/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/001024.MBX C L A S S A C T I O N R E P O R T E R Tuesday, October 24, 2000, Vol. 2, No. 207 Headlines AUTO FINANCING: Lawsuits Allege Discrimination in Nissan, GM BRIDGESTONE/FIRESTONE INC: Verbal Settlement Reached In First Lawsuit CAMPBELL SOUP: Securities Suits Consolidated, Amended and Pending in NJ COVAD COMMUNICATIONS: Cauley & Geller Files Securities Suit in CA COVAD COMMUNICATIONS: Milberg Weiss Files Securities Suit in CA FORD MOTOR: Stull, Stull Files Securities Suit in Michigan HAWAII: Held In Contempt For Alleged Failure To Fix Special Ed HOLOCAUST VICTIMS: Clouds over Austro-US Accord On Nazi Compensation INTUIT INC: Faces Lawsuits in CA over Invasion of Privacy INTUIT INC: Plintiff Willing to Quit Case over Ad. and Business Practice MOTORCAR PARTS: Faces Securities Suit in CA; Insurer Objects to Coverage MTBE LITIGATION: Supreme Court Dismisses Bid For Class Certification NEW HAVEN: Fed Suit Challenges Strip Search at Juvenile Facility OMAHA PUBLIC: Lawsuit in Lincoln Accuses of Employment Racial Bias PAYDAY LENDERS: Lawsuit against Cash Today Certified in Texas PRICELINE.COM, INC: Scott & Scott Files Securities Lawsuit in CT ROBERT MUGABE: Faces Claim For Damages Over Zimbabwe Election Killings SAGENT TECHNOLOGY: Milberg Weiss Files Securities Suit in CA WATER CONTAMINATION: Walkerton Commission Adds 3rd Party to Claim * Class Action Suit System To Be Put On Hold In Korea ********* AUTO FINANCING: Lawsuits Allege Discrimination in Nissan, GM ------------------------------------------------------------ Tens of thousands of black consumers nationwide have been charged millions of dollars more than white consumers seeking auto loans from two prominent automobile finance companies, two class-action lawsuits contend. General Motors Acceptance Corp. and Nissan Motors Acceptance Corp. "engineered and participated in a discriminatory kickback system that materially hurt African-American car buyers," said Gary Klein, senior attorney with the National Consumer Law Center in Boston, one of several lawyers and law firms involved in the case. GMAC and NMAC, the car makers' finance arms, deny the accusations in court documents and argue that studies supporting the accusations are flawed. Attempts Sunday to reach officials with the companies were unsuccessful. "We allege (both companies) should have known that their markup system would have a disparately negative impact on the black community," Klein said Sunday. The suits are seeking a change in the auto loan companies' practices and money back for black consumers who paid more than the objective lending rate over the last 11 years. Klein said the amount could be $100 million or more. The cases were filed in 1998 under seal, but court documents were recently unsealed on motions by news organizations. The suits gained class-action status in August from two federal judges who refused to dismiss the suits. The U.S. Justice Department also joined the case in August. (The Associated Press State & Local Wire, October 23, 2000) BRIDGESTONE/FIRESTONE INC: Verbal Settlement Reached In First Lawsuit --------------------------------------------------------------------- Relatives of a Texas couple who died after a tire blew out on their sport-utility vehicle have reached a verbal settlement with Bridgestone/Firestone in the first product liability lawsuit scheduled for trial since the company's August tire recall. Details of the settlement, which was first reported in the Web edition of the Wall Street Journal on Sunday night, were not disclosed. Ryan Anthony Guillen, 21, and his sister, Kimberly Guillen, 18, sued the Nashville, Tenn.-based tire manufacturer last November after their mother and stepfather were killed when their Ford Explorer crashed May 30, 1999. Nidia and Patricio Leal died when a Firestone tire unraveled, sending the vehicle skidding into a ditch near Brownsville, Texas. In a telephone interview with The Associated Press late Sunday, Robert J. Patterson, a lawyer for the siblings, confirmed that a verbal settlement was reached. He refused to elaborate. "We finalized it Friday, although it's just verbal at this point," he said from his home in Corpus Christi, Texas. "I really can't talk about the details but we've been talking for a while." Bridgestone/Firestone spokeswoman Jill Bratina confirmed an agreement was reached but declined any further comment. Patterson said he expected the settlement to be formally announced sometime this week. "The timing certainly helped a lot," he told the Wall Street Journal. "Firestone is doing jury studies, and if their studies are showing what ours are, they don't have a chance." (The Associated Press State & Local Wire, October 23, 2000) CAMPBELL SOUP: Securities Suits Consolidated, Amended and Pending in NJ ----------------------------------------------------------------------- As previously reported, ten purported class action lawsuits were commenced against Campbell Soup Company and certain of its officers in the United States District Court for the District of New Jersey. The lawsuits were subsequently consolidated, and an amended consolidated complaint was filed alleging, among other things, that Campbell and certain of its officers misrepresented the company's financial condition between September 8, 1997 and January 8, 1999, by failing to disclose alleged shipping and revenue recognition practices in connection with the sale of certain company products at the end of the company's fiscal quarters in violation of Section 10 (b) and 20 (a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. The actions seek compensation and other damages, and costs and expenses associated with the litigation. Campbell believes the action is without merit and intends to defend the case vigorously. In management's opinion, the outcome of this lawsuit will