/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/030224.mbx C L A S S A C T I O N R E P O R T E R Monday, February 24, 2003, Vol. 5, No. 38 Headlines ABBOTT LABORATORIES: Faces Lawsuits Over False Pricing Under Medicaid BERTELSMANN: Music Publishers Launch NY Suit Over Investment in Napster BEZEQ: Tel Aviv Court Allows Consumer Suit Over Late Charges To Proceed BOMBAY CO.: Agrees To Settle CA Overtime Wage Lawsuit For $1.35 Million CABOT CORPORATION: Faces Antitrust Suit Over Carbon Black Pricing in MA CALIFORNIA: Oakwood City Agrees To Settle Suit V. Rogue Police Officers CAPRIUS INC.: NJ Court Consolidates Securities Fraud, Derivative Suits CHICAGO: Officials To File Charges V. Club Owners Over Deadly Stampede CREDIT CARD: Hacker Accesses Millions of Visa, MasterCard Customer Info EXXON-MOBIL: Court Rejects Consumers Lawsuit Over Halted Gas Supplies FASTFOOD LITIGATION: Plaintiffs To File Amended Consumer Obesity Suit FIREWORKS OF ALABAMA: Recalls 72T Boxes of Sparklers Due To Fire Hazard FORD MOTOR: Recalls Escort, Mercury Cars For Unneeded Airbag Deployment HMO LITIGATION: KY Judge Grants Class Certification To Antitrust Suit ILLINOIS: Mt. Prospect Settles Racial Bias Suit By Hispanic Motorists ILLINOIS: Two Chicago Theaters Face Suit Over Commercials Before Movies MCDONALD'S CORPORATION: Vegetarian Groups Intervene in Consumer Lawsuit MERCEDES BENZ: NJ Court Grants Certification To Consumer Fraud Lawsuit MERRILL LYNCH: To Settle For $80M SEC Probe Over Role in Enron Collapse NIKE INC.: FL Attorney General Starts Probe Over Antitrust Violations NISSAN MOTOR: Reaches Settlement In Race Bias Suit For Minority Buyers PLAYNATION PLAY: Recalls 1,400 "Fun Buckets" For Strangulation Hazard SECURITIES LITIGATION: NY Court Allows IPO Securities Suits To Proceed TENET HEALTHCARE: Employees Lodge Suit Over False Financial Statements TOBACCO LITIGATION: IL Legislators Mull Lowering Appeal Bonds For Firms UNITED COMPANIES: Workers Settle Lawsuit Over Rash Use Of Their Funds UNITED STATES: ACLU To Challenge Review Court Decision On Wiretapping UNIVERSITY of MICHIGAN: Microsoft, Others Support Affirmative Action WESTELL TECHNOLOGIES: Agrees To Settle Securities Fraud Suit in N.D. IL New Securities Fraud Cases BIO-TECHNOLOGY GENERAL: Berman DeValerio Launches Securities Suit in NJ INTERSTATE BAKERIES: Cauley Geller Commences Securities Suit in W.D. MO INTERSTATE BAKERIES: Shepherd Finkelman Commences Securities Suit in MO PARAMETRIC TECHNOLOGIES: Bernstein Liebhard Files Securities Suit in MA SAWTEK INC.: Milberg Weiss Commences Securities Fraud Suit in M.D. FL TRANSKARYOTIC THERAPIES: Wolf Popper Lodges Securities Suit in MA Court ********* ABBOTT LABORATORIES: Faces Lawsuits Over False Pricing Under Medicaid --------------------------------------------------------------------- Abbott Laboratories faces a number of class actions filed on behalf of individuals or entities, are pending that allege generally that the Company and numerous other pharmaceutical companies reported false pricing information in connection with certain drugs that are reimbursable under Medicare and Medicaid. These cases generally seek damages, treble damages, disgorgement of profits, restitution and attorneys' fees. The federal court cases have been consolidated in the United States District Court in Massachusetts under the Multidistrict Litigation Rules as "In re: Pharmaceutical Industry Average Wholesale Price Litigation, MDL 1456." Transfers to MDL 1456 are pending for the following additional cases, which have all been removed to federal court: (1) "Rice," filed in July 2002 in the Superior Court for the State of California, Alameda County, (2) "Thompson," filed in August 2002 in the Superior Court for the State of California, San Francisco County, (3) "Turner," filed in September 2002 in the Superior Court for the State of California, San Francisco County; and (4) "Congress of California Seniors," filed in September 2002 in the Superior Court for the State of California, Los Angeles County. One additional case is pending in federal court, named "County of Suffolk, et al.," filed in January 2003 in the United States District Court for the Eastern District of New York. Cases are also pending in five state courts: (i) "State of West Virginia ex rel. Darrell v. McGraw, Jr., Attorney General," filed in October 2001 in the Circuit Court for the State of West Virginia, Kanawha County, (ii) "Peralta, a minor by and through his Guardian ad Litem, Filamena Iberia," filed in October 2001 in the Superior Court for the State of California, Los Angeles County, (iii) "Swanston, individually and on behalf of himself and all others similarly situated," filed in December 2002 in the Superior Court for the State of Arizona, Maricopa County, (iv) "Digel," filed in December 2002 in the Circuit Court for the State of Tennessee, Thirteenth Judicial District of Memphis; and (v) "State of California ex rel. Ven-A-Care of the Florida Keys, Inc.," filed in January 2003 in the Superior Court for the State of California, Los Angeles The Company has filed or intends to file a response in each case denying all substantive allegations. BERTELSMANN: Music Publishers Launch NY Suit Over Investment in Napster ----------------------------------------------------------------------- German media giant Bertelsmann faces a class action filed in the United States District Court in New York by a group of music publishers over the company's investment in the Napster song-swapping service, the Agence France-Presse reports. The suit, filed on behalf of around 160,000 songwriters and publishers, alleges the Napster file-sharing service led to massive copyright abuse. The suit seeks $US17 billion ($28.57 billion) in damages. The suit alleges that the Company's strategy to fund Napster extended the life of the service, leading to greater number of copyrighted works being shared illegally. Among the four named plaintiffs in the suit are legendary songwriters Jerry Leiber and Mike Stoller, who penned such classics as Jailhouse Rock and Stand By Me. Randy Poe, the president of Leiber and Stoller Music Publishing told the Agence France-Press the suit would open a new front in the music industry's war against copyright piracy through free Internet downloads. "It's hard to understand sometimes, because the concept of copyright is an intangible," Mr Poe said. "But essentially what people are doing is exactly the same as walking into Tower Records and putting a CD under your shirt and walking out. You are stealing from someone who owns a right." The suit further alleged that Bertelsmann was "fully aware of the critical role its funding played in facilitating infringement by Napster users." Napster roared across the internet in 1999, when founder and then-college student Shawn Fanning invented a method by which users could easily pass files from computer to computer over the world wide web. At its peak, Napster claimed some 70 million users, who could access and pass along a vast collection of music titles freely, the Agence France-Presse reports. BEZEQ: Tel Aviv Court Allows Consumer Suit Over Late Charges To Proceed ----------------------------------------------------------------------- The Tel Aviv District Court allowed an NIS1 million class action to proceed against telephone company Bezeq (TASE:BZEQ), on behalf of people the Company charged for bill collection, despite their having paid telephone bills before the Company opened proceedings against them, Globes Online reports. Judge Gavriel Kling granted class certification to the suit, covering the Company's customers who paid their bills from March 1997 and until the lawsuit was filed in 2000. The claimant asserted that the Company charged him NIS10 for paying his bill a few days late. The claimant claims that charging for overdue payment of a bill within two weeks of its deadline is illegal, since Bezeq takes no action to collect unpaid bills for 14 days after the deadline. The Company claims the charge are clearly and explicitly permitted in the Bezeq ordinance, which authorize it to collect a pre-set charge for late payments of any telephone bill, regardless and independent of any actual collection process, Globes Online reports. Judge Kling's ruling states that the Company's Bezeq's authorization to charge subscribers for collection of overdue payments was dependent on the implementation of collection processes, i.e. only if and when Bezeq took action to collect the bill. He added that according to the ordinance, Bezeq could charge the NIS 10 fee only if a collection process was launched due to a returned check or a standing order that was not honored. Judge Kling also ruled that in the Age of Computers, there was no evidence to Bezeq's allegation of higher costs for maintaining a monitoring system for overdue bills. BOMBAY CO.: Agrees To Settle CA Overtime Wage Lawsuit For $1.35 Million ----------------------------------------------------------------------- Antique-furniture reproductions and home accessories company Bombay Co., agreed to settle a class action filed in California State Court, alleging overtime wage law violations for $1.35 million, Bloomberg.com reports. The suit alleged that the Company had improperly classified its California