/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/080331.mbx C L A S S A C T I O N R E P O R T E R Monday, March 31, 2008, Vol. 10, No. 63 Headlines ANHEUSER-BUSCH: Appeals in Underage Drinking Suits Discontinued BEAR STEARNS: Schiffrin Barroway Files NY ERISA Violations Suit BP PRUDHOE: Court Dismisses Claims in "Goldman" Litigation CANADA: Court Expected to Rule on Students' $200-Million Lawsuit CARRIER CORP: Offers Payment to Settle Gas Furnace Lawsuit COUNTRYWIDE HOME: Settles FCRA Violation Lawsuit for $2,600,000 DIAMOND FOODS: Underpaid Walnut Growers File Suit in California DOWNEY SAVINGS: Still Faces "Holman" Labor Lawsuit in Calif. ELI LILLY: Faces Zyprexa Product Liability Lawsuits in Canada ELI LILLY: Faces N.Y. Suits Over Zyprexa Side Effects, Promotion ERA CLASS.COM: Faces Lawsuit in Alabama Over Illegal Charges GENZYME CORP: $64M Settlement of Suits Over Tracking Stocks OK'd HARRAH'S ENTERTAINMENT: Settles Suits Over $15.1B Buyout Offer LIFELOCK INC: Customer Sues Over Fraudulent Business Practices MBIA INC: Faces Two Securities Violations Lawsuits in New York MURPHY OIL: Continues to Face Litigation Over 2003 La. Fire NEW JERSEY: Lawsuit Seeking to Stop Strip Searches Certified NEW YORK: Court Dismisses Lewisboro Wetlands Lawsuit NEW YORK ENERGY: Charges Exorbitant Termination Fees, Suit Says NEW YORK NYCLU: Seeks Emergency Action in Indigent Defense Case PACIFIC CAPITAL: Faces Calif. Suits Over Bank Product Agreements RAMBUS INC: Calif. Court Mulls $18M Securities Suit Settlement REGIONS FINANCIAL: Holzer Files AL Shareholder Derivative Action SHORETEL INC: Milberg LLP Files Derivative Lawsuit in California SOUTH CAROLINA ELECTRIC: No Certification Yet for "Gressette" STARBUCKS CORP: Nichols Kaster Files Tip-Pooling Suit in Minn. STARBUCKS CORP: Mischaracterized in Recent Lawsuits Over Tips STATE STREET: Proposed Amended Complaint Filed in NY ERISA Suit SYNTAX-BRILLIAN: Lead Plaintiff Appointment Deadline is April 7 VALASSIS COMMS: Seeks Dismissal of Conn. Securities Fraud Suit XEROX CORP: Settles Accounting Fraud Lawsuits for $670 Million New Securities Fraud Cases CITIGROUP INC: Girard Gibbs Files Securities Fraud Suit in N.Y. HUMANA INC: Dreier Announces Securities Fraud Suit Filing in KY MORGAN STANLEY: Levi & Korsinsky Files Auction Rates Suit in NY NEUROMETRIX INC: Schiffrin Barroway Files Securities Fraud Suit UBS AG: Levi & Korsinsky Files NY Auction Rate Securities Suit ********* ANHEUSER-BUSCH: Appeals in Underage Drinking Suits Discontinued --------------------------------------------------------------- The plaintiffs in several purported class actions over underage drinking voluntarily discontinued all appeals in their respective cases, which had named Anheuser-Busch Cos., Inc. as one of the defendants, according to Anheuser-Busch's Feb. 29, 2008 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2007. The Company had been served with complaints in putative class action lawsuits in California, Michigan, Ohio, West Virginia and Wisconsin. These suits had named a large number of other brewers and distillers and sought to blame minors' intentional violations of state alcohol laws on lawful product advertising, generally asserting theories of consumer fraud, unjust enrichment and public nuisance. These class actions had been instituted by the parents of illegal underage drinkers to obtain the sums that underage people purportedly spent illegally buying alcohol from persons or entities other than the defendants. The California case was dismissed in 2005, and in August 2006 the plaintiffs in that case voluntarily discontinued their appeal, thus ending the suit. The Michigan, Ohio, West Virginia and Wisconsin cases were dismissed in 2006. In July 2007, the U.S. Court of Appeals for the Sixth Circuit effectively affirmed the dismissal of the Michigan and Ohio actions for plaintiffs' failure to plead an injury to themselves and causation. In November 2007, the plaintiffs voluntarily discontinued all appeals, thus ending all illegal underage drinking litigation pending against the Company. Anheuser-Busch Cos., Inc. -- http://www.anheuser-busch.com/-- is the holding company parent of Anheuser-Busch, Inc., a beer brewer. The company is also the parent corporation to a number of subsidiaries that conduct various other business operations. The company's operations are comprised of four segments: domestic beer, international beer, packaging and entertainment. BEAR STEARNS: Schiffrin Barroway Files NY ERISA Violations Suit --------------------------------------------------------------- The law firm of Schiffrin Barroway Topaz & Kessler, LLP filed the first lawsuit of its kind on behalf of participants and beneficiaries of The Bear Stearns Companies, Inc., Employee Stock Ownership Plan, with the United States District Court for the Southern District of New York, alleging violations of the Employee Retirement Income Security Act, the federal law governing employee benefit plans. The lawsuit seeks to recover, on behalf of the Plan and its aggrieved participants, losses in connection with the unprecedented devaluation of The Bear Stearns Companies, Inc. common stock held by Plan participants between December 14, 2006 and the present. This case epitomizes the danger of concentrating hundreds of millions of "retirement eggs: in one basket -- employer stock -- even for employees of an institution like Bear Stearns. The plaintiff alleges that Bear Stearns, like too many others, has inflicted long-term harm on its most precious resource -- its workers. Pursuant to ERISA, the defendants-fiduciaries of the Plan-were obligated to ensure that the Plan's assets were prudently invested. The Complaint alleges that the defendants utterly failed to fulfill their fiduciary duties and, as a result, the Plan's participants have suffered tremendous losses to their retirement savings. The Complaint generally alleges that Bear Stearns and certain of its officers and directors allowed the imprudent investment of the Plan's assets/participants' retirement savings in Bear Stearns equity throughout the Class Period, despite the fact that they clearly knew or should have known that such investment was imprudent due to, among other things: (a) the Company's failure to disclose material adverse facts about its financial well-being including its ability to continue as a going concern; (b) the foreseeable deleterious consequences to the Company resulting from its substantial entrenchment in the subprime mortgage market; (c) the fact that, as a consequence of the above, the Company's stock price was artificially inflated; and (d) the fact that heavy investment of retirement savings in Company stock would therefore result in significant losses to the Plan, and consequently, to its participants. Specifically, the plaintiff's complaint alleges that Bear Stearns stock was an inherently imprudent Plan investment vehicle because the Company: (1) was grossly over-exposed to the potential for substantial losses as conditions in the subprime industry deteriorated; (2) actively concealed the ominous dangers it faced; (3) failed to take accurate and timely write-downs for losses resulting from the collapse of the subprime market; and that the (4) Company's statements about its financial well-being and future business prospects were lacking in any reasonable basis when made. This case is brought on behalf of the Plan and its participants. Proposed class actions have also been brought against Bear Stearns regarding violations of the federal securities laws by the company's public shareholders. For more information, contact: Edward W. Ciolko, Esq. Richard A. Maniskas, Esq. Schiffrin Barroway Topaz & Kessler, LLP 280 King of Prussia Road Radnor, PA 19087 Phone: 1-888-299-7706 (toll free) 1-610-667-7706 e-mail: info@sbtklaw.com BP PRUDHOE: Court Dismisses Claims in "Goldman" Litigation ---------------------------------------------------------- The U.S. District Court for the District of Alaska dismissed several claims in the purported class action, "Michael Goldman v. BP plc, et al., Case No. 3:06-CV-00260 TMB," which was filed against BP Prudhoe Bay Royalty Trust, according to the Trust's Feb. 29, 2008 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2007. The complaint, filed on Nov. 7, 2006, purportedly as a class action by plaintiff Michael Goldman, on behalf of the public holders of units in the Trust, against BP plc, the Trust, BP Exploration (Alaska) Inc. (BP Alaska), The Standard Oil Co. and other defendants. In April 2007, the plaintiff voluntarily dismissed the Trust as a defendant in the action. However, in September 2007, the district court dismissed all of the plaintiff's claims against BP, BP Alaska and Standard Oil without prejudice. The suit is "Michael Goldman v. BP plc, et al., Case No. 3:06- CV-00260 TMB," which was filed with the U.S. District Court for the District of Alaska, Judge John W. Sedwick presiding. Representing the plaintiff is: Anna C. Dover, Esq. (adover@milbergweiss.com) Milberg Weiss LLP One Pennsylvania Plaza, 50th Floor New York, NY 10119 Phone: 212-594-5300 Fax: 212-656-1820 Representing the defendants are: Jeffrey M. Feldman, Esq. (feldman@frozenlaw.com) Feldman Orlansky & Sanders 500 L. Street, Suite 400 Anchorage, AK 99501 Phone: 907-272-3538 Fax: 907-274-0819 - and - Richard C. Pepperman, II, Esq. (peppermanr@sullcrom.com) Sullivan & Cromwell LLP 125 Broad Street New York, NY 10004 Phone: 212-558-4000 Fax: 212-558-3588 (fax) CANADA: Court Expected to Rule on Students' $200-Million Lawsuit ---------------------------------------------------------------- The Honourable Justice Joan L. Lax of the Ontario Superior Court of Justice is expected to issue her ruling on whether to allow the court to hear a $200 million class action lawsuit against the province's 24 community colleges. This unprecedented case was launched on behalf of Ontario's college students by two college students, Andy Hassum and Dan Roffey. The class action is seeking to recover $200 million in ancillary fees paid by Ontario's college students, fees that are prohibited by a Binding Policy Directive issued by the Ontario Government. In an effort to prevent the court from proceeding to consider the underlying merits of the students' case, the defendant colleges brought a motion seeking to have the case thrown out. The colleges' position was that the government's "binding policy directive" is a kind of guideline and not a "law," and therefore does not entitle any students to sue to recover fees collected in violation of the directive. The colleges did not deny the existence of the Binding Policy Directive or their collection of the prohibited fees. However, they claimed that only the government could enforce the Directive, and not the students from whom the fees were actually collected. On January 8, 2008, a hearing was held to consider the defendant's motion to strike the case. After two and a half months of deliberation, Justice Lax is now expected to issue her ruling. The representative plaintiffs and their legal counsel, and representatives of the Canadian Federation of Students, will be available for comment immediately following the release of the ruling. The Canadian Federation of Students-Ontario unites more than 300,000 college and university students across the province from more than 35 students' unions. CARRIER CORP: Offers Payment to Settle Gas Furnace Lawsuit ---------------------------------------------------------- A class-action lawsuit over certain gas furnaces made by Carrier Corp. means that some Canadians may be entitled to payments, 680News reports. According to 680News, the furnaces in question were 90-plus per cent high-efficiency, including a secondary heat exchanger. The report points out that, under the settlement reached by the parties, former owners of the gas furnaces will receive payments only if the secondary heat exchanger failed. The settlement also includes an opt-out offer, plus payments and offers of an enhanced 20-year warranty on the company's high- efficiency gas furnaces. The settlement, 680News notes, is not an admission of wrongdoing by Carrier Corp. According to 680News, the deadline for opt outs and objectionsis on June 9, 2008, while the deadline to submit claims is September 8. Hearings for the approval of the settlement will be held on June 16. More information, forms and a list of qualifying furnace models can be obtained at a toll-free number, 1-877-632-0916. COUNTRYWIDE HOME: Settles FCRA Violation Lawsuit for $2,600,000 --------------------------------------------------------------- Magistrate Judge Jeffrey Cole, of the U.S. District Court for the Northern District of Illinois, Eastern Division, approved on a final basis the proposed settlement of the class action filed by Clayton