/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/021014.mbx C L A S S A C T I O N R E P O R T E R Monday, October 14, 2002, Vol. 4, No. 203 Headlines ALLOY INC.: Asks NY Court to Dismiss Consolidated Securities Fraud Suit BIKEPRO INC.: Voluntarily Recalls 50,000 Baby Walkers For Injury Hazard BOTTOMLINE TECHNOLOGIES: Asks NY Court To Dismiss Securities Lawsuit BRIO CORPORATION: Recalls Plan Toys Caterpillars For Choking Hazard CALIFORNIA: Ventura County Settles Inmates Suit Over Rights Violations CATHOLIC CHURCH: Manchester Diocese To Settle Sexual Abuse Claims CHICAGO CUBS: Fans Commences Consumer Fraud Suit Over Ticket Purchases DOE RUN: Faces Five Suits Alleging Damages From MO Mining Facilities DOLLAR TREE: Recalls 280,000 Animal Toy Sponges For Choking Hazard DOLLAR TREE: Recalls 310,000 Polyester Pool Animals For Choking Hazard EDISON SCHOOLS: Plaintiffs Decide To File Consolidated Suit in S.D. NY EDISON SCHOOLS: Shareholder Derivative Suits To Be Consolidated in NY EMULEX CORPORATION: Trial in Securities Suit Set July 2003 in C.D. CA EXTREME NETWORKS: Asks NY Court To Dismiss Consolidated Securities Suit GLAXO SMITHKLINE: Court Allows Ads Saying Paxil is "Non Habit-Forming" HMO LITIGATION: Industry Fights Motion Seeking Claims Reconsideration INTERNATIONAL PAPER: Faces Suit For Fixing Southeastern Timber Prices OHIO: Two Women Sue Coroner For Keeping Body Parts After Autopsies OPTICAL CABLE: Commences Implementation of Securities Suit Settlement ORIENTAL INTERNATIONAL: Recalls 3,500 Baby Walkers For Injury Hazard PARTY CITY: Securities Suit Remanded To Federal Court For Settlement PARTY CITY: Employees Commence Overtime Wage Suit in CA State Court PHILIP MORRIS COS.: Merrill Lynch Downgrades Biggest Cigarette Maker PINNACLE SYSTEMS: Asks Court To Dismiss Amended Securities Fraud Suit POULTRY INDUSTRY: Chicken Waste Removal Likely Litigation Alternative SCHERING-PLOUGH: Faces Suit After CEO Makes Negative Earnings Comments SOUTH CAROLINA: Patients File Suit V. Pharmacy Over Tainted Medicines UNITED STATES: Settles Lawsuit Over Federal Plaza Protests With ACLU UNOCAL CORP.: Engineer's Suit Sent To Appeals Court For Reconsideration WAL-MART STORES: Former Employees File Suits, Alleging Wage Abuses *Judges Called Upon To Ensure Fairness To All Parties in Class Actions New Securities Fraud Cases CONSECO INC.: Schiffrin & Barroway Lodges Securities Suit in S.D. IN CONSECO INC.: Cauley Geller Commences Securities Fraud Suit in S.D. IN DPL INC.: Wolf Popper Commences Securities Fraud Suit in S.D. Ohio ESS TECHNOLOGY: Schiffrin & Barroway Lodges Securities Suit in N.D. CA FLEMING COMPANIES: Schiffrin & Barroway Lodges Securities Suit in TX MERRILL LYNCH: Finkelstein Thompson Lodges Securities Suit in S.D. NY QUADRAMED CORPORATION: Charles Piven Commences Securities Suit in CA SCHERING-PLOUGH: Wechsler Harwood Commences Securities Suit in NJ Court WALT DISNEY: Johnson & Perkinson Commences Securities Suit in C.D. CA ********* ALLOY INC.: Asks NY Court to Dismiss Consolidated Securities Fraud Suit ----------------------------------------------------------------------- Alloy, Inc. asked the United States District Court for the Southern District of New York to dismiss the consolidated securities class action pending against it and: (1) James K. Johnson, (2) Matthew C. Diamond, (3) BancBoston Robertson Stephens, (4) Volpe Brown Whelan & Company, (5) Dain Rauscher Wessels, and (6) Ladenburg Thalmann & Co., Inc. The complaint purportedly is filed on behalf of persons who purchased the Company's common stock between May 14, 1999 and December 6, 2000, and alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically, the complaint alleges that, in connection with the Company's initial public offering, the defendants failed to disclose "excessive commissions" purportedly solicited by and paid to the underwriter defendants in exchange for allocating shares of the Company's common stock to preferred customers. The suit further alleged agreements among the underwriter defendants and preferred customers tying the allocation of the Company's IPO shares to agreements to make additional aftermarket purchases at pre- determined prices. Plaintiffs claim that the failure to disclose these alleged arrangements made the Company's prospectus incorporated in its registration statement for our IPO materially false and misleading. The Company believes that the allegations are without merit and intends to defend vigorously against the plaintiffs' claims. Motions to dismiss the amended complaint have been filed by the underwriter defendants and a liaison committee consisting of counsel for various issuers litigating similar claims. BIKEPRO INC.: Voluntarily Recalls 50,000 Baby Walkers For Injury Hazard ----------------------------------------------------------------------- Bikepro, Inc. is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 50,000 baby walkers. The baby walkers can fit through a standard doorway and are not designed to stop at the edge of a step. Babies using these baby walkers could be seriously injured or killed if they fall down stairs. The Company has not received any reports of injuries involving these walkers. This recall is being conducted to prevent the possibility of injury. The recalled walkers are intended for babies age 6 months or older. The walkers are blue, green, pink and yellow. They have a musical tray, a thick foamed padded seat and some are equipped with stoppers on the side. These model numbers are recalled: (1) 305, (2) 308RK, (3) 309STP, (4) 384, (5) 386, (6) 388, (7) 388STP, (8) 389STP, (9) 392STP, (10) 393STP, (11) 395 and (12) 399STP The model numbers are located on the outside of each box. The baby walkers bear a warning label that states in part: "WARNING: NOTE: NEVER LEAVE CHILD UNATTENDED" or "NEVER LEAVE YOUR BABY ALONE IN THIS BABY WALKER" or "USE ONLY FOR CHILDREN WHO CAN SIT UNASSISTED." The baby walkers may bear a label stating "BEBELOVE." Independent discount stores located in Arizona, California, Colorado, Texas, Michigan, Missouri and New York sold these baby walkers from January 2000 through August 2001 for between $18 and $22. For more details, contact the Company by Phone: 800-261-2559 between 9 am and 5 pm PT Monday through Friday, or visit the firm's Website: http://www.bikepro@yahoo.com. BOTTOMLINE TECHNOLOGIES: Asks NY Court To Dismiss Securities Lawsuit -------------------------------------------------------------------- Bottomline Technologies, Inc. asked the United States District Court for the Southern District of New York to dismiss the consolidated securities class action pending against it and: (1) Daniel M. McGurl, (2) Robert A. Eberle, (3) Fleetboston Robertson Stephens, Inc., (4) Deutsche Banc Alex Brown Inc., (5) CIBC World Markets, and (6) J.P. Morgan Chase & Co., and (7) BancBoston Robertson Stephens The suit asserts claims under Sections 11, 12(2) and 15 of the Securities Act of 1933, as amended, and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended. The complaint asserts, among other things, that the description in the Company's prospectus for its initial public offering was materially false and misleading in describing the compensation to be earned by the underwriters of the Company's offering, and in not describing certain alleged arrangements among underwriters and initial purchasers of the Company's common stock from the underwriters. This case is one of over 300 consolidated proceedings alleging similar claims against underwriters, issuers, and individuals affiliated with the issuers. Counsel for all underwriters and all issuers have separately filed motions to dismiss all of these related actions. The issuer motions address issues common to all or many issuers and individuals affiliated with them. Briefing on these motions is not complete. The Company intends to vigorously defend itself against this complaint. While this proceeding is in its early stages, the Company does not currently believe that the outcome will have a material adverse impact on its financial condition. BRIO CORPORATION: Recalls Plan Toys Caterpillars For Choking Hazard ------------------------------------------------------------------- BRIO Corporation is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling three lot numbers, about 1,000, of the Plan Toys pull-along caterpillars. The antenna on the pull toy can detach, posing a choking hazard to young children. The Company has not received any reports of injuries or incidents involving these toys. This recall is being conducted to prevent the possibility of injury. The recalled pull-along caterpillar is bright red and yellow and was sold under the Plan Toys brand name. The wooden caterpillar is about 7-inches long and is pulled by a nylon string. The caterpillar's antenna are two blue protruding pegs that extend about 1/2-inch from the head. The recalled lot numbers are 0645917, 12142323 and 0724423 and are printed on the inside flap of the packaging. A stamp on the top of the tail end of the caterpillar displays the Plan Toys logo and the words "Made in Thailand." Specialty toy stores, Internet retailers and mail order