/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/041217.mbx C L A S S A C T I O N R E P O R T E R Friday, December 17, 2004, Vol. 6, No. 249 Headlines ALLSTATE INSURANCE: Faces Litigation Over Program Reorganization ARIZONA: Latino Advocacy Group Lodges Race Discrimination Suit CALIFORNIA: City Settles Protracted Litigation Over Gender Bias CPG PARTNERS: NJ Court Approves Settlement of Stockholder Suit DAOU SYSTEMS: CA Court Mulls Appeal of Securities Suit Dismissal DIET PATCHES: FTC Files Complaints V. 2 Fraudulent Manufacturers FINOVA CAPITAL: Thaxton Entities Suits Transferred To SC Court FIRST COMMAND: Pays $12 Mil To Settle SEC, NASD Fraud Charges GRILL CONCEPTS: Wage Suits Moved To Los Angeles Superior Court GTC BIOTHERAPEUTICS: Faces Lawsuit Over Primera Corporation Sale HARTFORD LIFE: Faces Stock, ERISA Suits Related to NYAG Lawsuit LATTICE SEMICONDUCTOR: Shareholders Launch Stock Lawsuits in OR LINCOLN BENEFIT: Breach of Contract Suit Moved To RI State Court MERRILL LYNCH: Desktop Publishers Charged With Insider Trading OPLINK COMMUNICATIONS: Asks NY Court To Approve Suit Settlement PROLONG INTERNATIONAL: OH Court Approves Stock Suit Settlement PSS WORLD: Trial in FL Securities Fraud Lawsuit Set October 2005 PSS WORLD: FL Court Okays Settlement of Securities Fraud Lawsuit PSS WORLD: FL Court Approves Settlement of Overtime Wage Lawsuit PURCHASEPRO.COM INC.: Executives Settle SEC Financial Fraud Case PURDUE PHARMA: OH Court Denies Class Status For OxyContin Suit QUICKLOGIC CORPORATION: Asks NY Court To Approve Suit Settlement REVLON INC.: NY Court Dismisses Stock Lawsuit Without Prejudice ROYAL GROUP: Shareholders Launch Securities Fraud Lawsuits in NY SMART & FINAL: Distributes Settlement Of CA Overtime Wage Suits SMART & FINAL: Discovery Proceeds in Overtime Wage Lawsuit in CA SOS STAFFING: UT Judge Declines To Dismiss Shareholder's Lawsuit SUPERCONDUCTOR TECHNOLOGIES: Consolidated Lawsuit Filed in CA THRIVENT FINANCIAL: Reaches Settlement Over Policyholder Claims TULLY'S COFFEE: Employees Launch Overtime Wage Suit in CA Court UNITED STATES: ARTA Releases 3rd "Judicial Hellholes(R)" Report UNITED STATES: ILR Applauds President Bush For Legal Reform UNITED STATES: President Pushes For Reform To Limit Lawsuits VALEANT CANADA: Health Canada Recalls Drug V. Manic-Depression WASHINGTON GROUP: ID Court Suit Settlement Approval Deemed Final WORLDCOM: NY Judge Agrees With Plaintiffs On Banks' Diligence WYETH PHARMACEUTICALS: MT Woman Lodges Hormone Replacement Drugs Asbestos Alert ASBESTOS LITIGATION: AIG Inc. Continues to Meet Asbestos Claims ASBESTOS LITIGATION: Madison County's Suit Filings Down in 2004 ASBESTOS LITIGATION: Medical Costs Could Reach $32.2M in Montana ASBESTOS LITIGATION: Many UK Companies Fail to Follow New Rules ASBESTOS LITIGATION: Florida County Case Filings Plummet ASBESTOS LITIGATION: Group Seeks $84M Penalty for Johns Manville ASBESTOS LITIGATION: Amicus Slams Insurers Evading Compensation ASBESTOS LITIGATION: Zurn Continues to Receive Asbestos Claims ASBESTOS LITIGATION: Supreme Court Rules MT State Could Be Sued ASBESTOS LITIGATION: Fears Cause Aussies to Avoid DIY Projects ASBESTOS LITIGATION: Crane Co. Warns of Earnings Shortfall in 4Q ASBESTOS LITIGATION: MA Court Seeks Relocation Area for Workers ASBESTOS LITIGATION: Court Upholds Denial of Claim Against Todd ASBESTOS LITIGATION: Disagreements Still Plague Asbestos Bill ASBESTOS LITIGATION: Calls for a Probe Hound Site Redevelopment ASBESTOS LITIGATION: Pres. Bush Demands Action to Limit Lawsuits ASBESTOS LITIGATION: Worksafe Probes Theft from Demolition Site ASBESTOS LITIGATION: HI School Shuts Down Due to Contamination ASBESTOS LITIGATION: Hanson PLC Takes Additional Asbestos Charge ASBESTOS ALERT: Inquest Reveals Coal Worker Died Due to Exposure ASBESTOS ALERT: Council Pursues Fly-tipper as Plant Rouses Fear ASBESTOS ALERT: Widow Sues UC Board Over Exposure in Los Alamos ASBESTOS ALERT: Court Reverses Dismissal of Case V. Agilent, HPQ ASBESTOS ALERT: Judge Affirms Dismissal of Case V. Intl Paper Co ASBESTOS ALERT: Victim's Wife Files Lawsuit V. Timken Company ASBESTOS ALERT: GTC Chemical fined GBD1,800 for Act Violations ASBESTOS ALERT: Inquest Deferred as Cause of Disease is Disputed ASBESTOS ALERT: Swindon Asbestos Victim Wins GBD50T Settlement ASBESTOS ALERT: EPA Cites PCS for Clean Air Act Violations in MD New Securities Fraud Cases MERCK & CO.: Scott + Scott Lodges Securities Fraud Suit in NJ ROYAL GROUP: Charles J. Piven Lodges Securities Fraud Suit in NY ROYAL GROUP: Schatz & Nobel Lodges Securities Fraud Suit in NY SUPPORTSOFT INC.: Schiffrin & Barroway Lodges CA Securities Suit ********* ALLSTATE INSURANCE: Faces Litigation Over Program Reorganization ---------------------------------------------------------------- AllState Insurance Company faces litigation relating to its agency program reorganization announced in 1999. These matters include a lawsuit filed in December 2001 by the U.S. Equal Employment Opportunity Commission (EEOC) alleging retaliation under federal civil rights laws, a class action filed in August 2001 by former employee agents alleging