counsel for NASCAT.
"Under America's system of justice, weighing facts, inferences,
and evaluating defendants' behavior is the responsibility of
juries, not judges. And, under our Constitution, plaintiffs and
defendants alike are entitled to trial by jury in both civil and
criminal cases."
In commenting on the Supreme Court case, attorneys Kim and Roddy
also released their March 8 amici curiae (friend of court) brief
supporting Tellabs' defrauded shareholders. Securities fraud
class actions filed in federal courts, like the Tellabs'
lawsuit, not only serve to deter corporate misbehavior, but are
the primary method for investors to recover their losses in
investment frauds.
The Supreme Court Tellabs case focuses on varying
interpretations of a provision of the PSLRA that requires
investors to allege that a "defendant acted with a particular
state of mind . . . giving rise to a strong inference that the
defendant" intended to violate the law.
In deciding to permit the Tellabs class action to move forward
to trial, the U.S. Court of Appeals for the 7th Circuit had said
Tellabs' investors had alleged sufficient facts to meet the
"state of mind" requirement and that it was unnecessary to
consider competing inferences offered by the corporate
defendants.
Rather, the "strong inference" requirement was met if it would
permit "a reasonable person" to strongly infer that defendants
"acted with the required intent." The 7th Circuit's view is
consistent with positions taken by other U.S. Courts of Appeal,
including the 10 Circuit and the 2nd Circuit in several earlier
securities fraud cases.
NCPERS and NASCAT agree with the circuit courts' approach,
specifically restating and endorsing the 2nd Circuit's pleading
requirements. In order for plaintiffs to meet the required
PSLRA pleading standard of demonstrating a "strong inference" of
defendants' intent to violate the law, the Second Circuit said
investors could take one of two approaches:
-- providing factual allegations that established a
strong motive to commit fraud and an opportunity; or,
alternatively,
-- to allege facts constituting circumstantial evidence of
either reckless or conscious behavior.
(b) Bush Admin Would Require Detailed Evidence on Defendants'
"States of Mind"
Tellabs' defendants and the Administration say fulfilling those
2nd Circuit factual pleading requirements -- difficult in and of
themselves -- is not sufficient. Plaintiffs, they argue, must
produce detailed facts in their complaint specifically
demonstrating that defendants intended to violate the law -- an
impossible feat before legal discovery is permitted.
Moreover, defendants and the Administration say judges must also
"consider whether the facts alleged in the complaint leave open
a range of non-culpable explanations for the defendants'
conduct." Regardless of the facts of the fraud, if an innocent
explanation is possible, a judge should throw out the case, they
argue.
(c) Meritorious Claims of Defrauded Investors Would be Routinely
Thrown-Out
"If the Supreme Court agrees with Tellabs defendants and the
Administration, meritorious lawsuits filed by defrauded
investors would be routinely thrown out of federal court,
permitting white-collar wrongdoers to escape accountability and
undermining the integrity of U.S. capital markets," NASCAT
attorney Roddy continued. "Fraud victims would be effectively
deprived of their right to a trial by jury as guaranteed under
the Seventh Amendment to the Constitution."
Mr. Roddy said the underlying Tellabs fraud case provides a good
case example. As found by the 7th Circuit, the investors'
second amended complaint provides strong circumstantial evidence
that would lead a "reasonable person" to find a "strong
inference" that a conscious fraud was perpetrated.
Indeed, the complaint is based on interviews with former Tellabs
employees, including senior marketing executives and others with
inside knowledge, a review of the company's public filings with
the SEC, and an analysis of corporate news releases, securities
analyst reports, and media interviews, among other sources.
(d) Tellabs Execs Allegedly Lied to Investors, Securities
Analysts and the Media
The shareholders' complaint explains in detail how Tellabs,
which manufactured and marketed optical networking and broadband
access equipment, experienced a "dramatic slowdown" in its
markets during the period mid-2000 to mid-2001. Demand for
Tellabs' products was slowing and in internal meetings attended
by the defendant senior managers, the company's salesmen and
marketing managers reported that sales of key products were
declining by as much as 50 percent, the complaint says.
At the same time, however, the company was engaging in deceptive
and fraudulent sales practices including falsifying orders and
lying to the media and securities analysts about the company's
performance to give the appearance that sales and revenues were
continuing at a "robust" pace, according to the complaint.
During the period covered by the class action, Tellabs' share
price rose to a peak of $65.38 and, when the truth about the
company's business reversals finally came out, plunged to
$16.04.
