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C L A S S A C T I O N R E P O R T E R
Tuesday, December 7, 2004, Vol. 6, No. 242
Headlines
ALTERNATIVE HEALTH: Recalls Eye Rinse Products Due To Sterility
AMERICA'S MONEYLINE: To Appeal Denial of Arbitration in IL Suit
AMERICAN PHARMACEUTICAL: Plaintiffs File Consolidated Suit in IL
ARCHSTONE SMITH: Amended Mold Suit Names New Plaintiffs
ARKANSAS: Judge Dismisses Suit Challenging AR Sex Offender Law
CALIFORNIA: Cedar Fire Suit Seeks Over $100 Million in Damages
CIT GROUP: Faces Consumer Lawsuit Over NorVergence Leases in NJ
CONSECO INC.: IN Court Hears Officers' Motion To Dismiss Lawsuit
CONSECO INC.: IN Court Stays Delaratory Judgment Action in Suit
CONSECO LIFE: CO Court To Rule on Appeal of Certification Denial
CONSECO LIFE: Continues To Face Fraud Lawsuits in Various Courts
CONSECO LIFE: TX Court Preliminarily Approves Suit Settlement
COSI INC.: Asks NY Court To Dismiss Lawsuit For Securities Fraud
CROSS COUNTRY: Faces Three Securities Fraud Lawsuits in S.D. FL
DR. CLARK: Agrees To Settle FTC Complaint Over Consumer Fraud
ENBRIDGE GAS: OED Expands Suit Deferral Account To Capture Costs
FIRST NATIONS: Chief Hails Ontario Ruling On Indian Abuse Case
ILLINOIS: Lawyer Wants Judge Taken Off $200M Lottery Scam Suit
ILLINOIS: Supreme Court Ruling on Fraud May Have Local Impact
IMC GLOBAL: Reaches Settlement for Securities Suit in DE Court
IMC GLOBAL: Reaches Settlement for Investor Suit V. PLP Merger
ISRAEL: Smokers Launch Suit Over Misleading "Lights" Cigarettes
KINDER MORGAN: Aspen City To Pay Undetermined Attorneys Fees
MANHATTAN NATIONAL: Policyholders Launch Fraud Suit in NM Court
MOHAWK INSTITUTE: Appeals Court Certifies School Abuse Lawsuit
PHILADELPHIA LIFE: Trial in FL Fraud Suit Expected in June 2005
PSF GROUP: Northern MO Residents Launch Property Damage Lawsuit
SAXON MORTGAGE: Reaches Settlement For MI Consumer Fraud Lawsuit
SERVIER CANADA: Ontario Judge OK's Ponderal, Redux Settlement
STAR GAS: Shareholders Launch Securities Fraud Suits in CT Court
UNOMEDICAL INC.: Recalls Airway Adapters Due To Injury Hazard
WILLIS GROUP: Named As Defendant in Marsh & McLennan Fraud Suit
New Securities Fraud Cases
AUTOBYTEL INC.: Pomerantz Haudek Lodges CA Securities Fraud Suit
AUTOBYTEL INC.: Murray Frank Lodges Securities Fraud Suit in CA
AXIS CAPITAL: Murray Frank Lodges Securities Fraud Suit in NY
RS INVESTMENT: Stull & Stull Lodges Securities Fraud Suit in MD
SIRVA INC.: Brian M. Felgoise Lodges Securities Fraud Suit in IL
SIRVA INC.: Marc S. Henzel Lodges Securities Fraud Suit in IL
STAR GAS: Pomerantz Haudek Sets Lead Plaintiff Deadline
UTSTARCOM: Murray Frank Lodges Securities Fraud Suit in N.D. CA
UTSTARCOM Pomerantz Haudek Lodges Securities Fraud Suit in CA
MERCK & CO.: Scott + Scott, LLC Lodges Fiduciaries Suit in NJ
*********
ALTERNATIVE HEALTH: Recalls Eye Rinse Products Due To Sterility
---------------------------------------------------------------
Alternative Health & Herbs Remedies of Albany, OR, is conducting
a voluntary nationwide recall of all lots of four American
Health & Herbs Ministry brand eye rinse products. These include
Eye Rinse Concentrate formula 1036 live concentrated herbal
tincture, White Willow Bark 3193 live concentrated herbal
tincture, Fennel Seed 3126 live concentrated herbal tincture and
Elderberry Flower 3247 live concentrated herbal tincture.
Products are packaged in 2 oz. and 8 oz. brown glass bottles.
This recall follows a FDA inspection which concluded
manufacturing conditions and controls were insufficient to
produce a sterile product. Non-sterile eye drops pose an
unacceptable risk of causing eye infections, which in rare cases
could lead to blindness.
Approximately 300 bottles of these products have been
distributed nationwide since November 1, 2002. All lots of these
four products are subject to this recall action, irrespective of
the lot number and expiration date shown on the bottle.
Consumers who may have any of these products on hand are advised
not to use them as eye drops or eye washes. Consumers are asked
to return them to Alternative Health & Herbs Remedies, P.O. Box
217, Albany, OR 97321 or discard them and send Alternative
Health & Herbs Remedies a purchase receipt for a full refund.
Consumers with questions may call Alternative Health & Herbs
Remedies at 1-800-345-4152.
AMERICA'S MONEYLINE: To Appeal Denial of Arbitration in IL Suit
---------------------------------------------------------------
America's MoneyLine, Inc. intends to appeal the denial of its
motion to compel arbitration for the class action filed in the
United States District Court for the Southern District of
Circuit Court of the Third Judicial Circuit, Madison County,
Illinois, styled "Josephine Coleman v. America's MoneyLine,
Inc., Case No. 02L1557."
This is a class action suit alleging consumer fraud and unjust
enrichment under Illinois law and similar laws of other states.
Ms. Coleman alleges that she was improperly charged a fee for
overnight delivery of mortgage loan documents.
In December 2002, defendants filed a Petition to Compel
Arbitration in the United States District Court for the
Southern District of Illinois. The Motion to Compel
Arbitration in Federal Court was denied on jurisdictional
grounds. The Company appealed the District Court's
decision to the United States Court of Appeals for the
Seventh Circuit. The Court of Appeals affirmed the
District Court's decision. The Company then filed a
motion to compel arbitration in state court, which was
denied during the third quarter of 2004. The Company
plans to appeal the denial of the Motion to Compel
Arbitration to the 5th District Court of Appeals for the
State of Illinois.
AMERICAN PHARMACEUTICAL: Plaintiffs File Consolidated Suit in IL
----------------------------------------------------------------
Plaintiffs filed a consolidated securities class action against
American Pharmaceutical Partners, Inc., one of its officers and
American BioScience, Inc. in the United States District Court
for the Northern District of Illinois.
The suits allege violations of Section 10(b) and Section 20(a)
of the Securities Exchange Act of 1934, and rule 10b-5,
principally relating to purportedly false and misleading
statements made by the Company regarding Abraxane.
The action alleges that defendants made materially false and
misleading statements with respect to the drug Abraxane, a
reformulated version of Taxol, under development for the
treatment of breast cancer. Throughout the Class Period,
defendants touted Abraxane as a safer and more effective
alternative to Taxol, the world's best-selling chemotherapy drug
for cancer. Defendants claimed that clinical studies had
indicated that:
(1) Abraxane could be administered without Cremophor, a
toxic substance with severe side-effects that limited
the tolerable dose and effectiveness of Taxol;
(2) unlike Taxol, Abraxane could be administered without
the need for potentially harmful steroid pre-medication
and other drugs that reduce the loss of white blood
cells;
(3) because Abraxane was not formulated with a toxic
substance it could be delivered in much higher doses
than Taxol and was therefore more effective than Taxol
with respect to reduction in tumor size; and
(4) because it can be injected intravenously directly to
the location of the tumor, Abraxane therapy is only
one-half hour, compared to 3 hours for Taxol.
The consolidated suit is filed in the United States District
Court for the Northern District of Illinois, under Judge Ronald
A. Guzman. The consolidated suit is composed of:
(i) Morris v. Amer Bioscience Inc., case no. 1:03cv07525
(ii) Greenfield v. Amer Bioscience Inc., case no.
1:03cv07774
(iii) Rafool v. Amer Bioscience Inc., case no. 1:03cv07901
(iv) Martin v. Amer Bioscience Inc., case no. 1:03cv08654
(v) Danto v. Amer Bioscience Inc., case no. 1:03cv09255
Lawyers for the defendants are Christopher A. Patz of Morrison &
Foerster, 425 Market Street, San Francisco, CA 94105; Nathan P.
Eimer, Christine M. Johnson, Adam B. Deutsch of Eimer Stahl
Klevorn & Solberg, LLP, 224 South Michigan Avenue, Suite 1100,
Chicago, IL 60604, Phone: (312) 660-7600 and Evan L. Land,
Morrison & Foester LLP, Phone: 400 Capital Mall, Sacramento, CA
95814, Phone: (916)448-3200
Law firms for the plaintiffs are:
(a) Cauley Geller Bowman Coates & Rudman, LLP (New York),
200 Broadhollow, Suite 406, Melville, NY, 11747, Phone:
631.367.7100, Fax: 631.367.1173
(b) Charles J. Piven, World Trade Center-Baltimore, 401
East Pratt Suite 2525, Baltimore, MD, 21202, Phone:
410.332.0030, E-mail: pivenlaw@erols.com
(c) Faruqi & Faruqi LLP, 320 East 39th Street, New York,
NY, 10016, Phone: 212.983.9330, Fax: 212.983.9331, E-
mail: Nfaruqi@faruqilaw.com
(d) Federman & Sherwood, 120 North Robinson, Suite 2720,
Oklahoma City, OK, 73102, Phone: 405-235-1560, Fax:
wfederman@aol.com
(e) Goodkind Labaton Rudoff & Sucharow LLP, 100 Park
Avenue, New York, NY, 10017 Phone: 212.907.0700, Fax:
212.818.0477, E-mail: info@glrslaw.com
(f) Marc S. Henzel, 210 West Washington Square, Third
Floor, Philadelphia, PA, 19106, Phone: 215.625.9999,
Fax: 215.440.9475, e-mail: Mhenzel182@aol.com
(g) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(h) Miller, Faucher & Cafferty LLP, 30 North LaSalle
Street, Suite 3200, Chicago, IL, 60602, Phone:
312782.4880, E-mail: mmiller@millerfauchner.com
(i) Much, Shelist, Freed, Denenberg, Ament & Eiger, P.C.,
200 N LaSalle St Ste 2100, Chicago, IL, 60601, Phone:
312.346.3100
(j) Much Shelist Freed Denenberg Ament & Rubenstein, PC,
Chicago, IL, Phone: 800-470-6824, Fax: 312-621-1750,
(k) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(l) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, fax: 212.686.0114, E-mail:
newyork@whafh.com
ARCHSTONE SMITH: Amended Mold Suit Names New Plaintiffs
-------------------------------------------------------
Plaintiffs amended a class action filed against Archstone-Smith
Operating Trust, to name new class representatives. The amended
suit is styled "Bercovits et al., v. Archstone-Smith Operating
Trust, et al."