not have a material effect on the consolidated results of operations, financial position or cash flows of the company. COVAD COMMUNICATIONS: Cauley & Geller Files Securities Suit in CA ----------------------------------------------------------------- The law firm of Cauley & Geller, LLP announced on October 21 that a class action lawsuit has been filed in the United States District Court for the Northern District of California on behalf of those who purchased or otherwise acquired Covad Communications Group, Inc. securities between September 7, 2000 and October 17, 2000 (the "Class Period"), including those who acquired Covad shares in connection with Covad's acquisition of BlueStar Communications Group ("BlueStar") and those who acquired Covad convertible senior notes. The complaint charges Covad and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that defendants misrepresented the revenues that Covad was deriving from its newly acquired BlueStar business, which, together with defendants' false representations that Covad would post Q3 2000 EPS of $(1.18) and revenues of $ 74.7 million, operated to artificially inflate the price of Covad stock to a Class Period high of $20.93 on September 11, 2000. This upsurge in Covad's stock caused by defendants' alleged false and misleading statements enabled Covad to complete a $500 million bond offering and the $140 million stock-for-stock acquisition of BlueStar. On October 17, 2000, 15 business days after the acquisition of BlueStar was completed and just 18 business days after Covad raised $500 million in a debt offering, Covad revealed that it was in fact suffering a huge decline in revenues, was not posting smaller negative EPS growth, and contrary to defendants' repeated assurances, Covad was forced to reveal the problems it had been experiencing during the Class Period in attempting to grow its business. This announcement caused its stock price to drop to as low as $3.50 (or over $5 per share) on record volume of 70 million shares on October 18, 2000, causing hundreds of millions of dollars in damages to members of the Class. Contact: Cauley & Geller, LLP Sue Null, 888/551-9944 CauleyPA@aol.com COVAD COMMUNICATIONS: Milberg Weiss Files Securities Suit in CA --------------------------------------------------------------- Milberg Weiss (http://www.milberg.com/covad/)announced on October 20 that a class action has been commenced in the United States District Court for the Northern District of California on behalf of those who purchased or otherwise acquired Covad Communications Group, Inc. (Nasdaq:COVD) securities between September 7, 2000 and October 17, 2000 (the "Class Period"), including those who acquired Covad shares in connection with Covad's acquisition of BlueStar Communications Group ("BlueStar") and those who acquired Covad convertible senior notes. The complaint charges Covad and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that defendants misrepresented the revenues that Covad was deriving from its newly acquired BlueStar business, which, together with defendants' false representations that Covad would post Q3 2000 EPS of $(1.18) and revenues of $ 74.7 million, operated to artificially inflate the price of Covad stock to a Class Period high of $20.93 on September 11, 2000. This upsurge in Covad's stock caused by defendants' alleged false and misleading statements enabled Covad to complete a $500 million bond offering and the $140 million stock-for-stock acquisition of BlueStar. On October 17, 2000, 15 business days after the acquisition of BlueStar was completed and just 18 business days after Covad raised $500 million in a debt offering, Covad revealed that it was in fact suffering a huge decline in revenues, was not posting smaller negative EPS growth, and contrary to defendants' repeated assurances, Covad was forced to reveal the problems it had been experiencing during the Class Period in attempting to grow its business. This announcement caused its stock price to drop to as low as $3.50 (or over $5 per share) on record volume of 70 million shares on October 18, 2000, causing hundreds of millions of dollars in damages to members of the Class. Contact: Milberg Weiss Bershad Hynes & Lerach LLP William Lerach, 800/449-4900 wsl@mwbhl.com ECONNECT: SEC File Shows Summary of 31 Shareholder Suits Filed this Year ------------------------------------------------------------------------ As reported previously in the CAR, securities suits were filed against the company earlier in the year. In its report filed with the SEC, the company presents a list of 31 complaints by investors against the company. These thirty-one actions were filed on various dates between March 14, 2000 and early May 2000, inclusive, and are all pending in the United States District Court for the Central District of California. These actions are brought by various putative classes of the purchasers of the Registrant's common stock. The putative classes alleged, none of which have been certified, range from no earlier than November 18, 1999 through March 13, 2000. Plaintiffs in the various actions assert that the company and Thomas S. Hughes, as well as (in certain of the actions) Jack M. Hall, Diane Hewitt, Anthony L. Hall, and Kevin J. Lewis, have violated Section 10(b) of the Exchange Act (false or misleading statements and omissions which deceived stock purchasers) and also Section 20(a) of the Exchange Act (liability as a "controlling person" with respect to a primary violation of securities laws). The principal allegations concern various alleged material misrepresentations and omissions which supposedly made the company's public statements on and after November 18, 1999 (and/or on and after November 23, 1999) false and misleading, thereby artificially inflating the market in and for the Registrant's common stock. No class has yet been certified in