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/raid1/www/Hosts/bankrupt/CAR_Public/011127.mbx C L A S S A C T I O N R E P O R T E R Tuesday, November 27, 2001, Vol. 3, No. 231 Headlines EL CAJON: Homeowners Sue City, FEMA Consultants Due To Flood Map Error ENRON CORPORATION: Marc Henzel Commences Securities Suit in S.D. TX GROUND ZERO: Partnership Formed To Protect Workers at the WTC Site HAYES LEMMERZ: Marc Henzel Commences Securities Suit in E.D. Michigan KENTUCKY: Judge Certifies Sales Tax Suit, State To Refund $24 Million MICROSOFT CORPORATION: 800 New York Schools Eligible For Settlement MICROSOFT CORPORATION: Court To Weigh Fairness of $1B Settlement NESCO INC.: Marc Henzel Commences Securities Suit in N.D. Oklahoma NOVEN PHARMACEUTICALS: Marc Henzel Commences Securities Suit in S.D. FL PAYDAY LENDING: Suits Challenge Payday Lending Firms' Fees, Interest PRODUCT RECALLS: CPSC Releases List Of Recalled Children's Products RITALIN LITIGATION: Plaintiffs Voluntarily Withdraw Ritalin Suit SIRIUS SATELLITE: Marc Henzel Initiates Securities Suit in Vermont STARMEDIA NETWORK: Marc Henzel Initiates Securities Suit in S.D. NY SYNTHRAX INNOVATIONS: Diet Drug Lipokinetix Could Cause Liver Problems TURNSTONE SYSTEMS: Milberg Weiss Initiates Securities Suit in N.D. CA UNIFY CORPORATION: Milberg Weiss Lodges Securities Suit in N.D. CA UNITED STATES: New Communities' Black Farmers To Sue Over Racial Bias US WIRELESS: Milberg Weiss Commences Securities Suit in N.D. California UTAH: Lawyers' Dispute Leads To Delay of Navajos' Suit Against State VENTRO CORPORATION: Milberg Weiss Commences Securities Suit in N.D. CA VERSATA INC.: Milberg Weiss, Scott Scott Appointed Lead Counsels WEGMANS FOOD: Inaccurate Ingredient Label Sparks Bread Recall ********* EL CAJON: Homeowners Sue City, FEMA Consultants Due To Flood Map Error ---------------------------------------------------------------------- 350 El Cajon City homeowners filed a class action in San Diego state court against the City and consultants hired by the Federal Emergency Management Agency (FEMA) after a mistake on a FEMA flood map allegedly caused them to pay for unnecessary flood insurance. The homeowners are pursuing the suit in San Diego Superior Court after a federal court had dismissed their suit last month, saying that the suit was not filed in time. Judge Thomas Whelan said an appeal should have been filed within 90 days of June 19, 1997 when the flood plain designation became effective. A federal lawsuit should have followed 60 days after that. The suit contends that the plaintiffs paid $300 to $1,500 in flood insurance premiums while their homes were wrongly considered to be at an elevation with a 1 percent risk of flooding each year. The suit also asserts the city and West Consultants failed to tell FEMA that numerous flood-control projects had been built in the neighborhood from 1959 to 1988 and to review the flood plain map. West Consultants denied that the mistake was theirs, saying that city officials and developers were responsible for giving his company accurate data. David Williams, president of West Consultants, asserted that the maps were created using information from the city and aerial photographs, but not by land surveys. City attorney Morgan Foley said that the city might file cross- complaints against FEMA or its consultants, "We're still going through our files to prepare an appropriate defense for the city." Attorney for the plaintiffs, Mike Cooper, said that West Consultants were "negligent", saying the Company did not look for the existing flood controls that meant his clients weren't in a high-risk flood zone. He added "West (Consultants) obviously should have seen these massive concrete-lined channels.All they had to do is open their eyes." He also told SignOnSanDiego that he was disappointed with the Federal Court's ruling dismissing the suit, "I see the judge's order as nothing more than a misunderstanding of our case.I'm not faulting the court. I just wish that the court had given us an opportunity to be heard." FEMA official, Jack Eldridge, said he was pleased with the federal court's ruling, saying FEMA's mapping process already includes an ample appeal procedure, which was mentioned in the judge's ruling. ENRON CORPORATION: Marc Henzel Commences Securities Suit in S.D. TX ------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Southern District of Texas, Houston Division, on behalf of purchasers of the common stock of Enron Corporation (NYSE: ENE) between October 19, 1998 and October 17, 2001, inclusive. The suit is pending against the Company and: (1) Kenneth Lay, (2) Jeffrey K. Skilling and (3) Andrew Fastow. The suit 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 January 18, 2000 and October 17, 2001. These misrepresentations artificially inflated the price of the Company's common stock. Specifically, the complaint alleges that the Company issued a series of statements concerning its business, financial results and operations that failed to disclose: (i) that the Company's Broadband Services Division was experiencing declining demand for bandwidth and the Company's efforts to create a trading market for bandwidth were not meeting with success as many of the market participants were not creditworthy; (ii) that the Company's operating results were materially overstated as result of the Company failing to timely write- down the value of its investments with certain limited partnerships which were managed by the Company's chief financial officer; and (iii) that the Company was failing to write-down impaired assets on a timely basis in accordance with GAAP. On October 16, 2001, the Company surprised the market by announcing that it was taking non-recurring charges of $1.01 billion after-tax, or ($1.11) loss per diluted share, in the third quarter of 2001, the period ending September 30, 2001. Subsequently, the Company revealed that a material portion of the unwinding of investments with certain limited partnerships were controlled by Enron's Chief Financial Officer and that the Company would be eliminating more than $1 billion in shareholder equity as a result of its unwinding of the investments. As this news began to be assimilated by the market, the price of Company common stock dropped significantly. During the Class Period, Company insiders disposed of over $73 million of their personally held common stock to unsuspecting investors. For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 GROUND ZERO: Partnership Formed To Protect Workers at the WTC Site ------------------------------------------------------------------ U.S. Labor Secretary, Elaine Chao, announced that an alliance has been formed to protect the safety and health of thousands of workers at the World Trade Center disaster site. An earlier report in