/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/030221.mbx C L A S S A C T I O N R E P O R T E R Friday, February 21, 2003, Vol. 5, No. 37 Headlines AAMES FINANCIAL: CA Court Approves Settlement of Overtime Wage Lawsuit AAMES FINANCIAL: Attempting To Settle Yield-Spread Premium Suit in CA AUTOMOBILE MANUFACTURERS: Faces Antitrust Lawsuit Over Canadian Cars CANADA: Ontario Pension Plan Members File Breach of Fiduciary Duty Suit CHINA: Chinese Court Accepts First Lawsuit For Securities Violations IDAHO: To Contract With Doctors For Blood Lead-Screening For Children IGEN INTERNATIONAL: Plaintiffs Ask MD Appeals Court To Review One Claim MONTEREY PASTA: Investors Commence Suit For Securities Violations in CA OLIN CORPORATION: Residents Sue Over Perchlorate-Tainted Wells PARAMETRIC TECHNOLOGY: Shareholders Sue Over Securities Violations PEMSTAR INC.: Plaintiffs File Consolidated Securities Suit in MN Court POLYMEDICA CORPORATION: Defendants Appeal Refusal To Dismiss MA Lawsuit RURAL/METRO CORPORATION: Plaintiffs Ask AZ Court To Certify Fraud Suit TEXAS: Bill Aimed At Limiting Legal Avenues Of Tort Activity Proposed TYCO INTERNATIONAL: Transfer of Securities Lawsuits To NH Court Sought TYCO INTERNATIONAL: Faces Amended Consolidated Securities Lawsuit in NH TYCO INTERNATIONAL: Plaintiffs File Consolidated ERISA Suit in NH Court UNITED AIRLINES: Hearing-Impaired Teen Files Suit For Captioned Movies Asbestos Alert ASBESTOS LITIGATION: Devon Sailor's Appeal Rejected in Asbestos Claim ASBESTOS LITIGATION: Bill Seeking Asbestos Reform Introduced in Senate ASBESTOS LITIGATION: 50 Years Later, Asbestos Exposure Destroying Lives ASBESTOS LITIGATION: State Court Judge Jaffe Admits Guilt for Extortion ASBESTOS LITIGATION: Ex-Mayor Archer Fights Exploitative Asbestos Suits ASBESTOS LITIGATION: Retiree Dies Due to Asbestos Related Cancer ASBESTOS LITIGATION: ABB Moves to Settle Asbestos Related Litigation ASBESTOS ALERT: DaimlerChrysler Corp. Battles Asbestos Related Lawsuits ASBESTOS LITIGATION: Asbestos at Hotel Spawns Investigations ASBESTOS LITIGATION: Emmett J. Bean Workers Fear Exposure To Asbestos ASBESTOS ALERT: Flowserve Corporation Notes Asbestos Related Litigation ASBESTOS LITIGATION: Stay on Suits V. Halliburton Extended to March 21 ASBESTOS ALERT: Oil States Subsidiaries Face Asbestos Related Claims ASBESTOS ALERT: Pennzoil Joins Asbestos Premise-Owner Defendants List ASBESTOS ALERT: United Tech Faces 850 Asbestos Cases, 16T Claimants New Securities Fraud Cases AMERCO: Charles Piven Commences Securities Fraud Lawsuit in NV Court CARREKER CORPORATION: Levy & Levy Commences Securities Suit in N.D. TX CORVIS CORPORATION: Stull Stull Commences Securities Suit in N.D. CA LEXENT INC.: Beatie and Osborn Commences Investor Suit in DE Court MOTOROLA INC.: Chitwood & Harley Lodges Securities Suit in N.D. IL OWENS CORNING: Charles Piven Commences Securities Suit in N.D. Ohio PARAMETRIC TECHNOLOGIES: Charles Piven Commences Securities Suit in MA SPRINT CORPORATION: Charles Piven Commences Securities Suit in KS Court SPRINT CORPORATION: Johnson & Perkinson Lodges Securities Suit in KS UNUM PROVIDENT CORPORATION: Levy & Levy Commences Securities Suit in TN ********* AAMES FINANCIAL: CA Court Approves Settlement of Overtime Wage Lawsuit ---------------------------------------------------------------------- The United States District Court of California approved the settlement proposed by Aames Financial Corporation to settle a class action filed against it and certain of its subsidiaries. A former loan executive filed the suit on behalf of himself and current and former loan executives employed by the Company. The plaintiff alleges that during his employment, he and other loan executives worked in excess of 8 hours per day or 40 hours per week. The suit alleges that the Company willfully failed to pay overtime in violation of the Federal Fair Labor Standards Act and, with respect to loan executives employed in California, in violation of the California Labor Code and Business & Professional Code & sect. 17200, an earlier Class Action Reporter story states. On February 10, 2003, the court approved a settlement between the parties regarding this litigation, in which the Company did not admit liability. The Company believes that the terms of this settlement did not have a material adverse effect on its consolidated financial position and results of operations. AAMES FINANCIAL: Attempting To Settle Yield-Spread Premium Suit in CA --------------------------------------------------------------------- Aames Financial Corporation is engaged in mediation with the plaintiffs in the class action pending against it and certain of its subsidiaries, in the Los Angeles County Superior Court. Plaintiffs, the Company's former customers, filed this action on behalf of themselves and all persons who applied for or obtained loans from the Company during the prior four years. Plaintiffs allege various state law claims premised their contention that the Company routinely "upcharges" third party fees and underdiscloses annual percentage rates. In April 2002, plaintiffs filed a third amended complaint limiting the purported class to California borrowers and asserting claims based upon the payment of a yield spread premium to their broker. Plaintiffs contend that such yield spread premium payments constitute kickbacks and/or illegal referrals under California law and/or that the Company failed to properly disclose the nature of a yield spread premium. Plaintiffs seek certification of the class, damages consisting of fees paid to mortgage brokers, statutory treble damages, attorneys' fees and costs, restitution, disgorgement of improperly collected charges, punitive damages and injunctive relief. The Company has answered the amended complaint, again asserting various affirmative defenses. The parties are presently engaged in mediation. No trial has been set. AUTOMOBILE MANUFACTURERS: Faces Antitrust Lawsuit Over Canadian Cars -------------------------------------------------------------------- A conspiracy by automobile manufacturers and dealers to block Canadian imports has cost American consumers thousands of dollars extra for each new car purchased since at least 2001 - billions of dollars overall, according to an antitrust lawsuit announced today by the law firm of Berman DeValerio Pease Tabacco Burt & Pucillo. The suit was filed in the United States District Courts for the District of Massachusetts and the Northern District of California. Similar actions are being filed in other federal courts. Coincidentally, the complaints came as dealers geared up to promote low prices on Presidents' Day weekend. The complaint names most major carmakers as defendants, along with associations representing American and Canadian dealerships. It says the defendants conspired to eliminate the import of lower-priced new cars from Canada into the United States to illegally stifle competition. As part of the alleged conspiracy, for example, American dealerships refused to honor new car warranties on cars purchased in Canada. Canadian dealers pay manufacturers 10% to 30% less for cars than their Americans counterparts, despite the elimination of duties and tariffs by the North American Free Trade Agreement (NAFTA) in 1993 and the subsequent harmonization of safety and environmental regulations for new cars, the complaint alleges. "Talk about sticker shock: Car makers have rigged the deck to make U.S. consumers pay thousands of dollars more per vehicle than Canadians for virtually the same cars," said Joseph J. Tabacco, Jr., a Berman DeValerio partner. "These auto manufacturers were all for NAFTA if it meant getting cheaper parts and labor. But when free trade threatened to cut into their U.S. profits, they worked to get around it - and broke the law to keep prices high." The complaint alleges that the conspiracy permitted manufacturers to maintain higher prices on virtually every car sold in the United States compared to prices of the same vehicles in Canada. In one example cited in the complaint, Ford's 2002 Windstar LX minivan had a Manufacturers Suggested Retail Price (MSRP) of $16,448 in Canada and $22,340 in the United States - a difference of 26%. In a second example, the MSRP for a 2002 Lexus SC43 was 13% lower in the Canada than the United States, $53,151 compared to $61,055. According to the complaint, the manufacturers conspired to block Canadian imports to the United States even though the Canadian cars were, for all practical purposes, identical and conformed to US regulations. The only differences were metric vs. imperial measure speedometers and odometers and, in some cases, daytime running lights, all of which could easily be adapted. Named as defendants are: (1) the General Motors Corporation and its Canadian subsidiary; (2) the Ford Motor Company and its Canadian subsidiary; (3) the Toyota Motor Corporation of Japan and its US subsidiary; (4) the Honda Motor Company, Ltd. of Japan and its US subsidiary; (5) DaimlerChrysler Aktiengesellschaft of Germany and its Canadian subsidiary; (6) the Nissan Motor Company of Japan and its US and Canadian subsidiaries; (7) Bayerischen Motor Werken Aktiengesellschaft (BMW) of Germany and its US subsidiary; (8) the Canadian Automobile Dealers Association (CADA) of Toronto, which represents over 3,000 franchised new automobile dealerships in Canada; and (9) the National Automobile Dealers Association (NADA) of McLean, Virginia, which represents over 43,000 franchised automobile dealerships across the United States US and Canadian franchise dealerships for the above manufacturers are cited as unnamed co-conspirators in the complaint. For more information, contact Richard Lorant by Phone: 617-542-8300 or (mobile) 617-230-0903 by E-mail: rlorant@bermanesq.com or visit the firm's Website: http://www.bermanesq.com. CANADA: Ontario Pension Plan Members File Breach of Fiduciary Duty Suit ----------------------------------------------------------------------- Members of a pension plan have filed a class proceeding regarding serious investment losses suffered by about 2,300 current and former employees of 26 Ontario farm co-operatives. According to the Financial Services Commission of Ontario, or FSCO, only $64 million was available last September to meet $120 million in pension promises under the Participating Co-operatives of Ontario Trusteed Pension Plan. Among the larger groups affected are the retirees and former employees of the defunct United Co-operatives of Ontario. The suit names as defendants the pension plan board of trustees, its former investment manager and consultant, and the custodian of the pension fund. The action alleges that the defendants were negligent and breached their fiduciary duties owed to plan members. "With wind-up costs, lawyers and administrative fees and potential actuarial costs it is realistic to expect payouts of less than 50 per cent," pension trustees warned plan members in a recent letter. FSCO has given the trustees until the end of February to propose measures to comply with the funding requirements of Ontario pension legislation. However, members have expressed concern that the plan may have to be wound up in a deficit position. An internal report by FSCO raises serious questions about how well the plan's board of trustees supervised the investment manager, who used derivative investment contracts to avoid substantial losses on equity investments. Plan members may not be eligible for partial compensation from the Ontario Pension Benefits Guarantee Fund. The guarantee fund does not cover multi-employer pension plans, which the farm co-operatives' plan has been since 1994. Until 1994, the pension plan was sponsored and administered by the United Co-operatives of Ontario, which went through a restructuring and sale of assets due to a fall in its business. Lawyer Ari Kaplan of the firm Koskie Minsky said some members who retired early have already received notice stating that their pensions were calculated improperly and have been asked to repay money. "I have heard that one retiree has had his pension already reduced by 70 per cent and has been asked to repay money to the pension plan," Mr. Kaplan said. He said his firm is still investigating what other claims plan members might have and whom such claims might be made against. "Members are being told that they must increase their own contributions or take a cut in benefits as a result of the drop in assets, or risk having their plan wound up in a deficit", he said. According to the FSCO report, an independent fund manager succeeded in losing fund