R. Poehl against Home Loan Investment Bank F.S.B. -- formerly known as Ocean Bank F.S.B. Case Background Mr. Poehl originally filed the suit with the U.S. District Court for the Eastern District of Missouri. The case was subsequently transferred to the U.S. District Court for the Northern District of Illinois, Eastern Division, as a result of multidistrict litigation. Mr. Poehl, both individually and on behalf of a class of 301,430 fellow Missouri-residents, alleged that Home Loan willfully violated the Fair Credit Reporting Act by obtaining "pre- screened" credit data from a consumer-reporting agency to identify the class members (for the purpose of sending the solicitation). However, Home Loan failed to make a "firm offer of credit" as required under FCRA. Home Loan denied that it violated FCRA in any way, and asserted, among other things, that even if it did violate FCRA, its violation was not willful. On April 9, 2007, the Court granted Mr. Poehl's request for class certification and certified a class consisting of all persons with addresses in the State of Missouri to whom Home Loan sent or caused to be sent a solicitation in the same form as was received by Mr. Poehl between June 14, 2004, and June 14, 2006, and did not receive credit in response. The parties eventually reached a settlement agreement, which was approved by the Court on an interim basis on Nov. 28, 2007. The Court entered its final-approval order on March 24, 2008. Settlement Terms The settlement provides for an aggregate payment of $2,600,000. Green Jacobson & Butsch, P.C., has been awarded attorneys' fees in an amount equal to 30% of the total settlement fund -- $780,000 -- which will be distributed among the attorneys who contributed to the recovery achieved by the class in such amounts as it determines to be appropriate in its sole discretion. The class counsel will also pay law the firms of Edelman Combs Lattruner & Goodwin, LLC, and Markun Zusman & Compton, LLP, the total sum of $55,000. The class representative, Mr. Poehl, will received $4,000 in settlement of his individual claim, and as compensation for his efforts on behalf of the class. Class members who timely completed and returned the claim forms will each be paid a pro rate share of the balance remaining in the $2,600,000 settlement fund. DIAMOND FOODS: Underpaid Walnut Growers File Suit in California --------------------------------------------------------------- The Walnut Growers of California filed a lawsuit with the San Joaquin County Superior Court against Diamond Foods Inc., claiming that "Diamond grossly underpaid its 1,600 growers," The Record reports. The Record relates that the dozens of walnut growers -- who were under long-term contracts issued shortly after the former Diamond of California growers cooperative converted to a public company in July 2005 -- claim they and others were severely underpaid by Diamond Foods, perhaps by $52 million for their 2005 and 2006 crops. Under those contracts Diamond would set annual walnut prices "in good faith," subject to adjustments for quality, variety, grade and other factors. Growers argue that they should receive a fair market price under those terms but that the company consistently has undercut prices paid by other processors. In response to the lawsuit, Diamond released a short statement, pledging to "vigorously defend itself against this litigation." "We believe this suit reflects the dissatisfaction of a small minority of our growers and is meritless," the culinary and snack nut company said. Based in Stockton, Calif., Diamond Foods, Inc. is a food company specializing in processing, marketing and distributing culinary, snack, in-shell and ingredient nuts, and snack products. The Company's products are sold in over 60,000 retail locations in the United States, and in over 100 countries. DOWNEY SAVINGS: Still Faces "Holman" Labor Lawsuit in Calif. ------------------------------------------------------------ Downey Savings and Loan Assoc., F.A., a subsidiary of Downey Financial Corp., continues to face a purported class action filed by two former traditional branch employees with the Los Angeles Superior Court, California. The suit was filed on Oct. 29, 2004, under the caption, "Margie Holman and Alice A. Mesec, et al. v. Downey Savings and Loan Association, Case No. BC323796." The complaint seeks unspecified damages for alleged unpaid regular and overtime wages and bonuses, inadequate meal and rest breaks, and related claims. The plaintiffs are seeking class-action status to represent all other current and former Downey Savings employees who held the position of Customer Service Supervisor and Customer Service Representative at Downey Savings' in-store branches at any time from Oct. 29, 2000 to date. Based on a review of the current facts and circumstances with retained outside counsel: -- Downey Savings plans to oppose the claim and assert all appropriate defenses, and -- management has provided for what is believed to be a reasonable estimate of exposure for this matter in the event of loss. The company reported no development in the matter in its Feb. 29, 2008 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2007. Downey Financial Corp. -- http://www.downeysavings.com-- is a savings and loan holding company. Downey Savings and Loan Association (the Bank) is the Company's wholly owned subsidiary. The Company is also involved in real estate investments. Its banking activities focus on attracting funds from the general public and institutions and obtaining borrowings; originating and investing in loans, primarily residential real estate mortgage loans, investment securities and mortgage-backed securities, and originating and selling loans to investors in the secondary markets. ELI LILLY: Faces Zyprexa Product Liability Lawsuits in Canada ------------------------------------------------------------- Eli Lilly and Co. is facing several purported product liability class actions in Canada over the drug, Zyprexa, according to the company's Feb. 29, 2008 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2007. In early 2005, the company was served with four lawsuits seeking class action status in Canada on behalf of patients who took Zyprexa. One of these four lawsuits has been certified for residents of Quebec, and a second has been certified in Ontario and includes all Canadian residents, except for residents of Quebec and British Columbia. In general, the Canadian actions allege a variety of injuries from the use of Zyprexa, with the majority alleging that the product caused or contributed to diabetes or high blood-glucose levels. Eli Lilly and Co. -- http://www.lilly.com/-- discovers, develops, manufactures and sells products in one business segment, pharmaceutical products. The Company also has an animal health business segment. It manufactures and distributes its products through owned or leased facilities in the U.S., Puerto Rico and 25 other countries. Eli Lilly and Company's products are sold in approximately 135 countries. The Company also conducts research to find products to treat diseases in animals and to increase the efficiency of animal food production. ELI LILLY: Faces N.Y. Suits Over Zyprexa Side Effects, Promotion ---------------------------------------------------------------- Eli Lilly and Co. faces several purported federal class actions in New York over the side effects and improper promotion of the drug, Zyprexa, according to the company's Feb. 29, 2008 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2007. In 2005, two lawsuits were filed with the U.S. District Court for the Eastern District of New York purporting to be nationwide class actions on behalf of all consumers and third-party payors, excluding governmental entities, which have made or will make payments for their members or insured patients being prescribed Zyprexa. These actions have now been consolidated into a single lawsuit, which is brought under certain state consumer protection statutes, the federal civil RICO statute, and common law theories, seeking a refund of the cost of Zyprexa, treble damages, punitive damages, and attorneys' fees. Two additional lawsuits were filed with the U.S. District Court for the Eastern District of New York in 2006 on similar grounds. As with the product liability suits, these lawsuits allege that the company inadequately tested for and warned about side effects of Zyprexa and improperly promoted the drug. Eli Lilly and Co. -- http://www.lilly.com/-- discovers, develops, manufactures and sells products in one business segment, pharmaceutical products. The Company also has an animal health business segment. It manufactures and distributes its products through owned or leased facilities in the U.S., Puerto Rico and 25 other countries. Eli Lilly and Company's products are sold in approximately 135 countries. The Company also conducts research to find products to treat diseases in animals and to increase the efficiency of animal food production. ERA CLASS.COM: Faces Lawsuit in Alabama Over Illegal Charges ------------------------------------------------------------ ERA Class.com, Inc., is facing a class-action complaint filed with the U.S. District Court for the Southern District of Alabama claiming that the company charges illegal and unearned fees during real estate closings, CourtHouse News Service reports. This is a class action on behalf of a class of all persons who qualify under applicable Real Estate Settlement Procedures regulations and who have paid a "Processing Fee" to ERA Class.com during the period when ERA has collected and accepted such fee in connection with a real estate settlement involving a federally related mortgage loan. The plaintiffs want the court to rule on: (a) whether defendant's practice of collecting and accepting a Processing Fee is violative of the Federal Real Estate Settlement Procedures Act, codified at 12 USC Section 2607; (b) whether defendant provided any new or additional service to class members in exchange for the $295 Processing Fee it has collected from each class member; (c) whether defendant's charge for $295 for a Processing Fee is an unearned fee under RESPA; and (d) whether defendant's charge for $295 for a Processing Fee is a duplicative fee under RESPA. The plaintiffs ask the court: -- to declare defendant's practice of collecting a Processing Fee at closing as part of the settlement process violative of the Real Estate Settlement Procedures Act; -- for an order certifying the suit as a class action, under Fed. R. Civ. P. 23(a) and 23(b)(3); -- for an order appointing plaintiffs as representatives of the class; -- for an order appointing the undersigned counsel as class counsel pursuant to Fed. R. Civ. P. 23; -- for an order directing that reasonable notice of the class action be provided to all members of the class at the appropriate time after discovery and dispositive motions have been resolved; -- for violating RESPA, an order and judgment finding that the defendant is liable as a matter of law to each member of the class for treble damages; -- for declaratory and injunctive relief as permitted by law or equity, including enjoining defendant from continuing the unlawful practices as set forth; -- for reasonable attorneys' fees as provided by law in an amount according to proof at trial; -- for pre-and-post judgment interest as provided bya law in an amount according to proof at trial; -- for an award of costs and expenses incurred in this action; and -- for such other relief as the court may deem just and proper. The suit is "Estate of Gary Ellison et al v. ERA Class.com Inc., Case No. 08-162," filed with the U.S. District Court for the Southern District of Alabama. Representing the plaintiffs are: Earl P. Underwood, Jr. (epunderwood@alalaw.com) James D. Patterson (jpatterson@alalaw.com) Post Office Box 969 Phone: (251) 990-5558 Fax: (251) 990-0626 GENZYME CORP: $64M Settlement of Suits Over Tracking Stocks OK'd ---------------------------------------------------------------- A $64,000,000 settlement that effectively concludes all litigation against Genzyme Corp. following a consolidation of it's tracking stock structure in 2003, has been approved, according to the company's Feb. 29, 2008 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2007. Through June 30, 2003, the company had three outstanding series of common stock, referred to as tracking stocks: i. Genzyme General Stock (which the company now refers to as Genzyme Stock), ii. Biosurgery Stock, and iii. Molecular Oncology Stock. In 2003, four lawsuits were filed against the company regarding the exchange of all of the outstanding shares of Biosurgery Stock for shares of Genzyme Stock in connection with the elimination of the company's tracking stocks in July 2003. Each of the lawsuits