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/raid1/www/Hosts/bankrupt/CAR_Public/030218.mbx C L A S S A C T I O N R E P O R T E R Tuesday, February 18, 2003, Vol. 5, No. 34 Headlines ABERCROMBIE & FITCH: Employee Launches Lawsuit Over "Uniforming" Policy CANADA: Dermatologist Sued For Injecting Patients With Liquid Silicone CATHOLIC CHURCH: Details Of Sexual Abuse Sought In Suit v. KY Diocese CONNECTICUT: Court Awards Certification to Suit For Mentally Retarded CONTINENTAL AIRLINES: Trial in Travel Agents' Suit Set April 2003 in NC FLEMING COMPANIES: Amended Lawsuit Alleges Misstated Financial Reports GROUP HEALTH: Agrees To Reimburse Members For Alternative Treatments INDONESIA: Flood Victims Appeal To Jakarta Court Over Dismissal of Suit KOREA: President Roh Talks Of Pushing for Chaebol Reform, New Systems MARYLAND: Students Protest Tuition Increase, Allege Breach Of Contract MARYLAND: Black Lawmakers Okay Gov. Ehrlich's Stand on Suit Settlement NETSILICON INC.: Asks NY Court To Dismiss Consolidated Securities Suit NEW MEXICO: ACLU Sues For Replacement Of Court-Appointed Police Monitor ORLEANS HOMEBUILDERS: Agrees To Settle Homeowner Lawsuit in NJ Court PENTHOUSE INTERNATIONAL: Asks IL Court To Dismiss Consumer Fraud Suit ROBERT BOSCH: Recalls 2 Million Drill Battery Chargers For Fire Hazard SPRINT CORPORATION: Accused of Failing To Disclose Tax Shelters VARI-L CO.: CO Court Grants Approval To Securities Lawsuit Settlement WAL-MART STORES: Faces Largest Gender Bias Lawsuit In American History WEST VIRGINIA: Bill To Curb Non-residents' Right To Sue In State Courts WEST VIRGINIA: Elkins Mayor Relieved Of Duties In Sex Harassment Probe New Securities Fraud Cases AMERCO: Cauley Geller Commences Securities Fraud Lawsuit in NV Court AMERCO: Kaplan Fox Lodges Securities Fraud Lawsuit in NV Federal Court COSi INC.: Barrack Rodos Commences Securities Fraud Lawsuit in S.D. NY COSi INC.: Cauley Geller Commences Securities Fraud Lawsuit in S.D. NY MIIX GROUP: Lampf Lipkind Launches Securities Fraud Lawsuit in NJ Court MONTEREY PASTA: Bull & Lifshitz Commences Securities Lawsuit in N.D. CA PARAMETRIC TECHNOLOGY: Milberg Weiss Commences Securities Lawsuit in MA PARAMETRIC TECHNOLOGY: Cauley Geller Commences Securities Suit in MA SAWTEK INC.: Schiffrin & Barroway Lodges Securities Lawsuit in M.D. FL ********* ABERCROMBIE & FITCH: Employee Launches Lawsuit Over "Uniforming" Policy ----------------------------------------------------------------------- An Abercrombie & Fitch employee recently filed a lawsuit seeking class action status, in Los Angeles, claiming the Ohio-based retailer did not reimburse her and other workers for clothes they are required to buy and wear at work, Reuters English News Service reports. The lawsuit filed by Jennifer Solis, who works at the chain's Capitola, California, store, alleges that the company's employees, as a condition of employment, are required to buy and wear at work, one "floor set" of clothes from the current Abercrombie & Fitch line four times each year. Ms. Solis earns $6.75 per hour and claims she typically spends between $100 and $300 on each "floor set." She claims she has paid about $1,200 of her own money to purchase the required clothing, plus approximately $100 in dry cleaning costs, since she was hired in May 2002. The lawsuit alleges that the chain's "uniforming policy" violates California labor laws, which require employers to provide and maintain uniforms. The lawsuit asks the court, therefore, to order the company to reimburse about 1,000 California employees for their work-related clothing expenses, to pay general damages and to halt its alleged "uniforming" policy. The lawsuit filed by Ms. Solis is one of a rash of suits dealing with a prevalent industry practice of "wardrobing," or requiring the employee to purchase and wear the same brand of clothing sold by the employer. CANADA: Dermatologist Sued For Injecting Patients With Liquid Silicone ---------------------------------------------------------------------- Anna Barbiero recently filed a $100 million lawsuit, seeking class action status, against prominent Toronto dermatologist Dr. Sheldon Pollack, alleging that she has suffered a multitude of health problems as a result of being injected with banned liquid silicone by Dr. Pollack, The Toronto Star reports. The statement of claim contends, generally, that Dr. Pollack injected liquid silicone into patient to smooth facial wrinkles and scars and plump up lips and further contends that his patients suffered serious illness as a result. More particularly, Ms. Barbiero alleges that some of the side effects she has had as a result of the injections include, among others, hair loss, migraine headaches and numbness in her legs. Some former patients of Dr. Pollack also allege in the statement of claim that they, too, have experienced adverse effects from being injected with liquid silicone. Although Lawrence Thacker, Dr. Pollack's lawyer, declined to comment, Douglas Elliott, who is acting as attorney for representative plaintiff Ms. Barbiero, said, ""We say our patients have suffered a spectrum of injuries as a result (of these injections). Some of them have been unable to make a living and have incurred costs associated with the symptoms that have been produced from the effects of the silicone." Health Canada does not allow injections of liquid silicone for cosmetic uses. The lawsuit also asserts that liquid silicone is used in the production of aviation brake fluid. The US Food and Drug Administration says silicone can move from the injection site to other parts of the body, causing inflammation and discoloration of surrounding tissues, and form nodules of inflamed tissues as well. Ms. Barbiero also has complained to the College of Physicians and Surgeons (College) of Ontario about her medical experiences with Dr. Pollack. The College is the provincial governing body that regulates and disciplines the doctors. The College has not yet set the date for the disciplinary proceedings at which it will hear Ms. Barbiero's complaint. In a June 18, 2002, letter from Dr. Pollack to the College he writes that it was his "standard and usual practice, prior to using injectable grade liquid silicone (IGLS) to explain carefully to every patient the nature, risk and effect of possible complications of IGLS, as well as its status for sale and use in Canada." Dr. Pollack also writes in the same letter that he informed Ms. Barbiero "that the material was not for sale in Canada." The College already has in its possession information making allegations against Dr. Pollack. The College alleges Dr. Pollack injected silicone in 20 or more patients since May 8, 1999, even though he had informed Health Canada that he had discontinued such practice. The College also alleges that although Dr. Pollack's clinical records for 20 or more patients indicate that he injected those patients with a wrinkle-smoothing substance called Artecoll, which is approved in Canada, he "actually had injected liquid silicone." CATHOLIC CHURCH: Details Of Sexual Abuse Sought In Suit v. KY Diocese --------------------------------------------------------------------- Two Northern Kentucky residents recently filed a proposed class action lawsuit in Boone County Circuit Court in Kentucky against the Diocese of Covington, seeking the opening of church archives that allegedly detail sexual abuse claims against priests, The Lexington Herald-Leader reports. Gregory S. Harvey, 34, of Covington and Maria Rebecca Trout Caddell, 47, of Erlanger, both of whom allege they were sexually abused by priests, claim that the diocese kept confidential files on sexual abuse and misconduct by the priests, open only to the bishop of Covington and the chancellor of the diocese. The lawsuit further alleges that these diocese officials refused to report the contents of the records to law enforcement officials or other clergy, leading to an organized cover-up of sexual abuse involving more than 100 children since 1958. The lawsuit asks that in addition to opening its files on the past sexual abuse, that the diocese reform the way it handles present and future sexual abuse and misconduct allegations, that an independent monitor be appointed to review the practices of the diocese in this area for five years and report back to the court any dereliction. The lawsuit seeks punitive damages with interest for the plaintiffs. A spokesman for the diocese said that diocese officials followed an outlined set of procedures in dealing with sexual abuse and misconduct claims against priests. The diocese revised its sexual abuse policy in 2000. Ms. Caddell alleges she was sexually abused by a priest in 1967, when she was 11, and a parishioner attending St. Patrick's Church in Mayville. Mr. Harvey