money between 1997 and 2000. However, during these years, stocks and bonds were providing strong returns to other pension plans. Things went from bad to worse when stock prices fell in 2001 and 2002. Individual members have been given only a sketchy explanation that losses prior to 2001 resulted, among other things, from the use of derivative investments. A FSCO report sent to Nancy Fletcher, director of pension administration at the Co-operatives pension plan, refers to the use of "protection contracts" based on derivatives. "There were no written policies or procedures established by the pension committee in respect of these investments," the report alleges. "Investments in derivatives call for a high level of sophistication." "One of the areas stressed in the policies (of the Pension Commission of Ontario and FSCO) is the need for documented policies and procedures on the practice of using derivatives as an investment strategy" the FSCO report states. The FSCO report also questions if certain assets were registered in the name of the pension fund or the name of an investment adviser, contrary to the Pension Benefits Act and the pension plan's guidelines. For more details, contact Ari Kaplan by Phone: 416-595-2087 or by Fax: 416-204-2875 or contact Michael Mazzuca by Phone: 416-595-2101 or by Fax: 416-204-2881 or contact Kirk Baert by Phone: 416-595-2117 or by Fax: 416-204-2889 CHINA: Chinese Court Accepts First Lawsuit For Securities Violations -------------------------------------------------------------------- A Chinese court, for the first time, accepted a class action, which involves alleged financial fraud at a petrochemical company, according to a report by Dow Jones Business News. It is uncertain when a trial might begin. The Harbin Intermediate Court, located in northeast China, accepted the lawsuit on behalf of 381 plaintiff shareholders who allege that the Daqing Lianyi Petrochemical Company falsified its books both before and after its initial public offering in 1996. The lawsuit further alleges that the company bribed regulators "to look the other way." The lawsuit seeks 10.2 million yuan ($1.2 million) in damages. In addition to Daqing Lianyi, the lawsuit names as defendants three of its board members, underwriters at Shenyin Wanguo Securities Co. and the company's Harbin-based accounting firm. Some 600 people expressed an interest in joining the suit accepted by the Harbin court. However, the Harbin court actually consolidated cases it had accepted earlier on behalf of individuals in order to form the suit, which is going forward, newspapers have reported. The way was paved for acceptance of the Daqing Lianyi case by the Harbin Court, which like the rest of the Chinese court system is cautious of change, after regulators fined the company, ordered its restructuring and sent a number of people to jail. At that point, it was evident that the company and its officers had been guilty of wrongdoing. Consequently, the Harbin court was open to accommodating the interests of the shareholders when they subsequently filed their grievances with the court. The plaintiffs' lawyer, Xuan Wei Hua, of Grandell Legal Group Shanghai, described the shareholders' class action against Daqing as a "test case," according to media reports. He has predicted that the case will "help further establish the class action system in China." IDAHO: To Contract With Doctors For Blood Lead-Screening For Children --------------------------------------------------------------------- Pediatricians in Idaho will conduct blood-lead screening for children in order to help the state of Idaho meet its obligations under the Medicaid program. The state's Department of Health and Welfare hopes to line up seven contracts with doctors to install blood-lead testing devices and have the program going by March, the Associated Press Newswires reports. A class action, filed in 2000, on behalf of children from the Siver Valley, contending the state failed to comply with lead-screening for children in various Medicaid programs, was settled recently when the state entered into a consent decree. Federal District Court Magistrate Judge Mikel Williams earlier had issued a judgment which found the state was not screening poor children for potential lead hazards through Medicaid's Early and Periodic Screening, Diagnosis and Treatment Services. The state and the plaintiffs, represented by former Idaho Supreme Court Justice Robert Huntley, began negotiating the consent decree in November. "The fact is, as a condition of participation in Medicaid, the state receives federal dollars and is required to implement this program," Mr. Huntley said. "In truth, the state has not been devoting proper resources to implement the program. It will take proper funding from the Legislature." In order to help the state get the screening program started, Dr. Terence Neff, who operates clinics in Coeur d'Alene and Post Falls, has agreed to have the testing machines set up in his clinics. Dr. Neff is also president of the Idaho Pediatrics Society. He said the group has voted to support the state and provide child blood-lead screening for a minimum of two years. The screening will follow both state and federal Medicaid guidelines to screen children at ages one and two. IGEN INTERNATIONAL: Plaintiffs Ask MD Appeals Court To Review One Claim ----------------------------------------------------------------------- Plaintiffs in the shareholder derivative and class action lawsuits filed against IGen International, Inc. asked the Maryland Special Appeals court to review the dismissal of one of the five claims in the suit, making the dismissal of the other claims final. In February 2001, Brown Simpson Strategic Growth Fund LP, Brown Simpson Strategic Growth Fund, Ltd. and Brown Simpson Partners I initiated a shareholder derivative lawsuit for and on behalf of the shareholders of the Company in the Circuit Court for Montgomery County, Maryland against four of the Company's current directors, two former directors, three executive officers and the Company as a nominal defendant. In the complaint, Brown Simpson alleged breach of fiduciary duties by the named individual defendants in connection with transactions between the Company and other entities in which certain directors and officers are alleged to have an interest, including the Meso Scale Diagnostics, LLC. joint venture. In March 2001, a second shareholder derivative lawsuit was filed by Laurence Paskowitz in the Circuit Court for Montgomery County, Maryland with allegations substantially the same as those set forth in the complaint filed by Brown Simpson. The complaint was later amended to add direct claims against the defendants and to seek class action certification for those direct claims. Both lawsuits sought principally that the defendants hold in trust and be required to account for and restore to the Company damages that IGEN has allegedly sustained by reason of the allegations and relief relating to board and management composition. The Paskowitz complaint also sought damages for a class of IGEN shareholders for the direct claims against the individual defendants. The complaints did not include any claims against the Company. The Company and the individual defendants filed motions to dismiss or, in the alternative, for summary judgment in both lawsuits. In May 2002, the court issued an opinion and order dismissing all claims asserted against all of the defendants in both cases. No appeal was filed by the Brown Simpson plaintiff and the decision in that case is now final. In June 2002, the Paskowitz plaintiff filed an appeal to the Court of Special Appeals in Maryland seeking review only for one direct claim. The Circuit Court dismissal of all other claims in the Paskowitz complaint is now final. A decision of the Court of Special Appeals is anticipated in the near future. The Company believes that the remaining claim in the Paskowitz suit is without merit. MONTEREY PASTA: Investors Commence Suit For Securities Violations in CA ----------------------------------------------------------------------- Monterey Pasta Corporation faces a securities class action filed in the United States Court for the Northern District of California on behalf of purchasers of the Company's common stock between the period July 11, 2002 and December 16, 2002, inclusive. The press release stated the complaint alleges the defendant violated sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder by allegedly issuing a series of materially misleading statements to the market during the class period, thereby artificially inflating the price of the Company's stock. The plaintiff, who is not identified in the press release, seeks to recover damages on behalf of all acquirers of the Company's stock during the class period. The Company has not been served with, nor seen the complaint as of the time of this filing. OLIN CORPORATION: Residents Sue Over Perchlorate Tainted Wells -------------------------------------------------------------- Five homeowners in San Martin, California, recently filed a class action, in Santa Clara County Superior Court, against Olin Corporation, the aerospace and ammunition manufacturer, whose Morgan Hill highway- flare operation has allegedly contaminated their drinking water wells with a chemical used in rocket fuels, the San Jose Mercury News reports. Lead plaintiffs Kisti Daniels, Mark Daniels, Sue McElwaine, Louis J. Kateh, Jr. and Fred N. Threatt filed the suit on behalf of thousands of residents and nearby affected areas. The lawsuit also names as defendants Olin's subsidiary, Standard Fusee Corporation, which operated the highway-flare firm, as well as two Fusee supervisors, Anne Lee and Yoshio Suekawa. The lawsuit asks for an unspecified amount of damages for the residents. The residents allege their properties have decreased in value since the contamination by the chemical perchlorate, known to cause thyroid disorders, was disclosed a month ago. Olin Corporation has accepted responsibility for the contamination, which is the biggest occurrence of groundwater pollution in the county's history, and stands ready to assume responsibility for the cleanup costs. Plaintiffs' lawsuit is asking that the corporation create a program to survey and monitor the health of the current residents and any other persons who lived in the area since 1955. The lawsuit asks further that the Company pay all costs for medical diagnosis and treatment for such residents. The lawsuit also seeks a survey of residents with thyroid or endocrine disorders, the data from which would be put into a confidential registry open to medical doctors and researchers. The contamination was revealed after testing showed that a plume of perchlorate had spread through the underground aquifer. Tests recently released showed that 90 of the 271 wells tested south of the site so far tested positive for the chemical. More than 500 businesses and homes are awaiting results. Officials fear the chemical could affect the drinking water of more than 2,000 people. The perchlorate was first discovered three years ago at the 13-acre site in southern Morgan Hill where Standard Fusee operated a flare- manufacturing plant from 1955 to 1996. The company mixed chemicals in metal bowls, which were then washed out and the rinse water dumped into an evaporation pond, from which it percolated into the ground. Over the years, a plume of perchlorate contamination spread at least seven miles southeast through the underground aquifers in an area where most residents get their drinking water from wells. The plaintiffs' lawsuit therefore charges that Olin and Standard Fusee negligently let the chemical perchlorate seep into the South County groundwater supply despite knowing better after a half-century of experience in chemical use. Ignoring California's environmental laws, the lawsuit further charges, Standard Fusee, "created a toxic waste site, left their waste in the soils and allowed it to infiltrate the groundwater system." The suit says, "It is uncertain as to the length of time which will be required for abatement of the contamination, if it can be abated at all." The residents, says the lawsuit "are essentially prisoners of the Olin site, having lost all ability to sell, market or finance." PARAMETRIC TECHNOLOGY: Shareholders Sue Over Securities Violations ------------------------------------------------------------------ Parametric Technology Corporation (NasdaqNM: PMTC) faces a securities class action filed in the United States District Court for the District of Massachusetts naming the