catalogs sold the caterpillar toys nationwide from January 2002 through September 2002 for about $15. Consumers should return the recalled toys to BRIO Corp., SAFETY RECALL - Caterpillar, N120 W18485 Freidstadt Road, Germantown, Wis. 53022. For more information, contact the Company by Phone: 888-274-6869 between 8:30 am and 5 pm CT Monday through Friday. CALIFORNIA: Ventura County Settles Inmates Suit Over Rights Violations ---------------------------------------------------------------------- Ventura County will pay $255,600 to settle a federal class action filed by jail inmates who charge that the authorities violated their legal rights by keeping them in custody for days without filing criminal charges, the Associated Press Newswires reports. The settlement has been confirmed by lawyers and administrators for the Ventura County Sheriff's Department. Under terms of the agreement, which still must be approved in federal court, 81 former inmates will be paid between $100 and 1,250 for each extra day spent in jail. Inmates who were never charged with a crime will receive more money than those who were charged, convicted and given credit for time served. The most any one inmate will be paid is $7,500, officials said. State law requires that suspects either be arraigned on criminal charges or released within 48 hours of arrest. For years, however, Ventura County law enforcement officers have re-arrested suspects while they were still in custody, thereby giving prosecutors more time to gather evidence to support charges. CATHOLIC CHURCH: Manchester Diocese To Settle Sexual Abuse Claims ----------------------------------------------------------------- The Roman Catholic Diocese of Manchester agreed to settle allegations of sexual abuse filed by 16 people, the church said Thursday, according to an Associated Press report. Charles Douglas, lawyer for the 16 plaintiffs, said they hoped for a settlement. The diocese, which covers New Hampshire, faces suits by more than 100 alleged victims of sexual abuse. It also faces investigation by the attorney general's office, relating to the way complaints were handled. The diocese's bishop John McCormack has also been heavily criticized for the way sexual abuse claims were handled. However, the diocese has denied the charges, saying no active priest in New Hampshire is the subject of credible molestation charges or allegations. Mr. Douglas allegedly represents eight alleged victims of retired priest Rev. Leo Shea. Rev. Shea pleaded guilty in 1994 to sexually assaulting a 14-year old boy. The suit alleges Rev. Shea molested a plaintiff at another priest's funeral around 1970 at St. Anthony's church in Manchester, according to AP. "Shea would chase the altar boys around the church, corner them and attack them," Mr. Douglas charged in the Hillsborough County Superior Court lawsuit. The suit also mentions the Rev. Philip Breton of Assumption Parish in Tilton and the Rev. Hubert Mann of St. Charles Parish in Dover as having committed sexual offenses, but both have died, according to the suit. "At this point, we're willing to do anything we can to help bring resolution for people," the Rev. Edward Arsenault, diocesan chancellor, said in July, AP reports. He has also said the church wanted any settlements to include a "pastoral element" that lets the church try to make spiritual, as well as monetary, amends. "The accusations that have been made are about fractured relationships, and Bishop (John) McCormack is committed to doing whatever we can do to help heal those relationships," he said. CHICAGO CUBS: Fans Commences Consumer Fraud Suit Over Ticket Purchases ---------------------------------------------------------------------- The Chicago Cubs faces a class action filed by thousands of fans who purchased tickets for more than face value from the "alter-ego" subsidiary established by the team to compete with local ticket brokers, according to the Chicago Sun-Times. The suit, filed in Illinois Circuit Court, asserts claims for: (1) consumer fraud, (2) deceptive business practices, and (3) violating the Illinois Ticket Scalping Act The suit asserts that state law expressly forbids the owners and managers of professional sporting or entertainment events from selling tickets above their face value. According to the Chicago Sun-Times story, the Cubs violated this when they started placing tickets for "original distribution sale" through Wrigley Field Premium Ticket Services Inc., a Delaware corporation created last spring. Cubs executive vice president Mark McGuire serves as president of Wrigley Field Premium Ticket Services Inc. Mr. McGuire is also the Cubs' point man in protracted negotiations with City Hall to expand the Wrigley bleachers and add more night games. Thousands of tickets have been sold to others "in excess of the lawful price," the suit states. The suit seeks an injunction barring the Cubs from engaging in the "unlawful" ticket-selling practice, and seeks $100 in damages for every ticket sold through Wrigley Field Premium Ticket Services for more than the face-value price. "People are paying more than what they can lawfully be charged," said Paul M. Bauch, an attorney for the plaintiffs, according to the Chicago Sun-Times. "It also limits the supply of tickets in the market, which tends to drive up prices." Mr. McGuire refused to comment on the merits of the lawsuit, except to say the Cubs were "comfortable with the setup" of the team's ticket- selling subsidiary. He said the surprise legal salvo could be linked to the team's ongoing stalemate with the owners of rooftop clubs overlooking Wrigley Field, the Chicago Sun-Times reports. DOE RUN: Faces Five Suits Alleging Damages From MO Mining Facilities -------------------------------------------------------------------- Doe Run Resources, Inc. faces five lawsuits, four of which are class actions, alleging certain damages from discontinued mine facilities in St. Francois County, Missouri. The first case seeks to have certified a class consisting of property owners in Bonne Terre, Missouri, alleging that property values have been damaged due to the tailings from the discontinued operations. In the second case plaintiffs seek to have certified a class of children who lived or went to school or day care in Bonne Terre, Missouri or whose mothers lived in Bonne Terre during their pregnancies. The third and fourth cases are class actions for property damage and medical monitoring concerning alleged damages caused by chat, tailings, and related operations in six areas in St. Francois County. The fifth case alleges personal injury against two children living in St. Francois County. The Company is unable at this time to estimate the expected outcome of and the final costs of any of these actions. Therefore, there can be no assurance that these cases would not have a material adverse effect, both individually and in the aggregate, on the results of operations, financial condition and liquidity of the Company. The Company has and will continue to vigorously defend itself against all these claims. DOLLAR TREE: Recalls 280,000 Animal Toy Sponges For Choking Hazard ------------------------------------------------------------------ Dollar Tree Stores, Inc. is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 280,000 animal toy sponges. The eyes on the toys can detach, posing a choking hazard to young children. The Company has received one report of an eye coming off. No injuries have been reported. This recall is being conducted to prevent the possibility of injuries. There are three types of sponge animals involved in this recall: whales, turtles and fish. The sponge animals are made of soft terry cloth and have suction cups for attaching to tiled or smooth surfaces. The toys have a sewn-in label that reads in part, "DOLLAR TREE DISTRIBUTION, INC.," "MADE IN CHINA" and "RN# 87254." Dollar Tree, Only One Dollar, Only $1, Dollar Express and Dollar Bills sold the stuffed animals nationwide from May 2001 through September 2002 for $1. For more information, contact the Company by Phone: 800-876-8077 between 9 am and 5 pm ET Monday through Friday or visit the firm's Website: http://www.dollartree.com. DOLLAR TREE: Recalls 310,000 Polyester Pool Animals For Choking Hazard ---------------------------------------------------------------------- Dollar Tree Stores, Inc. is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 310,000 stuffed polyester pool animals. The seams can separate exposing the polyester stuffing and foam beads. The foam beads pose a choking hazard to young children. The Company has received one report of the seam ripping, exposing the polyester stuffing and a plastic bag containing foam beads. No injuries have been reported. There are eight types of stuffed polyester pool animals involved in this recall: crab, duck, frog, octopus, seahorse, shark, turtle and whale. The brightly colored stuffed animals have a sewn-in label that reads in part, "DOLLAR TREE DISTRIBUTION, INC.," "MADE IN CHINA" and "RN# 87254." Dollar Tree, Only One Dollar, Only $1, Dollar Express and Dollar Bills sold the stuffed animals nationwide from