The Company is working towards the settlement of several class
actions filed against it in the Circuit Court of the Eleventh
Judicial Circuit in and for Miami-Dade County, Florida.
"Henriques, et al. v. Archstone-Smith Operating Trust, et al.,"
filed on August 27, 2002 on behalf of a class of residents at
Harbour House. The case alleged that water infiltration and
resulting mold contamination at the property had been caused by
faulty air-conditioning and had resulted in both personal
injuries to the plaintiffs and damage to their property.
The Company has reached a settlement with plaintiffs in
Henriques. Not all plaintiffs have accepted the court-approved
settlement, and some of these individuals have filed separate
lawsuits. The Company is in the process of determining the
merits of their claims.
"Santos, et al. v. Archstone-Smith Operating Trust, et al., was
filed in the same court on February 13, 2003, on behalf of a
class of residents at Harbour House. The plaintiffs in this
case make substantially the same allegations as those made in
the Henriques claim and seek both injunctive relief and
unspecified monetary and punitive damages. The Company is
currently in settlement discussions with the individuals who
have retained counsel.
"Michel, et al., v. Archstone-Smith Operating Trust, et al.,"
was filed on May 9, 2003 on behalf of the class of residents at
the property. The plaintiffs in this case make substantially
the same allegations as those made in the Henriques claim and
seek both injunctive relief and unspecified monetary and
punitive damages. The suit is pending.
"Semidey, et al., v. Archstone-Smith Operating Trust, et al.,"
was filed on June 9, 2003, on behalf of the class of residents
at the property. The plaintiffs in this case made substantially
the same allegations as those made in the Henriques claim and
sought both injuctive relief and unspecified monetary and
punitive damages. Although the Company was never served with
this complaint, it has reached a settlement with a majority of
the represented residents and therefore this complaint was
dismissed without prejudice.
Although the Company is in continued discussions with the
remaining represented residents in the Semidey case, plaintiffs'
counsel elected to re-file a class action suit on behalf of
these individuals, styled "Sullivan, et al., v. Archstone-Smith
Operating Trust, et al." on July 6, 2004 in the Circuit Court of
the Eleventh Judicial Circuit in and for Miami-Dade County,
Florida. This is based upon the same allegation as the Semidey
action and seeks the same relief, with the exception of damages
for bodily injury, which are excluded. Plaintiffs' counsel
has advised the Company that they intend to seek recovery for
any bodily injury claims through individual lawsuits.
ARKANSAS: Judge Dismisses Suit Challenging AR Sex Offender Law
--------------------------------------------------------------
U.S. District Judge Susan Webber Wright dismissed a lawsuit
challenging Arkansas' sex-offender law but left in place an
agreement barring enforcement of the statute requiring high-risk
sex offenders to move if they live within 2,000 feet of a school
or daycare center pending a possible appeal, the Arkansas
Democrat Gazette reports. The federal judge rejected the
plaintiffs' arguments that the residency requirement of the law
passed last year violated their federal equal-protection and
due-process rights.
Three men sued the Little Rock and Pine Bluff police departments
and the Arkansas Department of Correction in May. Days later,
Judge Wright signed an order allowing convicted sex offenders
Donald Weems, Michael Briggs and Tony Lampkin to live within
2,000 feet of schools or day-care centers as long as they report
their addresses to police. Mr. Lampkin died in August while Mr.
Weems has since offended again, according to Little Rock police.
The three men were seeking class-action status for their
lawsuit, which Judge Wright recently dismissed.
This spring, parole officers and cities across Arkansas sent
letters and knocked on doors to tell sex offenders living close
to schools or day-care centers that they must move or face
prosecution. According to Greg Karber, who has also filed a
lawsuit challenging the way the state determines which sex
offenders are high risk, the attorney for the three plaintiffs,
the state shouldn't have the right to tell sex offenders one day
that they can live in a place, then change its mind and make
them move. Any appeal to Judge Wright's ruling will be filed
with the 8th U.S. Circuit Court of Appeals in St. Louis.
Little Rock City Attorney Tom Carpenter stated that it pleased
him to hear the state still has the residency rule "in our
arsenal." Mr. Carpenter gave credit to C. Joseph Cordi Jr. of
the state's attorney general's office for his work on the case.
"Obviously we're pleased because [the ruling] says that we've
got a statute that's constitutional, and we can take special
action with people who have committed sexual offenses and make
sure they don't live in places where they can jeopardize
children," Mr. Carpenter adds.
CALIFORNIA: Cedar Fire Suit Seeks Over $100 Million in Damages
--------------------------------------------------------------
A lawsuit seeking in excess of $100 million in damages, which
claims that fire officials were negligent by failing to put out
the Cedar fire when it was still small and theoretically
manageable has been recently filed in San Diego Superior Court,
the San Diego Union Tribune reports.
The lawsuit, which was filed on behalf of residents of the more
than 2,200 homes or businesses that were destroyed or damaged in
the fire, names the county of San Diego and the California
Department of Forestry as defendants.
Filed by a national law firm that specializes in "catastrophic
litigation," the suit claims that while responding to emergency
calls on the fire, the defendants "failed to provide adequate or
timely fire suppression activities." The suit further claims
that the aerial response to the fire was inadequate because
county and state facilities at the Ramona airport were
improperly staffed and in a "dangerous condition" on October 25,
2003, when the fire began. The suit says officials "failed to
dispatch firefighting aircraft to eliminate or maintain the
initial fire before it spread to surrounding areas."
According to attorney Mark Grotefeld, an attorney to the
national law firm, the lawyers are asing to have the suit
approved as a class action on behalf of those who lost property
in the fire. He further said that the residents would be
contacted later if a judge approves the class action request.
The Cedar fire began late in the afternoon of October 25.
Authorities say a lost and disoriented hunter started the blaze,
which eventually burned more than 273,000 acres, destroyed
nearly 2,300 homes and killed 15 people. After a claim was
filed by the same law firm earlier this year, he said it
appeared the county is not liable for damages because of a state
code that gives immunity to public agencies for any liability
arising from firefighting.
Mr. Grotefeld said he wants a process established in which
residents can file damage claims with an independent agency,
similar to the commission set up to handle claims after the
September 11, 2001, terrorist attacks. The idea, he said, is to
address costs that people weren't compensated for. The suit
seeks monetary damages that "may exceed $100 million," attorneys
fees and other costs. Mr. Grotefeld also said at least one other
suit naming the U.S. Forest Service, as a defendant, will be
filed soon by his firm.
CIT GROUP: Faces Consumer Lawsuit Over NorVergence Leases in NJ
---------------------------------------------------------------
CIT Group, Inc. was named as a defendant in a class action filed
in the United States District Court for the District of New
Jersey, styled "Exquisite Caterers v. Popular Leasing et al."
The suit was filed against 13 financial institutions, including
the Company, who had acquired equipment leases from NorVergence,
Inc., a reseller of telecommunications and Internet services to
businesses. Exquisite Caterers based its complaint on
allegations that NorVergence misrepresented the capabilities of
the equipment leased to its customers and overcharged for the
equipment. The complaint asserts that the NorVergence Leases
are unenforceable and seeks rescission, punitive damages, treble
damages and attorneys' fees.
In addition, putative class action suits in Florida and Texas
and several individual suits, all based upon the same core
allegations and seeking the same relief, have been filed by
NorVergence customers against the Company and the other
financial institutions.
CONSECO INC.: IN Court Hears Officers' Motion To Dismiss Lawsuit
----------------------------------------------------------------
The United States District Court for the Southern District of
Indiana heard the motion to dismiss filed by several individual
defendants in the consolidated securities class action filed
against Conseco, Inc.
Since the Company announced its intention to restructure its
capital on August 9, 2002, a total of eight purported securities
fraud class action lawsuits were filed against it and certain of
its current and former officers. These lawsuits were filed on
behalf of persons or entities who purchased the Company's
Predecessor's common stock on various dates between October 24,
2001 and August 9, 2002.
In each case the plaintiffs allege claims under Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, as amended and
allege material omissions and dissemination of materially
misleading statements regarding, among other things, the
liquidity of Conseco and alleged problems in CFC's manufactured
housing division, allegedly resulting in the artificial
inflation of the Company's Predecessor's stock price. On March
13, 2003, all of these cases were consolidated into one case in
the United States District Court for the Southern District of
Indiana, captioned "Franz Schleicher, et al. v. Conseco, Inc.,
Gary Wendt, William Shea, Charles Chokel and James Adams, et
al., Case No. 02-CV-1332 DFH-TAB."
The lawsuit was stayed as to all defendants by order of the
United States Bankruptcy Court for the Northern District of
Illinois. The stay was lifted on October 15, 2003. The
plaintiffs have filed a consolidated class action complaint with
respect to the individual defendants. The Company's liability
with respect to this lawsuit was discharged in the Plan and its
obligation to indemnify individual defendants who were not
serving as one of its officers or directors on the Effective
Date of the Plan is limited to $3 million in the aggregate under
the Plan. The Company's liability to indemnify individual
defendants who were serving as an officer or director on the
Effective Date, of which there is one such defendant, is not
limited by the Plan. A motion to dismiss was filed on behalf of
defendants Shea, Wendt and Chokel, which was heard on November
19, 2004.
CONSECO INC.: IN Court Stays Delaratory Judgment Action in Suit
---------------------------------------------------------------
The United States District Court for the Southern District of
Indiana granted Conseco, Inc.'s motion to stay the declaratory
judgment action filed in relation to the class action pending
against the Company on behalf of the ConsecoSave Plan.
In October 2002, Roderick Russell, on behalf of himself and a
class of persons similarly situated, and on behalf of the
ConsecoSave Plan, filed the suit against the Company, Conseco
Services, LLC and certain of its current and former officers.
The suit is styled "Roderick Russell, et al. v. Conseco, Inc.,
et al., Case No. 1:02-CV-1639 LJM."
The purported class action consists of all individuals whose
401(k) accounts held common stock of the Company's Predecessor
at any time since April 28, 1999. The complaint alleges, among
other things, breaches of fiduciary duties under the Employee
Retirement Income Security Act (ERISA) by continuing to permit
employees to invest in the Company's Predecessor's common stock
without full disclosure of the Company's true financial
condition.
This lawsuit was stayed as to all defendants by order of the
Bankruptcy Court. The stay was lifted on October 15, 2003. On
March 22, 2004, plaintiffs filed an amended complaint and added
additional former officers as named defendants and dismissed
Conseco, Inc. as a party. The Company filed a motion to dismiss
the amended complaint on June 1, 2004. On July 30, 2004, the
Russell matter was dismissed.
On August 25, 2004, the plaintiffs filed a notice of appeal in
the 7th Circuit Court of Appeals. On February 13, 2004, the
Company's fiduciary insurance carrier, RLI Insurance Company,
filed a declaratory judgment action asking the court to find no
liability under its policy for the claims made in the Russell
matter (RLI Insurance Company v. Conseco, Inc., Stephen Hilbert,
et al., Case No. 1:04-CV-0310DFH-TAB (Southern District,
Indiana)). On March 15, 2004, RLI filed an amended complaint
adding Conseco Services as an additional defendant.
