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C L A S S A C T I O N R E P O R T E R
Wednesday, March 12, 2003, Vol. 5, No. 50
Headlines
APPLIED DIGITAL: Reaches Agreement To Settle Securities Suit in S.D. FL
ATI TECHNOLOGIES: Fairness Hearing For Suit Settlement Set April 2003
BRISTOL-MYERS SQUIBB: Maine Reaches Settlement In Buspar Antitrust Suit
BROCADE COMMUNICATIONS: NY Court Dismisses Consolidated Securities Suit
CALIFORNIA: Two Buses Crash on Interstate 15, Forty Passengers Injured
CALIFORNIA: Disability Rights Advocates Sue Over Rehab Center Closure
CANADA: Toll-Highway Firm To Reimburse Late Fees To Customers in Suit
CENDANT CORPORATION: Court Dismisses Claims V. Firm in Homestore Suit
CONSTELLATION ENERGY: Hearing on CA Power Contracts Suit Set March 2003
CONSTELLATION ENERGY: Faces Lawsuits Alleging Mercury Poisoning in MD
CONSTELLATION ENERGY: Briefing on Suit Certification To End July 2003
CRACKER BARREL: Court Denies Certification of Race Discrimination Suit
IDAHO POWER: Named as Defendant in Energy Producers Lawsuit in W.D. WA
IDAHO POWER: Named As Defendant in Suit V. Energy Producers in Oregon
JEFFERSON-PILOT CORPORATION: Reaches Agreement To Settle Consumer Suit
MORTGAGE SERVICERS: Face Tougher Rules in New Consumer Protection Bill
NATIONAL BANK: Plaintiffs File Amended Suit For RICO, ERISA Violations
PHILIP MORRIS: Closing Arguments To Commence In "Light" Cigarette Trial
TOBACCO LITIGATION: Parties In Lights Lawsuit Go Public, Await Verdict
VIVENDI UNIVERSAL: Asks NY Court To Dismiss Securities Fraud Lawsuit
*Wall Street Firms Finally Getting The Message About Sexual Harassment
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
* Online Teleconferences
New Securities Fraud Cases
ADC TELECOMMUNICATIONS: Cauley Geller Commences Securities Suit in MN
ADC TELECOMMUNICATIONS: Schiffrin & Barroway Lodges MN Securities Suit
ADC TELECOMMUNICATIONS: Glancy & Binkow Lodges Securities Lawsuit in MN
ALLOY INC.: Schiffrin & Barroway Lodges Securities Lawsuit in S.D. NY
ASTROPOWER INC.: Schiffrin & Barroway Files Securities Suit in DE Court
LIPPER CONVERTIBLES: Cohn Lifland, Kucker & Bruh File Securities Suit
PARAMETRIC TECHNOLOGIES: Marc Henzel Commences Securities Lawsuit in MA
PARAMETRIC TECHNOLOGIES: Stull Stull Commences Securities Lawsuit in MA
PARAMETRIC TECHNOLOGIES: Chitwood & Harley Lodges Securities Suit in MA
*********
APPLIED DIGITAL: Reaches Agreement To Settle Securities Suit in S.D. FL
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Applied Digital Solutions, Inc. (Nasdaq: ADSX) has reached a memorandum
of understanding to settle the consolidated securities class action
filed in the United States District Court for the Southern District of
Florida on behalf of all persons who purchased the Company's common
stock from February 11, 2000 through May 10, 2002, inclusive.
According to an earlier Class Action Reporter story, the primary
allegations in the recently filed amended consolidated suit include
claims that:
(1) the Company recklessly engaged in a strategy of acquiring
subsidiaries without regard to any strategic worth;
(2) the Company lacked the necessary accounting controls over its
subsidiaries;
(3) the Company manipulated its stock price through the issuance
of press releases; and
(4) the Company's statements about its Intellesale, Inc. and
VeriChip Corporation subsidiaries were false and misleading.
The settlement involved no admission of liability and will be entirely
covered by proceeds from insurance. The settlement is subject to
various conditions, including court approvals and approval of a special
litigation committee of the Company's board of directors.
ATI TECHNOLOGIES: Fairness Hearing For Suit Settlement Set April 2003
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The United States District Court for the Eastern District of
Pennsylvania has set for April 25,2003 the fairness hearing for the
US$8 million settlement proposed by ATI Technologies, Inc. to settle
the class action filed against it, and certain of its officers and
directors.
The shareholders alleged in their lawsuits that the company made
material misleading statements and engaged in omissions of relevant
information before a May 2000, earnings warning. Chief Financial
Officer Terry Nickerson said insurance will cover about US$3 million of
the settlement of lawsuits filed in May 2001, according to an earlier
Class Action Reporter story.
In July 2002, the Court dismissed all claims in the litigation except
as to the alleged misrepresentations and omissions concerning ATI's
RAGE 4 1/4RAGE 128 and RAGE 5 1/4RAGE 128 PRO products and inventory.
A stipulation and agreement of settlement has been executed and filed
with the court.
The terms of the stipulation and agreement of settlement, which are
subject to final court approval and notice to class members, include no
admission of liability or wrongdoing by the company or other
defendants.
BRISTOL-MYERS SQUIBB: Maine Reaches Settlement In Buspar Antitrust Suit
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Bristol-Myers Squibb reached a preliminary settlement with Maine, in
the federal class action it filed 14 months ago against the Company and
other drug manufacturers over illegally blocking competition for
generic drugs, resulting in inflated prices for BuSpar, a popular anti-
anxiety drug, the Portland Press Herald reports. Maine is joining 34
states, Puerto Rico and the District of Columbia in seeking court
approval of the proposed settlement with Bristol-Myers, the maker of
BuSpar.
The lawsuit alleged that Bristol-Myers Squibb misrepresented its patent
rights over BuSpar, causing the federal Food and Drug Administration
(FDA) to extend the company's monopoly by blocking generic competitors.
The attorney general said the defendants, including Bristol-Myers,
Watson Pharma Inc. and Danbury Pharmacal Inc., have agreed to pay the
plaintiffs more than $90 million to settle the case. If the court
approves the proposed BuSpar settlement, a nationwide consumer fund
will be established and adminstered by the states. The fund will be
designed to compensate consumers who can prove that they bought BuSpar
between January 1, 1998, and January 31, 2003.
Consumers who were taking BuSpar during that period may be eligible to
receive as much as $300, Mr. Rowe said. Maine state agencies that
bought BuSpar at inflated prices will be eligible to receive up to
$500,000. The Maine Medicaid program spent $500,000 on BuSpar during
the period at issue in the case.
Under the settlement's terms, Bristol-Myers is prohibited from
attempting to re-list the BuSpar patent with the FDA. The company has
had a monopoly on the product since it was first approved by the FDA in
1986.
BROCADE COMMUNICATIONS: NY Court Dismisses Consolidated Securities Suit
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The United States District Court for the Southern District of New York
dismissed the consolidated securities class actions filed against
Brocade Communications, Inc., certain of its officers and directors,
and certain of the underwriters for the Company's initial public
offering.
The suit alleged that various underwriters engaged in improper and
undisclosed activities related to the allocation of shares in the
Company's initial public offering of securities. The complaint seeks
unspecified damages on behalf of a purported class of purchasers of
common stock from May 24, 1999 to December 6, 2000.
