/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/010717.mbx C L A S S A C T I O N R E P O R T E R Tuesday, July 17 2001, Vol. 3, No. 138 Headlines ADAPTIVE BROADBAND: Faces California Suits Over Alleged Violations ADVANCEPCS: No Class Certified Yet On Two-year Old ERISA Lawsuit AKAMAI TECHNOLOGIES: Marc Henzel Begins Securities Suit In S.D. NY AMTRAN INC: Faces Huge Indiana Shareholders Suit For Founder's Offer BOLLINGER INDUSTRIES: Hearing On Settlement Deal Scheduled For Aug. 24 BRACERO PROGRAM REPARATION: Suit Seeks Recovery Of $500M In Wage Cuts COLORADO STATE: Welfare Benefits Hold Property Rights Says Court DELTA FINANCAL: Decision On Motion For Summary Judgment Pending DRUG PRICE LITIGATION: Justice Department, FTC To Probe Drug Pricing DRUGSTORE.COM: Marc Henzel Commences Securities Suit In S.D. New York ETOYS INC.: Wolf Haldenstein Begins Securities Suit In S.D. New York FIRST USA: Bank Admits Facing Suits Over Credit Business Policies FLEETWOOD ENTERPRISES: Court Allows Notification OF 31T Class Members IBP INC.: Faces Consolidated Shareholder Lawsuit In Delaware Court IMMUNE RESPONSE: Milberg Weiss Files Securities Suit In S.D. New York MAINE: State Executives Appeal Decision Granting Class Status MUSE TECHNOLOGIES: Weiss & Yourman Files Securities Suit In New Mexico NETCENTIVES INC.: Cauley Geller Begins Securities Suit In S.D. New York PSS WORLD: Milberg Weiss Files Securities Lawsuit In M.D. Florida QUALITY SYSTEMS: Court Schedules Status Conference For July 30 SAN JOAQUIN: Retirement Board Agrees To Pay $50-$170 More In Benefits SPRINGS INDUSTRIES: Inks Settlement Agreement For SC, NY Cases STATE FARM: Auto Insurers Face Millions In New Costs If Suit Succeeds U.S. GOVERNMENT: Native Americans Sue Over Trust Fund Mismanagement WICHITA CITY: Judge Okays Notification Of Potential Plaintiffs ********* ADAPTIVE BROADBAND: Faces California Suits Over Alleged Violations ------------------------------------------------------------------ Adaptive Broadband Corporation admitted in a recent regulatory filing to the Securities and Exchange Commission that several securities class action lawsuits have been filed against it. The Company said the suit was brought last March 19 before the U.S. District Court for the Northern District of California. Aside from the Company, certain of its present and former officers and directors were also named as defendants in the suit. These lawsuits have now been consolidated into a single case brought on behalf of all entities or persons who purchased or acquired the Company's securities between August 10, 2000 and March 15, 2001. The plaintiffs allege violations of federal securities laws through false and misleading statements made during this period regarding the Company's financial condition. The plaintiffs seek damages for the alleged inflated price of the securities purchased by all class members, attorneys' fees and costs of litigation. Meanwhile, on May 16, 2001, a stockholder of the Company also filed a complaint in the Superior Court of the State of California, County of Santa Clara, derivatively on behalf of the Company, against four current directors and the Company, as a nominal defendant. The complaint alleges essentially the same material facts as are alleged in the federal class action litigation, but instead is brought derivatively, on behalf of the Company. The plaintiff in this action seeks unspecified restitution and damages, equitable and/or injunctive relief to attach and impose a trust on the proceeds of any benefits accruing to defendants for their illegal acts, plaintiff's fees and costs of litigation. The Company intends to defend these actions vigorously, but there can be no assurance that they will not have a material adverse effect on the Company. ADVANCEPCS: No Class Certified Yet On Two-year Old ERISA Lawsuit ---------------------------------------------------------------- AdvancePCS recently disclosed in a report to the Securities and Exchange Commission that no plaintiff has yet acquired class certification in the now two-year old suit alleging breach of ERISA fiduciary obligations. The leading U.S. health improvement services provider continues to deny all allegations of wrongdoing in its report. In a suit filed in March 1998, plaintiffs allege that the Company is an ERISA fiduciary and that it has breached its fiduciary obligations in connection with its development and implementation of formularies, preferred drug listings and intervention programs for its sponsors of ERISA health plans. In particular, plaintiffs allege the Company's therapeutic interchange programs and negotiation of formulary rebates and discounts from pharmaceutical manufacturers violate fiduciary obligations. AdvancePCS believes that it does not assume any of the plan fiduciary responsibilities that would subject it to regulations under ERISA. The case is currently pending in the U.S. District Court of the District of New Jersey. Advance PCS is the largest pharmacy benefit management company in the United States currently serving more than 75 million health plan members and managing more than $21 billion in prescription drug