/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/071220.mbx C L A S S A C T I O N R E P O R T E R Thursday, December 20, 2007, Vol. 9, No. 252 Headlines AMERICAN INT'L: Ruling on Bid to Certify Caremark Suit Pending AMERICAN INT'L: Subsidiary Appeals Class Status of “Gunderson” AMERICAN INT'L: Discovery Still Ongoing in N.Y. Securities Suit AMERICAN INT'L: Discovery Still Ongoing in ERISA Litigation AMERICAN INT'L: Calif. Court Junks Suit Over 21st Century Offer AT&T MOBILITY: Customer Sues Over “Unauthorized” Phone Bills AVVO.COM: Wash. Grants Motion to Dismiss Net Rating Service Suit CELLCOM ISRAEL: Faces $253M Suit Over Hazards of Cell Sites CHEMTURA CORP: Conn. Court Mulls Motion to Junk Securities Suit FACEBOOK INC: Setles Calif. Lawsuit Over Recycled Phone Numbers FARMERS & MERCHANTS: Investor Suit Settlement Granted Final OK FAROUK SYSTEMS: Recalls Hairstyling Irons with Faulty Off Switch FITNESS QUEST: Recalls Elliptical Trainers Due to Fall Hazard ILLINOIS: Chicago Police Wrongfully Issued Thousands of Tickets INTERLINK ELECTRONICS: Moves to Settle Cal. Securities Suit INTERNATIONAL COAL: W.Va. Court Mulls Motion to Junk IPO Lawsuit ITC DELTACOM: Reaches Settlement for Rights-of-Way Suit in Fla. LIBERMAN BROADCASTING: Settles Labor-Related Lawsuits in Calif. NATIONAL SECURITY: Units Face Suits in Hurricanes' Aftermath NATURAL HEALTH: Motion to Dismiss Tex. Securities Suit Pending MORGAN KEEGAN: Shareholders File Fraud Lawsuit Against Funds OREGON: Multnomah County Sheriff Sued Over Strip Search Policy PHYSICIAN'S CORP: Appeals Court Upholds Order Favoring Lloyd's ROMI ENTERPRISES: Recalls SCUBA Regulators that can Malfunction TJX COMPANIES: Settles Banks' Suit Over Cardholders' Info Theft WASHINGTON: Asotin's Jail Booking Fee Policy Illegal, Suit Says New Securities Fraud Cases HOMEBANC CORP: Shalov Stone Files Securities Fraud Suit in Fla. HOMEBANC CORP: Vianale & Vianale Files Fla. Securities Lawsuit MORGAN STANLEY: Wolf Haldenstein Files Securities Fraud Suit SECURITY CAPITAL: Zwerling Schachter Files Securities Fraud Suit ULTA SALON: Bernard Gross Files Securities Fraud Suit in Ill. ********* AMERICAN INT'L: Ruling on Bid to Certify Caremark Suit Pending -------------------------------------------------------------- A state court in Alabama has yet to rule on a motion to certify a purported class action filed against American International Group, Inc. (AIG) and certain of its subsidiaries over a 1999 settlement of class and derivative litigation involving Caremark Rx, Inc. Initially, AIG and certain of its subsidiaries were named as defendants in two putative class actions in state court in Alabama that arise out of the 1999 settlement. The plaintiffs in the second action have intervened in the first action, and the second action has been dismissed. An excess policy issued by a subsidiary of AIG with respect to the 1999 litigation was expressly stated to be without limit of liability. In the current actions, plaintiffs allege that the judge approving the 1999 settlement was misled as to the extent of available insurance coverage and would not have approved the settlement had he known of the existence and/or unlimited nature of the excess policy. They further allege that AIG, its subsidiaries, and Caremark are liable for fraud and suppression for misrepresenting and/or concealing the nature and extent of coverage. In their complaint, plaintiffs request compensatory damages for the 1999 class in the amount of $3.2 billion, plus punitive damages. AIG and its subsidiaries deny the allegations of fraud and suppression and have asserted, inter alia, that information concerning the excess policy was publicly disclosed months prior to the approval of the settlement. They further assert that the current claims are barred by the statute of limitations and that plaintiffs assertions that the statute was tolled cannot stand against the public disclosure of the excess coverage. Plaintiffs, in turn, have asserted that the disclosure was insufficient to inform them of the nature of the coverage and did not start the running of the statute of limitations. The trial court is currently considering, under standards mandated by the Alabama Supreme Court, whether a class action can be certified and whether the defendants in the case brought by the intervenors should be dismissed. The company reported no development in the matter in its Nov. 7, 2007 Form 10-Q Filing with the U.S. Securities and Exchange Commission for the quarter ended Sept. 30, 2007. American International Group, Inc. (AIG) -- http://www.aig.com -- is a holding company which, through its subsidiaries, is engaged in a range of insurance and insurance-related activities in the United States and abroad. AIG's primary activities include both General Insurance and Life Insurance & Retirement Services operations. Other significant activities include Financial Services and Asset Management. AIG's reportable segments by product or service line are General Insurance, Life Insurance & Retirement Services, Financial Services and Asset Management. AIG provides its products and services in more than 130 countries and jurisdictions. AMERICAN INT'L: Subsidiary Appeals Class Status of “Gunderson” -------------------------------------------------------------- A subsidiary of American International Group, Inc. (AIG) is appealing a certification of a purported class action filed against it in the 14th Judicial District Court for the State of Louisiana. It is further seeking an appeal of a jurisdictional ruling. Known as the Gunderson complaint, it accuses defendants of failing to comply with certain provisions of the Louisiana Any Willing Provider Act (Act) relating to discounts taken by defendants on bills submitted by Louisiana medical providers and hospitals that provided treatment or services to workers compensation claimants. It seeks monetary penalties and injunctive relief. On July 20, 2006, the court denied defendants motion for summary judgment and granted plaintiffs partial motion for summary judgment, holding that the AIG subsidiary was a group purchaser and, therefore, potentially subject to liability under the Act. On Nov. 28, 2006, the court issued an order certifying a class of providers and hospitals. In an unrelated action also arising under the Act, a Louisiana appellate court ruled that the district court lacked jurisdiction to adjudicate the claims at issue. In response, defendants in the Gunderson case filed an exception for lack of subject matter jurisdiction. On Jan. 19, 2007, the court denied the motion, holding that it has jurisdiction over the putative class claims. The AIG subsidiary is appealing the class certification ruling and is seeking an appeal from the jurisdictional ruling. The company reported no development in the matter in its Nov. 7, 2007 Form 10-Q Filing with the U.S. Securities and Exchange Commission for the quarter ended Sept. 30, 2007. American International Group, Inc. (AIG) -- http://www.aig.com -- is a holding company which, through its subsidiaries, is engaged in a range of insurance and insurance-related activities in the United States and abroad. AIG's primary activities include both General Insurance and Life Insurance & Retirement Services operations. Other significant activities include Financial Services and Asset Management. AIG's reportable segments by product or service line are General Insurance, Life Insurance & Retirement Services, Financial Services and Asset Management. AIG provides its products and services in more than 130 countries and jurisdictions. AMERICAN INT'L: Discovery Still Ongoing in N.Y. Securities Suit --------------------------------------------------------------- Fact and class discovery is currently ongoing in a consolidated securities fraud class action filed in the U.S. District Court for the Southern District of New York against American International Group, Inc. (AIG). Beginning in October 2004, a number of putative securities fraud class actions were filed against AIG and consolidated as, “In re American International Group, Inc. Securities Litigation.” The lead plaintiff in the consolidated class action is a group of public retirement systems and pension funds benefiting Ohio state employees, suing on behalf of themselves and all purchasers of AIGs publicly traded securities between October 28, 1999 and April 1, 2005. The named defendants are AIG and a number of present and former AIG officers and directors, as well as C.V. Starr & Co., Inc., Starr International Company, Inc., General Reinsurance Corp., and PricewaterhouseCoopers LLP, among others. The lead plaintiff alleges, among other things, that AIG: -- concealed that it engaged in anti-competitive conduct through alleged payment of contingent commissions to brokers and participation in illegal bid-rigging; -- concealed that it used income smoothing products and other techniques to inflate its earnings; -- concealed that it marketed and sold income smoothing insurance products to other companies; and -- misled investors about the scope of government investigations. In addition, the lead plaintiff alleges that AIGs former Chief Executive Officer manipulated AIGs stock price. The lead plaintiff asserts claims for violations of Sections 11 and 15 of the Securities Act of 1933, Section 10(b) of the Exchange Act, and Rule 10b-5 promulgated thereunder, Section 20(a) of the Exchange Act, and Section 20A of the Exchange Act. In April 2006, the court denied the defendants motions to dismiss the second amended class action complaint. In December 2006, a third amended class action complaint was filed, which does not differ substantially from the prior complaint. Fact and class discovery is currently ongoing. The company reported no development in the matter in its Nov. 7, 2007 Form 10-Q Filing with the U.S. Securities and Exchange Commission for the quarter ended Sept. 30, 2007. The suit is “In Re American International Group, Inc. Securities Litigation, Case No. 1:04-cv-08141-JES,” filed in the U.S. District Court for the Southern District of New York under Judge John E. Sprizzo. Representing the plaintiffs are: Jason Samuel Cowart, Esq. Pomerantz Haudek Block Grossman & Gross LLP 100 Park Avenue, 26th Floor New York, NY 10017 Phone: (212)-661-1100 Fax: (212)-661-8665 E-mail: jscowart@pomlaw.com - and - Thomas A. Dubbs, Esq. Labaton Rudoff & Sucharow LLP 100 Park Avenue, 12th Floor New York, NY 10017 Phone: 212-907-0700 Fax: 212-818-0477 E-mail: tdubbs@labaton.com Representing the defendants is: Lewis E. Farberman, Esq. Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, NY 10019 Phone: (212)-373-3577 Fax: (212)-492-0577 E-mail: lfarberman@paulweiss.com AMERICAN INT'L: Discovery Still Ongoing in ERISA Litigation ----------------------------------------------------------- Discovery is ongoing in a consolidated class action filed against American International Group, Inc. (AIG) over allegations of Employee Retirement Income Security Act violations. Between Nov. 30, 2004 and July 1, 2005, several ERISA actions were filed on behalf of purported class of participants and beneficiaries of three pension plans sponsored by AIG or its subsidiaries. A consolidated complaint filed on Sept. 26, 2005 alleges a class period between Sept. 30, 2000 and May 31, 2005 and names as defendants AIG, the members of AIGs Retirement Board and the Administrative Boards of the plans at issue, and four present or former members of AIGs Board of Directors. The factual allegations in the complaint are essentially identical to those in the securities actions. Plaintiffs allege that defendants violated duties under ERISA by allowing the plans to offer AIG stock as a permitted investment, when defendants allegedly knew it was not a prudent investment, and by failing to provide participants with accurate information about AIG stock. AIGs motion to dismiss was denied by order dated Dec. 12, 2006. AIG filed an answer on Feb. 12, 2007, denying plaintiffs allegations of wrongdoing and asserting affirmative defenses to plaintiffs claims. Discovery was consolidated with proceedings in the securities actions and is ongoing. The company reported no development in the matter in its Nov. 7, 2007 Form 10-Q Filing with the U.S. Securities and Exchange Commission for the quarter ended Sept. 30, 2007. American International Group, Inc. (AIG) -- http://www.aig.com -- is a holding company which, through its subsidiaries, is engaged in a range of insurance and insurance-related activities in the United States and abroad. AIG's primary activities include both General Insurance and Life Insurance & Retirement Services operations. Other significant activities include Financial Services and Asset Management. AIG's reportable segments by product or service line are General Insurance, Life Insurance & Retirement Services, Financial Services and Asset Management. AIG provides its products and services in more than 130 countries and jurisdictions. AMERICAN INT'L: Calif. Court Junks Suit Over 21st Century Offer --------------------------------------------------------------- The Superior Court of California, Los Angeles County dismissed a consolidated class action against American International Group, Inc. (AIG), at the request of the plaintiffs. The suit is over AIG's Jan. 24, 2007 proposal to acquire the remaining shares of 21st Century Insurance Group common stock, which AIG does not yet own. Shortly after the announcement in late January 2007 of AIG's offer to acquire the outstanding shares of 21st Century not already owned by AIG and its subsidiaries, two related class actions were filed in the Superior Court of California, Los Angeles County, against AIG, 21st Century, and the individual members of 21st Century's Board of Directors, two of whom are current executive officers of AIG. The actions were filed purportedly on behalf of the minority shareholders of 21st Century and assert breaches of fiduciary duty in connection with the AIG proposal. The complaints alleged that the proposed per share price was unfair and sought preliminary and permanent injunctive relief to enjoin the consummation of the proposed transaction. On May 23, 2007, a third action was filed alleging breaches of fiduciary duty by the same defendants based upon their entering into the merger agreement and taking steps to complete the contemplated merger, and seeking injunctive relief comparable to that sought in the first two complaints. All three actions were consolidated under the caption, “In re 21st Century Shareholder Litigation.” On Aug. 14, 2007, the court dismissed the action at the request of the plaintiffs. American International Group, Inc. (AIG) -- http://www.aig.com -- is a holding company which, through its subsidiaries, is engaged in a range of insurance and insurance-related activities in the United States and abroad. AIG's primary activities include both General Insurance and Life Insurance & Retirement Services operations. Other significant activities include Financial Services and Asset Management. AIG's reportable segments by product or service line are General Insurance, Life Insurance & Retirement Services, Financial Services and Asset Management. AIG provides its products and services in more than 130 countries and jurisdictions. AT&T MOBILITY: Customer Sues Over “Unauthorized” Phone Bills ------------------------------------------------------------ Morris Fiddler, a citizen of Illinois, individually and on behalf of a class of similarly situated individuals, brought a purported class action against: * AT&T Mobility, LLC, * M-Qube, Inc., * Verisign, Inc. seeking to stop defendants' alleged unlawful practice of charging cellular telephone customers for products and services the customers have not authorized. The practice allegedly resulted in defendants' unlawfully collecting money from consumers statewide. The suit seeks to obtain redress for all persons injured by their conduct. Plaintiff brings this action on behalf of herself and two classes: (A) The "Carrier Class": a class consisting of all AT&T wireless telephone subscribers in Illinois who suffered losses or damages as a result of AT&T billing for mobile content products and services not authorized by the subscriber; provided, however, that the following are excluded from this proposed class: (i) the defendants, and (ii) any employee of a defendant. (B) The "Aggregator Class": a class consisting of all wireless telephone subscribers in Illinois who suffered losses or damages as a result of incurring charges on their cellular telephone bills from or on behalf of m-Qube and/or VeriSign not authorized by the subscriber; provided, however, that the following are excluded from the proposed class: (i) the defendants, and (ii) any employee of a defendant. The plaintiff wants the court to rule on: (a) whether AT&T's conduct is in breach of contract, violates Illinois Consumer Fraud and Deceptive Business Practices Act, and violates Illinois Consumer Fraud and Deceptive Business Practices Act. Common questions for the Aggregator Class include: (a) whether m-Qube and/or Verisign has unjustly received money belonging to plaintiff and the aggregator class and whether under principles of equity and good conscience, m-Qube should not be permitted to retain it; (b) whether m-Qube and/or VeriSign tortiously interfered with contracts between Plaintiff and the Aggregator Class, on the one hand, and their wireless carriers, on the other hand, by causing them tob e charged for products and services by their carrier that were unauthorized; (c) whether m-Qube's and/or VeriSign's conduct violates Computer Tampering; and (d) whether m-Qubes and VeriSigns's conduct violates Illinois Consumer Fraud and Deceptive Business Practices Act. The plaintiff seek, among others, that the court; -- certify the case as a class action on behalf of the Classes and appoint Morris Fiddler Class Representative, and KamberEdelson, LLC as lead counsel; -- enter judgment against AT&T for all economic, monetary, actual, consequential, and compensatory damages caused by its conduct, and if its conduct is proved willful, award plaintiff and the Carrier Class exemplary damages -- enter judgement against m-Qube and VeriSign for all economic, monetary, actual, consequential, and compensatory damages caused by defendants' conduct, and if its conduct is proved willful, award plaintiff and the Aggregator Class exemplary damages; and -- enter judgment for injunctive, statutory and/or declaratory relief as is necessary to protect the interests of plaintiff and the classes. AT&T Mobility does business as the New AT&T, formerly known as Cingular Wireless. The suit was filed in the Circuit Court of Cook County, Illinois County Department, Chancery Division. Representing the plaintiffs are: Jay Edelson, Esq. Myles McGuire, Esq. John Blim, Esq. KamberEdelson, LLC 53 West Jackson Boulevard Suite 1530 Chicago, Illinois 60604 Phone: (312) 569 6370 AVVO.COM: Wash. Grants Motion to Dismiss Net Rating Service Suit ---------------------------------------------------------------- The U.S. District Court for the Western District of Washington dismissed with prejudice a Class Action Complaint filed against Avvo, Inc., a website that rates and profiles lawyers. In June, Hagens Berman filed a proposed nationwide class action in the U.S. District Court for the Western District of Washington, on behalf of other attorneys claiming that Avvo.com is unfair and highly deceptive (Class Action Reporter, June 18, 2007). The suit alleges that the site launched by the creator of the successful travel Web site Expedia violates unfair methods of competition and deceptive acts in the conduct of commerce as stated in the Washington Consumer Protection Act. Avvo, which was launched on June 5, 2007, touts itself as a resource for consumers looking to hire an attorney by grading attorneys from one to 10 using a mathematical model based on multiple -- but undisclosed -- sources of information. A low score indicates that an