April 2002 through August 2002 for $1. For more information, contact the Company by Phone: 800-876-8077 between 9 am and 5 pm ET Monday through Friday or visit the firm's Web site: http://www.dollartree.com. EDISON SCHOOLS: Plaintiffs Decide To File Consolidated Suit in S.D. NY ---------------------------------------------------------------------- Plaintiffs in the securities class actions pending against Edison Schools, Inc. and certain of its officers and directors have moved to file a consolidated suit in the United States District Court for the Southern District of New York. These lawsuits are largely identical and each alleges that the Company and certain of its officers and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. They seek an unspecified amount of compensatory damages, costs and expenses related to bringing the actions, and in a few instances, injunctive relief. The plaintiffs allege that the Company's public disclosures from November 1999 to March 2002 regarding its financial condition were materially false and misleading because the Company allegedly improperly inflated its total revenues by including certain payments, including payments for teacher salaries, that were paid directly to third parties by local school districts and charter school boards that contracted with the Company. Each of the lawsuits references the May 14, 2002, cease-and-desist order issued by the United States Securities and Exchange Commission on consent against the Company. Several of the lawsuits also mention two restatements of the Company's financial statements, one regarding a warrant purchased in 1998 by a philanthropic organization and the other regarding a severance agreement between Edison and one of its senior officers, made by Edison as a result of the May 14, 2002 cease-and- desist order. One lawsuit also contains an allegation that the Company, certain of its officers and directors, and the investment banks that underwrote its November 1999 offering of class A common stock violated Sections 11 and 15 of the Securities Act of 1933 by issuing a prospectus containing untrue statements of material fact or omissions of material fact, regarding the Company's financial condition and its inclusion in its stated revenue of certain payments made directly to third parties by local school districts and charter school boards that contracted with the Company. In July 2002, several plaintiffs filed motions to be appointed lead plaintiff and also moved to consolidate the ten lawsuits in one action. To date, there has been no ruling by the court on these motions. The Company believes that it has strong defenses to the claims raised by these lawsuits. However, if the Company were not to prevail, the amounts involved could be material to it. EDISON SCHOOLS: Shareholder Derivative Suits To Be Consolidated in NY --------------------------------------------------------------------- Three shareholder derivative lawsuits pending against Edison Schools, Inc.'s officers and directors on behalf of the Company are set to be consolidated in the Supreme Court for the State of New York, County of New York. Plaintiffs in these lawsuits contend that the Company's officers and directors committed various common law torts against the Company in connection with the allegedly improper inflation of the Company's total revenues by including certain expenses, including teacher salaries, that were paid directly by local school districts. In particular, the plaintiffs allege that the officers and directors named as defendants violated their fiduciary duties to the Company by: (1) failing to implement and maintain an adequate internal accounting control system; (2) causing the Company to conceal from the public its true financial condition; and (3) using material non-public information to sell shares of the Company's common stock and thereby reap millions of dollars in illegal insider trading gains. The Company has negotiated a stipulation in the first two derivative actions which allows: (i) plaintiffs until November 22, 2002 to file a consolidated amended complaint; and (ii) defendants until January 22, 2003 to file a responsive pleading to plaintiffs' consolidated complaint. The Company is in the process of attempting to negotiate a comparable stipulation in the third derivative action. The Company believes that its officers and directors also have strong defenses to these lawsuits. EMULEX CORPORATION: Trial in Securities Suit Set July 2003 in C.D. CA --------------------------------------------------------------------- Trial in the consolidated securities class action pending against Emulex Corporation and certain of its officers and directors is expected to commence in July 2003 in the United States District Court for the Central District of California. The consolidated suit was filed on behalf of purchasers of the Company's common stock during various periods ranging from January 18, 2001, through February 9, 2001. The complaints allege that the Company and certain of its officers and directors made misrepresentations and omissions in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended. The Company moved to dismiss the suit, which the court denied in March 2002. The defendants moved for reconsideration of that order, but the court again denied the motion in an order dated May 3, 2002. Plaintiffs have commenced discovery. The court has scheduled a trial setting conference on June 6, 2003, with an expectation that the case will be set for trial in July 2003. As a result of these class actions, a number of derivative cases were filed in state courts in California and Delaware, and in federal court in California, alleging that certain officers and directors breached their fiduciary duties to the Company in connection with the events alleged in the federal suits. The derivative cases filed in California state courts have been consolidated in Orange County Superior Court and plaintiffs filed a consolidated and amended complaint on January 31, 2002. On May 10, 2002, the Orange County Superior Court ordered that the consolidated actions be stayed pending resolution of the federal suit. The derivative suit in Delaware was dismissed on August 28, 2001. On March 15, 2002, the United States District Court for the Central District of California ordered that the federal derivative action be stayed pending resolution of the federal class action. The plaintiffs in that action filed a motion for reconsideration of the stay order, which was subsequently denied June 3, 2002. The Company believes that the lawsuits are without legal merit and intends to defend them vigorously. However, the lawsuits are at an early stage and it is not possible to predict whether the Company will incur any material liability in connection with such lawsuits. EXTREME NETWORKS: Asks NY Court To Dismiss Consolidated Securities Suit ----------------------------------------------------------------------- Extreme Networks, Inc. asked the United States District Court for the Southern District of New York to dismiss the consolidated securities class action pending against it on behalf of all persons who purchased the Company's common stock from April 8, 1999 through December 6, 2000. The suit names as defendants the Company, six of its present and former officers and several investment banking firms that served as underwriters of the Company's initial public offering and October 1999 secondary offering. The complaint alleges liability under Sections 11 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, on the grounds that the registration statement for the offerings did not disclose that: (1) the underwriters had agreed to allow certain customers to purchase shares in the offerings in exchange for excess commissions paid to the underwriters; and (2) the underwriters had arranged for certain customers to purchase additional shares in the aftermarket at predetermined prices. The Securities Act of 1933 allegations against the Company and its officers are made as to the secondary offering only. The amended complaint also alleges that false analyst reports were issued. The Company is aware that similar allegations have been made in other lawsuits filed in the Southern District of New York challenging over 300 other initial public offerings and secondary offerings conducted in 1999 and 2000. On July 15, 2002, the Company (and the other issuer defendants) filed a motion to dismiss. The Company cannot give any assurance that it will prevail in the lawsuit. Failure to prevail could have a material adverse effect on the Company's consolidated financial position, results of operations and cash flows in the future. GLAXO SMITHKLINE: Court Allows Ads Saying Paxil is "Non Habit-Forming" ---------------------------------------------------------------------- Federal Judge Mariana Pfaelzer allowed GlaxoSmithKline Plc (GSK) to claim that its anti-depressant Paxil is not addictive in its advertisements, rejecting a request by attorneys for a group of Paxil users that advertisements stating that Paxil is "non-habit forming" be permanently barred, Reuters reports. Several Paxil users filed the suit