In March 2002, the court entered an order dismissing without prejudice
all claims against the Company and its officers and directors named in
the consolidated proceeding. In October 2002, the individual
defendants were dismissed without prejudice from the action. In
February 2003, the court entered an order dismissing all of the
plaintiffs' claims against the Company. No appeal has been filed.
CALIFORNIA: Two Buses Crash on Interstate 15, Forty Passengers Injured
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Two tour buses crashed into each other on California's southbound
Interstate 15, critically injuring eight passengers and injuring dozens
of others, the Associated Press reports.
The crash happened Sunday, March 10, at about 3:20 pm, between a Gold &
Silver Charter Bus, Inc. bus and a Hebaragi & Lemi Bus, Inc. vehicle.
The accident caused both southbound lanes to be closed for five hours
and resulted in a commuter nightmare for Californians heading home from
Las Vegas.
California Highway Patrol Officer Adam Cortinas estimated the buses
were traveling about 55 mph through an area undergoing road
construction when the Gold & Silver Charter bus hit the rear of the
Hebaragi & Lemi bus. The speed limit in the area is 70 mph but is
slower in construction zones, the Associated Press reports. The
Hebaragi & Lemi bus had rear-ended another car, which prompted the
collision between the two buses, said Sgt. Stan Clair of the CHP.
"Everybody was crying and screaming, and blood was gushing from those
who were injured," passenger Ruth Frost told Fox affiliate KTTV-TV in
Los Angeles.
Hebaragi & Lemi general manager Eric Song told AP investigators told
him that one of the company's 56 passengers experienced chest pain and
was taken to a hospital. The remaining 55 passengers were placed on
another bus and were en route back to Los Angeles, he said. Gold &
Silver could not be reached for comment.
CALIFORNIA: Disability Rights Advocates Sue Over Rehab Center Closure
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A coalition of disability rights advocates recently filed a class
action in the US District Court in California to stop Los Angeles
County from closing the well-known, much-respected Rancho Los Amigos
National Rehabilitation Center, the Los Angeles Times reports. Also
joining in the suit are Protection and Advocacy, Inc., the Western
Center on Law and Poverty, the National Senior Citizens Law Center and
the law firm of Kirkland & Ellis.
The lawsuit says the closing would violate the federal Americans With
Disabilities Act and other legislation prohibiting discrimination on
the basis of disabilities, because many patients would have nowhere
else to turn for treatment. The lawyers in the lawsuit say they are
suing on behalf of about 5,000 Rancho patients who are recipients of
Medi-Cal, the government insurance program for the poor and disabled.
County supervisors say they have no alternative because of a looming
budget deficit in the Health Services Department. County Health
Director Thomas Garthwaite, however, has not been a proponent of
Rancho, even though it performs miracles, he says, because it is far
too expensive to run.
Nearly a third of its patients are indigent, and the county estimates
it would have to pay $15 million to $30 million a year just to cover
uninsured patients. The county projects it will save about $194
million over the next three years by closing the center. That is the
arithmetic of the center, which does not seem likely to go away even if
it survives the present crisis by some kind of patch-up "fix."
A certain amount of imaginative thinking has been going on, and the
California Community Foundation hopes to save the hospital by turning
it into a non-profit organization. A foundation study determined that
Rancho could be a fund-raising powerhouse like other rehabilitation
hospitals of its stature. Foundation President Jack Shakely is
scheduled to report to the Board of Supervisors by April on funding
commitments he has procured.
"The health-care system is in crisis," said Eve Hill, director of the
Western Law Center for Disability Rights. "But whatever the cost-
benefit analysis of a life, the answer cannot be to deny health care
completely to a community, based on disability, race, gender, poverty
or any other characteristic."
Concluding with a comment suggesting cuts must be spread throughout a
community, Ms. Hill said if the county cuts services it must do so more
equitably.
CANADA: Toll-Highway Firm To Reimburse Late Fees To Customers in Suit
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Negotiators in a class action over a toll-highway company charging
customers unreasonable late fees, agreed to a proposed settlement by
whose terms 407 ETR, the company, would reimburse millions of dollars
to customers who paid those unreasonable late fees, the Toronto News
reports.
Richard Prendiville, who filed the class action, sent 407 ETR a check
for his outstanding balance. While it was in the mail on its way to
407 ETR, a 12-cent charge accrued on Mr. Prendiville's account. When
the company received the check, and credited it to his account, there
still remained a balance of 12 cents due on his account. He was fined
a $30 late fee, at an interest rate far above the Criminal Code's
maximum allowable interest of 60 percent annually.
Under the terms of the settlement, 407 ETR will offer a $6 credit to
840,000 customers who were charged the $30 late fee. Any customers,
such as Mr. Prendiville, who was charged the late fee as a result of an
administrative error, will be credited $30.
Martin Doane, a lawyer representing the plaintiffs, including Mr.
Prendiville, said, "There is nothing wrong with charging a late fee,
but the fee has to be directly related to the company's costs of
collecting late payments."
Following upon the filing of the class action and the settlement
arising out of the negotiations, the company undertook some changes:
(1) beginning April 7, 2003, the company would charge $12.50 when
a customer has not paid the bill in three months. The company
would charge another $12.50 when it must resort to other means
to collect payment; and
(2) responding to the complaints of customers that they were
unable to inform the company about payments, the company hired
more staff, so that the average waiting time to speak with a
representative would be less than 17 seconds;
"They have totally revamped the consumer process, largely due to the
class action lawsuit," said Mr. Doane.
CENDANT CORPORATION: Court Dismisses Claims V. Firm in Homestore Suit
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The US District Court in Los Angeles, California dismissed with
prejudice all claims made against Cendant Corporation and Cendant Real
Estate Division Chairman Richard A. Smith in the class action filed
against Homestore, Inc., its former executives and other firms by the
California State Teachers Retirement System (CALSTeRS).
The lawsuit charges that Homestore, former CEO Stuart Wolff, former COO
Peter Tafeen and a number of others used bogus sales transactions to
falsify the company's earnings reports so the results would meet Wall
Street analysts' revenue projections. The executives are accused of
using the phony financial statements to pump up the company's stock
price and pocket allegedly ill-gotten gains through the exercise of
stock options and sale of company stock, Inman News Features reports.
"As we have asserted from the outset, this lawsuit had no merit. We are
pleased that the court agreed," Cendant General Counsel James E.
Buckman told Inman.
The $92 billion pension fund joined the $1 billion lawsuit to recover
$9 million in investment losses and to make a point about investor
control of corporate governance, according to a spokesperson.
Mike Long, who was named CEO of Homestore after Wolff's resignation in
January 2002, has said the company would like to settle the lawsuit.
That will be difficult due to the large number of plaintiffs whose
interests may differ from Homestore's own aims.
CONSTELLATION ENERGY: Hearing on CA Power Contracts Suit Set March 2003
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Hearing for the class action filed against Constellation Power
Development, Inc. and other energy companies has been set for March
2003 in the Superior Court, County of San Francisco.
The suit seeks damages of $43 billion, recession and reformation of
approximately 38 long-term power purchase contracts, and an injunction
against improper spending by the state of California. The Company is
named as a defendant but does not have a power purchase agreement with
the State of California. However, the Company's High Desert Power
Project does have a power purchase agreement with the California
Department of Water Resources.
In 2002, the court issued an order to the plaintiff asking that he show
cause why he had not yet served the defendants. In April 2002, a
second show cause order was issued. After several postponements, a
hearing is now scheduled on that order.
