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/raid1/www/Hosts/bankrupt/CAR_Public/010911.mbx C L A S S A C T I O N R E P O R T E R Tuesday, September 11, 2001, Vol. 3, No. 177 Headlines ADVANCE AUTO: Faces Suit For Consumer Fraud in Tennessee Circuit Court AEGIS REALTY: Termination of Acquisition Makes Securities Suits "Moot" AVANEX CORPORATION: Marc Henzel Commences Securities Suit in NY BUY.COM: Sued by Stockholders For Securities Acts Violations in NY CHICAGO: Lawsuit Alleges Unlawful Routine Arrests of Panhandlers CHOLESTECH CORPORATION: Hearing For Approval Of $3M Settlement Set CLARENT CORPORATION: Cauley Geller Initiates Securities Suit in CA CONAGRA FOODS: Cauley Geller Commences Securities Suit in NE DAY-TIMERS INC.: Sued by Fort Madison Local Over Junk Fax Ads DECONNA ICE: Irate Dieters Sue Over Erroneous Ice Cream Label E-LOAN INC.: Sued For Securities Acts Violations in NY ENVIRONMENTAL LITIGATION: Governments Face Pollution Suits FAIRMARKET INC.: Marc Henzel Initiates Securities Suit in NY FARSTAD OIL: Colorado Court Dismisses Securities Suit Without Prejudice FLORIDA: Businessmen Mull Lawsuit Over Miami Construction Project HAYES LAMMERZ: Rosen Law Firm Files Securities Suit in MI INSURANCE LITIGATION: Minnesota Courts Approve $215M Settlement in MN KINDRED HEALTHCARE: Faces Securities Suit in Jefferson County, KY KMART CORPORATION: Sued by Miami Local For Deceptive Ad Campaign LOCKHEED MARTIN: 600 People Join "Red Light Camera" Suit MARVELL TECHNOLOGY: Marc Henzel Initiates Securities Suit in NY MEMBERWORKS INC: Minnesota District Court Dismisses Consumer Suit MEMBERWORKS INC.: Sued by Consumers For Unfair Business Practices METROMEDIA NETWORKS: Cauley Geller Files Securities Suit in NY NATIONWIDE LIFE: Ohio State Court Denies Motion to Dismiss Suit NEW COMMERCE: Sued in NY For Securities Act Violations NUANCE COMMUNICATIONS: Securities Suits Could Affect Operations ORACLE CORPORATION: Sued by Stockholders For Securities Fraud OTG SOFTWARE: Marc Henzel Commences Securities Suit in NY PFIZER INC: Federal Regulators Open Criminal Inquiry on Drug Trial PHOENIX LIFE: Demutualization Spurs Two Suits in IL and NY WAR REPARATIONS: Ex-POW Asks Japan For $1 Trillion Compensation ********* ADVANCE AUTO: Faces Suit For Consumer Fraud in Tennessee Circuit Court ---------------------------------------------------------------------- Advance Auto Parts, Inc. was charged with fraud in a class action suit filed in the Circuit Court for Jefferson County, Tennessee. The suit alleges that the Company sold used, old or out-of-warranty automotive batteries as new. Joe C. Proffitt, Jr. filed the suit on behalf of himself and all others in the states of Alabama, California, Georgia, Kentucky, Michigan, North Carolina, Ohio, South Carolina, Tennessee, Texas, Virginia and West Virginia who purchased batteries from Advance from November 1, 1991 to November 5, 1997. The suit is awaiting class certification. Advance believes it has no liability for such claims and intends to defend them vigorously. Advance Auto Parts is part of Advance Holdings Inc., the No. #2 Auto Chain in the country. Advance operates more than 1,760 stores under the Advance Auto Parts and Western Auto names in 38 states, Puerto Rico, and the US Virgin Islands. It also sells merchandise through more than 620 independently owned Western Auto stores in 48 states. AEGIS REALTY: Termination of Acquisition Makes Securities Suits "Moot" ---------------------------------------------------------------------- Aegis Realty, Inc. labeled three securities suits "moot" as the Company terminated the transaction at issue in the complaints last August 7,2001. Last December 2000, the Company announced that it would enter into an acquisition agreement to acquire a portfolio of 19 community shopping centers and several retail development opportunities from Dallas, Texas-based P.O'B Montgomery & Company, together with POB's on- going development business. The decision sparked three class actions: (1) PAUL V. THE RELATED COMPANIES, L.P., ET AL. filed on or about February 8, 2001 in the New York Supreme Court, County of New York, (2) SCHNIPPER V. AEGIS REALTY, INC., ET AL., filed on or about March 23,2001 in the Circuit Court for Montgomery County, Maryland, and (3) OPPORTUNITY PARTNERS, L.P. V. STUART J. BOESKY, ET AL. filed on or about April 4,2001 in the Circuit Court of Baltimore City, Maryland The three suits allege that the defendants breached their fiduciary duties to the Aegis stockholders by, among other things, committing Aegis to pay unwarranted fees and other consideration to affiliates of the Advisor. Since the announcement of the termination of the agreement, the parties in the first suit have signed a stipulation discontinuing the action, which has been submitted to the Court. This action must be approved by the Court in order for it to become effective. No action has yet been taken by the plaintiffs in the remaining in response to the Company's announcement. Although the transaction at issue was terminated for reasons unrelated to the three lawsuits, the Company believes that the claims asserted in each of the three lawsuits are now moot. If the plaintiff in each action does not voluntarily dismiss the action because it is now moot, the defendants intend to apply to the applicable court for such relief in addition to or as an alternative to the pending motions to dismiss already filed by defendants. AVANEX CORPORATION: Marc Henzel Commences Securities Suit in NY --------------------------------------------------------------- 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 the securities of Avanex Corporation (Nasdaq: AVNX) between February 3, 2000 and December 6, 2000, inclusive. The action is pending against defendants Avanex, Morgan Stanley & Co., Incorporated, Lehman Brothers, Inc. and FleetBoston Robertson Stephens, Inc. The complaint alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On or about February 3, 2000, Avanex commenced an initial public offering of 6,000,000 of its shares of common stock at an offering price of $36 per share. In connection therewith, Avanex filed a registration statement, which incorporated a prospectus, with the SEC. The complaint further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (1) defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which defendants allocated to those investors material portions of the restricted number of Avanex shares issued in connection with the Avanex IPO; and (2) defendants had entered into agreements with customers whereby defendants agreed to allocate Avanex shares to those customers in the Avanex IPO in exchange for which the customers agreed to purchase additional Avanex shares in the aftermarket at pre-determined prices. As alleged in the complaint, the SEC is investigating underwriting