/raid1/www/Hosts/bankrupt/CAR_Public/990525.MBX
C L A S S A C T I O N R E P O R T E R
Tuesday, May 25, 1999, Vol. 1, No. 78
Headlines
AMERICAN FAMILY: Illinois Agent Fights Commission Cuts
CANDIE'S INC.: Glancy Firm Files Complaint in New York
CENTRAL & SW CORP: Updates Central Power & Light Litigation
COLEMAN CO.: Agrees to Settle Minority Shareholders' Complaint
COMMAND SYSTEMS: Initial Settlement Reached in IPO Litigation
IRIDIUM LLC: Catalogs District of Columbia Securities Suits
MONROE COUNTY, FL: Home Owners Challenge Short-Term Rental Ban
MONY GROUP: Plaintiffs Appeal Dismissal of Deceptive Sales Case
NATIONAL AUTO: Peckerman and Rooks Lawsuits Consolidated
OHIO: Suspected Dealer Wants Police to Stop Confiscating Cash
PDG ENVIRONMENTAL: Court Grants Final Approval to Settlement
PROVIDIAN FINANCIAL: Girard & Green File Complaint in California
STAUFFER CHEMICAL: Judge Rejects Neighbors Class Complaint
WELLCARE MANAGEMENT: Settles New York Shareholder Litigation
WISCONSIN: Out-of-State Landowners Say State Forest Fees Unfair
*********
AMERICAN FAMILY: Illinois Agent Fights Commission Cuts
------------------------------------------------------
An American Family Insurance agent in Illinois filed a lawsuit
in Waukesha County Circuit Court this week, claiming he and
other agents have lost millions of dollars in commissions since
the company cut commission levels in 1996. According to the
story in the Wisconsin State Journal, Harry "Joe" Wesolowski, of
LaGrange, Ill., says he missed out on as much as $20,000 in
commissions on health insurance policies alone, in the first
year the reduction took effect. "I've just had it," Wesolowski
said in telephone interview. "It's gotten to the point where I
can't support my office staff." The total loss, for about 3,000
agents employed by American Family since 1995 or earlier, could
reach $15 million to $30 million, he said.
Wesolowski is the only agent named in the legal action, but the
complaint seeks certification as a class action lawsuit. Other
agents support the suit but are hesitant about coming forward,
he said. "There's a great fear factor," he said. "We fear we
will be terminated."
A longtime agent in Wisconsin and two in Minnesota were
terminated in 1995, and claimed the firings resulted from their
unsuccessful efforts to elect an agent to the company's board of
directors. Wesolowski, a 17-year American Family agent, said he
has no problem with cutting commissions for new business but
existing policies should not have been part of the reduction.
"General contract law would be violated if they could change all
commissions," he said.
Wesolowski filed the suit Tuesday in Wisconsin because American
Family has its headquarters in Madison. American Family
spokeswoman Judy Lowell declined to comment on the lawsuit,
saying the company's lawyers have not had a chance to review the
document. But she said the company reduced commissions because
of increasing competition in the industry, from banks and the
Internet. "People are able to buy insurance directly, without an
agent," Lowell said. "American Family remains committed to our
family of independent contractor agents." Commissions are being
pared over the course of 10 years to reduce the total commission
rate to 10 percent from 11 percent, Lowell said. At the same
time, the company provided an allowance for company brochures,
more money for advertising and computer upgrades.
But Wesolowski said commissions on health insurance premiums
were slashed from 10 percent to 4 percent all at once. That was
a blow for agents in Illinois, where 65 percent of the company's
health insurance policies are sold, he said.
The company has faced other legal troubles recently. American
Family agreed to a $77 million settlement in March to two class
action lawsuits claiming deceptive life insurance sales
practices. In 1995, the company reached a $14.5 million
settlement in a redlining case, in which it was accused of
refusing to insure homes in Milwaukee's low-income
neighborhoods. No wrongdoing was admitted in either case.
(Wisconsin State Journal; 05/22/99)
CANDIE'S INC.: Glancy Firm Files Complaint in New York
------------------------------------------------------
A class action was filed by the Law Offices of Lionel Z. Glancy
in the United States District Court for the Southern District of
New York on behalf of all persons who purchased the common stock
of Candie's Inc. (Nasdaq:CAND) between May 28, 1997, through May
12, 1999. The Complaint charges Candie's and certain of its
officers and directors with violations of federal securities
laws by materially misrepresenting Candie's financial results to
the public. The misrepresentations caused Candie's stock price
to be artificially inflated.