retaliation and age discrimination under the Age Discrimination in Employment Act, breach of contract and Employee Retirement Income Security Act (ERISA) violations, and a lawsuit filed in October 2004 by the EEOC alleging age discrimination with respect to a policy limiting the rehire of agents affected by the agency program reorganization. The Company is also defending another action, in which a class was certified in June 2004, filed by former employee agents who terminated their employment prior to the agency program reorganization. These plaintiffs have asserted claims under ERISA and for constructive discharge, and are seeking the benefits provided in connection with the reorganization. The Company has asked the Court to reconsider its class certification ruling. In late March 2004, in the first EEOC lawsuit and class action lawsuit, the trial court issued a memorandum and order that, among other things, certified classes of agents, including a mandatory class of agents who had signed a release, for purposes of effecting the court's declaratory judgment that the release is voidable at the option of the release signer. The court also ordered that an agent who voids the release must return to the Company any and all benefits received by the [agent] in exchange for signing the release. The court also "concluded that, on the undisputed facts of record, there is no basis for claims of age discrimination." The EEOC and plaintiffs have asked the court to clarify and/or reconsider its memorandum and order. The case otherwise remains pending. A putative nationwide class action has also been filed by former employee agents alleging various violations of ERISA. This matter was dismissed with prejudice in late March 2004 by the trial Court but will be the subject of further proceedings on appeal. In these matters, plaintiffs seek compensatory and punitive damages, and equitable relief. In addition, AIC is defending certain matters relating to its life agency program reorganization announced in 2000. These matters include an investigation by the EEOC with respect to allegations of age discrimination and retaliation. The Company is cooperating fully with the agency investigation and will continue to vigorously defend these and other claims related to the life agency program reorganization. The outcome of these disputes is currently uncertain. ARIZONA: Latino Advocacy Group Lodges Race Discrimination Suit -------------------------------------------------------------- The Arizona chapter of the League of United Latin American Citizens, a Latino advocacy organization filed a complaint against Maricopa Community Colleges over racially charged messages posted on the Glendale campus' computer system by a math professor, the Arizona Republic reports. According to an official with the group, the suit was filed the complaint Monday with the U.S. Department of Education's Office of Civil Rights. The move comes one month after the Mexican American Legal Defense and Educational Fund filed a class-action suit in U.S. District Court in Phoenix over what it called festering racial problems at Glendale Community College. Both groups have accused school officials of standing by while Walter Kehowski used the computer system to send discriminatory messages and provided links to White supremacist sites. "Mr. Kehowski has continually created a very hostile, racially antagonistic environment throughout the campus," said Silverio Garcia, LULAC's state education chairman. "The Maricopa County board has allowed him to use federally funded servers and technology at the expense of taxpayers to create this hostile environment." However, school officials, who said they were not notified of LULAC's complaint, have said the district supports the rights of all individuals to voice opinions. "Mr. Kehowsi did not violate any policy," said Chris Chesrown, spokeswoman for the community colleges. "The same protections that allow him to voice his opinion allow groups to assemble and petition in pursuit of their grievances." CALIFORNIA: City Settles Protracted Litigation Over Gender Bias --------------------------------------------------------------- A decade long legal battle over widespread sexual harassment and discrimination within the Los Angeles Police Department was recently concluded when City Council members voted to settle class-action lawsuits for $4.9 million, the Los Angeles Times reports. The lawsuits, which involved seventeen current and former police officers and civilian employees, who had charged that they had suffered discrimination and harassment as far back as the 1980s, was known collectively as Tipton-Whittingham vs. Los Angeles. The controversial suit gave rise to vast reforms within the department, but resolution had stalled over the issue of attorney's fees and damages. The decision to settle the case followed a recent state Supreme Court ruling against the city. Among the attorneys and organizations representing the plaintiffs was the American Civil Liberties Union of Southern California, whose executive director upon hearing of the city council's decision said that she was pleased