attorney should be approached with "extreme caution" while higher ratings denote "good" to "superb" performance. On June 28, online lawyer rating service Avvo asked a federal judge to dismiss the class action (Class Action Reporter, July 5, 2007). Avvo argues that its free attorney rating system is protected by the First Amendment. Its motion states that other disgruntled lawyers have filed similar lawsuits in the past and that it emerged from these that the Constitution does not exempt lawyers from opinions and evaluations. It also states that Avvo is an opinion that is protected by the First Amendment and cannot be subjected to claims under the Consumer Protection Act. In its opinion, the court wrote, "Defendants assert that the opinions expressed through the rating system (i.e., that attorney X is a 3.5 and/or that an attorney with a higher rating is better able to handle a particular case than an attorney with a lower rating), are absolutely protected by the First Amendment and cannot serve as the basis for liability under state law. The court agrees." "As I have said from the beginning, this was a case that never should have been filed," said Mark Britton, Avvo CEO. "We are gratified that the court agrees. We can now get back to serving consumers rather than litigating with lawyers that want to stop our service." "This is a huge win for our First Amendment rights to express our opinions as Americans," said Bruce E.H. Johnson, partner, Davis Wright Tremaine LLP, and Avvo's counsel. "Judge Lasnik's well reasoned and thoughtful opinion confirms our view that lawyers cannot exempt themselves from public scrutiny." "Keep in mind that this case was initiated by a sanctioned attorney that did not like having his recent misconduct brought to light," added Mr. Britton. "But to provide consumers with the information and guidance to help them choose the right lawyer, sometimes we need to shine a flashlight into some dark places, and we'll continue to do so as long as it benefits consumers." Avvo offers free information and guidance to help consumers choose the right attorney. A critical piece of guidance the company provides is the Avvo Rating, which is Avvo's effort to evaluate a lawyer's background, based on the information Avvo knows about the lawyer. Avvo saves users hours of research time because they have scoured state courts, bar associations and lawyer websites to collect detailed information about every licensed attorney in Arizona, California, District of Columbia, Georgia, Illinois, New York, Ohio, Pennsylvania, Texas, and Washington. This data is enhanced by content provided directly by lawyers and consumers, including client ratings and peer endorsements. To date, thousands of consumers and attorneys have provided client ratings, peer endorsements, and profile information to Avvo. Avvo recently enhanced its web site with "Avvo Answers," a free legal questions-and-answers forum that provides personalized answers to consumers' specific legal questions. "Avvo Answers" is the only legal Q&A website where users can assess the qualifications of every lawyer who answers a question -- through their Avvo Rating and Avvo Profile -- and the quality of their answer through votes from the community of Avvo users. Plaintiffs in the case are John Henry Browne and Alan Wenokour. For more information, contact: Steve Berman, Esq. Mark Firmani, Esq. Hagens Berman Sobol Shapiro LLC Phone: (206) 623-7292 or (206) 443-9357 E-mail: Steve@hbsslaw.com or Mark@firmani.com Web site: http://www.hbsslaw.com CELLCOM ISRAEL: Faces $253M Suit Over Hazards of Cell Sites ----------------------------------------------------------- Cellcom Israel Ltd. said it was served with a purported class action filed in the District Court of Tel Aviv by plaintiffs claiming to be residing next to cell sites of Cellcom and two other cellular operator defendants. The sites were built in violation of the law, according to the plaintiffs. Plaintiffs allege that the defendants have created environmental hazards by unlawfully building cell sites and therefore demand that the defendants will compensate the public for damages (other than personal damages, such as depreciation of property and/or health related damages which are excluded from the purported class action), demolish existing unlawfully built cell sites and refrain from unlawfully building new cell sites. If the lawsuit is certified as a class action, the compensation claimed from the defendants (without any allocation of this amount among the defendants) is estimated by the plaintiffs to be $253.35 million. At this preliminary stage, the Company is unable to assess the lawsuit's chances of success. For more information, contact: Shiri Israeli Investor Relations Coordinator Phone: +972-52-998-9755 E-mail: investors@cellcom.co.il - and - Ehud Helft Ed Job Investor Relations Contact CCGK Investor Relations Phone: +1-866-704-6710 (US) or +1-646-213-1914 E-mail: ehud@gkir.com or ed.job@ccgir.com CHEMTURA CORP: Conn. Court Mulls Motion to Junk Securities Suit --------------------------------------------------------------- The U.S. District Court for the District of Connecticut has yet to rule on Chemtura Corp.'s motion to dismiss a consolidated securities class action filed against the company and certain of its former officers and directors (Crompton Individual Defendants), and certain former directors of the company's predecessor Witco Corp. Filed on July 20, 2004, the suit was brought by plaintiffs on behalf of themselves and a class consisting of all purchasers or acquirers of the company's stock between October 1998 and October 2002. The consolidated amended complaint principally alleges that the company and the Crompton Individual Defendants caused the company to issue false and misleading statements that violated the federal securities laws by reporting inflated financial results resulting from an alleged illegal, undisclosed price- fixing conspiracy. The putative class includes former Witco Corp. shareholders who acquired their securities in the Crompton Corp.-Witco merger pursuant to a registration statement that allegedly contained misstated financial results. The complaint asserts claims against the company and the Crompton Individual Defendants under Section 11 of the Securities Act of 1933, Section 10(b) of the U.S. Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. Plaintiffs also assert claims for control person liability under Section 15 of the Securities Act of 1933 and Section 20 of the U.S. Securities Exchange Act of 1934 against the Crompton Individual Defendants. The complaint also asserts claims for breach of fiduciary duty against certain former directors of Witco Corp. for actions they allegedly took as Witco Corp. directors in connection with the Crompton-Witco merger. The plaintiffs seek, among other things, unspecified damages, interest, and attorneys' fees and costs. The company and the Crompton Individual Defendants filed a motion to dismiss on Sept. 17, 2004, which is now fully briefed and pending. The former directors of Witco Corp. filed a motion to dismiss in February 2005, which is pending. On July 22, 2005, the court granted a motion by the company and the Crompton Individual Defendants to stay discovery in the related Connecticut shareholder derivative lawsuit, pending resolution of the motion to dismiss by the company and Crompton Individual Defendants. The company reported no development in the matter in its Nov. 8, 2007 Form 10-Q Filing with the U.S. Securities and Exchange Commission for the quarter ended Sept. 30, 2007. The suit is “In Re Crompton Corp Securities Litigation, Case No. 3:03-cv-01293-EBB,” filed in the U.S. District Court for the District of Connecticut under Judge Ellen Bree Burns. Representing the plaintiffs are: Nancy A. Kulesa, Jeffrey S. Nobel and Andrew M. Schatz Schatz & Nobel One Corporate Center, 20 Church St., Suite 1700 Hartford, CT 06103 Phone: 860-493-6292 Fax: 860-493-6290 E-mail: nancy@snlaw.net, jnobel@snlaw.net and firm@snlaw.net Representing the defendants are: Bradford S. Babbitt, Esq. Robinson & Cole 280 Trumbull St. Hartford, CT 06103-3597 Phone: 860-275-8209 Fax: 860-275-8299 E-mail: bbabbitt@rc.com Andrew J. Frackman, Esq. O'Melveny & Myers, LLP 7 Times Square New York, NY 10033 Phone: 212-326-2000 Fax: 212-326-2061 E-mail: afrackman@omm.com - and - Thomas D. Goldberg, Esq. Day, Berry & Howard One Canterbury Green Stamford, CT 06901-2047 Phone: 203-977-7383 Fax: 203-977-7301 E-mail: tdgoldberg@dbh.com FACEBOOK INC: Setles Calif. Lawsuit Over Recycled Phone Numbers --------------------------------------------------------------- Internet social network Facebook Inc. has settled a lawsuit over alleged illegal profit from unauthorized text messages, the AP WorldStream reports. In October, a lawsuit seeking class-action status was filed against Facebook in the U.S. District Court in San Jose, California alleging it has profited from its members by sending thousands of unauthorized text messages to mobile phone users whose numbers previously belonged to other people (Class Action Reporter, Oct. 24, 2007). Named plaintiff Lindsey Abrams -- a Patriot, Indiana, mother in her mid-20s -- alleges she began receiving unsolicited text messages apparently intended for an unidentified Facebook member shortly after she received a new mobile number from Verizon Communications Inc. in November 2006. The messages included explicit language and unsettling remarks, according to Ms. Abrams' civil complaint. She alleges she was charged 10 cents per message and told she could not block the Facebook texting without cutting off notes she wanted to receive. The lawsuit contends other consumers with recycled phone numbers have been besieged with unsolicited Facebook text messages containing party invitations and unwanted sexual advances. The lawsuit sought unspecified damages. The recent settlement was announced by Ms. Abrams' attorneys. According to the report, Facebook stipulated to the agreement in