On May 12, 1999, Candie's announced that it may restate earnings
for fiscal 1998 and the first three quarters of 1999, due to the
material overstatement of revenue and earnings. Further, the
financial statements could no longer be relied upon, and the
Company would not report fiscal 1999 results within the time
frame allotted by a previously granted file extension. Following
the Candie's disclosure after the close of the market on May 12,
1999, Nasdaq halted trading in Candie's common stock on May 13,
1999.
Candie's is primarily engaged in the design, marketing and
importation of women's and girls' casual and fashion footwear
and handbags under the CANDIES(r) and BONGO(r) trademarks for
distribution to retailers.
For more information, contact Lionel Z. Glancy, Esq. or Michael
Goldberg, Esq. at 888-773-9224 or 310-201-9150 or write to
lglancy@aol.com via email.
CENTRAL & SW CORP: Updates Central Power & Light Litigation
-----------------------------------------------------------
In May 1996, the City of San Juan, Texas filed a class action in
Hidalgo County, Texas District Court on behalf of all cities
served by Central Power and Light Company (CPL) based upon CPL's
alleged underpayment of municipal franchise fees. The
plaintiffs' petition asserts various contract and tort claims
against CPL as well as certain audit rights. The suit seeks
unspecified damages and attorneys' fees. CPL filed a
counterclaim for any overpayment of franchise fees it may have
made as well as its attorneys' fees. CPL also filed a motion to
transfer venue to Nueces County, Texas, and a plea to the
jurisdiction and pleas in abatement asserting that the Texas
Commission has primary jurisdiction over the claims. In May 1996
and December 1996, respectively, the Cities of Pharr, Texas and
San Benito, Texas filed individual suits making claims virtually
identical to those claimed by the City of San Juan. In January
1997, CPL filed an original petition at the Texas Commission
requesting the Texas Commission to declare its jurisdiction over
CPL's collection and payment of municipal franchise fees.
In April 1997, the Texas Commission issued a declaratory order
in which it declined to assert jurisdiction over the claims of
the City of San Juan. CPL appealed the Texas Commission's
decision to the Travis County, Texas District Court, which
affirmed the Texas Commission ruling on February 19, 1999. After
the Texas Commission's order, the Hidalgo County District Court
overruled CPL's plea to the jurisdiction and plea in abatement.
In July 1997, the Hidalgo County District Court entered an order
certifying the case as a class action. CPL appealed this order
to the Corpus Christi Court of Appeals. In February 1998, the
Corpus Christi Court of Appeals affirmed the trial court's order
certifying the class. CPL appealed the Corpus Christi Court of
Appeals ruling to the Texas Supreme Court, which declined to
hear the case. In August 1998, the Hidalgo County District Court
ordered the case to mediation and suspended all proceedings
pending the completion of the mediation. The mediation was
completed in December 1998, but the case was not resolved.
On January 5, 1999, a class notice was mailed to each of the
cities served by CPL. Over 90 of the 128 cities declined to
participate in the lawsuit. However, CPL has pledged that if any
final, non-appealable court decision in the litigation awards a
judgement against CPL for a franchise underpayment, CPL will
extend the principles of that decision, with regard to the
franchise underpayment, to the cities that decline to
participate in the litigation. The plaintiffs have filed a
motion to extend the time for the cities to decide whether to
participate in the lawsuit.
Although CPL believes that it has substantial defenses to the
cities' claims and intends to defend itself against the cities'
claims and pursue its counterclaims vigorously, CPL cannot
predict the outcome of the municipal franchise fee litigation or
its impact on CPL's results of operations or financial position.
COLEMAN CO.: Agrees to Settle Minority Shareholders' Complaint
--------------------------------------------------------------
Coleman, Sunbeam and Camper Acquisition Corp. ("CAC"), a wholly-
owned subsidiary of Sunbeam, have entered into an Agreement and
Plan of Merger, providing that among other things, CAC will be
merged with and into Coleman, with Coleman continuing as the
surviving corporation. Pursuant to the Coleman Merger Agreement,
each share of the Company's common stock issued and outstanding
immediately prior to the effective time of the Coleman Merger
(other than shares held indirectly by Sunbeam and shares, if
any, for which appraisal rights have been exercised) will be
converted into the right to receive (a) 0.5677 of a share of
Sunbeam common stock, with cash paid in lieu of fractional
shares, and (b) $6.44 in cash, without interest. In addition,
unexercised stock options at the time of the Coleman Merger will
be cashed out by Sunbeam at a price per share equal to the
difference between $27.50 per share and the exercise price of
such options.