Company and certain of its current and former directors and officers as defendants. The complaint alleges that false statements were made concerning PTC's maintenance revenue and purports to be filed on behalf of purchasers of the Company's common stock during the period October 19, 1999 and December 31, 2002. The Company believes that the complaint is without merit and will contest the lawsuit vigorously, it said in a press statement. PEMSTAR INC.: Plaintiffs File Consolidated Securities Suit in MN Court ---------------------------------------------------------------------- Plaintiffs in the securities class actions filed against Pemstar, Inc. filed a consolidated amended securities suit in the United States District Court for the District of Minnesota. The suit names as defendants the Company and: (1) Allen Berning, (2) William Leary, (3) William Kullback, (4) Robert Murphy, (5) Steve Petracca, (6) Karl Shurson, (7) Robert Ahmann, (8) Paul Singh, (9) Gregory Lea, (10) Thomas Burton and (11) Bruce Jaffe The suit alleges that certain current and former officers and directors of the Company violated Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934. The lawsuit alleges, in essence, that the defendants defrauded their shareholders by making optimistic statements during a time when they should have known that business prospects were less promising. The suit further alleges a violation of Sections 11 and 12 of the Securities Act of 1933. The suit specifically states that the registration statement filed by the Company in connection with a secondary offering contained false, material misrepresentations. It is too early to predict the likelihood of prevailing on the suit. The Company believes the actions are wholly without merit and will vigorously defend against the claims. POLYMEDICA CORPORATION: Defendants Appeal Refusal To Dismiss MA Lawsuit ----------------------------------------------------------------------- The consolidated shareholder derivative suit filed against Polymendica Corporation's board of directors is docketed at the Massachusetts Appeals court. Several suits were filed in Massachusetts Superior Court for Middlesex County, and were later consolidated. The suit alleges that the directors and officers breached their fiduciary duties by, among other things, failing to exercise reasonable care in the oversight of corporate affairs and management with respect to the operations of Liberty and by acquiescing in alleged misconduct by Liberty. The suit seeks unspecified damages, the return of compensation, and other relief, including injunctive relief. The defendants filed a motion to dismiss the suit on January 31, 2002. After briefing and a hearing on the motion, the court entered an order denying the motion to dismiss on July 16, 2002. On August 8, 2002, defendants filed a motion for reconsideration of the order denying defendants' motion to dismiss, or, in the alternative, to report the case to the appeals court and stay the proceeding. The court issued an order on September 16, 2002 in which it refused to reconsider its decision, but reported the case to the appeals court and granted defendants' motion to stay the action. On January 23, 2003, the Appeals court docketed the case under the caption Roberta Casden v. Daniel S. Bernstein and others; No. 2003-P-01070. The directors and defendants believe they have meritorious defenses to the claims made in the consolidated complaint and intend to contest the claims vigorously. The Company is unable to express an opinion as to the likely outcome of this litigation. RURAL/METRO CORPORATION: Plaintiffs Ask AZ Court To Certify Fraud Suit ---------------------------------------------------------------------- Plaintiffs in the one of the securities suits pending against Rural/Metro Corporation asked the United States District Court for the District of Arizona to certify the suit as a class action. Two suits were initially filed on behalf of purchasers of the Company's publicly traded securities between April 28,1997 and June 11,1998. One suit, Haskell V. Rural/Metro Corporation et al., was filed in Pima County, Arizona Superior Court, while the other suit, Ruble V. Rural/Metro Corporation, et al., was filed in the United States District Court for the District of Arizona. The suits name as defendants the Company and: (1) Warren S. Rustand, the former Chairman of the Board and Chief Executive Officer of the Company, (2) James H. Bolin, the former Vice Chairman of the Board, and (3) Robert E. Ramsey, Jr., the former Executive Vice President and former Director The Haskell suit seeks unspecified damages under the Arizona Securities Act, the Arizona Consumer Fraud Act, and under Arizona common law fraud, and also seeks punitive damages, a constructive trust, and other injunctive relief. The Ruble suit seeks unspecified damages under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended. The complaints in both actions allege that between April 28, 1997 and June 11, 1998 the defendants issued certain false and misleading statements regarding certain aspects of the Company's financial status and that these statements allegedly caused the Company's common stock to be traded at artificially inflated prices. The complaints also allege that Mr. Bolin and Mr. Ramsey sold stock during this period, allegedly taking advantage of inside information that the stock prices were artificially inflated. The Arizona State Court later granted a request for a stay of the Haskell action until the Ruble action is finally resolved. The Company and the individual defendants moved to dismiss the Ruble action. The court later granted the motion to dismiss, but granted the plaintiffs leave to replead. The plaintiffs then filed a second amended complaint. The Company and the individual defendants moved to dismiss the second amended complaint. On March 8, 2002, the court granted the motions to dismiss of Mr. Ramsey and Mr. Bolin with leave to replead and denied the motions to dismiss of the Company and Mr. Rustand. Mr. Ramsey and Mr. Bolin have been dismissed from the Ruble v. Rural/Metro case although the court has permitted plaintiffs leave to file another complaint against those individuals. Mr. Rustand and the Company remain defendants. The parties have commenced discovery in the Ruble v. Rural/Metro case. During discovery, the parties conduct investigation through formal processes such as depositions, subpoenas and requests for production of documents. This phase is currently expected to run through November 2003. In addition, Plaintiffs have moved to certify the class in the Ruble v. Rural/Metro case. Defendants, without waiving the right to object in the future, at this juncture expect to stipulate to the certification of the class. TEXAS: Bill Aimed At Limiting Legal Avenues Of Tort Activity Proposed --------------------------------------------------------------------- Representative Joseph Nixon, R-Houston, recently filed legislation in the Texas House that, if passed, would be the first important revision of Texas civil law in some eight years, having the potential of bringing important changes into the lives of ordinary Texas citizens, the Austin American-Statesman reports. Rep. Nixon's bill, among other things, would impose some stricter rules for class actions. It would limit the amount of interest paid on judgments, increase the pressure on plaintiffs to make out-of-court settlements and protect retailers and manufacturers from liability when they sell potentially defective products. Supporters of the changes, like Richard Trabulsi, President of Texans for Lawsuit Reform, say the newly proposed legislation addresses abuses that only recently are being given publicity. "If the Legislature passes this agenda . it makes Texas a beacon state. It will show the way for a fair, balanced and efficient system," Mr. Trabulsi said. Some Texans, however, voice other sentiments, charging that business interests are working to take from average citizens their right to sue when they are wronged. "This (the proposed bill) is an agenda that is driven by lobbyists," said Daniel Lambe, executive director of Texas Watch, a consumer rights group. "There is nothing in this bill that the public or average Texas family is crying out for." Many of the items in Mr. Nixon's House Bill 4 were considered and rejected in 1995, when a number of tort law changes were enacted. Groups, for example, that want lawsuit limits placed on the right to sue are now pushing for the revival of such proposals only gathering dust in the House Civil Practices Committee. "Most all of the things they are suggesting (the lawmakers, the lobbyists) have been considered and rejected in 1995, and since then," said Willie Chapman of the Texas Trial Lawyers Association. For example: (1) a key provision of the bill would attempt to compel more out-of-court settlements by providing that defendants offer an amount for settlement. If the plaintiffs do not accept, the plaintiffs would have to win a judgment within 10 percent of the settlement offer or pay part of the defense's legal costs. (2) Juries would be allowed to consider how much other people or businesses not parties to the lawsuit might have contributed to the injury and assign blame accordingly, possibly limiting the damages that a named defendant would have to pay. (3) The bill would shield retailers from liability when they merely sold a product that is claimed to be dangerous or defective; it would protect manufacturers whose products have complied with all pertinent federal and state regulations. TYCO INTERNATIONAL: Transfer of Securities Lawsuits To NH Court Sought ---------------------------------------------------------------------- Plaintiffs in four class actions pending against Tyco International Ltd. asked for the transfer of the suits from the United States District Court for the Southern District of Florida to the District of New Hampshire. The suits were initially filed in December 2002 in the Circuit Court for Palm Beach County, Florida: (1) Hromyak V. Tyco International, Ltd., et al., (2) Rappold V. Tyco International, Ltd., et al., (3) Myers V. Tyco International, Ltd., et al., and (4) Goldfarb V. Tyco International, Ltd., et al. Plaintiffs in each of these actions also assert claims against the Company, certain of its current and former directors and officers, and in three instances the Company's auditors under the Securities Act of 1933, and seek class certification, compensatory damages and attorneys' fees and expenses. The HROMYAK complaint purports to bring suit on behalf of persons who exchanged their United States Surgical Corporation (US Surgical) stock for Company shares in connection with our acquisition of US Surgical in or about October of 1998. The RAPPOLD complaint purports to bring suit on behalf of persons who exchanged their InnerDyne, Inc. (InnerDyne) stock for shares of Tyco in connection with its acquisition of InnerDyne in or about December of 2001. The MYERS complaint purports to bring suit on behalf of persons who exchanged their TyCom, LTD (TyCom) stock for shares of Tyco in connection with the Company's acquisition of TyCom in or about December of 2001. The GOLDFARB complaint purports to bring suit on behalf of persons who exchanged their Scott Technologies, Inc. (Scott) stock for shares of Tyco in connection with the Company's acquisition of Scott in or about May of 2001. The suits uniformly allege that the registration statement filed in connection with the Company's acquisition of the respective companies contained false and misleading statements concerning, among other things, financial disclosures concerning certain of the Company's mergers and acquisitions and accounting therefor. TYCO INTERNATIONAL: Faces Amended Consolidated Securities Lawsuit in NH ----------------------------------------------------------------------- Tyco International, Ltd. faces an amended consolidated class action filed in the United States District Court for the District of New Hampshire. The suit names as defendants certain former officers and certain current and former directors of the Company, its auditors, and the Company as a nominal defendant. As to the Company's present or former personnel, the complaint asserts causes of action for breach of fiduciary duty and waste of corporate assets. As against the Company's auditors, the complaint asserts causes of action for negligence, negligent misrepresentations, and breach of contract. The action alleges that individual defendants engaged in, permitted and/or acquiesced in the following alleged improper conduct: (1) using Tyco funds for personal benefit, including misappropriation of funds from the Company's Key Employee Loan Program and relocation programs; (2) engaging in improper self-dealing real estate transactions; (3) entering into improper undisclosed retention agreements; and (4) filing false and misleading financial statements with the Securities and Exchange Commission that were based on improper accounting methods. TYCO INTERNATIONAL: Plaintiffs File Consolidated ERISA Suit in NH Court ----------------------------------------------------------------------- Plaintiffs in the class actions against Tyco International Ltd. and certain of its current and former employees, officers and directors filed an amended consolidated suit in the United States District Court in the District of New Hampshire. The suits were brought under the Employee Retirement Income Security Act (ERISA). The complaints purported to bring claims on behalf of the Tyco International (US) Inc. Retirement Savings and Investment Plans and the participants therein. Two of the actions were filed in the United States District Court for the District of New Hampshire, and the six remaining actions were transferred to that court by the Judicial Panel on Multidistrict Litigation. The suit named as defendants the Company, certain of its present and former officers, directors and employees, its wholly owned subsidiary Tyco International (US) Inc., its retirement committee. The complaint asserts that the defendants breached their fiduciary duties under ERISA by negligently misrepresenting and negligently failing to disclose material information concerning, among other things: (1) related-party transactions and executive compensation; (2) Tyco's mergers and acquisitions and the accounting therefor, as well as allegedly undisclosed acquisitions; and (3) misstatements of Tyco's financial results The complaint also asserts that the defendants breached their fiduciary duties by allowing the Plans to invest in Tyco stock when it was not a prudent investment. The plaintiffs seek: (i) a declaration that the defendants are not entitled to protection under ERISA's safe harbor provision; (ii) an order compelling the defendants to make good to the Plans all losses caused by the defendants' alleged breaches of fiduciary duty; (iii) imposition of a constructive trust on any amounts by which any defendant was unjustly enriched; (iv) an order enjoining future violations of ERISA; (v) actual damages in the amount of any losses the Plans suffered; (vi) costs and attorneys' fees, and (vii) an order for equitable restitution and other appropriate equitable monetary relief UNITED AIRLINES: Hearing-Impaired Teen Files Suit For Captioned Movies ---------------------------------------------------------------------- Sam Bynum, an 18-year-old high school senior, who is severely hearing- impaired, filed a federal lawsuit in Houston, which claims that Continental Airlines, American Airlines, United Airlines and several other airlines are violating the Americans with Disabilities Act by not providing captioning with their movie/TV screens, the Houston Chronicle reports. Mr. Bynum has requested the court to grant his lawsuit class action status. Disability laws require that companies must make reasonable accommodations to comply with the disabilities act, said David George, a Houston lawyer. Mr. George pointed out that the legal issue in the airlines' case may be determined by the cost of making captioned movies available. For example, Mr. George said, small mom and pop businesses are not required to provide elevators to disabled customers because the cost to them would be too much of a financial burden. On the other hand, requiring a hotel chain to provide elevators would be seen as a reasonable accommodation. In this case, if airlines "are required to spend millions to retrofit every plane, that may not be reasonable, but if they just have to install software, that may be considered reasonable, Mr. George said. Mr. George's partner, Brady Edwards, said that adding subtitles would not be onerous. United Airlines spokesman Jeffrey Green said the airline typically does not comment on pending litigation. However, he said, there are technical problems with putting captions on the screens. For one, they would be difficult to fit on the small screens used on planes. With screens ranging from the size of a paperback to a sheet of notebook paper, the type would either be too tiny or take up much of the screen. Asbestos Alert ASBESTOS LITIGATION: Devon Sailor's Appeal Rejected in Asbestos Claim --------------------------------------------------------------------- A former sailor from Devon, United Kingdom who says his health was ruined by exposure to asbestos, has lost his case for compensation from the Ministry of Defence (MoD). Alan Matthews, 65, from Exeter, said he was exposed to large quantities of asbestos dust while serving in the Royal Navy 40 years ago. However, five Law Lords refused to strip the MoD of the last vestiges of the Crown immunity, which protects it from being sued over injuries suffered decades ago. Mr. Matthews said he was "absolutely gutted" by the Lords' decision and his lawyers are now to take the case to the European Court of Human Rights in Strasbourg. The 1947 Crown Proceedings Act barred lawsuits against the MoD over injuries sustained by services personnel, until it was repealed in 1987. However, the change was not applied retrospectively, meaning those injured before 1987 could not bring claims. In January 2002, the High Court ruled this broke an individual's right to a fair hearing, part of the Human Rights Convention, when Mr. Matthews first brought his case to court. However, the verdict was overturned in the Court of Appeal three months later and the case was taken to the House of Lords, where it was again rejected. Mr Matthews said of the verdict, "It's not about the rules, it's about justice, and we just haven't had it. I'm not going to throw in the towel. I always knew this was going to be a struggle, but the fight must go on. The livelihoods of too many people, including families and widows who have lost loved ones to the negligence of the armed forces, depend on the outcome of my case to give up now." Four years ago, X-rays showed Mr. Matthews' lungs had been affected by asbestos dust. Mr. Matthews believes this came from when he was exposed to the substance as an electrician in the Royal Navy between 1955 and 1968. ASBESTOS LITIGATION: Bill Seeking Asbestos Reform Introduced in Senate ---------------------------------------------------------------------- Legislation aimed at curbing asbestos lawsuits has been introduced in the US Senate, just days after a call for action by the nation's largest legal group, a senator's office said. Senate Budget Committee Chairman Don Nickles introduced the asbestos reform bill, spokeswoman Gayle Osterberg said. It would limit asbestos personal injury claims by, among other things, setting medical criteria. However, some critics say this would exclude too many people from filing claims, and they favor another possible solution, setting up a trust fund for victims. They are also hoping to get their ideas into legislation in the new Congress. The Senate Judiciary Committee Republican chairman Orrin Hatch of Utah, and the ranking Democrat, Vermont Sen. Patrick Leahy, are trying to find a consensus on asbestos reform that industry, lawyers and unions could support. Earlier this month the American Bar Association backed limits on asbestos lawsuits brought over non-cancerous lung injuries that plaintiffs allege were caused by exposure to the fire-retardant mineral. Sen. Nickles' bill, which largely mirrors the ABA approach, and a Senate Judiciary Committee hearing on asbestos set for March 5 could spur further debate in Congress over whether to stop the torrent of litigation blamed for driving more than 60 companies into bankruptcy. Previous Congresses have failed to address soaring asbestos claims. Companies lobbying for limits have been countered by environmentalists and trial lawyers with major involvement in asbestos litigation. Last year, there was talk in Congress for months about an asbestos bill, but it never materialized. Supreme Court justices have invited Congress to find a national solution to the "elephantine mass of asbestos cases," as Justice David Souter said in 1999. Asbestos was widely used for fireproofing and insulation until the 1970s, when scientists concluded that inhaled fibers could be linked to cancer and other diseases. An avalanche of claims since then has cost more than $54,000,000,000 in settlements. In a statement, Sen. Nickles, a former businessman, said, "There is no question asbestos litigation is a serious deterrent to economic growth." Sen. Nickles held a Senate Budget Committee hearing on that aspect last month. His bill would use criteria approved by the American Medical Association to establish whether someone is sick enough to sue. It would also put on hold the statute of limitations until a physical impairment is discovered, a provision aimed at preventing a rush to file claims over fear that the right to file suit might expire before illness develops. The bill prohibits "venue shopping" in courts, with the exception of cancer patients diagnosed with a life expectancy of less than three years. Michael Baroody, executive vice-president of the National Association of Manufacturers, welcomed Sen. Nickles' effort, saying it "brings the stars into even closer alignment for passage of long-needed reform legislation." Mr. Baroody chairs the Asbestos Alliance, an industry group that favors setting medical criteria to root out frivolous lawsuits. However, Damon Silvers, counsel for the AFL-CIO and an advocate of an asbestos victims trust fund, said the Nickles bill was harmful to victims who could not meet the specific medical criteria for suing. "We estimate that more than a million people who have been injured would not get any compensation" under such a medical criteria system, Mr. Silvers said. In the House, Reps. Chris Cannon, a Utah Republican, and Cal Dooley, a California Democrat, are also drafting an asbestos bill. ASBESTOS LITIGATION: 50 Years Later, Asbestos Exposure Destroying Lives ----------------------------------------------------------------------- Terry and David Thiele share boyhood memories of burying themselves up to their necks in the pile of scrap ore outside the northeast Minneapolis factory. Mary Mattera and Glen Martner say they played in the same vermiculite with their sisters nearly a half century ago. For some 40 years, kids played at that pile. Nobody told them that microscopic asbestos fibers in the ore could embed in their lungs. No one knew that, decades later, the tiny toxins would link their lives in a slowly unfolding nightmare. At least nine people who played in the pile, as well as two of their parents, are dead or sick from asbestos-related respiratory diseases, according to lawyers and family members. When the Minnesota Department of Health finishes a survey of 6,000 neighborhood residents, the toll could rise. Discovery of the illnesses is stirring anger and anxiety among scores of present and former residents who played in the ore, who spread it along base paths of a ball field, or who put in their driveways and gardens. Some of them have disabling lung ailments. Some have abnormal X-rays. Others worry they'll be next. "It's kind of like having a bomb strapped to you," said David Thiele, 51, of Faribault, who has lung scarring but no symptoms. "You just don't know when it's set to go off." The Western Mineral Products Co. operated the plant between Madison and Jefferson Sts. for decades, heating the vermiculite to 2,000 degrees until it popped into granules, which it sold as Zonolite attic insulation. W.R. Grace & Co. bought the Montana vermiculite mining operation in 1963 as well as dozens of processing plants nationwide, including the one in Minneapolis. Now-bankrupt Grace calls it "a real tragedy" that many of its workers were sickened or killed by asbestos-related illnesses. Grace executives blame inadequate science that failed to alert regulators to the need for tougher exposure limits. Grace executives also have said that nearly all of the asbestos contaminant was eliminated during processing, and that they have yet to see proof that anyone in the neighborhood has gotten sick from the pile. However, interviews with Twin Cities lawyers, public health experts, the victims and their family members show the evidence is mounting. One telltale sign may be