court papers filed Dec. 14 in San Jose federal court. Without admitting any wrongdoing, Facebook agreed to make it easier for recipients of text messages to block future messages originating from the social network. Facebook also will work more closely with mobile phone carriers to monitor the lists of recycled numbers and reduce the frequency of unwanted text messages. Facebook also agreed to pay the legal fees of Abrams' attorneys, who work for KamberEdelson LLP in Chicago. The amount will be determined by after court hearings next year. A Facebook spokeswoman declined to comment. The suit is “Abrams v. Facebook, Inc., Case Number: 5:2007cv05378,” filed in the U.S. District Court for the Northern District of California, under Magistrate Judge Patricia V. Trumbull. FARMERS & MERCHANTS: Investor Suit Settlement Granted Final OK -------------------------------------------------------------- The Superior Court of the State of California for the County of Orange conducted a hearing on December 17, 2007 on whether to grant final approval to a proposed settlement of the class action and derivative lawsuit brought by shareholder Marcus D. Walker against certain present and former officers and/or directors of Farmers & Merchants Bank of Long Beach and the Bank as nominal defendant. At the conclusion of the hearing, the Court indicated that it would approve the Settlement and enter a formal order and judgment dismissing with prejudice the litigation brought by Marcus D. Walker in the next few days. The Court's final approval and its entry of a judgment dismissing with prejudice the litigation are conditions to the effectiveness of the proposed Settlement and the transactions contemplated thereby. On December 6, 2007 the Bank's shareholders approved a proposal authorizing the Bank to repurchase shares of the Bank's common stock, which approval was also a condition to the effectiveness of the proposed Settlement. Effectiveness of the proposed Settlement and the transactions contemplated thereby remain subject to other conditions, including, but not limited to, the Court's judgment not being reversed or materially modified on appeal. As part of the settlement, the Bank would commence a tender offer after the effective date of the proposed settlement whereby the Bank would offer to purchase up to 14,720 shares of its common stock at a price of $7,300 per share. If the proposed Tender Offer does not proceed or close for any reason other than as a result of the termination of the settlement, then the Bank would instead commit to make distributions to its shareholders in the aggregate amount of $86,000,000 (including the amounts required to be used by the Bank to repurchase shares from Marcus D. Walker and his related and affiliated parties pursuant to the Standstill Agreement). Farmers & Merchants Bank of Long Beach -- http://www.fmb.com-- offers personal and business banking services in California. It provides business banking products and services, such as business checking accounts, money market accounts, investment accounts, merchant card services, small business loans, real estate and construction loans, commercial loans, church and nonprofit loans; and personal banking services, including personal checking accounts, personal money market accounts, personal savings accounts, and personal and home loans. The bank operates 20 branches in Long Beach and Orange County. Farmers & Merchants Bank was founded in 1907 and is based in Long Beach, California. FAROUK SYSTEMS: Recalls Hairstyling Irons with Faulty Off Switch ---------------------------------------------------------------- Farouk Systems Inc., of Houston, Texas, in cooperation with the U.S. Consumer Product Safety Commission, is recalling about 5,700 WEE CHI Ceramic Hairstyling Irons. The company said the iron's "off" switch was installed incorrectly. When the iron is plugged in and switch is in the "off" position, the iron remains "on," which could pose fire and burn hazards. No inncidents/injuries have been reported so far. The recalled hairstyling iron is black and measures 9.5 inches long. "CHI" is printed on the iron in red lettering. Date code 0306 or 0507 is embossed on the inside of the paddle. The irons were made in South Korea and sold by professional beauty supply distributors and beauty salons nationwide from April 2006 through September 2007 for about $160. Pictures of the recalled styling irons: http://www.cpsc.gov/cpscpub/prerel/prhtml08/08124a.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml08/08124b.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml08/08124c.jpg Consumers are advised to stop using the product immediately and contact the firm to return the product for a full refund or replacement iron. Farouk Systems is directly notifying all distributors and retailers. For additional information, contact Farouk Systems Inc. at (800) 237-9175 between 8 a.m. and 5 p.m. CT Monday through Friday, or visit http://www.farouk.com FITNESS QUEST: Recalls Elliptical Trainers Due to Fall Hazard ------------------------------------------------------------- Fitness Quest Inc., of Canton, Ohio, in cooperation with the U.S. Consumer Product Safety Commission, is recalling about 23,000 Eclipse 1175e Elliptical Trainers. The company said the cranks that connect the foot platforms to the rear wheel of the machine can break during exercise, posing a fall hazard to consumers. Fitness Quest has received about 190 reports of cranks breaking. No injuries have been reported. This recall involves the Eclipse 1175e elliptical trainers. The elliptical trainer is a cardiovascular exercise machine. The machine has two foot platforms attached to a wheel at the rear of the machine. Each machine has "1175e" stamped on an oval decal located on the side of the wheel housing. The trainers were made in China and sold at Sports Authority, Modell, Dunhams, JC Penney stores and other retailers nationwide from September 2006 to October 2007 for between $290 and $450. To see picture of the recalled trainer: http://www.cpsc.gov/cpscpub/prerel/prhtml08/08126.jpg Consumers are advised to stop using the recalled elliptical trainers immediately and contact Fitness Quest for a free replacement elliptical machine or a credit towards the purchase of another Fitness Quest exercise machine. For additional information, contact Fitness Quest at (800) 321- 9236 between 8:30 am and 8 pm ET Monday through Friday, or visit http://www.fitnessquest.com ILLINOIS: Chicago Police Wrongfully Issued Thousands of Tickets --------------------------------------------------------------- The Law Offices of Blake Horwitz said in a statement that a class action will be filed against the City of Chicago, Mayor Richard Daley, and various police officers. Chicago police officers have been arresting and ticketing thousands of innocent civilians for violating the cell phone ban -- which prohibits using a cell phone while driving -- to the tune of millions of dollars accrued to City coffers, under a law that has never been properly enacted, the statement said. The law (625 ILCS 5/11207) requires the City to put up signs to inform drivers that they may not speak on their cell phone while they are driving. There are no signs. The City has certified that it has failed to put up signs. Therefore, every single arrest in this regard has been illegal. All money received by the City through tickets that its officers have issued has been illegally secured. "The City is simply trying to earn more money given the absence of a balanced budget," says police misconduct attorney, Blake Horwitz. Blake Horwitz, who has sued the City more then 100 times for police misconduct violations, points out that since the cell phone ban was passed almost two years ago the city has collected millions of dollars. Drivers cited for violating the ban are fined $75, or up to $200 if the driver is involved in an accident. As of September 2007, over 25,000 citations had been issued citing violations of the Ordinance, representing an influx of revenue to the city of nearly two million dollars The suit will be filed by the Law Offices of Blake Horwitz, a civil rights firm specializing in police misconduct. For more information, contact: The Law Offices of Blake Horwitz Website: http://www.policewatchers.com' INTERLINK ELECTRONICS: Moves to Settle Cal. Securities Suit ----------------------------------------------------------- Parties in a securities fraud class action filed against Interlink Electronics, Inc. in the U.S. District Court for the Central District of California, are working to settle the matter. Filed on Nov. 15, 2005, the suit, “Roger Brooks, et al. v. Interlink Electronics, Inc., et al., Case No. 2:05-cv-08133-PA- SH,” was brought against the company and two of its current and former officers. It alleges that between April 24, 2003 and Nov. 1, 2005, the company and two of its current and former officers made false and misleading statements and failed to disclose material information regarding the company's results of operations and financial condition. The complaint also alleges violations of federal securities laws, Sections 10 (b) and 20(a) of the U.S. Securities Exchange Act of 1934 and Rule 10b-5, including allegations of issuing a series of material misrepresentations to the market which had the effect of artificially inflating the market price. It seeks unspecified damages and legal expenses. On Nov. 3, 2006, the court appointed new lead plaintiffs. On Jan. 16, 2007, the lead plaintiffs filed an amended complaint. The amended complaint also includes claims under the Securities Act and the Exchange Act and seeks unspecified damages and legal expenses. On Feb. 22, 2007, defendants filed a motion to dismiss the amended complaint. On Sept. 26, 2007, the Court issued an order granting defendants’ motion in part and denied it in part. The Court gave plaintiffs 21 days to amend the complaint. On Oct. 11, 2007, the parties filed a stipulation requesting that the Court extend the