/raid1/www/Hosts/bankrupt/CAR_Public/020410.mbx
C L A S S A C T I O N R E P O R T E R
Wednesday, April 10, 2002, Vol. 4, No. 70
Headlines
CINEMARK USA: Faces Suit Over Unsolicited Fax Advertisements in TX
HEALTHCARE RECOVERIES: Moves For Summary Judgment In Suit in TX Court
HEALTHCARE RECOVERIES: Court's Dismissal of Subrogation Suit Appealed
HEALTHCARE RECOVERIES: Sued For Subrogation Fraud in Illinois Court
HEALTHCARE RECOVERIES: Plaintiffs Appeal Dismissal of Subrogation Suit
HEALTHCARE RECOVERIES: Sued Over Relationship With Prudential in TX
HEALTHCARE RECOVERIES: Alabama Federal Court Dismisses RICO Complaint
HEALTHCARE RECOVERIES: Plaintiffs in Suit Ask FL Court To Certify Class
HERTZ CORPORATION: Appeals Court Remands Insurance Suit to State Court
MICHIGAN: Court Preserves Homeowner's Right To Sue Over Sewer Backups
OSTEOTECH INC.: Denies Claims in CA Suit Over "Sale" of Organs, Tissue
SLAVE REPARATIONS: Supporters Say Suit's Chances For Winning Are Slim
US TRUST: Agrees To Settle United Companies Employees' ERISA Suit in LA
XTO ENERGY: To Vigorously Oppose Gas Royalties Suit in OK Federal Court
XTO ENERGY: Faces Suit Over Gas Royalties For Native Americans in WY
XTO ENERGY: Sued Along With 200 Gas Companies in Royalties Suit in KS
Securities Fraud
ADELPHIA COMMUNICATIONS: Wolf Haldenstein Names Deloitte Touche in Suit
ADELPHIA COMMUNICATIONS: Berman DeValerio Files Securities Suit in PA
ADELPHIA COMMUNICATIONS: LeBlanc Waddell Files Securities Suit in PA
ADELPHIA COMMUNICATIONS: Berger Montague Lodges Securities Suit in PA
ANDRX CORPORATION: Bernstein Liebhard Lodges Securities Suit in S.D. FL
BOSTON SCIENTIFIC: MA Suits Dismissed, Derivative Suits Pending in NY
CALPINE CORPORATION: Weiss Yourman Launches Securities Suit in N.D. CA
CYMER INC.: Plaintiffs To Voluntarily Dismiss Securities Suit in CA
EAGLE BUILDING: Kaplan Fox Commences Securities Fraud Suit in S.D. FL
GEMSTAR-TV GUIDE: Glancy Binkow Commences Securities Suit in C.D. CA
GEMSTAR-TV GUIDE: Weiss Yourman Commences Securities Suit in C.D. CA
GEMSTAR-TV GUIDE: Bernstein Liebhard Launches Securities Suit in CA
HEALTHSOUTH CORP.: AL Court Sets Certification Hearing For April 2002
JDS UNIPHASE: Rabin Peckel Initiates Securities Fraud Suit in N.D. CA
JDS UNIPHASE: Berman DeValerio Commences Securities Suit in N.D. CA
JDS UNIPHASE: Bernstein Liebhard Commences Securities Suit in N.D. CA
JUNIPER NETWORKS: Stull Stull Commences Securities Suit in N.D. CA
LUMENIS LTD.: Wechsler Harwood Commences Securities Suit in S.D. NY
METAWAVE COMMUNICATIONS: LeBlanc Waddell Lodges Securities Suit in WA
METAWAVE COMMUNICATIONS: Berman DeValerio Files Securities Suit in WA
NEWPOWER HOLDINGS: Schiffrin Barroway Lodges Securities Suit in S.D. NY
RENT-A-CENTER INC.: Mounting Vigorous Defense V. Securities Suits in TX
SIRIUS SATELLITE: Labels "Without Merit" Securities Suit in S.D. NY
SYMBOL TECHNOLOGIES: LeBlanc Waddell Initiates Securities Suit in NY
*********
CINEMARK USA: Faces Suit Over Unsolicited Fax Advertisements in TX
------------------------------------------------------------------
Cinemark USA, Inc. faces a class action pending in the State Court in
Collin County, Texas, alleging the Company sent unsolicited fax
advertisements in violation of federal and state law. The suit also
names American Blast Fax, Inc. as co-defendant.
Lawyer Jerry Galow and his law firm Watson, Bishop, London & Galow, PC
filed the suit on behalf of all others similarly situated. The suit
seek the right to recover on their own behalf and on behalf of the
alleged class $500 per alleged violation, three times the damages
available for knowing and/or willful violations of those statutes, or
alternatively, punitive damages, and unspecified damages for the
alleged negligence per se of the Company.
The Company is vigorously defending this suit. Although the Company is
unable to predict the outcome of this litigation, management believes
the Company's potential liability with respect to such a proceeding is
not material in the aggregate to the Company's financial position,
results of operations and cash flows.
HEALTHCARE RECOVERIES: Moves For Summary Judgment In Suit in TX Court
---------------------------------------------------------------------
Healthcare Recoveries, Inc. filed a motion for summary judgment in the
class action filed against the Company and Prudential Health Care Plan,
Inc., one of the Company's clients, in the District Court for the 150th
Judicial District, Bexar County, Texas.
The suit alleges that the Company's subrogation recovery efforts on
behalf of its Prudential violated a number of common law duties, as
well as the Texas Insurance Code and the Texas Business and Commerce
Code. The suit alleges that the Company, as the subrogation agent for
Prudential, made fraudulent misrepresentations in the course of
unlawfully pursuing subrogation and reimbursement claims that
plaintiffs assert are unenforceable because:
(1) prepaid medical service plans may not exercise rights of
subrogation and reimbursement;
(2) the subrogation and reimbursement claims asserted by the
Company are not supported by contract documents that provide
enforceable recovery rights and/or do not adequately describe
the recovery rights; and
(3) the sums recovered pursuant to such claims unlawfully exceed
the amount Prudential paid for medical goods and services.
The Company was served with the petition in early November 1999, and
has answered, denying all allegations. The court has not yet addressed
the question of whether to certify the putative class, and has not yet
ruled on the defendant's motion for summary judgment.
HEALTHCARE RECOVERIES: Court's Dismissal of Subrogation Suit Appealed
---------------------------------------------------------------------
Plaintiffs appealed the dismissal of a class action filed against
Healthcare Recoveries, Inc. by the United States District Court for the
Eastern District of Louisiana.
The suit asserts that the Company's subrogation recovery efforts on
behalf of its clients violate certain Louisiana state laws, the federal
Fair Debt Collection Practices Act and the Louisiana Unfair Trade
Practices Act. The suit further alleges that:
(1) the Company intentionally and negligently interfered with the
plaintiff's and the putative class members' rights to settle
certain personal injury claims; and
(2) that the Company unlawfully pursued subrogation and
reimbursement claims that plaintiff asserts are unenforceable
because the clauses in the Company's clients' coverage
documents that create such recovery rights are rendered null
and void by Louisiana statutes that generally prohibit
coordination of benefits with individually underwritten
insurance coverages.
The suit was filed on behalf of all persons covered under group health
policies that were issued or delivered in the State of Louisiana and
who received any communication from the Company attempting to enforce
any clauses that allegedly were rendered null and void by Louisiana
law.
In July 2001, the Court granted a motion for summary judgment filed by
the Company as concerned the plaintiff's Fair Debt Collection Practices
Act claim, dismissing those claims with prejudice. The Court denied
the Company's motion for summary judgment, without prejudice to the
right of the Company to reassert its motion, with respect to the
plaintiff's state law claims. The Court ordered that the parties submit
memoranda addressing whether the Court still had subject matter
jurisdiction, given dismissal of the federal claim.
In August 2001, the Court ruled that it lacked subject matter
jurisdiction, thus dismissing the remaining claims, without prejudice.
The plaintiffs then filed an appeal to the United States Fifth Circuit
Court of Appeals. The parties completed appellate briefing in January
2002.
In addition to filing the appeal in federal court, the plaintiffs also
filed a new complaint in the Civil District Court for the Parish of
Orleans, Louisiana, asserting claims substantially similar to those in
the federal action.
HEALTHCARE RECOVERIES: Sued For Subrogation Fraud in Illinois Court
-------------------------------------------------------------------
Healthcare Recoveries, Inc. faces a class action pending in the Circuit
Court of the Sixth Judicial Circuit, Champaign County, Illinois
relating to the Company's role as subrogation agent for PersonalCare
Health Management, Inc.