was a purported class action on behalf of holders of Biosurgery Stock. Three cases were filed in Massachusetts state court, and one case was filed in the U.S. District Court for the Southern District of New York. On June 4, 2007, the Massachusetts Supreme Judicial Court reversed an order of the Massachusetts Appeals Court and affirmed dismissal of the first of the state court actions. The remaining two state court actions remained stayed while the action filed in the U.S. District Court progressed. In that action, the U.S. District Court had denied the company's motion to dismiss the successive amended complaints and granted the plaintiffs' motion to certify a class. On August 6, 2007, the company reached an agreement in principle with counsel for the plaintiff class to settle and dismiss that case for $64.0 million. The U.S. District Court entered an order approving the settlement on Dec. 30, 2007. Because the members of the class in the New York action released all claims, the settlement and its approval, as a practical matter, resolved the two remaining actions in Massachusetts state court. Those two cases have been dismissed. Genzyme Corp. -- http://www.genzyme.com-- is a biotechnology company that operates in six units. Renal develops, manufactures and distributes products that treat patients suffering from renal diseases, including chronic renal failure. Therapeutics develops, manufactures and distributes therapeutic products, with a focus on products to treat patients suffering from genetic diseases and other chronic debilitating diseases. Transplant develops, manufactures and distributes therapeutic products that address pre-transplantation, prevention and treatment of graft rejection in organ transplantation and other hematologic and auto-immune disorders. Biosurgery develops, manufactures and distributes biotherapeutics and biomaterial products, with an emphasis on products that meet medical needs in orthopaedics and broader surgical areas. Genetics provides testing services for the oncology, prenatal and reproductive markets. Oncology develops, manufactures and distributes products for the treatment of cancer. HARRAH'S ENTERTAINMENT: Settles Suits Over $15.1B Buyout Offer -------------------------------------------------------------- Harrah's Entertainment, Inc., settled purported class action suits involving the proposed buyout of the gaming company by private equity investors, according to Harrah's Feb. 29, 2008 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2007. The plaintiffs in the suits consider the $15.1-billion offer from the buyout firms, which translates to a per share price of $83.50, as too low. They generally allege that the transaction is an "apparent camouflaged management buyout," (Class Action Reporter, April 9, 2007). Delaware Lawsuits On Oct. 5, 2006, Henoch Kaiman and Joseph Weiss filed a purported class action complaint with the Delaware Court of Chancery, Civil Action No. 2453-N, against Harrah's, its board of directors and its sponsors (Apollo Global Management, LLC and TPG Capital, L.P.), challenging the proposed transaction as inadequate and unfair to Harrah's public stockholders. Two similar putative class actions were subsequently filed with the Delaware Court of Chancery: 1. "Phillips v. Loveman, et al., Civil Action No. 2456- N;" and 2. "Momentum Partners v. Atwood, et al., Civil Action No. 2455-N." On Oct. 19, 2006, the Delaware Court of Chancery consolidated the three Delaware cases under the heading, "In Re Harrah's Entertainment, Inc. Shareholder Litigation." On Dec. 22, 2006, the Delaware plaintiffs' counsel filed an amended and consolidated class action complaint against Harrah's, its directors, and the Sponsors, and added as defendants Apollo Management V, L.P., Hamlet Holdings, LLC, and Merger Sub. The consolidated complaint alleges that Harrah's board of directors breached their fiduciary duties and that the Sponsors aided and abetted the alleged breaches of fiduciary duty in entering into the merger agreement. The consolidated complaint seeks, among other relief, class certification of the lawsuit, an injunction against the proposed transaction, compensatory and rescissory damages to the class, and an award of attorneys' fees and expenses to plaintiffs. On Feb. 14, 2007, the defendants began to produce documents in response to the Delaware plaintiff's initial discovery request. Initial Nevada Lawsuits On Oct. 3, 2006, Natalie Gordon filed a putative class action with the state district court in Clark County, Nevada, Case No. A529183, against Harrah's, its board of directors and the Sponsors, challenging the proposed transaction as inadequate and unfair to Harrah's public stockholders. Eight similar putative class actions were subsequently filed with the Clark County district court: 1. "Phillips v. Harrah's Entertainment, Inc., et al., Case No. A529184;" 2. "Murphy v. Harrah's Entertainment, Inc., et al., Case No. A529246;" 3. "Shapiro v. Alexander, et al., Case No. A529247;" 4. "Barnum v. Alexander, et al., Case No. A529277;" 5. "Iron Workers Tennessee Valley Pension Fund v. Harrah's Entertainment, Inc., et al., Case No. A529449;" 6. "Staehr v. Harrah's Entertainment, Inc., et al., Case No. A529385;" 7. "Berliner v. Harrah's Entertainment, Inc., et al., Case No. A529508;" and 8. "Frechter v. Harrah's Entertainment, Inc., et al., Case No. A529680." All of the complaints name Harrah's and its current directors as defendants. Four of the complaints also name the Sponsors as defendants. One complaint further names two former directors of Harrah's as defendants: Joe M. Henson and William Barron Hilton. On Oct. 6, 2006, the Clark County district court consolidated these complaints under the heading, "In Re Harrah's Shareholder Litigation," and appointed liaison counsel for the consolidated action. A consolidated class action complaint was subsequently filed. The consolidated complaint alleges that Harrah's Entertainment's board of directors breached their fiduciary duties and the Sponsors aided and abetted the alleged breaches of fiduciary duty in connection with the proposed transaction. The consolidated complaint seeks, among other relief, class certification of the lawsuit, an injunction against the proposed transaction, declaratory relief, compensatory and rescissory damages to the class, and an award of attorneys' fees and expenses to the plaintiffs. On Oct. 25, 2006, Harrah's removed the consolidated action to the U.S. District Court for the District of Nevada as "In Re Harrah's Shareholder Litigation, Case 2:06-CV-01356," pursuant to the Securities Litigation Uniform Standards Act. On Nov. 27, 2006, plaintiffs Gordon, Phillips, Murphy, Shapiro, and Barnum filed a motion for remand. Also on that date, plaintiff Iron Workers Tennessee Valley Pension Fund filed a separate motion for remand. On Dec. 5, 2006, plaintiff Frechter joined Iron Workers' motion for remand. On Jan. 5, 2007, the plaintiff in Iron Workers filed notice of its intention to voluntarily dismiss its action. On that same date, plaintiffs Gordon, Phillips, Murphy, Shapiro and Barnum filed a notice of withdrawal of their motion for remand. The court approved these notices on Jan. 9, 2007. On January 23, 2007, defendants moved to dismiss the remaining actions pursuant to SLUSA. On Feb. 5, 2007, plaintiffs Gordon, Phillips, Murphy, Shapiro and Barnum filed a First Amended Consolidated Class Action Complaint, adding a claim that the December 2006 14A filings by Harrah's with the SEC in connection with the merger were false and misleading. Accordingly, eight consolidated cases currently remain in the U.S. District Court for the District of Nevada. On Feb. 12, 2007, the court denied the Frechter motion for remand under the SLUSA. On Feb. 23, 2007, the defendants filed a reply brief renewing their request that the court dismiss the actions in their entirety. Subsequent Nevada Lawsuits On Nov. 22, 2006, two putative class actions were filed with the state district court in Clark County, Nevada against Harrah's and its board of directors: 1. "Eisenstein v. Harrah's Entertainment, Inc., et al., Case No. A531963;" and 2. "NECA-IBEW Pension Fund v. Harrah's Entertainment, Inc., et al., Case No. A531965." Both complaints allege that Harrah's board of directors breached their fiduciary duties in connection with the proposed transaction. The complaints seek, among other things, declaratory and injunctive relief; neither of them seeks damages. On Jan. 3, 2007, the plaintiffs in both actions filed a Joint Motion to Designate Litigation as Complex, Consolidate Cases, and for Appointment of Lead Counsel. A hearing on the plaintiffs' motion, which had been scheduled for Jan. 30, 2007, was vacated pursuant to a stipulation between the parties, dated Jan. 25, 2007. On Jan. 26, 2007, in accordance with the parties' Jan. 25, 2007 stipulation, the Clark County district court ordered the consolidation of the Eisenstein and NECA-IBEW Pension Fund complaints and appointed lead and liaison counsel. Settlement Procedures On March 8, 2007, Harrah's, its board of directors, and the other named defendants in the Delaware and Nevada Lawsuits above entered into a memorandum of understanding with plaintiffs' counsel in those lawsuits. Under the terms of the memorandum, Harrah's, its board of directors, the other named defendants, and the plaintiffs have agreed in principle that the Initial Nevada Lawsuits and the Delaware Lawsuit will be dismissed without prejudice and, subject to court approval, the Subsequent Nevada Lawsuits would be dismissed with prejudice. The parties subsequently entered into a stipulation of settlement incorporating the terms of the memorandum of understanding. Harrah's, its board of directors, and the other defendants deny all of the allegations in the lawsuits. Nevertheless, the defendants agreed in principle to settle the purported class action litigations in order to avoid costly litigation and mitigate the risk that the litigation may have caused a delay to the closing of the Merger. Pursuant to the terms of the Stipulation, Harrah's agreed to provide certain additional information to stockholders that was included in its definitive proxy statement dated March 8, 2007. In addition, Harrah's or its successor has agreed to pay the legal fees and expenses of plaintiffs' counsel, up to a certain limit and subject to approval by the court, and the costs of providing notice to the class. Class members have the right to opt out of the proposed settlement. However, the defendants have the right to terminate the proposed settlement if the holders of more than a designated amount of shares elect to opt out. The entry of a final judgment and the grant of a release against Harrah's, its board of directors and the other named defendants will not affect the rights of any stockholders who timely and validly request exclusion from the settlement class pursuant to applicable law. On Feb. 4, 2008, the Stipulation was submitted to a district court in Nevada, where it was approved and an order was entered for notice and a hearing in this matter. Per the court's order, a settlement hearing is to be held on April 21, 2008. Harrah's Entertainment, Inc. -- http://www.harrahs.com-- is gaming company that owns, operates, and manages about 50 casinos (under such names as Bally's, Caesars, Harrah's, Horseshoe, and Rio), primarily in the U.S. and the U.K. Operations include casino hotels, dockside and riverboat casinos, and Native American gaming establishments. LIFELOCK INC: Customer Sues Over Fraudulent Business Practices -------------------------------------------------------------- A LifeLock Inc. customer filed a class action lawsuit with U.S. District Court for the District of Arizona against the Tempe- based identity-theft prevention company on March 27, 2008, accusing it of fraudulent business practices, azcentral.com reports. According to the report, Byrl Lane and his attorneys argue in the civil complaint that LifeLock misleads its customers because the $1-million service guarantee it advertises "is riddled with restrictions, waivers and limitations." Mr. Lane argues that LifeLock advertisements trick consumers into thinking the company will pay up to $1 million to recoup any losses resulting from misuse of their personal information when its service guarantee presents much narrower scope. Mr. Lane is seeking unspecified damages for all LifeLock customers and is asking the company to return all money it collected from customers, among other steps. The report explains that LifeLock charges customers $10 per month to sign them up for fraud alerts with credit bureaus, obtain their free annual credit reports and add their names to mailing list opt-outs. Critics have argued that the company tricks consumers into believing