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C L A S S A C T I O N R E P O R T E R
Tuesday, May 7, 2002, Vol. 4, No. 89
Headlines
AARON BROTHERS: CA Court Approves $5M Overtime Wage Suit Settlement
APOLLO GROUP: Former Counselors File Overtime Wage Suit in CA Court
BELLSOUTH CORPORATION: Workers File Suit For Racial Discrimination
CALIFORNIA: Federal Court Raises Hurdle For Employee Overtime Pay Suits
CALIFORNIA: Appeals Court Rejects Suit Over Los Osos Sewer Project
CATHOLIC CHURCH: Judge Decides Ex-Altar Boys Waited Too Long To Sue
FEDERAL EXPRESS: Court To Rule on Summary Judgment For Consumer Suit
FEDERAL EXPRESS: Faces Suit For Imposing Fuel Surcharge in IL Court
FLORIDA: Broward County, Civil Groups Settle Bias Suit Over Election
FORD MOTOR: Court Denies Certification To Breach Of Warranty Suit
HOUSEHOLD INTERNATIONAL: Faces Suit For Defrauding Consumers in IL
INDIAN FUNDS: Interior Department Hindered Congress Watchdog's Effort
LOCKFORMER CO.: Federal Ruling Ties Firm To Well Pollution in Illinois
MICHAELS STORES: Settles Employee Suit Over Overtime Wages in CA Court
NEVADA: Doctor Files Suit Seeking Screenings For Children's Leukemia
PENNSYLVANIA: Truckers Threaten Civil Rights Suits Over Truck Crackdown
PIZZA HUT: Suit For Hindus Alleges Veggie Pizza Contains Beef Product
UNITRIN INC.: Agrees To Settle Suit Over Race-Based Premiums in AL
WAR REPARATIONS: Swiss Fund Pays Out 288M Francs For WWII Survivors
WHIRLPOOL CORPORATION: Muslim Employees Sue For Alleged Discrimination
Securities Fraud
ADAPTEC INC.: Appeals Court Upholds Dismissal of Securities Fraud Suit
BIONOVA HOLDING: Plaintiffs Appeal Dismissal of Securities Fraud Suit
CRAYFISH CO.: Plaintiffs Await Lead Counsel Decision in S.D. NY
DOV PHARMACEUTICAL: Fruchter & Twersky Commences Securities Suit in NY
DYNEGY INC.: Wolf Popper Commences Securities Fraud Suit in S.D. TX
EAGLE BUILDING: Cohen Milstein Commences Securities Suit in S.D. FL
ENRON CORPORATION: University Regents Hire Former Judge As Consultant
JDS UNIPHASE: Keller Rohrback Lodges Securities Fraud Suit in N.D. CA
MCLEODUSA CORPORATION: Labels "Without Merit" ERISA Suit in N.D. Iowa
MERRILL LYNCH: Holzer & Holzer Launches Securities Fraud Suit in NY
MERRILL LYNCH: Cohen Milstein Commences Securities Suit in S.D. NY
MERRILL LYNCH: Cohen Milstein Commences Securities Suit in S.D. NY
MERRILL LYNCH: Pomerantz Haudek Commences Securities Suit in S.D. NY
MERRILL LYNCH: Wolf Haldenstein Commences Securities Suit in S.D. NY
MERRILL LYNCH: Schiffrin & Barroway Lodges Securities Suit in S.D. NY
NTL INC.: Wolf Haldenstein Commences Securities Fraud Suit in S.D. NY
ORACLE CORPORATION: Plaintiffs File Amended Securities Suit in N.D. CA
ORACLE CORPORATION: Shareholder Derivative Suits Spring up in CA, DE
PHYCOR INC.: $3.4M Consolidated Suit Settlement Expected
RAILWORKS CORPORATION: MD Court Stays Suit Due To Bankruptcy Filing
REGENERATION TECHNOLOGIES: Securities Suits' Consolidation Expected
WORLDCOM INC.: Kirby McInerney Commences Securities Suit in S.D. NY
*********
AARON BROTHERS: CA Court Approves $5M Overtime Wage Suit Settlement
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The Los Angeles County Superior Court in California preliminarily
approved the US$5 million settlement proposed by retail chain Aaron
Brothers, Inc. to settle a class action brought on behalf of its former
store managers, assistant store managers, and managers-in-training,
alleging violations of California wage laws.
The suit alleges that the Company violated various California laws by
erroneously treating its store managers, assistant store managers, and
managers-in-training as "exempt" employees who are not entitled to
overtime compensation. The suit asserts that the Company:
(1) violated various California Labor Codes;
(2) violated Section 17200 of the California Business and
Professions Code; and
(3) engaged in conversion
In June 2001, the plaintiff filed an amended complaint, which expanded
the purported class to include all current the Company's salaried store
managers, assistant store managers, and managers-in-training based in
California. The amended suit also added a new plaintiff as a class
representative and two additional causes of action for injunctive and
declaratory relief.
On March 15, 2002, the Company negotiated a definitive settlement of
the suit, subject to final court approval. The Court granted
preliminary approval of the settlement on March 29, 2002.
APOLLO GROUP: Former Counselors File Overtime Wage Suit in CA Court
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Apollo Group, Inc. faces a class action filed in December 2001 in the
Superior Court of the State of California for the County of Solano by
one current and two former enrollment counselors with The University of
Phoenix, Inc., on behalf of themselves and current and former
enrollment counselors employed by the Company in the State of
California.
The suit alleges that during their employment, they and other
enrollment counselors worked in excess of 8 hours per day or 40 hours
per week, and contend that the Company failed to pay overtime.
An initial status conference has been scheduled, but no trial date has
been set. While the outcome of this legal proceeding is currently not
determinable, management does not expect the results of this action to
have a material adverse effect on the Company's business, results of
operations or financial condition.
BELLSOUTH CORPORATION: Workers File Suit For Racial Discrimination
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Five workers, in a federal discrimination lawsuit, recently filed in
Birmingham, Alabama, claim that BellSouth Corporation denied black
employees promotions through unfair advancement tests and policies, The
Associated Press reports. The plaintiffs are seeking to have the
lawsuit designated a class action applicable to an estimated 15,000
black Company employees
The suit accused the Company of "a lengthy history of using invalidated
Tests" to prevent black employees from advancing to management and
other higher positions. Plaintiffs say only 13 percent of black
employees are managers or hold professional positions, with less than
six percent serving as senior managers or officers.
Attorneys involved in the case include Cyrus Mehri, the Washington D.C.
lawyer, who led a class action against Coca-Cola that ended in a record
$192.5 million settlement. Mr. Mehri's firm also has filed bias suits
against Johnson & Johnson and Texaco.
The Company's Chairman and Chief Executive, Duane Ackerman, said the
Company takes the allegations seriously and plans to investigate the
claims thoroughly. "BellSouth's culture is one of inclusion, and we
are firmly committed to the equal and respectful treatment of every
employee," he said in a statement.
Officials of the Atlanta-based Company portray it as racially
diverse, noting that nearly a quarter of the Company's 85,700 employees
are black. Forty percent of the people hired last year were black and
nearly half of the Company's corporate officers are minorities or
women, said BellSouth spokesman Jeff Battcher.
CALIFORNIA: Federal Court Raises Hurdle For Employee Overtime Pay Suits
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A rush of class action lawsuits in California over the right to
overtime pay, which already has cost companies hundreds of millions of
dollars in settlements, have hit their first hurdle with a new court
decision, The Wall Street Journal has reported
Lawyers said a recent decision by the state's Second Appellate District
Court in Los Angeles, to reverse a lower court decision granting class
action status to 1,400 employees at Sav-On Drug Stores Inc. in an
overtime dispute, may be critical in stemming the flow of successful
claims.
Since 2000, when the state legislature passed a law making it easier
for employees, especially managers, to file for overtime pay, more than
160 companies have been sued by class actions in California seeking
additional pay, said Kenneth D. Sulzer, a partner at Chicago law firm
Seyfarth Shaw, which represents companies in such suits. Among the 160
are Rite Aid Corporation, Pacific Bell Telephone Company and Starbucks
Corporation, which said its profit in the fiscal second quarter ended
March 31 fell short of the year-earlier period because of an $18
million settlement for two wage-and-hour class actions.
In the Sav-On case, the group of employees sued the subsidiary of
Albertson's, Inc. of Boise, Idaho, in April 2000, saying the Company
failed to pay them overtime. A trial court granted the plaintiffs
class action status. Plaintiffs' attorney Edward J. Wynne, of the San
Francisco law firm Righetti & Wynne PC, had argued that although the
plaintiffs were classified as salaried managers, which generally
exempts them from receiving overtime, they were "improperly" and
"illegally" misclassified.
The plaintiffs said that under California state law, they were
"nonmanagerial employees." The law allows managers to file for
overtime pay if 50% of their time is spent doing non-managerial duties.