store managers as exempt from overtime pay. It sought to recoup the pay on behalf of the mangers. The Company said the expenses didn't hurt fourth-quarter profit, Bloomberg.com reported. Including the cost of settlement, the Company said in a disclosure to the Securities and Exchange Commission, fourth- quarter earnings still rose to the upper end of the earlier announced range of 37 cents to 41 cents a share. The Company had net income of $11.7 million, or 35 cents a share, a year ago. Shares of Fort Worth, Texas-based Bombay Co. rose 3 cents to $4.97 as of 4:15 p.m. in New York Stock Exchange composite trading. The stock has more than doubled in the past year, Bloomberg.com reported. CABOT CORPORATION: Faces Antitrust Suit Over Carbon Black Pricing in MA ----------------------------------------------------------------------- Cabot Corporation faces a class action filed by Technical Industries Inc., alleging wrongdoing in the pricing of some products, according to a filing with the Securities and Exchange Commission. The suit is pending in the United States. District Court for the District of Massachusetts, and also names as defendants: (1) Phelps Dodge Corporation, (2) Columbian Chemicals Co., (3) Degussa Engineered Carbons LP, (4) Degussa AG (G.DGX) and (5) Degussa Corporation The lawsuit was filed on behalf of Technical Industries and all individuals or entities that purchased carbon black in the US directly from the defendants from 1999 until the present, the Company filing from last Friday said. The Company said in a statement that the lawsuit was brought under US antitrust laws and claims that the defendants conspired to fix, raise, maintain or stabilize prices for carbon black sold in the US during that time. The plaintiffs seek treble damages and legal costs, according to the filing. The class of plaintiffs in this action hasn't been certified. The Company said it believes it has strong defenses to these charges, according to the filing. CALIFORNIA: Oakwood City Agrees To Settle Suit V. Rogue Police Officers ----------------------------------------------------------------------- The City of Oakwood, California has agreed to settle for $10.9 million several civil rights lawsuits filed against a group of police officers who allegedly beat suspects and planted drugs on innocent people, the Associated Press reports. Former officers Clarence Mabanag, 37, Jude Siapno, 34 and Matthew Hornung, 31, are currently facing trial in the United States District Court in California for allegedly beating suspects and falsifying police reports. Alleged leader Frank "Choker" Velasquez avoided prosecution by fleeing the country earlier. 119 plaintiffs filed lawsuits saying the City's police department encouraged or ignored the abuse during the summer of 2000. City officials also agreed to implement reforms in the department, including establishing a hot line to report police abuse and improving citizen access to internal affairs investigators. An outside monitor will be named in the next two months to a five-year term to ensure the reforms are implemented, the Associated Press reports. "We did not bury our heads in the sand," City Attorney John Russo told AP. "We acknowledged freely our faults, and we've worked arm in arm toward fixing the problem rather than hiding from or denying the problem." Federal Judge Thelton Henderson approved the settlement January 22, but it remained sealed until Tuesday. It ends nearly all civil legal actions brought in connection with the officers. CAPRIUS INC.: NJ Court Consolidates Securities Fraud, Derivative Suits ---------------------------------------------------------------------- The United States District Court in New Jersey ordered the securities class actions and the shareholder derivative suits pending against Caprius, Inc. and its principal officers and directors consolidated. The suits cover the period between February 14, 2000 and June 20, 2002. The suits allege that the individual defendants made alleged misrepresentations to the plaintiff upon their acquisition of a controlling interest in the Company in 1999 and thereafter made other alleged misrepresentations and took other actions as to the plaintiff to the supposed detriment of the plaintiff and the Company. No answer has yet been filed to this complaint as the parties agreed to extend the Company's time to answer the complaint. Since January 1, 2003 an order was entered in the court consolidating the derivative action and the class action. The order further provides that the time for the defendants to answer or otherwise move with respect to the complaint in the class action is extended. CHICAGO: Officials To File Charges V. Club Owners Over Deadly Stampede ---------------------------------------------------------------------- The Chicago nightclub where 21 people were killed in a stampede faces criminal charges from city officials, who say the owners violated a previous court order telling them to shut down the club because of safety violations, including failure to provide enough exits, the Associated Press reports. Last week, the E2 Club became the site of one of the deadliest stampedes in recent memory. Hundreds of people stampeded down a stairwell, after security guards broke up a fight, and someone sprayed pepper gas or Mace. A lawyer for the club operators alleged that someone might have shouted a warning about a terrorist attack. The panic resulted in 21 people dead, and 57 people injured. "We were literally piled from the top to the bottom of those steps, on top of people, not able to move with people constantly pushing," witness Lemont James Jr., who suffered a dislocated jaw, told AP. The club is operated by Le Mirage All-Night Studio Inc., which also owned the Epitome restaurant downstairs. In July, Cook County Circuit Judge Daniel J. Lynch issued a court order telling them to shut down second-floor operations. "The management of this business is well aware of this court order," Chicago fire Commissioner James Joyce said at a news conference Monday afternoon. "The owner knows damn well he is not to operate that second-floor facility." Police Superintendent Terry Hillard told AP the club owned an elaborate videotaping setup and said police were trying to monitor tapes to determine exactly what had happened. Officials say criminal contempt charges could be filed this week. An attorney for the club quickly responded to the city's allegations, telling a news conference that his client had a deal to stay open, AP reports. Lawyers for both sides allegedly reached a deal in October under which the second-floor nightclub would remain in operation. Another court hearing was scheduled for next month, Andre Grant, lawyer for the Company said. Under the deal, an upper level section of VIP seating, known as the skyboxes, was to be closed. The skyboxes were closed Monday, he continued. City officials made no mention of any deal to keep the club open in their public statements Monday but Mr. Grant said the city knew the club was operating, AP reports. "This is open use and the city is 100 percent aware of it, and in fact management has asked consistently and repeatedly the city to assist with crowd control," he said. CREDIT CARD: Hacker Accesses Millions of Visa, MasterCard Customer Info ----------------------------------------------------------------------- A hacker was able to access more than five million Visa and MasterCard accounts throughout the nation through a third party processor, representatives for the card associations told Reuters. Early investigations have revealed that none of information, which would include credit card numbers, was used in a fraudulent way, though. MasterCard said it began to notify its members the week of February 3 that more than 2 million MasterCard accounts had been broken into after the processor told it about the problem, MasterCard spokeswoman Sharon Gamsin said. About 3.4 million Visa accounts also have been accessed in the incident, according to spokesman John Abrams. Credit card associations, or groups of financial institutions who issue the cards, said they could not specify when the breach occurred or how it was accomplished, because it involved a third party processor used by merchants and not Visa or MasterCard systems. The associations said they could not disclose the name of that processor, according to Reuters. "Visa's fraud team immediately notified all affected card issuing financial institutions and is working with the third-party payment card processor to protect against the threat of a future intrusion," the association said in a statement. Neither Visa nor MasterCard would disclose which institution were involved. "This is not something regional, it was throughout the nation and could be any bank," Mr. Abrams told Reuters. EXXON-MOBIL: Court Rejects Consumers Lawsuit Over Halted Gas Supplies --------------------------------------------------------------------- An Australian court rejected a class action against Exxon-Mobil's Australian arm by 1.5 million gas consumers seeking compensation, because they were without gas supplies following an explosion at the company's Longford plant, on September 25, 1998, in which two men were killed, Associated Press Newswires reports. The