spending on an annualized basis on behalf of its health plan sponsors. It also offers a wide range of other health improvement products and services, such as prescription discount cards for the uninsured and under-insured, web-based programs, disease management, clinical trials and outcomes studies. AKAMAI TECHNOLOGIES: Marc Henzel Begins Securities Suit In S.D. NY ------------------------------------------------------------------ The law firm of Marc S. Henzel filed a securities class action lawsuit in the United States District Court for the Southern District of New York on behalf all persons who acquired Akamai Technologies, Inc. (Nasdaq: AKAM) securities between October 28, 1999 and June 29, 2001.. Named as defendants in the complaint are Akamai and the following executive officers of Akamai: (i) George H. Conrades, (ii) Paul Sagan, (iii) Arthur H. Bilger, (iv) Todd A. Dagres, (v) Thomas Leighton, (vi) Daniel M. Lewin, (vii) Terrance G. McGuire and (viii) Edward W. Scott. The complaint also names as defendants the following underwriters of Akamai's initial public offering: Morgan Stanley & Co. Incorporated, Donaldson Lufkin & Jennrette Securities Corporation, Salomon Smith Barney, Inc. and Thomas Weisel Partners LLC. The complaint charges defendants with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 for issuing a Registration Statement and Prospectus that contained materially false and misleading information and failed to disclose material information. For more information, contact: The Law Offices of Marc S. Henzel by Mail: 210 West Washington Square, Third Floor Philadelphia, PA 19106, by Phone: 888-643-6735 or 215-625-9999 by Fax: 215-440-9475 by E-mail: Mhenzel182@aol.com or visit the firm's Website: www.members.aol.com/mhenzel182 AMTRAN INC: Faces Huge Indiana Shareholders Suit For Founder's Offer -------------------------------------------------------------------- Amtran Inc. faces what could be a huge class action suit involving hundreds of thousands plaintiffs over the decision of its founder to acquire all common stock he currently does not own. The Company announced mid-May this year the intention of J. George Mikelsons, founder and chairman of the board, to acquire all the outstanding common stocks of the Company. Mikelsons currently owns 72 percent of the Company. Shareholders are opposed to the acquisition as the offer hinders them from taking third party bids. Mikelsons is only offering $21 in cash per share, without interest in order to once again take 100 percent control of the company. The suit alleges that by entertaining the founder's offer, the other defendants who are all members of the board of directors breached their fiduciary duties to the shareholders. The following are the defendants aside from Mikelsons: (i) John P. Tague, President and Chief Executive Officer; (ii) James W. Hlavacek, Executive Vice-President and Chief Operating Officer; (iii) Kenneth K. Wolff, Executive Vice-President and Chief Financial Officer; (iv) William P. Rogers, Jr., board of directors member; (v) Robert A. Abel, board of directors member; and (vi) Andrejs P. Spitnieks, board of directors member and Internatioal Aviation consultant. According to the plaintiffs, the other Defendants fiduciary obligations under the circumstances of the offer obligated them to: (a) Undertake an appropriate evaluation of Amtran's net worth as a merger/acquisition candidate; (b) Seriously invite, consider and not act to discourage other offers for Amtran; (c) Put the interests of Amtran shareholders first, instead of their own interests in entrenching themselves in their positions at a reconstituted Amtran 100 percent owned by Mikelsons; (d) Actively evaluate the proposed sale to Mikelsons and engage in a meaningful auction with third parties in an attempt to obtain the best value for Amtran's public shareholders; (e) Act independently so that the interests of Amtran's public shareholders will be protected and enhanced; and (f) Adequately ensure that no conflicts of interest exist between the individual defendants' own interests and their fiduciary obligations in order to maximize shareholder value or, if such conflicts exist, to ensure that all conflicts are resolved in the best interests of Amtran's public shareholders. The suit, which was filed May 30 in the U.S. District Court for the Southern District of Indiana, Indianapolis division, seeks class action certification, declaration that defendants breached their fiduciary duties, enjoining of the proposed sale or if consummated rescinding, awarding of compensatory and rescissory damages, and awarding of attorneys' fees. The plaintiffs claim the members of the Class number hundreds of thousands since Amtran has millions of outstanding shares of common stock. Amtran, through its wholly owned subsidiary, American Trans Air, Inc., is the tenth largest air passenger carrier in the United States, based on revenue passenger miles. Amtran operates significant service from Chicago Midway and Indianapolis to thirty destinations and has a fleet of fifty-six aircraft, including twenty-four Boeing 727's, fifteen Boeing 757's, and seventeen