(e) Court Should Consider Context of Enron, WorldCom & Other
Corporate Scandals
"The alleged Tellabs fraud is just one of several cases in the
early 2000s that followed a similar pattern of corporate
prevarication and deception aimed at artificially inflating
stock prices," NCPERS' Hank Kim added. "Any reasoned analysis
of the PSLRA's 'strong inference' requirement cannot be viewed
in isolation, but, rather must take into account the remarkable
breaches of fiduciary duty, failed audits, and corporate
scandals that have infected this nation's capital markets almost
from the date of passage of the PSLRA."
"Financial scandals at Enron, WorldCom, Tyco International,
Global Crossing, and Adelphi Communications, among others, have
cost shareholders staggering amounts of money," NASCAT's
counsel, Kevin Roddy, concluded. "There is no reason to make a
defrauded investor's task of deterring securities fraud and
recovering some of their losses more difficult than it is at
present."
The National Conference on Public Employee Retirement Systems is
the largest national nonprofit public pension fund association
with a membership including more than 500 pension funds with
approximately $3 trillion in assets.
The National Association of Shareholder and Consumer Attorneys
is a nonprofit organization comprised of about 100 law firms
representing investors -- including pension funds and
individuals -- in cases of securities fraud and other forms of
"white collar" criminal activity.
CONTACT: Hank H. Kim, Executive Director and Counsel of the
National Conference on Public Employment Retirement Systems, +1-
202-624-1456; Kevin P. Roddy, Counsel for Amicus Curiae for the
National Association of Shareholder and Consumer Attorneys, +1-
732-636-8000; Jeff McCord for NCPERS and NASCAT, +1-540-364-
4769.
TORONTO-DOMINION: Sued in Ontario for Allegedly Holding Deposits
----------------------------------------------------------------
The law offices of Juroviesky and Ricci LLP filed a class action
in the Ontario Superior Court of Justice against The Toronto-
Dominion Bank.
The proposed class is composed of persons who have maintained a
bank account with defendant and have:
-- made one or more deposits into their bank account at any
time between March 27, 2001 and March 27, 2007; and
-- were not able to access their funds immediately upon
such deposit because the Defendant held their funds,
Juroviesky and Ricci LLP are seeking to pursue remedies against
the defendant for common law breach of contract, breach of
common law duty/agency, conversion, unjust enrichment, and
negligence.
Generally, the statement of claim alleges that the defendant
wrongfully withheld certain of its clients' funds on deposit
with defendant, i.e. cheques, wire transfers, or other deposits,
after the defendant had already received payment on such deposit
(such payment received from the source or payor financial
institution in respect of such deposit).
The detailed statement of claim filed with the Ontario Superior
Court of Justice is the result of an extensive and independent
investigation conducted by Juroviesky and Ricci LLP, according
to the law firm.
Juroviesky and Ricci LLP said that to its knowledge, no other
statement of claim has been filed in this matter against
defendant and no other law firms, as at the time of filing its
statement of claim, represent plaintiffs in this litigation.
Juroviesky and Ricci LLP informs that for investors to join this
class action as a lead or representative plaintiff, discuss this
action/announcement, or be included in the TD Bank database,
they must e-mail Juroviesky and Ricci LLP at
info@jrclassactions.com with 'TD Hold' in the subject line, and
send their full contact information (name, address, phone
number, and email address.
Juroviesky and Ricci LLP on the Net:
http://www.jrclassactions.com.
VERMONT: Motorcycle Club's Civil Rights Suit Gets Class Status
--------------------------------------------------------------
The U.S. District Court of the District of Vermont granted
class-action status to a suit filed by the members of a
motorcycle club suing Jamaica town officials and the Windham
County Sheriff's Department, The Brattleboro Reformer reports.
On Dec. 22, 2005, The Pathfinder Motorcycle Club filed a civil
rights suit against former Sheriff Sheila Prue, several of the
deputies, and the town of Jamaica and its Select board.
The suit alleged that the club's civil rights were violated when
the town of Jamaica asked the sheriff's department to stop the
club's annual rally in August 2004 because the participants
lacked state-approved tires, goggles, helmets, directional
signals and license plates. The suit claims that the bikers
were lied to about those Vermont requirements.
In January the District Court denied class-action status to the
lawsuit, saying there was no record of the club's lawyer
handling these types of cases (Class Action Reporter, Feb. 14,
2007).
Specifically, the judge wrote in his ruling, "The record
contains no information suggesting plaintiffs' counsel is
knowledgeable or experienced, either with civil rights
litigation or class-action practice," according to the report.
The court granted class-action status to the case after William
Palmieri, the club's attorney, filed a motion for
reconsideration along with paperwork showing his qualifications.
The class will now be able to include every person that signed
up for the Red Fox Turkey Run motorcycle ride in 2004.
A hearing is scheduled for May 3 for both parties to argue a
motion for summary judgment.