the mesotheliomas. In 1998, Mr. Mattera's sister, Karen Asmussen, died at age 57 of the disease, a rare, fast- moving cancer of the lining of the lungs that is almost always caused by asbestos exposure. Mr. Mattera said that while living nearby from 1948 to 1958, Ms. Asmussen walked through dust from the plant to and from school and played in the pile during visits to her grandmother's home a block away. When Ms. Asmussen's husband hugged her on Valentine's Day in 1997, Mattera said, her sister felt the first pain from what was soon identified as a tumor in her chest. Ms. Asmussen's son, Guy, of Isanti, said doctors removed one of her lungs but the cancer spread to the other one. "She was connected to a (oxygen) tank for the last four months of her life," he said. "Towards the end it was miserable, terrible," Mr. Mattera said. "It was just painful to breathe." Mr. Martner, a retired engineer in Fontana, Calif., said he and his sister, Carolyn Ellingson, played in the pile when their family lived across the street from the plant from 1948 to 1956. Ms. Ellingson, a San Francisco artist, died last spring of mesothelioma at age 64. "When Carolyn was very sick and went into the hospital, the doctors suspected right away that it was asbestos-related," Mr. Martner said. "Everybody that played in that is at risk . I have a mass on my lung." Elwin Thiele, 78, and his wife, Jacqueline, 76, lived across the street from the plant for 48 years. Hastings lawyer Rick LaVerdiere said their three children -- David, Terry, and Lynette Nickelson -- played in the scrap pile. Mr. LaVerdiere said all five of the Thieles have calcified plaque in the lining of their lungs -- a condition that usually appears only if "someone had a tremendous amount of exposure to asbestos over a long period of time or a long time ago." He said Elwin and Terry Thiele also have asbestosis -- a more advanced asbestos disease that restricts breathing, sometimes lethally. "It's incredible," Mr. LaVerdiere said. "You've got an entire family, and the only known exposure was living near the plant and being in the piles as children. That kind of evidence says that even non- occupational exposure to their products can produce disease." Elwin (Tip) Thiele, a retired cabinetmaker, was rushed to a hospital earlier this month with severe chest pains. He was informed that his lungs were deteriorating and was given pain-killing morphine during a two-day hospital stay. "It seems like it's closing in on me," he said after another doctor's visit last week. Terry Thiele, 56, a retired phone technician, estimates he played in the pile 50 times. He said his doctor first noticed a shadow on his chest X-ray 13 years ago. Now, he said, the scarring on his X-ray "looks like a patchwork quilt" and his asbestosis frequently leaves him short of breath. Peter Stasica of Coon Rapids said his 38-year-old brother, Jeff, who frolicked with him on the pile 30 years ago, has "tumors all over his lungs." John Dordan, 55, of Milaca, said he played in the pile and in the boxcars that carried raw asbestos to the plant, where his father worked. He said his father died of an asbestos-related disease, and his doctor says he has a "blotch" on his chest X-ray. Public health experts say the northeast Minneapolis situation appears to be shaping into a smaller-scale version of the horrors that have ravaged Libby, Montana, where the ore was mined for more than 60 years. Published reports say more than 200 miners have died and more than 800 other people have lung diseases. The Environmental Protection Agency has conducted major cleanups in both Libby and northeast Minneapolis over the past three years. The neighborhood exposures in Minneapolis surfaced in early 2000, when public health officials learned that Harris Jorgensen, who had played on the scrap pile as a child, had died of lung cancer in 1991 at age 44. Jorgensen got a court settlement from W.R. Grace, though the firm admitted to no liability. Aubrey Miller, then a Denver-based epidemiologist with the US Public Health Service who was assessing the damage in Libby, said that Jorgensen's case "told me we've got a big problem all over the country. That's when we went crazy, started informing other regions, started looking into where this stuff was sent." Most of the nation's asbestos exposures can be traced, in part, to researchers' failure to home in on the dangers until the early 1960s, and the government's sluggish moves to regulate asbestos. The death toll from asbestos exposure among American workers is projected to reach 500,000 in the coming years. However, public health officials say the asbestos-related illnesses among non-workers in Libby and Minneapolis are extraordinary and may mark a new chapter in American environmental health. In Libby, more than two-thirds of roughly 1,250 area residents found to have lung abnormalities in a screening by the US Agency for Toxic Substances and Disease Registry "had no occupational exposure at all." Besides the illnesses among families that lived near the Minneapolis plant, the Star Tribune reported three years ago that asbestos contributed to the deaths of at least 10 workers at a second plant 13 blocks from the Grace factory that also processed Libby ore. Two sisters who grew up across the street from that plant, operated until 1971 by the B.F. Nelson Co., died of asbestos-related diseases, and a third has lung problems. William Corcoran, Grace's vice president for public and regulatory affairs, said Grace takes responsibility for the deaths of its former workers. However, he contended that nearly all the illnesses in Libby -- and the company argues that the death toll is far lower than reported -- involved Grace workers or their family members who were exposed to dust they brought home on their clothes. Grace has yet to see sufficient information about the Minneapolis cases, he said, "to draw any firm conclusions about the illnesses these individuals may have or the causes of those illnesses." ASBESTOS LITIGATION: State Court Judge Jaffe Admits Guilt for Extortion ----------------------------------------------------------------------- A chastened Allegheny County Common Pleas Judge Joseph A. Jaffe wiped away tears yesterday as he admitted extorting $13,000 in cash from an attorney whose law firm had 1,300 asbestos cases pending before him. Judge Jaffe, 53, of Upper St. Clair, sat beside his lawyer, Robert Leight, and answered questions from Chief US District Judge Donetta W. Ambrose, who addressed him as "Mr. Jaffe." Judge Jaffe's appearance in US District Court marked the first time a sitting Allegheny County Common Pleas judge has pleaded guilty to a federal crime. He admitted violating the Hobbs Act, a federal law that prohibits public officials from using their official power to obtain property or services. He pleaded guilty to the first charge in an indictment handed up by a grand jury on Oct. 16, 2002. During the hearing, Judge Jaffe frequently responded, "Yes, your honor." His face turned red as he acknowledged his actions, signed his guilty plea and wept. Dressed in a gray suit, Judge Jaffe told the judge he was under the care of a therapist and taking an anti-depressant medication for severe depression. He admitted that he showed a list of his personal debts to Joel Persky, a partner in the law firm of Goldberg, Persky Jennings & White. The debts included a $4,200 vacation to Hilton Head, SC, medical bills and a court judgment of $2,000. Mr. Persky reported the solicitation to the FBI and cooperated with federal authorities, who recorded all of the men's subsequent meetings. Judge Jaffe also admitted promising Mr. Persky "unlimited access" to him in exchange for the money and to hold certain defendants liable in asbestos cases if Mr. Persky wanted them to remain on the hook. Federal authorities stopped Judge Jaffe outside of Persky's Squirrel Hill home on Aug. 7, 2002 and retrieved an envelope containing the cash from Mr. Persky. At a news conference following Jaffe's hearing, US Attorney Mary Beth Buchanan said the FBI is continuing to investigate reports that he accepted referral fees from lawyers in exchange for steering cases to them. The code of judicial conduct prohibits judges from accepting such fees. Judge Jaffe, who remains free on a $15,000 recognizance bond, will be sentenced May 16. He faces a prison term ranging from two years to 30 months at a minimum-security prison. Ambrose can impose a stiffer sentence. Kenneth McCabe, special agent in charge of the FBI's Pittsburgh division, thanked Mr. Persky for coming forward. "Sometimes you need to do the right thing, even if it's not the most convenient thing," Mr. Persky said. During the news conference, Mr. Buchanan acknowledged that lawyer Edwin H. Beachler did not notify authorities that Judge Jaffe had solicited money from him last summer. Mr. Beachler's firm of Caroselli, Beachler, Conboy & McTiernan had several hundred asbestos cases pending before Judge Jaffe. Last summer, Mr. Beachler gave Jaffe a check for $12,500 after the judge showed him the same list of personal debts Mr. Persky saw. The code of conduct for lawyers requires them to notify authorities of any unethical conduct by fellow lawyers or judges. Mr. Buchanan insisted Mr. Beachler was a victim of Judge Jaffe's misconduct and that he cooperated with federal authorities once they approached him. If Judge Jaffe had gone to trial, Mr. Beachler would have testified against him, Mr. Buchanan said. Judge Jaffe never cashed Mr. Beachler's check and the lawyer never received anything in return for it, Mr. Buchanan said. Any sanctions against Mr. Beachler, Mr. Buchanan said, should come from the Office of Disciplinary Counsel, an arm of the state Supreme Court that investigates and prosecutes lawyers accused of misconduct. Art Heinz, a spokesman for the Administrative Office of Pennsylvania Courts, said the guilty plea does not affect Judge Jaffe's status. The judge was suspended without pay by the Court of Judicial Discipline on Jan. 15 but his medical benefits remain in effect. Judge Jaffe's annual salary was $121,225. Joseph A. Massa Jr., chief counsel for the Judicial Conduct Board, which prosecutes judges accused of wrongdoing, said the board's investigation into Judge Jaffe's conduct was continuing. In the past, the conduct board has usually waited until a judge was sentenced before asking the state Court of Judicial Discipline to remove that judge from office. ASBESTOS LITIGATION: Ex-Mayor Archer Fights Exploitative Asbestos Suits ----------------------------------------------------------------------- After eight years as mayor of Detroit, you might think Dennis Archer had seen enough squabbling and petty infighting to last a lifetime. However, as president-elect of the American Bar Association (ABA), he continues to prod the nation's lawyers into tackling the biggest, most contentious legal issue in America today. In Seattle, at Mr. Archer's urging, the ABA voted to recommend that Congress place limits on who can sue over exposure to cancer-causing asbestos. The ABA plan, approved by 70 percent of delegates, sets medical standards to differentiate between people who are seriously sick and those who are not. For 20 years, the ABA, the US Supreme Court and Congress have been yelping about an asbestos crisis that has bankrupted scores of companies and put as many as 120,000 people out of work. "Despite all that, nobody went to work on it," Mr. Archer declared. That changed in November, when he asked the ABA for authority to create a commission to study the asbestos issue and propose solutions. "I got a lot of grief. People said, 'Wait, don't pass this now,'" Mr. Archer said, noting that plaintiffs' attorneys have reaped huge fees from the $54,000,000,000 paid to asbestos claimants since the 1970s. So why did Mr. Archer, 61, who became chairman of the Dickinson Wright law firm in January 2002 after deciding not to seek a third term as mayor, decide to push the asbestos issue right away? He doesn't become ABA president until August. He had watched the crisis grow, he said. "I became even more concerned when a great company like Federal-Mogul of Southfield went into bankruptcy, not from exposing workers in Michigan to asbestos, but because it had acquired a British company," he continued. Mr. Archer also said that Congress appears poised to consider asbestos reform this year, and that "the ABA should have a seat at the table." The Senate Judiciary Committee will hold a hearing March 5 on asbestos. More than 200,000 asbestos cases clog the dockets of US courts today. More than 60 