practices in connection with several other initial public offerings. For more details, contact 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: http://members.aol.com/mhenzel182. BUY.COM: Sued by Stockholders For Securities Acts Violations in NY ------------------------------------------------------------------ Internet retailer Buy.com, Inc. faces multiple class action suits filed in the United States District Court, Southern District of New York, charging them with violation of federal securities laws The suits was filed on behalf of purchasers of Buy.com securities during the period between February 7, 2000 and December 6, 2000. The complaints allege that our prospectus was materially false and misleading because it failed to disclose, among other things, that our underwriters had solicited and received excessive and undisclosed commissions from certain investors. The lawsuits also allege that the underwriters engaged in actions that artificially inflated the price of the stock. Greg Hawkins and Mitch Hill have been named as defendants in each of these cases in connection with their capacity as former officers and/or directors of Buy.com. The Company believes that other similar class action suits will be filed against them and intends to defend itself vigorously. CHICAGO: Lawsuit Alleges Unlawful Routine Arrests of Panhandlers ---------------------------------------------------------------- The State of Chicago faces a class action lawsuit filed in the United States District Court in Chicago over the routine arrest of panhandlers on public sidewalks. The City of Chicago routinely arrests and jails dozens of homeless individuals who panhandle peaceably on public sidewalks, a proposed class-action lawsuit alleged Thursday. The suit was filed on behalf of three panhandlers--two of them men who allegedly have been arrested and jailed at least 10 times since early last year. The third plaintiff, a woman, has been arrested only once but ticketed numerous times, according to attorney Mark G. Weinberg, who said police go easier on female panhandlers. The suit further alleges the city has "a well-established policy" of arresting nonaggressive panhandlers on public sidewalks and contends the practice violates their 1st Amendment free speech rights and 4th Amendment right against unlawful arrest. The city denied the allegation, saying panhandlers are arrested only when they act "exceptionally aggressive or disruptive." Weinberg says none of the arrests involved aggressive behavior on the part of the panhandlers. The suit seeks in excess of $50,000 in damages and asks to bar the city from banning panhandling on public walkways. Jennifer Hoyle, a spokeswoman for the city's Law Department, said police and prosecutors insist that the begging portion of the disorderly conduct ordinance isn't enforced frequently. "It's being used when [panhandlers] are actually disorderly," Hoyle said. If panhandlers were arrested as many as 10 times each since early last year, as the lawsuit alleged, the volume of prosecutions would be huge, Hoyle said. "We're not seeing that," she said. CHOLESTECH CORPORATION: Hearing For Approval Of $3M Settlement Set ------------------------------------------------------------------ The United States District Court of the Northern District of California will hold a hearing on October 31,2001 regarding the proposed $3 million settlement of the class action lawsuit filed against Cholestech Corporation. The hearing will be held before the Honorable Phyllis J. Hamilton, for the purpose of determining: (1) whether the proposed settlement of the claims in the Litigation for the sum of #3,000,000 in cash, plus accrued interest should be approved by the Court as fair, just, and reasonable and adequate; (2) where, thereafter, the Litigation should be dismissed with prejudice as set forth in the Stipulation of the Settlement dates as of July 31, 2001; (3) whether the Plan of Allocation is fair, just, reasonable and adequate and therefore should be approved; and (4) whether the application of Plaintiffs' Lead Counsel for the payment of attorneys' fees and reimbursement of costs and expenses incurred in connection with the Litigation should be approved. The suit was filed in 1999 against the Company and certain of its former and current officers. For more information, contact Cholestech Securities Litigation by Mail: c/o The Garden City Group. Inc., P.O. Box 8807, Melville, NY 11747- 8807. You may also contact the Law Office of Leonel Z. Glancy by Mail: 1801 Avenue of the Stars, Suite 311, Los Angeles, California 90067 CLARENT CORPORATION: Cauley Geller Initiates Securities Suit in CA ------------------------------------------------------------------ Cauley Geller Bowman & Coates, LLP announced today that a class action has been filed in the United States District Court for the Northern District of California on behalf of purchasers of Clarent Corp. (Nasdaq: CLRN) publicly traded securities during the period between April 20, 2001 and August 31, 2001, inclusive. The complaint charges Clarent and certain of its officers and directors with violations of the Securities Exchange Act of 1934. On September 4, 2001, Clarent announced in a press release that it had discovered information suggesting that its previously reported revenues for the first and second quarters of fiscal 2001 may have been materially overstated, and that the Company's Board of Directors was forming a special committee to investigate a number of transactions that placed in question the Company's historical financial results. The Company also stated that its first quarter 2001 revenues, as release on April 19, 2001, and its second quarter 2001 revenues, as release on July 19, 2001, will be reduced and the related net losses will increase upon conclusion of the review. In addition, the Company anticipates that its revenues for the second half of fiscal 2001 and for fiscal 2002 will be substantially below previously anticipated levels, and that the related losses will be significantly larger than expected. The Company also announced that several of its officers had been placed on administrative leave. On this news trading halted at $5.37. For more information, contact 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 CONAGRA FOODS: Cauley Geller Commences Securities Suit in NE ------------------------------------------------------------ The Law Firm of Cauley Geller Bowman & Coates, LLP announced today that a class action has been filed in the United States District Court for the District of Nebraska on behalf of purchasers of ConAgra Foods Inc. (NYSE:CAG) publicly traded securities during the period between August 28, 1998 and May 23, 2001, inclusive. The complaint charges ConAgra and certain of its officers and directors with violating the federal securities laws