/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/071029.mbx C L A S S A C T I O N R E P O R T E R Monday, October 29, 2007, Vol. 9, No. 214 Headlines BARCLAYS CAPITAL: Ind. Couple Files TILA Violations Lawsuit BOEING CO: Still Faces Employment Bias Lawsuits in Wash., Ill. BOEING CO: Ill. Court Consolidates ERISA Violations Lawsuit BOEING CO: Ill. Court Orders Stay for ERISA Violations Lawsuit BOEING CO: Parties Conclude “Wheeler” ERISA Litigation in Ill. BROADCOM CORP: Dispute in Cal. Securities Suit Now Resolved COLUMBIA GAS: Faces W.Va. Suit Over T16 Pipeline Contamination CROCUS INVESTMENT: No Ruling Yet on Release of Receiver's Report DELL COMPUTER: N.M. A.G. Backs Local Man in Consumer Fraud Suit DUNKIN’ DONUTS: Recalls Glow Sticks Due to Choking Hazards E.I DU PONT: Faces $400M Liability in Spelter, W.Va. Lawsuit GUIDECRAFT INC: Recalls Puppet Theaters on High Lead Content HEELYS INC: Faces Tex. Securities Fraud Suits Over December IPO HURRY CORP: Recalls Bicycles with Cranks that can Detach in Use KONG MAXX: Recalls Ladder Stands that can Become Unstable MASTEC: Agrees to Settle Legacy Wage, Hour Suit for $12.6M MITEL NETWORKS: Faces Litigation Over Inter-Tel Merger Agreement NORTHROP GRUMMAN: Review to Delay Jan. 22 Cal. ERISA Suit Trial PAYLESS SHOESOURCE: Recalls Girls’ Boots Due to Fall Hazard PRAXAIR INC: Still Faces Multiple Lawsuits Over Welding Fumes R.L. ALBERT: Recalls Halloween Pails Due to High Lead Content SOUTH DAKOTA: 2004 Flood Victims Have Until Jan. to Join Suit SOUTH DAKOTA: Proposed New Strip Search Suit Plaintiffs Junked SPRINT: Agrees to Disclose Lock Code to Settle Cal. Lawsuit UNION PACIFIC: Panel to Decide Jurisdiction for Antitrust Suits WELLPOINT HEALTH: CMA Added as Plaintiff in Cal. Hospitals' Suit WELLPOINT INC: Parties Settle Calif. Insurance Policies Lawsuit * Law Journal Names This Year's “Plaintiffs' Hot List” New Securities Fraud Cases NUTRISYSTEM INC: Abraham Fruchter Files Pa. Securities Lawsuit WELLCARE HEALTH: Kahn Gauthier Files Securities Suit in Fla. ********* BARCLAYS CAPITAL: Ind. Couple Files TILA Violations Lawsuit ----------------------------------------------------------- Barclays Capital Real Estate, Inc., and Mortgage Electronic Registration Systems, Inc. are facing a purported class action in the U.S. District Court for the Northern District of Indiana, alleging violations of the Truth In Lending Act or TILA, The Gary Post Tribune reports. The suit was filed by Kerry and Susan Burke on Oct. 18, 2007 against the defendants for their alleged failure to specify that its mortgage payments were due every month. It was brought on behalf of more than 50 other plaintiffs. The Burkes seek to have their mortgages rescinded for what they claim is a failure to disclose the proper terms of repayment for a $126,000 home equity loan they took out in January 2007. According to the suit, the federally required Truth-in-Lending statement that plaintiffs received at closing, which spells out the cost and terms of repayment, did not stipulate that the mortgage payments were due every month. Instead, it stated that a certain number of payments were due by a specific date. Though the text of the mortgage document contains numerous references to the fact that monthly payments are required, the lawsuit argues that the failure to disclose the schedule of repayment is grounds to cancel the mortgage under TILA. Canceling the mortgage would essentially negate the more than $300,000 in interest the couple would be required to pay over the lifetime of the loan. In addition to asking the court to void their mortgage, plaintiffs are also seeking compensation for their attorney fees. The suit is “Burke et al. v. Barclays Capital Real Estate Inc. et al., Case No. 2:07-cv-00365-PPS-PRC,” filed in the U.S District Court for the Northern District of Indiana under Judge Philip P. Simon with referral to Judge Paul R. Cherry. Representing the plaintiffs are: Daniel A. Edelman, Esq. Edelman Combs Latturner & Goodwin LLC 120 S. LaSalle Street Suite 1800 Chicago, IL 60603 Phone: 312-739-4200 Fax: 312-419-0379 E-mail: courtecl@edcombs.com BOEING CO: Still Faces Employment Bias Lawsuits in Wash., Ill. -------------------------------------------------------------- The Boeing Co. continues to face two employment discrimination class actions in Washington and Illinois. Williams Litigation In the Williams racial discrimination class action, which was filed in the U.S. District Court for the Western District of Washington, the company prevailed in a jury trial in December 2005, but plaintiffs appealed the pre-trial dismissal of compensation claims in November 2005. Calendar Litigation In the Calender racial discrimination class action, which was filed in the U.S. Northern District of Illinois -- a spin-off from Williams – plaintiffs dropped their promotions claim on June 6, 2006 and put their compensation claims on hold pending the outcome of the Williams appeal. The company reported no development in the case at its Oct. 24, 2007 Form 10-Q Filing with the U.S. Securities and Exchange Commission for the quarterly period ended Sept. 30, 2007. Chicago, Illinois-based The Boeing Co. -- http://www.boeing.com/ -- is an aerospace company that operates in six principal segments: Commercial Airplanes, Aircraft and Weapon Systems, Network Systems, Support Systems, Launch and Orbital Systems, and Boeing Capital Corp. BOEING CO: Ill. Court Consolidates ERISA Violations Lawsuit ----------------------------------------------------------- The Boeing Co. remains a defendant in a consolidated class action filed in the U.S. District Court for the Northern District of Illinois, alleging violations of Employee Retirement Income Security Act, according to the company's Oct. 24, 2007 Form 10-Q Filing with the U.S. Securities and Exchange Commission for the quarterly period ended Sept. 30, 2007. On Sept. 13, 2006, two UAW Local 1069 retirees filed a class action asserting allegations that Boeing is obligated to provide vested lifetime retiree medical benefits to plaintiffs and all class members. Plaintiffs alleged that recently announced changes to medical plans for retirees of UAW Local 1069 constituted a breach of collective bargaining agreements under Section 301 of the Labor- Management Relations Act and Section 502(a)(1)(B) of the ERISA. The lawsuit alleged that the collective bargaining agreements and the medical plans obligate Boeing to provide vested lifetime retiree health care benefits to the plaintiffs and to all class members. On Sept. 15, 2006, Boeing filed a lawsuit in the Northern District of Illinois against the International UAW and two retiree medical plan participants seeking a declaratory judgment confirming that the company has the legal right to make changes to these medical benefits. On June 4, 2007, the U.S. District Court for the Middle District of Tennessee ordered that its case be transferred to the U.S. District Court for the Northern District of Illinois. The two cases were consolidated on Sept. 24, 2007. Chicago, Illinois-based The Boeing Co. -- http://www.boeing.com/ -- is an aerospace company that operates in six principal segments: Commercial Airplanes, Aircraft and Weapon Systems, Network Systems, Support Systems, Launch and Orbital Systems, and Boeing Capital Corp. BOEING CO: Ill. Court Orders Stay for ERISA Violations Lawsuit -------------------------------------------------------------- The U.S. District Court for the Southern District of Illinois stayed a purported class action that alleges violations of the Employee Retirement Income Security Act against The Boeing Co. On Oct. 13, 2006, the company was named as a defendant in the lawsuit, which was filed in the U. S. District Court for the Southern District of Illinois. Plaintiffs, seeking to represent a class of similarly situated participants and beneficiaries in the Boeing Company Voluntary Investment Plan, alleged that fees and expenses incurred by the Plan were and are unreasonable and excessive, not incurred solely for the benefit of the Plan and its participants, and were undisclosed to participants. The plaintiffs further alleged that defendants breached their fiduciary duties in violation of Section 502(a)(2) of ERISA, and sought injunctive and equitable relief pursuant to Section 502(a)(3) of ERISA. Plaintiffs