to hear of the settlement but that the changes the LAPD made in 1997 to correct the problems were just as vital. According to Ramona Ripston, "This settlement is very important for those women in the department who've been waiting a very long time for a decision. Equally important, though, is that we've already achieved a lot. It seems to me that women are now quite successfully integrated into the department." One plaintiff had complained that she had suffered bruises from routine fondling by officers while others said they had been passed over for promotions. Other plaintiffs also said they had been ridiculed and harassed by fellow officers and internal affairs investigators after reporting problems. Two of the plaintiffs are men. Of the settlement amount, the plaintiffs will share $3.6 million and $1.25 million will go to their attorneys with the payments to plaintiffs ranging from $25,000 to $800,000. The case was hung up for years over the issue of payment to lawyers, because the LAPD adopted a series of reforms without a Court order, the city argued that it did not owe a fee that attorneys may claim when they are the catalyst for reform. Although the city had paid that $1.8-million "catalyst" fee in 1998, it sought a refund. However, the state Supreme Court disagreed, so the lawyers will keep the fee plus the $1.25 million in recent settlement. CPG PARTNERS: NJ Court Approves Settlement of Stockholder Suit -------------------------------------------------------------- The Court of Chancery in Essex County, New Jersey approved the settlement of the class action filed against CPG Partners LP, seeking to enjoin the Company's merger with Simon Property Group, Inc. The complaint, which was brought by a purported stockholder of the Company, names the Company and each of the members of its board of directors as defendants. The complaint alleges that the defendants have violated fiduciary duties of care, loyalty, candor and independence owed to the public stockholders of the Company. The plaintiff seeks, among other things, class action certification, a declaration that the merger agreement is unenforceable, a preliminary and permanent injunction against the defendants from proceeding with or closing the merger unless and until the Company implements a procedure that is free from conflicts of interest and an award of attorneys' fees and costs of suit. A settlement hearing was held on October 5, 2004 at which the Court approved a settlement of the case involving certain additional disclosure and the payment by the Company of costs of approximately $0.9 million to the plaintiff's attorneys. DAOU SYSTEMS: CA Court Mulls Appeal of Securities Suit Dismissal ---------------------------------------------------------------- The United States District Court for the Southern District of California has yet to rule on plaintiffs' appeal of the dismissal of the consolidated securities class action filed against Daou Systems, Inc. and certain of its officers and directors. The amended complaint alleges that the Company improperly used the "percentage-of-completion" accounting method for revenue recognition. Claims are pleaded under both the 1933 Securities Act (relating to the Company's initial public offering) and section 10b of the 1934 Securities Act. The complaint was brought on behalf of a purported class of investors who purchased the Company's Common Stock between February 13, 1997 and October 28, 1998, but it does not allege specific damage amounts. A Motion to Dismiss the second amended consolidated class action complaint was filed on February 22, 2000. On March 27, 2002, the Court granted the Motion but extended to plaintiffs the opportunity to file a Third Amended Complaint. The plaintiffs filed their Third Amended Complaint on May 16, 2002, to which the Company responded with another Motion to Dismiss. The Motion was filed on June 24, 2002 and challenged the legal sufficiency of the allegations. On October 15, 2002, the Court granted that Motion, this time with prejudice. The plaintiffs timely noticed appeal and filed their Appellants' Brief with the Ninth Circuit Court of Appeal on April 9, 2003. On July 2, 2003, the Company filed its Respondents’ Brief and Cross-Appeal. The Cross-Appeal challenges the trial Court's failure to assess whether the complaint complied with applicable pleadings standards. After the Appeal and Cross-Appeal were fully briefed, oral arguments were heard before a panel in February 2004. On October 7, 1998 and October 15, 1998, two separate complaints were filed in the Superior Court of San Diego County, California. These state Court complaints mirror the allegations set forth in the federal complaints. They also assert claims for common law fraud and the violation of certain California statutes. As with their federal counterparts, they do not allege specific damage amounts. On April 1, 1999, a Consolidated Amended Class Action was filed on behalf of the same state Court plaintiffs, and this new complaint alleges the same factual basis as is asserted in the federal litigation. The state litigation pleads claims for fraud and violations