"Their titles were operating managers and assistant managers," said Mr.
Wynne. "But they were primarily engaged in non-managerial activities
such as stocking shelves and ringing up sales."
Sav-On argued that the range of a manager's activities varied
significantly depending on a store's size, sales volume and hours of
operation, said Rex Heinke, an attorney at the law firm of Akin, Gump,
Strauss, Hauer & Feld LLP, which represented Sav-On.
The Appellate Court found merit in Sav-On's argument, and said the
plaintiffs failed to show that the operations and tasks performed by
Sav-On employees were "so uniform as to be appropriate for class-wide
determination." Mr. Wynne said he will appeal the decision.
CALIFORNIA: Appeals Court Rejects Suit Over Los Osos Sewer Project
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A federal appeals court has thrown out a lawsuit intended to stop a
controversial and expensive sewer project in Los Osos, The San Luis
Obispo Tribune reported recently. However, the group vows to keep on
fighting and is planning a class action lawsuit, a recall of the
services district board and dissolution of the board through petitions
with the Local Agency Formation Commission.
The Ninth District Circuit Court of Appeals in Pasadena dismissed a
lawsuit by a group of 17 Los Osos residents against the Los Osos
Community Services District, alleging that the $84.6 million sewage
collection and treatment project was prohibitively expensive.
In their ruling, the Appeals Court found that the services district had
acted properly in requiring the sewer. "Appellants have not shown that
the government has infringed any of their fundamental rights or their
protected property or liberty rights," the judges wrote. "There is no
fundamental right to live free of government regulation, to use septic
tanks or to have access to cheap sewers."
The ruling is the latest in a string of legal setbacks for the sewer
opponents who call themselves Citizens for an Affordable Safe
Environment, or CASE. Lawsuits in local Superior Court and lower
federal courts also have been rejected. CASE spokesman Al Barrow said
the group will battle on. They want the services district to find a
cheaper alternative, preferably one that maintains the current septic
system.
Rosemary Bowker, president of the services district board, said she is
pleased with the ruling. She hopes the district will be able to move
forward with the project. The sewer has fallen behind schedule because
the lawsuits have prevented the district from selling the bonds it
needs to fund the sewer planning and construction.
"These lawsuits are disruptive and a drain to the district's budget,
which is intended to fund critical services to the residents of Los
Osos," she said.
CATHOLIC CHURCH: Judge Decides Ex-Altar Boys Waited Too Long To Sue
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Superior Court Judge John Himmelberger Jr. ruled recently that the two
ex-altar boys, Robert and Philip Young, who alleged they suffered years
of sexual abuse at the hands of a priest, waited too long to sue and
may not participate in the class action against the Diocese of Camden,
because they waited too long to bring their claim, The Star-Ledger of
Newark, New Jersey, reported. The Judge rebuked the church's lawyers,
however, for their hardball defense.
The decision followed closely upon days of wrenching and often graphic
testimony and now clouds the prospects for other plaintiffs in the
lawsuit, which names 15 priests and numerous church officials as
defendants. The Youngs, in a three-and-a-half week hearing held in
Atlantic City, were the first plaintiffs required to justify bringing a
complaint beyond the statute of limitations.
In coming weeks, similar hearings will be held for 16 other plaintiffs,
who filed late claims and must present an adequate justification of
duress or mental instability, the exceptions, which, if accepted by the
Court, permits them to leap the hurdle of the statute of limitations.
In the hearing, leading up to the Judge's recent decision, the diocese
lawyers asked Judge Himmelberger to dismiss the Youngs from the suit,
saying the statute of limitations had long expired. They accused the
Youngs of acting only after learning that the church had paid $3.2
million to settle similar suits.
The Judge found that the Youngs knew around 1983 and 1984 that they had
been harmed. He also calculated that under New Jersey law, they had
until 1988 and 1989, respectively, to bring their complaint. He said
he saw nothing in their case that would warrant an exception to the
rule, indicating that he had not given weight to the justifications the
Youngs had presented for warranting an exception to the general rule as
to the operation of the statute of limitations. While duress is an
exception permitted under the law, the Young brothers' claims of
religious duress do not appear to have been sufficient.
However, even as he ruled in favor of the diocese, Judge Himmelberger
rebuked church officials for employing "hardball" tactics in defending
themselves against the "scourge" of sexual abuse. "Even though the
church was within its legal rights to defend itself, the church's
position on this matter is at odds with its stance as a moral force in
society," Judge Himmelberger said. "From where I sit, playing legal
hardball does not seem quite right."
The decision comes at a time of unprecedented turmoil for the Catholic
Church, which is defending itself against hundreds of allegations that
priests abused children and that church officials did little or nothing
about it for decades.
FEDERAL EXPRESS: Court To Rule on Summary Judgment For Consumer Suit
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The United States District Court in San Diego, California has yet to
decide on the plaintiffs' motion for summary judgment in the class
action pending against Federal Express Corporation.
The suit generally alleges that customers who had late deliveries
during the 1997 Teamsters strike at United Parcel Service were entitled
to a full refund of shipping charges pursuant to our money-back
guarantee, regardless of whether they gave timely notice of their
claim.
The Court has ruled for the Company on all but the first eight days of
the UPS strike. The plaintiffs moved for summary judgment, which was
heard by the Court in April 2002. Should the plaintiffs prevail, the
Company plans to appeal to the 9th Circuit Court of Appeals. A trial
date is scheduled for June 2002 should the plaintiffs' motion for
summary judgment be denied.
The Company intends to vigorously oppose the suit.
FEDERAL EXPRESS: Faces Suit For Imposing Fuel Surcharge in IL Court
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Federal Express Corporation faces a class action pending in Illinois
State Court, alleging that the Company imposed a fuel surcharge in a
manner that is not consistent with the terms and conditions of its
contracts with customers.
The Court has certified the class and notices will be sent to class
members during the fourth quarter of 2002. The Company believes that
the claims in both of these cases are without merit. The Company has
denied any liability with respect to these claims and intends to
vigorously defend itself in these cases. However, given the nature and
status of these claims, an estimate of potential loss, if any, cannot
be made and no amounts have been provided for these contingencies.
FLORIDA: Broward County, Civil Groups Settle Bias Suit Over Election
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Broward County and civil rights groups representing minority voters
around the state have settled a federal discrimination suit stemming
from Florida's controversial 2000 presidential election, The Miami
Herald reported.
Broward becomes the state's second county after Leon, to agree to
change voter registration and polling practices that were sought by the
National Association for the Advancement of Colored People (NAACP) and
other rights organizations. The groups have complained that unfair
practices prevented black voters in particular from casting ballots in
2000, or prevented their ballots from being counted. Miami-Dade
County, however, has refused to enter into a deal and remains a
defendant in the lawsuit, which only seeks remedies to prevent the
recurrence of the 2000 problems.
News of the Broward settlement came after a hearing in the US District
Court in downtown Miami to determine whether the suit would be
certified as a class action. Anita Hodgkiss, lead attorney in the
lawsuit filed by the NAACP last year, said a motion for approval of the
Broward settlement has been filed, but still needs the signature of
Judge Alan Gold.
Ms. Hodgkiss did not discuss specifics, but said the agreement had
"slight variations" to the one reached last month with Leon County's
supervisor of elections. The settlement does not require Broward to
pay any money, but it has requirements the county must follow before,
during and after elections, said Broward Supervisor of Elections Miriam
Oliphant.
Ms. Oliphant, who took office after the 2000 election and ensuing
recount, said the settlement includes providing the NAACP with detailed
post-election reports about minority voting, making sure that voters
who speak languages other than English are able to vote and hiring
diverse poll workers.
Broward also must have a laptop computer at each precinct to check the
master voter rolls, a solution designed to address problems experienced
in 2000, when voters were turned away because they were not listed in a
particular precinct, and there was no way to verify their registration
from afar.
The Leon County settlement includes identifying and reinstating
residents who were wrongfully purged from the voter rolls, and
providing a written explanation to anyone whose provisional ballot was
rejected.
Provisional ballots were introduced in last year's Elections Reform
Act, which outlawed punch-card ballots and established a uniform system
for manual recounts.
At this point, five county supervisors, including David Leahy of
Miami-Dade, four state officials and one private firm remain in the
lawsuit.
Attorneys on both sides argued last week whether the case should
receive class action status, which would allow state voters who allege
their rights were violated to join the lawsuit. Defense attorneys
argued that the new provisional ballot option made many of the
plaintiffs' claims moot. Judge Gold, clearly frustrated by the
wrangling between the remaining defendants and the plaintiffs, told
both sides to find a mediator and work toward a settlement.