alleges he was sexually abused by a priest when he was 13, while attending St. Joseph's Elementary School in Camp Springs. Both plaintiffs claim the sexual abuse took place at various locations, including diocesan-assigned residences for clergy. CONNECTICUT: Court Awards Certification to Suit For Mentally Retarded --------------------------------------------------------------------- Connecticut Federal Judge Janet Bond Arterton recently granted class action status to a lawsuit filed on behalf of mentally retarded people stuck on a waiting list for state services and housing, the Associated Press Newswires reports. The lawsuit, filed on behalf of The ARC/Connecticut and 26 people, will now be expanded to include all 1,700 people on the state waiting list, Judge Arterton ruled. The lawsuit claims that the federal law requires the states to integrate people with disabilities into the community. Keeping mentally retarded persons on a waiting list for years denies them their rights under federal law. The named defendants include Department of Mental Retardation Commissioner Peter H. O'Meara and Department of Social Services Commissioner Patricia A.Wilson-Coker, who is responsible for Connecticut's Medicaid plan. Some of the people have been on the state waiting list for 15 years and "desperately need housing," said Andrew Alan Feinstein, an attorney for the plaintiffs. Many of the mentally retarded live with their parents, who eventually will be unable to meet their needs, Mr. Feinstein added. Mr. Feinstein said that many of the individuals on the waiting list are capable of living in conventional housing with certain support services, such as vocational help, day services or someone who just checks on them with regularity and provides help whenever it is needed. Some of the mentally retarded on the list are waiting for placements in group homes. Commissioner O'Meara pointed out that a non-moving waiting list can be attributed in large part to diminishing funds during a period of strapped budgets. He also said that in recent years, lawmakers have reduced funds earmarked for reduction of the waiting list from $15 million, to $10 million, to only $250,000 in fiscal year 2002. He expects that in the budget for the current fiscal year, state funding for waiting-list reduction will be eliminated. CONTINENTAL AIRLINES: Trial in Travel Agents' Suit Set April 2003 in NC ----------------------------------------------------------------------- Trial in the class action filed against Continental Airlines, Inc. and other airlines by travel agents will commenced on April 28, 2003 in the United States District Court for the Eastern District of North Carolina. The suit, filed on behalf of American travel agencies, challenges the reduction and ultimate elimination of travel agent base commissions by certain air carriers, including the Company and other domestic and international air carriers. The amended complaint alleges an unlawful agreement among the airline defendants to reduce, cap or eliminate commissions in violation of federal antitrust laws during the years 1997 to 2002. The plaintiffs seek compensatory and treble damages, injunctive relief and their attorneys' fees. The class was certified on September 18, 2002. Discovery has been completed. The Company believes the plaintiffs' claims are without merit. A final adverse court decision awarding substantial money damages, however, would have a material adverse impact on the Company's financial condition, results of operations and liquidity. FLEMING COMPANIES: Amended Lawsuit Alleges Misstated Financial Reports ---------------------------------------------------------------------- Shareholders of Fleming Companies, the nation's largest wholesale food distributor, filed an amended securities class action recently in the US District Court for Eastern Texas, and consolidates several complaints that were filed by investors late last year, Associated Press Newswires reports. The amended lawsuit claims that the top executives, including the current chairman and chief executive, deliberately misstated financial reports in 2001 and 2002. Generally, the amended complaint alleges that Fleming executives were inflating profits reported to investors and giving upbeat outlooks that they knew to be false. The amended lawsuit further charges that Fleming, having overstated earnings throughout 2001, continued to overstate earnings in 2002. The company, says the amended lawsuit, lied to investors about the health of its retail operations even as it issued a new stock offering and negotiated new credit lines with banks. The amended complaint also details existence of a new insider account provided by an unidentified former employee who was a financial analyst at Fleming's retail division from October 2001 to late July 2002. The alleged insider account details, among other things, descriptions of how executives allegedly fabricated improper deductions on supplier invoices in order to shore up sagging profits, and artificially inflated the sales reports of Fleming's now-discontinued retail operations. The company quickly refuted the behaviors detailed in the insider account. "Any such claims of wrongdoing are patently not true," Fleming responded in a statement, declining to elaborate further on the allegations. "The individual quoted in the filing is simply a disgruntled employee. The truth will come out through the court process, where the company is prepared to address these items." The lawsuit reveals its own abbreviated "take" on the allegations made against Fleming, by citing a November article in The Albuquerque Journal, which says, "The fraud is so egregious that Fleming has been referred to in the food industry as 'Flem-ron.' " GROUP HEALTH: Agrees To Reimburse Members For Alternative Treatments -------------------------------------------------------------------- Group Health Cooperative agreed to settlement of a class action lawsuit brought by its members that could reimburse them as much as $10 million for naturopathic, acupuncture and massage therapy, under a state law mandating parity for alternative treatment, Associated Press has reported. The settlement may involve, according to lawyers' estimates, as many as 100,000 members in one of the largest and oldest health maintenance organizations in the nation. Group Health has a membership of about 600,000. "It is a victory for consumers who want choices," said Jane Guiltinan, dean of clinical affairs at Bastyr University, a natural medicine and health sciences school in Kenmore. Washington, under a state law enacted in 1996, requires alternative health care that is state regulated and licensed to be covered by health insurers the same as more traditional, standard practices. The law was unanimously upheld by the state's Supreme Court, in 2001, when insurers went to court arguing that expanding the list of approved providers would drive up premium costs. In 2001, Group Health members went to court and successfully challenged a requirement by the insurer that they exhaust traditional treatment options before applying for reimbursement for alternative treatment. They also refuted the cooperative's requirements for referrals from traditional physicians. Washington is one of about a half-dozen states that require insurers to cover treatment by acupuncturists, chiropractors, osteopaths, nutritionists and other alternative practitioners. Previous settlements were reached in cases against Regence Blue Shield, Premera Blue Cross and the Northwest Washington Medical Bureau, which has since merged into Regence. INDONESIA: Flood Victims Appeal To Jakarta Court Over Dismissal of Suit ----------------------------------------------------------------------- Jakarta's flood victims will appeal the dismissal of a class action filed against a number of defendants, including City Governor Sutiyoso, over floods that plagued the city last year, in Jakarta High Court. The Central Jakarta District Court dismissed the suit in a ruling on November 21, 2002, the Jakarta Post reports. Secretary of the advocacy team for the plaintiffs, Tubagus Haryo Karbyanto, said the governor must be held accountable for last years's flooding. Mr. Tubagus said, ""The Mayors are indeed the ones directly responsible for the operational task of handling the floods, but the Jakarta Governor, the West Java Governor, R. Nuriana and President Megawati, were responsible for coordinating the operation." Mr. Tubagus said the three have been named as defendants in the suit, as they allegedly failed to properly coordinate their subordinates in handling last year's floods. "The mistakes committed by the subordinates are the responsibility of their superiors," Mr. Tubagus said, while addressing a media conference at the Jakarta