/raid1/www/Hosts/bankrupt/CAR_Public/030807.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, August 7, 2003, Vol. 5, No. 154
Headlines
CATHOLIC CHURCH: Australian Parents To Launch Sex Abuse Lawsuit
CERTEGY CHECK: CA Court Grants Final Approval to Suit Settlement
CREDIT CARDS: First Phase of Visa, Mastercard Settlement Ends
EQUINIX INC.: Working on Settlement of Securities Lawsuit in NY
FLORIDA: NTSB Blames Poor Track Maintenance For Train Derailment
FRANCHISE DIRECT: Court Enters Final Judgment in SEC Complaint
FREEMARKETS INC.: Reaches Agreement to Settle NY Securities Suit
FREEMARKETS INC.: PA Court To Decide on Stock Suit Certification
GENERAL ELECTRIC: To Settle NY Suit Over Defective Dishwashers
GEORGIA PACIFIC: GA Court Says Suit Settlement Not Enforceable
HOUSEHOLD INTERNATIONAL: Atty. General Inks Consumer Settlement
HOWARD BEEF: Recalls Ground Beef For E. Coli Contamination
INTELLI-CHECK INC.: NJ Court Dismisses Securities Fraud Lawsuit
LASIK VISION: Faces Consumer Lawsuit Over Fraudulent Ads, Rates
LOWE'S HOME: Rochester Employees Commence Overtime Wage Lawsuit
NANOPHASE TECHNOLOGIES: IL Court Approves $2.5M Securities Pact
NDCHEALTH CORPORATION: Pharmacies Allege IL Trade Act Violations
NEW JERSEY: Fails Federal Audit of State Child Welfare System
NEW YORK: Smaller Babies For Mothers Present in 9/11 WTC Attack
ONEOK INC.: KS Residents Sue Over Yaggy Gas Facility Explosions
SRI SURGICAL: SEC Files Enforcement Action For Securities Fraud
SYPRIS TECHNOLOGIES: LA Court Grants Summary Judgment in Lawsuit
UTSTARCOM INC.: Working To Settle Securities Fraud Suit in NY
ZAPATA CORPORATION: NV State Court Dismisses Stockholders Suit
*New Legal Theories Revive Obesity Case Against Fast Food Chains
New Securities Fraud Cases
AVATAR HOLDINGS: Abbey Gardy Lodges Securities Suit in DE Court
IMPATH INC.: Schiffrin & Barroway Lodges Securities Suit in NY
SOLUTIA INC.: Lasky & Rifkind Lodges Securities Suit in N.D. CA
STELLENT INC.: Brian Felgoise Lodges Securities Suit in MN Court
STELLENT INC.: Charles Piven Lodges Securities Suit in MN Court
STELLENT INC.: Lasky & Rifkind Files Securities Suit in MN Court
*********
CATHOLIC CHURCH: Australian Parents To Launch Sex Abuse Lawsuit
---------------------------------------------------------------
The Catholic Church in South Australia faces a possible
compensation claim to be filed by parents of intellectually
disabled children who were sexually abused by former school bus
driver Brian Charles Perkins, Catholic News reports.
Mr. Perkins, 66, pleaded guilty to charges that he sexually
abused five children, including two male students at St. Ann's
School in Marion, Adelaide. The offences allegedly took place
on the school bus, in the woodwork room where Mr. Perkins
volunteered, at his home and at a Prospect address. Mr. Perkins
was extradited to South Australia, after a personal plea by
Catholic Archbishop Philip Wilson.
Parents are set to file a legal claim. Archbishop Phillip
Wilson welcomed Perkins's guilty plea. "We're very pleased that
Brian Perkins has accepted responsibility for the pain he has
caused and I hope that the full process of the application of
justice will bring some sense of relief to victims and their
families," he told the Advertiser.
The Church also faces charges that it mishandled sexual abuse
allegations against Mr. Perkins in the late 1980s and early
1990s. Adelaide lawyer Brian Hayes, QC, has been tasked to
prepare a report from statements taken by a team of lawyers
during a 12-month investigation.
CERTEGY CHECK: CA Court Grants Final Approval to Suit Settlement
----------------------------------------------------------------
The United States District Court for the Eastern District of
California granted final approval to the settlement of the class
action filed against Certegy Check Services, Inc., fully
releasing the Company from all claims.
This lawsuit was based on a claim that, during the period August
1992 through December 31, 1996, the Company improperly assessed
a service charge on unpaid checks, which allegedly violated
provisions of the Federal Fair Debt Collection Practices Act and
California's Unfair Business Practices Act. The action sought,
among other remedies, a refund of all service charges collected
from California consumers during this period, prejudgment
interest, statutory damages under the Fair Debt Collection
Practices Act, and attorneys' fees, an earlier Class Action
Reporter story states.
These amounts in the aggregate could have exceeded $18 million
if the plaintiffs had prevailed in the case. In November 2002,
the Company entered into a memorandum of understanding with the
plaintiffs providing for a settlement whereby the Company will
pay $3.975 million, net of amounts covered under a Letter of
Agreement with the Company's insurance carriers, to the
plaintiffs in exchange for a full and final release of all
claims asserted.
CREDIT CARDS: First Phase of Visa, Mastercard Settlement Ends
-------------------------------------------------------------
The first stage of implementing an historic and landmark
settlement, the largest ever in an antitrust case, has been
completed. 8,148,276 notices to the merchants and other
entities who are class members in the lawsuit against Visa USA
Inc. and MasterCard International, Inc. have been mailed, and
notice by publication of summary notices in national
publications and trade press have been completed.
The second stage of implementation began on Friday, August 1,
2003, as Visa and MasterCard reduced the interchange fees
charged to merchants for their point of sale debit card
transactions (primarily off-line signature debit card
transactions) by approximately one-third.
This price reduction is expected to provide up to $1 billion in
cost savings to US merchants this year alone, which is in
addition to the $3.05 billion damages award to be paid by Visa
and MasterCard, the largest amount ever paid in the settlement
of an antitrust case.
The third stage of the settlement will begin on January 1, 2004,
when merchants will be free, for the first time in history, to
accept Visa and/or MasterCard credit card transactions but
refuse to accept off-line signature debit transactions or vice
versa.
More than six years ago, in October of 1996, the merchants filed
suit against MasterCard and Visa because they were attempting to
monopolize the debit card market just as they have monopolized
the credit card market. The merchants also challenged Visa and
MasterCard's enforcement of their "Honor All Cards" tying rule,
which illegally forced merchants who accept their credit cards
also to accept their slow, fraud-prone, excessively priced and
deceptively designed debit cards. The case was certified as a
class action in February of 2000, and the trial was set to
commence on April 28, 2003, following the defendants'
unsuccessful appeals of the class certification decision and
supplementation of summary judgment motions.
After the jury was empanelled, the parties agreed to the
settlements. Final settlement agreements were signed on June 4,
2003 and the federal judge overseeing the case, Hon. John
Gleeson, granted preliminary approval to the settlements and the
notice plan on June 13, 2003. Any objections to the terms of
the settlements and plan of allocation are due to be filed by
September 5, 2003, and a fairness hearing will take place on
September 25, 2003, in US District Court for the Eastern
District of New York before Judge John Gleeson.