Lockheed L-1011's. Chicago Express Airlines, Inc., Amtran's wholly owned commuter airline, operates nine Saab 340B's. The entire fleet is supported by Amtran's own maintenance and engineering facilities in Indianapolis and Chicago Midway and maintenance support stations worldwide. BOLLINGER INDUSTRIES: Hearing On Settlement Deal Scheduled For Aug. 24 ---------------------------------------------------------------------- Bollinger Industries Inc. announced recently that it has reached a settlement deal with two groups of plaintiffs to end a securities suit filed five years ago. The Company said a hearing for final approval of the settlement has been set on August 24. The deal involves payment of $400,000, which the company has already deposited in an escrow account pending approval of settlement. In addition, the Company was also required to issue 200,000 shares of common stocks. The shares are subject to a Put and Call Agreement which permits (1) the Company to call the stock for $2.00 per share, and (2) the plaintiffs to require the Company to purchase the stock for $1.00 per share. These put and call options run for one year after the effective date of the final settlement and approval of the litigation. On March 22, 1996 the following groups of plaintiffs filed separate securities class actions in the U.S. District Court for the Northern District of Texas: Suntrust Group -- primarily composed of Suntrust Bank Atlanta, as trustee for Suntrust Retirement Sunbelt Equity Fund STI Group -- composed of STI Classic Fund and STI Classic Sunbelt Both the Suntrust and STI lawsuits listed the Company, Glenn D. Bollinger (Chairman and CEO), Bobby D. Bollinger (President), Michael J. Beck (former CAO) as defendants. Director John L. Maguire and Grant Thornton, LLP, the Company's former independent accountant, were also listed as defendants in the Suntrust lawsuit. The court has granted a class certification on the STI lawsuit. BRACERO PROGRAM REPARATION: Suit Seeks Recovery Of $500M In Wage Cuts --------------------------------------------------------------------- Mexicans who were contracted to work on American farms and railroads during and after World War II under the bracero program are suing the U.S. and Mexican governments and four banks for reparations. In a report by the San Francisco Chronicle, the Mexican complainants say that money deducted from their wages and supposedly placed in savings accounts was never returned. They now seek an accounting of all funds that were to have been placed in savings accounts for the braceros, plus interest on the money and an unspecified amount of punitive damages. It is estimated that the amount deducted from the bracero paychecks between 1942 and 1949 now has a value of $500 million, plus interest. Under Public Law 78, Mexican people were allowed to enter the United States under short-term contracts for manual labor as braceros -- a word that literally means "arm men" in Spanish -- from 1942 until 1964. In the postwar period, virtually all braceros worked on farms throughout the American West, the San Francisco Chronicle. Leocadio de la Rosa, 90, is the lead plaintiff in the case currently pending in the U.S. District Court in San Francisco. De la Rosa was among the hundreds of thousands of Mexicans who filled a critical manpower need while American soldiers fought World War II abroad. Under an agreement between the U.S. and Mexican governments, 10 percent of the wages of the braceros was placed in a savings fund and was transmitted from U.S. to Mexican banks. It was supposed to be paid to the men upon their return to Mexico. The suit also listed Wells Fargo Bank and three Mexican banks as defendants. It alleges breach of contract and violation of a financial trust, and seeks payment of the wages withheld, plus interest. COLORADO STATE: Welfare Benefits Hold Property Rights Says Court --------------------------------------------------------------- Colorado's Court of Appeals ruled recently in a class action lawsuit originally brought against the State of Colorado, Adams County and Denver, that welfare recipients have a property right and entitlement to their benefits; therefore benefits cannot be withdrawn or reduced without due process, according to an Associated Press report. This ruling, which upheld a November 1999 decision by Denver District Judge Lawrence Marizanares, could mean the restoration of hundreds of dollars in lost benefits to each of thousands of Colorado families, according to the same report. The lawsuit claimed that many welfare recipients were given reduced benefits or taken off the welfare rolls without the opportunity for a hearing. Additionally, the lawsuit complained that the notices advising the recipients of the change in the welfare system were vague. The issuance of such notices and reduction or withdrawal of benefits occurred after the state's welfare system underwent a large-scale change in 1997 subsequent to passage of federal legislation, which totally altered how the welfare system would function. Denver settled the lawsuit in May 1999, even before the District judge's ruling, by paying $1.2 million