Legal Aid Institute in Central Jakarta. Mr. Tubagus was commenting on the legal arguments presented by the district court in their ruling, which stated that the plaintiffs had sued the wrong persons. The court said that the officials directly responsible for handling the flood and its aftermath were Jakarta's five mayors. The plaintiffs' lawyer said in response to the lower court's argument that the district court had failed to take into account Law No. 34/1999, on the Jakarta Administration, which gives the governor of Jakarta the power to take full control of the capital, unlike other provincial administrations. "Therefore, the victims will not file a new lawsuit against the mayors," said Mr. Tubargus, the plaintiffs' lawyer. The accused, he said, were sued for their alleged failure to give prior warning to Jakartans and to provide necessary emergency action after the floods, which forced more than 97,000 families or 365,000 individuals to leave their homes and seek temporary shelter for several weeks. KOREA: President Roh Talks Of Pushing for Chaebol Reform, New Systems --------------------------------------------------------------------- President Elect Roh Moo-hyun recently repeated his determination for chaebol reform. He said there is still a long way to go, in a speech at a forum sponsored by the Federation of Korean Industries, Asia Pulse reports. "Some improvement has been made in corporate transparency and chaebol's ownership structures, but it still falls far short of foreign investors' expectations," Mr. Roh said. Mr. Roh confirmed again that he will enforce such corporate reform policies as the institution of a securities class action system. He added that a strengthened limit on inter-subsidiary investments would be invoked despite opposition from business circles. The President Elect said conglomerates should heed the criticism that valuable companies have been incorporated mostly into the nation's top four chaebol, resulting in an excessive concentration of economic power that has blocked social integration. He said he did not favor government intervention to boost the sagging economy, saying "The current economy is not bad enough for the government to take "perk-up" measures. Mr. Roh commented on the recent downgrade by Moody's Investors Service of the nation's credit rating outlook from "positive" to "negative." He said he planned to persuade the North, in a transparent manner, to settle its nuclear weapons issue peacefully. In regard to the problem with North Korea, the President Elect added that he will be meeting with President George Bush in the near future to discuss a rational policy that might bring a solution to the nuclear issue. MARYLAND: Students Protest Tuition Increase, Allege Breach Of Contract ---------------------------------------------------------------------- Seven University System of Maryland students have filed a class action in Baltimore Circuit Court to block a midyear tuition increase, alleging the increase is a breach of contract because the students enrolled for the school year on the understanding they would be charged the fixed tuition rates that their universities had posted for both the fall and spring semester, the Associated Press Newswires reports. A hearing is scheduled for Tuesday on the students' request for a temporary injunction to block the surcharges, which students have several weeks to pay. "The students and the universities have a contract, and the universities can't change it midway through the year," said Andrew Freemen, one of the attorneys representing the students. The students from the University of Baltimore and University of Maryland, Baltimore, said university officials broke that contract by deciding last month to raise the spring semester's rate by as much as $557, after some spring classes had started and after many spring tuition bills had been mailed. The Board of Regents passed the midyear increase January 23, for all the system's institutions except Coppin State College and the University of Maryland, University College, after Governor Robert Ehrlich cut $36 million from this year's system budget. Students had been told of a possible increase in a January 8 letter from system Chancellor William Kirwan. The increase resulted in additional spring semester payments of up to $115 for in-state undergraduates, $333 for out-of-state undergraduates, and $557 for some professional school students. "We are struggling to react and certify the factual statements (in the suit), but we are prepared to defend the regents' action," said Assistant Attorney General John Anderson. "We don't think it is a breach of any legally cognizable contract. The university system was reluctant to do this but obviously had no choice." If successful, the lawsuit could provide some precedent for student challenges of midyear tuition increases elsewhere. Several states have passed such increases this year without being sued. Mr. Freeman said the only precedents he could find were a 1904 case involving the Baltimore University law school and a 1992 case involving the University System of New Hampshire. MARYLAND: Black Lawmakers Okay Gov. Ehrlich's Stand on Suit Settlement ---------------------------------------------------------------------- Black legislators who have conferred with Governor Robert Ehrlich, and also have pressured him, about speedy approval of the racial profiling settlement of the lawsuit brought by black motorists against the state police, now say they are satisfied with his position, the Associated Press Newswires reports. The group believes the matter can be brought to close within a month. Senator Lisa Gladden, D-Baltimore, joined the legislators in their position. She said Governor Ehrlich told them that he wants to clarify a few points in the agreement, but does not intend to make substantive changes. "It is our expectation . that this matter will be put to rest," Senator Gladden said. The senator's comments came after she and four other black lawmakers met for more than an hour with Governor Ehrlich, Lt. Governor Michael Steele and Edward Norris, who was nominated by the governor to be the superintendent of the state police. State NAACP officials also met with the governor and expressed their conviction that the changes he contemplates appear to be of a minor nature. "The goal is to have this resolved in 30 days," said Edythe Flemings Hall, president of the state NAACP. "We want the governor to be comfortable with it (the agreement) because we want him to be committed to it." The understanding that now appears to exist between the administration and the black lawmakers about the nature of changes the governor is considering and the time frame in which the racial profiling settlement is expected to be signed, could clear the way for the Senate to confirm the appointment of Mr. Norris as superintendent of the state police. The vote has been delayed twice because the Legislative Black Caucus had threatened to hold up confirmation until the settlement was signed. Senator Gladden said she did not intend to ask for another delay. The racial profiling lawsuit had its beginnings in 1992, triggered when a state trooper stopped the car of Washington lawyer Robert L. Wilkins, in Cumberland, Maryland. Mr. Willins refused to consent to a search of his car, and dozens of other motorists joined him as plaintiffs in his class action against the state police. The suit alleged that black motorists were unfairly singled out for stops and searches by the state police. The American Civil Liberties Union (ACLU) undertook representation of the plaintiffs in this lawsuit, which was granted class action status. Former State Police Superintendent David Mitchell and the ACLU agreed to a settlement in October. Although the Board of Public Works was supposed to ratify the agreement before former Governor Parris Glendening left office, the vote was postponed at then Governor Elect Ehrlich's request. As part of the settlement, state police would put more cameras in cars to record traffic stops, and a system would be developed to track the race of motorists who are stopped. Additionally, the settlement also provided that a special telephone number would be set up for complaints and a police-citizen panel would be established to monitor reports of racial profiling. Individual plaintiffs are not to receive money from the settlement, but the state would pay $325,000 in attorney fees to lawyers who handled the lawsuit. NETSILICON INC.: Asks NY Court To Dismiss Consolidated Securities Suit ---------------------------------------------------------------------- NetSilicon, Inc. asked the United States District Court for the Southern District of New York to dismiss a consolidated amended securities class action complaint naming