court's decision did say that two companies could make claims for property damage and left open the possibility that other firms can sue for losses that occurred during the two weeks following the blast that they were without gas supplies. Esso was not liable for "purely economic losses" sustained by gas consumers and businesses during the statewide halt to gas supplies, wrote Justice William Gillard of the Supreme Court in the state of Victoria. Purely economic losses are revenue losses a business might have suffered. Justice Gillard ruled, however, that Esso was open to claims for physical damage or property loss such as spoilage of goods caused because of stoppage of gas supplies. The Justice's ruling upheld the Melbourne companies claims for physical damages. The ruling applied only to the question of liability and did not award compensation. Therefore, the two firms will have to file separate actions for compensation for the physical damages or property loss suffered because of gas supply failures. Esso had argued that under Australian law it had no legal responsibility for the losses due to gas service stoppage, claimed by the class action. If the class action was successful, contended the company, the legal principle such success rested upon would be a threat to all Australian companies that supply raw materials or services. Esso Australia chairman Robert Olsen said to reporters outside the court that the decision against economic loss claims was a victory for "common sense." As to the portion of the judgment pertaining to its liability for physical damage, Mr. Olsen said the judgment would have to be further studied in order to determine whether the company will appeal. In June of last year, a Supreme Court jury found Esso Australia guilty on 11 criminal charges arising from the explosion. The court fined the company two million Australian dollars (US$1.1 million). FASTFOOD LITIGATION: Plaintiffs To File Amended Consumer Obesity Suit --------------------------------------------------------------------- Pelman v. McDonald's, the lawsuit brought by two very overweight young girls charging the company with responsibility for their obesity, has not gone away. Although the outrage and ridicule which commentators heaped upon its premises could have produced, some thought, an early demise. However, Federal Judge Robert Sweet, it must be remembered, while dismissing the case in the form and with the arguments with which it appeared before him, provided extensive guidance on how the complaint might be redrafted to give the lawsuit a better chance of getting to trial another time, the Financial Times reports. Judge Sweet told the plaintiffs' lawyers that they had not shown that McDonald's products presented any health risk beyond what any ordinary consumer could be expected to know. If they, the lawyers, could show that the health risk presented by the company's product was, in fact, beyond what the ordinary consumer could be expected to know, then, said Judge Sweet, he would look at the lawsuit of Perlman v. McDonald's again. Judge Sweet even named the food that he thought might fall into the category of health risk beyond what the ordinary consumer could be expected to know - Chicken McNuggets, stuffed with additives and containing twice the fat by weight of a hamburger. Samuel Hirsch, Ms. Pelman's lawyer, is expected to submit an amended lawsuit by the deadline set by the court, this Friday, or seek an extension. The legal analysts say that if the amended lawsuit is allowed to proceed, copycat cases might be encouraged to try to make their way through the courts. It is expected that Mr. Hirsch would ask for class action certification; therefore, potentially millions of overweight young people could join his lawsuit. However, analysts say, even should Mr. Hirsch's lawsuit fail again, a loose alliance of lawyers, many experienced in tobacco litigation, is already working on other strategies to launch against the fast-food industry. Although there are parallels between tobacco-related illnesses and those stemming from obesity, the question remains whether the fast-food industry can be held legally to blame in the way cigarette companies were for smoking-related illnesses. Lawyers are finding it difficult to build their cases, since food, unlike tobacco, is essential to life, safe in moderation, and not generally considered addictive. Consumers are free to choose what they want to eat, and generally they are aware that some foods are less healthful than others. While such awareness by the consumer plays a role in the building of a legal case, since Mr. Pelman, in its first round at least, Judge Sweet did acknowledge that a food like Chicken McNuggets is more than just chicken, which, ordinarily, the consumer might regard as a healthier option than beef. The judge wrote in his opinion, "It is as least a question of fact as to whether a reasonable consumer would know - without recourse to McDonald's website - that a Chicken McNuggets contained so many other ingredients other than chicken and provided twice the fat of a hamburger." Richard Daynard, a professor at Northeastern University School of Law and another tobacco lawyer who is turning his attention to obesity, admits that product liability cases against the food companies are much more difficult than those against tobacco. He thinks another strategy may work better: alleging deceptive marketing under states' consumer protection statutes, where injury does not have to be proven. Professor Daynard, for example, thinks even the label "low-fat" is deceptive. He parallels this strategy with that used in a trial now under way against Philip Morris alleging it misled people into thinking "light" cigarettes were more healthful than regular ones. However, many lawyers believe that what could really alter the dynamics of the legal battle, is, if any case gets past the initial motion for dismissal that the defendant companies always file. If plaintiffs can survive that motion, the next step is "discovery," which give plaintiffs' lawyers the opportunity to search corporate files for incriminating documents. Tobacco lawsuits made little progress for two decades until documents were revealed showing that the cigarette makers had covered up the risks of smoking and manipulated nicotine levels to increase addictiveness. Peter Bleakley, member of the law firm Arnold & Porter in Washington, DC and an expert in defending product liability cases, says, "Cases that appear frivolous can take on a different appearance if, during discovery, you find in the files of a company letters or e-mails that show that the company was aware of the dangers of a product and suppressed it." Even if nothing illegal could made out of this, documents that show a company has targeted children or the obese could be a public relations headache. McDonald's argued in the Pelman case that it cannot be held responsible for individual diet and lifestyle choices, given consumers' limitless eating choices. The Company has said that its food "can be and is part of a healthy diet, based on the sound nutrition principles of balance, variety and moderation." The Company has responded to Judge Sweet's comments on Chicken McNuggets by noting that the menu item is made from chicken from a trusted supplier, and reaching the conclusion from this observation that the item, Chicken McNuggets is a "quality product." McDonald's says it is sure an amended version of the Pelman case will be dismissed, as was the first one. However, an executive from another food company, who has asked not to be named, says the industry should not blame obesity entirely on unhealthy lifestyles and deny all responsibility. That was the path the cigarette makers took 20 years ago, the executive said, he believes the food industry is going to have to change its marketing: remove advertising that promotes over- consumption and run campaigns linked with physical activities. "Any food company that thinks it can get through this without changing anything is kidding itself," the executive said. "You can see the collision course that is coming. It's either going to be regulation, legislation or litigation." FIREWORKS OF ALABAMA: Recalls 72T Boxes of Sparklers Due To Fire Hazard ----------------------------------------------------------------------- Fireworks of Alabama, Inc. is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 72,000 boxes of bamboo stick sparklers. The sparklers' bamboo-stick handles can catch fire, burn and disintegrate and emit burning fragments during use. These sparklers present a fire hazard and a risk of burn injury. The Company has not received any reports of injuries associated with these bamboo stick sparklers. This recall is being conducted to prevent the possibility of injuries. The recalled sparklers are packaged in a multicolored cardboard box and sold with six sparklers per box. The sparklers measure about 7-inches long. Labels on the packaging read in part "Bamboo Stick Color Sparklers," "6 PIECES," and "MADE IN CHINA." Only bamboo sparklers with "LB-N011-7" printed on the packaging are included in the recall. Variety stores sold these sparklers nationwide from June 2002 through December 2002 for about $2 a box. For more