to 1,900 families. Adams County paid $550,000 to 900 welfare recipients, in strict accordance with District Judge Marizanares's ruling, before appealing to the Court of Appeals. Adams County officials are discussing whether to ask the Colorado Supreme Court to review the case. More than half of the state's welfare recipients live in Adams and Denver counties. Christopher Beall, an attorney for the plaintiffs, said the appeals court ruling could clear the way for lawsuits against other Colorado counties that used the same faulty notices from July 1997 and November 1999. The notices were subsequently revised. DELTA FINANCAL: Decision On Motion For Summary Judgment Pending --------------------------------------------------------------- Delta Financial Corporation disclosed recently that it has filed a motion for summary judgment on a suit currently pending before the Supreme Court of the State of New York. The disclosure was contained in the company's latest regulatory filing with the Securities and Exchange Commission. According to the company, it is just waiting for decision on the matter, which was opposed vigorously by the plaintiffs in its reply last March. The cases traces its roots to April last year when plaintiffs filed a suit alleging that the Company collected from borrowers certain fees when they paid off their mortgage loans with Delta. The complaint seeks the following from the court: (a) certification of a class of plaintiffs, (b) declaratory relief finding that the payoff statements used include unauthorized charges and are deceptive and unfair, (c) injunctive relief, and (d) unspecified compensatory, statutory and punitive damages (including legal fees), based upon alleged violations of Real Property Law 274-a, unfair and deceptive practices, money had and received and unjust enrichment, and conversion. DRUG PRICE LITIGATION: Justice Department, FTC To Probe Drug Pricing -------------------------------------------------------------------- Scores of government agencies, class action lawyers, and health care whistle blowers are lining up to pursue dozens of pricing cases against the pharmaceutical industry. According to The Philadelphia Inquirer, the Department of Justice, the Federal Trade Commission, and state attorneys general will probe the alleged fraud and kickback schemes involving drug-makers and doctors. They are also due to investigate the inflating federal drug- reimbursement rates. Companies and health care providers could face costly fines and sweeping non-monetary settlements that could force changes in profitable business practices. Spokesmen for the drug companies are reluctant to comment on the wave of investigations and litigation. With a growth rate of 15 to 18 percent in the last few years, the pharmaceutical industry is the fastest-growing segment of health care, the Inquirer said. DRUGSTORE.COM: Marc Henzel Commences Securities Suit In S.D. New York --------------------------------------------------------------------- The law firm of Marc S. Henzel filed a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of purchasers of Drugstore.com, Inc. (Nasdaq: DSCM) common stock between July 28, 1999 and June 15, 2001, inclusive. The complaint alleges that defendants Drugstore.com, Inc., Peter M. Neupert, David E. Rostov, Jeffrey P. Bezos, Brook H. Byers, L. John Doerr, William D. Savoy, Howard Schultz and Jed A. Smith violated the federal securities laws by issuing and selling Drugstore.com common stock pursuant to the July 28, 1999 IPO without disclosing to investors that some of the underwriters in the offering, including the lead underwriters, had solicited and received excessive and undisclosed commissions from certain investors. For more details, contact: The Law Offices of Marc S. Henzel by Mail: 210 West Washington Square, Third Floor Philadelphia, PA 19106, by Telephone: (888)643-6735 or (215) 625-9999, by Fax: (215) 440-9475, by E-mail: Mhenzel182@aol.com or visit the firm's Website: members.aol.com/mhenzel182 ETOYS INC.: Wolf Haldenstein Begins Securities Suit In S.D. New York -------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP commenced a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of purchasers of eToys, Inc. (NASDAQ:ETYS) securities between May 19, 1999 and December 6, 2000, inclusive. Listed as defendants in the case were Goldman Sachs Group, Inc., FleetBoston Robertson Stephens, Inc., Credit Suisse First Boston Corp., Merrill Lynch, Pierce, Fenner & Smith, Inc., Dain Rauscher, Inc., and J.P. Morgan Chase. The complaint alleges that defendants violated the federal securities laws by issuing and selling eToys common stock pursuant to the May 19, 1999 IPO without disclosing to investors that some of the underwriters in the offering, including the lead underwriters, had solicited and received excessive and undisclosed commissions from certain investors. For more details, contact: Wolf Haldenstein Adler Freeman & Herz LLP by Mail: 270 Madison Avenue, New York, New York 10016 by Phone: (800) 575- 0735 (Fred Taylor Isquith, Esq., Gregory M. Nespole, Esq., Gustavo Bruckner, Esq., Michael Miske or George Peters) by E-mail: classmember@whafh.com or visit the firm's Website: www.whafh.com FIRST USA: Bank Admits Facing Suits Over Credit Business Policies ----------------------------------------------------------------- First USA Bank, National Association recently admitted it has encountered serious challenges against its policies and practices regarding its credit card business. First USA said many of these challenges have matured into several lawsuits seeking class action certification in various state and federal courts. First USA said a few suits have now been conditionally certified as class actions to permit settlement of the claims. "The Bank has defended itself against claims in the past and intends to continue to do so in the future," First USA said in a recent report to the Securities and Exchange Commission. FLEETWOOD ENTERPRISES: Court Allows Notification OF 31T Class Members --------------------------------------------------------------------- More than 30,000 current and former employees of Fleetwood Enterprises, manufacturer of recreational vehicles and manufactured homes, should begin receiving notices soon asking if they want to join a class action lawsuit accusing the company of violating the federal Fair Labor Standards Act, which sets forth the nation's overtime laws, according to a recent Associated Press report. U.S. Magistrate Mikel Williams has signed an order allowing the sending out of notices to 31,728 hourly workers, employed by Fleetwood from February 11, 1997 to February 20, 2001. The letters will ask the employees whether they want to be included in the complaint, filed against the company on February 2000. Boise, Idaho lawyer Dan Williams, who is representing employees, estimated that about 5,000 of those notified will join the lawsuit. The lawsuit originally was filed on behalf of Trina Bristow of Nampa, Idaho, who alleged in her complaint, among other things, that Fleetwood required or allowed employees to work "off-the-clock" without getting paid; improperly rounded down employee time; changed time records and did not keep other necessary records. While a spokesman for the company has declined to comment, in court documents the company has denied the allegations against it. IBP INC.: Faces Consolidated Shareholder Lawsuit In Delaware Court ------------------------------------------------------------------ A consolidated shareholder suit is currently pending against IBP, Inc., the Company revealed in a report to the Securities and Exchange Commission recently. This consolidated suit involves fourteen purported class actions filed between October 2 and November 1, 2000 against the members of the Company's board of directors and Rawhide Acquisition Corporation and its affiliates. The case is docketed at the Delaware Court of Chancery captioned, "In Re IBP, Inc. Shareholders Litigation, C.A. No. 18373-NC. It alleges that the terms of the "Rawhide Agreement" entered into by the Company and Rawhide Holdings Corporation were unfair to the Company's stockholders. The merger agreement involves the acquisition by the Company of Rawhide's outstanding shares in a transaction whereby each share would be converted into the right to receive $22.25 in cash. Plaintiffs also asserted a derivative claim on behalf of the Company, alleging that its directors wrongfully agreed to the Rawhide Agreement and the termination fee and expense reimbursement provisions therein. The company provided no additional information on the case other than the filing by the plaintiffs of a consolidated amended complaint last January 8. This amended complaint added Tyson Foods, Inc. and Lasso Acquisition Corporation as defendants. The plaintiffs allege that the proposed transaction between the Company and the defendants was also unfair and had been entered into in breach of the fiduciary duties of the Company's Board, with the complicity of Tyson. IMMUNE RESPONSE: Milberg Weiss Files Securities Suit In S.D. New York --------------------------------------------------------------------- Milberg Weiss filed a class action in the United States District Court for the Southern District of California late last week on behalf of purchasers of Immune Response Corporation (NASDAQ:IMNR) common stock during the period between May 17, 1999 and July 6, 2001. The complaint charges Immune Response and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Immune Response is a biopharmaceutical company engaged in the business of developing immune-based therapies to induce immune responses for the treatment of HIV, autoimmune diseases and cancer. The complaint alleges that during the Class Period, defendants made false and misleading statements about the efficacy of the Company's REMUNE product, which was intended to stimulate an HIV-infected person's immune system to attack HIV. Defendants misstated and manipulated the results of a study performed on REMUNE, which ended in May 1999 and then attempted to prevent scientists who performed the study from divulging the results to the public. As a result of the defendants' false statements, Immune Response's stock price traded at inflated levels during the Class