In October 1998, Coleman and Sunbeam entered into a memorandum
of understanding to settle, subject to court approval, certain
class actions brought by minority shareholders of Coleman
against Coleman, Sunbeam and certain of their current and former
officers and directors challenging the proposed Coleman Merger.
Under the terms of the proposed settlement, if approved by the
court, Sunbeam will issue to the Coleman public shareholders
five-year warrants to purchase up to 4.98 million shares of
Sunbeam common stock at $7.00 per share, subject to certain
anti-dilution provisions. Any shareholder who does not exercise
his appraisal rights under Delaware law will receive the
warrants. These warrants will be issued when the Coleman Merger
is consummated, which is now expected to be during the second
half of 1999.
There can be no assurance that the court will approve the
settlement as proposed, although such approval is not a
condition to the consummation of the Coleman Merger. The
consummation of the Coleman Merger is contingent upon several
conditions including, among other things, the filing of a
registration statement under the Securities Act of 1933 (the
"Securities Act") for the purpose of registering the shares of
Sunbeam common stock to be issued in the Coleman Merger (the
"Registration Statement") and that the Registration Statement
shall have become effective in accordance with the provisions of
the Securities Act.
Sunbeam has filed a preliminary Registration Statement, but is
uncertain when the Registration Statement will become effective.
However, it is anticipated the Coleman Merger will be completed
during the second half of 1999. Upon consummation of the Coleman
Merger, Coleman will become an indirect wholly-owned subsidiary
of Sunbeam.
COMMAND SYSTEMS: Initial Settlement Reached in IPO Litigation
-------------------------------------------------------------
On or about May 6, 1998, plaintiffs Don M. Doney, Jr. and
Madelyn J. McCabe filed a lawsuit in the United States District
Court for the Southern District of New York. The lawsuit was
filed against COMMAND SYSTEMS INC., certain of its officers and
directors (Edward G. Caputo, Stephen L. Willcox, Robert B.
Dixon, John J.C. Herndon, James M. Oates and Joseph D. Sargent)
and the managing underwriters of the initial public offering
(Cowen & Company and Volpe Brown Whelan & Company LLC). On or
about June 22, 1998, the same plaintiffs amended their complaint
in the lawsuit they had filed with the United States District
Court for the Southern District of New York. On or about May 8,
1998, another plaintiff, Chaile B. Steinberg, filed a new
lawsuit against the same defendants in the same court. On or
about June 26, 1998, named plaintiff Michael Makinen, filed a
lawsuit in the same court against the same defendants.
Each of the plaintiffs purports to represent a class consisting
of purchasers of common stock pursuant to the initial public
offering. These lawsuits were consolidated into one lawsuit by
order of the United States District Court for the Southern
District of New York. Consequently, the plaintiffs filed a
consolidated complaint named In Re Command Systems, Inc.
Securities Litigation on September 30, 1998, seeking to
represent a class of purchasers of common stock from March 12,
1998, the dates of the initial public offering, through April
29, 1999. The consolidated complaint alleges that the defendants
violated the Securities Act of 1933 in that the Company failed
to properly register 345,000 shares of common stock that were
sold in the initial public offering, and consequently the
defendants sold unregistered securities to the public, and the
prospectus for the initial public offering contained untrue
statements of material fact and omitted to state other facts
necessary to make the statements made in the prospectus not
misleading with respect to the unregistered shares, the
Company's business strategy and other matters.
The plaintiffs seek rescission of the sales of the shares in the
initial public offering and unspecified damages, including
rescissionary damages, interest, costs and fees. Such
shareholder litigation, if concluded in favor of the plaintiffs,
could have a material adverse effect on the Company's business,
financial condition and results of operations.
On December 7, 1998, the Company and the other defendants
entered into a memorandum of understanding to settle the
dispute, but a memorandum of understanding is not a definitive
settlement agreement. A definitive settlement agreement
resulting from the memorandum will also require court approval.
By the terms of the memorandum, the parties have agreed in
principle to a total payment from the Company to the plaintiffs
of $5.75 million in cash plus accrued interest, minus approved
attorney's fees and related expenses. The $5.75 million will
accumulate interest as of the date of the preliminary court
approval of a definitive settlement agreement entered into among
the parties based on the memorandum, but will not be payable
until the court approves the settlement and such approval is
final. In addition, the Company may be responsible for certain
legal fees and related expenses incurred in connection with the
litigation. The Company recognized a charge to operations of
$1.8 million in the fourth quarter of 1998 for costs of the
settlement and related expenses. There can be no assurance,
however, that a definitive settlement agreement will be reached,
or that, if reached, it will be approved by the court.
