/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/000410.MBX C L A S S A C T I O N R E P O R T E R Monday, April 10, 2000, Vol. 2, No. 70 Headlines ADVANCE STORES: Sued by Retailers and Jobbers under Robinson-Patman Act AURORA FOODS: Sirota & Sirota Files Securities Complaint in California BANK ONE: Krislov & Associates Files Securities Lawsuit in Illinois CCC INFORMATION: Insurance Company Customer Sues Service Provider in IL CENTURY BUSINESS: Reports on Securities Suits for Periods in 98 & 99-00 CONSECO INC: Milberg Weiss Files Securities Lawsuit in Indiana DATASTREAM SYSTEMS: SC Ct Denies Motion to Dismiss Securities Complaint FINOVA GROUP: Kaplan, Kilsheimer Files Securities Lawsuit in Arizona HARBINGER CORP: Amended Securities Complaint Filed IC ISAACS: Intends to Defend Vigorously Lawsuit in MD over IPO in 1997 JOSLYN CORP: Some Say Creosote Settlement Is Not Large Enough LASERSCOPE: Seeks Mediation for '97 Suit Re Heraeus Manufactured Laser MEDICAL RESOURCES: Settles Securities Lawsuits in New Jersey MICROSOFT CORP: Says Brighton Man Files Price-gouging Suit to Cash in OMTOOL LTD: Vows Vigorous Defense of Securities Suit in New Hampshire SELECT COMFORT: Contests Securities Suit Filed in Minnesota TOBACCO LITIGATION: Fed Appeals Ct OKs Flight Attendants' Case TOBACCO LITIGATION: Florida Trial Case Chronology TOBACCO LITIGATION: Jury Blames Smoking for Cancer in Florida Case TOBACCO LITIGATION: TPLP Issues Statement on Furor over Jury Award VETERINARY CENTERS: Announces Lawsuits Filed in CA and DE over Merger VISIONAMERICA INC: Announces Re-negotiation with ICON & Securities Suit ********* ADVANCE STORES: Sued by Retailers and Jobbers under Robinson-Patman Act ----------------------------------------------------------------------- As of January 1, 2000, Advance Stores Company, Incorporated had 1,617 stores in 38 states, Puerto Rico and the Virgin Islands operating under the "Advance Auto Parts" and "Western Auto" names. As reported in its filing with the SEC, Advance Auto Parts is the second largest specialty retailer of automotive parts, accessories and maintenance items in the United States, and based on store count, the Company believes it is the largest retailer in a majority of its markets. In addition, Western is a wholesale supplier of automotive parts and accessories and home and garden merchandise to approximately 670 stores in 48 states through the wholesale dealer network. In March 2000, the Company was notified it has been named in a lawsuit filed on behalf of independent retailers and jobbers against the Company and others for various claims under the Robinson-Patman Act. The Company believes these claims are without merit and intends to defend them vigorously; however, the ultimate outcome of this matter can not be ascertained at this time. AURORA FOODS: Sirota & Sirota Files Securities Complaint in California ---------------------------------------------------------------------- Sirota & Sirota LLP, announces on April 7 that it has filed a class action in the United States District Court, Northern District of California, on behalf of all persons who purchased the common stock of Aurora Foods, Inc. (NYSE: AOR) between April 28, 1999 and February 17, 2000 inclusive (the "Class Period"). The complaint alleges that Aurora Foods, Inc. and certain of its officers/or directors issued and made a series of materially false and misleading statements regarding Aurora's financial condition and financial performance during the Class Period. The complaint alleges that Aurora materially understated its expenses in violation of Generally Accepted Accounting principles. As a result, on February 18, 2000, Aurora was forced to announce that it would take a non-cash charge which would result in "material reduction in earnings for 1999 and possibly a small loss." Contact: Saul Roffe, Esq. Howard B. Sirota, Esq. Sirota & Sirota LLP 110 Wall Street New York, New York 10005 (212) 425-9055 (212) 425-9093 (fax) or visit website at http://www.sirotalaw.com BANK ONE: Krislov & Associates Files Securities Lawsuit in Illinois ------------------------------------------------------------------- The law firm of Krislov & Associates, Ltd. announces that on April 6, 2000 a class action lawsuit was filed in the United States District Court for the Northern District of Illinois (case 00C2109), on behalf of all persons who exchanged their securities of First Chicago NBD Corp. for Bank One Corp. pursuant to the October 2, 1998 merger of First Chicago and Bank One. Former shareholders of First Chicago claim Bank One and certain of its officers violate Section 11, 12 and 15 of the Securities Act of 1933 and Sections 14 and 20 of the Securities & Exchange Act of 1934 in connection with the October 2, 1998 merger. The claims in the lawsuit are based upon material misrepresentations and omissions in the Registration Statement and Proxy/Prospectus issued in the merger which caused the price of Bank One common stock to be artificially inflated at the time these securities were issued to former First Chicago shareholders in exchange for their First Chicago common shares. As a result, First Chicago shareholders received insufficient value when their First Chicago common stock was exchanged for Bank One common stock pursuant to the merger. Contact: Clinton A. Krislov or Michael R. Karnuth, both of Krislov & Associates, Ltd., 312-606-0500 CCC INFORMATION: Insurance Company Customer Sues Service Provider in IL ----------------------------------------------------------------------- CCC Information Services Group Inc., through its wholly owned subsidiary CCC Information Services Inc. ("CCC"), is a supplier of automobile