The suit is "Pathfinders Motorcycle Club et al. v. Prue et al.,
Case No. 1:05-cv-00330-jgm," filed in the U.S. District Court of
the District of Vermont under Judge J. Garvan Murtha.
Representing the plaintiffs is William S. Palmieri, The Law
Offices of William S. Palmieri, L.L.C., 205 Church Street, Suite
311, New Haven, CT 06510, Phone: (203) 562-3100, Fax: (203) 498-
6076, E-mail: wpalmieri@hotmail.com.
Representing the defendants is James F. Carroll of English,
Carroll, Ritter & Boe, P.C., 64 Court Street, Middlebury, VT
05753, Phone: (802) 388-6711, Fax: (802) 388-2111, E-mail:
jcarroll@ecrlaw.com.
WATSON PHARMACEUTICALS: 9th Circuit Mulls Securities Suit Appeal
----------------------------------------------------------------
The U.S. Court of Appeals for the 9th Circuit has yet to rule on
an appeal in the consolidated securities class action, "In re:
Watson Pharmaceuticals, Inc. Securities Litigation, Case No. CV-
03-8236 AHM."
Beginning in November 2003, several securities class actions
were commenced in the U.S. District Court for the Central
District of California against the company and certain of its
present and former officers and directors. On Feb. 9, 2004, the
Federal Court issued an order consolidating all of the federal
actions under the caption, "In re: Watson Pharmaceuticals, Inc.
Securities Litigation."
In addition to the federal consolidated actions, two shareholder
derivative actions were filed in California Superior Court for
the County of Riverside. These suits are:
-- "Philip Orlando v. Allen Chao, et al., Case No. 403717"
and
-- "Charles Zimmerman v. Allen Chao, et al, Case No.
403715)."
These federal and state cases all relate to the drop in the
price of the company's common stock in November 2001.
Generally, they allege that the company failed to timely advise
investors about matters such as falling inventory valuations,
increased competition and manufacturing difficulties, and
therefore, the company's published financial statements and
public announcements during 2000 and 2001 were false and
misleading.
On November 16, 2004, the shareholder derivative actions were
dismissed without prejudice. On Aug. 2, 2004, the U.S. District
Court for the Central District of California granted the
defendants' motion to dismiss the federal consolidated action,
and allowed plaintiffs until Aug. 30, 2004 to file an amended
complaint.
On Aug. 30, 2004, the lead plaintiff in the federal consolidated
action notified the court that it did not intend to file an
amended complaint in response to the court's order granting the
defendants' motion to dismiss. On Sept. 2, 2004, the District
Court entered a judgment of dismissal in favor of the
defendants.
On Oct. 1, 2004, one of the non-lead plaintiffs in the
consolidated action filed a Notice of Appeal of the dismissal of
the action with the U.S. Court of Appeals for the 9th Circuit,
"Pension Fund v. Watson Pharmaceuticals, Inc., USCA Docket No.
04-56791."
The court heard oral argument on the appeal on Nov. 17, 2006.
On Dec. 1, 2006, the court ordered appellants to file a new and
separate action against defendants within 28 days or show cause
why they had not done so.
Appellants did not file a new and separate action, responding
that such a filing would be time-barred and requesting a ruling
on their appeal.
As of Feb. 26, the appellate court had not yet ruled on the
matter, according to Watson's March 1 Form 10-K filing with the
U.S. Securities and Exchange Commission for the quarterly fiscal
year ended Dec. 31, 2006.
The consolidated suit is "In Re: Watson Pharmaceuticals, Inc.
Securities Litigation, 03-CV-08236," filed in the U.S. District
Court for the Northern District of California under Judge A.
Howard Matz.
Representing the plaintiffs are:
(1) Lim, Ruger & Kim, LLP, 1055 West Seventh Street,
Suite 2800, Los Angeles, CA, 90017, Phone: 213-955-
9500, Fax: 213-955-9511, E-mail: info@lrklawyers.com;
and
(2) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA 19004, Phone: 610-667-7706, Fax: 610-667-7056, E-
mail: info@sbclasslaw.com.
WELLS FARGO: Sued in Calif. Over "Hidden" Credit Card Fees
----------------------------------------------------------
Wells Fargo & Co. and Wells Fargo Bank N.A. were named as
defendants in a purported class action that was filed by a
college student in California over alleged hidden credit card
fees charged to him.
Joshua Endres filed the suit on Nov. 9, 2006 in the U.S.
District Court for the Northern District of California. He
filed the suit, which seeks class-action status, after stumbling
into what his attorney calls a "hidden profit center" in 2002
when he applied for a Wells Fargo credit card.