Of the $5.75 million to be deposited in a settlement fund by the
Company, the Company will be reimbursed for all but $1.65
million. This reimbursement will come in part from the Company's
insurance carrier and the rest pursuant to the indemnification
agreement with the Company's former counsel in the initial
public offering. In addition, the Company may be responsible for
certain legal fees and related expenses incurred in connection
with the litigation. The Company cannot be certain, however,
that a definitive settlement agreement will be reached, or that
if it is reached, that the court will approve it.
In the definitive settlement agreement, the members of the class
represented by plaintiffs will give up their right to assert
individual claims against the Company or its underwriters, based
on their purchase of the Company's common stock in the initial
public offering and in the open market during the period from
March 12, 1998 through April 29, 1998. In return for this
concession, class members will be entitled to share pro rata in
the $5.75 million cash settlement fund, plus interest, minus
approved attorneys' fees and related expenses, upon the court's
final approval of the settlement. Any class member can decide
not to participate in the settlement, and choose to pursue his
or her individual claim against the Company or the other
defendants, by filling out and returning an "opt-out" form which
will be mailed to all class members following the court's
preliminary approval of the settlement.
The memorandum of understanding provides for a pro rata
distribution of the cash settlement fund, plus interest, minus
approved attorneys' fees and related expenses, to purchasers of
the Company's common stock in the period from March 12 through
April 29, 1998, inclusive. Without knowing the number of
claimants and the amount of attorneys' fees and expenses to be
approved by the court, the Company cannot estimate the net
amount actually payable on a per share basis.
IRIDIUM LLC: Catalogs District of Columbia Securities Suits
-----------------------------------------------------------
Starting in late April 1999 and continuing in May 1999, various
purported securities class action lawsuits were filed against
IWCL, Iridium, Motorola Inc. and several former officers and
directors of IWCL and Iridium in the United States District
Court for the District of Columbia.
The complaints in these lawsuits purport to be class actions on
behalf of the purchasers of securities of IWCL and Iridium
during the period September 9, 1998 through March 29, 1999. The
complaints generally allege that defendants violated Section
10(b) of the Securities Exchange Act of 1934 (the "Exchange
Act") and Rule 10b-5 thereunder by making material misstatements
and by failing to disclose certain allegedly material
information regarding the commercialization of the Iridium
System. The complaints also assert claims against individual
defendants alleging violations of Section 20(a) of the Exchange
Act. The complaints also allege that, in violation of Section
20A of the Exchange Act, certain of the individual defendants
disposed of IWCL's class A common stock while the price of that
stock was artificially inflated by allegedly false and
misleading statements and omissions. The complaints seek
unspecified damages, attorneys' and experts' fees and costs, and
such other relief as the court deems proper.
As of May 6, 1999, the purported class actions commenced in the
United States District Court for the District of Columbia were:
Parker Freeland 99CV01002 4/22/99
Teck Young 99CV01017 4/26/99
Richard Ackerman 99CV01036 4/27/99
Brian Kleinman 99CV01053 4/28/99
Ramona Anne Marshall 99CV01058 4/29/99
Kenneth F. Turner 99CV01096 5/4/99
Jeffrey S. Hargrove 99CV01117 5/6/99
The company anticipates that additional class action complaints
containing similar allegations may be filed in the future.
MONROE COUNTY, FL: Home Owners Challenge Short-Term Rental Ban
--------------------------------------------------------------
The United Press International reports that a suit was filed in
federal court challenging the constitutionality of the ban on
short-term rentals of houses in Monroe County, Florida. The suit
says the ban infringes on the constitutional rights of 4,000
property owners in the Keys by taking away their livelihood.
The suit was filed for three homeowners but is intended for
class action status. It asks for $100 million, they amount they
say home owners would have earned if the ban had not been in
effect this year. The commission passed the bills after years of
complaints by homeowners that they were suddenly forced to live
next door to mini-hotels in residential neighborhoods. (UPI;
05/22/99)
MONY GROUP: Plaintiffs Appeal Dismissal of Deceptive Sales Case
---------------------------------------------------------------
In late 1995 and thereafter, a number of purported class actions
were commenced in various state and federal courts against MONY
GROUP INC alleging that the Company engaged in deceptive sales
practices in connection with the sale of whole and/or universal
life insurance policies from the early 1980s to the mid 1990s.
