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/raid1/www/Hosts/bankrupt/CAR_Public/030109.mbx C L A S S A C T I O N R E P O R T E R Thursday, January 9, 2003, Vol. 5, No. 6 Headlines BRISTOL-MYERS: Agrees To Settle Antitrust Lawsuits Over Buspar, Taxol CALIFORNIA: Pressure Mounting To Amend Stiff Consumer-Protection Law CANADA: Amazon.com Internet Privacy Settlement Funds Planned Net Clinic COMPACT DISCS: Consumers Asked To Avail of CD Price-Fixing Settlement CRACKER BARREL: GA Judge Says Bias Lawsuit Should Not Get Class Status ENRON CORPORATION: Vinson & Elkins Deny Role in Securities Violations ENRON CORPORATION: TX Court Postpones Securities Trial Until Sept. 2003 GERBER SCIENTIFIC: Plaintiffs Voluntarily Dismiss Securities Fraud Suit INDIAN FUNDS: Indians Present Document Essaying $137B Trust Fund Losses INDIANA: State To Return $720T In Overpayments to Food Stamp Recipients INDONESIA: Workers Join Protests Against "Release & Discharge" Policy KENTUCKY: Lawsuit To Be Filed V. Louisville Police Over Fatal Shooting LOUISIANA: Ferriday Town Faces Suit Over 1999 Water Interruption Notice MCKESSON CORPORATION: Court Dismisses Several Claims in Securities Suit MICHAELS STORES: Canadian Employees Commence Suit Over Unpaid Overtime NEW JERSEY: City Officials Defendants in Rent-Control Violations Suit NEW JERSEY: Agrees To Pay $775,000 To Settle Racial Profiling Lawsuits PNC BANK: Plaintiffs Appeal RICO Violations Suit Decertification PURDUE PHARMA: OH Court Asked To Grant Certification to Oxycontin Suit SUN RISE: Voluntarily Recalls 2.8T Bicycles For Accident, Injury Hazard THRIVENT FINANCIAL: Fraud Suit Filed For Life Insurance Policyholders TOBACCO LITIGATION: Trial Set For Suit Over Dangerous Product Knowledge TOBACCO LITIGATION: Group says States Failing To Use Settlement Money VISUAL NETWORKS: MD Court Dismisses Appeal of Securities Suit Dismissal WASHINGTON: WA Court Dismisses Public Utility Suit V. Energy Companies XEROX CORPORATION: Retirees May Be Owed Additional Pension Funds New Securities Fraud Cases ANNUITY AND LIFE: Bernstein Liebhard Commences Securities Lawsuit in CT CREDIT STORE: Finkelstein & Krinsk Commences Securities Suit in S.D. CA MOTOROLA INC.: Bernstein Liebhard Commences Securities Suit in S.D. NY SEPRACOR INC.: Shapiro Haber Launches Securities Fraud Suit in MA Court ********* BRISTOL-MYERS: Agrees To Settle Antitrust Lawsuits Over Buspar, Taxol --------------------------------------------------------------------- Bristol-Myers Squibb Company reached agreements in principle to settle substantially all antitrust litigation surrounding two of its products, the anti-anxiety drug BuSpar and the anticancer drug Taxol, for $670 million, Dow Jones Newswires reports. 29 states commenced an antitrust suit against the Company in December 2001 for allegedly keeping a cheaper generic version of BuSpar off the market, resulting in consumers and taxpayers allegedly being forced to pay higher prices for the drug as a result of anticompetitive actions. The suit charged the Company with violating federal and state antitrust laws by obtaining a new patent extending BuSpar's exclusive hold on the market. The same plaintiffs also filed an antitrust suit in June over Taxol, alleging the company illegally delayed for years generic competition, costing states and patients billions of dollars. The suit followed one seeking class-action status that was filed in 2001 by Miami attorney Michael Criden on behalf of a group of plaintiffs, Dow Jones Newswires reports. In a statement, the Company revealed it would shell out around $535 million to resolve claims brought by direct and indirect purchasers of the product, competitors and state attorneys general. The Company further said that while "it stood behind its actions and believed they were entirely lawful, it decided that it would be prudent to enter into settlements to put the uncertainty and risk of this litigation behind the company." The firm added, "Some terms and conditions remain to be finalized, and certain settlements require court approval. Among the provisions remaining to be negotiated are the terms for incorporating certain claimants, including a number of health insurers, into the existing framework." The Company also said final approval by the state attorneys general involved "is contingent upon further agreements on terms of injunctive relief." CALIFORNIA: Pressure Mounting To Amend Stiff Consumer-Protection Law -------------------------------------------------------------------- Pressure is mounting to amend one of California's stiffest consumer- protection laws, amid charges that it allows attorney to file frivolous lawsuits, thereby effectively extorting money from businesses, the Los Angeles Times reported. Changes may limit class action activity. Anaheim Assemblyman Lou Correa (D) plans to hold hearings on the matter and said he would introduce legislation that would change portions of the Unfair Competition Act. Meanwhile a top trial lawyers group, long a defender of the act, said it is time to make reforms. The act was designed to help consumers fight unfair business practices by prohibiting such things as false advertising and price-fixing. It allows plaintiffs to file lawsuits even if they have not been directly harmed by the alleged wrongdoing. Business groups, however, have long criticized the act, claiming it allows attorneys to shake down merchants with false claims. Supporters of the act have successfully fought efforts to amend the law over the years, arguing that it gives consumers the ability to "prosecute" unfair business practices that district attorneys don't have time to pursue. Now, even the leader of the Consumer Attorneys of California, Bruce Brusavich, said he would support changes, saying some attorneys are abusing the act. He said many of his colleagues have cited a Beverly Hills law firm that over the last year has filed thousands of lawsuits against Southern California restaurants, nail salons and auto-repair garages. The Beverly Hills law firm is the Trevor Law Group, which says those businesses are cheating the public. The lawsuits accuse restaurants of not meeting health codes, garages of selling used parts as new and similar violations. However, defendants say the lawyers are cooking up frivolous lawsuits based on government records of routine citations just to pressure businesses to settle for about $2000. Mr. Brusavich says that at latest count there are five law firms that are taking advantage of a wonderful consumer-protection statute. "We are encouraging the attorney general and the State Bar to crank up their investigation into the groups. Meanwhile, we are seeing if there is a legislative way to take the extortion incentive out of this law," he said. Robert Cartwright, who preceded Mr. Brusavich as president of Consumer Attorneys of California, said, "Nothing is perfect in this world, but for the most part it is a good law . (It) protects consumers against wrongful conduct by institutions. People who don't like to be held responsible for tobacco, toxins or pollutants or who are perpetrating financial fraud, don't like this law." Taking the first step toward new changes in the law, Assemblyman Lou Correa plans to hold a January 10 hearing on complaints from business owners. Mr. Correa said he would propose changes to the act based on testimony given at the hearing. CANADA: Amazon.com Internet Privacy Settlement Funds Planned Net Clinic ----------------------------------------------------------------------- The University of Ottawa (U of O) secured funding through Amazon.com for the creation of an Internet policy "litigation" clinic, a first of its kind in Canada devoted to defending the public interest in areas where technology and law intersect, the Toronto Star reports. The clinic, spearheaded by U of O law professor Michael Geist, will operate under the umbrella of the Ontario Research Network for E-commerce, a four-university