the Class Action Reporter stated that workers at Ground Zero were suffering from persistent cough and chest complaints, possibly the forerunners of a possible syndrome of illnesses that could rival the Gulf War and Agent Orange syndromes in medical and legal implications and fuel possible class actions. Ms. Chao emphasized "Those who work at Ground Zero are selflessly exposing themselves to serious hazards every day.This is a remarkable partnership to ensure the safety of these heroes as much as possible, because we can't let the terrorists claim another American life." The WTC Emergency Project Partnership Agreement formalizes a commitment to safety and health among contractors, employees, employee representatives, and governmental agencies participating in the emergency response efforts in lower Manhattan. The participants in the partnership are: (1) The Occupational Safety and Health Administration (OSHA), (2) the New York City Department of Design and Construction, (3) the Fire Department of New York, (4) Building and Construction Trades Council of Greater New York, (5) Building Trades Employers' Association, (6) Contractors Association of Greater New York, (7) General Contractors Association, (8) AMEC Construction Management, Inc., (9) Bovis Lend Lease LMB, Inc., (10) Tully Construction Co., Inc., and (11) Turner/Plaza Construction Joint Venture. The partnership agreement outlines a cooperative effort to ensure a safe work environment. New safety and health initiatives have already begun, including a new site orientation-training program and establishment of a safety committee that includes representatives from labor and management organizations as well as OSHA and other participating agencies. The orientation program familiarizes workers with potential hazards and personal protective equipment requirements. John Henshaw, OSHA Administrator, praised the partnership for its commitment to worker safety and health. "The World Trade Center site is potentially the most dangerous workplace in the United States.Our challenge is to ensure the September 11 tragedy claims no more victims in terms of fatalities or serious injuries or illnesses." HAYES LEMMERZ: Marc Henzel Commences Securities Suit in E.D. Michigan --------------------------------------------------------------------- The Law Office of Marc S. Henzel initiated a securities class action in the U.S. District Court for the Eastern District of Michigan on behalf of all shareholders who purchased the common stock of Hayes Lammerz International, Inc. (NYSE: HAZ) between June 8, 2000 and September 5, 2001. The suit 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/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 Company stock had been trading at during the class period. For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 KENTUCKY: Judge Certifies Sales Tax Suit, State To Refund $24 Million --------------------------------------------------------------------- The state of Kentucky could refund more than $24 million in used car sales tax after State Judge Lisabeth Abramson granted class action status to a suit challenging the sales-tax disparity in used vehicles. Three Kentucky residents filed the suit in 1999, alleging that the state's different tax treatment for used passenger vehicles bought in Kentucky and elsewhere infringed on interstate commerce. According to an Associated Press report, a Kentuckian who bought a $5,000 used car with a $3,000 trade-in paid 6% tax on the difference under the old tax setup. However, a resident who bought the same car out of state, even if it was just across the Ohio River, paid taxes on the entire $5,000. Judge Abramson's recent decision to make the lawsuit a class action ordered state officials to notify more than 800,000 residents early next year of their eligibility for partial refunds on sales tax. This could pave the way for numerous claims, officials and attorneys for both sides say, and take up to $24 million from the State's Road Fund. Revenue Cabinet Secretary Dana Mayton told Associated Press, "In the current budget situation, $24 million is a lot of money," while Mark Pfeiffer, spokesman for the Kentucky Transportation Cabinet, said some projects may have to wait if the claims were to be settled. Still undecided is what proof will be required for a refund and whether the cost of notification, which could surpass $500,000, will be paid by the state or from refund money, said Revenue Cabinet attorney Doug Dowell. In January, the Revenue Cabinet placed claim forms in county clerks' offices and on their Web site. About 855 people applied. MICROSOFT CORPORATION: 800 New York Schools Eligible For Settlement ------------------------------------------------------------------- Over 800 New York City schools are eligible to get part of the $1B settlement in cash and computer services that Microsoft is giving to the nation's poorest schools to settle hundreds of antitrust lawsuits. The $1 billion settlement is still subject to court approval. In an earlier Class Action Reporter issue, the software giant promised that it would set up a provide computer technology resources to all K- through-12 public schools in the United States, where around 70% of these schools' population comes from low-income families. Microsoft also said that it would grant $150 million to start a national foundation that would provide grants to local foundations and communications for purchasing computers and software. Another $160 million will be contributed to a separate fund, overseen by the foundation, to be used for technology support programs to assist participating schools. According to Crain's New York Business, 838 of the city's 1,218 public schools are Title-I eligible, meaning that about 68% of the students at the facility are entitled to either a free lunch or a reduced-price lunch under federal guidelines. Microsoft is stipulating that at least 70% of students at schools that apply for funds must be in federal lunch programs. The city's board of education said that 99% of the schools in the system are wired for computers and that 63% of all classrooms have Internet connections. She noted, however, many schools provide only minimal computer access to students or have older equipment. MICROSOFT CORPORATION: Court To Weigh Fairness of $1B Settlement ----------------------------------------------------------------- U.S. District Judge J. Frederick Motz will consider today whether to give the green light to the $1.B settlement proposed by software giant Microsoft Corporation to settle hundreds of antitrust class actions. The Company is proposing to provide $1 billion worth of computers, software and training to nearly 12,500 schools, where 68% of the students at the facility are qualified for federal meal assistance. The settlement