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/raid1/www/Hosts/bankrupt/CAR_Public/010214.MBX C L A S S A C T I O N R E P O R T E R Wednesday, February 14, 2001, Vol. 3, No. 32 Headlines AVENTIS: 3 Executives Leave Over Starlink Debacle BIOMUNE SYSTEMS: Resolves Securities Suit Filed in Utah CANKER PROGRAM: Crews Buzz to Infected Trees; Replacement Called for ENGINEERING ANIMATION: Discloses Details of Settlement with Stockholders GREAT ATLANTIC: $3M Offer Accepted in Suit Re Wages for Grocery Delivery HIP IMPLANT: S.F. Former Firefighter Sues for Damages of Faulty Hip HOLOCAUST VICTIMS: IBM Suit Shouldn't Delay Payment, Green Party Says INMATES LITIGATION: 8 File Suit over Anaconda-Deer Lodge County Jail INMATES LITIGATION: Settlement on WI Prison Anti-Porn Rule Gets Approval IOWA BEEF: Morris and Morris Files Securities Suit in South Dakota MINING DISEASES: Miners and Families in Australia Bid for Compensation MORTON CHEMICAL: Company Agrees to Medical Treatment for Ex-Workers MOTORCAR PARTS: 9th Cir Refuses to Address Lead Role in Securities Suit NIGHT CLUBS: Lawsuit Contends Racist Dress Codes Turn Away Minorities PRINCE FOOD: EEOC Charges Cafeteria Firm With Racial Bias REALITY: Ignagni Seek to Set Record Straight on the Kennedy-McCain Bill SCHULER HOLDINGS: Settles Suit Re Alleged Defects in Fairway Home Units SOLUTIA INC: Former Monsanto Sued for Alleged Hazardous Chemical Release U OF WASHINGTON: Female Employees Decry Inequality in Pay and Sue U.S. INTERACTIVE: Cauley Geller Files Securities Suit in Pennsylvania VENTILATION STACK: Sydney Homeowners Consider Lawsuit against Government ********* AVENTIS: 3 Executives Leave Over Starlink Debacle ------------------------------------------------- Aventis CropScience USA, the U.S. unit of pharmaceutical giant Aventis SA, said three senior executives had left the company after turmoil caused by its controversial gene-altered corn. An industry source, however, said Maurice Delage, president and chief executive, Ed Makowski, vice-president of market development, and general counsel Karen Weiner were fired last week following the debacle with StarLink corn. "Aventis said last Friday that the changes were related to StarLink," said the source, who declined to be identified. An Aventis spokesperson declined to comment on whether the three were sacked, but added that their departure from the company was effective immediately. "This is an opportunity to move forward with new management," she said. The spokesperson said Delage would be replaced by Esmail Zirakparvar, an American currently serving as a member of the crop protection executive committee at Aventis' global headquarters in France. The management shakeup comes on the heels of Aventis being hit hard after its gene-altered StarLink corn entered the human food chain late last year, resulting in an eventual recall of more than 300 food products in the United States. StarLink is not approved for human consumption because of concern that one of its proteins might trigger allergic reactions. The product was, however, allowed for use as animal feed in the United States. Parent firm Aventis SA said in December it had decided to designate 100 million euros ($142 million Canadian) during the fourth quarter to cover recall and liability costs related to its StarLink corn. An industry source said Aventis would have to shell out at least $100 million (U.S.) to compensate farmers who grew StarLink corn or had their regular varieties tainted by it. He said that amount, however, did not include additional costs Aventis faced to compensate grain handlers whose supplies were inadvertently tainted by StarLink corn in storage. Traces of the corn were also discovered in food products in Japan, the top buyer of U.S. corn, and South Korea, leading to a sharp decline in their imports of American corn. "The company probably wants to hold someone accountable for StarLink, and let them fall on the sword," said Todd Duvick, food and agribusiness analyst at Bank of America. Aventis was likely to let StarLink corn fade away to let the company concentrate on other new products, he added. In September, Aventis launched a buy-back program to retrieve as much StarLink corn as possible from farmers, and the company is facing a number of class-action lawsuits filed by farmers seeking compensation for losses. (The Toronto Star, February 13, 2001) BIOMUNE SYSTEMS: Resolves Securities Suit Filed in Utah ------------------------------------------------------- On October 12, 1995, a Proposed Class Action Complaint for Violations of the Federal Securities Laws was filed in the United States District Court for the District of Utah, Central Division, by Roman Sterlin (Civil No. 2:95CV-0944G). The Complaint, as subsequently amended, named as defendants, Biomune, David G. Derrick (Biomune's former Chief Executive Officer and Chairman of the Board), Aaron Gold (a former director), Charles J. Quantz (a former director), Jack D. Solomon (a founder of Biomune and a former member of its Business Advisory Board), Genesis Investment Corporation (a stockholder) and The Institute for Social & Scientific Development, Inc. (a stockholder). The plaintiff has alleged violations by the defendants of Sections 10(b), 20(a) and 20(A)(a) of the Securities Exchange Act of 1934, Rule 10b-5 promulgated under such Act and general misappropriation of material non-public information. Biomune and other defendants prevailed in a motion to dismiss the lawsuit based, among other grounds, on the expiration of applicable statutes of limitation. The plaintiff appealed the decision of the District Court to the United States Court of Appeals for the Tenth Circuit (No. 95-CV-944) in Denver, Colorado. On September 2, 1998, the Court of Appeals reversed in part the decision of the trial court and remanded the case for a determination by the trial court of whether the complaint had been timely filed in light of the decision of the appellate court. The trial court permitted the parties to conduct additional discovery before a hearing on the issue. On March 3, 2000, the defendants filed a joint motion to dismiss or alternatively for summary judgment. A hearing on these motions was held on May 23, 2000. On September 27, 2000, the trial court granted defendant's motion for summary judgment. On November 14, 2000, the trial court entered a judgment against the plaintiff dismissing the action in its entirety because the applicable one year statute of limitations barred the plaintiff's claims. Plaintiff appealed and by order of the Court of Appeals filed on December 4, 2000, the court granted plaintiff's motion to voluntarily dismiss the action. CANKER PROGRAM: Crews Buzz to Infected Trees; Replacement Called for -------------------------------------------------------------------- As citrus canker crews prepared to go to work on February 13 in Palm Beach County, Broward County leaders moved forward on a plan to replace thousands of trees lost to the eradication program. The state's chain saws will growl this morning at the La Paloma mobile home park in Boynton Beach, where inspectors found canker on three citrus trees. It will be the first visit from state eradication crews in months. The state cuts down all citrus trees within 1,900 feet of infected ones, a policy that has already devastated Broward County's tree canopy. Since the program began, the county has lost about 132,000 residential trees, as state workers attempted to prevent the epidemic from moving north. Attempting to repair some of the damage, the Broward League of Cities held a public hearing Monday to finalize a plan to give away trees to every homeowner who lost one. Plans call for spending about $ 20 million to replace each tree lost by a homeowner. So far, the program has $ 2 million in state funds and plans to raise more from the federal government and private sources, said Eileen Cudney, executive director of the Broward League of Cities. The trees cannot be citrus trees, due to the continuing fight against the disease. But a variety of trees will be available, with the choices determined by a nine-member technical advisory committee that will include a landscape architect, urban forester, homeowner association representatives and county officials. "We want to make sure we have good trees," Cudney said. "We want trees that are noninvasive, we want trees that provide habitat, we want trees that are hardy." Fruit trees on the list include Barbados cherry, Cattley guava, strawberry guava, hybrid guava, star fruit, loquat, longan, mango, sapodilla, avocado and lychee. Other trees on the list include white geiger, powerpuff, desert senna, crape myrtle, queen crape myrtle, golden trumpet tree, yellow elder, black calabash, frangipani, Hong Kong orchid, apple blossom cassia, jacaranda, yellow poinciana, gumbo limbo, slash pine, royal poinciana, red maple, shortleaf fig, pongam, live oak and paradise tree. The list is likely to change once the committee takes a close look at it. The issue of which trees to select came up at the public hearing, when Jack Lang, president of the Native Plant Society of Broward County, objected to the inclusion of guava trees, since they're not native to South Florida. "Guavas are being targeted and eradicated from natural areas and our county parks," he said. "They do invade natural areas, and they do become aggressive." The trees will be distributed through tree fairs held throughout the county. The fairs will probably be held in the summer of 2002, although it's possible they will be earlier, Cudney said. Volunteers will help deliver and plant trees for those unable to do so. Homeowners interested in the program don't need to do anything at this point. The state has a database with the names of everyone who lost trees to the canker eradication program, and they will be contacted and given vouchers for a new tree for each tree they lost. The Broward County Commission is scheduled to give final approval to the program Feb. 20, delegating authority for its implementation to the Broward League of Cities. In another development, a state appeals court has rejected a motion to remove the Broward County judge who crippled the state's canker eradication program. Without comment, the 4th District Court of Appeal rejected a motion to disqualify Circuit Judge J. Leonard Fleet, who issued an injunction in November that stopped the mass destruction of healthy trees in Broward County. The state had accused him of bias, citing remarks he made about then-Commissioner of Agriculture Bob Crawford's pending job offer from the state Citrus Commission. But the appeals court refused to order Fleet off the case. Liz Compton, spokeswoman for the Agriculture Department, said the state will drop the issue. Fleet's position is important for two reasons. The state has appealed his injunction that stopped the crews from cutting down healthy trees. If the appeals court overturns any part of his decision, he may find himself presiding over more hearings. And he is scheduled to preside over another part of the case that has not yet moved forward, the class-action suit seeking compensation for homeowners who lost trees. (Sun-Sentinel (Fort Lauderdale, FL), February 13, 2001) ENGINEERING ANIMATION: Discloses Details of Settlement with Stockholders ------------------------------------------------------------------------ Stockholders of Engineering Animation Inc. who sued the company over alleged accounting irregularities could average about 31 cents for each share they owned under a settlement proposal. Lawyers for plaintiffs and EAI filed documents in U.S. District Court in Des Moines earlier this month detailing the settlement. They already had agreed to settle the suit for $ 7.5 million for what plaintiffs called misleading statements that hid the true financial condition of the Ames software company. EAI, now owned by Unigraphics Solutions Inc., did not admit guilt. The company said previously that the loss will be covered by its insurer. At least seven shareholder suits hit the company in 1998 and 1999. The settlement proposes that members of the class be those who bought or sold EAI stock between Feb. 19, 1998, and April 6, 1999, or between June 29, 1999, and Oct. 1, 1999. Lawyers said they believe 15.9 million shares of EAI were traded during the time covered by the suits. Given the amount of the overall settlement, that works out to 47 cents per share. Plaintiffs' lawyers, led by the New York law firm of Milberg, Weiss, Bershad, Hynes & Lerach, have asked for one-third of the $ 7.5 million as their fee. That leaves $ 5 million, minus expenses that will be incurred to find shareholders and process their claims. With the attorneys' payment, shareholders would receive no more than 31 cents per share. Attorney David Bershad said that once court approval is given to the settlement, EAI has agreed to hand over its records of stock transactions. Using a company that specializes in such work, the lawyers also will notify stockbrokers and post media notices of the settlement. U.S. Judge Ronald Longstaff will schedule hearings to determine both the appropriateness of the settlement and the fairness to shareholders. Investors can opt out of the settlement if they properly notify the plaintiffs' lawyers. (The Des Moines Register, February 7, 2001) GREAT ATLANTIC: $3M Offer Accepted in Suit Re Wages for Grocery Delivery ------------------------------------------------------------------------ On January 13, 2000, the Attorney General of the State of New York filed an action in New York Supreme Court, County of New York, alleging that great Atlantic & Pacific Tea Co. and its subsidiary Shopwell, Inc., together with the Company's outside delivery service Chelsea Trucking, Inc., violated New York law by failing to pay minimum and overtime wages to individuals who deliver groceries at a Food Emporium store in New York City. The complaint seeks a determination of violation of law, an unspecified amount of restitution, an injunction and costs. A purported class action lawsuit was filed on January 13, 2000 in the federal district court for the Southern District of New York against the Company, Shopwell, Inc. and others by Faty Ansoumana and others. The federal court action makes similar minimum wage and overtime pay allegations under both federal and state law and extends the allegations to various stores operated by the Company. In December 2000, the plaintiffs in the federal court action accepted a $3 million offer of judgment made by the Company, such offer being conditional upon the federal court entering an order certifying a class consisting of the individuals who are the subject of a pending motion by the plaintiffs for class certification. In the event the Court enters the class certification order, this judgment will also resolve all related claims of the New York Attorney General. HIP IMPLANT: S.F. Former Firefighter Sues for Damages of Faulty Hip ------------------------------------------------------------------- A former San Francisco firefighter was to file a class-action suit on February 13 in U.S. District Court in San Francisco against an artificial hip manufacturer that produced thousands of defective hip implants. The plaintiff, James T. Ferguson, a 63-year-old San Francisco resident, received one of the hip implants on Sept. 27, 2000. His implant was one of 17,500 the company recalled on Dec. 8. This is not the first suit against Austin, Texas firm Sulzer Orthopedics Inc. and its parent company, Sulzer Medica of Switzerland. Numerous lawsuits have been filed around the country by plaintiffs who received a defective implant that failed, causing severe pain and the need for another surgery to replace the faulty part. Ferguson's lawsuit is the first of its kind to be filed on behalf of patients who received a potentially defective implant. "Someone who knows they have had a hip device implanted they know may fail is going to go through a considerable amount of anxiety and fear," said Richard Heimann, of Lieff, Cabraser, Heimann & Bernstein, lead attorney on the case. Heimann said the suit will seek damages for the cost of monitoring the patient as well as pain and suffering. Replacing the faulty hip can be very difficult. Hip surgery, to begin with, is a complicated operation. A second surgery can take twice as long because of the difficulties of dealing with scar tissue buildup and other complications. Sulzer has admitted causing the defect, which has affected up to 31,000 him implants produced since October 1999 with some dating back to 1997. The company estimates 17,500 were implanted. According to Sulzer, 341 patients nationwide have had to have their implants replaced. Essentially, the problem surfaced during the manufacturing process, when trace amounts of mineral oil were left on the implant shell, preventing it from adhering to the patient's bone. Sulzer has since changed its manufacturing process. At least 20 individual lawsuits have been filed in Alameda County, and several more in San Francisco. In addition, lawsuits have been filed throughout the country, including federal class-action suits filed in Chicago and Los Angeles. Sulzer spokesman Jim Moore said the company is doing everything it can to help patients and doctors, including paying for another surgery when necessary. Hip surgery costs from $20,000 to $70,000. Moore said the company does not think a class-action lawsuit is the best way to resolve the problem. His class-action lawsuit is designed to help recover damages on behalf of patients such as Estelle Knowland, 63, of Alameda. Knowland, a novelist, said she had been suffering from arthritis for the past 20 years and was in considerable pain by the time she had her hip implant surgery done last March. While she hasn't been able to recover as quickly as she would have if she had not received a faulty implant, Knowland said she has been able to manage her pain and does not require a second surgery. At least for now. Doctors are unclear why some patients need to have immediate surgery while others don't, but it may have to do with the amount of oil or how the body reacts. "I'm very aware of it every day. I don't go through the day casually. I need to be aware of where I put my feet and how I go up and down the stairs," Knowland said. "My life is better than it was before the replacement. But the replacement having a flaw is still profoundly upsetting."E-mail Victoria Colliver at vcolliver@sfchronicle.com. (The San Francisco Chronicle, February 13, 2001) HOLOCAUST VICTIMS: IBM Suit Shouldn't Delay Payment, Green Party Says --------------------------------------------------------------------- The U.S. class action lawsuit by Holocaust victims against International Business Machines Inc should not delay the payment of compensation to former Nazi slave labourers, according to Volker Beck, a spokesman for the Green Party. Beck was responding to comments made by Wolfgang Gibowski, a spokesman for the German foundation set up to compensate former Nazi slave labourers, that the lawsuit could lead to delays in compensation payments. According to Gibowski, the lawsuit could delay the granting of legal immunity to companies involved in the compensation payment project, of which IBM's German subsidiary is a member. (AFX European Focus, February 13, 2001) INMATES LITIGATION: 8 File Suit over Anaconda-Deer Lodge County Jail -------------------------------------------------------------------- Eight former inmates of the Anaconda-Deer Lodge County jail are suing police, the city of Anaconda and the county, claiming they were subjected to unnecessary strip searches that were videotaped or performed in view of other inmates. The eight, including seven women, claim they were ridiculed by employees, catcalled by other inmates while nude and threatened with rape. They contend officers also made and circulated videotapes of the incidents recorded on jail surveillance cameras. County Attorney Mike Grayson said the lawsuit, filed in federal court, contains flagrant falsehoods. "There are a number of allegations in the complaint that are flat-out not true," he said. Missoula attorneys Alan Blakley and Mark Jones filed the 16-page complaint on behalf of seven women and one man. They are asking U.S. Magistrate Richard Anderson of Billings to certify the case as a class action suit. The plaintiffs named so far are Julie Mattson, Kerry Lynn Courchane, Glenda Peterson, Ursula Adams, Alvina Cramer, Kathey Jean Wilson and Susan Pomroy. The lone male plaintiff is Camille Adams. They are suing former police chief Joe Guiberson, current chief Tom Blaz, seven police officers, four dispatchers, the city of Anaconda, and Anaconda-Deer Lodge County. The plaintiffs contend they were subjected to strip searches without probable cause after they either were arrested or surrendered to serve jail time. They said the searches were performed in a booking room in view of a hallway and male inmates, and that employees and officers circulated videotapes showing the inmates nude. Julie Mattson said she was left sitting naked in the booking room while a jail official searched for a uniform, the suit alleges. The official "knew that Mattson was in plain view of male inmates and could hear the male inmates make offensive and suggestive comments to Mattson while she sat nude in the booking area," Blakley and Jones said in the lawsuit. Another plaintiff alleges an officer offered to release her from jail in exchange for sex, and another plaintiff said two officers accompanied her into a bathroom while she changed and threatened to rape her. (The Associated Press State & Local Wire, February 13, 2001) INMATES LITIGATION: Settlement on WI Prison Anti-Porn Rule Gets Approval ------------------------------------------------------------------------ State officials settled a federal class action lawsuit brought by prisoners challenging the state's ban on pornographic material in prisons. The settlement bans nude personal photos sent to inmates and magazines that feature nudity. The agreement allows publications with an occasional nude photo or publications such as art or medical books that depict nudity for medical or educational purposes. Prison officials can forbid only written material that would be considered obscene outside the prison. U.S. District Judge Barbara Crabb, who approved the settlement, said the original state Department of Corrections rule was so broad she probably would have ruled it unconstitutional. Crabb said the rule would have banned a picture of Michelangelo's Sistine Chapel and any material with a written description of sex. As part of the settlement, the state agreed to pay $77,617 in legal fees and costs to the inmates' lawyers at the Roger Baldwin Foundation of the American Civil Liberties Union in Chicago. On the Net: Wisconsin Department of Corrections: http://www.wi-doc.com/ (The Associated Press State & Local Wire, February 13, 2001) IOWA BEEF: Morris and Morris Files Securities Suit in South Dakota ------------------------------------------------------------------ The law firm Morris and Morris announced on February 12 that a class action lawsuit captioned Krim v. Iowa Beef Processors, Inc., Case No. 01-4031 was filed in the United States District Court for the District of South Dakota seeking to pursue remedies under the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder on behalf of all purchasers of the common stock of Iowa Beef Processors Inc. (NYSE:IBP) between February 7, 2000 and January 25, 2001, inclusive (the "Class Period"). The Class Action Complaint alleges that the defendants issued materially false and misleading public statements about IBP's earnings and revenue during the Class Period through press releases announcing financial results and its public filings with the Securities and Exchange Commission including IBP's Form 10-K filed February 7, 2000; Form 10-Q filed May 9, 2000; Form 10-Q filed August 8, 2000; and Form 10-Q filed November 7, 2000. More specifically, on January 25, 2001, it is alleged that IBP belatedly disclosed that on December 29, 2000, the Securities and Exchange Commission had sent the Company's lawyers a comment letter which cited 45 apparent instances of improper accounting in financial reports filed by the Company, including the accounting at its DFG Foods Subsidiary ("DFG"). As a result, on January 26, 2001 IBP issued a press release announcing that it would take a pre-tax charge of at least $47 million against year 2000 earnings to compensate for the accounting errors involving DFG and that it may need to further adjust its financial results to reflect impairment of goodwill or other long-lived assets associated with DFG. The public dissemination of materially misleading financial information caused IBP's common stock to be artificially inflated throughout the Class Period. Indeed, when the Company belatedly disclosed the accounting irregularities, the market price of IBP stock dropped almost $4.00 or about 15%. Contact: Morris and Morris Patrick F. Morris, Esquire Jacqueline L. Green, Esquire Phone number: 800/296-0410 Fax number: 302/426-0406 E-mail address: firm@morrisandmorrislaw.com or Bantz, Gosch, Cremer, Peterson, Sommers & Wager, L.L.C. James M. Cremer, Esquire Phone number: 605/225-2232 Fax number: 605/225-2497 E-mail address: jcremer@midco.net MINING DISEASES: Miners and Families in Australia Bid for Compensation ---------------------------------------------------------------------- More than 1,000 people in Australia have made a bid for compensation for illnesses contracted while working in mines in England, Wales or Scotland, a law firm said on February 13. In conjunction with other claimants around the world, it is shaping up as one of the world's biggest class actions, believes law firm Ryan Carlisle and Thomas. People who worked in a mine in England or Wales after 1954, or in Scotland after 1949, or are the wife, son or daughter of a deceased miner, can register for compensation. Ryan Carlisle and Thomas is expected to act for thousands of miners and their families, who may be entitled to claim for diseases such as chronic bronchitis, asthma attacks, hearing loss and pneumoconiosis. Rohan Atherton, a partner with the law firm, said he had been overwhelmed by the response since taking over the workload from an Adelaide solicitor late last year. "We took over a bundle of files from another solicitor who had been doing some work on them ... and we have half a dozen people working on this full-time now," Mr Atherton told AAP. "We've had over about 1,200 or so people who have registered in one way or another with us and we anticipate that there will be significantly more since we ran our notices in the paper late last year. "About 40 to 50 per cent of claimants are sons, daughters and widows of the miners," he said. Mr Atherton said his firm was fine-tuning the way Australians could bid for compensation and would meet with the lawyers from the Department of Trade and Industry in England, who deal with the compensation claims. Mr Atherton said the compensation process had been underway in England since September 1999, after the British Coal Corporation admitted liability in a landmark court case in 1998. "There are now 120,000 people registered in England," he said. Although the range of damages depended on various factors, including the level of disability, the most available was about STG50,000 ($A135,777.33), Mr Atherton said. If the initial offer is not accepted by the claimant, mediation and then court action can follow, Mr Atherton said. (AAP Newsfeed, February 13, 2001) MORTON CHEMICAL: Company Agrees to Medical Treatment for Ex-Workers ------------------------------------------------------------------- About 200 former workers of a Paterson dye plant could receive lifetime medical monitoring and, if needed, cancer treatment as compensation for their exposure to carcinogens. A lawsuit against Morton Chemical Co. was filed after separate litigation by four former employees who alleged they developed bladder cancer as a result of working with the toxic chemicals. Rohm and Haas Co., a Philadelphia-based firm that acquired the company from Morton International Inc., is expected to pay several million dollars in medical expenses if a state judge approves the proposed settlement next month. On Feb. 8, plaintiffs attorney Steven Wodka of Little Silver claimed in legal papers that former employees are entitled to free monitoring due to exposure to seven named carcinogens linked specifically to bladder cancer. "The American chemical industry has a we-know-it-all attitude. But this is the first time I have seen a company agree to do the right thing for its employees, with respect to the quality of the program they have agreed to provide to their people with," Wodka said. On March 2, Superior Court Judge Susan Reisner is expected to determine whether the plaintiffs will be labeled as a class. Ten years ago, Morton Chemical Co. began regularly screening its workers for bladder cancer, but the program didn't include former employees and retirees, many from Bergen and Passaic counties. However, a class action would ensure that any employee who worked at least one month in the McLean Boulevard plant since it opened in 1946 would be entitled to routine urine testing, and, if bladder cancer is found, treatment of the disease. The company's 100 current employees would also be covered in the deal. Wodka is optimistic that the lawsuit, originally filed in May in Middlesex County and transferred to Passaic County, will be resolved by April. Rohm and Haas spokesman Syd Havely declined to comment on the lawsuit until a final decision has been made. Although none of the workers are known to have the cancer, the monitoring would 1 help detect the disease early. Wodka said that his clients, mostly men in their 60s and 70s, are at the highest risk of developing bladder cancer because the disease has a latency period of 15 to 25 years. "As these people get older, their risk of bladder cancer increases dramatically,"Wodka said. The workers claim they were exposed during the early stages of production, when the chemicals, used essentially by the company as raw materials, were poured from 55-gallon drums and mixed in vats. Wodka said the company should have kept the materials in a closed system or not used them at all. One chemical on the list, beta-napthylamine, was so notorious for causing bladder cancer in the 1960s that it was banned throughout Pennsylvania. Wodka said Rohm and Haas is seeking money from the chemical suppliers for failing to place adequate warning labels on the products. Of the eleven companies listed in the complaint, only Pfister Chemical Co., has agreed so far to contribute toward the settlement, Wodka said. It would pay $ 25,000. The plant was first owned by Patent Chemical Co., and later sold to Morton International Inc., which ran it from 1968 to 1999. (The Record (Bergen County, NJ), February 13, 2001) MOTORCAR PARTS: 9th Cir Refuses to Address Lead Role in Securities Suit -----------------------------------------------------------------------The Ninth Circuit has refused to address the lead-plaintiff appointment in the securities fraud class action against Motorcar Parts & Accessories. The court concluded that the order was unappealable under the collateral order doctrine and that a writ of mandamus was not justified because the appellant had not clearly shown the court erred in its choice . Z-Seven Fund Inc. et al. v. Motorcar Parts & Accessories Inc. et al., No. 00-55014 (9th Cir., Oct. 18, 2000). The 14 actions against Motorcar for alleged accounting irregularities were consolidated in the Central District of California, and four different groups and individuals filed for appointment as lead plaintiff: -- The Motorcar Plaintiffs' Group was made up of 34 unaffiliated individuals, represented by Milberg Weiss Bershad Hynes & Lerack. Their aggregate losses total $248,835 with one individual loss of $61,000; -- The Motorcar Institutional Group was made up of 209 unrelated individuals and firms, including the Z-Seven Fund. Represented by Weiss & Yourman, they proposed the appointment of the entire group as lead plaintiff or that the Z-Seven Fund alone should be appointed. Their losses total $1.8 million including Z-Seven's loss of $410,000; -- The Louisiana State Employee's Retirement System also moved for appointment asserting a loss of $53,700; and -- Plaintiff Francine Ehrlich requested appointment as lead plaintiff, with her losses totaling $54,745. Milberg Weiss and Weiss & Yourman contentiously argued for their respective clients to be appointed. Milberg Weiss accused Weiss & Yourman of unethically and illegally soliciting class members by sending misleading correspondence to broker-dealers. Milberg Weiss also said that Z-Seven should not be appointed as lead plaintiff because it had been sued for breach of fiduciary duty in an unrelated matter and would be subject to unique defenses. Weiss & Yourman said the suit had been voluntarily dismissed. Weiss & Yourman also attacked the ethical qualifications of Milberg Weiss asserting the firm had recently paid $50 million to settle an abuse-of-process claim. Weiss & Yourman also said Milberg Weiss tried to intimidate brokers in the Network Associates litigation by telling them they could be fined up to $1 million and face a prison sentence for providing shareholder lists to law firms. Subsequently, the district court appointed Ehrlich as lead plaintiff, in part because no one contested her adequacy to fulfill the role. However, the court did not appoint her attorneys as class counsel; instead, it selected Marc Seltzer, who represented the retirement fund. When Z-Seven appealed the appointment under the collateral order doctrine, Ehrlich moved to dismiss it for lack of jurisdiction. Citing Coopers & Lybrand v. Livesay, 437 U.S. 463 (1978), the U.S. Court of Appeals for the Ninth Circuit said that for an order to be appealable as a collateral order, it "must conclusively determine the disputed question, resolve an important issue completely separate from the merits of the action, and be effectively unreviewable on appeal from a final judgment." Circuit Judge Barry G. Silverman, writing for the panel, said the appointment was not a conclusive, immutable determination of the issue, whether or not the lower court had reserved the right to revisit the issue. "It can be revisited if circumstances warrant," he said, as the district court has the "continuing duty" to see that a class is adequately represented. The court also ruled that the appointment does not resolve an issue separate from the merits of the case. "The determination of the adequacy of the lead plaintiff necessarily involves the consideration of facts and circumstances that relate directly to the merits, such as the typicality of claims and any defenses that might apply," he added. Although Z-Seven argued that review of the lead-plaintiff appointment will be moot by the time of final appeal, the circuit court disagreed. It said there is no reason why an erroneous lead-plaintiff ruling cannot be reviewed on appeal like other procedural rulings that occur during the course of the litigation. Francine Ehlich was represented by Marc M. Seltzer, David H. Boren and Susman Godfrey of Los Angeles. The Z-Seven Fund was represented by Behram V. Parekh of Weiss & Yourman in Los Angeles and Joseph H. Weiss of the firm's New York office. (Securities Litigation & Regulation Reporter, November 22, 2000) NIGHT CLUBS: Lawsuit Contends Racist Dress Codes Turn Away Minorities --------------------------------------------------------------------- A class action lawsuit has been filed against six popular Polk County night clubs, contending they continue to turn away minorities by using racist dress codes. Mike Ward and Duane Pack, both of Des Moines, filed the suits in Polk County District Court Monday on behalf of black night club patrons. "I've been exposed to racism, but never as open as it is here," said Pack, a member of the U.S. Army who has traveled widely. "It hurts." The two drew public attention to the codes months before Charles Lovelady Jr. died a year ago in a scuffle at one of the clubs. The incident was spurred by Lovelady's wearing a hood inside the bar. Pack, 27, said he thinks Lovelady's life might have been spared had bar owners or city leaders listened to the concerns as early as August 1999. The lawsuit by Pack and Ward, 32, an accountant, targets Coconut Joe's, Big Kahuna, Papa's Planet, Generations, Club Iguana Jakes and Graffiti's, the now-closed club where Lovelady died. Both men allege they were repeatedly denied access when similarly dressed white patrons were allowed inside. Roxanne Conlin, attorney for Ward and Pack, contends the disparate treatment of minorities has continued. Conlin said her clients' treatment was indicative of hundreds of others who have complained of discrimination by the clubs, some of whom may testify in a trial. The lawsuit must be certified by a judge as a class action before proceeding. Lawyer Bill Kutmus, who represents owners of Club Iguana Jakes and Graffiti's, denied the allegations of race discrimination. "As far as Grafitti's is concerned, their music was calculated to attract diversity and minorities," said Kutmus, who said he had not yet read the lawsuit. Several clubs either changed or abandoned codes banning clothes favored by blacks in the wake of Lovelady's death and media coverage of bar workers' treatment of minority patrons. Pack said he began to have problems with the clubs in August 1999 after he moved to Des Moines. He and Ward contacted Conlin two days before 26-year-old Lovelady choked to death in a struggle with bouncers. Pack said on the rare occasions that he and Ward were admitted to the clubs, they were sometimes asked to leave for code violations without being given their money back. After their accounts were featured in local news reports, both men said they were barred for life from Coconut Joe's. Ward was similarly denied admission to Papa's Planet, the lawsuit alleges. (The Associated Press State & Local Wire, February 13, 2001) PRINCE FOOD: EEOC Charges Cafeteria Firm With Racial Bias --------------------------------------------------------- The U.S. Equal Employment Opportunity Commission has filed a class-action lawsuit against Prince Food Systems, accusing the cafeteria company of refusing to hire blacks and creating a hostile work environment. The commission also charged Monday that officials of the Houston-based company ignored complaints about sexual harassment and fired a cashier who complained of sexual advances. Company officials said they could not comment on specific charges in the lawsuit but that they have treated employees fairly. "We have a long history with no complaints, and our work force is very diverse," the company said in a statement issued late Monday. "Our management team consists of hardworking black, white and Hispanic men and women who are devoted to providing an equal-opportunity environment." The company said it had interviewed the staff at the corporate cafeteria where the incidents allegedly occurred, "and we found no evidence of wrongdoing on the part of any of our employees or management." The equal-employment commission said the incidents occurred in the late 1990s at the Fluor Daniel Building in the Houston suburb of Sugar Land. Fluor Daniel was not named in the lawsuit. The federal commission charged that white applicants were being hired at the same time the company told black applicants there were no available jobs. Applications from blacks were thrown out, said commission lawyer Tim Bowne. According to the lawsuit, managers also made comments that blacks only drink and take drugs, and a manager told one black employee, "Go play with your monkey friends." Bowne said that a male worker was fondled and attacked by co-workers, and that a supervisor ignored his cries for help. The worker said he quit because of the incidents. The commission also charged in its lawsuit that a female cashier who complained about sexual harassment from the same supervisor was accused of stealing from her cash drawer and was fired. According to a police report, the company never provided evidence of a theft, and the employment commission said it believes the theft charge was a pretext for retaliating by firing the woman, the Houston Chronicle reported. Prince Food lawyer David Schein said the commission didn't produce any evidence to support the charge and relied instead on statements from complaining employees. Prince Food Systems has about 175 employees. (The Associated Press State & Local Wire, February 13, 2001) REALITY: Ignagni Seek to Set Record Straight on the Kennedy-McCain Bill ----------------------------------------------------------------------- The American Association of Health Plans President and CEO Karen Ignagni on February 13 challenged lawmakers to level with the American people about proposals that purport to protect patients but instead will force them to finance a runaway liability system. The Kennedy-McCain legislation puts patients at risk by dramatically expanding a fundamentally flawed system. "This year, we have a new opportunity to craft a balanced and effective solution," said Ignagni. "But we need a debate on the facts. That means leveling with the American people about what this bill will actually do and whether it is a step forward or a step backwards." Ignagni pointed to four fundamental misunderstandings about the Kennedy- McCain bill. * Contorts Principles of Texas Law - The Kennedy-McCain bill imposes liability on health plan decisions specifically not covered by Texas law. It would blow the lid off of the Texas standard for liability, creating a volatile and unpredictable system. * "Caps" Still Permit Unlimited Damages - The bill permits new causes of action, creating the potential for unlimited lawsuits with unlimited economic and non-economic damages, plus unlimited punitive damages under state law and up to $5 million of unprecedented punitive damages for contract claims under federal law. * Class Action Suits Are Actually Expanded - The Kennedy-McCain bill would actually expand the ability to file class action suits under ERISA and RICO. * Completion of External Review Is Not Required - Kennedy-McCain creates "exceptions" that would make the external review system virtually ineffective, by allowing claims for unlimited damages to go straight to court if there is simply an allegation that harm occurred or may occur. The bill also would allow claims for unlimited damages to proceed in state court even when an independent review organization has upheld the health plan's decision. Ignagni said AAHP would continue its efforts to promote proposals that would improve the health care system for consumers, including external review, while opposing legislation that would raise their costs. "We have been working for the past four years to highlight the dangers of expanded liability -- especially the negative impact it would have on America's working families," Ignagni said. "In the coming weeks, we will be taking this message directly to the American people to demonstrate the costs and consequences of a runaway liability system." The American Association of Health Plans (AAHP) is the largest national trade organization representing more than 1,000 health maintenance organizations (HMOs), preferred provider organizations (PPOs), and other similar health plans that provide health care coverage to more than 140 million Americans. SCHULER HOLDINGS: Settles Suit Re Alleged Defects in Fairway Home Units ----------------------------------------------------------------------- In April 1996, Schuler Homes was served with a purported class action complaint by owners of units and the owners' association of Fairway Village at Waikele alleging, among other things, material construction defects and deficiencies, misrepresentations regarding the cost of insurance and breach of a covenant of good faith and fair dealing. Following the court's denial of a class certification request, a second action involving other homeowners at Fairway Village advancing the same claims was initiated. While Schuler Homes believed the claims to be largely without merit, Schuler Homes entered into a settlement agreement in April 1999 with the third party defendants, insurance carriers and all of the plaintiffs in both lawsuits, except for the owners of three units. The owners of two of the three units subsequently settled in late 1999, bringing an end to the initial suit. The one remaining plaintiff in the second action settled in April 2000. The remediation of the units at Fairway Village required by the settlement agreement has been substantially completed. The costs of remediation are not material to Schuler Homes. SOLUTIA INC: Former Monsanto Sued for Alleged Hazardous Chemical Release ------------------------------------------------------------------------ Getting ready for softball season involves more than breaking in a new glove this year in one east Alabama city. A bulldozer rumbles through deep left field at the city park, scraping away as much as a foot of topsoil. A man walking down the first base line wears a white suit and green rubber gloves to protect him from the red infield dirt. The work is part of a $750,000 project to rid three softball fields of low levels PCBs, a hazardous material that has been found scattered throughout Oxford and neighboring Anniston, home of a factory that made the toxic chemical for decades. Solutia Inc., which is being sued for causing contamination throughout the area, is cleaning up the fields at the request of the city. Scouring the ballfields is only the latest in a string of cleanups in the area for Solutia, which has spent more than $30 million since 1995 to remove PCBs around Anniston. Lynn Burgess never worried about her three girls playing softball at the Oxford complex, located beside Interstate 20. But she is still glad traces of the chemical are being removed. "My children are all healthy. If I thought it was dangerous, I wouldn't put them out there," she said. Thousands of children and adults have played on the fields since they were constructed in the 1970s. "Just about every kid in the county played out there, but we've never had any problem," said Mayor Leon Smith. Solutia, formerly called Monsanto Co., manufactured polychlorinated biphenyls in Anniston from the 1930s through 1971. The chemical, which was used in electrical insulators but has since been linked to cancer in laboratory animals, was banned in the United States in 1977. Ending production didn't solve the problem of PCB contamination in the Anniston-Oxford area, located about 45 minutes east of Birmingham. Some 3,600 people are involved in a class-action lawsuit against the company, which they blame for health problems and devaluing their property. The ballfield cleanup is unrelated to the lawsuit, said Craig Branchfield, manager of remediation projects at Solutia. The plant is more than four miles from the ballpark, but Branchfield said Solutia believes PCBs were carried from the factory by a ditch that empties into Snow Creek, which borders the ballpark. Nearby, the company had to remove PCB-contaminated dirt from a shopping mall before an expansion could get under way. Branchfield said the same creek carried the chemical to that site. The level of PCBs found on the fields was so low it would not pose a health threat, said Branchfield. He said the work is being done solely to help boost "public confidence." One foot of dirt is being stripped off infields, which will be covered with new, clean dirt. About 3 inches of soil is being taken off outfields, which will be sodded in time for the opening of softball season on March 15. The dirty dirt is being dumped at another area of the park, where it sits covered with black plastic. The company might build a parking lot on the soil. "We will have to gauge public sentiment," said Branchfield. (The Associated Press State & Local Wire, February 13, 2001) U OF WASHINGTON: Female Employees Decry Inequality in Pay and Sue ----------------------------------------------------------------- Nearly 40 years after Betty Friedan and Gloria Steinem began fighting for women to gain equal access to fields like law, business, and medicine, the battle is increasingly shifting to a new front: equal treatment once they get there. In particular, an intense struggle is being played out in the hallowed halls of the nation's universities. Despite their role as a launching pad for many young women's careers, a growing number of colleges face charges of not offering equal opportunities for female professors. Now the University of Washington is confronting one of the most significant and visible gender-discrimination challenges in decades: a class-action lawsuit, filed on behalf of as many as 2,000 women, charging broad inequities in pay, promotion, grant money, and teaching loads. A judgment against the university could hold stark implications for other schools, say observers - and could even send a warning to the corporate world, where evidence shows women are still often paid less than their male counterparts. At the very least, it is likely to cause campuses across the US to take a closer look at the treatment of their women faculty. The University of Washington "has tremendous credibility with other universities," says Catherine Didion, president of the Washington, D.C.-based Association of Women in Science. "This suit has the potential to be a catalyst at other campuses, a wake-up call: Do we have these same problems, and what can we do now, before there's a class action here?" The women at UW are hardly alone in their claims of bias. At campuses from the University of Texas to Florida State, accusations of discrimination have proliferated in recent years. No less prestigious a university than Stanford is currently being investigated by the US Department of Labor, after several dozen women professors filed a formal complaint. Moreover, last month, presidents from nine of the nation's top universities, including Harvard, the University of California at Berkeley, and the University of Michigan, got together and unanimously declared that gender bias is likely common on America's campuses. The meeting, held at the Massachusetts Institute of Technology in Cambridge, Mass., was a follow-up to a landmark MIT report documenting discrimination on its own campus. But widespread discrimination - as opposed to isolated instances - is a difficult charge to prove. And UW officials insist that in their case, it's simply not true. "We do not believe there's been any systemic discrimination against women at the university. Period," says Norman Arkans, associate vice president for university relations. Since the decisions on faculty pay raises are made in some 100 autonomous departments within the university, college administrators argue it's unlikely a pattern of discrimination could happen. "All these faculty go through peer review in their departments. And it's almost all based on merit," Mr. Arkans says. "In a system like this, it is virtually impossible for there to be systemic discrimination - because it's so decentralized." The initial complaint, which led to the class action, was brought by Dolphine Oda, a professor of oral pathology at the UW School of Dentistry. Ms. Oda charged that she was paid less than her male colleagues despite considerable accomplishments, including 14 distinguished teaching awards and publication in more than 55 medical journals. Others then lodged similar complaints. Because of unequal promotions and hiring practices, the suit contends, only 1 in 4 professors on a tenure track in 1997 at the UW were women, as were 60 percent of nontenure-track professors. A statistician employed by those bringing the suit looked at faculty hired between 1981 and 1986. The data showed that the percentage of women who became full professors by 1997 was 20 percent lower than the percentage of men who made the cut. Steve Berman, an attorney for the women, contends that, despite the individual decisions made by departments, a "top down" pattern of discrimination can be found at the university that begins with senior administrators and makes its way down to the colleges and departments. He points out that the university conducted two separate studies of its own, in 1997 and 1998, and both "found that there was a systematic, across-the-board problem [of gender-based discrimination]. And they did nothing about it," he says. THE university is currently appealing a local superior court judge's decision to certify the case as a class action. If it loses its appeal, the case is scheduled for trial in January 2002. But between now and then, the movement for gender equity in academia is certain to expand. Already Harvard, the University of Arizona, and the University of California at Berkeley have begun looking at the issue on their campuses. And the nine schools that met last month in Cambridge have pledged to regroup in a year - just in time for the UW trial in Seattle. "I don't want this to be seen as a zero-sum game," says Ms. Didion of the movement for gender equity. "In the past, it's been assumed that in order for one party to gain, another must lose. And that doesn't have to be true here." "Encouraging such diversity in your faculty helps you make certain that your school is really the best it can be." (The Christian Science Monitor, February 13, 2001) U.S. INTERACTIVE: Cauley Geller Files Securities Suit in Pennsylvania --------------------------------------------------------------------- The Law Firm of Cauley Geller Bowman & Coates, LLP announced on February 12 that it has filed a class action in the United States District Court for the Eastern District of Pennsylvania on behalf of all individuals and institutional investors that purchased the common stock of U.S. Interactive, Inc. (Nasdaq:USITQ) between February 10, 2000 and November 8, 2000, inclusive (the "Class Period"). The complaint charges that certain officers and directors of the Company violated the federal securities laws by providing materially false and misleading information about the Company's business and financial condition, and as a result of these false and misleading statements the Company's stock traded at artificially inflated prices during the class period. Specifically, the complaint alleges that during the Class Period, defendants were aware that at least two of the Company's dot-com clients, which were owned in part by certain of the defendants, would not be able to pay the Company for services rendered. Notwithstanding this adverse information, defendants reassured the public that U.S. Interactive's dot-com risk exposure was minimal because the Company only did business with dot-com organizations that had proper funding levels. In addition, the complaint alleges that defendants failed to disclose that the Company was unable to pay-off even part of an $80 million debt and would not achieve profitability by the end of 2000 as previously represented. On September 20, 2000, the Company pre-announced that its third quarter financial results would be lower than expected due to rapid changes in the Internet professional services market, including lengthening sales cycles, re-evaluation of e-business initiatives by clients and prospective clients, and reduced funding available to its dot-com clients. Following this partial disclosure, the Company's stock dropped over 33% from the day before to close at $12.937. On November 8, 2000, when the Company announced its third quarter financial results, it disclosed that not only were its results worse than pre-announced on September 20, 2000, but that the Company was forced to write-off $8.8 million of uncollectible accounts receivable during the third quarter, which amounts were primarily related to services performed for dot-com organizations. Following this full disclosure, U.S. Interactive's stock dropped to $0.81 per share. Contact: Cauley Geller Bowman & Coates, LLP, Boca Raton Sue Null, Charlie Gastineau or Jackie Addision Toll Free: 1-888/551-9944 E-mail: info@classlawyer.com or For media Sue Null or Charlie Gastineau VENTILATION STACK: Sydney Homeowners Consider Lawsuit against Government ------------------------------------------------------------------------ A compromise deal allowed about 270 residents near the proposed M5 East motorway ventilation stack in southern Sydney to sell their homes to the government, State Roads Minister Carl Scully said on February 13. Mr Scully announced the $10 million state government buy-out scheme following a campaign by Turrella home owners and green bans on the motorway construction by the Construction, Forestry, Mining and Energy Union (CFMEU). Residents attacked the move, however, as a "cheap fix" which avoided the building of a $20 million filtration system onto the stack to filter the exhaust fumes from a four-kilometre tunnel to be built as part of the motorway. Residents and greens groups, who have been lobbying the government to install a filtration system on the stack, branded the buy-out offer a "cheap fix". Local resident Giselle Mawer said compensation for home owners would cost about $10 million compared with a filtration system, which would cost over $20 million. The offer was also restricted to residents living within 400 metres of the proposed stack and only within one year of an attempt being made to sell the property through traditional means. Ms Mawer said residents would seek advice on launching a class action against the government over failed duty of care to the community. "People have lived here for years and I would say the majority won't want to move," she said. "Residents want the stack to be filtered so it is risk-free." Teacher Eileen Stoddart, who has lived in Turrella for more than 50 years, said it would be difficult to leave. "There are seven to eight schools in this region that will be affected by the stack," she said. "Offering to buy our homes is the less expensive option for the government but it's hard to just up and leave, especially when you have lived here for a long time. "It's criminal." Mr Scully said he believed the deal was fair with the Roads and Traffic Authority (RTA) to buy homes at unaffected market prices. "Some residents have told the RTA in recent consultations that they plan to move away but are concerned their property values have been reduced by the proposed stack," Mr Scully said. "If people find within a period of 12 months of the motorway opening, that they are unable to sell their homes at the price they would have otherwise been able to sell them at ... the RTA will purchase the home off them." The value of each property would be established by negotiation between parties after independent valuations had been obtained with the NSW Valuer-General the final arbiter, the minister said. Mr Scully said he expected only half of affected residents would take up the offer. While "sharing" the residents' concerns about air quality, Mr Scully said filtration would not greatly decrease pollution. He said the RTA was working on an air-management plant to address the problem in a cost-effective way. "The advice is that an electrostatic precipitator, which is what the local community wants installed, will only deal with a small part of the problem that emanates from those exhausts," Mr Scully said. According to the RTA, the M5 East will be open to traffic in 2002. Stretching for 13 kilometres between King Georges Road at Beverly Hills, in the city's south-west, and General Holmes Drive in Kyeemagh, it will carry an estimated 58,200 vehicles daily. A twin-lane tunnel will be built as part of the motorway with the ventilation stack to be located in a neighbouring industrial area. The CFMEU imposed the interim green ban following concerns from builders that the government had not taken seriously concerns about the health effects on local residents from the unfiltered exhaust fumes. The New South Wales Opposition declared if elected it would commit to building a filter on the stack. (AAP Newsfeed, February 13, 2001) ********* 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 * * *