Miami-Dade NAACP branch President Bradford Brown said he was outraged
that Miami-Dade had not settled. "It is appalling that Dade County is
fighting this as opposed to settling as Leon and Broward have done,"
said Mr. Brown. The issue was not trying to nitpick on particular
cases, but how to achieve the best opportunity for Dade citizens to
exercise their franchise.
FORD MOTOR: Court Denies Certification To Breach Of Warranty Suit
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A federal appeals court threw out nationwide class action status for
plaintiffs suing Ford Motor Company and Bridgestone/Firestone American
Tire LLC over the diminished value of their cars and tires in an
opinion that could have broad ramifications for class actions
generally, The Wall Street Journal reported.
Ford and Bridgestone/Firestone, the US unit of Japan's Bridgestone
Corporation, claimed victory, but plaintiffs' attorneys want a
rehearing before the full appeals court panel of the Seventh US Circuit
Court of Appeals in Chicago. If the unanimous opinion of the three-
member panel of the Appeals Court is upheld, those attorneys say they
will then file class actions in individual state courts.
In the sweeping opinion, the three-member panel ruled that the massive
litigation could not proceed because a number of differing state laws
would have to be applied. The Court also ruled the suit involved too
many products sold over a long period, making the case unmanageable for
a single court.
Moreover, the panel said, a single suit involving millions of claims
posed unfair financial risks for both companies, likely forcing them to
seek a settlement "at a price that reflects more the risk of a
catastrophic judgment as much as, if not more than, the actual merits
of the claims." The decision reverses a November ruling by United
States District Court Judge Sarah Evans Barker of Indianapolis.
The lawsuit, alleges breach of warranty and consumer fraud, and seeks
compensation for millions of owners of Ford Explorers equipped with any
of these Firestone tires purchased since 1990:
(1) ATX,
(2) ATX II,
(3) Firehawk ATX,
(4) ATX 23 Degree,
(5) Widetrack Radial Baja,
(6) Wilderness tires, or
(7) similar tires sold by Firestone under other names.
Bridgestone/Firestone has recalled millions of these tires because of
an alleged manufacturing defect that caused the treads to peel loose at
highway speeds.
The tires have been linked to 271 deaths by federal safety regulators
and more than 800 injuries. Plaintiffs in the litigation are seeking
compensation for the tires and for the diminished resale of their Ford
Explorers, but not personal injury awards. Hundreds of personal
injury lawsuits are pending.
In seeking class action status, plaintiffs' lawyers argued that a mega-
trial could proceed under state laws where the two companies have their
respective headquarters: Michigan, because Ford is based in Detroit,
and Tennessee, because Bridgestone/Firestone is based in Nashville.
However, the Appeals Court rejected that argument. "If recovery for
breach of warranty or consumer fraud is possible," the court said, "the
injury is decided where the consumer is located rather than where the
seller maintains its headquarters." That line of reasoning effectively
pulled the laws of all states into play, which by itself would make the
case too unwieldy to proceed.
"We are disappointed, but we don't intend to stop here," said Don
Barrett, of Lexington, Mississippi, lawyer for the plaintiffs. "If this
opinion remains the law of this case, we will take the court at its
word that we should go to state courts and file class actions in state
courts."
Bridgestone/Firestone said the decision confirms its contentions that
the "issues and circumstances involved in these no-injury lawsuits are
far too varied to justify class certification."
Ford said the Court "recognized that Ford and Firestone already have
addressed the tire issue by replacing nearly 30 million tires and that
the National Highway Traffic Safety Administration has investigated the
safety of the tires and Explorers and did not find any additional
action to be warranted."
HOUSEHOLD INTERNATIONAL: Faces Suit For Defrauding Consumers in IL
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A lawsuit seeking class action status, was recently filed in Cook
County Circuit Court, in Illinois, by three borrowers, charging
Prospect, Illinois-based Household International, one of the nation's
biggest consumer finance firms, with defrauding low and moderate income
consumers, according to an Associated Press report
The suit seeks a court order forcing the Company to rescind the
plaintiffs' loans and void any liens, interest or fees, along with
giving plaintiffs time to return the principal of their loans to the
company.
The suit alleges that the Company and its subsidiaries misled borrowers
about terms and conditions on loans totaling at least $45 million. The
lawsuit further claims that borrowers were "induced to enter secured
loan transactions" with the Company or one of its two main
subsidiaries, Household Finance Corporation of California and
Beneficial Corporation.
The suit also alleges that the Company used sales promotions to lure
borrowers into debt-consolidation loans with high rates and fees, and
principal amounts that exceeded the value of their homes and prepayment
penalties.
Association of Community Organizations for Reform Now (ACORN) President
Maude Hurd issued a written statement on the behalf of the plaintiffs,
accusing the Company of stripping borrowers of "their major form of
wealth.The equity in their homes."
Company spokeswoman Megan Hayden said that while she had not seen the
lawsuit, she was familiar with the plaintiffs' allegations. She said
that the loans contained all of the proper disclosures and that all of
the Company's lending policies were followed. The Company looks
forward to a fair hearing, she said, so "we can talk about the facts
rather than rhetoric."
Two alleged victims and ACORN filed a similar lawsuit in February in
Sacramento, California. The suit deals with an estimated $2 billion in
secured loans to tens of thousands of California borrowers over the
past four years by the Company and its subsidiaries.
The Company is the second-largest consumer finance company in the
United States. Its subsidiaries make secure home equity and unsecured
consumer loans, mostly to lower middle-income and working-class
customers.
INDIAN FUNDS: Interior Department Hindered Congress Watchdog's Effort
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The Interior Department has hampered the efforts of a congressional
watchdog assigned to help fix a mismanaged system of royalties from use
of American Indian land, The Associated Press has reported
Interior Secretary Gale Norton and other top Interior officials have
obstructed Special Trustee Thomas Slonaker, publicly blamed him for
failures to fix the Indian trust fund and undermined much of his
authority, wrote court monitor Joseph S. Kieffer III. The Department's
actions toward Mr. Slonaker "are unconscionable and smack of
retaliation," Mr. Kieffer wrote.
The Department's actions have made it impossible for the Special
Trustee to do the job Congress intended when it created the office in
1994, Mr. Kieffer wrote in his latest report to United States District
Judge Royce Lamberth.
Mr. Slonaker and a top deputy provided damaging testimony at a recent
trial to determine whether Secretary Norton should be held in contempt
for failing to comply with Court orders to fix the Indian trust fund.
A contempt ruling is still pending.
The Interior Department is responsible for collecting royalties oil and
gas mining, timber harvesting, grazing and other uses of Indian land
and distributing the money to the landowners. However, plaintiffs in a
class action say that the Department has mismanaged the money,
squandering, losing, failing to collect it, among other things, in an
amount totaling more than $10 billion over more than a century.
Interior spokesman John Wright recently said the Department has not
reviewed Mr. Kieffer's latest report and could not comment, according
to Associated Press.
In a recent report Secretary Norton filed with the court, she said she
is encouraged by the progress being made toward fixing the trust fund,
but she outlined numerous obstacles remaining.
"This Shakespearean tragedy has no end," Mr. Kieffer wrote.
LOCKFORMER CO.: Federal Ruling Ties Firm To Well Pollution in Illinois
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Days before the opening of the trial in a federal class action against
Lockformer Company, the judge removed one issue by ruling that the
metal fabricating company's Lisle, Illinois facility is the source of
contamination found in the private wells of the homeowners who are
filing the suit, the Chicago Tribune reports
Federal Judge Harry Leinenweber ruled that "no reasonable jury" would
return a verdict eliminating the Company's Ogden Avenue plant as the
source of the contamination after considering the "substantial credible
evidence" presented by the plaintiffs. There is not sufficient
evidence, he said, supporting the Company's "hypothesis of other
possible sources."
"The ruling speaks for itself," said the plaintiffs' attorney, Shawn
Collins of Naperville, who requested the order. "As a matter of law
now, the Lockformer property is the source of the contamination in the
class-action area."
Mr. Collins said that two issues remain to be decided at the trial.
One is which of the three defendants name in the lawsuit is responsible
for the contamination at the plant. The defendants, in addition to the
Company, are the Company's parent firm and the current owner of its
former chemical supplier. The second issue is whether the plaintiff
homeowners have been hurt by the contamination of their wells.
A group of Lisle homeowners brought the suit, alleging that more than
100 homes on wells south of the plant could be contaminated by the
solvent trichloroethyllene (TCE). Residents sued after well tests
showed TCE, a possible carcinogen, in 21 of 33 homes. Judge
Leinenweber later ruled the suit could proceed as a class action for
liability issues and injunctive relief, but not necessarily for
monetary damages.
The Company has acknowledged that TCE, used as a degreaser, was spilled
on the site of its plant over decades, but it denies the TCE found in
the wells came from its business site.
MICHAELS STORES: Settles Employee Suit Over Overtime Wages in CA Court
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Michaels Stores, Inc. settled the class action filed against the
Company by Taiyeb Raniwala, one of its former assistant managers, on
behalf of the Company stores' former and current assistant store
managers.