by issuing a series of material misrepresentations to the market during the Class Period concerning its financial performance for the Company's fiscal years 1998, 1999 and 2000. The suit alleges that defendants issued press releases reporting ConAgra's quarterly and year-end financial performance, and filed reports confirming such performance with the Securities and Exchange Commission (the "SEC"). These statements, as alleged in the complaint, were materially false and misleading because United Agri Products, a ConAgra subsidiary, engaged in improper accounting throughout the Class Period, including improperly recognizing revenue and insufficiently reserving for bad debt. On May 23, 2001 ConAgra issued a press release announcing that the Company will restate its financial results for the fiscal years 1998, 1999 and 2000. The press release revealed that ConAgra will restate revenues for the Company's fiscal years 1998-2000, inclusive, which will be reduced by an estimated total of $349 million. The press release further revealed that the Company estimated that, upon restatement, earnings per share will be reduced from $1.35 to $1.32 for 1998, from $1.46 to $1.41 for 1999, and from $1.67 to $1.60 for 2000. In addition, according to the press release, the Company is cooperating with an ongoing investigation by the SEC into the matter. For more information, contact 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 DAY-TIMERS INC.: Sued by Fort Madison Local Over Junk Fax Ads ------------------------------------------------------------- Well-known calendar publisher Day-Timers, Inc. faces a class action lawsuit filed last September 5,2001 in a North Lee County District Court for sending junk fax advertisements. Day-Timers Inc., a Pennsylvania-based division of publisher Prentiss Hall Corp., allegedly sent three junk fax advertisements to Lilly Vega of Fort Madison in July and August. The federal Telephone Consumer Protection Act states that it's illegal to send unsolicited fax advertisements. The suit states Vega and many more potential customers were faxed by the company, and each willful and knowing violation is subject to a $1,500 penalty. Multiply that by the number of people sent the fax advertisements, and damages could climb into the millions. However, there is an exception in the law for advertising to existing customers, and Vega previously bought items from Day-Timers, Inc. The plaintiff's counsel, Atty. Doug Napier, reiterates that the exception doesn't apply to faxes unless the customer gives the company express permission to send advertising material. Napier already has pending judgments totaling $8 million against two Florida discount travel firms for violating the federal Telephone Consumer Protection Act. DECONNA ICE: Irate Dieters Sue Over Erroneous Ice Cream Label ------------------------------------------------------------- A "labeling error" could prove costly to DeConna Ice Cream Co. Angry dieters filed a series of lawsuits over the Company's star product - Big Daddy reduced-fat ice cream. The ice cream became popular among the Weight Watchers crowd as its label boasted of 100 calories and 2 grams of fat for 12 ounces of ice cream -- an entire container. None of the Company's far bigger competitors could come up with a product remotely close to what the ice cream claimed In June, however, The South Florida Sun-Sentinel had the ice cream sent to a laboratory, amidst its growing popularity discovered the product actually had triple what was claimed. DeConna explained it as a labeling error. The product should have read "3 servings" instead of only one. The Company has corrected the labels, but many stores still have products with old labels. In late July, state Department of Agriculture and Consumer Services officials said they would begin the process to test the product themselves. E-LOAN INC.: Sued For Securities Acts Violations in NY ------------------------------------------------------ E-Loan, Inc. faces four related lawsuits filed in the U.S. District Court for the Southern District of New York between August 10, 2001 and August 30, 2001. The suits also named as defendants: (1) Christian Larsen, (2) Janina Pawlowski, (3) Frank Siskowski, (4) Goldman Sachs & Co., Inc., (5) FleetBoston Robertson Stephens, Inc. and (6) Merrill Lynch Pierce Fenner & Smith Incorporated. The lawsuits allege that Goldman Sachs & Co., Inc., FleetBoston Robertson Stephens, Inc. and Merrill Lynch Pierce Fenner & Smith Incorporated violated Section 12(a) of the Securities Act of 1933 by: (i) receiving excessive and undisclosed commissions and fees, and (ii) by entering into unlawful private agreements with brokers' customers. The suits also state that all defendants violated Section 11 of the Securities Act of 1933, and Section 10(b) and Rule 10b-5 under the Securities Exchange Act of 1934 by making material false and misleading statements in the initial public offering prospectus concerning brokers' commissions and private agreements with brokers' customers. The Company intends to vigorously defend these actions. E-Loan originates and brokers mortgages and home equity lines of credit; its Web site provides mortgage calculators, rate checkers, and loan-status monitors. The company also offers car loans, credit cards, small-business loans, and credit scoring for consumers. ENVIRONMENTAL LITIGATION: Governments Face Pollution Suits ---------------------------------------------------------- A consortium of lawyers representing environmental groups such as Greenpeace and the World Wildlife Fund of the United States are threatening to sue the governments of the United States, Great Britain and other countries accused of causing pollution. The suit will be on behalf of millions of people affected by global warming, according to a recent report by Ben Fenton appearing in The Daily Telegraph. The consortium have been discussing ways of holding governments and corporations liable for damage done to the planet by carbon dioxide and other emissions. The proposed lawsuits, representing millions of people whose homes are flooded by rising sea waters or whose lives are affected by polluted air, would mean that people living on the other side of the world could sue governments in Washington D.C. and elsewhere. Supporters of this form of environmental litigation said they were energized to take such action by the Bush administration's recent decision to abandon the Kyoto protocol on global warming. The consortium further said that their actions would be based on the experience of class actions filed by Holocaust survivors and by smokers against large corporations. The groups joined together to investigate, for instance, the possibility of representing the 10,000 people of the tiny island nation of Tuvalu, which scientists believe will be submerged by