companies, including Federal-Mogul, have filed for bankruptcy under the weight of asbestos claims. Hundreds of other companies are defendants in lawsuits, among them General Motors Corporation, Ford Motor Co., DaimlerChrysler AG, and Dow Chemical Co. Fear of big damage awards is dragging down the stock prices of many industrial firms. The US Supreme Court, as recently as three months ago, has issued ominous warnings about the crisis, urging Congress to do something about it, but until now, Congress hasn't. It's a touchy issue for Congress, and not only because trial lawyers are a powerful lobby. Many people have suffered terrible illness and died awful deaths due to asbestos. Victims are powerful witnesses, and legislators are reluctant to appear unsympathetic by nickel-and-diming them over damages. What has catapulted asbestos into a litigation crisis is not the legitimate suffering of the seriously ill, but the explosion of lawsuits driven by for-profit "screening" companies that actively solicit non-sick or mildly sick workers who might have been exposed to asbestos in the past. Asbestos was commonly used as a fire retardant in insulation and construction until it was linked to respiratory illness and cancer. Industries stopped using it in the 1970s, but some asbestos-related cancer has a long latency period, up to 40 years. By inducing people with free X-rays and promotional ads that declare "You May Have Million $ Lungs," the screening firms have directed thousands of plaintiffs to lawyers who then sued seeking damages for fear of cancer. Mary Alexander, president of the Association of Trial Lawyers of America, argued that the ABA proposal would close courts to 90 percent of people who have sued. "Those who are sick but not dying would be denied," she said. The ABA study group appointed by Mr. Archer, however, found egregious examples of doctors for screening firms who either declared every person they examined to be ill or who stated that they were paid more for positive findings of illness than for negative results. Mr. Archer, a plaintiff's attorney for 15 years early in his career, describes the ABA approach as a "win-win." It would clear courts of asbestos cases filed by the non-sick, provide faster relief for the seriously ill and defer, but not deny, the right of people to sue if they get seriously ill in the future. He knows the ABA's suggested standard will be debated fiercely and amended plenty in Congress. ASBESTOS LITIGATION: Retiree Dies Due to Asbestos Related Cancer ---------------------------------------------------------------- A retired fireman developed cancer and died following years of exposure to asbestos. Former boiler engineer Arthur Wood, aged 72, of Warrington Road, Leigh, had stripped and maintained coal mine boilers across Leigh for the National Coal Board for 14 years before becoming a fireman at Leigh fire station in 1959. Mr. Wood worked at the station for 25 years before his health began to deteriorate two years ago. He was diagnosed with cancer in October 2001 after "significant exposure to asbestos in confined spaces." He died in December. Bolton Coroner Jennifer Leeming recorded a verdict that the cause of death was an industrial disease. She said, "Clearly he contracted it as a result of exposure to asbestos. The community has got cause to be grateful to Mr. Wood for his services as a fireman over the years." ASBESTOS LITIGATION: ABB Moves to Settle Asbestos Related Litigation -------------------------------------------------------------------- ABB's Combustion Engineering division has filed for Chapter 11 bankruptcy protection as part of a 'pre-packaged' $1,200,000,000 (P750,000,000) deal with more than 100,000 claimants. The asbestos issue has threatened to place more pressure on ABB when it has already been forced to sell assets and focus on power and automation technology. Analysts said the bankruptcy move gave ABB some breathing space as it restructures its global operations involving 146,000 staff in 100 countries. Stock markets worldwide had become increasingly nervous about the scale of the asbestos claims it inherited when it bought Combustion Engineering, a manufacturer of industrial boilers, in 1990. ABB posted a record loss of $691,000,000 for 2001 and has yet to report results for last year. It is weighed down by debts of $9 billion, which it is hoping to cut by slashing $800,000,000 of costs through job cuts and sell-offs. ASBESTOS ALERT: DaimlerChrysler Corp. Battles Asbestos Related Lawsuits ----------------------------------------------------------------------- Like other companies in the automotive industry, DaimlerChrysler (primarily DaimlerChrysler Corporation) experienced a growing number of lawsuits which seek compensatory and punitive damages for illnesses alleged to have resulted from direct and indirect exposure to asbestos used in certain components (principally brake pads). Typically, these suits name many other corporate defendants and may also include claims of exposure to a variety of non-automotive asbestos products. DaimlerChrysler Corporation believes that many of these lawsuits involve unsubstantiated illnesses or assert only tenuous connections with components in its vehicles. It is possible, however, that the number of these lawsuits will continue to grow and that the company could incur significant costs in the future in resolving these lawsuits. Litigation is subject to many uncertainties, and the outcome of individual matters is not predictable with assurance. It is reasonably possible that the final resolution of some of these matters could require DaimlerChrysler to make expenditures, in excess of established reserves, over an extended period of time and in a range of amounts that cannot be reasonably estimated. Although the final resolution of any such matters could have a material effect on DaimlerChrysler's consolidated operating results for a particular reporting period, DaimlerChrysler believes that it should not materially affect its consolidated financial position. COMPANY PROFILE DaimlerChrysler AG (NYSE: DCX) Epplestrasse 225 70546 Stuttgart, Germany Phone: +49-711-17-0 Fax: +49-711-17-94075 http://www.daimlerchrysler.com Employees : 372,470 Revenue : $156,838,000,000 Net Income : $4,947,000,000 Assets : -- Liabilities : -- (As of December 31, 2002) Description: DaimlerChrysler is the world's #3 carmaker in sales (behind General Motors and Ford). Formed by the $37 billion acquisition of Chrysler by Germany's Daimler-Benz in 1998, the company makes about 4.7 million vehicles a year. Chrysler's brands include Dodge, Eagle, Jeep, and Plymouth vehicles, the Mercedes brand is limited to luxury sedans, commercial vehicles, and SUVs. Also, DaimlerChrysler's Freightliner unit is the US's #1 heavy-truck maker. The car maker, also has a 10% stake in Hyundai Motor and a 37% stake in Mitsubishi Motors. ASBESTOS LITIGATION: Asbestos at Hotel Spawns Investigations ------------------------------------------------------------ Federal and state regulators have opened investigations into the release of asbestos at the Doubletree Club Hotel in Norfolk, Virginia. The hotel at Military Circle Shopping Center remains closed as work crews clean up contamination by the cancer-causing substance. Spokespeople with the federal Environmental Protection Agency and the Virginia Department of Labor and Industry would confirm only that the agencies have launched inquiries into the release. Neither could estimate how long those studies might take. However, Norfolk officials said the contamination of the 15-story, 208-room hotel is extensive. "This is a large event," Lt. Garry Windley, a spokesman for Norfolk Fire-Rescue, said. "It's a huge cleanup." According to Doubletree, a contractor's crew disturbed a surface containing asbestos while refinishing walls on the hotel's third floor. The company did not disclose the name of the contractor or how the disturbance occurred. However, Mr. Windley said workers became concerned about the amount of dust in the air and wanted it checked for asbestos. "They were working for a while without knowing it," he said. Mr. Windley did not know what kind of protective equipment the crew was using. EPA, the labor and industry department, which runs the state's occupational safety and health program, and Norfolk Fire-Rescue were called to check the release, Mr. Windley said. The Doubletree shut down and paid for about 100 guests to go to nearby hotels, and tests confirmed the presence of asbestos. Military Circle was never closed, although the doors connecting it directly to the hotel were locked when the Doubletree shut down. Air on the third floor of the hotel had more than four times the acceptable limit of asbestos. Mr. Windley said subsequent analysis also detected the substance on floors two through 15. "It was carried throughout the hotel from work done on the third floor," he said. The third, fourth and fifth floors had been closed to guests due to renovations when the release occurred. Doubletree manager Mike Milenko said further tests are pending, but initial tests on other floors suggested that asbestos was within acceptable levels. "The only floors that tested high were unoccupied," he said. The Doubletree has no record of building code violations, according to Norfolk city officials. Asbestos can cause cancer and other health problems when inhaled, and has been banned for many uses in the past three decades. The substance is not necessarily harmful as long as it is not airborne. Asbestos can, however, be released from deteriorating or damaged materials like insulation, acoustical materials or floor tiles, which were often installed in older buildings. Typically, asbestos abatement is handled by cleaning the air and surfaces in part of the contaminated area, then sealing it off and moving along to the next piece of the job. Mr. Milenko said that early estimates that the Doubletree will be shut down until at least the end of the month were a guess, and that he could not predict how long the closure might last. He said he is not sure whether the hotel's owners, Norfolk Hotel LLC of New York, have insurance that would cover the loss of business during such an event. "I'm sure they'll explore what the policy covers," he said. Neither the EPA nor the labor and industry department would speculate on the outcome of their investigations. However, a party found negligent in an asbestos release could face legal action by regulators or exposed workers. The EPA said that in December, for instance, a Connecticut contractor was sentenced to three years' probation and forced to pay $132,300 in cleanup costs and expenses for employee medical monitoring after improperly handling asbestos abatement while demolishing a building. ASBESTOS LITIGATION: Emmett J. Bean Workers Fear Exposure To Asbestos --------------------------------------------------------------------- As the massive renovation of the Emmett J. Bean Center in Lawrence, Washington DC winds down, some workers there say they fear the government's handling of the project may have exposed them to dangerous levels of asbestos. More than a dozen current and former workers have been found at the building who said they suffered serious respiratory problems during the construction. In at least one case, a longtime defense department worker, Andy Robbins, was approved for worker's compensation with a diagnosis of exposure to asbestos. "I was sick," Mr. Robbins, who worked for 25 years as an accountant on the third floor, said. "There were people up there that I thought were going to die on the spot." Officials with both the Defense Finance and Accounting Service -- the building's main tenant -- and the General Services Administration, which owns the building, insisted that workers were not put at risk. "We've got air monitoring that we've done that shows everything we've done has been within EPA guidelines," said Michelle Majka, the GSA's project manager on the renovation. However, workers contend there were conflicting lab results, faulty asbestos-abatement procedures and other inconsistencies that raised concerns about excessive asbestos levels. The center, also known as the Finance Center or Building One, is the federal government's second- largest building, after the Pentagon. Located at 56th Street and Post Road, it houses about 4,000 federal employees. Five years ago, GSA began a taxpayer-funded renovation project worth $123,000,000 on the aging complex. Most of the employees continued to work at their desks as construction crews worked nearby. By early 2000, some employees began