have filed a motion to certify the class, which Boeing has opposed. On Sept. 10, 2007, the court issued an order staying class certification pending resolution by the U.S. Court of Appeals for the Seventh Circuit of “Lively v. Dynegy, Inc.,” according to the company's Oct. 24, 2007 Form 10-Q Filing with the U.S. Securities and Exchange Commission for the quarterly period ended Sept. 30, 2007. Chicago, Illinois-based The Boeing Co. -- http://www.boeing.com/ -- is an aerospace company that operates in six principal segments: Commercial Airplanes, Aircraft and Weapon Systems, Network Systems, Support Systems, Launch and Orbital Systems, and Boeing Capital Corp. BOEING CO: Parties Conclude “Wheeler” ERISA Litigation in Ill. -------------------------------------------------------------- Parties in the matter, "Wheeler et al. v. Pension Value Plan for Employees of The Boeing Co. et al., Case No. 3:06-cv-00500-DRH- PMF," filed a joint stipulation concluding the matter. The suit was filed in the U.S. District Court for the Southern District of Illinois alleging that The Boeing Co. violated Employment Retirement Income Security Act in relation to computations of its Pension Value Plan for Employees. On June 23, 2006, two employees and two former employees of Boeing filed a purported class action on behalf of themselves and similarly situated participants in the Plan, against: -- Boeing Co., -- McDonnell Douglas Corp., and -- the Pension Value Plan for Employees of The Boeing Co. The suit was filed in the U.S. District Court for the Southern District of Illinois on June 23, 2006 by: -- Larry Wheeler of Edwardsville; -- David and Maral Keeton of Wildwood, Missouri; and -- Vincent Parisi of Bellefontaine Neighbors, Missouri. Plaintiffs allege that as of Jan. 1, 1999 and all times thereafter, the Plan's benefit formula used to compute the accrued benefit violates the accrual rules of ERISA and that plaintiffs are entitled to a recalculation of their benefits along with other equitable relief. Specifically, plaintiffs claim that their retirement benefits are less than the accrued benefit to which they are legally entitled, since the plan failed to properly apply accrual and vesting rules imposed by ERISA. The conduct mentioned is widespread, affecting hundreds of plan participants, according to the complaint. Plaintiffs also claim that the plan violates ERISA's anti-back loading provisions by making benefits accrue very slowly over time until the participants nears the normal retirement age so that a participant's vested pension rights have very little value until they complete a very long period of service. In addition, plaintiffs argue that under ERISA a defined benefit plan must allow a participant to accrue, i.e. earn benefits no less that ratably over a working career so as to prevent employers from using creative plan designs to avoid the protection afforded by ERISA's vesting rules. The company believes the allegations claimed by plaintiffs lack merit and have filed a motion to dismiss all claims. Relief Sought Furthermore, plaintiffs claim they are entitled to appropriate equitable relief to redress the plan's violations of ERISA and to enforce provisions, and incidental monetary relief mechanically flowing from injunctive relief in the form of a common fund equal to the difference between what they were paid under the alleged unlawful method of computing their pension benefits. The suit asked the court for a declaration that the pension plan's method of computing benefits is unlawful, a judgment for them and against the company and a permanent injunction preventing the plan from calculating pension benefits in violation of ERISA. Plaintiffs also asked the creation of a common fund equal to the amount of pension benefits due, pre and post judgment interest, attorneys' fees and costs pursuant to the common fund/benefit doctrine or any other applicable laws and any other relief the court deems appropriate under the circumstances. On March 13, 2007, the court granted Boeing's motion and dismissed the suit with prejudice. Plaintiffs have filed a motion to vacate the judgment, which Boeing opposed. The court denied the motion to vacate the judgment on Sept. 6, 2007 and the parties filed a joint stipulation on Sept. 14, 2007 concluding the lawsuit. The suit is, "Wheeler et al. v. Pension Value Plan for Employees of The Boeing Co. et al., Case No. 3:06-cv-00500-DRH-PMF," filed in the U.S. District Court for the Southern District of Illinois under Judge David R. Herndon. Representing the plaintiffs are: Matthew H. Armstrong, Esq. Jerome J. Schlichter, Esq. Schlichter Bogard Phone: 314-621-6115 and 618-632-3329 Fax: 314-621-7151 E-mail: marmstrong@uselaws.com jschlichter@uselaws.com Representing the defendants are: Lisa Demet Martin, Esq. Bryan Cave St. Louis, 211 North Broadway, One Metropolitan Square Suite 3600 St. Louis, MO 63102 Phone: 314-259-2000 Fax: 314-259-2020 - and - Christopher J. Rillo, Esq. Groom Law Group Chartered, 1701 Pennsylvania Ave. NW Washington, DC 20006 Phone: 202-857-0620 Fax: 202-659-4503 E-mail: crillo@groom.com BROADCOM CORP: Dispute in Cal. Securities Suit Now Resolved ----------------------------------------------------------- A federal appeals court resolved a dispute in the appointment of class counsel in a consolidated securities fraud class action filed against Broadcom Corp. in the U.S. District Court for the Central District of California. From August through October 2006, several plaintiffs filed these purported shareholder class actions in the U.S. District Court for the Central District of California against Broadcom and certain of its current or former officers and directors (Options Class Actions) (Class Action Reporter, May 10, 2007): -- "Bakshi v. Samueli, et al., Case No. 06-5036 R (CWx)," -- "Mills v. Samueli, et al., Case No. SACV 06-9674 DOC R(CWx)," and -- "Minnesota Bakers Union Pension Fund, et al. v. Broadcom Corp., et al., Case No. SACV 06-970 CJC R (CWx)." The essence of the plaintiffs' allegations is that Broadcom improperly backdated stock options, resulting in false or misleading disclosures concerning, among other things, Broadcom's business and financial condition. Plaintiffs also allege that Broadcom failed to account for and pay taxes on stock options properly, that the individual defendants sold Broadcom stock while in possession of material nonpublic information, and that the defendants' conduct caused artificial inflation in Broadcom's stock price and damages to the putative plaintiff class. Plaintiffs assert claims under Sections 10(b) and 20(a) of the U.S. Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. In November 2006 the Court consolidated the Options Class Actions and appointed the New Mexico State Investment Council as lead class plaintiff. In October 2007, the federal appeals court resolved a dispute regarding the appointment of lead class counsel. The lead plaintiff’s consolidated class action complaint will be due 45 days after the district judge enters a revised order appointing lead class counsel. The first identified complaint is "Sonam Bakshi v. Henry Samueli et al., Case No. 2:06-cv-05036-R-CW," filed in the U.S. District Court for the Central District of California under Judge Manuel L. Real with referral to Judge Carla Woehrle. Representing the plaintiffs are: Michael D. Braun, Esq. Braun Law Group 12400 Wilshire Boulevard, Suite 920 Los Angeles, CA 90025 Phone: 310-442-7755 E-mail: service@braunlawgroup.com - and - Bryan L. Crawford, Esq. Heins Mills & Olson 3550 IDS Ctr., 80 South 8th St. Minneapolis, MN 55402 Phone: 612-338-4605 Fax: 612-338-4692 Representing the defendants are: Gordon A. Greenberg, Esq. McDermott Will & Emery 2049 Century Park E, 34th Fl. Los Angeles, CA 90067-3208 Phone: 310-277-4110 Fax: 310-277-4730 - and - Stephen S. Hasegawa, Esq. Irell & Manella 1800 Avenue of the Stars, Ste. 900 Los Angeles, CA 90067-4276 Phone: 310-277-1010 E-mail: shasegawa@irell.com COLUMBIA GAS: Faces W.Va. Suit Over T16 Pipeline Contamination -------------------------------------------------------------- Columbia Gas Transmission Corp. faces a purported class action in Roane Circuit Court in West Virginia concerning damages caused by the company's T16 pipeline, Chris Dickerson of The West Virginia Record reports. The suit was filed by