elicited mixed reactions from experts, with others asserting that it was a creative solution that will put computers in the hands of poor school children, and others deriding it as a legal ruse that will further the company's dominant position in the computer business. Company CEO Steve Ballmer told reporters last week that the settlement ".avoids long and costly litigation for the company and at the same time, really makes a difference in the lives of millions of school children in some of the most economically disadvantaged schools in the country." Some class action attorneys from California oppose this view, saying this was a ploy designed to entrench the Windows monopoly while allowing the company to pay back only a tiny fraction of what it actually owes consumers. The attorneys will ask the judge to strike down the settlement or allow their lawsuits to proceed separately in California. An important issue in the dispute is a U.S. antitrust doctrine that holds that only a "direct purchaser" can collect damages in private antitrust suits. Gene Crew, an antitrust attorney heading one of the cases against the Company, says that the direct purchaser restriction applies nationwide, except in the more than a dozen states like California that have passed laws repealing it. Judge Motz earlier ruled that in states that had not passed the so-called "repealer" statutes, antitrust litigants could not recover damages from the company. That's because most consumers do not get Microsoft's Windows software directly from the company, but pre-loaded onto a machine they buy from a computer manufacturer. The attorneys said such a settlement could neutralize cases like theirs in repealer states, which they say still hold the potential for larger damage awards against the Company. Crew calls the settlement a "clever tactic.whereby they hijack the California case and use it to lend value to meritless cases elsewhere." He further said the settlement "flunks the smell test," because it is worth only a fraction of the amount Microsoft might end up owing to consumers. He estimates that in California alone, overcharges may total $3 billion to $9 billion. Crew argued that the settlement deal is actually a "marketing device" that "allows them to further entrench their monopoly" by spreading free Microsoft software into primary and secondary schools. The settling attorneys think otherwise, arguing the settlement was a better deal for consumers than trying to divide the money among individuals. Michael Hausfeld, of the Cohen Milstein Hausfeld and Toll lawfirm, asserted last week consumers would have gotten as little at $10 apiece if Microsoft had agreed to reimburse them directly. "This was a very carefully thought-out plan," Hausfeld told Reuters. "There's a lot of complaining out there, and there's no relationship between the complaining and reality." CEO Ballmer has denied the settlement is aimed at boosting the company's market share in American schools, saying money from the settlement can be used to buy software from Microsoft competitors. NESCO INC.: Marc Henzel Commences Securities Suit in N.D. Oklahoma ------------------------------------------------------------------ The Law Office of Marc S. Henzel filed a securities class action in the United States District Court for the Northern District of Oklahoma, on behalf of all persons or entities who purchased Nesco, Inc. common stock (Nasdaq: NESC) between April 26, 2000 and August 16, 2001, both dates inclusive. The suit names as defendants, the Company and: (1) Eddy L. Patterson, (2) James Howell, and (3) Larry Johnson The suit alleges that defendants violated Section 10(b) and 20(a) of the Securities and Exchange Act of 1934 by issuing a series of materially false and misleading statements about the Company's quarterly and annual financial results for 2000, and its quarterly financial results for the first quarter of 2001. At the close of the class period, the Company restated its revenues for 2000 and the first quarter of 2001 to adjust for $3.65 million in overbooked sales. The overbooked sales, which were the result of accounting irregularities, forced the company to reduce its earnings for 2000 to $588,000, or 6 cents a share, from the previously reported $2.85 million, or 31 cents per share. The suit alleges that as a result of these false and misleading statements the price of the Company's common stock was artificially inflated throughout the class period. For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 NOVEN PHARMACEUTICALS: Marc Henzel Commences Securities Suit in S.D. FL ----------------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a securities class action in the United States District Court for the Southern District of Florida, on behalf of purchasers of the securities of Noven Pharmaceuticals Inc. (NASDAQ: NOVN) between March 27, 2001 and November 1, 2001 inclusive. The action, is pending against the Company and: (1) Robert C. Strauss, President, Co-Chairman and Chief Executive Officer; (2) James B. Messiry, Chief Financial Officer and (3) Steven Sablotsky, Co-Chairman and Director The complaint charges 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 materially false and misleading statements to the market between March 27, 2001 and November 1, 2001. Throughout the class period, the Company publicly touted two of its women's hormone replacement products and represented that sales of these agents would be substantial. These statements, as alleged in the complaint, were materially false and misleading because by November 13, 2000, defendants knew that: (i) Novartis Pharma AG, its exclusive marketing agent in Europe, was not aggressively marketing the Company's two hormone drugs, and (ii) Novartis was instead marketing its own competing drug, Estraderm. On August 2, 2001, the Company issued a press release that only partially revealed the truth, stating that sales to Novartis were weaker than analysts and investors had been led to believe. In response, Company stock price plunged by 43%, to close at $18.98 on August 3, 2001. Subsequently, on November 1, 2001, the Company issued a press release that revealed, for the first time, that Novartis had its own hormone-replacement system and would not be converting to its product. Also, that Novartis had excess-inventories of the Company's products and that, as a result, European sales would decline substantially in the fourth quarter of 2001 and 2002. In response to this announcement, Company stock price fell by 33% to $14.89 For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 PAYDAY LENDING: Suits Challenge Payday Lending Firms' Fees, Interest -------------------------------------------------------------------- Arkansas Circuit Judge David Laser is expected to rule soon on a series of class action