as defendants the Company, certain of its officers and directors, certain underwriters involved in the Company's initial public offering (IPO). The suit asserts among other things, that the Company's IPO prospectus and registration statement violated federal securities laws because they contained material misrepresentations and/or omissions regarding the conduct of the Company's IPO underwriters in allocating shares in the Company's IPO to the underwriters' customers. The suit further states that NetSilicon and the two named officers engaged in fraudulent practices with respect to this underwriter's conduct. Pursuant to a stipulation between the parties, the two named officers were dismissed from the lawsuit, without prejudice, on October 9, 2002. The action seeks damages, fees and costs associated with the litigation, and interest. The Company understands that various plaintiffs have filed substantially similar lawsuits against over 300 other publicly traded companies in connection with the underwriting of their IPOs. On July 15, 2002, the Company, along with the other 300-plus publicly traded companies that have been named in substantially similar lawsuits, filed a collective motion to dismiss the complaint on various legal grounds common to all or most of the issuer defendants. The court heard oral argument on this motion on November 1, 2002. The litigation process is inherently uncertain and unpredictable, and there can be no guarantee as to the ultimate outcome of this pending lawsuit. The Company and its officers and directors believe that the allegations in the complaint are without merit. NEW MEXICO: ACLU Sues For Replacement Of Court-Appointed Police Monitor ----------------------------------------------------------------------- The American Civil Liberties Union (ACLU) contends in a recently filed motion in federal court in Santa Fe, New Mexico, that the unequal treatment of black citizens by police in Hobbs, has become worse since the settlement of a discrimination lawsuit and appointment of a police monitor under the terms of that settlement, the Associated Press Newswires reports. The ACLU, in its motion, seeks replacement of the police monitor. The current monitor for the Hobbs police is Clarence Chapman, a former police chief for the University of California at Los Angeles. The ACLU's motion alleges that instead of analyzing reports on arrests, searches, stops and incidents involving use of force by police, Mr. Chapman "ratified, excused or ignored the clear violations" of the settlement. The settlement, signed in June 2001, stemmed from a class action filed in 1999, on behalf of the black residents in Hobbs. The lawsuit alleged the blacks in Hobbs were subjected to excessive force, warrantless searches and false charges. The settlement required police to improve investigations into allegations of officer misconduct and to improve as well department training and disciplinary procedures. Hobbs police also agreed to collect racial information on arrests, searches field stops for questioning and incidents involving force by officers. ACLU attorneys Richard Rosenstock and Daniel Yohalem contend the data show the disparate treatment of blacks has grown since the settlement was signed. The details of the data indicate that blacks make up about seven percent of Hobbs' residents, but comprise 15 percent of those stopped for questioning, more than 16 percent of those arrested and more than 21 percent of those arrested for resisting, evading or obstructing an officer. The ACLU says the latter charge is highly discretionary, often growing out of an officer's overreaction to a citizen's lawful verbal challenge to an officer's authority. ORLEANS HOMEBUILDERS: Agrees To Settle Homeowner Lawsuit in NJ Court -------------------------------------------------------------------- Orleans Homebuilders, Inc. agreed to settle a class action filed against it and certain of its unnamed affiliates, in Burlington County, New Jersey. The lawsuit alleged, in part, that certain townhomes and condominiums designed and constructed by Orleans Homebuilders, Inc and certain of its affiliates did not have sufficient combustion air in the utility rooms, thereby causing a carbon monoxide build-up in the homes. The Township of Mount Laurel later intervened in the suit In January 2003, the Company reached a settlement of the lawsuit. While the settlement is still subject to the court approval, the pertinent terms of the settlement are: (1) as many as approximately 3,600 homeowners will be given the opportunity to have their homes inspected by the Township of Mount Laurel to determine whether the utility room has adequate combustion air as required by the applicable construction code in effect at the time the home was constructed; (2) if the inspection reveals inadequate combustion air, the Company, at its sole cost will repair the home; (3) in addition, those homeowners given the opportunity to have their homes inspected also will be given the opportunity to receive a carbon monoxide detector at the Company's sole cost and expense; (4) the Township of Mount Laurel will act as administrator and the Company has agreed to pay the township for the homes inspected, up to an aggregate of $100,000; (5) approximately 1,700 homeowners will be given a one time opportunity to have their gas-fired appliances inspected and cleaned at the Company's sole cost and expense. The Company has agreed to pay plaintiffs' attorneys' fees and costs of $445,000. The Company has reached a settlement with its insurer to partially cover the costs of the settlement. The Company has accrued estimated costs of approximately $500,000, net of insurance proceeds, in connection with the settlement agreement. PENTHOUSE INTERNATIONAL: Asks IL Court To Dismiss Consumer Fraud Suit --------------------------------------------------------------------- Penthouse International, Inc. and subsidiary General Media, Inc., publisher of Penthouse Magazine asked the Circuit Court of Cook County, Illinois, to dismiss the class action alleging that the defendants published photographs of a woman topless in the June 2002 issue of Penthouse Magazine, falsely representing them to be pictures of tennis star Anna Kournikova. The suit alleges: (1) breach of contract, (2) breach of express warranty and (3) consumer fraud The plaintiffs have filed a request that the action be certified as a class action with the two plaintiffs as class representatives and their lawyer as class counsel. The Company intends to vigorously defend itself in this action. It is still too early to determine the possible outcome of the proceedings. Therefore management cannot give an opinion as to the effect the suit will have on the Company's financial condition or results of operations. There can be no assurance, however, that the ultimate liability from these proceedings will not have a material adverse effect on its financial condition and results of operations. ROBERT BOSCH: Recalls 2 Million Drill Battery Chargers For Fire Hazard ---------------------------------------------------------------------- Robert Bosch Tool Corporation is cooperating with the United States Consumer Product Safety Commission (CPSC) by voluntarily recalling about 2 million Skil(R) Warrior drill battery chargers. The transformer inside the charger can overheat. If this occurs, the charger housing can melt and deform, possibly igniting flammable materials near or on the charger. The Company has received one report of a charger causing a fire that resulted in property damage, and 160 reports of chargers overheating. These chargers were sold with or as accessories for Skil Warrior drills. The drills are black with red trim. Red lettering on the drills reads, "SKIL." The chargers have their volt size written in red lettering. The recall includes 9.6 volt, 12 volt, 14.4 volt and 18- volt chargers. The chargers were included with tool model numbers 2375, 2380, 2475, 2480, 2482, 2580, 25582 and 2882. Chargers also were sold separately with model numbers 92950, 92970, 92980 and 92990 with part number 2610995852. The model and part numbers are written on labels found on the back of the plug or on the side of the chargers. Home center, hardware and discount department stores sold these chargers nationwide from July 1994 through February 2003 for between $21 and $30. For more details, contact the Company by Phone: (800) 661-5398 between 7 am and 7 pm CT any day, or visit the Website: http://www.Skil.com. SPRINT CORPORATION: Accused of Failing To Disclose Tax Shelters --------------------------------------------------------------- Sprint Corporation faces a class action after disclosures that the Company's two top executives used tax shelters that are now under scrutiny by the Internal Revenue