Despite the fact that final court approval will not occur until
after the September 25, 2003 fairness hearing, certain events
arising from the settlements are starting to occur. The
settlements required Visa and MasterCard to significantly lower
the interchange rates which apply to off-line signature debit
card transactions on August 1, 2003. These lowered rates will
be in effect until the end of this year, saving merchants as
much as $1 billion for the remainder of this year. These rate
reductions are intended to benefit merchants.
According to Lloyd Constantine, a principle in the New York firm
Constantine & Partners, the lead counsel for the merchants, "It
is important for each merchant to ask the firm that processes
its Visa and MasterCard debit transactions about these
reductions in the interchange rates, which are part of the
discount rate that each merchant pays for these debit
transactions."
The settlements also provide that on January 1, 2004 all
merchants will, for the first time, be free to accept Visa and
MasterCard credit card transactions but refuse to accept off-
line signature debit transactions or vice versa. The debit and
credit products will be "untied." Each merchant has an
individual decision to make about whether or not to continue
accepting the debit and credit products when they are untied
next January.
Under the settlements, the merchants are receiving notice of
their right to discontinue acceptance of the Visa and/or
MasterCard debit products on at least a monthly basis from the
financial institutions through which they accept and settle
Visa/MasterCard transactions. A merchant may continue to accept
the PIN debit products (including Visa's Interlink and
MasterCard's Maestro) if it decides to stop accepting the other,
signature authorized debit products. Any merchant that chooses
to stop accepting the Visa and/or MasterCard debit products must
give 30 days notice of its intent to do so.
Under the settlements, Visa is set to pay $2.025 billion to
merchants over the next 10 years and MasterCard is set to pay
$1.025 billion over the same period. By December 22, 2003, Visa
and MasterCard must pay $350 million to the settlement fund and
then pay $300 million every year for the next nine years.
According to the American Bar Association, the $3.05 billion
total settlement is the largest ever in an antitrust case.
Mr. Constantine says that, "In the long run, this settlement
offers more choice and more competitive pricing for merchants
and consumers."
"This settlement will expand consumers' payment choices. For
more than a decade Visa, MasterCard and their member/owner banks
have suppressed the faster, safer and less expensive online PIN
debit transactions," he continued. "Once the terms of the
settlements have been fully approved and implemented, consumers
will be able to freely choose the way they pay without economic
coercion, which Visa and MasterCard have used against consumers
and merchants."
"While the terms of the settlements call for payments over ten
years, both Visa and MasterCard have agreed to cooperate in an
effort to secure financing to allow all payments to be made to
merchants over the next year. This process would save a
significant amount in administrative costs, upwards of $100
million, so we expect that the total of the payments that
merchants would receive during the next year would be worth more
than the total that they would have received in ten checks over
nine years," said Mr. Constantine.
The certified class consists of all persons and business
entities that have accepted Visa and/or MasterCard credit cards
and therefore have been required to accept Visa and/or
MasterCard offline signature debit transactions from October 25,
1992 to the present.
Members of the class were given Notice of Pendency and an
opportunity to opt-out of the case in September, October and
November of 2002. New Merchants - i.e., those who first began
accepting Visa and/or MasterCard credit and debit cards for
payment after June 21, 2002 -- have the right to exclude
themselves from the class by filing a request for exclusion by
September 5, 2003. Any class members have the right to object
to the settlements by September 5, 2003 and to appear at the
fairness hearing on September 25, 2003.
EQUINIX INC.: Working on Settlement of Securities Lawsuit in NY
---------------------------------------------------------------
Equinix, Inc. is negotiating a settlement for the consolidated
securities class action filed against it, certain of its
officers and directors, and several investment banks that were
underwriters of the Company's initial public offering in the
United States District Court for the Southern District of New
York.
The suit, filed purportedly on behalf of investors who purchased
the Company's stock between August 10, 2000 and December 6,
2000, alleges that the underwriter defendants agreed to allocate
stock in the Company's initial public offering to certain
investors in exchange for excessive and undisclosed commissions
and agreements by those investors to make additional purchases
in the aftermarket at pre-determined prices.
The plaintiffs allege that the prospectus for the Company's
initial public offering was false and misleading and in
violation of the securities laws because it did not disclose
these arrangements. It is possible that additional similar
complaints may also be filed.
In July 2003, A Special Litigation Committee of the Equinix
Board of Directors agreed to participate in a settlement with
the plaintiffs that are anticipated to include most of the
approximately 300 defendants in similar actions. This
settlement agreement is subject to court approval and sufficient
participation by all defendants in similar actions.
The proposed settlement includes, without limitation, a
guarantee of payments to the plaintiffs in the lawsuits,
assignment of certain claims against the underwriters in the
Company's IPO to the plaintiffs, and a dismissal of all claims
against Equinix and related individuals. Other than legal fees
incurred to date, the Company expects its insurance carriers
will pay all settlement expenses, if any.
FLORIDA: NTSB Blames Poor Track Maintenance For Train Derailment
----------------------------------------------------------------
The National Transportation Safety Board approved a report that
blamed poor track maintenance for the derailment of the Amtrak
Auto Train in Crescent City, Florida on April 18, 2002, the
Associated Press reports. Twenty-one of the train's 40 cars
left the track. Four people were killed and 36 were seriously
injured.
The train's engineer told investigators that he had seen a
misalignment of the track just ahead and was trying to apply the
brakes when the force of the derailment threw him against the
wall. A coal train of track owners CSX Transportation passed
over the track just before the Auto Train took the curve, and
that crew told NTSB investigators that they noticed no roughness
or irregularity.
The report further states that CSX did not ensure the track was
properly aligned and had adequate supports. "This is something
that should have been prevented through proper maintenance,"
NTSB Chairwoman Ellen Engleman told AP.
The NTSB recommended that CSX should develop a program to ensure
compliance with the company's maintenance standards. It also
asked Amtrak, the Federal Railroad Administration and the
Transportation Security Administration to ensure there are
accurate lists of all passengers and crew on long-distance
trains. Investigators say determining who was on board was made
more difficult because there was no such list.
"If you have emergency personnel looking for people who don't
exist, that's unacceptable," Ms. Engleman told AP.
FRANCHISE DIRECT: Court Enters Final Judgment in SEC Complaint
--------------------------------------------------------------
The US District Court for the Southern District of Florida
entered final judgments of permanent injunction and other relief
against Franchise Direct, Inc., a Florida corporation and Andrew
Doney one of its sales agents, respectively.
The final judgments, entered by the consents of Franchise Direct
and Mr. Doney and without admitting or denying the allegations
of the SEC's complaint, enjoin them from violations of Sections
5(a), 5(c) and 17(a) of the Securities Act of 1933, Sections
10(b) and 15(a)(1) of the Securities Exchange Act of 1934, and
Rule 10b-5 thereunder.
In addition to enjoining Franchise Direct and Mr. Doney, the
final judgments order disgorgement in the amounts of $769,886
and $186,169, respectively, but waive payment of disgorgement
and do not impose a civil penalty based on the Sworn Statements
of Financial Condition and other supporting documents submitted
by Franchise Direct and Mr. Doney.
The SEC commenced this action by filing its complaint on
December 10, 2002, against Franchise Direct, Mr. Doney and
others alleging that defendants violated the antifraud and
registration provisions of the federal securities laws in
connection with the offer and sale of securities in Nutrition
Superstores.Com, Inc. and Advanced Wound Care, Inc. between 1998
and 2001.