details, contact the Company by Phone: (800) 289-5569 between 9 am and 5 pm ET Monday through Friday. FORD MOTOR: Recalls Escort, Mercury Cars For Unneeded Airbag Deployment ----------------------------------------------------------------------- Ford Motor Company recalled more than 441,000 1997 Ford Escort and Mercury Tracer cars worldwide, due to electrical fires and unintended airbag deployment, possibly caused by a contaminated airbag monitor, Reuters reports. At least 159 reports were given to the Company, detailing unintended airbag deployment which allegedly resulted in a small number of minor injuries, including arm and facial abrasions from the airbags, Ford spokesman Glenn Ray told Reuters. At least eight lawsuits related to the airbags have also been filed against Ford, Mr. Ray said. Earlier this year, US regulators notified the Company of the defects. During an investigation, the Company discovered that the airbag monitors could become contaminated from fluid leaks or condensation from the heater case. The Company instituted the recall so it could install a protective shield over the airbag sensors. Ford said the rate of reported problems with the airbags is extremely low, but it decided to recall the cars to fix the problem. Ford will install a shield and waterproof grease at no charge to customers at Ford and Mercury dealerships, Reuters reports. A majority of the 441,000 recalled cars are from the United States, but some were also sold in Canada, Mexico, Europe and elsewhere, Ford said. HMO LITIGATION: KY Judge Grants Class Certification To Antitrust Suit --------------------------------------------------------------------- A Kentucky judge, Joseph Bamberger of the Boone County Court, issued an order permitting Kentucky physicians to pursue a price fixing class action case against the area's largest HMO's. The action is a setback for defendants: (1) Aetna Health Inc. (NYSE: AEF), (2) Humana, Inc. (NYSE: HUM), (3) Anthem Blue Cross and Blue Shield (NYSE: ATH) and (4) United Health Care, Inc. (NYSE: UNH) Each of the defendants sought to force individual physician arbitration. "The order is an important legal breakthrough that will allow physicians to prove that the HMO's are creating a local health care emergency," Stanley M. Chesley of Waite, Schneider, Bayless & Chesley, the physicians' attorneys, said in a statement. The physician's case alleges that local doctors are paid less by the HMO's than physicians performing the same procedures in similar communities. "The HMO's are creating a slow stranglehold on the community, with low reimbursement rates that force dedicated and hard working physicians to leave the Greater Cincinnati community," added Chesley. "This case will send a message to HMO's that they have a responsibility to the communities to provide adequate numbers of excellent physicians receiving proper payments for their skills and efforts." Mr. Chesley's co-counsel, Richard S. Wayne of Strauss & Troy, another Cincinnati firm was pleased with the order for another reason. "This breakthrough order shows that the Northern Kentucky Medical Society has standing to bring the lawsuit," he said. The case will be tried to a jury prompting Mr. Wayne to point out, "I am confident that a jury, when given the opportunity, will find the HMO's have put profit ahead of the long term interests of the patients." Judge Bamberger's decisions follows a similar order issued by Judge David Davis, in Cincinnati. In a related case, Judge Davis found that the Academy of Medicine had standing to bring a similar action brought by the Cincinnati Academy of Medicine and southwest Ohio physicians. No trial date is set for either case. For more details, contact Stanley M. Chesley by Phone: 513-621-0267 or contact Richard S. Wayne by Phone: 513-629-9472 ILLINOIS: Mt. Prospect Settles Racial Bias Suit By Hispanic Motorists --------------------------------------------------------------------- A settlement was approved recently in the class action that accused Mount Prospect police officers of targeting Hispanics for traffic stops, the Chicago Daily Herald reports. According to the terms of the settlement, the village of Mount Prospect will pay 41 Hispanic drivers, including the three main plaintiffs, somewhat less than $13,000. The plaintiffs' three attorneys will be paid $150,000. Peter Wilkes, one of the plaintiffs' attorneys, believes his clients have been well served by the lawsuit. The case, Mr. Wilkes said, will provide a financial compensation, modest as it may be, to 41drivers who claim they were ticketed because of their ethnicity. However, the financial compensation for the class members was not the important thing, Mr. Wilkes said. Mount Prospect and other towns have acted to make reforms that will benefit Hispanics in the city and suburbs for generations, Mr. Wilkes said. A clear message, the attorney added, has been sent that this form of conduct will not be tolerated. "So many changes have been made in Mount Prospect and other towns since this case started," Mr. Wilkes said. "Towns are making efforts, whether it is cameras in squad cars or the elimination of arrest quotas, to keep this from happening. That is very satisfying." Settlement of this lawsuit officially ends three years of inquiries - four lawsuits and a federal investigation - into the alleged racial profiling in Mount Prospect. ILLINOIS: Two Chicago Theaters Face Suit Over Commercials Before Movies ----------------------------------------------------------------------- Two Chicago theatre chains face a class action filed by a high school teacher and a university professor, over commercials run before the start of the movie, the Associated Press reports. Theatre chains Classic Cinemas and Loews Cineplex Entertainment face the suit, which asserts that commercials belong on TV, not on the movie screen. The suit further asserts that start-time delays from the on- screen ads are a waste of the moviegoers' time. One of the plaintiff's lawyers told AP, "if you are forced to watch commercials, you should be compensated for it." The suit seeks damages of $75 for each person in the class action, and ask that the commercials be dropped, or that movie ads at least give the actual start times for movies so you can come in after the commercials and not miss any of the movie. The lawsuits don't take issue with movie previews, which also run before the feature. A spokesman for Classic Cinemas calls the lawsuits ridiculous, AP reports. He says his theaters run only three minutes of commercials per movie. MCDONALD'S CORPORATION: Vegetarian Groups Intervene in Consumer Lawsuit ----------------------------------------------------------------------- Michael B. Hyman, principal with Chicago law firm Much Shelist Freed Denenberg Ament & Rubenstein, PC, announced today that he has successfully intervened in a proposed settlement with McDonald's corporation on behalf of a group of prominent members of the vegetarian community. At issue is the proposed allocation of $6 million in funds to be directed to vegetarian organizations. The funds are the result of a proposed settlement in a class action suit filed against fast food giant McDonald's practice in using beef products in the preparation of its french fries and hash browns. The objectors assert that the $6 million distribution, as proposed, violates the terms of the settlement agreement by improperly directing funds to non-vegetarian groups, groups hostile to vegetarianism and groups in limited size and geographical reach. "This proposed distribution violates not just the letter, but the spirit of the settlement agreement," Mr. Hyman said. Specifically, the proposed settlement disbursements are directed at twelve organizations. Of the twelve, Hyman and the objectors argue that seven are clearly not vegetarian organizations. Moreover, an eighth, the Vegetarian Resource Group, earmarked for $1.4 million or 23% of the settlement dollars, originally opposed the lawsuit. The court has set February 25 to specifically rule on the proposed distribution plan. Mr. Hyman concluded by saying, "this settlement should promote the values of the vegetarian community, but as proposed, it is far from achieving its purpose." For more details, contact Jay Dinwoodie, Marketing Manager by Phone: (312) 521-2122 or by E-mail: jdinwoodie@muchshelist.com MERCEDES BENZ: NJ Court Grants Certification To Consumer Fraud Lawsuit ---------------------------------------------------------------------- New Jersey Federal Court has ruled that a lawsuit accusing Mercedes- Benz and its New York, New Jersey, and Connecticut area dealers of engaging in a conspiracy to fix the price of new Mercedes-Benz automobiles may proceed as a class action on behalf of all Mercedes- Benz purchasers in the tri-state region from 1991 through 1999. The lawsuit is based in part on the allegations made by one of the dealers in a counter suit against the Company. The suit on behalf of purchasers or lessees of new vehicles was filed in 1999. In 2002 the Company revealed, in its SEC filings, that a grand jury had been empanelled to hear evidence relating to the allegations. "We are very pleased that Judge Wolin has held that this case should go forward on a class basis," Paul Gallagher of