Service, according to a report by The Kansas City Star. The lawsuit was recently filed by John Gebhardt in the United States District Court in Kansas City, Kansas, on behalf of investors who purchased shares of FON Group, the tracking stock for Sprint's long- distance and local phone operations, between February 1, 2001, and February 5, 2003. Mr. Gebhardt's address was not given, and he was identified only as a purchaser of Sprint securities. The complaint alleges that Sprint, Chief Executive and Chairman William Esrey, President and Chief Operating Officer Ronald LeMay and the company's auditors, Ernst & Young, violated the Securities Exchange Act of 1934. The lawsuit claims that Sprint failed to disclose in its financial statements that it, with the help of Ernst & Young, improperly avoided substantial tax liabilities as a result of its employees exercising numerous stock options. Spokesman for the company Bill White said, "Sprint stands by its financial reporting, which was in compliance with all general accepted accounting principles." The legal action comes barely a week after The Wall Street Journal reported that Mr. Esrey and Mr. LeMay, two of the longest-tenured executives in telecommunications industry, were forced out by Sprint's board over personal tax shelters they used in 1999 and 2000. The shelters allowed the two executives to defer taxes on Sprint options that, when exercised, produced a $311 million paper profit. Without the complicated shelters, Mr. Esrey and Mr. LeMay would have owed more than $123 million in income taxes. Mr. Gebhardt's lawsuit alleges that Sprint issued misleading financial statements in 2001 and 2002, by failing to disclose what the lawsuit calls "disguised tax benefits secretly harvested by defendants Esrey and LeMay related to their use of accelerated options contracts." The "accelerated options contracts" are an apparent reference to options whose vesting was accelerated when Sprint shareholders approved the Company's $129 billion merger with WorldCom Inc. in April 2000. Regulators disapproved the deal on antitrust grounds. However, it appears that the shareholders' mere approval of the merger gave Sprint employees immediate access to the options, which otherwise would have taken years to mature. What does all this mean? When did Sprint commit the alleged wrongdoing charged in the lawsuit? When the employees exercised those options, Sprint took a tax deduction on the gains? The lawsuit seems to allege that those tax benefits were improper. In an interview with The Kansas City Star, Sprint's chief financial officer, Robert J. Dellinger, said the company's options accounting is consistent with IRS regulations and generally accepted accounting principles. VARI-L CO.: CO Court Grants Approval To Securities Lawsuit Settlement --------------------------------------------------------------------- The United States District Court in Colorado granted preliminary approval to a settlement proposed by Vari-L Co., Inc. to settle a consolidated securities class action pending against it and certain of its former officers, on behalf of purchasers of the Company's common stock between December 17, 1997 and July 6, 2000. The suit charges the Company and certain of its officers, with violations of the federal securities laws by issuing materially false and misleading financial statements, an earlier Class Action Reporter story states. In November 2001, the Company filed a motion to dismiss all claims in the suit. The Company's motion argued that the amended consolidated complaint alleges wrongdoing by former corporate employees in furtherance of their personal interests, as opposed to corporate interest, which does not state a claim for securities fraud against the Company. The class action representatives filed their response to the Company's motion to dismiss and the Company filed a reply to that response but the court had not yet ruled on that motion. In October 2002, the Company and the class representatives reached an agreement in principle for the settlement of the litigation and executed a memorandum of understanding (MOU), subject to court approval. The MOU outlines the general terms of the proposed settlement and is intended as a basis for drafting a stipulation of settlement. The MOU contemplates that the Company will pay $250,000 in cash and issue 2.0 million shares of the Company's common stock. The number of shares issuable pursuant to the MOU is subject to certain anti-dilution adjustments in the event the Company sells its common stock or securities convertible into its common stock below certain threshold prices. Under the MOU, the Company is also required to transfer its claims against Joseph H. Kiser, David G. Sherman, Jon C. Clark and Derek L. Bailey to the plaintiffs. However, the Company will retain the claims from the Company action against former officers described below. The Company will also assign to the plaintiffs any right it might have to proceeds or other damages from the Directors and Officers insurance policies with Reliance Insurance Company and Agricultural Excess and Surplus Insurance Company. Mr. Sherman and Mr. Clark have executed settlement agreements and/or mutual releases with the Company, the terms of which preclude them from asserting claims against the Company for advancement or indemnification of their attorneys fees and other costs of defense. Mr. Kiser and Mr. Bailey have also executed similar agreements. However, if the court does not approve the stipulation and dismiss the actions with prejudice (or, in the case of Mr. Kiser, if he does not receive the consideration provided for in his settlement agreement), Mr. Bailey and Mr. Kiser may assert claims against the Company for advancement or indemnification of their attorneys fees and other costs of defense, which claims may be material. On January 22, 2003, the Company, the class action representatives and the individual defendants executed and filed the Stipulation with the United States District Court for the District of Colorado. The terms under the Stipulation are consistent with the terms under the MOU as described above. On January 29, 2003, the United States District Court for the District of Colorado issued its order preliminarily approving the settlement of the private securities class action, certification of the class, and the provision of notice to members of the class. The preliminary approval provides for a settlement hearing scheduled on March 28, 2003 to determine whether the proposed settlement of the litigation on the terms and conditions provided forth in the stipulation is fair, just and reasonable to the class. The preliminary approval provides for the mailing of notice of the proposed settlement to members of the class by February 4, 2003 and a publication of a summary notice of the proposed settlement in the Investor's Business Daily on February 11, 2003. The final settlement of the private securities class action is subject to several conditions and uncertainties, many of which are outside of the Company's control. Such conditions include the issuance of an order by the court of a final judgment and order of dismissal of the actions with prejudice following the fairness hearing and the absence of or dismissal of any appeal to such final judgment. The Company anticipates that the 2.0 million shares to be issued under the Stipulation will be issued approximately two months after the issuance of a final judgment and order of dismissal of the actions with prejudice. The Company believes it is unlikely such shares will be issued prior to the closing of the asset sale as described above. While the Company believes that the approval of the stipulation and dismissal of the actions with prejudice are probable, there can be no assurance that the court will approve the stipulation and dismiss the actions with prejudice. WAL-MART STORES: Faces Largest Gender Bias Lawsuit In American History ---------------------------------------------------------------------- The discrimination lawsuit recently launched against Wal-Mart, the nation's biggest employer, not only accuses the Company of favoring men over women in promotions and pay, but also aims to include all 700,000 women who worked at Wal-Mart from 1996 to 2001, thereby making this lawsuit the largest employment discrimination class action in American history, the Deseret News reports. The lawyers plan to file their motion for class certification in April. The lawsuit was filed in Federal Court in San Francisco, and focuses largely on one statistic compiled by plaintiffs' experts: In 2001, women made up 65 percent of Wal-Mart's hourly employees and 33 percent of its managers. The suit also claims disparities in pay. Plaintiffs' experts found that full-time hourly women