of certain California Corporation Code provisions. By stipulation of the parties and order of the Court, the litigation was stayed, pending the outcome of the motion to dismiss the federal lawsuits. DIET PATCHES: FTC Files Complaints V. 2 Fraudulent Manufacturers ---------------------------------------------------------------- The Federal Trade Commission has continued its attack on bogus weight-loss claims by suing a diet patch manufacturer and a retailer that marketed the patch directly to Spanish-speaking consumers. In two separate federal Court actions, the FTC charged that the patch manufacturer, Transdermal Products International Marketing Corporation, and the retailer, SG Institute of Health & Education, Inc., falsely claimed that the skin patch causes substantial weight loss. The FTC complaints in both cases also challenge false claims that the patch or its main ingredient, sea kelp, has been approved by the Food and Drug Administration (FDA). The FTC further alleged that Transdermal Products provided retailers with deceptive marketing materials that could be used to mislead consumers. "We're determined to pursue deception to its source," said Lydia B. Parnes, Acting Director of the FTC's Bureau of Consumer Protection. "Today's action targets a Company that manufactured both an ineffective product and the misleading claims to sell it. These defendants are doubly responsible for the deception." The FTC's case against Transdermal Products and its President, William Newbauer, will proceed to litigation in U.S. District Court for the Eastern District of Pennsylvania. SG Institute and its principals settled with the FTC and agreed to stop making the deceptive claims. The defendants in both cases allegedly used one or more of the seven bogus weight-loss claims that are part of the FTC's "Red Flag" education campaign announced in December 2003. The ongoing Red Flag campaign provides guidance to assist media outlets and others in spotting false claims in weight-loss ads. According to the FTC, one of the most common false weight- loss claims is that diet patches, topical creams and gels, body wraps, and other products worn on the body or rubbed into the skin can cause substantial weight loss. Transdermal Products International Marketing Corporation, based in Bristol, Pennsylvania, and its president, advertised on the Internet to recruit distributors who would purchase patches from Transdermal and sell them at retail. Transdermal sold the purported weight-loss patches to distributors under several brand names, including LePatch, Revo Patch, Svelt Patch, and Z Patch. Transdermal also sold unmarked patches, which retailers could sell under their own brand names. Transdermal allegedly provided its distributors with advertising copy and purported substantiation materials, including a document claiming to be a scientific weight loss study demonstrating the patch's efficacy. Transdermal's ads contain statements such as, "Amazing Skin Patch Melts Away Body Fat." According to the complaint, Transdermal has sold approximately 381,000 "units" of 30 patches to distributors, for which distributors paid approximately $1.75 million. The FTC's complaint alleges that the Transdermal defendants made false claims that the patch causes substantial weight loss, safely enables users to lose more than three pounds per week for more than four weeks, and causes permanent weight loss. In addition, the complaint alleges that the defendants falsely claimed that scientific research demonstrates that the patch causes substantial weight loss and that the FDA approved the product's main ingredient - Fucus vesiculosus (sea kelp) - for weight loss. The complaint also alleges that the defendants made unsubstantiated claims that the product causes weight loss and "melts away" body fat. Finally, the complaint alleges that by providing their distributors with deceptive advertising and substantiation materials, the defendants provided them with the means and instrumentalities to deceive consumers. SG Institute of Health & Education, Inc., based in Tamarac, Florida, and its owners, Pedro Salas and Vanessa Salas (SGI), settled charges that they made false and unsubstantiated claims in marketing Revopatch Plus, a purported weight-loss and cellulite-reduction skin patch. Revopatch Plus was manufactured by Transdermal (the subject of a separate FTC lawsuit, described above). The FTC's complaint alleges that SGI falsely claimed that Revopatch Plus causes substantial weight loss in a short time, for example, 15 pounds in four weeks and 20 pounds in six weeks, and has been approved by the FDA. The complaint also alleges that SGI claimed without substantiation that Revopatch Plus causes weight loss, eliminates fat, reduces appetite, regulates metabolism, and reduces or dissolves cellulite. The defendants' ads claimed, for example, that Revopatch Plus "takes away the urge to eat and the accumulated fat in the body: and best of all, it is 2 products in 1, because it helps you to lose weight and it helps you dissolve cellulite." The SGI action is part of the FTC's Hispanic Law Enforcement and Outreach Initiative - a comprehensive campaign initiated in 2003 to identify and halt fraud targeting Spanish-speaking consumers in the United States. According to the FTC, the SGI defendants advertised their product in major, national Spanish-language magazines, on local radio stations in California and New York City, and on Telemundo in Florida. Consumers purchased the patch by calling a toll-free telephone number listed in the ads. SGI sold the patch in units of 30, 60, and 90 for prices ranging from $60 to $200. It is estimated that SGI sold more than $1 million in patches since September 2001. To settle the FTC charges, the proposed stipulated final order prohibits the defendants from falsely claiming that Revopatch Plus or any other product applied to the skin causes substantial weight loss in a short period of time or that the FDA has approved sea kelp for controlling weight. The order also prohibits the defendants from misrepresenting that any health- related product, service, or program has been approved by the FDA. In addition, the order requires the defendants to have competent and reliable scientific evidence before making future claims about the benefits, performance, efficacy, safety, or side effects of any health-related product, service, or program. The order includes an "avalanche clause," that provides that the defendants will have to pay $1 million if a Court finds that they misrepresented their financial condition. Finally, the proposed order contains various recordkeeping and reporting requirements to assist the FTC in monitoring the defendants' compliance. For more details, contact the FTC's Consumer Response Center, by Mail: 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, 202-326-2182 or Lemuel Dowdy or Joel Brewer, Bureau of Consumer Protection by Phone: 202-326-2981 or 202-326-2967 (Transdermal Products) of Edwin Rodriguez, Bureau of Consumer Protection, by Phone: 202-326-3147 (SG Institute) FINOVA CAPITAL: Thaxton Entities Suits Transferred To SC Court -------------------------------------------------------------- The lawsuits filed against FINOVA Capital Corporation over its loan to The Thaxton Group, Inc. and several related entities have been transferred to the United States District Court for the District of South Carolina for consolidated pre-trial proceedings. Under its loan agreement, FINOVA has a senior secured loan to the Thaxton Entities of approximately $108 million at September 30, 2004. The Thaxton Entities were declared in default under their loan agreement with FINOVA after they advised FINOVA that they would have to restate earnings for the first two fiscal quarters of 2003, and had suspended payments on their subordinated notes. As a result of the default, FINOVA exercised its rights under the loan agreement, and accelerated the indebtedness. The Thaxton Entities then filed a petition for bankruptcy protection under Chapter 11 of the federal bankruptcy code in the United States Bankruptcy Court for the District of Delaware on October 17, 2003, listing assets of approximately $206 million and debts of $242 million. The first lawsuit, a complaint captioned "Earle B. Gregory, et al, v. FINOVA Capital Corporation, James T. Garrett, et al.," was filed in the Court of Common Pleas of Lancaster County, South Carolina, case no. 2003-CP-29-967, and was served on FINOVA on October 17, 2003. An amended complaint was served on November 5, 2003, prior to the deadline for FINOVA to answer, plead, or otherwise respond to the original complaint. The Gregory action was properly removed to the United States District Court for the District of South Carolina on November 17, 2003, pursuant to 28 U.S.C. 1334 and 1452. The plaintiffs filed a motion to remand the case to state Court, but the U.S. District Court denied this motion in an order dated December 18, 2003. The second Thaxton-related complaint, captioned "Tom Moore, Anna Nunnery, et al., v. FINOVA Capital Corporation, Moore & Van Allen PLLC, and Cherry, Bekaert & Holland LLP, case No. 8:03- 372413 ("Moore")," was filed in the United States District Court for the District of South Carolina on November 25, 2003, and was served on FINOVA on December 2, 2003. The third complaint, captioned "Sam Jones Wood and Kathy Annette Wood, et al., v. FINOVA Capital Corporation, Moore & Van Allen PLLC, and Cherry, Bekaert & Holland LLP," was filed in the Superior Court for Gwinnett County, Georgia, case no. 03-A13343-B, and was served on FINOVA on December 9, 2003. FINOVA properly removed the Wood action to the United States District Court for the Northern District of Georgia (Atlanta Division) on January 5, 2004. The fourth complaint, captioned "Grant Hall and Ruth Ann Hall, et al., v. FINOVA Capital Corporation, Moore & Van Allen PLLC, and Cherry, Bekaert & Holland LLP, case no. 03CVS20572," ("Hall") was filed in the Mecklenberg County, North Carolina, Superior Court, and was also served on FINOVA on December 9, 2003. FINOVA properly removed the Hall action to the United States District Court for the Western District of North Carolina (Charlotte Division) on January 5, 2004. The fifth complaint, captioned "Charles Shope, et al., v. FINOVA Capital Corporation, Moore & Van Allen PLLC, and Cherry, Bekaert & Holland LLP, case No. C 204022 ("Shope")," was filed in the United States District Court for the Southern District of Ohio, Eastern Division, and was served on FINOVA on January 13, 2004. Each of the five Thaxton-related lawsuits are styled as class actions, purportedly brought on behalf of certain defined classes of people who had purchased subordinated notes from the Thaxton Entities. The complaints by the subordinated noteholders allege claims of fraud, securities fraud, and various other civil conspiracy and business torts in the sale of the subordinated notes. Each of the complaints seeks an unspecified amount of damages, among other remedies. In addition to FINOVA, the complaints each name as co-defendants Thaxton's accountants and attorneys, and in the Gregory case, several officers of the Thaxton Entities. FIRST COMMAND: Pays $12 Mil To Settle SEC, NASD Fraud Charges ------------------------------------------------------------- The Securities and Exchange Commission initiated settled public administrative and cease-and-desist proceedings against First Command Financial Planning, Inc. (First Command), a registered broker-dealer whose customer base consists almost entirely of active-duty and retired U.S. Military personnel. The Commission's Order finds that First Command, which is headquartered in Fort Worth, Texas, violated Section 17(a)(2) of the Securities Act by using misleading sales materials to offer and sell mutual-fund investments through an installment method called a systematic investment plan (systematic plan). The systematic plans allowed investors to accumulate mutual-fund shares indirectly by making fixed monthly contributions over a period of at least 15 years. Systematic-plan investors were charged an upfront load on the plans equal to 50% of the plan's first 12 monthly payments. The Commission's Order finds that, since at least January 1999, First Command offered and sold systematic plans by, in part, making misleading statements and omissions concerning: (1) comparisons between the systematic plan and other mutual-fund investments; (2) the availability of the Thrift Savings Plan, a Federal Government-sponsored retirement savings and investment plan, which offers military investors many of the features of a systematic plan at lower costs; and (3) the efficacy of the upfront load in ensuring that investors remain committed to the systematic plan. The Commission's Order directs First Command to cease and desist from committing or causing any violations and any future violations of Section 17(a)(2) of the Securities Act and also censures the firm. First Command is also ordered to pay disgorgement and interest of $12 million, which shall be used to make restitution to certain customers and to fund an investor- education program for the U.S. military and their families as provided in a related settled NASD disciplinary action, which was also announced today (NASD Case No. CAF040085). First Command is also required to retain an Independent Consultant for two years to, among other things, review and make recommendations concerning the adequacy of First Command's sales literature, sales training systems and procedures, and supervisory procedures and systems. First Command consented to the issuance of the Commission's Order without admitting or denying the Order's substantive findings. GRILL CONCEPTS: Wage Suits Moved To Los Angeles Superior Court -------------------------------------------------------------- The Superior Court of California of Orange County granted Grill Concepts, Inc.'s motion to move the class action filed against it by one of its former hourly restaurant employees to the Superior Court of California of Los Angeles County. Plaintiffs have yet to file the suit in Los Angeles. The plaintiff alleged violations of California labor laws with respect to providing meal and rest breaks. The lawsuit sought unspecified amounts of penalties and other monetary payments on behalf of the plaintiffs and other purported class members. Discovery is currently continuing in these matters. GTC BIOTHERAPEUTICS: Faces Lawsuit Over Primera Corporation Sale ---------------------------------------------------------------- GTC Biotherapeutics, Inc. faces a class action filed in the Court of Common Pleas for Philadelphia County in Pennsylvania by two employees of one of the Company's former subsidiaries, seeking damages, declaratory relief and certification of a class action relating primarily to their Company stock options. The claims arise as a result of the Company's sale of Primedica Corporation to Charles River Laboratories International, Inc. in February 2001, which the Company believes resulted in the termination of Primedica employees' status as employees of the Company or its affiliates and termination of their options. The plaintiffs contend that the sale of Primedica to Charles River did not constitute a termination of their employment with the Company or its affiliates for purposes of the Company's equity incentive plan and, therefore, that