Mr. Endres was an 18-year-old Crafton Hills College student in
2002 when he agreed to open a "College Visa Credit Card account"
at a Wells Fargo branch in Yucaipa, Calif., which allegedly had
overdraft protection. However, according to attorneys, he was
not told of the $10 charge to be incurred each time he overdrew
his checking account, even by as much as 1 cent.
Nearly five years later, Mr. Endres is still paying his last
$300 of debt triggered largely by the $10 charge. Mr. Endres,
22, is now a music major at Cal Poly Pomona.
The suit seeks unlimited damages and demands that Wells Fargo
reimburses customers and stop what the lawsuit refers to as
"hidden fees."
Currently the case is winding through the U.S. District Court
for the Northern District of California under Judge Phyllis J.
Hamilton. However, no trial dates have been set.
Wells Fargo denied most allegations in federal court papers
filed in February.
The suit is "Endres v. Wells Fargo & Co. et al., Case No. 3:06-
cv-07019-PJH," filed in the U.S. District Court for the Northern
District of California under Judge Phyllis J. Hamilton.
Representing the plaintiffs is Richard D. McCune, Jr. of Welebir
& McCune, 2068 Orange Tree Lane, Suite 215, Redlands, CA 92374,
Phone: 909-335-0444, Fax: 909-335-0452, E-mail:
rdm@wmtrial-law.com.
Representing the defendants is Sonya D. Winner of Covington &
Burling, LLP, One Front Street, Suite 3500, San Francisco, CA
94111, Phone: 415-591-6000, Fax: 415-591-6091, E-mail:
SWinner@cov.com.
WINSTAR COMMS: N.Y. Securities Suit Deal Gets Final Approval
------------------------------------------------------------
The U.S. District Court for the Southern District of New York
granted final approval to a proposed settlement in the class
action, "In Re Winstar Communications Securities Litigation,
Master File No. 01 Civ. 3014 (GBD)."
The settlement covers all persons and entities that purchased or
otherwise acquired the publicly issued common stock or notes of
Winstar Communications, Inc. from March 10, 2000 through and
including April 2, 2001.
In its amended final judgment order, the court found that the
settlement agreement was fair, reasonable and adequate, and in
the best interest of the class, thus the class action was
dismissed with prejudice and without cost.
The class plaintiffs include BIM Intermobiliare SGR, Robert
Ahearn, and DRYE Custom Pallets. Grant Thornton LLP is a "non-
released" party under the settlement.
The class plaintiffs' counsels are awarded 30% of the gross
class settlement fund in fees, and $482,639.56 in reimbursement
of costs and other expenses.
Case Background
Beginning in April of 2001, investors commenced a number of
putative class actions against Winstar, certain of its former
officers and directors and Winstar's former auditing firm, Grant
Thornton.
In an order dated July 30, 2001, the court consolidated those
actions and named the law firm of Shalov Stone & Bonner LLP as
lead counsel for the Class; and the firms of Berger & Montague,
P.C., Shapiro Haber & Urmy LLP and Stull, Stull & Brody to an
Executive Committee of firms representing the class.
Listed as plaintiffs in the suit are:
-- Sanford Gould;
-- BIM Intermobiliare SGR;
-- Bulldog Capital Management LP;
-- Robert Ahearn;
-- DRYE Custom Pallets;
-- Kevin Sherman;
-- Max C. Michaels;
-- Robin Kwalbrun;
-- Eleanore Reznick;
-- Yan Sun;
-- Frank Zappariello;
-- Theodore S. Gutowicz;
-- David Rich;
-- Richard Sulentic; and
-- Andres Rios.
Of those plaintiffs three were later appointed lead plaintiffs
of the case. They subsequently filed a consolidated amended
complaint and, thereafter, a second amended complaint.
In the second amended complaint, the lead plaintiffs alleged
claims for violations of Section 10(b) of the U.S. Exchange Act
against the individual defendants, defendant Grant Thornton, and
Lucent Technologies, Inc.
Additionally, the lead plaintiffs alleged claims for violations
of the "control person" provisions of Section 20(a) of the
Exchange Act against the individual defendants.
Among other things, the lead plaintiffs alleged that the
individual defendants artificially inflated the financial
results reported by Winstar during the class period.
A copy of the court's amended final judgment order is available
free of charge at: http://researcharchives.com/t/s?1c6f.
The suit is "Gould, et al v. Winstar, Inc., et al., Case No.
1:01-cv-03014-GBD," filed in the U.S. District Court for the
Southern District of New York under Judge George B. Daniels.