employees working at least 45 weeks at Wal-Mart, made about $1,150 less than men working in similar jobs. In another telling finding, disparities in kinds of jobs held were found. Plaintiffs' experts found that women make up 89.5 percent of Wal-Mart's cashiers, 79 percent of department heads, 37.6 of its assistant store managers and 15.5 percent of its store managers. Making a comparison with other retailers, the lawsuit claims that among 20 other large retailers, 57 percent of the managers were women. According to Joseph Sellers, a lawyer for the plaintiffs, their experts found, "There is strong evidence that the company is mistreating women because they are women." Wal-Mart officials have dismissed the lawsuit as baseless. They say the Company has deep pockets and therefore is a target for lawyers to squeeze. The Company, with its 3,300 stores, including Sam's Clubs, has annual revenues of more than $230 billion. "At Wal-Mart we do not discriminate against anyone, including women," Mona Williams, Wal-Mart's vice-president of communications said. Ms. Williams questioned the statistics presented by the plaintiffs' lawyers and their hired experts, even though they had used computer tapes provided by Wal-Mart for their analyses of the company's employment practices. Ms. Williams continued "These numbers were put together in all these different ways by people who have a vested interest, by people who are trying to sue us, by lawyers who stand to make an awful lot of money in this case." Ms. Williams also said women's lack of interest in managerial jobs helped explain the lower percentage of women managers. Ms. Williams did acknowledge, however, that the company-wide posting of notices in January inviting workers to apply to become managerial trainees was a first for Wal-Mart. The posting went up after the plaintiffs' lawyers and experts had asserted repeatedly that Wal-Mart's failure to post management positions was a major reason for its low percentage of women managers. Without posting, the lawyers argued, promotions often relied on favoritism and a buddy network. Women who were asked about the responses they received when they told general managers of their interest in managerial positions, told about receiving age-old responses, such as men have families to support and you won't like the long hours. One woman said a Wal-Mart manager in South Carolina explained to her that Wal-Mart paid men more than it paid women because "God made Adam before he made Eve." WEST VIRGINIA: Bill To Curb Non-residents' Right To Sue In State Courts ----------------------------------------------------------------------- Non-residents would face restrictions in filing lawsuits in the state courts of West Virginia under a bill approved recently by the Senate Judiciary Committee, according to a report by the Associated Press Newswires. The bill, sponsored by 25 of the Senate's 34 members, now goes before the full Senate. Under the terms of the Senate bill (SB213), nonresidents could not sue in the state courts unless "a substantial part" of the action set forth in the complaint occurred in West Virginia. Therefore, each plaintiff in a civil action would have to establish his/her fulfillment of that requirement in a separate claim. The proposal has been supported by corporations that have been involved in defending their interests in class actions, such as asbestos, tobacco, telecommunications cases, among others. Various lawyers presented their arguments for and against the Senate Bill. Senate Judiciary Chairman Jeffrey Kessler, D-Marshall, thought West Virginia's reputation as a liberal jurisdiction brought plaintiffs to the state, and he said, "That ties up the state courts and resources and creates a horrible perception." On the other hand, Senator Larry Rowe, D-Kanawha, argued the law of the issue, saying "A large body of law say you can sue any defendant where you find that defendant. This bill may be intended to apply to mass tort cases, but it clearly sweeps too broadly," said Mr. Rowe, a trial lawyer. In fact, he continued, "it might be unconstitutional to prevent an Ohio resident hurt in Ohio by a West Virginia driver from filing for damages in West Virginia." Scott Segal, a Charleston trial attorney, who has spearheaded asbestos class actions, also argued against the law. He said, "The bill could hurt employees exposed to toxic products in multiple states, such as construction workers, by forcing them to file separate lawsuits in different states." In a case before the US Supreme Court, the railroad Norfolk Southern Corporation argued that trial lawyers seeking sympathetic courts have filed 5,500 asbestos cases in West Virginia against railroads on behalf of former employees who live in other states. However, those cases were filed under a federal law and would apparently be unaffected by the Senate bill. WEST VIRGINIA: Elkins Mayor Relieved Of Duties In Sex Harassment Probe ---------------------------------------------------------------------- Mayor Virgil Broughton of Elkins, West Virginia, has been relieved of administrative duties and publicly censured after the City Council recently decided he had acted inappropriately toward female city employees and had attempted to intimidate the city clerk, the Associated Press Newswires reports. The City Council made their decision after holding two executive sessions totaling about 3 1/2 hours. The Council's findings were based on a report by attorney Michael J. Florio of Clarksburg. Mr. Florio had been hired to investigate allegations made by City Clerk Philip Graziani at a December 19 council meeting. Mr. Graziani alleged that Mayor Broughton had sexually harassed female city employees and had threatened his job as well. At the same meeting Mayor Broughton defended himself and accused Mr. Graziani of having a sexual relationship with another city employee and asking the mayor to help cover it up. As a result of the investigation and the resultant report, council members were able to make their determinations and voted to adopt the proposed resolution which said that the mayor had engaged in inappropriate conduct of a sexual nature toward at least three female employees, and that "touching, kissing and hugging of employees by the manager (the mayor) should never occur." Mayor Broughton's son, Councilman Van Broughton, abstained from voting. New Securities Fraud Cases AMERCO: Cauley Geller Commences Securities Fraud Lawsuit in NV Court -------------------------------------------------------------------- Cauley Geller Bowman Coates & Rudman, LLP initiated a securities class action in the United States District Court for the District of Nevada on behalf of purchasers of Amerco (Nasdaq: UHAL) publicly traded securities during the period between February 12, 1998 and September 26, 2002, inclusive. The complaint charges Amerco and certain of its officers and directors with violating the federal securities laws by issuing false and misleading statements during the class period. Specifically, the complaint alleges that during the class period, defendants caused Amerco to engage in transactions with SAC Holding Corporation and SAC Holding Corporation II (SAC Holdings), which falsely improved Amerco's financials, and which served to benefit Amerco insiders to the detriment of Amerco shareholders. According to the complaint, defendants failed to disclose the true nature and financial impact of the transactions to the public. The complaint further alleges that Amerco failed to disclose that defendants used Amerco's resources to identify, purchase, and/or develop self-storage properties, which it then sold to SAC Holdings for inadequate consideration or caused SAC Holdings to buy. SAC Holdings, owned and controlled by Amerco insiders, thereby received substantial benefit from transactions which otherwise served to falsely improve Amerco's financials. On September 26, 2002, Amerco restated its 2002 financial results in an amended 10-K for the year ended March 31, 2002, and restated its 2001 and 2000 financials for the second time. The complaint charges that as a result of the defendants' false and misleading statements during the class period, Amerco's stock price was artificially inflated, averaging approximately $18 per share. In the weeks following news of the above events, Amerco's share price tumbled to less than $5, causing Plaintiff and other members of the class to suffer damages, according to the complaint. For more details, contact Jackie Addison, Heather Gann or Sue Null by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 1-888-551-9944 by E-mail: info@cauleygeller.com or visit the firm's Website: http://cauleygeller.com/template8.asp?pcode=6&pp=1 AMERCO: Kaplan Fox Lodges Securities Fraud Lawsuit in NV Federal Court ---------------------------------------------------------------------- Kaplan Fox & Kilsheimer LLP initiated a securities class action against Amerco (Nasdaq:UHAL) and certain of its officers and directors in the United States District Court for the District of Nevada. This suit is brought on behalf of all persons or entities, other than defendants, who purchased Amerco securities between February 12, 1998 and September 26, 2002, inclusive. The complaint alleges that Amerco and certain of its officers and directors violated the federal securities laws by issuing false and misleading statements during the class period. During the class period, defendants caused Amerco to engage in transactions with SAC Holding Corporation and SAC Holding Corporation II (hereinafter "SAC Holdings"), which falsely improved Amerco's financials, and which served to benefit Amerco insiders to the detriment of Amerco shareholders. Defendants failed to disclose the true nature and financial impact of the transactions to the public. Specifically, Amerco failed to disclose that defendants used Amerco's resources to identify, purchase, and/or develop self-storage properties, which it then sold to SAC Holdings for inadequate consideration or caused SAC Holdings to buy. SAC Holdings, owned and controlled by Amerco insiders, thereby received substantial benefit from transactions which otherwise served to falsely improve Amerco's financials. On September 26, 2002, Amerco restated its 2002 financial results in an amended 10-K for the year ended March 31, 2002, and restated its 2001 and 2000 financials for the second time. As a result of the defendants' false and misleading statements during the class period, Amerco's stock price was artificially inflated, averaging approximately $18 per share. In the weeks following news of the above events, Amerco's share price tumbled to less than $5. Plaintiff and other members of the class were damaged thereby. For more details, contact Frederic S. Fox, or Shelley Thompson by Mail: 805 Third Avenue, 22nd Floor, New York, NY 10022 by Phone: (800) 290-1952 or (212) 687-1980 by Fax: (212) 687-7714 by E-mail: mail@kaplanfox.com or visit the firm's Website: http://www.kaplanfox.com COSi INC.: Barrack Rodos Commences Securities Fraud Lawsuit in S.D. NY ---------------------------------------------------------------------- Barrack, Rodos & Bacine 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 the common stock of Cosi, Inc. (Nasdaq: COSI) pursuant to the Company's Registration Statement and Prospectus dated November 13, 2002 (which became effective November 21, 2002), in connection with or traceable to Cosi's initial public offering (IPO), through February 3, 2003. The complaint charges the Company, certain of its officers and directors, and William Blair & Co., the lead underwriter for the IPO, with violations of federal securities laws. Among other things, plaintiff claims that defendants issued a materially false and misleading Registration Statement and Prospectus in connection with the IPO. Specifically, the plaintiff alleges that the Company misrepresented its ability to use the IPO proceeds to open 53 to 59 restaurants in 2003. On February 3, 2003, less than 3 months after the offering, the Company announced that rather than opening the 53 to 59 new stores, Cosi expected to open no more than 10 Company-owned restaurants in 2003. The Company also announced that it had changed its business strategy disclosed in the Prospectus. Instead of growing through opening Company-owned stores, the Company would grow through franchising. In reaction to the disclosure the price of the stock dropped by more than 30%, falling to $3.10 per share. As a result of defendants' false and misleading statements in the complaint, the complaint alleges that Cosi's common stock was overpriced in the offering and in the aftermarket until February 3, 2003. For more details, contact the Shareholder Relations Manager by Mail: 3300 Two Commerce Square, 2001 Market Street, Philadelphia, PA 19103, by Phone: 800-417-7305 or 215-963-0600 by Fax: 888-417-7306 or 215-963-0838 by E-mail: mgoldman@Barrack.com or visit the firm's Website: http://www.barrack.com COSi INC.: Cauley Geller Commences Securities Fraud Lawsuit in S.D. NY ---------------------------------------------------------------------- Cauley Geller Bowman Coates & Rudman, LLP initiated a securities class action in the United States District Court for the Southern District of New York, located at 500 Pearl Street, NY, NY, 10007, on behalf of purchasers of Cosi, Inc. (Nasdaq: COSI) common stock during the period between April 24, 2002 and December 17, 2002, inclusive. The complaint alleges that defendants violated Sections 11 and 15 of the Securities Act of 1933 by issuing a materially false and misleading Prospectus and Registration Statement in connection with Cosi's Initial Public Offering. As alleged in the complaint, the Registration Statement and Prospectus contained several sections, which discussed the Company's plans for growth and described how the proceeds raised from the IPO would enable the Company to implement these plans. These statements were materially false and misleading because: (1) the Offering Materials failed to disclose that the funds raised by the IPO would be insufficient to implement the Company's expansion plan, contrary to the representations repeatedly made in the Company's Offering Materials; (2) at the time of the IPO, defendants should have known that the costs of expansion would be greater than the cash available to the Company (which included working capital and proceeds from the IPO), making it highly improbable that the Company would be able to successfully continue to open numerous new stores at such a rapid pace; and (3) the Offering Materials failed to disclose that a reduction in the price of the IPO would result in the Company being forced to abandon its growth strategy. For more details, contact Samuel H. Rudman, David A. Rosenfeld, Jackie Addison, Heather Gann or Sue Null by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 1-888-551-9944 by E-mail: info@cauleygeller.com or visit the firm's Website: http://www.cauleygeller.com MIIX GROUP: Lampf Lipkind Launches Securities Fraud Lawsuit in NJ Court ----------------------------------------------------------------------- Lampf, Lipkind, Prupis & Petigrow initiated a securities class action has been commenced in the United States District Court for the District of New Jersey (Trenton) on behalf of purchasers of The MIIX Group, Incorporated (NYSE:MHU) common stock during the period between July 30, 1999 and September 12, 2002. The complaint charges MIIX GROUP and certain of its officers and directors with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. The complaint is also a derivative class action for breaches of the fiduciary duties of MIIX GROUP officers and directors owed to stockholders. The complaint charges the Medical Society of New Jersey with domination and control of the actions of MIIX GROUP, its officers and its directors, at all times during the class period and with responsibility for the violations alleged in the complaint. The complaint alleges that during the class period, after experiencing over $200 million in unexpected losses from claims and substantially increasing loss reserves, defendants issued a series of statements to the public indicating that the Company was pursuing a reorganization and restructuring plan of MIIX GROUP that would offer the greatest opportunity to realize value for MIIX GROUP stockholders. Thereafter, MIIX GROUP's own directors and officers formed a new competing company raising over $26 million in a private placement and transferred MIIX GROUP's profitable New Jersey medical malpractice business and assets to that company from which MIIX GROUP only stands to earn license fees, service income, and commissions. MIIX GROUP's directors approved a non-competition agreement assuring MIIX GROUP could not sell insurance or service any other New Jersey medical malpractice insurer other than the new company. The new company and its stockholders are projected to earn $8 million annually by 2007. MIIX GROUP and its stockholders own no interest in the new company, and MIIX GROUP's officers and directors have appointed themselves to serve as the officers and directors of the company by virtue of which they stand to earn substantial compensation. During the class period, while MIIX GROUP was expanding its operations simultaneously in over 20 states, MIIX GROUP issued a series of false and misleading statements about MIIX GROUP's earnings, profitability, business condition, reserves, and expansion plans and issued financial statements that were materially false and misleading and violated