claims information and processing services, claims management software and communication services. The Company's TOTAL LOSS service is to provide insurance companies the ability to effect total loss settlements on the basis of market-specific values utilizing physically inspected used car inventories. The Company uses its proprietary database and valuation software to provide insurance companies with independent, current, local market values and vehicle identification data. On January 31, 2000, a putative class action lawsuit was filed against CCC, Dairyland Insurance Co., and Sentry Insurance Company. Susanna Cook v. Dairyland Ins. Co., Sentry Ins. and CCC Information Services, Inc., No. 2000 L-1 (Circuit Court of Johnson County, Illinois). Plaintiff alleges that her insurance company, using the Company's TOTAL LOSS product, offered an inadequate amount for her automobile. Plaintiff seeks to represent a nationwide class of all insurance customers who, during the period from January 28, 1989 up to the date of trial, had their total loss claims settled using a valuation report prepared by CCC. The complaint also seeks certification of a defendant class consisting of all insurance companies who used the Company's valuation reports to determine the "actual cash value" of totaled vehicles. Plaintiff asserts various common law and contract claims against the defendant insurance companies, and various common law claims against CCC. Plaintiff seeks an unspecified amount of compensatory and punitive damages, as well as an award of attorneys' fees and costs. The above action follows the filing of several other putative class actions, which name only CCC and individual insurance companies. Those actions, each of which was filed by the same plaintiffs' attorney in the Circuit Court of Cook County, Illinois, are captioned as follows: ALVAREZ-FLORES V. AMERICAN FINANCIAL GROUP, INC., ATLANTA CASUALTY CO., AND CCC INFORMATION SERVICES, INC., No. 99 CH 15032 (filed 10/19/99); GIBSON V. ORION AUTO, GUARANTY NATIONAL INS. CO. AND CCC INFORMATION SERVICES, INC., No. 99 CH 15082 (filed 10/20/99); KEILLER V. FARMERS INSURANCE GROUP OF COMPANIES, FARMERS GROUP, INC., FARMERS INSURANCE EXCHANGE, FARMERS INSURANCE CO. OF OREGON, AND CCC INFORMATION SERVICES, INC., No. 99 CH 15485 (filed 10/27/99); STEPHENS V. THE PROGRESSIVE CORP., PROGRESSIVE PREFERRED INS. CO. AND CCC INFORMATION SERVICES, INC., No. 99 CH 15557 (10/28/99); MYERS V. TRAVELERS PROPERTY CASUALTY CORP., THE TRAVELERS INDEMNITY COMPANY OF AMERICA, AND CCC INFORMATION SERVICES, INC., No. 00 CH 2793 (filed 2/22/00). In the Cook County cases, plaintiffs allege that their individual insurance companies, using CCC's TOTAL LOSS valuation product, offered plaintiffs an inadequate amount for their automobiles. The plaintiffs further allege that CCC's TOTAL LOSS product does not provide fair, accurate values for used vehicles. The plaintiffs assert various common law and statutory claims against CCC and the individual insurers. In each case, plaintiffs seek to represent a class of customers who made a total loss claim for which their individual insurer defendant used a valuation report by CCC, and who allegedly did not receive the market value of their automobile. Plaintiffs seek unspecified compensatory and punitive damages and an award of attorneys' fees and expenses. Certain of the insurance company defendants have filed preliminary motions to dismiss plaintiffs' claims and/or to compel appraisals. Those motions are currently pending. As of this date, there has been no ruling on plaintiffs' class action allegation. CCC indicates its intention to vigorously defend all of the above described lawsuits to which it is a party, and support its customers in other actions. CCC says that due to the numerous legal and factual issues that must be resolved during the course of litigation, it is unable to predict the ultimate outcome of any of these actions. If CCC were held liable in any of the actions (or otherwise concludes that it is in CCC's best interest to settle any of them), CCC could be required to pay monetary damages (or settlement payments). Depending upon the theory of recovery or the resolution of the plaintiff's claims for compensatory and punitive damages, or potential claims for indemnification or contribution by CCC's customers in any of the actions, these monetary damages (or settlement payments) could be substantial and could have a material adverse effect on CCC's business, financial condition or results of operations. The Company says it is yet unable to estimate the magnitude of its exposure, if any, at this time. CENTURY BUSINESS: Reports on Securities Suits for Periods in 98 & 99-00 ----------------------------------------------------------------------- The Company tells investors in its file with the SEC that in February 2000, two additional purported stockholder class-action lawsuits - Gochman, et al. v. Century Business Services, Inc., et al. and Korn, et al. v. Century Business Services, Inc., et al. - were filed in the United States District Court for the Northern District of Ohio and one additional purported stockholder class-action lawsuit - Albert, IV, et al. v. Century Business Services, Inc., et al. - was filed in the United States District Court for the District of Maryland, against Century and certain of its current and former directors and officers. As reported in the CAR, the plaintiffs in these cases alleged violations of the Securities Exchange Act of 1934 in connection with certain statements made. In its file with the SEC, the Company says that the class period is from February 9, 1999 to January 28, 2000. The Company