The suit was initially filed in December 2001 by Valerie Rogalla,
naming only PersonalCare as a defendant. Ms. Rogalla later amended the
suit to include the Company as a defendant.
The suit asserts that the Company, as subrogation agent for
PersonalCare, made fraudulent misrepresentations in the course of
unlawfully pursuing subrogation and reimbursement claims. The complaint
alleges that the subrogation and reimbursement claims pursued were not
supported by contract documents that provide enforceable recovery
rights.
The Company denied the allegations in the suit and stated its intent to
vigorously defend its position in this case in a disclosure with the
Securities and Exchange Commission.
HEALTHCARE RECOVERIES: Plaintiffs Appeal Dismissal of Subrogation Suit
----------------------------------------------------------------------
Plaintiffs have filed an appeal of the Court of Common Pleas in
Richland County, South Carolina's order dismissing the class action
pending against Healthcare Recoveries, Inc. and Companion Health Care
Corporation (CHC), one of the Company's clients, relating to the
Company's subrogation efforts on CHC's behalf.
The suit was commenced in December 1999, and was later amended. The
amended suit alleges that the Company, as the subrogation agent for
CHC, made fraudulent misrepresentations in the course of unlawfully
pursuing subrogation and reimbursement claims that plaintiffs assert
are unenforceable because:
(1) prepaid medical service plans may not exercise rights of
subrogation and reimbursement;
(2) the subrogation and reimbursement claims asserted by the
Company are not supported by contract documents that provide
Enforceable recovery rights and/or do not adequately describe
the recovery rights; and
(3) the sums recovered pursuant to such claims unlawfully exceed
the amount CHC was entitled to collect for such medical goods
and services.
The suit further alleges that the defendants unlawfully pursued
subrogation and reimbursement claims by:
(i) failing to pay pro rata costs and attorney's fees to attorneys
who represented purported class members with respect to tort
claims underlying the subrogation and reimbursement claims;
and
(ii) failing to include in subrogation and reimbursement claims all
applicable discounts that CHC received for such medical goods
and services.
The Company denied the allegations in the suit, and moved for its
dismissal, which the Court granted. Plaintiffs filed a notice of
appeal on July 20, 2001. The appeal is pending but has not been
briefed or argued.
HEALTHCARE RECOVERIES: Sued Over Relationship With Prudential in TX
-------------------------------------------------------------------
Healthcare Recoveries, Inc. faces a class action pending in the United
States District Court for the Western District of Texas against the
Company and Prudential Health Care Plan, Inc., one of its clients,
asserting claims on behalf of members of ERISA-governed health plans.
The suit alleges that the Company's subrogation recovery efforts on
behalf of its client Prudential violated a number of common law duties,
as well as the terms of certain ERISA plan documents, RICO, the federal
Fair Debt Collection Practices Act, the Texas Insurance Code and the
Texas Business and Commerce Code.
The suit alleged that the Company, as the subrogation agent for
Prudential, made fraudulent misrepresentations in the course of
unlawfully pursuing subrogation and reimbursement claims that
plaintiffs assert are unenforceable because:
(1) prepaid medical service plans may not exercise rights of
subrogation and reimbursement;
(2) the subrogation and reimbursement claims asserted by the
Company are not supported by contract documents that provide
enforceable recovery rights and/or do not adequately describe
the recovery rights; and
(3) the sums recovered pursuant to such claims unlawfully exceed
the amount Prudential paid for medical goods and services.
The suit further alleged that the Company unlawfully pursued
subrogation and reimbursement claims by:
(i) failing to pay pro rata attorney's fees to attorneys who
represented purported class members with respect to tort
claims underlying the subrogation and reimbursement claims;
and
(ii) recovering subrogation and reimbursement claims from purported
class members who have not been fully compensated for their
injuries.
In January 2000, the defendants filed a motion to dismiss the suit.
The court later entered an order dismissing all of the plaintiff's
claims with the exception of the plaintiff's claim for attorney fees,
which remains pending before the court for disposition.
The Company filed an answer to the suit, denying all of the
allegations, while the plaintiffs filed a motion to alter or amend the
Court's ruling on the motion to dismiss. The Court has ordered
additional discovery related to the motion but has not yet ruled on the
motion, nor has the court addressed the issue of class certification.
HEALTHCARE RECOVERIES: Alabama Federal Court Dismisses RICO Complaint
---------------------------------------------------------------------
The United States District Court for the Northern District of Alabama,
Southern Division dismissed the amended class action filed against
Healthcare Recoveries, Inc. and one of the Company's clients on behalf
of two putative sub-classes, both consisting of members nationwide of
the client health plan, who either:
(1) allegedly paid inflated subrogation claims due to alleged
failure by the health plan or by the Company to disclose
discounts in the health plan's payments to medical providers;
or
(2) allegedly were denied coverage of certain claims by the health
plan.
The suit was initially commenced in October 1999 in the Circuit Court
of Jefferson County, Alabama and was later removed to the Alabama
federal court. In January 2000, the suit was amended, retaining all
counts from the original complaint and seeking an additional
declaratory judgment that the health plan and the Company have a right
to recover through subrogation only the actual benefits paid to medical
providers on behalf of the class.
The amended suit asserted claims against the Company under a variety of
theories including:
(i) unjust enrichment,
(ii) breach of contract,
(iii) breach of fiduciary duty and
(iv) violations of RICO
In January 2002, the Court dismissed the suit. The plaintiffs did not
appeal the order and the case is now concluded.
HEALTHCARE RECOVERIES: Plaintiffs in Suit Ask FL Court To Certify Class
-----------------------------------------------------------------------
Plaintiffs in the amended suit filed against Healthcare Recoveries,
Inc. has asked the United States District Court for the Southern
District of Florida to certify the suit as a class action.
The amended suit, commenced in October 1999, brought by William Conte
and Aaron Gideon, asserts that the Company's subrogation recovery
efforts on behalf of its clients violate a number of state and federal
laws, including the Fair Debt Collection Practices Act and the Florida
Consumer Collection Practices Act.
The suit also seeks a declaratory judgment that the Company, as the
subrogation agent for various healthcare payors, is not entitled to
assert and recover upon subrogation or reimbursement liens it asserts
on settlements obtained from third party tortfeasors when the
settlement is in an amount less than the amount required to fully
compensate the injured party for all elements of damage caused by the
tortfeasor.
The suit was filed on behalf of all participants or beneficiaries of
ERISA plans nationwide whose net recovery of damages through judgments,
settlements or otherwise against liable third parties has been reduced
or potentially reduced by the Company's alleged assertion and/or
recovery of unlawful subrogation/reimbursement rights of its clients.
In November 1999, the Company moved to dismiss the amended complaint.
The court later issued a decision dismissing plaintiffs' common law
claims for fraud and unjust enrichment as well as their claims under
the federal Fair Debt Collection Practices Act and the Florida Consumer
Collection Practices Act. The court did not, however, dismiss the
remaining count of the amended suit (Count I), which seeks a
declaratory judgment and damages under ERISA based on the Company's
alleged violation of the "make whole" rule.
In July 2001, the Company filed a motion for reconsideration or re-
argument with respect to that portion of the opinion on the motion to
dismiss that sustained, as a pleading matter, Count I but the court
denied the motion.
The plaintiffs moved to have the suit certified as a class action, such
motion has been fully briefed and was submitted to the court in
September 2001. In an order entered January 8, 2002, the Court
referred the class certification motion to the Chief Magistrate Judge
for a report and recommendation. In early March 2002, the parties
completed supplemental briefing with respect to the propriety of class
certification. The Chief Magistrate Judge has not yet submitted a
report and recommendation.
HERTZ CORPORATION: Appeals Court Remands Insurance Suit to State Court
----------------------------------------------------------------------
The Eleventh Circuit Court of Appeals remanded to Alabama State Court
the class action filed against Hertz Corporation and other rental
companies on behalf of all persons in the United States who rented from
them, and as part of the rental, purchased optional insurance products.
The suit was commenced in October 1997 in Circuit Court of Coosa
County, Alabama, and was later removed by the defendants to the United
States District Court for the Middle District of Alabama, Northern
Division (Montgomery).
The defendants filed a series of motions requesting dismissal of the
various causes of action based upon the judge's initial ruling that a
private right of action does not exist under Alabama law for the
alleged unlicensed sale of insurance. A final order of dismissal was
entered in January 2000 and the plaintiffs subsequently filed an appeal
to the Eleventh Circuit.