Generally Accepted Accounting Principles and rules and regulations of the SEC, thereby misleading investors regarding MIIX GROUP's true financial condition, then-current financial performance, and prospects. MIIX GROUP repeatedly asserted that its insurance company subsidiaries would produce profitable results, that the expansion plans were on track and advisable, that MIIX GROUP followed "prudent business practices," possessed "unrivaled claims operations and litigation defense service," and was "widely known for defense expertise" at a time that MIIX GROUP officers and directors knew the facts were to the contrary. As a result, the prices of MIIX GROUP's securities were artificially inflated during the class period to as high as $18.31 per share. During the first quarter of 2002 MIIX GROUP announced a loss of $45.4 million and adjustment of net loss reserves for prior accident years increasing reserves by $29.5 million attributable to insurance business written during the years 1994 - 2001. For more details, contact Harvey J. Kesner by Phone: 212/527-9974 MONTEREY PASTA: Bull & Lifshitz Commences Securities Lawsuit in N.D. CA ----------------------------------------------------------------------- Bull & Lifshitz LLP initiated a securities class action in the United States District Court for the Northern District of California on behalf of purchasers of Monterey Pasta Company (Nasdaq:PSTA) common stock between July 11, 2002 and December 16, 2002, inclusive. The suit alleges that defendant violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between July 11, 2002 and December 16, 2002, thereby artificially inflating the price of Monterey Pasta securities. For more details, contact Peter D. Bull or Joshua M. Lifshitz by Phone: 212-213-6222 by Fax: 212-213-9405 or by E-mail: counsel@nyclasslaw.com. PARAMETRIC TECHNOLOGY: Milberg Weiss Commences Securities Lawsuit in MA ----------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action on behalf of purchasers of the securities of Parametric Technology Corporation (NASDAQ: PMTC) between October 19, 1999 and December 31, 2002 inclusive and who were damaged thereby. The action is pending in the United States District Court for the District of Massachusetts, against the Company and: (1) Steven C. Walske (CEO until March 1, 2000 and Chairman until June 2000), (2) Noel G. Posternak (Chairman since June 2000), (3) C. Richard Harrison (CEO since March 1, 2000, President since 1994), (4) Edwin J. Gillis (Parametric's Executive Vice President, CFO and Treasurer from January 15, 2002 to November 12, 2002) The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between October 19, 1999 and December 31, 2002. The complaint alleges that, throughout the class period, Parametric issued numerous statements and filed quarterly and annual reports with the SEC, which described the Company's supposedly increasing revenues and financial performance. These statements were materially false and misleading when made, the complaint alleges, because the Company had overstated its revenue since fiscal 1999, in violation of generally accepted accounting principles and because the Company lacked adequate internal controls and was unable to accurately determine and report the Company's financial condition. On December 31, 2002, after the close of regular trading, Parametric issued a press release announcing a "$20 to $25 million of previously recognized maintenance revenue which should have been deferred and recognized in fiscal 2003 and later periods." Accordingly, the Company announced, it "expects to report a corresponding reduction in maintenance revenue in prior periods, primarily in fiscal year 2002." In reaction, on January 2, 2003, shares of Parametric closed at $2.19 per share, after hitting an intraday low of $1.95, as compared with a class period high of $32.88 per share, reached on December 16, 1999. For more details, contact Steven G. Schulman or U. Seth Ottensoser by Mail: One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by Phone: (800) 320-5081 by E-mail: Parametriccase@milbergNY.com or visit the firm's Website: http://www.milberg.com PARAMETRIC TECHNOLOGY: Cauley Geller Commences Securities Suit in MA -------------------------------------------------------------------- Cauley Geller Bowman Coates & Rudman, LLP initiated a securities class action in the United States District Court for the District of Massachusetts on behalf of purchasers of Parametric Technology Corp. (Nasdaq: PMTC) ("Parametric" or the "Company") common stock during the period between October 19, 1999 and December 31, 2002, inclusive. The suit alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between October 19, 1999 and December 31, 2002, thereby artificially inflating the price of Parametric common stock. Throughout the class period, as alleged in the suit, defendants issued numerous statements and filed quarterly and annual reports with the SEC which described the Company's increasing revenues and financial performance. The suit alleges that these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (1) that since fiscal 1999, in violation of Generally Accepted Accounting Principles (GAAP) and its own revenue recognition policies, the Company had cumulatively overstated its previously recognized maintenance revenue from its service contracts by approximately $33.4 million; (2) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (3) that as a result, the value of the Company's income and financial results were materially overstated at all relevant times. On December 31, 2002, after the close of regular trading, Parametric shocked the market by announcing that it had identified "$20 to $25 million of previously recognized maintenance revenue which should have been deferred and recognized in fiscal 2003 and later periods." Accordingly, the Company announced, it "expects to report a corresponding reduction in maintenance revenue in prior periods, primarily in fiscal year 2002." The next day of trading, on January 2, 2003, shares of Parametric closed at $2.19 per share, after hitting an intraday low of $1.95, as compared with a class period high of $32.88 per share, reached on December 16, 1999. Subsequent disclosures revealed that the Company would be restating its financial results from fiscal year 1999 through fiscal year 2002 because a cumulative total of $33.4 million in maintenance revenue had improperly been reported as revenue during that time. For more details, contact Jackie Addison, Heather Gann or Sue Null by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 1-888-551-9944 by E-mail: info@cauleygeller.com or visit the firm's Website: http://www.cauleygeller.com SAWTEK INC.: Schiffrin & Barroway Lodges Securities Lawsuit in M.D. FL ---------------------------------------------------------------------- Schiffrin & Barroway, LLP initiated a securities class action in the United States District Court for the Middle District of Florida on behalf of all purchasers of the common stock of Sawtek, Inc. currently a subsidiary of TriQuint Semiconductor, Inc. (Nasdaq:TQNT), between January 7, 2000 and May 24, 2001, inclusive. The complaint charges Sawtek, Inc. 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' material omissions and the dissemination of materially false and misleading statements concerning Sawtek's business operations and financial performance caused Sawtek's stock price to become artificially inflated, inflicting damages on investors. Sawtek designs, develops, manufactures and markets a broad range of electronic signal processing components, based on "surface acoustic wave" or SAW technology, primarily for use in the wireless communications industry. The complaint alleges that during the class period, defendants misrepresented Sawtek's financial performance by improper "channel stuffing" -- inflating revenue by shipping more products than distributors could sell -- and by disseminating false and misleading statements concerning the Company's revenue and business prospects despite a widespread downturn in the wireless and telecommunications markets. Sawtek's actual financial performance was revealed on May 23, 2001, when defendants' acknowledged that the Company's projected results for the quarter ending June 30, 2001, would fall well below the Company's previously issued revenue guidance. By the close of trading on the next day, May 24, 2001, Sawtek's stock price had plunged more than seventeen percent (17%) from the previous day's close as a result of this news. For more details, contact Marc A. Topaz or Stuart L. Berman by Phone: 1-888-299-7706 (toll free) or 1-610-667-7706 by E-mail: info@sbclasslaw.com or visit the firm's Website: http://www.sbclasslaw.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 * * *