CONSTELLATION ENERGY: Faces Lawsuits Alleging Mercury Poisoning in MD
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Constellation Energy, Inc. faces several claims alleging mercury
poisoning from several sources, filed in the Circuit Court for
Baltimore City, Maryland. The suits also name as defendants Baltimore
Gas & Energy (BGE) and several other defendants.
The suits allege mercury poisoning from several sources, including coal
plants formerly owned by BGE. The plants are now owned by a subsidiary
of Constellation Energy. In addition to BGE and Constellation Energy,
approximately 11 other defendants, consisting of pharmaceutical
companies, manufacturers of vaccines and manufacturers of Thimerosal
have been sued. Approximately 50 cases have been filed to date, with
each case seeking $90 million in damages from the group of defendants.
The plaintiffs have filed motions to remand the cases back to the
Baltimore City Circuit Court. At this time no discovery has occurred.
The Company believes that it has meritorious defenses and intends to
defend the action vigorously. However, the Company cannot predict the
timing, or outcome, of these cases, or their possible effect on its
financial results.
CONSTELLATION ENERGY: Briefing on Suit Certification To End July 2003
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Constellation Energy Group, Inc. faces a racial discrimination class
action pending in the United States District Court for the District of
Maryland. The suit also names as defendants Baltimore Gas and Electric
Company, and Company subsidiaries Constellation Nuclear, and Calvert
Cliffs Nuclear Power Plant.
The action seeks class certification for approximately 150 past and
present employees and alleges racial discrimination at Calvert Cliffs
Nuclear Power Plant. The amount of damages is unspecified, however the
plaintiffs seek back and front pay, along with compensatory and
punitive damages.
The court scheduled a briefing process for the motion to certify the
case as a class action. The briefing process is scheduled to end in
July 2003.
The Company does not believe class certification is appropriate and
further believes that it has meritorious defenses to the underlying
claims. However, it cannot predict the timing, or outcome, of the
action or its possible effect on its financial results.
CRACKER BARREL: Court Denies Certification of Race Discrimination Suit
----------------------------------------------------------------------
The United States District Court in the Northern District of Georgia
denied certification of a class action in a four-year-old lawsuit
against Cracker Barrel Old Country Store, Inc., which alleged
discrimination against African-American employees at the company's
restaurants.
In a 175-page ruling issued on March 7, 2003, Federal Judge Harold
Murphy said the employees had failed to make the case that their
lawsuit should be certified as a national class action. Judge Murphy
said "The Court . concludes that the statistical evidence simply does
not demonstrate that the Defendant engaged in a consistent pattern of
adverse treatment of African-Americans."
It was the second time in six months that Judge Murphy rejected a class
action against the Company brought by the same attorneys. In a 64-page
decision on October 1, Judge Murphy ruled a group of African-American
customers of Cracker Barrel and their attorneys had failed to prove
that a common set of circumstances existed to justify a national class
action.
"We are very pleased with the court's ruling, which supports what we
have said from the beginning," Cracker Barrel President and Chief
Operating Officer Donald M. Turner said in a statement. "In both
lawsuits, there was simply no evidence Cracker Barrel engaged in a
pattern of discrimination against African-Americans - either our
employees or our customers."
Mr. Turner noted the ruling in the employee case was especially
gratifying because "we take a great deal of pride in the fact that we
treat all of our employees with dignity and respect." Cracker Barrel
has a proven record of promoting African-Americans and placing them in
positions of major responsibility, Turner said.
About 23 percent of Cracker Barrel's more than 50,000 employees are
minorities, he said. Some 13 percent are African-American. According
to Mr. Turner, more than 7 percent of the company's store managers are
African-American, and the company's three top executives who handle
human resources, employee training, and purchasing also are African-
Americans. "This simply isn't the profile of a business that engages
in a pattern or practice of discrimination," he said.
The case started in October, 1999, when plaintiffs' attorneys
representing a group of 13 African-American employees or former
employees held a news conference in Atlanta, GA, to announce they were
pursuing a class action against Cracker Barrel for alleged incidents of
racial discrimination.
For more details, contact Julie Davis of CBRL Group Inc., Lebanon by
Phone: 615/443-9266 or visit the firm's Website:
http://www.crackerbarrel.com
IDAHO POWER: Named as Defendant in Energy Producers Lawsuit in W.D. WA
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Idacorp, Inc. was named as a defendant in a class action filed in the
United States District Court for the Western District of Washington in
Seattle, against various energy firms, on behalf of all persons and
businesses residing in Washington who were purchasers of electrical
and/or natural gas energy from any period beginning in January 2000 to
the present.
The complaint alleges claims under the Washington Consumer Protection
Act, RCW 19.86, as well as common law claims of fraud by concealment,
negligence and for an accounting. The complaint asserts that the
defendants, including the Company, engaged in, among other things,
unfair and deceptive acts, in violation of the Federal Power Act, by
(1) withholding the supply of energy;
(2) misrepresenting the amount of its energy supplies;
(3) exercising improper control over the energy markets; and
(4) manipulating the price of energy markets resulting in energy
rates being unjust, unreasonable and unlawful
The Company's response to the complaint is due within 30 days from the
date of service. The Company intends to vigorously defend against this
lawsuit and believes this matter will not have a material adverse
effect on its consolidated financial position, results of operations or
cash flows.
IDAHO POWER: Named As Defendant in Suit V. Energy Producers in Oregon
---------------------------------------------------------------------
Idaho Power Corporation, along with other power firms, face a class
action pending in the United States District Court for the District of
Oregon, on behalf of all persons and businesses residing in Oregon who
were purchasers of electrical and/or natural gas energy from any period
beginning in January 2000 to the present.
The suit, initially filed in the Circuit Court of the State of Oregon
for the County of Multnomah, alleges claims under the Oregon Unfair
Trade Practices Act, ORS 646.605 et seq. in addition to claims of fraud
by concealment, negligence and for an accounting. The complaint
asserts that the defendants, including the Company, engaged in, among
other things, unfair and deceptive acts, in violation of the Federal
Power Act, by:
(1) withholding the supply of energy;
(2) misrepresenting the amount of its energy supplies;
(3) exercising improper control over the energy markets; and
(4) manipulating the price of energy markets resulting in energy
rates being charged to Oregon energy consumers that were
unjust, unreasonable and unlawful
The plaintiff seeks certification of a class action, equitable and
injunctive relief, an accounting, attorneys' fees and costs. The
Company intends to seek an extension of time to respond. The Company
further intends to vigorously defend against this lawsuit and believes
this matter will not have a material adverse effect on its consolidated
financial position, results of operations or cash flows.
JEFFERSON-PILOT CORPORATION: Reaches Agreement To Settle Consumer Suit
----------------------------------------------------------------------
Jefferson-Pilot Corporation reached an agreement with plaintiffs in a
class action filed on behalf of 165,000 holders and beneficiaries of
certain Excess Interest Whole Life and Participating Whole Life
policies, most of which were sold in the 1980s and early 1990s,
regarding the manner in which their policies were sold, serviced and
administered.
The settlement is subject to final court approval later this year. In
the settlement, the Company denies any allegations of wrongdoing. The
Company believes that its sales, servicing and administrative practices
are - and always have been - designed to match customers' needs with
appropriate products and to fully inform customers about the operation
and features of those products.
Among other things, the settlement will provide class policyholders
free term life insurance and the opportunity to purchase additional
life insurance and annuity policies enhanced with special premium and
interest bonuses paid by the company. It will benefit Jefferson Pilot
by resolving and eliminating the need for corporate resources to be
spent on a lawsuit that has been pending for seven years. Management
believes its current accruals for litigation expense are adequate.
