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C L A S S A C T I O N R E P O R T E R
Monday, May 17, 2004, Vol. 6, No. 96
Headlines
ALLIANCE CAPITAL: Asks NJ Court To Dismiss Securities Fraud Suit
AMERICAN PROCESSING: Class Discovery Starts in Gas Proceeds Suit
BLOCKBUSTER INC.: Texas Court Dismisses Securities Fraud Lawsuit
BURLINGTON RESOURCES: Discovery Commences in OK Natural Gas Suit
CALIFORNIA: SEC Obtains Preliminary Injunction V. Stock Fraud
CALIFORNIA: Prime Bank Scheme Instigator Pleads Guilty to Felony
CALLAWAY GOLF: Discovery Commences in TN Consumer Fraud Lawsuit
GENZYME CORPORATION: Plaintiffs File Consolidated MA Stock Suit
HALLIBURTON CO.: TX Court To Hold Hearing For Lawsuit Settlement
INTERPORE INTERNATIONAL: Faces Securities Fraud Suit in CA Court
IVAX PHARMACEUTICALS: Continues To Face Antitrust Suits in FL
IVAX PHARMACEUTICALS: Continues to Face "Fen-Phen" Drug Lawsuits
IVAX PHARMACEUTICALS: Three MA AWP Antitrust Lawsuits Dismissed
KINDER MORGAN: CO Court Orders Filing of Certification Motion
MCNEIL CONSUMER: Recalls Motrin Chewable Tablets For Mislabeling
MURPHY OIL: Louisiana Residents Launch Suits Over June 2003 Fire
NASHUA CORPORATION: Court Mulls Summary Judgment, Certification
NORTHWESTERN CORPORATION: Reaches Settlement For Investor Suits
NORTHWESTERN CORPORATION: To Enter Mediation in MT Investor Suit
NORTHWESTERN CORPORATION: CA Court Stays Securities Fraud Suit
PERRINI CORPORATION: MA Court Dismisses One Claim in Stock Suit
QLT INC.: Plaintiffs Ask NY Court To Reconsider Suit Dismissal
RYLAND GROUP: Shareholders Launch Securities Lawsuit in N.D. TX
SANGSTAT MEDICAL: CA Court Dismisses Securities Violations Suit
THERAGENICS CORPORATION: Asks For Summary Judgement in GA Suit
WARNER LAMBERT: Forges $430M Neurontin "Off-labeling" Suit Pact
New Securities Fraud Cases
ABATIX CORPORATION: Reinhardt Wendorf Launches Stock Suit in TX
GENTA INC.: Goodkind Labaton Lodges Securities Fraud Suit in NJ
GENTA INC.: Milberg Weiss Lodges Securities Fraud Lawsuit in NJ
GENTA INC.: Bernard Gross Lodges Securities Fraud Lawsuit in NJ
LIQUIDMETAL TECHNOLOGIES: Geller Rudman Files FL Securities Suit
VERDISYS INC.: Geller Rudman Lodges Securities Suit in S.D. TX
*********
ALLIANCE CAPITAL: Asks NJ Court To Dismiss Securities Fraud Suit
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Alliance Capital Management L.P. asked the United States
District Court for the District of New Jersey to dismiss the
securities class action filed against it.
On December 13, 2002, a putative class action complaint entitled
"Patrick J. Goggins, et al. v. Alliance Capital Management L.P.,
et al." was filed in the United States District Court for the
Southern District of New York against the Company, Alliance
Premier Growth Fund and individual directors and certain
officers of Premier Growth Fund. On August 13, 2003, the court
granted the Company's motion to transfer the Goggins Complaint
to the United States District Court for the District of New
Jersey.
On December 5, 2003, plaintiffs filed an amended complaint.
The Amended Goggins Complaint alleges that defendants violated
Sections 11, 12(a)(2) and 15 of the Securities Act because the
Fund's registration statements and prospectuses contained untrue
statements of material fact and omitted material facts. More
specifically, the Amended Complaint alleges that the Fund's
investment in Enron was inconsistent with the Fund's stated
strategic objectives and investment strategies.
Plaintiffs seek rescissory relief or an unspecified amount of
compensatory damages on behalf of a class of persons who
purchased shares of Premier Growth Fund during the period
October 31, 2000 through February 14, 2002.
AMERICAN PROCESSING: Class Discovery Starts in Gas Proceeds Suit
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Class discovery is proceeding in the class action against
American Processing, L.P. (subsequently ONEOK, Inc.), styled
"Darrell Sargent d/b/a Double D Production v. Parker & Parsley
Gas Processing Co., American Processing, L.P. and Cesell B.
Cheatham, et al., Cause No. 878," filed in the 100th Judicial
District Court, Carson County, Texas.
The plaintiff filed a purported class action suit in 1999 and
amended its petition in late 2002 to assert claims on behalf of
over 1,000 producers who process gas through as many as ten gas
processing plants formerly owned by the Company, a former wholly
owned subsidiary of Kinder Morgan, Inc. in Carson and Gray
counties and other surrounding Texas counties.
The plaintiff claims the Company (and subsequently, ONEOK, Inc.
which purchased the Company in 2000) improperly allocated
liquids and gas proceeds to the producers. In particular, among
other claims, the plaintiff challenges the methods and
assumptions used at the plants to allocate liquids and gas
proceeds among the producers and processors. The petition
asserts claims for breach of contract and Natural Resources
Code violations relating to the period from 1994 to the present.
To date, the plaintiff has not made a specific monetary demand
nor produced a specific calculation of alleged damages. The
plaintiff has alleged generally in the petition that damages are
"not to exceed $200 million" plus attorney's fees, costs and
interest. The defendants have filed a counterclaim for
overpayments made to producers.
Pioneer Natural Resources USA, Inc., formerly known as Parker &
Parsley Gas Processing Company is a co-defendant. Parker &
Parsley has claimed indemnity from American Processing based on
its sale of assets to American Processing on October 4, 1995. We
have accepted indemnity and defense subject to a reservation of
rights pending resolution of the suit. The plaintiff has also
named ONEOK as a defendant. The defendants expect to assert
objections to class certification upon the completion of class
discovery.
BLOCKBUSTER INC.: Texas Court Dismisses Securities Fraud Lawsuit
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The United States District Court for the Northern District of
Texas dismissed the consolidated securities class action filed
against Blockbuster, Inc., certain of its officers and a
director, styled In re Blockbuster Inc. Securities Litigation.
The consolidated amended complaint claims violations of the
Securities Exchange Act of 1934 for the time period
approximately between February and December 2002. It also
generally alleges that the defendants made untrue statements of
material fact and/or omitted to disclose material facts about
Blockbuster's business and operations, that the value of
Blockbuster's common stock was therefore artificially inflated
and that certain of the individual defendants sold shares of
Blockbuster's common stock at inflated prices. The plaintiffs
seek unspecified compensatory damages.
In April 2004, the Company's motion to dismiss was granted by
the United States District Court for the Northern District of
Texas and the consolidated amended complaint was dismissed in
its entirety, partially with prejudice and partially without
prejudice.
In February, March and April 2003, three shareholder derivative
actions were filed, one of which is pending in federal court in
Texas and two have been consolidated into one action in Texas
state court, each arising from substantially similar operative
facts. These shareholder derivative actions include claims for
breach of fiduciary duties for various time periods beginning in
February2002 and name certain Blockbuster officers and
directors, some of whom are directors and/or executive officers
of the Company, as individual defendants, and Blockbuster as a
nominal defendant.
BURLINGTON RESOURCES: Discovery Commences in OK Natural Gas Suit
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Pre-trial discovery is proceeding in the class action filed
against Burlington Resources, Inc. and its former affiliate, El
Paso Natural Gas Company, in the District Court of Washita
County, State of Oklahoma.
Plaintiffs contend that defendants underpaid royalties from 1983
to the present on natural gas produced from specified wells in
Oklahoma through the use of below-market prices, improper
deductions and transactions with affiliated companies and in
other instances failed to pay or delayed in the payment of
royalties on certain gas sold from these wells. The plaintiffs
seek an accounting and damages for alleged royalty
underpayments, plus interest from the time such amounts were
allegedly due. Plaintiffs additionally seek the recovery of
punitive damages.
The plaintiffs have not specified in their pleadings the amount
of damages they seek from the Company. However, through
pre-trial discovery, plaintiffs have provided defendants with
alternative theories of recovery claiming monetary damages of up
to $263.6 million in principal, plus interest, punitive damages
and attorney's fees.