they have to pay for such services when they can sign up for them directly with the credit bureaus for free. LifeLock says it is providing customers the convenience of doing those steps for them. The company's terms and conditions state it "will pay professionals to assist in restoring any such loss or recover such expenses . . . provided however that the maximum limit of our Service Guarantee is $1 million per lifetime for all incidents." The actual service guarantee states the company will only pay for expenses resulting from a defect in its service. "It's just a bald warranty that offers nothing," Robert Carey, Esq., one of Mr. Lane's attorneys, told azcentral.com. The complaint also argues that under its terms and conditions, LifeLock's service is actually an insurance product and should be regulated by state insurance departments. LifeLock Chief Executive Officer Todd Davis told azcentral.com that he was not aware that the lawsuit had been filed. Mr. Davis further said he was limited on what he could say about the complaint because he had not yet seen it but believed his company's service is not insurance. "We mitigate risk on the front end so, unlike an insurance provider that just aggregates the risk among a pool of people," Mr. Davis said. "We have over 20 letters from state insurance commissioners that agree with our position that we're a service with a warranty." azcentral.com points out that Mr. Lane's lawsuit is the second civil suit filed against the company in as many months. In February 2008, the report recalls, credit bureau Experian sued LifeLock with the U.S. District Court for the Central District of California, accusing the company of deceptive practices. The Arizona Department of Insurance has reviewed LifeLock's service and does not believe it is an insurance product, department spokeswoman Erin Klug told azcentral. According to the report, the department did send LifeLock a letter in January asking it to change a Web page for a service called Life-Lock Insurance that stated it was an affiliate of LifeLock and directed viewers to the company's official site. That site has been changed. MBIA INC: Faces Two Securities Violations Lawsuits in New York -------------------------------------------------------------- MBIA, Inc. faces two purported class actions filed with the U.S. District Court for the Southern District of New York, alleging violations of the federal securities laws, according to the company's Feb. 29, 2008 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2007. On Jan. 11, 2008, a putative shareholder class action was filed against the company and certain of its officers, "Schmalz v. MBIA, Inc. et al., No. 08-C V-264." The plaintiff seeks to represent a class of shareholders who purchased MBIA stock between Jan. 30, 2007, and Jan. 9, 2008. The complaint alleges that the defendants violated Sections 10(b) and 20(a) of the U.S. Securities Exchange Act of 1934. The complaint also alleges that the defendants issued false and misleading statements with respect to the Company's exposure to losses stemming from the Company's insurance of CDOs and RMBS, including its exposure to so-called "CDO-squared" securities, which allegedly caused the Company's stock to trade at inflated prices. The Defendants' deadline to respond to the complaint has been extended pending the resolution of lead counsel status and the possible filing of an amended and consolidated complaint. The Company has received subpoenas or informal inquiries from a variety of regulators, including the SEC, the Securities Division of the Secretary of the Commonwealth of Massachusetts, and other states' regulatory authorities, regarding a variety of subjects, including disclosures made by the Company to underwriters and issuers of certain bonds, the Warburg Pincus transaction, the Company's announcement of preliminary loss reserve estimates on Dec. 10, 2007 related to the Company's residential mortgage-backed securities exposure, and disclosures regarding the Company's CDO exposure, the Company's communications with rating agencies, and the methodologies used by rating agencies for determining the credit rating of municipal debt. The Company is cooperating fully with each of these regulators and is in the process of satisfying all such requests. The Company may receive additional inquiries from these or other regulators and expects to provide additional information to such regulators in response to any inquiries with respect to these or other matters in the future. On Feb. 22, 2008, another putative shareholder class action lawsuit against the Company and certain of its officers, "Teamsters Local 807 Labor Management Pension Fund v. MBIA Inc. et al., No. 08-CV-1845," was filed with the U.S. District Court for the Southern District of New York, alleging violations of the federal securities laws. The allegations of the Teamsters complaint are substantially similar to the allegations of the Schmalz complaint, except that the class period in the Teamsters complaint runs from Oct. 6, 2006, to Jan. 9, 2008. MBIA, Inc. -- http://www.mbia.com-- is engaged in providing financial guarantee insurance and other forms of credit protection, as well as investment management services to public finance and structured finance issuers, investors and capital market participants on a global basis. MURPHY OIL: Continues to Face Litigation Over 2003 La. Fire ----------------------------------------------------------- Murphy Oil Corp. continues to face a consolidated class action in connection to a June 10, 2003 fire that severely damaged the Residual Oil Supercritical Extraction unit at the Company's Meraux, Louisiana refinery. The ROSE unit recovers feedstock from the heavy fuel oil stream for conversion into gasoline and diesel. Subsequent to the fire, numerous class actions have been filed seeking damages for area residents. All the lawsuits have been administratively consolidated into a single legal action in St. Bernard Parish, Louisiana, except for one action filed in federal court. On May 5, 2004, the plaintiffs in the consolidated action in St. Bernard Parish amended their petition to include a direct action against certain of the Company's liability insurers. The St. Bernard Parish action has since been removed to federal court court where a class certification decision is pending. The company reported no development in the matter in its Feb. 29, 2008 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2007. Murphy Oil Corp. -- http://www.murphyoilcorp.com/-- is a global oil and gas exploration, and production company with refining and marketing operations in North America and the United Kingdom. The Company's operations are classified into two business activities: Exploration and Production, and Refining and Marketing. NEW JERSEY: Lawsuit Seeking to Stop Strip Searches Certified ------------------------------------------------------------ New York Attorney Susan Chana Lask, Esq., announced a major victory for civil rights and prison policy changes in the State of New Jersey. There are 13 Federal Districts in the United States and all but the District of New Jersey have certified prison strip search class actions. Now, New Jersey District Judge Joseph H. Rodriguez in Case Number 05-3619 granted the first New Jersey class-action status to Ms. Lask's strip search lawsuit and granted her class action counsel. The lawsuit was filed on behalf of Albert Florence and tens of thousands of men and women charged with a minor offenses since 2005 who were and are being strip searched by Burlington County Jail and Essex County Correctional Facility. The Complaint alleges that Mr. Florence was driving through Burlington County in 2005 when during a routine traffic stop the officer found a warrant against him for failure to pay an Essex County court fine. Despite his providing proof of a court document that he satisfied the fine, he was arrested and taken to Burlington County Jail to wait for Essex County officials to pick him up. Once in Burlington's facility, he was taken to a shower room and ordered to strip naked and turn around naked while the guard looked over his naked body with his arms outstretched. Then he was transported to Essex County's facility where he was again ordered to strip naked in a group of 3-5 men where many guards and other persons looked over their naked bodies, had them turn around and squat and cough as a group. "I was subject to two strip searches for no reason in front of many people for a charge that was found to be a mistake. I was never so humiliated and never want anyone to go through what I experienced," Mr. Florence said. There are two types of charges in New Jersey, "non-indictable" arrests such as minor offenses of failure to pay child support, traffic offenses such as driving while suspended or shoplifting, and "indictable" arrests such as more serious crimes of drug offenses and murder. The Supreme Court of the United States and New Jersey Courts hold that strip searching persons arrested for minor non- indictable charges is unconstitutional unless the prison facility can give a reasonable basis why it is strip searching that person. The reasonable basis requires a written statement that the prison facility suspected the person arrested was concealing drugs, contraband or a weapon. During discovery in this case, Class Counsel Susan Chana Lask found that Burlington and Essex County facilities strip search everyone, no matter what their charge is and they do not list any reason why they do it. "That means you can be arrested for failing to pay a traffic ticket and the next thing you know you're standing stripped naked next to a felony drug dealer to your right and a murderer to your left, while guards look you up and down naked and make you squat and cough. It's degrading and its unconstitutional," said Ms. Lask. The class action demands an injunction against the Counties' blanket policies of strip searching, revising the prison policies of blanket strip searches and seeks damages for every man and woman charged with a minor offense who was strip searched since 2005. To contact Ms. Lask Susan Chana Lask, Esq. Law Offices of Susan Chana Lask 244 Fifth Avenue, Suite 2369 New York, NY 10001 Phone: (212) 358-5762 Web site: http://www.appellate-brief.com NEW YORK: Court Dismisses Lewisboro Wetlands Lawsuit ---------------------------------------------------- On March 25, 2008, Judge Charles Brieant dismissed all charges in the three-year-old wetlands lawsuit against Lewisboro, in Westchester County, New York, The Lewisboro Ledger reports. According to the Class Action Reporter on March 11, 2008, Magistrate Judge George Yanthis issued a 29-page report to presiding Judge Brieant, of the U.S. Southern District of New York, recommending the dismissal of every charge in the lawsuit. The lawsuit was initiated by a group of town residents represented by Cross River attorney Alexandra Manbeck, Esq. The suit alleges that Lewisboro had illicitly charged the residents with violations of the town wetlands law, and that parts of the wetlands law and its procedures were unconstitutional. Ms. Manbeck first sued the town and its employees in 2005, challenging both the town Wetlands and Watercourses Law and the Planning Board's procedure for hearing and ruling over wetlands violations. Ms. Manbeck went through the system when her husband, Peter Manbeck, was charged with three wetlands violations. One was dropped when a violating structure was removed. The other two still stand: one for a shed and the other for filling, clearing and grading the property. Both were done, without a permit, within the town's 150-foot wetlands buffer. Ms. Manbeck was also charged with a building violation for filling a pool without proper fencing around it. The plaintiffs objected to a lack of due process in the Planning Board's procedure, and what they call a perceived conspiracy among Town Board members and planners. The suit calls the law "vague," "arbitrary" and "discriminatory," leaving "absolute discretion to [wetlands inspector Jay] Fain to decide without any legally fixed standards, what is prohibited and what is not in each particular case." The suit was originally filed with Ms. Manbeck as the sole attorney, although she later added more plaintiffs and named additional town officials as defendants. Three years later, the suit names the town of Lewisboro, the Planning Board, and the Conservation Advisory Council; among the individuals named are Jay Fain, former Town Supervisor Jim Nordgren, former Planning Board Chairman Jackie Dzaluk, and the other Planning Board members. There are 10 plaintiffs: Mr. Manbeck; Jay and Carol Durante; Lynn and David Gutermuth; Geoffrey Shaw; Wendy Gennimi; Mary Clark; Daniel Pritchard; and David Oltman. Judge Brieant