the Company breached its contractual obligations to them and other Primedica employees who had not exercised their stock options. The complaint demands damages in excess of $5 million, plus interest. HARTFORD LIFE: Faces Stock, ERISA Suits Related to NYAG Lawsuit --------------------------------------------------------------- The Hartford Financial Services Group, Inc. and five of its executive officers face two class actions filed in the United States District Court in Connecticut, after New York Attorney General Eliot Spitzer filed a civil complaint over insurance fraud. On October 14, 2004, the New York Attorney General's Office filed a civil complaint (the "NYAG Complaint") against Marsh Inc. and Marsh & McLennan Companies, Inc. (collectively, "Marsh") alleging, among other things, that certain insurance companies, including the Company, participated with Marsh in arrangements to submit inflated bids for business insurance and paid contingent commissions to ensure that Marsh would direct business to them. The Company is not joined as a defendant in the action. Since the filing of the NYAG Complaint, the Company has become aware of several private actions against it asserting claims arising from the allegations of the NYAG Complaint. The securities suits allege claims under Section 10(b) of the Securities Exchange Act and SEC Rule 10b-5. The complaints allege on behalf of a putative class of shareholders that The Company and the five named individual defendants, as control persons of The Company, "disseminated false and misleading financial statements" by concealing that "(The Hartford) was paying illegal and concealed `contingent commissions' pursuant to illegal `contingent commission agreements.'" The class period alleged is November 5, 2003 through October 13, 2004, the day before the NYAG Complaint was filed. The complaints seek damages and attorneys' fees. In addition, the Company is aware of three putative class actions filed in the same Court on behalf of participants in The Hartford's 401(k) plan against The Hartford, Hartford Fire Insurance Company, The Hartford's Pension Fund Trust and Investment Committee, The Hartford's Pension Administration Committee, The Hartford's Chief Financial Officer, and John/Jane Does 1-15. The suits assert claims under the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), alleging that The Hartford and the other named defendants breached their fiduciary duties to plan participants by, among other things, failing to inform them of the risk associated with investment in The Hartford's stock as a result of the activity alleged in the NYAG Complaint. The class period alleged is November 5, 2003 through the present. The complaints seek restitution of losses to the plan, declaratory and injunctive relief, and attorneys' fees. LATTICE SEMICONDUCTOR: Shareholders Launch Stock Lawsuits in OR --------------------------------------------------------------- Lattice Semiconductor Corporation, its Chief Executive Officer Cyrus Y. Tsui and its President Stephen A. Skaggs face several securities class actions filed in the United States District Court for the District of Oregon. These complaints were filed on behalf of a putative class of investors who purchased the Company's stock between April 22, 2003 and April 19, 2004. They generally allege violations of federal securities laws arising out of its previously announced restatement of financial results for the first, second, and third quarters of 2003. Consistent with the usual procedures for cases of this kind, the Company anticipates that these cases (and any other similar putative class action complaints that might be filed against us) may be consolidated into a single action. In September and October 2004, two shareholder derivative complaints were filed, purportedly on behalf of the Company, in the Circuit Court of the State of Oregon for the County of Washington, against all of its current directors, certain former directors, and certain executive officers. The derivative plaintiffs make allegations substantially similar to those in the putative class action complaints, as well as allegations of breach of fiduciary duty, abuse of control, gross mismanagement, waste of corporate assets, and unjust enrichment. The suits are pending in the United States District Court in Oregon under Judge Dennis J. Hubel, styled: (1) Autumn Partners, LLC v. Lattice Semiconductor Corporation et al, 3:04-cv-01255-HU (2) Marcano v. Lattice Semiconductor Corporation et al, 3:04-cv-01533-HU (3) Pfeiffer v. Lattice Semiconductor Corp. et al, 3:04-cv- 01429-HU The plaintiff firms in this litigation are: (i) Berman, DeValerio, Pease, Tabacco Burt & Pucillo (MA), One Liberty Square, Boston, MA, 2109, Phone: 617.542.8300, Fax: 617.230.0903, E-mail: info@bermanesq.com (ii) Goodkind Labaton Rudoff & Sucharow LLP, 100 Park Avenue, New York, NY, 10017, Phone: 212.907.0700, (fax) 212.818.0477, info@glrslaw.com (iii) Paskowitz & Associates, Phone: 800.705.9529, E-mail: classattorney@aol.com (iv) Shepherd, Finkelman, Miller & Shah, LLC, Phone: 877.891.9880, E-mail: jshah@classactioncounsel.com Lawyers for the