attorneys Tim J. Yianne and Harry F. Bell Jr. of Bell & Bands on Oct. 17 on behalf of Emogene Helmick, who is seeking compensatory damages and injunctive relief for property damage caused by contamination from Columbia Gas pipelines located, among other places, on her property in Little Pigeon. According to the suit, which has been assigned to Judge Thomas Evans, Columbia Gas has operated a natural gas pipeline system in the northeastern part of the U.S. since the 1890s. Presently, the company now has about 12,750 miles of such pipeline and 36 natural gas storage fields. Columbia Gas, according to the suit, no longer uses the line to transmit gas, but it has attempted to transfer ownership of the line for the portion of pipeline that crosses Ms. Helmick's property. "However, as a condition of transferring the pipeline, Columbia has attempted to have plaintiff sign an 'Ownership Transfer of Abandoned Pipeline' contract where plaintiff makes certain warranties if she should remove any equipment, scrap or other materials," the suit states. The complaint maintains that these warranties are a violation of the Federal Resource Conversation and Recovery Act, an actual or threatened release of hazardous substance under the Federal Comprehensive Environmental Response, Compensation and Liability Act or a violation of other environmental laws, rules and regulations. The potential class would consist of all individuals who own property in West Virginia that has been contaminated by the T16 pipeline. The complaint says factors that would be considered include whether contaminants have caused a diminution of property value and, if so, by how much. The amount of damages for the cost of removal and disposal of the contaminants also would be considered. Ms. Helmick is seeking class action status for the case. She is also seeking an order creating and implementing a court- supervised defendant-funded program to pay for the removal and disposing of contaminants from the pipelines, attorney fees, court costs - including medical monitoring administration – as well as other relief. For more details, contact: Tim J. Yianne, Esq. Harry Bell Jr., Esq. Bell and Bands 30 Capitol Street, P.O. Box 1723 Charleston, West Virginia 25326 Phone: (304) 345-1700 and (800) 342-1701 Fax: (304) 345-1715 Web site: http://www.belllaw.com CROCUS INVESTMENT: No Ruling Yet on Release of Receiver's Report ---------------------------------------------------------------- A Manitoba Court of Queen's Bench judge has reserved her decision as to when the result of a recent probe into the troubled Crocus Investment Fund will be disclosed, The Winnipeg Free Press reports. The fund's receiver, Deloitte, has recommended previewing the report for a limited group of individuals and companies that are named as respondents in a class action. Afterwards, the report will be released to the public. Lawyers for the shareholders want the report distributed to the public immediately. Most of the defendants are siding with the receiver's plan, according to Jeff Keele of CJOB.com. The timing of the release of the report is crucial to those involved in the class action. A hearing to hear arguments about certification of the class action is scheduled for January 2008. However, the deadline for submissions for that hearing is November 9, according to Geoff Kirbyson and Dan Lett of the Winnipeg Free Press. The receiver is suggesting the parties look over the materials and come back to court on November 7 to argue whether it should be released publicly, according to Mr. Keele. Norman Boudreau, one of the lawyers pursuing the class action, told the judge he was concerned that the Deloitte report would not be released by the court in time to be used in arguments for the certification. Judge Deborah McCawley said she would make a ruling very promptly. January Hearing A Winnipeg court has set a week-long certification hearing starting on Jan. 7, 2008 for a CAD200 million lawsuit filed on behalf of Crocus Investment shareholders (Class Action Reporter, Sept. 13, 2007). Investors filed the suit in 2005 after the labor sponsored fund failed. The suit alleges, among others, that the province "did not properly enforce the Crocus Act," and that provincial officials "deliberately ignored multiple warning signs regarding the management of the Crocus Fund" (Class Action Reporter, Nov 22, 2006). Lead plaintiffs, GrowthWorks Canadian Fund Ltd. and Bernie Bellan, have proposed a $1 million settlement for the suit. Defendants in the suit are: - Crocus Investment; - Manitoba Securities Commission; - 17 individuals that include past senior officers and members of the fund's board of directors; and - Manitoba province. Deloitte is represented by Russell Holmes. Ken Filkow, a partner at D'Arcy & Deacon who is representing several former Crocus directors. Lead attorney for the investors is: David Klein, Esq. David Klein, Klein Lyons Suite 1100 - 1333 West Broadway Vancouver, B.C. V6H 4C1 Phone: (604) 874-7171 DELL COMPUTER: N.M. A.G. Backs Local Man in Consumer Fraud Suit --------------------------------------------------------------- The New Mexico Attorney General's Office is supporting a local man who is suing Dell Computer Corp. for selling him a computer that didn't have as much storage capacity as the company had claimed, The Associated Press reports. In a show of support, the Attorney General's Office filed a brief with the state Supreme Court in the case of Robert Fiser, who filed a class action against the company in 2004. In his suit, Mr. Fiser accused Dell of violating parts of the New Mexico Unfair Practices Act and the New Mexico Uniform Commercial Code. Plaintiff also states claims for breach of contract, misrepresentation and violations of the covenants of good faith and fair dealing. Commenting on his office's recent move, Attorney General Gary King told The Associated Press that part of his job is to protect New Mexicans from unfair and deceptive trade practices. In its brief, A.G. King's office is asking the high court to overturn a decision by the state Court of Appeals that upheld Dell's contention that Ms. Fiser was bound by an arbitration provision displayed on the back of a packing slip attached to the computer's shipping box. The attorney general contends that the appellate court wrongly determined that Texas law, not New Mexico law, should apply to the case. A.G. King also states in the brief, “When New Mexico consumers enter into contracts with out-of-state merchants, particularly adhesion contracts such as the one at issue in this case, they deserve the protection of New Mexico law.” He also pointed out that the court erred by holding that the arbitration provision was not procedurally unconscionable and that the plaintiff was precluded from filing a class action. DUNKIN’ DONUTS: Recalls Glow Sticks Due to Choking Hazards ---------------------------------------------------------- Dunkin’ Donuts LLC, of Canton, Mass. in cooperation with the U.S. Consumer Product Safety Commission, is recalling about 1 million pink and orange glow sticks (free giveaway with donuts). Consumers are advised to stop using recalled products immediately unless otherwise instructed. The recalled glow sticks are not properly labeled to warn consumers that the cap and lanyard can detach, posing a choking hazard. Additionally, the lanyard poses a strangulation hazard to young children. No injuries/incidents have been reported so far. The pink and orange glow sticks were given away free with purchases of donuts. They were made in China and sold at Dunkin’ Donuts stores nationwide from September 2007 through October 2007. They were a free giveaway with the purchase of donuts. Picture of the recalled glow stick: http://www.cpsc.gov/cpscpub/prerel/prhtml08/08030.jpg Consumers are advised to immediately take the recalled glow sticks away from young children and return them to any Dunkin’ Donuts for a free donut. For additional information, contact Dunkin’ Donuts at (800) 859- 5339 between 8 a.m. and 8 p.m. ET Monday through Friday, or visit http://www.DunkinDonuts.com. E.I DU PONT: Faces $400M Liability in Spelter, W.Va. Lawsuit ------------------------------------------------------------ E.I. du Pont de Nemours and Co. has to pay nearly $400 million in awards for wanton, willful and reckless conduct