On July 28, 2004, the Company filed a motion to stay the RLI
matter until Russell is resolved. On September 2, 2004, RLI
filed a motion for judgment on all counterclaims. On October 5,
2004, the motion to stay this matter was granted.
CONSECO LIFE: CO Court To Rule on Appeal of Certification Denial
----------------------------------------------------------------
The District Court of Adams County, Colorado has yet to rule on
plaintiffs' appeal of the denial of class certification for the
class action filed against four of Conseco, Inc.'s subsidiaries,
seeking unspecified damages.
The suit is styled "Jose Medina and others similarly situated v.
Conseco Annuity Assurance Company, Conseco Life Insurance
Company, Bankers National Life Insurance Company and Bankers
Life and Casualty Company, Cause No. 01-CV-2465." The suit
alleges, among other things, breach of contract regarding
alleged non-disclosure of additional charges for those
policyholders paying via premium modes other than annual.
On July 14 and 15, 2003 the plaintiff's motion for class
certification was heard and the Court took the matter under
advisement. On November 10, 2003, the Court denied the motion
for class certification. On January 26, 2004, the plaintiff
appealed the trial court's ruling denying class certification.
All further proceedings have been stayed pending the outcome of
the appeal.
CONSECO LIFE: Continues To Face Fraud Lawsuits in Various Courts
----------------------------------------------------------------
Conseco, Inc. and its subsidiaries, Conseco Life Insurance
Company and Bankers Life and Casualty Company, have been named
in purported class actions and an individual lawsuit alleging,
among other things, breach of contract with regard to a change
made in the way monthly deductions are calculated for insurance
coverage. Many of these nationwide purported class action
lawsuits were filed in Federal courts across the United States.
The Judicial Panel on Multidistrict Litigation consolidated
these lawsuits into the case now referred to as "In Re Conseco
Life Insurance Co. Cost of Insurance Litigation, Cause No. MDL
1610, filed in the United States District Court for the Central
District of California.
Other nationwide purported class actions and an individual
lawsuit are filed in Illinois, Indiana and California state
courts. The case filed in Illinois state court is Barry A.
Feinberg, Trustee of the Linda Leventhal Irrevocable Trust,
individually and on behalf of all other persons and entities
similarly situated v. Conseco Life Insurance Company, f/k/a
Massachusetts General Life Insurance Company, Case No. 04CH17937
(Circuit Court, Cook County, Illinois). Those cases filed in
Indiana state courts have been consolidated into the case now
referred to as Alene P. Mangelson, et al. v. Conseco Life
Insurance Company, Cause No. 29D01-0403-PL-211 (Superior Court,
Hamilton County, Indiana).
Those cases filed in California state courts are as follows:
(1) Stephen Hook, an individual, on behalf of himself and
all others similarly situated v. Conseco Life Insurance
Company and Bankers Life and Casualty Company and Does
1 through 10, Case No. CGC-04-428872 (Superior Court,
San Francisco County, California);
(2) Michael S. Kuhn, on behalf of himself and all others
similarly situated v. Conseco Life Insurance Company
and Does 1 through 100, Case No. 03-416786 (Superior
Court, San Francisco County, California);
(3) Sidney H. Levine and Judith A. Levine v. Conseco Life
Insurance Company, Mark Peters Insurance Services,
Inc., Hon. John Garamendi (in his capacity as Insurance
Commissioner for the State of California) and Does 1
through 10, Case 04 CV 125 LAB (BLM) (Superior Court,
San Diego County, California);
(4) Steven Rose, on Behalf of Himself and All Others
Similarly Situated, and on Behalf of the General Public
for the State of California v. Conseco Life Insurance
Company, Case No. GIC 827178 (Superior Court, San Diego
County, California);
(5) Alfonso Tamayo, individually and on behalf of all
others similarly situated and on behalf of the General
Public v. Conseco Life Insurance Co., Inc., an Indiana
Corp., successor to Philadelphia Life Insurance Co. and
formerly doing business as Massachusetts General Life
Insurance Company, Case No 04-431660 (Superior Court,
San Francisco County, California)
The company has filed a motion with the Judicial Council of
California requesting consolidation of all the California state
court cases.
CONSECO LIFE: TX Court Preliminarily Approves Suit Settlement
-------------------------------------------------------------
The County Court of Cameron County, Texas granted preliminary
approval to the settlement of the Texas statewide class action
filed against Conseco Life Insurance Company, styled "Lawrence
Onderdonk and Yolanda Carrizales v. Conseco Life Insurance
Company, and Pete Ramirez, III Cause No. 2003-CCL-102-C."
On February 12, 2004, the complaint was amended to allege a
purported nationwide class and to name Conseco Services LLC as
an additional defendant. On March 5, 2004, the complaint was
amended a second time naming additional plaintiffs.
The purported class consists of all former Massachusetts General
Flexible Premium Adjustable Life Insurance Policy policyholders
who were converted to Conseco Life Flexible Premium Adjustable
Life Insurance Policies and whose accumulated values in the
Massachusetts General policies were applied to first year
premiums on the Conseco Life policies. The complaint alleged,
among other things, civil conspiracy to convert the accumulated
cash values of the plaintiffs and the class, and the violation
of insurance laws nationwide.
The parties have reached a settlement agreement on a class-wide
basis. On October 14, 2004, the judge signed an order
preliminarily approving the settlement. The hearing for final
approval is set for January 31, 2005.
COSI INC.: Asks NY Court To Dismiss Lawsuit For Securities Fraud
----------------------------------------------------------------
Cosi, Inc. asked the United States District Court for the
Southern District of New York to dismiss the consolidated
securities class action filed against it, certain of its
officers and directors and the underwriters of its initial
public offering.
On February 5, 2003, a purported shareholder class action
complaint was filed, alleging that the defendants violated
Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, as
amended, by misstating, and by failing to disclose, certain
financial and other business information (Sheel Mohnot v. Cosi,
Inc., et al., No. 03 CV 812). At least eight additional class
action complaints with substantially similar allegations were
later filed. These actions have been consolidated in In re Cosi,
Inc. Securities Litigation.
On July 7, 2003, lead plaintiffs filed a Consolidated Amended
Complaint, alleging on behalf of a purported class of purchasers
of the Company stock allegedly traceable to its November 22,
2002 IPO, that at the time of the IPO, the Company's offering
materials failed to disclose that the funds raised through the
IPO would be insufficient to implement an expansion plan; that
it was improbable that the Company would be able to open 53 to
59 new restaurants in 2003; that at the time of the IPO, the
Company had negative working capital and therefore did not have
available working capital to repay certain debts; and that the
principal purpose for going forward with the IPO was to repay
certain existing shareholders and members of the Board of
Directors for certain debts and to operate the Company's
existing restaurants.
The plaintiffs in the Securities Act Litigation generally seek
to recover recessionary damages, expert fees, attorneys' fees,
costs of Court and pre and post judgment interest. On August
22, 2003, lead plaintiffs filed a Second Consolidated Amended
Complaint, which was substantially similar to the Consolidated
Amended Complaint.
On September 22, 2003, we filed motions to dismiss the Second
Consolidated Amended Complaint in the Securities Act Litigation.
Plaintiffs filed their opposition to the Company's motions to
dismiss on October 23, 2003. The Company filed reply briefs on
November 12, 2003.
On July 30, 2004, the Court granted plaintiffs permission to
replead their complaint against the Company. On September 10,
2004, plaintiffs filed their Third Consolidated Amended
Complaint. Plaintiffs abandoned their claim that the Company
misled investors about its ability to execute its growth plans.
Instead, plaintiffs claim that the Company's offering materials
failed to disclose that, at the time of the IPO, the Company was
researching the possibility of franchising its restaurants. On
October 12, 2004, the Company filed a motion to dismiss
plaintiffs' Third Consolidated Amended Complaint. Plaintiffs'
filed an opposition to the motion to dismiss on November 19,
2004.
CROSS COUNTRY: Faces Three Securities Fraud Lawsuits in S.D. FL
---------------------------------------------------------------
Cross Country Healthcare, Inc., its President, Chief Executive
Officer and Director Joseph Boshart and Emil Hensel, Chief
Financial Officer and a Director, face three securities class
actions filed in the United States District Court, Southern
District of Florida.
The lawsuits allege, among other things, that defendants
violated Sections 10(b) and 20(a) of the Securities Exchange Act
of 1934 and Rule 10b-5 promulgated thereunder by, among other
things, issuing public documents and statements that were
materially false and misleading concerning the Company's
business, operations and prospects which artificially inflated
the price of the Company's common stock.
The suits are filed in the United States District Court for the
Southern District of Florida, under Judge Kenneth L. Ryskamp.
The suits are styled:
(1) City of Ann Arbor v. Cross County Healthcare, Inc.,
case no. 9:04cv80728. Lawyers for the plaintiff are
David J. George and Robert Jeffrey Robbins of Lerach
Coughlin Stoia Geller, Rudman & Robbins, 197 S Federal
Highway, Suite 200 Boca Raton, FL 33432, Phone: 561-
750-3000
(2) Cohen v. Cross Country Health, et al., case no. 04-CV-
80768. Lawyers for the plaintiffs are Brian P. Murray,
Eric J. Belfi of Murray Frank & Sailer, 275 Madison
Avenue, Suite 801, New York, NY 10016, Phone: 212-682-
1818 and Kenneth J. Vianale of Vianale & Vianale, 5355
Town Center Road, Suite 801, Boca Raton, FL 33486,
Phone: 561-391-4900
(3) Husted et al v. Cross Country Health, et al, case no.
04-CV-80785. Lawyers for the plaintiffs are Marc A.
Topaz of Schiffrin & Barroway, 3 Bala Plaza East, Suite
400, Bala Cynwyd, PA 19004, Phone: 610-667-7706 and
Eric Todd Salpeter of Zebersky & Payne, 4000 Hollywood
Boulevard, Suite 400 North Hollywood, FL 33021, Phone:
954-989-6333
Lawyers for the defendants are:
(i) Stanley Howard Wakshlag, Brian Paul Miller, and
Samantha J. Kavanaugh of Akerman Senterfitt, Suntrust
International Center, 1 SE 3rd Avenue, 28th Floor,
Miami, FL 33131-1714, Phone: 305-374-5600
(ii) Matthew Henry Triggs of Proskauer Rose, 2255 Glades
Road, Suite 340 West, Boca Raton, FL 33431-7360, Phone:
561-241-7400
(iii) Kenneth J. Vianale of Vianale & Vianale, 5355 Town
Center Road, Suite 801, Boca Raton, FL 33486, Phone:
561-391-4900
DR. CLARK: Agrees To Settle FTC Complaint Over Consumer Fraud
-------------------------------------------------------------
A Switzerland-based company and its United States counterpart
have agreed to provide refunds to its U.S. citizens, as part of
a settlement with the Federal Trade Commission. Dr. Clark
Research Association, a California company and Dr. Clark
Behandlungszentrum GMbH, doing business as Dr. Clark Zentrum,
sold a variety of dietary supplements and devices that they
alleged cured advanced and terminal cancers, AIDS, and other
serious diseases.