rising seas due to global warming. The people already have begun drawing up emergency plans exploring the possibility of moving en masse to Australia or New Zealand. Other possible clients for legal actions would be the populations of low-lying countries such as the Maldives and Holland, a former legal adviser to Friends of the Earth told The New York Times. FAIRMARKET INC.: Marc Henzel Initiates Securities Suit in NY ------------------------------------------------------------ Marc S. Henzel commenced a securities class action lawsuit in the United States District Court for the Southern District of New York on behalf all persons who acquired FairMarket, Inc. (Nasdaq: FAIM) securities between March 14, 2000 and December 6, 2000. Named as defendants in the complaint are FairMarket and the following executive officers of FairMarket: Scott T. Randall, and John Belchers. The complaint also names as defendants the following underwriters of FairMarket's initial public offering: U.S. Bancorp Piper Jaffray Inc., Deutsche Bank Securities Inc., and FleetBoston Robertson Stephens, Inc. 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. The Prospectus was issued in connection with FairMarket's initial public offering of 5 million shares of common stock at $17.00 per share that was completed on or about March 14, 2000. The complaint alleges that the Prospectus was false and misleading because it failed to disclose: (1) the Underwriter Defendants' agreement with certain investors to provide them with significant amounts of restricted FairMarket shares in the IPO in exchange for exorbitant and undisclosed commissions; and (2) the agreement between the Underwriter Defendants and certain of its customers whereby the Underwriter Defendants would allocate shares in the IPO to those customers in exchange for the customers' agreement to purchase FairMarket shares in the after-market at pre-determined prices. For more information, contact 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: http://members.aol.com/mhenzel182. FARSTAD OIL: Colorado Court Dismisses Securities Suit Without Prejudice ----------------------------------------------------------------------- Colorado State Court has dismissed without prejudice the class action suit filed against Farstad Oil, Inc. in Colorado state court last May 2001, for failure to state a claim. The Complaint alleges that the Trust was formed in February of 1997 to purchase a "natural gas liquids" processing facility from defendant Farstad Gas & Oil, LLC. Money for the purchase was obtained from selling units in the Trust to investors, including the plaintiffs. The suit, filed in January 2001, was brought about by the sale of units in Marcum Midstream 1997-1 Business Trust from March 31,1997 through October 27,1997. Also named as defendants were the following: (1) Farstad Gas & Oil LLC (2) Jeff Farstad, CEO of SPF Energy, (3) Marcum Midstream 1997-1 Business Trust (4) Meretek Technologies, Inc. (5) Marcus Gas Transmission, Inc. (6) Marcum Resources (7) W. Philip Marcum and others (the "Marcum defendants") The suit further asserted that defendants are liable under the Colorado Securities Act, CR ss. 11-51-101, et seq. for misrepresentations in the sale of the Trust units. The plaintiffs have filed a motion seeking leave to amend the Complaint. The Company defendants have denied any liability and have instructed their attorneys to continue vigorously defending them. FLORIDA: Businessmen Mull Lawsuit Over Miami Construction Project ----------------------------------------------------------------- Eight business owners on Collins Avenue in Miami Beach are planning to file a class action lawsuit against the state, due to a construction project causing them to lose revenue. The Florida Department of Transportation began a $6.9 million reconstruction project on Collins Avenue last April to fix cracked sidewalks, improve drainage, add lighting, landscaping and signs. Visitors and those who work on Collins Avenue in Miami Beach have labeled the area a "war zone" as they walk through rubble and rocks and face horrendous traffic. Joseph Nevel owns Wolfie's, a restaurant, at 2038 Collins Ave. and is one of the eight affected business who plan to file the suit He says he is losing $7,000 to $12,000 a week due to the project. Oscar Guzman says that the project has caused ".a great loss of money every day." His company, the New Millenium Cash Exchange is dependent on tourists to exchange foreign currency and used to make $500 a day. Now, he barely makes $10 a day. Dean Peters, general manager for the Raleigh Hotel, says the hotel's headaches have included areas being torn up and then left untouched for months, and traffic patterns changing daily, diverting customers away from the businesses. ``It's not a very pleasant experience for employees and guests of the hotel,'' Peters said. Miami mayor Neisen Kasdin asked for patience in a Miami Herald report "Complete reconstruction is a major undertaking and no doubt has created a great deal of inconvenience, however, it is work that has to be done,'' The first phase of the project has a December 14 deadline, but to business owners who pay $4,000 a month rent on the avenue, that may not be soon enough. HAYES LAMMERZ: Rosen Law Firm Files Securities Suit in MI --------------------------------------------------------- The Rosen Law Firm has filed a class action lawsuit in the United States District Court for the Eastern District of Michigan on behalf of purchasers of Hayes Lemmerz International, Inc. (Nasdaq - HAZ) publicly traded securities during the period between June 8, 2000 and September 5, 2001, inclusive. The complaint alleges that the company violated the federal securities laws by issuing a series of material misrepresentations to the market concerning its financial results for fiscal 2000 and the first quarter of fiscal 2001. Specifically, the reported net loss of $41.8 million for fiscal 2000 was understated by at least 31% and was actually $56.4 million for that fiscal year period. Net loss for the first quarter of fiscal 2001, which was previously reported as $7.6 million, was understated by a staggering 350% and was actually $34.7 million for the quarter. The Company stated that its investigation relating to these financial misrepresentations would continue and that additional restatements or adjustments may be necessary. Also, as a result of these restatements, the Company revealed that it was in breach of certain financial covenants under its senior credit facility. On September 5, 2001, when this adverse information was disclosed, the stock was halted from trading and opened the following day at $2.10 per share. This represented a 50% decline from the prior day's trading price of $4.15 per share and more than a 90% decline from the $20 per share Hayes stock had