against the Company in Los Angeles federal court, alleging the Company deliberately downplayed the severity of withdrawal symptoms from the drug. Last month, Judge Pfaelzer had granted a temporary injunction against the ads, but she delayed the start date of the order until after hearings held this week. The Company earlier presented in court statements by the United States Food and Drug Administration, saying it had previously reviewed in- depth Paxil's side effects and concluded that the drug is not habit forming and, as a result, the ads did not mislead. A hearing on a bid to certify the case as a class-action lawsuit has been scheduled for Nov. 18, according to Glaxo. "We are extremely pleased with the ruling," company spokesman Michael Fleming told Reuters, adding that Glaxo has not yet decided whether to resume running adds that say Paxil is non-habit forming. HMO LITIGATION: Industry Fights Motion Seeking Claims Reconsideration --------------------------------------------------------------------- Attorneys for 145 million managed care patients recently have asked a judge to reconsider his rejection of their class action claims against their insurers, the Associated Press Newswires reports. Industry lawyers have responded that the decision rendered by US District Judge Federico Moreno all but killed the patients' lawsuit. The same judge did, however, accept a companion class action brought by more than 600,000 doctors. Patients' attorneys told the judge in their motion for reconsideration that he should have applied, in this decision-making, the rigorous analysis required by the United States Supreme Court. The patients pointed out that, in contrast to the doctors' racketeering case, they the patients are not seeking one trial uniting half of the nation's population against the industry. Instead, they envision six trials against Aetna, Cigna, Foundation, Humana, Prudential and United. Even if the trials are not permitted, patients' attorneys asked for the right to pursue company-wide injunctions to correct allegedly false corporate disclosures to health plan subscribers. Judge Moreno has rejected the patients' class action as unmanageable and too individualized based on verbal company representations. In Humana's case, the lawsuit likely would cover 5.9 million patients, and their attorneys said there was "not one shred of evidence of any alleged oral disclosures." Industry attorneys contend that the judge's decision rejecting the patients' class action claims was right, but that he was wrong in accepting the doctors' companion case. The industry plans to file a notice of appeal asking the 11th US District Court of Appeals to put the case on hold until a full review has been made of the doctors' case. The doctors claim they have been routinely shortchanged in a profit- driven system that makes it costly and time-consuming for them to object when their claims are underpaid. Among other things, the patients claim the insurers over-promised and under-delivered, notably when guaranteeing care for medical necessities. INTERNATIONAL PAPER: Faces Suit For Fixing Southeastern Timber Prices --------------------------------------------------------------------- Three South Carolina landowners have sued International Paper, saying the Stamford, Conn.-based Company conspired to keep Southeastern timber prices artificially low, the Associated Press Newswires reports. The lawsuit, filed recently in US District Court in Columbia, South Carolina, seeks three times the amount lost because of the alleged price fixing. The losses were not specified in the complaint. The lawsuit also seeks class action status against the Company, which operates mills in Eastover and Georgetown, and is among the largest purchasers of harvested pulpwood timber in South Carolina. Under the Company's "quality supplier program," a small number of firms enter into contract with International Paper to supply it with timber. Prices are then fixed by the Company, the lawsuit alleges. Because of the program, the Company no longer competes to buy timber tracts. Instead, it leaves purchasing to the selected companies, which then sell the timber to the Company. The suit further alleges that participating companies also agreed not to compete with each other, further hurting timber values. OHIO: Two Women Sue Coroner For Keeping Body Parts After Autopsies ------------------------------------------------------------------ The Hamilton County Coroner says it sometimes is necessary to keep brains removed during autopsies in order to complete tests to determine cause of death, the Associated Press Newswires reports, referring to the lawsuit recently filed against him by two women charging him with keeping relatives' brains, without families' permission, after performing the necessary autopsies. Coroner Carl L. Parrott Jr. said that his office plans to implement a policy change October 15, to inform relatives that they have the option of delaying the funeral to wait for the organs. Dr. Parrott said that could involve a delay of one to two weeks. The plaintiffs' lawsuit, filed in US District Court, in Cincinnati, contends that the practice of keeping body parts violates court rulings that families have the rights to the body parts. The lawsuit asks for unspecified damages and requests class action status on behalf of other families whose relatives' body parts were removed by the coroner since 1991. The lawsuit also lists the three county commissioners as defendants. The lawsuit's two lead plaintiffs say that their respective relatives, a son and a father, died in 2000, and underwent autopsies by the Hamilton County Coroner's office. The two women did not learn the men's brains had been removed until after they were buried, the lawsuit says. Dr. Parrott and other doctors who lead national and state coroners' associations have said that removing and keeping brains and other body parts is sound medical practice in investigating causes of death and terminal illnesses. "The standard of care around the nation is to retain organs because you cannot make meaningful conclusions with an instant analysis," Dr. Parrott said. Coroners have a statutory obligation to try to determine a cause of death in autopsy cases, Dr. Parrott said. Organs, usually brains, need to be kept for further analysis in five to eight percent of the autopsies. Some problems sometimes cannot be detected without extended study of an organ, such as subtle lesions to a brain. Attorney John Metz, who represents the two women plaintiffs, filed a similar lawsuit in 1989, to challenge a former Hamilton County coroner's practice of removing corneas for use as transplants, without families' permission. That lawsuit led to a ruling by the 6th US Circuit Court of Appeals in 1991, that families have an enforceable "property interest" in the bodies of loved ones. OPTICAL CABLE: Commences Implementation of Securities Suit Settlement --------------------------------------------------------------------- Optical Cable, Inc. has started preparing payments for settlement of the consolidated securities class action pending in the United States District Court for the Western District of Virginia against it and: (1) Robert Kopstein, former Chairman, President and Chief Executive Officer, (2) Luke J. Huybrechts and (3) Kenneth W. Harber The consolidated suit, filed on behalf of purchasers of the Company's common stock during the period ranging from June 14, 2000, through September 26, 2001, alleges that the defendants violated Sections 10(b) and 20 of the federal Securities Exchange Act of 1934 in making certain alleged misrepresentations and/or omitting to disclose material facts. On June 26, 2002, the Company issued a press release announcing that it reached a tentative agreement to resolve the suit. The settlement, which is subject to final court approval, provides for a cash payment of $700,000 and the issuance of warrants to purchase 250,000 shares (adjusted for the 1-for-8 reverse stock split approved on July 30, 2002) of the Company's common stock at an exercise price per share calculated in a manner intended to approximate market prices around June 18, 2002, the date the Company entered into a memorandum of understanding. On July 22, 2002, the court entered an order of preliminary approval of the proposed settlement, and had a final approval hearing for September 23, 2002. The court has not yet released a decision. The first installment, totaling $500,000, of the cash portion of the settlement was paid prior to July 31, 2002, upon preliminary court approval. The second installment, totaling $200,000, of the cash portion of the settlement is to be paid on November 1, 2002 (or upon final court approval of the settlement and certification of the class, if later). The warrants will be exercisable for five years. The Company intends that the shares issuable upon the exercise of the warrants will be registered under the Securities Act of 1933, as amended. ORIENTAL INTERNATIONAL: Recalls 3,500 Baby Walkers For Injury Hazard -------------------------------------------------------------------- Oriental International Trading