/raid1/www/Hosts/bankrupt/CAR_Public/030311.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, March 11, 2003, Vol. 5, No. 49
Headlines
AT&T RESEARCH: To Settle For $75,000 EEOC Suit For Age Discrimination
AUSTRALIA: Most Bali Victims To Join Suit Against al-Qaeda's Financiers
BAYER: Plaintiffs Present E-mails Showing Baycol Research Disregarded
BAYER: Baycol Suits Increase Bringing Questions Of Financial Stability
BRISTOL-MYERS SQUIBB: Agrees To Settle FTC Generic Drug Antitrust Suit
CANADA: Court Rules Credit Reporting Firms Can Be Sued Over False Data
ENRON CORPORATION: TX Judge Refuses To Move Securities Fraud Suit Trial
FLORIDA: Court Probes Ban on Children's Adoption By Gay Men, Lesbians
HONEYWELL INTERNATIONAL: Enters Mediation In NJ Securities Fraud Suit
HSBC USA: Asks PA Court To Dismiss Consolidated Securities Suit in PA
ILLINOIS: Class Status Denied For Suit Over Treatment Of Mentally Ill
INDONESIA: Landslide Victims Sue State Forestry Firm, Local Government
LOCKHEED MARTIN: CA Court Dismisses Claims in Securities Fraud Lawsuit
MARYLAND: NAACP Gives Deadline To Vote On Racial Profiling Settlement
MARYLAND: Workers File Suit To Seek Double Pay For Snow Emergency Work
MCG CAPITAL: Investors Launch Suit For Securities Violations in E.D. VA
NIGERIA: Human Rights Group To Commence Suit Over January 2002 Bombing
PANAMSAT CORPORATION: Asks DE Court To Dismiss Securities Fraud Lawsuit
PENNSYLVANIA: Suit's Success To Void Forms For In-Depth Employee Checks
PESTICIDE FIRMS: Judge Certifies Suit Over Lobsters Killed By Chemicals
PHILADELPHIA: Man Sues After Being Mistakenly Arrested, Sent To Prison
QWEST COMMUNICATIONS: Judge Certifies Lawsuit Over "Fly Free" Promotion
REAL ESTATE: Asks Court To Set Aside Verdict in Securities Fraud Suit
SBC: Settles Consumer Suit With Money After Sending Free Phone Cards
SPIEGEL INC.: To Settle SEC Allegations Of Withholding Financial Info
TEXAS: Court Dismisses Portions Of Suit Seeking Closed-Captioned Films
TOBACCO LITIGATION: Judge To Deliver Ruling In "Light" Cigarettes Case
TOYOTA MOTOR: Agrees To Settle Suit Alleging Clean Air Act Violations
UNITED KINGDOM: Australian, New Zealand Ex-Coal Miners To Join Lawsuit
WHYALLA AIRLINES: Landmark Out-Of-Court Settlement Forged In Crash Suit
New Securities Fraud Cases
MICHAELS STORES: Weiss & Yourman Files Securities Fraud Suit in N.D. TX
MICROTUNE INC.: Lovell Stewart Lodges Securities Fraud Suit in E.D. TX
PARAMETRIC TECHNOLOGY: Wolf Haldenstein Commences Securities Suit in MA
PROVIDENT FINANCIAL: Schiffrin & Barroway Lodges Securities Suit in OH
PROVIDENT FINANCIAL: Milberg Weiss Commences Securities Suit in S.D. OH
PROVIDENT FINANCIAL: Charles Piven Commences Securities Suit in S.D. OH
PROVIDENT FINANCIAL: Cauley Geller Commences Securities Suit in S.D. OH
SOLECTRON CORPORATION: Cauley Geller Lodges Securities Suit in N.D. CA
UNUMPROVIDENT CORPORATION: Emerson Poynter Lodges Securities Suit in TN
VITALWORKS INC.: Schiffrin & Barroway Lodges Securities Lawsuit in CT
*********
AT&T RESEARCH: To Settle For $75,000 EEOC Suit For Age Discrimination
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AT&T Research Laboratories will settle for $75,000 an age
discrimination lawsuit filed by the United States Equal Employment
Opportunity Commission on behalf of a 50-year-old man denied a job in
favor of an applicant almost half his age, the Associated Press
reports.
The settlement ended a lawsuit filed last year, alleging claims under
the Age Discrimination in Employment Act of 1967 on behalf of Gideon
Vigdorhous, who had applied for a job as a research statistician at the
Florham Park laboratories. The lawsuit charged that the job was given
to a 28-year-old with less experience than Mr. Vigdorhous.
Under the settlement, the Company agreed conduct training on age
discrimination for supervisors, managers and staffing personnel who
have hiring authority at the Florham Park facility. The Company will
reimburse the EEOC $500 for the training, in addition to travel and
copying costs.
AT&T denies any wrongdoing, according to the settlement, which was
announced Thursday by the EEOC, AP reports.
AUSTRALIA: Most Bali Victims To Join Suit Against al-Qaeda's Financiers
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The majority of Australian Bali bomb victims have indicated they will
join a multi-trillion US dollar class action against financiers of the
al-Qaeda terrorist network, the Australian Associated Press General
News reports.
Twenty-three Australian, including victims of the bombings and the
families of those who died, have joined the action being brought by
Richard Middleton, who is a member of a US legal firm. Another 50
people have registered their interest in the action, and lawyers are
confident they will officially join. In addition, eight people from
overseas who were affected by the bombing have joined the action. The
October 12, 2002 attacks killed nearly 200 people, 89 of whom were
Australian.
Mike Hourigan is Australian legal counsel for the class action and has
been meeting with families and victims across Australia since the
action was announced early last month. Mr. Hourigan said families had
been assured there was no financial cost for them when they joined the
suit, even if it failed.
"Almost without exception, the families and victims want to join this
action mainly as a way of striking back at terrorism, not necessarily
the financial compensation that would come with a victory," said Mr.
Hourigan.
Those who sign up will be joining the relatives of about 900 victims of
the September 11 terrorist attacks, who are seeking $185 trillion in
damages from al-Qaeda financiers. The defendants named in the class
action include wealthy Saudi individuals, banks, corporations and
Islamic charities implicated in the financing of al-Qaeda.
BAYER: Plaintiffs Present E-mails Showing Baycol Research Disregarded
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Bayer Corporation allegedly disregarded disturbing research on the
cholesterol drug Baycol, before it was withdrawn from the market,
evidence such as emails and documents presented in trial in Texas
federal court suggests, the Associated Press reports. The $100 million
lawsuit, filed by an 82-year-old retired engineer who says a muscle-
destroying side effect made his legs stop working, is the first of
thousands against Bayer to go to trial in the United States.
Baycol (or Lipobay) was recalled in August 2001, after it was linked to
at least 52 deaths worldwide and to a side effect known as
rhabdomyolysis, a condition that causes muscle tissue to disintegrate
and to fail.
Internal documents and e-mails released by the plaintiff's lawyers
during the trial show executives discussing potential dangers long
before sales were halted. In June 2000, an e-mail to a vice president
noted that "there have been some deaths related to Baycol," and that
people at its marketing partner, SmithKline Beecham, knew it.
"So much for keeping this quiet," the e-mail said. "How will marketing
spin this?" another e-mail wondered, the Associated Press reports.
According to the suit, the Company was overly eager to jump into the
lucrative US market for the cholesterol-fighting drugs known as
statins. About 8 million Americans use statins to lower their risk of
heart attacks, making them the third most widely prescribed drug in the
nation, AP stated. At the trial, which opened February 18, plaintiff's
attorney Mikal Watts said Bayer "knew its drug would kill people, that
chose to go ahead and kill people anyway so they could go ahead and
make a billion dollars."
Bayer attorney Philip Beck said the e-mails were taken out of context.
He assured that after Bayer finishes presenting its case - it began
this week - the jury would see that the company worked with the FDA to
make sure Baycol was used safely.
The Company faces more than 7,000 lawsuits from former Baycol users,
mostly in the United States. Mr. Beck said the company is taking
responsibility for the drug and would rather compensate victims than
fight them in court. However, he told AP the plaintiff's lawyer had
backed Bayer up against the wall by demanding a settlement covering
1,600 plaintiffs. "Most of those cases are meritless," Beck said. "We
weren't going to be held hostage like that."
The Company has paid $125 million to settle about 450 cases, and
investors are clearly worried. The US-traded stock of German parent
Bayer AG has fallen about one-fourth since the Texas trial began.