The suit, filed in the Alameda County Superior Court, California,
alleged that the Company violated various California laws by
erroneously treating its assistant store managers as "exempt" employees
who were not entitled to overtime compensation. Based on these
allegations, the suit asserted that the Company:
(1) violated various California Wage Orders;
(2) violated Section 17200 of the California Business and
Professions Code; and
(3) engaged in conversion
In June 2001, the Company negotiated a tentative settlement of the
purported class action with Ms. Raniwala. The settlement, in exchange
for a full release of claims, received final approval from the court in
November 2001. As a result, the case was dismissed effective November
20, 2001. The distribution of the settlement proceeds was made on
January 19, 2002.
NEVADA: Doctor Files Suit Seeking Screenings For Children's Leukemia
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A doctor who criticized the investigation into a childhood cancer
cluster in Fallon, Nevada, has filed a lawsuit seeking class action
status and asking that the fuel companies, the Navy and the city be
ordered to pay for leukemia screening for children with ties to the
northern Nevada community, according to a recent Associated Press
report. The suit names as defendants:
(1) the city of Fallon,
(2) the United States Navy,
(3) Exxon Mobil Corporation,
(4) Kinder-Morgan Partners, and
(5) Speedway Gas Station
Other health officials dispute that a screening test can determine
whether a child is likely to develop leukemia, as claimed in the
lawsuit filed by Dr. Alan Levin in the United States District Court in
Reno.
Dr. Levin, who is also a lawyer, filed the suit for Marie Snyder, a
Fallon resident, on behalf of her three-year-old son, Dylan Kaleb
Ridenour. It seeks class-action certification to include any person
who, since 1992, lived in Fallon "for at least three months during the
first 10 years of their lives and who have not been diagnosed with
leukemia or other bone marrow disease."
Since 1997, 15 children who lived in Fallon have been diagnosed with
leukemia. Of those, two have died. Health officials have said that
given an average rate of about three childhood cases per 100,000
children, they would normally expect to see about one case every five
years in the Fallon area, based on its population.
State and federal health officials suspect an environmental cause in
the agricultural and military town of Fallon, 60 miles east of Reno,
although none has been found. Dr. Levin, however, contends the cancer
epidemic is associated with benzene, a carcinogen found in jet fuel.
Dr. Levin estimated the potential class could include about 1,500
people at an average cost of about $1,500 per person tested, an
estimated total cost of $2 million to $3 million. Dr. Levin said it is
possible to genetically screen children by drawing blood and testing
for certain chromosome breaks to determine whether they are predisposed
to develop the disease.
Other health professionals disagree. "In order to test for any DNA
break, you have to test leukemia tissues," Dr. Mary Guinan, former
state health officer said. "Anyone who has gone into remission or who
does not have leukemia cannot be tested."
Zip Upham, public information officer for the Fallon Naval Air Station,
said the Navy does not believe Dr. Levin has as much expertise as
scientists studying the case for the state and the federal Centers for
Disease Control. "If there was a medical screen that was viable to
give to the children to tell them if they were susceptible to getting
leukemia, I am pretty sure the CDC would be the ones leaning forward to
make it available," Mr. Upham said.
Kinder-Morgan operates a pipeline to the rural city of Fallon and the
Navy base. Larry Pierce, a spokesman for the Houston Company, said
officials there have not yet reviewed the suit and could not
immediately comment.
Fallon Mayor Ken Tedford Jr. and city attorney Michael Mackedon were
aware of the suit but unavailable for immediate comment, a spokeswoman
for Mr. Mackedon's office said.
Officials at Irving, Texas-based Exxon Mobil also were not immediately
available for comment.
PENNSYLVANIA: Truckers Threaten Civil Rights Suits Over Truck Crackdown
-----------------------------------------------------------------------
A year after Philadelphia began cracking down on dangerous trucks and
impounding rigs for violations, the number of crashes has decreased,
but truckers are still steaming over fines and seizures and even
threatening civil rights suits, The Associated Press has reported.
Since April, 2001, 1,603 trucks have been pulled off Philadelphia roads
and seized for safety violations. Big-rig accidents on the roadways
are down 69 percent. However, the truckers are still fuming and even
threatening civil rights suits, The Philadelphia Inquirer reported.
Gail Toth, director of the New Jersey Motor Truck Association calls the
seizures "an abuse of power," as well as "un-American and
unconstitutional."
Last spring, angered by an average of two major tractor trailer crashes
weekly, city police and traffic court invoked a never-used 1999 law
allowing impoundment of unsafe trucks. According to that law, the
nine-member truck detail can stop any truck for inspection without
cause, and if the tickets they write exceed $250, the truck is seized.
The driver has to go to court and pay fines, court costs, towing,
storage and paperwork. Then the driver has to fix the truck at the lot
or have it towed to a repair shop.
Ms. Toth says, "They're putting guys out of business," and that the
action taken on the streets of Philadelphia is unconstitutional. Her
group, which represents 1,000 New Jersey truckers, has joined the
2,330-member Pennsylvania Motor Truck Association in asking authorities
to let drivers make minor repairs at the side of the road. If
agreement cannot be reached, Ms. Toth said her group will file a
federal civil rights lawsuit against the punishment-first policy. A
class action prevailed against a similar impounding policy in
Louisiana.
Since the program went into effect, the number of crashes has been
reduced dramatically. However, it is not clear whether that is because
trucks are safer or whether truckers are detouring around the city
because of the tough enforcement program.
PIZZA HUT: Suit For Hindus Alleges Veggie Pizza Contains Beef Product
---------------------------------------------------------------------
A lawyer who successfully sued McDonald's Corporation over its use of
beef flavoring on its french fries, recently filed a similar lawsuit
against Pizza Hut, Inc. seeking class action certification on behalf of
15 million vegetarians and one million Hindus in the United States, The
Associated Press reports. The lawsuit was filed in King County
Superior Court and then transferred to the United States District
Court, seeking unspecified damages and alleged violations of consumer
protection laws
Harish Bharti has charged the Company with using a beef product in its
Veggie Lover's Pizza while promoting the product to vegetarians.
"While they claim it's a vegetarian product, they have a beef product
in their cheese," Mr. Bharti said. He added that the practice is
deceptive and harmful to vegetarians and to Hindus, who would never
knowingly eat beef because they consider the cow sacred.
The lawsuit claims the Company does not identify the beef product in
its ingredient list because it's considered a "secret ingredient" that
gives their pizzas their flavor.
The Company has denied the allegation. "We do not have any beef
product in our pizzas," said Patty Sullivan, a spokeswoman for the
Dallas-based company. Beyond that, she said the Company does not
comment on pending litigation.
Mr. Bharti's lawsuit against McDonald's accused that company of using
beef tallow in US fries long after making a widely-publicized pledge
in 1990 to cook them only in vegetable oil. Similar lawsuits were
filed in Illinois, California, New Jersey and Texas.
McDonald's replied that it never claimed the fries it sells in the
United States are vegetarian. However, the Company did apologize for
any confusion surrounding the use of beef flavoring in the production
of fries.
In a settlement granted preliminary approval this past week by an
Illinois state court judge, McDonald's agreed to pay $10 million to
vegetarian and Hindu organizations and create a board to advise on a
vegetarian menu.
UNITRIN INC.: Agrees To Settle Suit Over Race-Based Premiums in AL
------------------------------------------------------------------
Unitrin, Inc. has agreed to compensate holders of 300,000 life-
insurance policies in a settlement of a class action over race-based
premiums that charged blacks more than whites, The Wall Street Journal
recently reported.
The Company is the latest insurer to reach such a settlement. Into the
1960s, many insurers that sold to blacks charged them higher premiums,
based on mortality tables that showed that they, as a group, had a
significantly shorter average life expectancy than whites. Under
pressure from the civil-rights movement and court decisions, insurers
stopped charging race-based premiums on new policies, although some
companies continued the higher-price premiums on policies that were in
force.
The Company said it would provide a minimum of $33 million in benefits
to members of the class represented in the lawsuit. The Company also
said the settlement and associated litigation costs are covered by a
$32.4 million reserve that was taken in the second quarter of 2000.
The agreement is subject to approval by the Alabama state court.
The Company also reached an agreement with the Illinois Director of
Insurance, on behalf of insurance regulators nationwide, to pay $1
million in cash to certain policyholders and a fine of $1.25 million to
be apportioned among participating states.
These Unitrin units are covered by the settlement:
(1) United Insurance Co. of America,
(2) Reliable Life Insurance Co. and
(3) Union National Life Insurance Co.
Other companies that have reached similar settlements are:
(i) ING Group's Life Insurance Co. of Georgia,
(ii) MetLife, Inc., and
(iii) American General Corp., now part of American General Group
Inc.