Company is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 3,500 baby walkers. The walkers will fit through a standard doorway and are not designed to stop at the edge of a step. Babies using these walkers can be seriously injured or killed if they fall down stairs. The Company has not received any reports of injuries involving these walkers. This recall is being conducted to prevent the possibility of injury. This recall includes the "Honey" model baby walker. The walkers are intended for a baby 5 months and older. They were sold in blue, yellow or pink with a padded seat and an activity tray. Model numbers included in the recall are 820, 860, 862 and 802. The model numbers are printed on the seat backs. A warning label on the walker reads in part, "WARNING: Suitable for babies between five and ten months old." Independent discount stores located in Arizona, California, Texas, Illinois, North Carolina and New York sold these baby walkers from May 2001 through June 2002 for between $18 and $22. For more details, contact the Company by Phone: 866-666-9868 between 9 am and 5 pm PT Monday through Friday or visit the firm's Website: http://www.bike-stroller.com. PARTY CITY: Securities Suit Remanded To Federal Court For Settlement -------------------------------------------------------------------- The United States Third Circuit Court of Appeals remanded the consolidated securities class action pending against Party City Corporation to the United States District Court for the District of New Jersey, for purposes of implementing the settlement of the suit. The suit is pending against the Company, its former Chief Executive Officer and its former Chief Financial Officer and Executive Vice President of Operations on behalf of persons who purchased or acquired the Company's common stock during various time periods between February 26, 1998 and March 18, 1999. The suit alleges, violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder, and sought unspecified damages. The plaintiffs alleged that defendants issued a series of false and misleading statements and failed to disclose material facts concerning, among other things, the Company's financial condition, adequacy of internal controls and compliance with certain loan covenants during the class period. The plaintiffs further alleged that because of the issuance of a series of false and misleading statements and/or the failure to disclose material facts, the price of the Company's common stock was artificially inflated. In early 2000, defendants moved to dismiss the second amended complaint on the ground that it failed to state a course of action. In May 2001, the district court granted the motion with prejudice. The plaintiffs promptly filed a notice of appeal to the United States Court of Appeals for the Third Circuit. In April 2002, the parties reached an agreement in principle to settle the action. The terms of the settlement are contained in the agreement in principle, and include the settlement amount the Company is to pay, which is not material to its results of operations or financial condition, according to a disclosure to the Securities and Exchange Commission. The settlement provided for in the agreement in principle is subject to certain conditions, including the negotiation of a definitive settlement agreement and the approval of the terms of the settlement agreement by the district court after notice to the members of the class who have the right to object. There can be no assurance that all these conditions will be satisfied. PARTY CITY: Employees Commence Overtime Wage Suit in CA State Court ------------------------------------------------------------------- Party City Corporation faces a class action filed in Los Angeles Superior Court by an assistant manager in one of the Company's California stores for himself and on behalf of other members of an alleged class of Party City store managers. The plaintiffs claim the Company misclassified the class members as exempt from California overtime wage and hour laws. The class members seek the disgorgement of overtime wages allegedly owed by the Company to them but not paid and they also seek punitive damages and statutory penalties. If a class is certified, liability is found and a judgment is entered, such a judgment may adversely affect the Company. The Company intends to vigorously oppose the suit. PHILIP MORRIS COS.: Merrill Lynch Downgrades Biggest Cigarette Maker -------------------------------------------------------------------- Philip Morris Cos. was downgraded by Merrill Lynch & Co. after a California jury recently ordered the world's biggest cigarette maker to pay $28 billion to punitive damages to a woman with lung cancer, Newsday reports. Merrill Lynch analyst Martin Feldman reduced his rating to "neutral" from "buy," citing the jury's award to 64-year-old Betty Bullock, the largest in history to an individual smoker, and the potential to lose other cases after this one. The points of law, which steered this case to a jury victory will doubtless be applied in future class actions as well as in other individual suits. Philip Morris shares fell as much as 6.1 percent. The stock has declined 21 percent this year. Mr. Feldman is the fifth analyst to downgrade the Manhattan-based tobacco company since August 1. The other analysts expressed concern about litigation losses and increased competition. Last Friday's verdict ranks second only to the $145 billion a Miami jury told the industry to pay in a class action in 2000. Standard & Poor's reduced its outlook for the company and its Kraft Foods Inc. unit to negative from stable, citing the Bullock verdict and other lawsuit losses. Awards of more than $1 billion are often reduced by trial judges or by higher courts on appeal. The industry has three more cases in California in the coming months, however, Mr. Feldman said. There is no indication that the tobacco companies will win those suits, he said. PINNACLE SYSTEMS: Asks Court To Dismiss Amended Securities Fraud Suit --------------------------------------------------------------------- Pinnacle Systems, Inc. asked the United States District Court for the Northern District of California to dismiss the third consolidated securities class action pending against it and certain of its officers and directors. The amended suit alleges that the defendants violated the federal securities laws by making false and misleading statements concerning our business during a putative class period of April 18, 2000 through July 10, 2000. Plaintiffs filed a consolidated amended complaint in December 2000, and defendants thereafter moved to dismiss that complaint. In May 2001, the court dismissed the consolidated amended complaint and permitted plaintiffs to file an amended complaint. Plaintiffs then filed a second amended complaint in June 2001. Defendants thereafter moved to dismiss that complaint. In a written order dated January 25, 2002, the court dismissed the second amended complaint and granted plaintiffs leave to amend. On March 22, 2002, plaintiffs filed a third consolidated amended complaint, which defendants have moved to dismiss. The Company is defending the case vigorously, but has not accrued any liability related to this contingency since a liability cannot be reasonably estimated. POULTRY INDUSTRY: Chicken Waste Removal Likely Litigation Alternative --------------------------------------------------------------------- Poultry companies will be asked to pay for removal of chicken waste from sensitive watersheds as an alternative to litigation, Oklahoma's environmental secretary says, according to a report by Associated Press Newswires. The companies have made it clear that "they will not accept technical legal liability for the action of their contract growers," state Secretary of Environment Brian Griffin said recently at the 23rd Oklahoma Governor's Water Conference. "That is a deal-breaker, a line in the sand," said Mr. Griffin. "If we force them to take that liability, they will fight that all the way to the US Supreme Court." For decades, contract chicken farmers have been applying chicken waste to pastures as fertilizer. Excessive phosphorus, which is linked to the chicken waste, is blamed for degrading the water quality of Oklahoma lakes and scenic rivers. "There are a lot of things the companies can do with the waste - gasify it, pelletize it, or compost it. However, first you have to bank it, get it off the fields to a safe storage area, then get it out of the watershed," Mr. Griffin said. Attorney Charles Shipley, who represents a class action brought against poultry companies for waste pollution to Grand Lake, called Mr. Griffin's plan "weak-kneed." "Without having the poultry companies being held liable for the waste generated by the contract growers for their industry, I think you get less than half a loaf," Mr. Shipley said. "We avoid actual relief by avoiding the issue of their liability." One of Tulsa's main drinking water sources, Lake Eucha, has been affected by the phosporus loads, creating chronic taste and odor episodes that have cost the city millions to treat. Additionally, city