Cohen, Milstein, Hausfeld & Toll,(DC) one of the lead lawyers for the plaintiffs said in a statement. "This decision enables everyone who purchased or leased a new Mercedes-Benz between 1991 and 1999 to be represented in a single action, which will determine whether each of the class members are entitled to a refund resulting from a conspiracy by Mercedes and the dealers not to discount prices below an agreed-upon level." For more details, contact Deborah Schwartz by Phone: 301/897-8838 by Fax: 301/897-9143 by E-mail: dschwartz@mediarelationsinc.com or visit Cohen Milstein's Website: http://www.cmht.com MERRILL LYNCH: To Settle For $80M SEC Probe Over Role in Enron Collapse ----------------------------------------------------------------------- Investment firm Merrill Lynch will settle for $80 million an investigation launched by the United States Securities and Exchange Commission over its role in the Enron transactions, CBS Marketwatch reports. The settlement concludes the SEC probe into the firm's dealings with the collapsed energy trader, which allegedly used off-the-books partnerships to hide nearly $1 billion in debt and inflate profits. Enron later filed for bankruptcy in December 2001, one of the nation's biggest bankruptcies. Under the settlement, Merrill Lynch will record $80 million in disgorgement, penalties and interest in its fourth quarter financial results. The Company, which did not admit or deny wrongdoing in the settlement, also agreed not to violate federal securities laws in the future. While the SEC has completed its investigation into Merrill's work with the fallen energy trader, the securities firm still faces litigation related to its Enron work. A securities class action, spearheaded by the University of California is pending in the United States District Court for the Southern District of New York against several Wall Street banks, including Merrill, J.P. Morgan and Citigroup. "This is not the end of the Enron story by any means," Scott Wendelin, head of Prospect Financial Advisors in Los Angeles told CBS Marketwatch. "But this is (Merrill's) first step on rebuilding credibility for their clients and investors." NIKE INC.: FL Attorney General Starts Probe Over Antitrust Violations --------------------------------------------------------------------- The Florida Attorney General's Office is investigating sports goods manufacturer Nike, Inc. for allegedly fixing the retail price of shoes and clothing, the Company revealed early this week, the Associated Press reports. The Company has denied the allegations and is "cooperating fully," Company spokesman Vada Manager told AP. The Company earlier received a notice of a civil investigation in January "in regard to issues of pricing of products at retail." The attorney general has asked several major sporting goods retailers whether the Company withheld items because its most expensive shoes, such as the top Air Jordan and Shox lines, weren't being sold at prices the company considered suitable. Sports Authority Inc. received a letter dated January 3 from the attorney general requesting information, Frank Bubb, the company's general counsel told AP. He declined to provide further details. Joann Carrin, spokeswoman for the Florida attorney general's office, said she couldn't confirm or deny the investigation because state antitrust law prohibits it, AP reports. NISSAN MOTOR: Reaches Settlement In Race Bias Suit For Minority Buyers ---------------------------------------------------------------------- Nissan Motor Acceptance Corporation reached a settlement in a federal class action charging it with discrimination relating to the loan rates it offered to minority buyers, the Associated Press reports. Ten black and Hispanic car buyers from Tennessee and Florida filed the class action, saying that the Company charged them higher interest rates on car loans than whites with similar credit ratings. Under the settlement, the Company will pay US$5,000 to US$20,000 to more than 125,000 plaintiffs, and will pay $1 million to Washington- based consumer group America Saves. The Company also agreed to tell car buyers their interest rate may be negotiable. The Company also agreed to institute a credit pre-approval program offering "no mark-up" rates to black and Hispanic buyers who have never declared bankruptcy or had cars repossessed. The "markup" is a percentage in addition to the minimum percentage rate at which NMAC approves credit. It usually is split between the dealer and NMAC, AP reports. The case was the first in a series of recent lawsuits against automobile financing companies and banks. Plaintiffs' lawyers have estimated tens of thousands of black consumers were overcharged $100 million or more by the automotive financing companies. The Company has denied the claims in the suit, saying it does not collect race or ethnicity information when credit is sought and that all people are treated equally. Attorneys on both sides said they agreed not to comment on the settlement, which applies to borrowers at Nissan and Infiniti dealers, until approved by US District Judge Todd Campbell. PLAYNATION PLAY: Recalls 1,400 "Fun Buckets" For Strangulation Hazard --------------------------------------------------------------------- Playnation Play Systems is cooperating with the US Consumer Product Safety Commission (CPSC) by voluntarily recalling about 1,400 "Fun Buckets," a vinyl bucket attached to a rope used to lift small items up to backyard play sets' forts. As children play on the play set's slide or platform, the 6- to 8-ft free-hanging rope can become entangled around the child's neck. This presents a strangulation hazard to young children. The Company is aware of two incidents where the bucket's rope became entangled around the necks of two 4-year-olds. Both of the children were freed without injury. However, CPSC knows of 135 children who have died in the last 10 years from all types of ropes, leashes or jump ropes attached to backyard play sets. This recall involves "Fun Buckets" sold as an add-on option for backyard play sets. The 14-inch-deep buckets are either yellow or green vinyl and have a black nylon strap attached to the rope. The "Fun Bucket" was sold with a heavy wood bracket to attach it to the roof of a play set fort. Distributors of backyard play sets nationwide sold the fun buckets from February 1998 through February 2003 for about $25. For more information, contact the Company by Phone: (770) 792-9300 between 10 am and 5 pm ET Monday through Friday or visit the firm's Website: http://www.playset.com. SECURITIES LITIGATION: NY Court Allows IPO Securities Suits To Proceed ---------------------------------------------------------------------- United States District Court for the Southern District of New York Judge Shira A. Scheindlin allowed the IPO Securities Litigation filed by thousands of investors against companies who made their initial stock offerings during the technology stock bubble to proceed, rejecting the defendants' omnibus motion to dismiss. The suits name as defendants 55 underwriters, 309 issuers of stock in high technology and Internet-related stocks and thousands of individuals. They target a high percentage of the more than 460 high technology and Internet-related companies that raised capital by selling ownership of their company to the public from January 1998 to December 2000, the Associated Press reports. The suits similarly alleged that the value of the plaintiffs' investments plummeted as a result of alleged fraud - misstatements in financial statements and prospectuses, unauthorized underwriter agreements, improper disclosure - that caused the prices of stocks to be artificially inflated. Judge Scheindlin said she considered the claims and counterclaims made in the suits, which were filed in the court from January to December 2001. She also said, in her 238-page ruling, the plaintiffs presented "a coherent scheme by underwriters, issuers and their officers to defraud the investing public" by concealing, through misinformation, various tie-in agreements, undisclosed compensation and analyst conflicts to artificially boost the value of the new shares, AP reports. The decision came at the stage of litigation in which defendants attempt to have lawsuits dismissed on the grounds that there are insufficient allegations to put before a jury. Judge Scheindlin said some of the defendants could be dropped from the case because there was not enough evidence against them, but that most would stand. TENET HEALTHCARE: Employees Lodge Suit Over False Financial Statements ---------------------------------------------------------------------- Employees of the nation's second biggest hospital chain Tenet Healthcare Corporation commenced a class action against the Company and its officers, including Chairman Jeffrey Barbakow, alleging they were misled by false financial statements, Bloomberg.com reports. The suit, filed in the Los Angeles Superior Court, further alleges that the Company and its officers knew or should have known the company was artificially inflating revenue by encouraging patients to undergo unneeded surgeries and over-billing Medicare. The suit, filed on behalf of employees participating in a stock purchase plan, is the