Although the claims asserted in each case are not identical,
they seek substantially the same relief under essentially the
same theories of recovery (i.e. breach of contract, fraud,
negligent misrepresentation, negligent supervision and training,
breach of fiduciary duty, unjust enrichment and/or violation of
state insurance and/or deceptive business practice laws).
Plaintiffs in these cases (including the Goshen case discussed
below) seek primary equitable relief (e.g. reformation, specific
performance, mandatory injunctive relief prohibiting the Company
from canceling policies for failure to make required premium
payments, imposition of a constructive trust and/or creation of
a claims resolution facility to adjudicate any individual issues
remaining after resolution of all class-wide issues) as opposed
to compensatory damages, although they seek compensatory damages
in unspecified amounts.
The Company has answered the complaints in each action (except
for one recently filed action and another being voluntarily held
in abeyance), has denied any wrongdoing, and has asserted
numerous affirmative defenses.
On June 7, 1996, the New York State Supreme Court certified the
Goshen case, being the first of the aforementioned class actions
filed, as a nationwide class consisting of all persons or
entities who have, or at the time of the policy's termination
had, an ownership interest in a whole or universal life
insurance policy issued by the Company and sold on an alleged
"vanishing premium" basis during the period January 1, 1982 to
December 31, 1995. On March 27, 1997, the Company filed a motion
to dismiss or, alternatively, for summary judgment on all counts
of the complaint. All of the other putative class actions (with
one exception discussed below) have been consolidated and
transferred by the Judicial Panel on Multidistrict Litigation to
the United States District Court for the District of
Massachusetts, or are being voluntarily held in abeyance pending
the outcome of the Goshen case. The Massachusetts District Court
in the Multidistrict Litigation has entered an order essentially
holding all of the federal cases in abeyance pending the action
of the Goshen case.
On October 21, 1997, the New York State Supreme Court granted
the Company's motion for summary judgment and dismissed all
claims filed in the Goshen case against the Company on the
merits. On March 18, 1999 the order by the New York State
Supreme Court was affirmed by the New York State Appellate
Division, First Department. On April 19, 1999, plaintiffs filed
a motion to the New York State Court of Appeals for leave to
appeal from the final determination of the Appellate Division
which affirmed the New York Supreme Court's order granting
summary judgment and dismissing the complaint. All actions
before the United States District Court for the District of
Massachusetts are still pending.
In addition, on or about February 25, 1999, a purported class
action was filed against MONY Life Insurance Company of America
("MLOA") in Kentucky state court covering policyholders who
purchased individual universal life insurance policies from MLOA
after January 1, 1988 claiming breach of contract and violations
of the Kentucky Consumer Protection Act. On March 26, 1999, MLOA
removed that action to the United States District Court for the
Eastern District of Kentucky, requested the Judicial Panel on
multidistrict litigation to transfer the action to the
multidistrict litigation in the District of Massachusetts and
sought a stay of further proceedings in the Kentucky District
Court pending a determination on multidistrict transfer. On
April 19, 1999, the Judicial Panel entered a conditional
transfer order transferring the case to the Federal District
Court in Massachusetts. Plaintiffs have submitted a motion in
opposition to the transfer.
NATIONAL AUTO: Peckerman and Rooks Lawsuits Consolidated
--------------------------------------------------------
On October 22, 1998, Pearl Peckerman, I.R.A., on behalf of
herself and all others similarly situated, filed a putative
class action complaint in the United States District Court for
the Southern District of Florida against NATIONAL AUTO FINANCE
CO INC and certain current and former officers and directors of
the Company. Plaintiffs' allegations of liability are based on
various theories of recovery, including alleged violations of
Sections 11, 12(2), 15 and 20(a) of the Securities Act of 1933,
as amended, and Section 10(b) and Rule 10b-5 of the Securities
Exchange Act of 1934, as amended. Plaintiffs are seeking
compensatory damages, as the court deems appropriate.
On December 4, 1998, Harvey Rooks, Rachel Rooks and Joyce
Bornstein, on behalf of themselves and all others similarly
situated, filed a putative class action complaint in the United
States District Court for the Southern District of Florida
against the Company and certain current and former officers and
directors of the Company. Plaintiffs' allegations of liability
are based on various theories of recovery, including alleged
violations of Sections 11,12(2), 15 and 20(a) of the Securities
Act of 1933, as amended, and Section 10(b)and Rule 10b-5 of the
Securities Exchange Act of 1934, as amended. Plaintiffs are
seeking compensatory damages, as the court deems appropriate.