deadline for the filing of an amended complaint by sixty (60) days so that the parties could pursue settlement discussions. On Oct. 12, 2007, the Court signed the parties’ stipulation. The suit is “Roger Brooks, et al. v. Interlink Electronics, Inc., et al., Case No. 2:05-cv-08133-PA-SH,” filed in the U.S. District Court for the Central District of California under Judge Percy Anderson with referral to Judge Stephen J. Hillman. Representing the plaintiffs are: Timothy J. Burke, Esq. Stull Stull and Brody 10940 Wilshire Boulevard, Suite 2300 Los Angeles, CA 90024 Phone: 310-209-2468 E-mail: service@ssbla.com Lionel Z. Glancy, Esq. Glancy Binkow and Goldberg 1801 Avenue of the Stars, Suite 311 Los Angeles, CA 90067 Phone: 310-201-9150 - and – Roy L. Jacobs, Esq. Roy L. Jacobs and Associates 60 East 42nd Street, 46th Floor New York, NY 10165 Phone: 212-867-1156 Representing the defendants is: Daniel S. Floyd, Esq. Gibson Dunn & Crutcher 333 S. Grand Ave., 45th Fl. Los Angeles, CA 90071-3197 Phone: 213-229-7000 E-mail: dfloyd@gibsondunn.com INTERNATIONAL COAL: W.Va. Court Mulls Motion to Junk IPO Lawsuit ---------------------------------------------------------------- The U.S. District Court for the Southern District of West Virginia has yet to rule on a motion to dismiss a purported class action against International Coal Group, Inc., which is accusing it of misleading investors about its operations when it made an initial public offering of stock in late 2005. On April 5, 2007 a class action was filed in the U.S. District Court in the Southern District of West Virginia against the company and certain of its officers and directors. The complaint alleges that our registration statements filed in connection with its initial public offering contained false and misleading statements, and that investors relied upon those securities filings and suffered damages as a result. The court ordered certain plaintiffs to serve as lead plaintiffs and lead counsel, and, as a result, the plaintiffs filed an amended complaint on Aug. 24, 2007. The company filed a Motion to Dismiss the Amended Class Action Complaint on Sept. 28, 2007, and that motion remains pending, according to the company's Nov. 14, 2007 Form 10-Q Filing with the U.S. Securities and Exchange Commission for the quarter ended Sept. 30, 2007. The suit is “City of Ann Arbor Employees' Retirement System, et al. v. ICG, Inc., et al., Case No. 2:07-cv-00226,” filed in the U.S. District Court for the Southern District of West Virginia under Judge John T. Copenhaver, Jr. Representing plaintiffs are: Mark W. Carbone, Esq. Carbone & Blaydes 2442 Kanawha Boulevard East Charleston, WV 25301 Phone: 304/342-3650 Fax: 304/342-3651 E-mail: wvjustice@aol.com William S. Lerach, Esq. Matthew P. Montgomery, Esq. Darren J. Robbins, Esq. Lerach Coughlin Stoia Geller Rudman & Robbins Suite 1900, 655 West Broadway San Diego, CA 92101 Phone: 619/231-1058 Fax: 619/231-7423 - and - Steven F. White, Esq. Suite 908, 405 Capitol Street Charleston, WV 25301 Phone: 304/720-1400 Fax: 304/346-6731 ITC DELTACOM: Reaches Settlement for Rights-of-Way Suit in Fla. --------------------------------------------------------------- ITC DeltaCom, Inc. reached a tentative settlement of a purported class action in Florida that was filed by two local real property owners, according to the company's Nov. 14, 2007 Form 10-Q Filing with the U.S. Securities and Exchange Commission for the quarter ended Sept. 30, 2007. The company uses the rights-of-way of Gulf Power Co. in Florida for a portion of its integrated communications services network. During 2000, Gulf Power Co. was sued in the Circuit Court of Gadsden County, Florida, by two real property owners that claim to represent a class of all real property owners over whose property Gulf Power Co. has facilities that are used by third parties. The real property owners have alleged that Gulf Power Co. does not have the authority to permit the Company or other carriers to transmit telecommunications services over the rights-of-way. ITC DeltaCom was made a party to this litigation in August 2001. Additional plaintiffs have been added through various amendments to the complaint. In November 2005, the trial court entered a declaratory judgment for the plaintiffs. In that decision, the court ruled that the easements do not allow general telecommunications use and that Gulf Power Co. did not have the right to apportion the easement for general telecommunications purposes. Gulf Power Co. and the Company appealed the declaratory judgment. In October 2006, the Florida First District Court of Appeals dismissed the appeal brought by Gulf Power Co. and the Company on the basis that the trial court’s November 2005 ruling was not a final order and therefore not yet subject to appeal. In April 2007, the trial court entered an order certifying a class for declaratory and injunctive relief of property owners over whose property Gulf Power Co. owns an easement on which Gulf Power Co. has allowed installation of fiber optic cable that is used for purposes other than transmitting electricity and Gulf Power Company’s own electricity-related internal communications. The trial court’s order also denied the motions filed by Gulf Power Company and the Company to vacate the prior declaratory judgment and for summary judgment and continued the plaintiffs’ motion for a permanent injunction, which would restrict the Company’s ability to add new customers and services over the disputed route. The parties have submitted a proposed settlement to the trial court for approval that would allow for the Company’s continued use of the fiber over the right-of-way; however, the Company cannot provide any assurance as to whether the settlement will be consummated as proposed due to the contingencies to which the settlement is subject. As proposed, the settlement would not result in a material adverse effect upon the Company’s financial position or results of operations. ITC^Deltacom, Inc. -- http://www.deltacom.com-- is a provider of integrated communications services, primarily to businesses, in the Southeastern U.S. The Company provides voice and data communications services, including local exchange, long- distance, high-speed or broadband data communications, and Internet access connectivity, and sells customer premise equipment to the Company's end-user customers. LIBERMAN BROADCASTING: Settles Labor-Related Lawsuits in Calif. --------------------------------------------------------------- Liberman Broadcasting of California LLC (LBI Sub), an indirect wholly owned subsidiary of LBI Media Holdings, Inc., settled two purported class actions alleging labor-related violations. 2005 Litigation In June 2005, eight former employees of LBI Sub filed suit in Los Angeles County Superior Court alleging claims on their own behalf and also on behalf of a purported class of former and current employees of LBI Sub. The complaint alleged, among other things, wage and hour violations relating to overtime pay, and wrongful termination and unfair competition under the California Business and Professions Code. Plaintiffs sought to recover, among other relief, unspecified general, treble and punitive damages, as well as profit disgorgement, restitution and their attorneys’ fees. 2007 Litigation In June 2007, two former employees of LBI Sub filed another suit in Los Angeles County Superior Court, alleging claims on their own behalf and also on behalf of a purported class of former and current employees of LBI Sub. The complaint alleged, among other things, violations of California labor laws with respect to providing meal and rest breaks. Plaintiffs sought, among other relief, unspecified liquidated and general damages, declaratory, equitable and injunctive relief, and attorneys fees. Settlement On July 13, 2007, LBI Sub entered into a settlement agreement with class action representatives to settle, subject to court approval, all pending litigation. While LBI Sub denies the allegations in both lawsuits, it has agreed to the proposed settlement of both actions to avoid significant legal fees, other expenses and management time that would have to be devoted to the two litigation matters. The settlement, which is subject to final documentation and court approval, provides for a maximum settlement payment of $825,000 (including attorneys’ fees and costs and administrative fees). In consideration of the settlement payment, the plaintiffs in both cases agreed, upon final court approval, to dismiss the two class actions with prejudice and to release all known and unknown claims arising out of or relating to such claims. The parties have agreed to cooperate to obtain the court’s approval of the settlement. The settlement will become effective and binding only if approved by the court. LBI Media Holdings, Inc. -- http://www.lbimedia.com/-- is a wholly owned subsidiary of Liberman Broadcasting, Inc. The Company and its wholly owned subsidiaries own and operate radio and television stations in Los Angeles, California, Houston, Texas and Dallas, Texas and a television station in San Diego, California. The Company operates in two segments: radio and television. NATIONAL SECURITY: Units Face Suits in Hurricanes' Aftermath ------------------------------------------------------------ National Security Group, Inc.'s property & casualty subsidiaries face a number of legal matters filed in the aftermath of Hurricanes Katrina and Rita in Mississippi, Louisiana, and Alabama, according to the company's Nov. 14, 2007 Form 10-Q Filing with the U.S. Securities and Exchange Commission for the quarter ended Sept. 30, 2007. These actions include individual lawsuits and purported statewide class actions, although to date no class has been certified in any action. These actions make a number of allegations of underpayment of hurricane-related claims, including allegations that the flood exclusion found in the Company’s subsidiaries’ policies, and in certain actions other insurance companies’ policies, is either ambiguous, unenforceable as unconscionable or contrary to public policy, or inapplicable to the damage sustained. The various suits seek a variety of remedies, including actual and/or punitive damages in unspecified amounts and/or declaratory relief. Elba, Alabama-headquartered National Security Group, Inc. -- http://www.nationalsecuritygroup.com/-- is an insurance holding company. The Company, through its property and casualty subsidiaries, primarily writes personal lines coverage, including dwelling fire and windstorm, homeowners, mobile homeowners and personal non-standard automobile lines of insurance in 11 states. The Company, through its life insurance subsidiary, offers a basic line of life, and health and accident insurance products in six states. NATURAL HEALTH: Motion to Dismiss Tex. Securities Suit Pending -------------------------------------------------------------- Natural Health Trends Corp. continues to seek a dismissal of a securities fraud class action pending against it in the U.S. District Court for the Northern District of Texas, according to the company's Nov. 14, 2007 Form 10-Q Filing with the U.S. Securities and Exchange Commission for the quarter ended Sept. 30, 2007. On Sept. 11, 2006, The Rosen Law Firm P.A. filed a putative class action purportedly on behalf of certain purchasers of the company's common stock to recover damages caused by alleged violations of federal securities laws. The lawsuit names the company and certain current and former officers and directors as defendants. On Dec. 20, 2006, the court granted an unopposed motion to designate The Rosen Law Firm P.A. as lead counsel. On Feb. 20, 2007, the named plaintiffs filed an amended complaint. On April 23, 2007, the Company and the other defendants filed motions to dismiss the lawsuit. On June 22, 2007, the plaintiffs filed a response in opposition of the motions to dismiss. On July 23, 2007, the Company and the other defendants filed replies to the plaintiffs’ opposition to the motions to dismiss. The suit “Zagami v. Natural Health Trends Corp et al., Case No. 3:06-cv-01654,” is filed in the U.S. District Court for the Northern District of Texas under Judge Sidney A. Fitzwater. Representing the plaintiffs are: Thomas E. Bilek, Esq. Hoeffner & Bilek 1000 Louisiana St., Suite 1302 Houston, TX 77002 Phone: 713/227-7720 Fax: 713/227-9404 E-mail: tbilek@hb-legal.com Christopher S. Hinton, Esq. The Hinton Law Firm 350 Fifth Ave., Suite 5508 New York, NY 10118 Phone: 646/723-3377 Fax: 212/202-3827 - and - Phillip Kim, Esq. Laurence Rosen, Esq. The Rosen Law Firm 350 Fifth Ave., Suite 5508 New York, NY 10118 Phone: 212/686-1060 Fax: 214/202-3827 MORGAN KEEGAN: Shareholders File Fraud Lawsuit Against Funds ------------------------------------------------------------ Two shareholders of Regions Morgan Keegan Select Intermediate Bond Fund and/or Regions Morgan Keegan Select High Income Fund (the Funds) filed a securities fraud class action against the Funds in the U.S. District Court for the Western District of Tennessee on Dec. 6. The action was brought on behalf of persons who purchased shares of the Funds during the period December 6, 2004 through the October 3, 2007 against the Funds’ investment adviser, officers and directors and the other defendants for, inter alia, the violation of the disclosure requirements of federal securities laws and the federal Investment Company Act. The suit was filed by Richard A. Atkinson, M.D. and Patricia B. Atkinson on behalf of themselves and others similarly situated. Plaintiff Richard A. Atkinson, M.D., a resident of the State of Tennessee, invested approximately $43,000 in the Intermediate Fund during the Class Period, as set forth in the accompanying certification. Plaintiff Patricia B. Atkinson, a resident of the State of Tennessee, invested approximately $109,000 in the Intermediate Fund during the Class Period, as set forth in the accompanying certification. The Funds and the defendants allegedly misrepresented or failed to disclose material facts relating to: (i) the nature of the risk being assumed by an investment in the Funds, (ii) the illiquidity of certain securities in which the Funds invested, (iii) the extent to which the Funds’ portfolios contained securities that were illiquid or exhibited the characteristics of illiquid securities so that they were highly vulnerable to suddenly becoming unsalable at the prices at which they were being carried on the Funds’ records, (iv) the extent to which the Funds’ portfolios were subject to fair value procedures, (v) the extent to which the values of such securities, and, consequently, the net asset values (NAVs) of the Funds, were based on estimates of value and the uncertainty inherent in such estimated values, and (vi) the concentration of investments in a single industry. Plaintiffs, by and through their undersigned attorneys, bring this action upon personal knowledge as to themselves and their own acts, upon the investigation conducted by and through Plaintiffs’ counsel as to all other matters, including without limitation, analysis of publicly available news articles and reports, public filings with the Securities and Exchange Commission, review of various web sites and Internet information sources (including the Morgan Keegan Funds website), news reports, press releases and other matters of public record, prospectuses, Statements of Additional Information, annual and semi-annual reports issued by and on behalf of the Funds, sales materials, and upon information and belief. The suit was filed against: -- Morgan Asset Management, Inc.; -- Morgan Keegan & Company, Inc.; -- Regions Financial Corporation; -- MK Holding, Inc.; -- Allen B. Morgan, Jr., former director and chairman; -- J. Kenneth Alderman, former director; -- Jack R. Blair, former director; -- Albert C. Johnson, former director; -- James Stillman R. McFadden, former director; -- W. Randall Pittman, former director; -- Mary S. Stone, former director; -- Archie W. Willis, III, former director; -- Brian B. Sullivan, President of the Funds and President and Chief Investment Officer of Morgan Management; -- J. Thompson Weller, Treasurer of the Funds; -- Charles D. Maxwell, former secretary and Assistant Treasurer of the Funds; -- Michele F. Wood, former Chief Compliance Officer of the Funds; -- James C. Kelsoe, Jr., former Senior Portfolio Manager of the Funds and of Morgan Management; -- David H. Tannehill, former Portfolio Manager of the Funds and of Morgan Management; and -- PricewaterhouseCoopers LLP, auditor Plaintiffs, on behalf of themselves and the other members of the class, seeks, among others, an order declaring this action to be a proper class action; awarding Plaintiffs and the other members of the class rescission or compensatory or rescissory damages; awarding to plaintiffs and the other members of the class prejudgment interest in the manner and at the maximum rate where permitted by law; awarding to Plaintiffs and the other members of the class costs and expenses of this litigation, including reasonable attorneys’ fees and costs, including experts’ fees and costs. Representing the plaintiffs are: Jerome A. Broadhurst, Esq. Charles D. Reaves, Esq. Jerome A. Broadhurst, Esq. Apperson, Crump & Maxwell, PLC 6000 Poplar Avenue, Suite 400 Memphis, TN 38119-3972 Phone: (901) 260-5133 Fax: (901) 435-5133 E-mail: creaves44@comcast.net jbroadhurst@appersoncrump.com Vernon J. Vander Weide, Esq. Thomas V. Seifert, Esq. Head, Seifert & Vander Weide, P.A. 333 South Seventh Street, Suite 1140 Minneapolis, MN 55402-2422 Phone: 612-339-1601 Fax: 612-339-3372 E-mail: vvanderweide@hsvwlaw.com tseifert@hsvwlaw.com Richard A. Lockridge, Esq. Gregg M. Fishbein, Esq. Lockridge Grindal Nauen PLLP 100 Washington Avenue South, Suite 2200 Minneapolis, MN 55401 Phone: 612-339-6900 Fax: 612-339-0981 E-mail: ralockridge@locklaw.com gmfishbein@locklaw.com Carolyn G. Anderson, Esq. Timothy J. Becker, Esq. Zimmerman Reed, P.L.L.P. 651 Nicollet Mall, Suite 501 Minneapolis, MN 55402 Phone: 612-341-0400 Fax: 612-341-0844 E-mail: cga@zimmreed.com tjb@zimmreed.com OREGON: Multnomah County Sheriff Sued Over Strip Search Policy -------------------------------------------------------------- Multnomah County Sheriff Bernie Giusto is facing a class action over strip searches at the country detention center, Matt Davis of The Portland Mercury reports. The suit was filed by attorney Leonard Berman on behalf of Riley Hinds, a former inmate at the Multnomah County Detention Center, on his own behalf and on behalf of a class of others similarly situated people. The plaintiff alleges that his civil rights were violated when he was strip searched after he was arrested on a mistaken warrant for a purported probation violation on July 24, 2006. Mr. Berman contends that the county has a blanket policy of strip searching inmates at the jail even for or misdemeanor or violation charges where there is no reasonable suspicion to believe an inmate is carrying a weapon or other contraband. He said that the blanket strip-search policy is unconstitutional. He is calling on anyone who has been strip searched at the jail following a misdemeanor arrest over the last two years to join in the case. PHYSICIAN'S CORP: Appeals Court Upholds Order Favoring Lloyd's -------------------------------------------------------------- The Third District Court of Appeal, in an opinion filed Nov. 28, affirmed a trial court's order favoring Underwriters at Lloyd’s over National Union Fire Insurance Co. in a suit seeking to determine which insurer's policy covered a class action against the Physician's Corp. of America. This is a dispute between two insurers over a sizeable class action settlement paid on behalf of the insured, Physician's Corp., which was a Miami-based, publicly-traded health care company. Both Lloyd’s and National Union had issued consecutive liability policies covering PCA’s directors and officers. Lloyd’s had issued primary and excess “claims-made” director- and-officer policies to Physician's Corp. for the period of April 7, 1996, to September 8, 1997. National Union’s policy covered the period of September 8, 1997, to September 8, 2003. The class action that eventually was settled was filed in November of 1997, which fell within National Union’s coverage period. National Union argues, however, that Lloyd’s should respond for the loss because Lloyd’s was obligated to pay for any “[l]oss resulting from any Claim first made during the policy period for a Wrongful Act” and to reimburse Physician's Corp. for any loss Physician's Corp. paid as indemnification “to any Directors and Officers resulting from any Claim during the policy period for a Wrongful Act.” National Union had appealed a trial court's order denying its motion for partial summary judgment and granting appellees Underwriters at Lloyd's, London and Certain Insurance Companies' cross-motion for summary judgment. In an opinion issued last month, the circuit court affirmed the trial court's decision because National Union has failed to show that Physician's Corp. of America provided Lloyd's with the notice required under PCA's insurance contract with Lloyd's. ROMI ENTERPRISES: Recalls SCUBA Regulators that can Malfunction --------------------------------------------------------------- ROMI Enterprises, of San Leandro, Calif., in cooperation with the U.S. Consumer Product Safety Commission, is recalling about 6,000 Oceanic and AERIS SCUBA Regulator First Stages. The company said an internal component that seals air between the high pressure first-stage and the intermediate pressure second-stage can fail. This can result in uncontrolled flow of air to the diver and pose a risk of serious injury or death. ROMI has received two reports of units malfunctioning during diving and six reports of units malfunctioning while being tested by dealers prior to delivery to consumers. No injuries reported. Description and Models: The recall involves the following regulator first stages: (a) Oceanic Regulator First Stages Model CDX5 Certain serial numbers from 30202856 through 51312641-and-Purchased from May 2006 through October 2007 Model FDX10 Certain serial numbers from 51408026 through 51411813-and-purchased from May 2006 through October 2007 Models CDX, DXi, DX3, DX4, and TDX5 All serial numbers -and- Serviced from May 2006 through October 2007 (b) AERIS Regulator First Stages Model AT400 Certain serial numbers from 30200036 through 51311560-and-Purchased from May 2006 through October 2007 Balanced Diaphragm All serial numbers -and - Serviced from May 2006 through October 2007 The model and serial numbers are stamped on the side of the body or on the body's rubber covering. The regulators were made in the United States and Taiwan. The items were either sold or repaired at authorized Oceanic and AERIS retailers nationwide from May 2006 through October 2007. The items sold for between $300 and $500. To see pictures of the regulators: http://www.cpsc.gov/cpscpub/prerel/prhtml08/08127a.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml08/08127b.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml08/08127c.jpg Consumers are advised to immediately stop using the recalled regulator first stages and take them to any authorized Oceanic or AERIS dealer for a free replacement part. For further information or to determine if your specific unit is affected, contact ROMI toll-free at (888) 636-9390 between 8 a.m. and 5 p.m. PT Monday through Friday. Oceanic customers can send an e-mail to service@oceanicusa.com or visit http://www.oceanicworldwide.com.AERIS customers can send an e- mail to info@diveaeris.com or visit http://www.diveaeris.com TJX COMPANIES: Settles Banks' Suit Over Cardholders' Info Theft --------------------------------------------------------------- The TJX Companies, Inc. has entered into a settlement agreement with all but one of the seven banks and bankers associations that sued TJX in a putative class action as a result of the intrusion(s) into TJX's computer system. As a result of the TJX data breach, which was first disclosed in mid January, there have been dramatic costs to financial institutions in the effort to protect cardholders. The Massachusetts Bankers Association filed the lawsuit to protect customer privacy and data security for customer accounts (Class Action Reporter, May 1, 2007). The suit is centered on the fact that banks paid a heavy price for TJX's security "negligence" in losses to fraudulent account charges and massive card-reissuing campaigns following the breach. Under the recent agreement, the Massachusetts Bankers Association, Connecticut Bankers Association and Maine Association of Community Banks, along with Eagle Bank, Saugusbank, and Collinsville Savings Society, will dismiss all of their claims against TJX. The Massachusetts Bankers Association represents 207 commercial, savings and co-operative banks and savings and loan institutions in Massachusetts and elsewhere in New England. The Connecticut Bankers Association represents over 64 financial institutions conducting banking operations in the State of Connecticut and elsewhere in New England. The Maine Association of Community Banks represents 23 Maine- based financial institutions. Carol Meyrowitz, President and Chief Executive Officer of The TJX Companies, Inc., stated, "It has been almost one year since TJX discovered that our computer system had been criminally attacked. In that time, we have further strengthened our security and achieved full compliance with the Payment Card Industry Data Security Standards. “We support the intent of these standards and continue to take our responsibility to protect customer data seriously. However, the TJX experience underscores broader challenges facing the U.S. payment card system that require urgent action by merchants, banks, payment card companies and associations, and we look forward to greater cooperation in order to better serve and protect customers." As part of the agreement, the three bankers associations are recommending that the Visa issuers among their 292 member banks where appropriate accept the Alternative Recovery Offer provided for in the agreement among Visa, TJX, and TJX's acquiring bank announced on November 30, 2007. The financial terms of the settlement were not disclosed, but the amount paid by TJX primarily reimbursed the settling bankers associations and banks for a negotiated portion of the expenses they incurred in this case, excluding attorney's fees, and is encompassed within the reserve previously taken in TJX's fiscal 2007 second quarter. Further, TJX has denied all wrongdoing. The agreement follows the court's recent ruling denying the plaintiffs' motion to represent a class of banks in this action. That ruling is subject to a pending motion for reconsideration and a possible appeal by the non-settling plaintiff bank. The suit is "Massachusetts Bankers Association et al vs. TJX Companies, Case No. 1:07-cv-10791-WGY," filed in the U.S. District Court for the District of Massachusetts, under Judge William G. Young. Representing plaintiffs is: James R. Byrne Tyler, Cooper & Alcorn LLP, CityPlace 35th Floor, 185 Asylum Street Hartford, CT 06103-3488 Phone: 860-725-6201 Fax: 860-278-3802 E-mail: jbyrne@tylercooper.com WASHINGTON: Asotin's Jail Booking Fee Policy Illegal, Suit Says --------------------------------------------------------------- Asotin County is facing a purported class action for alleged violations of three local residents' civil rights in relation to the collection of the county's jail booking fee policy. The collection of booking fees is allegedly illegal in that it violates plaintiffs' established constitutional rights under the Fourteenth Amendment not to be deprived of property without the due process of law. The suit was filed by lawyers for the Center for Justice on behalf of Daniel K. Garrison, Christopher M. Roy and Frederick D. Roy who have been residents of Asotin County. The plaintiffs were all assessed a booking fee of $50.00. Subsequently, Frederick Roy was released from Asotin County Jail and all charges were dropped. Upon Frederick Roy’s release his funds were not returned, according to the suit. The Defendant’s booking fee collection policy allegedly violates plaintiffs’ rights under the Fourteenth Amendment of the U.S. Constitution for several reasons: a) It does not provide each individual Plaintiff with adequate notice of the seizure and conversion of their property and their attendant rights; b) It does not provide an opportunity to object to the taking and conversion of their property, and to assert a reason, such as indigent status or exempt source of funds, that may prevent the County from taking and converting their money; c) It does not provide any type of hearing prior to taking the property; and d) It impermissibly places the burden on each individual Plaintiff to get their money back. Allegedly, Asotin County’s illegal seizure of money from each individual Plaintiff and other class members proximately caused special damages in the amount of money taken, pre-judgment interest in an amount to be proven at trial, consequential damages in an amount to be proven at trial, and nominal damages. Each Plaintiff provisionally proposes the class definition: All individuals who were assessed a booking fee and whose funds have been converted to the County’s use under the Asotin County Jail’s booking fee policy and RCW 70.48.390 without adequate notice and/or hearing, in violation of their due process rights under the law. The plaintiffs are asking the court, among others, to certify the case as a class action; establish the actual booking fees incurred by Asotin County in the relevant period of time and order the refund of all excess funds taken, with prejudgment interest; award Plaintiffs and the class all special and general damages resulting directly and proximately from Defendant’s conduct; award Plaintiffs and the class all prejudgment and post judgment