cases against payday lenders, alleging that they charge unreasonable business fees and usurious interest rates for their deferred check services, the Associated Press recently reported. According to attorney for the plaintiffs, Chris Averitt, "What's happened in all the other cases is that (payday lenders) have either settled, filed some kind of bankruptcy or shut down and left the state." He added, "What might happen is we get a very large judgment and they either file bankruptcy, or for whatever reason, the judgment is not collectable and they don't appeal it. Our preference would be that they actually appeal the case.We'd like the Arkansas Supreme Court to issue an opinion one way or the other about its merits." If Judge Laser decides in the plaintiffs' favor, they could be awarded more than $3 million, twice the amount the defendants in the class action suits have collected in fees, said Jay Scholtens, an attorney with Averitt's law firm. "What we need the judge to do is look past all the games they play with words and recognize that the customer needs money, he doesn't have money, he goes to this place and they advance him money, then he pays a lot of money for the use of that cash," Scholtens said. He says that is the the textbook definition of interest, ".regardless of what they call it." Article 19 of the Arkansas Constitution provides that lenders may charge no more than five percent more than the Federal Reserve interest rate, not to exceed 17 percent for their services. In 1999, the Legislature approved Act 1216, which provides that deferred-check charges, which typically are $10 fees charged by payday lenders on top of 10 percent of the amount loaned, are not interest and therefore cannot be defined as usurious. It is the Jonesboro attorneys' contention that the cost paid for using money is interest, regardless of what the lenders want to call it in order to escape the constitutional limits placed on interest charges. Longtime state Senator Cliff Hoofman, D-North Little Rock, agrees that the loan companies are violating the law, citing a 2000 decision by the Arkansas Supreme Court which says that the cost of using money is to be considered interest. Therefore, the lenders are not only violating the state Supreme Court's mandate but also the state Constitution's provision defining the limits of interest. Senator Hoofman, who led the legislative battle against Act 1216 and also lost an attempt earlier this year to repeal the Act asserted "It's still the cost of using money; therefore it is usurious." PRODUCT RECALLS: CPSC Releases List Of Recalled Children's Products ------------------------------------------------------------------- The U.S. Consumer Product Safety Commission (CPSC) has released a list of earlier recalled and dangerous children's products that may still be in homes all over the country. As families gather for the holidays, the CPSC is warning consumers of many products with the potential to seriously injure or kill that are still being used despite product and recall warnings. This list identifies recalled children's products that are off store shelves but may still be lurking in attics, basements, toy boxes or closets. The products include: (1) Zapper Toys (940,000 products) distributed by nine firms. Small balloon tongues and the cylinders holding the tongues can detach posing a choking hazard. One firm received a report of a 3-year-old boy who inhaled a balloon tongue that detached from a Zapper toy into his sinus cavity. He required medical treatment to remove the part from his nose. Throw away toys or take them back to place of purchase for a refund. (2) Sassy Rattles (455,000 products) distributed by Sassy Inc - Rattles have sewn-on spherical fabric eyes that can detach, posing a choking hazard. 129 reports of eyes detaching; 1 child started to choke and parent used Heimlich maneuver to remove the eye. Take rattle away from young children and return to Sassy for free replacement. Contact Sassy by Phone: 800.781.1080 or visit the firm's Website: www.sassybaby.com (3) Little Tikes Swings (250,000 products) distributed by Little Tikes Company. The buckles on the swing can break and the shoulder restraint straps can pull out of the back of the seat, causing young children to fall. 14 reports of problems, 5 injuries. Contact Little Tikes to receive a free repair kit by Phone: 800.815.4820 or visit the firm's Website: www.littletikes.com (4) Lane Cedar Chests (12 million products) distributed by Lane Co.- The cedar chest lids automatically latch shut when closed, posing a suffocation hazard to children. 10 children suffocated inside the chests. New locks, used since 1987, will prevent entrapments because they do not automatically latch shut. No Lane cedar chests manufactured since 1987 pose this safety hazard. Contact Lane to get new free locks (easy to install at home) to prevent entrapments by Phone: 888.856. 8758 or www.lanefurniture.com (5) Safety 1st Fold-Up Booster Seat models 173, 173A and 173B (1.5 million products) distributed by Safety 1st. The top half of the booster seat insert can separate, causing a child to fall and be injured. 32 reports where the seat halves separated; 7 injuries. Contact Safety 1st for free repair kit by Phone: 888.579.1730 or visit the firm's Website: www.safety1st.com (6) Evenflo Joyride Car Seats/Carriers models 203, 205, 210, 435, 493 (3.4 million products) distributed by Evenflo Co. Inc. When used as an infant carrier, the handle can unexpectedly release, causing the seat to flip forward and allowing an infant to fall to the ground and suffer serious injuries. 240 reports of handles releasing; 97 injuries. Contact Evenflo to get a free repair kit by Phone: 800.557.3178 or visit the firm's Website: www.joyridecarseat.com (7) Century Car Seats/Carriers (4 million products) distributed by Century products. When used as an infant carrier, the handle can break, causing an infant to fall to the ground and suffer serious injuries. 2700 reports of handle-related problems; 200 injuries. Contact Century to get a free easy-to-install replacement handle by Phone: 800.865.1419 or visit the firm's Website: www.centuryproducts.com (8) Baby Trend Portable Cribs/Play Yards models Home and Roam and Baby Express (100,000 products) distributed by Baby Trend Inc.- these cribs/play yards can collapse and entrap an infant in the V-shape created by the collapsed sides of the crib/play yard. Play yards made since 1997 meet a new safety standard that requires the top rails automatically lock into place when the unit is fully set up. 5 deaths and 3 reports of babies found not breathing who were revived. Contact Baby Trend to get a free new play yard by Phone: 800.328.7363 or visit the firm's Website: www.babytrend.com (9) Cosco Playpens models "Zip n Go," "Okie Dokie" and "Carters" (102,000 products) distributed by Dorel Juvenile Group. Plastic tabs on the playpen that lock the rails into the corners can break or loosen over time, allowing the rails to turn inward, collapse, and entrap an infant. 