been trading at. A class action lawsuit has already been filed on behalf of Hayes shareholders to recover the damages caused by the improper conduct described above. For further details, contact Laurence Rosen by Phone: 866-767-3653 (toll-free) by E-mail: lrosen@rosenlegal.com or visit the firm's website: www.rosenlegal.com INSURANCE LITIGATION: Minnesota Courts Approve $215M Settlement in MN --------------------------------------------------------------------- Several life and health insurers reached a settlement in three class action suits filed in Minnesota state and federal courts which commenced October 13,1998. It is expected the settlement will provide $215 million of benefits to more than two million class participants. The first suit, filed in the District Court, Fourth Judicial District for the State of Minnesota, County of Hennepin, charged life and health insurers with unfair insurers' sales practices, alleged agent misconduct, failure to properly supervise agents and other matters. The suits named as defendants the following: (1) American Express Financial Corporation, (2) American Centurion Life Assurance Company, (3) American Partners Life Insurance Company, (4) IDS Life Insurance Company, (5) IDS Life Insurance Company of New York, and (6) American Enterprise Life Insurance Company. The suits, brought by individuals who purchased an annuity in a qualified plan, allege that the sale of annuities in tax-deferred contributory retirement investment plans (e.g., IRAs) is never appropriate. In August 2000, another similar class action suit was commenced in the United States District Court for the District of Minnesota. In September 2000, the plaintiffs filed a consolidated complaint in State Court alleging the same claims as the previous actions. On Oct. 2, 2000, the court entered an order conditionally certifying a class for settlement purposes, preliminarily approving the class settlement, directing the issuance of a class notice to the class and scheduling a hearing to determine the fairness of settlement for March, 2001. On March 6, 2001 the court heard oral arguments on plaintiffs' motions for final approval of the class action settlement. On May 16, 2001 the District Court, Fourth Judicial District for the State of Minnesota, County of Hennepin filed its Final Order and Judgment Approving Class Action Settlement. On May 15, 2001 the United States District Court for the District of Minnesota echoed the state court's decision. An appeal has been filed with the Minnesota Court of Appeals and with the United States Court of Appeals for the Eighth Circuit. KINDRED HEALTHCARE: Faces Securities Suit in Jefferson County, KY ----------------------------------------------------------------- Kindred Healthcare intends to defend itself vigorously against a class action lawsuit filed in the Jefferson County, Kentucky, Circuit Court. The suit alleges that certain of the Company's current and former executive officers and directors damaged the Company and business partner Ventas, Inc. by: (1) violations of the securities laws, (2) insider trading, (3) fraud and securities fraud (4) damaging our reputation and that of Ventas. The plaintiff asserts that such actions were taken deliberately, in bad faith and constitute breaches of the defendants' duties of loyalty and due care. The complaint is based on substantially similar assertions to those made in the class action lawsuit filed in December 1997 in the U.S. District Court for the Western District of Kentucky. The above suit alleged that the Company and Ventas, Inc. violated Sections 10(b) and 20(a) of the Exchange Act, by issuing to the investing public a series of false and misleading statements concerning Ventas' then current operations and the inherent value of its common stock. The complaint further alleged that as a result of these purported false and misleading statements concerning Ventas' revenues and successful acquisitions, the price of the common stock was artificially inflated. Both actions are still pending in court. Kindred Healthcare operates about 55 acute care hospitals and more than 300 skilled nursing facilities providing such health services as respiratory, rehabilitation, and chronic care. It also operates institutional pharmacies. Struggling with plunging profits, lower reimbursements, and problems with lenders, the company filed for Chapter 11 bankruptcy protection and has emerged under a plan of reorganization worked out with Ventas. KMART CORPORATION: Sued by Miami Local For Deceptive Ad Campaign ---------------------------------------------------------------- A Miami local has filed a lawsuit in Miami-Dade Circuit Court against the Michigan-based Kmart Corporation, alleging that the retail giant engaged in deceptive and unfair trade practices. Bartimous Berry seeks class action status for the suit, which he filed after checking out Kmart's "Dare To Compare" advertising campaign, which said Kmart had cheaper prices that its competitors, notable Target Corporation. Berry decided to compare prices at Kmart and Target for himself on common items like ketchup and potato chips and claims that he discovered that many of Kmart's advertised price comparisons advertised were inaccurate. The suit hopes to include all consumers who purchased an item advertised in the campaign. Last August 21, Minneapolis-based Target Corp. sued Kmart in U.S. District Court in Minneapolis over the Dare to Compare campaign after a marketing study it commissioned found inaccurate price comparisons being displayed at Kmart stores. The suit accused Kmart of false advertising, unlawful and deceptive trade practices and consumer fraud. Kmart vigorously denied allegations last month saying that it was unfortunate that Target had to resort to "needless, costly litigation when they discover that they are falling behind in pricing in the retail arena," However, Kmart removed the Dare to Compare price displays late last August 31 and Target withdrew its request for a temporary restraining order that would have required Kmart to take them down. Target has not withdrawn its suit. According to a Target spokesman, the company notified Kmart of errors it found in the Dare to Compare price comparisons soon after the campaign began. When Kmart continued to publicize the "false" comparisons, Target retained Leo J. Shapiro and Associates, a market research firm in Chicago. Kmart has remained defiant, accusing Target of pursuing ".frivolous litigation" and calling the allegations "seriously flawed." LOCKHEED MARTIN: 600 People Join "Red Light Camera" Suit -------------------------------------------------------- Almost 600 people have joined the class action lawsuit accusing Lockheed Martin of unfair business practices in operating the red-light camera system in San Diego. The complaint, filed Thursday, alleges