The FTC alleged that the defendants made unsubstantiated health
or safety claims. In its complaint, the FTC alleged that the
defendants advertised, among other things, that:
(1) the "Zapper" (sold as the "Super-Zapper Deluxe") is a
device that purportedly kills disease-causing parasites
in the body with electricity and is effective in
treating serious and chronic diseases like cancer and
AIDS;
(2) the "Syncrometer" is a device that purportedly can
detect substances within the body and diagnose
diseases;
(3) "Dr. Clark's New 21 Day Program for Advanced Cancers,"
a regimen that includes dietary supplements,
purportedly cures advanced cases of cancer and, when
used with the "Super-Zapper Deluxe," renders surgery
and chemotherapy unnecessary; and
(4) the "Complete Herbal Parasite Program" - also called
the Herbal Parasite Cleanse - is effective to treat
serious diseases when used with the Zapper.
The FTC charged that the defendants did not have a reasonable
basis to substantiate the claims made in the ads.
To settle the FTC's charges, the proposed final order prohibits
the defendants from making unsubstantiated health or safety
claims for any food, drug, dietary supplement, or device. The
order also requires the defendants to notify U.S. consumers that
they are entitled to full refunds. In addition, the settlement
contains various recordkeeping provisions to assist the FTC in
monitoring the defendants' compliance.
The Commission vote authorizing staff to file the settlement in
federal district court was 5-0. It was filed in the U.S.
District Court for the Northern District of Ohio, Eastern
Division, on November 18, 2004, and entered by the court on
November 22, 2004.
For more information, contact the FTC's Consumer Response
Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington,
D.C. 20580 or visit the Website: http://www.ftc.gov. Also
contact Brenda Mack, Office of Public Affairs by Phone:
202-326-2182 or contact Michael Milgrom, FTC's East Central
Region - Cleveland, by Phone: 216-263-3419
ENBRIDGE GAS: OED Expands Suit Deferral Account To Capture Costs
----------------------------------------------------------------
The Ontario Energy Board issued its Decision on the application
by Enbridge Gas Distribution Inc. (Enbridge) to expand the scope
of an existing deferral account to capture additional costs. The
Board's Decision approves the recording of plaintiff's costs
associated with a class action suit filed by an Enbridge
customer regarding late payment penalties.
On August 31, 2004, the Board approved an application by
Enbridge to create a deferral account to record the costs
related to Enbridge's legal expenses, the costs of actuarial
advice and the costs of analyzing historical billing records.
The Board stated in its decision that Enbridge could make a
future application to include other costs once the details of
such other costs were known.
In April 2004, a ruling by the Supreme Court of Canada clarified
the law regarding the rate at which utilities can set late
payment penalties charged to customers who pay after the due
date. The Supreme Court determined that Enbridge would be
required to repay a portion of the amounts paid to it as late
payment penalties from April 1994 up to the date that late
penalties came into compliance with the Criminal Code. That
decision also ordered Enbridge to pay the plaintiff's costs in
the proceeding.
Enbridge has now determined the details of the costs of the
plaintiff's lawyers and the Board has approved their inclusion
in the 2005 deferral account. Prior to disposal of any deferral
account, Enbridge must apply to the Board to determine whether
the costs should, in fact, be recovered from ratepayers. The
Board emphasized in its decision that the recording of costs in
the deferral account does not automatically imply any outcome
respecting disposition. That will be determined in a future
proceeding.
For more information on the Board, please visit our web site at
http://www.oeb.gov.on.caor contact the Customer Service Centre
at 416-314-2455 or toll-free at 1-877-632-2727.
FIRST NATIONS: Chief Hails Ontario Ruling On Indian Abuse Case
--------------------------------------------------------------
Assembly of First Nations National Chief Phil Fontaine responded
to an Ontario Court of Appeal ruling that certified former
students of the Mohawk Institute Residential School in
Brantford, Ontario as a "class" for the purposes of litigation.
The action is captioned, Cloud v. Canada. This is the first time
that survivors can advance the claim collectively in Ontario.
"Between 1922 and 1969," said the National Chief, "students at
the Mohawk Institute Residential School, like First Nations and
other Aboriginal people at residential schools across Canada,
were allegedly abused in many ways. There are specific incidents
of emotional harm and physical and sexual abuse, as well as the
loss of language and culture that impacts our people to this
very day. The decision recognizes that these abuses affected all
the students of the school, as well as their families."
The National Chief noted that the AFN released its Report on
Canada's Dispute Resolution Plan to Compensate for Abuses in
Indian Residential Schools in early November. That report
provides details on a better, more comprehensive and fair
process to resolve the legacy of the residential schools system,
one of the darkest and most troubling chapters of Canadian
history.
"We support the survivors in this class action because there is
currently no acceptable alternative except the courts," said
National Chief Fontaine. "Survivors and their families are
rejecting the government's dispute resolution process because it
is adversarial and often serves to re-victimize survivors. This
decision speaks to the limitations of the current DR process and
limitations of access to justice for individuals. The Cloud
class action that is certified today emphasizes the need for the
government to respond to the AFN report and, more important,
work with First Nations and survivors to create a better process
that truly leads to justice, restitution and reconciliation."
"I will also be meeting with the lawyers representing these
litigants to discuss working together to press the government
into action, in light of this decision, this report and our
common goals of justice, healing and reconciliation."
Only 19 claims have been settled under the current federal ADR
process and it is estimated there are as many as 12,000
residential schools survivors involved in class action lawsuits.
At the current pace, it will take 53 years to settle all
residential schools claims at a cost to taxpayers of $2.3
Billion in administrative fees alone. If the government were to
adopt the approach set out in the AFN report then all claims
could be resolved in a cost-effective manner by December 2010.
"We have called on the government of Canada to respond to our
report's recommendations within three months," said the National
Chief. "The recommendations and analysis in this report offer an
effective, streamlined process that will clear the backlog of
claims efficiently and provide survivors, First Nations and all
Canadians with justice and healing. This approach would help all
of us to avoid costly and time-consuming litigation."
The Assembly of First Nations is the national organization
representing First Nations citizens in Canada.
ILLINOIS: Lawyer Wants Judge Taken Off $200M Lottery Scam Suit
--------------------------------------------------------------
Jody Pope, the attorney in a high-profile class-action suit over
a lottery scam in the 1990s and pending in Madison County, is
demanding the removal of the judge in the case, claiming that
connections among the judge, a trial lawyer and the judge's
court reporter prejudice the proceedings, the St. Louis Post-
Dispatch reports.
The suit was filed in Madison County Circuit Court in 2000
against James Blair Down, a Canadian accused of bilking hundreds
of thousands of people out of an estimated $200 million in a
lottery scam in the 1990s. It faced several controversies from
the beginning, with the latest involving Circuit Judge Philip J.
Kardis, plaintiff co-counsel Robert Forbes, and Mr. Forbes'
wife, Linda Forbes.
Before Judge Kardis was appointed to the bench in 1989, he was a
partner with Mr. Forbes in the personal injury firm of Kardis &
Forbes. Linda Forbes now serves as Judge Kardis' court reporter.
Judge Kardis took over the case last December, after Circuit
Judge Nicholas Byron recused himself without explanation, while
Mr. Forbes first appeared in court on the matter in February,
serving as co-counsel to lead attorney Stephen Tillery, a class-
action specialist with the St. Louis firm of Korein Tillery.
Acting on Mr. Forbes' motion, Judge Kardis gave preliminary
approval to a $10 million settlement.
Mr. Pope, a lawyer representing a group of plaintiffs who object
to the settlement, complained at the time that the only
substantial difference in the settlement and one that Byron
rejected last year was that it increased lawyer fees by at least
$1 million - to 15 percent from 5 percent of the settlement
amount. He further stated in February: "I call this version
'Settlement A-Light,' because it increases their (Tillery and
Forbes) attorneys' fees from 5 percent to 15 percent. Mr.
Tillery and Mr. Forbes have never taken a substantive role in
the case, but their fees just got tripled."
Pope added that he has recently learned of Mr. Forbes'
connections to the judge and is now contemplating the filing of
a motion to have Judge Kardis removed from the case. He adds,
"I'm appalled because those relationships represent a complete
subversion of the judicial process. The whole theory of the
basic tenets of due process is an impartial tribunal.
Mr. Pope further stated, "Judges especially are supposed to
avoid even the appearance of impropriety. It seems to me quite
astonishing that Judge Kardis did not volunteer in open court
that Mr. Forbes had been a law partner of his, and that Mr.
Forbes is married to Judge Kardis' court reporter."
It is not clear however, if Judge Kardis chose his own court
reporter, as was the rule in Madison County for many years.
According to legal experts, court reporters are now more
commonly assigned to specific judges. Judge Kardis has set a
December 15 trial date to grant final approval of the settlement
against Mr. Down, who had pleaded guilty in 1998 of conspiring
to mail gambling materials. He served a six-month prison term
and paid about $12 million in restitution. Madison County's role
in what would become a tortuous legal odyssey over the case
started two years later.
In 2000, an Irish restitution company, Interclaim Holdings,
hired the South Carolina law firm of Ness, Motley to go after
Mr. Down's assets. Ness, Motley in turn retained Mr. Tillery to
file the class action in Madison County.
However, months later, Ness, Motley negotiated a deal with Mr.
Down that cut out Interclaim. Under that settlement,
conditionally approved in November 2001 in Madison County, Mr.
Down was to pay the plaintiffs' lawyers $2 million and Down's
400,000 victims would get $6 million. Critics of the settlement
argued that victims would claim only a small part of that amount
because of a complicated claim form.
Interclaim then sued Ness, Motley in federal court in Chicago
over the case. Last year, a jury ordered the law firm to pay $36
million, an award upheld on appeal.
Before that 2001 settlement in Madison County was thrown out,
Lester Brickman, a law professor at Cardozo Law School in New
York and a prominent critic of Madison County Circuit Court,
labeled it "the most abusive class-action settlement of the
decade, if not the century."
ILLINOIS: Supreme Court Ruling on Fraud May Have Local Impact
-------------------------------------------------------------
A decision that is sure to be referenced soon in defense
arguments is one that the United States Supreme Court ruled on
November 30, Koons Buick Pontiac GMC v. Bradley Nigh, wherein
justices ruled 8-1 against the Virginia man who alleged he was a
victim of unfair tactics by the car dealership in Alexandria,
the Madison County Record reports.
There are at least 40 similar cases pending in Madison County.
But judging by the number of auto finance companies on the
Madison County Circuit Court docket, there could possibly be
many more cases affected by the ruling.
For example, Chad Carpenter v. Nissan Motor Acceptance, alleges
Nissan and Nissan Motor Acceptance (NMAC) schemed to charge
consumers more finance charges than they should. Chad Carpenter
filed the class action suit on Sept. 11, 2002.
Mr. Carpenter, who is represented by Daniel J. Cohen of the
Lakin Law Firm in Wood River, alleges that Nissan fraudulently
marked up financing fees above and beyond what was charged by
NMAC. Since 1990, NMAC, which is represented by Hinshaw &
Culbertson of Chicago has been sued 14 times in Madison County.
A Virginia jury had ordered Koons Buick Pontiac GMC Inc. to pay
Bradley Nigh more than $24,000 in damages, but the Supreme Court
said that he was entitled to no more than $1,000 under the
federal Truth in Lending Act.