denied class action status to the original lawsuit. The lawsuit made it past a critical first round of litigation in November 2005, when the presiding judge ruled that the suit had enough unanswered questions to declare a more in-depth look at the charges, and because of that, it was not dismissed in federal court as requested by the defendants. Judge Brieant also did not feel enough information was presented to render a decision on the case at that time. The more serious racketeering charges were thrown out, as was filing it as a class action lawsuit. However, Judge Brieant determined that the case should remain in federal court and enter the discovery stage of the court process that allows for depositions of those named in the suit. A second lawsuit was filed in 2005 that was similar to the original lawsuit but included additional plaintiffs. That lawsuit was later enveloped into the original lawsuit. In his recommendation, Judge Yanthis analyzed each claim separately. In some claims, such as those alleging that the town selectively prosecuted some residents and not others, he pointed out flaws in the plaintiff's readings of the law. Specifically, Judge Yanthis recommended the dismissal of: -- the plaintiffs' claim that the wetlands law is unconstitutionally vague, because almost all the plaintiffs admitted they knew wetlands existed on their property. In the case of the one plaintiff who claimed to be ignorant of wetlands on her property, the wetlands there were identified as state wetlands, and therefore were not defined by the town law, the judge stated; -- the plaintiffs' claim that the plaintiffs' right to be represented by a lawyer was violated, because, according to Judge Yanthis, every one of them was notified they had the right to counsel; -- the plaintiffs' claim that former wetland inspector Jay Fain's inspections of property violated the Fourth Amendment right to be free of unreasonable search, with the judge holding that "the town had a legitimate interest in protecting the town's wetlands and by extension its water supply," and that all inspections were "either done in response to a complaint or as part of a permit process." According to The Ledger, it is not yet known if Ms. Manbeck intends to file an appeal to the judge's decision. "I'm glad that it's been tested in court, and that now shows that the wetlands law is constitutional and important for public health and safety," Mr. Nordgren, who was town supervisor when the suit was originally filed and was named as a defendant in it, told The Ledger. "After a very long ordeal, I welcome and embrace Judge Brieant's decision," said Mr. Fain in a statement to The Ledger. "It is a complete vindication of the work I did for the town of Lewisboro, and for all those individuals who support the concepts of environmental quality and water quality protection. To those people who supported me throughout the litigation, I offer my heartfelt thanks. I am happy that after a very protracted lawsuit, justice has prevailed." "Mr. Fain was merely doing his job, which was to protect the environment, and became the target of a baseless lawsuit by a very few number of Lewisboro residents," said Dan O'Neill, Mr. Fain's lawyer. "It's obvious that the allegations were defamatory against Jay Fain, whose actions were exemplary while doing his job for the town of Lewisboro." Ms. Manbeck did not return repeated phone calls made by The Ledger. NEW YORK ENERGY: Charges Exorbitant Termination Fees, Suit Says --------------------------------------------------------------- New York Energy Savings Corp. is facing a class-action complaint filed with the Supreme Court of the State of New York, Kings County claiming it charges exorbitant termination fees in relation to its "Electricity & Natural Gas Price Protection Proram," CourtHouse News Service reports. In March 2005, the defendant began aggressively marketing an "Electricity & Natural Gas Price Protection Program" to residential and commercial customers in the City of New York and the New York City metropolitan area as a way to save money on energy costs. The plaintiffs claim that the company, under the program, promises to save customers money, but charges exorbitant termination fees and other inflated "variable charges" that actually increases their bills. The plaintiffs bring the action on behalf of all persons and businesses, including both residential and non-residential customers in New York City who have entered into a "Electricity or Natural Gas Price Protection Program" with the defendant. The plaintiffs demand the following relief: -- certification of the putative class pursuant to Article 9 of the New York Civil Practice Law and Rules; -- awarding actual damages to members of the putative class for the materially deceptive and misleading business practices of these defendants; -- equitable relief for members of the putative class including but not limited to enjoining defendants from deceptive and misleading business practices, invalidation of the liquidated damages provision of the Customer Agreement, contractual reformation, and contractual recission; and -- an award of reasonable attorney's fees to counsel for the class. The suit is "Advanced Medical and Alternative Care, PC et al. v. New York Energy Savings Corp., et al," filed with the Supreme Court of the State of New York, Kings County. Representing the plaintiffs is: Elliot L. Lewis, Esq. Law Office of Joseph M. Lichtenstein, PC 170 Old Country Road, Ste. 301 Mineola, New York 11501 Phone: (516) 873-6300 NEW YORK NYCLU: Seeks Emergency Action in Indigent Defense Case --------------------------------------------------------------- The New York Civil Liberties Union, which filed a class action lawsuit in November 2007 that charged the state with failing to uphold its constitutional duty to provide effective counsel to defendants who cannot afford an attorney, is now seeking a preliminary injunction that would ensure legal representation for New Yorkers charged with a crime, according to Elizabeth Benjamin of New York Daily News. The NYCLU Web site recalls that the law firm of Schulte Roth & Zabel LLP filed the landmark class action lawsuit over New York's broken public defense system. The class action lawsuit charges that a lack of adequate funding, oversight and statewide standards is denying New Yorkers accused of crimes their lawful right to competent, qualified and timely representation at all stages of the justice process, a violation of the U.S. Constitution, the state constitution and the laws of New York. Plaintiffs are individuals charged with crimes in Onondaga, Ontario, Schuyler, Suffolk and Washington counties who have encountered these problems; but the lawsuit seeks statewide reform on behalf of all defendants who are or will be charged with felonies, misdemeanors or lesser offenses and who cannot afford a lawyer. As a result of the deficiencies, many individuals facing criminal charges are compelled to appear in court without a lawyer at critical junctures, such as when bail decisions are made, the NYCLU relates. This often results in excessive bail being set and keeps too many people in jail awaiting trial. Studies link high bail to an increased likelihood of conviction. NYCLU also points out that many public defense lawyers also fail to: -- meet or consult with clients at critical stages in their cases; -- investigate the charges against their clients or hire necessary forensic experts; -- file necessary pre-trial motions; and -- provide meaningful consultation before clients accept plea bargains, even when this is a viable defense. "The public defense crisis in New York is unfair both to defendants and to the lawyers who are charged with representing them," said lead counsel on the case, NYCLU Staff Attorney Corey Stoughton. "Defendants are unfairly given second-rate justice because they cannot afford to pay private lawyers, and public defense attorneys are not given the resources, tools and training they need to do right by their clients." According to NYCLU, the situation is far too dire and the stakes too high to wait for relief. It believes there are steps that can be taken now to ease the situation in the short term. Thus, it filed a request for immediate emergency relief to address the issue. "At this moment there are New Yorkers who are being denied justice simply because they are poor," said Donna Lieberman, executive director of the NYCLU. "We look forward to a full resolution to this urgent problem, but with lives on the line we can't afford to sit back and wait. Immediate action is necessary." According to NYCLU, the relief must ensure that all criminal defendants are appointed a competent, knowledgeable attorney with sufficient time and resources. It must also: * Implement standards and procedures to ensure that attorneys appointed to represent indigent criminal defendants have sufficient qualifications and training; * Establish caseload and workload limits to ensure that public defense attorneys have adequate time to devote to each client's case; * Guarantee that every eligible indigent criminal defendant is assigned a public defense attorney within 24 hours of arrest who is present at every critical proceeding and has the opportunity to consult with each client in advance of any critical proceeding; * Ensure that investigators and experts are available to every public defense attorney for every case in which an attorney deems that investigative or expert services would be useful to the defense; and * Establish uniform written standards and procedures for determining eligibility for the assignment of a public defense attorney. PACIFIC CAPITAL: Faces Calif. Suits Over Bank Product Agreements ---------------------------------------------------------------- Pacific Capital Bancorp faces two purported class actions in California that were filed by tax preparation franchisees of Jackson Hewitt, Inc., in connection to certain Bank Product Agreements, according to the company's Feb. 29, 2008 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2007. The suits, both filed on Jan. 14, 2008, are: 1. "Big Sky Ventures I, LCC, et al v. Pacific Capital Bancorp, et al.," was filed with the U.S. District Court for the Central District of California. 2. "Joseph D. Irlanda v. Pacific Capital Bancorp, et al.," was filed with the Superior Court of California, County of Los Angeles. In Big Sky Ventures, the plaintiffs purport to represent a class consisting of all tax preparation franchisees of Jackson Hewitt, Inc. located outside of California. In Irlanda, the plaintiff purports to represent a class consisting of all tax preparation franchisees of Jackson Hewitt, Inc. located in California. The plaintiffs in both actions entered into annual Bank Product Agreements with the Company which gave them the right, but not the obligation, to provide to their customers certain Company financial products such as refund anticipation loans. They allege that prior to the Agreement with the Company applicable to the 2006 tax year, they could charge their customers fees in connection with the Company's financial products which they provided. The plaintiffs allege that in the 2006 tax year Agreement, their fees were limited to $40 per product and that in the Agreements for the 2007 and 2008 tax years, they were prohibited from charging their customers any fee for providing them with such products. Furthermore, they allege that in their franchise agreements with Jackson Hewitt, Inc, they are required to provide the Company's financial products to their customers. In each action, the plaintiffs make the following claims for relief: -- A judicial declaration that the agreements applicable to the 2007 and 2008 tax years are unconscionable, void and unenforceable for economic duress, lack of consent, undue influence, and lack of consideration. -- Injunctive relief prohibiting the Company from enforcing the terms of the 2008 Bank Product Agreement. -- For restitution from the Company for the uncompensated services provided by the plaintiffs during the 2006, 2007 and 2008 tax years. -- For rescission of the 2008 Bank Product Agreement. -- For damages from the Company pursuant to California's Unfair Competition Law under Business and Professions Code Sections 172000, et seq. Pacific Capital Bancorp -- http://www.pcbancorp.com/-- is a bank holding company and has five subsidiaries; Pacific Capital Bank, N.A., and four wholly owned unconsolidated subsidiaries, used as business trusts in connection with issuance of trust- preferred securities. RAMBUS INC: Calif. Court Mulls $18M Securities Suit Settlement -------------------------------------------------------------- The U.S. District Court for the Northern District of California has yet to approve the proposed $18-million settlement of a consolidated securities fraud class action suit filed against Rambus, Inc., according to the company's Feb. 29, 2008 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2007. On July 17, 2006, the first of six class action lawsuits was filed in the Northern District of California against Rambus and certain of its current and former executives and board members. On Sept. 26, 2006, these class action suits were consolidated under the caption, "In re Rambus, Inc. Securities Litigation, C- 06-4346-JF (N.D. Cal.)