Lockheed Martin abused the process of the courts by allowing false evidence to be used to convict people cited by the San Diego red-light camera system. San Diego Superior Court Judge Ronald L. Styn ruled last month that evidence from red-light cameras were untrustworthy and unreliable and should not be used to convict people of running the red light. Last Tuesday he excluded evidence against defendants in the consolidated red-light camera cases and dismissed their tickets. Styn ruled that a government agency should run the traffic system not Lockheed Martin, who is paid $70 for every conviction, which poses a problem with the evidence admitted in this case, the judge ruled. This case, one of several in recent months, is different because they are not suing the city or the San Diego Police Department. The plaintiffs are seeking retribution from lost money, time and other ill effects from the red-light ticket convictions. The complaint alleges 10 violations of unfair business practices and is seeking $27.1 million in compensatory damages plus punitive damages. "We want the $271 back and if anyone went to traffic school we want that money paid plus time lost," Mitchell Mehdy, otherwise known as "Mr. Ticket", said. He is an attorney known to devote his entire law career to the low-cost defense of traffic tickets. The plaintiffs want compensation from increase in insurance premiums due to a ticket paid by a motorist, and compensation for anyone who has lost his license. Spokesman for the SDPD Dave Cohen said an audit of the red-light cameras will begin this week and an attempt will be made to take a broad look at the entire system. "Hopefully they will tell us if it needs to be tweaked," Cohen said. "Our plan is do what we can to see if it meets public confidence. Our goal to keep intersections safe." He also said the audit should be completed in 30 to 60 days, but the contract doesn't specify a completion deadline. City Attorney Casey Gwinn's office said in a statement that until the audit is complete, the City Attorney will take no further action regarding any other cases. MARVELL TECHNOLOGY: Marc Henzel Initiates Securities Suit in NY --------------------------------------------------------------- A class action lawsuit was filed by Marc S. Henzel in the United States District Court for the Southern District of New York on behalf of purchasers of the securities of Marvell Technology Group, Ltd. (Nasdaq: MRVL) between June 27, 2000 and December 6, 2000, inclusive. The action is pending against defendants Marvell, Goldman Sachs & Co. and Lehman Brothers, Inc. The complaint alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On or about June 27, 2000, Marvell commenced an initial public offering of 6,000,000 of its shares of common stock at an offering price of $15 per share. In connection therewith, Marvell filed a registration statement, which incorporated a prospectus, with the SEC. The complaint further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (1) defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which defendants allocated to those investors material portions of the restricted number of Marvell shares issued in connection with the Marvell IPO; and (2) defendants had entered into agreements with customers whereby defendants agreed to allocate Marvell shares to those customers in the Marvell IPO in exchange for which the customers agreed to purchase additional Marvell shares in the aftermarket at pre-determined prices. As alleged in the complaint, the SEC is investigating underwriting practices in connection with several other initial public offerings. For further details, contact: 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: http://members.aol.com/mhenzel182. MEMBERWORKS INC: Minnesota District Court Dismisses Consumer Suit ----------------------------------------------------------------- The United States District Court, District of Minnesota dismissed a class action suit filed in July 1999 against nationwide telemarketer MemberWorks, Inc. Plaintiffs Kathryn Rosebear and Anne Bergman alleged that the Company violated Minnesota Consumer Law and violated their privacy policies. The Company vehemently denied the allegations contained in the suit. MEMBERWORKS INC.: Sued by Consumers For Unfair Business Practices ----------------------------------------------------------------- Nationwide telemarketer MemberWorks, Inc. faces allegations of unfair business practices in four class action lawsuits filed against them in various state courts. In March 2001, Teresa McClain filed a class action suit against Coverdell & Company, a wholly owned subsidiary of the Company, and other defendants in the United States District Court for the Eastern District of Michigan, Southern Division. The suit, alleges that Coverdell and the other defendants violated the Michigan Consumer Protection Act and other applicable Michigan laws in connection with the marketing of insurance products. Two class action suits were filed in June 2001 by plaintiffs Judith Jeselskis and Marcia Walters in Circuit Court of the Tenth Judicial District, Highlands County Civil Division, Florida, and Circuit Court of the Sixth Judicial Circuit, Pinellas County Civil Division, Florida, respectively. The suits allege that the Company and the other defendants violated the Florida Deceptive and Unfair Trade Practices Act, in connection with the marketing of certain membership programs offered by the Company. In July 2001, a purported class action was instituted by Alan Stone against the Company and other defendants in Superior Court of the State of California, County of Orange. The suit, which seeks unspecified monetary damages, alleges that the Company and the other defendants violated California business practices law. The Company labeled the allegations in these suits as unfounded and has instructed their counsels to oppose these actions vigorously. METROMEDIA NETWORKS: Cauley Geller Files Securities Suit in NY -------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP announced today that a class action has been filed in the United States District Court for the Southern District of New York on behalf of purchasers of Metromedia Fiber Network, Inc. (Nasdaq:MFNX) securities during the period between January 8, 2001 and July 2, 2001, inclusive. The complaint charges Metromedia and certain of its officers and directors with violating the federal securities laws by issuing a series of material misrepresentations to the market thereby artificially inflating the price of Metromedia securities. Specifically, defendants issued multiple press releases announcing and highlighting Metromedia's receipt of a $350 million credit facility from Citicorp USA, Inc. ("Citicorp") which would enable Metromedia to complete the construction of an extensive fiber optic