BAYER: Baycol Suits Increase Bringing Questions Of Financial Stability
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The number of lawsuits over Bayer's cholesterol drug Baycol are
increasing, bringing in their wake questions of how well the 140-year-
old German company's drug business can weather the thousands of
lawsuits lining up in the courts, The Wall Street Journal reports.
Some analysts have been translating these questions into numbers.
Bayer has said that it has received 7,800 cases and plaintiffs' lawyers
say they have filed hundreds of new claims since the first case went to
trial two weeks ago. This information, plus the fact that 700,000
people in the United States took Baycol before Bayer removed the drug
from the market in August 2001, has given analysts the "stuff" from
which predictions are made: Some analysts are estimating as much as $5
billion in eventual settlements.
Reports say that Bayer's position after loss of Baycol, one of its top
sellers, is not the most stable. This, combined with the fact that
half of its existing pharmaceutical sales come from drugs about to
become generic, makes for a shaky financial position. The company has
taken steps to shore up its drug business by a willingness to
restructure and relinquish majority control, but most potential bidders
have backed away.
"Bayer's pharmaceutical business is in a very weak position to begin
with," said Tony Cox, analyst at Dresdner, Kleinwort Wasserstein. "It
is hard to guess how it will turn out for the company." As a result
investors have been turning their backs on the stock, knocking off
nearly a quarter of its market value in the past two weeks.
The overarching legal question is how much Bayer executives knew about
the dangers of Baycol while they were trying to turn it into a
blockbuster product. One jury's answer is expected in about two weeks,
from the Corpus Christi, Texas, trial, and it should go a long way in
determining the extent of Bayer's financial exposure.
Any verdict that awards punitive damages could trigger thousands of new
claims in the United States, according to the lawyers. Such a verdict
would embolden lawyers to pursue much steeper awards than the average
$280,000 out-of-court settlements Bayer has paid out so far. The
case's outcome also is expected to depend on a US District Court
judge's ruling in the next few months over whether to include thousands
of other cases filed in federal court in a class action.
Since August, Bayer has settled 450 cases for a total of $125 million,
and is negotiating to settle about 500 more for approximately the same
amount. So far, the company's insurance has covered those claims. The
biggest payments, for about $1.2 million each, have been paid to
relatives of patients who died from the severe muscle-weakening
condition linked to Baycol. However, lawyers at Kenneth B. Moll &
Associates in Chicago, which has filed nearly 1,000 claims on behalf of
Baycol patients, say the company still has not settled many of the most
serious claims.
BRISTOL-MYERS SQUIBB: Agrees To Settle FTC Generic Drug Antitrust Suit
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Bristol-Myers Squibb agreed to settle antitrust charges filed by the
United States Federal Trade Commission (FTC) by submitting to tough new
restrictions on its business tactics, Reuters reports. The suit
alleges the Company illegally blocked cheaper versions of three of its
drugs, anti-anxiety drug BuSpar and cancer drugs Taxol and Platinol.
The suit further alleges the Company delayed generic competition by
filing new patents for the three drugs that didn't meet the standard
for listing in the "Orange Book" of patent-protected drugs published by
the Food and Drug Administration, Reuters states.
Under the agreement, the Company will adhere to a 10-year ban that will
prohibit it from its past practice of filing new patent listings that
automatically lock out generic competitors to a particular drug for 30
months at a time. In January, the Company also reached a $670 million
settlement to resolve similar charges regarding BuSpar and Taxol, filed
by a group of state attorneys, generic drugmakers and pharmacy chains.
"Bristol's illegal conduct protected nearly $2 billion in yearly sales
from the three monopolies," FTC Chairman Timothy Muris told a news
conference, "forcing cancer patients and others to overpay by hundreds
of millions of dollars for important and often life-saving
medications."
The five-member FTC voted unanimously to accept the settlement which
will be subject to 30 days public comment, Reuters reports.
Bristol-Myers can still file suit against a generic drug company for
patent infringement under the settlement. The company said in a
statement the restrictions should not significantly impact protection
of its intellectual property, nor adversely impact its financial
position. "The company has agreed to these proposed terms in order to
achieve a resolution of these matters which will allow it to continue
its focus on discovering and developing quality medicines," Bristol-
Myers said.
State attorneys general also praised the settlement. "The message to
other drug manufacturers should be loud and clear: We will not tolerate
illegal misuse of patents or misconduct that deprives patients of
affordable medicine," Connecticut Attorney General Richard Blumenthal
told Reuters.
CANADA: Court Rules Credit Reporting Firms Can Be Sued Over False Data
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Credit-reporting agencies can be sued for negligence, the Ontario Court
of Appeal ruled recently. Two conditions must be present, however, in
order for plaintiffs to prevail: the false information must have been
circulated by the agency and the credit rating of the individual
involved must have been harmed, The Globe and Mail reports.
The ruling by the appeals court was a major victory in a class action
that included up to 600,000 people who were discharged from bankruptcy,
but yet had harmful financial information left on their records.
"This is a social issue about the power of two companies to control
every aspect of our lives," said Joel Vale, a lawyer for the
plaintiffs. "Up until now, there wasn't a mechanism for an individual
to sue them for damages from false information that caused the consumer
harm."
ENRON CORPORATION: TX Judge Refuses To Move Securities Fraud Suit Trial
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A Washington County judge, State District Court Judge Terry Flenniken,
once more, in a recent hearing, has denied a motion by defendants, in
what likely will be the first Enron Corporation shareholder trial, to
move this Enron case from its country setting in the town of Brenham,
Texas, the Houston Chronicle reports.
Several defendants have twice moved the case to a federal court only to
have it bounced back. While the gigantic class actions against Enron
are stalled in federal court awaiting judicial rulings, Judge Flenniken
appears ready to take the one Enron shareholder class action, with its
20 plaintiffs, to trial, in Brenham, in September.
The lawsuit was brought in the Brenham state court by Houston lawyers
G. Sean Jez and George Fleming, who are representing local investors
who bought Enron stock after hearing then-Chairman Kenneth Lay extol
Enron at a Brenham business lunch. Defense attorneys have argued that
there not enough contacts between Enron and Brenham in Washington
County, and that, therefore, the case belongs in Houston.
However, Mr. Jez, representing his clients the local investors, argued
in response, "If Mr. Lay had never set foot in Brenham, this never
would have happened. But Ken Lay (came here and) told these people how
great Enron stock was, and in fact it wasn't, and Mr. Lay knew that."
That, and the fact that local people then bought the stock, seems to be
sufficient contact to keep the lawsuit, which alleges fraud,
negligence, conspiracy and still other charges, in Brenham.
During this same hearing before Judge Flenniken, Andy Ramzel and Rusty
Hardin for Arthur Andersen, made their arguments asking to bring more
than two dozen banks and others into the Brenham-based lawsuits. The
judge took this motion to add third parties under advisement.
FLORIDA: Court Probes Ban on Children's Adoption By Gay Men, Lesbians
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The three judges on the panel of the 11th Circuit Court of Appeals
questioned whether there was a "rational basis" for a Florida law
banning gay men and lesbians from adopting children in a case that has
drawn national attention, The Miami Herald reports.
The four gay men who had received an adverse decision in the US
District Court in Miami, say that the 26-year-old law, which is the
only blanket ban against gay adoption in the nation, violates their
constitutional rights. The law was drafted and passed by the
Legislature in 1977, at a time when Anita Bryant, a former Miss
America, was leading a nationwide attack against gay rights.
The plaintiffs' lawyer, Matt Coles of the American Civil Liberties
Union, told the appellate panel that there was no reason for the
exclusion because state officials already allow gay men and lesbians to
be foster parents and legal guardians. The four gay men who are suing
about the blanket rule against adoption by homosexuals are either
foster parents or guardians for the four children they want to adopt.
"It just doesn't make any sense," said Mr. Coles, director of the
ACLU's Lesbian & Gay Rights Project.
The questioning by the judges seemed to focus on finding whether that
"rational basis" for the Florida law exists, or whether the law is an
exercise in discrimination. Appellate Judge Stanley Birch Jr. asked
why the exclusion against adoption by gay males, but not singles who
are straight.
Casey Walker, attorney representing the Department of Children and
Families, said that single people are desirable as adoptive parents
solong as they are heterosexual. He said the agency contends children
growing up in a gay or lesbian home could be influenced by that
lifestyle.
"Anything wrong with that?" Judge Birch asked.
"The science says there may be," said Mr. Walker without elaboration.