at its former zinc-smelting plant, reports say. In 2004, 10 property owners from the town of Spelter filed a negligence suit against the companies that operated the plant in Spelter. Dupont bought the property in 1899. It re-assumed ownership of the zinc smelting plant when it was shut down by authorities in 2001 due to health concerns. Defendants are: -- Dupont; -- T.L. Diamond & Co. in New York and plant manager Joe Puashel; -- Nuzum Trucking Co. of Shinnston; and two defunct companies: * Matthiesen & Hegeler Zinc Co. Inc. of Illinois, and * Meadowbrook Corp. of West Virginia. The plaintiff is Waunona Crouser. During the first phase of the trial on Oct. 1, the jury found Dupont liable for and negligent in creating the waste site. In the second and third phase, jurors ordered DuPont to provide medical monitoring for 40 years to residents who were exposed to arsenic, cadmium and lead; and to pay nearly $55.5 million to clean private properties. The plan to provide the monitoring, estimated to cost more than $100 million, will be determined by Judge Thomas Bedell. He will also determine how the punitive damages will be divided. In the fourth and final phase of the trial, a Harrison County jury ordered Dupont to pay $196.2 million in punitive damages, bringing its total liability to about $400 million. Dupont has said it will appeal the verdict. Representing plaintiffs is: Mike Papantonio, Esq. Levin, Papantonio, Thomas, Mitchell, Echsner & Proctor, P.A. 316 South Baylen Street, Suite 600 Pensacola, Florida 32502-5996 (Escambia Co.) P.O. Box 12308, Pensacola, FL, 32591 Phone: 850-435-7000; 888-435-7001 Fax: 850-435-7020 GUIDECRAFT INC: Recalls Puppet Theaters on High Lead Content ------------------------------------------------------------ Guidecraft Inc., of Englewood, N.J. in cooperation with the U.S. Consumer Product Safety Commission, is recalling about 5,400 tabletop puppet theaters. Consumers are advised to stop using recalled products immediately unless otherwise instructed. The company said the surface paints on the puppet theater’s wooden panels contain excessive levels of lead, violating the federal lead paint standard. No incidents or injuries has been reported so far. The recalled puppet theater has red panels on the front and sides and a chalkboard signboard on top. The puppet theater measures about 24-inches in length, 6-inches in width and about 28-inches in height. It was made in China and sold at specialty toy stores, gift shops, catalogs and Web sites nationwide from June 2006 through August 2007 for about $35. Picture of the recalled puppet theaters: http://www.cpsc.gov/cpscpub/prerel/prhtml08/08031.jpg Consumers are adviced to immediately take the recalled puppet theaters away from children and contact Guidecraft to receive a replacement theater or another product of equal value. For additional information, contact Guidecraft toll-free at (888) 824-1308 between 9 a.m. and 4:30 p.m. CT Monday through Friday, or http://www.guidecraft.com. HEELYS INC: Faces Tex. Securities Fraud Suits Over December IPO --------------------------------------------------------------- Heelys, Inc. faces several securities fraud class actions in the U.S. District Court for the Northern District of Texas on behalf of all purchasers of the company's common stock, pursuant or traceable to the company's Dec. 7, 2006 Initial Public Offering (IPO). According to reports, the company recently disclosed that it has been served with five class actions related to its December 2006 IPO. Theses suits were recently transferred to a single judge, and Heelys says it expects them to be combined into one case Case Background The Complaint charges Heelys and certain of its officers and directors with violations of the Securities Act of 1933. Heelys is engaged in the design, marketing, and distribution of action sports-inspired products for children (Class Action Reporter, Sept. 19, 2007). The Company's primary product is a dual-purpose footwear product that incorporates a removable wheel in the heel. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that a significant number of severe injuries had been reported to the Consumer Product Safety Commission (CPSC) concerning injuries sustained by children using the Company's wheeled footwear; (2) that children needed to use proper protective safety equipment to avoid suffering potentially serious injuries while using the Company's wheeled footwear; (3) that sales of the Company's wheeled footwear would dramatically decline as safety concerns and injury reports were revealed to consumers; and (4) that, as a result of the foregoing, the Company's Registration Statement was false and misleading at all relevant times. On Dec. 7, 2006, the Company conducted its IPO. In connection with the IPO, the Company filed a Registration Statement and Prospectus with the SEC. The IPO was a financial success for the Company and selling stockholders, as they were able to sell 6.425 million shares of the Company's stock to investors at a price of $21.00 per share, for gross proceeds of $134.9 million. Then in June 2007, a series of reports and articles highlighted the unsafe nature of the Company's wheeled footwear when used without protective safety equipment. The June edition of Pediatrics reported on the risk and severity of injuries sustained by children who used the Company's wheeled footwear without such protection, and showed a high number of injuries requiring hospital visits due to their severity. Shortly thereafter, the CPSC reported that accidents from wheeled footwear contributed to roughly 1,600 emergency room visits in 2006. These reports and others revealed that a high percentage of these injuries were sustained by children falling backwards while using the wheeled footwear, and resulted in injuries such as cracked skulls and concussions, broken bones and dislocations, and at least one death. On Aug. 7, 2007, the Company reported its second quarter 2007 financial results. The Company significantly lowered its full- year outlook, citing "challenges at retail related primarily to an over-inventoried position of product at many of the Company's domestic accounts." The Company's Chief Financial Officer also reported that retailers were reluctant to place significant fourth-quarter orders until current inventories were reduced. Additionally, the Company was forced to significantly reduce its revenue and earnings guidance for the remainder of 2007. On this news, shares of the Company's stock declined $10.57 per share, or 48 percent, to close on Aug. 8, 2007 at $11.42 per share, on unusually heavy trading volume. The suits seek damages on behalf of investors who claim they were misled about the health of Heelys' business in its IPO registration statements. The first identified complaint is “Brian Rines, et al. v. Heelys, Inc., et al.,” filed in the U.S. District Court for the Northern District of Texas. Representing the plaintiffs are: Claxton & Hill 3131 McKinney Ave., Suite 700 LB 103 Dallas, TX, 75204-2471 Phone: 214.969.9099 Glancy Binkow & Goldberg LLP 1801 Ave. of the Stars, Suite 311 Los Angeles, CA, 90067 Phone: (310) 201-915 Fax: (310) 201-916 E-mail: info@glancylaw.com Kaplan Fox & Kilsheimer, LLP 805 Third Avenue, 22nd Floor New York, NY, 10022 Phone: 212.687.1980 Fax: 212.687.7714 E-mail: info@kaplanfox.com - and - Law Offices of Howard G. Smith 3070 Bristol Pike, Suite 112 Bensalem, PA, 19020 Phone: 215.638.4847 Fax: 215.638.4867 HURRY CORP: Recalls Bicycles with Cranks that can Detach in Use --------------------------------------------------------------- The U.S. Consumer Product Safety Commission, in cooperation with Huffy Corp. of Miamisburg, Ohio, announced a voluntary recall of about 22,000 2007 Huffy “Howler” and “Highland” Bicycles. Consumers should stop using recalled products immediately unless otherwise instructed. The bicycle crank can unexpectedly come off, causing the rider to lose control, fall and suffer serious injuries. Huffy has received two reports of the crank coming off, resulting in one injury. The recall involves 2007 model year, multi-speed bicycles with 26-inch, 24-inch or 20-inch wheels. The “Howler” was sold in black (model K3587, boy’s model), blue (model K4587, men’s model), and red (model K6587, men’s model). The “Highland” was sold in white (model K4597, women’s model) and blue (model K6597, women’s model). The name "Howler" or "Highland" is printed on the frame of the bicycle, and the name "Huffy" is on the front of the frame. Model numbers are located on a label on the bottom of the frame where the crank is attached to the bicycle. The bicylces were made in China and distributed through Kmart stores nationwide from May 2007 through July 2007 for between $80 and $100. Consumers are advised to stop using the recalled bicycles immediately and contact Huffy Corp. to receive instructions on tightening the crank. Pictures of the recalled bicycles: http://www.cpsc.gov/cpscpub/prerel/prhtml08/08028a.