latest in several suits against the Company, which has suffered a 55 percent drop in share value since federal agents raided one of its hospitals in October. Further, the US Justice Department accused Tenet of filing phony Medicare claims, in a January lawsuit seeking $323 million in damages, and about 30 securities suits have been filed, Bloomberg.com reports. "Defendants knew or were reckless or negligent in not knowing that Tenet's financial results were artificially inflated"' the suit claims. The suit says Tenet and its directors failed their fiduciary responsibility to make sure the company complied with all laws and regulations. "They did not do so," the suit says. "As a result, plaintiff and plan participants suffered damages for which these defendants are personally responsible." Tenet spokesman Steve Campanini declined to comment, citing company policy not to discuss pending litigation, Bloomberg.com reports. TOBACCO LITIGATION: IL Legislators Mull Lowering Appeal Bonds For Firms ----------------------------------------------------------------------- Illinois legislators are considering legislation that would reduce the amount of money a tobacco company would have to post for an appeal bond prior to appealing a judgment for the plaintiff smokers, the Associated Press Newswires reports. The idea has been proposed recently in the Illinois legislature, since Philip Morris is engaged in a class action in Madison County, Illinois, that alleges the company falsely claimed its "light" cigarettes were less harmful. The plaintiffs' lawyers are seeking $7.1 billion in compensation for the smokers, and punitive damages potentially could be many times that amount. Ordinarily, the loser in such a lawsuit is required to post the amount of the full award due the winning side, plus interest, as a bond, before such loser is allowed to pursue an appeal. The bond ensures that the prevailing party will receive the amount of the award if the original ruling is upheld by the appeals court. However, the major tobacco companies argue that because of the size of the jury awards, they are not able to post the amount of money that might be required prior to appeal. They say they might have to declare bankruptcy instead, since if they do not have such amounts for the bond, neither would they have the funds for the award. "It is not hard to imagine a judgment getting up into the tens of billions," Keith Teel, an attorney for Philip Morris and several other tobacco companies recently told an Illinois Senate committee. Such a judgment probably would interrupt, and perhaps permanently end, the massive payments tobacco companies are making to states under the 1998 settlement of a nationwide lawsuit against cigarette makers, Mr. Teel said. Mr. Teel noted that a Florida jury had awarded smokers $145 billion in a class action against cigarette makers. Florida thereupon changed its laws relating to appeal bonds in order to limit the amount required to be posted to $500 million. Senator James Clayborne, D-St. Louis, is sponsoring legislation that would limit tobacco company appeal bonds to $25 million. The senator said details of the proposed bill are in the process of being worked through, and the amount of the "cap" is not yet firm. Senator Clayborne's bill is opposed by the American Lung Association, Illinois Coalition Against Tobacco and the Illinois Trial Lawyers Association, as well as the attorneys arguing the suit against Philip Morris. The bill also was criticized by Donald Garner, a law professor at Southern Illinois University law school, who has written law journal articles critical of tobacco companies. "This is ill-considered, special-interest legislation," said Professor Garner. UNITED COMPANIES: Workers Settle Lawsuit Over Rash Use Of Their Funds --------------------------------------------------------------------- Former employees who invested in United Companies Financial Corporation's stock ownership plan have reached a $10 million settlement with the failed company, over the owners' continued investment of workers' funds in the company's stock, although the stock price was collapsing, The Baton Rouge Advocate reports. The settlement, which was filed recently in US District Court, in Baton Rouge, Louisiana, settles a class action including several thousand employees who participated in the Employee Stock Ownership Plan (ESOP) after September 1, 1995, but excludes the company's executives. The four attorneys who represented the plaintiffs will receive 30 percent of the settlement, about $1.2 million. Under the terms of the settlement, the amount each employee receives from the settlement will be based on how much he/she had invested in the ESOP. The employees filed three separate class actions, which later were consolidated, all claiming the management of United Companies should not have invested employee funds solely in company stock, and that the ESOP did not require that investments be exclusively in United Companies. After the stock began to slide, the administrator of ESOP, US Trust Company of California, continued to invest employee funds in United Companies stock, the lawsuits say. United Companies, a Baton Rouge- based company that made high-risk consumer loans, filed for bankruptcy protection from its creditors in March 1999. The agreement with employees over stock investments is the second settlement reached between United Companies and its former stockholders. Under the first agreement, about 7,500 non-employee stockholders are splitting a $20.5 million settlement, approved in 2002. In this case, stockholders sued J. Terrell Brown, United Companies' former chief executive officer and president and Dale Redman, formerly chief financial officer, claiming the two officers hid from investors hundreds of millions of dollars in debt. That misleading behavior, which artificially inflated the stock, led people to continue to buy stock, thinking the company was on a stable financial footing, the lawsuit claims. Attorney fees and expenses amounting to about $7.2 million came out of the $20.5 settlement. US District Judge James Brady approved both settlements. UNITED STATES: ACLU To Challenge Review Court Decision On Wiretapping --------------------------------------------------------------------- The American Civil Liberties Union (ACLU) and other civil rights groups challenged the United States' Justice Department's powers, by filing an appeal of a review court decision allowing wiretapping as a surveillance method, the Associated Press reports. After September 11, Congress granted the government broader spying authority after the attacks. The review court's ruling was a huge victory for the Bush administration, which argues that the surveillance is an important component of its war on terror. Part of the review panel's ruling removed legal barriers between the surveillance operations of the Justice Department's criminal and intelligence divisions, AP reports. The two had been treated differently because the standard for criminal wiretaps, instead of those granted by the spy court, is considered more difficult because of the constitutional protection against unreasonable searches and seizures. The ACLU argues that the review court misinterpreted the law, making it too easy for the government to get permission to listen to telephone conversations, read e-mail and search private property, and then use the information in criminal cases. Civil groups have worried that there were not enough checks to ensure the surveillance won't extend to law-abiding citizens. The ACLU, and other American-Arab groups, further assert that they are representing people who are monitored under warrants approved by the super-secret Foreign Intelligence Surveillance Court or "spy court," which deals with intelligence request involving suspected spies. In the filing, the ACLU said the decision further "opens the door to surveillance abuses that seriously threatened our democracy in the past." Other groups also have been concerned that the administration was going too far with surveillance. "The irony is no one can know for certain whether they are the subject of these secret surveillance orders because they're secret," Ann Beeson, ACLU's associate legal director told AP. She said the group has "taken this somewhat radical step" to protect those people. The other groups involved in the appeal are: (1) the National Association of Criminal Defense Lawyers, (2) the American-Arab Anti-Discrimination Committee and (3) the Arab Community Center for Economic and Social Services The Supreme Court may not allow the appeal because the ACLU was not one of the parties in the review court case. The ACLU filed arguments opposing the government but was not directly involved. UNIVERSITY of MICHIGAN: Microsoft, Others Support Affirmative Action -------------------------------------------------------------------- Microsoft Corporation and dozens of other major American companies intend to support the University of Michigan's minority student admissions policy, which the Bush administration has opposed, Reuters reports. The United States Supreme Court is preparing to review, in the coming months, several cases involving the admissions to the University's law school and