Policyholders entitled to receive benefits will receive written
notification and detailed disclosure regarding policyholder benefits
provided under the settlement.
For more details, contact Paul E. Mason, Vice President of Corporate
Affairs of Jefferson Pilot Financial by Phone: 1-336-691-3313 by E-
mail: http://www.jpfinancial.com
MORTGAGE SERVICERS: Face Tougher Rules in New Consumer Protection Bill
----------------------------------------------------------------------
A new consumer protection bill on Capitol Hill focuses attention on an
issue that millions of homeowners deal with routinely - their rocky
relationships with the firms that "service" their mortgages, the
Orlando Sentinel reports. The bill, sponsored by Rep. Robert Andrews
(D-NJ) would expand the homeowners' abilities to initiate class actions
against their servicers for botched payments from their escrow
accounts, among other foul-ups.
Servicing is the administering of the monthly mechanics of the
consumer's home loan -- sending out statements, keeping track of the
consumer's payments, assessing late fees, making disbursements from the
consumer's escrow account, canceling private mortgage insurance,
responding to complaints and requests for information. The servicer
may be a different company from the one that originally made the loan
to the consumer. The servicer essentially handles the workaday details
of the loan and receives a fee from the owner of the loan.
The issue plaguing the consumer? What are her/his legal rights in
relation to the servicer? What are the consumer's rights when the
servicer botches the escrow account, failing to make an on-time payment
for the property insurance, property taxes or other fees?
A new legislative proposal in the House of Representatives would add
accuracy and timeliness in escrow account disbursements to the list of
legal rights that homeowners already have in connection with their home
mortgages. The bill, known as the Homeowners Escrow Payments Assurance
Act (H.R. 650) would expose servicers to treble damage awards for any
failure to make timely payments from escrow accounts for property
insurance, taxes or other escrow items.
At a time when the legislative hall across the nation are replete with
bills to curtail the average citizen's rights in many areas of her/his
life, including the right to sue, Rep. Andrews' bill is reassuring.
NATIONAL BANK: Plaintiffs File Amended Suit For RICO, ERISA Violations
----------------------------------------------------------------------
Plaintiffs in the class action against the National Bank of Commerce
filed an amended suit on behalf of participants of Corky's Bar-B-Que
retirement plan, through its co-trustees, its plan participants and on
behalf of all similarly situated retirement plans and their plan
participants.
The suit also names as defendants First Mercantile Turst, First
Mercantile Capital Management and First Mercantile directors and
officers Kenneth Lenoir and Scot Lenoir. Corky's has since withdrawn
as a named plaintiff and an amended complaint has been filed adding two
other named plaintiffs and the bank's parent National Commerce
Financial Corporation as defendants.
The suit alleges that the Lenoirs, First Mercantile and First
Mercantile Capital violated the Employee Retirement Income Security Act
(ERISA), the Investment Advisers Act, and conducted an enterprise under
the Racketeer Influenced and Corrupt Organizations Act (RICO), by
disclosing one fee for retirement plan administration and investment
services but actually collecting a different, higher fee for those
services.
The suit also alleges that the Company and NCF violated ERISA by
transferring plans from the Company to First Mercantile for
administration and investment services, conspired with the other
defendants and facilitated the RICO enterprise, and exercised dominion
and control over First Mercantile justifying imputation of First
Mercantile's conduct to the Company and NCF. The plaintiffs seek
certification of a class allegedly consisting of 2,300 plans with over
100,000 plan participants and beneficiaries, rescission of all
contracts between First Mercantile and putative class members,
restoration to putative class members of all funds placed with First
Mercantile, disgorgement of all fees paid, prejudgment and post-
judgment interest, attorneys' fees and costs.
The plaintiffs also seek a declaration that a mid-October, 2002,
agreement between First Mercantile and a significant number of
retirement plans regarding the fee issue is null and void. The Company
obtained the mid-October 2002 agreement from affected customers after
it determined that certain client information and agreements were out
of date and that some lacked documentation with reference to trustee's
fees being collected for services rendered to the customers and plans.
The amended complaint alleges an unspecified amount of compensatory
damages and also seeks any damages to be tripled under RICO.
The defendants have vigorously defended this suit to date and will
continue doing so. The amount of damages awarded, if any, which could
result if the plaintiffs were to prevail in their suit cannot be
determined as no hearings have occurred with respect to the
appropriateness of class certification.
PHILIP MORRIS: Closing Arguments To Commence In "Light" Cigarette Trial
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Testimony has ended in the Madison County, Illinois, trial of a class
action against Philip Morris, accused of defrauding smokers of "light"
cigarettes. Closing arguments were given Monday, and both sides will
have three hours to address Circuit Court Judge Nicholas Byron
who has said he hopes to render his ruling the same day, Associated
Press Newswires reports.
Attorney for the plaintiffs Stephen Tillery said he plans to ask Judge
Byron to award $7.1 billion in compensatory damages to the class
members. Mr. Tillery said he plans to ask the court to assess punitive
damages as well. He also said he has not decided on the amount he will
ask for in punitive damages, except that the amount will be at least
double the amount sought in compensatory damages.
The lawsuit claims Philip Morris defrauded about 1.1 million Illinois
smokers by leading them to believe Marlboro Lights and Cambridge Lights
are safer than regular cigarettes. The plaintiffs have argued that
light cigarettes actually are more harmful; partly, because of the way
people smoke them to get more nicotine per puff, and partly because the
air vents on light cigarettes affect their toxicity. Expert witnesses
were called in the course of the trial to testify to plaintiffs'
claims.
Philip Morris attorneys argued that the company has never claimed light
cigarettes are safer than regular cigarettes. Philip Morris claims the
government labeled light cigarettes safer, based on government testing.
The company further contended that the smokers of light cigarettes
should not be awarded any money since they lost none, because light
cigarettes cost the same as regular cigarettes.
The lawsuit does not seek compensation for smoking-related illness.
TOBACCO LITIGATION: Parties In Lights Lawsuit Go Public, Await Verdict
----------------------------------------------------------------------
The two sides in the class action relating to Philip Morris's light
cigarettes, conducted a kind of public relations blitz on Friday while
waiting for the verdict expected from Madison County Circuit Judge
Nicholas Byron on Monday, the Belleville News-Democrat reports.
The plaintiffs' attorneys held a teleconference Friday morning for
reporters to speak with three scientists who testified during the
trial, in which the plaintiffs were trying to prove that Philip Morris
misled consumers about the safety of the light cigarettes manufactured
by the company. Philip Morris countered with its own news
teleconference Friday afternoon, with company Vice President William
Ohlemeyer noting that Madison County had more class actions filed last
year than any other county in the country.
"I think the facts are the facts about Madison County," Mr. Ohlemeyer
said.
The plaintiffs' allege that Philip Morris led smokers of Marlboro
Lights and Cambridge Lights to believe those cigarettes are safer than
regular cigarettes. The plaintiffs' attorneys plan to ask for a
judgment of $7 billion in compensatory damages and at least 14 billion
in punitive damages.