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml08/08028b.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml08/08028c.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml08/08028d.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml08/08028e.jpg For more information, contact Huffy Corp. toll-free at (888) 366-3828 between 8 a.m. and 4:30 p.m. ET Monday through Friday, or visit http://www.huffybikes.com KONG MAXX: Recalls Ladder Stands that can Become Unstable --------------------------------------------------------- Gorilla Inc., of Flushing, Mich., in cooperation with the U.S. Consumer Product Safety Commission, is voluntarily recalling about 6,000 Kong Maxx Ladder Stands. Consumers are advised to stop using recalled products immediately unless otherwise instructed. The ladder stands can become unstable while in use, causing the user to fall. The addition of one ladder section to the stand makes the platform further away from the bracing. When the stand is at its full height, the distance between the bracing and the platform may result in platform instability prior to attachment to and/or detachment from the tree. Gorilla Inc. has received two reports of consumers who fell from these ladder stands and suffered injuries to the back and knee. This recall involves Gorilla Kong Maxx Ladder Stands with model number 43032 and batch numbers G051507, G051507D, G061507D, G071507D, and G081507D. Model numbers are printed on the box only. Batch numbers are stamped on the vertical rail of the first ladder section. The stand is 19-feet to the shooting rail, or 16-foot 8-inches to the platform. The foot platform measures 17 ½ -inches wide. This is the only Gorilla, Inc. ladder stand with these dimensions. The ladders were made in China and sold at Gander Mountain stores nationwide from July 2007 through September 2007 for about $180. Remedy: Consumers should immediately stop using the ladder stands and contact Gorilla Inc. to receive a refund. Picture of the recalled ladder: http://www.cpsc.gov/cpscpub/prerel/prhtml08/08035a.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml08/08035b.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml08/08035c.jpg For additional information, contact Gorilla Inc. at (800) 914- 4567 between 9 a.m. and 4:30 p.m. ET Monday through Friday, or visit http://ww.gorillatreestands.com-- consumers can also write the firm at Gorilla, Inc. 3475 Eastman Drive Flushing, Mich. 48433. MASTEC: Agrees to Settle Legacy Wage, Hour Suit for $12.6M ---------------------------------------------------------- MasTec, Inc. (MTZ) reached an agreement to settle its previously disclosed wage and hour lawsuit regarding the Company's install to the home employees. The lawsuit involving claims dating back as far as 2001 and covering current and former employees from California, Florida, Georgia, Maryland, New Jersey, New Mexico, North Carolina, South Carolina, Texas and Virginia, is similar to numerous class action lawsuits filed against others nationwide. While the Company denies the allegations underlying the lawsuit, it has agreed to the settlement to avoid significant legal fees, the uncertainty of a jury trial, other expenses and management time that would have to be devoted to protracted litigation. The gross settlement of $12.6 million is subject to court approval and represents the maximum payout, assuming 100% opt-in by all potential members of the purported class. The minimum payment under the agreement is approximately $3.8 million to the plaintiffs' attorneys and $750 thousand for the named plaintiffs who have already joined the lawsuit. Future opt-in rates are hard to predict, especially with the transient nature of this workforce. While difficult to estimate, the Company expects actual payments to be less than the gross settlement amount, and the appropriate charge for financial statement purposes is currently being evaluated. As a result of this litigation, the Company has instituted a number of procedures and safeguards to avoid being the target of such litigation in the future. For 2006 and 2007, the Company estimates that it will spend over $20 million on outside legal fees and expenses, with the bulk of the expenditures related to old, legacy issues. In many cases, the Company has made inadequate or unsatisfactory progress. As a result, MasTec's senior management recently announced a significant shift in strategy regarding its older legal cases and disputes. The shift in strategy is to accelerate closure of many of the older legal cases and disputes while protecting the economic interests of the Company and its shareholders. Most of this legacy litigation relates to the years 2001 through 2005 and does not involve current customers. As a part of this change in legal strategy, the Company expects to book significant additional charges and reserves for the most recent quarter ended September 30. MasTec's current 2007 earnings guidance, which it announced in the Company's September 5, 2007 press release, specifically excluded the positive or negative impact of any legacy litigation. Jose Mas, MasTec's President and Chief Executive Officer, noted "We have re-assessed all of our major legal cases and disputes and decided to accelerate the closure of a number of cases. With continued high legal costs for litigating these cases and the related drain on management time, we have concluded that it is in the best interest of the Company to get a number of the older legal cases and disputes behind us." Mr. Mas continued, "In the last few years, we have significantly strengthened our management team, improved our portfolio of businesses and customers and improved our financial and operational controls. As a result, our current business activities have generated dramatically less litigation than we once had. Therefore, when we get these older legal cases and disputes behind us over the next few months, we expect to enjoy a much lower level of expense for outside legal fees." Mr. Mas concluded, "We have excellent opportunities with the customers and markets that we currently serve and intend to get our legacy litigation behind us so that we can focus on executing and growing our good business opportunities." MasTec -- http://www.mastec.com-- is a leading specialty contractor operating throughout North America across a range of industries. The Company's core activities are the building, installation, maintenance and upgrade of communication and utility infrastructure systems. MITEL NETWORKS: Faces Litigation Over Inter-Tel Merger Agreement ---------------------------------------------------------------- Mitel Networks faces a purported class action in connection to a merger agreement with Inter-Tel (Delaware), Inc., according to the company's Oct. 24, 2007 Form 20-F Filing with the U.S. Securities and Exchange Commission for the fiscal year ended April 30, 2007. Pursuant to an Agreement and Plan of Merger (Merger Agreement) dated as of April 26, 2007 among Mitel, Inter-Tel, and Arsenal Acquisition Corp., a wholly-owned subsidiary of Mitel, Mitel agreed to acquire Inter-Tel for $25.60 per share, in cash, representing a total purchase price of approximately $729 million (Merger). Pursuant to the Merger Agreement, Arsenal merged with and into Inter-Tel and Mitel indirectly acquired all of the outstanding stock of Inter-Tel such that Inter-Tel became a wholly-owned subsidiary of Mitel. The Merger was subsequently completed on Aug. 16, 2007. In April 30, 2007, Mitel was made party to a class action lawsuit related to the proposed merger. The complaint alleges that the Company aided and abetted Inter- Tel in breaching their fiduciary duties of