Period, increasing to as high as $18.31 on March 6, 2000. Defendants took advantage of this inflation, completing a secondary public offering of 2.76 million shares of Immune Response stock in August 2000 for net proceeds of $14.9 million. For more information, contact: Milberg Weiss Bershad Hynes & Lerach LLP through William Lerach by Phone: 800/449-4900 by E-mail: wsl@milberg.com or visit the firm's Website: www.milberg.com MAINE: State Executives Appeal Decision Granting Class Status ------------------------------------------------------------- State officials filed an appeal late last week on a lower court decision granting class action status to a lawsuit that calls for reforms in how in-home services are provided to children with mental disabilities. Maine officials claim that trying to craft a single, court-imposed solution for all the children would ignore their individual needs, the Bangor Daily News said. The State, however, said it is prepared to settle the case should it loses its appeal. The suit was originally filed on behalf of two Augusta-area teen-agers whose families said they were deprived the care mandated under federal Medicaid law. First District Judge Gene Carter ruled recently that hundreds of other children in the same situation also could be considered parties in the case. The state filed its appeal in the First Circuit Court in Boston. MUSE TECHNOLOGIES: Weiss & Yourman Files Securities Suit In New Mexico ---------------------------------------------------------------------- Weiss & Yourman filed a class action lawsuit against Muse Technologies, Inc. (OTC BB:MUZE.OB) and its senior executives in the United States District Court for the District of New Mexico, seeking to recover damages on behalf of defrauded investors who purchased Muse securities. The complaint asserts claims against defendants Muse, Curtiz J. Gangi, and Brian R. Clark for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The complaint alleges that defendants issued a series of false and misleading statements about the Company's business, earnings growth and financial condition during the Class Period. For further details, contact: Weiss & Yourman through James E. Tullman, Mark D. Smilow, or David C. Katz by Phone: (888) 593-4771 or (212) 682- 3025, by E-mail: wynyc@aol.com or by Mail: Weiss & Yourman, The French Building, 551 Fifth Avenue, Suite 1600, New York, New York 10176. NETCENTIVES INC.: Cauley Geller Begins Securities Suit In S.D. New York ----------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP filed last week a class action in the United States District Court for the Southern District of New York on behalf of purchasers of Netcentives, Inc. (Nasdaq: NCNT) securities during the period between October 14, 1999 and December 6, 2000, inclusive. The complaint charges the following defendants with violations of Sections 11, 12(a) (2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder: (i) Netcentives, (ii) Credit Suisse First Boston Corporation, (iii) Hambrecht & Quist, LLC, (iv) Thomas Weisel Partners, LLC, (v) West Shell, III and (vi) John F. Longinotti For more details, contact: CAULEY GELLER BOWMAN & COATES, LLP through its Client Relations Department: Jackie Addison, Sue Null or Charlie Gastineau by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 1-888-551-9944 (toll free) or by E-mail: info@classlawyer.com PSS WORLD: Milberg Weiss Files Securities Lawsuit In M.D. Florida ----------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP filed a class action lawsuit last week on behalf of purchasers of the securities of PSS World Medical, Inc. (NASDAQ: PSSI) between October 26, 1999 and September 1, 2000, inclusive. The action, numbered 3-01-CV-795-J-12-TEM, is pending in the United States District Court, Middle District of Florida, Jacksonville Division against defendants PSSI, David A. Smith and Patrick C. Kelly. The Honorable Howell W. Melton is the Judge presiding over the case. The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between October 26, 1999 and September 1, 2000, thereby artificially inflating the price of PSSI securities. Throughout the class period, defendants issued multiple press releases and filed quarterly reports and an annual report with the Securities and Exchange Commission, which materially overstated the Company's net income in violation of Generally Accepted Accounting Principles. For more information, contact: Steven G. Schulman or Samuel H. Rudman by Mail: One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by Phone: (800) 320-5081 by Email: pssicase@milbergNY.com or visit the firm's Website: http://www.milberg.com QUALITY SYSTEMS: Court Schedules Status Conference For July 30 -------------------------------------------------------------- A California court handling a class action lawsuit against Quality Systems Inc. has scheduled a status conference on July 30. According to a Company disclosure, both counsels for the plaintiffs and the Company will meet before the conference to discuss plaintiffs' review on the documents produced by the Company during a discovery held earlier this year. The JOHN P. CAVENY v. QUALITY