The judge also questioned why the state held so steadfastly to the
principle that a child's best interest only can be provided in a
married household. "What may have been rational in 1977, may no longer
be," said Judge Birch.
Senior Judge Proctor Hug focused on the pool of 3,400 Florida children
eligible for adoption in a state lacking enough foster parents and
adoptive homes. "There's a shortage. Why isn't that something we
would consider when evaluating the rationality of the law?" Judge
Proctor asked.
Mr. Walker, attorney for the Department of Children and Families, said
the lawsuit challenging the law was not a class action. "But it is
brought on behalf of the children," Judge Hug said, referring to the
two children named as plaintiffs in the lawsuit.
Matt Coles, ACLU attorney for the four gay men seeking the right to
adopt children, said he expects the appellate panel to issue a ruling
later this year. Mr. Coles said he thought it likely the court would
wait until after the US Supreme Court rules in June on a challenge to
a Texas sodomy law that criminalizes gay intercourse.
HONEYWELL INTERNATIONAL: Enters Mediation In NJ Securities Fraud Suit
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Honeywell International, Inc. entered mediation in the consolidated
securities class action pending against it and seven of its current and
former officers in the United States District Court for the District of
New Jersey.
The suit principally alleges that the defendants violated federal
securities laws by purportedly making false and misleading statements
and by failing to disclose material information concerning the
Company's financial performance, thereby allegedly causing the value of
Company stock to be artificially inflated.
In January 2002, the court dismissed the consolidated complaint against
four of the Company's current and former officers. The court has
granted plaintiffs' motion for class certification defining the
purported class as all purchasers of Company stock between December 20,
1999 and June 19, 2000.
The parties have agreed to participate in a two-day settlement
mediation in April 2003 in an attempt to resolve the cases without
resort to a trial. All significant discovery in the cases has been
stayed pending further order of the court.
Notwithstanding the Company's agreement to mediate, it believes there
is no factual or legal basis for the allegations in the securities
suit. Although it is not possible at this time to predict the
litigation outcome of these cases, the Company expects to prevail if
the cases are not resolved through mediation. However, an adverse
litigation outcome could be material to the Company's consolidated
financial position or results of operations.
HSBC USA: Asks PA Court To Dismiss Consolidated Securities Suit in PA
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HSBC USA, Inc. asked the United States District Court for the Eastern
District of Pennsylvania to dismiss the securities class action filed
on behalf of former shareholders of Republic New York Corporation
(Republic) who acquired common stock between May 10, 1999 (when the
signing of the merger agreement between Republic and HSBC was
announced) and September 15,1999.
The amended suit alleges that the defendants violated the federal
securities laws in the merger transaction between Republic and HSBC by
failing to disclose certain facts relating to potential liabilities
with respect to the Princeton Note Matter in a timely manner.
In January 2001, defendants filed a motion to dismiss the suit. In
April 2002, the court denied in part the Company's motion to dismiss.
The plaintiffs then filed a motion for class certification, which the
Company opposed. Following a refusal by the plaintiff to produce
documents to the Company and disclosure by the plaintiff that she
desired to cease being a named plaintiff in the action, the Company
moved to dismiss the action. The counsel for the proposed class
opposed that motion and sought leave to provide notice to the class.
The plaintiff's motion for class certification and the Company's motion
to dismiss both remain pending. The Company intends to continue to
defend this action vigorously.
ILLINOIS: Class Status Denied For Suit Over Treatment Of Mentally Ill
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US District Court Judge David Herndon in East St. Louis ruled recently
that the lawsuit challenging treatment of the seriously mentally ill
inmates at Tamms Correctional Center, the state's "super-max" prison,
cannot proceed as a class action lawsuit, the Chicago Tribune reports.
Civil rights attorneys sued the state and various officials on behalf
of three inmates at Tamms, alleging that staff members consistently
minimized or ignored manifestations by the inmates of serious mental
illness. The lawyers hoped to represent a class of 50 or more
prisoners whose mental health will suffer, they contend, without proper
treatment.
Class action status would have allowed the lawyers to seek broader
reforms in how the state prison system treats mentally ill inmates.
However, Judge Herndon wrote in his ruling that no more than 15 Tamms
inmates are seriously mentally ill. Therefore, the judge said a class
action was not appropriate. In fact, said Judge Herndon, in his 13-
page opinion, many inmates who saw staff psychiatrists or who were
placed on suicide watch were not seriously ill.
"Time and again, the records demonstrated that inmates on suicide watch
or the 'chronic caseload' had ulterior motives," Judge Herndon wrote.
"One inmate on suicide watch frankly conceded that he wanted that
status so he could talk with a friend."
The three inmates who sued initially as lead plaintiffs in 2000, can
continue to pursue their individual claims. They contend that the
strict, severe conditions of the prison, where prisoners may spend 23
hours a day in isolation, cause some mentally ill inmates to
deteriorate rapidly, leading to attempts to kill or mutilate
themselves.
INDONESIA: Landslide Victims Sue State Forestry Firm, Local Government
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Lawyers for the families of the landslide victims in East Java have
filed a class action against the state forestry firm and the local
district government, the Jakarta Post said.
At least 26 people were killed when a landslide triggered by heavy
rains engulfed a hot springs resort near Mojokerto in East Java
province in December, while a similar mudslide claimed 21 lives in
Garut in West Java in January. The victims have demanded 781 billion
rupiah ($87 million) in compensation, claiming that illegal logging in
a protected forest above the resort contributed to the disaster. The
lawsuit for the West Java mudslide demands that the state forestry
company and the local government pay the victims 50.41 billion rupiah
in compensation.
Lawsuits are rare in Indonesia. Last November a court rejected a
multi-million lawsuit filed by victims of devastating floods in Jakarta
against Megawati and two provincial governors. The hope is, of course,
that the courts will accept the landslide and mudslide lawsuits.
LOCKHEED MARTIN: CA Court Dismisses Claims in Securities Fraud Lawsuit
----------------------------------------------------------------------
The United States District Court for the Central District of California
dismissed several claims in the consolidated securities class action
pending against Lockheed Martin Corporation, and certain of its
officers and directors. The suits allege that the defendants violated
US securities laws by allegedly:
(1) employing devices, schemes and artifices to defraud;
(2) making untrue statements of material facts or omitting to
state material facts necessary in order to make statements, in
light of the circumstances under which they were made, not
misleading; or
(3) engaging in acts, practices and a course of business that
operated as a fraud or deceit upon class members in connection
with their purchases of the Company's common stock.
According to the complaints, class members were damaged, because they
paid artificially inflated prices for our stock. The plaintiffs are
seeking damages and costs, as well as equitable, injunctive and other
relief.
One complaint alleges claims on behalf of a putative class of
shareholders who purchased Company stock between August 13, 1998 and
December 23, 1998. The defendants in that action include the Company,
Vance D. Coffman, Marcus C. Bennett, Norman R. Augustine and three of
the Company's former officers. The other complaint alleges claims on
behalf of a putative class of shareholders who purchased Lockheed
Martin stock between January 28, 1999 and June 9, 1999. The defendants
in that action include the Company, Vance D. Coffman, Marcus C. Bennett
and two of the Company's former officers.
The Company has filed motions to dismiss the complaints, as well the
amended complaints filed by the plaintiffs, in both matters. Most
recently, in the first proceeding, the court granted the Company's
motion to dismiss the second amended complaint. The plaintiffs filed a
third amended complaint and the Company filed a motion to dismiss
that complaint in October 2002.
In the second proceeding, the court granted part and denied part of the
Company's motion to dismiss the second amended complaint. The court
dismissed, with leave to amend, the allegation that the Company
publicly announced false or misleading expectations about anticipated
results in a variety of areas, including the sale of F-16 aircraft to a
foreign government in 1999, expected deliveries of C-130J aircraft in
1999 and earnings projections. The court dismissed, without leave to
amend, the allegations that the Company made false statements regarding
the expected number of satellite launches in 1999. However, the court
denied the Company's motion regarding the allegations that it falsely
claimed the sale of seven C-130J aircraft to the Air Force and
improperly recognized revenue from that sale.
Plaintiffs advised the court that they intend to stand on the second
amended complaint and to proceed solely on the revenue recognition
allegation. In addition, plaintiffs have without prejudice dismissed
as defendants Mr. Bennett and a former officer of the Company.
MARYLAND: NAACP Gives Deadline To Vote On Racial Profiling Settlement
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When black lawmakers emerged from a closed-door meeting with Governor
Robert Ehrlich on February 13, they were confident that a settlement in
the decade-old racial profiling case would be resolved within a month,
and, they said as well they were satisfied that the Governor and state
police Superintendent Edward T. Norris wanted no substantive changes to
the proposed agreement, Associated Press Newswires reports.