consortium that also includes Carleton University, Queen's University and McMaster University. The Ontario research network is supplying part of the clinic's $500,000 budget, but Amazon.com, through a special fund set up as part of a U.S. class action privacy settlement, will contribute a major portion of the funding. The clinic is the first Canadian recipient of the Amazon.com fund, the Toronto Star states. "There are many issues related to the Internet and technology that are increasingly coming onto the legal scene in Canada, and there hasn't been a source that anybody can turn to and say, I need help," Mr. Geist, who specializes in Internet law and serves as technology counsel to Osler, Hoskin & Harcourt LLP, told the Star. "The goal here is to provide a voice for Canadians that sometimes isn't heard." In addition to helping educate the public on Internet policy issues, the clinic will participate on behalf of the public in government consultation processes and will support legal cases - on a pro bono basis - touching everything from domain-name disputes and digital copyright challenges to privacy infringement and e-commerce rules. Similar clinics have been set up in the United States at Harvard University, Stanford University and Berkeley at the University of California. The Ottawa clinic, to be launched this spring, will serve as a training ground for law students. "If somebody's looking to launch a complaint with the privacy commissioner but doesn't know how, or has launched a complaint and isn't satisfied with the outcome and wants to go to court, that's where we would get involved," Mr. Geist stated. The clinic's advisory board includes Mark Rotenberg, executive director of the Electronic Privacy Information Center in Washington, D.C., and Diane Cabell, associate director for the Berkman Center for Internet & Society at Harvard Law School. COMPACT DISCS: Consumers Asked To Avail of CD Price-Fixing Settlement --------------------------------------------------------------------- Few consumers have taken advantage of the $143 million settlement offered by top US distributors of compact discs (CDs) and music retailers for a lawsuit alleging the Companies conspired with retailers to set music prices at a minimum level to raise the retail prices for CDs, the Associated Press reports. The suit was commenced by 41 states and commonwealths, alleging record companies conspired with music distributors on CDs bought between 1995 and 2000. The Companies later opted to settle rather than wage a costly legal battle. Under the settlement, the Companies opted to pay US$143 million in cash and CDs. Customers can get payments for as much as $20, depending on how many share the settlement amount. However, by the end of December, only about 30,000 people nationwide had applied for a piece of the pie, a tiny fraction of the number the settlement could handle. "The response thus far has been fairly abysmal," Washington Attorney General Christine Gregoire, who's been on morning radio shows to promote the settlement, AP reports. The settlement's Web site has been up for a month, and legal notices have been published in TV Guide, Parade and other national magazines, but the response rate has been very low, said Tina Kondo, a senior assistant attorney general in Ms. Gregoire's office. "I guess people don't like to read legal notices," she said. Ms. Gregoire and other officials hope a radio advertising campaign set to launch soon will boost interest in the settlement. Anyone who bought a CD, cassette tape or vinyl record at a retail store between 1995 and 2000 is eligible. The application window closes March 3. The music distributors participating in the deal are: (1) Bertelsmann Music Group, (2) EMI Music Distribution, (3) Warner-Elektra-Atlantic Corporation, (4) Sony Music Entertainment, (5) Universal Music Group, (6) Trans World Entertainment, (7) Tower Records and (8) Musicland Stores, a division of Best Buy Co. Inc. CRACKER BARREL: GA Judge Says Bias Lawsuit Should Not Get Class Status ---------------------------------------------------------------------- African-American employees of restaurant chain Cracker Barrel Old Country Store faced another setback as a federal magistrate in Atlanta, Georgia recommended that class action status be denied in a lawsuit filed, alleging the Company segregated black from white workers and gave them "back of the house" assignments such as cook and dishwasher. Several similar suits were filed against the Company on behalf of employees at Cracker Barrel locations in Alabama, Georgia, Florida, North Carolina, Texas, Virginia and the District of Columbia, the Associated Press reports. In October, a federal appeals court ruled that a separate discrimination suit against the company could not include an additional 40 plaintiffs and the NAACP. The would-be plaintiffs claimed black customers were subjected to racial slurs and served food taken from the trash. A lawyer for the plaintiffs, Grant Morris, noted that the latest decision must be approved by the presiding judge in the case. "That is clearly the important decision we are waiting for," Mr. Morris told AP. "It's not necessarily a setback." The Company praised the decision, saying "There is simply no evidence Cracker Barrel engages in a pattern of discrimination against African- American employees . Indeed, quite the opposite is true. We treat all of our employees with dignity and respect." ENRON CORPORATION: Vinson & Elkins Deny Role in Securities Violations --------------------------------------------------------------------- Vinson & Elkins categorically denied knowingly participating in any fraud against Enron shareholders, in a legal papers filed in the United States District Court in Texas, the Houston Chronicle reports. The Houston law firm was named as defendant in a purported securities suit over the collapse of the energy giant, also the firm's largest client. The suit charges the firm with committing fraud, because it should should have recognized the transactions as being illegal and refused to represent Enron, especially in creating off-the-book partnerships. The suit further states that the lawyers gave false legal opinions, helped structure transactions that appeared to independent but were controlled by Enron insiders, and helped prepare false submissions to the Securities and Exchange Commission. The firm's response was delayed because US District Judge Melinda Harmon did not rule until December on the dozens of requests from defendants seeking to be dismissed from the case, the Houston Chronicle states. Vinson & Elkins had hoped it would be dismissed because of a US Supreme Court case often interpreted as absolving law firms in securities cases because they are considered enablers, not perpetrators. However, Judge Harmon refused to let the law firm and most other defendants out of the suit. In the 135-page response filed Tuesday, the firm said it had done nothing wrong. It further said the firm did not approve the business transactions, but only prepared documents at the request of the client and its accountants. The firm notes it was hardly a "general counsel" for Enron and didn't participate in internal management or board deliberations. It was one of many outside law firms Enron hired for various kinds of work, including litigation and regulatory compliance issues. "Vinson & Elkins had a minimal role in the 68 Enron disclosures that the complaint alleges are fraudulent; in many instances, it had no role at all and never even saw the asserted false statements before they were made," stated the law firm response, filed by attorney Joe Jamail. The response states that the firm played no role in three core issues: the questioned related-party transactions, overall securities disclosures and the accounting treatments at issue, the Houston Chronicle states. ENRON CORPORATION: TX Court Postpones Securities Trial Until Sept. 2003 ----------------------------------------------------------------------- A Washington County judge postponed a trial on an Enron securities class action until September, which would still make it the first such case to be tried, the Houston Chronicle reports. Defense attorneys had sought an even longer delay, claiming they could not be ready in less than a year. "You can't try this case in two weeks or two months," said Craig Smyser, a lawyer for former Enron Chief Financial Officer Andrew Fastow. "It's an immense financial and human problem." State District Judge Terry Flenniken disagreed. "I can tell you this. It is not going to be three or four months. This is no California." Attorney George Fleming wanted the judge to stick to his original trial date of March. Mr. Fleming represents about two dozen local investors who bought Enron stock after hearing then-Chairman Ken Lay extol the company at a Brenham business lunch. "We're ready to go," Fleming said. "We'll put Lay, (former CEO Jeff) Skilling, Fastow, (former Arthur Andersen partner David) Duncan and others on the stand." Going to trial in about eight weeks would seem to be impossible because a federal court order has frozen discovery proceedings for months, the Chronicle states. The Brenham case is still scheduled ahead of other major state and federal lawsuits. US District Judge Melinda Harmon oversees a conglomeration of about six dozen Enron cases in two would- be class-action suits on behalf of shareholders and former employees. Judge Harmon has already said she will be setting a new trial date, but it won't be in 2003. In February, the judge will hear Andersen's motion to bring a lot more parties into the Brenham lawsuit, including most of the financial institutions sued in the federal shareholder case, plus former Enron executive Michael Kopper, who has pleaded guilty to fraud and money laundering. Andersen says they should be brought in because a jury might find them culpable also, the Chronicle reports. GERBER SCIENTIFIC: Plaintiffs Voluntarily Dismiss Securities Fraud Suit ----------------------------------------------------------------------- The Louisiana Municipal Police Employees' Retirement System, lead plaintiff in the consolidated securities class action against Gerber Scientific, Inc., agreed to voluntarily dismiss the suit filed in the United States District Court for the District of Connecticut. The suits were filed on behalf of a proposed class of purchasers of the securities of the Company between May 27, 1999 and April 12, 2002 seeking to pursue remedies under the Securities Exchange Act of 1934. The first lawsuit was filed shortly after the Company announced, on April 15, 2002, that it expected to take a $12.0 million pre-tax charge in its fiscal fourth quarter, the period ending April 30, 2002, and that the Company was conducting an internal review of its financial reporting for the period January 1, 1998 through April 30, 2002 in response to an investigation by the Securities and Exchange Commission into its inventory and reserve accounting practices. In this announcement, the Company stated that once its investigation had been completed, the Company would likely restate its financial results for the appropriate periods, according to an earlier Class Action Reporter story. The Louisiana Municipal Police Employees' Retirement System has determined that the claims against Gerber Scientific, Inc. and its officers and directors should be dismissed. The plaintiffs and lead counsel believed that this course of action was consistent with their fiduciary responsibilities under the Private Securities Litigation Reform Act of 1995. Accordingly, on December 17, 2002, the Louisiana Municipal Police Employees' Retirement System, through its counsel, entered into an agreement with the defendants to voluntarily dismiss this action, without prejudice. On December 24, 2002, Judge Janet C. Hall approved the voluntary dismissal and ordered that the action be dismissed without prejudice. For more details, contact Eitan Misulovin by Phone: (212) 554-1484 or by E-mail: eitan@blbglaw.com INDIAN FUNDS: Indians Present Document Essaying $137B Trust Fund Losses ----------------------------------------------------------------------- American Indians gave Federal Judge Royce Lamberth a detailed accounting based on private historical records asserting that the government has cheated them out of as much as $137.2 billion over the past 115 years, the New York Times reports. The detailed filing is the latest development in the class action filed on behalf of more than 300,000 American Indians against the United States government over royalties earned on tribal land. The suit alleges that the government has lost or stolen millions of dollars earned from oil and mineral, timber and grazing leases, proceeds of which go into a trust fund for the Indians' benefit. The suit, filed in June 1996, has become increasingly bitter, the New York Times states, with documents being destroyed and the secretaries of the interior and treasury being held in contempt of court. The filing gave the idea of how much the Indians lost. Before that, evidence was largely anecdotal. "We just knew there was a lot of money missing," Tex Hall, president of the National Congress of American Indians and the head of his tribe, the Mandan, Hidatsa & Arikara Nation in North Dakota told the NY Times. "Elders would come to me and say, 'Tex, I got money last year but didn't get any this year.' There was so much variation in the system that we know something was wrong." The filing detailed private records of oil extraction and mineral mining going back to the late 19th century, and states that the government had stolen, lost or misallocated tens of billions since it was given responsibility for managing assets on Indian lands in 1887. The lawyers said that if all the figures were added up they would hit $137.2 billion, the NY Times reports. Government officials disputed the figure. Steven Griles, the deputy interior secretary who manages the trust-fund issue, told the Times, "Nobody has shown me that there has been a loss. They haven't provided one shred of evidence." The Interior Department also filed a brief yesterday that shows only how it intends to reform trust fund management and account for the money in the fund. INDIANA: State To Return $720T In Overpayments to Food Stamp Recipients ----------------------------------------------------------------------- The Indiana Family and Social Services Administration will return about $720,000 to more than 3,000 Hoosiers who had been overpaid in food stamps and then forced to repay the difference to the government, the Indianapolis Star reports. The Indiana Civil Liberties Union (ICLU) filed the suit on behalf of two food stamp recipients, alleging the state violated federal law by collecting overpayments that resulted from government mistakes. The suit was dismissed in January 2002, but the United States 7th Circuit Court of Appeals reinstated the suit. The state had contended the collections are permitted under the 1996 federal food stamp law, which allowed agencies to correct overpayments by reducing monthly food stamp allowances. Last month, US District Judge Larry McKinney ordered the state to stop several steps it had taken to recover overpayments, including involuntarily reducing food stamp allotments, intercepting federal tax returns and taking federal pay or unemployment benefits from food stamp recipients, the Indianapolis Star reports. Matt Raibley, manager of the family support services section, told the Star 3,416 letters would be mailed out by today telling people they can join the lawsuit. The state also posted notices at all county offices; the notices will stay up until June 20. INDONESIA: Workers Join Protests Against "Release & Discharge" Policy --------------------------------------------------------------------- Thousand of workers from both private and state companies have joined