loyalty and due care by approving the merger without regard to the fairness of the transaction to Inter-Tel stockholders. The plaintiff is seeking an injunction to the consummation of the proposed merger. NORTHROP GRUMMAN: Review to Delay Jan. 22 Cal. ERISA Suit Trial --------------------------------------------------------------- A Jan. 22, 2008 trial is slated for the consolidated class action, “In Re Northrop Grumman Corporation ERISA Litigation,“ according to the company's Oct. 24, 2007 Form 10-Q Filing with the U.S. Securities and Exchange Commission for the quarterly period ended Sept. 30, 2007. The suit was a consolidation of two separately filed the Employee Retirement Income Security Act class actions. The suits were: -- "Grabek v. Northrop Grumman Corporation, et al., previously styled Waldbuesser v. Northrop Grumman Corporation, et al.," and -- "Heidecker v. Northrop Grumman Corporation, et al." Plaintiffs in "Grabek" allege breaches of fiduciary duty by the company, certain of its administrative and Board committees, all members of the company's Board of Directors, and certain company officers and employees with respect to alleged excessive, hidden and/or otherwise improper fee and expense charges to the Northrop Grumman Savings Plan and the Northrop Grumman Financial Security and Savings Plan (both of which are 401(k) plans). The Heidecker litigation asserts similar claims, but has dismissed the company's Board of Directors. Each lawsuit seeks unspecified damages, removal of individuals acting as fiduciaries to such plans, payment of attorney fees and costs, and an accounting. The suits were consolidated under the caption, "In Re Northrop Grumman Corporation ERISA Litigation," for discovery and other purposes, as each alleged similar issues of law and fact. They were consolidated in the U.S. District Court for the Central District of California. On May 21, 2007, the Court granted a motion to dismiss with prejudice the company and the Board of Directors from the Grabek litigation. On May 25, 2007, the Court entered an order dismissing the company with prejudice from the Heidecker lawsuit, the Directors having been previously dismissed. On Aug. 7, 2007, the Court denied plaintiffs’ motion for class certification. The plaintiffs sought leave to file an appeal with the U.S. Court of Appeals for the Ninth Circuit on the issue of class certification. On Sept. 28, 2007, the Ninth Circuit ordered that the trial court proceedings be stayed pending its decision on whether to grant appellate review, and on Oct. 11, 2007, the Ninth Circuit granted such review. The decision to grant appellate review will delay the commencement of trial previously scheduled to begin on Jan. 22, 2008. Northrop Grumman Corp. -- http://www.northropgrumman.com/-- along with its subsidiaries, provides products, services and solutions in information and services, aerospace, electronics and shipbuilding. PAYLESS SHOESOURCE: Recalls Girls’ Boots Due to Fall Hazard ----------------------------------------------------------- Payless ShoeSource Inc., of Topeka, Kan., in cooperation with the U.S. Consumer Product Safety Commission, announced a voluntary recall of about 90,000 girls’ boots. Consumers should stop using recalled products immediately unless otherwise instructed. The company said the guitar-shaped zipper pulls on each boot can interlock while a child is walking, causing the child to trip and fall. Payless has received five reports of the zipper pulls interlocking, including one report of a four-year-old girl who fell and skinned her knees. This recall involves black jeweled girls’ boots. The boots have a silhouette of a guitar on the outer leg and a guitar-shaped zipper pull on the inner leg. “Hannah Montana” is engraved on the boot outsole and a photo of the singer and show’s character is printed on the box. The boots were sold in girls’ sizes 10 1/2 to 4 1/2 . No other styles or models are involved in this recall. The boots were made in China and sold at Payless ShoeSource stores nationwide and Payless.com from August 2007 through September 2007 for about $27. Picture of the recalled boots: http://www.cpsc.gov/cpscpub/prerel/prhtml08/08034.jpg Consumers are advised to take these boots away from children immediately and return them to the store where purchased for a full refund or exchange. For additional information, contact Payless at (800) 654-0697 between 7:30 a.m. and 11:30 p.m. CT daily. Consumers can also visit http://www.payless.com PRAXAIR INC: Still Faces Multiple Lawsuits Over Welding Fumes ------------------------------------------------------------- Praxair, Inc. remains a co-defendant with many other companies in 501 lawsuits (as of Sept. 30, 2007) alleging personal injury caused by manganese contained in welding fumes, according to the company's Oct. 24, 2007 Form 10-Q Filing with the U.S. Securities and Exchange Commission for the quarterly period ended Sept. 30, 2007. There were a total of 3,057 individual claimants in these cases. The cases were pending in several state and federal courts. The federal cases have been transferred to the U.S. District Court for the Northern District of Ohio for coordinated pretrial proceedings. The plaintiffs seek unspecified compensatory and, in most instances, punitive damages. In the past, Praxair has either been dismissed from the cases with no payment or has settled a few cases for nominal amounts. There are seven proposed class actions seeking medical monitoring on behalf of welders. None of the class actions have been certified; the judge overseeing the federal cases recently denied a motion for a medical monitoring class action. Praxair, Inc. -- http://www.praxair.com-- is an industrial gases supplier in North and South America, Asia, and has businesses in Europe. R.L. ALBERT: Recalls Halloween Pails Due to High Lead Content ------------------------------------------------------------- R.L. Albert & Son, of Greenwich, Conn., in cooperation with the U.S. Consumer Product Safety Commission, is recalling about 55,000 Skull pails filled with Halloween candy mix. Consumers are advised to stop using recalled products immediately unless otherwise instructed. The company said the surface paint on the eyes, nose, and teeth of the skull contains excessive levels of lead, violating the federal lead paint standard. No incidents or injuries have been reported so far. This recall involves the Albert’s Halloween skull pails filled with candy mix. The skull-shaped pail is white with green eyes, nose and teeth. The pail has a clear lid with a label in which “Albert’s” and “Skull Pails Filled with Halloween Candy Mix” is printed. The pail measures about 5 1/2 inches high. Picture of a recalled pail: http://www.cpsc.gov/cpscpub/prerel/prhtml08/08033.jpg The pails were made in China and sold at retail stores nationwide from September 2007 through October 2007 for $2. Consumers are advised to immediately take the recalled product away from children and take it to the retailer where it was purchased to receive a full refund. For additional information, contact Albert’s toll-free at (866) 796-6110 between 9 a.m. and 5 p.m. ET Monday through Friday. SOUTH DAKOTA: 2004 Flood Victims Have Until Jan. to Join Suit ------------------------------------------------------------- About 29,000 notices are going out to people in Sioux Falls advising them of the existence of a class action over water damage due to heavy rains in the area during the summer of 2004, according to Keloland.com. The action has been given a go-ahead by a circuit court earlier this year (Class Action Reporter, March 30, 2007). Homeowners filed the suit on behalf of themselves and anyone in the city whose property was damaged in the May 29 and June 16, 2004 storms. Court documents claim that the rains flooded streets and basements and sent up to several feet of raw sewage into homes across Sioux Falls. It also claims that homeowners suffered personal injury and property damage because the City of Sioux Falls negligently designed, constructed, maintained and inspected it's sanitary and storm sewer lines and systems. The class includes people who live in the area of Sioux Falls from 57th street to the South, Southeastern drive to the East, Kiwanis Avenue to the West and Russell Street to the North. They must also have