However, patience is wearing thin, and Herbert H. Lindsey, president of
the Maryland State Conference of NAACP branches, said recently that if
the Board of Public Works does not vote on the proposed racial
profiling settlement by March 19, they will scrap the agreement and
continue with their lawsuit. Mr. Lindsey is calling on the board,
composed of the Governor, Comptroller William Donald Schaefer and
Treasurer Nancy K. Kopp, to vote at their next meeting on the consent
decree that would settle the lawsuit.
The proposed racial profiling, $325,000 settlement would require policy
changes by the state police and development of programs that would aim
to support the policy changes. The $325,000 would be used to cover the
legal expenses of minority motorists who claim they were stopped by
troopers solely on the basis of their ethnicity.
Apparently, the issues the Governor wanted clarified were more
substantive than he thought they were when he was talking to the
legislators. For now, a federal judge is reviewing several provisions
in the consent decree at the request of the governor's office.
"We have fulfilled our commitment to submit the points we have asked to
have clarified by the presiding judge, in timely fashion," said
Shareese N. Deleaver, a spokeswoman for Governor Ehrlich. "It is in
the hands of the judge now."
Susan Goering, executive director of the American Civil Liberties Union
of Maryland, said that the settlement is "a time-limited agreement,"
and that, therefore, the issues "will end up in court if this isn't
settled quickly. That's unfortunate."
ACLU attorneys are representing the NAACP and 14 motorists in the
racial profiling class action. A settlement must be approved by the
Board of Public Works, but the item was not put on the board's agenda
until the end of Governor Parris N. Glendening's term, and then-
Governor Elect Ehrlich proposed that the settlement be held over
his to his administration to be voted on, since they would be the ones
who would have to live with it. Governor Glendening agreed.
MARYLAND: Workers File Suit To Seek Double Pay For Snow Emergency Work
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The American Federation of State, County and Municipal Employees
Council 92 recently filed several class action grievances relating to
February's snow emergency on behalf of its members who are considered
essential employees, including hospital workers and some state highway
workers who plowed after the 28.2 inches of snow fell, The Baltimore
Sun reports.
These workers are seeking double pay for their work while the state of
emergency was in effect, a provision their union says is in its
contract. Correctional officers stuck in maximum-security prisons for
24 hours during the record snowfall are also seeking double pay for
their work.
Governor Robert L. Ehrlich Jr. declared the state of emergency on
February 16 and lifted it at six pm on February 23. The union contract
states that essential employees are to be paid double under such
circumstances, union officials said. The provision was negotiated
after the 1996 blizzard, which left many of the service-giving aspects
of the state and municipal governments in a bind.
A letter from the union, on February 26, to Governor Ehrlich's cabinet
members and to agency heads of the Department of Budget and Management,
says that although the Governor declared a state of emergency,
provisions for the additional compensation have not yet been made.
"This snow emergency has given us a vivid idea of how Governor Ehrlich
is going to treat state workers," said Zachary J. Ramsey, executive
director of AFSCME Council 92, which represents 35,000 employees.
The Governor's office has not yet received a formal list of grievances
from the union, Governor Ehrlich's spokesman Henry Falwell said, and
will not comment until it does.
MCG CAPITAL: Investors Launch Suit For Securities Violations in E.D. VA
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MCG Capital Corporation faces a securities class action filed in the
United States District Court for the Eastern District of Virginia. The
suit also names as defendants certain of its officers and the
underwriters of the Company's initial public offering.
The complaint alleges that the defendants made certain misstatements in
violation of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933
and Section 10(b), Rule 10b-5 and Section 20(a) of the Securities
Exchange Act of 1934. Specifically, the complaint asserts that members
of the plaintiff class purchased the Company's common stock at
purportedly inflated prices during the period from November 28, 2001 to
November 1, 2002 as a result of certain misstatements regarding the
academic degree of the Company's chief executive officer.
The complaint seeks unspecified compensatory and other damages, along
with costs and expenses. We intend to defend this lawsuit vigorously.
NIGERIA: Human Rights Group To Commence Suit Over January 2002 Bombing
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HUMAN rights organization, Legal Defence and Assistance Project (LEDAP)
has concluded arrangements to institute a class action against the
Federal Government and the Red Cross Society of Nigeria on behalf of
suffering victims of the January 27, 2002 bomb-blast which occurred in
Lagos, following its alleged failure to compensate them till date.
A separate suit is also to be instituted by the organization against
the National Emergency Management Agency (NEMA), President of the Red
Cross Society of Nigeria, Mr Emmanuel Ijewere and the Ufot Ekaete-led
committee set up by the Federal Government to oversee funds raised for
the bomb-blast victims. The suit is to compel them to account for all
the relief materials including money collected from private and
corporate individuals during the period to assist the direct victims of
the disaster.
On the prosecution team of the two suits are legal practitioners from a
number of human rights organizations based in Lagos, including Centre
for Law Enforcement and Education (CLEEN). All processes in the two
suits are to be lodged at the registry of a high court in Lagos, Friday
this week.
According to the National Coordinator of LEDAP, Mr Chinonye Obiagwu,
the need to drag the Federal Government and its agency, NEMA, the Red
Cross Society of Nigeria and its president to court arose following an
avalanche of complaints from the direct victims of the disaster to the
effect that nothing was given as compensation to them till date.
According to him, some of the victims who lost household items worth
millions of naira to the disaster, sustained varying degrees of
injuries and landed property besieged his Lagos office, urging LEDAP to
assist them to get justice especially when some of the victims of the
disaster were really compensated. More so, the suffering victims
claimed that the disaster would not have occurred but for the
negligence of the government.
He explained that, "some of the victims who came to our office here
even alleged that the Red Cross Society of Nigeria instructed them to
photocopy a paid advertisement in the September 23, 2002 edition of the
Guardian newspaper containing names of the direct bomb-blast victims,
affix their passport and accompany the documents with a list of all
they lost to the disaster and their estimated worth to determine the
exact damages they were entitled to.
PANAMSAT CORPORATION: Asks DE Court To Dismiss Securities Fraud Lawsuit
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Panamsat Corporation asked the Court of Chancery in the State of
Delaware to dismiss a class action filed on behalf of holders of the
Company's common stock was filed in the Court of Chancery in the State
of Delaware against its Board of Directors and Hughes Electronics.
The complaint alleged that Hughes Electronics and the Company's
directors breached their fiduciary duty to the stockholders of the
Company in connection with the settlement between Hughes Electronics,
GM and EchoStar terminating the EchoStar Transaction in which Hughes
Electronics received $600 million and EchoStar's contingent obligation
to purchase the Company's common stock terminated. The class of
plaintiffs on whose behalf the suit has been asserted is alleged to
consist of all holders of the Company's common stock excluding any who
are related to or affiliated with any of the defendants.
On January 31, 2003, the defendants filed a motion to dismiss for
failure to state a claim upon which relief can be granted. Pursuant to
Delaware law and the Company's organizational documents, the Company
has an indemnification obligation to the members of its Board of
Directors from liability for certain matters.
The Company believes that the suit would be, in the event of an adverse
outcome, be material to the Company.
PENNSYLVANIA: Suit's Success To Void Forms For In-Depth Employee Checks
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Forms signed by more than 500 employees giving the nursing home chain,
Presbyterian Homes Inc., authorization to conduct background checks of
their employees, could be voided if one of their former colleagues wins
her wrongful-firing lawsuit, The Harrisburg Patriot reports.
This could happen because all of the employees of the Camp Hill-based
Presbyterian Homes Inc. are now part of the lawsuit in federal court
brought by Lisa R. Kelchner of South Williamsport. This came about
when Judge John E. Jones III made Ms. Kelchner's lawsuit a class
action. Therefore, if Ms. Kelchner wins her lawsuit for wrongful
firing, the forms the employees signed would be voided until
Presbyterian Homes follows the correct procedure, said her lawyer,
Clifford A. Reiders.
Ms. Kelchner filed her lawsuit after her hours as recreation director
at Sycamore Manor, a Presbyterian Homes facility near Williamsport,
were eliminated. She had twice refused to sign a form under the Fair
Credit Reporting Act. The signed form would have authorized an
investigation into her business and personal affairs.
This lawsuit could have an effect beyond the employees at the 17
Presbyterian Homes facilities in Pennsylvania, Maryland and Ohio.