Representing the plaintiffs are:
(1) Thomas George Ciarlone, Jr. of Shalov Stone & Bonner
LLP, 485 Seventh Avenue, Suite 1000, New York, NY
10018, Phone: (212) 239-4340, Fax: (212) 239-4310, E-
mail: tciarlone@lawssb.com; and
(2) Marc S. Henzel of Law Offices of Marc S. Henzel, 273
Montgomery Ave., Bala Cynwyd, PA 19004, Phone: 610-660-
8000, Fax: 610-660-8080, E-mail: Mhenzel182@aol.com.
Representing the defendants are:
(i) James Lawrence Bernard of Stroock & Stroock & Lavan
LLP, 180 Maiden Lane, New York, NY 10038, Phone: 212-
806-5400, Fax: 212-806-6006, E-mail:
Jbernard@stroock.com; and
(ii) Bruce Domenick Angiolillo of Simpson Thacher & Bartlett
LLP (NY), 425 Lexington Avenue, New York, NY 10017,
Phone: 212-455-2000, Fax: 212-455-2502, E-mail:
bangiolillo@stblaw.com.
XM SATELLITE: D.C. Court Dismisses Securities Fraud Litigation
--------------------------------------------------------------
The U.S. District Court for the District of Columbia granted a
motion seeking a dismissal of a consolidated securities fraud
class action against XM Satellite Radio Holdings, Inc.
In her ruling, Judge Ellen Segal Huvelle pointed out that the
case failed to identify any materially misleading statements or
omissions' by the company that would support it.
On May 8, 2006 an investor sued XM Satellite seeking damages for
violations of federal securities laws on behalf of all investors
who acquired XM securities from July 28, 2005 through and
including Feb. 15, 2006.
The lawsuit claims that XM and Hugh Panero, its president and
chief executive officer, violated Sections 10(b) and 20(a) of
the U.S. Securities Exchange Act of 1934, Sections 78j(b) and
78t of the U.S. Commerce and Trade Code, and U.S. Securities and
Exchange Commission Rule 10b-5, 17 Code of Federal Regulations
Section 240.10b-5, promulgated thereunder.
According to the complaint, Washington-based XM and Mr. Panero
violated the federal securities laws by issuing materially false
and misleading statements during the class period that
artificially inflated the company's stock price.
Specifically, the complaint says defendants led the market to
believe that XM would grow its subscriber base to 6 million by
year-end 2005, while lowering two of its "key metrics:"
Subscriber Acquisition Costs and Cost Per Gross Addition.
In reality, however, the company was allegedly well aware that
costs, especially SAC and CPGA, would skyrocket in the fourth
quarter of 2005 due to a $25 million promotional campaign to
combat the debut of the popular "Howard Stern Show" on Sirius
Satellite Radio, XM's chief competitor.
On Feb. 16, 2006, the company announced a net loss of $268.3
million for the fourth quarter of 2005, compared with $188.2
million a year earlier.
For the full 2005 year, XM's net loss was $666.7 million,
compared to $642.4 million in 2004. In addition, the company
announced that both SAC and CPGA were much higher than the
market had been led to believe.
The market reacted swiftly to those revelations, sending the
price of XM's common stock down 5.03%, from a close of $25.25
per share on Feb. 15, 2006, to $23.98 per share the next day.
The company's stock price fell a further 10.05% to $21.57 per
share at the close of trading Feb. 17, 2006, the complaint says.
According to the complaint, Mr. Panero and other insiders
engaged in highly suspicious stock sales during the class
period, with Mr. Panero selling approximately 413,334 shares, or
98.71% of his personally held XM stock, for approximately
$8,841,161.
Collectively, company insiders sold approximately 2,769,516 of
personally held XM stock during the fourth quarter of 2005,
reaping proceeds of approximately $73,325,009.
On June 7, 2006, Judge Ellen Huvelle signed a Consolidation
Order, consolidating all related cases into one class action as
"In re XM Satellite Radio Holdings Securities Litigation, C.A.
No. 06-0802."
On July 3, 2006, competing motions for the appointment of lead
plaintiff and lead counsel were filed with the court. On Aug.
1, 2006, Judge Huvelle issued a Memorandum Opinion and Order
appointing lead plaintiffs and lead counsel.
On Aug. 31, 2006, the company said it received a letter from the
staff of the U.S. Securities and Exchange Commission requesting
that the company voluntarily provide documents regarding the
company's subscriber targets, costs associated with attempting
to reach those targets, and related matters during the third and
fourth quarters of 2005.
On Sept. 26, 2006, lead plaintiffs filed their consolidated
class action complaint. The company then filed a motion to
dismiss this matter.
On March 2007, Judge Huvelle dismissed the case. She
specifically stated that plaintiffs failed to show that the
company's statements "lacked a reasonable basis when made."