officials are suing the city of Decatur, Arkansas, and six poultry companies. Efforts to reduce the pollution in the Illinois River without litigation have not improved the river. Mr. Shipley said "instead of seeing an improvement in water quality of the scenic river, we have seen a deterioration, just the opposite." SCHERING-PLOUGH: Faces Suit After CEO Makes Negative Earnings Comments ---------------------------------------------------------------------- Schering-Plough Corporation faces a securities class action, alleging the Company cheated investors when its shares fell, following a meeting with a big investor, Reuters reports. The suit alleges that Company CEO Richard Kogan made negative comments about the company's earnings last Tuesday in a meeting with Putnam Investment Management money managers, one of Schering-Plough's largest shareholders. The Company allegedly violated the Securities Exchange Act by unfairly distributing important information to certain investors without releasing it publicly. According to Reuters, Schering-Plough last Thursday night issued a profit warning for 2002 and 2003 after the stock declined 20 percent in three days with no explanation from the company. Some angry investors said the meeting with Putnam on Tuesday, followed by a closed-door meeting with selected analysts on Thursday afternoon, allowed Mr. Kogan to make negative comments to certain investors before it released its outlook publicly. The Securities and Exchange Commission is investigating the matter. Shares of Schering-Plough were down 4.3 percent, or 78 cents, at $17.31 in afternoon trading on the New York Stock Exchange. SOUTH CAROLINA: Patients File Suit V. Pharmacy Over Tainted Medicines --------------------------------------------------------------------- The South Carolina pharmacy that health officials say produced a pain medicine suspected of contamination has been sued by a group of patients who want a fund established to pay their medical expenses, the Associated Press Newswires reports. One patient died and two others became ill with fungal meningitis, state health officials said. The class action was filed recently in Wilson, North Carolina, where one of the plaintiffs lives. The lawsuit seeks to represent all the estimated 870 patients in North Carolina, who received the steroid, methylprednisolone, which the state Department of Health and Human Services said was compounded by Urgent Care Pharmacy in Spartanburg, South Carolina. State and federal health authorities think the drug may have been contaminated with a fungus during production and then shipped to pain clinics in five states this summer. The pharmacy's founder has said he does not believe his Company was responsible for the contamination. Clinics in Jacksonville, Pinehurst and Goldsboro used the drug, state officials said. Last week they sent letters to the patients who received injections of the drug, notifying them of their exposure. The lawsuit contends that everyone who had an injection of the steroid has suffered mental anguish, and now must undergo tests to monitor infection. The lawsuit is seeking damages of less than $75,000 per person from Urgent Care Pharmacy to establish the monitoring fund. "What we are trying to do is set up some sort of court supervised medical monitoring that will not cost these patients or their insurance companies a dime," said Kim Wilson, a lawyer with Duffus & Melvyn, which represents the plaintiffs in the lawsuit. State epidemiologist Dr. Jeffrey Engel said the US Food and Drug Administration, the Centers for Disease Control and Prevention and the South Carolina Board of Pharmacy are investigating Urgent Care Pharmacy. UNITED STATES: Settles Lawsuit Over Federal Plaza Protests With ACLU -------------------------------------------------------------------- United States authorities have agreed not to restrict protests in Federal Plaza downtown to one group at a time, thereby settling a class action by the American Civil Liberties Union (ACLU), lawyers recently disclosed, according to a report by the Chicago Tribune. Under terms of the proposed settlement, the US General Services Administration, which manages federal property, may not deny a plaza permit solely because another group holds a permit to use the site at the same time. The settlement protects the rights of counter- demonstrators to hold protests when a group with a contrary view has planned a rally, said Adam Schwartz, staff attorney for the ACLU of Illinois. US District Judge Ruben Castillo gave the settlement his preliminary approval, and said, "Having the space across the street open is important to the Constitution, which did not die along with many others on September 11." Judge Castillo said this while speaking from his courtroom in the Dirksen Federal Building located across Dearborn Street from the Plaza. A hearing is scheduled for November 26, for any person opposed to the settlement to present objections. The ACLU filed the lawsuit in May 2001, after it was barred from distributing bust cards explaining what to do if one was stopped by the police at a rally against police brutality at the Federal Plaza the previous autumn. After the September 11 attacks, the ACLU amended the lawsuit to challenge the General Services Administration's subsequent ban on public rallies in Federal Plaza. In March, the ban was lifted and most of the concrete barriers ringing the plaza were removed. UNOCAL CORP.: Engineer's Suit Sent To Appeals Court For Reconsideration ----------------------------------------------------------------------- An Allentown engineer and inventor has won a round in a lawsuit that alleges California fuelmaker Unocal Corp. stole his formula for a less- polluting gasoline, the Allentown Morning Call reports. The US Supreme Court sent the lawsuit, filed by William L. Talbert, President of Talbert Fuel Systems Inc. back to a federal appeals court in Washington, to reconsider the claims against Unocal in light of a High Court ruling in May that broadened patent rights for inventors. That ruling gave inventors wider latitude to sue makers of competing products that are similar to the original patent but do not exactly copy it. Mr. Talbert's gasoline patent lawsuit is one of several bounced back to lower courts because of the Supreme Court's decision in May in Fesco Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co. The High Court ruling gives scope to the idea of bundling a number of inventors' cases together. The Supreme Court order represents the first major legal victory for Mr Talbert, 70, since his lawsuit was filed in 1998. A lower court had dismissed the suit on the grounds that Unocal's gasoline had different characteristics from Mr. Talbert's fuel, and the US Court of Appeals for the Federal Circuit upheld that ruling in January. A key claim of Mr. Talbert's claim is that the Company stole his idea to make a cleaner-burning gasoline after he shared details of his then- pending patent with Unocal in 1989. The Company expressed no interest in Mr. Talbert's invention, but got its own patent in 1994, on a form of cleaner-burning gasoline designed to meet California's clean-air mandates. Mr. Talbert's legal team includes Harvard Law School professor Arthur Miller and Melvyn I. Weiss of Milberg Weiss Bershad Hynes & Lerach, a national law firm known for class-action securities litigation. Mr. Talbert's lawyers portrayed the case as a David versus Goliath match. Lawyers for Unocal and another defendant, Tosco Corp., said the Supreme Court order is narrowly focused and unlikely to change the outcome of the Talbert case. WAL-MART STORES: Former Employees File Suits, Alleging Wage Abuses ------------------------------------------------------------------ Wal-Mart Stores, Inc., the nation's No. 1 retailer, is facing wage abuse suits across the United States, the Associated Press Newswires reports. The lawsuits are coming from current and former employees like Leona Crawford, who used to work in a South Haven, Michigan, store. Ms. Crawford said she often had to work five hours more per week than for which she was paid. "It makes you feel you are a little worthless, that you are being taken advantage of," Ms. Crawford, 50, told the Detroit Free Press for a recent story. Ms. Crawford accuses the retailer of holding down its labor costs by forcing hourly employees to work for free. Lawyers for seven former Wal-Mart workers from around the state of Michigan will go to court November 5, to ask that their complaints be made a class action, allowing thousands of past and current workers to sue for unpaid wages. Filed in September of 2001, in Saginaw, Circuit Court, the lawsuit claims that the Company engaged in a "systematic scheme of wage abuse against its hourly employees in Michigan." Similar suits are pending in about 29 other states as labor lawyers take on the powerhouse retailer and union leaders try to organize its work force. Company spokesman William Wertz denies the allegations of widespread abuses. "Our associates are central to our business success, and it makes no sense from a business standpoint to mistreat or cheat