Judge Jones noted that no court has yet ruled on the issue of whether
an employee can be fired for refusing to sign an authorization for an
investigation under the Fair Credit Reporting Act.
PESTICIDE FIRMS: Judge Certifies Suit Over Lobsters Killed By Chemicals
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Long Island Sound lobstermen recently won a key victory, the
certification of members of the class, in their class action filed
against the makers of pesticides and insecticides, which they allege,
helped to kill millions of lobsters in 1999, Newsday reports.
In his 42-page order, US District Judge Thomas C. Platt ruled that any
lobstermen who had valid harvesting licenses from the states of New
York or Connecticut, and who, beginning in September 1999, suffered
damages, would be certified as members of a class who could benefit
from any award or settlement in the case. The class likely will
include more than 300 commercial lobstermen.
"It is the start of a legal victory," said John Gorman, a Mount Sinai
fisherman, who is president of the Long Island Sound Lobstermen's
Association. "The certification of the class is certainly something
the chemical companies did not want."
The lawsuit was filed at the federal courthouse in Central Islip on
behalf of three lobstermen in New York and Connecticut. The defendants
are four chemical manufacturers or distributors who sold the substances
placed in storm drains or sprayed by helicopter or truck in Connecticut
and New York, including Nassau and Suffolk counties, to control the
mosquitoes that spread the West Nile virus.
The lobstermen allege that the spraying's impact on their industry was
made worse by Hurricane Floyd, which swept across the metropolitan area
on September 15 to 17, 1999. They say the storm triggered heavy run-
off of chemically tainted water into the Sound.
The chemical companies say that the insecticides were never sprayed on
the surface of Long Island Sound. New York City, they also say, was
the only entity that sprayed for mosquitoes before September 15, when
the hurricane arrived. Nassau and Suffolk Counties conducted
aggressive spraying programs, but they were launched a week after the
hurricane.
The scientists who met recently in Bridgeport, Connecticut, say their
studies show that chemicals used in the spraying are unusually toxic to
lobsters. However, the scientists conceded that they do not know
whether enough of the chemicals was present in the Sound in September
1999, to kill the lobsters.
What are, so far, better documented, say the scientists, are the 1999
conditions that probably placed heavy physical stress on the lobsters.
These include dangerously low levels of oxygen in the water on the
Sound floor and higher than normal bottom-water temperatures.
PHILADELPHIA: Man Sues After Being Mistakenly Arrested, Sent To Prison
----------------------------------------------------------------------
Ebony Davis' lawyers, Paul Messing and Jonathan H. Feinberg, have filed
a class action in Philadelphia federal court, against the City of
Philadelphia in order to bring before the public the unconstitutional
practices going on at Traffic Court, where people are being jailed
without counsel and without trial, according to a report by The
Philadelphia Daily News. US District Judge Timothy J. Savage will
hear the case.
Ebony Davis, 47, a West Philadelphia contractor, was mistaken for one
Allen Davis who owed about $7,500 in traffic tickets, and despite his
protests, was put in handcuffs and taken to Traffic Court as a
scofflaw. His protests of innocence, of not being Allen Davis, were
not listened to. He was told he had to pay $1,780 as a down payment on
the $7,500 he owed for motor vehicle violations or go to jail. He did
not have the money.
On September 30, 2002, Ebony Davis stood before Traffic Court Judge
Robert Shaffer, without counsel, without trial, still saying he was not
Allen Davis, and was sentenced to jail for 26 days. After having
served the full sentence, and during the processing for his release,
authorities realized they had put the wrong man in jail, Mr. Davis'
lawyers said. He was taken back to Traffic Court on October 25, where
he met with a prosecutor and court-appointed lawyer (appointed 26 days
too late) and was ordered released from custody, after the court
acknowledged the wrong man had been sent to jail.
Mistaken identity cases are rare, say Ebony Davis' lawyers, but even
without that added element of wrongdoing, the lawyers complain that
dozens of alleged scofflaws have been jailed in traffic court
illegally, without a fair trial, within the past two years.
Even people who owe money are entitled to constitutional protections,
but apparently that is not happening down there (in traffic court),
said Mr. Messing. "We know dozens of cases, and we believe there might
be more," he added.
The class action lawsuit, in addition to suing the City of
Philadelphia, names as defendants the Traffic Court and its two top
judges, Francis E. Kelly and Fortunato Perri.
QWEST COMMUNICATIONS: Judge Certifies Lawsuit Over "Fly Free" Promotion
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In Sibley County, Minnesota, District Court Judge Thomas G. McCarthy
has certified a class action against Qwest Communications over a "Fly
Free America" promotion the company ran in 1998 and 1999, the Duluth
News-Tribune reports.
The class action could involve 22,000 residents of Minnesota who
switched their long-distance service to Qwest during the Fly Free
America promotion, according to Judge McCarthy's ruling. Under the
terms of the promotion, customers were offered two free airline tickets
in exchange for switching to Qwest long distance for a minimum of two
months.
The breach-of-contract lawsuit claims that telemarketers for a firm
hired by Qwest in relation to the promotion failed to tell customers
who accepted the offer that they had to stay at a participating hotel
for a specified number of nights at published rates. Attorneys
representing the plan claim the promotion ended up costing some people
thousands of dollars in hotel charges.
REAL ESTATE: Asks Court To Set Aside Verdict in Securities Fraud Suit
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National Partnership Investment Corporation (NAPICO) and Real Estate
Associates Limited II (an affiliated partnership in which NAPICO is the
corporate general partner asked the United States District Court for
the Central District of California to set aside the verdict in favor of
plaintiffs in a class action pending against them.
In August 1998, two investors holding an aggregate of eight units of
limited partnership interests in Real Estate Associates and two
investors holding an aggregate of five units of limited partnership
interests in Real Estate Associates Limited VI (another affiliated
partnership in which NAPICO is the managing general partner) filed a
lawsuit against the Partnership, NAPICO and certain other defendants.
The complaint alleged that the defendants breached their fiduciary duty
to the limited partners of certain NAPICO managed partnerships and
violated securities laws by making materially false and misleading
statements in the consent solicitation statements sent to the limited
partners of such partnerships relating to approval of the transfer of
partnership interests in limited partnerships, owning certain of the
properties, to affiliates of Casden Properties Inc., organized by an
affiliate of NAPICO. The plaintiffs sought equitable relief, as well
as compensatory damages and litigation related costs.
In August 1999, one investor holding one unit of limited partnership
interest in Housing Programs Limited (another affiliated partnership in
which NAPICO is the corporate general partner) commenced a virtually
identical action in the same court against the Partnership, NAPICO and
certain other entities. The second action was subsumed in the first
action, and was certified as a class action.
In August 2001, plaintiffs filed a supplemental complaint, which added
new claims, including a rescission of the transfer of partnership
interests and an accounting. The matter was tried in October and
November 2002.
In November 2002, the jury returned special verdicts against NAPICO and
certain other defendants in the amount of approximately $25.2 million
for violations of securities laws and against NAPICO for approximately
$67.3 million for breaches of fiduciary duty. In addition, the jury
awarded the plaintiffs punitive damages against NAPICO of approximately
$92.5 million.
NAPICO and the other defendants have submitted motions seeking to set
aside the verdict in its entirety, with oral argument scheduled for
March 2003. While the matter is not yet final and no judgment has
been entered, the matter is the responsibility of the former
shareholders of Casden Properties Inc. pursuant to the documents
related to AIMCO's acquisition of Casden Properties Inc., which was
completed in March 2002.
SBC: Settles Consumer Suit With Money After Sending Free Phone Cards
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SBC, a phone company in Indiana tried to settle a class action over
services which customers paid for but had not requested, by sending
them phone cards, which they had not agreed to accept as settlement,
Associated Press Newswires reports.
Indiana consumers filed a class action in 1995, against SBC's
predecessor, Ameritech, alleging they were wrongly charged for a
service covering repairs. The service, called "Linebacker" was
optional, but Ameritech never informed plaintiffs of this fact at the
time they were signing up with the company, or at any other time.
Each lawsuit sought refunds for the amount the plaintiffs had paid for
the unrequested Linebacker service. Instead, SBC Communications, which
had acquired Ameritech, mailed the customers cards that could be used
to pay for long-distance calls at the company's pay phones. The
plaintiffs insisted upon the refunds their lawsuit sought. Therefore,
a federal judge approved a $430,000 settlement between the state's
largest phone company and about 1,400 customers. Reimbursements will
vary, depending on how long each customer was billed for the optional
repair service.