FREEMARKETS INC.: Reaches Agreement to Settle NY Securities Suit
----------------------------------------------------------------
Freemarkets, Inc. reached a memorandum of understanding to
settle the consolidated securities class action filed against it
in the United States District Court for the Southern District of
New York alleging violations of the securities laws in
connection with the Company's December 1999 initial public
offering. The suit also names as defendants certain of its
officers are named as defendants, together with the underwriters
that are the subject of the plaintiffs' allegations.
The suit has been consolidated for pretrial purposes with
approximately 1,000 other lawsuits filed against other issuers,
their officers, and underwriters of their initial public
offerings.
The consolidated complaint alleges claims against the Company
and seven of its officers and/or directors, as well as seven
investment banking firms who either served as underwriters or
are successors in interest to underwriters of the Company's IPO.
The suit alleges that the prospectus used in the Company's IPO
contained material misstatements or omissions regarding the
underwriters' allocation practices and compensation in
connection with the IPO, and also alleges that the underwriters
manipulated the aftermarket for the Company's stock. Damages in
an unspecified amount are sought, together with interest, costs
and attorney's fees.
The defendants filed a motion to dismiss the suit. By
stipulation and order dated October 9, 2002, the individual
defendants were dismissed without prejudice from the suit. On
February 19, 2003, the court denied the Company's motion to
dismiss.
On June 25, 2003, a Special Committee of the Board of Directors
of the Company approved a proposed settlement of the litigation
under terms set forth in a Memorandum of Understanding and
authorized the Company to enter into a definitive settlement
agreement to be prepared in accordance with the Memorandum of
Understanding. The anticipated settlement will be subject to
court approval following notice to class members and a fairness
hearing.
Based on the memorandum of understanding, the Company believes
that the anticipated settlement will have no material effect on
the Company.
FREEMARKETS INC.: PA Court To Decide on Stock Suit Certification
----------------------------------------------------------------
The United States District Court in Pittsburgh, Pennsylvania is
considering class certification for the consolidated securities
fraud suit filed against Freemarkets, Inc. and two of its
executive officers.
The suit stems from the Company's announcement on April 23, 2001
that, as a result of discussions with the SEC, the Company was
considering amending its 2000 financial statements for the
purpose of reclassifying fees earned by the Company under a
service contract with Visteon.
On October 30, 2001, the Company filed a motion seeking to
dismiss all of the cases in their entirety. On January 17,
2003, the court denied the motion to dismiss.
In addition, on September 24, 2001, an individual claiming to be
a FreeMarkets shareholder filed a shareholder's derivative
action, nominally on behalf of FreeMarkets, against all of the
Company's directors and certain of its executive officers.
FreeMarkets is also named as a nominal defendant.
The suit is based on the same facts alleged in the foregoing
securities fraud class actions and was stayed pending a ruling
on the Company's motion to dismiss the federal suit. The
Company believes that the plaintiffs' allegations are without
merit.
GENERAL ELECTRIC: To Settle NY Suit Over Defective Dishwashers
--------------------------------------------------------------
General Electric Co. will settle for $1.4 million a state
lawsuit charging it with deceptive practices relating to a
dishwasher that the Company recalled in 1999 because of a fire
hazard, the Associated Press reports.
The Company recalled the dishwashers in 1999, after 90 reports
of it causing fires nationwide. New York Atty. General Elliot
Spitzer then sued the Company, alleging it deceived thousands of
consumers into buying new dishwashers by concealing the
availability of a quick, inexpensive repair.
A New York trial court ruled that the Company misled residential
customers by telling them the fire hazard could not be
rectified. The Company allegedly urged residential customers to
scrap their machines and buy new ones, while telling commercial
customers how to fix them. An appeals court later upheld the
trial court's decision.
Under a court order, the Company will pay a $650,000 penalty and
refund $780,000 to almost 2,260 New York consumers, amounting to
$346 each for them, Christine Pritchard, a spokeswoman for
Attorney General Eliot Spitzer, told AP.
The agreement was patterned after a national agreement in a
California court that recovered $20 settlements for consumers in
the rest of the country, she said. That agreement, approved by
a court in September, is under appeal in part over the size of
the payments. The total settlement payment wasn't immediately
available.
GE spokeswoman Kim Freeman told AP the company disagreed with
the New York court's decision but wanted to resolve the case and
move on. "Throughout the dishwasher recall, GE intended to
provide clear and accurate information regarding the options
available to consumers under the recall program consistent with
the guidelines established by the CPSC," Ms. Freeman said.
GEORGIA PACIFIC: GA Court Says Suit Settlement Not Enforceable
--------------------------------------------------------------
The United States District Court for the Northern District of
Georgia ruled that an enforceable settlement was not reached in
the class action against Georgia Pacific Corporation, alleging
claims under the Employee Retirement Income Security Act of 1974
(ERISA). The suit also names as defendant the Georgia-Pacific
Corporation Salaried Employees Retirement Plan.
The suit seeks recovery of alleged underpayments of lump-sum
benefits to persons taking early retirement from the Company,
together with interest, attorney's fees, and costs. After the
court granted the defendants' motion for summary judgment in
March 1999, the United States Court of Appeals for the Eleventh
Circuit reversed the district court's ruling in August 2000 and
remanded the case for further proceedings, holding that the
terms of the Plan required a calculation of lump-sum benefits
that could result in additional payments to members of the
class.
In September 2000, the defendants filed a petition for rehearing
and rehearing en banc with the Eleventh Circuit, which was
denied. The defendants also filed a petition for certiorari to
the United States Supreme Court in January 2001, which was
denied.
In March 2002, the district court issued an order granting in
part and denying in part the summary judgment motions of both
the Plaintiff class and the Defendants. In addition, the order
remanded some issues to the Plan administrator for
interpretation and specified that the parties must file another
proposed order implementing these rulings within a certain time
period.
The Company has determined that, in all likelihood, damages will
be awarded to the plaintiff class, which will require the Plan
to make additional payments to members of the class and may in
turn affect our net periodic pension cost and obligation to fund
the Plan over time. In November 2002, the defendants reached a
settlement in principle with the plaintiff class subject to
definitive documents, which settlement would not result in a
material impact on our funding obligation or results of
operations.
However, early in the first quarter of 2003, the settlement
negotiations were terminated. Notwithstanding termination of
the negotiations, the Plaintiff class filed a motion seeking a
ruling that an enforceable agreement was reached. After a
hearing on the issues in June 2003, the District Court ruled
that the parties had not reached an enforceable settlement
agreement, and the court held a status conference regarding
further briefing on the underlying issues left unresolved by the
court's March 2002 order.
HOUSEHOLD INTERNATIONAL: Atty. General Inks Consumer Settlement
---------------------------------------------------------------
Thousands of Florida consumers who had home loans with Household
or Beneficial Finance will soon be able to claim settlement
payments, Florida Attorney General Charlie Crist announced.
Notices are being sent to approximately 41,000 Floridians who
borrowed from Household or Beneficial informing them of their
eligibility to share in the state's $23-million settlement with
Household International. Under the settlement distribution
plan, Floridians who secured loans originated with
Household/Beneficial between January 1, 1999, and September 30,
2002, will be sent forms to claim payments ranging from a
minimum of $100 to more than $2,000.