IMC GLOBAL: Reaches Settlement for Securities Suit in DE Court
--------------------------------------------------------------
IMC Global, Inc. reached a settlement for the consolidated class
action filed against it, its entire board of directors and
Cargill Crop Nutrition in the Court of Chancery for New Castle
County in Wilmington, Delaware.
The first suit, filed on January 30, 2004 by a common
stockholder of IMC on behalf of a purported class of all common
stockholders of IMC, alleges, among other things, that the
individual defendants breached their fiduciary duties of care
and loyalty to the Company's common stockholders by, among other
things, failing to conduct an auction or otherwise checking the
market value of IMC before voting to approve the combination
agreement with Cargill. The suit also alleges that the merger
consideration to be received by IMC's common stockholders is
inadequate because, among other things, it is less than the
"intrinsic value" of IMC's common stock and it does not offer a
premium to IMC's common stockholders. The lawsuit seeks, among
other things, to enjoin or rescind the combination transactions
or, alternatively, to recover unspecified damages and costs.
On February 24, 2004, a second lawsuit, similar to the lawsuit
described above, was filed in the Court of Chancery for New
Castle County in Wilmington, Delaware. On March 17, 2004, the
Delaware Court of Chancery consolidated these two lawsuits and
named the complaint in the lawsuit described in the previous
paragraph as the operative complaint for the consolidated
lawsuit. On August 20, 2004, the parties reached an agreement
in principle to settle the class action litigation and
subsequently executed definitive settlement documents, which
have been filed with, and are subject to the approval of, the
Delaware Court of Chancery.
IMC GLOBAL: Reaches Settlement for Investor Suit V. PLP Merger
--------------------------------------------------------------
IMC Global, Inc. reached a settlement for the consolidated class
action filed in the Court of Chancery for New Castle County in
Wilmington, Delaware against it, Phosphate Resources Limited
Partnership (PLP), PLP's administrative managing general partner
and their respective boards of directors, by holders of PLP
units in connection with the merger of PLP into a subsidiary of
the Company.
The suit generally alleges that the defendants breached their
fiduciary duties as a consequence of various public
announcements made by IMC that it intended to make, or that it
had made, a proposal to acquire all of the outstanding PLP units
that it did not already own. The plaintiffs in these lawsuits,
on behalf of a class of all unitholders of PLP (except for the
defendants and their affiliates), seek, among other things, to
enjoin the PLP merger or, to the extent that the PLP merger is
consummated, to rescind the PLP merger, and monetary damages in
an unspecified amount.
On August 20, 2004, the parties reached an agreement in
principle to settle the class action litigation and subsequently
executed definitive settlement documents filed with, and subject
to the approval of, the Delaware Court of Chancery.
ISRAEL: Smokers Launch Suit Over Misleading "Lights" Cigarettes
---------------------------------------------------------------
Two Israeli smokers recently filed a NIS 5-billion class action
against cigarette makers and distributors in Israel, the
Ha'aretz reports.
In the suit they brought before the Tel Aviv District Court, the
smokers claim that the manufacturers and distributors misled the
public for decades about the risks of smoking so-called "light"
cigarettes and named as defendants: Philip Morris, which makes
Marlboro Lights, Parliament and L&M; Dubek, maker of Time Lite,
Golf Lite and Noblesse Lite; Salem, which makes Winston; the
maker of Kent and Lucky Strike; GT International, maker of
Camel, and their distributors.
According to the smokers, these companies chose the misleading
term "light" to describe cigarettes that ostensibly contained
less nicotine, which is the addictive substance in them. The
"light" cigarettes were therefore perceived to be less harmful
to the health.
However, the Health Ministry and the Israel Cancer Association
found that though the "light" cigarettes may have contained less
nicotine, they did not reduce the risk of contracting the
diseases associated with smoking. The plaintiffs say that based
on reports from the cancer association, the ads lulled smokers
into taking more smoke into their lungs and holding it there
longer in order to bring the body the nicotine it craved, say
the plaintiffs. Because they changed the way they smoked,
smokers were actually receiving larger amounts of the more than
4,000 toxins found in cigarettes, of which 43 are carcinogenic.
After the scam was revealed and the claims of the manufacturers
were debunked, the Health Ministry ordered the manufacturers to
remove the word "light" from packaging, the plaintiffs further
pointed out. The authorities were thus signaling that use of the
word "light" amounted to misleading the public, they claim in
their suit, which purports to be on behalf of anybody who has
bought light cigarettes in the last seven years.
Furthermore, the plaintiffs claim that if they'd known they were
as bad as regular cigarettes, they would have bought the regular
ones and reduced their daily intake by 50 percent at least, or
alternatively, their motivation to stop smoking would have been
greater.
Based on the fact that a pack of imported cigarettes costs NIS
17.50, the claimants calculate that their average annual outlay
on the light ones totaled NIS 6,387. If they'd smoked regular
cigarettes they could have saved at least a quarter of that
amount, or NIS 1,500 a year over seven years, which comes to NIS
11,000 each.
The plaintiffs estimate that Israel has half-a-million light-
cigarette consumers, which lifts the bill the companies face to
beyond NIS 5 billion. The defendants have yet to file their
response.
KINDER MORGAN: Aspen City To Pay Undetermined Attorneys Fees
------------------------------------------------------------
The city of Aspen will have to pay Kinder Morgan's undetermined
attorney fees and all costs incurred from a lawsuit filed
against the energy company by Aspen, a judge has ruled, the
Aspen Times reports.
9th Judicial District Chief Judge T. Peter Craven in the Pitkin
County branch of the court handed the ruling down on November
22. The cities of Aspen and Glenwood Springs filed a class-
action lawsuit in June alleging that Kinder Morgan and Rocky
Mountain Natural Gas had been charging its customers too much
for natural gas, which Glenwood Springs bowed out of in
September.
The suit, filed in Garfield County District Court, alleged that
"since at least 1980 the natural gas companies have
systematically and falsely represented the characteristics and
quality of retail natural gas that they sold to plaintiffs and
members of the class in order to unjustly enrich themselves."
The suit was based on a claim that because the gas companies
failed to compensate for a decrease in air pressure at higher
elevations - high elevation naturally decreases the density of
the gas - the less-dense gas "had significantly lower heating
content." At Aspen's elevation, the suit claims natural gas
contains at least 23 percent less heating value than it would at
sea level. As a result, the suit claims that the two gas
companies "knowingly, deceptively and falsely fail to apply the
required conversion factor when billing for the natural gas they
have sold and continue to sell."
In his most recent ruling, Judge Craven wrote that Aspen's
status, as a political subdivision of the state of Colorado does
not shield it from attorney's fees. According to the judge
written opinion, "Aspen made the choice to prosecute this
litigation. [The law] does not exclude any discrete class of
litigants from its sweep, and it applies to 'all actions' for
personal or property injuries based on tort."
Dan Watson, president of Kinder Morgan's retail business, said
no final price tag has been placed on attorney costs because
they are ongoing. And they could mount up substantially if Aspen
appeals the court's original decision that Kinder Morgan did
nothing wrong, a move Mr. Watson said his company expects. "As
we said from the beginning, we feel this is an important part of
clearing our name," Mr. Watson said of his company's decision to
seek attorney fees from Aspen. Because the winning of attorney
fees, which he guessed would be less than $100,000, is largely a
symbolic gesture, Mr. Watson said the money recovered for the
fees and costs would go to a charity to be determined later.
MANHATTAN NATIONAL: Policyholders Launch Fraud Suit in NM Court
---------------------------------------------------------------
Manhattan National Life Insurance Company continues to face a
purported nationwide class action seeking unspecified damages in
the First Judicial District Court of Santa Fe, New Mexico,
styled "Robert Atencio and Theresa Atencio, for themselves and
all other similarly situated v. Manhattan National Life
Insurance Company, an Ohio corporation, Cause No. D-0101-CV-
2000-2817."
The suit alleges among other things fraud by non-disclosure of
additional charges for those policyholders paying via premium
modes other than annual. Conseco, Inc., the Company's former
parent retained liability for this litigation in connection with
the sale of the Company in June 2002.
MOHAWK INSTITUTE: Appeals Court Certifies School Abuse Lawsuit
--------------------------------------------------------------
In a unanimous decision that was recently released, the Ontario
Court of Appeal has unanimously certified a class action brought
by the former students of the Mohawk Institute Residential
School (the "School"), a native residential school in Brantford,
Ontario, and their families. The action is captioned Cloud v.
Canada.
The students sought to recover damages for the harm inflicted on
them as a result of them attending the school. The action was
brought against the Government of Canada, the diocese of Huron
and the New England Company.
The School was located in Brantford, Ontario, near the Six
Nations Reserve. The School was opened in 1828 as a residential
school for First Nations' children. It was founded by the New
England Company, a charitable organization, dating back to the
17th Century, with the mission of teaching the Christian
religion and the English language to the native peoples of North
America.
The New England Company ran the School until 1922, when it
leased the School to the Federal Government. Under the lease,
Canada agreed to continue the School as an educational
institution for native children and agreed to continue to train
them in the teachings and doctrines of the Church of England.
In 1929, Canada sought to appoint an Anglican clergyman as
principal of the School and looked to the Bishop of the diocese
of Huron to nominate appropriate candidates, a selection process
that was repeated in 1945. The School closed in 1969.
The class action covers the years of 1922 to 1969. During that
time, there were 150 to 180 students at the School each year,
ranging in age from 4 to 18 and split roughly equally between
boys and girls. All were native children, that is, Indians
within the meaning of the Indian Act. In all, approximately
1,400 native children attended the School during those years.
The plaintiffs are members of the various First Nations from
which the students came. They allege that the Government of
Canada, the New England Company and the diocese of Huron, either
singly or together, were responsible for the operation and
management of the School.
The plaintiffs claimed that the School was run in a way that was
designed to create an atmosphere of fear, intimidation and
brutality. Physical discipline was frequent and excessive. Food,
housing and clothing were inadequate. Staff members were
unskilled and improperly supervised. Students were cut off from
their families. They were forbidden to speak their native
languages and were forced to attend and participate in Christian
religious activities. It is alleged that the aim of the School
was to promote the assimilation of native children.
The lower courts had refused to allow the case to proceed. The
Ontario Court of Appeal, Ontario's highest court, decided that
the lower courts erred in refusing to allow the case to proceed,
and ordered that it should be certified as a class action and
permitted to proceed to trial.
The Court certified claims for breach of fiduciary duty,
negligence and breach of aboriginal rights. It also ruled that
dealing with all of the facts and issues raised in the case
should be dealt with in one trial to substantially save time and
expense. The Court also ruled access to justice would be greatly
enhanced by a class action, as it is the best way to ensure the
former students have access to justice and the possibility of
redress. The evidence brought before the Court indicated many
of the former students are aging, very poor, and in some cases,
still extremely emotionally troubled by their childhood school
experiences.
The plaintiffs, who are represented by the law firms of Cohen
Highley LLP and Koskie Minsky LLP, claim more than 1 billion
dollars in damages against the defendants.