These companies all have reached similar settlements, as indicated
above, or set aside funds for settlements for selling race-based
insurance policies. American General agreed, in 2000, to pay $215
million in such a settlement, and MetLife took a $250 million charge
last year to create a reserve for settlement.
WAR REPARATIONS: Swiss Fund Pays Out 288M Francs For WWII Survivors
-------------------------------------------------------------------
A Swiss fund set up five years ago to help needy survivors of the
Holocaust recently completed its work, saying that it had paid out 288
million Swiss francs (US$180 million) to 309,000 people around the
world, The Associated Press reported.
The fund was set up in spring 1997, when Switzerland faced
unprecedented international criticism for its role in the World War II
era. The neutral country, which stayed out of the war, was accused of
helping Adolf Hitler's war machine and systematically turning Jewish
refugees back at the border to face certain death in Nazi-occupied
countries. A Swiss government-funded study concluded in March that
authorities knowingly had contributed to the Holocaust by sending back
Jewish refugees to face their Nazi persecutors.
The fund was made up of contributions from Swiss banks and industry.
It is separate from a two billion franc ($1.25 billion) settlement
reached by Swiss banks under the threat of class actions in the United
States, and aimed at compensating Jews whose money was kept in dormant
Swiss bank accounts after the war.
Introducing the fund's final report, its President Rolf Bloch said the
money was never designed as compensation or damages for the wrongs
suffered by the Jews and other Nazi victims, but was rather a gesture
of solidarity and compassion.
According to the final report:
(1) more than four-fifths of the beneficiaries were Jewish
survivors of the Holocaust. The rest went to persecuted
groups;
(2) 43% of the money went to eastern Europe, 29% to Israel
and 16% to North America;
(3) more than half the money went to people between the ages of 73
and 83; and
(4) beneficiaries received between 360 francs and 1,200 francs
(between $225 and $750). Jewish and other groups in each
country were responsible for identifying the needy and
distributing the money;
WHIRLPOOL CORPORATION: Muslim Employees Sue For Alleged Discrimination
----------------------------------------------------------------------
A group of 16 current and former Muslim employees at a Whirlpool
Corporation plant in La Vergne, Tennesse, filed suit against the
household appliance giant, alleging a consistent pattern of religious
discrimination. The class action, filed in United States District Court
for the Middle of Tennessee, claims that Muslim employees were denied
the right to pray at work, despite repeated requests for religious
accommodation.
The plaintiffs also allege that supervisors at the plant followed
Muslim employees to the restroom to ensure that they did not pray
during their breaks. In addition, employees allege they were terminated
after being discovered praying.
According to the complaint, "Whirlpool has created and fostered an
extremely hostile and humiliating work environment for those of the
Muslim faith, particularly amongst its Somali workers, subjecting them
to personal humiliation and emotional distress."
The suit was initiated after one of the employees contacted the Council
on American-Islamic Relations (CAIR), a Washington-based Islamic
advocacy group. The Company rejected CAIR's repeated attempts at
mediation.
"CAIR has received numerous reports of discrimination from former and
current Muslim employees of the plant in Tennessee. In each instance,
Whirlpool has refused to engage in any meaningful dialogue," said CAIR
Communications Coordinator Hodan Hassan.
The suit seeks an order forcing Whirlpool to provide reasonable
accommodation for the plaintiffs' religious practices, $310,000 in
compensatory damages, as well as punitive damages for the emotional
pain and suffering caused by the discrimination.
For more information, contact Ibrahim Hooper by Phone: 202-488-8787 or
202-489-5108 by E-mail: cair@cair-net.org or Ms. Hodan Hassan by Phone:
202-488-8787 or 703-861-7294 or by E-mail: hhassan@cair-net.org or
visit the Web site: http://www.cair-net.org
Securities Fraud
ADAPTEC INC.: Appeals Court Upholds Dismissal of Securities Fraud Suit
----------------------------------------------------------------------
The United States Ninth Circuit Court of Appeals upheld a lower court's
decision to dismiss with prejudice the securities class action against
Adaptec, Inc. and certain of its current and former officers and
directors.
The suit was commenced in 1998, alleging that the defendants made false
and misleading statements at various times during the period between
April 1997 and January 1998 in violation of federal securities laws.
The defendants moved for the suit's dismissal, which was granted by the
court in September 2001. The plaintiffs then appealed that decision to
the Ninth Circuit Court of Appeals in October 2001, and in March 2002,
the court dismissed the appeal.
BIONOVA HOLDING: Plaintiffs Appeal Dismissal of Securities Fraud Suit
---------------------------------------------------------------------
The United States Ninth Circuit Court of Appeals heard arguments on
plaintiffs' appeal of a lower court's dismissal of a securities class
action against Bionova Holding Corporation, relating to the merger of
its subsidiary with Dynap Plant Technology Corporation.
The first suit was commenced in January 1997 in the United States
District Court for the Northern District of California. Another
substantially identical suit was commenced in January 1999 in the same
court. The two suits were later consolidated.
The consolidated suit alleges that, prior to the merger of DNAP with
the Company's subsidiary on September 26, 1996, the plaintiffs owned
shares of DNAP's $2.25 Convertible, Exchangeable Preferred Stock. In
connection with the merger, all of the shares of common stock and
preferred stock of DNAP were converted into the number of shares of
common stock of the Company specified in the merger agreement.
The plaintiffs allege that they were denied certain rights they
allegedly had under the terms of the preferred stock and that certain
Individuals, each of whom was a director of DNAP prior to the merger
and in some cases later served as a director of the Company, breached
fiduciary duties of loyalty, candor and care allegedly owed to the
Company and its stockholders.
The plaintiffs claim to have been damaged by the alleged actions of the
defendants and therefore the plaintiffs seek unspecified actual and
punitive damages as well as reimbursement of their litigation costs
and expenses.
On August 27, 1997, the Court granted motions to dismiss all of the
claims pending against all of the defendants, except the claims of
breach of the fiduciary duty of loyalty against the individual
defendants. On January 14, 1999, the Court reinstated the plaintiffs'
claims that the preferred stockholders were denied their contractual
right to vote on the merger, and then on March 9, 2000, the Court
granted summary judgment in favor of the defendants on the voting
rights claims.
On December 21, 2000, the Court granted summary judgment in favor of
the defendants on all remaining claims. The plaintiffs then appealed
this judgment to the Court of Appeals for the Ninth Circuit, which
heard arguments on the matter on February 12, 2002.
The Company and DNAP deny any wrongdoing or liability in this matter
and intend to vigorously contest this lawsuit.
CRAYFISH CO.: Plaintiffs Await Lead Counsel Decision in S.D. NY
----------------------------------------------------------------
Crayfish Co., Ltd intends to vigorously oppose the consolidated
securities class action pending against them in the United States
District Court for the Southern District of New York.
The suit arose from eleven similar class actions commenced in September
2000. The lawsuits includes allegations that during the course of the
Company's March 8, 2000 public offering of American Depositary Shares,
the Company failed to disclose material facts about the decline in
business of its principal shareholder and former business partner,
Hikari Tsushin. The suits made similar allegations against the
underwriters for the offering and certain of the Company's former
officers and directors and Hikari Tsushin.
Certain plaintiffs then moved to be appointed as lead plaintiffs and to
consolidate all eleven actions. In September 2001, the Court entered
an order consolidating all eleven actions and appointed lead counsel
for the plaintiffs. Certain of the plaintiffs have moved for
reconsideration of the Court's decision and for the appointment of a
different lead counsel. That motion is under consideration by the
Court. Plaintiffs have forty-five days after the determination of this
motion to file a consolidated amended complaint.
The Company is not required to respond to the plaintiffs' original
complaint and will respond to the consolidated amended complaint after
it is served. The Company however warns that the conclusion of the
litigation in a manner adverse to the Company could have a material
adverse effect on its business and financial condition.
DOV PHARMACEUTICAL: Fruchter & Twersky Commences Securities Suit in NY
-----------------------------------------------------------------------
Fruchter & Twersky, LLP initiated a securities class action against Dov
Pharmaceutical, Inc. (Nasdaq:DOVP) in the United States District Court
for the Southern District of New York, on behalf of all persons who
purchased the Company's common stock in or traceable to its April 25,
2002 initial public offering.
The action charges the Company and certain of its officers and
directors, and the lead underwriters of its IPO, CIBC World Markets and
Lehman Brothers, with violations of Sections 11 and 12 of the
Securities Act of 1933.
The Company issued five million shares in its IPO on April 25, 2002 at
$13 a share, but failed to timely inform the class of a revision of its
1999 financial results to properly include a Joint Venture in Bermuda
with Elan Corporation. The class was not promptly made aware of the
restatement, and as a result, suffered losses on the first day of
trading or thereafter, when the shares of the Company fell from $13 to
$8.70 per share.
For more details, contact Jack G. Fruchter by Mail: One Pennsylvania
Plaza, 19th Floor, New York, New York 10119 by Phone: 212-279-5050,
800-440-8986 by Fax: 212-279-3655 or by E-mail:
JFruchter@FruchterTwersky.com
DYNEGY INC.: Wolf Popper Commences Securities Fraud Suit in S.D. TX
-------------------------------------------------------------------
Wolf Popper LLP initiated a securities class action in the United
States District Court for the Southern District of Texas, asserting
federal securities laws violations against Dynegy, Inc. (NYSE:DYN) and
its senior executives:
(1) Stephen Bergstrom,
(2) Charles L. Watson,
(3) Robert Doty, and
(4) Michael R. Mott
The suit, filed on behalf of all persons who purchased the Company's
common stock on the open market from April 17, 2001 through April 25,
2002, inclusive, alleges that defendants manipulated the market price
of the Company's common stock by artificially inflating its reported
cash flow from operations by $300 million through a scheme entitled
"Project Alpha."
On April 25, 2002, the Company announced that the Securities and
Exchange Commission was conducting an inquiry into its accounting
practices in connection with Project Alpha, and that it would amend its
2001 financial statements to correct the improper recognition of $300
million in cash flow from operations.
During the class period, and as a result of defendants'
misrepresentations, shares of the Company's common stock traded as high
as $57.95 per share, in May of 2001. On April 25, 2002, after the
Company announced the SEC probe and the revision of its financial
statements, its common stock fell from its April 24, 2002 closing price
of $27.30 per share to $19.21 per share on April 25, 2002, and then
fell to a 52 week low of $14.90 per share on April 26, 2002.
For more details, contact Robert C. Finkel by Mail: 845 Third Avenue,
New York, NY 10022-6689 by Phone: 212-451-9620 or 877-370-7703 by Fax:
212-486-2093 or 877-370-7704 by E-mail: irrep@wolfpopper.com or visit
the firm's Web site: http://www.wolfpopper.com
EAGLE BUILDING: Cohen Milstein Commences Securities Suit in S.D. FL
-------------------------------------------------------------------
Cohen, Milstein, Hausfeld & Toll, PLLC 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 Eagle Building
Technologies Inc. (OTC:EGBT,PK), between the period of April 18, 2001
through February 14, 2002.
The complaint charges the Company and Anthony M. D'Amato with
violations of the federal securities laws. The suit 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 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 details, contact Steven J. Toll or Lisa Polk by Mail: 1100 New
York Avenue, NW West Tower, Suite 500 Washington, DC 20005 by Phone:
888-240-0775 or 202-408-4600 by E-mail: stoll@cmht.com or
lpolk@cmht.com
ENRON CORPORATION: University Regents Hire Former Judge As Consultant
---------------------------------------------------------------------
The University of California Regents, lead plaintiff in the
shareholders' class action against Enron Corporation and other
defendants, have turned to a former San Diego federal judge for advice,
The San Diego Union-Tribune reports. Milberg Weiss Bershad Hynes &
Lerach will remain as lead counsel representing the University of
California system, which lost $145 million in Enron stock investments.
Lawrence Irving, who presided over some of San Diego's most prominent
cases, has been hired as a consultant by the Regents. Judge Irving,
67, mediates mostly major commercial disputes. He helped negotiate an
$800 million settlement between environmental officials and Aventis
CropSciences USA Inc., aimed at cleaning up one of the nation's most
toxic Superfund sites. Judge Irving has mediated cases involving both
Milberg Weiss and William Lerach, the attorney who heads the firm's
shareholder litigation team.
While on the bench, Judge Irving presided over class actions that Mr.
Lerach had filed against Nucorp in 1982, alleging that the company had
falsified its financial results. UC spokesman Trey Davis described the
Regents' decision to seek outside advice from Judge Irving as typical,
and said it was "no reflection on the quality of the work of the lead
counsel."
As a federal judge for eight years, Judge Irving presided over a
dispute arising from automaker John DeLorean's bankruptcy proceeding
and civil litigation stemming from the J. David & Co. Ponzi scheme,
among other things.
In 1990, Judge Irving resigned from the bench, citing his deep
disappointment with sentencing guidelines enacted by Congress in 1987.
The guidelines, which have been criticized as too rigid, eliminated
parole in the federal system and determined prison time based on
calculations of the crime charged and a defendant's criminal history.
San Diego lawyer Chuck Dick said it is not unusual in big cases for
clients to hire consultants. "They may be hired to assess economic
aspects, they may be hired to give another legal perspective or they
may be hired to work on settlements. Many clients don't want to have
their trial lawyer being the same one to conduct settlement talks."
The grand jury investigation in Los Angeles of Milberg Weiss'
involvement into the solicitation and fabrication of investors for
class-action securities suits did not dissuade Texas Judge Melinda
Harmon from selecting Milberg Weiss' client, the UC Regents as lead
plaintiff in the shareholder class-action lawsuits.
JDS UNIPHASE: Keller Rohrback Lodges Securities Fraud Suit in N.D. CA
---------------------------------------------------------------------
Keller Rohrback LLP initiated a securities class action in the United
States District Court for the Northern District of California on behalf
of purchasers of JDS Uniphase Corporation (NASDAQ: JDSU) securities
between July 27, 1999 and July 26, 2001. Shareholders allege that the
Company and certain of its officers and directors issued a series of
false and misleading statements concerning the Company's business and
financial condition during the class period.
Specifically, it is alleged 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 25.2 million shares of their own stock for proceeds of $2.1
billion.
Then, on July 26, 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, more than 94% below the
class period high of $146.32.
For more details, contact Jen Veitengruber, Lynn Sarko, Juli Farris and
Elizabeth Leland by Phone: 800-776-6044 by E-mail:
investor@kellerrohrback.com or visit the firm's Web site:
http://www.SeattleClassAction.com.
MCLEODUSA CORPORATION: Labels "Without Merit" ERISA Suit in N.D. Iowa
---------------------------------------------------------------------
McLeodUSA Corporation intends to vigorously defend against a class
action filed in the United States District Court for the Northern
District of Iowa (Cedar Rapids Division), pursuant to the Employee
Retirement Income Security Act of 1974, as amended, on behalf of
participants in the the Company's Incorporated 401(k) Profit Sharing
Plan against certain present and former members of our Board of
Directors.
The suit alleges breach of fiduciary duty, mismanagement of plan assets
and misrepresentation, during the alleged class period from January 8,
2001 to December 3, 2001. The suit also names as defendants "John
Does," as yet unidentified members of our Employee Benefits Committee,
and "Richard Roes," as yet unidentified additional members of our Board
of Directors.
The Company labeled the suit "without merit." However, as this case is
in an early stage, it is impossible to evaluate the likelihood of an
unfavorable outcome or to estimate the amount or range of potential
loss, if any, to the Company.
MERRILL LYNCH: Holzer & Holzer Launches Securities Fraud Suit in NY
-------------------------------------------------------------------
Holzer & Holzer initiated a securities class action in the United
States District Court for the Southern District of New York on behalf
of purchasers of Internet Capital Group (Nasdaq:ICGE) common stock
during the period between August 30, 1999 and November 8, 2000,
inclusive, against Merrill Lynch & Co. Inc. and its former star
Internet analyst, Henry Blodget, for violations of sections 10(b) and
20(a) of the Securities Exchange Act of 1934.
The suit alleges that defendants violated sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated
thereunder, by the issuance of analyst reports regarding Internet
Capital which recommended the purchase of Internet Capital common stock
and which set price targets for Internet Capital common stock without
any reasonable factual basis.
Furthermore, the suit alleges that when issuing their Internet Capital
reports, defendants failed to disclose significant, material conflicts
of interest which they had, in light of their use of Mr. Blodget's
reputation and his Internet Capital analyst reports, to obtain
investment banking business for Merrill Lynch.
The suit further alleges that in issuing their Internet Capital
reports, in which they were recommending the purchase of Internet
Capital stock, defendants failed to disclose material, non-public
adverse information which they possessed about Internet Capital as well
as their true opinion about Internet Capital.
For more details, contact Michael I. Fistel by Phone: 888-508-6832 or
404-847-0085 if in Atlanta or by E-mail: michaelfisteljr@msn.com
MERRILL LYNCH: Cohen Milstein Commences Securities Suit in S.D. NY
------------------------------------------------------------------
Cohen, Milstein, Hausfeld & Toll, PLLC initiated a securities class
action in the United States District Court for the Southern District of
New York on behalf of purchasers of the common stock of Internet
Capital Group Inc. (Nasdaq:ICGE) between the period of August 30, 1999
through November 8, 2000 against Merrill Lynch & Co. Inc. and its
Internet analyst Henry Blodget.
The suit alleges that to maintain and enhance Merrill Lynch's
investment banking relationships with ICGE, defendants issued analyst
reports with positive ratings on ICGE which were materially misleading
as they are inconsistent with their own contemporaneous, private
adverse assessments of ICGE.
For example, defendants were repeatedly issuing a short-term
accumulate, long-term buy rating on ICGE despite their internal e-mails
that there was no hopeful news to relate and that they saw nothing that
will turn this around near-term.
For more details, contact Steven J. Toll or Katrina Jurgill by Phone:
888-240-0775 or 202-408-4600 by E-mail: stoll@cmht.com or
kjurgill@cmht.com or visit the firm's Web site: http://www.cmht.com
MERRILL LYNCH: Cohen Milstein Commences Securities Suit in S.D. NY
------------------------------------------------------------------
Cohen, Milstein, Hausfeld & Toll, PLLC filed a securities class action
in the United States District Court for the Southern District of New
York on behalf of purchasers of the common stock of Aether Systems
(Nasdaq:AETH) between the period of November 15, 1999 through February
20, 2002 against Merrill Lynch & Co. Inc. and its Internet analysts
Henry Blodget and Virginia Syer Genereux.
The suit alleges that to maintain and enhance Merrill Lynch's
investment banking relationships with Aether, defendants issued analyst
reports with positive ratings on Aether which were materially
misleading as they were inconsistent with their own contemporaneous,
private adverse assessments of Aether.
For example, defendants were repeatedly issuing a short-term
accumulate, long-term buy rating on Aether despite their internal e-
mails that Aether stock had horrible fundamentals.
For more details, contact Steven J. Toll or Diana Steele by Phone:
888-240-0775 or 202-408-4600 by E-mail: stoll@cmht.com or
dsteele@cmht.com or visit the firm's Web site: http://www.cmht.com
MERRILL LYNCH: Pomerantz Haudek Commences Securities Suit in S.D. NY
--------------------------------------------------------------------
Pomerantz Haudek Block Grossman & Gross LLP initiated a securities
class action charging Merrill Lynch & Co., Inc. (NYSE:MER) and its
former Internet research analyst Henry M. Blodget with issuing false
and misleading analyst reports about Internet Capital Group, Inc.
(Nasdaq:ICGE) in violation of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934.
The suit was filed on behalf of investors who purchased the common
stock of Internet Capital during the period between August 30, 1999 and
November 8, 2000, inclusive in the United States District Court for the
Southern District of New York.
It is alleged that during the class period, defendants' initiation of
coverage and its rating and reports on Internet Capital were not based
on independent, objective analyses but instead were biased and tilted
in the Company's favor to enable Merrill Lynch to maintain and enhance
its lucrative investment banking business relationship with this
important client.
The suit charges that defendants' positive public statements about
Internet Capital were inconsistent with their own contemporaneous,
private negative assessments. For example, while repeatedly
reiterating an Accumulate/Buy (2-1) rating, defendants internally
labeled Internet Capital stock "a disaster."
Furthermore, defendants concealed from the public that although Merrill
Lynch technically had five ratings, it had a policy and practice of
issuing only its top three ratings. During the relevant time herein,
defendant never issued a "reduce" or "sell" rating on any Internet
company. Indeed, during the class period, even as market conditions
changed, defendants repeatedly reissued an Accumulate/Buy rating on
Internet Capital, thus reassuring investors about their continued
confidence in the Company.
As a result of defendants' false and misleading statements, the market
price of Internet Capital common stock was artificially inflated during
the class period.
On April 8, 2002, New York State Attorney General Eliot Spitzer
announced that a ten-month investigation had revealed that Merrill
Lynch's "supposedly independent and objective investment advice was
tainted and biased by the desire to aid Merrill Lynch's investment
banking business."
Since then the Attorney General has reportedly reached an interim
settlement with Merrill Lynch requiring it to make more meaningful
disclosures about its current, past, and future investment banking
relationships with companies on which it issues research reports, but
larger issues relating to possible payment of restitution and even
criminal charges are still unresolved. Merrill Lynch's ratings on
Internet Capital were among those challenged by the Attorney General.
The Securities and Exchange Commission and other states have now
announced their own investigations against Merrill Lynch.
For more details, contact Andrew G. Tolan by Phone: 888-476-6529,
888-4-POMLAW by E-mail: agtolan@pomlaw.com or visit the firm's Web
site: http://www.pomlaw.com
MERRILL LYNCH: Wolf Haldenstein Commences Securities Suit in S.D. NY
--------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class
action in the United States District Court for the Southern District of
New York. The suit was filed on behalf of purchasers of Excite@Home
Corporation common stock between May 5, 1999 and April 8, 2002,
inclusive, against Merrill Lynch & Co. Inc. and its former star
Internet analyst, Henry Blodget, for violations of Sections 10(b) and
20(a) of the Securities Exchange Act of 1934.
The suit alleges that defendants violated sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated
thereunder, by the issuance of analyst reports regarding Excite@Home
which recommended the purchase of Excite@Home common stock and which
set price targets for Excite@Home common stock without any reasonable
factual basis.
Furthermore, when issuing their Excite@Home reports, defendants failed
to disclose significant, material conflicts of interest in their use of
Mr. Blodget's reputation and his Excite@Home analyst reports to obtain
investment banking business for Merrill Lynch.
Furthermore, in issuing their Excite@Home reports, in which they were
recommending the purchase of Excite@Home stock, defendants failed to
disclose material, non-public, adverse information which they possessed
about Excite@Home as well as their true opinion about the valuation of
Excite@Home.
For more details, contact Fred T. Isquith, Robert Abrams, 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 Excite@Home.
MERRILL LYNCH: Schiffrin & Barroway Lodges Securities Suit in S.D. NY
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Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Southern District of New York on
behalf of all purchasers of the common stock of At Home Corporation
(OTC Bulletin Board: ATHMQ) from May 5, 1999 through April 8, 2002,
inclusive.
The complaint charges Merrill Lynch & Co., Inc. and analyst Henry
Blodget with violating sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 by the issuance of analyst reports regarding At
Home which recommended the purchase of At Home common stock and which
set price targets for At Home common stock without any reasonable
factual basis.
Specifically, the complaint alleges that, when issuing their At Home
reports, defendants failed to disclose significant, material conflicts
of interest in their use of Mr. Blodget's reputation and his At Home
analyst reports to obtain investment banking business for Merrill
Lynch.
Furthermore, in issuing their At Home reports, in which they were
recommending the purchase of At Home stock, defendants failed to
disclose material, non-public, adverse information which they possessed
about At Home as well as their true opinion about the valuation of At
Home.
For more details, contact Marc A. Topaz or Stuart L. Berman by Mail:
Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone:
888-299-7706 (toll free) or 610-667-7706 by E-mail: info@sbclasslaw.com
or visit the firm's Web site: http://www.sbclasslaw.com
NTL INC.: Wolf Haldenstein Commences Securities Fraud Suit in S.D. NY
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Wolf Haldenstein Adler Freeman & Herz LLP initiated an expanded
securities class action in the United States District Court for the
Southern District of New York on behalf of purchasers of NTL, Inc.
(NYSE: NLI); (NASDAQ: NTLD) securities between May 6, 1999 and April
15, 2002, inclusive, against the Company and certain of its officers
and directors.
The suit alleges that defendants violated the federal securities laws
by issuing 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 during
the Class Period, defendants issued to the investing public false and
misleading financial statements concerning the Company's financial
condition and ability to service its debt load. Moreover, the Company
omitted to state material information necessary to be issued in order
to make prior statements not misleading.
On April 16, 2002, before the market opened, NTL shocked the investing
community by announcing that, contrary to previous denials of a
liquidity crisis and assertions of financial vigor, the Company would
in fact file a Chapter 11 case and convert $10.6 billion of debt into
equity. During the Class Period, the price of NTL stock plummeted from
a $109 Class Period high to just pennies a share.
If you purchased NTL securities during the Class Period, and either
lost money on the transaction or still hold the securities, you may, no
later than June 18, 2002, request that the Court appoint you as lead
plaintiff. A lead plaintiff is a representative party that acts on
behalf of other class members in directing the litigation. In order to
be appointed lead plaintiff, the Court must determine that the class
member's claim is typical of the claims of other class members, and
that the class member will adequately represent the class. Under
certain circumstances, one or more class members may together serve as
"lead plaintiffs." Your ability to share in any recovery is not,
however, affected by the decision whether or not to serve as a lead
plaintiff. You may retain Wolf Haldenstein, or other counsel of your
choice, to serve as your counsel in this action.
Wolf Haldenstein has extensive experience in the prosecution of
securities class actions and derivative litigation in state and federal
trial and appellate courts across the country. The firm has
approximately 60 attorneys in various practice areas; and offices in
Chicago, New Jersey, New York City, San Diego, and West Palm Beach. The
reputation and expertise of this firm in shareholder and other class
litigation has been repeatedly recognized by the courts, which have
appointed it to major positions in complex securities multi-district
and consolidated litigation.
If you wish to discuss this action or have any questions, please
contact Wolf Haldenstein Adler Freeman & Herz LLP at 270 Madison
Avenue, New York, New York 10016, by telephone at 800-575-0735 (Fred
Taylor Isquith, Esq., Gustavo Bruckner, Esq., Michael Miske, George
Peters, or Derek Behnke), via e-mail at classmember@whafh.com or visit
our website at http://www.whafh.com.Your e-mail should refer to NTL.
ORACLE CORPORATION: Plaintiffs File Amended Securities Suit in N.D. CA
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Plaintiffs in the consolidated securities class action against Oracle
Corporation filed an amended suit after the United States District
Court for the Northern District of California dismissed the original
suit.
The suit arose from several class actions commenced against the Company
and its Chief Executive Officer in March 2001. The suits were later
consolidated and amended, adding the Chief Financial Officer and an
Executive Vice President as defendants.
The consolidated suit, brought on behalf of purchasers of the stock
of the Company during the period December 15, 2000 through March 1,
2001, alleged that the defendants made false and misleading statements
about the Company's actual and expected financial performance and the
performance of certain of its applications products, while certain
individual defendants were selling Company stock, in violation of
federal securities laws. The plaintiffs further alleged that certain
individual defendants sold Company stock while in possession of
material non-public information.
On March 22, 2002, the court granted the Company's motion to dismiss
the consolidated action without prejudice and the plaintiffs filed an
amended complaint on April 10, 2002. The Company believes that it has
meritorious defenses against this action and will continue to
vigorously defend it.
ORACLE CORPORATION: Shareholder Derivative Suits Spring up in CA, DE
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Oracle Corporation faces several shareholder derivative suits in
California and Delaware courts filed against its current and former
directors, allegedly on behalf of the Company.
Some of the suits were filed in the Superior Court of the State of
California, County of San Mateo and County of Santa Clara, while three
similar lawsuits were filed in the Court of Chancery in the State of
Delaware in and for New Castle County. In March 2002, a similar
derivative suit was filed in the United States District Court for the
Northern District of California.
The suits allege that the defendants breached their fiduciary duties to
the Company by making, or causing to be made, alleged misstatements
about the Company's revenue, growth, and the performance of certain of
its applications products while certain officers and directors sold
Company stock and by allowing the Company to be sued in the shareholder
class actions.
On February 8, 2002, the Company answered the Delaware complaint. On
March 14, 2002, the Company moved to dismiss portions of the San Mateo
derivative suit. A hearing on that motion and related motions
currently is scheduled for April 19, 2002.
The Company's Board of Directors established a Special Litigation
Committee to investigate the allegations in the Delaware derivative
suit and in the California state and federal derivative suits. The
Company expects to respond to the federal derivative suit shortly.
PHYCOR INC.: $3.4M Consolidated Suit Settlement Expected
--------------------------------------------------------
Phycor, Inc. agreed to settle for $3.4 million the consolidated
securities class action pending in the United States District Court for
the Middle District of Tennessee against the Company and certain of its
current and former officers and directors:
(1) Joseph C. Hutts,
(2) Derril W. Reeves,
(3) Thompson S. Dent,
(4) Richard D. Wright and
(5) John K. Crawford
The consolidated suit began as 10 securities fraud suits filed in state
and federal courts in Tennessee between September 8, 1998 and June 24,
1999. The factual allegations of the complaints in all 10 actions are
substantially identical and assert that during various periods between
April 22, 1997 and September 22, 1998, the defendants issued false and
misleading statements which materially misrepresented the Company's
earnings, financial condition and its clinic operations.
The defendants also allegedly misrepresented and failed to disclose
various other matters concerning our operations in order to conceal the
alleged failure of the Company's business model. The plaintiffs
further assert that the alleged misrepresentations caused the Company's
securities to trade at inflated levels while the individual defendants
sold shares of our stock at such levels.
The federal court actions were consolidated in the United States
District Court for the Middle District of Tennessee, while the state
court actions were consolidated in Davidson County State Court in
Tennessee. The defendants moved to dismiss the federal suit, but the
Court denied the motions. The consolidated state action was dismissed
for failure to state a claim, but the plaintiffs, however, were granted
leave to file an amended complaint.
The plaintiffs then filed an amended state complaint, asserting, in
addition to the original Tennessee Securities Act claims, that the
defendants had also violated Section 11 and 12 of the Securities Act of
1933 for alleged misleading statements in a prospectus released in
connection with the CareWise acquisition. The amended complaint also
added KPMG LLP (KPMG), the Company's independent public auditors, as a
defendant. KPMG removed this case to federal court and its motion
to dismiss was denied.
On October 20, 2000, this case was consolidated with the original
federal consolidated action and a new consolidated complaint was filed.
In May 2001, the Court granted plaintiffs' motion for class
certification.
The defendants then reached a proposed settlement with the plaintiff
class, which will resolve all of the claims in the consolidated
actions. On March 12, 2002, the parties filed with the district court
a memorandum of understanding. It outlines the proposed settlement, the
terms of which include the payment of $3.4 million derived from
insurance proceeds in exchange for complete releases of all defendants
and dismissal of the consolidated cases with prejudice. A preliminary
hearing on the appropriateness of the settlement was scheduled in the
District Court for April 19, 2002.
RAILWORKS CORPORATION: MD Court Stays Suit Due To Bankruptcy Filing
-------------------------------------------------------------------
The United States District Court for the District of Maryland
(Baltimore Division) stayed the securities class action pending against
Railworks Corporation, on behalf of all persons or entities who
purchased the Company's securities during the period between February
10, 1999 and August 20, 2001, inclusive.
The suit charges the Company and the former Chairman of the Board with
securities fraud under the Securities Act of 1934, as amended. The
plaintiffs are seeking an undetermined amount of damages.
The Company filed for bankruptcy on September 20, 2001. As a result,
the Court stayed this action as to all defendants and administratively
closed the case.
The Company believes the suit is without merit and intends
to defend itself vigorously if the action is reopened.
REGENERATION TECHNOLOGIES: Securities Suits' Consolidation Expected
-------------------------------------------------------------------
Regeneration Technologies, Inc. faces multiple securities class actions
pending in the United States District Court, Northern District of
Florida Gainesville Division, against the Company and certain of its
current and former officers and directors.
The suits, filed on behalf of all persons who purchased the Company's
common stock between July 25, 2001 and January 31, 2002, alleges that
the Company's inventory was overvalued and, as a result, its public
statements during the class period about its net income and earnings
per share were false and misleading. The suits assert that the
defendants' conduct violated Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, and SEC Rule 10b-5 thereunder.
The Company expects that the suits will be consolidated. The Company
intends to defend these actions vigorously but is not able to predict
their outcome.
WORLDCOM INC.: Kirby McInerney Commences Securities Suit in S.D. NY
-------------------------------------------------------------------
Kirby McInerney & Squire, LLP initiated a securities class action on
behalf of purchasers of shares of WorldCom, Inc. (Nasdaq:WCOM) between
January 3, 2000, and April 29, 2002, inclusive, in the United States
District Court for the Southern District of New York. The suit asserts
claims under Sections 10(b) and 20(a) of the Securities Exchange Act of
1934 and Rule 10b-5 promulgated by the SEC thereunder against the
Company and:
(1) Bernard J. Ebbers, its President and Chief Executive Officer,
(2) James C. Allen,
(3) Max E. Bobbitt,
(4) Francesco Galesi, and
(5) Arthur Andersen, LLP
The defendants allegedly violated the federal securities laws by making
misrepresentations and/or omissions in connection with false and/or
misleading financial statements. Particularly, the defendants
misrepresented the Company's earnings in its public filings with the
SEC and elsewhere as a result of failing to record write-downs of
goodwill and other intangible assets associated with its acquisition of
numerous telecommunications companies at premium prices.
The suit further alleges that the defendants affirmatively misstated
the value of goodwill and other intangible assets associated with the
Company's acquisition of numerous telecommunications companies at
premium prices and carrying such assets on the Company's balance sheet
at the cost of acquiring them long after it had become apparent that
WorldCom had overpaid to acquire such assets.
Additionally, the defendants failed to disclose that the Company's
goodwill and other intangible assets associated with its acquisitions
of numerous telecommunications companies at premium prices were being
carried at unrealistically and misleadingly high values on the
Company's balance sheet.
For more information, contact Ira M. Press, Melissa Fleming by Mail:
830 Third Avenue, 10th Floor, New York, New York 10022 by Phone:
212-317-2300 or 888-529-4787 or visit the firm's Website:
http://www.kmslaw.com
*********
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
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Copyright 2002. All rights reserved. ISSN 1525-2272.
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