protest against the Indonesian government's release and discharge policy, which releases debtors from possible criminal charges, the Jakarta Post reports. The workers said they might resort to a nationwide strike or sue the government to annul the decision. Labor unions of state utility companies, such as telecommunications company PT Telkom and PT Indosat, electricity company PT PLN, oil and gas company Pertamina and railway company PT KAI, as well as unions from state- and private-owned banks and even a union representing workers from Japanese companies, signed a petition on Tuesday against the government's release and discharge, or R&D, policy. Nazir Syarief, representing labor unions at state companies like PT Indosat and PT Telkom, said the petition was the first step in a campaign to revoke the R&D policy. "Our last resort would be to cease services -- no power, no long-distance calls, even if it's just for an hour," mr. Nazir told the Post. The government's R&D policy allows ex-bankers who have admitted to abusing about US$10 billion in state funds to avoid legal prosecution if they repay some of the money and other debts to the government. The policy has been met with protests and criticism. Union members said the policy smacked of injustice. Last week, non-governmental organizations threatened to sue President Megawati Soekarnoputri if she insisted on releasing debtors from possible criminal charges, the Post states. "The government should instead make a list of rich corruptors and force them to return the money," Mr. Nazir said. Coordinator of the Indonesian Corruption Watch (ICW), Teten Masduki, who helped arranged the press meeting for the petition signing, said the petition would enhance the campaign against the R&D policy. "We may not be staging mass demonstrations on the streets, but we'll make sure the government hears our voice," he told the Post. Labor unions joining the anti-R&D protest marks a shift from their previous concerns on the sale of state companies. Meanwhile, it also signals a more unified front amid growing protests against President Megawati over what they described were her insensitive policies, the Post states. KENTUCKY: Lawsuit To Be Filed V. Louisville Police Over Fatal Shooting ---------------------------------------------------------------------- Kentucky lawmaker Paul Bather said a class action will mostly likely be filed against the Louisville Police Department, over the fatal police shooting of James Taylor, 50, by Louisville Police Officer Michael O'Neill on December 5,2002, WLKY (Kentucky) reports. Mr. Taylor was handcuffed in his home on East St. Catherine Street when Mr. O'Neill fired at him 12 times, hitting him with all but one of the gunshots, WLKY NewsChannel 32 reported. Since then, almost-daily protests have taken place at LPD headquarters since. Demonstrators said they'll protest until they get justice. The police investigation has been turned over to the commonwealth's attorney. LOUISIANA: Ferriday Town Faces Suit Over 1999 Water Interruption Notice ----------------------------------------------------------------------- The town of Ferriday, Louisiana faces a class action filed on behalf of water customers were inconvenienced by a 124-day boil water notice. The class includes anyone - residents, business owners or operators, employees of those businesses, hospital patients or students - who got his or her water from the Town of Ferriday Water Plant during the time of the notice, which ran from August 20 to December 22, 1999, the Natchez Democrat reports. The Third Circuit Court of Appeals upheld the class certification and last July, the state Supreme Court denied writs of review from the suit's three defendants, the Town of Ferriday, engineers Owen and White Inc. and U.S. Filter Wastewater Group Inc., the company that made Ferriday's water plant. Before the legal heat gets turned up, attorney Chuck Norris is giving potential plaintiffs a chance to remove themselves from the suit. Because the suit has been class certified, anyone who fits the description approved by Johnson is eligible to receive damages if the lawsuit is successful. There is no need to "sign up" as a plaintiff. However, for those who would rather not have anything to do with anything remotely litigious, Mr. Norris is required to allow members of the class to opt out, the Natchez Democrat states. Because many people may not know that they are plaintiffs or even that the suit was class certified, Mr. Norris is publishing, per court order, a detailed notice spelling out all qualifying factors and instructions for opting out in local newspapers. The deadline for getting off the list of plaintiffs is February 24, but Mr. Norris said he doesn't anticipate any contraction of the plaintiff pool, which has been estimated at 4,000 people. He further said he hopes the suit will go to trial as early as the first half of 2004, but the courts are hard to predict, and the legal process is never fast. MCKESSON CORPORATION: Court Dismisses Several Claims in Securities Suit ----------------------------------------------------------------------- The United States District Court for the Northern District of California dismissed several of the securities fraud claims pending against drug wholesaler McKesson Corporation, in a class action relating to its 1999 acquisition of HBO & Company, Reuters reports. The court dismissed with prejudice claims based on any conduct or statements by the Company prior to the acquisition HBO, a healthcare software company. The court also dismissed with prejudice claims against all present and former outside directors of McKesson who had been named in the case. The Company has thirty days to respond to the rulings in the suit, which was commenced after it was forced to restate earnings in April of 1999 following its discovery HBO had overstated its profits. However, the court allowed other claims against the Company to go forward. Although the court found the complaint did not adequately allege the Company was negligent in failing to uncover fraud at HBO prior to the merger, the court declined to dismiss claims against McKesson and one former and one current officer of the company based on post-merger proxy materials, a company statement said, according to a Reuters report. MICHAELS STORES: Canadian Employees Commence Suit Over Unpaid Overtime ---------------------------------------------------------------------- Arts-and-crafts retailer Michaels Stores, Inc. faces a class action filed by a group of Canadian retail store managers, alleging the Company owes them thousands of dollars worth of underpaid overtime, the Toronto Star reports. According to the suit, the Company owes anyone who has worked as a manager or assistant manager in its stores additional pay at overtime rates for any hours worked beyond 44 hours a week. The suit charges the Company with violating the Employment Standards Act when it failed to pay its management staff overtime rates for hours worked beyond 44 hours a week. Overtime rates are 1.5 times regular pay rates. Under the act, managerial staff is exempt from overtime rates except where those managers spend most of their time performing non-supervisory tasks, such as stocking stores shelves, working the cash register, arranging displays and selling products. The lawsuit alleges Company management staff spent most of their time on those types of non-managerial duties. The lawsuit also alleges the managers and assistant managers at Michaels Stores were required to work as many as 50 to 60 hours at peak times such as Christmas at regular rates of pay, the Toronto Star states. The number of people affected is relatively small, probably a couple of hundred, but the amount of money owed each individual could be "substantial," their lawyer, David Thompson, of the Hamilton law firm Scarfone Hawkins LLP told the Star. He added that the suit is the second time the world's largest arts-and- crafts