"This is a fitting conclusion to our extensive investigation
into allegations of unfair and deceptive lending practices,"
said Atty. General Crist. "Floridians did business in good
faith by risking their most valuable possession - their home -
only to discover they had paid too much. This is a strong
settlement and now these same consumers have a way to receive
reimbursements."
The consumer payment program stems from the landmark settlement,
with Florida acting as one of the lead states, between Household
International and the attorneys general and banking regulators
of all 50 states and the District of Columbia. Household
International, through its subsidiaries Household and Beneficial
Finance, is one of the nation's largest sub-prime mortgage
lenders.
The states alleged that Household International had overcharged
borrowers in assessed fees and interest, and had misled
borrowers about other loan terms such as prepayment penalties
and credit insurance.
Under the settlement, which was finalized in December, Household
International agreed to pay $484 million to the states to be
distributed to eligible Household International borrowers. The
monetary settlement was the largest ever obtained by state
attorneys general in a consumer protection case.
As part of the settlement, Household International also agreed
to implement a series of reforms within its lending operations.
Court injunctions in place in all 50 states restrict prepayment
penalties on current and future home loans, prohibit loan
"flipping" (a practice that can lead to a mortgage that exceeds
the value of a home), limit up-front points and origination
fees, and improve loan disclosures.
The Florida settlement distribution plan provides for payments
to all Household International borrowers who were subject to
specific unfair lending practices, including excessive loan
points, prepayment penalties, and credit insurance "packing" (a
practice where various forms of insurance are added to the loan
amount and financed over the life of the loan - sometimes
amounting to five years worth of insurance financed by 30 years
of payments). The size of each Florida borrower's reimbursement
depends on the presence of these various loan factors and the
amount of the consumer's loan.
All Household International customers who are eligible to
receive a settlement payment should receive a mail notice from
the settlement administrator within the next week. Consumers
who wish to participate in the settlement will have to complete
and return a simple claim and release form by October 14, 2003.
The actual settlement payments will be then be paid directly to
the consumers by check before the end of the year.
For more details, contact the national settlement administrator
by Phone: 1-888-780-2156 or visit the Website:
http://www.household-beneficial-settlement.com.
HOWARD BEEF: Recalls Ground Beef For E. Coli Contamination
----------------------------------------------------------
Minnesota meatpacker Howard Beef Processors is recalling 194,700
pounds of frozen ground beef products for possible contamination
with harmful E. coli bacteria that cause two people in Colorado
to get sick, the United States Department of Agriculture
announced, AP reports.
The meat bears the establishment code, EST. 8934, under the name
Ellison Farms to supermarkets and through door-to-door sales
nationwide, officials at the department's Food Safety and
Inspection Service told AP. The meat was processed sometime
between May 30 and June 11.
E. coli 0157:H7 can cause severe diarrhea and dehydration. It is
fatal in some cases. Children, the elderly and people with weak
immune systems are the most vulnerable to getting sick from the
bacteria.
For more information, contact Diane Hamersma, a Howard Beef
customer service representative by Phone: 1-800-535-4555.
INTELLI-CHECK INC.: NJ Court Dismisses Securities Fraud Lawsuit
---------------------------------------------------------------
The United States District Court for the District of New Jersey
dismissed a securities civil action filed by plaintiffs Daniel
Borislow, Keith Jones and D&K Charitable Foundation against
Intelli-Check, Inc. and four current and former officers and
directors of the company.
The plaintiffs, who were short-sellers of Intelli-Check stock,
brought suit in October 2001, alleging violations of federal
securities laws. Originally, the plaintiffs proposed a class
action suit, but they amended their lawsuit in November 2001
into an individual action on behalf of the three individual
plaintiffs.
On July 26, 2002, the company filed a motion to dismiss the
lawsuit, which was granted on July 30, 2003. The court's
decision allows the plaintiffs to move to file an amended
complaint within 30 days. The court stated that, "If plaintiffs
choose to timely move for leave to file (an) amended complaint,
the Court will then consider whether the amendments would be
futile."
LASIK VISION: Faces Consumer Lawsuit Over Fraudulent Ads, Rates
---------------------------------------------------------------
A report by Florida's ABC Action News triggered a class action
against the Lasik Vision Institute (LVI), charging the company
with deceptive advertising and malpractice. Resident Paula
Knapp decided to file a class action after she saw ABC's Mike
Mason reporting on the Company's eye surgery rates.
LVI reportedly released ads in a local paper, offering surgery
at an unbelievable rate of US$299 per eye. Last month, Mr.
Mason challenged LVI's President, Marco Musa, to reveal how many
customers really get his special rate, but Mr. Musa never made
good on his promise to do so.
Ms. Knapp told ABC that her surgery at LVI left her with a
terrible infection, and claims the company uses deceptive
advertising to attract customers. Mr. Mason's report also
revealed that most of the victims went to LVI because of the ad
in the paper, but they all paid a lot more.
Attorney Larry Beltz told ABC he has not found anyone who got
the advertised $299 rate, so basically it was a "bait and
switch." He said he has yet to find anyone who actually got the
deal in the paper, but says he's going to subpoena LVI's records
to find out if anyone actually got the $299 deal.
LOWE'S HOME: Rochester Employees Commence Overtime Wage Lawsuit
---------------------------------------------------------------
Lowe's Home Improvement faces a nationwide class action filed by
its Rochester employees, claiming they were not paid properly
for overtime hours, WOKR13 reports.
Local law firm Dolin, Thomas and Soloman filed the suit on
behalf of the Company's current and former employees and could
eventually ask for millions of dollars from the company.
Counselor at law Nelson Thomas said they will ask current and
former employees from around the country to participate.
NANOPHASE TECHNOLOGIES: IL Court Approves $2.5M Securities Pact
---------------------------------------------------------------
The United States District Court for the Northern District of
Illinois ordered preliminary approval of a $2,500,000 settlement
of the securities class action filed against Nanophase
Technologies Corporation and certain of its current and former
officers. The suit arose from plaintiffs' allegations
concerning the Company's public disclosures regarding its
dealings with Celox, a British customer.
Under the terms of the settlement signed by the parties and
preliminarily approved by the court, the settlement successfully
resolves all claims against all defendants, without any
admission of liability or other wrongdoing by any party.
Because Nanophase anticipates that the settlement will be funded
by the Company's directors and officers liability insurance, the
Company expects that the settlement will not have a material
adverse effect on Nanophase's financial position or its results
of operations. The preliminarily approved settlement is subject
to notice to class members and final judicial approval at a
subsequent hearing currently scheduled for November 12, 2003.
The settlement will successfully resolve the only remaining
litigation pending against the Company.
"We believe that settlement of this class action for an amount
within insurance policy limits promotes our shareholders' best
interests, even though the Company still regards the claims
asserted against defendants in the litigation as having been
without merit," said Joseph Cross, Nanophase's President and
CEO. "The settlement will avoid future distraction and enable
us to focus exclusively on the Company's business development
initiatives and planned progress toward enhancing product
revenue during the remainder of 2003 and through 2004.
Management recognizes that revenue growth and further extending
our technology lead in the field of nanocrystalline materials is
the optimum path toward maximizing shareholder value."