undergraduate program. President Bush has said the policy amounts to a "quota system that unfairly rewards or penalizes prospective students based solely on their race." Black and other minority group advocates have defended affirmative action as a way to remedy past discrimination and to achieve student diversity, but critics have said that the programs amount to an unconstitutional form of "reverse discrimination," Reuters states. The software giant said such policies are critical to maintaining racial and ethnic diversity at institutions of higher education. "By upholding the university's ability to include race and other factors in the admissions process, the courts will preserve Microsoft's ability -- and that of other companies -- to recruit the diverse work force necessary for success in today's global marketplace," Claudette Whiting, Microsoft's senior diversity director, said in a company statement. Along with Microsoft, the other companies supporting the University are: (1) General Motors Corporation, (2) 3M, (3) Abbott Laboratories, (4) Bank One, (5) Boeing Co., (6) Coca-Cola, (7) Intel, (8) Johnson & Johnson, (9) Pfizer, and (10) Sara Lee More than 30 companies will sign a friend of the court brief supporting the University of Michigan's affirmative action policy to be filed on Tuesday in two lawsuits before the US Supreme Court. In its own friend of the court brief, No. 1 US automaker GM argues that, "In short, universities, not businesses, 'are ideal institutions to foster' the skills and values necessary for participation in a heterogeneous society," Reuters states. WESTELL TECHNOLOGIES: Agrees To Settle Securities Fraud Suit in N.D. IL ----------------------------------------------------------------------- Westell Technologies, Inc. agreed to settle the consolidated securities class action filed against it and certain executive officers and directors of the Company in the United States District Court for the Northern District of Illinois. In addition, the Company announced an agreement to settle the related consolidated derivative action, filed in the United States District Court for the Northern District of Illinois. The actions generally alleged that the defendants violated the antifraud provisions of the federal securities laws or state common laws by making false and misleading statements in 2000 regarding forecasts for the second quarter of Westell's fiscal 2001. Under the terms of the settlement agreement, all claims will be dismissed without any defendant's admission of liability or wrongdoing. Under the terms of the settlement, the Company's and its directors' and officers' liability insurers will pay a total of $3.95 million to the plaintiffs and their counsel. The Company does not expect to pay anything in connection with the settlement. The shareholder class will receive $3.35 million out of which the court will be asked to award attorneys' fees and expenses to class counsel. Counsel to plaintiffs in the derivative action will receive the remaining $600,000 to settle the derivative claim. Beyond the financial settlement, the Company agreed to adopt certain corporate governance and communications procedures. The agreement is subject court approval. "These cases represent the last of any material litigation in which Westell was involved when I arrived in July 2001 ", Van Cullens Westell's President and CEO, said in a statement. "We are very pleased to have advanced the cases to this stage." The parties expect that the Court will first consider the settlement at a preliminary approval hearing that they anticipate will occur in March 2003. For more details, contact Nicholas Hindman of Westell Technologies, Inc. by Phone: 630/375-4136 (CFO) by E-mail: nhind@westell.com or Ken Trantowski of KGT Communications Group by Phone: 630/469-8765 or by E- mail: kennethg--trantowski@msn.com New Securities Fraud Cases BIO-TECHNOLOGY GENERAL: Berman DeValerio Launches Securities Suit in NJ ----------------------------------------------------------------------- Berman DeValerio Pease Tabacco Burt & Pucillo initiated a securities class action against Bio-Technology General Corporation (Nasdaq:BTGC) and certain of its top executives, accusing the biopharmaceutical company of issuing false and misleading financial statements to the public. The lawsuit was filed in the US District Court for the District of New Jersey. Plaintiffs seek damages for violations of federal securities laws on behalf of all investors who bought the Company's common stock from April 19, 1999 to August 2, 2002. The lawsuit claims Bio-Technology defrauded investors by releasing false and misleading financial statements about its revenue and earnings, causing the company's stock to reach an artificially high price. Bio-Technology stunned its investors on August 2, 2002 by announcing it would have to revise and restate its prior financial results for 1999, 2000, 2001 and the first quarter of 2002. According to the complaint, Bio-Technology violated Generally Accepted Accounting Principles and Securities and Exchange Commission rules, improperly accounting for: (1) development and startup costs associated with a new drug, (2) compensation charges resulting from stock option awards to certain employees and former employees; and (3) revenue from a 1999 product sale in which significant uncertainties about the realization of the invoiced amount arose The market reacted swiftly to the company's announcement. Bio- Technology stock fell from a high of $4.16 on August 1, 2002 to a low of $3.49 on August 2, 2002, a single-day decline of more than 15% on heavy volume and a decline of more than 83% from the class period high of $20.44 on March 1, 2000. For more details, contact C. Oliver Burt, III by Mail: 515 North Flagler Drive, Suite 1701, West Palm Beach, FL 33401 by Phone: (561) 835-9400 by E-mail: lawfla@bermanesq.com or visit the firm's Website: http://www.bermanesq.com INTERSTATE BAKERIES: Cauley Geller Commences Securities Suit in W.D. MO ----------------------------------------------------------------------- Cauley Geller Bowman Coates & Rudman, LLP initiated a securities class action in the United States District Court for the Western District of Missouri on behalf of purchasers of Interstate Bakeries Corporation (NYSE: IBC) common stock during the period between September 17, 2002 and December 17, 2002, inclusive. The suit alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between September 17, 2002 and December 17, 2002, thereby artificially inflating the price of IBC common stock. Throughout the class period, as alleged in the Complaint, defendants issued numerous statements regarding the Company's financial performance and future prospects. Specifically, defendants claimed that the Company was experiencing a rebound in the sales of its sweet cake products, which had slowed down in the previous quarter, and described how the Company would be able to increase prices for certain bread products and maintain its anticipated level of profitability in the face of increasing commodity prices. The suit alleges that these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (1) that since the beginning of the class period, the Company was actually experiencing a negative variance with respect to cake sales as compared to the prior year and, therefore, had not seen any indication of any rebound in cake sales; and (2) the Company did not maintain sufficient centralized control over price increases to ensure that the Company could raise prices on bread products without damaging profitability; defendants knew that an increase in prices typically would result in a sacrifice in market share and the Company actually was exposed to significant risk with respect to its ability to attain profits based upon commodity prices. On December 17, 2002, the last day of the class period, IBC shocked the market by reporting extremely poor second quarter earnings, which it attributed primarily to weak sales of its sweet cakes. Following this announcement, shares of IBC common stock plunged in value by over 35%, from $23.16 per share on December 16, 2002, to $15.00 per share on December 17, 2002, on extremely heavy trading volume that was almost fifty (50) times more active than normal. Prior to the disclosure of the Company's true financial condition, certain of the Individual Defendants and other IBC insiders sold shares of their personally-held common stock for gross proceeds in excess of $16 million. For more details, contact Samuel H. Rudman, David A. Rosenfeld, Jackie Addison, Heather Gann or Sue Null by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone: 1-888-551-9944 by E-mail: info@cauleygeller.com or visit the firm's Website: http://www.cauleygeller.com INTERSTATE BAKERIES: Shepherd Finkelman Commences Securities Suit in MO ----------------------------------------------------------------------- Shepherd, Finkelman, Miller & Shah, LLC initiated a securities class action on behalf of institutions, individuals and other investors who purchased the common stock and other securities of Interstate Bakeries Corp. (NYSE: IBC) between September 17, 2002 and December 17, 2002, in the United States District Court for the Western District of Missouri. The suit names as