SPIEGEL INC.: To Settle SEC Allegations Of Withholding Financial Info
---------------------------------------------------------------------
Spiegel, Inc. agreed to settle charges filed by the United States
Securities and Exchange Commission (SEC), alleging that the retailer
withheld material adverse financial information from the public,
Reuters reports.
The Company filed several overdue financial statements last month. It
was late in submitting its quarterly financial reports, and filed its
2001 statements and the figures for the first three quarters of 2002 in
February. The SEC asserts the Company decided not to make its required
10K and 10Q filings on a timely basis in order to "conceal" the "going
concern" issue from the public. "Instead, the company filed a series
of (notices of late filing) indicating that Spiegel was not in a
position to file because various lending agreements were not in place,"
the SEC said.
The Company settled the suit without admitting or denying the
accusations in the SEC's civil complaint. The Company also agreed to
appoint an independent examiner, which will review the company's
financial records since Jan. 1, 2000 and provide the court with a
report of its findings in four months, the SEC said in a statement.
The SEC added that the court will later determine if the payment of
compensation to investors or civil penalties would be appropriate for
the company, which publishes the Spiegel Catalog and is the parent of
the Eddie Bauer retail chain.
In Downers Grove, Illinois, Spiegel said in a statement that it had
agreed to a partial final judgment and permanent injunction from
further violations, Reuters states. A company spokeswoman, Debbie
Koopman, said it was a company policy not to comment on litigation
matters as the SEC continues its investigation.
TEXAS: Court Dismisses Portions Of Suit Seeking Closed-Captioned Films
----------------------------------------------------------------------
US District Court in Texas Judge Kenneth M. Hoyt has dismissed portions
of a class action, seeking an order that theaters provide more closed
captioned films for the disabled, Associated Press Newswires reports.
Rob Todd, a former city councilman, filed the class action in May of
last year on behalf of his son Robert Preston, who is hearing-impaired.
Mr. Todd filed the lawsuit against movie producers under the Americans
with Disabilities Act (ADA) and a civil rights claim against both the
producers and theater operators.
Judge Hoyt ruled that, under the ADA, a landmark 1990 civil rights law,
movie theaters are not places of public accommodation, since the Act
does not seek to regulate how goods or services are presented to
consumers. While the ADA purposes to provide equal access to public
places, Judge Hoyt said, it does not define equal access to include
equal enjoyment.
Marian Rosen, Mr. Todd's co-counsel, said theaters should be considered
public places of accommodation, and she said she is going forward with
the ADA claims against the theater companies.
Laura Marie Franze is a Dallas lawyer representing AMC, Cinemark and
Regal Theater companies. Ms. Franze said she will file a motion for a
summary judgment and is confident the case will be dismissed. Ms.
Franz noted that theaters are merely a venue for viewing the movies;
operators do not produce movies.
TOBACCO LITIGATION: Judge To Deliver Ruling In "Light" Cigarettes Case
----------------------------------------------------------------------
Judge Nicholas Byron of the state circuit court in Madison County,
Illinois, said he expects to rule from the bench once closing arguments
are completed in the class action against cigarette maker Philip
Morris, accused of misleading plaintiffs about the dangers of so-called
"light" cigarettes. "Monday at five o'clock we will know the winner
and the loser," said Judge Byron in court on Wednesday, The Wall Street
Journal reports.
The plaintiffs allege that Philip Morris misled them about the dangers
of "light" cigarettes. They are seeking more than $7 billion in
compensatory damages, which is an estimate of the money spent by
Illinois smokers on both Marlboro Lights and Cambridge Lights from 1971
to last year. The plaintiffs represent about 1.1 million Illinois
smokers. The plaintiffs are also seeking punitive damages.
Philip Morris, on the other hand, denies such allegations and says
light cigarettes carry the same government-mandated health warning as
do regular cigarettes.
Public-health experts for years have said that low-tar cigarettes are
just as dangerous as regular smokes. Then, in 2001, the National
Cancer Institute published a report criticizing the marketing of
"lights" as "deceptive." That appraisal helped fuel a new round of
lawsuits on light cigarettes.
Meanwhile, the Illinois legislature is considering a bill, backed by
Philip Morris, a unit of the Altria Group, Inc., that would place a $25
million limit on the size of any bond the party would be required to
post to appeal an adverse verdict. The current law states that the
party seeking appeal from an adverse award, must post a bond equal to
the size of that entire award or judgment.
Some industry analysts are not very sanguine about the company's
prospects sofar as this case is concerned. They note that the
jurisdiction is known for its high number of class actions, an
indication that the courts favor plaintiffs. "Given the judge's
comments thus far, and our sense of the environment in Illinois, we
would not be hopeful on a win," said Merrill Lynch tobacco analyst
Martin Feldman.
News that the judge would decide the case from the bench, immediately
upon conclusion of closing arguments, sent Altria shares down $1.71 per
share.
TOYOTA MOTOR: Agrees To Settle Suit Alleging Clean Air Act Violations
---------------------------------------------------------------------
Toyota Motor Corporation has reached a settlement for the lawsuit filed
against it, under the Clean Air Act, the United States Justice
Department announced, according to a Reuters report. The suit involves
2.2 million vehicles manufactured between 1996 and 1998, and alleges
that the Company's computerized emissions control monitoring systems
did not work properly and could permit increased emissions of fuel
vapors without the knowledge of the owners.
Under the settlement the Company pledged to improve anti-pollution
controls on old, publicly owned buses that were not made by Toyota.
The Company will reportedly spend about $20 million to retrofit up to
3,000 public diesel fleet vehicles to make them run cleaner and extend
the emission control system warranty. The Company will also accelerate
its compliance with new emission control requirements and pay a
$500,000 civil penalty. The Justice Department said the settlement
will cost Toyota an estimated $34 million.
A Toyota spokeswoman told Reuters the Japanese automaker was
"comfortable" with the settlement, and noted it was sharply below the
$58 billion in civil penalties the government had originally sought in
its lawsuit filed on behalf of the Environmental Protection Agency.
"We wanted a project unrelated to Toyota's own business" that would
also improve the environment, spokeswoman Martha Voss said. "The
vehicles were never found to be out of compliance . We settled the case
to avoid prolonging the dispute."
The settlement also requires Toyota to accelerate, by about one year,
its compliance with EPA's new "near-zero" evaporative emissions
regulation, which requires the capture of more gasoline vapors, Reuters
states. Due to the accelerated compliance, about 1.4 million new
Toyota vehicles manufactured from 2004 to 2006, which would not yet be
subject to the new regulation, will be built with more robust
evaporative emission control systems. The accelerated compliance
schedule is estimated to cost Toyota about $11 million.
UNITED KINGDOM: Australian, New Zealand Ex-Coal Miners To Join Lawsuit
----------------------------------------------------------------------
Under the terms of an agreement with the British Coal Board of Great
Britain, some five thousand former coal miners, now living in New
Zealand and Australia, will join more than 200,000 others in the
world's biggest class action to claim compensation for their work-
related illness, said their lawyer recently, without having to return
to the United Kingdom for medical assessment, according to a report by
Australian Associated Press General News.
The expatriate former coal miners' lawyer, Simon Garnett, said the
miners could claim money from an $11 billion compensation fund set up
by the British Coal Board. The miners, under the rules of eligibility,
must have suffered chronic bronchitis, small airways disease, asthma or
respiratory-related heart conditions, and worked in English or Welsh
mines after 1954, or Scottish mines after 1949, Mr. Garnett said.
"We are hopeful that the medical testing can begin in Australia within
the next few months," said Mr. Garnett, a partner in the law firm Ryan
Carlisle Thomas. "Given the deteriorating health of many of the
claimants, we are well aware of the need to progress these claims as
quickly as possible."
Claims can be made on the basis of pain and suffering, medical
expenses, loss of income and other illness-related expenses. Many sick
and dying former coal miners have waited years for the chance to claim
compensation, added Mr. Garnett. Families of miners who already have
died from work-related illness also will be eligible to make a claim
for pain and suffering, loss of income, funeral and other expenses.
"These men gave their health to meet the UK's energy demands, and it is
essential we repay the debt as quickly and fairly as possible," said a
UK government spokesman.
WHYALLA AIRLINES: Landmark Out-Of-Court Settlement Forged In Crash Suit
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The way has been smoothed and marked out for Australian plaintiffs to
pursue class actions in the United States in the future by a milestone
out-of-court settlement which was recently reached in the case of the
Whyalla Airlines crash in which eight people died, the Australian
Review reports.