NDCHEALTH CORPORATION: Pharmacies Allege IL Trade Act Violations
----------------------------------------------------------------
NDCHealth Corporation faces a class action filed by several
independent pharmacies in the Twentieth Judicial Circuit Court,
St. Clair County, Illinois. The suit also names as defendants
sixty-two other computer systems vendors, specifically IMS
Health, Inc.
The suit alleges that IMS violated the Illinois Trade Secrets
Act and breached alleged contracts it had with the computer
systems vendors by reselling what the plaintiffs claim to be
proprietary drug information to a competing prescription drug
provider. The plaintiffs have also alleged that the computer
systems vendors, including the Company, violated the Illinois
Trade Secrets Act and breached alleged contracts with the
plaintiffs by providing what they claim to be proprietary
pharmacy data to IMS. The plaintiffs are claiming damages in
excess of $100 million, alleging that other independent
pharmacies have similar relationships with IMS and the computer
systems vendors.
The Company has denied all liability in the lawsuit, and has
objected to certification of the class. Its contracts with IMS
provide for indemnification, and it has asserted a claim for
indemnification against IMS. Based on the Company's preliminary
internal investigations, management does not currently
anticipate that this case will have a material adverse impact on
its financial position, liquidity or results of operations.
NEW JERSEY: Fails Federal Audit of State Child Welfare System
-------------------------------------------------------------
A federal audit conducted on New Jersey's child welfare system
revealed that the state's Division of Youth and Family Services
(DYFS) was performing badly in several critical areas, the Star-
Ledger reports. The areas include:
(1) failing to document it has made reasonable efforts to
keep a children out of foster care, or reunite foster
children with their families as soon as possible;
(2) placing children in foster homes without proof that
they had been licensed to certify their safety,
cleanliness and the character of the foster parents;
(3) keeping children that parents have voluntarily placed
in foster care longer than six months without a judge's
approval;
(4) seeking reimbursement for a foster child who does not
live in poverty;
The failure of the audit, conducted by the US Administration for
Children and Families, may cause the state to return as much as
$10 million in US aid, according to state and federal officials
familiar with the review. The state also failed its previous
review, in 2000, but only had to return $191,000.
"We are anticipating we are not going to pass the audit," DYFS
Chief of Staff Jean Marimon told the Star-Ledger in a recent
interview.
Susan Orr, associate commissioner of the U.S. Children's Bureau
within the Administration for Families, told the Star-Ledger.
"We give the states a chance to improve. Most states that do
not pass (the first time) pass the second time."
Deborah Bradley Kilstein, chief of staff for the state
Department Human Services, which includes DYFS, said a plan was
in place. "What was missing," she said "was continued
evaluations to insure the action steps were adequate and were
being maintained over time."
The state in June settled a federal class action brought by a
children's advocacy group that accused it of underfunding its
child care agency and trapping foster children in a system that
puts them at risk for abuse and neglect. Under the settlement,
a panel of national child welfare experts will oversee the
state's reforms.
NEW YORK: Smaller Babies For Mothers Present in 9/11 WTC Attack
---------------------------------------------------------------
A research report shows that air pollution from the World Trade
Center terrorist attacks may have resulted in smaller babies
among pregnant mothers who were in or near the collapsing
towers, the Associated Press reports.
The study, which came out in the Journal of the American Medical
Association, revealed that a condition called "intrauterine
growth restriction" or IUGR caused the size differences among
babies born to women exposed to dirt and soot in the attacks.
The report asserts that exposed pregnant women in the study
faced double the risk of delivering babies who were up to about
a half-pound smaller than babies born to non-exposed women. The
condition has been linked to air pollution.
Previous research also has found that babies affected by IUGR
may be at increased risk for heart disease, hypertension and
other health problems in adulthood, Dr. Philip Landrigan,
chairman of Mount Sinai School of Medicine's community and
preventive medicine department, and one of the researchers told
AP. While duration of the exposure was relatively short, "the
intensity of exposure to soot and dust was extraordinarily
high," he said.
The study involved 182 women, including 12 who were in the
towers on September 11, 2001. Their babies were compared with
infants born at Mount Sinai's hospital in Manhattan to women who
were pregnant during the attacks but weren't near the site.
The study is one of the several efforts to elaborate on the
health effects of the World Trade Center attack. Some reports
have found respiratory problems and post-traumatic stress
disorder in people who survived the attacks, AP states. Follow-
up studies are planned to see if the children face heightened
risks of health problems as they get older.
ONEOK INC.: KS Residents Sue Over Yaggy Gas Facility Explosions
---------------------------------------------------------------
OneOK, Inc. faces several class actions charging it with
violating several Kansas Department of Health and Environment
(KDHE) regulations, pertaining to its Yaggy gas storage
facility.
The facility's operating parameters were changed in January
2001, as mandated by the KDHE following natural gas explosions
and eruptions of natural gas geysers in or near Hutchison,
Kansas. In July 2002, the KDHE issued an administrative order
that assessed a $180,000 civil penalty against the Company,
based on alleged violations of several KDHE regulations. A
status conference was held on June 27, 2003, regarding progress
toward reaching an agreed upon consent order. The matter was
continued for 90 days during pending settlement negotiations.
Two class actions have been filed against the Company in
connection with the natural gas explosions and eruptions of
natural gas geysers that occurred at the Yaggy facility. These
lawsuits were filed on the grounds that the eruptions and
explosions related to natural gas that allegedly escaped from
the Yaggy storage facility.
On January 17, 2003, the two-year statute of limitations for
known personal injury claims and all non-class members expired.
In addition to the two class action matters, sixteen additional
lawsuits have been filed against the Company or its subsidiaries
seeking recovery for various claims, including property damage,
personal injury, loss of business and, in some instances,
punitive damages.
Although no assurances can be given, the Company believes that
the ultimate resolution of these matters will not have a
material adverse effect on its financial position or results of
operations.
SRI SURGICAL: SEC Files Enforcement Action For Securities Fraud
---------------------------------------------------------------
The United States Securities and Exchange Commission filed a
settled civil enforcement action in the United States District
Court in Tampa, Florida, against Alexander H. Edwards III,
former president of SRI/Surgical Express, Inc. (SRI), a Florida
hospital supply company that trades on the NASDAQ National
Market System under the symbol STRC.
The complaint alleged that Mr. Edwards caused SRI to enter into
two transactions that resulted in SRI overstating its Fiscal
2001 third quarter revenue by $832,000 even though neither of
the counter parties ever agreed to accept delivery of, or pay
for, additional products in SRI's third quarter.
Without admitting or denying the allegations in the complaint,
Mr. Edwards consented to the entry of a Final Judgment
permanently enjoining him from future violations of (or aiding
and abetting violations of) Sections 10(b), 13(b)(5), and
13(b)(2)(A) and (B) of the Securities Exchange Act of 1934 and
Exchange Act Rule 13b2-1. The Final Judgment also imposes a
$50,000 civil penalty.
The Commission also issued a settled cease-and-desist order
against SRI, its former COO Wayne R. Peterson, and its former
CFO James T. Boosales. The findings in the Order involved the
premature recognition of customer orders at the end of SRI's
2001 second and third quarters.
SRI, Mr. Peterson and Mr. Boosales neither admitted nor denied
the findings in the order. In the order, the Commission ordered
that:
(1) SRI cease and desist from committing or causing any
violations and any future violations of Sections 13(a),
and 13(b)(2)(A) and (B) of the Exchange Act, and Rules
13a-13 and 12b-20 thereunder;
(2) Mr. Peterson cease and desist from committing or
causing any violations and any future violations of
Sections 13(b)(5) of the Exchange Act and Rule 13b2-1
thereunder; and
(3) Mr. Boosales cease and desist from causing any
violations and any future violations of Section
13(b)(2)(B) of the Exchange Act.
SYPRIS TECHNOLOGIES: LA Court Grants Summary Judgment in Lawsuit
----------------------------------------------------------------
The Louisiana State District Court granted summary judgment in
Sypris Technologies' favor in class actions arising out of an
explosion of a coker plant owned by Exxon Mobil in Baton Rouge,
Louisiana.
In each of these lawsuits, it is alleged that a carbon steel
pipe elbow that Sypris Technologies manufactured was improperly
installed and the failure of which caused the explosion, an
earlier Class Action Reporter story states.
One of the actions was brought by Exxon Mobil in 1994 in state
district court in Louisiana and claims damages for destruction
of the plant, which Exxon Mobil estimates exceed one hundred
million dollars. Sypris Technologies is a co-defendant in this
action with the fabricator who built the pipeline into which the
elbow was incorporated and with the general contractor for the
plant.
The second action is a class action suit also filed in 1994 in
federal court in Louisiana on behalf of the residents living
around the plant and claims unspecified damages. Sypris
Technologies is a co-defendant in this action with Exxon Mobil,
the contractor and the fabricator.
In both actions, the Company maintains that the carbon steel
pipe elbow at issue was appropriately marked as carbon steel and
was improperly installed, without Sypris Technologies'
knowledge, by the fabricator and general contractor in
circumstances that required the use of a chromium steel elbow.
UTSTARCOM INC.: Working To Settle Securities Fraud Suit in NY
-------------------------------------------------------------
Utstarcom, Inc. is working on a settlement for a securities
class action pending against it and various underwriters for its
initial public offering in the United States District Court for
the Southern District of New York.
The suit alleges undisclosed improper underwriting practices
concerning the allocation of IPO shares, in violation of the
federal securities laws. Similar complaints have been filed
concerning the IPOs of more than 300 companies, and the
litigation has been coordinated in the court.
The Company denies the litigation's allegations. A proposal has
been made for the settlement and release of claims against the
issuer defendants, including the Company. The settlement is
subject to a number of conditions, including approval of the
proposed settling parties and the court.
ZAPATA CORPORATION: NV State Court Dismisses Stockholders Suit
--------------------------------------------------------------
The District Court of Clark County, Nevada agreed to dismiss the
class action filed against Zapata Corporation and Omega Protein
on behalf of all Omega Protein stockholders. No class period
has been identified. The suit also names as defendants Avram A.
Glazer, Chairman, President and CEO of Zapata and Darcie Glazer,
a director of Zapata, both of whom are also directors of Omega
Protein, and all other Omega Protein directors.
Plaintiff claims that the individual defendants and Zapata
breached their fiduciary duties to Omega Protein's stockholders
by not properly considering a so-called offer sent via e-mail to
Zapata by Hollingsworth, Rothwell & Roxford, a Florida
partnership.
News reports have identified a Hollingsworth, Rothwell & Roxford
partner, Theodore Roxford, as the former Lawrence Niren. Mr.
Roxford is the subject of a March 19, 2003 New York Times
article entitled "A Financial Big Shot With an Unusual Past" and
a June 19, 1995 Forbes article entitled "Stop Me Before I Steal
Again."
The complaint alleges that the "offer" was to acquire all of
Zapata's shares for $45.00 per share. It also alleges that the
offer was to acquire all of Omega's shares for $45.00 per share.
Plaintiff claims that Zapata and the individual defendants
breached their duties to Omega's stockholders by rejecting the
purported offer and that Omega Protein's stockholders have been
damaged by being prevented from receiving a fair price for their
stock. Plaintiff seeks an order directing the defendants to
carry out their fiduciary duties to Omega Protein's
stockholders, to refrain from breaching them, and awarding
plaintiff unspecified compensatory damages and his costs and
expenses incurred in the action.
The Company is not aware of any e-mail sent by Hollingsworth,
Rothwell & Roxford to Omega Protein or any offer for the
purchase of Omega Protein shares. The Company believes that the
claims are without merit, and moved to dismiss the action.
Omega Protein answered the complaint denying all allegations and
moved for summary judgment.
On April 17, 2003, plaintiff's counsel filed papers in
opposition to Zapata's motion to dismiss and Omega's motion for
summary judgment. Plaintiff's counsel also filed a cross motion
to amend the complaint and a proposed amended complaint. The
amended complaint seeks to add new plaintiffs, both of whom are
alleged to be Zapata and Omega stockholders and add Zapata's
other directors as additional defendants.
The proposed amended complaint makes additional factual
allegations and alleges breach of fiduciary duties owed by the
defendants to Omega and Zapata stockholders by not considering
the so-called offer referred to in the original complaint and a
second so-called offer sent via e-mail by Hollingsworth,
Rothwell & Roxford on March 9, 2003. The proposed amended
complaint alleges that initial offer was raised to $50.00 per
share contingent on Zapata and certain of the named defendants
meeting with Hollingsworth, Rothwell & Roxford.
The Company filed responsive papers in support of its
motion to dismiss and in opposition to the proposed amendment.
Motion argument was held on May 12, 2003 before the Honorable
Michelle Leavitt, District Court Judge for Clark County, Nevada.
Judge Leavitt granted summary judgment in favor of Omega Protein
and two of its directors, Gary L. Allee and Joseph L. Von
Rosenburg III, who had been named in the litigation. Judge
Leavitt also denied plaintiffs' cross-motion for leave to amend
the complaint as against Omega Protein, Mr. Allee and Mr.
Rosenburg. The court reserved decision on Zapata's motion to
dismiss and plaintiffs' cross-motion for leave to amend.
On July 30, 2003, the court also granted Zapata's motion to
dismiss and denied the balance of plaintiffs' cross-motion for
leave to amend. The time for appeal has not yet run. The
Company does not know whether the plaintiff will appeal, but
believes that the claims are without merit and will defend
against any appeal vigorously.
*New Legal Theories Revive Obesity Case Against Fast Food Chains
----------------------------------------------------------------
When a group of obese teenagers sued McDonald's, claiming the
fast food vendor made them fat, those watching the highly
publicized case howled in derisive amusement, Time Magazine
(September 2003, Bonus Section) reports.
McDonald's and its competitors are not laughing now. When
Federal Judge Robert Sweet dismissed the teenagers' case last
February, he reasoned that customers knew the dangers of eating
Big Macs and supersize fries. However, he said more in less
noted parts of his ruling to set the stage for future plaintiff
lawsuits.
Judge Sweet noted that "Chicken McNuggets, rather than being
merely chicken fried in a pan, are a McFrankenstein creation of
various elements not utilized by the home cook." These elements
include ground chicken skin, hydrogenated oils and
dimethylpolysiloxane, an antifoaming agent, and he questioned
whether customers understood the risks of eating McDonald's
chicken over regular chicken.
Attorneys for the teens perceived the difference Judge Sweet was
pointing out -- the unknown, non-understood risks customers took
when eating certain of McDonald's foods. The attorneys filed a
revised lawsuit, alleging that McDonald's engaged in deceptive
advertising, in part because it failed to disclose adequately
the additives and processing methods that make its food less
healthful.
The revised lawsuit is once more before Judge Sweet, in New York
City, for another round of legal fencing. McDonald's says its
McNuggets contain the same ingredients found in grocery-store
chicken and says the second lawsuit is as baseless as the first.
Whether or not the revised case ultimately succeeds, many more
are sure to follow. Unlike the original lawsuit, the new ones
may have staying power. Trial lawyers have been busy building
their store of knowledge by meeting with public-health experts,
legislators and nutritionists; they have refined their arsenal
against both the fast food and packaged-food firms.
Some of the arguments are speculative - such as the allegation
that certain companies manipulated addictive properties in their
junk food, as some tobacco companies did with their products.
For example, some lawyers claim that some fast-food restaurants
deliberately raise the temperature at which they cook their
fries to increase the amount of fat absorbed.
However, there are two additional legal theories that have
evolved that could pose a more serious threat to the fast food
firms. One is based on deceptive advertising; the other, on
aggressive marketing to children. Plaintiffs' lawyers are
looking at school-board contracts that give big soda companies
exclusive placement in school vending machines in return for
cash payments. Consequently, school boards from Seattle to New
York City are reconsidering their partnerships with soda
vendors.
Thanks in part to the publicity generated by the initial lawsuit
against McDonald's, "there has been a shift in perception," said
Marion Nestle, chair of the Department of Nutrition and Food
Studies at New York University, "from seeing obesity only as a
personal or family responsibility to seeing it as a societal
problem with societal solutions."
This trend has food companies scrambling to put on a more
healthful face. For example, Kraft, the maker of Kraft Macaroni
& Cheese, Oreo cookies and Oscar Mayer meats, recently promised
to eliminate in-school marketing to children, introduce smaller
portions and develop more nutritious products. The United
States Food and Drug Administration recently has required new
disclosures of trans-fatty acids, a major cause of heart
disease, on all packaged foods.
McDonalds, with whom this movement took its first serious step,
is working to reduce the use of trans fats for cooking its fires
and has introduced a new premium line of salads nationally as
well as leaner all-white-meat versions of its Chicken McNuggets
in New York and Ohio. These are but a few examples of the
trend.
Such tactics may help companies connect with more health-
conscious consumers, but they also serve to protect against
future lawsuits. "Obesity and liability are a place to watch
over the next five years," said David Adelman, a consumer-food
analyst at Morgan Stanley, who also covered tobacco. "It would
be a mistake to underestimate the creativity of plaintiffs'
lawyers."
Policy changes among the food marketers have done little to
dampen the zeal of those lawyers who worked for decades to get
similar concessions from the tobacco companies. "The changes
(of some food policies) are just part of the food companies'
image campaigns," said Samuel Hirsch of New York City, one of
the lawyers behind the McDonald's lawsuit. "Without
accountability and legal standards, as soon as attention is
focused elsewhere, they (the food companies) will pull back."
John Banzhaf, a longtime foe of tobacco and a professor of legal
activism at George Washington University Law School, is among
those leading the charge against firms he regards as junk-food
peddlers. The idea of suing these companies came to him after a
journalist called his attention to a 2001 Surgeon General's
report noting that illness associated with obesity had cost the
country $117 billion in the previous year alone. This figure
was close to the average annual costs associated with smoking --
$150 billion, according to the Surgeon General.
Professor Banzhaf began to wonder whether food companies were
vulnerable to the same kind of lawsuits that have plagued Big
Tobacco. Walt Riker, a spokesman for McDonald's has responded
to the idea of lawsuits, saying, "People interested in the real
issues are talking about the totality of an individual's
lifestyle. McDonald's will do its part, but the lawsuits are
publicity gimmicks."
Even plaintiffs' lawyers concede that food litigation is not
exactly parallel to tobacco cases. Richard Daynard, a professor
at Northeastern University School of Law, who was active in
bringing lawsuits against Big Tobacco companies, said, "Someone
who eats often at McDonald's also probably does not eat well at
home and may lead a sedentary lifestyle."
Food also has health benefits. But "there is no such thing as a
healthy diet of smoking or smoking in moderation," said
Professor Daynard.
Food companies, however, may be vulnerable to lawsuits that
allege they have engaged in misleading advertising, whether by
misstating calorie information or failing to disclose health
risks when describing a food as nutritious. Plaintiffs' lawyers
argue that consumers who rely on inaccurate information cannot
make informed decisions about what to eat. Robert's American
Gourmet just settled a class action claiming that the firm
misstated the calorie and fat content of the popular Pirate's
Booty snack and reportedly paid out more than $3 million.
McDonald's paid $12.5 million in 2001, and issued a public
apology to settle a suit, brought by former students of
Professor Banzhaf, for advertising that its fries were cooked in
vegetable oil, leading consumers to think they were vegetarian,
when in fact they also were cooked in beef fat.
Lawyers are already striking indirectly at food companies by
examining their contracts with local school boards. In almost
half of US school districts, officials allow companies such as
Coca-Cola and PepsiCo to sell soda in school vending machines or
on-campus stores. Some school districts have exclusive
arrangements with a soda company, which creates an opportunity
to build brand loyalty among young consumers. In return, cash-
starved schools receive up-front payments and in some cases a
percentage of sales.
The Seattle School Board voted 4 to 3 to renew its five-year
exclusive contract with Coca-Cola, even after Professor Banzhaf
and a local attorney threatened to sue the district and each
school board member if the contract was renewed. Steven Brown,
board vice-president, and one of the members who voted for
renewal, said "We are in a serious budget situation."
However, plaintiffs' lawyers argue that school boards are liable
on this issue because they have a special duty to look after
students while they are in school. "Taking money from food
companies to encourage the use of harmful products is an
egregious violation of that duty," said Professor Banzhaf.
While many agree with the position that the school board
breaches its duty to the children by engaging in the Coca-Cola
contract, yet they are reluctant to urge that money be spent for
lawyers to fight a legal battle against the school board; an
opinion expressed by the parent of an eighth grader. Adam
Drewnowski, director of the Center for Public Health Nutrition
at the University of Washington, said, "If you want to influence
the school board, you run for a seat on the board. Threatening
a lawsuit is just unconscionable."
Some fear that the use of such aggressive tactics will undermine
quieter efforts to address health and nutrition issues. In
several cities, for example, a coalition of parents and teachers
have succeeded in persuading school boards to remove junk food
from hallways without resorting to lawsuits. In New York City,
for example, the Department of Education announced in June that
it would ban candy and soda from school vending machines and
would reduce the fat content in cafeteria meals.
To others, the lawsuits seem a necessary evil. Jacqueline
Domac, a nutrition teacher in California's Venice High School,
and an organizer of the Los Angeles coalition of parents and
teachers that has persuaded the Los Angeles Unified School
District to ban soda sales in school districts beginning in 2004
while considering setting tougher nutrition standards for
cafeteria menus, said, however, "Just because we were able
to get this done on a local level does not mean it will work
everywhere. For some school districts, it may take the threat
of a lawsuit."