SYSTEMS, INC., ET AL. lawsuit has been pending in the Superior Court of the State of California for the County of Orange since April 22, 1997. This suit alleges that the following defendants violated California Corporations Code Sections 25400 and 25500, California Civil Code Sections 1709 and 1710, and California Business and Professions Code Sections 17200 et. seq.: (i) Sheldon Razin, (ii) Robert J. Beck, (iii) Gregory S. Flynn, (iv) Abe C. LaLande, (v) Donn Neufeld, (vi) Irma G. Carmona, (vii) John A. Bowers, (viii) Graeme H. Frehner, and (ix) Gordon L. Setran All of the foregoing individuals were either officers, directors or both during the period from June 26, 1995 through July 3, 1996, The plaintiffs said the Company violated the above California laws by issuing positive statements about the Company that allegedly were knowingly false, in part, in order to assist the Company and the individual defendants in selling Common Stock at an inflated price in the Company's March 5, 1996 public offering and at other points during the class period. The complaint seeks compensatory and punitive damages in unspecified amounts, disgorgement, declaratory and injunctive relief, and attorneys' fees. SAN JOAQUIN: Retirement Board Agrees To Pay $50-$170 More In Benefits --------------------------------------------------------------------- Retirees and present employees of San Joaquin County, California can now receive enhanced retirement benefits if the settlement agreement reached last week receives court approval. The San Joaquin County Retirement Board has finally agreed to settle a three-year old case in a resolution approved last Friday, the Lodi New- Sentinel said. The agreement provides for $50-per-month supplement to already-retired employees and $170 additional for other employees that retire after Jan. 1, 2001. The lawsuit was filed April 1998 by the San Joaquin County Deputy Sheriffs Association against the Retirement Board. The suit was filed along with similar lawsuits across the state following a 1997 California Supreme Court decision in which the court concluded that an individual's retirement benefits should not only be based upon salary earned within the final year of work, but should include other forms of incentive pay. A San Francisco County Superior Court judge is expected to send formal notice of the court settlement hearing sometime this month, the Lodi News-Sentinel said. SPRINGS INDUSTRIES: Inks Settlement Agreement For SC, NY Cases -------------------------------------------------------------- A settlement agreement has been reached in several cases filed against Springs Industries, Inc. in various courts in South Carolina and New York, the Company reported recently. In a regulatory filing with the Securities and Exchange Commission, the Company revealed it successfully inked the agreement April 24. Under the terms of the memorandum of understanding, the plaintiffs have agreed to settle the lawsuits and dismiss the claims with prejudice on the basis of an acknowledgement by the defendants that the pendency of the litigation was a material factor that led to: (1) increasing the consideration offered from $44.00 to $46.00 per share and (2) conditioning the completion of the re-capitalization on the vote of the majority of shareholders whose shares are being converted into cash. The complaints in the state court actions, which are substantially similar, allege that the defendants have breached their duties to the public shareholders of Springs in connection with the proposed re- capitalization, and that the $44.00 per share price initially proposed by the Close family and Heartland Industrial Partners was inadequate and unfair. In particular, the complaints allege that the proposed re- capitalization involves a conflict of interest in that the Close family shareholders allegedly control the Springs board of directors. As relief, the complaints seek, among other things: (i) an injunction blocking completion of the re-capitalization, or if it is consummated, rescinding the re-capitalization; (ii) damages for an unspecified amount; (iii) an accounting; and (iv) attorneys' fees in an unspecified amount. The settlement is subject to confirmatory discovery by the plaintiffs, the drafting and execution of settlement documents, the dismissal of the lawsuits, final court approval of the settlement and the completion of the re-capitalization. In addition, the defendants have agreed not to oppose the plaintiffs' application to the court for an award of attorneys' fees. The purported class actions are pending in South Carolina state court, York County; South Carolina state court, Beaufort County; federal court for the District of South Carolina; and New York state court, New York County. STATE FARM: Auto Insurers Face Millions In New Costs If Suit Succeeds --------------------------------------------------------------------- The face of the automobile insurance industry in Georgia may never be the same, if a present lawsuit is decided in favor of the plaintiffs. According to the Ledger-Enquirer, at stake in the case pending in the Muscogee Superior Court are "millions of