." Ronald L. Schwarcz was then appointed lead plaintiff. An amended consolidated complaint was filed on Feb. 14, 2007, adding PricewaterhouseCoopers LLP as defendant. The complaint alleges violations of various federal securities laws. It seeks damages in an unspecified amount as well as attorneys' fees and costs. The defendants filed motions to dismiss the lawsuit. Per agreement of the parties, briefing on the motions to dismiss was suspended, and the motions were taken off calendar. However, the parties have agreed in principle to resolve the dispute, subject to court approval. The settlement, which is subject to final documentation as well as review by the California court, provides for a payment by Rambus of $18.0 million and would lead to a dismissal with prejudice of all claims against all defendants in the class action litigation. The suit is "In re Rambus Inc. Securities Litigation, Case No. 5:06-cv-04346-JF," filed with the U.S. District Court for the Northern District of California, Judge Jeremy Fogel presiding. Representing the plaintiffs is: Timothy J. Burke, Esq. Stull Stull & Brody 10940 Wilshire Boulevard Suite 2300 Los Angeles, CA 90024 Phone: (310) 209-2468 Fax: 310-209-2087 e-mail: service@ssbla.com Representing the defendants are: Douglas John Clark, Esq. (dclark@wsgr.com) Wilson Sonsini Goodrich & Rosati Professional Corporation 650 Page Mill Road Palo Alto, CA 94304-1050 Phone: 650/493-9300 Fax: 650 565-5100 Jeffrey S. Facter, Esq. (jfacter@shearman.com) Shearman & Sterling LLP 525 Market Street Suite 1500 San Francisco, CA 94105 Phone: 415-616-1100 Fax: 415-616-1199 Anthony I. Fenwick, Esq. (anthony.fenwick@dpw.com) Davis Polk & Wardwell 1600 El Camino Real Menlo Park, CA 94025 Phone: 650-752-2015 Fax: 650-752-2111 REGIONS FINANCIAL: Holzer Files AL Shareholder Derivative Action ---------------------------------------------------------------- A shareholder derivative lawsuit has been filed with the United States District Court for the Northern District of Alabama against, among others, Regions Financial Corporation's Board of Directors. Regions Financial is named as a nominal defendant. The shareholder derivative action alleges that the Board, among others, violated the Securities Exchange Act, breached fiduciary duties, engaged in insider selling, wasted corporate assets and were unjustly enriched. Specifically, the complaint alleges, among other things, that the Board covered up the Company's subprime exposure, causing the Company's stock price to be artificially inflated. The complaint alleges that while the Company's subprime exposure was hidden, the Board authorized a major stock buyback, causing the Company to overpay for the stock. At the same time, the complaint alleges, several Board members unloaded over $63 million worth of their personally owned stock reaping unfair profits. For more information, contact: Corey D. Holzer, Esq. (cholzer@holzerlaw.com) Michael I. Fistel, Jr., Esq. (mfistel@holzerlaw.com) Marshall P. Dees, Esq. (mdees@holzerlaw.com) Holzer Holzer & Fistel, LLC 1117 Perimeter Center West, Suite E-107 Atlanta, GA 30338 Phone: (888) 508-6832 (toll-free) SHORETEL INC: Milberg LLP Files Derivative Lawsuit in California ---------------------------------------------------------------- The law firm of Milberg LLP filed a derivative lawsuit with the Superior Court of California, County of Santa Clara, against certain directors and officers of ShoreTel, Inc. (Nasdaq: SHOR) and that it is investigating facts regarding ShoreTel. The plaintiff is suing derivatively on behalf of ShoreTel. The Complaint alleges that defendants breached their fiduciary duties to ShoreTel by causing and failing to prevent the dissemination of false and misleading statements about ShoreTel's financial condition and earnings forecasts, thereby subjecting the Company to potential liabilities and penalties and exposing it to risk of substantial loss of its money and assets and other potential harm. The Complaint alleges that the public statements made about ShoreTel were false and misleading because ShoreTel was in fact experiencing a decline in new customer sales and attempted to conceal the decline by, among other things, "stuffing" the distribution channels with excess inventory. The Complaint alleges that as a result of defendants' breaches of fiduciary duties, the Company's reputation and credibility has been damaged, and at least one class action has been commenced against ShoreTel alleging fraud and violations of federal securities laws. For more information, contact: Jeff S. Westerman, Esq. Elizabeth P. Lin, Esq. Milberg LLP One California Plaza 300 South Grand Avenue, Suite 3900 Los Angeles, California 90071 Phone number: (800) 320-5081 e-mail: contactus@milberg.com/ Web site: http://www.milberg.com SOUTH CAROLINA ELECTRIC: No Certification Yet for "Gressette" ------------------------------------------------------------- The Circuit Court of Common Pleas for the Ninth Judicial Circuit has yet to rule on a motion seeking for the certification of a wider class in a rights-of-way lawsuit filed against South Carolina Electric & Gas Co. and SCANA Corp., according to South Carolina Electric's Feb. 29, 2008 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2007. In May 2004, SCANA, and SCE&G were served with a purported class action filed by Douglas E. Gressette, individually and on behalf of other persons similarly situated against the companies. The case was filed with South Carolina's Circuit Court of Common Pleas for the Ninth Judicial Circuit. The plaintiff alleges that SCANA and SCE&G made improper use of certain easements and rights-of-way by allowing fiber optic communication lines and wireless communication equipment to transmit communications other than SCANA's and SCE&G's electricity-related internal communications. The plaintiff asserted causes of action for unjust enrichment, trespass, injunction and declaratory judgment. The plaintiff did not assert a specific dollar amount for the claims. SCANA and SCE&G believe their actions are consistent with governing law and the applicable documents granting easements and rights-of-way. The Circuit Court granted SCANA's and SCE&G's motion to dismiss and issued an order dismissing the case in June 2005. The plaintiff appealed to the South Carolina Supreme Court. The Supreme Court overruled the Circuit Court in October 2006 and returned the case to the Circuit Court for further consideration. In July 2007, the Circuit Court issued a ruling that limits the plaintiff's purported class to owners of easements situated in Charleston County, South Carolina. The plaintiff appealed this ruling to the South Carolina Court of Appeals. The court has dismissed the appeal, determining that the Circuit Court ruling is not immediately appealable. The plaintiff's motion for class certification was recently heard, and correspondence from the Circuit Court indicates the judge's intention to certify the class. There has been no formal order and the class remains limited to easements in Charleston County. South Carolina Electric & Gas Co. -- http://www.sceg.com/-- generates and sells electricity to retail and wholesale customers, and purchases, sells and transports natural gas to retail customers. STARBUCKS CORP: Nichols Kaster Files Tip-Pooling Suit in Minn. -------------------------------------------------------------- On March 27, 2008, Sandra Delsing -- a former employee at the Cottage Grove Starbucks -- filed a lawsuit against the company with the Minnesota State Court in Washington County alleging that the coffee retailer illegally required its baristas to share tips with shift managers, South Washington County Bulletin reports. According to Nichols Kaster & Anderson, the law firm representing Ms. Delsing, the lawsuit alleges that Starbucks violated Minnesota Statute Section 177.24 by establishing an illegal tip pool that denied employees of the full amount of gratuities that Starbucks' patrons intended for the employees to receive. The statute states that any gratuities received by an employee are the sole property of the employee. The plaintiff's attorney, E. Michelle Drake, Esq., explained, "The lawsuit alleges that Starbucks required employees to share tips with one another. Minnesota law forbids employers from telling employees how to share their tip money and says that any decisions about sharing tips are up to the employees, not the company. One of the reasons the law exists is to prevent companies like Starbucks from using one employee's tips to subsidize another employee's wages. We hope to recover the tips that rightfully belong to the employees." This case is similar to a case that was recently litigated in California and resulted in a verdict in excess of $100 million for the California Plaintiffs. Ms. Delsing is asking that the lawsuit be made class action, similar to a recent California case against Starbucks. The class would include all non-managerial Starbucks employees who received tips and were forced to pool and divide them, according to the Complaint. A similar lawsuit has also been filed in Massachusetts. For more information, contact: Paul J. Lukas, Esq. E. Michelle Drake, Esq. Nichols Kaster & Anderson, PLLP 4600 IDS Center, 80 South Eighth Street Minneapolis, Minnesota 55402 Phone: (612) 256-3200 (612) 256-3249. STARBUCKS CORP: Mischaracterized in Recent Lawsuits Over Tips ------------------------------------------------------------- Starbucks Coffee Co. released a statement in reaction to the recent lawsuits filed against it over customer tips. As reported in the Class Action Reporter, Mar. 27, 2008, a former barista at a Starbucks Coffee store in Chestnut Hill filed a lawsuit class action suit on March 25 against the coffee chain with the Suffolk Superior Court over customer tips. The CAR report said that Hernan Matamoros accuses Starbucks of shortchanging him on tips for serving customers. He says that the coffee giant routinely violated Massachusetts law by requiring baristas to share money left in tip jars with shift supervisors, who perform similar duties but have managerial responsibilities. As reported in the CAR on March 25, 2008, San Diego Superior Court Judge Patricia Cowett issued an injunction preventing Starbucks' shift supervisors from sharing in future tips. The ruling is in connection with a lawsuit filed on Oct. 8, 2004, by a former hourly employee of the company, who alleges that it violated the California Labor Code by allowing shift supervisors to receive tips. Some of the more than 120,000 current and former baristas affected by the California suit could each receive more than $10,000, Boston Globe cited Terry Chapko, Esq., a lawyer from suburban San Diego who represented the plaintiff, as saying. Starbucks had labeled the ruling as "an extreme example of an abuse of the class-action procedures in California courts" and said it would appeal. Starbucks is also facing a second class-action suit at the company's headquarters in Seattle. In reaction to the suits, Starbucks released the following statement on March 27: "Recent litigation has resulted in misunderstanding among some of our customers and partners (employees) about tipping in Starbucks stores. Our tip policy allows hourly partners (baristas and shift supervisors) to receive their fair share of customer tips. Shift supervisors are not managers and have no managerial authority. Even the California Court recognized this distinction. Both baristas and shift supervisors are hourly store partners who serve our customers and provide the Starbucks Experience in our stores. We do not believe customers differentiate between them, because they provide the same customer service. As a result, they pool their tips when customers express their gratitude for superior service. In contrast, store managers and assistant store managers perform managerial duties, and therefore do not share in the tips given by customers. That is why we disagree so strongly with the California Superior Court's recent ruling that would not allow shift supervisors to receive what is rightfully theirs. We believe the California Court's decision is not only contrary to the law, but also fundamentally unfair and beyond all common sense and reason. Unfortunately, copy-cat lawsuits