Both the Peckerman and Rooks complaints focus on allegations
surrounding the Company's 1997 restated financial statements,
the interpretation of FASB No.125 and the relationship between
the Company and its prior outside service provider, Omni
Financial Services of America, Inc.
On February 5, 1999, the United States District Court for the
Southern District of Florida ordered that these actions be
consolidated. It is anticipated that the Plaintiffs will file a
consolidated class action complaint styled In re National Auto
Finance Company, Inc. Securities Litigation. Since the
consolidated class action complaint has not yet been filed, the
Company is presently unable to assess the merits of the claims
or determine whether the Company or plaintiffs will attempt to
add additional parties or claims.
The Company has directors' and officers' liability insurance
policies that apply to this litigation with a liability limit of
$5 million; two excess policies with liability limits of $2
million and $3 million, respectively. Each insurer has raised
certain coverage defenses or denied coverage. The Company has
engaged, and will continue to pursue appropriate strategies to
protect and preserve its claims of full coverage under all such
policies.
OHIO: Suspected Dealer Wants Police to Stop Confiscating Cash
-------------------------------------------------------------
UPI reports that an Ohio man says a state law allowing police
departments to confiscate goods and cash is unconstitutional.
Shawn Simpson has filed a federal class-action lawsuit to stop
the practice. He says the Cincinnati police department
confiscated 52-hundred dollars but never pressed charges against
him.
Simpson told UPI that Cincinnati each year confiscates more than
one-million dollars and the practice cheats low-income people
who can't afford to fight back. Simpson's lawyer Robert Newman
says Cincinnati police turn confiscated property over to federal
authorities to make it more difficult to get the items back.
Simpson was arrested in 1998 and charged with drug trafficking,
but a grand jury refused to indict him. He later pleaded guilty
to misdemeanor marijuana possession and paid a 25-dollar fine.
Cincinnati police officials turned over his 52-hundred dollars
to the FBI.
PDG ENVIRONMENTAL: Court Grants Final Approval to Settlement
------------------------------------------------------------
On June 30, 1995, an action, caption Klein v. PDG Remediation,
Inc., et al., No. CIV-4954 (DAB), was filed in the United States
District Court for the Southern District of New York asserting
federal securities law claims against PDG ENVIRONMENTAL INC, its
directors and certain of its officers, PDGR and the underwriters
of the initial public offering. The Klein action was brought as
a purported class action on behalf of the named plaintiff and
all persons and entities who purchased PDGR's common stock from
February 9, 1995, the effective date of the initial public
offering, through May 23, 1995. The plaintiff alleged that the
defendants violated Sections 11 and/or 15 of the Securities Act
of 1933, as amended, and Section 12(2) of the Securities
Exchange Act of 1934, as amended, by issuing or participating in
the issuance of the registration statement and prospectus which
contained material misstatements or omissions, and that the
purported class members purchased shares of Common Stock in
reliance on the allegedly false and misleading registration
statement and prospectus.
Specifically, the plaintiff alleged that the defendants knew or
should have known that the Florida reimbursement program in
which PDGR participates was operating at a deficit and was being
revised to eliminate funding of remediation activities for lower
priority sites. The plaintiffs were seeking certification of the
action as a class action and rescission of the purchase of
shares of common stock by members of the purported class or
statutory damages, as well as interest, attorneys' fees and
other costs and expenses.
On June 8, 1998, an agreement in principle to settle the class
action litigation was reached with the plaintiff's attorneys. In
October 1998, the Court preliminarily approved the settlement
and ordered that notice be sent to the class members. On January
26, 1999, the Court finally approved the settlement and the
monies presently held in the settlement fund are to be
distributed to the plaintiff class upon the filing of a proof of
claim and release in the lawsuit. PDG ENVIRONMENTAL INC and
ICHOR (formerly PDG Remediation) paid a total of $432,500 to
settle the lawsuit. The registrant's share of the settlement was
$173,000 and was paid into the settlement fund in October 1998.
PROVIDIAN FINANCIAL: Girard & Green File Complaint in California
----------------------------------------------------------------
The law firm Girard & Green, LLP, filed a lawsuit in the San
Francisco Superior Court on behalf of all persons who were
holders of credit cards issued by Providian Bank or Providian
Bank, N.A. The complaint charges Providian Financial
Corporation, Providian National Bank, and Providian Bank, N.A.,
with violations of California Business and Professions Code
sections 17200 and 17500.
The complaint alleges that, defendants engaged in deceptive,
unfair and oppressive business practices directed at their
credit cardholders. These practices include failing to post
payments received from cardholders in a timely fashion; imposing
unauthorized charges for credit protection and other services;
failing to respond to cardholder complaints, correct overcharges
and remove improper charges assessed to cardholders; and
claiming that Providian credit cards repair or enhance a
cardholder's credit rating.
To learn more, contact Daniel C. Girard, Robert S. Green, or
Eric H. Gibbs at 415-981-4800 or at providian@classcounsel.com
via email.
STAUFFER CHEMICAL: Judge Rejects Neighbors Class Complaint
----------------------------------------------------------
The St. Petersburg Times reported that U.S. District Judge Susan
Bucklew has denied a request to grant class-action status in a
lawsuit filed by John and Bonnie Mills against Stauffer Chemical
Co. The lawsuit claimed that cleanup work at the Stauffer site
on the Pinellas-Pasco county line sent noxious fumes billowing
into nearby neighborhoods, harming the health of residents. The
site's presence lowered property values, they said.
Their attorneys argued in Bucklew's Tampa courtroom that as many
as 5,000 people who lived, worked or went to school within 1 1/2
miles of the Stauffer property may have been affected by the
site.
In her ruling, Bucklew said there was not enough evidence to
show that a class existed. "The plaintiffs provide no evidence
of the number of property owners who may have actually had
damage to their property or of the number of class members that
have suffered personal injury or have actually been exposed to a
chemical discharge," she wrote. "Although the Court may make
common sense assumptions, it is unwilling to guess without some
scintilla of evidence" how many people have been affected.
Robert Barnes, the Millses' attorney, can appeal Bucklew's
decision to the 11th U.S. Circuit Court of Appeals. The Millses
also could pursue a lawsuit on their own. "Obviously, we are
very disappointed in the court's ruling," said Barnes, who
compared Stauffer's sweeping legal defense to that of Big
Tobacco. "At this point, we are reviewing our options with our
client in terms of what appeal rights there may be." The
Millses, who live across the Anclote River from the old Stauffer
plant, could not be reached for comment.
Attorneys for Stauffer argued that their client could not be
blamed for declining property values or poor health in thousands
of residents, workers and students. Each claim should be tried
individually, said Stauffer attorney Chris Coutroulis. "We're
very pleased with the ruling," he said. "We think it's the
correct ruling based on both the facts and the law. It's a fair
ruling." The Stauffer plant processed phosphorus from 1947 to
1981, when it closed, leaving behind more than 30 different
toxins in the soil and water. The U.S. Environmental Protection
Agency declared the property a Superfund site in 1994. Two years
later, while a contractor was trying to remove barrels of crude
phosphorus from the site, some of the phosphorus ignited when it
came in contact with the air. The fire sent fumes into nearby
neighborhoods, irritating the eyes, ears and throats of
residents, including Bonnie Mills. Stauffer sent fliers to homes
within a 1 1/2-mile radius of the site, warning residents that
the company would sound an alarm if another accident happened.
Barnes used that 1 1/2-mile radius to determine where the
lawsuit's class would come from. Bucklew ruled there was no
proof chemicals released in October 1996 had spread in that
area.
Barnes filed a report by a real estate appraiser showing that
property values in the ring around Stauffer declined since the
accident. Bucklew called the report "unscientific (and)
unreliable" because it did not look at property values outside
the 1 1/2-mile radius. Barnes said Friday he would have prepared
a more thorough property report for a trial but did not think
one was necessary for a hearing on class status. Coutroulis, an
attorney for Stauffer, criticized the report last month, saying
that the accident had nothing to do with declining property
values near the site because properties far from Stauffer had
declined in value as well.
Coutroulis also argued that creating a class of victims would be
next to impossible because everyone who lived, worked or went to
school near Stauffer may have a different medical, lifestyle or
employment history. Proving that everyone's health problems were
related to Stauffer toxins would be difficult, Coutroulis said.
Bucklew bolstered Coutroulis' argument in her ruling.
"Plaintiffs' complaint alleges exposure to various chemicals
(more than a dozen different potentially hazardous materials) by
several different means (air, soil, surface water and ground
water) caused by several separate occurrences (burning of
phosphate during operation of the facility, dumping and burying
of chemical waste during operation of facility, razing of
facility, negligent cleanup of site and spill during cleanup),"
Bucklew wrote. "This exposure is alleged to have occurred to
various locations in a mile- and-a-half radius around the
facility for over a 40-year period," she continued. "Plaintiffs'
claims of property damage and personal injury will differ
depending upon which chemicals the property or person was
exposed to, by which means they were exposed, the length of time
they were exposed and which occurrence caused the exposure."