PHILADELPHIA LIFE: Trial in FL Fraud Suit Expected in June 2005
---------------------------------------------------------------
Trial in the consolidated class action filed against
Philadelphia Life Insurance Company (now known as Conseco Life
Insurance Company) is expected to commence in June 2005 in the
United States District Court for the Middle District of Florida.
On June 27, 2001, two suits were initially filed as purported
nationwide class actions seeking unspecified damages. The suits
were later consolidated into an action styled "In Re PLI Sales
Litigation, Cause No. 01-MDL-1404," alleging among other things,
fraudulent sales and a "vanishing premium" scheme.
The Company filed a motion for summary judgment against both
named plaintiffs, which motion was granted in June 2002.
Plaintiffs appealed to the 11th Circuit Court of Appeals. The
11th Circuit, in July 2003, affirmed in part and reversed in
part, allowing two fraud counts with respect to one plaintiff to
survive. The plaintiffs' request for a rehearing with respect
to this decision has been denied. The Company filed a summary
judgment motion with respect to the remaining claims. This
summary judgment was denied in February 2004. In March 2004,
the remaining plaintiff filed a motion to substitute plaintiff,
to which Philadelphia Life has objected.
On September 27, 2004, Philadelphia Life was named in a
purported nationwide class action filed by the same plaintiff's
attorney seeking unspecified damages in the District Court of
Clark County, Nevada, styled "Emma Gilbertson individually and
on behalf of others similarly situated v. Conseco Life Insurance
Company f/k/a Philadelphia Life Insurance Company, Cause No.
A492738." The suit alleges breach of contract pertaining to
notice of premium increases.
PSF GROUP: Northern MO Residents Launch Property Damage Lawsuit
---------------------------------------------------------------
PSF Group Holdings, Inc. faces a class action filed in the
United States District Court in Kansas City, Missouri, styled
"Daniel Herrold, et al. and Others Similarly Situated v.
ContiGroup Companies, Inc, Premium Standard Farms, Inc., and PSF
Group Holdings, Inc."
The suit was initially filed in the Circuit Court of Jackson
County, Kansas City, Missouri. The action seeks to create a
class of plaintiffs living within 10 miles of the Company's
farms in Northern Missouri, including contract grower farms, who
are alleged to have suffered interference with their right to
use and have quiet enjoyment of their respective properties.
SAXON MORTGAGE: Reaches Settlement For MI Consumer Fraud Lawsuit
----------------------------------------------------------------
Saxon Mortgage, Inc. reached a settlement for the class action
filed against it in the United States District Court for the
District of Michigan, styled "Shirley Hagan, et al. v. Concept
Mortgage Corp., Saxon Mortgage, Inc."
The suit, initially filed in the Circuit Court of Wayne County,
Michigan, alleges that the defendant mortgage companies,
including the Company, violated the Home Ownership and Equity
Protection Act, the Truth in Lending Act, and the Real Estate
Settlement Procedures Act with respect to the fees and interest
rate charged to plaintiff and the related loan disclosures, in
connection with the plaintiff's loan and the loans of a
similarly situated class of borrowers. The suit seeks
rescission of the affected loans, damages with interest, and
costs and attorneys fees.
The Company removed the case to federal court and filed a motion
to compel arbitration, which was granted by the Magistrate Judge
and subsequently appealed by the plaintiff. The District Court
affirmed the Magistrate Judge's order, and arbitration was
initiated. In August, 2004, the parties entered into a
settlement agreement pursuant to which the Company agreed to
reduce the outstanding balance, and interest rate, of the
plaintiff's loan and pay the plaintiff's legal fees in the
approximate amount of $30,000.
SERVIER CANADA: Ontario Judge OK's Ponderal, Redux Settlement
-------------------------------------------------------------
Attorneys representing Canadians (excluding those residing in
Quebec) who ingested the diet drugs, Ponderal and Redux,
recently revealed that the Honourable Mr. Justice Peter Cumming
of the Ontario Superior Court of Justice has approved the
settlement of a national class action with the Defendants
Servier Canada Inc. and related companies.
The settlement provides for settlement funds of $25,000,000 for
the payment of benefits, health insurer costs and legal fees,
with an additional amount of up to $15,000,000 being made
available should the initial fund be insufficient.
The settlement will pay benefits to individuals who took these
drugs and suffered from Valvular Heart Disease ("VHD") or
Primary Pulmonary Hypertension ("PPH"), both of which have
allegedly been associated with ingestion of the drugs. A
parallel settlement was reached in proceedings brought on behalf
of residents of Quebec where Court Approval is pending.
The national class is represented by the Toronto law firm of
Rochon Genova LLP and residents of British Columbia are
represented by the Vancouver law firm of Klein Lyons. Notices of
the Settlement Approval are to be published throughout the
country in the coming days. Steps are being taken to effect the
settlement of similar litigation in Quebec.
STAR GAS: Shareholders Launch Securities Fraud Suits in CT Court
----------------------------------------------------------------
Star Gas Partners, LP faces several securities class actions
filed in the United States District Court for the District of
Connecticut, alleging violations of federal securities laws.
The suits allege that during the Class Period, defendants caused
Star Gas's shares to trade at artificially inflated levels
through the issuance of false and misleading statements. As a
result of this inflation, Star Gas was able to complete a
secondary public offering of 1.3 million common units and two
note offerings totaling $65 million, raising net proceeds of $95
million during the Class Period. The true facts, which were
known by each of the defendants but concealed from the investing
public during the Class Period, were as follows:
(1) that the Company was experiencing massive delays in the
centralization of its dispatch system and causing its
customers to flee to competitors;
(2) that the Company's Petro heating oil division's
business process improvement program was faltering and
not generating the benefits claimed by defendants;
(3) that contrary to defendants' earlier indications, the
Company was not able to increase or even maintain
profit margins in its heating oil segment;
(4) that the Company's second quarter 2004 claimed profit
margins were an aberration and not indicative of the
Company's success or ability to pass on the heating oil
price increase because the Company had earlier acquired
heating oil (sold in the second quarter) at a much
lower basis; and
(5) that as a result, defendants were facing imminent
bankruptcy and would no longer be able to service the
Company's debt, all of which would halt the Company's
ability to maintain the Company's credit rating and/or
obtain future financing.
The class period in the suit is from December 4,2003 to October
18,2004. The plaintiff firms in this litigation are:
(1) Lerach Coughlin Stoia Geller Rudman & Robbins (San
Diego), 401 B Street, Suite 1700, San Diego, CA, 92101,
Phone: 619.231.1058, Fax: 619.231.7423, E-mail:
info@lerachlaw.com
(2) Murray, Frank & Sailer LLP, 275 Madison Ave 34th Flr,
New York, NY, 10016, Phone: 212.682.1818, Fax:
212.682.1892, E-mail: email@rabinlaw.com
(3) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com
(4) Abbey Gardy, LLP, 212 East 39th Street, New York, NY,
10016, Phone: 212.889.3700, E-mail: info@abbeygardy.com
(5) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(6) Law Offices of Brian M. Felgoise, P.C., Esquire at 261
Old York Road, Suite 423, Jenkintown, PA, 19046, Phone:
215.886.1900, E-mail: securitiesfraud@comcast.net
(7) Shepherd, Finkelman, Miller & Shah, LLC, 35 East State
Street, Media, PA, 19063, phone: 877.891.9880, E-mail:
jshah@classactioncounsel.com
(8) Barrack, Rodos & Bacine (Main office, Philadelphia),
3300 Two Commerce Square, 2001 Market Street,
Philadelphia, PA, 19103, Phone: 215.963.0600, Fax:
215.963.0838, E-mail: info@barrack.com
(9) Milberg Weiss Bershad & Schulman LLP (New York), One
Pennsylvania Plaza, 49th Floor, New York, NY, 10119,
Phone: 212.594.5300, Fax: 212.868.1229, E-mail:
info@milbergweiss.com
(10) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
UNOMEDICAL INC.: Recalls Airway Adapters Due To Injury Hazard
-------------------------------------------------------------
Unomedical Inc., of McAllen, Texas, is expanding its warning and
beginning a recall of airway adapters it distributed in the U.S.
and Europe. Several adapters have been found to be blocked or
occluded - potentially preventing exhalation or inhalation. This
could result in serious or life-threatening injury to patients.
In a public alert issued on November 28, the Company warned the
public that at least two lots of its Hospitak brand 22mm/15mm
adapters may have been affected by this problem. Although this
product is primarily distributed to medical institutions, some
units may be distributed for home use. These adapters are used
in a wide variety of respiratory applications, for example:
extending breathing circuits and attaching reservoir bags.
Consumers who have one of these recalled products should stop
using it, contact their physicians and contact Unomedical, Inc.
Subsequent Company investigation indicates that other lots of
the product, including airway adaptors used in other medical
devices, may have been affected. Some of the affected products
have been labeled and sold under the Viasys, Unomedical, and
Dr„ger brand name. The total list of affected products and lot
numbers are as follows. The lot number is displayed on the
immediate label of the package.
(1) Hospitak, REF 903-GM, IPPB Circuit Exhalation Valve &
Nebulizer Circuit Universal 4" Length with Adapter, Lot
numbers 04-35 and 04-36
(2) Hospitak, REF 903-E, IPPB Ventilator Circuit, Lot
Number 04-35
(3) Hospitak, REF 1011, IPPB Ventilator Circuit, Lot
numbers 04-40 and 04-41
(4) Hospitak, REF CD1N4Y-E, Mapleson D. Anesthesia Non-
Rebreathing Circuit, 10", Lot number 04-38
(5) Hospitak, REF CJ4N2Y-E, Jackson-Rees, Anesthesia Non-
Rebreathing Circuit, 12", Lot number 04-37
(6) Hospitak, REF CJ4N1VY-E, Jackson-Rees, Anesthesia Non-
Rebreathing Circuit, 12", Lot number 04-37
(7) Hospitak, REF 962-E, Adapter 22mm/15mm, Lot numbers 04-
37, 04-38, 04-40, 04-41, 04-44, 04-45, 04-46, 04-47
and 04-48
(8) Hospitak, REF 1450, Face Ten Mask w/ Aerosol Tubing
60", Oxygen Tubing 7' & Connector, Lot numbers 04-42,
04-43, and 04-47
(9) Hospitak, REF 8026, Adapter 22mm/15mm, Lot numbers 04-
36, 04-37, and 04-47
(10) Viasys, REF BLD-14772, Pulmanex Adult Transport
Ventilator Circuit with Exhalation Valve, Non-Heated,
72", Lot numbers 23604005 and 31504003
(11) Viasys, REF BLD-14660, Pulmanex Adult Transport Circuit
w/ Exhalation Valve, Non-Heated, 60", Lot Numbers
31304004
(12) Viasys, REF BLD-1000, Pulmanex Adapter 22mm O.D. x 22mm
O.D. x 15 mm I.D., Lot numbers 27904001 and 29504001
(13) Viasys, REF BLD-8101, Pulmanex Carhill Valve Kit:
Medium Adult, Lot numbers 28004002 and 29604001
(14) Viasys, REF BLD-8100, Pulmanex Carhill Valve Kit: Large
Adult, Lot number 29404003
(15) Unomedical REF 962MM, Adapter 22mm/15mm, Lot numbers
04-35, 04-36, 04-37, and 04-40
(16) Dr„ger Medical, REF 40314160, Bird-Bennet-Monaghan IPPB
circuit, Latex Free, Lot numbers 04-38 and 04-44
Patients and medical health professionals who have Hospitak,
Viasys, Unomedical, and/or Dr„ger brand airway adapters should
check with Unomedical, Inc. before using the product. Patients
and health care institutions who are not sure of the origin of
the airway adapters they have in stock may want to check with
their suppliers to make sure that they are not affected by this
recall. To date one serious patient injury has been reported.