network. These statements were materially false and misleading because defendants failed to disclose that: (1) the Citicorp credit facility was contingent on the receipt of additional commitments from other lenders and that Metromedia was experiencing difficulty obtaining such commitments given the distressed market for telecom companies; (2) the further development of the Company's fiber optic network would be significantly delayed without obtaining the credit facility which was dependent on obtaining the necessary additional loan commitments; and (3) based on the foregoing, defendants' statements about the Company and its prospects were lacking in a reasonable basis at all times. Finally, on July 2, 2001, Metromedia issued a press release announcing that it received an extension of the commitment letter for its $350 million credit facility from Citicorp and revealed for the first time that the commitment letter from Citicorp was subject to the receipt of commitments from other lenders in the amount of $287.5 million. In response to this announcement, shares of Metromedia's stock closed at $1.95 per share on July 2, 2001, a far cry from the class period high of $19.06 reached on January 19, 2001. For more information, contact Jackie Addison, Sue Null or Charlie Gastineau by Phone: 1-888-551-9944 (toll-free) or by E-mail: info@classlawyer.com NATIONWIDE LIFE: Ohio State Court Denies Motion to Dismiss Suit --------------------------------------------------------------- Ohio State Court denied Nationwide Life Insurance Company's motion to dismiss a class action suit filed in October 1998. The lawsuit related to the sale of deferred annuity products for use as investments in tax-deferred contributory retirement plans. On May 3, 1999, the complaint was amended to name additional defendants. The amended complaint is brought on behalf of all persons who purchased individual deferred annuity contracts or participated in group annuity contracts sold by Nationwide and the other named Nationwide affiliates which were used to fund certain tax-deferred retirement plans. The plaintiffs are waiting for class certification. NEW COMMERCE: Sued in NY For Securities Act Violations ------------------------------------------------------ New Commerce One Holdings, Inc. faces two class action suits filed in the United States District Court for the Southern District of New York. The first case,iled on June 19, 2001, named the Company, several company officers and directors and three underwriters in the Company's initial public offering as defendants. The complaint alleges: (1) violations of Section 11 of the Securities Act of 1933 against all defendants, (2) a violation of Section 15 of the Securities Act and Section 20(a) of the Securities Exchange Act of 1934 against the individual defendants, and (3) violations of Section 12(a)(2) of the Securities Act and Section 10(b) of the Exchange Act (and Rule 10b-5, promulgated thereunder) against the underwriters. A similar complaint was filed last July 6, 2001 in the Southern District of New York. The complaint is substantially identical to the Cameron complaint, except in that it alleges violations of Section 10(b) of the Exchange Act (and Rule 10b-5, promulgated thereunder) against all defendants, including the Company and the individual defendants. The Company anticipates that additional related substantially-identical lawsuits may be brought, and further anticipates that all such lawsuits will eventually be coordinated or consolidated with one another. The Company says that it will defend itself vigorously as they have meritorious defenses to these securities lawsuits. NUANCE COMMUNICATIONS: Securities Suits Could Affect Operations ---------------------------------------------------------------- Pending securities class suits could adversely affect business operations, software services provider Nuance Communications revealed in a report to the Securities and Exchange Commission. The first of these suits was filed in March 2001 in the United States District Court for the Northern District on behalf of people who purchased stock during the period January 31, 2001 through March 15, 2001. The suit further charged the Company and its directors with insider trading and false and misleading statements in violation of the federal securities laws. The Company, however, believes that it has meritorious defenses to these allegations and will contest the actions vigorously. ORACLE CORPORATION: Sued by Stockholders For Securities Fraud ------------------------------------------------------------- Shareholders of software giant Oracle Corporation filed several class action suits in the United States District Court for the Northern District of California on and after March 9, 2001. The suit also named the Company's Chief Executive Officer as co- defendant. A consolidated amended complaint adding the Chief Financial Officer and an Executive Vice President as defendants was filed on August 3, 2001. The consolidated amended complaint is brought on behalf of purchasers of the stock of the Company during the period December 15, 2000 through March 1, 2001. Plaintiffs allege that the defendants made false and misleading statements about the Company's actual and expected financial performance and the performance of certain of its applications products, while certain individual defendants were selling Company stock, in violation of Federal securities laws. Plaintiffs further allege that certain individual defendants sold Company stock while in possession of material non-public information. On June 20, 2001 the Court consolidated the class actions into a single action and appointed lead plaintiff and class counsel. Other derivative lawsuits were filed in the Superior Court of the State of California, County of San Mateo and County of Santa Clara on and after March 12, 2001, and in the Court of Chancery in the State of Delaware in and for New Castle County. The Company also faces similar class actions in the Superior Court of the State of California, County of San Mateo, and in the Superior Court of the State of California, County of San Mateo. The above suits also make substantially similar allegations with the above suits but were filed on behalf of purchasers of the stock of the Company during the period April 29, 1997 through December 9, 1997. The Company has yet to respond to these suits. The Company believes that the above allegations have no merit and will defend itself vigorously. OTG SOFTWARE: Marc Henzel Commences Securities Suit in NY ---------------------------------------------------------- Marc S. Henzel initiated a securities class action lawsuit in the United States District Court for the Southern District of New York on behalf all persons who acquired OTG Software, Inc. (Nasdaq: OTGS) securities between March 10, 2000 and December 6, 2000. Named as defendants in the complaint are OTG and the following: (1) Richard A. Kay, (2) F. William Caple, (3) Ronald W. Kaiser, (4) Credit Suisse First Boston Corporation, (5) Deutsche Bank Securities Inc., (6) SG Cowen Securities Corporation and (7) Friedman, Billings, Ramsey & Co., Inc. 