During the plaintiffs' teleconference, Dr. William Farone, a chemist
who had directed research at Philip Morris from 1976 to 1984, described
Philip Morris's business practices as "diabolical." Dr. Farone said he
thought he was being employed by Philip Morris to make cigarettes
safer, but discovered Philip Morris was not interested in producing a
safer cigarette that delivers less tar because it would be easy to quit
smoking that type of cigarette. He said he still felt responsible for
smoking-related deaths. He said a fellow researcher was so distraught
about working for Philip Morris that she committed suicide by drinking
liquid nicotine. "That woman is on my mind constantly," Dr. Farone
said.
Dr. Farone said that Philip Morris designed its light brands with tiny
ventilation holes that allow those cigarettes to perform well on
government test machines. Twenty-three smokers from across Illinois
testified at the trial that they were influenced by the words "lowered
tar and nicotine" on packages of light cigarettes. "Every one of them
thought lower tar and nicotine would be safer," said Belleville
attorney Stephen Tillery, who represents the plaintiff class.
However, the light cigarettes are actually more harmful to smokers
because people puff on them harder or more often and also because the
addition of air affects the chemistry, according to the plaintiff
attorneys.
Dr. Peter Shields, an oncology professor at Georgetown, who also
testified for the plaintiffs, said studies have shown an increase in
cancers on the outside part of the lungs in places where light
cigarettes are sold. He said the increase is 10-fold in women and 17-
fold in men. He called the introduction of light cigarettes "an
interesting experiment on people."
The lawsuit does not seek compensation for illness. Rather, it claims
that about 1.1 million Illinois smokers should be compensated for
economic losses because they did not get the product they thought they
were buying.
However, Mr. Ohlemeyer said smokers of light cigarettes have suffered
no economic loss because light cigarettes cost the same as regular
cigarettes. He added that packages of light cigarettes have always
contained the same health warning that is on regular Marlboro
cigarettes. "The fact of the matter is, Philip Morris has always done
what the government and Federal Trade Commission has told them to do,"
said Mr. Ohlemeyer.
The Philip Morris case is the first class action that has gone to trial
in Madison County. The plaintiffs and defendants, instead, resolve the
issues through a settlement.
VIVENDI UNIVERSAL: Asks NY Court To Dismiss Securities Fraud Lawsuit
--------------------------------------------------------------------
Beleaguered French media giant Vivendi Universal asked the United
States District Court for the Southern District of New York to dismiss
a securities class action filed by American shareholders against the
Company, its former chairman Jean-Marie Messier and its former chief
financial officer Guillaume Hannezo.
The suit, filed on behalf of shareholders who acquired Company
securities between February 11, 2002 and July 3, 2002, inclusive,
charges that defendants violated the federal securities laws by issuing
a series of materially false and misleading statements to the market
throughout the class period which statements had the effect of
artificially inflating the market price of the Company's securities, an
earlier Class Action Reporter story states.
According to the Financial Times, the Company says the court does not
have the authority to rule on the case because the main decisions
affecting the group were taken in France, most members of the board
were Europeans and the shares listed on the New York stock market
accounted for only 8.9 per cent of the total.
*Wall Street Firms Finally Getting The Message About Sexual Harassment
----------------------------------------------------------------------
Some big investment banks are taking seriously complaints of sexual
harassment. One of them, J.P. Morgan Chase, took swift, severe, no-
nonsense action last week against two high-ranking and highly paid
employees, the Houston Chronicle reports. In a society in which the
women at the brokerage firms and on the trading floors, where they have
been subjected to insulting, demeaning treatment, no longer just "take
it," but go out and sue, and win, the brokerage firms know the
publicity they will receive, during the course of the litigation and in
the media, will tarnish their reputations irrevocably.
J.P. Morgan Chase recently dismissed two investment bankers, one of
whom was a managing director and is a son of the former king of Sikkim.
A group of investment bankers from J.P. Morgan Chase attended a party
in Manhattan given by one of their colleagues, and later a small group
of the bank's employees went to a bar, where the two bankers, who
subsequently were dismissed, observed a woman, a less-senior investment
banker, who worked with them at J.P. Morgan.
The two bankers approached her and made unwanted, inappropriate
advances toward her, according to later accounts by witnesses. They
pressed against the unidentified woman, sandwiching her between them
with their bodies. When the woman protested, another high-ranking
banker intervened, according to witnesses. He later reported the
incident to the firm's personnel department, which investigated.
The woman and other J.P. Morgan employees who were at the bar,
supported that account of events. When confronted by officials of the
firm about their behavior, the two investment bankers did not dispute
that their conduct had been inappropriate, current and former employees
of the firm have said.
The two bankers who were dismissed are Palden Gyuimed Namgyal and
Norman Gretzinger. Mr. Namgyal was a managing director, and Mr.
Gretzinger, a vice-president. They were consumer-products bankers who
handled the sales of well-known companies, like Domino's Pizza,
StarKist tuna, Playtex Products. People who have worked with the two
men said their job performances were not factors in their dismissal.
The two men, who live in Bronxville, New York, declined to comment on
their dismissals.
On Wall Street, any indication that an employee was fired for cause is
considered a big obstacle to finding work again in the industry. "It
will be very difficult, particularly in this economy, to find another
job," said Janet Hanson, a money manager who founded 85 Broads, a
network of women who have worked at Goldman Sachs.
Employees in many industries are routinely fired for harassment and
discrimination. That has not been the case on Wall Street where
brokerage firms and trading floors have largely retained reputations as
places where such behavior goes unpunished. However, the times may be
changing, as firms have more recently been sued by women who have
complained of unfair, demeaning treatment, and won their cases, and a
great deal of publicity.
Two of the biggest brokerage firms, Merrill Lynch and the Smith Barney
unit of Citigroup, settled class actions filed by female brokers in the
1990s. The Equal Employment Opportunity Commission is suing another
big securities firm, Morgan Stanley, on behalf of women who worked in
its investment bank. A trial in that case is expected to begin later
this year.
"This goes right under the category of ethics. We are in a whole new
climate," said Janet Hanson, who, as indicated below, founded 85
Broads, a network of women who have worked at Goldman Sachs. "This may
be the beginning of companies behaving in a very, very different manner
because the liability is too great. The Street is getting that
message."
Mr. Namgyal, 39, is the son of Palden Thondup Namgtyal, who was the
last king of Sikkim, a tiny protectorate in the Himalayas that is now
part of India. Mr. Namgyal's mother is Hope Cooke, an American. Mr.
Namgyal and his family were royalty for part of Mr. Namgyal's
childhood. When he was 9, his mother moved with him and his sister to
New York. India took away the powers of the king and later annexed
Sikkim.