Patients and medical institutions may contact Unomedical at
1-800-634-6003. Those who have other questions or concerns may
also contact their local FDA office.
WILLIS GROUP: Named As Defendant in Marsh & McLennan Fraud Suit
---------------------------------------------------------------
Willis Group Holdings, Ltd. has been named as a defendant in the
class action filed in the United States District Court for the
Southern District of New York against various insurance carriers
and insurance brokerage firms.
Beginning in April 2004, the New York Attorney General issued
subpoenas to a number of insurance carriers and insurance
brokerage firms, including the Company. These subpoenas
requested information regarding, among other things,
arrangements pursuant to which insurers compensated insurance
brokers for distribution and other services provided to
insurers. The New York Department of Insurance also requested
information concerning these compensation arrangements.
In October 2004, the New York Attorney General filed suit
against one of the insurance brokers, accusing that broker of
steering clients to insurers with which it has these
compensation arrangements and of soliciting false or fictitious
quotes from insurers (the "NY AG Complaint"). The New York
Attorney General has stated publicly that he has broadened his
investigation of the insurance industry to cover other practices
and other possible violations of law, including violations of
fiduciary duty, securities laws, and antitrust laws. The New
York Attorney General has also publicly stated that civil and
criminal charges may be filed against both individuals and other
industry participants.
After the New York Attorney General commenced his investigation,
insurance commissioners and attorneys general of other states
have announced that they are conducting similar investigations
and have issued subpoenas to a number of insurance carriers and
insurance brokerage firms, including the Company.
The complaint alleges conduct by the defendants similar to the
conduct alleged in the NY AG Complaint and also alleges, among
other things, the existence of a conspiracy among the insurance
carriers and brokers whereby they have engaged in violations of
the federal RICO statute. It is expected that further lawsuits
may be filed.
The suit is styled "Opticare Health Systems, Inc. v. Marsh &
McLennan Companies, Inc. et al, 1:04-cv-06954-DC," filed in the
United States District Court for the Southern District of New
York, under Judge Denny Chin.
New Securities Fraud Cases
AUTOBYTEL INC.: Pomerantz Haudek Lodges CA Securities Fraud Suit
----------------------------------------------------------------
The law firm of Pomerantz Haudek Block Grossman & Gross LLP
(www.pomerantzlaw.com) initiated a class action lawsuit against
Autobytel Inc. ("Autobytel" or the "Company") (Nasdaq:ABTL) and
two of the Company's senior officers, on behalf of all persons
or entities who purchased the securities of Autobytel during the
period between July 24, 2003 and October 21, 2004, inclusive
(the "class period"). The case was filed in the United States
District Court Central District of California, Southern
Division.
The complaint alleges that Autobytel and the Company's President
and Chief Executive Officer, Jeffrey A. Schwartz, and Hoshi
Printer, Executive Vice President and Chief Financial Officer of
the Company, violated the federal securities laws arising out of
defendants' dissemination of false and misleading statements
concerning the Company's results and operations. Autobytel Inc.
Is an automotive marketing service company that helps dealers
and manufacturers through its marketing, advertising and
customer relationship management tools and programs, primarily
through the Internet.
According to the complaint, the true facts, which were known by
each of the defendants but concealed for the investing public
during the Class Period, were that
(1) the Company inappropriately recorded revenue/income
associated with its dealer sales credit;
(2) that as a result of this, the Company's financials were
materially inflated;
(3) that the Company's financial results were in violation
of Generally Accepted Accounting Principles ("GAAP");
(4) that the Company lacked adequate controls to issue
earnings or projection reports;
(5) that the Company was experiencing weaker than claimed
customer relationship management ("CRM") revenues and
zero growth in its dealer network size, and
(6) that as a result of the above, the Company's financial
results were materially inflated at all relevant times.
On July 24, 2003, the Company issued a press release titled
"Autobytel Inc. Reports Record Revenue and Profits". In the
release, the Company reported net income of $1.1 million, or
$0.03 per share, on a GAAP basis, meeting analysts estimates,
and revenues of $21.7 million, representing the highest reported
quarterly revenue in the Company's history. Throughout the Class
period the Company continued to assert its financial good
health.
On October 21, 2004, the Company issued a press release
announcing partial third quarter financial results and that it
would reschedule its earnings conference call and webcast, which
had been scheduled for that day. It also announced that the
Audit Committee of the Board of Directors of the Company was
directing an internal review of the accounting treatment of
certain unapplied credits that were recognized as revenue during
the four quarters ended March 31, 2004.
For more details, contact Teresa Webb or Carolyn S. Moskowitz of
Pomerantz Haudek Block Grossman & Gross LLP by Phone:
(888) 476-6529 or by E-mail: tlwebb@pomlaw.com or
csmoskowitz@pomlaw.com.
AUTOBYTEL INC.: Murray Frank Lodges Securities Fraud Suit in CA
---------------------------------------------------------------
The law firm of Murray, Frank & Sailer LLP initiated a class
action lawsuit in the United States District Court for the
Central District of California on behalf of purchasers of the
securities of Autobytel, Inc. ("Autobytel" or the "Company")
(Nasdaq:ABTLE) between July 24, 2003 and October 21, 2004,
inclusive (the "Class Period").
The Complaint alleges defendants knew or recklessly disregarded
that their statements were materially false and misleading when
made because:
(1) the Company inappropriately recorded revenue/income
associated with its dealer sales credits;
(2) as a result of this, the Company's financial results
were materially inflated;
(3) the Company's financial results were in violation of
GAAP;
(4) the Company lacked adequate internal controls to issue
earnings or projection reports;
(5) the Company was experiencing weaker than claimed CRM
revenues and zero growth in its dealer network size;
and
(6) as a result of the above, Autobytel's financial results
were materially inflated at all relevant times.
On October 21, 2004, the Company revealed its third quarter 2004
financial results would be rescheduled because the Audit
Committee and Board of Directors of the Company were directing
an internal review of the accounting treatment of certain
credits that were recognized as revenue during the preceding
quarters. These revelations shocked the market, causing
Autobytel's share price to plummet the next day from the
previous day's close of $8.81, to close on October 22, 2004, at
$6.88, a one-day drop of nearly twenty two percent (22%) as a
result of this news.
For more details, contact Eric J. Belfi or Aaron Patton of
Murray, Frank & Sailer LLP by Phone: (800) 497-8076 or
(212) 682-1818 by Fax: (212) 682-1892 or by E-mail:
info@murrayfrank.com.
AXIS CAPITAL: Murray Frank Lodges Securities Fraud Suit in NY
-------------------------------------------------------------
The law firm of Murray, Frank & Sailer LLP initiated a class
action lawsuit in the United States District Court for the
Southern District of New York on behalf of all purchasers of
AXIS Capital Holdings Limited ("AXIS") (NYSE:AXS) during the
period between August 6, 2003 and October 14, 2004 (the "Class
Period").
The complaint charges AXIS, Michael A. Butt, Andrew Cook, and
John R. Charman 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 AXIS entered into illegal "contingent commission
agreements" with insurance companies to pay so-called
"contingent commissions";
(2) that AXIS concealed these "contingent commissions" and
such "contingent commission agreements," thereby
subjecting defendants to various violations of
applicable principles of fiduciary law, and
(3) that as a result of this illegal scheme, defendants,
throughout the Class Period, materially overstated and
artificially inflated AXIS' earnings, income, and
earnings per share.
On October 14, 2004, New York Attorney General Eliot Spitzer
announced that he had charged several of the nation's largest
insurance companies and the largest broker with bid rigging and
payoffs that he claimed violated fraud and competition laws. On
this news, shares of AXIS fell $1.69 per share, or 6.53 percent,
to close at $24.20 per share on unusually high trading volume on
October 14, 2004.
For more details, contact Eric J. Belfi or Aaron D. Patton of
MURRAY, FRANK & SAILER LLP by Phone: (800) 497-8076 or
(212) 682-1818 by Fax: (212) 682-1892 by E-mail:
info@murrayfrank.com.
RS INVESTMENT: Stull & Stull Lodges Securities Fraud Suit in MD
---------------------------------------------------------------
The law firm of Stull, Stull & Brody initiated a class action
lawsuit in the United States District Court for the District of
Maryland, on behalf of all purchasers, redeemers and holders of
shares of the RS family of mutual funds (collectively, the "RS
Funds"), which are managed by RS Investment Management, L.P.,
between October 6, 1999 and October 5, 2004 (the "Class
Period").
The following RS Funds are subject to this lawsuit:
(1) RS Diversified Growth Fund (Nasdaq: RSDGX)
(2) RS Emerging Growth Fund (Nasdaq: RSEGX)
(3) RS Growth Fund (Nasdaq: RSVPX)
(4) RS Information Age Fund (Nasdaq: RSIFX)
(5) RS Internet Age Fund (Nasdaq: RIAFX)
(6) RS Midcap Opportunities Fund (Nasdaq: RSMOX)
(7) RS Smaller Company Growth Fund (Nasdaq: RSSGX)
(8) RS Contrarian Value Fund (Nasdaq: RSCOX)
(9) RS Global Natural Resources Fund (Nasdaq: RSNRX)
(10) RS Partner Fund (Nasdaq: RSPFX)
The complaint charges defendants RS Investment Trust, RS
Investment Management, L.P., G. Randall Hecht, Steven M. Cohen,
James L. Callinan, and the John Doe Defendants with violations
of the Securities Act of 1933 (the "Securities Act")and the
Securities Exchange Act of 1934 (the "Exchange Act"). The
Complaint alleges that during the Class Period the defendants
engaged in illegal and improper trading practices, in concert
with certain institutional traders, which caused financial
injury to the shareholders of the RS Funds. According to the
Complaint, the Defendants surreptitiously permitted certain
favored investors, including the John Doe Defendants, to
illegally engage in "timing" of the RS Funds whereby these
favored investors were permitted to conduct short-term, "in and
out" trading of mutual fund shares, despite explicit
restrictions on such activity in the RS Funds' prospectuses.
For more details, contact Tzivia Brody, Esq. at Stull, Stull &
Brody by Mail: 6 East 45th Street, New York, NY 10017 by Phone:
1-800-337-4983 or by E-mail: 212/490-2022 or by E-mail:
SSBNY@aol.com or visit their Web site: http://www.ssbny.com.
SIRVA INC.: Brian M. Felgoise Lodges Securities Fraud Suit in IL
----------------------------------------------------------------
The law offices of Brian M. Felgoise, PC initiated a securities
class action on behalf of shareholders who acquired Sirva, Inc.
(NYSE: SIR) securities between November 25, 2003 and November 9,
2004, inclusive (the Class Period).