The judge also ruled that the company's projections of its
marketing costs were "forward-looking statements...accompanied
by meaningful cautionary language' and therefore shielded from
lawsuits."
The suit is "In re XM Satellite Radio Holdings Securities
Litigation, C.A. No. 06-0802," filed in the U.S. District Court
for the District of Columbia under Judge Ellen Huvelle.
Representing the plaintiffs are:
(1) Kimberly Anne Chadwick of Doherty, Sheridan & Persian,
8408 Arlington Boulevard, Fairfax, VA 22031, Phone:
(703) 698-7700, Fax: (703) 641-9645, E-mail:
kchadwick@dsp-law.com;
(2) Donald J. Enright and Karen Jennifer Marcus both of
Finkelstein Thompson & Loughran, 1050 30th Street, NW
Washington, DC 20007, Phone: (202) 337-8000, Fax: (202)
337-8090, E-mail: dje@ftllaw.com or kjm@ftllaw.com;
(3) Burton John Fishman of Fortney & Scott, 1750 K Street,
NW, Suite 325, Washington, DC 20006, Phone: (202) 689-
1200, Fax: (202) 776-7801, E-mail:
fishman@fortneyscott.com;
(4) Nancy M. Juda of Lerach Coughlin Stoia Geller Rudman &
Robbins LLP, 1100 Connecticut Avenue, NW, Suite 730,
Washington, DC 20036, Phone: (202) 822-2024, E-mail:
nancyj@lerachlaw.com;
(5) Gary Edward Mason of The Mason Law Firm, 1225 19th
Street, NW, Suite 500, Washington, DC 20036, Phone:
(202) 429-2290, Fax: (202) 429-2294, E-mail:
gmason@masonlawdc.com;
(6) Arthur L. Shingler, III of Scott & Scott LLC, 600 B
Street, Suite 1500, San Diego, CA 92101, Phone: (619)
233-4565, Fax: (619) 233-0508, E-mail:
ashingler@scott-scott.com; and
(7) Daniel S. Sommers and Steven J. Toll both of Cohen
Milstein Hausfeld & Toll, PLLC, 1100 New York Avenue,
NW, West Tower, Suite 500, Washington, DC 20005, Phone:
(202) 408-4600, Fax: (202) 408-4699, E-mail:
dsommers@cmht.com or stoll@cmht.com.
Representing the defendants are:
(i) Charles Edward Davidow and Michael A Mugmon both of
Wilmer Cutler Pickering Hale & Dorr LLP, 1875
Pennsylvania Avenue, NW, Washington, DC 20006, Phone:
(202) 663-6241 or (202) 663-6101, Fax: (202) 663-6363,
E-mail: charles.davidow@wilmerhale.com or
michael.mugmon@wilmerhale.com; and
(ii) Christopher J. Herrling of Wilmer Cutler Pickering Hale
& Dorr LLP, 2445 M Street NW, Washington, DC 20037-
1420, Phone: (202) 663-6000, Fax: (202) 663-6363, E-
mail: cherrling@wilmer.com.
* Labaton Sucharow Weighs Tellabs, Credit Suisse Suits' Effects
---------------------------------------------------------------
The outcome of the cases "Tellabs, Inc. v. Makor Issues &
Rights, Ltd." and "Credit Suisse v. Billing," whose oral
arguments were heard by the Supreme Court last week, may impact
the viability of many other securities class actions, and may
hinder investors' ability to file future actions to recover
losses, according to Labaton Sucharow & Rudoff LLP.
Jonathan M. Plasse and Christopher McDonald, attorneys with
Labaton Sucharow & Rudoff LLP, answer some of the most pressing
questions these cases present.
(a) Why should investors and pension funds care about these
cases?
In the "Credit Suisse v. Billing" case, the court will decide
whether antitrust laws apply to Wall Street. In Tellabs, the
court will decide whether to make it easier for securities class
actions to be dismissed before the all the facts about the case
are laid out for the Court to review.
Both cases may impede shareholders' ability to recover losses
caused by a company's fraudulent disclosures, collusion and
other illegal practices. Should these cases be decided in favor
of the defendants, the impact on the investing community will be
devastating.
The Credit Suisse case could make collusion to inflate stock
prices easier for investment banks and institutional investors
because Wall Street would be immune from the antitrust laws that
apply to virtually all other industries. The Tellabs case could
significantly increase the burden that investors -- public
pension funds, retirement funds, individuals and others -- face
when attempting to recover losses caused by a company's
fraudulent activity.
The ultimate result could be an increase in corporate fraud --
which is the last thing this country needs after Enron, WorldCom
and other financial debacles of late.
(b) Who has sided with the shareholders in these cases, and
where does the Government stand?