also reports that the statements at issue were made by, among other things, improperly amortizing goodwill and failing adequately to monitor changes in operating results. Century expects that the Albert action will be transferred to the United States District Court for the Northern District of Ohio, that all of the actions will be consolidated, and an amended complaint will be filed. None of these events has yet taken place. The Company also discloses that n March 2, 2000, an additional purported stockholder class-action lawsuit - Marsh, et al. v. Century Business Services, Inc., et al. - was filed in the United States District Court for the Northern District of Ohio against Century and certain of its current and former directors and officers. The plaintiffs in this case made similar allegations for the time period from March 4, 1999 to January 28, 2000. There has been no discovery in any of the actions. Century and the named director and officer defendants deny all allegations of wrongdoing made against them in these actions and intend to vigorously defend each of these lawsuits. Although the ultimate outcome of such litigation is uncertain, based on the allegations contained in the complaints, management does not believe that these lawsuits will have a material adverse effect on the financial condition, results of operations or cash flows of Century. The Company also reports to the SEC the case for the class period in 1998, which has also been reported in the CAR. The SEC report says that in September 1999, three purported stockholder class-action lawsuits were filed in the United States District Court for the Northern District of Ohio against Century and certain of its current and former directors and officers. Subsequently, these three actions were consolidated into a single case, Darby, et al. v. Century Business Services, Inc., et al., filed January 28, 2000, alleging violations of the Securities Exchange Act of 1934 in connection with certain statements made during the period from February 6, 1998 to November 23, 1998, by, among other things, misstating revenue run rates, improperly accounting for certain acquisitions, improperly amortizing goodwill, and failing to disclose certain adverse information of which the defendants were aware. CONSECO INC: Milberg Weiss Files Securities Lawsuit in Indiana -------------------------------------------------------------- The law firm of Milberg Weiss Bershad Hynes & Lerach LLP give notice that a class action lawsuit was filed on April 7, 2000, in the United States District Court for the Southern District of Indiana, Indianapolis Division, on behalf of all persons who purchased the stock of Conseco Inc. (NYSE: CNC) between April 28, 1999, and March 31, 2000, inclusive (the "Class Period"). The complaint charges Conseco and certain of its officers and directors with violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that defendants issued a series of materially false and misleading statements concerning its subsidiary Conseco Finance, which was formerly known as Green Tree Financial Corporation ("Green Tree") and the value of Green Tree's portfolio of interest-only securities. Contact: at Milberg Weiss Bershad Hynes & Lerach, Steven G. Schulman or Samuel H. Rudman at One Pennsylvania Plaza, 49th Floor, New York, New York 10119-0165, by telephone 1-800-320-5081 or via e-mail: endfraud@mwbhlny.com or visit website at http://www.milberg.com Milberg Weiss Bershad Hynes & Lerach LLP Shareholder Relations Dept. E-Mail: endfraud@mwbhlny.com 1-800-320-5081 DATASTREAM SYSTEMS: SC Ct Denies Motion to Dismiss Securities Complaint ----------------------------------------------------------------------- On January 11, 1999, several shareholders filed a putative class action complaint in the United States District Court for the District of South Carolina, Greenville Division, naming as defendants, the Company, Larry G. Blackwell and the Company's former Chief Financial Officer. Several substantially similar complaints were filed in the same court shortly thereafter. The complaints alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Plaintiffs seek to represent a class of individuals who purchased the Company's common stock from April 1 to October 20, 1998. On June 25, 1999, the court ordered that the actions be consolidated and that a single consolidated complaint be filed. On August 13, 1999, the plaintiffs filed a consolidated amended class action complaint. The consolidated amended complaint alleges that defendants artificially inflated Datastream's earnings and stock price by (i) taking certain one-time charges not in accordance with generally accepted accounting principles ("GAAP") in connection with Datastream's acquisitions of Insta and SIS and (ii) materially understating the Company's reserves for doubtful accounts in violation of GAAP. The plaintiffs seek compensatory damages and unspecified equitable relief. On September 13, 1999, the Company and the individual defendants moved to dismiss the consolidated amended complaint. The court denied the defendants' motion to dismiss on January 27, 2000. The Company filed its answer to the consolidated class action complaint on February 24, 2000. The Company intends to defend this action vigorously, but sees that due to the inherent uncertainties of the litigation process, the Company is unable to predict the outcome of this litigation. The Company believes that if the outcome of the litigation is adverse to the Company, it could have a material adverse effect on the Company's business, financial condition and results of operations. FINOVA GROUP: Kaplan, Kilsheimer Files Securities Lawsuit in Arizona -------------------------------------------------------------------- The law firm of Kaplan, Kilsheimer & Fox LLP announces on April 7 that a class action has been commenced in the United States District Court for the District of Arizona, on behalf of all persons who purchased or otherwise acquired the common stock of FINOVA Group, Inc. (NYSE: FNV) between July 15, 1999 and March 26, 2000, inclusive, (the "Class Period"). The complaint charges FINOVA and an executive officer with violations of the Securities Exchange Act of 1934. The complaint alleges, among other things, that defendants issued materially false and misleading statements concerning the Company's financial statements, revenues and earnings per share. During the Class Period defendants represented that FINOVA's growth would continue through the first quarter of 2000 and beyond and represented that is business would be strong going forward. However, defendants failed to disclose that FINOVA's business was suffering and that as a result FINOVA would have to take a charge of $70 million in the first quarter of 2000. Contact: Frederic S. Fox, Esq. Joel B. Strauss, Esq. Kaplan, Kilsheimer & Fox LLP 805 Third Avenue - 22nd Floor New York, NY 10022, (800) 290-1952, (212) 687-1980 Fax: (212) 687-7714 E-mail address: mail@kkf-law.com HARBINGER CORP: Amended Securities Complaint Filed -------------------------------------------------- On September 13, 1999, the Company and three of its current or former officers and directors, C. Tycho Howle, David Leach and Joel G. Katz, were named in a purported class action lawsuit alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The complaint alleged that during a class period running from February 4, 1998 through October 1, 1998 defendants made materially false and misleading statements, and failed to disclose material facts regarding the Company's business condition, future prospects and integration of acquisitions. According to the complaint, these purported misrepresentations and omissions artificially inflated the price of the Company's common stock throughout the class period and resulted in substantial losses by members of the purported class. On January 13, 2000, the Court entered an order appointing lead plaintiffs and lead plaintiffs' counsel. On March 6, 2000, plaintiffs filed an amended complaint reiterating and expanding upon the basic claims asserted in the original complaint by, among other things, adding allegations regarding the Company's accounting practices. Plaintiffs seek certification of the case as a class action, a declaration that defendants violated the federal securities laws, unspecified money damages according to proof, interest, attorneys' fees and costs. The Company believes all claims asserted in the action are without merit, and intends to defend the case vigorously. IC ISAACS: Intends to Defend Vigorously Lawsuit in MD over IPO in 1997 ---------------------------------------------------------------------- IC Isaacs & Co. and certain of its current and former officers and directors have been named as defendants in three putative class actions filed in United States District Court for the District of Maryland. The first of the actions was filed on November 10, 1999 by Leo Bial and Robert W. Hampton. The three actions, which have been consolidated with Mr. Bial as the first-named plaintiff, purport to have been brought on behalf of all persons (other than the defendants and their affiliates) who purchased the Company's stock between December 17, 1997 and November 11, 1998. The plaintiffs allege that the registration statement and prospectus issued in connection with the Company's initial public offering, completed in December 1997, contained materially false and misleading statements, which artificially inflated the price of the Company's stock during the class period. Specifically, the complaints allege violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Act of 1934 and Rule 10b-5 promulgated thereunder. The plaintiffs seek recision, damages, costs and expenses, including attorneys' fees and experts' fees, and such other relief as may be just and proper. The Company believes that the plaintiffs' allegations are without merit and intends to defend the cases vigorously. JOSLYN CORP: Some Say Creosote Settlement Is Not Large Enough ------------------------------------------------------------- Dozens of people suffering from diseases they claim were triggered by a creosote plant in Bossier City say they are not getting enough money from a proposed settlement with the site's owners. More than 2,000 plaintiffs in a class-action lawsuit are slated to get money from defendants Joslyn Corp. and Beazer East Inc. for contamination left at the site of the old Lincoln Creosote plant. About 200 people have filed letters in state district court, saying their portion of the $32 million settlement is too low. Hearings on the individual cases have taken place in Benton for the past two days, allowing residents to give reasons why they should receive more money. "My base money should have been $150,000, but all I got was about $9,000 after all of this," said Carmen Gallow, 37, who has had three miscarriages. Jerline Smith, who lived near the site for 26 years, said she is entitled to more than $11,000. She said her son almost died from meningitis and still suffers from mental problems. She said her medical problems include swelling in her back and neck and the current possibility of breast cancer. Monetary awards to each plaintiff are confidential, but objection letters from residents show some residents have been offered as little as $500, an amount they say is not enough