connection with any of these actions. All cases have been combined into one case before the Honorable Margaret M. Morrow, entitled In Re eConnect, Inc. Securities Litigation, Master File No. 00-02674 MMM (JWJx). Negotiations are underway regarding the settlement of these actions. Additionally, a shareholder of the company named John P. Maloney, filed an individual action for "securities fraud and misrepresentation" against the company and Mr. Hughes on May 12, 2000 in small claims court in Torrance, California. eConnect subsequently removed the action to the United States District Court for the Central District of California, and requested that it be consolidated with In Re eConnect, Inc. Securities Litigation. However, on September 11, 2000, the Honorable Margaret M. Morrow ruled that Mr. Maloney's action should be remanded to the state small claims court. The 31 lawsuits pending are: * Einhorn, et al. v. eConnect, Thomas S. Hughes, Jack M. Hall, Dianne Hewitt, Anthony L. Hall, and Kevin J. Lewis, Case No. 00- 02674 MMM (JWJx); * Eckstein, et al. v. eConnect, Inc. , Thomas S. Hughes, Jack M. Hall, Dianne Hewitt, Anthony L. Hall, and Kevin J. Lewis, Case No. 00- 02700 DDP (CWx); * Bernstein, et al. v. eConnect, Inc., et al., Case No. 00-02703 FMC (BQRx); * Colangelo, et al. v. eConnect, Inc., et al., Case No. 00-02743 SVW (SHx); * Baron, et al. v. eConnect, Inc. , Thomas S. Hughes, Jack M. Hall, Dianne Hewitt, Anthony L. Hall, and Kevin J. Lewis, Case No. 00- 02757 WJR (CTx); * Warstler, et al. v. eConnect, Inc. , Thomas S. Hughes, Jack M. Hall, Dianne Hewitt, Anthony L. Hall, and Kevin J. Lewis, Case No. 00- 02758 R (SHx); * Prager, et al. v. eConnect, Inc. , Thomas S. Hughes, Jack M. Hall, Dianne Hewitt, Anthony L. Hall, and Kevin J. Lewis, Case No. 00- 02759 GHK (RCx); * Weisblum, et al. v. eConnect and Thomas S. Hughes, Case No. 00- 02770 MRP (CTx); * Mazda, et al. v. eConnect, et al., Case No. 00-02776 LGB (Mcx); * Pirraglia, et al. v. eConnect, et al., Case No. 00-02875 SVW (CWx); * Hershkop and Hershkop, et al. v. eConnect and Thomas S. Hughes, Case No. 00-03095 MRP (RNRx); * Bacun, et al. v. eConnect, Inc. , Thomas S. Hughes, Jack M. Hall, Dianne Hewitt, Anthony L. Hall, and Kevin J. Lewis, Case No. 00- 03161 FMC (JWJx); * Fine, et al. v. eConnect, Inc. and Thomas Hughes, Case No. 00- 03290 SVW (BQRx); * Smith, et al. v. eConnect, Thomas Hughes, Case No. 00-03301 DT (Mcx); * Reimer, et al. v. eConnect, Thomas Hughes, Case No. 00-03405 JSL; * Tepper, et al. v. eConnect and Thomas S. Hughes, Case No. 00- 03444 WJR (CTx); * Bury, et al. v. eConnect, Thomas Hughes, Case No. 00-03446 ABC; Villari, et al. v. eConnect, Thomas Hughes, Case No. 00-03447 LGB (SHx); * Ringel, et al. v. eConnect, Inc. , Thomas S. Hughes, Jack M. Hall, Dianne Hewitt, Anthony L. Hall, and Kevin J. Lewis, Case No. 00- 03591 RSWL (RNBx); * Massaro, et al. v. eConnect, Inc., Thomas S. Hughes, Jack M. Hall, Dianne Hewitt, Anthony L. Hall, and Kevin J. Lewis, Case No. 00- 03671 DDP (MANx); * Gardner, et al. v. eConnect, Inc., Thomas S. Hughes, Jack M. Hall, Dianne Hewitt, Anthony L. Hall, and Kevin J. Lewis, Case No. 00- 03897 MMM (RZx); * Schneyer, et al. v. eConnect, Case No. CV-00-03783 MMM (JWJx); * Ginocchi, et al. v. eConnect, Case No. 00-04003 MMM (JWJx); * Matrisciani, et al. v. eConnect, Case No. 00-04181 MMM (JWJx); * Dutton, et al. v. eConnect, Case No. 00-04505 LGB (Ex); * Shaw, et al. v. eConnect, Case No. 00-04637 LGB (Ex); * Gowrie, et al. v. eConnect, Case No. 00-04686 LGB (Ex); * Belcher, et al. v. eConnect, Case No.00-04792 LGB (Ex); * Lively, et al. v. eConnect, Case No. 00-03112 MMM (JWJx); * Levine, et al. v. eConnect, Case No. 00-03649 MMM (JWJx); and * Berkowitz, et al. v. eConnect, Case No. 00-04152 MMM (JWJx). FORD MOTOR: Stull, Stull Files Securities Suit in Michigan ---------------------------------------------------------- A class action lawsuit was filed on October 20, 2000, in the United States District Court for the Eastern District of Michigan, Southern Division on behalf all persons who purchased the common stock of Ford Motor Company, (NYSE:F) ("Ford," or the "Company") between January 21, 1999 through and including August 9, 2000 (the "Class Period"). This action is also brought as a class action on behalf of a sub-class of persons and entities who acquired Ford common stock pursuant to a Registration Statement filed with the SEC on or about June 1, 2000, in connection with a recapitalization of Ford stock, and those who acquired such stock in the aftermarket that can be traced to the stock issued pursuant to the Registration Statement. The complaint charges that statements regarding Ford's business, as contained in Ford's reports to shareholders, SEC filings including Registration Statement, Proxy Statement and Form 10-K, and other of its public disclosures during the Class Period were materially false and misleading. The company misled the investing public regarding the safety of the Ford Explorer in combination with Firestone tires, and failed to disclose the significant number of deaths, accidents, complaints and claims resulting therefrom, both in the United States and in foreign countries. Contact: Stull, Stull & Brody, New York Tzivia Brody, Esq., 1-800-337-4983 fax: 212/490-2022 SSBNY@aol.com HAWAII: Held In Contempt For Alleged Failure To Fix Special Ed -------------------------------------------------------------- In a class action spanning most of the past decade, the U.S. District Court, District of Hawaii held that the state of Hawaii in contempt for failing to bring its special education programs in line with the IDEA and Section 504. Felix by Servietti-Coleman v. Cayetano, 32 IDELR 230 (D. Haw. 2000). The class action was initiated in 1993 by a group of students with mental health needs. In 1994 the parties entered into a consent decree in which the state agreed to "implement a seamless system of care." Following modifications to the decree and the state's subsequent noncompliance, 141 benchmarks were established to gauge the state's progress toward compliance in each of its school facilities. The class charged that the state failed to comply with the decree and asked the court to find it in contempt. The court found that the state failed to meet many of the most significant benchmarks, such as modifying its facilities and updating personnel procedures. The state also could have offered special incentives, higher salaries, or better working conditions to attract qualified special education teachers, but it did not. The state was unable to satisfactorily explain why it did not meet the benchmarks, whose deadlines the court termed "firm but manageable." While it made progress, the court scolded the state for failing to take "every reasonable step" to comply with the decree. A good faith effort to comply was also irrelevant, for all that was required to find the state in contempt was noncompliance with the decree. The court ordered further hearings to determine the appropriate relief. (Special Education Law Monthly, October 18, 2000) HOLOCAUST VICTIMS: Clouds over Austro-US Accord On Nazi Compensation -------------------------------------------------------------------- Austria and the United States are to sign an accord Tuesday to compensate victims of Nazi slave labour programs, in what Vienna hopes will end legal action against it over the policy. But the agreement is clouded by the threat of continuing claims for compensation for forced labourers and from Jews who had assets seized by Nazis after Hitler annexed Austria into the Third Reich in 1938. US Deputy Treasury Secretary Stuart Eizenstat, who will sign the agreement at a ceremony in Vienna, has said it will protect Austria against class-action suits pledged by US lawyers representing victims. Austria has pledged to pay 6 billion schillings (436 million euros) in compensation to the some 150,000 survivors of the Nazi slave labour policies, a sum accepted by Washington. Payouts could begin this year, Vienna says. The slave labour accord is to be signed at the Austrian chancellory by Eizenstat and Maria Schaumayer, the Austrian government's chief negotiator and representative on the issue. But for the accord to have any force, lawyers with suits against Austria currently must be persuaded to drop them first. Schaumayer said at the weekend she remained "wary" about forced labour agreement, according to the APA news agency. She notably pointed out that Germany signed a similar agreement on slave labour compensation in July -- but that legal suits remained in place against Germany despite the July agreement. "Nothing has been withdrawn," she said. New York lawyer Ed Fagan -- who played a key role in securing accords in Switzerland and Germany, is demanding that Austria pay out 12 billion schillings (876 million euros) to Jews whose assets were seized by the Nazis. German lawyer Michael Witti, who has worked with Fagan on Nazi-era claims in other countries, said that the two lawyers will sign the accord Tuesday. But an Austrian weekly reported Saturday that a new law suit has been launched against Austria, including claims for forced labour and for property confiscated from them. The new suit has been launched against both the state of Austria and Austrian firms by Jay R. Fialkoff, a lawyer in the New York office of Moses and Singer, according to the magazine Profil. Austria is also to sign bilateral compensation accords with ex-communist countries where survivors still live, including Belarus, the Czech Republic, Hungary, Poland, Russia and Ukraine. Whatever happens on the slave labour issue, Austria is committed also to begin negotiations immediately on the issue of compensation for Jews whose assets were seized by the Nazis after 1938. Austria's Jewish community, which says such assets included some 70,000 appartments as well as personal valuables and belongings, agreed to a payment of some 150 million dollars for some of those assets, or about 7,500 dollar for each of the 21,000 survivors. But they insist that sum is only the start -- in contrast to Ernst Sucharipa, the government's representative in charge of the issue, who says any further payments must come from private industry. Austria's Jewish community leader Ariel Muzicant also wants negotiations to include compensation not only for survivors, but for descendants of Jews whose assets were stolen: some 65,000 Jews who died in the Holocaust and 115,000 others who have died since World War II. (Agence France Presse, October 23, 2000) INTUIT INC: Faces Lawsuits in CA over Invasion of Privacy --------------------------------------------------------- On March 3, 2000 a class action lawsuit, Bruce v. Intuit Inc., was filed in the United States District Court, Central District of California, Eastern Division. Two virtually identical lawsuits were later filed: Rubin v. Intuit Inc., was filed on March 8, 2000 in the United States District Court, Southern District of New York and Newby v. Intuit Inc. was filed on April 27, 2000, in the United States District Court, Central District of California, Eastern Division. A similar lawsuit, Almanza v. Intuit Inc. was filed on March 22, 2000 in the Superior Court of State of California, San Bernadino County, Rancho Cucamonga Division. The Bruce and Newby lawsuits were then consolidated into one lawsuit, In re Intuit Privacy Litigation, filed on July 28, 2000 in the United States District Court of California, Eastern Division. These purported class actions allege violations of various federal and California statutes and common law claims for invasion of privacy based upon the alleged intentional disclosure to third parties of personal and private customer information entered at Intuit's Quicken.com website. The