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
-------------------------------------------------
March 13-14, 2003
MOLD INSURANCE LITIGATION CONFERENCES - FEATURING A KEYNOTE
ADDRESS BY MELINDA BALLARD
Bridgeport Continuing Education
Los Angeles
Contact: 818-505-1490
March 17-18, 2003
FEN-PHEN LITIGATION CONFERENCE
Mealey Publications
The Fairmont Hotel, Dallas
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
March 20-21, 2003
FUNDAMENTALS OF INSURANCE COVERAGE LAW
Mealey Publications
The Westin Hotel, Philadelphia
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
March 23-24, 2003
CALIFORNIA ENVIRONMENTAL UPDATE
Bridgeport Continuing Education
Long Beach
Contact: 818-505-1490
March 27-28, 2003
ASBESTOS LITIGATION
Hotel Nikko, San Francisco
Contact: 1-888-224-2480; http://www.americanconference.com
April 2-5, 2003
INSURANCE INSOLVENCY & REINSURANCE ROUNDTABLE
Mealey Publications
The Fairmont Scottsdale Princess, AZ
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
April 3, 2003
ASBESTOS LITIGATION CONFERENCE: THE NEW BATTLEGROUND
Glasser Legalworks
New York Helmsley Hotel, New York City
Contact: 800-308-1700; 973-890-0058
April 4-5, 2003
TOXIC TORT IN CALIFORNIA
Bridgeport Continuing Education
San Francisco
Contact: 818-505-1490
April 4-5, 2003
TOXIC TORT AND ENVIRONMENTAL IN CALIFORNIA
Bridgeport Continuing Education
Contact: 818-505-1490
April 8, 2003
SILICA LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel Boston
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
April 10-11, 2003
HANDLING CONSTRUCTION RISKS 2003:
ALLOCATE NOW OR LITIGATE LATER
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
April 15, 2003
WALL STREET FORUM: ASBESTOS
Mealey Publications
The Ritz-Carlton Hotel Battery Park
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
April 28-29, 2003
EPHEDRA LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Huntington Hotel & Spa, Pasadena, CA
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
April 28-29, 2003
BAD FAITH AND PUNITIVE DAMAGES
Hotel Nikko, San Francisco
Contact: 1-888-224-2480; http://www.americanconference.com
May 1, 2003
TOXIC TORT IN CALIFORNIA
Bridgeport Continuing Education
Los Angeles
Contact: 818-505-1490
May 1-2, 2003
ASBESTOS LITIGATION 2003
Andrews Publication
New Orleans Grande Hotel, New Orleans
Contact: seminar@andrewspub.com
May 5-6, 2003
THE CURRENT STATE OF MEDICAL MALPRACTICE IN PA & NJ
Mealey Publications
The Ritz-Carlton Hotel, Philadelphia
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
May 7-8, 2003
MANAGING MOLD LIABILITIES
Bridgeport Continuing Education
San Francisco
Contact: 818-505-1490
May 14-15, 2003
CALIFORNIA ENVIRONMENTAL UPDATE
Bridgeport Continuing Education
San Jose
Contact: 818-505-1490
June 2-3, 2003
BAYCOL LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel Amelia Island, FL
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
June 2-3, 2003
ASBESTOS BANKRUPTCY CONFERENCE
Mealey Publications
The Westin Hotel Philadelphia
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
June 9, 2003
ANTI-SLAPP STATUTE CONFERENCE
Mealey Publications
The Ritz-Carlton Huntington Hotel & Spa
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
June 12-13, 2003
CCA-TREA-TED WOOD LITIGATION CONFERENCE
Mealey Publications
The Ritz-Carlton Hotel Amelia Island, FL
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
June 12-13, 2003
ENVIRONMENTAL INSURANCE: PAST, PRESENT AND FUTURE
American Law Institute
Boston
Contact: 215-243-1614; 800-CLE-NEWS x1614
June 16-17, 2003
LITIGATING EMPLOYMENT DISCRIMINATION & SEXUAL HARASSMENT CLAIMS
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
June 16-17, 2003
ASBESTOS LITIGATION 101 CONFERENCE
Mealey Publications
The Fairmont Hotel, Dallas
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
June 26-27, 2003
THE CLASS ACTION LITIGATION SUMMIT
Northstar Conferences
The Westin Embassy Row, Washington, DC
Contact: 866-265-1975; 212-596-6006; cservice@northstarconferences.com
August 1, 2003
CLASS ACTION LITIGATION 2003: PROSECUTION AND DEFENSE STRATEGIES
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
September 8-9, 2003
CORPORATE GOVERNANCE: LIABILITY OF CORPORATE
OFFICERS AND DIRECTORS
Mealey Publications
The Ritz-Carlton Hotel Amelia Island, FL
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
September 19-21, 2003
THE 20TH TOBACCO PRODUCTS LIABILITY PROJECT CONFERENCE
Northeastern University School of Law
Contact: scuri@tplp.org
November 13-14, 2003
ASBESTOS LITIGATION IN THE 21ST CENTURY
ALI-ABA
New Orleans
Contact: 215-243-1614; 800-CLE-NEWS x1614
TBA
Water Contamination Litigation Conference
Mealey Publications
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
TBA
Fair Labor Standards Conference
Mealey Publications
Contact: 1-800-MEALEYS; 610-768-7800; mealeyseminars@lexisnexis.com
* Online Teleconferences
------------------------
March 06-31, 2003
ETHICAL CONSIDERATIONS IN MASS TORT AND CLASS
ACTION LITIGATION IN TEXAS
CLE Online Seminar
Contact: 512-778-5665; info@cleonline.com
March 06-31, 2003
NBI PRESENTS "LITIGATING THE CLASS ACTION LAWSUIT IN FLORIDA
CLE Online Seminar
Contact: 512-778-5665; info@cleonline.com
April 2, 2003
TOXIC MOLD: WHAT REAL ESTATE PRACTITIONERS NEED TO KNOW NOW
Practising Law Institute
PLI New York Center
Contact: 800-260-4PLI; info@pli.edu.
April 15, 2003
LITIGATING POSTTRAUMATIC STRESS DISORDER
ABA-CLE
Contact: 800-285-2221; abacle@abanet.org
May 14, 2003
CLASS ACTION BASICS
ABA-CLE
Contact: 800-285-2221; abacle@abanet.org
EXPERT WITNESS ADMISSIBILITY IN MOLD CASES
LawCommerce.Com/Mealey's
Online Streaming Video
Contact: customerservice@lawcommerce.com
INTRODUCTION TO CLASS ACTIONS AND LARGE RECOVERIES
Big Class Action
Contact: seminars@bigclassaction.com
NON-TRADITIONAL DEFENDANTS IN ASBESTOR LITIGATION
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
PAXIL LITIGATION
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
RECENT DEVELOPMENTS INVOLVING BAYCOL
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
RECOVERIES
Big Class Action
Contact: seminars@bigclassaction.com
SELECTION OF MOLD LITIGATION EXPERTS: WHO YOU NEED ON YOUR TEAM
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
SHOULD I FILE A CLASS ACTION?
LawCommerce.Com / Law Education Institute
Contact: customerservice@lawcommerce.com
THE EFFECTS OF ASBESTOS ON THE PULMONARY SYSTEM
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
THE STATE OF ASBESTOS LITIGATION: JUDICIAL PANEL DISCUSSION
Online Streaming Video
LawCommerce.Com/Mealey's
Contact: customerservice@lawcommerce.com
TRYING AN ASBESTOS CASE
LawCommerce.Com
Contact: customerservice@lawcommerce.com
______________________________________________________________________
The Meetings, Conferences and Seminars column appears in the Class
Action Reporter each Wednesday. Submissions via e-mail to
carconf@beard.com are encouraged.
New Securities Fraud Cases
ADC TELECOMMUNICATIONS: Cauley Geller Commences Securities Suit in MN
---------------------------------------------------------------------
Cauley Geller Bowman Coates & Rudman, LLP initiated a securities class
action in the United States District Court for the District of
Minnesota on behalf of purchasers of ADC Telecommunications Inc.
(Nasdaq: ADCT) publicly traded securities during the period between
November 2, 2000, and March 28, 2001, inclusive.
The complaint charges that on November 2, 2000, ADC announced in a
press release that the Company would meet or exceed published fiscal
expectations, and that despite the expected overall decrease in telecom
spending, shifts in Internet carrier spending would continue to benefit
the Company especially in broadband access and optical components. The
Company echoed these bullish predictions throughout the class period.