complaining of breathing problems. "It was like I couldn't stop coughing," said Jim Crews, chief of the finance service's Budget Execution Reports Division, who supervised about 20 employees at the center. Lou Mendyk, a financial management specialist, said employees could see thick dust accumulating in their work areas. "During the day when (construction workers) were on the roof, you could see some of it floating down," Mr. Mendyk said. "Everyone talked about it. Everyone was concerned." Mr. Majka said asbestos removal was done in accordance with Environmental Protection Agency regulations, with airtight containment areas bordered by construction barriers. However, workers question whether containment procedures were proper and whether all asbestos was identified. Robbins and several others took their concerns to building officials and an Indianapolis inspector, who cited tests that were negative for asbestos. When Mr. Robbins took his own sample of ceiling material, two separate labs confirmed his suspicion of asbestos - a finding later also confirmed by the city. Mr. Majka, however, said workers were kept safe because the entire building was treated in accordance with asbestos- abatement standards. Since the symptoms of excessive asbestos exposure can take decades to show up, some workers fear they might never find out who's right in the dispute. Meanwhile, they're back to work in their newly renovated offices. "I think until people start dying off and basically autopsies are done and asbestos is found, we might not know the truth 'til then," Mr. Crews said. ASBESTOS ALERT: Flowserve Corporation Notes Asbestos Related Litigation ----------------------------------------------------------------------- Flowserve Corporation (NYSE: FLS) is a defendant in numerous pending lawsuits (which include, in many cases, multiple claimants) that seek to recover damages for alleged personal injury allegedly resulting from exposure to asbestos-containing products formerly manufactured and/or distributed by the Company. All such products were used within self-contained process equipment, and management does not believe that there was any emission of ambient asbestos-containing fiber during the use of this equipment. COMPANY PROFILE Flowserve Corporation (NYSE: FLS) 222 W. Las Colinas Blvd., Ste. 1500 Irving, TX 75039 Phone: 972-443-6500 Fax: 972-443-6800 http://www.flowserve.com Employees : 11,000 Revenue : $2,251,300,000 Net Income : $53,000,000 Assets : -- Liabilities : -- (Preliminary Report as of December 31, 2002) Description: Flowserve makes pumps, valves, and mechanical seals. The acquisition of Ingersoll-Dresser Pumps (IDP) from Ingersoll-Rand made Flowserve the world's largest provider of pumps for the chemical, petroleum, and power industries. Flowserve's flow solutions division offers mechanical seals, sealing systems, and repair services to OEMs that make pumps, compressors, and mixers. Its flow control division makes valves, actuators, and related equipment that control the flow of liquids and gases. Although its products are found around the world, the US accounts for more than 50% of sales. Flowserve is buying Invensys' flow control division. ASBESTOS LITIGATION: Stay on Suits V. Halliburton Extended to March 21 ---------------------------------------------------------------------- Halliburton (NYSE: HAL) announced following a hearing in the Harbison- Walker bankruptcy case that the court's temporary restraining order has been continued until March 21. This restraining order was originally entered on February 14, 2002, staying more than 200,000 pending asbestos claims against Halliburton's subsidiary DII Industries, LLC (DII). The court also ruled Halliburton must file an affidavit stating settlement agreements have been signed by attorneys representing 75% of DII's current asbestos claimants by March 14, 2003. If this deadline is not met, the court will hear oral arguments presented by both sides on March 21, on a motion to lift the stay. While there can be no assurance that formal agreements will be reached or that the stay would be continued following oral arguments, Halliburton already has preliminary agreements with attorneys representing more than 90% of claimants and believes that settlement agreements with the required 75% of claimants can be completed prior to the deadline. On December 18, 2002, Halliburton announced that it had reached an agreement in principle to achieve a global settlement of its asbestos claims. The agreement contemplated that Halliburton would conduct due diligence on the asbestos claims, and that DII and attorneys for the asbestos claimants would use reasonable efforts to execute definitive settlement agreements. While all the required settlement agreements have not yet been executed, Halliburton and attorneys for certain of the asbestos claimants have now reached agreement on what they believe will be a template for such settlement agreements. These agreements are subject to a number of conditions, including agreement on a Chapter 11 plan of reorganization for certain Halliburton subsidiaries, including DII, approval by 75% of current asbestos claimants to the plan of reorganization, the negotiation of financing acceptable to Halliburton; approval by Halliburton's board of directors and confirmation of the plan of reorganization by a bankruptcy court. The template settlement agreement also grants the claimants' attorneys a right to terminate the definitive settlement agreement on ten days' notice if Halliburton's DII subsidiary does not file a plan of reorganization under the bankruptcy code on or before April 1. Halliburton is conducting due diligence on the asbestos claims, which is not expected to be completed by April 1. Therefore, Halliburton does not expect its subsidiary to file a plan of reorganization prior to April 1. Although there can be no assurances, Halliburton does not believe the claimants' attorneys will terminate the settlement agreements on April 1 as long as adequate progress is being made toward a Chapter 11 filing. ASBESTOS ALERT: Oil States Subsidiaries Face Asbestos Related Claims -------------------------------------------------------------------- Oil States International is aware that certain energy service companies that have used asbestos in the past in connection with the manufacture of equipment or otherwise in the operation of their business have become the subject of increased asbestos related litigation. Since September 30, 2001, subsidiaries of the Company have been named as defendants in two cases by plaintiffs seeking damages, including punitive damages, alleging that certain of its subsidiaries have responsibility for two individuals developing mesothelioma as a result of exposure to asbestos. Although these are the only cases that management is aware that are pending or threatened against the Company or its subsidiaries involving allegations relating to asbestos exposure, there can be no assurance that other asbestos related claims will not be made. Based on its preliminary investigation, these two cases or future claims relating to asbestos exposure will have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity. COMPANY PROFILE Oil States International, Inc. (NYSE: OIS) 3 Allen Center, 333 Clay St., Ste. 3460 Houston, TX 77002 Phone: 713-652-0582 Fax: 713-652-0499 http://www.oilstatesintl.com Employees : 3,216 Revenue : $616,800,000 Net Income : $39,700,000 Assets : -- Liabilities : -- (Preliminary Report as of Dec 31, 2002) Description: Oil States International lends a helping hand to oil and gas drillers and producers. The company provides tubular services and offers casing, premium tubing, and line pipes. Oil States' well site services range from remote site accommodations to hydraulic well control equipment. The company also offers offshore products, including flex-element technology and subsea pipeline products. Drilling its way into e-commerce, the firm has developed a portal for ordering tubular products. Founded in 1949 in Texas, Oil States focuses on deepwater activities in major producing regions. The company is expanding its operations through acquisitions. Chairman L. E. Simmons owns 63% of the firm. ASBESTOS ALERT: Pennzoil Joins Asbestos Premise-Owner Defendants List --------------------------------------------------------------------- Pennzoil Quaker State Company is involved as a premise-owner defendant in numerous asbestos lawsuits, pending primarily in Louisiana and West Virginia. The plaintiffs generally allege exposure to asbestos and asbestos- containing products while working on the premises of the premise-owner defendants, and strict liability and negligence actions against the premise-owner defendants, including the Company. They do not allege that the Company manufactures any products containing asbestos. The plaintiffs generally allege that asbestos-containing products sold, distributed and supplied by the other defendants in the lawsuits were defective and unreasonably dangerous and that those defendants were thus negligent in failing to warn the plaintiffs of these dangers. The Company is contesting these actions vigorously. ASBESTOS ALERT: United Tech Faces 850 Asbestos Cases, 16T Claimants ------------------------------------------------------------------- Like many other companies in recent years, United Technologies and its subsidiaries have been named as a defendant in lawsuits alleging personal injury as a result of exposure to asbestos integrated into certain of the Corporation's products or premises. While the Corporation has never manufactured asbestos and no longer incorporates it in any currently-manufactured products, certain of its historical products, like those of many other manufacturers, have contained components incorporating asbestos. The Corporation has made no payment in a substantial majority of the cases closed to date. The remainder of the resolved cases have settled for amounts that are not material to the Corporation, and have been supported in part by insurance. At present, the Corporation is named in about 850 lawsuits involving around 16,000 individual claimants. More than 13,000 of these claimants are joined in seven lawsuits in circuit court in various counties in Mississippi that were filed or amended during 2002 to include the Corporation or certain of its subsidiaries. Each of these Mississippi lawsuits names from 200 to more than 400 other companies as defendants along with the Corporation or its subsidiaries. The complaints do not identify any products of the Corporation or its named subsidiaries, or specify the amount of damages claimed. Nor do they allege which claimants, if any, were exposed to asbestos attributable to the Corporation's products or premises, or the extent, if any, to which such claimants have been harmed. No discovery or other pretrial proceedings to develop such information have yet occurred. The Corporation does not believe that resolution of any of the foregoing or any other legal matters will have a material adverse effect upon the Corporation's competitive position, results of operations, cash flows, or financial condition. The Company said it's one of more than 200 defendants and doesn't see a "material" cost from the lawsuits. "We've paid less than $4 million in (asbestos) claims since the mid- 1990s and have considerable insurance support," company spokesman Peter Murphy said. "We believe in good disclosure." Analyst notes today mentioned the disclosure, including a report from Wachovia Securities' Sam Pearlstein. He called the disclosure a "surprise." United Technologies, which also makes Sikorsky helicopters and Pratt & Whitney jet engines, didn't say how much insurance coverage it has or what, if any, products it made containing asbestos. Asbestos, once used as an insulation and fireproofing material, has been linked to respiratory illnesses and cancer. Asbestos-related personal-injury claims have forced more than 60 companies into bankruptcy since 1982, including W.R. Grace Co. Pearlstein couldn't immediately be reached to comment. He rates United Technologies stock as "outperform." New Securities Fraud Cases AMERCO: Charles Piven Commences Securities Fraud Lawsuit in NV Court -------------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of AMERCO (NASDAQ: UHAL) between February 12, 1998 and September 26, 2002, inclusive. The case is pending in the United States District Court for the District of Nevada against the Company and certain of its officers and directors. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Charles J. Piven by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410-986-0036 by E-mail: hoffman@pivenlaw.com or visit the firm's Website: http://www.pivenlaw.com CARREKER CORPORATION: Levy & Levy Commences Securities Suit in N.D. TX ---------------------------------------------------------------------- Levy & Levy PC initiated a securities class action in the United States District Court for the Northern District of Texas, Dallas Division, on behalf of purchasers of Carreker Corporation (Nasdaq: CANIE) publicly traded securities during the period between May 20, 1998 and December 10, 2002, inclusive. 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 May 20, 1998 and December 10, 2002. According to the complaint, throughout the class period, Carreker filed financial statements with the SEC which represented that the Company was consistently delivering numerous consecutive quarters of record, double-digit growth, which the Company attributed to the strong demand for its products and Carreker's business model. In addition, according to the complaint, the Company expressly assured investors of its "dedication to transparent reporting practices" and highlighted the supposed "quality and integrity of (Carreker's) accounting and corporate governance practices." These statements were materially false and misleading, according to the complaint, because they failed to disclose that the Company had been improperly recognizing revenues throughout the class period, thereby artificially inflating its revenues, income and earnings per share. On December 10, 2002, the Company issued a press release announcing that it was investigating whether revenues were improperly recognized by being booked at once instead of ratably over a period of time, as required by applicable generally accepted accounting principles. This belated disclosure severely and negatively impacted Carreker's stock price, causing it to fall by 22.6% in one day on extremely heavy trading volume, from a December 9 close of $5.08 per share to close at $3.93 per share on December 10. Subsequently, the SEC initiated an investigation, which is ongoing, into the Company's accounting practices. On January 28, 2003, the Company announced that it will be restating the financial reports it has filed since 1998. For more details, contact Stephen G. Levy by Mail: One Stamford Plaza, 263 Tresser Blvd., 9th Floor, Stamford, CT 06901 by Phone: 800-601-4743 (toll-free) or 203-564-1920 by E-mail: LLNYCT@aol.com or visit the firm's Website: http://www.levylawfirm.com CORVIS CORPORATION: Stull Stull Commences Securities Suit in N.D. CA -------------------------------------------------------------------- Stull Stull & Brody initiated a securities class action in the United States District Court for the Northern District of California on behalf of purchasers of Corvis Corporation (NasdaqSC:CORV) securities between August 22, 2000 and January 29, 2001, inclusive. The suit charges that Robertson Stephens and its analyst Paul Johnson violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10-b(5). Specifically, the suit alleges that defendants repeatedly issued false and misleading "Buy" recommendations on Corvis, while privately advising a group of Robertson Stephens limited partnerships to sell their Corvis shares. Moreover, the suit alleges that defendant Johnson had invested in the limited partnerships which he privately advised to sell their Corvis shares. As a result of defendants' actions, the suit charges that Corvis shares traded at artificially elevated prices during the class period, and that plaintiff and the class were damaged. For more details, contact Michael Braun or Patrice Bishop by Phone: (888) 388-4605 or by E-mail: info@secfraud.com or visit the firm's Website: http://www.secfraud.com. LEXENT INC.: Beatie and Osborn Commences Investor Suit in DE Court ------------------------------------------------------------------ Beatie and Osborn LLP initiated a class action in the Delaware Chancery Court on behalf of shareholders of Lexent, Inc. (Nasdaq NM: LXNT) seeking, among other things, to enjoin the proposed transaction by Lexent's management to take the Company private for $1.25 per share in cash. The lawsuit names as defendants the Company and: (1) Hugh J. O'Kane, Jr., and (2) Kevin M. O'Kane The suit alleges breach of fiduciary duty by the O'Kanes in connection with their recent proposal to take the Company private. For more details, contact Eduard Korsinsky, Benjamin D. Coleman by Mail: 521 Fifth Avenue, 34th Floor New York, New York 10175 by Phone: (800) 891-6305 by Fax: (212) 888-9664 by E-mail: clientrelations@bandolaw.com or visit the firm's Website: http://www.bandolaw.com MOTOROLA INC.: Chitwood & Harley Lodges Securities Suit in N.D. IL ------------------------------------------------------------------ Chitwood & Harley initiated a securities class action in the United States District Court for the Northern District of Illinois, on behalf of purchasers of the common stock of Motorola, Inc. (NYSE:MOT) between February 3, 2000 and May 14, 2001 against Motorola, Inc. and certain of its officers and directors. The suit alleges that Motorola, a global telecommunications business, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing false and misleading statements concerning the Company's business which served to artificially inflate the price of Motorola's common stock. On February 3, 2000, Motorola issued a press release in which it announced that Motorola would provide products and services to Telsim Mobil Telekomunikasyon Hizmetleri A.S. ("Telsim"), a Turkish cellular phone system operator controlled by Turkish citizen Kemal Uzan, his sons Hakan and Cem, and various members of his immediate family. The press release, however, failed to disclose that Motorola's deal with Telsim required Motorola to provide the Turkish company with $1.7 billion in vendor financing. On March 29, 2001, Motorola filed its Form Def 14A Proxy Statement with the SEC in which the Company partially disclosed the magnitude of its vendor financing commitments. On April 6, 2001, shares of Motorola stock dropped twenty three percent. Six weeks later, Motorola revealed that $728 million of the Telsim loan was past due and that Motorola actually had loaned Telsim $2 billion in vendor financing -- $300 million more than had been disclosed. For more details, contact Jennifer Morris by Mail: 1230 Peachtree Street, Suite 2300, Atlanta, Georgia 30309 by Phone: (888) 873-3999 or (404) 873-3900 by E-mail: jlm@classlaw.com or visit the firm's Website: http://www.classlaw.com OWENS CORNING: Charles Piven Commences Securities Suit in N.D. Ohio ------------------------------------------------------------------- The Law Offices Of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of Owens Corning, Inc. (OTC BB: OWENQ) between September 20, 1999 and October 5, 2000, inclusive. The case is pending in the United States District Court for the Northern District of Ohio, Western Division against certain officers and directors of Owens Corning. Due to the automatic stay proceedings afforded by Owens Corning's bankruptcy filing, Owens Corning is not named as a defendant in this action. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Charles J. Piven by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410-986-0036 by E-mail: hoffman@pivenlaw.com or visit the firm's Website: http://www.pivenlaw.com PARAMETRIC TECHNOLOGIES: Charles Piven Commences Securities Suit in MA ---------------------------------------------------------------------- The Law Offices of Charles J. Piven, PA initiated a securities class action on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of Parametric Technology Corporation (NASDAQ: PMTC) between October 19, 1999 and December 31, 2002, inclusive. The case is pending in the United States District Court for the District of Massachusetts against the Company and certain of its officers and directors. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Charles J. Piven by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410-986-0036 by E-mail: hoffman@pivenlaw.com or visit the firm's Website: http://www.pivenlaw.com SPRINT CORPORATION: Charles Piven Commences Securities Suit in KS Court ----------------------------------------------------------------------- The Law Offices Of Charles J. Piven, P.A. initiated a securities class action on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of Sprint Fon Group (NYSE: FON) between February 1, 2001 and February 5, 2003, inclusive. The case is pending in the United States District Court for the District of Kansas against Sprint Corporation, certain of its officers and directors and Ernst & Young, LLP. The action charges that certain defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period which statements had the effect of artificially inflating the market price of the Company's securities. For more details, contact Charles J. Piven by Mail: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202 by Phone: 410-986-0036 by E-mail: hoffman@pivenlaw.com or visit the firm's Website: http://www.pivenlaw.com SPRINT CORPORATION: Johnson & Perkinson Lodges Securities Suit in KS -------------------------------------------------------------------- Johnson & Perkinson initiated a securities class action in the US District Court for the District of Kansas on behalf of purchasers of Sprint FON Group (NYSE: FON) common stock and PCS Group (NYSE: PCS) during the period between August 11, 2000 and February 13, 2003, inclusive. The complaint charges that defendants, the Sprint Corporation, Ernst & Young LLP, William Esrey and Ronald Lemay violated Sections 10(b), 14(a) 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. Specifically, the Company's press releases and SEC filings overstated the Company's earnings and net assets by failing to reserve for the likely reversal of over $100 million in tax benefits attributable to highly questionable tax shelters used by Sprint's executive officers and Defendants failed to reveal that these tax shelters caused a conflict of interest between the executives and Sprint and its accountants. For more details, contact Robin Freeman or James Conway by Mail: 1690 Williston Road, South Burlington, Vermont 05403, by Phone: 1-888-256-0890 or by E-mail: email@jpclasslaw.com. UNUM PROVIDENT CORPORATION: Levy & Levy Commences Securities Suit in TN ----------------------------------------------------------------------- Levy & Levy PC initiated a securities class action in the United States District Court for the Eastern District of Tennessee on behalf of purchasers of Unum Provident Corporation (NYSE: UNM) securities during the period between May 7, 2001 and February 4, 2003, inclusive. The complaint charges Unum Provident and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Unum Provident provides group disability and special risk insurance, as well as group life insurance, long-term care insurance, and payroll-deducted voluntary benefits offered to employees at their work sites. Unum Provident operates around the World. The complaint alleges that during the class period, defendants caused Unum Provident's shares to trade at artificially inflated levels through the issuance of false and misleading financial statements. The Company failed to properly record the impairment to its investments and operated "long-term denial factories," causing the Company's financial results to be inflated. As a result, the Company's shares traded at inflated prices enabling Unum Provident to raise proceeds of $250 million on June 13, 2002 in its bond offering. The lawsuit alleges that Unum Provident and its top officers inflated the prices of the Company's securities in order to pursue an accelerated securities sale program. Defendants knew that by concealing Unum Provident's true financial results they could foster the perception in the business community that Unum Provident was a "growth company," i.e., it was the only way Unum Provident could post the revenue and earnings per share growth claimed by defendants. On February 5, 2003, Unum Provident announced that it had recorded investment losses of $93 million and also reported that it was responding to Securities and Exchange Commission requests for information relating to its investment disclosures. For more details, contact Stephen G. Levy by Phone: One Stamford Plaza, 263 Tresser Blvd., 9th Floor, Stamford, CT 06901 by Phone: 800-601-4743 (toll-free) or 203-564-1920 by E-mail: LLNYCT@aol.com or visit the firm's Website: http://www.levylawfirm.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 * * *