the people we depend upon to provide the service our customers expect," Mr. Wertz said. *Judges Called Upon To Ensure Fairness To All Parties in Class Actions ---------------------------------------------------------------------- Every judge in America who presides over class actions has both the right and the duty to review settlement agreements to ensure that fairness is meted out to all parties, Mary Alexander, president of the Association of Trial Lawyers of America (ATLA) writes in USA Today. Since judges already have the power to control class action attorneys' fees and to protect consumers' rights through oversight, perhaps the Federal Trade Commission (FTC) should cast its attention to other, less-scrutinized problems, such as when defendants actually initiate class actions and settle them, sometimes on the day of the filing, in order to buy future immunity inexpensively, the story states. In these "collusive" settlements, Ms. Alexander writes, defendants organize mass fraud class actions to settle immediately for an insignificant amount without a true adversary. Punishing defendants who wrongly take advantage of the class action system for their own selfish ends would further the FTC's goal of protecting consumers. Class actions, in which large groups of injured people join in a single, economical lawsuit to seek compensation for their injuries and seek, as well, a change in the behavior by the people or corporations that caused the harm, provide a beneficial complement to government enforcement actions and a superior remedy for injured consumers. Class actions also are more efficient and less expensive than a host of individual lawsuits dealing with the same issues. There is no more effective means of protecting the interests of consumers in class actions than close judicial scrutiny to ensure that the injured consumers receive just compensation. So it is essential that all judges be given the financial, administrative and legal resources that permit them to eliminate case backlogs and give them the time to closely monitor settlements case by case, Ms. Alexander writes. The Association of Trial Lawyers of America (ATLA) has long maintained that coupon-only class action settlements often do little to make defendants pay back their wrongly obtained money and to compensate plaintiffs for their losses. Judges should consistently reject settlements that fail to compensate the injured plaintiffs fairly or to penalize the wrongdoers adequately, Ms. Alexander stated. In addition, the Judicial Conference of the United States, has just adopted a rule for federal courts that echoes ATLA's arguments, before the US Supreme Court, that plaintiffs should have the right to "opt out" of class-action settlements that do not benefit them. New Securities Fraud Cases CONSECO INC.: Schiffrin & Barroway Lodges Securities Suit in S.D. IN -------------------------------------------------------------------- The Law Offices of Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Southern District of Indiana on behalf of all purchasers of the common stock of Conseco, Inc. (OTC Bulletin Board: CNCE; formerly NYSE: CNC) from October 30, 2001 and July 15, 2002, inclusive. The complaint charges the Company and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that defendants disseminated a series of materially false and misleading statements regarding problems with the Company's liquidity and the Company's manufactured-homes financing business. The disclosure on the last day of the class period that the Company would miss certain bond payments caused the price of Company stock to drop 11.5%. The suit charges that defendants were in possession of materially adverse information about the Company's liquidity problems and manufactured-homes financing business but failed to fully disclose the information to investors, causing the Company's stock price to become artificially inflated, inflicting damages on investors. 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 Website: http://www.sbclasslaw.com CONSECO INC.: Cauley Geller Commences Securities Fraud Suit in S.D. IN ---------------------------------------------------------------------- Cauley Geller Bowman & Coates, LLP initiated a securities class action in the United States District Court for the Southern District of Indiana on behalf of purchasers of Conseco, Inc. (OTC Bulletin Board: CNCE.OB; formerly NYSE: CNC) publicly traded securities during the period between October 30, 2001 and July 15, 2002, inclusive. The suit charges the Company and certain of its officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Among other things, plaintiff claims that defendants disseminated a series of materially false and misleading statements regarding problems with the Company's liquidity and the Company's manufactured-homes financing business. The disclosure on the last day of the class period that the Company would miss certain bond payments caused the price of Company stock to drop 11.5%. The suit charges that defendants were in possession of materially adverse information about the Company's liquidity problems and manufactured-homes financing business but failed to fully disclose the information to investors, causing the Company's stock price to become artificially inflated, inflicting damages on investors. For more details, contact Jackie Addison, Heather Gann or Sue Null by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 888-551-9944 by E-mail: info@cauleygeller.com or visit the firm's Website: http://www.cauleygeller.com DPL INC.: Wolf Popper Commences Securities Fraud Suit in S.D. Ohio ------------------------------------------------------------------ Wolf Popper LLP initiated a securities class action against DPL Inc. (NYSE:DPL), its Chairman Peter H. Forster, and two of its senior officers, on behalf of purchasers of the Company's common stock from March 30, 1999 through August 14, 2002, in the United States District Court for the Southern District of Ohio, Western Division. The plaintiff alleges in the class action that, during the class period (March 30, 1999 through August 14, 2002, inclusive), defendants falsely represented that the Company's portfolio of financial assets, comprising approximately 25% of DPL's total assets, were "highly diversified both in terms of geography and industry" and were a hedge against the Company's energy business. Defendants failed to disclose that the Company's investment portfolio was highly concentrated in Argentinian debt securities and other securities that were highly risky. The facts began to be revealed after the close of regular trading on July 1, 2002, when the Company issued a press release announcing that it was revising downward its estimate of earnings for the full year 2002, largely as a result of a $110 million, or $0.92 per share, write- down of its financial assets. The write-down related primarily to investments in Latin America. The Company's results for the second quarter of 2002 were subsequently reported on July 29, 2002 precipitating a review of its debt for possible downgrading. On August 14, 2002, the Company revealed further information concerning the Company's investment portfolio and a contingent obligation to fund up to another $430 million of investments. The plaintiff alleges that defendants engaged in this scheme to enrich themselves. For example, in 2000 Mr. Forster received $1.2 million for managing the company's financial assets and $2.1 million when the price of DPL common stock reached $26 per share. During the class period, shares of DPL common stock closed at as high as $33.68 per share. When the truth about the losses in DPL's portfolio of financial assets was revealed after the close of regular trading on July 1, 2002, the price of DPL common stock fell to $21.57 per share. DPL common stock continued to decline as additional information was revealed. DPL common stock closed on October 2, 2002 at $16.60 per share. 