defendants the Company and: (1) Frank W. Coffey, (2) Mark Dirkes, (3) James R. Elsesser, (4) Robert P. Morgan, (5) Charles A. Sullivan, (6) Richard D. Willson and (7) Paul E. Yarick The defendants are all senior officers and/or directors of the Company during the class period. The suit charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing a series of false and misleading statements regarding IBC's business and financial condition during the class period. Specifically, the suit alleges that, inter alia, defendants mislead investors and the market regarding IBC's sales of critical products, the Company's ability to increase prices of certain products without adversely impacting market share and profits and IBC's ability to maintain profits in the face of higher ingredient and commodity prices. For more details, contact James E. Miller by Phone: 1-866-540-5505 by E-mail: jmiller@classactioncounsel.com or contact James C. Shah by Phone: 1-877-891-9880 by E-mail: jshah@classactioncounsel.com or visit the firm's Website: http://www.classactioncounsel.com PARAMETRIC TECHNOLOGIES: Bernstein Liebhard Files Securities Suit in MA ----------------------------------------------------------------------- Bernstein Liebhard & Lifshitz LLP initiated a securities class action on behalf of all persons who purchased or acquired common stock of Parametric Technology Corporation (Nasdaq: PMTC) between October 19, 1999 through and including December 31, 2002, in the United States District Court for District of Massachusetts against the Company and: (1) Steven C. Walske, (2) C. Richard Harrison, (3) Noel G. Posternak, and (4) Edwin J. Gillis The complaint charges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between October 19, 1999 and December 31, 2002, thereby artificially inflating the price of Parametric common stock. Throughout the class period, as alleged in the suit, defendants issued numerous statements and filed quarterly and annual reports with the SEC which described the Company's increasing revenues and financial performance. The suit alleges that these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (i) that since fiscal 1999, in violation of Generally Accepted Accounting Principles (GAAP) and its own revenue recognition policies, the Company had cumulatively overstated its previously recognized maintenance revenue from its service contracts by approximately $33.4 million; (ii) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (iii) that as a result, the value of the Company's income and financial results were materially overstated at all relevant times. On December 31, 2002, after the close of regular trading, Parametric shocked the market by announcing that it had identified "$20 to $25 million of previously recognized maintenance revenue which should have been deferred and recognized in fiscal 2003 and later periods." Accordingly, the Company announced, it "expects to report a corresponding reduction in maintenance revenue in prior periods, primarily in fiscal year 2002." The next day of trading, on January 2, 2003, shares of Parametric closed at $2.19 per share, after hitting an intraday low of $1.95, as compared with a class period high of $32.88 per share, reached on December 16, 1999. Subsequent disclosures revealed that the Company would be restating its financial results from fiscal year 1999 through fiscal year 2002 because a cumulative total of $33.4 million in maintenance revenue had improperly been reported as revenue during that time. For more details, contact Ms. Linda Flood, Director of Shareholder Relations, by Mail: 10 East 40th Street, New York, New York 10016, by Phone: (800) 217-1522 or 212-779-1414 by E-mail: PMTC@bernlieb.com or visit the firm's Website: http://www.bernlieb.com. SAWTEK INC.: Milberg Weiss Commences Securities Fraud Suit in M.D. FL --------------------------------------------------------------------- Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class action on behalf of all persons who purchased securities of Sawtek, Inc. (formerly Nasdaq: SAWS), currently a subsidiary of TriQuint Semiconductor, Inc. (Nasdaq:TQNT) between January 7, 2000 and May 24, 2001, inclusive. The action is pending in the United States District Court for the Middle District of Florida, Tampa Division, against the Company and: (1) Kimon Anemogiannis (President and CEO since November 14, 2000), (2) Gary A. Monetti (CEO from October 1, 1999 to November 14, 2000 and director) and (3) Raymond A. Link (Senior V. P.-Finance, Treasurer and CFO) 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 January 7, 2000 and May 24, 2001. The suit charges Sawtek and certain of its executive officers with violations of federal securities laws. Among other things, plaintiff claims that defendants' material omissions and the dissemination of materially false and misleading statements concerning Sawtek's business operations and financial performance caused Sawtek's stock price to become artificially inflated, inflicting damages on investors. Sawtek designs, develops, manufactures and markets a broad range of electronic signal processing components, based on "surface acoustic wave" or SAW technology, primarily for use in the wireless communications industry. The complaint alleges that during the class period, defendants misrepresented Sawtek's financial performance by improper "channel stuffing" - inflating revenue by shipping more products than distributors could sell - and by disseminating false and misleading statements concerning the Company's revenue and business prospects despite a widespread downturn in the wireless and telecommunications markets. The Company's actual financial performance was revealed on May 23, 2001, when defendants' acknowledged that the Company's projected results for the quarter ending June 30, 2001, would fall well below the Company's previously issued revenue guidance. By the close of trading on the next day, May 24, 2001, the Company's stock price had plunged more than seventeen percent (17%) from the previous day's close as a result of this news. For more details, contact Steven G. Schulman or U. Seth Ottensoser by Mail: One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by Phone: (800) 320-5081 by E-mail: sawtek@milbergNY.com or visit the firm's Website: http://www.milberg.com TRANSKARYOTIC THERAPIES: Wolf Popper Lodges Securities Suit in MA Court ----------------------------------------------------------------------- Wolf Popper LLP initiated a securities class action against Transkaryotic Therapies, Inc. (Nasdaq:TKTX), in the United States District Court for the District of Massachusetts, on behalf of persons who purchased TKT securities, or who sold put options, on the open market from January 4, 2001 through January 14, 2003. The suit alleges that during the class period, defendants made misrepresentations and nondisclosures of material fact concerning TKT's prospects for FDA approval of TKT's Replagal enzyme therapy for the treatment of Fabry disease. In fact, the suit alleges, defendants knew by virtue of their ongoing communications with the FDA that the FDA considered TKT's data on the primary pain reduction endpoint of TKT's Phase II study to be uninterpretable, and further that the FDA considered that TKT's cardiac and renal data did not support approval. The true facts were first revealed after the close of the securities markets on October 2, 2002, when TKT admitted that the FDA had determined that TKT's data on pain reduction was "uninterpretable," and that TKT had determined not to rely on that data to seek FDA approval for marketing of Replagal. Rather, defendants stated that TKT would rely primarily on its data for cardiac and renal improvement in Phase II tests for patients receiving Replagal. At the January 14, 2003 Advisory Committee meeting to consider approval of Replagal, a representative of the FDA testified that in a letter dated December 22, 2000, and on a "frequent basis thereafter," the FDA had advised TKT that "the clinical study data (from the Phase II studies) had not provided substantial evidence of efficacy and fully detailed the facts leading to that conclusion. (The FDA's Center for Biologics Evaluation and Research) recommended that additional clinical studies be conducted." On January 15, 2003, TKT closed at $6.49, more than 85% below its Class Period high. TKT was motivated to make the materially false and misleading statements during the class period, among other things, to sell $267 million in common stock in secondary public offerings. Defendant Richard F. Selden was similarly motivated to sell 90,000 shares of his personal holdings of TKT common stock during the class period for total consideration of $2,800,000. On February 11, 2003, Mr. Selden resigned his positions as Chairman and CEO of TKT. Mr. Selden's loss of credibility with investors and the FDA has been widely attributed as the cause of his resignation. For more details, contact Robert C. Finkel by Mail: 845 Third Avenue, New York, NY 10022 by Phone: 212-451-9620 or 877-370-7703 (toll free) by Fax: 212-486-2093 or 877-370-7704 (toll free) by E-mail: irrep@wolfpopper.com or visit the firm's Website: http://www.wolfpopper.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 * * *