421 reports of rails not locking; 1 death to a baby whose chest was caught in the V-shape created by the collapsed sides of his playpen. Contact Dorel Juvenile Group to get a refund or replacement product by Phone: 800.314.9327 or visit the firm's Website: www.djgusa.com (10) Twister Portable Lamps (480,000 products) distributed by Emess Lighting, Inc. and SLI Lighting Solutions, Inc. The lamp's bulb can become hot, presenting a risk of burn injuries and the risk of fire if the bulb touches combustibles. 5 injuries and 12 reports of property damage. Contact the firm to get a free retrofit kit by Phone: 800.366.2579 or visit the firm's Website: www.twisterlamp.com For more details, contact the Consumer Product Safety Commission by Phone: 1-800-638-2772 or visit the firm's Website: www.cpsc.gov RITALIN LITIGATION: Plaintiffs Voluntarily Withdraw Ritalin Suit ---------------------------------------------------------------- Puerto Rican plaintiffs voluntarily withdrew a class action charging two medical organizations and pharmaceutical giant, Novartis, with conspiring to fraudulently increase Ritalin sales. The suit named Novartis, the manufacturer of Ritalin, the American Psychiatric Association (APA) and the Children And Adults With Attention Deficit/Hyperactivity Disorder (CHADD) as defendants. The suits alleged that the three entities conspired to improperly broaden the diagnostic criteria for Attention-Deficit/Hyperactivity Disorder (AD/HD) thereby increasing Ritalin sales. The suit further alleged unspecified harm from Ritalin after receiving information from the CHADD website in 1993. Four similar suits have been filed, two of which were dismissed, and one withdrawn. Only one suit, filed in New Jersey remains. On March 9, 2001, Judge Rudi Brewster of the United States District Court in San Diego dismissed the lawsuit filed in his court, finding that the plaintiffs had failed to set forth any allegations to support their claims. On May 17, 2001, Judge Hilda G. Tagle of the United States District Court in Brownsville, Texas, dismissed the lawsuit pending in her court, also finding that the plaintiffs in the Texas case had failed to come forward with even the most basic information to support their conspiracy allegations. On July 3, 2001, the plaintiffs in a similar action filed in Florida federal court quietly withdrew their lawsuit completely. CHADD called the move as "emphasizing the baseless nature of five class action lawsuits" in a press statement, saying "CHADD has always maintained that these allegations are ridiculous." According to Gerald Zingone, legal counsel for CHADD. "The dismissal of four cases, both by the courts and the plaintiffs themselves, confirms what we have known all along: there is simply no merit to the plaintiffs' suggestion that CHADD has violated the trust of its membership by `conspiring' to increase sales of Ritalin." CHADD President Evelyn Green also said in the statement "AD/HD is recognized by the scientific and medical community as a real and serious disorder if left untreated.The dismissal of the complaint in Puerto Rico strengthens even further our resolve to providing CHADD members with the best science-based, evidence-based information available." SIRIUS SATELLITE: Marc Henzel Initiates Securities Suit in Vermont ------------------------------------------------------------------ The Law Office of Marc S. Henzel commenced a securities class action in the United States District Court for the District of Vermont on behalf of purchasers of Sirius Satellite Radio, Inc. (NASDAQ: SIRI) common stock during the period between February 17, 2000 and April 2, 2001, inclusive. The suit charges the Company and certain of its officers and directors with violating the federal securities laws by failing to disclose facts known to them, or recklessly disregarded by them, which demonstrated that the announced commercial launch dates for the Company's satellites required for the Company's service, published throughout the Class Period, were impossibly ambitious. Defendants knew, or recklessly disregarded, that it would be possible for the Company to offer its service commercially by the end of 2000, as initially disclosed, or early in 2001, as subsequently disclosed. The complaint alleges that at all times during the class period defendants issued materially false and misleading statements and press releases concerning when the Company's service would be commercially available, which caused the market price of Company common stock to be artificially inflated. When the truth about the Company's business was revealed to the public, the price of common stock dropped precipitously. For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 STARMEDIA NETWORK: Marc Henzel Initiates Securities Suit in S.D. NY ------------------------------------------------------------------- The Law Office of Marc S. Henzel commenced a securities class action in the United States District Court for the Southern District of New York on behalf of purchasers of the securities of StarMedia Network, Inc. (NASDAQ: STRM) between May 25, 1999 and December 6, 2000, inclusive. The action is pending against: (1) Goldman Sachs & Co., (2) BancBoston Robertson Stephens, Inc., (3) Salomon Smith Barney, Inc. and (4) Morgan Stanley & Co., Incorporated. The complaint alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. In May 1999, the Company commenced an initial public offering of 7,000,000 of its shares of common stock, at an offering price of $15.00 per share. In connection therewith, the Company 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: (i) 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 StarMedia shares issued in connection with the StarMedia IPO; and (ii) defendants had entered into agreements with customers whereby defendants agreed to allocate StarMedia shares to those customers in the StarMedia IPO in exchange for which the customers agreed to purchase additional StarMedia shares in the aftermarket at pre-determined prices. For more information, contact Marc S. Henzel by Mail: 273 Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: 610.660.8000 or 888.643.6735 by Fax: 610.660.8080 by E-Mail: mhenzel182@aol.com or visit the firm's Website: http://members.aol.com/mhenzel182 SYNTHRAX INNOVATIONS: Diet Drug Lipokinetix Could Cause Liver Problems ---------------------------------------------------------------------- The U.S. Food and Drug Administration (FDA) issued a warning to consumers to immediately stop using Lipokinetixr, marketed as a dietary supplement by Syntrax