suffered flooding damage and have the documentation, such as receipts for repairs, to prove it. The class is estimated to include between 300 and 500 people. Residents have until January 4, 2008 to return their letters and join the lawsuit. To take part in the suit, residents must have owned property or lived in the area and have at least one of the following: (1) cleaning expenses caused by the flood, (2) repair costs as a result of the flood, (3) personal property loss, (4) lost income, or (5) loss in value of property. The suit is before Minnehaha County Circuit Court Judge Stuart Tiede. The plaintiffs' attorney is John Hughes. He can be reached at 339-3939. SOUTH DAKOTA: Proposed New Strip Search Suit Plaintiffs Junked -------------------------------------------------------------- U.S. District Judge Lawrence Piersol refused a motion to name new plaintiffs in a strip search lawsuit against Minnehaha County, Josh Verges of the Argus Leader reports. A Rochester resident and two others have filed a class action against Minnehaha County, South Dakota over alleged unreasonable strip searches at the county’s juvenile detention center (Class Action Reporter, July 10, 2007). Jillian Clark was arrested for shoplifting at a department store in Sioux Falls nearly seven years ago. She was 17 at the time. She claims she was brought to a holding room and was asked to strip naked. Ms. Clark said she kept the humiliating experience to herself until Jodie Smook told a similar story. Ms. Smook lost the case. An appellate court ruled last year that the Minnehaha juvenile detention center did nothing wrong by searching her while she stood in her underwear after she was picked up for a curfew violation. The court said then that its ruling did not apply to juveniles who had to get fully naked and who were charged with minor offenses. Judge Piersol's recent ruling said lawyers must show that the three new proposed class representatives fit those descriptions and were detained after October 1997. The other two plaintiffs suing Minnehaha County are Nicole Stauffacher, detained for shoplifting in 1997, and Ross Engelbrecht, who was arrested at 17 for underage alcohol consumption. Ms. Stauffacher said the experience scarred her emotionally and that she’s participating in the suit so no other minors would be violated in the same manner. The suit seeks compensatory damages. SPRINT: Agrees to Disclose Lock Code to Settle Cal. Lawsuit ----------------------------------------------------------- Sprint is agreeing to unlock its mobile phones for its California customers to settle an unfair competition class action filed against it in Alameda County Superior Court, David Kravets disclosed at http://blog.wired.com/27bstroke6/2007/10/sprint-agreeing.htm. The suit alleged that when Sprint sold handsets (phones) to consumers all the handsets were sold with a software lock that prevented consumers from using the handsets to receive the services of other providers. This lock has never been disclosed to consumers. Sprint has consistently represented that its iphones "will not accept the services of any wireless provider other than Sprint." The locked phones sold by Sprint can be used on the networks of other providers (as when a phone is on "roam"), but classmembers cannot use a locked Sprint phone to receive the services of another provider. Sprint allegedly uses these locks to make it more expensive for consumers to leave Sprint and start service with another carrier. According to Mr. Kravets, under the settlement: Sprint agrees to disclose to its current and former customers, upon request, the software programming code (the Lock Code) on their CDMA phones (other than prepay or global phones) necessary to access the program module of the phones, upon de-activation or after de- activation, provided the customer is or was not in default of any obligation to Sprint at the time of de-activation, and for de-activated phones, the Lock Code(s) are available or can be made reasonably available to Sprint's Customer Care personnel at the time of the request or within a reasonable time period thereafter. Sprint will also provide information about locking and how to obtain the Lock Code in its Terms and Conditions of Service. Sprint denies any wrongdoing. The settlement still awaits court approval. The suit was granted class certification on March 23, 2006. The class is composed of "all California residents who have purchased handsets from Sprint" and a subclass of "all members of the class who are consumers as defined by Civil Code 1761." The suit is "In re: Cellphone Termination fee cases." UNION PACIFIC: Panel to Decide Jurisdiction for Antitrust Suits --------------------------------------------------------------- The Judicial Panel on Multidistrict Litigation is expected to issue this month a decision regarding which District Court should handle consolidated antitrust complaints filed against Union Pacific Corp., and several others. About 20 small rail shippers (many of whom are represented by the same law firms) filed virtually identical antitrust lawsuits in various federal district courts against the company and four other Class I railroads in the U.S. The original plaintiff filed the first of these claims in the U.S. District Court in New Jersey on May 14, 2007, and the additional plaintiffs filed claims in district courts in various states, including Florida, Illinois, Alabama, Pennsylvania, and the District of Columbia. These suits allege that the railroads engaged in price-fixing by establishing common fuel surcharges for certain rail traffic. The company received additional complaints during the third quarter of 2007, increasing the total number of complaints to 26. A few of these suits involve plaintiffs alleging that they are or were indirect purchasers of rail transportation and seeking to represent the class of indirect purchasers of rail transportation that paid fuel surcharges. These complaints have added allegations under state antitrust and consumer protection laws. All of these “copycat” lawsuits (whether filed by direct or indirect purchasers of rail transportation) are being filed by various groups of plaintiffs’ lawyers seeking to become lead counsel in a nationwide class action against the railroads. Each of the plaintiffs requests certification of its complaint as a class-action. On Sept. 27, 2007, the Judicial Panel on Multidistrict Litigation heard arguments regarding which District Court should handle the consolidated complaints, and the company expects the panel to issue a decision in November of this year. Union Pacific Corp. -- http://www.up.com/-- operates through its principal operating company, Union Pacific Railroad Co., which is a Class I railroad operating in the U.S. WELLPOINT HEALTH: CMA Added as Plaintiff in Cal. Hospitals' Suit ---------------------------------------------------------------- The California Medical Association (CMA) was added as a plaintiff in a purported class action that was filed in a California state court against WellPoint Health Networks Inc., Blue Cross of California, and BC Life & Health Insurance Co. The suit was filed on behalf of hospitals over alleged wrongful rescission of individual health insurance policies. It seeks to recover for payment of claims denied where the member was rescinded. An amended complaint was recently filed adding the California Medical Association along with the California Hospital Association as new plaintiffs in this suit, according to the company's Oct. 24, 2007 Form 10-Q Filing with the U.S. Securities and Exchange Commission for the quarterly period ended Sept. 30, 2007. WellPoint, Inc. -- http://www.wellpoint.com-- is a commercial health benefits company serving approximately 34 million medical members as of Dec. 31, 2006. WELLPOINT INC: Parties Settle Calif. Insurance Policies Lawsuit --------------------------------------------------------------- Parties in one of several class actions against WellPoint Health Networks Inc., Blue Cross of California, and BC Life & Health Insurance Co. that is alleging the wrongful rescission of individual insurance policies have reached a settlement in the matter. In various California state courts, the Company is defending a number of individual lawsuits and several purported class actions alleging the wrongful rescission