have been filed. We intend to vigorously fight all such unjust lawsuits. To further clarify and contrary to some media reports, Starbucks has not taken money from any of its partners, nor is there money to be refunded or returned from Starbucks. Consistent with what is one of the most widely accepted practices in the service industry, this tip money goes directly from customers to the partners who provide them with superior service. For more than 35 years, Starbucks has been committed to treating its partners with the highest respect and dignity. As part of this commitment, Starbucks provides benefits unrivaled by many other companies -- including healthcare for eligible full and part-time partners and stock option programs. All eligible store employees are included in these programs. We pledge to continue to provide a great workplace for our more than 170,000 partners around the world." Starbucks Corp. -- http://www.starbucks.com/-- purchases and roasts whole bean coffees and sells them, along with fresh, rich-brewed coffees, Italian-style espresso beverages, cold blended beverages, various complementary food items, coffee- related accessories and equipment, a selection of premium teas and a line of compact discs, primarily through Company-operated retail stores. STATE STREET: Proposed Amended Complaint Filed in NY ERISA Suit --------------------------------------------------------------- A group of retirement and benefit plans have filed a motion with the United States District Court, Southern District of New York, for leave to file a Consolidated Amended Class Action Complaint against defendant State Street Bank and Trust Co. alleging that State Street breached its fiduciary duties under the federal Employee Retirement Income and Security Act from January 1, 2007, through December 31, 2007, to the plans by causing State Street's purportedly conservative fixed income bond funds to make imprudent investments in high-risk and highly leveraged financial instruments tied to, among other things, volatile asset-backed and subprime mortgage-backed securities. The State Street bond funds at issue include the: -- Enhanced Intermediate Bond Fund; -- Intermediate Bond Fund for Employee Trusts; -- Daily Bond Market Fund, the Daily Corporate/Government Credit Bond Fund; -- SSgA Government Credit Bond Non-Lending Fund; -- SSgA Yield Plus Fund; -- Total Bond Market Fund; -- SSgA Bond Market Fund; -- Bond Market Non-Lending Fund; -- Limited Duration Bond Fund; -- SSgA Intermediate Bond CTF Fund; -- SSgA Intermediate Bond NL Fund, and; -- the Short Term Bond Fund. The class action plaintiffs seek a recovery for all ERISA plans which invested in these funds and suffered losses. Three class actions have already been consolidated under the caption "In re State Street Bank and Trust Co. ERISA Litigation, No. 07 Civ. 8488 (S.D.N.Y.) (RJH)." The court-appointed lead plaintiffs in the action, consisting of fiduciaries of the Unisystems, Inc., Employees' Profit Sharing Plan, the Andover Companies Employees Savings & Profit Sharing Plan and the Nashua Corporation Retirement Plan, allege that investors in various State Street bond funds saw the performance of their investments in the Bond Funds plummet in 2007, with the performance of some of the Bond Funds lagging their benchmark indices by as much as 30%. State Street has publicly acknowledged that it has "received inquiries from regulatory authorities" regarding its fixed- income strategies, and that it has set aside approximately $625 million in reserves for "legal exposure and related costs in connection with [its] fixed income strategies." In January 2008, State Street also announced that the President and CEO of State Street Global Advisor, William W. Hunt, had resigned, and six senior members of SSgA's "fixed income team" have reportedly been terminated. Discovery in the consolidated class action is presently underway. ERISA plans, ERISA-governed plan participants or their counsel who have questions concerning the Bond Funds, the pending class action law suit against State Street or the proposed Consolidated Amended Complaint may contact: William C. Fredericks, Esq. (wfredericks@blbglaw.com) Jerald D. Bien-Willner, Esq. (jbien-willner@blbglaw.com) Berstein Litowitz Berger & Grossman LLP 1285 Avenue of the Americas New York, New York 10019 Telephone: (212) 554-1400 Derek W. Loeser, Esq. (dloeser@kellerrohrback.com) Karin B. Swope (kswope@kellerrohrback.com) Keller Rohrback LLP 1201 Third Avenue, Suite 3200 Seattle, Washington 98101 Telephone: (206) 623-1900 - and - Jeffrey C. Block, Esq. (jblock@bermanesq.com) Patrick T. Egan (pegan@bermanesq.com) Berman DeValerio Pease Tabacco Burt & Pucillo One Liberty Square Boston, Massachusetts 02109 Telephone: (617) 542-8300 SYNTAX-BRILLIAN: Lead Plaintiff Appointment Deadline is April 7 --------------------------------------------------------------- Zwerling, Schachter & Zwerling, LLP, reminds investors of Syntax-Brillian Corp. of the April 7, 2008 lead plaintiff appointment deadline for the class action filed with the United States District Court for District of Arizona on behalf of all persons and entities who purchased the common stock of Syntax- Brillian Corp. (NASD: BRLC) pursuant to a public offering of approximately 25.6 million shares at $5.75 per share. On May 24, 2007, Zwerling Schachter filed the class action suit alleging that defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933. Specifically, the complaint alleges that the registration statement and prospectus filed with the SEC in connection with the May 24, 2007 public offering contained materially false and misleading statements, or omitted to state other facts necessary to make the statements made not misleading, concerning Syntax-Brillian's revenue growth, profitability, and its business in China (Class Action Reporter, Feb. 12, 2008). On September 12, 2007, Syntax-Brillian announced that the results for its first quarter 2008, ending on September 30, 2007, would be significantly below expectations. The Company projected first quarter 2008 revenues of between $170-180 million, when analysts were expecting the Company to report revenues of $254 million, a shortfall of more than 25%. On November 11, 2007, the Company announced that revenues for the quarter ended September 30, 2007, was $150.6 million, a decline of 26.6% from the previous quarter, and that revenue from China in the quarter was $14.6 million, compared with $96.8 million in the prior quarter, a decline of approximately 85%. The Complaint alleges that Syntax-Brillian failed to disclose in the registration statement and prospectus that while the Company shipped hundreds of thousands of LCD televisions to its sole distributor in China during the Class Period, and recorded hundreds of millions of dollars in revenue in connection with these shipments, the end-user demand for the Company's LCD televisions in China was much weaker than what investors were led to believe. For more information, contact: Kevin McGee, Esq. (kmcgee@zsz.com) Willy Gonzalez, Esq. (wgonzalez@zsz.com) Zwerling, Schachter & Zwerling, LLP 41 Madison Avenue New York, NY 10010 Tel.: 800-721-3900 Tel.: 212-223-3900 Fax: 212-371-5969 Web site: http://www.zsz.com/ VALASSIS COMMS: Seeks Dismissal of Conn. Securities Fraud Suit -------------------------------------------------------------- Valassis Communications, Inc., is seeking for the dismissal of a consolidated securities fraud litigation filed with the U.S. District Court for the District of Connecticut, according to the company's Feb. 29, 2008 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2007. Upon the company's completion of the acquisition of ADVO, it assumed responsibility for ADVO's pending securities class actions. In September 2006, three securities class actions were filed: 1. "Robert Kelleher v. ADVO, Inc., et al.," 2. "Jorge Cornet v. ADVO, Inc., et al.," 3. "Richard L. Field v. ADVO, Inc., et al.," The suits were filed against ADVO and certain of its officers with the U.S. District Court for the District of Connecticut by certain ADVO shareholders seeking to certify a class of all persons who purchased ADVO stock between July 6, 2006, and Aug. 30, 2006. These complaints generally allege ADVO violated federal securities law by making a series of materially false and misleading statements concerning ADVO's business and financial results in connection with the proposed merger with Valassis and, as a result, the price of ADVO's stock was allegedly inflated. On Dec. 12, 2006, the Kelleher plaintiffs filed a Motion to Partially Lift Discovery Stay, in response to which defendants filed opposition on Jan. 16, 2007. The presiding judge denied the plaintiff's motion to lift the stay on discovery. In addition, the court ordered the matters consolidated under a single action entitled, "Robert Kelleher et al. v. ADVO, Inc., et al., Case No. 3:06CV01422(AVC)." A revised, consolidated complaint was filed by the plaintiffs on June 8, 2007. On Aug. 24, 2007, the defendants filed a Motion to Dismiss the plaintiff's complaint. The plaintiff filed a Brief in Opposition to the defendants' motion on Oct. 10, 2007, and the defendants' responsive pleading was filed Nov. 13, 2007. The suit is "Robert Kelleher et al. v. ADVO, Inc., et al., Case No. 3:06CV01422(AVC)," filed with the U.S. District Court for the District of Connecticut, Judge Alfred V. Covello presiding. Representing the plaintiffs are: Jennifer L. Gmitro, Esq. (JGmitro@csgrr.com) Coughlin Stoia Geller Rudman & Robbins 655 West Broadway, Suite 1900 San Diego, CA 92101 Phone: 619-231-1058 Fax: 619-231-7243 - and - Ari J. Hoffman, Esq. (ahoffman@cohenandwolf.com) Cohen & Wolf, P.C. 1115 Broad St., Po Box 1821 Bridgeport, CT 06604 Phone: 203-368-0211 Fax: 203-394-9901 Representing the defendants are: Sharleen Joy Davis, Esq. (sharleen.davis@klgates.com) Kirkpatrick & Lockhart Preston Gates Ellis, LLP State Street Financial Center One Lincoln Street Boston, MA 02111 Phone: 617-261-3255 Fax: 617-261-3175 - and - Shawn M. Harpen, Esq. (sharpen@mwe.com) McDermott Will & Emery, LLP 18191 Von Karman Avenue Suite 500 Irvine, CA 92612 Phone: 949-757-6061 Fax: 949-851-9348 (fax) XEROX CORP: Settles Accounting Fraud Lawsuits for $670 Million -------------------------------------------------------------- Xerox Corp. disclosed on March 27, 2008, that it has agreed to pay $670 million to settle several lawsuits that alleged accounting fraud at the company, DemocratandChronicle.com reports. The report recounts that the fraud allegations date way back to the late 1990s and concern the company's inflating its pre-tax earnings by about $1.4 billion between 1997 and 2000. This matter led to Xerox paying a then-record $10-million fine to the Securities and Exchange Commission in April 2002. The following year, Xerox covered $19.4 million of the SEC penalties levied against six former top company executives, including former Xerox chairman, Paul Allaire, and former CEO, G. Richard Thoman. In its announcement, Xerox said it had received preliminary court approval to settle the largest of the consolidated class- action lawsuits brought by shareholders in relation with the accounting scandal. DemocratandChronicle.com notes that, according to Xerox, the settlement will mean a $491-million charge against first-quarter earnings. The balance of the $670-million settlement fund apparently would come from the company's insurance coverage. CEO Anne Mulcahy said that Xerox is financially strong enough to absorb the charge and settle because it wanted to cut short the expense and time of continuing litigation. Under the settlement, Xerox admitted no wrongdoing. New Securities Fraud Cases CITIGROUP INC: Girard Gibbs Files Securities Fraud Suit in N.Y. --------------------------------------------------------------- The law firm of Girard Gibbs LLP filed a class action lawsuit with the United States District Court for the Southern District of New York on behalf of persons who purchased Auction Rate Securities from Citigroup Inc., Citigroup Global Markets, Inc. and Citigroup Smith Barney between March 27, 2003, and February 13, 2008, inclusive and who continued to hold such securities as of February 13, 2008. The class action is brought against Citigroup Inc., Citigroup Global Markets and its wholly-owned broker-dealer subsidiary, Citigroup Smith Barney. The Complaint alleges that Citigroup violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by deceiving investors about the investment characteristics of auction rate securities and the auction market in which these securities traded. Auction rate securities are either municipal or corporate debt securities or preferred stocks which pay interest at rates set at periodic "auctions." Auction rate securities generally