to cover their doctor bills. Damages are based on a formula that takes into consideration the location of the residence, how long the resident lived there and the severity of health problems stemming from the contamination. "I'm very sorry some of the people are unhappy, and I hope if we have the wrong information, they certainly get their increases," said Troy E. Bain, an attorney for the plaintiffs. "The purpose of the whole thing was to try to treat everyone the same as best we could." A special court-appointed master is determining whether residents should get more money. A public hearing is scheduled for May 5 for residents still opposed to their proposed payment. (The Associated Press, April 7, 2000) LASERSCOPE: Seeks Mediation for '97 Suit Re Heraeus Manufactured Laser ---------------------------------------------------------------------- In 1997, a medical malpractice and product liability suit was filed against a hospital, two physicians and Laserscope relating to a laser manufactured by Heraeus Surgical, Inc. which was acquired by Laserscope in August 1996. Although a trial date has been set, the Company is currently pursuing mediation through an independent third party. While there can be no assurance as to the ultimate disposition of the case, the Laserscope does not believe the outcome of the case will have a material adverse impact on the Company's financial position or results of operations. MEDICAL RESOURCES: Settles Securities Lawsuits in New Jersey ------------------------------------------------------------ Between November 14, 1997 and January 9, 1998, seven class action lawsuits were filed in the United States District Court for the District of New Jersey against the Company and certain of the Company's directors and/or officers. The complaints in each action asserted that the Company and the named defendants violated Section 10(b), and that certain named defendants violated Section 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), alleging that the Company omitted and/or misrepresented material information in its public filings, including that the Company failed to disclose that it had entered into acquisitions that were not in the best interest of the Company, that it had paid unreasonable and unearned acquisition and financial advisory fees to related parties, and that it concealed or failed to disclose adverse material information about the Company. On August 9, 1999 the District Court approved an agreement settling all of the pending class actions in consideration primarily of (i) a payment of $2.75 million to be provided by the Company's insurer and (ii) the issuance of $5.25 million of convertible subordinated promissory notes (the "Convertible Subordinated Notes"). The $5.25 million of Convertible Subordinated Notes bear interest at the rate of 8% per annum, will be due on the earlier of August 1, 2005 or when the Company's presently outstanding Senior Notes are paid in full, and may be prepaid in cash by the Company at any time after issuance subject to the payment of a prepayment premium which begins at 8% and decreases over time. Additionally, the Convertible Subordinated Notes are convertible into shares of the Company's Common Stock beginning February 15, 2000 at a price per share equal to $2.62 per share. The Ash Complaint On June 2, 1998, Mr. Ronald Ash filed a complaint against the Company, StarMed, Wesley Medical Resources, Inc., a subsidiary of the Company ("Wesley"), and certain officers and directors of the Company in the United States District Court for the Northern District of California. On June 24, 1997, the Company, acquired the assets of Wesley, a medical staffing company in San Francisco, California, from Mr. Ash and another party for 45,741 shares of the Company's Common Stock valued at $2,000,000 and contingent consideration based on the company achieving certain financial objectives during the three year period subsequent to the transaction. The Ash complaint, among other things, alleges that the defendants omitted and/or misrepresented material information in the Company's public filings and that they concealed or failed to disclose adverse material information about the Company in connection with the sale of Wesley to the Company by the plaintiff. The plaintiff seeks damages in the amount of $4.25 million or, alternatively, rescission of the sale of Wesley. On October 7, 1998, upon motion by the Company, the Ash action was transferred from the United States District Court for the Northern District of California and consolidated with the pending securities class actions in the United States District Court for the District of New Jersey. The Company believes that it has meritorious defenses to the claims asserted by plaintiff, and intends to defend itself vigorously. On February 19, 1999, the Company filed a motion to dismiss the Ash Complaint. The legal proceedings described above are in their preliminary stages. Although the Company believes it has meritorious defenses to all claims against it, the Company is unable to predict with any certainty the ultimate outcome of these proceedings. MICROSOFT CORP: Says Brighton Man Files Price-gouging Suit to Cash in --------------------------------------------------------------------- Microsoft Corp. claims that a Brighton man and other people across the nation are using the court system as a way to cash in on the software giant's legal misfortunes with the federal government. Jim Cullinan, a spokesman from Microsoft's headquarters in Redmond, Wash., said Thursday April 6 that the attempt by James Barnard of Brighton to create a class-action lawsuit against the company for alleged price-gouging