of individual insurance policies. The suits name WellPoint as well as Blue Cross of California (BCC) and BC Life & Health Insurance Company (BCL&H), both WellPoint subsidiaries. The lawsuits generally allege breach of contract, bad faith and unfair business practices in a purported practice of rescinding new individual members following the submission of large claims. In December 2006, the California Medical Association filed a motion to intervene in one of the class actions. The motion has not been heard. The parties have agreed to mediate most of these lawsuits and the mediation has resulted in the resolution of some of these lawsuits. A settlement of one of the class actions is pending preliminary approval by the trial court, according to the company's Oct. 24, 2007 Form 10-Q Filing with the U.S. Securities and Exchange Commission for the quarterly period ended Sept. 30, 2007. WellPoint, Inc. -- http://www.wellpoint.com-- is a commercial health benefits company serving approximately 34 million medical members as of Dec. 31, 2006. * Law Journal Names This Year's “Plaintiffs' Hot List” ---------------------------------------------------- The National Law Journal has released its sixth annual Plaintiffs' Hot List. The journal describes the list as its "unscientific survey of the litigation scene since the summer of 2006." The journal asked readers to nominate exemplary firms that devote at least half of their resources to plaintiffs' work, and which have achieved at least one significant win during that period. It said that "significant" means winning a large amount of money through a bench or jury verdict, or otherwise defining industry practices or the progress of related litigation. The winners are: * Berger & Montague; * Bernstein Liebhard & Lifshitz; * Bernstein Litowitz; * Coughlin Stoia; * Grant & Eisenhofer; * Hagens Berman Sobol Shapiro; * Korein Tillery; * Labaton Sucharow; * Lieff Cabraser; * Phillips & Cohen; * Schiffrin Barroway; * Seeger Weiss; * Whatley Drake & Kallas The journal highlighted the works of Whatley Drake & Kallas in pursuing a case against health maintenance organizations on behalf of physicians alleging the HMOs conspired to deny or reduce payments to doctors for covered medical services. As a result, the law firm permanently changed the balance of power between the health plan providers and doctors. It mentioned Wilmington, Del.'s Grant & Eisenhofer's work that invoked "a new and fairly untried Dutch statute to bring a class action against oil giant Shell on behalf of 50 European investors." The result was a settlement totaling upward of $500 million for the plaintiffs — as well as a new model for resolving future class actions in Europe, the journal said. It also noted Bernstein Litowitz's victories this year in stockholder and bondholder class actions. New Securities Fraud Cases NUTRISYSTEM INC: Abraham Fruchter Files Pa. Securities Lawsuit -------------------------------------------------------------- Abraham Fruchter & Twersky LLP has filed a class action in the United States District Court for the Eastern District of Pennsylvania on behalf of a Class consisting of all persons other than Defendants who purchased the securities of NutriSystem, Inc. (NTRI) between February 14, 2007 and October 4, 2007, inclusive, seeking to pursue remedies under the Securities Exchange Act of 1934. The complaint charges NutriSystem and certain of its officers and directors with violations of the Exchange Act. The Company provides weight management and fitness products and services in the United States. According to the complaint, during the Class Period, defendants issued materially false and misleading statements that misrepresented and failed to disclose: (a) that the Company was signing up fewer new customers and was not performing according to internal expectations; (b) that the Company's costs of acquiring new customers were significantly increasing; (c) that the Company's performance was being negatively impacted by competition from other weight loss products on the market; and (d) as a result of the foregoing, Defendants lacked a reasonable basis for their positive statements about the Company and its prospects. Then, on October 3, 2007, after the markets closed, the Company announced its preliminary third quarter 2007 results and revised earnings guidance for the full year of 2007. In response to this announcement, the price of NutriSystem common stock fell $15.98 per share, or approximately 34%, to close at $31.59 per share, on extremely heavy trading volume. Lead plaintiff filing deadline is December 10, 2007. For more information, contact plaintiff's counsel: Jack Fruchter, Esq. Larry Levit, Esq. Abraham Fruchter & Twersky LLP One Penn Plaza, Suite 2805, New York, New York 10119 Phone: (212) 279-5050 Fax: (212) 279-3655 E-mail at jfruchter@aftlaw.com llevit@aftlaw.com WELLCARE HEALTH: Kahn Gauthier Files Securities Suit in Fla. ----------------------------------------------------------- Kahn Gauthier Swick, LLC has filed a class action against WellCare Health Plans, Inc. (WCG) in the United States District Court for the Middle District of Florida, Tampa Division, Case No. 8:07 CV 1940-T24, on behalf of shareholders who purchased the common stock of the Company between May 8, 2006 and October 24, 2007, inclusive. No class has yet been certified in this action. WellCare, along with its Chief Executive Officer, President and Chairman of its Board of Directors Todd S. Farha, and its Chief Financial Officer and Senior Vice President Paul L. Behrens, are charged with making a series of materially false and misleading statements related to the Company's business and operations in violation of the Securities Exchange Act of 1934. On October 24, 2007, state and federal law-enforcement agents armed with a federal search warrant raided WellCare's Tampa, Florida headquarters. Agents from the Federal Bureau of Investigation, the Health and Human Services Department and the Florida attorney general's Medicaid fraud unit participated in the raid. WellCare provides managed-care plans for 2.3 million Medicare and Medicaid participants nationwide. The Complaint filed today alleges that at all times during the Class Period: (1) it was not true that the Company was operating according to plan, when, in fact, throughout the Class Period, defendants had propped up the Company's results by manipulating WellCare's accounting for revenues and income, and failed to report proper expenses and other material information about the Company; (2) unbeknownst to investors, defendants had materially overstated the Company's profitability by failing to properly account for the Company's health care expenses and results of operations and by artificially inflating the Company's financial results; (3) it was also not true that WellCare contained adequate systems of internal operational or financial controls, such that WellCare's reported financial statements were true, accurate or reliable; (4) as a result of the foregoing, it also was not true that the Company's financial statements and reports were prepared in accordance with GAAP ad SEC rules. Accordingly, as a result of the aforementioned adverse conditions which defendants failed to disclose, throughout the Class Period, defendants lacked any reasonable basis to claim that WellCare was operating according to plan, or that WellCare could achieve guidance sponsored and/or endorsed by defendants. Following the news of the raid on WellCare's headquarters, the New York Stock Exchange subsequently halted trading of shares in WellCare. The Company's shares fell $7.10, or 5.8%, to $115.17 per share at market close on October 24, 2007. Then, on October 25, 2007, when shares resumed trading, shares opened at approximately $64.00 per share, before reaching an intra day low of $27.50 and closing at $42.67. Lead plaintiff filing deadline is December 26, 2007. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. For more information, contact: Lewis Kahn, Esq. Phone: 1-866-467-1400, ext. 100 E-mail: lewis.kahn@kgscounsel.com ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Glenn Ruel Senorin, Ma. Cristina Canson, and Janice Mendoza, Editors. Copyright 2007. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. 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