complaints seek injunctive relief, orders to disgorge profits related to the alleged acts, and statutory and other damages. Intuit believes these lawsuits are without merit and intends to defend the litigation vigorously. INTUIT INC: Plintiff Willing to Quit Case over Ad. and Business Practice ------------------------------------------------------------------------ In addition, on April 19, 2000, Bosch v. Intuit Inc. was filed in the Superior Court, State of California, County of Los Angeles, Central District. This lawsuit alleges violations of California statutes for alleged false and deceptive advertising and unlawful business practices related to QuickBooks products and purchasing the Basic Payroll Service. In September 2000, the plaintiff voluntarily dismissed this lawsuit. MOTORCAR PARTS: Faces Securities Suit in CA; Insurer Objects to Coverage ------------------------------------------------------------------------ The Company Motorcar Parts and Accessories is a defendant in a class action lawsuit pending in the United States District Court, Central District of California. The complaint in this action alleges that the Company misstated its earnings in violation of securities laws over a three-year period and seeks damages on behalf of all investors who purchased Company common stock from August 1, 1996 to July 30, 1999. The Company's insurance carrier has also filed a claim against the Company and certain officers that seeks to invalidate coverage for claims made against the Company's officers in the class action lawsuit. The outcome of these cases cannot presently be determined. MTBE LITIGATION: Supreme Court Dismisses Bid For Class Certification -------------------------------------------------------------------- The Supreme Judicial Court has dismissed an appeal that sought to grant class-action status to a lawsuit by five Maine well owners against manufacturers of the gasoline additive MTBE. In upholding a judge's denial of class certification earlier this year, the justices agreed unanimously that the issue was not ripe for appeal because there has yet to be a final judgment in the case. The plaintiffs may renew the appeal for certification following a final decision, said their attorney, Jon Hinck. The lawsuit alleges that Atlantic Richfield Co. and its subsidiaries, which manufacture MTBE, or methyl tertiary butyl ether, violated state law by failing to warn the public that the additive can seep into the ground and contaminate well water. The judge who denied class certification concluded that there were many ways that wells can be contaminated and that the lawsuit did not adequately encompass the concerns of all well owners in Maine. (The Associated Press State & Local Wire, October 23, 2000) NEW HAVEN: Fed Suit Challenges Strip Search at Juvenile Facility ---------------------------------------------------------------- A city lawyer has filed a federal lawsuit claiming the strip search policy at the New Haven Juvenile Detention Center violates the constitutional rights of children. The suit contends the state and supervisor Leonard Barbieri are responsible for inflicting mental and emotional distress on the youths. "The taxpayer charges the state of Connecticut to protect our children, keeping them safe and off the streets and locking them up when needed," said Anthony A. Wallace, who filed the lawsuit in U.S. District Court. "But here they are abusing the children and taking away their dignity." Wallace said the center policy is to perform a strip search on all detainees even if they are truant or runaways and not charged with crimes. Barbieri declined to comment, referring calls to the state Judicial Department. A spokeswoman in the Chief Court Administrator's office said she could not comment on pending litigation. Attorney General Richard Blumenthal said he had not seen the lawsuit and could not comment. The suit seeks an injunction that would prohibit the use of strip searches at all state juvenile detention centers, compensatory and punitive damages and attorneys' fees. It also seeks class action status to include people in the state who were held for their own protection or arrested for misdemeanors and non-criminal offenses and were strip searched. The suit asserts that at least 10 federal appeal courts have ruled strip searches of adults charged with misdemeanors or held in civil matters are a violation of the Fourth Amendment unless there is reasonable suspicion to believe the person arrested is concealing weapons or contraband. It claims juveniles should be similarly protected. Plaintiffs in the case are not named. Wallace said similar lawsuits have been filed in Rhode Island, Massachusetts, New York City and Kentucky. In Kentucky, he said, the case was settled for $17 million. (The Associated Press State & Local Wire, October 23, 2000) OMAHA PUBLIC: Lawsuit in Lincoln Accuses of Employment Racial Bias ------------------------------------------------------------------ In a federal lawsuit filed last week, Omaha Public Power District is accused of discriminating against black employees by denying them promotions, fair job evaluations, compensation and training. Four current employees and a former worker filed the class-action lawsuit in U.S. District Court in Lincoln. The plaintiffs are seeking a judgment giving them and every other black employee the job positions they would hold if not for the alleged discrimination. They also want monetary compensation for the lost earnings. Omaha attorney Marlon Polk said the complaining employees are not trying to drag the utility through the mud, but are seeking redress for the unfair situations black employees have had to endure. The lawsuit claims OPPD managers "hand-pick" preselected white employees for promotions before the openings are posted companywide. "The posting policy is then followed as a formality by supervisors and managers," the lawsuit says. The lawsuit also accuses the utility of paying black employees less than white counterparts for identical or similar jobs and subjecting black employees to so-called "lead walls," which restrict their lateral movement into other positions within the company. According to the lawsuit, black employees account for about 7 percent of the company's 2,292 workers, yet represent less than 1 percent of the senior level positions. The five named plaintiffs include a manager, a secretary, a stenographer, an account clerk and a former employee. OPPD president Fred Petersen said the company still was reviewing the lawsuit, filed in U.S. District Court in Omaha. The case later was transferred to the federal court in Lincoln, where it has been assigned to Judge Richard G. Kopf. Petersen said OPPD has a long-standing record of compliance with Equal Employment Opportunity guidelines in its hiring and employment practices and is committed to fairness. (The Associated Press State & Local Wire, October 23, 2000) PAYDAY LENDERS: Lawsuit against Cash Today Certified in Texas ------------------------------------------------------------- In an action against payday lenders, the District Court for the Southern District of Texas certified a class of borrowers so financially strapped they borrowed money at extremely usurious rates. Henry, et al. v. Cash Today Inc., et al., Nos. H-99-3335, C-99-305 (S.D. Tex. 9/19/00). Wesley Timothy Henry and George Rodriguez filed separated actions against Cash Today Inc. and other payday lenders, alleging the lenders' "payday loans" violated the Truth in Lending Act, the Racketeer Influenced and Corrupt Organizations Act, state usury laws, Texas Debt Collection Act and the Texas Deceptive Trade Practices Consumer Protection Act. In an amended consolidated complaint, the borrowers claimed the "defendants are unlicensed lenders engaging in a practice, centrally directed by Cash Today, U.S.A., of making high interest (at more than twice the rate permitted by Texas law) payday loans throughout Texas, while pretending to sell advertising and operating a check cashing business in order to avoid liability for usury and violations of TILA." Specifically, the borrowers alleged the lenders violated the TILA by failing to disclose the amount financed, the finance charge, the annual percentage rate and the total number of payments. They also contended the lenders engaged in prohibited debt collection practices by making threats of criminal prosecution and misrepresenting that the plaintiffs' transactions were not loans. The borrowers moved for certification of a class of all Texas residents who entered into transactions with lenders "purporting to be cash-back advertising sales." The lenders argued that the borrowers failed to satisfy the commonality, typicality and adequacy of class representation requirements. They also contended the borrowers failed to satisfy Rule 23(b)(3) requirements by showing a class action was superior to other available methods for dealing with their claims. The court concluded that the borrowers satisfied the numerosity requirement by showing the lenders maintained 30,000 to 40,000 loan customer files throughout Texas. Second, the court found the borrowers satisfied the commonality requirement because common questions "linked" all class members on all causes of action. As to the TILA claim, the court stated, the "shared questions are whether defendants were engaged in making consumer loans and whether their failure to provide required disclosures violated the statute." The court added, "because a borrower need not show reliance or injury for a TILA cause of action, but simply make an objective comparison of defendants' disclosure practices with the requirements of TILA ... there is no danger of individual differences undermining class similarities." The court also found that the plaintiffs' usury cause of action created a common issue: Whether the transactions were loans and whether they exceeded the statutory interest rate. Finally, the court said "[t]he nature of the misleading representations ... in violation [of] the DTPA would be the same for all class members. The borrowers satisfied the typicality requirement because each member entered into the same type of payday loan. Lastly, the court determined that the proposed representation was adequate because the representative and members sought money damages, and their counsel was experienced. As the court noted, to maintain a class action under Rule 23(b)(3), the borrowers must show that (1) common questions predominate over any questions affecting only individual members and (2) the class resolution is superior to other available methods for the "fair and efficient adjudication of the controversy." The court observed that the lenders "operated in essentially the same manner, as centrally directed by Defendant Cash Today USA, with regard to all customers" and determined that the borrowers satisfied the predominance requirement of Rule 23(b)(3). With regard to the TILA claim, the court stated the lenders engaged in the same practices of alleged nondisclosure. The court also stated, "the 'common nucleus of operative fact' for purposes of the Count Two usury claim is that Defendants lent Plaintiffs' money at a rate exceeding 600% per annum." The court further found a class action a superior method for resolving the dispute. As the court stated, "Plaintiffs emphasize that most of the affected borrowers are probably unaware of the violation of their rights and the claims individually are for relatively small amounts of money, making the likelihood of individual litigation unlikely." According to the court, "the nature of the case indicates that the potential class is composed of individuals so financially strapped that they would borrow money at extremely usurious rates." The court concluded that the borrowers met their burden of proof for class certification and granted the borrowers' motion. (Consumer Bankruptcy News, October 17, 2000) PRICELINE.COM, INC: Scott & Scott Files Securities Lawsuit in CT ---------------------------------------------------------------- Scott & Scott, LLC, (scottlaw@scott-scott.com) a Connecticut-based law firm, filed suit in the United States District Court for the District of Connecticut on behalf of all persons who purchased the common stock of Priceline.com, Inc. (NASDAQ:PCLN) from July 24, 2000 through September 26, 2000. Scott & Scott, LLC announces that it has extended the class period to represent shareholders of Priceline.com, Inc. who purchased those shares from January 31, 2000 to October 4, 2000. The complaint alleges that Priceline.com and certain of its directors and officers violated the Securities Exchange Act of 1934 by issuing false and misleading statements. It contends that Priceline.com did not disclose that its third quarter results would not meet expectations even though it knew that it would not due to lower than anticipated sales. That, coupled with insider trading and the disclosure of missed earnings on September 27, 2000, caused shareholders to lose 42% value on that date when shares plunged from$18.64 to $ 10.75. Contact: Scott & Scott LLC Neil Rothstein, 619/251-0887 ROBERT MUGABE: Faces Claim For Damages Over Zimbabwe Election Killings ---------------------------------------------------------------------- President Robert Mugabe is facing a $400 million ( pounds 260 million) compensation claim from the victims of political violence in Zimbabwe during the campaign for parliamentary elections in June. Three victims will give evidence against Mr Mugabe at a hearing in the US District court in New York. They include Maria Stevens, whose husband David was shot dead by so-called war veterans in April. Mr Mugabe, who was served with the civil claim while attending a United Nations summit in New York last month, is being sued for serious human rights abuses allegedly committed against his political opponents. Any damages award will be difficult to enforce. But the victims, supported by Zimbabwe's main opposition party, the Movement for Democratic Change, hope to highlight their cause in an international setting. The MDC's leaders fear that Mr Mugabe has been allowed to get away with his systematic abuses of power as international attention has moved on elsewhere. The Zimbabwe Human Rights Forum has documented more than 1,000 crimes from beatings to torture. International observers confirmed the widespread use of violence during the campaign. Thirty-one people were killed. Most of the violence was attributed to supporters of Mr Mugabe's ruling Zanu-PF party who recently granted an amnesty for their crimes. The victims, acting with the support of the Human Rights Forum, also hope that should Mr Mugabe be ousted, either by the recently instigated impeachment proceedings or by civil unrest, damages could be extracted from his considerable overseas assets. A judgment against him in New York would also make it difficult for him to visit America to attend meetings of the UN and other world bodies for fear of having a damages claim enforced against him. Earlier this year a jury in New York ordered Radovan Karadzic, the former Bosnian Serb leader, to pay $745 million ( pounds 300 million) to a group of women who accused him of killings and other atrocities. Mrs Stevens said her primary concern was to draw attention to the fact that there was "no justice and no redress" in Zimbabwe. Since her husband, a white tobacco farmer, was abducted from a police station and shot at point-blank range Mrs Stevens has been trying get justice for herself and her children. "I have been going through all the channels and all the relevant authorities but without success. When I go to the ministry of justice they say I am in the wrong office and cannot take any action," she said. Also giving evidence will be Adella Chiminya, who says she is not afraid to testify despite the real possibility that she could be arrested on her return to Zimbabwe. Her husband, Tichaona, was burned alive in his car near Buhera, southern Zimbabwe, in April. Witnesses recognised the attackers as Zanu-PF supporters and members of the feared Central Intelligence Organisation but no arrests were made. Mrs Chiminya, 34, whose husband was the campaign manager for the opposition leader, Morgan Tsvangirai, has been left to bring up two children, Faith, 15, and Blessed, 11, on her own. "What we want is for the whole world to know that there is no justice in Zimbabwe. It is now six months since my husband was killed and nothing has been done," she said. The third plaintiff in what lawyers hope to broaden into a class action is Elliot Pfebve. His brother, Matthew, 49, was beaten to death by Zanu-PF activists during an attack by a mob of more than 300 on the family home in April. He said: "As the MDC candidate for the Bindura constituency I was the target that day but I think they mistook my brother for me. My father was also beaten unconscious and lost two fingers on his right hand." "After all these atrocities Mugabe is still free and with the amnesty no one will ever be brought to justice for these crimes." (The Daily Telegraph(London), October 23, 2000) SAGENT TECHNOLOGY: Milberg Weiss Files Securities Suit in CA ------------------------------------------------------------ Milberg Weiss (http://www.milberg.com/sagent/)announced on October 20 that a class action has been commenced in the United States District Court for the Northern District of California on behalf of purchasers of Sagent Technology Inc. ("Sagent") (NASDAQ:SGNT) common stock during the period between Oct. 21, 1999 and April 18, 2000 (the "Class Period"). The complaint charges Sagent and certain