The Company and El Paso Natural Gas Company have asserted
contractual claims for indemnity against each other. The court
has certified the plaintiff classes of royalty and overriding
royalty interest owners, and the parties are proceeding with
pre-trial discovery. It is anticipated that this matter will be
scheduled for trial during 2004.
CALIFORNIA: SEC Obtains Preliminary Injunction V. Stock Fraud
-------------------------------------------------------------
The Securities and Exchange Commission obtained a preliminary
injunction in a multi-million dollar securities fraud scheme
perpetrated by six Southern California defendants:
(1) D.W. Heath & Associates, Inc.,
(2) Private Capital Management, Inc.,
(3) Private Collateral Management, Inc.,
(4) PCM Fixed Income Fund I, LLC,
(5) Daniel William Heath, 47, of Chino Hills; and
(6) Denis Timothy O'Brien, 49, of Yorba Linda
The defendants agreed to the entry of the preliminary
injunction. The Commission alleges that the defendants, who
raised at least $60 million, lured elderly victims to workshops
with the promise of a free lunch and then bilked them out of
their retirement money by purporting to sell them safe,
guaranteed notes.
U.S. District Judge John F. Walter of the U.S. District Court
for the Central District of California also set a hearing on the
Commission's application for appointment of a permanent receiver
for May 20, 2004.
The Commission's complaint, filed on April 28, 2004, in federal
court in Los Angeles, alleges that the defendants fraudulently
induced at least 803 elderly investors nationwide to invest in
PCM notes that purportedly pay a "guaranteed" return of 5.5% to
8% per year. The defendants claim that investor funds will be
used to make secured loans to businesses. The defendants also
represent that independent IRA administrators conducted "due
diligence" on the PCM Notes and that either investors will be
repaid their principal at maturity, or they may redeem all or
part of their investment before maturity, subject to a 10%
penalty. Finally, the defendants claim that PCM and the PCM
Fund are California entities.
According to the complaint, these representations are false.
There is no evidence that there are any secured loans. The PCM
Notes also are not liquid because the defendants have failed to
promptly return investor funds. The complaint further alleges
that some investors have had to threaten to file, or actually
filed, lawsuits against the defendants to get back their money.
Nor is it true that IRA administrators have conducted due
diligence. Finally, there is no record that either PCM or the
PCM Fund are California legal entities.
The Court's Order of May 6, 2004, preliminarily enjoins the
defendants from future violations of the registration and
antifraud provisions of the federal securities laws, Sections
5(a), 5(c) and 17(a) of the Securities Act of 1933 and Section
10(b) of the Securities Exchange Act of 1934 and Rule 10b-5
thereunder. The Order also freezes the assets of all defendants
(except O'Brien), orders an accounting, prevents the destruction
of documents, and expedites discovery. The Commission also
seeks permanent injunctions, and other relief, including
disgorgement and civil penalties against all defendants.
The suit is styled "SEC v. D.W. Heath & Associates, Inc.,
Private Capital Management, Inc., Private Collateral Management,
Inc., PCM Fixed Income Fund I, LLC, Daniel William Heath, and
Denis Timothy O'Brien, Case No. CV 04-02949JFW(Ex)."
CALIFORNIA: Prime Bank Scheme Instigator Pleads Guilty to Felony
----------------------------------------------------------------
Nicholas Roblee, the head of a phony investment firm who ran a
"prime bank" scheme that fraudulently raised more than $4
million from investors across the United States, pleaded guilty
to eight felony counts -- four counts of wire fraud and four
counts of money laundering - in an action brought by the United
States Attorney for the Central District of California.
Mr. Roblee, who was the president of Los Angeles-based Premier
Marketing & Investments, Inc., is scheduled to be sentenced on
September 13. Mr. Roblee, age 35, a resident of Encino,
California, also uses the name Nicholas Richmond.
Previously, the Commission filed an emergency civil injunctive
action against Roblee and Premier on January 14, 2003, charging
them with violating the registration and antifraud provisions of
the federal securities laws. On January 15, 2003, the Court
issued a temporary restraining order as to Roblee and Premier,
as well as orders freezing their assets, prohibiting the
destruction of documents, granting expedited discovery, and for
an accounting. On January 23, 2003, the Court issued an order
preliminarily enjoining Roblee and Premier from violating the
registration and antifraud provisions, and continuing the other
orders issued on January 15.
In its complaint, the Commission alleged that the defendants had
raised about $4.5 million by representing to investors that they
would invest their monies in a variety of "high-yield"
investment programs involving, among other things, short-term
promissory notes, real estate-related bridge loans, and the
purchase and sale of precious metals; that these programs would
generate returns of up to 200% per month; and that investor
funds would remain at all times in a "trust account" and never
be put at risk. In reality, Roblee used investor monies to pay
for Premier's operating expenses and his personal living
expenses, to finance adult film productions and an adult-content
website, and to make returns of purported profits and principal
to Premier investors.
On September 24, 2003, a default judgment was entered against
Premier in the Commission's civil action, permanently enjoining
Premier from violating the registration and antifraud provisions
and ordering it to disgorge $4,497,451 plus prejudgment
interest. The Commission's civil action against Roblee remains
pending.
The suit is styled "SEC v. Premier Marketing & Investments, Inc.
and Nicholas Roblee a/k/a Nicholas Richmond, Civil Action No.
CV 03-0342 RGK (JTLx)."
CALLAWAY GOLF: Discovery Commences in TN Consumer Fraud Lawsuit
---------------------------------------------------------------
Discovery is proceeding in the class action filed against
Callaway Golf Company and Callaway Golf Sales Company in
the Circuit Court of Sevier County, Tennessee, Case No.2001-241-
IV.
The complaint asserts a class action by the plaintiff on behalf
of himself and on behalf of consumers in Tennessee and Kansas
who purchased select Callaway Golf products on or after March
20, 2000. Specifically, the complaint alleges that the Company
adopted a New Product Introduction Policy governing the
introduction of certain of the Company's new products in
violation of Tennessee and Kansas antitrust and consumer
protection laws. The plaintiff is seeking damages, restitution
and punitive damages.
GENZYME CORPORATION: Plaintiffs File Consolidated MA Stock Suit
---------------------------------------------------------------
Genzyme Corporation faces a consolidated securities class action
filed in the Massachusetts Superior Court, regarding the
exchange of all of the outstanding shares of Biosurgery Stock
and Molecular Oncology Stock for shares of Genzyme General
Stock.
The first case, filed in Massachusetts Superior Court in May
2003, was a purported class action on behalf of holders of
Biosurgery Stock alleging a breach of the implied covenant of
good faith and fair dealing in the Company's charter and a
breach of the Company's board of directors' fiduciary duties.
The plaintiff in this case was seeking an injunction to adjust
the exchange ratio for the tracking stock exchange. The Court
dismissed the complaint for failure to state a claim on November
12, 2003. The plaintiff in this case has appealed the dismissal
of the complaint.
Two substantially similar cases were filed in Massachusetts
Superior Court in August and October 2003. These cases were
consolidated in January 2004. The fourth case, filed in the
U.S. District Court for the Southern District of New York in
June 2003, was brought by two holders of Biosurgery Stock
alleging, in addition to the state law claims contained in the
other cases, violations of federal securities laws, common law
fraud, and a breach of the merger agreement with Biomatrix. The
plaintiffs are seeking an adjustment to the exchange ratio, the
rescission of the acquisition of Biomatrix, and unspecified
compensatory damages.
HALLIBURTON CO.: TX Court To Hold Hearing For Lawsuit Settlement
----------------------------------------------------------------
The United States District Court in Texas will hold a fairness
hearing for the settlement proposed by Halliburton Co. for the
securities class action and shareholder derivative suits filed
against it.
On June 3, 2002, approximately twenty similar class actions were
filed on behalf of purchasers of the Company's common stock
alleging violations of the federal securities laws. Several of
those lawsuits also named as defendants Arthur Andersen, LLP,
our independent accountants for the period covered by the
lawsuits, and several of the Company's present or former
officers and directors.
Those lawsuits alleged that the Company violated federal
securities laws during the period from approximately May 1998
until approximately May 22, 2002, in failing to disclose a
change in the manner in which the Company accounted for revenue
associated with unapproved claims on long-term engineering and
construction contracts, and that the Company overstated revenue
by accruing the unapproved claims in amounts allegedly in excess
of those that were probable of recovery and could be reliably
estimated.
On October 11, 2002, a shareholder derivative action arising out
of the same facts and circumstances was filed in the District
Court of Harris County, Texas against a number of present and
former officers and directors. That action was subsequently
dismissed upon the Company's motion. On March 12, 2003, another
shareholder derivative action arising out of the same events and
circumstances was filed in federal court against certain of the
Company's present and former officers and directors. The class
action cases were later consolidated and the amended
consolidated class action complaint, styled "Richard Moore v.
Halliburton," was filed and served upon the Company on April 11,
2003. In early May 2003, the Company announced that it had
entered into a written memorandum of understanding setting forth
the terms upon which both the consolidated cases and the federal
court derivative action would be settled, and in June 2003, the
lead plaintiffs' lawyer in the Moore action filed a motion for
leave to file a second amended consolidated complaint. The
court granted that motion on or about January 28, 2004.
In addition to restating the contract claims, the second amended
consolidated complaint includes nondisclosure claims arising out
of the 1998 acquisition of Dresser Industries, Inc. by
Halliburton that were included in the settlement discussions
leading up to the signing of the memorandum of understanding and
are among the claims to be resolved by the terms of the proposed
settlement of the consolidated class actions.
The memorandum of understanding called for Halliburton to pay $6
million, which is to be funded by insurance proceeds. After the
May 2003 announcement regarding the memorandum of understanding,
one of the lead plaintiffs in the consolidated class actions
announced that it was dissatisfied with the lead plaintiffs'
counsel's handling of settlement negotiations and what the
dissident plaintiff regarded as inadequate communications by the
lead plaintiffs' counsel. The dissident lead plaintiff further
asserted that it believes the lead plaintiffs' counsel failed in
connection with the settlement negotiations to take into account
the alleged value of certain Dresser claims and that the $6
million proposed settlement figure is therefore inadequate. It
is unclear whether this dispute within the ranks of the lead
plaintiffs will have any impact upon the process of approval of
the settlement and whether the dissident plaintiff will object
to the settlement at the time of the fairness hearing or opt out
of the class action for settlement purposes. The process by
which the parties will seek approval of the settlement is
ongoing. The attorneys representing the dissident plaintiff
filed yet another class action case in August 2003, raising
allegations similar to those raised in the second amended
consolidated complaint regarding the contract and Dresser
claims.
The Company believes that the allegations in that action, styled
Kimble v. Halliburton Company, et al., are without merit. The
Company also believes that those new allegations fall within the
scope of the memorandum of understanding and that the
settlement, if approved and consummated, will dispose of those
claims in their entirety with respect to all members of the
putative class who do not validly and timely elect not to
participate in the settlement. That action was recently
consolidated within the "Richard Moore v. Halliburton" case.
The Court recently tentatively scheduled a preliminary hearing
for May 2004 on the subject of preliminary approval of the
fairness of the settlement agreed to in the memorandum of
understanding.
As of the date of this filing, the $6 million settlement amount
for the consolidated actions and the federal court derivative
action was fully covered by our directors' and officers'
insurance carrier. As such, the Company has accrued a
contingent liability for the $6 million settlement and a $6
million insurance receivable from the insurance carrier.
INTERPORE INTERNATIONAL: Faces Securities Fraud Suit in CA Court
----------------------------------------------------------------
Interpore International, Inc. and each member of its board of
directors face a securities class action filed in the Superior
Court of the State of California, County of Orange, styled
"Abrams v. Interpore International, Inc., et al., (Case No.
04CC00093."
The suit alleges that the Company and its directors breached the
fiduciary duties of care, loyalty, candor, and independence owed
to the Company's s stockholders in connection with the proposed
acquisition of Interpore by Biomet, Inc. Specifically, the
lawsuit alleges that Interpore and its directors failed to take
steps to maximize the value of Interpore, took steps to avoid
competitive bidding, gave Biomet an unfair advantage, failed to
solicit other potential acquirors or alternative transactions
and failed to properly value Interpore.
The plaintiff seeks to enjoin Interpore from proceeding with the
proposed acquisition by Biomet. Additionally, the complaint
seeks certification of a class, a declaration that Interpore and
its directors have breached their fiduciary duties in entering
into the proposed transaction with Biomet, an injunction barring
the proposed acquisition and directing Interpore to pursue a
transaction in the best interests of its stockholders, a
constructive trust upon any benefits improperly received by
Interpore or any of its directors as a result of the proposed
acquisition, costs, and attorneys' and experts' fees.
IVAX PHARMACEUTICALS: Continues To Face Antitrust Suits in FL
-------------------------------------------------------------
IVAX Pharmaceuticals, Inc. and other pharmaceutical firms
continue to face several class actions filed on behalf of
customers who purchased a certain proprietary drug directly from
Abbott Laboratories during the period beginning on October
29,1998.
On December 21, 1998, an action purporting to be a class
action, styled Louisiana Wholesale Drug Co. vs. Abbott
Laboratories, Geneva Pharmaceuticals, Inc. and Zenith Goldline
Pharmaceuticals, Inc., was filed in the United States District
Court for the Southern District of Florida, alleging a violation
of Section 1 of the Sherman Antitrust Act. Plaintiffs allege
that, by settling patent-related litigation against Abbott in
exchange for quarterly payments, the defendants engaged in an
unlawful restraint of trade. The complaint seeks unspecified
treble damages and injunctive relief.
Eighteen additional class action lawsuits containing allegations
similar to those in the Louisiana Wholesale case were filed in
various jurisdictions between July 1999 and February 2001, the
majority of which have been consolidated with the Louisiana
Wholesale case. On December 13, 2000, plaintiffs' motion for
summary judgment on the issue of whether the settlement
agreement constituted a per se violation of Section 1 of the
Sherman Antitrust Act in the Louisiana Wholesale case was
granted, but on September 15, 2003, the United States Court of
Appeals for the Eleventh Circuit reversed the order. On March
13, 2000, the Federal Trade Commission (FTC) announced that it
had issued complaints against, and negotiated consent decrees
with, Abbott Laboratories and Geneva Pharmaceuticals arising out
of an investigation of the same subject matter that is involved
in these lawsuits. The FTC took no action against IPI. To
date, seventeen of the actions naming IPI have either been
settled or dismissed.
IVAX PHARMACEUTICALS: Continues to Face "Fen-Phen" Drug Lawsuits
----------------------------------------------------------------
IVAX Pharmaceuticals, Inc. has been named in a number of
individual and class action lawsuits in both state and federal
courts involving the diet drug combination of fenfluramine and
phentermine, commonly known as "fen-phen."
Generally, these lawsuits seek damages for personal injury,
wrongful death and loss of consortium, as well as punitive
damages, under a variety of liability theories including strict
products liability, breach of warranty and negligence. The
Company did not manufacture either fenfluramine or phentermine,
but did distribute the brand equivalent version of phentermine
manufactured by Eon Labs Manufacturing, Inc. (Eon) and Camall
Company.
Although IPI had a very small market share, to date, IPI has
been named in approximately 5,543 cases and has been dismissed
from approximately 4,974 of these cases, with additional
dismissals pending.
IVAX PHARMACEUTICALS: Three MA AWP Antitrust Lawsuits Dismissed
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Three class actions filed against IVAX Pharmaceuticals, Inc. and
others in the United States District Court of Massachusetts have
been dismissed.
On July 12, 2002, an action purporting to be a class action
styled "John Rice v. Abbott Laboratories, Inc., et al." was
filed in the Superior Court of the State of California, alleging
violations of California's Business & Professional Code 17200 et
seq. with respect to the way pharmaceutical companies report
their average wholesale price (AWP).
Plaintiffs allege that each defendant reported an AWP to
Medicare and Medicaid, materially misrepresenting the actual
prices paid to defendants by physicians and pharmacies for
prescription drugs. The complaint requests unspecified damages,
including punitive damages, and injunctive relief.
Two other class actions, "Thompson v. Abbott Laboratories, Inc.,
et al." and "Turner v. Abbott Laboratories, Inc., et al.,"
containing similar allegations against IPI and others were filed
in California courts in August and September 2002, respectively,
as well. All three cases were removed to federal court and
transferred to the Pharmaceutical Industry Average Wholesale
Price Multi-District Litigation in the United States District
Court for the District of Massachusetts.
On November 23, 2003, the plaintiff in the Rice Action dismissed
his action against IPI and other defendants without prejudice.
On January 9, 2004, the court denied the motions filed by the
plaintiffs in the Thompson Action and the Turner Action to
remand the cases to state court and further ruled that the
claims in these actions were preempted by the Employee
Retirement Income Security Act (ERISA). In February 2004, the
plaintiffs in the Thompson Action and the Turner Action also
dismissed their actions against IPI and other defendants.
KINDER MORGAN: CO Court Orders Filing of Certification Motion
-------------------------------------------------------------
The United States District Court for the District of Colorado
ordered plaintiffs in the class action filed against Kinder
Morgan, Inc. to file their motion for class certification by May
28, 2004.
The suit, styled "Adams vs. Kinder Morgan, Inc., et al., Civil
Action No. 00-M-516," seeks compensatory damages against all
defendants jointly and severally, together with interest,
attorney fees and expenses. The plaintiffs brought claims
alleging securities fraud under Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 on behalf of all people who
purchased the common stock of Kinder Morgan during the class
period from October 30, 1997 to June 21, 1999. The class period
occurred prior to the installation of the Company's current
management team in October 1999.
The complaint centers on allegations of misleading statements
concerning operations of the Bushton Processing Plant and
certain contracts, as well as allegations of overstatement of
income in violation of accounting principles generally accepted
in the United States of America during the class period.
On February 23, 2001, the federal district court dismissed
several claims raised by the plaintiff, with prejudice, and
dismissed the remaining claims, without prejudice. On April 27,
2001, the Adams plaintiffs filed their second amended complaint.
On March 29, 2002, the federal district court dismissed the
Adams plaintiffs' second amended complaint with prejudice. On
May 2, 2002, the Adams plaintiffs appealed the dismissal to the
10th Circuit Court of Appeals. In a published decision, on
August 11, 2003, the 10th Circuit Court of Appeals reversed the
district court's dismissal, but upheld the dismissal of Mr.
Kinder, the Company's Chairman and Chief Executive Officer, from
this action. The mandate from the 10th Circuit Court of Appeals
was issued on October 17, 2003. A scheduling conference has
been set for May 11, 2004. The Court has ordered the plaintiffs
to file their motion for class certification by May 28, 2004 and
has ordered that class certification discovery proceed.
MCNEIL CONSUMER: Recalls Motrin Chewable Tablets For Mislabeling
----------------------------------------------------------------
McNeil Consumer & Specialty Pharmaceuticals is alerting
consumers that one manufacturing lot (Lot # JAM108, exp 1/06) of
Children's Motrin (ibuprofen) Grape Chewable Tablets may
mistakenly contain Tylenol 8-Hourr extended release
(acetaminophen) Geltabs. Lot # JAM108 was distributed nationwide
to wholesale and retail customers between February 5 and April
1, 2004. The bottles are labeled as containing 24 tablets.
The Tylenol 8-Hour product provides an adult dose of
acetaminophen, and use of this adult product could provide more
than the recommended dose (overdose) for children. The
mislabeled bottles appear to be the result of a packaging error
for this one lot. To date, two mislabeled bottles have been
identified but no injuries have been reported as a result of
this issue. In the interest of patient health and safety,
McNeil, in consultation with the U.S. Food and Drug
Administration, is taking the precaution of alerting consumers
nationwide about this issue to help them identify the
potentially affected product. McNeil has also alerted retailers
nationwide.
The two medicines are visibly different. Children's Motrin Grape
Chewable Tablets are round, purple-colored, scored tablets with
the letters MO and the number 50 on the tablet surface. These
tablets have a non-glossy finish and a grape smell. The Tylenol
8-Hour Geltabs are shiny, hard, round, and gelatin-coated. The
geltabs are white on one side, red on the other, with "8 Hour"
printed in blue on either the red or the white side.
Consumers can identify the manufacturing lot number that is
embossed on the carton end flap, and printed on the bottle label
under McNeil's address as "Exp 1/06 JAM108". Anyone identifying
one of the bottles included in this consumer alert should
contact McNeil's Consumer Relationship Center at 1-800-962-5357.
Parents who believe their children may have taken Tylenol 8-Hour
Geltabs, believing them to be Children's Motrin Grape Chewable
Tablets, should contact their health care provider or a poison
control center immediately
For more information on this consumer alert, or to report an
adverse event, please call McNeil's Consumer Relationship Center
at 1-800-962-5357.
McNeil continues to be committed to the integrity of its
products and the health and safety of the patients who use its
products.
MURPHY OIL: Louisiana Residents Launch Suits Over June 2003 Fire
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The Murphy Oil Corporation faces two class actions relating to a
fire that severely damaged the Residual Oil Supercritical
Extraction (ROSE) unit, which recovers feedstock from the heavy
fuel oil stream for conversion into gasoline and diesel, at the
Company's Meraux, Louisiana refinery in June 20,2003.
Subsequent to the fire, numerous class action lawsuits have been
filed seeking damages for area residents. All the lawsuits have
been administratively consolidated into a single legal action in
St. Bernard Parish, Louisiana, except for one action filed in
federal court. Additionally, individual residents of Orleans
Parish, Louisiana, have filed an action in that venue.
The Company maintains liability insurance that covers such
matters, and it recorded the applicable insurance deductible as
an expense in 2003. Accordingly, the Company does not believe
that the ultimate resolution of the class action litigation will
have a material adverse effect on its financial condition, it
stated in a regulatory filing.
NASHUA CORPORATION: Court Mulls Summary Judgment, Certification
---------------------------------------------------------------
The Circuit Court of Cook County, Illinois heard motions for
summary judgment and class certification for the consolidated
class action filed against Nashua Corporation, Cerion
Technologies, Inc., certain directors and officers of Cerion,
and the Company's underwriter, on behalf of all persons who
purchased the common stock of Cerion between May 24, 1996 and
July 9, 1996.
The amended consolidated complaint alleged that, in connection
with Cerion's initial public offering, the defendants issued
materially false and misleading statements and omitted the
disclosure of material facts regarding, in particular, certain
significant customer relationships. In October 1997, the court
on motion by the defendants dismissed the consolidated
complaint. The plaintiffs filed a second amended consolidated
complaint alleging similar claims as the first consolidated
complaint seeking damages and injunctive relief.
On May 6, 1998, the Court, on motion by the defendants,
dismissed with prejudice the second amended consolidated
complaint. The plaintiffs appealed the Court's ruling. On
November 19, 1999, the Appellate Court reversed the ruling that
dismissed the second amended consolidated complaint. The
Appellate Court ruled that the second amended consolidated
complaint represented a valid claim and sent the case back to
Circuit Court for further proceedings.
On December 27, 1999, the Company filed a petition with the
Supreme Court of Illinois. In that petition, the Company asked
the Supreme Court of Illinois to determine whether the Circuit
Court or the Appellate Court is correct. The Company's petition
was denied and the case was sent to the Circuit Court for trial.
Discovery has been completed, but no date has been set for trial
and pre-trial motions. On October 8, 2003, the Court heard
motions on a Summary Judgment motion and a class action
certification motion.
NORTHWESTERN CORPORATION: Reaches Settlement For Investor Suits
---------------------------------------------------------------
Northwestern Corporation reached a memorandum of understanding
with plaintiffs who filed shareholder class action and
derivative suits against it and certain of its present and
former officers and directors.
Several suits were initially filed in the United States District
Court for the District of South Dakota, Southern Division,
alleging violations of Sections 11, 12 and 15 of the Securities
Act of 1933 and Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The
complaints contained varying allegations, including that the
defendants misrepresented and omitted material facts with
respect to the Company's 2000, 2001, and 2002 financial results
and operations included in the Company's filings with the SEC,
press releases, and registration statements and prospectuses
disseminated in connection with certain offerings of debt,
equity, and trust preferred securities. The complaints seek
unspecified compensatory damages, rescission, and attorneys'
fees and costs as well as accountants' and experts' fees.
In June 2003, the complaints were consolidated in the United
States District Court for the District of South Dakota and given
the caption "In re NorthWestern Corporation Securities
Litigation," Case No. 03-4049, and Carpenters Pension Trust for
Southern California, Oppenheim Investment Management, LLC, and
Richard C. Slump were named as co-lead plaintiffs. In July
2003, the Lead Plaintiffs filed a consolidated amended class
action complaint naming NorthWestern, NorthWestern Capital
Financing II and III, Blue Dot, Expanets, certain of the
Company's present and former officers and directors, along with
a number of investment banks that participated in the securities
offerings.
The amended complaint alleges that the defendants misrepresented
and omitted material facts concerning the business operations
and financial performance of NorthWestern, Expanets, Blue Dot
and CornerStone, overstated NorthWestern's revenues and earnings
by, among other things:
(1) maintaining insufficient reserves for accounts
receivable at Expanets,
(2) failing to disclose billing problems and lapses and
data conversion problems,
(3) failing to make full disclosures of problems (including
the billing and data conversion issues) arising from
the implementation of Expanets' EXPERT system,
(4) concealing losses at Expanets and Blue Dot by
improperly allocating losses to minority interest
shareholders,
(5) maintaining insufficient internal controls, and
(6) profiting from improper related-party transactions
The Company and certain of its present and former officers and
directors, were also named as defendants in two complaints
purporting to be class actions which were filed in the United
States District Court for the Southern District of New York,
entitled "Sanford & Beatrice Golman Family Trust, et al. v.
NorthWestern Corp., et al., Case No. 03CV3223, and "Arthur
Laufer v. Merle Lewis, et al., Case No. 03CV3716," which were
brought on behalf of the purchasers of the Company's 7.20%,
8.25%, and 8.10% trust preferred securities which were offered
and sold pursuant to the Company's registration statement on
Form S-3 filed on July 12, 1999.
The plaintiffs' claims are based on similar allegations of
material misrepresentations and omissions of fact relating to
the registration statement in violation of Sections 11 and 12 of
the Securities Act of 1933, and they seek unspecified
compensatory damages, rescission and attorneys', accountants'
and experts' fees. In July 2003, "Arthur Laufer v. Merle Lewis,
et al." was transferred to the District of South Dakota and
consolidated with the consolidated actions pending in that
court. In September 2003, "Sanford & Beatrice Golman Family
Trust, et al. v. NorthWestern Corp., et al." was also
transferred to the District of South Dakota.
In February 2004, the "Golman Family Trust" action was also
consolidated with the actions pending in that court. The
actions have been stayed as to NorthWestern Corporation due to
its bankruptcy filing. In October 2003, Expanets, Blue Dot, and
certain of NorthWestern's present and former officers and
directors filed motions to dismiss the consolidated amended
class action complaint for failure to state a claim, which are
currently pending in the District of South Dakota.
Certain of the Company's present and former officers and
directors and NorthWestern, as a nominal defendant, have been
named in two shareholder derivative actions commenced in the
United States District Court for the District of South Dakota,
Southern Division, entitled "Deryl Lusty, et al. v. Richard R.
Hylland, et al., Case No. CIV034091 and "Jerald and Betty
Stewart, et al. v. Richard R. Hylland, et al., Case No.
CIV034114. These shareholder derivative lawsuits allege that
the defendants breached various fiduciary duties based upon the
same general set of alleged facts and circumstances as the
federal shareholder suits. The plaintiffs seek unspecified
compensatory damages, restitution of improper salaries, insider
trading profits and payments from NorthWestern, and disgorgement
under the Sarbanes-Oxley Act of 2002.
In July 2003, the complaints were consolidated in the United
States District Court for the District of South Dakota and given
the caption "In re NorthWestern Corporation Derivative
Litigation, Case No. 03-4091." In October 2003, the action was
stayed pending a ruling on defendants' motions to dismiss in the
related securities class action, "In re NorthWestern Corporation
Securities Litigation."
On November 6, 2003, the Bankruptcy Court entered an order
preliminarily enjoining the plaintiffs in "In re NorthWestern
Corporation Derivative Litigation" from prosecuting the
litigation against NorthWestern, its subsidiaries and its
current and former officers and directors until further order of
the Bankruptcy Court.
On February 7, 2004, the parties to the above consolidated
securities class actions and consolidated derivative litigation,
together with certain other affected persons and parties,
reached a tentative settlement of the litigation. On April 19,
2004 the parties and other affected persons signed a memorandum
of understanding which memorialized the tentative settlement.
Among the terms of the proposed settlement, the Company,
Expanets, Blue Dot and other parties and persons will be
released from all claims to these cases, a settlement fund in
the amount of $41 million (of which approximately $37 million
would be contributed by the Company's directors and officers
liability insurance carriers, and $4 million would be
contributed from other persons and parties) will be established,
and the plaintiffs would have a $20 million liquidated
securities claim against Netexit.
The Company has filed a motion in NorthWestern's bankruptcy
proceeding seeking approval of the terms of the memorandum of
understanding and related documents. The settlement is subject
to the occurrence of several conditions, including approval of
the proposed settlement by the Bankruptcy Court in the Company's
bankruptcy proceeding and approval of the proposed settlement by
the federal District Court for the District of South Dakota,
where the consolidated class actions are pending.
NORTHWESTERN CORPORATION: To Enter Mediation in MT Investor Suit
----------------------------------------------------------------
Northwestern Corporation intends to enter a mediation with
parties in the class action styled "McGreevey, et al. v. The
Montana Power Company, et al," filed in the United States
District Court in Montana.
The lawsuit, which was filed by former shareholders of The
Montana Power Company (most of whom became shareholders of Touch
America Holdings, Inc. as a result of a corporate reorganization
of The Montana Power Company) against the Company and other
defendants, claims that the disposition of various generating
and energy-related assets by The Montana Power Company were void
because of the failure to obtain shareholder approval for the
transactions. Plaintiffs thus seek to reverse those
transactions, or receive fair value for their stock as of late
2001, when plaintiffs claim shareholder approval should have
been sought.
The Company is named as a defendant due to the fact that it
purchased Montana Power LLC, which plaintiffs claim is a
successor to The Montana Power Company. The company denies the
lawsuit's allegations.
On November 6, 2003, the Bankruptcy Court approved a stipulation
between the Company and the plaintiffs in the suit, providing
that litigation, as against NorthWestern, Clark Fork & Blackfoot
LLC, the Montana Power Company, Montana Power LLC and Jack
Haffey, shall be temporarily stayed for 180 days from the date
of the stipulation. Upon an agreed upon motion, the automatic
stay has been lifted for the limited purpose of conducting a
mediation with all parties to the case to seek a resolution.
NORTHWESTERN CORPORATION: CA Court Stays Securities Fraud Suit
--------------------------------------------------------------
The class action filed against Northwestern Corporation, certain
of its former officers and directors in the United States
District Court for the Northern District of California has been
stayed as against the Company for 180 days.
The Company and certain of its former officers and directors
were named as defendants in certain complaints filed against
CornerStone Propane Partners, LP and other defendants purporting
to be class actions filed in the United States District Court
for the Northern District of California by purchasers of units
of CornerStone Propane Partners alleging violations of Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule
10b-5 promulgated thereunder.
Through November 1, 2002, the Company held an economic equity
interest in a subsidiary that serves as the managing general
partner of CornerStone Propane Partners, LP. Certain former
officers and directors of NorthWestern who are named as
defendants in certain of these actions have also been sued in
their capacities as directors of the managing general partner.
These complaints allege that defendants sold units of
CornerStone Propane Partners based upon false and misleading
statements and failed to disclose material information about
CornerStone Propane Partners' financial condition and future
prospects, including overpayment for acquisitions, overstating
earnings and net income, and that it lacked adequate internal
controls. All of the lawsuits have now been consolidated and
Gilbert H. Lamphere has been named as lead plaintiff.
The actions have been stayed as to NorthWestern due to its
bankruptcy filing. On October 27, 2003, the plaintiffs filed an
amended consolidated class action complaint. The new complaint
does not name NorthWestern as a defendant, although it alleges
facts relating to NorthWestern's conduct. Certain of the
Company's former officers and directors are named as defendants
in the amended consolidated complaint. The plaintiffs seek
compensatory damages, prejudgment and postjudgment interest and
costs, injunctive relief, and other relief.
On November 6, 2003, the Bankruptcy Court entered an order
approving a stipulation between NorthWestern and plaintiffs in
this litigation. The stipulation provides that litigation as
against NorthWestern shall be temporarily stayed for 180 days
from the date of the stipulation. Pursuant to the stipulation
and after providing notice to NorthWestern, the plaintiffs may
move the Bankruptcy Court for termination of the temporary stay.
PERRINI CORPORATION: MA Court Dismisses One Claim in Stock Suit
---------------------------------------------------------------
The United States District Court for the District of
Massachusetts dismissed one claim in the 21.25 Preferred
Shareholders class action filed against Perrini Corporation's
current and former directors, styled "Doppelt, et al. v. Tutor,
et al., Case No. 02CV12010 (MLW)."
On October 15, 2002, Frederick Doppelt, Arthur I. Caplan and
Leland D. Zulch filed a lawsuit individually, and as
representatives of a class of holders of the Company's
Depositary Shares. Mr. Doppelt is a current director of Perini
and Mr. Caplan is a former director of Perini.
Specifically, the original complaint alleged that the defendants
breached their fiduciary duties owed to the holders of the
Depositary Shares and to Perini. The plaintiffs principally
allege that the defendants improperly authorized the exchange of
Series B Preferred Stock for common stock while simultaneously
refusing to pay accrued dividends due on the Depositary Shares.
On January 6, 2003, the defendants moved to dismiss the lawsuit.
Among other things, the defendants argued that they did not owe
fiduciary duties to the holders of the Depositary Shares and the
claims of breach of fiduciary duty owed to Perini must be
dismissed because the claim could only be brought as a
derivative action.
On March 21, 2003, the plaintiffs filed an opposition to the
motion to dismiss and in May 2003 the plaintiffs asked the Court
for leave to file an amended complaint. In June 2003 the
plaintiffs were given leave to file an amended complaint. The
amended complaint filed in July 2003 adds an allegation that the
defendants have further breached their fiduciary duties by
authorizing a tender offer for the purchase of up to 90% of the
Depositary Shares and an allegation that the collective actions
of the defendants constitute unfair and deceptive business
practices under the provisions of the Massachusetts Consumer
Protection Act. The amended complaint withdrew the allegation
of a breach of fiduciary duty owed to Perini, but retained the
allegation with respect to a breach of those duties owed to the
holders of the Depositary Shares.
Thus, the amended complaint asserted two claims: a breach of
fiduciary duty claim and a violation of the Massachusetts
Consumer Protection Act (Chapter 93A). The plaintiffs seek
damages in an amount not less than $15,937,500, trebled, plus
interest, costs, fees and other unspecified punitive and
exemplary damages.
On August 29, 2003, the defendants filed a motion to dismiss the
amended complaint. The plaintiffs filed an opposition thereto
and on October 14, 2003, the defendants filed their reply. On
April 12, 2004, the Court dismissed the claim under the
Massachusetts Consumer Protection Act. The Court did not
dismiss the claim for breach of fiduciary duty, except as such
claim relates to the tender offer for the purchase of the
Company's Depositary Shares.
In 2001, a similar lawsuit was filed by some of the same
plaintiffs in the United States District Court for the Southern
District of New York, which claimed that the Company breached
its contract with the holders of Depositary Shares. In 2002,
the case was dismissed and upon appeal by the plaintiffs to the
United States Court of Appeals for the Second Circuit, the Court
of Appeals affirmed the dismissal.
QLT INC.: Plaintiffs Ask NY Court To Reconsider Suit Dismissal
--------------------------------------------------------------
Plaintiffs asked the United States District Court for the
Southern District of New York to reconsider its dismissal of the
consolidated securities class action filed against QLT, Inc. on
behalf of purchasers of the Company's common shares between
August 1, 2000 and December 14, 2000. The complaint also names
as defendants:
(1) Julia Levy, former President, Chief Executive Officer
and a current Director of the Company; and
(2) Kenneth Galbraith, the Company's former Executive Vice
President, Chief Financial Officer and Corporate
Secretary.
The plaintiffs allege that the defendants violated Sections
10(b) and 20(a) of the Securities Exchange Act of 1934. The
plaintiffs allege that on December 14, 2000 the Company
announced that it expected to miss its Visudyne sales estimates
for the fourth-quarter 2000, and that in response, the Company's
common share price dropped approximately 31%.
The plaintiffs claim that the Company's December 14, 2000
statements contradicted prior information issued by the
defendants concerning the demand for Visudyne and the Company's
prospects. The plaintiffs allege that the defendants overstated
the demand for Visudyne, did not properly disclose reimbursement
issues relating to Visudyne and that the defendants had no basis
in the months preceding the December announcement for their
projections of fourth-quarter sales. The plaintiffs further
allege that the intent of the individual defendants to mislead
investors can be inferred from their sale of a substantial
amount of the Company's common shares during the months of
August and September 2000. The plaintiffs sought injunctive
relief, fees and expenses and compensatory damages in an
unspecified amount.
On March 31, 2004 the United States District Court of the
Southern District of New York issued an Opinion and Order
dismissing the class action complaint with prejudice. The court
also found that the plaintiffs failed to state a valid claim for
securities fraud. On April 14, 2004, the plaintiffs filed a
motion with the same court for reconsideration of the Opinion
and Order dismissing the class action complaint.
RYLAND GROUP: Shareholders Launch Securities Lawsuit in N.D. TX
---------------------------------------------------------------
Ryland Group, Inc. and two of its officers face a securities
class action filed in the United States District Court for the
Northern District of Texas.
The lawsuit alleges violations of federal securities law as a
result of information about home sales during the fourth quarter
of 2003. The Company denies the suit's allegations.
SANGSTAT MEDICAL: CA Court Dismisses Securities Violations Suit
---------------------------------------------------------------
The California Superior Court, County of Alameda granted
SangStat Medical Corporation's motion to dismiss the shareholder
class action filed against it, styled "Pignone v. SangStat
Medical Corp., et al., (Case No. RG 03110801)."
The plaintiff alleged that he was a stockholder of SangStat and
purported to bring the action on behalf of the holders of
SangStat common stock. The plaintiff named as defendants in the
action are SangStat and each of SangStat's former directors.
The plaintiff's complaint asserts that SangStat and each of its
former directors breached fiduciary duties to SangStat
stockholders by consenting to the acquisition by Genzyme. The
plaintiff's complaint did not seek monetary damages but instead
sought only equitable relief, including an order rescinding the
transaction to the extent already implemented. The plaintiff
also sought costs of suit, including attorneys' fees.
The plaintiff filed an amended complaint in November 2003. On
April 5, 2004, the Court granted SangStat's motion to dismiss
with prejudice.
THERAGENICS CORPORATION: Asks For Summary Judgement in GA Suit
--------------------------------------------------------------
Theragenics Corporation asked the United States District Court
for the Northern District of Georgia to grant summary judgment
in the consolidated securities class action filed against it and
certain of its officers and directors, alleging violations of
the federal securities laws.
The suit alleges violations of Sections 10(b), 20(a) and Rule
10b-5 of the Securities and Exchange Act of 1934, and purports
to represent a class of investors who purchased or sold
securities during the time period from January 29, 1998 to
January 11, 1999. The amended complaint generally alleges that
the defendants made certain misrepresentations and omissions in
connection with the performance of the Company during the class
period and seeks unspecified damages.
On May 14, 1999 a Company stockholder filed a derivative
complaint in the Delaware Court of Chancery purportedly on
behalf of the Company, alleging that certain directors breached
their fiduciary duties by engaging in the conduct that is
alleged in the consolidated federal class action complaint. The
derivative action has been stayed by the agreement of the
parties.
On July 19, 2000, the Court granted the Company's motion to
dismiss the consolidated federal class action complaint for
failure to state a claim against the Company, and granted the
plaintiffs leave to amend their complaint. On August 21, 2000,
the plaintiffs filed a second amended complaint and on March 30,
2001, the Court denied the defendant's motion to dismiss the
second amended complaint. The Court also denied the Company's
motion for reconsideration. Subsequently, the Court certified
the class and the parties commenced discovery. Discovery in the
case is now complete.
The Company filed a motion for summary judgment on September 30,
2003 in which it asks the Court to find that there is no genuine
issue as to any material fact in the case, and that, therefore,
the case must be dismissed. The plaintiffs have filed a brief
in opposition, and the motion is currently pending before the
Court.
WARNER LAMBERT: Forges $430M Neurontin "Off-labeling" Suit Pact
---------------------------------------------------------------
Florida Attorney General Charlie Crist announced a 50-state $430
million settlement with Warner-Lambert over allegations that the
company engaged in illegal "off-label" marketing of the
prescription drug Neurontin in direct violation of state and
federal laws. This case marks the first time the government has
aggressively prosecuted a pharmaceutical company for "off-label"
marketing practices.
Warner-Lambert, a subsidiary of Pfizer Inc., the world's largest
pharmaceutical company, illegally promoted Neurontin for various
"off-label" uses, including the treatment of psychiatric
disorders, back pain, and headaches. The Food and Drug
Administration, however, has approved the drug only for the
treatment of epilepsy and post-herpetic neuralgia.
"The health and safety of our consumers was potentially put at
risk when they took this medication for uses not approved by the
FDA," said AG Crist. "This settlement is important because it
will ensure that companies provide doctors and consumers with
fair and balanced information about this medication and others
like it."
Investigations conducted by state Attorneys General Consumer
Protection Divisions, the National Association of Medicaid Fraud
Control Units and the U.S. Attorney's Office in Boston uncovered
that approximately 90% of prescriptions written for Neurontin
were for "off-label" purposes. Although it is not illegal for
doctors to prescribe medications for "off-label" uses, it is
illegal for companies to encourage them to do so by
misrepresenting the medications' effectiveness in such uses.
Warner-Lambert allegedly circulated anecdotal reports promoting
"off-label" uses for Neurontin; sent payments to prescribers for
"research" that were, in effect, kickbacks for "off-label"
prescribing; and provided incomplete information about the drug
to the drug reference manual "Drugdex." These practices, among
many others, violated state consumer protection, state and
federal Medicaid, and federal drug regulations laws.
The $430 million settlement will be distributed as follows:
(1) $240 million to the U.S. Attorney's Office in Boston
for criminal violations of the Food, Drug and Cosmetics
Act;
(2) $152 million to the states and federal government for
Medicaid violations;
(3) approximately $2 million will go to the Florida Agency
for Health Care Administration for restitution;
(4) approximately $2 million to the Florida Attorney
General's Medicaid Fraud Control Unit in penalties;
(5) $38 million to the states for consumer protection
violations;
(6) $10 million in attorneys' fees and costs, of which
$678,000 will go to the Florida Attorney General's
Office;
(7) $28 million for a national advertising campaign and
remediation program to be overseen by AG Crist and
other Attorneys Generals
New Securities Fraud Cases
ABATIX CORPORATION: Reinhardt Wendorf Launches Stock Suit in TX
---------------------------------------------------------------
Reinhardt Wendorf & Blancfield filed a securities class action
in the United States District Court for the Northern District of
Texas, 4-04CV-341-A, on behalf of all persons or entities who
purchased or otherwise acquired Abatix Corporation securities
(Nasdaq: ABIX) between April 14, 2004 at 5:05 p.m. EST to April
16, 2004, at 9:27 a.m. EST, both times inclusive. The Complaint
names Terry Shaver, Frank Cinatl IV, and the Company as
defendants.
The Complaint alleges that defendants violated the Securities
Exchange Act of 1934 by making a series of materially false and
misleading statements concerning the Abatix's business agreement
with Goodwin Group LLC during the Class Period. Specifically,
the Complaint alleges that Abatix knew but failed to disclose
certain material facts, including that:
(1) the Company had not verified the proprietary nature of
RapidCool or that the Company had in fact, obtained the
"exclusive worldwide rights to distribute RapidCool;"
(2) that Abatix had not verified that Goodwin Group LLC was
the assignee of patents relating to RapidCool products,
nor had defendants verified the ownership of any patent
applications filed with respect to the product line;
and
(3) defendants knew but failed to disclose that they had
only been permitted to perform limited due diligence on
the proprietary nature of RapidCool products before
signing the distributorship agreement. As a result, the
prices of the Company's securities were artificially
inflated during the Class Period.
On April 21, 2004, the Company admitted that Abatix's April 14,
2004 press release announcing the signing of an agreement with
Goodwin Group LLC to distribute the RapidCool (TM) product line
created a significant increase in the price and volume of shares
traded, "which the Abatix believes was not warranted by Company
developments."
As a result of defendants' false and misleading statements the
price of Abatix securities was artificially inflated throughout
the Class Period, causing plaintiff and the other members of the
Class to suffer damages.
For more details, contact Garrett D. Blanchfield of Reinhardt
Wendorf & Blanchfield by Mail: E-1000 First National Bank Bldg.,
332 Minnesota St., St. Paul, MN 55101 by Phone: (800) 465-1592
or (651) 227-9990 by Fax: (651) 297-6543 or by E-Mail:
g.blanchfield@rwblawfirm.com
GENTA INC.: Goodkind Labaton Lodges Securities Fraud Suit in NJ
---------------------------------------------------------------
Goodkind Labaton Rudoff & Sucharow LLP filed a securities class
action in the United States District Court for the District of
New Jersey, on behalf of persons who purchased or otherwise
acquired publicly traded securities of Genta Inc. (NASDAQ:GNTA)
between September 10, 2003 and May 3, 2004, inclusive. The
lawsuit was filed against Genta and Raymond P. Warrell, Jr. and
Loretta M. Itri.
The complaint alleges that Defendants violated the federal
securities laws by issuing materially false and misleading
statements throughout the Class Period that had the effect of
artificially inflating the market price of the Company's shares.
Specifically, the Complaint alleges that throughout the Class
Period, Defendants misrepresented the safety of the Company's
drug, Genasense, for the treatment of advanced melanoma.
Additionally, Defendants misrepresented to the investor
community that Genasense did not appear to be associated with
serious adverse reactions in Phase III clinical trials. The
complaint further alleges Defendants knew that the drug was
associated with increased toxicity, and that FDA approval was
unlikely, overwhelming the marginal benefits of Genasense.
On April 30, 2004, the staff of the Oncologic Drugs Advisory
Committee ("ODAC") of the Food & Drug Administration ('FDA")
stated that the Phase III trial of Genasense failed to
demonstrate a survival benefit, the primary endpoint of the
trial. On May 3, 2004, the ODAC ruled by a majority vote that in
the absence of increased survival, the evidence presented did
not provide evidence of the effectiveness of the drug. As a
result of this announcement by ODAC, shares of Genta fell more
than $3 per share, to close at $5.11 on May 3, 2004 on very
heavy volume.
For more details, contact Christopher Keller, Esq. by Phone:
800-321-0476 by E-Mail: investorrelations@glrslaw.com or by
visiting their Web Site:
http://www.glrs.com
GENTA INC.: Milberg Weiss Lodges Securities Fraud Lawsuit in NJ
---------------------------------------------------------------
The law firm of Milberg Weiss Bershad & Schulman LLP filed a
securities class action on behalf of purchasers of the
securities of Genta, Inc. (NASDAQ: GNTA) between February 24,
2003 and May 3, 2004, inclusive, seeking to pursue remedies
under the Securities Exchange Act of 1934.
The action is pending in the United States District Court for
the District of New Jersey, against defendants Genta, Raymond P.
Warrell, Jr. (President, CEO, Director) and William P. Keane
(Chief Financial Officer).
The complaint alleges that during the Class Period defendants
artificially inflated the price of Genta stock by concealing
material information about the safety and efficacy of Genasense,
a potential blockbuster anticancer agent that was being reviewed
for approval by the Food and Drug Administration ("FDA"). The
complaint alleges that:
(1) defendants did not maintain sufficient documentation to
support the Company's repeated claims that Genasense
could demonstrate an "overall survival benefit";
(2) the Genasense data submitted by the Company to the FDA
was unclear, and that much of the improvement noted by
the Company in its studies was not documented and could
not be isolated and identified;
(3) defendants lacked a good faith basis to claim that
approval of Genasense was reasonably foreseeable; and
(4) as a result of the deficiencies in the Genasense FDA
application, it was not foreseeable at any time during
the Class Period that Genta would be able to achieve
profitability in the near-term.
On April 30, 2004, Genta shareholders learned that the FDA
advisory panel had voted 13-3 in favor of recommending that the
FDA reject the Genasense application for Genta's failure to
demonstrate that Genasense's benefits outweighed its risks and
side effects. That day, the FDA issued a statement regarding
Genasense stating the advisory panel determined that Genta had
failed to demonstrate either that Genasense performed as
promised or that the Company maintained the data to support its
claims of efficacy. In reaction to this announcement, the price
of Genta common stock plummeted, falling almost $6.00 per share,
to below $8.45 per share. In the days that followed shares of
the Company continued to trade lower as investors digested the
news, trading to below $5.00 by May 4, 2004.
For more details, contact Steven G. Schulman, Peter E. Seidman &
Andrei V. Rado by Mail: One Pennsylvania Plaza, 49th fl.,
New York, NY, 10119-0165 by Phone: (800) 320-5081 by E-Mail:
sfeerick@milbergweiss.com or visit their Web Site:
http://www.milbergweiss.com
GENTA INC.: Bernard Gross Lodges Securities Fraud Lawsuit in NJ
---------------------------------------------------------------
The Law Offices of Bernard M. Gross, P.C. filed a securities
class action in the United States District Court for the
District of New Jersey, against defendants GENTA INC.
(Nasdaq:GNTA) and Raymond P. Warrell, Jr., M.D. -- Chief
Executive Officer and Chairman of the Board and Loretta M. Itri,
M.D., on behalf of all persons who purchased Genta securities
(Nasdaq:GNTA), between March 26, 2003 through and including May
3, 2004 seeking remedies under the Securities Exchange Act of
1934.
Genta is a pharmaceutical company, which describes itself as
"focused on delivering innovative products for the treatment of
patients with cancer." Genasense is an oncology drug created by
Genta, which attempts to target directly the biochemical pathway
whereby cancer cells are ultimately killed by chemotherapy.
The complaint alleges that, during the Class Period, defendants
falsely represented to the investing public that Genasense did
not appear to be associated with serious adverse reactions in
the Phase 3 clinical trial. However, unknown to the public, the
use of Genasense was associated with increased toxicity and
discontinuations due to adverse events which seriously
threatened FDA approval of the drug, particularly in light of
the marginal benefits associated with the drug. By reason of the
testing of Genasense, defendants knew or should have known of
the following events:
(1) 69 (18.6%) patients discontinued therapy for adverse
events on the G3139 arm versus 39 (10.8%) on the DTIC
arm alone;
(2) the rate of serious adverse events was 40% on the G3139
arm versus 27% on DTIC alone;
(3) all toxicities were more frequent on the Genasense arm;
(4) the frequency of grade 3-4 adverse events, serious
adverse events and treatment emergent adverse events
leading to discontinuation were all higher on the
Genasense arm;
(5) the incidence of thrombocytopenia, a serious bleeding
disorder characterized by a marked decrease in the
number of blood platelets, was 28.8% in the Genasense
arm, compared with 11.1% in the DTIC arm;
(6) pyrexia (fever) was three times as frequent on the
Genasense arm with 53.1% in the Genasense arm, compared
to 17.5% on the DTIC arm;
(7) neutropenia (significantly reduced white blood cells)
and anorexia were twice as frequent with Genasense;
(8) upper extremity thrombosis (blood clots) occurred in 5%
of the patients receiving Genasense, compared with .8%
of the patients receiving DTIC alone;
(9) in the Genasense arm, 18.6% of patients discontinued
treatment permanently, compared with 10.8% on the DTIC
arm; and
(10) since the dosing of DTIC was identical on the two arms,
toxicity increases were due to the addition of G3139.
On September 10, 2003, Genta announced the results of the Phase
3 clinical study of Genasense and submitted the first portion of
the NDA to the FDA. The NDA was completed on December 8, 2003
and on February 6, 2004, Genta announced that the FDA had
accepted the NDA. In addition, Genta announced on February 6,
2004 that the FDA granted Priority Review status to the
application. On April 30, 2004, the staff of the Oncologic Drugs
Advisory Committee (ODAC) of the FDA stated in briefing
materials in advance of the May 3, 2004 ODAC meeting that the
Phase 3 clinical trial of Genasense failed to demonstrate a
survival benefit, which was the primary trial endpoint. However,
small but unreliable benefits were seen for progression-free
survival (PFS) and response rates (RR). The staff also stated:
"Uncertainty also exists regarding whether an improvement in PFS
and RP of this magnitude outweighs the increase in toxicity seen
with the combination (of Genasense and dacarbazine.): . . .
Survival was not improved and toxicity was increased." As a
result of this April 30th announcement, the price of Genta
shares dropped $5.83 or 40.4% to close at $8.60 on the Nasdaq
market on an unusually high volume of over 30 million shares
traded.
On May 3, 2004, the ODAC ruled by a 13-3 vote that, in the
absence of increased survival, the evidence presented did not
provide substantial evidence of effectiveness to outweigh the
increased toxicity of Genasense. As a result of this
announcement, the price of Genta shares fell more than $3 per
share, to close at $5.11 on May 3, 2004 at a high volume of over
17 million shares traded.
For more details, contact The Law Offices Bernard M. Gross,
P.C., (Susan R. Gross, Esq. & Deborah R. Gross, Esq.,) by Mail:
1515 Locust Street, Suite 200, Philadelphia, PA 19102 by Phone:
866-561-3600 or 215-561-3600 by E-Mail: susang@bernardmgross.com
or debbie@bernardmgross.com or visit their Web Site:
http://www.bernardmgross.com
LIQUIDMETAL TECHNOLOGIES: Geller Rudman Files FL Securities Suit
----------------------------------------------------------------
The Law Firm of Geller Rudman, PLLC announced today that a class
action lawsuit has been filed in the United States District
Court for the Middle District of Florida on behalf of purchasers
of Liquidmetal Technologies, Inc. (Nasdaq: LQMTE) common stock
during the period between May 22, 2002 and March 30, 2004,
inclusive.
The complaint charges that LQMT, John Kang, and Brian McDougal
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 May
22, 2002 through March 30, 2004, about its financial results.
More specifically, the Complaint alleges that the Company failed
to disclose and misrepresented the following material adverse
facts, which were known to the defendants or recklessly
disregarded by them;
(1) that LQMT failed to make its product commercially
feasible due to its high manufacturing cost;
(2) that LQMT, struggling with the lack of market
acceptance for the product, attempted to boost revenues
through fraudulent means via a deal with a South Korean
metals processing company;
(3) that LQMT's improving financial results were only made
possible though improper revenue recognition practices
in violation of Generally Accepted Accounting
Principles ("GAAP").
On February 20, 2004, the Company disclosed that it would have
to restate revenues for the third and fourth quarters of 2002
and the first quarter of 2003 due to improper revenue
recognition. On March 30, 2004, defendants revealed that the
Company's 10-K has been indefinitely delayed due to its
inability to complete the audit of prior years' financial
results. On April 29, 2004, LQMT announced that it received a
Nasdaq Staff Determination indicating that because the company
has not timely filed a Form 10-K with the SEC for the period
ended December 31, 2003, LQMT faces delisting from NASDAQ. In
response to the news, the price of LQMT stock declined during
the class period to close at slightly over $3 per share on March
30, 2004, a drop of over 80% from the stock's Class Period high.
For more details, contact Geller Rudman, PLLC by Mail: 197 South
Federal Highway, Suite 200, Boca Raton, FL 33432 by Phone:
(561) 750-3000 or (888) 262-3131 by Fax: (561) 750-3364 or visit
their Web Site: http://www.geller-
rudman.com/view_case.asp?cID=285
VERDISYS INC.: Geller Rudman Lodges Securities Suit in S.D. TX
--------------------------------------------------------------
The Law Firm of Geller Rudman, PLLC initiated a securities class
action in the United States District Court for the Southern
District of Texas, Houston Division, on behalf of purchasers of
Verdisys, Inc. (OTC Pink Sheets: VDYS.PK) (formerly Nasdaq:
VDYS) publicly traded securities during the period between
August 20, 2003 and March 9, 2004, inclusive.
The complaint charges Verdisys and its former Chief Executive
Officer, Dan Williams, and the Company's former Chief Financial
Officer, Andrew Wilson, with violations of Sections 10(b) and
20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder. The Complaint alleges that defendants
made materially misstatements with respect to the Company's
financial results. More specifically, the Complaint alleges that
defendants failed to disclose and indicate:
(1) that the Company had materially overstated its net
income and earnings per share;
(2) that defendants prematurely recognized revenue from
contracts between the Company, Edge Capital Group, Inc.
and Energy 2000 in violation of GAAP and its own
revenue recognition policy;
(3) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company; and
(4) that as result of recognizing revenue prematurely, the
Company's financial results were inflated at all
relevant times.
On March 10, 2004, the United States Securities and Exchange
Commission ("SEC") announced the temporary suspension of trading
of the securities of Verdisys at 9:30 a.m. on March 10, 2004,
and terminating at 11:59 p.m. on March 23, 2004. The SEC further
stated that temporarily suspending trading in the securities of
Verdisys was because of questions that had been raised about the
accuracy and adequacy of publicly disseminated information,
including assertions made in Commission filings, concerning,
among other things, the company's business operations related to
its lateral drilling services and the company's anticipated and
actual revenues.
On March 15, 2004, the Company announced that it was conducting
an ongoing internal investigation that began in December 2003
into the Company's activities in the second and third quarters
of 2003. The Company had thus far been unable to determine
whether certain radial drilling services were actually provided
to two of Verdisys' customers, Edge Capital Group, Inc. and
Energy 2000 NGC, Inc. in the Monroe field in Louisiana.
Accordingly, the Company expected to restate its interim 2003
financial statements to reverse $230,000 of revenue in the
quarter ended June 30, 2003, and $605,000 of revenue in the
quarter ended September 30, 2003, until such a time that it
could confirm such services were performed.
When shares of Verdisys resumed trading on March 24, 2004, they
plummeted $2.10 per share, or 35.9%, on unusually high volume to
close at $3.75 per share.
For more details, contact GELLER RUDMAN, PLLC (Samuel H. Rudman,
Esq. or David A. Rosenfeld, Esq.) by Mail: 200 Broadhollow,
Suite 406, Melville, NY 11747 by Phone: 631-367-7100 or
1-877-992-2555 by Fax: 1-631-367-1173 by E-Mail:
info@geller-rudman.com or visit their Web Site:
http://www.geller-rudman.com/view_case.asp?cID=266
*********
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.
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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.
*********
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Copyright 2004. All rights reserved. ISSN 1525-2272.
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