In a break from its past policies that encourage protecting
investors and the public -- rather than protecting wrongdoers --
the federal government has filed amicus briefs siding with the
defendants in Tellabs. However, representatives of a majority
of the states -- including the attorneys general of 24 states
and territories -- filed amicus briefs in support of the
plaintiffs in the Tellabs case. The attorneys general warn that
the standard advocated by the defendants and the federal
government "carries the high price of blocking many meritorious
claims...that protect the market, well-run businesses, and
investors."
In Credit Suisse the State of New York filed an amicus brief in
support of the plaintiff shareholders. That brief points out
that while the defendants "purport to oppose only private class
actions, the sweeping doctrinal change they advocate would
equally curtail the ability of governmental antitrust enforcers,
including the Justice Department and the State Attorneys
General, to protect investors and businesses from
anticompetitive conduct in the securities industry."
(c) What is the background on the Tellabs case?
Tellabs manufactured and marketed broadband access and optical
networking equipment. The plaintiffs' complaint alleges that
the defendants concealed from investors the fact that the
company was experiencing a "dramatic slowdown" in sales from
mid-2000 to mid-2001. During that same time, Tellabs' chief
executive was repeatedly reassuring investors that, unlike its
competitors, Tellabs was experiencing "robust growth." Also
during that period, Tellabs insiders profited by selling tens of
thousands of Tellabs shares for more than $8 million.
As a result of the defendants' alleged fraudulent acts and
statements, Tellabs' share price peaked at a high of $65.38,
before plunging to $16.04 after the truth about the company's
financial condition was disclosed.
(d) What is at issue in Tellabs?
To succeed on a fraud claim under the securities laws, a
plaintiff must put forth allegations that create a "strong
inference" that the defendants knew, or should have known, that
their statements to the investing public were false or
misleading.
In Tellabs the Supreme Court will be reviewing the 7th Circuit's
interpretation of the "scienter," a defendant's intent, or
culpable state of mind. The 7th Circuit found that a securities
class action can proceed if, based on the facts alleged in the
complaint, "a reasonable person could infer that the defendants
acted with the requisite intent" -- a standard consistent with
rulings by several other U.S. Courts of Appeals.
(e) What could be the impact of Tellabs?
The standards for scienter advanced by the defendants in this
case would make it extremely difficult for most securities class
actions to proceed. Were the Supreme Court to adopt the
position advanced by the defendants in the case, the impact
would be dramatic, as many meritorious lawsuits would likely not
survive.
This is true because investors would be required to not only
allege detailed, specific facts showing that the defendants
intended to violate the law, but facts that also rule out any
possible non-culpable explanations for the defendants' conduct.
This unreasonably high standard, which would have to be met
before the plaintiffs are permitted to engage in discovery on
the issue of the defendants' state of mind, would result in many
meritorious cases being thrown at the earliest possible stage of
litigation. In turn, investors would increasingly be left with
little recourse in the event of fraud.
(f) What is the background on the Credit Suisse case?
Investment banks and institutional investors (Credit Suisse is
just one of many named defendants) are alleged to have rigged
the IPOs of approximately 900 Internet and technology stocks in
the 1990s.
The plaintiffs allege that the underwriters and institutional
investors to which they sold IPO shares manipulated aftermarket
share prices by "tie in" arrangements such as "laddering." With
laddering, institutional investors agree to purchase an
allocation of initial public offering shares directly from the
underwriter, but also agree to purchase shares in the
aftermarket at pre-arranged ever-increasing prices.
The aftermarket purchases create the illusion of demand, which
artificially drives up the share prices that ordinary investors
pay in the open market. Thus, the plaintiffs claim the
artificially inflated price they paid for stock lined the
pockets of the investment banks and institutional investors who
had colluded to ensure the prices would skyrocket.
The defendants -- investment banks and others - contend that
since they operate within a market closely regulated by the
Securities and Exchange Commission, they should have immunity
from civil antitrust liability.
(g) What could be the impact of the Credit Suisse case?
If the Supreme Court reverses the Court of Appeals' decision, it
would essentially grant broad immunity for violations of the
antitrust laws to would-be defendants whose conduct is regulated
by the SEC. Regulated entities that violate the antitrust laws
will be able to claim immunity as a defense and thereby avoid
liability and the trebling of damages available under the
antitrust laws for conduct that otherwise would be unlawful.
For more information, contact: Labaton Sucharow & Rudoff LLP,
Jennifer Tetefsky, Phone: 212-907-0659, E-mail:
jtetefsky@labaton.com.
New Securities Fraud Cases
ACCREDITED HOME: Charles H. Johnson Announces Securities Lawsuit
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Charles H. Johnson & Associates 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 Corp. (LEND:) publicly traded securities
during the period Nov. 1, 2005 through March 12, 2007.