interest as allowed by law. The suit, docketed cv-07-392-JLQ, was filed in the U.S. District Court for the Eastern District of Washington. Representing the plaintiffs are: John D. Sklut, Esq. Jeffry K. Finer, Esq. Center for Justice 35 W. Main, Suite 300 Spokane, WA 99201 Phone: (509) 835.5211 Fax: (509) 835.3867 E-mail: jsklut@cforjustice.org jfiner@cforjustice.org New Securities Fraud Cases HOMEBANC CORP: Shalov Stone Files Securities Fraud Suit in Fla. --------------------------------------------------------------- Shalov Stone Bonner & Rocco LLP has filed a class action in the U.S. District Court for the Southern District of Florida on behalf of purchasers of the securities of HomeBanc Corp. (PINKSHEETS: HMBN) (PINKSHEETS: HMBNP) between September 26, 2005 and August 3, 2007. The complaint alleges that the officers of HomeBanc -- Kevin D. Race and Patrick S. Flood -- violated the federal securities laws. Beginning on September 26, 2005, HomeBanc sought to register 2 million shares of 10% Series A Cumulative Redeemable Preferred Stock. On February 2, 2006, HomeBanc sold these preferred shares through its underwriters, raising approximately $50 million. But HomeBanc failed to disclose in its registration statement that it was planning to sell its adjustable rate loans for cash, and was buying lower-quality, higher-risk, residential mortgage- backed securities. Throughout the Class Period, HomeBanc misrepresented its risk of loss due to interest rate fluctuations. HomeBanc was earning less in interest on its assets than the amount it had to pay in interest on its debts. As a result, HomeBanc had less cash available to meet its business and operating needs. HomeBanc, however, continued to tell investors that it had sufficient cash to support its liquidity needs for at least a year or more. But on August 7, 2007, HomeBanc filed for bankruptcy. Interested parties may move the court no later than January 29, 2008 for lead plaintiff appointment. For more information, contact: Christina Golden Sara Rosenberg Shalov Stone Bonner & Rocco LLP Telephone: (212) 239-4340 Facsimile: (212) 239-4310 Website: http://www.lawssb.com HOMEBANC CORP: Vianale & Vianale Files Fla. Securities Lawsuit -------------------------------------------------------------- The law firm of Vianale & Vianale LLP filed a class action on December 17, 2007 in U.S. District Court in the Southern District of Florida on behalf of purchasers of the securities of HomeBanc Corp. ("HomeBanc") (PINKSHEETS: HMBN) between September 26, 2005 and August 3, 2007. The complaint alleges that the officers of HomeBanc -- Kevin D. Race and Patrick S. Flood -- violated the Securities Exchange Act of 1934. HomeBanc originated home mortgage loans through its retail stores in Florida, Georgia, and North and South Carolina. Beginning on September 26, 2005, HomeBanc sought to register 2 million shares of 10% Series A Cumulative Redeemable Preferred Stock for sale to the public. On February 2, 2006, HomeBanc sold these preferred shares through its underwriters, and raised approximately $50 million. But HomeBanc failed to disclose in its registration statement that it was then planning to sell its adjustable rate loans for cash, and was buying lower-quality, higher-risk, residential mortgage-backed securities. Throughout the Class Period, HomeBanc misrepresented its risk of loss due to interest rate fluctuations. HomeBanc was earning less in interest on its assets than the amount it had to pay out in interest on its debts. As a result, HomeBanc had less cash available to meet its business and operating needs. HomeBanc, however, continued to tell the public throughout the Class Period that it had sufficient current cash balances and cash flows from its operations to support its liquidity needs for at least a year or more. Even as late as May 9, 2007, HomeBanc told the public that it had enough cash "to support our liquidity requirements for the foreseeable future." Just three months later, HomeBanc's common and Series A Preferred shares were delisted from the New York Stock Exchange. On August 7, 2007, HomeBanc filed for bankruptcy in Delaware where it is incorporated. (Because of its bankruptcy, we have not named HomeBanc as a defendant in this class action lawsuit.) Interested parties may move the court no later than January 29, 2008 for lead plaintiff appointment. For more information, contact: Kenneth J. Vianale, Esq. Julie Prag Vianale, Esq. Vianale & Vianale LLP 2499 Glades Road, Suite 112 Boca Raton, FL 33431 Phone: 888-657-9960 (Toll Free) or 561-392-4750 MORGAN STANLEY: Wolf Haldenstein Files Securities Fraud Suit ------------------------------------------------------------ Wolf Haldenstein Adler Freeman & Herz LLP filed a class actionin the United States District Court for the Southern District of New York, on behalf of all participants and beneficiaries of the Morgan Stanley 401(K) Plan from December 1, 2005 to present, whose accounts included investments in the stock of Morgan Stanley (NYSE MS). The lawsuit named as defendants Morgan Stanley, Morgan Stanley & Co. Inc., certain officers and directors of Morgan Stanley & Co. Inc., the Global Director of Human Resources of Morgan Stanley, and the Investment Committee of the Morgan Stanley 401(K) Plan. The Complaint alleges that during the Class Period, Defendants breached their fiduciary duties owed to Plan participants and beneficiaries under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. ss. 1000 et seq., by causing or permitting the Plan to offer, purchase and hold the stock of Morgan Stanley: (a) while such stock traded at artificially high prices due to, among other things, misinformation in the market concerning Morgan Stanley's business condition and operations; and (b) while Morgan Stanley exposed itself to the highly risky and tenuous subprime mortgage market. For more information, contact: Michael Jaffe, Esq. Derek Behnke Wolf Haldenstein Wolf Haldenstein Adler Freeman & Herz LLP Phone: 800-575-0735 or 212-545-4600 E-mail: classmember@whafh.com Website: http://www.whafh.com SECURITY CAPITAL: Zwerling Schachter Files Securities Fraud Suit ---------------------------------------------------------------- Zwerling, Schachter & Zwerling, LLP has filed a class action in the United States District Court for Southern District of New York on behalf of all persons and entities who purchased the common stock of Security Capital Assurance, Ltd. pursuant to the Company's secondary stock offering on June 6, 2007 of more than 9.6 million shares at $31.00 per share. Security Capital, through its subsidiaries, provides financial guaranty insurance, reinsurance, and other credit enhancement products to the public finance and structured finance markets in the United States and internationally. The complaint alleges that defendants violated Sections 11 and 15 of the Securities Act of 1933. Specifically, the complaint alleges that the Registration Statement and Prospectus filed with the Securities & Exchange Commission in connection with the secondary offering contained untrue statements of material facts because they failed to disclose that: 1) a substantial portion of the Company's credit portfolio related to sub-prime residential mortgage backed securities ("RMBS") and collateralized debt obligations ("CDOs") that had declined substantially in value; 2) the Company's net loss reserves were inadequate in light of the Company's deteriorating credit portfolio; 3) the Company's credit default swaps were not fairly valued at the time of the secondary offering; and 4) as a result of the Company's imprudent underwriting, inadequate loss reserves and overvaluation of its credit default swaps, the Company's AAA credit rating was at risk of being downgraded. As a result of these omissions, persons who purchased the Company's common stock pursuant to the secondary offering paid materially more than what the shares were worth. Interested parties may move the court no later than February 5, 2008 for lead plaintiff appointment. For more information, contact: Zwerling, Schachter & Zwerling, LLP Website: http://www.zsz.com ULTA SALON: Bernard Gross Files Securities Fraud Suit in Ill. ------------------------------------------------------------- Law Offices Bernard M. Gross, P.C. has commenced a class action in the United States District Court, Northern District of Illinois, on behalf of purchasers of the common stock of Ulta Salon, Cosmetics & Fragrances, Inc. (ULTA) between October 25, 2007 and December 10, 2007, inclusive, seeking to pursue remedies under the Securities Act of 1933. The complaint charges ULTA and three of its officers with violations of the Federal Securities Laws. ULTA operates retail stores that sell cosmetics and related items. ULTA went public on October 25, 2007, just nine days prior to the close of its fiscal third quarter on November 3, 2007. As alleged in the complaint, defendants issued materially false and misleading statements in connection with the IPO concerning ULTA's financial condition and the levels of its selling, general and administrative expenses inventories. On December 11, 2007, ULTA issued a press release disclosing the results of its Third Quarter, admitting that its inventories and SG&A expenses had risen dramatically in the Third Quarter. As a result of this startling disclosure, the price of ULTA common stock, which had been inflated by defendants' misrepresentations, declined in value. Plaintiff seeks to recover damages on behalf of all those who purchased the common stock of ULTA. Interested parties may move the court no later than January 22, 2008 for lead plaintiff appointment. For more information, contact: Susan R. Gross, Esq. Deborah R. Gross, Esq. Law Offices Bernard M. Gross, P.C. Phone: 866-561-3600 (toll free) or 215-561-3600 E-mail: susang@bernardmgross.com or debbie@bernardmgross.com Website: http://www.bernardmgross.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. 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