The exact amount of the settlement is closely guarded. However, a
typical US court judgment for an aviation-related death would be at
least $US500,000 ($813,350) each person. Adding costs and allowing for
individual circumstances, the US aircraft engine maker Textron Lycoming
is believed to have agreed to pay the estates of the eight dead
Australians an amount that is short of $US10 million, but in Australian
dollar terms is "comfortably" over $10 million.
Australia's largest litigation funder, the publicly listed (Australia)
IMF Ltd., helped fund the litigation in the United States. IMF reached
funding agreements with representatives of the estates of the victims.
For detailed management of the case in the United States, the
Australian parties formed an alliance with leading New York aviation
law firm Kreindler & Kreindler. For all purposes, the case focused on
the engine problems on Whyalla Airlines' Flight 904.
Kreindler & Kreindler is the same firm that filed a civil suit on
behalf of more than 1400 victims of the September 11, 2001, terrorist
attacks seeking $US1trillion in damages from al-Qaeda, Iraq, numerous
Saudi sponsors and others allegedly involved.
IMF (Australia) covered Australian costs, such as flying witnesses and
an engine to the United States, while Kreindler & Kreindler met US
expenses. Because of the US involvement, IMF agreed not to take its
usual 30 to 35 percent share of the proceeds.
A key issue in the conduct of the litigation was jurisdiction. IMF
opposed an Australian hearing "as the quantum of damages available
to the plaintiffs in the USA could be materially greater than damages
awarded in Australia." Unlike Australia, the United States allows
compensation to relatives for the pain and suffering experienced by the
victim during an incident.
The action against Lycoming, the engine maker, was filed in
Pennsylvania on May 3 last year. Lycoming sought, in a motion, that
the venue be shifted to Australia.
However, all these procedural matters were resolved when, on August 4,
US business executive Daniel Williamson and his family died in a crash
of his new Piper Malibu Mirage. The plane developed engine trouble
over Lake Michigan and crashed just short of the selected emergency
landing destination at Southwestern Michigan Regional Airport in Benton
Harbor, Michigan.
Crash investigations centered on engine crankshaft problems. Then, on
September 16, Lycoming issued mandatory service bulletin 533 listing
crankshafts for recall. The list included the serial number of a
crankshaft which happened to be the left crankshaft of the Whyalla
Airlines Piper Chieftain VH-MZK.
The Australian plaintiffs zeroed in on this information in a successful
cross motion for discovery of material from Lycoming. The plaintiffs'
cross motion was filed November 1, 2002.
"By Lycoming's own admission," said plaintiffs in a deposition, "the
crankshaft on the subject aircraft's left engine was part of the
worldwide recall."
Settlement out-of-court was reached last week.
New Securities Fraud Cases
MICHAELS STORES: Weiss & Yourman Files Securities Fraud Suit in N.D. TX
-----------------------------------------------------------------------
Weiss & Yourman initiated a securities class action against Michaels
Stores, Inc. (NYSE:MIK) and certain of its officers was commenced in
the United States District Court for the Northern District of Texas,
Dallas Division, on behalf of purchasers of Company shares between
August 8, 2002 and November 7, 2002.
The complaint charges defendants with violations of the Securities
Exchange Act of 1934. It alleges that defendants issued a series of
material misrepresentations that caused plaintiff and other members of
the class to purchase Michaels Stores common stock at artificially
inflated prices.
For more details, contact David C. Katz, Mark D. Smilow, or James E.
Tullman by Mail: The French Building, 551 Fifth Avenue, Suite 1600 New
York NY 10176 by Phone: (888) 593-4771 or (212) 682-3025 or by E-mail:
info@wynyc.com
MICROTUNE INC.: Lovell Stewart Lodges Securities Fraud Suit in E.D. TX
----------------------------------------------------------------------
Lovell Stewart Halebian LLP initiated a securities class action on
behalf of all persons who purchased, converted, exchanged or otherwise
acquired the common stock of Microtune, Inc. (NasdaqNM:TUNE) between
April 22, 2002 and February 20, 2003 inclusive.
The lawsuit asserts claims under Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC
thereunder and seeks to recover damages. The action is pending in the
US District Court for the Eastern District of Texas, Sherman Division.
According to the complaint, defendants made misstatements of material
facts and omitted to state material facts in their public statements
and elsewhere, including failing to disclose that Microtune had
materially overstated its revenue by immediately recognizing as revenue
certain sales which should have been categorized as deferred revenue
because payment was not assured and in fact was not made for
substantial periods of time, failing to disclose that a material
portion of Microtune's revenues had not in fact been received in cash,
and failing to disclose that Microtune lacked adequate internal
controls and was therefore unable to ascertain its true financial
condition at a given time.
The complaint alleges that after the truth of the foregoing became
known on February 20, 2003, when Microtune shocked the market by
announcing that its loss for 4Q '02, the period ending December 31,
2002, was $80.2 million, or almost double the loss of $47 million which
it had reported in the same period of the prior year, Microtune's share
price tumbled to as low as $1.09 per share, down from a class period
high of $15.20 per share.
For more details, contact Christopher J. Gray or Nikhil Shimpi by Mail:
500 Fifth Avenue New York NY 10110 by Phone: 212/608-1900 by E-mail:
classaction@lshllp.com
PARAMETRIC TECHNOLOGY: Wolf Haldenstein Commences Securities Suit in MA
-----------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class
action in the United States District Court for the District of
Massachusetts, on behalf of all who purchased the securities of
Parametric Technology Corporation (Nasdaq: PMTC) between October 19,
1999 and December 31, 2002, inclusive against the Company and certain
of its officers and directors.
The complaint alleges that throughout the class period, Defendants
issued numerous statements and filed quarterly and annual reports with
the SEC which described the Company's increasing revenues and financial
performance. These statements were materially false and misleading
because they failed to disclose and/or misrepresented the following
adverse facts, among others:
(1) that since fiscal 1999, in violation of Generally Accepted
Accounting Principles and its own revenue recognition
policies, the Company had cumulatively overstated its
previously recognized maintenance revenue from its service
contracts by approximately $33.4 million;
(2) that the Company lacked adequate internal controls and was
therefore unable to ascertain the true financial condition of
the Company; and
(3) that as a result, the value of the Company's income and
financial results were materially overstated at all relevant
times.
On December 31, 2002, 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." Consequently, the Company announced it
"expects to report a corresponding reduction in maintenance revenue in
prior periods, primarily in fiscal year 2002."
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 Fred Taylor Isquith, Gustavo Bruckner,
Michael Miske, George Peters, or Derek Behnke by Mail: 270 Madison
Avenue, New York, New York 10016, by Phone: (800) 575-0735 by E-mail:
classmember@whafh.com or visit the firm's Website:
http://www.whafh.com. All e-mail correspondence should make reference
to Parametric.
PROVIDENT FINANCIAL: Schiffrin & Barroway Lodges Securities Suit in OH
----------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Southern District of Ohio, Western
Division, on behalf of all purchasers of the common stock of Provident
Financial Group Inc. (Nasdaq:PFGI) publicly traded securities during
the period between April 14, 1998 and March 4, 2003, inclusive.
The complaint charges Provident Financial Group Inc. and certain of its
officers and directors with issuing false and misleading statements
concerning its business and financial condition. Specifically, the
complaint alleges that defendants issued numerous statements and filed
quarterly and annual reports with the SEC that described the Company's
increasing revenues and financial performance.
The suit alleges that these statements were materially false and
misleading because they failed to disclose and/or misrepresented the
following adverse facts, among others:
(1) that the Company had materially overstated its operating
results by failing to properly account for certain off-balance
sheet transactions. Specifically, the Company failed to
properly account for auto financing leases which caused it to
overstate its earnings;
(2) that the Company lacked adequate internal controls and was
therefore unable to ascertain the true financial condition of
the Company; and
(3) as a result of the foregoing, the Company's financial
statements issued during the class period were materially
false and misleading.
Indeed, the Company, by restating its financial statements, has now
admitted that its previously issued financial statements were
materially false and misleading.
On March 5, 2003, before the open of the market, Provident shocked the
market by announcing that it would be restating its financial results
for fiscal years 1997 through 2002. The Company attributed the
accounting issues to "nine auto lease financing transactions originated
between 1997 and 1999." The Company also revealed that it had restated
its total assets for 1997 through 2002 -- increasing its net assets for
each year (by understating assets, the Company materially overstated
its return on assets, a key operating metric for banks).
In addition, the Company reported that it was reducing its earnings
guidance for fiscal year 2003, as a result of the accounting problem.
In response to the announcement of the earnings restatement, the price
of Provident stock dropped from $28.07 per share to $22.46 per share in
heavy trading.
For more details, contact Marc A. Topaz or Stuart L. Berman by Phone:
(888) 299-7706 (toll free) or (610) 667-7706 or by E-mail:
info@sbclasslaw.com
PROVIDENT FINANCIAL: Milberg Weiss Commences Securities Suit in S.D. OH
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Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class
action on behalf of purchasers of the securities of Provident Financial
Group, Inc. (NASDAQ: PFGI) between March 30, 1998 and March 5, 2003,
inclusive, in the United States District Court for the Southern
District of Ohio, Western Division, against the Company, Robert L.
Hoverson (President) and Christopher J. Carey (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 March 30, 1998 and March 5, 2003.
The complaint alleges that during the class period, Provident filed
quarterly and annual financial reports with the SEC which detailed its
performance for the respective time period(s), described its accounting
policies and set forth its financial condition. The complaint further
alleges that these financial reports were materially false and
misleading because they failed to disclose that the Company had
improperly accounted for certain auto lease financing transactions,
thereby materially inflating the Company's reported earnings throughout
the class period.
These facts came to light, for the first time, on March 5, 2003, when
the Company issued a press release announcing that Provident had
improperly accounted for nine auto lease financing transactions
originated between 1997 and 1999 in a manner which inflated its
reported earnings from 1997 through 2002, inclusive. The Company
further revealed that the transactions were improperly reported as
"off-balance sheet" transactions and that it would be restating its
operating results downward for the years 1997 through 2002.
In response to this disclosure, the price of Provident common stock
plummeted, falling 20% in one day, from a March 4, 2003 close of $28.08
per share to $22.46 on March 5, on unusually heavy trading volume.
For more details, contact Steven G. Schulman by Mail: One Pennsylvania
Plaza, 49th fl. New York, NY, 10119-0165 by Phone: (800) 320-5081 by E-
mail: Provident@milbergNY.com or visit the firm's Website:
http://www.milberg.com
PROVIDENT FINANCIAL: Charles Piven Commences Securities Suit in S.D. OH
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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 Provident Financial Group, Inc.
(Nasdaq:PFGI) between April 14, 1998 and March 4, 2003, inclusive. The
case is pending in the United States District Court for the Southern
District of Ohio, Western Division, against the Company and certain of
its officers and/or directors.
The action charges that defendants violated federal securities laws by
issuing a series of materially false and misleading statements to the
market and overstating it earnings throughout the class period which
false and misleading statements and overstatements of earnings had the
effect of artificially inflating the market price of the Company's
securities during the class period.
For more details, contact Charles J. Piven, PA by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
PROVIDENT FINANCIAL: Cauley Geller Commences Securities Suit in S.D. OH
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Cauley Geller Bowman Coates & Rudman, LLP initiated a securities class
action in the United States District Court for the Southern District of
Ohio, Western Division, on behalf of purchasers of Provident Financial
Group Inc. (Nasdaq: PFGI) publicly traded securities during the period
between April 14, 1998 and March 4, 2003, 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 April 14, 1998 and March 4, 2003, thereby artificially
inflating the price of Provident securities.
Throughout the class period, as alleged in the suit, defendants issued
numerous statements and filed quarterly and annual reports with the SEC
which described the Company's increasing revenues and financial
performance. The suit alleges that these statements were materially
false and misleading because they failed to disclose and/or
misrepresented the following adverse facts, among others:
(1) that the Company had materially overstated its operating
results by failing to properly account for certain off-balance
sheet transactions. Specifically, the Company failed to
properly account for auto financing leases which caused it to
overstate its earnings;
(2) that the Company lacked adequate internal controls and was
therefore unable to ascertain the true financial condition of
the Company; and
(3) as a result of the foregoing, the Company's financial
statements issued during the class period were materially
false and misleading.
Indeed, the Company, by restating its financial statements, has now
admitted that its previously-issued financial statements were
materially false and misleading.
On March 5, 2003, before the open of the market, Provident shocked the
market by announcing that it would be restating its financial results
for fiscal years 1997 through 2002. The Company attributed the
accounting issues to "nine auto lease financing transactions originated
between 1997 and 1999." The Company also revealed that it had restated
its total assets for 1997 through 2002 -- increasing its net assets for
each year (by understating assets, the Company materially overstated
its return on assets, a key operating metric for banks).
In addition, the Company reported that it was reducing its earnings
guidance for fiscal year 2003, as a result of the accounting problem.
In response to the announcement of the earnings restatement, the price
of Provident stock dropped from $28.07 per share to $22.46 per share in
heavy trading.
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
SOLECTRON CORPORATION: Cauley Geller Lodges Securities Suit in N.D. CA
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Cauley Geller Bowman Coates & Rudman, LLP initiated a securities class
action in the United States District Court for the Northern District of
California on behalf of purchasers of Solectron Corporation (NYSE: SLR)
publicly traded securities during the period between September 17, 2001
and September 26, 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, 2001 and September 26, 2002, thereby
artificially inflating the price of Solectron securities.
Throughout the class period, as alleged in the complaint, defendants
issued numerous statements reporting artificially inflated financial
results. 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 the Company was carrying tens of millions of dollars of
obsolete and unsaleable inventory in its Technology Solutions
division which was required to be written down. As a result
of the foregoing, Solectron's reported financial results were
artificially inflated at all times during the class period;
(2) as a result of the Company's failure to writedown its
inventory in a timely manner, the financial statements
published by the Company during the class period were not
prepared in accordance with Generally Accepted Accounting
Principles and were materially false and misleading; and
(3) that it was materially false and misleading to characterize
the Company's earnings during the class period, as "in line"
with Company guidance, when had the Company properly accounted
for its inventory it would have drastically missed its
guidance.
On September 26, 2002, after the market closed, Solectron issued a
press release announcing its financial results for the fourth quarter
of 2002 and fiscal year 2002. The Company also reported that it was
booking a pre-tax charge of $97 million to reserve for inventory
revaluation and write-off. Solectron attributed the bulk of the charge
to "inventory risk assumed by Solectron's product-oriented Technology
Solutions business unit."
Following this announcement, and other revelations, shares of Solectron
common stock fell from their previous close.
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 or by E-mail:
info@cauleygeller.com
UNUMPROVIDENT CORPORATION: Emerson Poynter Lodges Securities Suit in TN
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Emerson Poynter LLP initiated a securities class action in the United
States District Court for the Middle District of Tennessee on behalf of
purchasers of UnumProvident Corporation (NYSE:UNM) publicly traded
securities during the period between May 7, 2001 and February 4, 2003.
The complaint charges UnumProvident and certain of its officers and
directors with violations of the Securities Exchange Act of 1934.
UnumProvident 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 worksites.
The complaint alleges that during the class period, defendants caused
UnumProvident'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
UnumProvident to raise proceeds of $250 million on June 13, 2002 in its
bond offering.
For more details, contact Ms. Tanya Autry, Investor Relations
Department by Phone: (800) 663-9817 or by E-mail:
shareholder@emersonfirm.com
VITALWORKS INC.: Schiffrin & Barroway Lodges Securities Lawsuit in CT
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Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the District of Connecticut on behalf
of all purchasers of the common stock of VitalWorks, Inc. (Nasdaq:VWKS)
publicly traded securities during the period between April 24, 2002 and
October 23, 2002, inclusive.
The complaint charges the Company and certain of its officers and
directors with issuing false misleading statements concerning its
business and financial condition. Specifically, the complaint alleges
that the defendants issued false and misleading statements concerning
the Company's increasing revenues and future prospects.
On October 23, 2002, VitalWorks announced that it had failed to achieve
pre- announced third quarter 2002 revenues and was lowering revenue
guidance for the remainder of fiscal year 2002; additionally, the
Company reported that it was lowering revenue guidance for fiscal year
2003 by over 10%. Market reaction to defendants' belated disclosures
was swift and severe.
On October 24, 2002, the first day of trading following VitalWorks
announcements, the price of VitalWorks common shares fell over 56% in
value to close at $3.13 per share on record trading volume of over 14
million shares.
For more details, contact Marc A. Topaz or Stuart L. Berman by Phone:
(888) 299-7706 (toll free) or (610) 667-7706 or by E-mail:
info@sbclasslaw.com
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and
Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima
Antonio and Lyndsey Resnick, Editors.
Copyright 2002. All rights reserved. ISSN 1525-2272.
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