On January 18, 2002, the Appeals Court concluded that the Federal Court
should have dismissed the case for lack of subject matter jurisdiction
because the amount in controversy does not exceed $75,000 as
statutorily required. For that reason, the Appeals Court vacated the
Federal Court's judgment and directed that it remand the case to the
state court.
MICHIGAN: Court Preserves Homeowner's Right To Sue Over Sewer Backups
---------------------------------------------------------------------
The Michigan Supreme Court recently ruled to preserve a homeowner's
right to sue if sewers back up into a basement, but the ruling also
means future lawsuits will be harder pressed to prove a city was at
fault, the Detroit Free Press reported.
In a 5-2 decision, the Court sent class actions filed against the
cities of Allen Park and Farmington Hills, stemming from sewer backups,
back to the circuit courts for another hearing on what caused them.
Before this decision, the courts would rule against the municipalities
if it could be shown that they owned and operated the sewerage system,
said Farmington Hills city attorney Timothy Ferrand. Now, the Supreme
Court has said that the homeowner must prove that the sewer operator
did something improperly, which caused the backup, Mr. Ferrand said.
Attorney Peter Macuga, who along with partner Steven Liddle represents
the homeowners who sued Allen Park and Farmington Hills, was pleased by
the Court's decision. "Homeowners used to be told (by the insurance
companies), `Sorry, it was an act of God,'" Mr. Macuga said. "But the
law in this state says, `If you are invaded by city sewage you have a
right to sue.'"
However, Mr. Ferrand said that plaintiffs may not be happy about
another part of the ruling that sends the cases back to their
respective circuit judges for further review. The Supreme Court said
that the trial courts failed to adequately look into what caused the
sewer backups. "The Court has ruled, `Go back and show causation,'"
Mr. Ferrand said.
Apparently, the Supreme Court relied on a new law, which went into
effect in January, allowing homeowners the right to collect damages in
sewer backup cases if municipal negligence is proved.
OSTEOTECH INC.: Denies Claims in CA Suit Over "Sale" of Organs, Tissue
----------------------------------------------------------------------
Osteotech, Inc. was named as defendant in a class action pending in the
Superior Court for the State of California, San Bernardino County,
charging the Company and fifteen other health services companies
with buying or selling human organs or tissue for valuable
consideration or profit.
The suit asserts:
(1) violations of the California Business and Professional Code,
(2) negligence,
(3) deceit and
(4) intentional and negligent infliction of emotional distress
However, through dismissals, either by the court or voluntarily by
plaintiffs, only the California Business and Professional Code and
negligence claims remain. It appears that the plaintiffs are seeking
only injunctive relief with respect to their California Business and
Professional Code claims.
The Company filed demurrers seeking dismissal of the negligence claims,
and a hearing on those demurrers was held on for February 21, 2002.
The court has yet to decide on the Company's demurrer. The Company
stated in a disclosure to the US Securities and Exchange Commission
that it was licensed by the State of California to do precisely what it
was doing, and that its activities are fully in accord with all state
and federal laws. Therefore, the Company believes this suit to be
without merit and will vigorously defend against the claims.
SLAVE REPARATIONS: Supporters Say Suit's Chances For Winning Are Slim
---------------------------------------------------------------------
The question of compensating blacks for slavery, raised with some
fanfare and drama when the lawsuit was filed on March 26, may become
one of the more divisive issues in the nation, the St. Paul Pioneer
Press reported recently. For now, most supporters and critics agree
that the landmark suits, targeting companies that had links to the
slave trade, come burdened with a virtually unconquerable number of
legal obstacles.
The slave reparations suits, seeking money damages, were filed against
FleetBoston, a large bank, CSX, a freight-rail company and Aetna, the
insurance firm, all of which allegedly participated in or profited from
the slave trade. Dozens of other companies also may be named in the
suits.
Although chances of a "win" are slim, however, the "win" itself may be
irrelevant, according to several lawyers and academics. Instead,
lawsuits should be seen as the first, and almost certainly, not the
most significant salvo in a far-reaching battle.
In the months ahead, many teams of lawyers, including some of the most
prominent litigators in the nation, will meet to craft far larger
reparations suits aimed at federal and state governments, and possibly
universities and private individuals. The lawsuits are just one arena
in a coordinated campaign that ultimately will involve appeals to
Congress, the White House, and the American people.
"I guess you could call it Round 1," said Alexander Pires Jr., a
Washington, DC lawyer who won a $1 billion settlement for black farmers
harmed by discrimination in federal farm loans.
Mr. Pires has joined with other high-profile lawyers, including Johnnie
Cochran and Harvard University's Charles Ogletree, to form the
Reparations Coordinating Committee, which plans to bring its own
lawsuit around the end of this year. Mr. Pires sees the current
lawsuits as a "prelude" that gives lawyers in future cases a chance to
gauge media reaction and public response.
Others say all of the litigation may serve only to raise public
consciousness and build support for congressional action or voluntary
payments by companies.
"The larger point is not whether the claims survive, or not but whether
they generate constructive societal discussion about the role
commercial entities played in the slave trade," said Laura Dickinson, a
University of Connecticut associate professor who teach a unit on
reparations.
"In that forum, it is an excellent piece of work," said Douglas
Rendleman, professor of law at Washington and Lee University in
Lexington, Virginia. "It is part of the effort that is being pursued
in the media, the Congress and now in the courts to make the case on a
moral level," Professor Rendleman said.
Is a case being made on a legal level? "It is certainly much sounder
right now on a moral or cultural level than on a technical legal
level," said Professor Rendleman, an expert in restitution issues.
That moral argument is being made in the nearly identical lawsuits
filed last week. The 21-page complaints recount the brutality of
slavery on American shores, which received at least eight million
Africans from the earliest slave ship in 1619 until the constitutional
amendment abolishing slavery in 1865.
The lawsuits argue that companies linked financially to slavery, Aetna,
for example, sold life insurance policies on slaves. The suits say
that the defendants were "unjustly enriched" by the institution and
should be held liable for their slavery-related profits.
Owen Pell, a New York lawyer, who defended JP Morgan in a lawsuit
accusing the bank of blocking wartime accounts held by Jews, said the
wrongs alleged in the reparations lawsuits need to be resolved by
legislators, not judges. He added that the lawsuits should not make it
to trial because their claims do not state a valid legal theory.
Mr. Pell sees a litany of legal hurdles. Among the biggest is the
statutes of limitations generally, which he believes ran out more than
a century ago. Another hurdle is that slavery was the law of the land
at the time Aetna and other companies acted and, it may be difficult to
draw a legal connection between the acts of individual companies in the
19th century and the harm suffered by modern-day blacks.
Mr. Pires, the Washington, D.C. lawyer, identifies additional problems.
Class certification itself is a problem, he says. Who would the
plaintiffs be? Who comprises the class?
Edward Fagan, the Livingston, New Jersey lawyer who filed against
Hartford, Connecticut-based Aetna, Boston-based Fleet Bank and
Richmond, Virginia-based railroad CSX, says he has a legal theory to
combat each obstacle. Mr. Fagan argues that the statute of limitations
will be extended because the plaintiffs could not have known until
recently about the involvement of specific corporations in the slave
trade. Further, he argues that "slavery was a crime against humanity,
and there is no statute of limitations on a crime against humanity."
"I wouldn't have done that. I would have gone after the federal
government," said Richard Scruggs, a Mississippi lawyer, who was the
force behind the $368 billion tobacco settlement. Mr. Scruggs says new
federal programs, rather than cash, are the only way to make a lasting
difference.
US TRUST: Agrees To Settle United Companies Employees' ERISA Suit in LA
-----------------------------------------------------------------------
The US Trust Company, NA (USTC, NA) agreed to settle a consolidated
class action pending in the United States District Court in Louisiana
on behalf of participants in an employee stock ownership plan (UC
ESOP), sponsored by United Companies Financial Corporation (United
Companies), which is currently in bankruptcy proceedings in Delaware.
The suit alleges that the Company, as directed trustee of UC ESOP,
breached its fiduciary duties under the Employee Retirement Income
Security Act of 1974 (ERISA) by failing to diversify the assets of UC
ESOP. The Company denied these charges.
Both parties in the suit later reached a tentative settlement. Under
the settlement, the plaintiffs would release the Company of all
liability. Other than an insignificant deductible, the settlement
payment would be paid from insurance coverage. The settlement will be
presented to the court for its approval after notice to members of the
class.