dollars each year in new costs to many insurance companies." These costs will be in the form of hundreds, and in some cases thousands, of dollars in potential payouts to policyholders whose automobiles have been damaged, the report said. The impact has been felt during the first 18 months of the class action lawsuit listed as Mabry, et al, v. State Farm Mutual Automobile Insurance Co. The suit raises the issue of whether policyholders in Georgia must be paid for the "diminished value" of an insured damaged automobile, and in this case, by State Farm. According to the suit, "diminished value" is the difference in a vehicle's market value before and after an accident, plus the insurance deductible. Although the case has not gone to jury trial and isn't likely to before January next year, Superior Court Judge Doug Pullen has issued two injunctions affecting State Farm's more than 800,000 policyholders in Georgia. State Farm appealed to the Georgia Supreme Court, which in turn has refused to intervene to block Pullen's injunctive order, allowing the case to proceed. Pullen has set another hearing for July 26. The case began when suit was filed in December 1999, on behalf of a Columbus woman and a Lithonia man. Rudine Mabry filed suit after a June 18, 1999, accident involving her daughter, Antoinette Mercer. Repair costs of $2,838 were paid by State Farm, but Mabry wasn't informed by the company that she was entitled under her comprehensive policy to receive $500 for the diminished value of her 1995 Hyundai Accent, according to the suit. An accident involving Maurice J. Cardenas of Lithonia in December 1998 resulted in repairs costing $7,561 for his 1998 Ford Contour, but his car was worth about $3,200 less as a result of the accident. The Company also did not notify Cardenas his policy entitled him to that money, the suit states. There are other lawsuits waiting in the wings filed in Muscogee Superior Court, including suits against Allstate, Government Employees Insurance Co., Progressive Insurance Co. and USAA, alleging similar failure to pay for an automobile's diminished value. U.S. GOVERNMENT: Native Americans Sue Over Trust Fund Mismanagement ------------------------------------------------------------------- Attorneys representing thousands of Native American tribal members in a class action suit against the government claim trust fund accounts' mismanagement for their plaintiffs adds up to at least $10 billion. The trust fund system was created in 1887 to administer royalties on mining, grazing and logging on American Indian lands, according to a recent report by the Associated Press. Department of Interior Secretary Gale Norton recently created a special office to guide the process and restored powers to a trustee. The department also wants to determine exactly how much of the trust funds may have been squandered. A federal court has ordered the Interior Department to piece together what the Indians are owed and to overhaul the trust fund management. To do that, Norton has appointed Bert T. Edwards, the former chief financial officer for the State Department, to serve as executive director of Historical Trust Accounting. Edwards' first responsibility will be to map out a timeline and cost estimates for trust fund reform. Norton also restored some authority to the special trustee, Thomas Slonaker, to reform the fund's accounting systems to prevent future mismanagement. Some of the trustee's power had been stripped by Norton's predecessor, Bruce Babbit. The federal court order also asks Slonaker to hire a private consulting firm to assess the Interior Department's trust fund reform efforts so far. Dennis Gingold, an attorney for the Indians suing the government, said Norton's orders are just a small part of the reforms needed. "One person is not able to correct the massive level of mismanagement and malfeasance that starts from the secretary on down," he said. WICHITA CITY: Judge Okays Notification Of Potential Plaintiffs -------------------------------------------------------------- More than 7,000 individuals could be involved in a suit against Wichita City, Kansas for jailing them over non-payment of Wichita Municipal Court fines. A district judge approved late last week the mailing of notices regarding the class action to 7,351 individuals who have spent a combined 148,537 days, or 407 years, in jail over a three-year period on Wichita's "time to pay" docket. The notices will tell people how to opt out of or join the suit, The Topeka Capital-Journal said. The figures, which come from records at Sedgwick County Jail, are being used to determine how many people could collect damages under claims that the city improperly imprisoned them between July 31, 1997, and March 9, 2000. Many of the people were low income, and 86 percent were black, the newspaper reported. ********* 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., Trenton, New Jersey, and Beard Group, Inc., Washington, D.C. Enid Sterling, Larri-Nil Veloso and Lyndsey Resnick, Editors. Copyright 2001. 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. 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