Innovations, Inc. Lipokinetix has been implicated in a number of serious liver injuries. The FDA has received multiple reports of persons who developed liver injury or liver failure while using Lipokinetix. Lipokinetix is marketed for weight loss. It contains the ingredients norephedrine (also known as phenylpropanolamine or PPA), caffeine, yohimbine, diiodothyronine, and sodium usniate. The injuries reported to FDA occurred in persons between 20 and 32 years of age. No apparent cause of liver injury was identified in these reports other than use of Lipokinetix. Liver injury developed between 2 weeks and 3 months of Lipokinetix use. The FDA urges consumers to discontinue use of Lipokinetix and consult their physician if they are experiencing symptoms possibly associated with this product, particularly nausea, weakness or fatigue, abdominal pain, or any change in skin color. For more information, contact the FDA's MedWatch adverse event and product problem hot line by Phone: 1.800.FDA.1088 or visit the Website: www.fda.gov/medwatch/how.htm or www.fda.gov/medwatch/safety/2001/safety01.htm#lipoki TURNSTONE SYSTEMS: Milberg Weiss Initiates Securities Suit in N.D. CA --------------------------------------------------------------------- Milberg Weiss Bershad Hynes and Lerach LLP initiated a securities class action in the United States District Court for the Northern District of California on behalf of purchasers of Turnstone Systems, Inc. (NASDAQ:TSTN) publicly traded securities during the period between June 5, 2000 and January 2, 2001 including those who acquired their shares in connection with its secondary offering on September 26, 2000. The suit charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Company is a provider of technology for the digital subscriber line (DSL) service industry. Its first and primary product, the Copper CrossConnect CX100, enables telephone access providers to remotely evaluate, manage, and control the DSL connections within the telephone routing system, permitting identification of copper lines which are suitable for DSL and making installation and maintenance of DSL on those lines cheaper and easier. The Company's customer base consists almost entirely of Competitive Local Exchange Carriers, or CLECs. The suit alleges that contrary to defendants' representations during the class period, the Company's CX100 product was fraught with problems, including blown capacitors, malfunctioning chips, and inaccurate calibration of the CX100. As a result, and contrary to the representations in the registration statement/prospectus, the CX100 product was unreliable, inaccurate and inefficient in deploying DSL services to the Company's customers. Moreover, the Company's key customers were returning the product as a result of the malfunctioning of the CX100. After the market closed on January 2, 2001, the Company issued another press release warning investors that its 4th Quarter 2000 revenue would be "substantially below" market estimates because its CLEC customers had cancelled and reduced their orders. The Company then announced revenue of $26 million to $28 million for the 4th Quarter 2000, 37% lower than consensus market analyst estimates. In the same press release, the Company also disclosed that it expected to take a $13.0 to $15.5 million charge to increase its inventory reserves and bad debt reserves, thus causing it to forecast an operating loss of $12 million to $14 million for the quarter. For more information, contact William Lerach by Phone: 800.449.4900, by E-mail: wsl@mwbhl.com or visit the firm's Website: www.milberg.com UNIFY CORPORATION: Milberg Weiss Lodges Securities Suit in N.D. CA ------------------------------------------------------------------ Milberg Weiss Bershad Hynes and Lerach LLP initiated a securities class action in the United States District Court for the Northern District of California on behalf of purchasers of Unify Corporation (NASDAQ:UNFY) publicly traded securities during the period between May 19, 1999 and July 28, 2000. The complaint charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Company develops, markets and supports Internet application server solutions that enable information technology organizations to deliver e-commerce applications by integrating enterprise, custom-built, and packaged applications with the Internet. The Company offered its stock at $6 per share during an initial public offering. The suit alleges that after the initial public offering, Company stock was a poor performer and traded below the offering price for much of 1997 and 1998. Unify reported little in the way of revenue and earnings growth. In early 1999, the insiders sought to cause the Company stock price to ride the wave caused by rising Internet stock prices so they could sell their personal stock for large gains. Portraying Unify as a financially viable Internet play, during the class period the individual defendants caused the Company to issue false financial results and make false statements about its results and demand for its new products, including Unify e-Wave, causing its stock to trade at artificially inflated levels. Defendants took advantage of this inflation by selling 700,288 of their personal shares for proceeds exceeding $7.8 million. In July 2000, the Company issued a press release disclosing that it had engaged in improper accounting and admitted that its fiscal 1999 and fiscal 2000 results had been false. Unify also stated that portions of its previously reported revenues had been "improperly recognized" and that its top two officers had been placed on "leave." On these shocking disclosures, Company stock trading was halted, after last trading at $3-15/16. As a result of the defendants' false statements, Company stock price traded at inflated levels during the class period, increasing to as high as $37-1/2 in December 1999. For more information, contact William Lerach by Phone: 800.449.4900 by E-mail: wsl@mwbhl.com or visit the firm's Website: www.milberg.com UNITED STATES: New Communities' Black Farmers To Sue Over Racial Bias --------------------------------------------------------------------- A group of African-Americans in Albany, Georgia gathers at regular intervals to discuss its legal claim against the U.S. government and the U.S. Department of Agriculture (USDA), according to a recent Associated Press report. The group used to own in common, and farm, a large tract of land called New Communities and over the course of 15 years, bought and worked the largest black-owned tract of land in the nation. The land spans 5,700 acres in Georgia, "crisscrossed by streams and railroad sidings." Plans called for: (1) three or four villages of 200 families each; (2) 20 to 30 acres would become an industrial park; (3) 10 to 20 acres, a cultural center; (4) a hospital and an education center. In 1985, New Communities declared bankruptcy, causing the land and equipment to be sold at auction, and much of the farm to be turned into subdivision lots. Charles Sherrod and his friends, all New Communities farmers, and Board members, are now discussing their claim against the government, which arose years after the 1985 bankruptcy. During that time, the USDA admitted years of systematic discrimination against black farmers in response to a national class-action lawsuit brought by some other black farmers in 1997. The discrimination, aided in no small part by the agency's own practices, caused the number of black growers to plummet from 925,000 in 1920 to about 18,000 in 1982. A judge later approved a national consent decree, saying "In several Southeastern states, for instance, it took three times as long on average to process the application of an African-American farmer as it did to process the application of a white farmer." Under the consent decree, farmers were given two options: (i) those with "substantial evidence" could drop their claims and walk away with a $50,000 payment for the presumption of discrimination; or, (ii) they could file a claim for actual damages, try to prove discrimination and risk getting nothing. This latter class of claimants would have to prove by a preponderance of the evidence that "similarly situated" white farmers in their areas were treated differently. More than 31,000 farmers accepted the "fast-track" program, just under 13,000 have been approved, with payments, so far, totaling more than $1 billion. Only about 200 claims for bigger damages were filed, with 80 claims still pending. New Communities' claims being one of them. Sherrod declined to say how much the group is seeking, except to say the land alone was worth $5 million. The claims are being handled through a closed administrative process, and federal officials did not return calls for comment. Sherrod claims that he applied for loans, in 1975, to the federal Farmers' Home Administration and the local administrator told him he would get a loan "over my dead body." Additionally, New Communities didn't get the first federal dollar until 1979, and then only after officials from Washington forced locals to approve the loans. By then, the group had had to sell off 1,348 acres at a bargain price to reduce debt loads and raise money. Robert Christian, the group's treasurer, said that when the government loans did come, they were always too little, too late, "You start late; you harvest late; and, of course, you're the last to sell.And the buyers who needed peanuts, they've already got their bins full." Sherrod recalls the beginnings of New Communities as just an idea in the mid-1960s. He said he knew that successful organizing in the South had to be accomplished multi-racially "A black-and-white problem" had to have "a black-and-white-solution." Therefore, Sherrod, together with whites from his alma mater, New York's Union Theological Seminary, formed the Southwest Georgia Project, and traveled with others to Israel to study communal living. A 1970 prospectus to a potential donor described the New Communities- to-be was described as "based on a vision of justice, communitarian values, decentralized institutions, planning by its own citizens." The model was further described as "quite idealistic in the sense of communal ownership, collective ownership for people who never had owned anything." US WIRELESS: Milberg Weiss Commences Securities Suit in N.D. California ----------------------------------------------------------------------- Milberg Weiss Bershad Hynes and Lerach LLP initiated a securities class action in the United States District Court for the Northern District of California on behalf of purchasers of U.S. Wireless Corporation (NASDAQ:USWC) publicly traded securities during the period between June 29, 1999 and May 25, 2001. The complaint charges the Company and its former Chairman and CEO with violations of the Securities Exchange Act of 1934. The Company, through a national network of wireless location systems, enables wireless carriers to offer location-enhanced services, including 911 caller pinpointing, localized news and traffic updates, vehicle and asset tracking, and carrier network management services. The complaint alleges that during the class period, in order to conceal their self dealing transactions, defendants caused US Wireless to falsely report its results for fiscal 2000 through improper characterization of the benefit and the beneficiaries of the issuance of shares of the Company's stock. As a result of this mischaracterization, the Company's net loss attributable to common shareholders was understated by $6.2 million, or 35%. Ultimately, the Company revealed that its results for fiscal 2000 were in error and would be restated to record the share issuances at fair market value and record a loss of $5.3 million for the shares and $0.9 million for certain tax effects. Absent defendants' improper accounting, the Company would have reported much less favorable fiscal 2000 earnings. In May 2001, Nasdaq issued an unusual press release entitled "Nasdaq Halts Trading of U.S. Wireless Corporation and Requests Additional Information from Company." On this news, Company shares were halted from trading at $2.91, 88% lower than the class period high of $24.50. For more information, contact William Lerach by Phone: 800.449.4900 by E-mail: wsl@milberg.com or visit the firm's Website: www.milberg.com UTAH: Lawyers' Dispute Leads To Delay of Navajos' Suit Against State -------------------------------------------------------------------- The decade-old class action filed by Navajos in San Juan County against the state of Utah has been delayed yet again. The Federal Court placed the suit on hold until May. U.S. District Judge Tena Campbell will hear in May arguments over the suit, which seeks to recover millions of dollars allegedly squandered by the State from their trust fund, according to a recent Associated Press report. The lawsuit concerns a trust fund Congress established in 1933 to hold royalties from oil drilled on Navajo land in San Juan County. A 1991 state audit reported that millions placed into the fund over the years could not be accounted for and could have been lost due to lax oversight, waste and ill-conceived business ventures. The suit was filed the following year, the Navajos contending that Utah owes the fund at least $142 million, $50 million that was allegedly misspent from 1960 to 1992, plus interest. The latest twist in the case, and the latest cause of delay, stems from a dispute among the three Salt Lake City attorneys representing the Navajos: Brian Bernard, John Pace and Parker Nielson. Nielson petitioned Judge Campbell to award him more