XTO ENERGY: To Vigorously Oppose Gas Royalties Suit in OK Federal Court
-----------------------------------------------------------------------
XTO Energy faces a class action filed in the District Court of Dewey
County, Oklahoma by royalty owners of gas wells in Oklahoma.
The suit alleges that since 1991, the Company has underpaid royalty
owners as a result of reducing royalties for improper charges for
production, marketing, gathering, processing and transportation costs
and selling natural gas through affiliated companies at prices less
favorable than those paid by third parties.
No class has been certified in the suit. The Court has ordered that the
parties enter into mediation, which should occur in the first half of
2002. The Company believes that it has strong defenses to this lawsuit
and intends to vigorously defend its position.
XTO ENERGY: Faces Suit Over Gas Royalties For Native Americans in WY
--------------------------------------------------------------------
XTO Energy faces a consolidated class action pending in the United
States District Court for Wyoming, alleging that the Company underpaid
royalties on natural gas produced from federal leases and lands owned
by Native Americans by at least 20% during the past ten years as a
result of mismeasuring the volume of natural gas and wrongfully
analyzing its heating content.
The suit, which was brought under the QUI TAM provisions of the US
False Claims Act, seeks treble damages for the unpaid royalties (with
interest), civil penalties between $5,000 and $10,000 for
each violation of the US False Claims Act, and an order for the Company
to cease the allegedly improper measuring practices.
While the Company is unable to predict the outcome of this case or
estimate the amount of any possible loss, it believes that the
allegations of this lawsuit are without merit and intends to vigorously
defend the action.
XTO ENERGY: Sued Along With 200 Gas Companies in Royalties Suit in KS
---------------------------------------------------------------------
XTO Energy and one of its subsidiaries were named as defendants along
with over 200 natural gas transmission companies in a class action
filed in the United States District Court of Stevens County, Kansas.
The suit was filed on behalf of all similarly situated royalty owners,
overriding royalty owners and working interest owners either from whom
defendants had purchased natural gas or who received economic benefit
from the sale of such gas since January 1, 1974. The suit alleges that
the defendants had mismeasured both the volume and heating content of
natural gas delivered into their pipelines resulting in underpayments
to plaintiffs.
The plaintiffs dismissed the Company and its subsidiary as a defendant,
but substituted another Company subsidiary as a defendant. The Company
has vowed to vigorously oppose the suit.
Securities Fraud
ADELPHIA COMMUNICATIONS: Wolf Haldenstein Names Deloitte Touche in Suit
-----------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP added auditing firm Deloitte
& Touche, LLP as one of the defendants in the securities class action
filed in the United States District Court for the Eastern District of
Pennsylvania on behalf of purchasers of Adelphia Communications Corp.
(NASDAQ: ADLAC) securities between March 30, 2000 and April 1, 2002,
inclusive. Deloitte and Touche is the Company's auditing firm. The
suit also names as defendants certain of its officers and directors,
including members of the Rigas family, the Company's founders.
The suit alleges that during the class period, the Company's founding
family, the Rigas family, borrowed $2.7 billion through various
entities, including a limited partnership named Highland Holdings, from
credit facilities that were co-guaranteed by the Company. This practice
allowed for these debt obligations to remain off the Company's balance
sheet and, instead, appear as if they were only the obligation of
Highland and the other entities.
The Rigas family used the borrowed money to purchase Company stock and
convertible bonds during the past four (4) years. According to
published reports, the securities purchased by the Rigas family cost
approximately $1.8 billion, but their market value has since shrunk by
approximately $1 billion.
Further, the Company's results and reported earnings were false
because, at all relevant times, defendants, including members of the
Rigas family:
(1) failed to disclose approximately $2.7 billion in off-balance
sheet debt that the Company had incurred during co-borrowing
ventures with various entities managed by the Company that
were under the control of the Rigas family;
(2) failed to disclose that this $2.7 billion in off-balance sheet
debt was not fully guaranteed by sufficient, underlying
assets;
(3) failed to disclose that Highland and other entities controlled
by the Rigas family had borrowed $2.7 billion and that the
loans were guaranteed by the Company. The Rigas family then
used these funds to purchase Company securities; and
(r) failed to disclose that the Rigases' purchase of Company
securities was effectuated through borrowed funds, guaranteed
by the Company.
The truth concerning the Company's true financial affairs began to
emerge on March 27, 2002, when the Company announced its Fourth Quarter
and Full-Year results. The press release and conference call that
followed revealed that the Company had at least $2.3 billion in off-
balance sheet debt stemming from the Company's guaranty of credit
facilities for Highland.
On April 1, 2002, the full-scope of the fraud was revealed when the
Company announced that it had requested an extension of time from the
SEC in which to file its Form 10-K.
Defendant Deloitte & Touche LLP was actively involved in the
preparation and dissemination of the Company's quarterly, as well as
year-end financial results throughout the class period. The Company
examined and opined on its financial statements for the fiscal years
ended 1999 and 2000. Deloitte & Touche LLP falsely represented that
its audits of the Company's 1999 and 2000 financial statements had been
conducted in accordance with generally accepted auditing standards.
Moreover, as reported in the April 5, 2002, edition of The Wall Street
Journal, Deloitte & Touche LLP occupied the dual role of auditor for
both the Rigas family partnerships and the Company. According the
Journal, "(t)he dual roles would have placed Deloitte in the best
position to examine the co-borrowing relationships and require their
disclosure."
For more information, contact Fred Taylor Isquith, Gregory Nespole,
Gustavo Bruckner, Michael Miske, George Peters or Derek Behnke by Mail:
270 Madison Avenue, New York, New York 10016 by Phone: 800-575-0735 by
E-mail: classmember@whafh.com or visit the firm's Web site:
http://www.whafh.com. E-mail should refer to Adelphia.
ADELPHIA COMMUNICATIONS: Berman DeValerio Files Securities Suit in PA
---------------------------------------------------------------------
Berman DeValerio Pease Tabacco Burt and Pucillo initiated a securities
class action against Adelphia Communications Corporation
(Nasdaq:ADLAC), claiming the Company deceived its investors about its
true financial condition. The suit was filed in the United States
District Court for the Eastern District of Pennsylvania on behalf of
all investors who bought Adelphia common stock and/or sold put options
from April 2, 2001 through March 27, 2002.
The suit charges the Company, a provider of cable television and local
telephone service, with failing to disclose its liability from at least
$2.284 billion in off-balance-sheet debt during the class period. The
suit named four members of the Rigas family, which has a controlling
interest in the company, as individual defendants.
According to the complaint, Highland Holdings, a partnership controlled
by the Rigas family, borrowed the $2.284 billion against credit
facilities that were co-guaranteed by the Company. The Rigas family
then used some of the loans' proceeds to buy more Company stock, the
complaint maintains.
The information, which would have affected the Company's stock price,
was not disclosed to investors during the class period. The SEC is
investigating the Company's accounting practices.
On March 27, 2002, the complaint says, the Company revealed the
existence of the off-balance-sheet debt. The Company's stock quickly
fell 18%, or $3.69, to close at $16.70 that day. The following day, the
stock price dropped an additional 11%, or $1.80, to close at $14.90,
wiping out more than $1 billion in market capitalization.
For more information, contact Nancy Ghabai or Alicia Duff by Mail: One
Liberty Square, Boston, MA 02109 by Phone: 800-516-9926 by E-mail:
law@bermanesq.com or visit the firm's Web site:
http://www.bermanesq.com.
ADELPHIA COMMUNICATIONS: LeBlanc Waddell Files Securities Suit in PA
--------------------------------------------------------------------
LeBlanc and Waddell LLC initiated a securities class action against
Adelphia Communications Corporation (Nasdaq:ADLAC), claiming that the
Company deceived investors about its true financial condition. The
suit was filed in the United States District Court for the Eastern
District of Pennsylvania on behalf of all investors who bought the
Company's common stock and/or sold put options from April 2, 2001
through March 27, 2002.
The suit charges the Company, a provider of cable television and local
telephone service, with failing to disclose its liability from at least
$2.284 billion in off-balance-sheet debt during the class period. The
suit named four members of the Rigas family, the majority owners of the
company, as individual defendants.
According to the suit, Highland Holdings, a partnership controlled by
the Rigas family, borrowed the $2.284 billion against credit facilities
that were co-guaranteed by the Company. The Rigas family then used some
of the loans' proceeds to buy more Company stock, the complaint
maintains.
The information, which would have affected the Company's stock price,
was not disclosed to investors during the class period. The SEC is
investigating the company's accounting practices.
On March 27, 2002, the complaint says, the Company revealed the
existence of the off-balance-sheet debt. The Company's stock quickly
fell 18%, or $3.69, to close at $16.70 that day. The following day, the
stock price dropped an additional 11%, or $1.80, to close at $14.90,
wiping out more than $1 billion in market capitalization.
For more information, contact Roger LeBlanc or Chad A. Dudley by Mail:
5353 Essen Lane, Suite 420, Baton Rouge LA 70809 by Phone: 800-988-3514
or by E-mail: rogerleblanc@lw-law.net
ADELPHIA COMMUNICATIONS: Berger Montague Lodges Securities Suit in PA
---------------------------------------------------------------------
Berger & Montague, PC initiated a securities class action against
Adelphia Communications Corporation (NASDAQ:ADLAC) in the United States
District Court for the Eastern District of Pennsylvania on behalf of
all persons or entities who purchased Company securities, including
common stock and/or notes, between January 19, 2001 and April 1, 2002,
inclusive. The suit also names as defendants:
(1) John J. Rigas,
(2) James P. Rigas,
(3) Michael J. Rigas and
(4) Timothy J. Rigas
The suit alleges that defendants violated Section 10(b) and 20(a) of
the Securities and Exchange Act of l934. More specifically, the suit
alleges that defendants failed to disclose billions of dollars of off-
balance sheet debt.
Unbeknownst to investors, the Company guaranteed loans for certain
entities controlled by the Rigas Family (the Company's controlling
shareholder), who used the money, in substantial part, to purchase
Company securities.
Defendants first disclosed the existence of the off-balance sheet debt
during an earnings conference call on March 27, 2002. On April 1,
2002, the Company announced that it was requesting an extension to file
its Annual Report on Form 10-K with the SEC. The Company reported that
the extension was being sought to allow the Company and its outside
auditors additional time to review certain accounting matters relating
to co-borrowing credit facilities which the Company is party to.
In response to these negative announcements, the price of the Company's
common stock dropped from $20.39 per share on March 26, 2002, to $13.12
per share on April 1, 2002. The price of Company common stock
continues to decline. The Company also announced the SEC is conducting
an informal investigation. The price of other Company securities have
also materially declined.
For more information, contact Sherrie R. Savett, Robin Switzenbaum or
Kimberly A. Walker by Mail: 1622 Locust Street, Philadelphia, PA 19103
by Phone: 888-891-2289 or 215-875-3000 by Fax: 215-875-5715 by E-mail:
InvestorProtect@bm.net or visit the firm's Web site:
http://www.bergermontague.com
ANDRX CORPORATION: Bernstein Liebhard Lodges Securities Suit in S.D. FL
-----------------------------------------------------------------------
Bernstein Liebhard and Lifshitz LLP initiated a securities class action
in the United States District Court for the Southern District of
Florida on behalf of all persons who acquired Andrx Corporation
securities between April 30, 2001 and February 21, 2002.
The suit charges that the Company and certain of its officers and
directors 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 during the class period,
thereby artificially inflating the price of the Company's common stock.
Specifically, the suit alleges that the Company issued a series of
statements concerning its generic version of the drug Tiazac that the
only thing holding up the drug from reaching the market was continuing
patent litigation with Biovail Corporation in connection with Tiazac.
The defendants failed to disclose that in fact, the Company had
difficulty making a stable version of generic Tiazac, including that it
had amended its original application to the FDA thirteen times. When
the Company announced on February 21, 2002 that the FDA had raised
certain issue concerning the generic Tiazac, its stock price dropped
from $42.61 per share on February 21, 2002 to $34.96 per share on
February 22, 2002, on volume of 15,767,100, over seven times the prior
days volume.
For more details, contact Ms. Linda Flood, Director of Shareholder
Relations by Mail: 10 East 40th Street, New York, New York 10016 by
Phone: 800-217-1522 or 212-779-1414 or by E-mail: ADRX@bernlieb.com.
BOSTON SCIENTIFIC: MA Suits Dismissed, Derivative Suits Pending in NY
---------------------------------------------------------------------
The United States District Court for the District of Massachusetts
dismissed the consolidated securities class action charging Boston
Scientific Corporation and certain of its offices of violations of
sections of the Securities Exchange Act of 1934.
The consolidated suit alleges that as a result of certain accounting
irregularities involving the improper recognition of revenue by the
Company's subsidiary in Japan, the Company's previously issued
financial statements were materially false and misleading.
The suit further alleges that the Company issued false and misleading
statements with respect to the launch of its NIR ON(R) Ranger with Sox
coronary stent delivery system and the system's subsequent recall.
Following a hearing on a motion by the Company and its officers, the
court dismissed the case without prejudice. The plaintiffs later
notified the Court that they would not amend their complaint, and the
court administratively closed the case.
However, the Company still faces two shareholder derivative lawsuits
commenced in January 2002 for and on behalf of the Company in the US
District Court for the Southern District of New York against the
Company's current directors. The suit named the Company as a nominal
defendant.
Both complaints relate to the Company's relationship with Medinol,
Ltd., Israel, with whom the Company has an exclusive worldwide
distribution agreement for its stent products. The suits allege the
defendants breached their fiduciary duties to the Company and its
shareholders in the management and affairs of the Company, and in the
use and preservation of the Company's assets.
The Company and its officers have not answered the derivative suits.
CALPINE CORPORATION: Weiss Yourman Launches Securities Suit in N.D. CA
----------------------------------------------------------------------
Weiss and Yourman initiated a securities class action in United States
District Court for the Northern District of California on behalf of
purchasers of Calpine Corporation (NYSE:CPN) securities between March
15, 2001 and December 13, 2001, inclusive.
The complaint charges that the Company and certain of its officers and
directors violated Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934, by issuing false and misleading statements concerning its
business and financial condition.
In particular, the suit charges that defendants issued opaque and
confusing balance sheets which artificially inflated the Company's
reported EBITDA (earnings before interest, taxes, depreciation and
amortization) and that as a result, members of the class purchased
Company shares at artificially inflated prices and suffered damages
when the stock fell over 38% over a one week period.
The Company has ownership interests in and operates gas fields, gas
pipelines, geothermal steam fields and geothermal power generation
facilities in the United States and Canada.
For more information, contact Mark Levine by Phone: 800-437-7918 or by
E-mail: info@wyca.com
CYMER INC.: Plaintiffs To Voluntarily Dismiss Securities Suit in CA
-------------------------------------------------------------------
Plaintiffs in the consolidated securities class action pending against
Cymer, Inc. in the United States District Court for the Southern
District of California intend to voluntarily dismiss the suit.
The consolidated suit arose from several suits commenced in September
1997 against the Company and certain of its officers and directors on
behalf of all persons who purchased the Company's common stock between
April 24, 1997 and September 26, 1997.
The consolidated suit alleges claims under the federal securities laws.
The Company and the other defendants allegedly made various material
misrepresentations and omissions during the class period.
In November 1999, the defendants asked the court to dismiss the
consolidated suit for failure to state a cause of action, and the Court
granted this motion. The plaintiffs filed their second amended
consolidated complaint in June 2000, which the Company again moved to
dismiss. In October 2001, the Court granted the motion to dismiss the
second consolidated complaint with prejudice and entered judgment in
favor of all defendants and against plaintiffs. The plaintiffs
promptly filed an appeal with the Ninth Circuit Court of Appeals.
While the appeal is still pending, the plaintiffs have recently
notified the Company that they intend to voluntarily dismiss the
appeal. Upon dismissal of the appeal, the case will have ended and the
judgment of the lower Court in favor of the Company will become final.
EAGLE BUILDING: Kaplan Fox Commences Securities Fraud Suit in S.D. FL
---------------------------------------------------------------------
Kaplan Fox and Kilsheimer initiated a securities class action against
Eagle Building Technologies, Inc. (OTC: EGBT) and Anthony M. D'Amato in
the United States District Court for the Southern District of Florida,
on behalf of all persons or entities who purchased or otherwise
acquired the Company's securities between April 18, 2001 and February
14, 2002, inclusive.
The suit charges the defendants with violations of the federal
securities laws. The complaint alleges, among other things, that
during the class period, the Company:
(1) improperly recorded revenue from its construction business in
India and made false and misleading statements regarding its
India operations, and
(2) made false and misleading statements regarding its post-
September 11 business endeavors, including an airport baggage
security system, mail sterilization technology, and money
laundering detection software.
As a result of defendants' misrepresentations, Company stock price was
artificially inflated during the class period, trading as high as
$12.30. On the Company's February 14 announcement, its stock fell 68%
to $1.44 on heavy trading.
For more information, contact Robert N. Kaplan, Laurence D. King or
Shelley Thompson by Mail: 805 Third Avenue, 22nd Floor, New York, NY
10022 by Phone: 800-290-1952 or 212-687-1980 by Fax: 212-687-7714 or by
E-mail: mail@kaplanfox.com
GEMSTAR-TV GUIDE: Glancy Binkow Commences Securities Suit in C.D. CA
--------------------------------------------------------------------
Glancy & Binkow LLP initiated a securities class action in the United
States District Court for the Central District of California on behalf
of all persons who purchased securities of Gemstar-TV Guide
International, Inc. (NASDAQ:GMST) between August 11, 1999 and April 1,
2002, inclusive.
The suit charges the Company and certain of its officers and directors
with violations of federal securities laws. Among other things, the
suit claims that defendants' material omissions and the dissemination
of materially false and misleading statements regarding the nature of
the Company's revenues and earnings caused Company stock price to
become artificially inflated, inflicting enormous damages on investors.
For more details, contact Michael Goldberg by Mail: 1801 Avenue of the
Stars, Suite 311, Los Angeles, California 90067 by Phone: 310-201-9150
or 888-773-9224 or by E-mail: info@glancylaw.com.
GEMSTAR-TV GUIDE: Weiss Yourman Commences Securities Suit in C.D. CA
--------------------------------------------------------------------
Weiss and Yourman filed a securities class action in United States
District Court for the Central District of California on behalf of
purchasers of Gemstar-TV Guide International, Inc. (Nasdaq:GMST) common
stock between August 11, 1999 and April 1, 2002, inclusive.
The suit alleges that the Company, and certain of its officers and
directors violated the Securities Exchange Act of 1934 by
misrepresenting the Company's quarterly financial results in press
releases, statements to analysts and filings with the SEC in an effort
to foster the illusion that earnings growth was in line with analysts'
estimates.
Specifically, in contravention to generally accepted accounting
principles (GAAP), defendants materially misrepresented the Company's
Fiscal 2001 financial results by failing to disclose that $20.8 million
of its $101 million in Interactive group sales came from a barter
exchange of intellectual property with Fantasy Sports and that $58.9
million of its $327 million Technology and Licensing segment revenue
for 2001 was related to accruals based on Scientific-Atlanta Inc. (SFA)
set-top box shipments that would only be realized upon a successful
ruling in a civil suit in Georgia federal court.
The suit alleges that as a result of the defendants' conduct, plaintiff
and other members of the class, suffered damages by purchasing the
stock at artificially inflated prices.
For more information, contact Zev Zysman by Phone: 800-437-7918 or by
E-mail: info@wyca.com
GEMSTAR-TV GUIDE: Bernstein Liebhard Launches Securities Suit in CA
-------------------------------------------------------------------
Bernstein Liebhard and Lifshitz, LLP initiated a securities class
action in the United States District Court for the Central District of
California on behalf of all persons who acquired Gemstar-TV Guide
International, Inc. (NASDAQ:GMST) securities between August 11, 1999
and April 1, 2002, inclusive.
The suit charges the Company and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The suit
alleges that during the class period, defendants caused the Company's
shares to trade at artificially inflated levels through the issuance of
false and misleading financial statements.
On April 1, 2002, the Company filed its 10-K, which stated in part,
"During 1997 through 1999, Scientific-Atlanta was under a license
agreement with the Company for the incorporation of interactive program
guides into Scientific-Atlanta set-top boxes. The license expired on
July 23, 1999, however, Scientific-Atlanta continued to ship set-top
boxes incorporating IPGs, which are the same or similar to the products
shipped during the term of the agreement. The Company instituted legal
proceedings in federal district court to recover damages, which are
probable, based upon the factors described above, to include revenues
commensurate with the licensing fees under the expired agreement. The
Company has accrued an aggregate of $107.6 million ($58.9 million,
$36.5 million and $12.2 million for the year ended December 31, 2001,
the nine months ended December 31, 2000 and for the period from July
23, 1999 through March 31, 2000, respectively) in license fees from
Scientific-Atlanta."
The 10-K also provides in relevant part, "In April 2001, the Company
entered into a non-monetary transaction with an unrelated company in
which $20.8 million of intellectual property was acquired in exchange
for $750,000 in cash and advertising having a fair value of $20
million. In addition, the Company received an option to acquire the
company in the event that certain performance criteria were met in each
of the following two years. The Company determined the fair value of
the advertising consideration, all of which was recognized during 2001
as the advertising was aired, based on cash transactions for similar
advertising sold to other parties." The stock dropped below $9 per
share on this news.
For more details, contact Ms. Linda Flood, Director of Shareholder
Relations by Mail: 10 East 40th Street, New York, New York 10016 by
Phone: 800-217-1522 or 212-779-1414 by E-mail: GMST@bernlieb.com or
visit the firm's Web site: http://www.bernlieb.com
HEALTHSOUTH CORP.: AL Court Sets Certification Hearing For April 2002
---------------------------------------------------------------------
The United States District Court for the Northern District of Alabama
will decide whether to grant class certification to a consolidated
securities suit filed against Healthsouth Corporation in a hearing set
for April 23,2002.
The suit charged the Company and certain of its current and former
officers and directors of misrepresenting or failing to disclose
certain material facts concerning the Company's business and financial
condition and the impact of the Balanced Budget Act of 1997 on its
operations in order to artificially inflate the price of the Company's
common stock, during the period April 24, 1997 through September 30,
1998. The defendants allegedly issued or sold shares of such stock
during the purported class period, in violation of Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
Certain of the named plaintiffs in the consolidated amended complaint
also claim to represent separate subclasses consisting of former
stockholders of Horizon/CMS Healthcare Corporation and National Surgery
Centers, Inc. who received shares of the Company's common stock in
connection with the Company's acquisition of those entities and assert
additional claims under Section 11 of the Securities Act of 1933 with
respect to the registration of securities issued in those acquisitions.
The Company asked the court to dismiss the suit in late June 1999. On
September 13, 2000, the magistrate judge issued his report and
recommendation, recommending that the court dismiss the amended
complaint in its entirety, with leave to amend. In December 2000,
without oral argument, the court issued an order rejecting the
magistrate judge's report and recommendation and denying the Company's
motion to dismiss.
The Company believed that the order failed to follow the standards
required under the Private Securities Litigation Reform Act of 1995
and Rule 9(b) of the Federal Rules of Civil Procedure, and filed a
motion asking the court to reconsider that order or to certify it for
an interlocutory appeal to the United States Eleventh Circuit Court of
Appeals. Oral argument on that motion was held on March 2, 2001, and
the Court denied that motion on March 12, 2001. The Court has scheduled
a hearing on the plaintiff's motion for class certification for April
23, 2002.
The Company believes that all claims asserted in the above suits are
without merit, and intends to vigorously defend against such
claims. Because such suits remain at an early stage, the Company
cannot currently predict the outcome of any such suits or the magnitude
of any potential loss if its defense is unsuccessful.
JDS UNIPHASE: Rabin Peckel Initiates Securities Fraud Suit in N.D. CA
---------------------------------------------------------------------
Rabin and Peckel LLP commenced a securities class action in the United
States District Court for the Northern District of California on behalf
of all persons or entities who purchased JDS Uniphase Corporation
securities (Nasdaq:JDSU) from July 27, 1999 through July 26, 2001, both
dates inclusive.
The suit charges the Company and certain of its officers and directors
with issuing false and misleading statements concerning its business
and financial condition. The Company is a provider of fiber optic
components and modules, which form the building blocks for fiber optic
networks.
The suit alleges that during the class period, defendants were
motivated to inflate the value of Company stock so that the Company
could make acquisitions using stock and so the individual defendants,
who are the top officers and directors of the Company, could sell their
shares.
During the class period, defendants represented that demand was
accelerating and the Company's only problem was its ability to
manufacture enough product to meet demand. Defendants represented that
they had outstanding visibility, including demand for the Company's
products through the end of fiscal 2001, ended on June 30,2001, and
that the Company had 80 engineers whose job it was to monitor customers
and their inventory levels and as a result, the Company would learn
about any slowdown in demand early.
The Company also misrepresented the success of its largest
acquisitions, including Optical Coating Labs, Cronos Integrated
Microsystems, E-Tek Dynamics and SDL Inc. As a result of these positive
statements, Company stock traded as high as $146.32.
The individual defendants (all of whom were top officers and directors
of the Company) and the Company's controlling shareholder took
advantage of the inflation, selling or disposing of 25.2 million shares
of their stock for proceeds of $2.1 billion. Then, in July 2001, the
Company announced the restatement of its third quarter results for
fiscal 2001, the write-off of $44 billion in goodwill associated with
its acquisitions, inventory write-downs, that earnings per share for
fiscal 2001 would be only $0.16, and that it would incur a loss of
$0.15 per share in fiscal 2002.
On this news, Company shares dropped to as low as $7.90, or more than
94% lower than the class period high of $146.32.
The suit alleges that as a result of defendants' false and misleading
statements the price of Company securities was artificially inflated
throughout the class period, causing plaintiff and the other members of
the class to suffer damages.
For more information, contact Eric Belfi or Maurice Pesso by Phone:
800-497-8076 or 212-682-1818 by Fax: 212-682-1892 by E-mail:
email@rabinlaw.com or visit the firm's Web site:
http://www.rabinlaw.com
JDS UNIPHASE: Berman DeValerio Commences Securities Suit in N.D. CA
-------------------------------------------------------------------
Berman DeValerio Pease Tabacco Burt and Pucillo initiated a securities
class action against JDS Uniphase Corporation (Nasdaq:JDSU), claiming
the Company used false and misleading statements to artificially
inflate its stock price. The suit is pending in the US District Court
for the Northern District of California on behalf of all investors who
bought JDS common stock from July 27, 1999 through July 26, 2001.
The suit claims that the San Jose-based fiber-optics company issued
false and misleading financial statements to the public. According to
the complaint, the Company and 10 of its top officers stated throughout
the class period that demand for the Company's products was
accelerating, and that the Company's only problem was its ability to
manufacture enough to meet demand. The suit also maintains that the
Company misrepresented the success of several major acquisitions and
downplayed its dependence on its two largest customers.
However, the Company falsely informed investors that demand was as
strong as claimed, the complaint alleges. On July 26, 2001, the
Company restated its third quarter 2001 financial results and took
massive fourth-quarter charges to account for a total of $44 billion in
write-offs associated with its acquisitions and excess inventory. Those
revisions and write-offs increased the Company's losses for fiscal year
2001 to $56.1 billion. According to the complaint, Company executives
knew of a slowdown in demand because the company employed 80 engineers
to monitor customers and inventory levels.
After the revised numbers were announced, Company stock fell to as low
as $7.90 per share after trading at a class period high of $146.32 - a
94% decline. The lawsuit also alleges that the artificially inflated
stock price enabled certain company officers to sell $2.1 billion of
their own Company holdings before the Company's true financial state
became public.
For more information, contact Jennifer Abrams or Joseph J. Tabacco Jr.
by Mail: 425 California Street, Suite 2025, San Francisco, CA 94104 by
Phone: 415-433-3200 by E-mail: law@bermanesq.com or visit the firm's
Web site: http://www.bermanesq.com
JDS UNIPHASE: Bernstein Liebhard Commences Securities Suit in N.D. CA
---------------------------------------------------------------------
Bernstein Liebhard and Lifshitz LLP initiated a securities class action
on behalf of all persons who acquired JDS Uniphase Corporation
securities between July 27, 1999 and July 26, 2001, in the United
States District Court for the Northern District of California.
The complaint charges the Company, certain of its officers and
directors and its controlling shareholder with violations of the
Securities Exchange Act of 1934. The Company is a provider of fiber
optic components and modules, which form the building blocks for fiber
optic networks.
The suit alleges that during the class period, defendants were
motivated to inflate the value of Company stock so that the Company
could make acquisitions using stock and so the individual defendants,
who are the Company's top officers and directors, could sell their
shares.
During the class period, defendants represented that demand was
accelerating and the Company's only problem was its ability to
manufacture enough product to meet demand. Defendants represented that
they had outstanding visibility, including demand for the Company's
products through the end of fiscal 2001 (F01, ended on June 2001), and
that the Company had 80 engineers whose job it was to monitor customers
and their inventory levels and as a result, the Company would learn
about any slowdown in demand early.
The Company also misrepresented the success of its largest
acquisitions, including Optical Coating Labs, Cronos Integrated
Microsystems, E-Tek Dynamics and SDL Inc. As a result of these positive
statements, Company stock traded as high as $146.32.
The individual defendants, all of whom were top officers and directors
of the Company, and its controlling shareholder took advantage of the
inflation, selling or disposing of 25.2 million shares of their stock
for proceeds of $2.1 billion. In July 2001, the Company announced the
restatement of its 3rd Quarter F01 results, the write-off of $44
billion in goodwill associated with its acquisitions, inventory write-
downs and that F01 EPS would be only $0.16 and that it would incur a
loss of $0.15 in F02.
On this news, Company shares dropped to as low as $7.90, or more than
94% lower than the class period high of $146.32.
For more details, contact Ms. Linda Flood, Director of Shareholder
Relations by Mail: 10 East 40th Street, New York, New York 10016 by
Phone: 800-217-1522 or 212-779-1414 by E-mail: JDSU@bernlieb.com or
visit the firm's Web site: http://www.bernlieb.com.
JUNIPER NETWORKS: Stull Stull Commences Securities Suit in N.D. CA
------------------------------------------------------------------
Stull Stull and Brody initiated a securities class action in the United
States District Court for the Northern District of California, San Jose
Division, on behalf of purchasers of Juniper Networks, Inc.
(Nasdaq:JNPR), common stock between April 12, 2001 and June 7, 2001,
inclusive.
The suit alleges that the Company and certain of its officers and
directors violated the Securities Exchange Act of 1934. The Company
purports to be a provider of purpose-built Internet infrastructure
solutions.
Specifically, the suit charges that during the class period, defendants
stated that the Company was on track to have second quarter 2001
revenues of $330+ million and that Deferred Revenue (i.e., revenue not
yet recognized because customers had not yet accepted products) had
declined because customer acceptance cycles were shorter than in the
past.
Defendants also represented the Company was on track to report 2001
earnings per share of $0.90 - $1.00, pro forma, causing its stock to
trade as high as $69.50. Defendants took advantage of this inflation,
selling 747,463 shares for proceeds of $42.9 million.
Then, on June 8, 2001, the Company disclosed that its revenues and
earnings would be much lower than previously represented. Defendants
also admitted that customer acceptance cycles were in fact much longer
than in the past, stretching from days to months. One analyst noted
that the Company's announcement was matched in "severity by its
tardiness."
On this news, Company shares dropped to $38.02, or more than 46% lower
than the class period high of $69.50.
Due to defendants' alleged deceptive and illegal conduct, plaintiff and
the other class members purchased their Company securities at inflated
prices. Had plaintiff and the other class members been aware of the
truthful condition of the Company and the adverse impact that
defendants' statements and omissions were having on the Company, they
would not have purchased their shares, or at least not at artificially
inflated prices.
For more information, contact Marc L. Godino by Phone: 888-388-4605 by
E-mail: info@secfraud.com or visit the firm's Web site:
http://www.secfraud.com
LUMENIS LTD.: Wechsler Harwood Commences Securities Suit in S.D. NY
-------------------------------------------------------------------
Wechsler Harwood Halebian & Feffer LLP initiated a securities class
action on behalf of an investor in the United States District Court for
the Southern District of New York on behalf of purchasers of Lumenis
Ltd. (Nasdaq: LUME) who publicly traded securities between January 7,
2002 and February 28, 2002, inclusive.
The suit alleges that defendants, the Company and certain of its
officers, violated the federal securities laws by issuing materially
false and misleading statements throughout the class period that had
the effect of artificially inflating the market price of the Company's
securities.
Specifically, the complaint alleges that throughout the class period,
defendants discounted and disputed marketplace rumors about its
operations even as it knew it was being investigated by the SEC and
that its distributors had been contacted by the SEC.
Additionally, even after announcing in a press release that it was
subject to an SEC investigation, the Company continued to hide the fact
that it had been aware of the SEC investigation and had been providing
information to the SEC for several weeks.
On February 28, 2002, the Company revealed the facts concerning the SEC
investigation in a conference call. These shocking revelations caused
the stock to plummet 30% in one day and more than 69% from its class
period high, resulting in damages to plaintiff and members of the
class.
For more information, contact Craig Lowther by Mail: 488 Madison
Avenue, 8th Floor, New York, New York 10022 by Phone: 877-935-7400 or
by E-mail: clowther@whhf.com
METAWAVE COMMUNICATIONS: LeBlanc Waddell Lodges Securities Suit in WA
---------------------------------------------------------------------
LeBlanc and Waddell initiated a securities class action against
Metawave Communications Corporation (Nasdaq:MTWV), alleging the Company
artificially inflated its stock price. The suit is pending in the
United States District Court for the Western District of Washington on
behalf of all investors who bought the Company's common stock from
April 24, 2001 through March 14, 2002.
The suit alleges that the Washington-based communications company
engaged in improper accounting and issued false and misleading
financial statements to the public. According to the suit, the Company
and some of its top officers highly touted customer demand and revenues
for its Spotlight GSM line of cellular phone antenna systems throughout
the class period.
However, the Company's later actions showed those statements to be
false, the complaint states. On March 14, 2002, the Company announced
a restructuring plan that included discontinuing the Spotlight GSM line
due to lack of demand. The Company took a $23 million charge against
first quarter 2002 earnings as a result.
Investors were further stunned, the complaint says, when the Company
revealed it had inflated its 2001 revenue by $5 to $7 million, or 11 to
16 percent of its total annual revenue, because of side-letters that
allowed customers to return the Spotlight GSM product at no charge.
According to the complaint, the Company admitted that recognizing that
revenue violated generally accepted accounting principles and that the
Company would have to restate its financial results for 2001.
The revelations prompted a 71% decline of the Company's stock price,
which fell from a closing price of $1.10 on March 14, 2002 to $0.32 on
March 15, 2002.
For more details, contact Roger LeBlanc by Mail: 5353 Essen Lane, Suite
420, Baton Rouge LA 70809 by Phone: 800-988-3514 or by E-mail:
rogerleblanc@lw-law.net
METAWAVE COMMUNICATIONS: Berman DeValerio Files Securities Suit in WA
---------------------------------------------------------------------
Berman DeValerio Pease Tabacco Burt and Pucillo initiated a securities
class action against Metawave Communications Corp. (Nasdaq:MTWV),
alleging the Company used improper accounting to artificially inflate
its stock price. The suit was filed in the United States District
Court for the Western District of Washington on behalf of all investors
who bought Metawave common stock from April 24, 2001 through March 14,
2002.
The suit alleges that the Washington-based communications Company
engaged in improper accounting and issued false and misleading
financial statements to the public. According to the complaint, the
Company and some of its top officers highly touted customer demand and
revenues for its Spotlight GSM line of cellular phone antenna systems
throughout the class period.
However, the Company's later actions showed those statements to be
false, the complaint states. On March 14, 2002, the Company announced
a restructuring plan that included discontinuing the Spotlight GSM line
due to lack of demand, the complaint says. The company took a $23
million charge against first quarter 2002 earnings as a result,
according to the complaint.
Investors were further stunned, the complaint says, when the Company
revealed it had inflated its 2001 revenue by $5 to $7 million, or 11 to
16 percent of its total annual revenue, because of side-letters that
allowed customers to return the Spotlight GSM product at no charge.
According to the complaint, the company admitted that recognizing that
revenue violated generally accepted accounting principles and that the
Company would have to restate its financial results for 2001.
The revelations prompted a 71% decline of the Company's stock price,
which fell from a closing price of $1.10 on March 14, 2002 to $0.32 on
March 15, 2002.
For more information, contact Steven D. Morris by Mail: One Liberty
Square, Boston, MA 02109 by Phone: 800-516-9926 by E-mail:
law@bermanesq.com or visit the firm's Web site:
http://www.bermanesq.com.
NEWPOWER HOLDINGS: Schiffrin Barroway Lodges Securities Suit in S.D. NY
-----------------------------------------------------------------------
Schiffrin and Barroway LLP initiated a securities class action against
NewPower Holdings, Inc. (NYSE:NPW) claiming that the Company misled
investors about its business and financial condition. The suit was
filed in the United States District Court for the Southern District of
New York on behalf of all investors who bought Company securities
between October 5, 2000 and December 5, 2001.
The suit alleges that the Company and certain of its officers and
directors with issuing false and misleading statement concerning its
business and financial condition. Specifically, the suit alleges that
the registration statement and prospectus for the Company's public
offering on October 5, 2000 was false and misleading in several ways,
including misrepresentations and omissions concerning the adequacy of
risk management systems put in place in conjunction with Company
affiliate, Enron Energy Services, Inc. (EES), and the true nature and
purpose of certain related party transactions, including transactions
pursuant to which Enron attempted to hedge its investment in the
Company through use of a partnership known as "Raptor III," which was
conceived and designed by Enron CFO Andrew Fastow.
Claims regarding these misrepresentations and omissions have been
asserted under Section 11 of the Securities Act against the
underwriters of the October 5, 2000 initial public offering and against
those persons who were directors (or about to become directors) of the
Company at the time of that offering, including the Company's top
executives:
(1) H. Eugene Lockhart, CEO,
(2) Lou L. Pai, Chairman and
(3) William I. Jacobs, CFO
The complaint alleges in this regard that the Company and certain of
its officers and directors misrepresented or failed to disclose:
(i) that the Company had not adopted effective and appropriate
hedging strategies against volatility of commodity prices;
(ii) that the Company was on course to achieve its financial goals
and had sufficient liquidity to do so; and
(iii) that certain forward contracts with EES posed little risk of
loss when in truth and in fact they were driving the Company
toward insolvency, and were largely structured to protect and
enrich Enron, the Company's controlling shareholder.
For more information, contact the Shareholder Relations Manager by
Phone: 888-299-7706 (toll free) or 610-822-2221 by E-mail:
info@sbclasslaw.com or visit the firm's Web site:
http://www.sbclasslaw.com
RENT-A-CENTER INC.: Mounting Vigorous Defense V. Securities Suits in TX
-----------------------------------------------------------------------
Rent-A-Center, Inc. labels several securities class actions pending
against the Company and certain of its current and former officers in
the United States District Court for the District of Texas, Texarkana
Division as "without merit". The suits were filed on behalf of all
purchasers of the Company's common stock from April 25,2001 through
October 8,2001.
The suits uniformly allege that the defendants violated Section 10(b)
and/or Section 20(a) of the Securities Exchange Act of 1934 and Rule
10b-5 promulgated thereunder by issuing false and misleading statements
and omitting material facts regarding the Company's financial
performance and prospects for the third and fourth quarters of 2001.
The Company intends to vigorously defend itself, thought it cannot give
any assurance that it will be found to have no liability in this
matter.
SIRIUS SATELLITE: Labels "Without Merit" Securities Suit in S.D. NY
-------------------------------------------------------------------
Sirius Satellite Radio, Inc. denies the allegations in a consolidated
securities class action pending against the Company and certain of its
current and former executive officers in the United States District
Court for the Southern District of New York.
The suit, brought on behalf of all persons who acquired the Company's
common stock on the open market between February 16, 2000 and
April 2, 2001, alleges violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder.
The suit alleges, among other things, that the 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 the Company's common stock to be
artificially inflated.
The Company believes that the allegations in the complaint have no
merit and intends to vigorously defend against this action.
SYMBOL TECHNOLOGIES: LeBlanc Waddell Initiates Securities Suit in NY
--------------------------------------------------------------------
LeBlanc Waddell LLC commenced a securities class action against Symbol
Technologies, Inc. (NYSE:SBL), claiming that the Company artificially
inflated its stock price. The suit was filed in the United States
District Court for the Eastern District of New York on behalf of all
investors who bought the Company's stock from October 20, 2000 through
February 12, 2002.
The suit charges the Company and three top officers with engaging in
improper accounting practices to keep the company's financial results
in line with analysts' expectations. The Company, based in Holtzville,
N.Y., develops and markets mobile and wireless computer devices.
Specifically, the defendants are accused of improperly booking a $10
million royalty payment in the third quarter of 2000 and of improperly
recording more than $40 million in revenue in the first quarter of
2001.
When news of the suspicious accounting practices first emerged in a
February 13, 2002 newspaper article, the price of Company stock quickly
dropped 17%, or $2.50 a share, to $11.70 a share. The following day,
February 14, 2002, the Company announced the abrupt retirement of chief
executive officer and revealed poor quarterly and annual results. The
company's stock price again fell sharply on the new reports, closing at
$8.40 per share on February 15, 2002.
For more information, contact Roger LeBlanc or Chad A. Dudley by Mail:
5353 Essen Lane, Suite 420, Baton Rouge LA 70809 by Phone: 988-3514 or
by E-mail: rogerleblanc@lw-law.net
*********
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 2002. 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 * * *