in sales is solely based on money. "There are four or five cases in Michigan alone and 120 in the country," Cullinan said. "These are simply an effort by plaintiffs and attorneys to go after a successful corporation and to go after money." On March 6, Livingston Circuit Judge Daniel Burress listened to additional testimony that Microsoft took advantage of its position in the market to inflate the cost of its products. Barnard wants to create a class-action lawsuit against the software giant for alleged price-gouging in sales of its omnipresent Windows operating system and Internet browser, Internet Explorer. Barnard's lawsuit is filed on behalf of any Michigan resident who has bought, leased or licensed a version of the Windows operating system or Explorer. The lawsuit claims that Microsoft "by unlawful and anti-competitive means, including the monopoly leveraging of its market power in the PC operating systems market, effectively eliminated competition in the Web browser and related markets." U.S. District Judge Thomas Penfield Jackson ruled that Microsoft had violated federal anti-trust laws by bundling the Explorer program with the Windows system, thus driving out competition. But none of Jackson's rulings accused Microsoft of price-gouging customers, Cullinan said. Microsoft is trying to consolidate as many of the class-action suits as possible in an effort to handle them quickly and to relieve the burden on the courts, he added, noting that the the company was waiting to hear from a panel of federal judges as to how that would be handled. "What this seems to be is simply cookie-cuter lawsuits being filed throughout the country," Cullinan said. "I don't think anyone can claim we've overcharged customers." Cullinan said Windows 98 sells for $89 retail and when sold as part of a computer, only adds about $65 to the computer's cost. He said other operating systems run from $99 to $149. Brighton resident James Barnard is asking Livingston County Circuit Court Judge Daniel Buress to certify his lawsuit against Microsoft Corporation as a class action. That would add all other consumers who purchased a Windows operating system with the Internet browser called Internet Explorer. The lawsuit requests that damages are not to exceed $75,000 for each plaintiff. Judge Buress said he will issue a written opinion in the future. (The Detroit News, April 7, 2000) OMTOOL LTD: Vows Vigorous Defense of Securities Suit in New Hampshire --------------------------------------------------------------------- On October 5, 1999 the Company and certain of its directors and officers were named as defendants in a purported securities class action complaint filed in the United States District Court for the District of New Hampshire. The complaint is allegedly brought on behalf of purchasers of the Company's stock during the period from August 8, 1997 to October 6, 1998, and alleges, among other things, that the Company's initial public offering prospectus and registration statement contained misstatements. The Company believes that the allegations contained in the complaint are without merit and intends to defend vigorously against the claims. The lawsuit, however, is in its earliest stages, and there can be no assurances that this litigation will ultimately be resolved on terms that are favorable to the Company. SELECT COMFORT: Contests Securities Suit Filed in Minnesota ----------------------------------------------------------- Select Comfort Corp. and certain former officers and directors have been named as defendants in a class action lawsuit filed on behalf of shareholders in U.S. District Court in Minnesota. The named plaintiffs, who purport to act on behalf of a class of purchasers of our common stock during the period from December 4, 1998 to June 7, 1999, charge the defendants with violations of federal securities laws. The suit alleges that the Company and the named directors and officers failed to disclose or misrepresented certain information concerning our business during the class period. The complaint does not specify an amount of damages claimed. The Company believes that the complaint is without merit and intend to vigorously defend the claims. The Company and the individual defendants brought a motion to dismiss all claims on November 10, 1999. The motion was heard by the magistrate on December 21, 1999. On January 27, 2000, the magistrate recommended dismissal of the claims based on Section 11 of the Federal securities laws. The magistrate recommended that the motion to dismiss be denied with respect to the claims based on Rule 10b-5 of the Federal securities laws. On February 15, 2000, the parties formally objected to the magistrate's recommendation. The Company says in its SEC report that the objection was made to the United States District Court in Minnesota who must issue the ruling on defendants' motion. The Court has not yet issued its ruling. Select Comfort has agreed to indemnify the individual defendants and to advance reasonable expenses of defense of the litigation to the individual defendants under applicable Minnesota corporate law. The Company reports that it had paid an aggregate of $2,326 to the law firm of Briggs & Morgan on behalf of defendant H. Robert Hawthorne as at the time of the filing of the SEC report. TOBACCO LITIGATION: Fed Appeals Ct OKs Flight Attendants' Case -------------------------------------------------------------- A Reuters report from Seattle April 6 says that a federal appeals court ruled on April 6 that non-smoking flight attendants could sue Northwest Airlines for allowing smoking on trans-Pacific flights. The report says that the class action suit seeks "tens of millions" of dollars for up to 4,000 flight attendants forced to breathe tobacco smoke on long flights for years after the airline banned smoking on domestic flights and in its corporate offices. Northwest now prohibits smoking on all flights, domestic and international. (AAP NEWSFEED, April 7, 2000) TOBACCO LITIGATION: Florida Trial Case Chronology ------------------------------------------------- Major events in the first smokers' class-action lawsuit to come to trial: May 1994 Class-action suit filed on behalf of sick U.S. smokers against the nation's five biggest cigarette makers and two industry groups. October 1994 State judge approves class certification. January 1996 State appeals court limits class to sick smokers in Florida. March 1998 Judge Robert Kaye assigned to case. July 1998 Jury selection begins. October 1998 Opening statements. Judge imposes gag order on trial participants. July 1999 Jury decides tobacco industry fraudulently conspired to make a dangerous, addictive product that causes cancer, heart disease and other illnesses. September 1999 State appeals court orders damages to be decided one smoker at a time. October 1999 Appeals court reverses itself, says jury can award punitive damages for class. November 1999 Compensatory damage phase begins for three smokers serving as class representatives. December 1999 State Supreme Court refuses to consider tobacco challenge to class punitive award. February 2000 State appeals court rejects tobacco industry challenge to gag order. March 2000 News media challenge gag order in federal court. April 2000 Federal judge lifts gag order. State jury awards $6.9 million in compensatory damages to two smokers. Jury also awards third smoker $5.8 million but said he should be barred from collecting the money because a four-year statute of limitations had expired. Judge says he would decide later how to handle that ruling. (The Associated Press, April 7, 2000) TOBACCO LITIGATION: Jury Blames Smoking for Cancer in Florida Case ------------------------------------------------------------------ A jury decided Friday April 7 that smoking caused cancer in three smokers who sued the tobacco industry in a landmark class-action trial. The amount of any possible damages wasn't immediately announced. If any of the three are awarded damages, that will clear the way for a possible multibillion-dollar punitive verdict later that the industry fears could bankrupt it. The smokers asked for $13.2 million in compensatory damages: a total of $4.2 million in medical costs and other past and future expenses and up to $3 million each for pain and suffering. The jury deliberated for a little more than two days. The same circuit court jury ruled last July that the industry fraudulently conspired to produce a dangerous, addictive product that caused 29 illnesses, including cancer and heart disease. Around the country, juries have awarded damages to individual smokers only six times. Three verdicts were overturned, two are on appeal, and one was returned last month with a record $1.72 million compensatory award to a single smoker. Jurors heard the life stories and microscopic details of cancer in Inglis nurse Mary Farnan, 44; Orlando clock maker Frank Amodeo, 60; and New Port Richey housewife Angie Della Vecchia, who died three weeks after the initial verdict last year at 53. Amodeo, a throat cancer patient, nodded his head up and down as the judge read the opening pages of the verdict. Both women started smoking at 11. Della Vecchia smoked for 40 years and Farnan for 29. Amodeo started smoking at 14 and kept it up for 34 years. Smokers' attorney Stanley Rosenblatt argued all three became addicted in the 1950s long before they became aware of the health dangers of smoking even though the industry was discovering links to disease and addiction at the same time. The industry disputed smoking as a cause of their cancers, fought the smokers' addiction claims and said they should not be rewarded for continuing to smoker years after health dangers became widely known. The first segment of the trial began in October 1998, and testimony in the compensatory phase began last November. The defendants are Philip Morris Inc., R.J. Reynolds Tobacco Co., Brown & Williamson, Lorillard Tobacco Co., Liggett Group Inc. and the industry's Council for Tobacco Research and Tobacco Institute. The industry has yet to pay anything in a smoker's case but has started paying on $246 billion in settlements with states. The landmark Miami case is the first smokers' class-action to come to trial. The compensatory issue has been overshadowed by industry fears of a ruinous $300 billion award in the next phase seeking punitive damages for an estimated 500,000 sick Florida smokers. But under state law, a punitive verdict cannot put a company out of business. Several tobacco-growing states have rushed to protect the industry from any crippling punitive award by setting a cap of $25 million to $100 million on the amount a company has to post as bond to pursue an appeal. Under Florida law, a defendant must post a bond equal to the damages levied while appealing a case. (AP Online, April 7, 2000) TOBACCO LITIGATION: TPLP Issues Statement on Furor over Jury Award ------------------------------------------------------------------ The Tobacco Products Liability Project has issued the following statement: For several weeks, a furor has been building in Florida and beyond over the possibility of a Miami jury awarding lump sum punitive damages of $300 billion in the class action trial known as "Engle." This fantastic figure comes from one source: Big Tobacco's top Florida attorney Dan Webb. In