retailer has faced allegations of unpaid overtime claims. Last June, the company announced it would take a US$3.2 million charge against earnings after settling a similar dispute with employees of its California stores. Thompson said several retailers in the United States are facing similar claims and, although this appears to be the first one in Canada, he believes there are probably more instances of it in Canada. "I suspect it's rampant in retail because of the nature of the business," he told the Star. The suit, filed in the Ontario Superior Court of Justice, launched on behalf of James Cotton of Burlington, who joined Michaels shortly after it entered the Canadian market in 1993. He had worked in a variety of positions, including store manager, before leaving the company last July. The Company has not yet responded to the statement of claim, Mr. Thompson told the Star. A spokesperson for the Irving, Texas-based firm said late yesterday that it believes the case has "absolutely no merit." NEW JERSEY: City Officials Defendants in Rent-Control Violations Suit --------------------------------------------------------------------- Attorney Flavio Komuves, 32, is spearheading a lawsuit against 100 landlords in New Brunswick, New Jersey, including the mayor and a city councilman, for some $7 million in rent-control violations, the Star- Ledger (Newark, NJ) reports. The city's rent-control problem exploded at the height of campaign season last year, when a band of activists discovered the city administration had failed to enforce the rent-control ordinance for years, allowing landlords, including Mayor James Cahill, Councilman Joseph Schrum and 98 other landlords, to raise rents without filing the mandatory paperwork. Mr. Komuves did not appear to think the matter should end with the mayor's apology, a payback to the previous year's tenants and a successful "squelch" by the city administration of an attempt by the activist group to tighten the rent-control laws so as to avert a repeat of such violations. Mr. Komuves filed a lawsuit against the 100 violators, including the mayor and the councilman. He has requested class action status for the lawsuit, seeking permission to sue on behalf of thousands of unnamed tenants for what he estimates is $21 million. A Superior Court judge is considering the request. The lawsuit asserts that the defendants are required under the law to pay tenants triple damages on the improper increases dating back for the past six years. Mr. Komuves admits the lawsuit is "a bold stroke." It could put a significant amount of money back in the pockets of the plaintiffs, while netting Mr. Komuves and his West Windsor law firm, Buchanan Ingersoll, a large fee and priceless publicity. However, Mr. Komuves, who has a history of liberal politics, says, "There are opportunities not only to do something socially just, but that make a lot of sense from a business standpoint." NEW JERSEY: Agrees To Pay $775,000 To Settle Racial Profiling Lawsuits ---------------------------------------------------------------------- The State of New Jersey agreed to pay a dozen motorists for more than US$775,000 to settle some of its most infamous racial-profiling cases, the Newark Star Ledger reports. The state will pay $200,000 each to lawyers Felix Morka and Laila Maher, who filed a lawsuit in 1997 over allegations that two state troopers assaulted them during a 1996 traffic stop. Other minority motorists later joined the suit, saying they were victims of discriminatory profiling. The suit helped galvanize the public against racial profiling and inspired reform. Another plaintiff, Elmo Randolph will receive $75,000. Mr. Randolph, an East Orange dentist who says he's been pulled over by police about 100 times over the years because he was black and drove a luxury car, however, does not believe the settlement will help eradicate racial profiling. If anything, he said, it will quiet critics' voices. "Ultimately, they never offered an apology to anyone," Randolph, who has testified often about his experiences with State Police troopers, in court and in legislative hearings told the Star Ledger. "The idea was, 'We'll pay you this, and go away.' By settling these cases, the discussion stops. They pay, the discussion stops, they go on." The settlement agreement is part of the almost US$19 million the All told, the agreement brings to nearly $19 million the amount New Jersey has paid to settle racial-profiling lawsuits since the state acknowledged the practice in the late 1990s. The largest by far was the $12.9 million the state agreed to pay in February 2001 to four minority men, three of whom were wounded by troopers in the April 1998 Turnpike shooting that triggered a public uproar over racial profiling, the Star Ledger reports. The agreement was negotiated by Douglas Wolfson, director of the Civil Division in the Attorney General's Office, and Neil Mullin and William Buckman, attorneys who represented the plaintiffs. The ACLU plans a Monday news conference at its office in Newark to announce the settlement. State officials say just a handful of racial-profiling lawsuits are pending, according to the Newark Star Ledger. However, many critics expect more claims to be filed as a result of a decision by the Attorney General's Office last year to dismiss dozens of criminal complaints in cases weakened by racially motivated policing. "New Jersey is the racial profiling state, and making amends to its victims is an important step to reform," said Deborah Jacobs, executive director of the ACLU of New Jersey. "But until we can address police culture, policies and practices to the extent that people are no longer victimized based on their skin color on New Jersey roads, there will be more litigation and more publicity around this issue." First Assistant Attorney General Peter Harvey disagreed, saying many of the old cases would be weak. Thanks to successful reforms, new claims are negligible, he said. "The State Police is a much different organization on the road today than it was in 1999," Mr. Harvey told the Star Ledger. The other plaintiffs and their settlement amounts are: (1) Herbert Morton, $50,000; (2) Kane Bragg, $25,000; (3) James Coffee, $34,650; (4) Pompeii Conover, $30,800; (5) William Eason, $34,650; (6) Christopher Good, $30,800; (7) John Okoli, $25,000; (8) Lloyd Permaul, $25,025, and (9) Avery Woods, $44,402 PNC BANK: Plaintiffs Appeal RICO Violations Suit Decertification ---------------------------------------------------------------- A group of homeowners and property owners from Pennsylvania and neighboring states, who are plaintiffs in the federal civil class action against PNC Bank, N.A. have filed an appeal to the US Court of Appeals for the Third Circuit, relating to a lower court's decision decertifying the suit. The plaintiffs allege a pattern of corporate corruption and racketeering, undertaken over ten years, from 1986 to 1996, by PNC Bank, N.A., a subsidiary of PNC Financial Services Group, Inc. PNC, and its predecessor, First Eastern Bank, and other defendants, centered on the Valley of Lakes real estate development (a/k/a "Eagle Rock Resort"), a massive 4000+ acre recreational subdivision, located near Hazleton, Pennsylvania. The plaintiffs allege that the bank conspired with the former developer, Frank Cedrone of CBG Ltd., to conceal the insolvency of CBG, which defaulted on virtually all of its promises to build the premier real estate development in the Northeast, such as by failing to complete the promised lake, the Arnold Palmer golf course, and complete the water, sewer, and road systems. Worse, after the developer declared bankruptcy, the plaintiffs allege that the bank secretly, and illegally, siphoned off millions of dollars from the developer's bankruptcy estate, from 1992 to 1996. The plaintiffs allege that the bank concealed millions of dollars from the bankruptcy court and trustee by misrepresenting to the