Barnes said the high number of toxins and the staggering number
of ways they could have been released is exactly why Stauffer
should face a class-action lawsuit. Those factors should not
protect polluters from suits, he said. "I think the concern I
have is the message that (Bucklew's ruling) sends out is if
you're going to pollute the environment, you're better off doing
it with as many different types of chemicals as you can and
doing it in as many ways as you can," Barnes said. "The more
chemicals you use and the more ways you pollute, the less likely
you are to ever have to face a class-action lawsuit." (St.
Petersburg Times; 05/22/99)
WELLCARE MANAGEMENT: Settles New York Shareholder Litigation
------------------------------------------------------------
WellCare Management Group, Inc. (OTC BB: WELL), has reached a
settlement regarding its shareholder litigation for $2.5
million, all of which is being funded by the insurance carrier
who provided coverage to individual defendants. The settlement
agreement is subject to New York Federal Court approval.
WellCare expects to recoup from the insurance carrier the
expenses related to fees paid to the attorneys representing the
individual defendants, less the Company's insurance deductible.
WISCONSIN: Out-of-State Landowners Say State Forest Fees Unfair
---------------------------------------------------------------
The Milwaukee Sentinel & Journal reports that a group that
forced lottery tax credits to be given to all property owners,
not just residents, is now suing the state because non-residents
pay more to visit state forests. The Wisconsin Out-of-State
Landowners Association has filed a class-action lawsuit asking
for equal admission fees since property taxes are used to fund
state forests.
"It's not a money issue," the group's executive director, Nick
Kaufmann, said Wednesday. "It's a fairness issue."
A small portion of property tax bills is used to pay for the
state's 10 forests. The Out-of-State Landowners Association
contends that since its members already pay for maintenance of
the forests, they shouldn't have to pay an extra $2 per day to
visit them. "It isn't fair in a state that prides itself on
fairness," Kaufmann said. "You have to pay the property tax
freight, but when it comes to enjoying some of the services,
there is a caveat."
Wisconsin is one of only three states that charges non-residents
more than residents to visit state forests. An annual sticker to
visit state forests is $18 for residents and $25 for non-
residents, while the daily charge is $5 or $7, respectively.
Department of Natural Resources Secretary George Meyer, whose
agency oversees the state forests, said property tax revenue
does not pay for all of the development and maintenance of
forests. Part of the forest budget, such as the stewardship fund
used to buy land for forests, comes from the state's general
revenue from income and sales taxes. "So I don't think they have
a valid claim," Meyer told The Milwaukee Sentinel & Journal.
"State residents pay more overall (in taxes) for our camp sites
than non-residents do, so that's why we have a slightly higher
fee for non-residents."
Paul DeLong, deputy state forester, said property taxes provide
about 80% of the forestry budget, with the majority of the rest
coming from general revenue. "Our position is that none of these
(forests) are solely supported through property taxes," added
Michael Lutz, attorney for the state's parks and recreation
program.
The lawsuit, filed last week in Dane County Circuit Court, seeks
an injunction against the higher admission fees that non-
residents pay to visit state forests. It does not involve state
parks, which are not funded through property taxes. Kaufmann
compared the difference in state forest entry fees to the law
giving the lottery tax credit only to residents a difference
that the out-of-state landowners' group persuaded a Dane County
judge to throw out as unconstitutional in 1996. Voters approved
a proposal in April changing the state constitution to ensure
the lottery tax credit is given only to property owners who live
in Wisconsin. "We just think it tends to be another sign that
(out-of-state landowners) are not recognized as making a
contribution to the state," Kaufmann said.
State forest entry fees are charged according to vehicle license
plates: Anyone driving into a forest in a car sporting Wisconsin
plates pays the resident fee, while visitors with other states'
license plates pay more. That's not fair, said the group's
attorney, Robert Gordon, pointing out that if Gov. Tommy G.
Thompson traveled in an Illinois friend's car to a Wisconsin
state forest, he would have to pay the non-resident fee. "The
non-resident property owner that is paying the exact same
property tax is required to pay a higher fee to get in the state
forest than his neighbor with a Wisconsin license," Gordon said.
(Milwaukee Sentinel & Journal; 05/20/99)
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