ADC's true financial performance and business prospects were revealed
at the end of the class period in a March 28, 2001 press release. In
the press release, the defendants acknowledged that the Company was in
fact performing below the projections issued earlier in the class
period and as a result, the Company lowered its fiscal 2001 earnings
guidance.
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
ADC TELECOMMUNICATIONS: Schiffrin & Barroway Lodges MN Securities Suit
----------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the District of Minnesota on behalf of
all purchasers of the common stock of ADC Telecommunications Inc.,
(Nasdaq:ADCT), from November 2, 2000 through March 28, 2001, inclusive.
The complaint charges that on November 2, 2000, ADC announced in a
press release that the Company would meet or exceed published fiscal
expectations, and that despite the expected overall decrease in telecom
spending, shifts in Internet carrier spending would continue to benefit
the Company especially in broadband access and optical components. The
Company echoed these bullish predictions throughout the class period.
ADC's true financial performance and business prospects were revealed
at the end of the class period in a March 28, 2001 press release. In
the press release, the defendants acknowledged that the Company was in
fact performing below the projections issued earlier in the class
period and as a result, the Company lowered its fiscal 2001 earnings
guidance.
For more information, visit the firm's Website:
http://www.sbclasslaw.com/cgi/signup.cgi
ADC TELECOMMUNICATIONS: Glancy & Binkow Lodges Securities Lawsuit in MN
-----------------------------------------------------------------------
Glancy & Binkow LLP initiated a securities class action in the United
States District Court for the District of Minnesota on behalf of all
persons who purchased securities of ADC Telecommunications, Inc.
(Nasdaq: ADCT) between November 28, 2000 and March 28, 2001, inclusive.
The suit charges ADC and certain of its 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 ADC's financial prospects
caused ADC's stock price to become artificially inflated, inflicting
damages on investors. ADC is a supplier of broadband-network
equipment, software and services that enable communications service
providers to deliver high-speed Internet, data, and voice services
across the so-called "last mile" connecting providers' offices to end-
users homes and businesses.
The suit alleges that during the class period, defendants repeatedly
represented that ADC would continue to achieve significant growth and
would not be affected by widely known reductions in capital spending on
the telecommunications infrastructure by communications service
providers.
Plaintiff claims that ADC's true financial performance and business
prospects were revealed on March 28, 2001, when defendants acknowledged
that the Company would lower its fiscal 2001 earnings guidance which
defendants had issued only four weeks earlier, cut as many as 4,000
jobs and close facilities in the face of canceled orders and declining
revenues caused by the reductions in spending on equipment by
telecommunications service providers.
For more details, contact Michael Goldberg by Mail: 1801 Avenue of the
Stars, Suite 311, Los Angeles, California 90067, by Phone: (310) 201-
9161 or (888) 773-9224 or by E-mail: info@glancylaw.com.
ALLOY INC.: Schiffrin & Barroway Lodges Securities Lawsuit in S.D. NY
---------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Southern District of New York on
behalf of all purchasers of the common stock of Alloy Inc.
(Nasdaq:ALOY), from August 1, 2002 through January 23, 2003, inclusive.
The complaint charges that the Company, Matthew C. Diamond (CEO), James
K. Johnson Jr. (President and COO) and Samuel A. Gradess (CFO) 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 August 1, 2002
and January 23, 2003.
Alloy is a teen-focused media company and direct marketer that targets
Generation Y consumers, i.e. the approximately 60 million people in the
United States between the ages of 10 and 24. The complaint alleges
that the Company claimed that its merchandising and advertising
segments complemented one another in a way that gave the Company an
edge over competitor teen retailers and media businesses and which
would enable it to succeed despite difficult market conditions in the
second half of 2002.
Unbeknownst to investors, the Company faced fierce competition for the
youth market and the weak economy forced the Company to cut its prices
and increase operating expenses, e.g. by offering free shipping and
deep discounts, thereby eroding Alloy's gross profit margin.
On January 23, 2003, the Company shocked the market by announcing that
EBTA for its fiscal fourth quarter ending January 31, 2003 would be $11
million to $12 million instead of the previously projected $15 million
to $16 million and that fiscal 2002 EBTA would be in the range of $30
to $31 million instead of the previously forecast $34 million to $38
million. On this news, the Company's share priced plummeted by 49%, or
$4.57, from the previous day's closing price of $9.10.
For more details, contact Marc A. Topaz or Stuart L. Berman by Mail:
Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone:
1-888-299-7706 (toll free) or 1-610-667-7706 or by E-mail:
info@sbclasslaw.com
ASTROPOWER INC.: Schiffrin & Barroway Files Securities Suit in DE Court
-----------------------------------------------------------------------
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the District of Delaware on behalf of
all purchasers of the common stock of AstroPower Inc. (Nasdaq:APWR)
from February 22, 2002 through August 1, 2002, inclusive.
The complaint charges that the Company, Allen M. Barnett (CEO and
President) and Thomas J. Stiner (CFO) 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 February 22, 2002 and August 1, 2002.
The complaint alleges that AstroPower develops, manufactures, markets
and sells a range of solar electric power generation products. The
complaint further alleges that the company claimed that it was well
positioned to take advantage of the increasing demand for solar power
products.
The complaint further alleges that, throughout the class period, the
Company reported strong revenue and earnings growth and that, as a
result of these statements and reports, which were disseminated to the
investing public, and which formed the basis for research analysts'
reports on the Company, the Company's per share stock price reached a
class period high of $27 on March 28, 2002.
In truth and in fact, throughout the class period, the Company was
unable to effectively manage its expanding and increasingly complex
operations; it was, inter alia, unable to allocate resources among its
various manufacturing facilities to effectively meet regional demand or
to tailor its production capacity to actual demand. Consequently,
during the time that the Company was stating that it was well
positioned to take advantage of the increased demand for solar
products, it was in fact losing ground to more effective competitors.
Additionally, to maintain the illusion that its operations were
successful, the Company throughout the class period reported
artificially inflated revenue and earnings by, inter alia, recording
revenue in advance of shipment, contrary to its stated principles of
revenue recognition.
The truth was revealed on August 1, 2002 when, after the close of
trading, the Company announced its results for the second quarter ended
June 30, 2002. Analysts were stunned. Reported revenue and net income
had not grown but, on the contrary, second quarter income was $365,000,
or $0.02 per diluted share compared to $1.7 million, or $0.07 per
diluted share in the year-earlier second quarter and revenue of $20.4
million represented only a one percent increase over reported revenue
for the prior quarter and was approximately $4.9 million below
analysts' consensus estimate.
On this news, AstroPower's share price plunged 48%, or $7.12, to $7.77,
its lowest price in almost three years.
For more details, contact Marc A. Topaz or Stuart L. Berman by Mail:
Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone:
1-888-299-7706 (toll free) or 1-610-667-7706 by E-mail:
info@sbclasslaw.com or visit the firm's Website:
http://www.sbclasslaw.com
LIPPER CONVERTIBLES: Cohn Lifland, Kucker & Bruh File Securities Suit
---------------------------------------------------------------------
Cohn Lifland Pearlman Herrmann & Knopf LLP and Kucker & Bruh, LLP
initiated a securities class action on behalf of purchasers of limited
partnership interests in Lipper Convertibles, LP. The action has been
instituted on behalf of two putative classes, one consisting of all
limited partners who invested in the partnership between January 13,
1998 and March 26, 2002 (10b5 Class) and the second consisting of those
limited partners who invested in the partnership between February 20,
1999 and March 26, 2002 pursuant to a prospectus (12(2) Class).