bankruptcy court that it was not receiving any money from the estate, when it was actually secretly receiving millions of dollars per year from payments that the property owners made on their purchase money mortgages to a N.J. agent of the bank, who wired the funds to the bank from a bank account at the DIME Savings Bank of New York. The bank siphoned off approximately: (1) $1,118,595.87 in 1992, (2) $921,567.30 in 1993, (3) $581,696.71 in 1994, (4) $439,709.98 in 1995, (5) $376,113.95 in 1996 and (6) $46,236.29 in 1997 Worse yet, the plaintiffs allege that in order to operate the development, while starving the bankruptcy estate of millions of dollars, the bank hired a "managing company," defendant MLA Management Associates Inc. (MLA), to shut down the development's facilities, and provide hardly any maintenance, while forcing the property owners to pay maintenance fees for services not rendered. Further, the plaintiffs allege that the developer retaliated against them for attempting to associate in order to seek help, such as by fining them for criticizing his rule. The developer even denied the Pennsylvania State Police access to the development. Some of the homeowners' children were repeatedly chased by snow plows, driven by the developer's employee, but the State Police was not allowed in the development. A number of the Plaintiffs lost their life savings as a result of the pattern of racketeering. The case was certified as a class action on June 19, 1996 on behalf of approximately one thousand individuals and families. The plaintiffs are appealing a later ruling of the US District Court for the Middle District of Pennsylvania which granted summary judgment to the bank, and decertified the case as a class action, on September 30, 1999. While the district court found that the evidence against the bank could support a finding of aiding and abetting of racketeering, it held that aiding and abetting of Racketeer Influenced and Corrupt Organizations Act (RICO) is no longer actionable in the Third Circuit. At the same time that the plaintiffs are proceeding with their appeal, the remainder of their RICO case against the bank's agent, MLA, and the former developer, who defaulted on all claims, is proceeding to trial before a jury in Williamsport, Pennsylvania. PURDUE PHARMA: OH Court Asked To Grant Certification to Oxycontin Suit ---------------------------------------------------------------------- Plaintiffs in the lawsuit filed against Purdue Pharma asked an Ohio federal court to grant nationwide class certification to the suit, relating to alleged physical harm brought by the Company's painkiller Oxycontin, the Cincinnati Enquirer reports. The four plaintiffs said that their lawsuit would protect the interests of anyone in the country who has been harmed by the drug. The lawsuit alleges the Company sold the drug without proper restrictions on its use. The suit further asserts that the Company should pay for prescription monitoring programs that would track Oxycontin prescriptions, making it possible for law enforcement to find out if someone is obtaining multiple prescriptions. The suit also seeks a medical monitoring program to track the effects of the drug on those who use it. If the lawsuit is certified as a national class action, all such claims against the drug manufacturer would be consolidated into the Cincinnati case, the Cincinnati Enquirer states. Judge S. Arthur Spiegel will decide later this year whether to grant class action certification. SUN RISE: Voluntarily Recalls 2.8T Bicycles For Accident, Injury Hazard ----------------------------------------------------------------------- Sun Rise Bicycle Industrial Co., Ltd. is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 2,800 bicycles. The frames on these bicycles can break, which can cause riders to lose control and crash. Raleigh America has received 13 reports of frames breaking including one incident where a consumer reported a broken heel. The recall involves the 2002 Diamondback X-10 and X-20 Bicycles. These are full-suspension, Y-frame mountain bikes. They are either silver and black or black and blue. "Diamondback" and "X10" or "X20" are written on the down and bottom tubes. Authorized Diamondback dealers sold the X-10 and X-20 bicycles nationwide from September 2001 through October 2002 for about $550 for the X-10 and $770 for the X-20. For more details, contact the Company by Phone: (888) 805-6396 between 7 am and 5 pm PT Monday through Friday, or visit the firm's Website: http://www.diamondback.com. THRIVENT FINANCIAL: Fraud Suit Filed For Life Insurance Policyholders --------------------------------------------------------------------- Thrivent Financial, formerly Lutheran Brotherhood faces a class action filed on behalf of its Midwest policyholders, who bought whole or universal life policies as far back as 1982, the Star Tribune reports. Nearly 500,000 Thrivent Financial clients have been invited to join the suit, which accuses the Company of issuing fraudulent vanishing premium policies. The suit alleges the Company mislead customers by telling them that their premiums would be invested, build cash value and eventually vanish after a set number of years. As interest rates fell in the 1990s, the value of the policies failed to grow as expected and many lost value, according to the suit. The suit seeks more than $60 million in damages. The Company has denied wrongdoing and said it will contest the suits in court. "There has been no determination that we engaged in the acts alleged or violated any laws," Dave Westmark, the firm's senior associate general counsel told the Star Tribune. A similar lawsuit seeking class action status was filed against the firm in California last week. According to the plaintiffs, almost 164,000 customers bought policies that failed to perform as promised after 1993, the court's cutoff year. Thousands of additional policyholders will be included in the suit if they bought policies after 1982 and changed payment or dividend options after 1993, the Star Tribune states. TOBACCO LITIGATION: Trial Set For Suit Over Dangerous Product Knowledge ----------------------------------------------------------------------- A trial date of January 21 has been set in a class action in Louisiana, filed seven years ago, charging the tobacco companies with manipulation of nicotine levels and marketing to children, among other things, Associated Press Newswires reported. Civil District Judge Richard Ganucheau, who officially retired from duty on December 31, received a special appointment to hear the case, which will probably take months to try. Jurors were chosen more than a year ago to hear the statewide class action. The lawsuit, filed in 1996, does not seek individual damages, saying instead that the tobacco industry should pay for programs to help smokers quit and for programs, as well, to monitor the health of current and former smokers. The Louisiana Supreme Court, in a November hearing, set up a plan for presentation of the case. The court ruled that the first phase would concentrate on such issues as the marketing of cigarettes to children, alleged manipulation of nicotine levels, whether industry officials knew they were making a dangerous product and whether they engaged in fraud and conspiracy. If the jurors decide that the companies are liable, the jurors would then decide what kinds of monitoring and stop-smoking programs should be available and what members of the class qualify. Tobacco companies contend that smoking is a matter of personal choice and that medical programs proposed to help smokers have not been proven to work. The first scheduled witness, Dr. Davis Burns of the University of California-San Diego School of Medicine, has testified in many other lawsuits against tobacco companies. TOBACCO LITIGATION: Group says States Failing To Use Settlement Money --------------------------------------------------------------------- A