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. The Prospectus was issued in connection with OTG's initial public offering of 5 million shares of common stock at $19.00 per share that was completed on or about March 10, 2000. The complaint alleges that the Prospectus was false and misleading because it failed to disclose: (i) the Underwriter Defendants' agreement with certain investors to provide them with significant amounts of restricted OTG shares in the IPO in exchange for exorbitant and undisclosed commissions; and (ii) the agreement between the Underwriter Defendants and certain of its customers whereby the Underwriter Defendants would allocate shares in the IPO to those customers in exchange for the customers' agreement to purchase OTG shares in the after- market at pre-determined prices. For further information, contact 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: http://members.aol.com/mhenzel182. PFIZER INC: Federal Regulators Open Criminal Inquiry on Drug Trial ------------------------------------------------------------------ Federal regulators have opened a criminal inquiry on the class action lawsuit filed by thirty Nigerian families against pharmaceutical giant Pfizer, Inc. Martha B. Hughes, a special agent with the U.S. Food and Drug Administration's Office of Criminal Investigation, reportedly has been collecting information about Pfizer's 1996 experiment of a then- unapproved antibiotic, known as Trovan, in Nigeria. An FDA spokesman neither confirmed nor denied the investigation. The suit, filed late last week in New York, asserts that Pfizer violated FDA regulations and international laws with their trial of a then-unapproved antibiotic known as Trovan. The suit alleges that their children participated in secret tests which led to serious injuries and even death. The suit further alleges that Pfizer used a falsified document to assure the FDA that a Nigerian ethics committee had already approved the clinical trial, conducted at a squalid epidemic camp. It also said Pfizer tested the children, some as young as a few months old, without getting the consent of parents or telling them alternative treatment was available, a Washington Post report revealed. The lawsuit has spurred street protests and an investigation by the Nigerian government. Earlier, Pfizer reiterated that its experiment was approved by the proper authorities and that they had asked consent from families of treated patients. In a press statement, Pfizer said that the experiment was "well conceived, well executed and saved lives." The exportation of American drug trials to Third World countries, where there are lower costs and lax regulations, has increased in the past year. It was in 1996 when Pfizer organized the Trovan experiment in Kano, Nigeria where, in two weeks, Pfizer researchers gave 100 children Trovan and another 100 children a comparison drug. Eleven of the children died, and others suffered deafness, lameness and other permanent injuries. Pfizer has said none of the problems were related to its experiment. Trovan was never approved for sale to children in the United States. Shortly after its marketing release for adults, Trovan was associated with fatal liver failures and its use was severely restricted. The European Union banned Trovan altogether. PHOENIX LIFE: Demutualization Spurs Two Suits in IL and NY ---------------------------------------------------------- Phoenix Life Insurance Co. faces two class action lawsuits arising from the demutualization of the Company last June 25,2001. The first of these lawsuits was filed on April 4, 2001 in the Circuit Court of Cook County for the Illinois County Department in the Chancery Division. The suit was filed on behalf of all current policyholders of Phoenix Life who purchased their policies prior to Phoenix Life's announcement of its intention to demutualize. The plaintiffs allegedly sustained losses due to the demutualization. The second lawsuit was filed on April 16, 2001 in the Supreme Court of the State of New York for New York County. The suit was filed on behalf of eligible policyholders of Phoenix Life as of December 18, 2000, the date the plan of reorganization was adopted. The suit also named Morgan Stanley & Co. Incorporated as defendant. Phoenix filed a motion to dismiss the complaint in May 2001 and intends to contest these actions vigorously. Phoenix Home Life Mutual Insurance Company effected the demutualization on last June 25, 2001. As a result, the company converted from a mutual life insurance company to a stock life insurance company, became a wholly owned subsidiary of The Phoenix Companies, Inc. and changed its name to Phoenix Life Insurance Company. WAR REPARATIONS: Ex-POW Asks Japan For $1 Trillion Compensation ---------------------------------------------------------------- A former U.S. prisoner of war seeks $1 trillion compensation from the Japanese government in a class action lawsuit filed in the United States District Court in Chicago. Retired Army Col. Melvin H. Rosen seeks compensation for suffering caused by the Imperial Japanese Army, an online report of the Japan Times stated. Rosen filed the suit on behalf of an estimated 435,000 Americans killed or wounded during the 1941-1945 war in the Pacific. Rosen was held prisoner in the Philippines by the Japanese army for 3 1/2 years after surviving the infamous Bataan Death March. Former POWs have filed a number of lawsuits since August 1999, when a 79-year-old U.S. war veteran filed a suit against Mitsui & Co. for forcing him to work in a Mitsui coal mine in Fukuoka. However, State Department spokesman Richard Boucher maintains that all war claims have been settled by the San Francisco Peace Treaty, signed by Japan in 1951 to formally end the war and settle war claims. U.S. and Japanese governments agreed that their citizens forfeited the right to pursue damages incurred by the war. In 2000, a U.S. federal court in San Francisco threw out the August 1999 suit against Mitsui, citing the relevant clauses in the treaty. The plaintiffs in Chicago, however, are arguing that the victims did not fully forfeit their right to demand compensation, citing declassified documents showing that then-Prime Minister Shigeru Yoshida promised the Dutch government that the Allies were not forfeiting that right. ********* 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, Aurora Fatima Antonio 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. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *