/raid1/www/Hosts/bankrupt/CAR_Public/040809.mbx
C L A S S A C T I O N R E P O R T E R
Monday, August 9, 2004, Vol. 6, No. 156
Headlines
AMERICAN HONDA: Recalls 7,494 FS600s For Defective Main Stands
AMERICAN HONDA: Recalls 7,067 S2000s For FMVSS 108 Noncompliance
AMERITRADE HOLDING: NE Court Hears Motion For Summary Judgment
AMERITRADE HOLDING: NE Court Refuses To Certify Consumer Lawsuit
BAUSCH & LOMB: Shareholder Settlement Won't Dent Firm's Earnings
BAYERISCHE MOTOREN: Recalls 7,532 Vehicles Due To Fire Hazard
CHARTER COMMUNICATIONS: Reaches $144M Derivative Suit Settlement
CLARUS CORPORATION: Enters $4.5M GA Securities Suit Settlement
COX COMMUNICATIONS: Faces 9 Shareholder Suits V. $8 Bil Buyout
EDISON SCHOOLS: Lawsuit Settlement Hearing Set October 12, 2004
ETHICON ENDO-SURGERY: NC Court Decertifies AWP Inflation Lawsuit
EVERGREEN RESOURCES: Shareholders File CO Suit V. Pioneer Merger
FINOVA CAPITAL: Plaintiffs File Consolidated Fraud Lawsuit in SC
GENERAL MOTORS: Recalls 29,951 SUVs Due To Defective ECAS System
GENERAL MOTORS: Recalls 41,928 Vehicles Due To Crash Hazard
GENERAL MOTORS: Recalls 2,857 Vehicles Due To Fuel Tank Defects
GENERAL MOTORS: Recalls 47,991 Vehicles For Torque Bolt Defects
HA-LO INDUSTRIES: Suit Settlement Hearing Set October 1, 2004
HALLIBURTON CO.: Former Employees Allege Fraud in New Lawsuit
HEALTH MANAGEMENT: Archie Lamb Lodges FL Price Gouging Lawsuit
HOLMES GROUP: Recalls 1.8M Rival Slow Cookers Due To Injury Risk
INTERNATIONAL TRUCK: Recalls 7,610 Trucks Due To Harness Defects
JENNIFER CONVERTIBLES: Settlement Hearing Set October 8, 2004
KINDER MORGAN: Defense Attorney Disputes Claims of Over Billing
LEAPFROG ENTERPRISES: CA Court Dismisses Suit, Denies Amendments
MCA FINANCIAL: SEC Settles Fraud Suit V. Seven Former Executives
MEDCO HEALTH: NY Court OKs ERISA Settlement, Other Suits Pending
MEDCO HEALTH: Asks PA Court To Dismiss Consumer Antitrust Suit
MEDCO HEALTH: Plaintiffs Lodge Amended Antitrust Suit in N.D. AL
MEDCO HEALTH: Asks CA Court To Dismiss Drug Price-Fixing Lawsuit
METLIFE INC.: Asks NY Court To Dismiss Suit Over Dec. 1999 Pact
METLIFE INC.: Seeks Dismissal of Downcoding, Bundling Suit in FL
METROPOLITAN CASUALTY: Discovery Proceeds in Consumer Fraud Suit
METROPOLITAN LIFE: Continues To Face Sales Practices Lawsuits
METROPOLITAN LIFE: Implements Settlement Of Discrimination Suit
METROPOLITAN LIFE: Asks NY Court To Certify Policyholder Lawsuit
METROPOLITAN LIFE: Retirees Commence Consumer Fraud Suit in DC
METROPOLITAN LIFE: Claims in NY Reorganization Suits Reinstated
METROPOLITAN LIFE: NY Court Refuses To Nix Securities Act Claim
METROPOLITAN PROPERTY: Medical Practitioners Commence FL Lawsuit
METROPOLITAN PROPERTY: IL Consumers Commence Two Fraud Lawsuits
NATIONAL FINANCIAL: SEC Institutes Settled Proceedings V. Owner
NEW JERSEY: Residents Lodge Suit V. Privately Owned Dams, State
NORTH MISSISSIPPI: Forges Settlement For Uninsured Patients Suit
OSRAM SYLVANIA: Recalls 5.6M B10 Light Bulbs Due To Injury Risks
POST PROPERTIES: Lawsuit Settlement Hearing Set August 25, 2004
PROCOM TECHNOLOGY: Settlement Hearing Set September 10, 2004
PUBLIC SERVICE: Reaches Pact For NJ Gas Meter Installation Suit
ROXY TRADING: Recalls Sesame Seeds For Salmonella Contamination
SCHERING-PLOUGH: Discovery Proceeds in NJ Securities Fraud Suit
SCHERING-PLOUGH: Plaintiffs Appeal NJ Fiduciary Suit Dismissal
SUBARU OF AMERICA: Recalls 1,959 Vehicles Due To Injury Hazard
SYMBOL TECHNOLOGIES: DE Court Approves Gold Lawsuit Settlement
TOYOTA NORTH: Recalls 1,959 Lexus LS 430 Due To Crash Hazard
TRIUMPH MOTORCYCLES: Recalls 2,792 Motorcycles Due To Fire Risks
VIROPHARMA INC.: Lawsuit Settlement Hearing Set October 12, 2004
XEROX CORPORATION: Discovery Continues in CT Securities Lawsuit
XEROX CORPORATION: Discovery Proceeds in CA Water Pollution Suit
XEROX CORPORATION: Asks Court To Dismiss ERISA Violations Suit
XEROX CORPORATION: NY Court To Rule on Apartheid Suit Dismissal
XEROX CORPORATION: NY Court Grants Certification To Bias Lawsuit
YAHOO.COM: CA Associates Lodges Suit V. Message Board Insults
New Securities Fraud Cases
CORINTHIAN COLLEGES: Lerach Coughlin Files Securities Suit in CA
CORINTHIAN COLLEGES: Wolf Haldenstein Lodges CA Stock Fraud Suit
EXPRESS SCRIPTS: Lerach Coughlin Lodges Securities Lawsuit in MO
INVISION TECHNOLOGIES: Brian M. Felgoise Lodges Stock Suit in NY
INVISION TECHNOLOGIES: Charles J. Piven Files CA Securities Suit
KVH INDUSTRIES: Marc S. Henzel Files Securities Fraud Suit in RI
TARO PHARMACEUTICAL: Brodsky & Smith Files Securities Suit in NY
TARO PHARMACEUTICAL: Schiffrin & Barroway Lodges NY Stock Suit
THORATEC CORPORATION: Brodsky & Smith Lodges CA Securities Suit
WIRELESS FACILITIES: Schiffrin & Barroway Files Stock Suit in CA
*********
AMERICAN HONDA: Recalls 7,494 FS600s For Defective Main Stands
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American Honda Motor Co., Inc. is cooperating with the National Highway
Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary
recall for about 7,494 units of Year 2002-2004 Honda FSC600 motorcycles.
Manufactured from November 2001 to December 2003, the NHTSA has determined
that on certain motorcycles, the main stand is attached to the frame with
two brackets, nuts and bolts. The nuts are spot-welded to the brackets. If
clearance exists between the nut and bracket, the spot welds may break when
the bolt is torqued. Over time, a bolt can loosen and fall out. The main
stand could partially or completely detach from the frame, interfering with
or damaging the rear wheel, and increasing the risk of a vehicle crash. A
completely detached stand falling on the roadway also creates a hazard for
other vehicles.
Dealers will install new brackets, longer bolts, and locknuts. The
manufacturer has reported that owner notification is expected to begin
during July 2004. Owners may contact Honda at 1-800-999-1009.
AMERICAN HONDA: Recalls 7,067 S2000s For FMVSS 108 Noncompliance
----------------------------------------------------------------
American Honda Motor Co., Inc. is cooperating with the National Highway
Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary
recall for about 7,067 units of Year 2000 Honda S2000 passenger vehicles.
Manufactured from June 1999 to April 2000 the NHTSA has determined that
certain passenger vehicles fail to conform to the requirements of Federal
Motor Vehicle Safety Standard No. 108, "Lamps, Reflective Devices, and
Associated Equipment." The side marker lamp lens and side reflex reflector
lens in the tail lamp assembly were manufactured with incorrect dye.
Dealers will replace the tail light assemblies. The manufacturer has
reported that owner notification is expected to begin during July 2004.
Owners may contact Honda at 1-800-999-1009.
AMERITRADE HOLDING: NE Court Hears Motion For Summary Judgment
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The District Court of Douglas County, Nebraska has yet to rule on summary
judgment for the class action filed against Ameritrade Holdings Corporation,
claiming the Company was not able to handle the volume of subscribers to its
Internet brokerage services. The complaint, as amended, seeks injunctive
relief enjoining alleged deceptive, fraudulent and misleading practices,
equitable relief compelling the Company to increase capacity, and
unspecified compensatory damages.
In May 2001, the Company filed a motion for summary judgment in the matter,
which the plaintiffs opposed. The court granted summary judgment for the
Company on January 2, 2002, and the plaintiffs appealed. On August 1, 2003,
the Nebraska Supreme Court reversed the District Court's grant of summary
judgment and remanded the case to the District Court for further
proceedings. The Nebraska Supreme Court did not decide whether the
plaintiffs' claims have merit.
On October 8, 2003, the Company filed with the District Court a renewed
motion for summary judgment. The District Court held a hearing on the
summary judgment motion on December 5, 2003.
AMERITRADE HOLDING: NE Court Refuses To Certify Consumer Lawsuit
----------------------------------------------------------------
The United States District Court for the District of Nebraska refused class
certification for a lawsuit filed against Ameritrade Holdings Corporation by
Keener, a pro se plaintiff. The suit also names as defendants Knight
Trading Group, Inc. and certain individuals.
The plaintiff asserts his action on behalf of persons who became clients of
the Company during the period from March 29, 1995 through September 30,
2003. As it pertains to the Company, the principal allegations of the
complaint are:
(1) that the Company had an indirect and direct equity
interest in Knight, to which it directed most of its
orders for execution;
(2) that the Company failed to accurately disclose the
nature of its relationship with Knight and the
consideration it received from Knight for directing
order flow to Knight; and
(3) that clients of Ameritrade did not receive best
execution of their orders from Knight and the Company.
The plaintiff claims that the Company's conduct violated certain provisions
of the federal securities laws, including Sections 11Ac, 10(b) and 3(b) of
the Securities Exchange Act of 1934 and SEC rules promulgated thereunder.
Plaintiff further claims the
individual defendants, including a present director and a former director of
the Company, are liable under Section 20(a) of the Exchange Act as
"controlling persons" for the claimed wrongs attributed to the Company and
Knight. In his prayer for relief, plaintiff requests monetary damages
and/or rescissionary relief in the amount of $4.5 billion against all
defendants, jointly and severally.
In January 2004, the Company, Knight and the individual defendants filed
motions to dismiss the complaint and to deny class certification or strike
the class action allegations. In July 2004, the Court granted the Company
defendants' motion to deny class certification and to stay the action
pending arbitration. The District Court ruled that plaintiff must amend
the complaint to delete all references to class members. The District Court
ruled that if plaintiff files an amended complaint, the Company defendants
may reassert a motion to compel arbitration and, if the motion is filed, the
claims
against the Company defendants will be stayed pending arbitration. The
District Court also granted the Knight defendants' motion to dismiss and to
strike to the extent of denying certification of a plaintiff class. The
District Court ruled that plaintiff must file an amended complaint that
deletes
all references to class members and that cures all additional defects.
BAUSCH & LOMB: Shareholder Settlement Won't Dent Firm's Earnings
----------------------------------------------------------------
The agreement to settle a three-year-old shareholder class action pending in
the U.S. District Court for the Western District of New York will in no way
affect the earnings of Bausch & Lomb, the Company said in a statement,
according to the Rochester Democrat and Chronicle.
The company further stated that once approved by the Court the insurance
company would pay the settlement. Robert B. Stiles, Bausch & Lomb general
counsel told the Rochester Democrat and Chronicle that the company decided
to settle the suit, "in order to eliminate the burden and expense of
protracted litigation."
Originally filed in December 2001, the suit alleges that B&L overstated
profits by $18 million during three quarters in 1999 and 2000, it also
alleges that the Company, among other things, failed to report $6 million in
rebates and reported $4.7 million in worthless inventory at cost value
instead of as a loss. Class members will include thousands of people who
bought stock from January 27, 2000, to August 24 of that year.
Plaintiff's attorney, Mark Rifkin, a partner at Wolf Haldenstein Adler
Freeman & Herz in New York City told the Rochester Democrat and Chronicle
that the lawsuit in question is one that consolidated several different
shareholder suits. Mr. Rifkin also stated, "We think the case presented some
risks to the class, however in light of the circumstances, we felt a
settlement was appropriate."
BAYERISCHE MOTOREN: Recalls 7,532 Vehicles Due To Fire Hazard
-------------------------------------------------------------
Bayerische Motoren Werke is cooperating with the National Highway Traffic
Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for
about 7,532 units of Year 2004 BMW 5 Series and BMW 6 Series passenger
vehicles.
Manufactured from September 2003 to April 2004, the NHTSA has determined
that on certain passenger vehicles equipped with 8-cylinder engines, a
circular retention clip at the quick-release coupling along the fuel supply
line was inadvertently not installed. In the event of a severe frontal
crash, the quick-release coupling could separate, causing fuel leakage. Fuel
leakage, in the presence of an ignition source, could result in a fire.
Dealers will install a circular retention clip at the quick-release coupling
along the fuel supply line. The manufacturer has reported that owner
notification is expected to begin during July 2004. Owners may contact BMW
at 1-800-831-1117.
CHARTER COMMUNICATIONS: Reaches $144M Derivative Suit Settlement
----------------------------------------------------------------
Charter Communications Inc. (Nasdaq: CHTR) (Charter or the Company) executed
memoranda of understanding with lawyers representing the plaintiffs in 18
class action and derivative lawsuits, effectively ending litigation pending
for two years. If the settlement is approved by the courts before which the
suits are pending, Charter will pay current and former shareholders and
their attorneys $144 million in cash and equity to settle claims about its
accounting and business practices from late 1999 through 2001. The $64
million cash component of the settlement will be provided by Charter's
insurance carriers.
On July 27, the United States Securities and Exchange Commission (SEC)
concluded its two year investigation of Charter arising out complaints
similar to those lodged in the civil lawsuits. As part of that settlement,
Charter neither admitted nor denied any wrongdoing and the SEC assessed no
fine against the Company. In the Settlement Agreement and Cease and Desist
Order, Charter agreed to the entry of an administrative order prohibiting
any future violations of United States securities laws.
"The settlement of the securities litigation effectively closes the books on
these serious legal matters confronting the Company," Charter President and
CEO Carl Vogel said. "We can now devote our complete and full attention to
serving customers and growing revenues. We will also maintain our efforts to
improve our debt structure in ways that will give us increased financial and
operating flexibility," he said.
In July 2003, the Department of Justice decided not to charge the Company as
part of an investigation into business practices at Charter during 2000 and
2001, most of which were the focus of the civil lawsuits that are now in the
process of being settled. The Government's investigation did result in the
indictment of four former Charter officers. Charter fully cooperated with
the Department of Justice in the inquiry and was the recipient of rare
public praise by both the United States Attorney and the chair of the
Government's Corporate Fraud Task force for its "extraordinary" cooperation.
No current officer or director of Charter is a target of the federal
investigation.
The execution of the memoranda of understanding between Charter and
attorneys for both the lead class action plaintiff and for the plaintiffs in
pending shareholder derivative suits, is the first of several procedural
steps that must be taken before the lawsuits are formally settled. The
federal judge before whom the suits are pending must give preliminary
approval to the settlement after final documentation is completed. The
current and former shareholders who are affected by the settlement -- the
"class members" who bought Charter common stock between November 1999 and
August 2002 -- must then be notified of its basic terms. Subsequently, the
same federal judge will hear objections to the settlement, if any, before
final approval is given. After final approval, the benefits of the
settlement would then be distributed to the affected class members.
As part of the settlement, the Company will also commit to maintaining or
implementing certain corporate governance measures. "We welcome any changes
that will improve our corporate governance and are committed to operating
our business consistent with the highest ethical standards," Vogel said.
"This has been a focus of mine since I started at Charter," he said.
Both before and during the SEC investigation, Charter had conducted an
internal review of its business practices. The Department of Justice, SEC
and civil inquiries focused on business and accounting practices in 2000 and
2001. Virtually all of the senior business leadership during that period has
been terminated or replaced.
As part of the settlement, all claims against Charter and its former and
present officers and directors will be released. The $144 million Charter
will pay in cash and equity will also cover the fees and expenses of
plaintiffs' counsel. Although Charter's insurance carriers will contribute
$64 million in cash as a key component of the settlement, Charter itself
will not be required to make any cash payments. The balance will be paid in
shares of Charter Class A common stock having an aggregate value of $40
million and ten year warrants to purchase shares of Class A common stock
having an aggregate value of $40 million. The number of warrants to be
issued will be computed as of the day the courts give final approval of the
settlements. The settlement of the various state and federal lawsuits are
conditioned upon, among other things, the parties' approval and execution of
definitive settlement agreements and the approval of the settlements by the
respective state and federal Courts.
CLARUS CORPORATION: Enters $4.5M GA Securities Suit Settlement
--------------------------------------------------------------
The Clarus Corporation (Nasdaq: CLRS) entered into a memorandum of
understanding to settle securities class action brought against the Company
that was originally filed in 2000. Pursuant to the memorandum, the Company
agreed in principle to settle the lawsuit in exchange for a payment of $4.5
million, which will be covered by insurance. The final settlement of the
consolidated class action is subject to certain action including the
execution of definitive documentation and approval by the Court.
The lawsuit, which was filed in the United States District Court for the
Northern District of Georgia on behalf of all persons who purchased
securities of Clarus Corporation ("Clarus" or the "Company") (NASDAQ: CLRS)
between October 20, 1999 and October 25, 2000, inclusive (the "Class
Period"), charges Clarus and certain officers and directors with violations
of Sections 10(b) and 20 of the Securities Exchange Act of 1934 and SEC Rule
10b-5. The complaint alleges that Defendants issued a series of materially
false and misleading statements concerning the Company's financial
condition. In particular, the complaint alleges that the Company improperly
recognized receivables as revenue when payment of those receivables was
overdue and collection improbable. As a result, Clarus's stock price was
artificially inflated throughout the Class Period. The complaint further
alleges that certain Company insiders took advantage of this artificial
inflation and sold millions of dollars worth of their own personal holdings
of Clarus stock.
Nigel Ekern, Clarus' Chief Administrative Officer stated in a press release,
"We continue to be actively engaged in the negotiation of a significant
transaction as part of our strategy to redeploy our cash and utilize our
NOL's, to the extent available. Of course, no assurance can be given that
this transaction will be consummated. Also, we are pleased that the
securities class action lawsuit has been settled and that the settlement
payment is expected to be covered by our insurance carriers."
COX COMMUNICATIONS: Faces 9 Shareholder Suits V. $8 Bil Buyout
--------------------------------------------------------------
Cox Communications (NYSE: COX) is facing nine class actions filed in
response to the Atlanta-based media company's August 2 proposal to go
private in a $8 billion buyout, the American Business Daily reports.
In their SEC filing, the Company further revealed that the nine class-action
lawsuits named Cox and each of its directors as defendants with eight of the
suits also naming Cox Enterprises Inc. (CEI) as a defendant.
The complaints allege the defendants have breached their fiduciary duties to
the stockholders of Cox in connection with CEI's proposal to acquire the
outstanding publicly held minority interest in Cox. The complaints also seek
the certification of a class of Cox stockholders, preliminary and permanent
injunctive relief prohibiting the defendants from proceeding with CEI's
proposal or requiring them to take certain actions with respect to CEI's
proposal, an accounting or compensatory damages (except in one instance),
attorneys' fees and costs, and other relief, and in certain complaints,
rescission or other damages in the event CEI's proposal is consummated.
Filed in the Delaware Court of Chancery on August 2, 2004, the suits were
captioned:
(1) Smith v. Cox Communications Inc. et al.;
(2) Wilson v. Cox Enterprises Inc., et al.;
(3) Steiner v. Cox Communications Inc., et al.;
(4) Guerinv. Cox Enterprises Inc. et al.;
(5) Eastside Investors LLP v. Cox Communications Inc., et
al.; and
(6) Hill v. Cox Communications Inc., et al.
Two other purported shareholders lawsuits were also initiated on the same
day, however it was filed in the Superior Court of Fulton County:
(i) Brody v. Cox Communications Inc., et al.; and
(ii) Golombuski v. Kennedy, et al.
On August 3, 2004, an additional action captioned Schaefer v. Cox
Communications Inc., et al. was filed in the Delaware Court of Chancery,
thus bringing the total to nine class-action lawsuits.
In addition to the allegations reported above, the complaint in the
Golombuski suit also alleges derivative claims on behalf of Cox for
corporate waste, abuse of control, breach of fiduciary duty and unjust
enrichment.
EDISON SCHOOLS: Lawsuit Settlement Hearing Set October 12, 2004
---------------------------------------------------------------
The United States District Court for the Southern District of New York will
hold a fairness hearing for the proposed settlement of the class action
filed against Edison Schools, Inc. on behalf of all persons who purchased or
otherwise acquired Edison common stock: (i) in or traceable to the initial
public offering of Edison common stock conducted on or about November 10,
1999; (ii) in or traceable to the secondary offering of Edison common stock
conducted on or about August 2, 2000; (iii) in or traceable to the follow-on
offering of Edison common stock conducted on or about March 20, 2001; or
(iv) between November 10, 1999 and May 14, 2002, inclusive.
The hearing will be held before the Honorable John E. Sprizzo in the United
States District Court, 40 Centre Street, New York, New York 10007, at 1:00
p.m., on October 12, 2004.
For more details, contact Steven G. Schulman of Milberg Weiss Bershad &
Schulman LLP by Mail: One Pennsylvania Plaza, New York, NY 10119-0165 or by
Phone: (212)-594-5300 OR In re Edison Schools, Inc., Securities Litigation
c/o The Garden City Group, Inc. - Claims Administrator by Mail: P.O. Box
9000 #6205, Merrick, NY 11566-9000 by Phone: (866) 808-3564 or visit:
http://www.gardencitygroup.com
ETHICON ENDO-SURGERY: NC Court Decertifies AWP Inflation Lawsuit
----------------------------------------------------------------
The North Carolina Court of Appeals decertified the class in the class
action filed against Johnson & Johnson and Ethicon Endo-Surgery, Inc., a
Johnson & Johnson operating company which markets endoscopic surgical
instruments.
The suit alleges average wholesale price (AWP) inflation and improper
marketing activities against TAP Pharmaceuticals. Ethicon Endo-Surgery,
Inc. is a defendant based on claims that
several of its former sales representatives are alleged to have been
involved in arbitrage of a TAP drug. The allegation is that these sales
representatives persuaded certain physicians in states where the drug's
price was low to purchase from TAP excess quantities of the drug and then
resell it in states where its price was higher.
On April 24, 2003, the trial judge certified a national class of purchasers
of the TAP product at issue. On July 6, 2004, that class was decertified
by the North Carolina Court of Appeals and the matter remanded to the trial
court for additional consideration.
EVERGREEN RESOURCES: Shareholders File CO Suit V. Pioneer Merger
----------------------------------------------------------------
Evergreen Resources, Inc. and its directors face a securities class action
filed in Denver County District Court in Colorado, after the Company's May
13, 2004 announcement of its merger with Pioneer Natural Resources Company.
The lawsuit alleges that the Company and its directors breached their
fiduciary duties to the Company's shareholders by, among other things,
agreeing to unfair and inadequate consideration for the shares of Evergreen
common stock held by the Company's shareholders. The plaintiffs in the
lawsuit are seeking injunctive relief.
This lawsuit and any other similar lawsuits could result in different merger
consideration being paid to the holders of Evergreen common stock who are
plaintiffs in such suits than the consideration paid to other Evergreen
shareholders. In addition, the combined company may have to indemnify its
directors for damages levied against the directors as a result of such
lawsuits, the Company said in a regulatory filing.
FINOVA CAPITAL: Plaintiffs File Consolidated Fraud Lawsuit in SC
----------------------------------------------------------------
Plaintiffs' attorneys Bagnell & Eason LLC, McGowan Hood & Felder and others
have filed a consolidated complaint against Finova Capital Corporation,
accountants Cherry Bekaert & Holland, attorneys Moore & Van Allen, and
various individuals, which was consolidated in the Federal District Court
for South Carolina, Anderson Division. Judge G. Ross Anderson, Jr. ordered
the plaintiffs who originally filed on behalf of subordinated noteholders of
the Finova-funded Thaxton Group, which filed bankruptcy last October to file
a single, consolidated complaint, and the plaintiff's attorneys filed a
unified complaint on July 28, 2004.
Plaintiffs allege Finova funded Thaxton's aggressive expansion by lending
excessive amounts, garnering large profits but leaving itself undersecured.
The complaint says Finova conspired with Thaxton to sell subordinated notes
mimicking bank CDs to unsophisticated investors, without revealing the true
purpose of the notes was to pay off uncollectible portions of Thaxton's debt
to Finova. The complaint also seeks damages against the attorneys and
accountants who aided the scheme and helped inflate Thaxton's financial
statements. A copy of the complaint can be obtained from the clerk's office
of the court or from Bagnell & Eason, LLC. Actions against Thaxton itself
are stayed by bankruptcy.
The complaint identifies four prospective classes, and two plaintiffs seek
to be appointed as lead plaintiffs with respect to each class. The classes
include all noteholders except Thaxton employees, and are differentiated by
the dates the notes were purchased
For more details, contact Bagnell & Eason LLL by Mail: 107 N. York St.,
Lancaster, SC 29720-2064 by Phone: (803)286-5055 or (803) 748-1333
GENERAL MOTORS: Recalls 29,951 SUVs Due To Defective ECAS System
----------------------------------------------------------------
General Motors Corporation is cooperating with the National Highway Traffic
Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for
about 29,951 units of Year 2002 GMC Envoy and Oldsmobile Bravada sports
utility vehicles.
Manufactured from October 2000 to October 2001, the NHTSA has determined
that certain sport utility vehicles equipped with an electronically
controlled air suspension (ECAS) have a condition in which the ECAS may
produce a brief electrical spike while the vehicle is operating. This
electrical spike can disrupt the powertrain control module (PCM) causing the
vehicle to stall. If the spike damages the PCM, the vehicle may not restart.
If this happens while the vehicle is moving, a crash could occur.
Dealers will install a wiring harness. The manufacturer has reported that
owner notification is expected to begin during July or August 2004. Owners
may contact Oldsmobile at 1-800-630-6537 or GMC at 1-866-996-9463.
GENERAL MOTORS: Recalls 41,928 Vehicles Due To Crash Hazard
-----------------------------------------------------------
General Motors Corporation is cooperating with the National Highway Traffic
Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for
about 41,928 units of the:
(1) Cadillac CTS, model 2004
(2) Cadillac SRX, model 2004
(3) Cadillac XLR, model 2004
(4) Chevrolet Corvette, model 2004
Manufactured from January to April 2004, the NHTSA has determined that on
certain passenger vehicles, the washers in the lower control arm ball stud
nut/washer assemblies were made of the wrong material. The washers may
fracture and become loose or fall away from the vehicle, reducing clamp
load. Separation of the control arm ball stud and steering knuckle, due to
disengagement of the tapered attachment and retaining nut, is possible. If
the control arm separates from the knuckle, the affected corner of the
vehicle will drop and the control arm would be forced downward, contacting
the wheel. The affected wheel could tilt outward and create a dragging
action that would tend to slow the vehicle and create a tendency for the
vehicle to turn in the direction of the affected wheel. In extreme
situations, the affected wheel assembly could separate from the vehicle.
Separation of the wheel assembly would also sever that wheel's hydraulic
brake hose and result in diminished braking performance of the vehicle,
which could result in a crash.
Dealers will inspect the ball stud joints and measure the torque of the nut
for all front lower control arms in all models affected as well as the rear
lower control arms on the XLR and Corvette. If the torque is not at
specification, the dealers will replace the ball stud, the knuckle, and the
nut. If the torque is at specification, the dealers will replace the
nut/washer assembly only. The manufacturer has reported that owner
notification is expected to begin during August or September 2004. Owners
may contact Cadillac at 1-866-982-2339 or Chevrolet at 1-800-630-2438.
GENERAL MOTORS: Recalls 2,857 Vehicles Due To Fuel Tank Defects
---------------------------------------------------------------
General Motors Corporation is cooperating with the National Highway Traffic
Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for
about 2,857 units of Year 2004 Pontiac Grand AM and Chevrolet Classic
vehicles.
Manufactured from May to June 2004, the NHTSA has determined that on certain
passenger vehicles may have been built with a fuel tank that does not meet
specification. A weld on these fuel tanks may be insufficient, resulting in
a fuel leak. Fuel leakage in the presence of an ignition source could result
in fire.
Dealers will inspect the fuel tank, and replace it if necessary. The
manufacturer has reported that owner notification began on July 2, 2004.
Owners may contact Pontiac at 1-800-620-7668 or Chevrolet at 1-800-630-2438.
GENERAL MOTORS: Recalls 47,991 Vehicles For Torque Bolt Defects
---------------------------------------------------------------
General Motors Corporation is cooperating with the National Highway Traffic
Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for
about 47,991 units of:
(1) Chevrolet Impala, model 2004
(2) Chevrolet Monte Carlo, model 2004
(3) Pontiac Grand Prix, model 2004
Manufactured from March to April 2004, the NHTSA has determined that certain
passenger vehicles were produced with lower than specified torque on both
front brake calipers to steering knuckle attachment bolts. With improper
torque, the clamp load at the joint may not be adequate to prevent movement
between the caliper bracket and knuckle. Depending on whether one or both
bolts backs out or fractures, the result can be locking of the affected
wheel during braking and an abrupt steering input in the direction of the
locked wheel, reduced braking and noise from the affected wheel, or severing
of a brake hose, increased brake pedal travel, and reduced steering control.
Reduced braking or steering control could cause a crash.
Dealers are to tighten both bolts to the specified torque. The manufacturer
has reported that owner notification began on July 6, 2004. Owners may
contact Chevrolet at 1-800-630-2438 or Pontiac at 1-800-620-7668.
HA-LO INDUSTRIES: Suit Settlement Hearing Set October 1, 2004
-------------------------------------------------------------
The United States District Court for the Northern District of Illinois will
hold a fairness hearing for the proposed settlement of the class action
filed against HA-LO Industries, Inc. on behalf of all persons who purchased
or acquired the common stock of the Company from February 18, 1999 to July
30, 2001.
The hearing will be held before the Honorable James F. Holderman in the
United States Courthouse, 219 South Dearborn St., Chicago, IL 60604 at
11:00am, on October 1, 2004.
For more details, contact Clifford Goodstein of Milberg Weiss Bershad &
Schulman LLP by Mail: One Pennsylvania Plaza, New York, NY 10119-0165 or by
Phone: (212)-594-5300 OR Katherine M. Ryan of Schiffrin & Barroway, LLP by
Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone:
1-888-299-7706 or 1-610-667-7706, or by E-mail: info@sbclasslaw.com
HALLIBURTON CO.: Former Employees Allege Fraud in New Lawsuit
-------------------------------------------------------------
Four former Halliburton Co. finance employees of filed a class action
against the Company on behalf of investors who bought the company's shares,
alleging that high-level and systemic accounting fraud occurred at the firm
between 1998 and 2001, the Houston Chronicle reports.
The filing details alleged accounting improprieties that go far beyond those
outlined by the Securities and Exchange Commission in its civil suit against
Halliburton, which the company recently settled for $7.5 million.
The charges in the complaint and in the SEC's action cover the two years
when Vice President Dick Cheney was Halliburton's chief executive. But he
was not named as a defendant in the new filing nor in the regulatory
proceeding. SEC officials said Cheney provided testimony and willingly
cooperated.
The former employees, who are not identified but who were managers in
financial or accounting positions at the firm, stated in the new filing that
financial results were inflated thru over billing, the exaggeration of
accounts receivable and understating accounts payable. The filing also noted
that one of the former accounting employees stated that her superiors
ordered her to make projects appear profitable and that executives misled
investors in 2001 about asbestos liabilities.
However, Halliburton vehemently denies the allegations and called the
lawsuit abusive and described it as a mudslinging effort against company.
HEALTH MANAGEMENT: Archie Lamb Lodges FL Price Gouging Lawsuit
--------------------------------------------------------------
Archie Lamb, nationally recognized class action attorney who led a coalition
of lawyers which were instrumental in major reforms among the largest HMO
insurance companies in the nation, and a team of lawyers from across the
country, have filed a proposed class-action lawsuit in a Florida district
court on behalf of victims of for-profit hospitals' unconscionable billing
practices of the uninsured. The lawsuits charge national for-profit hospital
chain Health Management Associates, Inc. (HMA) with billing uninsured
patients amounts substantially greater than amounts accepted by the hospital
from Medicare and insurance companies for the same procedures.
The hospital industry continues to be under increased scrutiny for billing
practices used against the nation's uninsured. A House subcommittee
continues its investigation after an initial round of hearings last month in
which hospital CEOs for non-profit hospitals and others testified. Hospital
and medical bills are the second leading cause of personal bankruptcy after
unemployment. Consejo de Latinos Unidos, a national advocacy group, has been
instrumental in bringing national attention to this important issue and the
involvement of Mr. Lamb.
The litigation is focused on correcting the abuses of for-profit hospitals
that gouge the uninsured while reaping billions in profits. "Our goal is to
achieve a degree of elemental fairness for working Americans that seek
needed healthcare. There is no national discourse on the spending of
healthcare dollars.
We must find ways to solve these important issues. Charging a small and
disenfranchised element of our society outrageous prices that result in
economic and emotional ruin is not the answer to solving our national
healthcare-funding conundrum. The court system is the only forum available
to the victims of continuous and unprecedented price gouging," noted Lamb.
The lawsuit was filed on behalf of Quintana, Miami Dade County resident Jose
Manuel Quintana. The defendant is HMA, headquartered in Naples, Florida with
more than 40 facilities throughout the country.
Mr. Lamb is the leader of a coalition of lawyers responsible for agreements
with major HMO insurance giants Cigna and Aetna that change their egregious
treatment of medical doctors. This coalition is preparing for a massive
trial in March of 2005 against the eight remaining defendants in that action
including Humana, United, Anthem and Wellpoint. Litigation has also begun in
separate cases filed against the nation's Blue Cross companies in the
Southern District of Florida.
For more details, contact Archie C. Lamb, Jr. of the Law Offices of Archie
Lamb, LLC by Mail: 2017 2nd Ave., N. Birmingham, AL 35203 by Phone:
205-324-4644 or 1-800-324-4425 by Fax: 205-324-4649 by E-mail:
alamb@archielamb.com
HOLMES GROUP: Recalls 1.8M Rival Slow Cookers Due To Injury Risk
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The Holmes Group Inc., of Milfrod, Massachusetts is cooperating with the
United States Consumer Product Safety Commission by voluntarily recalling
about 1.8 million Pots of Rival Slow Cookers.
The handles on the base of the slow cookers can break, posing a
risk of burns from hot contents spilling onto consumers. The CPSC has
received 45 reports of handles breaking, including 14 reports of consumers
who reported burn injuries from the hot contents.
Only Rival Crock-Pot(r) slow cookers with model numbers
3040, 3735, 5025, 5070 and 5445 manufactured before May 2002 are
included in the recall. The model number is printed on the UL label located
on the bottom of the base. The recalled Rival slow cooker has a removable
ceramic bowl that sits inside of a metal base. The Rival logo is printed on
the front of the unit above the control knob. The bases are round or oval in
shape and were sold in various colors and designs. A date code is stamped
onto the plug at the end of the power cord attached to each unit. The first
two digits represent the week of manufacture and the last two digits
represent the year of manufacture. Any plug with a date code from 0199 (1st
week of 1999) to 1802 (18th week of 2002) is included in this recall.
Manufactured in China, the pots were sold at all Wal-Mart, Kmart, Target and
additional discount department stores nationwide from January 1999 through
May 2002 for between $15 and $40.
Consumers should immediately stop using the product and contact
The Holmes Group to receive instructions on receiving a replacement base.
For more details, contact The Holmes Group at (800) 299-1284 anytime or
visit the firm's Web site at www.rivalrecall.com
INTERNATIONAL TRUCK: Recalls 7,610 Trucks Due To Harness Defects
----------------------------------------------------------------
International Truck & Engine Corporation is cooperating with the National
Highway Traffic Safety Administration (NHTSA) by issuing a June 2004
voluntary recall for about 7,610 units of:
(1) International 9200I, model 2002-2004,
(2) International 9400I, model 2002-2004
(3) International 9900I, model 2002-2004
Manufactured from June 2002 to January 2004, the NHTSA has determined that
on certain heavy-duty trucks, the engine electrical harness can chafe
against sharp edges on the engine. Sudden acceleration, activation of the
engine compression brake, engine speed dropping to idle, alternator overload
with possible fire, and a loss of engine ECM power resulting in engine
shutdown could occur without warning.
Dealers will inspect the harness to determine if it is damaged. If damaged,
the engine harness will be repaired. All harnesses will be re-routed and
stand-off brackets will be added. The manufacturer has reported that owner
notification is expected to begin during August 2004. Owners may contact
International at 1-800-448-7825.
JENNIFER CONVERTIBLES: Settlement Hearing Set October 8, 2004
-------------------------------------------------------------
The United States District Court for the Eastern District of New York will
hold a fairness hearing for the proposed settlement of the class action
filed against Jennifer Convertibles, Inc. and Harley J. Greenfield on behalf
of all persons who were record holders or beneficial owners of the Company's
common stock as of March 31, 2004 and their successors in interest.
The hearing will be held in Courtroom 930 of the United States Courthouse,
100 Federal Plaza, Central Islip, NY 11722 at 10:00am on October 8, 2004.
For more details, contact Howard I. Rhine of Feder, Kaszovitz, Isaacson,
Weber, Skala, Baas & Rhine, LLP by Mail: 750 Lexington Ave., New York, NY
10022 OR Judith Spanier of Abbey Gardy, LLP by Phone: (212) 889-3700 or
(800) 889-3701 or visit their Web site: http://www.abbeygardy.com
KINDER MORGAN: Defense Attorney Disputes Claims of Over Billing
---------------------------------------------------------------
Houston-based Kinder Morgan faces a class action filed by the Colorado
cities of Aspen and Glenwood Springs for over billing claims to have proof
that the cities understood the company's rate structures some years back,
Mike Beatty, the Company's attorney told the Houston Chronicle.
The cities in their class-action suit accused the natural gas company of
overcharging western Colorado customers for the last 25 years, since it
failed to take into account the elevation of the cities. Seeking unspecified
damages, the suits argues that due to the expansion of gas at higher
elevations, customers must buy more to heat homes in the mountains than
residents at sea level.
However the gas company denied the allegations and countered that it takes
altitude into account on Colorado's Western Slope, billing mountain
residents at a rate based on an average of area altitudes.
Attorney Mike Beatty told the Houston Chronicle that he could prove that in
1998, Aspen City Attorney John Worcester was aware of that billing method
citing a draft complaint prepared for the Colorado Public Utilities
Commission that he found while researching the case. In the draft Mr.
Worcester stated that the company's billing procedures weren't clear to him
six years ago. Since then Kinder Morgan has motioned a judge to dismiss the
case.
For more details, contact Michael L. Beatty of The Beatty Law Firm, P.C. by
Mail: 216 Sixteenth Street, Suite 1100, Denver, CO 80202-5115 (Denver Co.)
by Phone: 303-407-4499 or by Fax: 303-407-4494
LEAPFROG ENTERPRISES: CA Court Dismisses Suit, Denies Amendments
----------------------------------------------------------------
The California Superior Court in Alameda County approved the motion by
LeapFrog Enterprises, Inc. (NYSE: LF) to dismiss the shareholder derivative
lawsuit with prejudice and denied plaintiffs leave to amend the complaint.
The Superior Court entered final judgment in the action in favor of
LeapFrog.
The derivative complaint alleged causes of action against certain current
and former officers and directors for breach of fiduciary duty, abuse of
control, gross mismanagement, waste of corporate assets, unjust enrichment,
and violations of the California Corporations Code, and sought unspecified
damages against the individual defendants on behalf of LeapFrog, as well as
equitable relief and attorneys' fees.
"We believed strongly from the start that the action was without merit,"
said Tom Kalinske, Chief Executive Officer of LeapFrog. "We are pleased that
the judge reached the same conclusion." The federal securities class action
is still pending. The dismissal is subject to appeal.
MCA FINANCIAL: SEC Settles Fraud Suit V. Seven Former Executives
----------------------------------------------------------------
The Securities and Exchange Commission entered an Order Making Findings and
Imposing Remedial Sanctions Pursuant to Section 21C of the Securities
Exchange Act of 1934 and Rule 102(e) of the Commission's Rules of Practice
(Order) with respect to Grant Thornton LLP, Doeren Mayhew & Co. P.C., Peter
M. Behrens, CPA, Marvin J. Morris, CPA and Benedict P. Rybicki, CPA
(collectively Respondents). Simultaneously with the entry of the Order, the
Commission accepted settlement offers from each of the respondents in which
they consented to the entry of the Order without admitting or denying the
Order's findings.
Pursuant to the Order, Grant Thornton undertakes to pay $1.5 million as a
penalty, require its entire professional staff to undergo fraud-detection
training and provide at least $1 million to fund such training and suspend
certain joint audits with other auditing firms for a period of five years.
In addition, Grant Thornton is censured and required to pay disgorgement and
prejudgment interest of $59,749.41.
Pursuant to the Order, Doeren Mayhew, which voluntarily discontinued
conducting public audits as of March 19, 2003, undertakes to not accept new
public company auditing engagements for six months. In addition, if Doeren
Mayhew engages in audits of public companies after the expiration of six
months, Doeren Mayhew undertakes to establish and implement certain policies
and procedures specifically designed to improve the quality of its public
company audit practice for a period of three years. Doeren Mayhew also is
censured and required to pay disgorgement and prejudgment interest of
$115,126.86.
Pursuant to the Order, Morris, Behrens and Rybicki are denied the privilege
of appearing or practicing before the Commission for periods of five, three
and one years, respectively, from the entry of the Order.
The Order finds that the respondents caused and aided and abetted violations
of the reporting provisions of the federal securities laws, violated or
aided and abetted violations of Section 10A of the Securities Exchange Act
of 1934 and engaged in improper professional conduct pursuant to Rule 102(e)
of the Commission's Rules of Practice in connection with their audit of MCA
Financial Corporation's financial statements for the fiscal year ended Jan.
31, 1998. At the time, MCA was a mortgage banking company based in
Southfield, Michigan. Grant Thornto is a national accounting firm
headquartered in Chicago, Illinois. Doeren Mayhew is an accounting firm
based in Troy, Michigan. Grant Thornton and Doeren Mayhew jointly audited
MCA's 1998 annual financial statements. Behrens, a 47-year-old resident of
Troy, Michigan, is a partner in the Detroit office of Grant Thornton.
Morris, a 60-year-old resident of Grosse Pointe Park, Michigan, and Rybicki,
a 40-year-old resident of Grosse Pointe Park, Michigan, are directors of
Doeren Mayhew.
The Order further finds that:
(1) MCA violated the reporting provisions of the federal
securities laws by filing materially false and
misleading 1998 annual financial statements with the
Commission and using those financial statements in
connection with a public offering of debentures.
(2) MCA's 1998 annual financial statements were materially
false and misleading because MCA utilized related party
transactions to inflate and mischaracterize its income,
assets and equity.
(3) Behrens and Morris were the engagement partners for the
1998 MCA audit. Rybicki was the engagement manager for
that audit.
(4) During the audit, the respondents knew that MCA failed
to disclose several million dollars of material,
related party transactions in its 1998 annual financial
statements.
(5) Despite this knowledge, Grant Thornton and Doeren
Mayhew jointly issued a report containing an
unqualified opinion on MCA's 1998 annual financial
statements and consented to the inclusion of their
report in MCA's debenture offering materials.
(6) The respondents failed to inform MCA's Board of
Directors that MCA's 1998 annual financial statements
did not disclose millions of dollars of material,
related party transactions.
(7) The respondents did not adequately plan the 1998 MCA
audit, did not act with sufficient skepticism in
conducting the audit, and did not obtain enough
evidence to support their conclusions and, thus,
engaged in improper professional conduct.
In April 2002, the Commission filed a complaint in the U.S. District Court
for the Eastern District of Michigan against seven former executives of MCA.
The defendants are Patrick Quinlan, MCA's former CEO and Chairman of the
Board of Directors, Lee Wells, MCA's former President and Chief Operating
Officer and member of the Board of Directors, Keith Pietila, MCA's former
Chief Financial Officer and Chief Operating Officer, Alexander Ajemian,
MCA's former Controller and Treasurer, John O'Leary, MCA's former Senior
Vice President of Corporate Finance, Cheryl Swain, MCA's former Vice
President of Marketing Syndication and Kevin Lasky, MCA's former Vice
President of Portfolio Management.
Quinlan, Wells, Pietila, Ajemian, Swain and Lasky have pled guilty to
federal criminal charges arising out of MCA's fraudulent scheme. Pietila has
been sentenced to 48 months in prison and ordered to pay $256 million in
restitution. Ajemian was sentenced to 37 months in prison and ordered to pay
$256 million in restitution. Lasky was sentenced to 24 months in prison and
ordered to pay $128 million in restitution. Quinlan, Wells and Swain have
not been sentenced yet. O'Leary has been indicted on federal criminal
charges, and his trial is scheduled to begin in September 2004. In addition,
the Michigan Attorney General's Office has filed state felony securities
fraud charges against Quinlan, Wells, Pietila and Ajemian.
MEDCO HEALTH: NY Court OKs ERISA Settlement, Other Suits Pending
----------------------------------------------------------------
The United States District Court for the Southern District of New York
granted final approval to the settlement of several class actions filed
against Medco Health Solutions, Inc. and Merck-Medco Managed Care, L.L.C.,
alleging violations of the Employee Retirement Income Security Act (ERISA).
On December 17, 1997, a lawsuit captioned Gruer v. Merck-Medco Managed Care,
L.L.C. was filed, alleging that the Company should be treated as a
"fiduciary" under the provisions of ERISA and that the Company has breached
fiduciary obligations under ERISA in connection with the Company's
development and implementation of formularies, preferred drug listings and
intervention programs.
After the Gruer case was filed, six other cases were filed in the same court
asserting similar claims; one of these cases was voluntarily dismissed. The
plaintiffs in these cases, who are individual plan members and claim to
represent the interests of six different pharmaceutical benefit plans for
which the Company is the pharmaceutical benefit manager (PBM), contend that,
in accepting and retaining certain rebates, the Company has failed to make
adequate disclosure and has acted in the Company's own best interest and
against the interests of the Company's clients.
The plaintiffs also allege that the Company was wrongly used to increase
Merck's market share, claiming that under ERISA the Company's drug formulary
choices and therapeutic interchange programs were "prohibited transactions"
that favor Merck's products. The plaintiffs have demanded that Merck and
the Company turn over any unlawfully obtained profits to a trust to be set
up for the benefit plans.
In December 2002, Merck and the Company agreed to settle the Gruer series of
lawsuits on a class action basis to avoid the significant cost and
distraction of protracted litigation. Merck, the Company, and the plaintiffs
in five of these six cases filed a proposed class action settlement with the
court. On May 25, 2004, the court granted final approval to the settlement,
ruling, among other things, that the settlement was fair, reasonable, and
adequate to members of the settlement class. On June 28, 2004, the court
entered a Final Judgment dismissing the class actions with prejudice. Under
the settlement, Merck and the Company have agreed to pay $42.5 million, and
the Company has agreed to change or to continue certain specified business
practices for a period of five years. In September 2003, the Company paid
$38.3 million to an escrow account, representing the Company's portion, or
90%, of the proposed settlement. If the settlement becomes final, it would
resolve litigation by pharmaceutical benefit plans against Merck and the
Company based on ERISA and similar claims, except with respect to those
plans that affirmatively opt out of the settlement.
The plaintiff in the sixth case discussed above, Blumenthal v. Merck-Medco
Managed Care, L.L.C., et al. has elected to opt out of the settlement. The
release of claims under the settlement applies to plans for which the
Company has administered a pharmacy benefit at any time between December 17,
1994 and the date of final approval. It does not involve the release of any
potential antitrust claims. The settlement becomes final only after all
appeals have been exhausted. Thus far, two notices of appeal have been
filed.
Similar ERISA-based complaints against the Company and Merck were filed in
eight additional actions by ERISA plan participants, purportedly on behalf
of their plans, and, in some of the actions, similarly situated self-funded
plans. The complaints in these actions relied on many of the same
allegations as the Gruer series of lawsuits discussed above. The ERISA
plans themselves, which were not parties to these lawsuits, have elected to
participate in the settlement discussed above. Under the Final Judgment
discussed above, the court dismissed seven of these actions.
On May 21, 2004, however, the court granted the plaintiff in the other
action, Betty Jo Jones v. Merck-Medco Managed Care, L.L.C., et al.
permission to file a second amended complaint. In her Second Amended
Complaint, the plaintiff in the Jones action seeks to represent a class of
all participants and beneficiaries of ERISA plans that required such
participants to pay a percentage co-payment on prescription drugs. The
effect of the release under the settlement discussed above on the Jones
action has not yet been litigated.
In addition, a proposed class action complaint against Merck and the Company
has been filed by trustees of another benefit plan, the United Food and
Commercial Workers Local Union No. 1529
and Employers Health and Welfare Plan Trust, in the U.S. District Court for
the Northern District of California. This plan has elected to opt out of
the settlement. The United Food action has been transferred and
consolidated in the U.S. District Court for the Southern District of New
York by order of the Judicial Panel on Multidistrict Litigation.
On April 2, 2003, a lawsuit captioned Peabody Energy Corporation v. Medco
Health Solutions, Inc., et al. was filed in the U.S. District Court for the
Eastern District of Missouri. The complaint, filed by one of the Company's
former clients, relies on allegations similar to those in the ERISA cases
discussed above, in addition to allegations relating specifically to
Peabody, which has elected to opt out of the settlement described above.
The complaint asserts that the Company breached fiduciary duties under
ERISA, violated a New Jersey consumer protection law, improperly induced the
client into contracting with the Company, and breached the resulting
agreement. The plaintiff seeks compensatory, punitive and treble damages,
as well as rescission and restitution of revenues that were allegedly
improperly received by the Company. On October 28, 2003, the Judicial
Panel on Multidistrict Litigation transferred this action to the U.S.
District Court for the Southern District of New York to be consolidated with
the ERISA cases pending against the Company in that court.
On December 23, 2003, Peabody filed a similar action against Merck in the
U.S. District Court for the Eastern District of Missouri. The complaint
relies on allegations similar to those in the ERISA cases discussed above
and in the case filed by Peabody against the Company. The complaint asserts
claims that Merck violated federal and state racketeering laws, tortiously
interfered with Peabody's contract with the Company, and was unjustly
enriched. The plaintiff seeks, among other things, compensatory damages of
approximately $35 million, treble damages, and restitution of revenues that
were allegedly improperly received by Merck.
On April 19, 2004, the Judicial Panel on Multidistrict Litigation
conditionally transferred this action to the U.S. District Court for the
Southern District of New York to be consolidated with the ERISA cases
pending against Merck and the Company in that court.
On March 17, 2003, a lawsuit captioned American Federation of State, County
and Municipal Employees v. AdvancePCS et al. based on allegations similar to
those in the ERISA cases discussed above, was filed against the Company and
other major PBMs in the Superior Court of California. The theory of
liability in this action is based on a California law prohibiting unfair
business practices. The plaintiff, which purports to sue on behalf of
itself, California non-ERISA health plans, and all individual participants
in such plans, seeks injunctive relief and disgorgement of revenues that
were allegedly improperly received by the Company.
On June 11, 2002, a lawsuit captioned Miles v. Merck-Medco Managed Care,
L.L.C., based on allegations similar to those in the ERISA cases discussed
above, was filed against Merck and the Company in the Superior Court of
California. The theory of liability in this action is based on a California
law prohibiting unfair business practices. The plaintiff, who purports to
sue on behalf of the general public of California, seeks injunctive relief
and disgorgement of the revenues that were allegedly improperly received by
Merck and the Company. The Miles case was removed to the U.S. District
Court for the Southern District of California and, pursuant to the
Multidistrict Litigation order discussed above, was later transferred to the
U.S. District Court for the Southern District of New York and consolidated
with the ERISA cases pending against Merck and the Company in that court.
MEDCO HEALTH: Asks PA Court To Dismiss Consumer Antitrust Suit
--------------------------------------------------------------
Medco Health Solutions, Inc. and Merck-Medco Managed Care, LLC asked the
United States District Court for the Eastern District of Pennsylvania to
dismiss a lawsuit filed against them, styled "Brady Enterprises, Inc., et
al. v. Medco Health Solutions, Inc., et al."
The plaintiffs, which seek to represent a national class of retail
pharmacies that have contracted with the Company, allege that the Company
has conspired with, acted as the common agent for, and used the combined
bargaining power of plan sponsors to restrain competition in the market for
the dispensing and sale of prescription drugs. The plaintiffs allege that,
through the alleged conspiracy, the Company has engaged in various forms of
anticompetitive conduct, including, among other things, setting artificially
low reimbursement rates to such pharmacies. The plaintiffs assert claims
for violation of the Sherman Act and seek treble damages and injunctive
relief.
MEDCO HEALTH: Plaintiffs Lodge Amended Antitrust Suit in N.D. AL
----------------------------------------------------------------
Plaintiffs filed a second amended class action against Medco Health
Solutions, Inc. and Merck-Medco Managed Care, LLC in the United States
District Court for the Northern District of Alabama.
On October 1, 2003, a lawsuit captioned "North Jackson Pharmacy, Inc., et
al. v. Medco Health Solutions, Inc., et al." was filed on behalf of a
national class of independent retail pharmacies that have contracted with
the Company.
In February 2004, Merck and the Company filed motions to dismiss the
plaintiffs' amended complaint. However, prior to ruling on the motions, the
court granted the plaintiffs permission to file a second amended complaint,
which the plaintiffs filed on July
23, 2004.
In their Second Amended and Consolidated Class Action Complaint, the
plaintiffs allege that Merck and the Company have engaged in price fixing
and other unlawful concerted actions with others, including other PBMs, to
restrain trade in the dispensing and sale of prescription drugs to customers
of retail pharmacies who participate in programs or plans that pay for all
or part of the drugs dispensed, and have conspired with, acted as the common
agent for, and used the combined bargaining power of plan sponsors to
restrain competition in the market for the dispensing and sale of
prescription drugs.
The plaintiffs allege that, through such concerted action, Merck and the
Company have engaged in various forms of anticompetitive conduct, including,
among other things, setting reimbursement rates to such pharmacies at
unreasonably low levels. The plaintiffs assert claims for violation of the
Sherman Act and seek treble damages and injunctive relief.
MEDCO HEALTH: Asks CA Court To Dismiss Drug Price-Fixing Lawsuit
----------------------------------------------------------------
Medco Health Solutions, Inc. and Merck-Medco Managed Care, LLC asked the
Superior Court of California to dismiss a class action filed against them,
styled "Alameda Drug Company, Inc., et al. v. Medco Health Solutions, Inc.,
et al."
The plaintiffs, which seek to represent a class of all California pharmacies
that have contracted with the Company and that have indirectly purchased
prescription drugs from Merck, allege, among other things, that since the
expiration of a 1995 consent injunction entered by the U.S. District Court
for the Northern District of California, if not earlier, the Company has
failed to maintain an Open Formulary (as defined in the consent injunction),
and that the Company and Merck have failed to prevent nonpublic information
received from competitors of Merck and the Company from being disclosed to
each other.
The plaintiffs further allege that, as a result of these alleged
practices, the Company has been able to increase its market share and
artificially reduce the level of reimbursement to the retail pharmacy class
members, and that the prices of prescription drugs from Merck and other
pharmaceutical manufacturers that do business with the Company have been
fixed and raised above competitive levels. The plaintiffs assert claims for
violation of California antitrust law and California law prohibiting unfair
business practices. The plaintiffs demand, among other things, compensatory
damages, restitution, disgorgement of unlawfully obtained profits, and
injunctive relief.
METLIFE INC.: Asks NY Court To Dismiss Suit Over Dec. 1999 Pact
---------------------------------------------------------------
MetLife, Inc. and Metropolitan Life Insurance Company asked New York
Superior Court in New York County to dismiss a lawsuit filed on behalf of a
proposed class comprised of the settlement class in the Metropolitan Life
sales practices class action settlement approved in December 1999 by the
United States District Court for the Western District of Pennsylvania.
The complaint challenges the treatment of the cost of the sales practices
settlement in the demutualization of Metropolitan Life and asserts claims of
breach of fiduciary duty, common law fraud, and unjust enrichment.
Plaintiffs seek compensatory and punitive damages, as well as attorneys'
fees and costs.
METLIFE INC.: Seeks Dismissal of Downcoding, Bundling Suit in FL
----------------------------------------------------------------
MetLife, Inc., Mutual of Omaha and Cigna Healthcare asked the United States
District Court in Florida to dismiss a purported class action filed by the
American Dental Association and two individual providers.
The plaintiffs purport to represent a nationwide class of in-network
providers who allege that their claims are being wrongfully reduced by
downcoding, bundling, and the improper use and programming of software. The
complaint alleges federal racketeering and various state law theories of
liability.
METROPOLITAN CASUALTY: Discovery Proceeds in Consumer Fraud Suit
----------------------------------------------------------------
Discovery is ongoing in the purported class action has been filed against
Metropolitan Property and Casualty Insurance Company's subsidiary,
Metropolitan Casualty Insurance Company, in Florida State Court.
The suit alleges breach of contract and unfair trade practices with respect
to allowing the use of parts not made by the original manufacturer to repair
damaged automobiles. A motion for class certification is also pending.
METROPOLITAN LIFE: Continues To Face Sales Practices Lawsuits
-------------------------------------------------------------
Metropolitan Life Insurance Company, New England Mutual Life
Insurance Company and General American Life Insurance Company continue to
face numerous claims, including class action lawsuits, alleging improper
marketing and sales of individual life insurance policies or annuities.
These lawsuits are generally referred to as "sales practices claims."
In December 1999, a federal court approved a settlement resolving sales
practices claims on behalf of a class of owners of permanent life insurance
policies and annuity contracts or certificates issued pursuant to individual
sales in the United States by Metropolitan Life, Metropolitan Insurance and
Annuity Company or Metropolitan Tower Life Insurance Company between January
1, 1982 and December 31, 1997. The class includes owners of approximately
six million in-force or terminated insurance policies and approximately one
million in-force or terminated annuity contracts or certificates.
Similar sales practices class actions against New England Mutual, with which
Metropolitan Life merged in 1996, and General American, which was acquired
in 2000, have been settled. In October 2000, a federal court approved a
settlement resolving sales practices claims on behalf of a class of owners
of
permanent life insurance policies issued by New England Mutual between
January 1, 1983 through August 31, 1996. The class includes owners of
approximately 600,000 in-force or terminated policies. A federal court has
approved a settlement resolving sales practices claims on behalf of a class
of owners of permanent life insurance policies issued by General American
between January 1, 1982 through December 31, 1996. An appellate court has
affirmed the order approving the settlement. The class includes owners of
approximately 250,000 in-force or terminated policies.
Certain class members have opted out of the class action settlements noted
above and have brought or continued non-class action sales practices
lawsuits. In addition, other sales practices lawsuits have been brought.
As of June 30,
2004, there are approximately 331 sales practices lawsuits pending against
Metropolitan Life; approximately 40 sales practices lawsuits pending against
New England Mutual, New England Life Insurance Company, and New England
Securities
Corporation (collectively, "New England"); and approximately 51 sales
practices lawsuits pending against General American.
Some individual sales practices claims have been resolved through
settlement, won by dispositive motions, or, in a few instances, have gone to
trial. Most of the current cases seek substantial damages, including in
some cases punitive and treble damages and attorneys' fees. Additional
litigation relating to the Company's marketing and sales of individual life
insurance may be commenced in the future.
The Metropolitan Life class action settlement did not resolve two putative
class actions involving sales practices claims filed against Metropolitan
Life in Canada, and these actions remain pending.
METROPOLITAN LIFE: Implements Settlement Of Discrimination Suit
---------------------------------------------------------------
Metropolitan Life Insurance Company implemented the settlement of a class
action filed in the United States District Court for the Southern District
of New York against it, alleging gender discrimination and retaliation in
the MetLife Financial Services unit of the Individual segment.
The plaintiffs were seeking unspecified compensatory damages, punitive
damages, a declaration that the alleged practices were discriminatory and
illegal, injunctive relief requiring Metropolitan Life to discontinue the
alleged discriminatory practices, an order restoring class members to their
rightful positions (or appropriate compensation in lieu thereof), and other
relief.
In August 2003, the court granted preliminary approval to a settlement of
the lawsuit. At the fairness hearing held on
November 6, 2003, the court approved the settlement of the lawsuit.
METROPOLITAN LIFE: Asks NY Court To Certify Policyholder Lawsuit
----------------------------------------------------------------
Plaintiffs asked New York State Court to certify a class action in which two
policyholders seek to represent a class of owners of participating life
insurance policies.
Plaintiffs assert that Metropolitan Life breached their policies in the
manner in which it allocated investment income across lines of business
during a period ending with the 2000 demutualization. In August 2003, an
appellate court affirmed the dismissal of fraud claims in this action.
METROPOLITAN LIFE: Retirees Commence Consumer Fraud Suit in DC
--------------------------------------------------------------
Metropolitan Life Insurance Company faces a putative class action filed in
the United States District Court for the District of Columbia, in which
plaintiffs allege that they were
denied certain ad hoc pension increases awarded to retirees under the
Metropolitan Life retirement plan.
The ad hoc pension increases were awarded only to retirees (i.e.,
individuals who were entitled to an immediate retirement
benefit upon their termination of employment) and not available to
individuals like these plaintiffs whose employment, or whose spouses'
employment, had terminated before they became eligible for an immediate
retirement benefit. The plaintiffs seek to represent a class consisting of
former Metropolitan Life employees, or their surviving spouses, who are
receiving deferred vested annuity payments under the retirement plan and who
were allegedly eligible to receive the ad hoc pension increases awarded in
1977, 1980, 1989, 1992, 1996 and 2001, as well as increases awarded in
earlier years.
METROPOLITAN LIFE: Claims in NY Reorganization Suits Reinstated
---------------------------------------------------------------
An appellate court reinstated several claims in the class actions filed
against Metropolitan Life Insurance Company, challenging the fairness of
Metropolitan Life's plan of reorganization, as amended and the adequacy and
accuracy of Metropolitan Life's disclosure to policyholders regarding the
plan.
Several actions were filed, naming as defendants some or all of
Metropolitan Life, its Holding Company Metlife, Inc., the individual
directors, the New York Superintendent of Insurance and the underwriters for
MetLife, Inc.'s initial public offering, Goldman Sachs & Company and Credit
Suisse First Boston. Five purported class actions pending in the New York
State court in New York County were consolidated within the commercial part
of the New York State court. In addition, there remained a separate
purported class action in New York State court in New York County.
On February 21, 2003, the defendants' motions to dismiss both the
consolidated action and separate action were granted; leave to replead as a
proceeding under Article 78 of New York's
Civil Practice Law and Rules has been granted in the separate action. On
April 27, 2004, the appellate court modified the trial court's order by
reinstating certain claims against Metropolitan Life, Metlife, Inc. and the
individual directors. Another purported class action in New York State
court in Kings
County has been voluntarily held in abeyance by plaintiffs.
The plaintiffs in the state court class actions seek injunctive, declaratory
and compensatory relief, as well as an accounting and, in some instances,
punitive damages. Some of the plaintiffs in the above described actions
also have brought a proceeding under Article 78 of New York's Civil Practice
Law and Rules challenging the Opinion and Decision of the Superintendent who
approved the plan. In this proceeding, petitioners seek to vacate the
Superintendent's Opinion and Decision and enjoin him from granting final
approval of the plan.
METROPOLITAN LIFE: NY Court Refuses To Nix Securities Act Claim
---------------------------------------------------------------
The United States District Court for the Eastern District of New York
refused to dismiss the claim of violation of the Securities Exchange Act of
1934 in the consolidated class action filed against Metropolitan Life
Insurance Company.
Three suits were initially filed in the United States District Court for the
Eastern District of New York, claiming violation of the Securities Act of
1933 in connection with the plan. The plaintiffs in these actions, which
have been consolidated, claim
that the Policyholder Information Booklets relating to the plan failed to
disclose certain material facts and seek rescission and compensatory
damages.
Metropolitan Life's motion to dismiss these three cases was denied in 2001.
On February 4, 2003, plaintiffs filed a consolidated amended complaint
adding a fraud claim under the Securities Exchange Act of 1934. Plaintiffs
served a second consolidated amended complaint on April 2, 2004, and
continue to assert violations of the Securities Act of 1933 and the
Securities Exchange Act of 1934.
METROPOLITAN PROPERTY: Medical Practitioners Commence FL Lawsuit
----------------------------------------------------------------
Metropolitan Property and Casualty Insurance Company faces a purported class
action filed in Florida state court on behalf of medical practitioners who
provide MRI services.
The suit claims breach of contract and unjust enrichment arising out of the
alleged failure to include a consumer price index adjustment when paying MRI
provider fees. The Company is vigorously defending itself against this
lawsuit, it revealed in a disclosure to the Securities and Exchange
Commission.
METROPOLITAN PROPERTY: IL Consumers Commence Two Fraud Lawsuits
---------------------------------------------------------------
Metropolitan Property and Casualty Insurance Company faces two purported
nationwide class actions filed in Illinois state court.
One suit claims breach of contract and fraud due to the alleged
underpayment of medical claims arising from the use of a purportedly biased
provider fee pricing system. A motion for class certification has been
filed and discovery is ongoing.
The second suit claims breach of contract and fraud arising from the alleged
use of preferred provider organizations to reduce medical provider fees
covered by the medical claims portion of the insurance policy. A motion to
dismiss has been filed.
NATIONAL FINANCIAL: SEC Institutes Settled Proceedings V. Owner
---------------------------------------------------------------
The Securities and Exchange Commission instituted a public administrative
proceeding against Terese Herwick (Herwick) pursuant to Section 203(f) of
the Investment Advisers Act of 1940. Herwick, age 51, is a resident of Santa
Monica, California, and the owner and former President of National Financial
Systems, Inc. (NFSI), an unregistered investment adviser. Simultaneous with
the institution of the proceeding, Herwick submitted an Offer of Settlement
in which, while neither admitting nor denying the Commission's findings,
Herwick consented to the entry of an Order barring her from association with
any investment adviser. The Order was based on the entry of a permanent
injunction in a civil action filed against Herwick in Los Angeles,
California. The Commission's complaint alleged that Herwick and NFSI
violated the antifraud provisions by, among other things, misrepresenting
the assets under NFSI's management and taking undisclosed management fees.
The SEC's complaint, originally filed on September 25, 2003 in United States
District Court in Los Angeles alleges that in 1999, NFSI assumed management
of the "Fixed Fund," an unregistered pool of assets consisting of real
estate, equity securities, mutual funds, and bonds. Although Herwick knew
that a significant number of Fixed Fund assets had not performed for years
or had been foreclosed upon, neither NFSI nor Herwick disclosed these facts
to the Fixed Fund's investors. In January 2002, NFSI wrote off the worthless
assets, another fact that NFSI and Herwick never disclosed to Fixed Fund
investors. The value of the Fixed Fund's assets has fallen to approximately
50% of the amount owed to Fixed Fund investors as principal and purported
accrued dividends. As of March 31, 2003, the value of the Fixed Fund's
assets totaled no more than $7.4 million while the amounts it owed investors
in principal and purported accrued returns totaled at least $14.1 million.
NFSI never disclosed this fact to Fund investors either.
Instead, the complaint alleges, NFSI continued to promote the Fixed Fund as
an investment vehicle that purportedly seeks preservation and protection of
capital while providing regular monthly cash distributions. Moreover, NFSI
has provided Fixed Fund investors with quarterly account statements that
purport to credit those investors with their contracted-for rates of
return -- returns which have not been generated by the Fund's underlying
assets and which neither the Fund nor NFSI can possibly repay. In addition,
NFSI defrauded the Fixed Fund and its investors by charging the Fixed Fund
an undisclosed management fee, which for 2002 constituted more than 10% of
the value of the Fixed Fund's assets. In 2002, NFSI took over $700,000 in
management fees, while in 2001 it took over $520,000 in fees, none of which
was disclosed to investors.
The SEC's complaint alleges that NFSI and Herwick's conduct violated the
antifraud provisions of the federal securities laws, Section 17(a) of the
Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934
and Rule 10b-5 thereunder, and Sections 206(1) and (2) of the Investment
Advisers Act of 1940. The SEC's complaint asks the Court to permanently
enjoin NFSI and Herwick from future violations of the foregoing provisions;
to order NFSI and Herwick to disgorge, with prejudgment interest, all
ill-gotten gains from their illegal conduct; and to pay civil penalties.
NEW JERSEY: Residents Lodge Suit V. Privately Owned Dams, State
---------------------------------------------------------------
Fifteen Lumberton residents who suffered damage from last month's flooding
that resulted from several private dams breaking that sent water down the
Rancocas Creek initiated a lawsuit seeking class action status in a New
Jersey Superior Court, the Courier Post Online reports.
Named in the suit are four municipalities namely Medford Lakes, Medford
Township, Tabernacle and Evesham, the state, private dam owners and the
engineers for the owners.
Filed by Plaintiffs attorney Edward Petkevis, the suit alleges negligence by
the defendants caused the dams to burst during record rains July l2 causing
floods, which the state estimates to have caused $40 million in property
damages. According to Mr. Petkevis, the dams and their classifications
violated the state Safe Dam Act because of the improper construction,
inspection, maintenance and repair. Though not mentioned in the suit, the
exact number of property owners affected by the flooding is estimated by Mr.
Petkevis at about 800. The suit also seeks a restraining order to halt
construction of new dams until each can be fully investigated, however Mr.
Petkevis told the Courier Post that he is not pressing for such an order.
The suit also claims that the municipalities bear some of the
responsibility, since they have roads or utility easements on some of the
dams, which are mostly privately owned. The suit also blamed the state,
since it is responsible for raising the hazard classification of the dams
due to the fact that suburban growth along the creek increased the potential
for more damage.
According to Mr. Petkevis, 11 dams and their owners, such as the Birchwood
Colony Club and YMCA Camp Ockanickon in Medford, which could not be reached
for comment, are named in the suit. The attorney also expects to add other
dams, including Upper and Lower Aetna in Medford Lakes.
The latest state Department of Environmental Protection figures indicate 19
dams failed and others were damaged.
For more details, contact Edward R. Petkevis by Mail: 1380 Hornberger Ave.,
Roebling, New Jersey (Burlington Co.)
NORTH MISSISSIPPI: Forges Settlement For Uninsured Patients Suit
----------------------------------------------------------------
North Mississippi Medical System ("NMHS"), the largest rural hospital system
in the United States, has agreed to provide unparalleled benefits to
uninsured patients as part of a proposed class action settlement. The
settlement, the first of its kind since class action lawsuits were launched
in June against nonprofit hospitals for shirking their government-mandated
obligation to provide charity care to uninsured patients, will provide
substantial benefits to uninsured patients; namely, free care, discounted
care and repayment of charges paid in the past three years by uninsureds.
The settlement is a model for nonprofit hospital systems to fulfill their
mission to provide charitable healthcare to uninsured patients.
The settlement includes North Mississippi Health Services' affiliated system
of six hospitals, multiple clinics, and two outpatient surgery centers.
Collectively, the system has 650 beds, more than 4,000 employees and over $1
billion in annual billings.
NMHS, which is not a defendant, agreed to this landmark settlement amid
controversy, Congressional hearings and lawsuits related to non-profit
hospitals' treatment of uninsured patients. Since June 17, 2004, 40 class
action lawsuits have been brought against hospital systems and hospitals and
the American Hospital Association ("AHA") for breaching their obligation to
provide government-mandated charity care to uninsured patients in return for
substantial tax exemptions from which they have reaped millions upon
millions of dollars. As described in the lawsuits, the defendants have
formulated and implemented the practice of overcharging uninsured patients
more than any other patient group and deploying abusive collection
techniques, such as placing liens on homes and causing freezes on credit
card accounts, to collect on the inflated bills that the patient cannot
afford to pay. By failing to meet their obligations to uninsured patients
and yet continuing to benefit from tax exemptions, the defendants are also
victimizing the taxpayer who in effect is paying the "insurance premium" for
the nonprofit hospital to provide charitable healthcare to uninsured
patients.
Richard Scruggs, a lead attorney on behalf of the plaintiffs in the class
action litigation, stated, "This is a win-win for uninsured patients and the
hospital. For the uninsured patients, it enables the hospital to make
financially whole those who may have been overcharged and puts criteria in
place to ensure that hospitals will not overcharge patients in the future.
It also reaffirms NMHS's commitment to the guidelines for the nonprofit
hospital with respect to transparency, financial reporting, conflicts of
interest and inurement. Significantly, we have achieved a consensual
solution that fulfills the rights and needs of the uninsured patient and at
the same time does not impair the financial well being of the hospital. We
are pleased that this accord was reached even without a lawsuit being filed
against NMHS."
In the settlement, NMHS and its nine provider affiliates have agreed to
implement a new policy for providing discounted or free care to uninsured
patients, which will commence on October 1, 2004. Specifically, the
settlement financially protects uninsured patients by stipulating that NMHS
and its affiliates will never attempt to collect more than 10% of an
individual patient's annual income in a given year. NMHS will provide free
medical care to uninsured patients with household income at or below 200% of
the federal poverty level (FPL(1)). The hospitals will also base the
financial liability of the class of uninsured patients with household income
below 400% of the FPL by substantially discounting the uninsured patient's
inpatient services to no more than the Medicare rate and discounting all
other procedures to 51% of billed charges where there is no Medicare rate.
The hospitals will then further discount services to individuals according
to the following calculation:
Uninsured Patient
Financial Assistance Guidelines
Income level (of FPL) = Discount off of discounted rate
0 - 200% = 100%
201% - 250% = 50%
251% - 300% = 40%
301% - 350% = 25%
351% - 400% = 15%
Moreover, class members who have received medical treatment from NMHS or its
affiliates in the past three years will be entitled to have their hospital
bills recalculated in accordance with the above formula and will be refunded
all or a portion of the amount paid and/or a reduction of their outstanding
bill as if this discount policy had been in effect when they received
treatment.
Under the settlement agreement, NMHS also agreed to a set of policies that
will modify its charges to uninsured patients in the future. NMHS has
formalized its existing policy against engaging in aggressive collection
techniques such as placing liens against real estate or personal property or
reporting the patient's inability to pay medical bills to credit reporting
agencies. In addition, the hospital system has consented to it and its
collectors' complying with The Fair Debt Collection Practices Act.
NMHS has reaffirmed its commitment to treat uninsured patients with dignity,
respect and compassion and to provide emergency healthcare services to
uninsured patients in accordance with the law. According to the settlement,
NMHS will also provide expanded notice of its charity care policy and will
provide financial counseling to uninsured patients regarding their medical
bills.
NMHS will comply with applicable provisions of the Sarbanes-Oxley Act of
2002 and has developed a comprehensive conflict of interest policy to
identify and address any possible conflicts of interest. These actions are
intended to ensure sound financial, business and accounting procedures and
to ensure the proper allocation of resources so that the hospital system's
revenues are reinvested into the community healthcare system.
All current and future affiliates of NMHS have agreed to the settlement,
including North Mississippi Medical Center, Clay County Medical Corporation,
Marion Regional Medical Center Inc., Pontotoc Health Services, Inc.,
Tishomingo Health Services, Inc., Webster Health Services, Inc., North
Mississippi Medical Clinics, Inc., North Mississippi Pain Management Center,
LLC and North Mississippi Ambulatory Surgery Center, LLC.
For more details, contact Richard Scruggs of The Scruggs Law Firm, P.A. by
Phone: (662) 281-1212 or visit the litigation Web site:
http://www.nfplitigation.com
OSRAM SYLVANIA: Recalls 5.6M B10 Light Bulbs Due To Injury Risks
----------------------------------------------------------------
Osram Sylvania Products Inc., of Danvers, Massachusetts is cooperating with
the United States Consumer Product Safety Commission by voluntarily
recalling about 5.6 million of 60 watt B10 Décor Light Bulbs.
The glass bulb can separate from its base and break during use. The broken
glass can present a laceration injury to consumers, the hot broken bulb can
present a burn injury to consumers, and an exposed bulb filament can present
a shock hazard if handled while power remains applied to the fixture. Osram
Sylvania has received 119 reports of the glass bulbs breaking, including 29
reports of minor cuts or burns from consumers picking up broken glass from a
hot bulb.
The recalled 60 watt B10 medium base light bulbs were sold in packages of
two or four units. The bulbs are clear. Some were packaged as "Ceiling Fan"
and "Double Life" light bulbs. "SYLVANIA" is printed on the front of the
packaging and on the bulb base. The bulbs involved have a UPC bar code on
the back of the package ending in the following five digits: 13323, 13329,
13333, 13442, 13445, 13454, 13565, 13650, and 13721.
Manufactured in the United States, the light bulbs were sols at all Home
improvement centers, grocery, drug and discount department stores from
September 2002 through June 2004 for between $2 and $4.
If the bulb is broken, consumers should first unplug the light fixture or
turn off the main circuit breaker before attempting to remove the bulb.
Cloth or leather gloves should also be worn to prevent cuts or scratches
during bulb removal. Remove the light bulbs from any fixture where they are
installed and contact OSRAM Sylvania for free replacement bulbs.
For more details, contact Osram Sylvania Products Inc. by Phone: (877)
423-3772 between 8 a.m. and 6 p.m. ET Monday through Friday.
POST PROPERTIES: Lawsuit Settlement Hearing Set August 25, 2004
---------------------------------------------------------------
The Superior Court of Fulton County, State of Georgia will hold a fairness
hearing for the proposed settlement of the class action filed against Post
Properties, Inc. and certain of its officers on behalf of all persons,
entities and groups who are Company shareholders and who were beneficial
owners of the Company's common stock on May 22, 2003.
The hearing will be held before Judge Bensonetta Lane on August 25, 2004 at
11:30am, in Courtroom 1-D of the Superior Court of Fulton County, State of
Georgia, 136 Pryor St., Atlanta, GA 30303.
For more details, contact Michael I. Fister, Jr. of Holzer Holzer & Cannon,
LLC by Mail: 1117, Perimeter Center West Suite E-107, Atlanta, GA 30338 OR
Martin D. Chitwood of CHITWOOD & HARLEY, LLP by Mail: 2300 Promenade II,
1230 Peachtree Street, N.E. Atlanta, Georgia 30309 by Phone: (404) 873-3900
or (888) 873-3999 or 1-888-873-3999 ext. 6888 by Fax: (404) 876-4476 or by
E-mail: lsa@classlaw.com OR M. Robert Thornton, Esq. of King & Spalding, LLP
by Mail: 191 Peachtree St., Atlanta, GA 30303 OR John L. Latham of Alston &
Bird, LLP by Mail: 1201 West Peachtree St., Atlanta, GA 30309
PROCOM TECHNOLOGY: Settlement Hearing Set September 10, 2004
------------------------------------------------------------
The United States District Court for the Southern District of New York will
hold a fairness hearing for the proposed settlement of the class action
filed against PROCOM Technology and its officers on behalf of all persons
who purchased or acquired the common stock of the Company from December 9,
1999 to June 25, 2001.
The hearing will be held before the Honorable John G. Koeltl on September
10, 2004 at 4:00pm, in Courtroom 12B of the United States Courthouse of the
Southern District of New York, 500 Pearl St., New York, NY 10007-1312.
For more details, contact Michael K. Yarnoff or David Kessler of Schiffrin &
Barroway, LLP by Mail: Three Bala Plaza East, Suite 400, Bala Cynwyd, PA
19004 by Phone: 1-888-299-7706 or 1-610-667-7706, or by E-mail:
info@sbclasslaw.com OR Peter Binkow of Glancy Binkow & Goldberg LLP by Mail:
1801 Avenue of the Stars, Suite 311, Los Angeles, California 90067 by Phone:
(310) 201-9150 or (888) 773-9224 by E-mail: info@glancylaw.com or visit
their Web site: http://www.glancylaw.com
PUBLIC SERVICE: Reaches Pact For NJ Gas Meter Installation Suit
---------------------------------------------------------------
Public Service Enterprise Group, Inc. (PSEG) and Public Service Electric &
Gas Company (PSE&G) reached a settlement for the class action filed against
them in the Superior Court of New Jersey.
The suit alleged that PSE&G's installation of outdoor gas meters within
three feet of driveways or garages at residential locations is negligent.
The suit also requested the court to order PSE&G to establish a fund for the
purpose of remediating the allegedly improper meter installations.
In June 2004, the parties to the lawsuit entered into a settlement in which
PSE&G committed to enhance the protection of certain identified outdoor gas
meter sets over a three-year period. PSE&G anticipates that the cost of
such work will be immaterial. As a result of this settlement, the claims
were dismissed with prejudice.
ROXY TRADING: Recalls Sesame Seeds For Salmonella Contamination
---------------------------------------------------------------
Roxy Trading Inc., of Azusa, California, is recalling the following product
because it may be contaminated with Salmonella: "Roxy Brand White Sesame
Seeds"
This product comes in a 4 oz clear plastic bag with Chinese wording and Roxy
logo. The package is red, gold and white and approximately 7"x5" in size
with the bar code number, 051299 120320. The firm's name and address appears
on the back of the plastic bag. Product sold after June 26, 2004, is being
recalled.
Salmonella is an organism, which can cause serious and sometimes fatal
infections in young children, frail or elderly people and others with
weakened immune systems. Most cases resolve without the need for medical
attention. However, some persons infected with salmonella may experience
fever, diarrhea (which may be bloody), nausea, vomiting, and abdominal pain.
Consumers with the above symptoms should consult their physician. No
illnesses have been reported to date in connection with this product.
The contamination was identified when routine testing conducted by the
California Department of Health Services (CDHS) revealed the presence of
salmonella in a sample of "Roxy Brand White Sesame Seeds."
The recalled Roxy Brand product was sold in supermarkets throughout
California.
The company is asking supermarkets to discontinue distribution of this
product and to promptly return the product and stock on hand to the company
for credit. Consumers should not consume this product and return this
product to the point of purchase for a refund.
Consumers with questions may contact Paulette Ho, General Manager at
626-610-1388.
SCHERING-PLOUGH: Discovery Proceeds in NJ Securities Fraud Suit
---------------------------------------------------------------
Discovery is ongoing in the consolidated securities class action filed
against Schering-Plough Corporation in the United States District Court for
the District of New Jersey.
On February 15, 2001, the Company stated in a press release that the United
States Food and Drug Administration (FDA) had been conducting inspections of
the Company's manufacturing facilities in New Jersey and Puerto Rico and had
issued reports citing deficiencies concerning compliance with current Good
Manufacturing Practices, primarily relating to production processes,
controls and procedures.
A suit was then filed, alleging violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
Additional lawsuits of the same tenor followed. These complaints were
consolidated into one action
in the U.S. District Court for the District of New Jersey, and a lead
plaintiff, the Florida State Board of Administration, was appointed by the
Court on July 2, 2001.
On October 11, 2001, a consolidated amended complaint was filed, alleging
the same violations and purporting to represent a class of shareholders who
purchased shares of Company stock from May 9, 2000, through February 15,
2001. The Company's motion to
dismiss the consolidated amended complaint was denied on May 24, 2002. On
October 10, 2003, the Court certified the shareholder class.
SCHERING-PLOUGH: Plaintiffs Appeal NJ Fiduciary Suit Dismissal
--------------------------------------------------------------
Plaintiffs appealed the United States District Court in New Jersey's
dismissal of a class action filed against Schering-Plough Corporation,
Richard Jay Kogan (who resigned as Chairman of the Board November 13, 2002,
and retired as Chief Executive Officer, President and Director of the
Company April 20, 2003) and the Company's Employee Savings Plan (Plan)
administrator.
The suit alleges that the defendants breached their fiduciary obligations to
certain participants in the Plan. On October 6, 2003, a consolidated
amended complaint was filed, which names as additional defendants seven
current and former directors and other corporate officers. The Court
dismissed this complaint on June 29, 2004.
SUBARU OF AMERICA: Recalls 1,959 Vehicles Due To Injury Hazard
--------------------------------------------------------------
Subaru of America, Inc. is cooperating with the National Highway Traffic
Safety Administration (NHTSA) by issuing a June 2004 voluntary recall for
about 1,959 units of Year 2005 Subaru Legacy and Outback vehicles.
Manufactured from October 2003 to June 2004, the NHTSA has determined that
the left and right side curtain air bags in certain vehicles may not fully
deploy rapidly enough when activated in a side impact collision. This may
result in failure to provide the intended head protection, increasing the
risk of injury.
Dealers will replace the left and right side curtain air bag modules. The
manufacturer has reported that owner notification began on June 11, 2004.
Owners may contact Subaru at 1-800-782-2783.
SYMBOL TECHNOLOGIES: DE Court Approves Gold Lawsuit Settlement
--------------------------------------------------------------
The Court of Chancery of the State for the State of Delaware gave approval
to a settlement that Symbol Technologies, Inc. (NYSE:SBL) reached with the
plaintiff in the Gold derivative lawsuit. The settlement calls for the
lawsuit to continue as direct litigation by Symbol on its own behalf against
the defendants in this case.
The Gold lawsuit was filed on December 18, 2003, in the Court of Chancery of
the State for the State of Delaware, alleging that certain former directors
and officers of Symbol violated federal securities laws. The plaintiff sued
certain former directors and officers for their alleged violations of the
securities laws on behalf of Symbol. As part of the settlement, the
plaintiff in the Gold lawsuit consents to entry of Symbol's proposed order,
under which Symbol will now be the plaintiff in this case.
The settlement with Gold permits Symbol to complete its settlement with
Jerome Swartz, Symbol's co-founder and former chairman. As announced on June
3, 2004, Swartz will pay $7.2 million in cash and an additional $2.9 million
in cash or stock to Symbol, and the Company will dismiss Swartz from this
lawsuit.
"This settlement is yet another positive step in Symbol's ongoing efforts to
resolve problems created by the Company's former management," said Peter
Lieb, Symbol senior vice president and general counsel. "We have resolved
the investigation by the United States Attorney and the SEC, along with the
major class action lawsuits. This current settlement is yet another
significant milestone that permits Symbol to remain focused on our
customers, partners and our future."
As part of the settlement, Symbol will pay $185,000 to cover reasonable
legal fees of the plaintiff's lawyer.
TOYOTA NORTH: Recalls 1,959 Lexus LS 430 Due To Crash Hazard
------------------------------------------------------------
Toyota Motor North America, Inc. is cooperating with the National Highway
Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary
recall for about 14,259 units of Year 2004 Lexus LS 430 passenger vehicles.
Manufactured from July 2003 to January 2004, the NHTSA has determined that
on certain passenger vehicles, the impeller inside the fuel pump may have
been improperly molded. Alcohol in some fuels may deform the impeller and
cause it to come into contact with the pump housing. The fuel pump could
seize, which may result in engine stalling, thereby increasing the
possibility of a crash.
Dealers will replace the fuel pump. The manufacturer has reported that owner
notification is expected to begin during July 2004. Owners may contact Lexus
at 1-800-255-3987.
TRIUMPH MOTORCYCLES: Recalls 2,792 Motorcycles Due To Fire Risks
----------------------------------------------------------------
Triumph Motorcycles (America) Ltd. is cooperating with the National Highway
Traffic Safety Administration (NHTSA) by issuing a June 2004 voluntary
recall for about 2,792 units of Year 2002-2003 Triumph Bonneville America
and Year 2003-2004 Triumph Speedmaster motorcycles.
Manufactured from June 2001 to March 2004, the NHTSA has determined that on
certain motorcycles, the electrical power supply cable to the starter motor
may come into direct contact with the oil cooler return pipe due to improper
assembly. This could cause the insulation on the starter cable to degrade.
Should the starter motor cable insulation become worn, an electrical short
could occur, increasing the risk of a fire or not allowing the motorcycle to
start.
Dealers will examine the cable for signs of contact with the oil cooler
pipe. The cable will be re-positioned. The manufacturer has reported that
owner notification is expected to begin during July 2004. Owners may contact
Triumph at 1-678-854-2010.
VIROPHARMA INC.: Lawsuit Settlement Hearing Set October 12, 2004
----------------------------------------------------------------
The United States District Court for the Eastern District of Pennsylvania
will hold a fairness hearing for the proposed $9,000,000 settlement of the
ViroPharma Incorporated Securities Litigation on behalf of all persons or
entities who purchased ViroPharma Securities (Common Stock (Nasdaq: VPHM) or
6% subordinated convertible notes due 2007) between July 13, 1999 and March
19, 2002, inclusive, and were damaged thereby (The "Class").
The fairness hearing will be held on October 12, 2004 at 10:00 a.m. in
Courtroom 13A, United States Courthouse, 601 Market Street, Philadelphia, PA
19106-1797.
For more details, contact Berger & Montague, P.C. by Mail: 1622 Locust St.,
Philadelphia, PA 19103 by Phone: Telephone: 1-800-424-6690 by Fax:
215-875-4604 OR Schiffrin & Barroway, L.L.P. by Mail: Three Bala Plaza East,
Suite 400, Bala Cynwyd, PA 19004 by Phone: 610-667-7706 by Fax: 610-667-7056
by E-mail: info@sbclasslaw.com or infosb@sbclasslaw.com OR The Claims
Administrator, ViroPharma Incorporated Securities Litigation, Heffler,
Radetich & Saitta L.L.P. by Mail: P.O. Box 58549, Philadelphia, PA
19102-8549 by Phone: 800-528-7199 or visit:
http://www.hrsclaimsadministration.com
XEROX CORPORATION: Discovery Continues in CT Securities Lawsuit
---------------------------------------------------------------
Discovery is proceeding in the consolidated securities class action filed
against Xerox Corporation in the United States District Court for the
District of Connecticut, styled "In re Xerox Corporation Securities
Litigation." The suit also names as defendants:
(1) Barry Romeril,
(2) Paul Allaire and
(3) G. Richard Thoman
The consolidated action purports to be a class action on behalf of the named
plaintiffs and all other purchasers of common stock of the Company during
the period between October 22, 1998 through October 7, 1999. The amended
consolidated complaint in the action alleges that in violation of Section
10(b) and/or 20(a) of the Securities Exchange Act of 1934, as amended, and
SEC Rule 10b-5 thereunder, each of the defendants is liable as a participant
in a fraudulent scheme and course of business that operated as a fraud or
deceit on purchasers of the Company's common stock during the Class Period
by disseminating materially false and misleading statements and/or
concealing material facts relating to the defendants' alleged failure to
disclose the material negative impact that the April 1998 restructuring had
on the Company's operations and revenues.
The amended complaint further alleges that the alleged scheme:
(i) deceived the investing public regarding the economic
capabilities, sales proficiencies, growth, operations
and the intrinsic value of the Company's common stock;
(ii) allowed several corporate insiders, such as the named
individual defendants, to sell shares of privately held
common stock of the Company while in possession of
materially adverse, non-public information; and
(iii) caused the individual plaintiffs and the other members
of the purported class to purchase common stock of the
Company at inflated prices.
The amended consolidated complaint seeks unspecified compensatory damages in
favor of the plaintiffs and the other members of the purported class against
all defendants, jointly and severally, for all damages sustained as a result
of defendants' alleged wrongdoing, including interest thereon, together with
reasonable costs and expenses incurred in the action, including counsel fees
and expert fees.
On September 28, 2001, the court denied the defendants' motion for dismissal
of the complaint. On November 5, 2001, the defendants answered the
complaint. On January 7, 2003, the plaintiffs filed a motion for class
certification. That motion has not yet been fully briefed or argued before
the court.
XEROX CORPORATION: Discovery Proceeds in CA Water Pollution Suit
----------------------------------------------------------------
Discovery has begun in the complaints filed against Xerox Corporation in the
Superior Court of the State of California for the County of Los Angeles,
over the Company's alleged disposal and/or release of hazardous substances
into the soil and groundwater.
A lawsuit, styled "Christine Abarca, et al. v. City of Pomona, et al.," was
filed on behalf of 681 individual plaintiffs claiming damages as a result of
the Company's alleged disposal and/or release of hazardous substances into
the soil and groundwater. Subsequently, six additional complaints were
filed in the same court on behalf of another 459 plaintiffs, with the same
claims for damages as the June 1999 action. All seven cases have been
served on the Company. Currently there are approximately 540 plaintiffs
remaining in the case, as many plaintiffs have been dismissed from the
litigation.
Plaintiffs in all seven cases allege that hazardous substances from the
Company's operations entered the municipal drinking water supplied by the
City of Pomona and the Southern California Water Company, and as a result
they were exposed to the substances by inhalation, ingestion and dermal
contact. Plaintiffs' claims against the Company include personal injury,
wrongful death, property damage, negligence, trespass, nuisance, and
violation of the California Unfair Trade Practices Act. Damages are
unspecified.
The seven cases against the Company have been coordinated with approximately
13 unrelated cases against other defendants which involve alleged
contaminated groundwater and drinking water in the San Gabriel Valley area
of Los Angeles County. In all of those cases, plaintiffs have sued both the
providers of drinking water and the industrial defendants who they contend
contaminated the water. The body of groundwater involved in
the Abarca cases, and allegedly contaminated by the Company, is separate and
distinct from the body of groundwater that is involved in the San Gabriel
Valley cases, and there is no allegation that the Company is involved in the
San Gabriel Valley cases. Nonetheless, the court ordered both groups of
cases to be coordinated because both groups concern allegations of
groundwater and drinking water contamination, have similar theories of
liability alleged against the defendants, and involve a number of similar
legal issues, thus apparently making it more efficient, in the view of the
court, for all of them to be handled by one judge.
XEROX CORPORATION: Asks Court To Dismiss ERISA Violations Suit
--------------------------------------------------------------
Xerox Corporation asked the United States District Court for the District of
Connecticut (Hartford) to dismiss the class action filed against it,
alleging violations of the Employee Retirement Income Security Act (ERISA).
The suit, styled "In Re Xerox Corp. ERISA Litigation," was filed on behalf
of all persons who invested or maintained investments in the Xerox Stock
Fund in the Xerox 401(k) Plans (either salaried or union) during the
proposed class period, May 12, 1997 through November 15, 2002, and allegedly
exceeds 50,000 persons. The defendants include the following individuals or
groups of individuals during the proposed class period:
(1) the Plan Administrator,
(2) the Board of Directors,
(3) the Fiduciary Investment Review Committee,
(4) the Joint Administrative Board,
(5) the Finance Committee of the Board of Directors, and
(6) the Treasurer
The complaint claims that all the foregoing defendants were fiduciaries of
the Plan under ERISA and, as such, were obligated to protect the Plan's
assets and act in the interest of Plan participants. The complaint alleges
that the defendants failed to do so and thereby breached their fiduciary
duties.
Specifically, plaintiffs claim that the defendants failed to provide
accurate and complete material information to participants concerning Xerox
stock, including accounting practices which allegedly artificially inflated
the value of the stock, and misled participants regarding the soundness of
the stock and the prudence of investing their retirement assets in Xerox
stock. Plaintiffs also claim that defendants failed to invest Plan assets
prudently, to monitor the other fiduciaries and to disregard Plan directives
they knew or should have known were imprudent, and failed to avoid conflicts
of interest.
The complaint does not specify the amount of damages sought. However, it
asks that the losses to the Plan be restored, which it describes as
"millions of dollars." It also seeks other legal and equitable relief, as
appropriate, to remedy the alleged breaches of fiduciary duty, as well as
interest, costs and attorneys' fees.
The Company filed a motion to dismiss the complaint. The plaintiffs
subsequently filed a motion for class certification and a motion to commence
discovery. Defendants have opposed both motions, contending that both are
premature before there is a decision on their motion to dismiss.
XEROX CORPORATION: NY Court To Rule on Apartheid Suit Dismissal
---------------------------------------------------------------
The United States District Court for the Southern District of New York has
yet to rule on Xerox Corporation's motion to dismiss the class action filed
against it and other corporate defendants, styled "Digwamaje et al. v. IBM
et al."
The suit accuses the Company and other corporate defendants of
providing material assistance to the apartheid government in South Africa
from 1948 to 1994, by engaging in commerce in South Africa and with the
South African government and by employing forced labor, thereby violating
both international and common law. Specifically, plaintiffs claim
violations of the Alien Tort Claims Act, the Torture Victims Protection Act
and the Racketeer Influenced and Corrupt Organizations Act (RICO). They
also assert human rights violations and crimes against humanity. Plaintiffs
seek compensatory damages in excess of $200 billion and punitive damages in
excess of $200 billion. The foregoing damages are being sought from all
defendants, jointly and severally.
Oral argument of the motion was heard on November 6, 2003 and the Company is
awaiting the court's decision. Xerox denies any wrongdoing and is
vigorously defending the action, it stated in a regulatory filing.
XEROX CORPORATION: NY Court Grants Certification To Bias Lawsuit
----------------------------------------------------------------
The United States District Court for the Eastern District of New York
granted class certification to a lawsuit filed against Xerox Corporation,
styled "Warren, et al. v. Xerox Corporation."
The court entered an order certifying a nationwide class of all black
salespersons employed by the Company from February 1, 1997 to the present
under Title VII of the Civil Rights Act of 1964, as amended, and the Civil
Rights Act of 1871. Six black sales representatives filed the suit,
alleging that the Company engaged in a pattern or practice of race
discrimination against them and other black sales representatives by
assigning them to less desirable sales territories, denying them promotional
opportunities, and paying them less than their white counterparts. Although
the complaint does not specify the amount of damages sought, plaintiffs do
seek, on behalf of themselves and the classes they seek to represent, front
and back pay, compensatory and punitive damages, and attorneys' fees.
YAHOO.COM: CA Associates Lodges Suit V. Message Board Insults
-------------------------------------------------------------
Associates of corporate attorney Stephen Galton, a partner in the law firm
of Galton & Helm filed a proposed class-action lawsuit against
internet-giant Yahoo in Los Angeles Superior Court, Reuters reports.
The suit claims that Yahoo has unfairly protected people who post negative
messages on its bulletin boards and falsely advertised that it prevents such
abusive messages. The suit alleges that Mr. Galton registered to use Yahoo
message boards in early 2004 in order to respond to a negative late-2003
post about one of his clients, which he did not identify in the suit.
However after posting his response, under the screen name "stephengalton,"
he was subjected to name-calling by various other users of the message
boards. Feed up with the personal attacks the corporate attorney sued the
users and at the same time, sought their personal information through a
subpoena from Yahoo. The company though responded with incomplete or
inaccurate information, the suit stated.
The suit proposes as a class any California resident who has been targeted
by abusive messages on a Yahoo board, who tried to get such messages stopped
or learn the identity of the message poster, and who had such requests
denied within the last four years. It seeks restitution, a permanent
injunction and other forms of relief.
*********
CORINTHIAN COLLEGES: Lerach Coughlin Files Securities Suit in CA
----------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins LLP ("Lerach
Coughlin") initiated a class action in the United States District Court for
the Central District of California on behalf of purchasers of Corinthian
Colleges, Inc. ("Corinthian") (NASDAQ:COCO) publicly traded securities
during the period between August 27, 2003 and July 30, 2004 (the "Class
Period").
The complaint charges Corinthian and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. Corinthian is a
for-profit, post-secondary education company. As of September 30, 2003, it
operated 81 schools and colleges and two training centers in the United
States, as well as 45 colleges and 15 training centers in seven Canadian
provinces. Its schools grant either degrees or diplomas and offer a
curriculum with an emphasis on allied health, business, technology and
criminal justice.
The complaint alleges that during the Class Period, Corinthian violated
Generally Accepted Accounting Principles ("GAAP") and SEC rules by failing
to properly report and disclose the illegal nature of its revenue during the
Class Period. These financial statements and the statements about them were
false and misleading, as such financial information was not prepared in
conformity with GAAP, nor was the financial information a fair presentation
of the Company's operations due to the Company's improper accounting for and
disclosure about its revenues, in violation of GAAP and SEC rules.
Corinthian manipulated financial statements by allowing the Company to
generate fees, which it was not entitled to, which revenues may be forfeited
(via fines, judgments and costs associated therewith) and which artificially
inflated Corinthian's revenue, income and receivables.
On June 24, 2004, Corinthian announced that the U.S. Department of Education
uncovered violations in how Corinthian's Bryman College Campus in San Jose,
California administers federal student aid programs. The U.S. Department of
Education revoked the school's ability to receive advances on federal aid
funds.
Subsequently, on August 2, 2004, Corinthian pre-announced extremely
disappointing results for the fourth quarter of fiscal year 2004 (ended June
30, 2004), and decreased expectations for fiscal 2005.
Following this news, Corinthian stock dropped $8.43, or more than 40
percent, to $10.29 on volume of 84 million shares.
For more details, contact William Lerach or Darren Robbins of Lerach
Coughlin Stoia Geller Rudman & Robbins LLP by Phone: 800-449-4900 by E-mail:
wsl@lerachlaw.com or visit their Web site:
http://www.lerachlaw.com/cases/corinthian/
CORINTHIAN COLLEGES: Wolf Haldenstein Lodges CA Stock Fraud Suit
----------------------------------------------------------------
The law firm of Wolf Haldenstein Adler Freeman & Herz LLP initiated a class
action lawsuit in the United States District Court for the Central District
of California, on behalf of all persons who purchased the common stock of
Corinthian Colleges, Inc. ("Corinthian" or the "Company") (Nasdaq: COCO)
between August 27, 2003 and June 23, 2004, inclusive, (the "Class Period")
against defendants Corinthian and certain officers of the Company.
The case name and index number are Meneses v. Corinthian Colleges, Inc., et
al and SACV 04-923 DOC (MLGx).
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 securities.
The complaint further alleges that statements made by the Company were each
materially false and misleading, and were known by defendants to be false or
were recklessly disregarded as such thereby, for the reasons set forth in
following reasons, among others:
(1) the Company has systematically assisted students in
falsifying their financial aid applications for the
purpose of increasing student retention rates and to
increase reported revenues and earnings;
(2) a material portion of the Company's reported revenues
was derived through fraudulent business practices, such
as federal grants and financial aid payments granted on
the basis of representations that were falsified with
the assistance of the Company;
(3) the Company's purported risk with warnings failed to
disclose that the Company had falsified student
financial and applications and defrauded the federal,
state and private agencies which regulate and/or
accredit Corinthian's schools, thereby placing its
accreditation at serious risk and jeopardizing the
ability of its students to qualify for financial aid,
which would have a devastating impact on Corinthian's
business;
(4) the Company's results were not prepared and reported in
accordance with Generally Accepted Accounting
Principles and did not fairly present its actual
financial results or condition; and
(5) the Company lacked adequate internal controls.
For more details, contact Fred Taylor Isquith, Esq., Gustavo Bruckner, Esq.,
or Derek Behnke of Wolf Haldenstein Adler Freeman & Herz LLP by Mail: 270
Madison Avenue, New York, NY 10016 by Phone: (800) 575-0735 by E-mail:
classmember@whafh.com or visit their Web site:
http://www.whafh.com/cases/corinthian2.htm
EXPRESS SCRIPTS: Lerach Coughlin Lodges Securities Lawsuit in MO
----------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins LLP ("Lerach
Coughlin") initiated a class action in the United States District Court for
the Eastern District of Missouri on behalf of purchasers of Express Scripts,
Inc. ("Express Scripts") (NASDAQ:ESRX) publicly traded securities during the
period between October 29, 2003 and August 3, 2004 (the "Class Period").
The complaint charges Express Scripts and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. Express
Scripts is one of the largest Pharmacy Benefit Management ("PBM") companies
in North America providing PBM services to members through facilities in
eight states and Canada. Express Scripts serves thousands of client groups,
including managed care organizations, insurance carriers, third-party
administrators, employers and union-sponsored benefits plans.
The complaint alleges that during the Class Period, defendants caused
Express Scripts' shares to trade at artificially inflated levels through the
issuance of false and misleading statements and other illegal practices,
including its improper practice of changing patients' medications.
Ultimately, Express Scripts disclosed a number of investigations into those
improper practices, recorded additional litigation reserves of $15 million
and the Company was sued by the New York Attorney General. The New York
Attorney General lawsuit alleged that Express Scripts conducted an elaborate
scheme that inflated by millions of dollars the costs of prescription drugs
to New York state's largest employee health plan, the Empire Plan. The
lawsuit alleged that Express Scripts:
(1) "enriched itself at the expense of the Empire Plan and
its members by inflating the cost of generic drugs;"
(2) "diverted to itself millions of dollars in manufacturer
rebates that belonged to the Empire Plan;"
(3) "engaged in fraud and deception to induce physicians to
switch a patient's prescription from one prescribed
drug to another for which Express Scripts received
money from the second drug's manufacturer;"
(4) "sold and licensed data belonging to the Empire Plan to
drug manufacturers, data collection services and others
without the permission of the Empire Plan and in
violation of the State's contract;" and
(5) "induced the State to enter into the contract by
misrepresenting the discounts the Empire Plan was
receiving for drugs purchased at retail pharmacies."
On the news of these investigations, Express Scripts stock fell to $62.48
compared to a Class Period high of $79.81.
For more details, contact William Lerach or Darren Robbins of Lerach
Coughlin Stoia Geller Rudman & Robbins LLP by Phone: 800-449-4900 by E-mail:
wsl@lerachlaw.com or visit their Web site:
http://www.lerachlaw.com/cases/expressscripts/
INVISION TECHNOLOGIES: Brian M. Felgoise Lodges Stock Suit in NY
----------------------------------------------------------------
The law offices of Brian M. Felgoise, P.C. initiated a securities class
action on behalf of shareholders who acquired InVision Technologies, Inc.
(NASDAQ: INVN) securities between March 15, 2004 and July 30, 2004,
inclusive (the Class Period).
The case is pending in the United States District Court for the Southern
District of New York, against 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. No class has yet
been certified in the above action.
For more details, contact Brian M. Felgoise, Esq. by Mail: 261 Old York
Road, Suite 423, Jenkintown, PA 19046 by Phone: (215) 886-1900 or by E-mail:
FelgoiseLaw@aol.com
INVISION TECHNOLOGIES: Charles J. Piven Files CA Securities Suit
----------------------------------------------------------------
The law offices of Charles J. Piven, P.A. initiated a securities class
action on behalf of shareholders who purchased, converted, exchanged or
otherwise acquired the common stock of InVision Technologies, Inc.
(Nasdaq:INVN) between March 15, 2004 and July 30, 2004, inclusive (the
"Class Period").
The case is pending in the United States District Court for the Northern
District of California against defendant InVision and one or more of its
officers and/or directors. The action charges that defendants violated
federal securities laws by issuing a series of materially false and
misleading statements to the market throughout the Class Period, which
statements had the effect of artificially inflating the market price of the
Company's securities. No class has yet been certified in the above action.
For more details, contact the law offices of Charles J. Piven, P.A. by Mail:
The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525,
Baltimore, MD 21202 by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
KVH INDUSTRIES: Marc S. Henzel Files Securities Fraud Suit in RI
----------------------------------------------------------------
The law offices of Marc S. Henzel initiated a class action lawsuit in the
United States District Court for the District of Rhode Island on behalf of
purchasers of KVH Industries, Inc. (NASDAQ: KVHI) publicly traded securities
during the period between January 6, 2004 and July 2, 2004 (the "Class
Period").
The complaint alleges that, throughout the Class Period, defendants issued
materially false and misleading statements regarding KVH's increasing
financial results and the strong demand for its newly developed TracVision
A5 and G8 satellite TV systems (the "TracVision systems"). As alleged in the
complaint, these statements were materially false and misleading because
they failed to disclose, among other things:
(1) that defendants had "stuffed" the retail channels with
overpriced TracVision systems;
(2) that the Company's revenues were not growing by
millions of dollars per quarter and the purported
growth trends in the Company's revenues could not be
sustained; and
(3) that KVH had not realized any material cost reduction
in the manufacture of its TracVision systems and would
be forced to write-down its inventory of manufactured
goods by millions of dollars.
The complaint further alleges that defendants failed to disclose these
adverse facts in order to complete a public offering of KVH common stock,
raising more than $51.5 million in much needed capital.
On or about July 6, 2004, before the market opened for trading, KVH stunned
the investing public by announcing that it was slashing the retail price of
its TracVision systems by more than 34% and taking a multi-million dollar
write down of vendor purchase commitments and on-hand inventories to reflect
the true value of KVH's TracVision systems sales. In pre-opening market
trading, KVH common stock declined more than 19%, to open at $9.51 per share
on July 6, 2004, a 49% decline from the public offering price just 4 months
prior.
For more details, contact Marc S. Henzel, Esq. of the law offices of Marc S.
Henzel by Mail: 273 Montgomery Ave, Suite 202 Bala Cynwyd, PA 19004-2808 by
Phone: (888) 643-6735 or (610) 660-8000 by Fax: (610) 660-8080 by E-mail:
Mhenzel182@aol.com or visit their Web site:
http://members.aol.com/mhenzel182
TARO PHARMACEUTICAL: Brodsky & Smith Files Securities Suit in NY
----------------------------------------------------------------
The law offices of Brodsky & Smith, LLC initiated a securities class action
lawsuit on behalf of shareholders who purchased the common stock and other
securities of Taro Pharmaceutical Industries, Inc. ("Taro Pharmaceutical" or
the "Company") (Nasdaq:TARO), between February 20, 2003 and July 29, 2004
inclusive (the "Class Period").
The class action lawsuit was filed in the United States District Court for
the Southern District of New York. The Complaint alleges that defendants
violated federal securities laws by issuing a series of material
misrepresentations to the market during the Class Period, thereby
artificially inflating the price of Taro Pharmaceutical securities. No class
has yet been certified in the above action.
For more details, contact Marc L. Ackerman, Esq. or Evan J. Smith, Esq. of
Brodsky & Smith, LLC by Mail: Two Bala Plaza, Suite 602, Bala Cynwyd, PA
19004 by Phone: 877-LEGAL-90 or by E-mail: clients@brodsky-smith.com
TARO PHARMACEUTICALS: Schiffrin & Barroway Lodges NY Stock Suit
---------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class action lawsuit
in the United States District Court for the Southern District of New York on
behalf of all securities purchasers of Taro Pharmaceuticals Industries
(Nasdaq: TARO) ("Taro" and the "Company") from February 20, 2003 through
July 29, 2004, inclusive (the "Class Period").
The complaint charges Taro, Barrie Levitt, Aaron Levitt, Daniel Moros,
Samuel Rubinstein, and Kevin Connelly with violations of the Securities
Exchange Act of 1934. More specifically, the Complaint alleges that the
Company failed to disclose and misrepresented the following material adverse
facts which were known to defendants or recklessly disregarded by them:
(1) that the Company was unloading inventory onto
wholesalers in order to make sales because it was
experiencing increased competitive pressures in its
generic drugs business thereby artificially inflating
demand and, hence, the Company's overall financial
results;
(2) that the Company knew or recklessly disregarded the
fact that its continued efforts to develop new
proprietary drugs were exceedingly costly and were
severely undermining the profitability of its generic
drugs business, which could not support the demanding
development efforts; and
(3) that as a consequence of the foregoing, defendants
lacked a reasonable basis for their positive statements
about the Company's growth and progress.
On April 29, 2004, Taro reported financial results for the Company's first
quarter, ended March 31, 2004. Taro's first quarter 2004 sales increased 22%
to $84.1 million, compared with sales of $69.0 million for the first quarter
of 2003. Gross profit in the first quarter of 2004 increased 27% to $56.4
million, or 67% of sales, compared with $44.4 million, or 64% of sales, for
the year-ago quarter. This news shocked the market. Shares of Taro fell
$16.88 per share or 27.16 percent, on April 29, 2004, to close at $45.26 per
share. Then on July 29, 2004, reported results for the Company's second
quarter and six months ended June 30, 2004. Taro's second quarter sales were
$49.1 million, compared with $74.8 million in the second quarter of 2003.
Gross profit for the quarter was $23.5 million, compared with $50.0 million
for the second quarter of 2003. On this news, shares of Taro again fell
$5.94 per share or 19.75 percent, on July 29, 2004, to close at $24.14 per
share.
For more details, contact Marc A. Topaz, Esq. or Darren J. Check, Esq. of
Schiffrin & Barroway, LLP by Mail: Three Bala Plaza East, Suite 400, Bala
Cynwyd, PA 19004 by Phone: 1-888-299-7706 or 1-610-667-7706 or by E-mail:
info@sbclasslaw.com
THORATEC CORPORATION: Brodsky & Smith Lodges CA Securities Suit
---------------------------------------------------------------
The law offices of Brodsky & Smith, LLC initiated a securities class action
lawsuit on behalf of shareholders who purchased the common stock and other
securities of Thoratec Corporation ("Thoratec" or the "Company")
(Nasdaq:THOR), between April 28, 2004 and June 29, 2004 inclusive (the
"Class Period").
The class action lawsuit was filed in the United States District Court for
the Northern District of California. The Complaint alleges that defendants
violated federal securities laws by issuing a series of material
misrepresentations to the market during the Class Period, thereby
artificially inflating the price of Thoratec securities. No class has yet
been certified in the above action.
For more details, contact Marc L. Ackerman, Esq. or Evan J. Smith, Esq. of
Brodsky & Smith, LLC by Mail: Two Bala Plaza, Suite 602, Bala Cynwyd, PA
19004 by Phone: 877-LEGAL-90 or by E-mail: clients@brodsky-smith.com
WIRELESS FACILITIES: Schiffrin & Barroway Files Stock Suit in CA
----------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class action lawsuit
in the United States District Court for the Southern District of California
on behalf of all purchasers of the common stock of Wireless Facilities Inc.
(Nasdaq: WFII) ("Wireless" or the "Company") from April 26, 2000 through
August 4, 2004, inclusive (the "Class Period").
The complaint charges Wireless, Masood Tayebi, Terry Ashwill, Daniel
Stokely, Eric DeMarco, and Thomas Munro with violations of the Securities
Exchange Act of 1934. More specifically, the Complaint alleges that the
Company failed to disclose and misrepresented the following material adverse
facts which were known to defendants or recklessly disregarded by them:
(1) that the Company had materially underreported its
burgeoning foreign tax burden;
(2) that as a consequence of the foregoing, the Company
materially inflated its net income or loss by 3-8
percent or $10-12 million;
(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 the above, the Company's financial
results were materially inflated at all relevant times.
On August 4, 2004, Wireless reported results for the second quarter of
fiscal year 2004. In addition, the Company announced that it intends to
restate its financial statements filed on Form 10-K for the years 2001
through 2003 to accrue for certain foreign tax contingencies. News of this
shocked the market. Shares of Wireless fell as much as, 30% and reached at
one point on August 5, 2004, its 52 week low of $4.61 per share on unusually
heavy trading volume. At the end of the trading day, shares of Wireless fell
$1.96 per share or 28.08 percent to close at $5.02 per share.
For more details, contact Marc A. Topaz, Esq. or Darren J. Check, Esq. of
Schiffrin & Barroway, LLP by Mail: Three Bala Plaza East, Suite 400, Bala
Cynwyd, PA 19004 by Phone: 1-888-299-7706 or 1-610-667-7706 or by E-mail:
info@sbclasslaw.com
*********
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.
*********
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Class Action Reporter is a daily newsletter, co-published by
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Copyright 2004. All rights reserved. ISSN 1525-2272.
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The CAR subscription rate is $575 for six months delivered via e-mail.
Additional e-mail subscriptions for members of the same firm for the term of
the initial subscription or balance thereof are $25 each. For subscription
information, contact Christopher Beard at 240/629-3300.
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