Susan Roberts, a lawyer and consultant at the Agricultural Law
Center at Drake University, agrees. "I have been involved in
health policy for over 20 years," she said. We haven't had a
very large impact. Sometimes, it takes litigation to get
policies to change."
There is a host of people ready to consider litigation.
Professor Daynard recently helped lead a conference at
Northeastern University School of Law to discuss "Legal
Approaches to the Obesity Epidemic." More than 100
academicians, public-health experts and foundation
representatives attended, along with several trial lawyers in
training.
Brian Murphy, a recent graduate of Rutgers Law School said, "It
is a very important and pressing issue, and its (movement toward
an) outcome will be with us for years to come."
New Securities Fraud Cases
AVATAR HOLDINGS: Abbey Gardy Lodges Securities Suit in DE Court
---------------------------------------------------------------
Abbey Gardy, LLP initiated a securities class action in the
United States District Court for the District of Delaware on
behalf of a class of all persons or entities who hold 7%
convertible subordinated notes due April 1, 2005 sold by Avatar
Holdings Inc. (NasdaqNM:AVTR).
The complaint alleges that defendants violated Sections 12(a)(2)
and 15 of the Securities Act of 1933. The complaint names as
defendants the Company, Gerald D. Kelfer, Avatar's Chief
Financial Officer, President and Vice Chairman, and Juanita I.
Kerrigan, Avatar's Vice President and Secretary.
Avatar is a corporation primarily engaged in real estate
operations in Florida and Arizona. The case is brought in
connection with Avatar's July 1, 2003 announcement of its
redemption of $60 million of the $94,429 million in aggregate
principal amount of Notes outstanding. The Notes were
convertible, at any time prior to maturity, to shares of Avatar
common stock at a conversion price of $31.80 per share or Avatar
could redeem the Notes at its option at specified prices.
Because Avatar is a real estate company, the true value of its
real estate holdings is critical to Noteholders in making a
decision whether to have their Notes redeemed for cash, or
whether to exchange those Notes for shares of Avatar's common
stock. The Company's public documents state that its real
estate is valued at the lower of cost or market value.
Plaintiff alleges that Noteholders are unable to make an
informed decision whether to convert their Notes to Avatar
common stock or allow them to be redeemed because defendants
failed to disclose the basis on which the Company's land
inventories are valued. The complaint seeks disclosure of this
material information or damages that flow from the failure to
disclose it.
For more details, contact Nancy Kaboolian by Phone:
(212) 889-3700 or 800-889-3701 or by E-mail:
nkaboolian@abbeygardy.com
IMPATH INC.: Schiffrin & Barroway Lodges Securities Suit in 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
Impath, Inc. (NasdaqNM:IMPH) from February 21, 2001 through July
29, 2003, inclusive.
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 numerous positive statements
throughout the Class Period regarding the Company's financial
performance.
As alleged in the complaint, these statements were each
materially false and misleading when made as they failed to
disclose and misrepresented the following material adverse facts
which were then known to defendants or recklessly disregarded by
them:
(1) that the Company was failing to timely record an
impairment in the value of its accounts receivables. As
a result, the Company's reported financial results were
artificially inflated throughout the Class Period;
(2) that the Company was failing to properly account for
its GeneBank(TM) asset, thereby overstating its
reported financial results; and
(3) as a result of the foregoing, the Company's financial
statements published during the Class Period were not
prepared in accordance with Generally Accepted
Accounting Principles and were therefore materially
false and misleading.
On July 30, 2003, Impath shocked the market when it issued a
press release announcing that it had initiated an investigation
into possible accounting irregularities involving accounts
receivables which the Company believes have been materially
overstated and will likely require restatement. Following this
announcement, shares of Impath common stock were halted from
trading.
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
SOLUTIA INC.: Lasky & Rifkind Lodges Securities Suit in N.D. CA
---------------------------------------------------------------
Lasky & Rifkind, Ltd. initiated a securities class action in the
United States District Court for the Northern District of
California, on behalf of persons who purchased or otherwise
acquired publicly traded securities of Solutia, Inc. (NYSE:SOI)
between December 16, 1998 and October 10, 2002, inclusive,
against Solutia and certain officers of the Company.
The complaint alleges that throughout the class period, Solutia
issued false and misleading statements concerning the Company's
earnings, income and Company assets. Specifically, the
complaint alleges that Solutia inflated its share price by
agreeing to charge prices at certain levels and otherwise fix,
increase, maintain or stabilize prices of rubber chemicals sold
in the United States, all in violation of the United States'
anti-trust and securities laws.
For more details, contact Leigh Lasky by Phone: 800-321-0476
STELLENT INC.: Brian Felgoise Lodges Securities Suit in MN Court
----------------------------------------------------------------
The Law Offices of Brian M. Felgoise, PC commenced a securities
class action on behalf of shareholders who acquired Stellent,
Inc. (NasdaqNM:STEL) securities between October 2, 2001 and
April 1, 2002, inclusive, in the United States District Court
for the District of Minnesota. The suit names as defendants the
company and certain key officers and directors.
The action 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.
For more details, contact Brian M. Felgoise by Mail: 261 Old
York Road, Suite 423, Jenkintown, Pennsylvania, 19046, by Phone:
215-896-1900 or by E-mail: FelgoiseLaw@aol.com
STELLENT INC.: Charles Piven Lodges Securities Suit in MN Court
---------------------------------------------------------------
The Law Offices Of Charles J. Piven, PA initiated a securities
class action on behalf of shareholders who purchased, converted,
exchanged or otherwise acquired the common stock of Stellent,
Inc. (NasdaqNM:STEL) between October 2, 2001 and April 1, 2002,
inclusive. The case is pending in the United States District
Court for the District of Minnesota.
The action charges that defendants violated federal securities
laws by issuing a series of materially false and misleading
statements to the market throughout the class period which
statements had the effect of artificially inflating the market
price of the Company's securities.
For more details, contact Charles J. Piven by Mail: The World
Trade Center-Baltimore, 401 East Pratt Street, Suite 2525,
Baltimore, Maryland 21202, by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
STELLENT INC.: Lasky & Rifkind Files Securities Suit in MN Court
----------------------------------------------------------------
Lasky & Rifkind, Ltd. initiated a securities class action in the
United States District Court for the District of Minnesota, on
behalf of persons who purchased or otherwise acquired publicly
traded securities of Stellent, Inc. (Nasdaq:STEL) between
October 2, 2001 and April 1, 2002, inclusive. The lawsuit was
filed against Stellent and certain officers of the Company.
The complaint alleges that throughout the class period, Stellent
issued false and misleading statements concerning the Company's
earnings, income and Company assets. Specifically, the
complaint alleges that the Company failed to disclose and/or
misrepresented that significant amounts of the Company's sales
were to affiliates that were themselves financed by the Company
and also that the Company's customer base was beginning to defer
purchases.
As a result of the aforementioned, the Company's expected
revenue growth would no longer occur and the Company's reported
financial results were artificially inflated throughout the
Class Period.
For more details, contact Leigh Lasky by Phone: 800-321-0476
*********
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities. The Asbestos Defendant Profiles is backed by an
online database created to respond to custom searches. Go to
http://litigationdatasource.com/asbestos_defendant_profiles.html
*********
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 2003. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
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are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
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