that $1 million in interim attorneys' fees. Nielson also engaged in settlement talks with state attorneys without informing the other two attorneys, a fact both Pace and Bernard contend in court filings. Nielson argues, to the contrary, that an agreement among the three authorizes him to handle settlement discussions. Judge Campbell recently ruled that Nielson could no longer represent the class action if he could not work productively with the other two attorneys. State attorneys have asked Judge Campbell to consider whether Barnard and Pace should be allowed to continue representing the tribe members, and it is this matter on which the judge will hear arguments in May. Nielson has not returned calls for comment, while the other two attorneys say that they can adequately handle the case. Barnard called the state's move a strategy for more delay. Assistant State Attorney General Mark Ward said, however, that the state is trying to ensure that the Navajos are adequately represented so the eventual resolution of the case is not jeopardized by claims of ineffective counsel. Other delays occurred when the case was mired in disputes over an accounting of the fund, and a magistrate fined the state for delays in producing documents. The case was then transferred to a new judge, who oversaw debate this past summer about how the state should prepare a new accounting. VENTRO CORPORATION: Milberg Weiss Commences Securities Suit in N.D. CA ---------------------------------------------------------------------- Milberg Weiss Bershad Hynes and Lerach LLP initiated a securities class action pending in the United States District Court for the Northern District of California on behalf of purchasers of Ventro Corp. (NASDAQ:VNTR) common stock during the period between Feb. 15, 2000 and Dec. 6, 2000. The suit charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. During the class period, Ventro built and operated platforms for vertical business-to-business (B2B) e-commerce marketplace companies. The complaint alleges that by December 1999, defendants knew that the Company's existing business model did not work. Moreover, by the beginning of the class period it was evident to defendants that Ventro did not possess the technology to successfully compete as a marketplace. Defendants knew this would severely impair the Company's future revenue growth. However, defendants wanted to raise additional money through debt offerings before the bottom fell out of the Ventro's stock price. The Defendants allegedly continued to make positive but false statements about the Company's business and future revenues. As a result, Company stock traded as high as $243-1/2 per share during the class period. Then, on Dec. 6, 2000, Ventro announced a restructuring in which it closed down two out of three of its main B2B marketplaces. In early 2001, it was revealed that the Company's CEO and the other defendants had realized by December 1999 that its business model of independent marketplaces didn't make sense. It was also revealed that even the Company's partners were not satisfied with its technology for operating the marketplaces. By this time Ventro stock had declined to less than $2 per share, wiping out over $4 billion in market capitalization. Company stock has fallen 99% from its class period high of over $243 per share since the truth about the Company, its operations and prospects reached the market. For more information, contact Patrick J. Coughlin, John K. Grant, Shirley H. Huang by Mail: 100 Pine Street, Suite 2600 San Francisco, CA 94111 by Phone: 415.288.4545 by Fax: 415.288.4534 (fax) or visit the firm's Website: http://www.milberg.com VERSATA INC.: Milberg Weiss, Scott Scott Appointed Lead Counsels ---------------------------------------------------------------- Milberg Weiss Bershad Hynes and Lerach LLP and Scott and Scott LLC have been named lead counsels in a consolidated securities class action pending in the United States District Court for the Northern District of California on behalf of purchasers of Versata, Inc. (NASDAQ:VATA) publicly traded securities during the period between March 2, 2000 and March 29, 2001 including those who acquired their shares in connection with the Company's initial public offering on March 2, 2000. The complaint charges Versata and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Company provides a comprehensive suite of software and services that enable its customers to rapidly deploy e-business software applications that can be modified quickly to meet constantly changing business requirements. To date, the Company has been licensing its products and providing services to over 500 customers around the world. The complaint alleges that during the class period, Versata made false statements about its business and prospects and reported favorable but false financial results causing its stock to trade at artificially inflated levels of as high as $100-15/16 per share. In March 2001, the Company shocked the investment community with an announcement that its reported financial statements were under investigation. On this news, Versata shares plummeted to as low as $0.28, or 99% lower than its class period high of $100-15/16. For more information, contact Patrick J. Coughlin, Jeffrey W. Lawrence or Jason T. Baker by Mail: 100 Pine Street, Suite 2600 San Francisco, CA 94111 by Phone: 415.288.4545 by Fax: 415.288.4534 or visit the firm's Website: http://www.milberg.com/versata,or contact David R. Scott by Mail: 108 Norwich Avenue Colchester, CT 06415 by Phone: 860.537.3818 or by Fax: 860.537.4432. WEGMANS FOOD: Inaccurate Ingredient Label Sparks Bread Recall ------------------------------------------------------------- Wegmans Food Markets, Inc. is initiating a voluntary recall of approximately 353 loaves of 32 oz. Wegmans Old Fashioned Family Wheat Thin Sliced Bread with a use-by-date of 11/09. This product is being recalled because it may contain a walnut ingredient, which is not declared on the label. No illnesses have been reported to date. The recall of this product is of concern only to those individuals who have allergies to walnuts. Consumption may cause a serious or life- threatening reaction in persons with allergies to walnuts. The bread was produced on Friday, November 2, and would have been available in Wegmans stores between Friday, November 2 and Friday, November 9. Product with the affected code date is no longer on store shelves. Concerned customers should return the product to the Company for a full refund. Customers who have consumed the product and feel they are experiencing symptoms should contact their physician. For more information, contact the Firm by Phone: 1.800.WEGMANS. ********* 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 240/629-3300. * * * End of Transmission * * *