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 Website: http://www.wolfpopper.com. ESS TECHNOLOGY: Schiffrin & Barroway Lodges Securities Suit in N.D. CA ---------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the US District Court for the Northern District of California, alleging claims that ESS Technology, Inc. (Nasdaq:ESST) misled shareholders about its business and financial condition. Plaintiff seeks damages for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of all investors who bought ESS Technology, Inc. securities between Jan. 23, 2002 and Sept. 12, 2002. The complaint alleges that the Company disseminated false and misleading statements concerning the Company's operations and its prospects for 2002. Taking advantage of the inflation in ESS stock, certain of ESS's officers sold $1.8 million worth of their own ESS stock at artificially inflated prices of as much as $25.78 per share, while the Company itself sold $45.5 million worth of its own stock. For more details, contact Marc A. Topaz or Stuart L. Berman by Phone: 888-299-7706 (toll free), 610-822-2221 by E-mail: info@sbclasslaw.com or visit the firm's Website: http://www.sbclasslaw.com FLEMING COMPANIES: Schiffrin & Barroway Lodges Securities Suit in TX -------------------------------------------------------------------- Schiffrin & Barroway LLP initiated a securities class action against Fleming Companies, Inc. (NYSE:FLM) claiming that the Company misled investors about its business and financial condition. The complaint was filed in the US District Court for the Eastern District of Texas, Texarkana Division on behalf of all investors who bought Company securities between February 27, 2002 and July 30, 2002. The complaint alleges that the Company beginning in early 2002, the issued numerous positive statements regarding its "price-impact" retail supermarket division. These statements were made despite the fact that the defendants knew, or recklessly disregarded, that the performance of the Company's "price-impact" retail supermarket division was, in the words of the defendants, "disappointing." These statements falsely portrayed the Company's business prospects and artificially inflated and maintained the price of Company common stock. The defendants capitalized on their false and misleading statements by: (1) lowering the interest rate and extending the maturity on $250 million of the Company's debt; (2) raising over $155 million through the June 13, 2002 sale of 8 million shares of the Company's common stock at $19.40 per share; (3) raising an additional $200 million through the June 13, 2002 sale of Fleming Notes due 2010; and (4) using the proceeds of the June 13, 2002 securities sales to complete the purchase of Core-Mark International, Inc. and Head Distributing for $330 million in cash -- acquisitions described by the defendants as "key" to the Company's implementation of its strategic transformation into an efficient, national, multi-tier supply chain for consumer packaged goods. Then, approximately six weeks after defendants sold $355 million worth of Company securities, the Company announced after the close of trading on July 30, 2002 in an abrupt departure to the repeated and positive statements made by the defendants during the class period, that its "price-impact" retail supermarket division was not only performing poorly, but performing so poorly that the Company was considering abandoning this line of business entirely. The price of the Company's common stock dramatically declined on this announcement, falling from $15.21 on July 30, 2002 to $13.75 on July 31, 2002, on huge trading volume of 3.9 million shares, and continued to decline over the next two heavy trading days to a 52-week low of $10.76 on August 2, 2002. Since then, the price of Company common stock has never recovered, and currently trades well below the $19.40 price at which Fleming sold 8 million shares to unsuspecting investors on June 13, 2002. For more details, contact the Shareholder Relations Manager by Phone: 888-299-7706 (toll free)/ 610-822-2221 by E-mail: info@sbclasslaw.com or visit the firm's Website: http://www.sbclasslaw.com MERRILL LYNCH: Finkelstein Thompson Lodges Securities Suit in S.D. NY --------------------------------------------------------------------- Finkelstein, Thompson & Loughran initiated a securities class action against Merrill Lynch & Co., Inc. and the former head of its Internet group, Henry Blodget, on behalf of purchasers of iVillage Inc. (Nasdaq: IVIL) securities between November 9, 1999 and May 7, 2001, inclusive. The suit, filed in the United States District Court for the Southern District of New York, alleges that Merrill Lynch and its well-known Internet stock analyst Henry Blodget violated the federal securities laws by knowingly issuing false and misleading analyst reports regarding iVillage during the class period. Based on e-mails and other internal Merrill Lynch communications, which were made public as a result of the investigation conducted by the New York State Attorney General, the suit alleges that the defendants failed to disclose significant conflicts of interest between their investment banking and research departments. Specifically, the suit alleges that Mr. Blodget and other Merrill Lynch analysts issued very favorable analyst reports regarding iVillage to the public when they allegedly knew that the positive recommendations were unwarranted and false. The suit further alleges that, unbeknownst to the investing public, Merrill Lynch's buy recommendations and price targets for these companies were driven by its efforts to attract lucrative investment banking business rather than by the companies' fundamental merits. For more details, contact Conor R. Crowley or Halley F. Sexter by Phone: 202-337-8000 or by E-mail: crc@ftllaw.com or hfs@ftllaw.com or visit the firm's Website: http://www.ftllaw.com QUADRAMED CORPORATION: Charles Piven Commences Securities Suit in CA -------------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who acquired QuadraMed Corporation (Nasdaq:QMDCE) securities between May 11, 2000 and August 11, 2002, inclusive, in the United States District Court for the Northern District of California, against the Company and certain of its officers and directors. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Charles J. Piven by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410-986-0036 or by E-mail: hoffman@pivenlaw.com SCHERING-PLOUGH: Wechsler Harwood Commences Securities Suit in NJ Court ----------------------------------------------------------------------- Wechsler Harwood LLP initiated a securities class action in the United States District Court for the District of New Jersey on behalf of purchasers of Schering Plough Corporation (NYSE:SGP) common stock for the period between October 1, 2002 and October 3, 2002. The complaint alleges that the Company, Richard Jay Kogan, its Chairman, Chief Executive Officer and President, and Putnam Investment Management, LLC violated the Securities Exchange Act of 1934. The defendants violated the Act as a result of Mr. Kogan, on behalf of the Company, selectively provided non-public material, adverse information about the Company's projected earnings to management of Putnam at a luncheon meeting on October 1, 2002. Mr. Kogan made further selective disclosures of this non-public information to analysts at mid-day on October 3, 2002. It was not until approximately 11:00 p.m. on October 3, 2002 that the Company publicly announced that its 2003 and 2004 earnings would be far below analysts expectations. As a result of the selective disclosure by Mr. Kogan of this adverse, material, non-public information to defendant Putnam and others, defendant Putnam and the others were able to sell enormous amounts of Company shares before the general public received such information, thereby enabling the tippees to benefit from the receipt of their inside information to the detriment of plaintiff and the Class. From the time Putnam first learned of the material inside information through the close of the market on October 4, 2002, Company stock plunged from $21.80 per share to as low as $16.10 per share, a drop of over 25%. For more details, contact Samuel K. Rosen by Mail: 488 Madison Avenue, 8th Floor, New York, New York 10022 by Phone: 877-935-7400 by E-mail: srosen@whesq.com or rpinon@whesq.com or visit the firm's Website: http://www.whesq.com. WALT DISNEY: Johnson & Perkinson Commences Securities Suit in C.D. CA --------------------------------------------------------------------- Johnson & Perkinson initiated a securities class action on behalf of all those who purchased Walt Disney Co. (NYSE: DIS) securities during the period August 15, 1997 through May 15, 2002, in the United States District Court, Central District of California. The suit charges the Company and certain of its officers and directors with violations of federal securities laws. Plaintiff claims that the defendants caused the Company's stock price to become artificially inflated, inflicting damages on investors, by their material omissions and the dissemination of materially false and misleading statements concerning the existence, details, and potential effects of a pending lawsuit over merchandising rights for products bearing the likeness of "Winnie the Pooh" characters. Those effects include the potential payout by the Company of hundreds of millions of dollars in royalty payments in as well as the much more serious threat of possibly terminating the Company's merchandising agreement for Winnie the Pooh products, which represents several billion dollars a year in revenue. The suit alleges that for eleven years, the Company has been involved in this bitterly contested lawsuit with hundreds of millions of dollars at stake, but throughout they have never advised their stockholders of its existence. On May 15, 2002, defendants finally came clean about the amount of claims involved and the potential fallout of the Pooh litigation, and its stock price fell, reaching $13.77 on August 13, 2002, a decline of more than 40%. For more details, contact Dennis J. Johnson or Jacob B. Perkinson by Mail: 1690 Williston Road, South Burlington, Vermont 05403 by Phone: 888-459-7855 or by E-mail: JPLAW@adelphia.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 * * *