health advocacy group says that many state governments are using money they won in a landmark $246 billion tobacco settlement forged in 1998 to plug fiscal deficits rather than fund anti-smoking programs, Reuters states. According to a study by the American Lung Association, cash-strapped states are reneging on promises to spend the money on programs to prevent and stop smoking. Twelve states and the District of Columbia are cashing in their tobacco settlement altogether, issuing bonds backed by the money to help close billion-dollar budget shortfalls, said the "State of Tobacco Control" report. "They are raiding tobacco funds to cover budget shortfalls, and denying themselves a sound investment in their citizens' health," association president John Kirkwood told Reuters. Mr. Kirkwood further warned that the states will ultimately be left without funds to address the continuing epidemic of smoking-related illnesses, which his group says causes about 440,000 deaths a year in the United States, if the money is all spent. The group also complained that many states are not passing strict enough laws to ban indoor smoking. Forty-three states and the District earned an "F" for smoke-free air laws. Only six states - Arkansas, Indiana, Maryland, Maine, Minnesota and Mississippi - got a grade of "A" from the association for tobacco program funding. Thirty-two states and the District of Columbia received an "F," Reuters states. Overall, the states are spending about $698 million annually on smoking education and quit-smoking programs. That's only a fraction of the $9.8 billion a year the states are getting from the settlement, Kirkwood said. That amount is also less than half the $1.6 billion the states should be spending under guidelines laid out by the U.S. Centers for Disease Control, he added. "It's a short-term view," Mr. Kirkwood told Reuters. "Good public policy requires a longer view of things." States that have decided to sell bonds backed by the settlement funds will forego future tobacco settlement payments in favor of a smaller, lump sum now. The lung association said those states will receive only 30 to 40 percent of the original settlement amount. Nevertheless, Mr. Kirkwood said, the tobacco settlement money is an irresistible target to many cash-strapped states. VISUAL NETWORKS: MD Court Dismisses Appeal of Securities Suit Dismissal ----------------------------------------------------------------------- The United States District Court for the District of Maryland dismissed the pending appeal of the dismissal of the securities class action pending against Visual Networks, Inc. (Nasdaq: VNWK) and Scott Stouffer, chairman of the board and the former chief executive officer. In July, August and September 2000, several purported class action complaints were filed against the Company and Scott Stouffer, chairman of board and former chief executive officer. These complaints have since been combined into a single consolidated amended complaint. The complaint alleges that between February 7, 2000 and August 23, 2000, the defendants made false and misleading statements that had the effect of inflating the market price of the Company's stock, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, an earlier Class Action Reporter story states. On August 20, 2002, United States District Judge Deborah K. Chasanow entered an order in the United States District Court for the District of Maryland dismissing the consolidated securities class action complaint filed against the Company and Mr. Stouffer. On September 17, 2002, the plaintiffs appealed the District Court's decision to the United States Court of Appeals for the Fourth Circuit. The plaintiffs recently decided to withdraw their appeal and filed a consent motion to have the appeal dismissed. The United States Court of Appeals for the Fourth Circuit granted the plaintiffs' motion. The Fourth Circuit's decision ends the matter. "We are extremely pleased with the plaintiffs' decision to end their pursuit of an appeal. As we've said before, these complaints were without merit and we now have this behind us once and for all," said Peter J. Minihane, Visual Networks' interim president and chief executive officer, in a statement. For more details, contact Angela Tandy, Director, Corporate Communications, of Visual Networks, Inc. by Phone: 1-301-296-2741 or by E-mail: atandy@visualnetworks.com or visit the firm's Website: http://www.visualnetworks.com WASHINGTON: WA Court Dismisses Public Utility Suit V. Energy Companies ---------------------------------------------------------------------- The United States District Court in Washington dismissed a class action filed by the Sonomish Public Utility District against several energy firms, alleging that the companies used unfair business practices to drive electricity prices to record levels, the Walnut Creek Journal reports. The lawsuit was one of several complaints involving the California wholesale electricity market that was granted class-action status, Richard Wheatle, spokesman for Reliant Energy, one of the defendants in the suit, told the Journal. Snohomish attorneys argued in court papers that the energy companies manipulated the wholesale market to drive up rates, forcing the utility to "pay prices for electricity in excess of rates that would have been achieved by competitive market." The Washington utility claimed the companies violated California's antitrust and unfair competition laws. Federal Judge Robert H. Whaley ruled that the suit belonged in front of the Federal Energy Regulatory Commission (FERC), not a court. The lawsuit was filed in Washington, but hearings were held in San Diego, California in December. The judge said the case, which sought to recover the difference between the market price and a "just and reasonable" rate for electricity, would have to be decided by FERC, which has the authority to set rates. FERC is considering similar cases, including two filed by the utility, Judge Whaley noted in his order. The dismissal is important because "reaffirms the jurisdiction of FERC in its ratemaking authority and oversight of how rates are set in the wholesale market," Mr. Wheatley added. Officials with Snohomish Public Utility District didn't immediately return calls for comment, the Walnut Creek Journal reports. XEROX CORPORATION: Retirees May Be Owed Additional Pension Funds ---------------------------------------------------------------- Xerox Corporation may have shorted thousands of its retirees and former employees by miscalculating their lump-sum retirement benefits, their plight indicating only the tip of an iceberg of stunted retirement payouts to employees of other firms, the Deseret News reports. A federal judge issued a ruling in a class action against the company's retirement plan, which orders the Company to pay $300 million in back benefits and interest to about 13,000 former employees to compensate for its error. Xerox has appealed the ruling. However, if it is upheld, employees who left or retired from Xerox since January 1, 1990, and who took their pension in a lump sum rather than in monthly payments, may be eligible for additional payments ranging from less than $1,000 to more than $100,000. These are estimates given by Steven Katz of the law firm Carr Korein Tillery LLC, in Belleville, Illinois, one of the lead attorneys in the class action. Although this lawsuit concerns only Xerox, the issue of how payouts from cash-balance retirement plans are calculated could affect millions of Americans. Since the mid-1980s, hundreds of companies have switched from traditional pension plans, which generally provide a lifetime of monthly payments based on the employee's work history, to cash-balance plans, which offer departing employees a cash payment. When workers leave their jobs before normal retirement age and take a lump-sum payout from their plan, complicated and controversial actuarial calculations kick in to determine