arguing against the lump sum punitive damages trial plan to the Third District Court of Appeals last October 20th, Webb said that a $300 billion award, "would destroy any industry." The appeals court and the Florida Supreme Court rejected that appeal and let the lump sum punitive damages trial plan stand. "Webb, a top attorney for an industry chock full of legal talent, must have known that Florida law prohibits punitive damages that exceed the industry's net worth of about $100 billion," said Northeastern University Law Professor Richard Daynard, who is Chair of the Tobacco Products Liability Project. In any case where it has come up, Florida courts have ruled that punitive damages "may properly punish each wrongdoer by exacting from his pocketbook a sum of money which, according to his financial ability, will hurt, but not bankrupt." (e.g., Bould v. Touchette, 349 So.2d 1181 (Fla. 1977)). Webb's dubious contention is the industry's equivalent of shouting "FIRE" in a crowded theater. Panic has ensued and the rights of sick smokers and their survivors are being trampled. Florida attorney General Bob Butterworth issued an opinion to the Legislature urging action on a bill to delay any punitive damages award in the Engle case until after each claim of an estimated half million sick Florida smokers has been separately adjudicated over the next 10-20 years or more. The action is needed, purportedly, to protect tobacco industry settlement payments to the state of Florida should the companies seek bankruptcy protection. There are 2 problems with this logic: 1) under Florida law, punitive damages cannot bankrupt a defendant, and 2) As suggested recently by Credit Lyonnais Securities, Florida could easily protect and maintain settlement revenues by passing a contingent cigarette excise tax that would take effect only if the industry's payments to the state were interrupted. Importantly, excise taxes are not affected by bankruptcy protection. Florida could also securitize its settlement as a bond issue, thereby breaking the state's ties to Big Tobacco's future. Daynard notes that, "It appears this is simply an attempt by the tobacco companies to scare state governments into granting them special legal protections. Instead of falling for this trick, Florida should let the jury that has been hearing this case for more than a year and a half finish its work and let justice take its course." Contact: Richard Daynard or Mark Gottlieb (617) 373-2026, Tobacco Products Liability Project VETERINARY CENTERS: Announces Lawsuits Filed in CA and DE over Merger --------------------------------------------------------------------- Veterinary Centers of America, Inc. (NASDAQ:VCAI) announced on April 7 that two class action suits have been filed, one in Los Angeles Superior Court and one in the Court of Chancery of the State of Delaware in connection with the definitive merger agreement entered into on March 30, 2000. VCA says it has not had an opportunity to review the complaints and therefore has no comment regarding the suits at this time. Veterinary Centers of America, Inc. claims it owns and operates the largest network of free-standing, full service animal hospitals in the country and the largest network of veterinary-exclusive laboratories in the nation. VISIONAMERICA INC: Announces Re-negotiation with ICON & Securities Suit ----------------------------------------------------------------------- VisionAmerica Incorporated (Nasdaq/NM:VSNA) announced on April 7 that ICON Laser Eye Centers, Inc. (OTC CDN:ILEC.U Canadian Dealers Network) (ICON) has requested that VisionAmerica re-negotiate certain provisions of the Agreement dated February 24, 2000, wherein ICON purchased 1,000,000 shares of VisionAmerica common stock for a total purchase price of$4,000,000.00. The Agreement further provides that a warrant for an additional 1,000,000 shares of VisionAmerica common stock will be issued to ICON if, among other things, a registration statement is not filed for the original 1,000,000 shares by July 31, 2000. VisionAmerica is studying ICON's request for re-negotiation and intends to address it more fully with ICON in the near future. ICON and VisionAmerica are continuing to cooperate in establishing laser vision programs and have now initiated such programs in nine of VisionAmerica's markets. On March 29, 2000, an action was filed in the Federal District Court for the Middle District of Tennessee allegedly on behalf of all individuals and institutional investors that purchased or otherwise acquired publicly-traded securities of VisionAmerica between November 5, 1998, and March 24, 2000. The Company, Ronald L. Edmonds, former Chief Financial Officer, and Thomas P. Lewis, Chief Executive Officer, are named as defendants. ICON is not a party to this proceeding. The complaint alleges violations of federal securities laws based upon the provision of allegedly false and misleading information about VisionAmerica's financial condition during the above period. The complaint also alleges that certain shareholders suffered financial losses as a result of the alleged false and misleading information, and the complaint requests class action status for the plaintiffs. The Company has not filed an answer or other responsive pleading and is analyzing the complaint. Until the allegations are fully analyzed, the Company is unable to determine the potential impact of this action. The case has been reported in the CAR. ********* 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., Princeton, NJ, and Beard Group, Inc., Washington, DC. Theresa Cheuk, Managing Editor. Copyright 1999. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *