/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/010323.MBX C L A S S A C T I O N R E P O R T E R Friday, March 21, 2001, Vol. 3, No. 58 Headlines ALASKA AIRLINES: Lawyer Loses Battle For Refund On Nonrefundable Tickets BAYER CORP: Hit with Lawsuit for Cold Drug Sold over-the-Counter BERKS COUNTY: Gun Licencse Owners Take Sheriff to Court over Use of Data BROADCOM CORP: Revises Its Accounting Practices in Face of Lawsuits CHRYSLER: NC Lemon lawsuit Seeks Class-Action Status CHS ELECTRONICS: Bankruptcy Trustee Sues Over Officers Settlement FIRST UNION: Bank Settles Lawsuits over Pension Fund for $26 Mil HEARTLAND: SEC Freezes the Assets of Milwaukee Investment Firm Bonds HIH INSURANCE: Faces Faces Lawsuit By Angry Aussi Shareholders HOOTERS RESTAURANT: Unsolicited Faxes End with Multimillion Dollar Pact NORTEL NETWORKS: The Rosen Law Firm Files Securities Suit in New York NUANCE COMMUNICATIOINS: Savett Frutkin Files Securities Suit in CA NUANCE COMMUNICATIONS: Milberg Weiss Files Securities Suit in CA NUANCE COMMUNICATIONS: Seeger Weiss Files Securities Suit in CA SHELL STATION: African-American Motorists Charge Race Bias at Skokie, IL SPACELABS MEDICAL: Ricardo A. Guarnero Files Securities Lawsuit TENNESSEE VALLEY: Nuclear Plant Workers Sue For Overtime Pay WAR LITIGATION: Polish President Vetoes Property Compensation Bill WEBLINK WIRELESS: Schiffrin & Barroway Files Securities Suit in Texas ********* ALASKA AIRLINES: Lawyer Loses Battle For Refund On Nonrefundable Tickets ------------------------------------------------------------------------ A lawyer's attempt to obtain a refund on airline tickets that were sold as nonrefundable has ended after a three-year court battle. The Supreme Court last month refused to hear Lembhard G. Howell's case against Alaska Airlines. He said the airline should be required to refund the cost when passengers have unavoidable reasons for missing flights. In 1993, Howell's wife missed a flight to Spokane because she became ill and was denied a refund by Alaska. In 1998, Howell went to court after he got stuck with a ticket to Fairbanks when a trial was canceled. Howell also sought to make the case a class-action lawsuit on behalf of all airline passengers, noting that Alaska's practices are standard for the industry. "The court didn't agree with me, but that doesn't mean the court was right," he said. Had Howell prevailed, ticket prices for leisure travelers likely would have gone up, said Dan Burke, owner of Passport Travel and Tours in Kenmore. Nonrefundable tickets typically must be bought seven to 14 days in advance and require a Friday or Saturday night stay, with a maximum of 30 days. A 14-day, advance purchase Seattle-Los Angeles roundtrip ticket on Alaska this week was $258, compared with $548 for a refundable ticket. Business travelers who require flexibility pay higher fares, which help subsidize the lower ticket prices for vacationers, Alaska spokesman Jack Evans said. Howell could have paid a $35 fee to use his ticket for credit on another flight but he said he had no need for future trips. He wanted a refund or permission from Alaska to transfer the tickets to another user. Alaska has since raised the change fee to $50. A number of other carriers recently boosted the fee to $100. (The Associated Press State & Local Wire, March 22, 2001) BAYER CORP: Hit with Lawsuit for Cold Drug Sold over-the-Counter ---------------------------------------------------------------- Bayer Corp. has been hit with a class action lawsuit over its use of a common over-the-counter cold remedy that was pulled from drug store shelves in November. The drug, phenylpropanolamine, or PPA, is an ingredient in Bayer's Alka-Seltzer Plus effervescent cough and cold products. It was found in a Yale University study to increase the risk of hemorrhagic strokes -- bleeding in the brain -- among women. The suit was filed last week in Allegheny Common Pleas Court on behalf of Allegheny County residents who purchased Bayer drugs. Bayer said it cannot comment about pending litigation. But in a statement, it said, "Based on our experience and the information that has been available to us with regard to our product over the past 30-plus years, we believe that PPA is a safe ingredient as formulated in our Alka-Seltzer Plus effervescent cough/cold products." Bayer and a number of pharmaceutical companies such as Bristol-Myers Squibb Co. and Novartis Corp. made products containing PPA but stopped marketing them when the Food and Drug Administration issued a warning about PPA in November. At least six national class action lawsuits are being prepared against companies that sold drugs containing the ingredient. The suit against Bayer alleges the company knew about the potential health risks associated with PPA since the early 1980s but failed to adequately warn consumers of these risks. Lawyer Mark Coulter, of Pierce Raymond and Coulter, the Downtown law firm that filed the suit, said the suit was not seeking to represent people who many may have been injured by the use of the drug but was simply seeking to recover the costs of drugs they purchased but no longer can use. Personal injury claims will be filed separately, he said. (Pittsburgh Post-Gazette, March 22, 2001) BERKS COUNTY: Gun Licencse Owners Take Sheriff to Court over Use of Data ------------------------------------------------------------------------ Gun license owners in Berks County have joined in a suit accusing Republican Sheriff Barry J. Jozwiak of illegally using the confidential names and addresses of gun permit applicants to solicit campaign contributions. A judge has added more than 23,000 Berks County gun permit holders to the lawsuit. The ruling Tuesday by Northumberland County Senior Judge Barry F. Feudale in Berks County Court could cost Jozwiak and the county more than $28 million if a jury finds the sheriff violated the law. Jerry W. Schaeffer filed suit in September accusing Jozwiak of illegally using his name and address, which Schaeffer provided on a gun permit application. Schaeffer requested the case be handled as a class action. Letters sent to license holder invited recipients to join a support group named The Posse to re-elect Jozwiak. Using the confidential information is a violation of state law that can result in both civil and criminal penalties, officials said. (The Associated Press State & Local Wire, March 22, 2001 BROADCOM CORP: Revises Its Accounting Practices in Face of Lawsuits ------------------------------------------------------------------- As alleged in lawsuits filed by Abbey Gardy, LLP and other law firms and admitted by the Company, Broadcom Corp. granted warrants to customers of companies it acquired and treated those warrants as a goodwill expense of the acquisitions. As a result, plaintiffs allege that Broadcom made positive but false statements about its results and business, while concealing material adverse information about agreements with certain companies it acquired, which essentially resulted in Broadcom buying its own revenues. As announced in the Wall Street Journal on March 22, 2001, Broadcom Corp. will now treat the warrants as an adjustment to its revenue. The revised results present two measures of revenue: gross revenue and net revenue, which subtracts the value of the warrants. In the fourth quarter of last year, subtracting the value of the warrants reduced Broadcom's revenue by 10%, to $ 340.2 million, from $378.8 million. Broadcom has also announced that it had terminated most of the contracts that included the warrants because of the change in the business and market conditions since they were signed last year. Contact: Courtney Lynch, clynch@abbeygardy.com, or Stephanie Amin, samin@abbeygardy.com, both of Abbey Gardy, LLP, 800-889-3701 CHRYSLER: NC Lemon lawsuit Seeks Class-Action Status ---------------------------------------------------- Seven North Carolina residents who say Chrysler did not tell them about persistent problems with cars they bought have filed suit against the automaker. The lawsuit, filed Wednesday in Raleigh, seeks class-action status for consumers nationwide, which would help lawyers battling Chrysler to pool their resources and fight the company in one courtroom. The plaintiffs contend Chrysler and its authorized dealers routinely failed to tell consumers that their cars had been bought back from the original owners because of mechanical defects. The lack of disclosures inflated the prices of the cars and led consumers to pay for repair work that the automaker was legally responsible for, the lawsuit said. "By failing to disclose to consumers that the vehicles they were about to spend their hard-earned money on were lemons, Chrysler and these dealers were able to overcharge for these vehicles," said Raleigh lawyer Doug Abrams. He estimated that a class-action lawsuit could involve tens of thousands of consumers. In a case involving a Raleigh couple, Chrysler was ordered earlier this month to turn over financial records detailing the history of repurchased vehicles. Since 1993, the company bought back more than 50,000 vehicles with mechanical problems, then recouped about two-thirds of the investment reselling the majority of them at auction to dealers, according to the documents. Company officials said that only a quarter of 1 percent of the 19 million vehicles Chrysler manufactured during the past seven years were repurchased. Chrysler officials denied that the company or its dealers routinely failed to disclose the vehicle history to defraud consumers. Steve Hantler, Chrysler's assistant legal counsel, said that it is company policy to tell dealers that the vehicles were repurchased and that the automaker regularly audits its dealers to ensure that consumers are informed. Hantler added that selling repurchased vehicles is a common, heavily regulated practice among automakers and is sanctioned by state law. "The consumers are getting an excellent deal on these vehicles that are sold at a discount below other used cars with a better warranty," Hantler said. Chrysler was bought by Germany's Daimler-Benz in 1998 and is now a unit of DaimlerChrysler. Abrams represents Peter and Frances Pleskach, who sued Chrysler in 1999 maintaining that they were never told that their 1996 Dodge Caravan had been bought back because of electrical and other problems. Hantler said Chrysler disclosed the history to the dealer, Cox Dodge in Wilson, when it sold the car at auction. But he said the dealer made an "honest mistake" and failed to tell the Pleskaches. Abrams and lawyers for Chrysler are due in court Monday before Wake Superior Court Judge Narley Cashwell. Abrams is asking the judge to order Chrysler's chief executive officer to come to Raleigh to explain why the company has failed to produce documents related to the buyback of the more than 50,000 vehicles. Chrysler has asked the judge to grant the company more than the 15 days it was given to produce what Chrysler says are hundreds of thousands of documents. (The Associated Press State & Local Wire, March 22, 2001) CHS ELECTRONICS: Bankruptcy Trustee Sues Over Officers Settlement ----------------------------------------------------------------- Miami electronics company was headed for quick restructuring, now its mired in $ 11.75 million dispute. When CHS Electronics filed for bankruptcy last April, the once fast-growing computer products distributor described the move as the best orderly manner to conclude debt problems. Indeed, CHSs largest creditors immediately agreed to a Chapter 11 reorganization plan, and a court-appointed trustee moved forward to pay off some $ 495 million in debt. But a year later finds Miami-based CHS in a state of disorder. And instead of coming out of bankruptcy, the trustee is preparing to liquidate assets. Those assets could include the spoils of an $ 11.75 million settlement between shareholders and the former companys insurers that resolved a civil suit against directors and officers. The suit alleges mismanagement by the board and the executives before the company went broke. In a new twist, the trustee, Keith Cooper of PricewaterhouseCoopers, last week asked a federal judge to block the insurance company payment to those shareholders. He is following what is standard practice in bankruptcy cases: that shareholders are last among creditors to collect, and usually receive nothing. Even accounting for the bankruptcy courts convoluted nature, observers say things havent been orderly. When a circumstance arrives where you have an insolvent company, it gets very interesting, said Patricia Redmond, a bankruptcy expert at the Miami law firm Stearns Weaver Miller Weissler Alhadeff & Sitterson. That 8-year-old CHS Electronics is in liquidation at all is unusual. In 1994, the firm was the third-largest computer distributor in the world. It supplied desktop PCs to PC retailers, and grew by buying out foreign computer distributors. In mid-1998, the company had net earnings of $ 45.6 million. And Fortune Magazine ranked CHS 320th on its annual list of 500 top companies. But in 1999, CHS restated its profits for the second, third and fourth quarters of 1998 after shareholders alleged management had padded rebate values to inflate earnings. The company said profits for those periods were overstated by 50 percent. Angry shareholders sued, alleging that the company knowingly overstated profits by inflating the value of manufacturers rebates. In early 2000, insurers Royal Insurance Company of America in North Carolina and Zurich American Insurance Co. in Illinois agreed to pay $ 11.75 million after mediation. CHS filed for bankruptcy protection in April, throwing the settlement into disarray. Cooper claims that he should not only have a claim against the settlement, but against the officers and directors $ 20 million insurance policy. Last week, Cooper went to U.S. District Court in Miami and asked a federal judge to force the insurance companies to consider his claim against the policy. Anthony J. Carriuolo, an attorney for the trustee, said shareholders shouldnt be the only ones to receive money from the insurance companies. An attorney with the Fort Lauderdale law firm Berger Singerman, he said the trustee should also be allowed to make a claim against the policy, since creditors are owed over $ 800 million. The insurance companies are basically ignoring us and instead are focusing on paying the class action 100 cents on the dollar, he said. We think that is wrong. We are hopeful that the court will agree that competing claims should be paid on a fair and equitable basis instead of one group receiving a disproportionate share of the original funds. Carriuolo said one insurance company, Royal, told him they wouldnt consider the trustees claim until he obtains a court judgment. According to Carriuolo, Cooper told the insurance companies in September that the trustee was going to make its own claim. But arguments of fairness didnt sway U.S. Bankruptcy Judge Robert Mark, who ruled on Feb. 12 that Cooper couldnt ask his court to validate the claim. That is why Cooper appealed to the federal district court. We are asking the court to take control because the insurance companies are showing preference among competing claims, Carriuolo said. But Ronald G. Neiwirth, of the Miami law firm Fowler & White, who represented the plaintiff in the class action, said that Coopers argument is without merit. They want to stop the claim from going forward until they can catch up. he said. Cooper [as liquidation trustee] is the direct successor company, and since he is the company, no matter what claims he makes against the directors and officers it is not covered in the insurance, Neiwirth said. Securities claims get nothing, he added. If a company is insolvent, shareholders are last in line. Carriuolo disagrees. Arguing for the trustee, he said, We are carrying the flag the shareholders and creditors could have flown before the bankruptcy was filed. Carriuolo said one solution would be to place the money in an interest-bearing account until a liquidation plan is approved. We want the court to marshall the money until the judge can allocate the proceeds among the competing claims, he said. (Broward Daily Business Review, March 21, 2001) FIRST UNION: Bank Settles Lawsuits over Pension Fund for $26 Mil ---------------------------------------------------------------- Two class-action lawsuits accusing First Union Corp. of mismanaging employees' retirement funds have been tentatively settled for $26 million, the company and lawyers for the employees said. U.S. District Judge Richard Williams gave preliminary approval to the settlement and scheduled a final hearing for June 13. More than 150,000 former and current employees of the Charlotte, N.C.-based bank and the former Signet Banking Corp. are eligible to participate in the settlement, said plaintiffs' lawyer Michael Lieder. First Union bought Richmond-based Signet in 1997. The lawsuits, filed under federal antitrust and anti-racketeering statutes, accused First Union of putting its profits ahead of its employees' best interests in managing their in-house 401(k) retirement plans. First Union employees sought $300 million and former Signet employees sought $150 million in damages. The First Union suit was settled for $16 million, the Signet case for $10 million. "By settling we do not admit to any wrongdoing," said First Union spokeswoman Ginny Mackin. "In fact, we believe we would have won in court." She noted that the company won on several preliminary issues before settling the case to end the costly litigation. Mackin said the company and its shareholders will not be harmed because First Union's insurance will cover the settlement. In their lawsuit, First Union employees said their employer engaged in "self-dealing, pure and simple." The bank often charged employees full price for financial services while outside investors received waivers and discounts, the lawsuit said. The lawsuit also accused First Union of plowing the 401(k) investments into its own mutual funds to boost its funds' assets, hoping to make them more attractive to outside investors. "Because many of the issues in these cases are groundbreaking and challenge practices common to the 401(k) plans of many financial services companies, the plaintiffs believe that the settlement represents an excellent result," the parties said in a joint news release. Along with compensating the employees, the settlement requires First Union to appoint an independent adviser to the committee that oversees its 401(k) plan. (The Associated Press State & Local Wire, March 22, 2001) HEARTLAND: SEC Freezes the Assets of Milwaukee Investment Firm Bonds -------------------------------------------------------------------- The Securities and Exchange Commission has obtained a court order freezing the assets of three municipal bond funds operated by Heartland Advisors that caused substantial losses to investors last year. The Milwaukee investment management firm also said that the SEC is giving a court-appointed receiver authorization to liquidate the three funds. Shares in Heartland's High Yield Municipal Bond Fund and its High Yield Short Duration Municipal fell about 70 percent and 44 percent, respectively, overnight Oct. 13. Its Taxable High Yield Municipal Fund fell to $ 9.14 per share from $ 9.77 per share that day. After hitting a low of $ 8.03 per share, the taxable fund has climbed to $ 8.34. On March 2, the SEC gave Heartland an extra 15 days to complete annual audits for the three funds. PricewaterhouseCoopers is the firm's auditor. The drastic October losses prompted an examination by the SEC and a class action investor lawsuit. Heartland, its chief executive William Nasgovitz, PricewaterhouseCoopers, and former fund manager Thomas Conlin are being sued in federal court in Milwaukee by investors who claim they were misled about the value of the funds' holdings. (The Wisconsin State Journal, March 22, 2001) HIH INSURANCE: Faces Faces Lawsuit By Angry Aussi Shareholders -------------------------------------------------------------- HIH Insurance Ltd could face a barrage of legal action from shareholders following its decision to go into provisional liquidation a week ago. The Australian Shareholders Association (ASA) is considering launching a class action against the group on behalf of the 30,000 Australian investors who could end up with worthless stock. The ASA has reportedly held talks with a team of solicitors about whether it is possible to take HIH to court. "At this stage it is too early to think about it much further until the results of the investigation into the company are revealed," ASA chairman Ted Rofe told the Daily Telegraph. "But at this stage the position of the shareholders looks grim." HIH appointed provisional liquidator KPMG last Thursday after seeking permission in the New South Wales Supreme Court. The insurer's losses had blown out to a massive $800 million. Many of the group's policyholders have been able to obtain alternative cover thanks to a series of fire sales of HIH businesses carried out before the company went into liquidation. However, confusion still remains over whether claims on certain business policies can be guaranteed. The Insurance Council of Australia (ICA) said it was still unable to answer all policyholders' questions about the state of play for some HIH Insurance Ltd claims. The ICA said it and the industry had been working extremely hard to assist as many policyholders as possible to obtain alternative cover. "At this stage, because a provisional liquidator is involved, it is not possible to answer all policyholders' questions such as outstanding claims in some classes of business," ICA executive director Alan Mason said. "However, ICA is working with the provisional liquidator, KPMG, the regulators ASIC and APRA and major companies in the industry to try to help those policyholders affected." Mr Mason said a substantial number of policyholders with particular types of insurance had already had their policies taken over and honored by other major Australian insurance companies. HIH is being investigated by the Australian Securities and Investments Commission (ASIC) and the industry watchdog, the Australian Prudential Regulation Authority (APRA). Mr Mason said builders' warranty insurer Royal & Sun Alliance Australia Ltd (through Home Owners Warranty) had indicated it would offer new short term policies to builders previously covered by HIH. But outstanding claims arising from builders' warranty insurance would have to be dealt with by the provisional liquidator, he said. Allianz Australia is covering home, motor and compulsory third party (CTP) and small business insurance policies for HIH and its former subsidiaries FAI, CIC and WMG. NRMA Insurance Group Ltd is underwriting workers' compensation new business and Mr Mason said there was no need for people who currently held CTP or workers' compensation policies with HIH companies to make changes to those policies. QBE Insurance (Australia) Ltd is underwriting renewal or replacement of corporate insurances. ASIC has advised people with HIH, FAI or CIC travel insurance policies to check their cover. Westpac Banking Corp Ltd, meanwhile, said it had less than $1 million in loans or debt due from the HIH group. (AAP Newsfeed, March 22, 2001) HOOTERS RESTAURANT: Unsolicited Faxes End with Multimillion Dollar Pact ----------------------------------------------------------------------- An Augusta jury has cleared the way for a multimillion dollar settlement against Hooters restaurants for sending unsolicited advertising faxes. On Wednesday, the jury found that Hooters of Augusta Inc. willfully violated the Telephone Consumer Protection Act by sending out unsolicited advertising faxes. Atlanta-based Hooters of America Inc. may now have to pay $3.96 million to $12 million, depending on how Richmond County Superior Court Judge Carl C. Brown Jr. assesses punitive damages. The class action lawsuit, brought in June 1995 by Augusta attorney Sam Nicholson, included 1,320 others who said they received the advertising faxes from Hooters. The jury determined that six faxes were sent to each plaintiff. With a $500 fine for each, that amounts to a $3,000 award per plaintiff. But Brown could triple the assessment within 30 days because the jury found Hooters acted knowingly and willfully. "It was a case where I saw there was a violation of the law, and I just felt there needed to be something done about it," Nicholson said. "I think a lot of small business people are getting them (unsolicited faxes)." There are 250 Hooters restaurants in 40 states. The faxes were sent by a contracted agent of Hooters, Value-Fax of Augusta, but under federal law, the advertiser is considered the culpable party. Hooters attorney Suzanne Vesper promised an appeal and said Hooters would make its own claim against Bambi Clark, who owned Value-Fax. Clark, who did not respond to a court summons, could not be reached for comment. The Telephone Consumer Protection Act, which also regulates faxes, was passed in 1991. The $500 fine was established for unsolicited faxes because much of the cost of the advertisement, the paper, is borne by the consumer. Should Hooters lose an appeal and ultimately have to pay punitive damages, it may not be backed by its insurer. Wednesday morning, New Hampshire Insurance Co. filed a request for a declaratory judgment by the Richmond County Superior Court that the insurer not be made to pay any penalties resulting from a judgment. The insurer contends that the scope of its coverage does not apply in this instance. (The Associated Press State & Local Wire, March 22, 2001) NORTEL NETWORKS: The Rosen Law Firm Files Securities Suit in New York --------------------------------------------------------------------- The New York office of The Rosen Law Firm P.C. (www.rosenlegal.com) announces that the firm has filed a class action lawsuit on behalf of all persons who purchased the common stock of Nortel Networks Corporation (NYSE:NT; TSE:NT) during the period between November 1, 2000 through February 15, 2001, inclusive. The class action litigation has been assigned to the Honorable Raymond Dearie and Magistrate Marilyn Go in the United States District Court for the Eastern District of New York - Brooklyn, NY, Civ No. 01-1587. The complaint filed on March 14, 2001, alleges that beginning in November the defendants violated federal securities laws by issuing a series of materially false and misleading information that misrepresented the level of demand for its products from its customers. The complaint further alleges that defendants knew at the time they made these statements that, in fact, Nortel was experiencing a substantial shortfall in first quarter sales and earnings due to decreased orders from its customers. As a result of these false and misleading statements, Nortel's stock price was artificially inflated throughout the Class Period, causing plaintiffs and the other members of the class to suffer damages. Contact: The Rosen Law Firm P.C. Laurence Rosen, Esq. Toll Free: 1-866-rosenlegal lrosen@rosenlegal.com www.rosenlegal.com NUANCE COMMUNICATIOINS: Savett Frutkin Files Securities Suit in CA ------------------------------------------------------------------ Savett Frutkin Podell & Ryan, P.C. hereby gives notice that a class action complaint was filed in the United States District Court for the Northern District of California, located at 450 Golden Gate Avenue, San Francisco, CA 94102, on behalf of a class of persons who purchased the common stock of Nuance Communications, Inc. (NASDAQ:NUAN) during the period between January 31, 2001 through March 15, 2001 ("Class Period") and who were damaged thereby. The complaint charges Nuance and its senior officers, Ronald Croen (President and CEO), Brian Danella(VP, Secretary and General Counsel), Matthew Lennig (VP Engineering), Grahm V. Smith (VP and CFO) and Lloyd Leanse (VP Business Development) with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 promulgated thereunder. The complaint alleges that defendants issued a series of false and misleading statements to the market concerning the Company's business condition and prospects for the first quarter 2001 which resulted in artificially inflated prices for the Company's common stock. On January 30, 2001 defendants reported record revenue for the fourth quarter of 2000, touting the current strength of the Company and stating that the record revenues served as a solid basis for growing momentum. The complaint alleges that defendants failed to disclose that customers had deferred commitments to Nuance projects and that, as a result, revenues would be down significantly in the current quarter from the prior guidance provided to the market. Within one week of the January 30, 2001 press release, defendants began selling their personal holdings, selling 407,404 shares receiving proceeds of approximately $ 15.2 million. On March 15, 2001, after the market closed, defendants issued a press release disclosing that first quarter 2001 revenues would be down sharply, in the range of only$10-12 million and that per share losses would be up sharply in the range of $0.31-$0.38. Defendants had previously guided the market to believe that first quarter 2001 revenues would be in the range of $16 to $18 million. Defendants attributed the reduced results to postponed capital investment in Nuance products and services by repeat customers and new prospects. In a conference call, defendants admitted that Nuance's telecommunications customers and prospects had deferred purchases of Nuance projects. As a result of this announcement, the price of Nuance stock fell from a closing price of $17 on March 15 to a closing price of $9.6875 on March 16. Contact: Savett Frutkin Podell & Ryan, P.C. Barbara A. Podell Robert P. Frutkin Renee C. Nixon 215/923-5400 or 800/993-3233 mail@savettlaw.com NUANCE COMMUNICATIONS: Milberg Weiss Files Securities Suit in CA ---------------------------------------------------------------- Milberg Weiss (http://www.milberg.com/nuance/)announced on March 21 that a class action has been commenced in the United States District Court for the Northern District of California on behalf of purchasers of Nuance Communications Inc. (NASDAQ:NUAN) common stock during the period between Jan. 31, 2001 and March 15, 2001 (the "Class Period"). The complaint charges Nuance and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Nuance develops, markets, and supports a voice-recognition software platform that purportedly makes the information and services of enterprises, telecommunications networks, and the Internet accessible from any telephone. The complaint alleges that after exceeding analysts' earnings expectations for its fourth quarter and reporting "record revenue," defendants reaffirmed Nuance's leadership position in the voice-recognition market and the continued revenue growth experienced since the end of the fourth quarter. Thereafter, the Individual Defendants, contrary to their unwavering public support for the Company's prospects and its stock, sold vast quantities of their holdings in Nuance stock. Just weeks after defendants finished selling their own Nuance stock, they revealed that the Company's revenue growth had in fact ceased, and that revenues for the quarter would be well below those reported for the prior quarter. Commenting on the disappointing news, defendants stated: "Nuance attributes the revenue shortfall primarily to general economic conditions, which have led customers and customer prospects to postpone capital investment in Nuance products and service offerings based on Nuance products. The company believes its visibility is limited for both the second quarter and full-year results." Immediately following defendants' March 15, 2001 disclosures, the price of Nuance stock dropped, falling from its closing price of $17 per share March 15, 2001 to $9.68 per share at the close on March 16, 2001, a drop of more than 40%. Contact: Milberg Weiss Bershad Hynes & Lerach LLP William Lerach, 800/449-4900 wsl@mwbhl.com NUANCE COMMUNICATIONS: Seeger Weiss Files Securities Suit in CA --------------------------------------------------------------- Pursuant to 15 U.S.C. 78u-4(a)(3)(A)(i), Seeger Weiss LLP gives notice that on March 20, 2001, a class action lawsuit was filed in the United States District Court for the Northern District of California on behalf of all persons who purchased the publicly traded securities of Nuance Communications, Inc. (Nasdaq: NUAN), from January 31, 2000 through March 15, 2001, inclusive (the "Class Period"), and who were damaged thereby. Nuance develops, markets, provides, and supports voice-recognition software. The complaint charges Nuance and certain of its officers and directors with violations of the Securities Exchange Act of 1934 through their dissemination of materially false and misleading statements concerning, among other things, the Company's revenue growth and improved profitability, while concealing material adverse information concerning the declining demand for the Company's products and services. As a result, Nuance stock traded at artificially inflated prices throughout the Class Period. During the time that defendants touted the Company's historical and anticipated growth and improved profitability, Company insiders sold more that $15 million in Nuance stock. On March 15, 2001, Nuance announced that its First Quarter 2001 performance was not on track, that revenue was shrinking, and that a loss three times the size of that which was previously expected was forthcoming. Following the Company's announcement, the price of the Company's stock fell over 40%. Contact: Seeger Weiss LLP, New York David R. Buchanan, Esq., Seth A. Katz, Esq. or Stuart P. Slotnick, Esq. 212/584-0700 dbuchanan@seegerweiss.com skatz@seegerweiss.com sslotnick@seegerweiss.com SHELL STATION: African-American Motorists Charge Race Bias at Skokie, IL ------------------------------------------------------------------------ The following is being issued by Paul W. Mollica of Meites, Mulder, Burger & Mollica Several African-American motorists charge that a Shell station located in Skokie, Illinois maintains a illegal, discriminatory "pre-pay" policy against black customers. They filed a motion in federal court on March 19 seeking an immediate injunction against this practice. During January and February of 2001, three African-American drivers claim tat the Shell-brand gas station at 3301 W. Howard, Skokie, Illinois required them to pre-pay for gasoline purchases, while allowing non-African-Ameicans to pump gas on the same islands at the same time without having to pre-pay. These drivers gathered affidavits and videotaped evidence concerning these allegedly discriminatory transactions. The motion also alleges that the station's owner and operator -- Equilon Enterprises LLC, based in Houston, Texas -- "[s]ince at least tee spring of 9998 ...has been aware of a charge by plaintiff Daron Hill that this location discriminated against him on the basis of race by requiiing him t pre-pay for a gas purchase on September 21, 1997." This motion has been filed in a pending civil rights case in U.S. District Court in Chicago, Daron Hill et al. v. Shell Oil Co. et al., No 98 C 5766, filed as a class action on behalf of African-American motorists nationwide who buy Shell-brand gasoline. The motion filed before the judge hearing the Hlll aatter, ederal Judge James B. Moran, has been noticed for an initial presentment on March 22, 2001 at 9:45 amm. No rrial date is set. Contact: Paul W. Mollica rr Josie Raimon, of Meites, Mulder, Burger & Mollica, 312-263-0272 SPACELABS MEDICAL: Ricardo A. Guarnero Files Securities Lawsuit --------------------------------------------------------------- Ricardo A. Guarnero, Seattle attorney, announced on March 21 that they have filed a lawsuit against Spacelabs Medical, Inc. of Redmond, Wash. The suit alleges that Spacelabs systematically discriminated against Hispanic/Latino workers by paying them less than other workers, failing to promote them, denied overtime; denied training opportunities; paid less than similarly situated or less qualified Caucasians; retaliated against for challenging unauthorized practices; judged Hispanics by a different set of standards then applied to similarly situated or less qualified Caucasians; demoted or assigned to less favorable shifts, work areas, or facilities. The lawsuit is on behalf of all Hispanics employed by Defendant since March 16, 1996. Spacelabs Medical is a major producer of patient monitoring and diagnostic systems for the medical community. Among its leading product lines are Ultraview products, including a critical care patient monitoring system. For fiscal year ended 2000, the company had revenues of $249 million. Ricardo Guarnero, attorney for the Hispanic workers, stated, "Spacelabs has a large number of Hispanic workers that basically occupy the bottom rungs of the labor force. These workers are used as a reserve of cheap labor as they get paid minimal wages, receive no advancement and are otherwise expected to keep quiet. If they complain, they are summarily dismissed." Guarnero further stated, "In the case Hernandez, he had worked at the facility for over 22 years and had barely advanced, during his two decades of work for Spacelabs. Antonio Madrigal had worked there for 8 years, started at $7 an hour and was receiving raises of 10 cents/hr. each year with no advancement and no prospect of advancement when he was fired." The case is captioned Hernandez et. al., v. Spacelabs Medical, Inc., King County Superior Court Number 01-2-07975-1 SEA. Contact: Law Offices of Ricardo A. Guarnero Ricardo A. Guarnero, 206/381-1292 rguarnero@aol.com TENNESSEE VALLEY: Nuclear Plant Workers Sue For Overtime Pay ------------------------------------------------------------ Thirty-three workers from Sequoyah Nuclear Plant have gone to court against the Tennessee Valley Authority, claiming the utility improperly denied them overtime pay. Their trial began Tuesday before U.S. District Judge Leon Jordan and was expected to last at least a week. TVA attorneys argued the workers were managers who were exempt from overtime. Some of the workers testified that they did oversee others but had no decision-making authority. "Where does a task supervisor stand in the chain of command in the modifications department?" attorney Charles Van Beke asked one of his clients, Robert Mason. "The bottom of the list," answered Mason, who retired in May after a 26-year career with TVA. Several workers testified they all received overtime until TVA changed policies in 1996 to eliminate overtime during power outages or shutdowns at the plant near Chattanooga. Maintenance outages can occur every 18 months and last up to four weeks, during which employees said they have worked roughly 12 hours a day, every day until the plant is back in operation. U.S. Magistrate Robert Murrian ruled against TVA in 1999 in an overtime case affecting security workers at Sequoyah and the Watts Bar Nuclear Plant. Two similar lawsuits, including a class-action claim, are pending against TVA in federal court. (The Associated Press State & Local Wire, March 22, 2001) WAR LITIGATION: Polish President Vetoes Property Compensation Bill ------------------------------------------------------------------ Polish President Aleksander Kwasniewski vetoed a bill Thursday intended to compensate people for property seized by the old communist regime, leaving Poland as the only former East Bloc country without such legislation. Kwasniewski, an ex-communist, told a nationally televised news conference that he believes the bill is flawed and would be too costly for Poland. The measure was widely criticized abroad because of a citizenship requirement that effectively made Polish emigres, including many Jews in the United States and Israel who fled communist persecution, ineligible for compensation. It also was opposed by ex-communist opposition deputies in Poland's parliament, who said it would cost too much. ''First of all, it strikes against Poles' basic interest, which is creation of the best possible conditions for economic growth,'' said Kwasniewski, an ex-communist who cohabits with the Solidarity-led government. ''This is why I will not sign this bill into law.'' He said the bill was ''bad'' and that method proposed for compensating former property owners ''is at variance with the principle of social justice and citizens' equality before the law.'' The best method of restitution was for claimants to pursue their cases in the courts, Kwasniewski said. The government has disputed that contention, saying it could end up being much more expensive than the 50 percent compensation plan it proposed. Kwasniewski's veto indefinitely puts off the compensation plan because parliament's lower house, the Sejm, is considered unlikely to muster the necessary three-fifths majority to override it. Moreover, opinion polls suggest the ex-communists of the Democratic Left Alliance, which opposes compensation plans, are likely to win control of the government elections due this fall. The long-delayed plan, approved by the Sejm on March 7, called for compensation equivalent to 50 percent of the value of property seized from 1944 to 1962, either in kind or in the form of bonds. The government estimated that 170,000 eligible claims would cost about 43 billion zlotys (dlrs 10 billion) the equivalent of about 20 percent of Poland's annual budget. Solidarity had hoped the bill would head off class-action lawsuits in the United States by Jews seeking the return of property. Those hopes were undermined when ex-communist and maverick Solidarity deputies in the Sejm pushed through an amendment restricting eligibility to people who were Polish citizens at the end of 1999. That essentially eliminated claims by most Polish emigres, including many Jews who fled communist oppression. Kwasniewski said the provision was unacceptable. At least one Holocaust class-action suit against the Polish government is pending in U.S. District Court in Brooklyn, New York. The court has yet to decide whether to proceed with the case. An earlier case was dismissed by a court in Chicago, which ruled that it did not have jurisdiction. The Polish bill did not specifically address restitution for World War II Holocaust victims or their heirs. But it was meant in part to provide a way for them to seek compensation because most property they lost during the Nazi occupation was later seized by the communist regime. While a 1997 law provides for the return of communal Jewish property, this legislation was the first measure that in any way addressed holdings lost by individual Jews. (AP Worldstream, March 22, 2001) WEBLINK WIRELESS: Schiffrin & Barroway Files Securities Suit in Texas --------------------------------------------------------------------- A class action lawsuit was filed in the United States District Court for the Northern District of Texas, Dallas Division on behalf of all purchasers of the common stock of Weblink Wireless, Inc. (Nasdaq: WLNK) from December 29, 2000 through February 20, 2001, inclusive (the "Class Period"). The complaint charges that Weblink and its Chairman and Chief Executive Officer, John D. Beletic ("Beletic"), issued a statement on December 29, 2000, that a shelf registration for 8.5 million shares of Weblink common stock had been declared effective by the SEC and that the "effectiveness of the shelf registration works very well for us" with respect to obtaining the financing necessary to satisfy Weblink's cash requirements. However, this statement was materially false and misleading in that defendant Beletic knew as early as December 27, 2000, that "the sale of these registered common shares would no longer meet our capital needs." The complaint further alleges that defendants knew that the failure to secure adequate equity financing would cause a "going concern" audit opinion to be issued for Weblink. When news of Beletic's December 27th statement became public at the end of the Class Period, the price of Weblink stock fell 42% in a single day. Contact: Marc A. Topaz, Esq., or Robert B. Weiser, Esq., of Schiffrin & Barroway, LLP, 888-299-7706 or 610-667-7706, or info@sbclasslaw.com * Court Says Employers Can Require Arbitration of Disputes ---------------------------------------------------------- The Supreme Court handed employers a major victory by ruling that companies can insist that workplace disputes go to arbitration rather than to court. The 5-to-4 decision resolved a disagreement among the lower federal courts about the scope of the Federal Arbitration Act, a 76-year-old law that makes arbitration agreements enforceable in federal court. While the law indisputably applied to a wide variety of commercial disputes, the disagreement, based on an awkwardly worded exemption for at least certain workers, was over whether it covered employment contracts. Reading the exemption narrowly, the majority said that Congress intended to exempt only transportation workers from the law's reach. Justice Anthony M. Kennedy wrote the majority opinion, which was joined by Chief Justice William H. Rehnquist and by Justices Sandra Day O'Connor, Antonin Scalia and Clarence Thomas. Encouraged by earlier Supreme Court decisions treating arbitration favorably, employers are increasingly requiring workers to agree in advance to take any employment-related dispute to binding arbitration as a way of avoiding costly and prolonged litigation. But while siding with a majority of the lower courts on the overall scope of the arbitration law, the court left unresolved some important questions about what rights workers might retain under other federal laws, like the major antidiscrimination laws that guarantee the right to punitive damages and legal fees. Many arbitration agreements cap damages at lower levels and do not guarantee that employees who prevail can recover their costs. It is also unclear whether arbitration agreements can preclude class actions. Quoting language from an earlier arbitration case, Justice Kennedy said that under arbitration, a party gives up a judicial forum but "does not forgo the substantive rights afforded by the statute." One arbitration specialist, David Gibbs, a lawyer in Boston who advises corporate clients on setting up alternative dispute resolution systems, on March 22 said that there were dozens of cases in the lower courts addressing the elements that make up a fair arbitration program. The trend in the lower courts has been to ensure that workers receive the remedies available under federal law. The case began in 1997 as a discrimination suit under California law by a salesman for Circuit City Stores. Circuit City tried to enforce its standard arbitration agreement, which the salesman, St. Clair Adams, signed when he was hired two years earlier. The agreement made all "disputes or controversies" relating to employment at Circuit City subject to final, binding arbitration. On the basis of that agreement, the Federal District Court in San Francisco barred Mr. Adams's lawsuit. But the United States Court of Appeals for the Ninth Circuit, also in San Francisco, ruled that the agreement was not enforceable because the Federal Arbitration Act did not apply to employment contracts. With the Ninth Circuit being the biggest of the federal circuits, covering nine Western states, the decision alarmed the business community. Every other appeals court to have considered the question had found the arbitration act to apply to employment. The linguistic difficulty with the law came from an exemption clause providing that the statute did not apply "to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." What categories of employees was Congress excluding from federally enforced mandatory arbitration? To the judges of the Ninth Circuit, the most natural reading was that Congress meant to exclude all employment contracts, particularly in light of the legislative history that showed that Congress was interested in making commercial contracts subject to arbitration as quickly as possible by assuaging the concerns of organized labor over bringing any employment contracts under the new law. Under the Supreme Court's precedents at the time, Congress's jurisdiction over the economy was extremely narrow, so the exclusion referred only to those categories of employment over which Congress indisputably had jurisdiction. The other federal appeals courts, however, had read the exclusion narrowly to apply, today as in 1925, only to workers in the transportation industries. That was the correct interpretation, Justice Kennedy said, because to give a more elastic meaning to the phrase "engaged in foreign or interstate commerce" would be to "bring instability to statutory interpretation." Consequently, the exemption applies only to "contracts of employment of transportation workers," Justice Kennedy said. That conclusion in itself opened new questions for resolution in future cases. How should courts define transportation workers -- for example, a ticket agent for an airline? A delivery truck driver for Circuit City? In a dissenting opinion, Justice David H. Souter said the court was "imputing something very odd to the working of the Congressional brain" by concluding that Congress excluded coverage of "the class of employment contracts it most obviously had authority to legislate about in 1925" while extending the law to a much larger category of employees over whom federal jurisdiction was then highly uncertain. "It would seem to have made more sense either to cover all coverable employment contracts or to exclude them all," Justice Souter said, noting that Congress might well have made the policy judgment that "arbitration could prove expensive or unfavorable to employees, many of whom lack the bargaining power to resist an arbitration clause if their prospective employers insist on one." Justice John Paul Stevens wrote a more sharply worded dissent. By its "refusal to look beyond the raw statutory text," he said, the court "misuses its authority." Justice Stevens added: "A method of statutory interpretation that is deliberately uninformed, and hence unconstrained, may produce a result that is consistent with a court's own views of how things should be, but it may also defeat the very purpose for which a provision was enacted." The other two dissenting justices, Ruth Bader Ginsburg and Stephen Breyer, signed both of the dissenting opinions. Among the questions left open by the decision, Circuit City Stores v. Adams, No. 99-1379, was what role remains for federal administrative agencies, like the Equal Employment Opportunity Commission, in pursuing enforcement actions on behalf of employees who are covered by arbitration agreements. The court will decide shortly whether to hear an appeal by the E.E.O.C. from a decision by the federal appeals court in Richmond, Va., that it could not seek relief like backpay, damages or reinstatement on behalf of workers covered by arbitration agreements. The agency is arguing in that case, E.E.O.C. v. Waffle House Inc., No. 99-1823, that it was not a party to the agreement and that in seeking relief on the part of individuals, it is vindicating important public rights. In a second labor decision on March 22, the court ruled 7 to 2 that a federal law, the Employee Retirement Income Security Act of 1974, pre-empts state law on the designation of beneficiaries of Erisa-covered pension plans. In this case, Egelhoff v. Egelhoff, No. 99-1529, a man who was recently divorced died without a will and without removing his wife's name as the beneficiary of his pension. Under Washington State law, the benefits would have gone to his children by an earlier marriage, but the court ruled that the Erisa designation should prevail. (The New York Times, March 22, 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 * * *