of its officers and directors and its underwriter with violations of the Securities Exchange Act of 1934. Sagent is a provider of Real-time eBusiness Intelligence Solutions which purport to enable enterprises to win new customers and improve operational effectiveness. On April 13, 1999, defendants arranged for Sagent to sell over 5.7 million shares of Sagent stock to the public for $9 per share (the "IPO" or "Offering") for total proceeds of more than $50 million. The IPO was over-subscribed, causing Sagent's share price to jump to $15-9/16 per share on the same day. The complaint alleges that as part of defendants' effort to boost the price of Sagent stock, they misrepresented Sagent's true 1999 and 2000 prospects in an effort to conceal Sagent's true prospects until they were able to sell at least $8 million of their own Sagent stock and were able to renew and/or expand Sagent's credit line which was set to expire in early 2000. Renewing Sagent's credit line was extremely important to defendants, as Sagent had not been, and would not be able to, fund its operations from cash generated by its business operations, because Sagent was continuing to post substantial losses. On April 18, 2000, after representing throughout late 1999 and early 2000 that Sagent would achieve Q1 results of $17.4 million in revenue and $.04 in EPS, defendants revealed that Sagent would fall seriously short of the results theretofore promised by defendants. In fact, defendants were forced to reveal that contrary to their representations of closing Sagent's largest software deal ever and strong growth in revenue and EPS, Sagent was, in fact, suffering revenue and EPS declines. The price of Sagent shares dropped to as low as $7-7/32 per share on record volume of 17.5 million shares, a decline of more than 70% from where defendants had sold their own Sagent shares at prices as high as $27.875 months prior. Defendants further revealed that both Sagent's Vice President of Sales and Chief Financial Officer had resigned after the two officers had just collectively received more than $6 million in proceeds. Contact: Milberg Weiss Bershad Hynes & Lerach LLP William Lerach, 800/449-4900 wsl@mwbhl.com WATER CONTAMINATION: Walkerton Commission Adds 3rd Party to Claim ----------------------------------------------------------------- Two of the defendants in a proposed class-action suit are trying to pass the liability on to others. The Walkerton Public Utilities Commission and manager Stan Koebel have added eight "third parties" to the claim. A third-party action is a lawsuit within the context of another suit already under way, lawyer Scott Ritchie said. "The defendants who we have sued are asking to have blame cast on others," explained Ritchie, who represents victims of last May's E. coli outbreak, which killed seven people and left 2,300 ill. The move has no effect on his clients' suit, Ritchie said. It targets five defendants, including the Ontario government, Town of Brockton and Bruce-Grey- Owen Sound health unit. A document filed Oct. 16 in Superior Court alleges negligence by: * Farmers David and Carolyn Biesenthal, whose farm, next to one of Walkerton's three wells, is the source of the E. coli bacteria. (Health officials have stated that their farming practices are not at issue, ascribing the outbreak to the fact the well was not secure.) * Hydrogeologist Ian Wilson, who advised the utility during well construction. * Davidson Well Drilling Ltd., which drilled the three wells and was retained in 1999 to conduct a review and refurbishing of Well 5. * Three firms that successively acted as consulting engineer - Earth Tech (Canada) Inc., of Toronto, Conestoga-Rovers and Associates Ltd. of Waterloo and B. M. Ross and Associates Ltd. of Goderich. * Two firms that tested the town's water: GAP EnviroMicrobial Services Inc. and AL Canada Laboratories East Inc. (The Toronto Star, October 23, 2000) * Class Action Suit System To Be Put On Hold In Korea ----------------------------------------------------- The adoption of a mandatory collective voting system which would allow small shareholders to form voting blocs to influence board of directors elections is very likely to be put on hold, sources said Saturday. The collective voting system, which favors small shareholders, was proposed by civic groups as part of efforts to improve corporate governance, but the government and the ruling party have been reluctant to make the system mandatory. A policy decision-making source at the ruling Millennium Democratic Party said that "the government is strongly against making the collective voting system mandatory, and the MDP concurs." He added, "It is, therefore, hard to adopt the system." A government source said that the collective voting system is not a global standard. In advanced countries, corporations that adopt such systems are very rare, according to the source. In another issue related to small shareholders, the future of a class action suit system for stock trading disputes, looks uncertain. Under the system, when class action suits filed by a limited number of shareholders against specific listed companies are won, other small shareholders, not involved in the suit, could receive compensation, such as in cases where damages are incurred by false public disclosures. "The Justice Ministry remains very lukewarm about the class action suit system, and even the Finance-Economy Ministry shows some negative undercurrents, while in the government party, opinion is split," the source said. "For the moment, we cannot say for sure about the possible adoption of the system, but a final decision will be made sooner or later, pending inter-agency consultation and consultation with the ruling party," a Finance-Economy Ministry source said. (Asia Pulse, October 23, 2000) ********* 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 * * *