Lead plaintiff filing deadline is May 15, 2007.
The complaint alleges that defendants violated federal
securities laws by issuing a series of material
misrepresentations to the market during the class period
concerning the company's operations, financial performance and
prospects, thereby artificially inflating the price of
Accredited Home Lenders securities.
On Feb. 14, 2007, Accredited issued a press release announcing
disappointing profitability. Then, on March 12, 2007, after the
market closed, 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%.
For more information, contact: Neil Eisenbraun, Esq. at Charles
H. Johnson & Associates, 2599 Mississippi Street, New Brighton,
MN 55112, (651) 633-5685, E-mail: cjohnsonlaw@gmail.com.
COAST FINANCIAL: Brower Piven Announces Securities Fraud Suit
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The law firm of Brower Piven announces that a securities class
action was commenced on behalf of shareholders who purchased or
otherwise acquired the common stock of Coast Financial Holdings,
Inc. (CFHI) between Oct. 5, 2005 and Jan. 25, 2007, inclusive.
The case is pending in the U.S. District Court for the Middle
District of Florida against defendant Coast Financial Holdings,
Inc. and one or more of its officers and/or directors.
The action charges that defendants violated federal securities
laws by issuing a series of materially false and misleading
statements to the market throughout the Class Period, which
statements had the effect of artificially inflating the market
price of the U.S.'s securities.
No class has yet been certified in the above action. Lead
plaintiff filing deadline is May 21, 2007.
For more information, contact David Brower and Charles Piven at
Brower Piven, The World Trade Center-Baltimore, 401 East Pratt
Street, Suite 2525, Baltimore, Maryland 21202, E-mail:
hoffman@browerpiven.com, Phone: 410/986-0036.
USANA HEALTH: Brodsky & Smith Announces Securities Fraud Lawsuit
----------------------------------------------------------------
Law offices of Brodsky & Smith, LLC announces that a securities
class action has been filed on behalf of shareholders who
purchased the common stock of USANA Health Sciences, Inc. (USNA)
between July 18, 2006 and March 14, 2007, inclusive, seeking to
pursue remedies under the Securities Exchange Act of 1934. The
class action was filed in the U.S. District Court for the
District of Utah.
The complaint alleges that defendants violated federal
securities laws by issuing a series of material
misrepresentations to the market, thereby artificially inflating
the price of USANA.
No class has yet been certified in the above action.
For more information, contact Evan J. Smith, Esquire or Marc L.
Ackerman, Esquire at Brodsky & Smith, LLC, Two Bala Plaza, Suite
602, Bala Cynwyd, PA 19004, E-mail at clients@brodsky-smith.com,
Toll free Number 877-LEGAL-90.
USANA HEALTH: Schatz Nobel Announces Securities Fraud Lawsuit
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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 District of Utah on behalf of all persons
who purchased or otherwise acquired the publicly traded
securities of USANA Health Sciences, Inc.) between July 18, 2006
and March 14, 2007, inclusive.
The complaint alleges that USANA, a company engaged in the
manufacture and sale of nutritional and personal care products,
and certain of its officers and directors violated Federal
Securities laws by issuing a series of false statements
regarding the U.S.'s financial results.
Specifically, the complaint alleges that defendants failed to
disclose, among other things:
(i) that the U.S.'s multi-level marketing strategy was
operating as a pyramid scheme;
(ii) the bulk of the U.S.'s Associates sold not to end
customers, but to other associates;
(iii) that the USANA was experiencing a high associate
turnover rate, resulting in an unsustainable sales
force; and
(iv) 87% of the U.S.'s Associates were losing money.
The complaint further alleges that, as a result of these false
statements and omissions, USANA common stock traded at
artificially inflated prices.
On March 15, 2007, the Fraud Discovery Institute, Inc. (FDI)
issued a press release and The Wall Street Journal published an
article concerning a three-year investigation by the FDI that
had revealed that USANA's multi-level marketing system was an
unsustainable pyramid scheme.
On this news, the price of the U.S.'s stock declined $8.92 per
share, or 15%, to close on March 15, 2007 at $49.85 per share.
Lead plaintiff filing deadline is May 25, 2007.
For more information, contact Wayne T. Boulton and Nancy A.
Kulesa at Schatz Nobel Izard, P.C., -- http://www.snilaw.com--
Phone: (800) 797-5499, E-mail: firm@snlaw.net.
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S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
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USA. Glenn Ruel Senorin, Ma. Cristina Canson, and Janice
Mendoza, Editors.
Copyright 2007. All rights reserved. ISSN 1525-2272.
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