exactly how big the payout should be. The US Department of Labor audited a sampling of 60 cash- balance plans and discovered that in 13 cases, workers who left before normal retirement age did not receive all the benefits to which they were entitled. New Securities Fraud Cases ANNUITY AND LIFE: Bernstein Liebhard Commences Securities Lawsuit in CT ----------------------------------------------------------------------- The Law Offices of Bernstein Liebhard & Lifshitz, LLP initiated a securities class action in the United States District Court for the District of Connecticut on behalf of all persons who purchased or acquired Annuity & Life Re (Holdings), Ltd. (NYSE: ANR) securities between April 19, 2000 and November 19, 2002, inclusive. Plaintiff alleges that throughout the class period, defendants caused Annuity to make materially false and misleading public statements concerning the Company's earnings and expenses, which figures were misstated due to the Company's failure to properly account for: (1) embedded derivatives in certain reinsurance contracts; (2) minimum interest guarantee expenses; and (3) a $19.5 million reserve of minimum interest guarantees On July 25, 2002, defendants disclosed that Annuity would have to restate its financial statements for fiscal 2001 and the first quarter of fiscal 2002 because separate accounting was required for its embedded derivatives, which are derivative contracts that exist as part of securities. The understated expenses, misclassified reserve, and the fact that fiscal year 2000 and second quarter fiscal year 2002 financial statements would also have to be restated was not disclosed. After this partial disclosure, Annuity stock fell almost 50%, from $12.87 per share on July 25, 2002 to $6.30 per share on July 26, 2002. The full truth came out on November 19, 2002. On that date, Annuity announced that it was going to restate its financial results not only for fiscal year 2001 and the first quarter of 2002, but for fiscal year 2000 and the second quarter of 2002 as well. Defendants revealed that Annuity's $19.5 million reserve would have to be re-classified and that its minimum interest payments were wrongfully characterized as reductions in liability rather than as expenses. After the November 19th announcement, the price of Annuity stock dropped another 40%, on enormous volume twenty times larger than that of November 19th, from a close of $4.08 per share on November 19, 2002 to a close of $2.24 per share on November 20, 2002. For more details, contact Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or (212) 779-1414 by E-mail: ANR@bernlieb.com or visit the firm's Website: http://www.bernlieb.com CREDIT STORE: Finkelstein & Krinsk Commences Securities Suit in S.D. CA ----------------------------------------------------------------------- Finkelstein & Krinsk initiated a securities class action against certain of the officers and directors of The Credit Store, Inc. (AMEX: CDS) for violations of the federal securities laws, in the United States District Court for the Southern District of California on behalf of purchasers of Company securities between April 16, 2001 and August 19, 2002. The complaint charges certain of Credit Store's former and/or current officers and directors with violations of the Securities Exchange Act of 1934 and, specifically, alleges that Kevin Riordan, Jay Botchman and certain other past officers and directors made false statements or omitted material information about Credit Store's business and financial results causing its stock to trade at artificially inflated levels during the class period. The Credit Store represented itself to be a technology and information based financial services company providing credit card products to consumers having insufficient financial credentials to otherwise qualify for an unsecured credit card. In truth, the success of the Credit Store and the financial performance represented to its public investors were materially false and dependent on inaccurate assessments of Company business. The Credit Store created and used, inter alia, wholly owned satellite companies that served as devices to provide inaccurate financial accounting and disguise the deteriorating financial condition of the Company. The true cash flow for the Credit Store and multiple operating difficulties were being concealed during the class period. This allowed the improper diversion of Company assets and liabilities through mismanagement that improperly benefited Company insiders. On August 19, 2002, Credit Store filed a voluntary petition under Chapter 11 of Title 11 of the United States Bankruptcy Code. Absent this bankruptcy filing the Company would be a named defendant. For more details, contact Mark L. Knutson or Jeffrey R. Krinsk by Phone: 619/238-1333 or 877/493-5366 by E-mail: fk@classactionlaw.com MOTOROLA INC.: Bernstein Liebhard Commences Securities Suit in S.D. NY ---------------------------------------------------------------------- Bernstein Liebhard & Lifshitz, LLP initiated a securities class action in the United States District Court for the Southern District of New York on behalf of all persons who purchased or acquired Motorola, Inc. (NYSE: MOT) securities between February 3, 2000 and May 14, 2001, inclusive. Carl F. Koenemann is named as Defendant in the action. The suit alleges that defendant violated Section 10(b) of the Securities Exchange Act of 1934 and breached his fiduciary duty to the Class by issuing a series of materially false and misleading statements about the Company's financial results. The complaint alleges that Motorola's vendor financing commitments -- including over $1.7 billion in vendor financing to a customer in Turkey -- were never properly disclosed. The complaint alleges that as a result of these false and misleading statements, the price of Motorola common stock was artificially inflated throughout the class period causing Plaintiffs and the other members of the class to suffer damages. For more details, contact Ms. Linda Flood, Director of Shareholder Relations by Mail: 10 East 40th Street, New York, New York 10016 by Phone: (800) 217-1522 or 212-779-1414 or by E-mail: MOT@bernlieb.com. SEPRACOR INC.: Shapiro Haber Launches Securities Fraud Suit in MA Court ----------------------------------------------------------------------- Shapiro Haber & Urmy LLP initiated a securities class action with an expanded class period of May 17, 1999 through March 6, 2002 in the United States District Court for the District of Massachusetts on behalf of purchasers of Sepracor, Inc. (NASDAQ: SEPR) common stock. The suit charges the Company and certain of its current and former officers with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and SEC Rule 10b-5. The complaint asserts that the defendants misrepresented and concealed facts concerning Sepracor's most important product, Soltara, an antihistamine for which the Company had applied for FDA approval. The complaint charges that defendants falsely represented: (1) that there was no evidence that Soltara caused cardiac effects; (2) that Soltara had been tested at maximum exposure in patients; and (3) that the FDA had told Sepracor that the safety testing of Soltara was sufficient to allay any concerns about cardiac effects from the drug. The complaint further alleges that on March 6, 2002, at the end of the class period, defendants disclosed that their prior representations were untrue, and that the FDA had declined to approve Sepracor's application to market Soltara due to the facts defendants had misrepresented. These disclosures caused the market price of Sepracor stock to fall precipitously. For more details, contact Ted Hess-Mahan or Liz Hutton by Mail: 75 State Street, Boston, MA 02109, by Phone: (800) 287-8119 by Fax: (617) 439-0134, or by E-mail: cases@shulaw.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 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 * * *