The case is pending in the United States District Court for the
Northern District of Illinois, 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 by E-mail: securitiesfraud@comcast.net.
SIRVA INC.: Marc S. Henzel Lodges Securities Fraud Suit in IL
-------------------------------------------------------------
The law offices of Marc S. Henzel initiated a class action
lawsuit in the United States District Court for the United
States District Court for the Northern District of Illinois on
behalf of all of the common stock of SIRVA, Inc. (NYSE: SIR)
between November 24, 2003 and November 9, 2004, inclusive (the
"Class Period") and on behalf of purchasers who bought SIRVA
common stock pursuant to and/or traceable to the Company's June
8, 2004 Registration Statement.
The complaint charges SIRVA and certain of its officers and
directors with violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. SIRVA is in the global relocation industry,
providing its solutions to a diverse customer base, including
transferring corporate and government employees and moving
individual consumers.
According to the Complaint, 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 maintained inadequate reserves in the
Network Services division;
(2) that the growth and profitability of the Network
Services division was being adversely affected;
(3) that SIRVA failed to rationalize capacity, reduce fixed
costs, and generate a more meaningful relocation volume
growth in its European division; and
(4) that the profitability of the European operations was
suffering. Additionally, during the Class Period and
with the Company's stock trading at artificially
inflated prices, Company insiders embarked on an
insider trading scheme.
As a result of the insider trading scheme, Company insiders
reaped more than $336 million in gross proceeds.
On November 9, 2004, SIRVA reported third-quarter profit fell
from the year-ago period as the Company booked a $15.2 million
charge to increase insurance loss reserves. The Company said due
to higher reserves for U.S. insurance claims and continued poor
market conditions in Europe, 2004 earnings from continuing
operations are now projected to be between 86 cents and 87
cents. For 2005, it expects to post earnings in the range of
$1.25 to $1.30 per share.
News of this shocked the market. Shares of SIRVA fell $5.83 per
share, or 24.52 percent, to close at $17.95 per share.
For more detail, contact the law offices of Marc S. Henzel by
Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by
Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by
E-Mail: mhenzel182@aol.com.
STAR GAS: Pomerantz Haudek Sets Lead Plaintiff Deadline
-------------------------------------------------------
The law firm of Pomerantz Haudek Block Grossman & Gross LLP,
which has filed a class action lawsuit against Star Gas
Partners, L.P. ("Star Gas" or the "Company") (NYSE:SGU) and two
of the Company's senior officers, on behalf of all persons or
entities who purchased the securities of Star Gas during the
period between December 4, 2003 through October 18, 2004,
inclusive (the "Class Period"), reminds investors that they have
until Monday, December 20, 2004 to seek appointment by the Court
as one of the lead plaintiffs in this action.
The lawsuit alleges that defendants issued false and misleading
statements concerning the Company's operations, business model,
financial results and growth prospects. According to the
Complaint, defendants caused Star Gas's securities to trade at
artificially inflated levels through the issuance of false and
misleading statements. As a result of this inflation, Star Gas
was able to complete a secondary offering of 1.3 million common
units and two note offerings totaling $65 million, raising net
proceeds of $95 million during the Class Period. Specifically,
defendants concealed from investors that the Company was
experiencing massive delays in the centralization of its
dispatch system, causing customers to flee to competitors, that
the company's Petro heating oil division's process improvement
program was not delivering the benefits claimed by Defendants,
and that contrary to prior indications, the Company could not
maintain profit margins in its heating oil segment.
On October 18, 2004, the Company indicated that results at its
heating oil unit were expected to decline significantly, which
would inhibit it from meeting borrowing conditions under its
working capital credit line. In reaction to this news, shares of
Star Gas dropped dramatically, falling from $21.60 per share to
close at $4.32 the following day.
For more detail, contact Andrew G. Tolan, Esq. of Pomerantz
Haudek Block Grossman & Gross LLP by Phone: 888-476-6529
((888) 4-POMLAW) or by E-mail: agtolan@pomlaw.com.
UTSTARCOM: Murray Frank Lodges Securities Fraud Suit in N.D. CA
---------------------------------------------------------------
The law firm of Murray, Frank & Sailer LLP initiated a class
action lawsuit in the United States District Court for the
Northern District of California on behalf of purchasers of the
securities of UTStarcom, Inc. ("UTStarcom" or the "Company")
(Nasdaq: UTSI) between April 16, 2003 and September 20, 2004,
inclusive (the "Class Period").
The Complaint alleges that defendants misrepresented material
adverse facts during the Class Period, including, but not
limited to:
(1) significant problems with the Company's internal
controls;
(2) problems related to the Company's revenue recognition
polices and procedures; and
(3) supply chain problems that delayed recognition of
certain revenues.
On September 16, 2004, UTStarcom filed its second-quarter 2004
financial results with the Securities and Exchange Commission
stating, among other things, that a Company-initiated review of
a $290 million contract with Japan Telecom Co., Ltd. "led
management to conclude that certain significant control
deficiencies exist related to the review and evaluation of
criteria related to revenue recognition. ..."
Four days later, on September 20, 2004, UTStarcom announced that
the Company was revising its financial guidance downward for
third-quarter and full-year 2004 and, moreover, would defer
recognition of the entire $290-million Japan Telecom contract,
rather than recognize revenue of $220 million in the second half
of 2004.
For more details, contact Eric J. Belfi or Aaron Patton of
Murray, Frank & Sailer LLP by Phone: (800) 497-8076 or
(212) 682-1818 by Fax: (212) 682-1892 or by E-mail:
info@murrayfrank.com.
UTSTARCOM Pomerantz Haudek Lodges Securities Fraud Suit in CA
-------------------------------------------------------------
The law firm of Pomerantz Haudek Block Grossman & Gross LLP
initiated a class action lawsuit against UTStarcom, Inc.
("UTStarcom" or the "Company") (Nasdaq:UTSI) and eight of the
Company's senior executive officers and/or directors, on behalf
of all persons or entities who purchased the securities of
UTStarcom during the period from April 16, 2003 to September 20,
2004, inclusive (the "Class Period"). The case, Civil Action
Number 04 4991 in the United States District Court, Northern
District of California, has been assigned to Judge Charles R.
Bryer.
UTStarcom designs, manufactures and sells telecommunications
equipment, and provides services associated with their
operation. The complaint alleges that during the class period,
defendants violated the federal and securities laws by
disseminating materially false and misleading statements
concerning the Company's results and operations. The complaint
charges that defendants grossly inflated projections for the
fiscal years 2004 and 2005, thereby causing UTStarcom's shares
to trade at artificially inflated levels. The true facts, which
were known to each of the defendants but concealed from the
investing public, were that UTStarcom had massive supply chain
constraints delaying legitimate revenue recognition, its prime
margins were eroding in China, and its Japanese-related revenue
projections were overstated by $290 million. Defendants also
concealed that the Company lacked internal control over its
ability to analyze revenue recognizing criteria and was in
violation of Nasdaq rules requiring that the Board of Directors
have a majority which is independent.
On April 16, 2003, the first day of the class period, UTStarcom
issued a press release, titled "UTStarcom Q1 2003 Earnings
Results: Best Quarter in Company's History." In the release, the
Company reported "record revenues and earnings," including an
increase in net sales of 80% over the same period in the prior
year, and a 113% increase year-over-year in net income.
Throughout the class period, the Company issued a series of
press releases, continuing to assert its financial good health.
On September 16, 2004, UTStarcom filed its second quarter Form
10-Q with the SEC, in which it stated, among other things, that
a Company-initiated review of a deal with Japan Telecom "led
management to conclude that certain significant control
deficiencies exist related to the review and evaluation of
criteria related to revenue recognition, including process
deficiencies with respect to obtaining evidence of delivery" and
that "certain inventory transactions recorded in the quarter
ended June 30, 2004 were in error." News of significant problems
with the Company's internal controls caused UTStarcom shares to
drop 5.86% the next day, September 17, 2004. On September 20,
2004, the last day of the class period, a UTStarcom press
release announced that the Company was revising its financial
guidance downward for third-quarter and full-year 2004. News
that the entire $290 million in revenue from the Japan Telecom
deal was not eligible for recognition in 2004 shocked investors
and caused UTStarcom shares to drop $1.50, or 9.86%, in one day
on very heavy volume, to close at $13.70 on September 20, 2004.
For more details, contact Teresa Webb or Carolyn S. Moskowitz of
Pomerantz Haudek Block Grossman & Gross LLP by Phone:
(888) 476-6529 or by E-mail: tlwebb@pomlaw.com or
csmoskowitz@pomlaw.com.
MERCK & CO.: Scott + Scott, LLC Lodges Fiduciaries Suit in NJ
-------------------------------------------------------------
The law firm of Scott + Scott, LLC initiated a class action
lawsuit on behalf of participants and beneficiaries of the Merck
& Co., Inc. (NYSE:MRK) Savings and Security Plan and the
Employee Stock Purchase and Security Plan. The lawsuit has been
filed in the United States District Court for the District of
New Jersey.
The lawsuit alleges that Merck and other plan fiduciaries
breached their fiduciary duties and responsibilities by, among
other things, failing to investigate the prudence and good sense
of making large investments in Merck stock in these plans and by
making misrepresentations about various matters such as Vioxx,
one of the company's top-selling pharmaceutical products. Many
current and former Merck employees, both union and non-union,
have already chosen to participate and offer to lead in the
lawsuit (employee beneficiaries, as well). These employees/plan
participants have organized a group to direct the lawsuit so
that a solid and diverse representation will account for all
interests and have a strong voice in their litigation.
Merck withdrew Vioxx from the market on September 30 because the
drug significantly increased the risk of heart attacks and
strokes in patients taking it longer than 18 months. After the
drug had been withdrawn, the Wall Street Journal reported that
internal company emails and memos showed that Merck was aware of
the problems with Vioxx as early as March 2000, over 4 years
before the drug was withdrawn. Also, the SEC and the Department
of Justice announced that they were investigating whether Merck
misled investors and federal regulators about the safety of
Vioxx. Further, on November 30, 2004, the New York state
comptroller sued Merck in New Jersey federal court claiming the
Company had hid risks associated with this drug. Since Vioxx was
withdrawn from the market, Merck's stock price has dropped over
40% and is currently trading at an 8 1/2 year low. Merck is also
following through on the elimination of 4,400 jobs -- announced
last fall. Merck has major research and manufacturing facilities
in Readington Township and Whitehouse Station, New Jersey as
well as Upper Gwynedd and West Point, Pennsylvania. It also
states that it has operations in the New Jersey towns of
Somerset, Woodbridge, Rahway, Branchburg and Cokesburg.
For more details, contact Neil Rothstein of Scott + Scott, LLC
by Mail: 108 Norwich Avenue, Colchester, CT 06415 by Phone:
800-404-7770 (EST) or 800-332-2259 (PST) or 1/619-233-4565
(California) or 860/537-3818 by Fax: 860/537-4432 or by E-mail:
nrothstein@scott-scott.com or MerckERISALitigation@scott-
scott.com.
*********
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Wednesday's edition of the Class Action Reporter. Submissions
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asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
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*********
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Copyright 2004. All rights reserved. ISSN 1525-2272.
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