The suit names as defendants:
(1) Lipper Holdings, LLC, the general partner of the Partnership;
(2) Kenneth Lipper, Chairman, Chief Executive Officer and
President of Lipper Holdings, who was responsible for
supervising the day-to-day operations of the Partnership;
(3) Abraham Biderman, the Executive Vice President of Lipper
Holdings and the Co-Manager of the Partnership, who was
responsible for managing the day-to-day operations of the
Partnership; and
(4) Edward Strafaci, the Co-Manager of the Partnership, who was
responsible for managing the day-to-day operations of the
Partnership
The complaint alleges that the defendants artificially inflated the
value of the Partnership's assets, profits and performance by utilizing
inaccurate, unjustifiable and baseless pricing policies and valuation
practices, which violated, among other things, representations made in
the offering documents as well as generally accepted accounting
principles. The complaint alleges, and a report prepared by special
counsel retained by the Partnership confirms, that the valuations were
not supported by any rational basis.
The complaint alleges that the defendants violated Sections 10(b) and
20(a) of the Securities and Exchange Act of 1934 and SEC Rule 10b5
promulgated thereunder by misrepresenting the financial condition,
profitability, performance and value of the Partnership's assets and
the risk of investing in the Partnership, among other things, and
Section 12(2) of the Securities Act of 1933 by directly and indirectly
offering for sale and selling securities in the form of the limited
partnership interests by means of prospectus, which included untrue
material statements and omissions as to the profits, performance and
value of the Partnership assets, and the risk of investing in the
Partnership, among other things.
It alleges that the plaintiff and all of the members of the classes
were induced to purchase the limited partnership interests by the
misrepresentations and/or were ignorant of the omissions and that as a
result, they made the purchases at inflated prices and suffered losses
which they otherwise would not have suffered.
For more details, contact Peter S. Pearlman, of Cohn Lifland Pearlman
Herrmann & Knopf LLP by Mail: Park 80 Plaza West One, Saddle Brook, New
Jersey 07663 or by E-mail: psp@njlawfirm.com or contact Jeffrey W.
Herrmann by Mail: Park 80 Plaza West One, Saddle Brook, New Jersey
07663 or by E-mail: jwh@njlawfirm.com.
PARAMETRIC TECHNOLOGIES: Marc Henzel Commences Securities Lawsuit in MA
-----------------------------------------------------------------------
The Law Offices of Marc S. Henzel initiated a securities class action
in the United States District Court for the District of Massachusetts,
on behalf of all purchasers of the common stock of Parametric
Technology Corporation (NASDAQ: PMTC) from October 19, 1999, through
December 31, 2002, inclusive.
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:
(1) that since fiscal 1999, in violation of Generally Accepted
Accounting Principles (GAAP) and its own revenue recognition
policies, the Company had cumulatively overstated its
previously recognized maintenance revenue from its service
contracts by approximately $33.4 million;
(2) that the Company lacked adequate internal controls and was
therefore unable to ascertain the true financial condition of
the Company; and
(3) that as a result, the value of the Company's income and
financial results were materially overstated at all relevant
times.
On December 31, 2002, after the close of regular trading, Parametric
shocked the market by announcing that it had identified "$20 to $25
million of previously recognized maintenance revenue which should have
been deferred and recognized in fiscal 2003 and later periods."
Accordingly, the Company announced, it "expects to report a
corresponding reduction in maintenance revenue in prior periods,
primarily in fiscal year 2002."
The next day of trading, on January 2, 2003, shares of Parametric
closed at $2.19 per share, after hitting an intraday low of $1.95, as
compared with a class period high of $32.88 per share, reached on
December 16, 1999. Subsequent disclosures revealed that the Company
would be restating its financial results from fiscal year 1999 through
fiscal year 2002 because a cumulative total of $33.4 million in
maintenance revenue had improperly been reported as revenue during that
time.
For more details, contact Marc S. Henzel by Mail: The Law Offices of
Marc S. Henzel, 273 Montgomery Ave, Suite 202 Bala Cynwyd, PA 19004-
2808 by Phone: (888) 643-6735 or (610) 660-8000, by Fax:
(610) 660-8080, by E-mail: Mhenzel182@aol.com or visit the firm's
Website: http://members.aol.com/mhenzel182.
PARAMETRIC TECHNOLOGIES: Stull Stull Commences Securities Lawsuit in MA
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Stull Stull & Brody LLP initiated a securities class action in the
United States District Court for the District of Massachusetts, on
behalf of purchasers of Parametric Technology Corporation (NASDAQ:
PMTC) securities between October 19, 1999 and December 31, 2002,
inclusive against the Company and:
(1) Steven C. Walske (CEO until March 1, 2000 and Chairman until
June 2000),
(2) Noel G. Posternak (Chairman since June 2000),
(3) C. Richard Harrison (CEO since March 1, 2000, President since
1994) and
(4) Edwin J. Gillis (Executive Vice President, CFO and Treasurer
from January 15, 2002 to November 12, 2002)
The complaint charges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of materially false and misleading
statements to the market during the class period.
The complaint alleges that, throughout the class period, Parametric
issued numerous statements and filed quarterly and annual reports with
the SEC which described the Company's supposedly increasing revenues
and financial performance. These statements were materially false and
misleading when made, the complaint alleges, because the Company had
overstated its revenue since fiscal 1999, in violation of generally
accepted accounting principles and because the Company lacked adequate
internal controls and was unable to accurately determine and report the
Company's financial condition.
On December 31, 2002, after the close of regular trading, Parametric
issued a press release announcing a "$20 to $25 million of previously
recognized maintenance revenue which should have been deferred and
recognized in fiscal 2003 and later periods." Accordingly, the Company
announced, it "expects to report a corresponding reduction in
maintenance revenue in prior periods, primarily in fiscal year 2002."
In reaction, on January 2, 2003, shares of Parametric closed at $2.19
per share, after hitting an intraday low of $1.95, as compared with a
class period high of $32.88 per share, reached on December 16, 1999.
For more details, contact Tzivia Brody by Mail: 6 East 45th Street, New
York NY 10017 by Phone: 1-800-337-4983, by Fax: 212-490-2022 or by E-
mail: SSBNY@aol.com or visit the firm's Website: http://www.ssbny.com.
PARAMETRIC TECHNOLOGIES: Chitwood & Harley Lodges Securities Suit in MA
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Chitwood & Harley initiated a securities class action in the United
States District Court for the District of Massachusetts, on behalf of
purchasers of securities of Parametric Technology Corporation,
(Nasdaq:PMTC) between October 19, 1999 and December 31, 2002. The suit
is brought against the Company and certain of its officers and
directors.
The complaint 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 during the class period thereby artificially inflating the price
of Parametric securities.
The complaint alleges that, throughout the class period, Defendants'
statements and quarterly and annual reports filed with the SEC which
described the Company's increasing revenues and financial performance
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 Jennifer Morris by Mail: 1230 Peachtree
Street, Suite 2300, Atlanta Georgia 30309 by Phone: 1-888-873-3999 by
E-mail: jlm@classlaw.com or visit the firm's Website:
http://www.classlaw.com
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S U B S C R I P T I O N I N F O R M A T I O N
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Copyright 2002. All rights reserved. ISSN 1525-2272.
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