have long-term maturities or no maturity dates. The Complaint alleges that, pursuant to uniform sales materials and top-down management directives, Citigroup offered and sold auction rate securities to the public as highly liquid cash- management vehicles and as suitable alternatives to money market mutual funds. According to the Complaint, holders of auction rate securities sold by Citigroup and other broker-dealers have been unable to liquidate their positions in these securities following the decision on February 13, 2008, of all major broker-dealers including Citigroup to "withdraw their support" for the periodic auctions at which the interest rates paid on auction rates securities are set. The Complaint alleges that Citigroup failed to disclose the following material facts about the auction rate securities it sold to the class: (1) the auction rate securities were not cash alternatives, like money market funds, but were instead, complex, long-term financial instruments with 30 year maturity dates, or longer; (2) the auction rate securities were only liquid at the time of sale because Citigroup and other broker-dealers were artificially supporting and manipulating the auction rate market to maintain the appearance of liquidity and stability; (3) Citigroup and other broker-dealers routinely intervened in auctions for their own benefit, to set rates and prevent all-hold auctions and failed auctions; and (4) Citigroup continued to market auction rate securities as liquid investments after it had determined that it and other broker dealers were likely to withdraw their support for the periodic auctions and that a "freeze" of the market for auction rate securities would result. Interested parties may move the court no later than May 26, 2008, for lead plaintiff appointment. For more information, contact: Daniel C. Girard, Esq. Jonathan K. Levine, Esq. Aaron M. Sheanin, Esq. Girard Gibbs LLP 601 California Street, Suite 1400 San Francisco, CA 94108 Phone: 415-981-4800 415-981-4800 415-981-4800 HUMANA INC: Dreier Announces Securities Fraud Suit Filing in KY --------------------------------------------------------------- Dreier LLP announced that a class action lawsuit was commenced with the U.S. District Court for the Western District of Kentucky on behalf of investors who purchased Humana, Inc. during the period from February 4, 2008, through March 11, 2008, inclusive. Humana provides various health and supplemental benefit plans for employer groups, government benefit programs, and individuals in the United States. The complaint alleges that Humana and two of the Company's senior officers violated the Securities Exchange Act of 1934. The complaint alleges, among other things, that during the Class Period, the defendants misled investors by making materially false and misleading statements concerning Humana's anticipated earnings per share for the first fiscal quarter of 2008 and for the full year of 2008. Specifically, the complaint alleges that Defendants' statements were misleading because they failed to disclose that: (i) the Company was unable to properly calculate the prescription drug costs of its newly acquired members; and (ii) the Company's costs associated with its prescription drug plans had dramatically increased. In addition, as a result of the foregoing, Defendants' statements concerning the Company's anticipated EPS for the first quarter of 2008 and full year 2008 were made without a reasonable basis. On March 12, 2008, prior to the opening of the market, Defendants shocked investors by announcing that the Company would be revising its earnings guidance, which it had given to the market less than five weeks earlier. In response to this revelation, the price of Humana common stock dropped $6.50 to close at $40.88 per share. Interested parties may move the court no later than May 26, 2008 for lead plaintiff appointment. Dreier LLP on the net: http://www.dreierllp.com MORGAN STANLEY: Levi & Korsinsky Files Auction Rates Suit in NY --------------------------------------------------------------- Levi & Korsinsky, LLP filed a class action lawsuit with the United States District Court for the Southern District of New York on behalf of all those who purchased Auction Rate Securities from Morgan Stanley & Co., Inc., between March 25, 2003, and February 13, 2008, inclusive, and who continued to hold such securities as of February 13, 2008, to recover damages caused by Morgan Stanley & Co. Inc.'s violation of the federal securities laws. The Complaint alleges that Morgan Stanley violated the securities laws by deceiving investors about the investment characteristics of Auction Rate Securities and the auction market in which these securities traded. Auction Rate Securities are either municipal or corporate debt securities or preferred stocks which pay interest at rates set at periodic "auctions." Auction Rate Securities generally have long-term maturities or no maturity dates. The Complaint alleges that, pursuant to uniform sales materials and top-down management directives, Morgan Stanley offered and sold Auction Rate Securities to the public as highly liquid cash-management vehicles and as suitable alternatives to money market mutual funds. According to the Complaint, those who now hold Auction Rate Securities sold by Morgan Stanley cannot liquidate their positions since the auction market for these securities has collapsed. Interested parties may move the court no later than May 27, 2008, for lead plaintiff appointment. For more information, contact: Eduard Korsinsky, Esq. Juan E. Monteverde, Esq. Levi & Korsinsky, LLP 39 Broadway, Suite 1601 New York, NY 10006 Phone: (212) 363-7500 Fax: (212) 363-7171 e-mail: info@zlk.com Web site: http://www.zlk.com NEUROMETRIX INC: Schiffrin Barroway Files Securities Fraud Suit --------------------------------------------------------------- The law firm of Schiffrin Barroway Topaz & Kessler, LLP filed a securities class action with the United States District Court for the District of Massachusetts, on behalf of all purchasers of securities of NeuroMetrix Inc. between October 27, 2005, and March 6, 2007, inclusive. The Complaint charges NeuroMetrix and certain of its officers and directors with violations of the Securities Exchange Act of 1934. NeuroMetrix designs, develops and markets medical device products that aid physicians in the diagnosis and treatment of diseases of the nervous system and neurovascular disorders, as well as provide regional anesthesia and pain control. In particular, The NC-stat System, the Company's neuropathy diagnostic system, is comprised of disposable single-use biosensors which are placed on the patient's body to perform nerve conduction studies. The Complaint alleges that, throughout the Class Period, defendants failed to disclose material adverse facts about the Company's financial well-being, business relationships, and prospects. Specifically, defendants failed to disclose or indicate the following: (1) that health insurers were routinely and increasingly denying reimbursement, and raising payment issues, for procedures using the NC-stat System; (2) that field practitioners had raised serious concerns about the NC-stat System's efficacy; (3) that the Company had not applied for its own insurance billing code, but instead had instructed doctors to use billing codes for competing needle procedures; (4) that the Company was giving kickbacks to doctors by providing free sensors in exchange for referring other doctors to the NC-stat System; (5) that the Company lacked adequate internal and financial controls; and (6) that the Company's financial statements were materially false and misleading at all relevant times. On March 6, 2007, investors were shocked when The Boston Globe reported that federal prosecutors were investigating NeuroMetrix regarding possible fraud and for kickbacks the Company gave to doctors who recommended NeuroMetrix's product. Additionally, the article disclosed that the Company had not sought new billing codes for its NC-stat System, but rather had instructed doctors to use codes reserved for a different, more invasive procedure. On this news, the Company's shares fell $0.84 per share, or 7.62 percent, to close on March 6, 2007 at $10.18 per share, on unusually heavy trading volume. The Company's shares continued to decline the following day, falling an additional $0.73, or 7.17 percent, to close on March 7, 2007, at $9.45. The Boston Globe article was the first in a series of shocking news articles which had disastrous effects on the Company's shares. Also, revelations by the Company had a detrimental impact on its shares. For example, on March 28, 2007, the Company announced that its financial statements for fiscal years 2002 through 2005, as well as the first three quarters of 2006 could no longer be relied upon, as it had failed to collect and remit sales taxes from customers in a number of states. As a result, the Company was forced to record sales tax liability. Additionally, the Company disclosed that a material weakness existed in its internal controls over financial reporting. Then, on February 11, 2008, TheStreet.com reported that a meeting of the American Medical Association would likely result in minimal reimbursement to healthcare providers who used the Company's NC-stat System, and that the system would not be eligible for reimbursement under Medicare or Medicaid. The next day, the Company reported on these events, and reported that its revenues for the fourth quarter of 2007 were down from the previous year and previous quarter. The Company stated that it expected to continue to face "significant challenges" with regards to reimbursement of tests performed with the NC-stat System, and that this would continue to adversely impact their financial results. On this news, the Company's shares fell $5.22 per share, or 49.15 percent, to close on February 11, 2008, at $5.40 per share, on unusually heavy trading volume. The next day, the Company's shares fell an additional $1.20 per share, or 22.22 percent, to close on February 12, 2008, at $4.20 per share, on unusually heavy trading volume. The plaintiff seeks to recover damages on behalf of class members. For more information, contact: Darren J. Check, Esq. (dcheck@sbtklaw.com) Richard A. Maniskas, Esq. (rmaniskas@sbtklaw.com) Schiffrin Barroway Topaz & Kessler, LLP 280 King of Prussia Road Radnor, PA 19087 Phone: 1-888-299-7706 (toll free) 1-610-667-7706 e-mail: info@sbtklaw.com/ UBS AG: Levi & Korsinsky Files NY Auction Rate Securities Suit -------------------------------------------------------------- Levi & Korsinsky, LLP filed a class action lawsuit on behalf of all those who purchased Auction Rate Securities from UBS AG between March 21, 2003, and February 13, 2008, inclusive and who continued to hold such securities as of February 13, 2008 to recover damages caused by UBS AG's violation of the federal securities laws. The Complaint alleges that UBS violated the securities laws by deceiving investors about the investment characteristics of Auction Rate Securities and the auction market in which these securities traded. Auction Rate Securities are either municipal or corporate debt securities or preferred stocks which pay interest at rates set at periodic "auctions." Auction Rate Securities generally have long-term maturities or no maturity dates. The Complaint alleges that, pursuant to uniform sales materials and top-down management directives, UBS offered and sold Auction Rate Securities to the public as highly liquid cash-management vehicles and as suitable alternatives to money market mutual funds. According to the Complaint, those who now hold Auction Rate Securities sold by UBS cannot liquidate their positions since the auction market for these securities has collapsed. Interested parties may move the court no later than May 20, 2008, for lead plaintiff appointment. For more information, contact: Eduard Korsinsky, Esq. Juan E. Monteverde, Esq. Levi & Korsinsky, LLP 39 Broadway, Suite 1601 New York, NY 10006 Phone: (212) 363-7500 Fax: (212) 363-7171 e-mail: info@zlk.com Web site: http://www.zlk.com ********* A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the Class Action Reporter. Submissions via e-mail to carconf@beard.com are encouraged. Each Friday's edition of the CAR includes a section featuring news on asbestos-related litigation and profiles of target asbestos defendants that, according to independent research, collectively face billions of dollars in asbestos-related liabilities. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Glenn Ruel Senorin, Janice Mendoza, Freya Natasha Dy, and Peter Chapman, Editors. Copyright 2008. 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. 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