defendants are: (a) Barnes H. Ellis, Stoel Rives LLP, 2600 Standard Insurance Center, 900 SW Fifth Avenue, Portland, OR 97204, Phone: (503) 294-9243, Fax: (503) 220-2480, E- mail: bhellis@stoel.com (b) Robert E.L. Bonaparte, Shenker & Bonaparte, LLP, One SW Columbia Street, Suite 475, Portland, OR 97258, Phone: (503) 242-0005 Fax: (503) 323-7360 E-mail: attorneys@bb-law.net LINCOLN BENEFIT: Breach of Contract Suit Moved To RI State Court ---------------------------------------------------------------- The nationwide class action filed against Lincoln Benefit Life Co. will be transferred to Rhode Island state Court, after the Rhode Island Supreme Court refused summary judgment in favor of the Company. The suit alleges, among other things, breach of contract and breach of the implied covenant of good faith and fair dealing as a result of a change in the rate and cap on an annuity product. The Court certified the class and entered summary judgment in favor of the Company and against the certified class. Plaintiff filed notice of appeal and the Company filed a cross appeal. In June 2004, the Rhode Island Supreme Court upheld the class certification order but reversed the summary judgment order, entering judgment for the plaintiff class. The Company filed a Petition for Reargument in response to this Order. The Rhode Island Supreme Court denied the petition. MERRILL LYNCH: Desktop Publishers Charged With Insider Trading -------------------------------------------------------------- The Securities and Exchange Commission charged a San Francisco couple, Min T. Ma and Joyce Manni Ng, with reaping approximately $438,000 in illegal profits by trading ahead of mergers they learned about while working as onsite desktop publishers for investment banking firm Merrill Lynch. Ma and Ng were employed by Bowne Business Solutions to work as desktop publishing specialists at Merrill Lynch's Palo Alto, California office. The Commission's complaint alleges that from May to November 2003, Ma and Ng invested several times their annual income in the targets of mergers based on information they learned from confidential deal documents and access to Merrill Lynch computer files. Ma and Ng bought stock in three public companies - Oak Technology, Inc., SangStat Medical Corporation, and Applied Molecular Evolution, Inc. - shortly after working on confidential documents. Soon thereafter, when the mergers were announced and the stock prices skyrocketed, Ma and Ng liquidated their shares and doubled their money. The Commission's complaint charges Ma and Ng with trading on the basis of material, nonpublic information in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission seeks an order requiring Ma and Ng to disgorge their illegal trading profits and pay civil monetary penalties and prejudgment interest, and permanently enjoining Ma and Ng from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The action is titled, SEC v. Min T. Ma and Joyce Manni Ng, Case No. C-04-5295 (MHP, N.D. Cal.) OPLINK COMMUNICATIONS: Asks NY Court To Approve Suit Settlement --------------------------------------------------------------- Oplink Communications, Inc. asked the United States District Court for the Southern District of New York to grant preliminary approval for the settlement of the securities class action filed against it and certain of its officers and directors, styled "In re Oplink Communications, Inc. Initial Public Offering Securities Litigation, Case No.01-CV-9904." In the amended complaint, the plaintiffs allege that the Company, certain of the Company's officers and directors and the underwriters of the Company's initial public offering, or IPO, violated section 11 of the Securities Act of 1933 based on allegations that the Company's registration statement and prospectus failed to disclose material facts regarding the compensation to be received by, and the stock allocation practices of, the IPO underwriters. The complaint also contains a claim for violation of section 10(b) of the Securities Exchange Act of 1934 based on allegations that this omission constituted a deceit on investors. The plaintiffs seek unspecified monetary damages and other relief. Similar complaints were filed by plaintiffs (the "Plaintiffs") against hundreds of other public companies (the "Issuers") that went public in the late 1990s. On August 8, 2001, the IPO Lawsuits were consolidated for pretrial purposes before United States Judge Shira Scheindlin of the Southern District of New York. On July 15, 2002, the Company joined in a global motion to dismiss the IPO Lawsuits filed by all of the Issuers (among others). On October 9, 2002, the Court entered an order dismissing the Company's named officers and directors from the IPO Lawsuits without prejudice, pursuant to an agreement tolling the statute of limitations with respect to these officers and directors until September 30, 2003. On February 19, 2003, the Court issued a decision denying the motion to dismiss the Section 11 claims against the Company and almost all of the Issuers, and granting the motion to dismiss the Section 10(b) claim against the Company. The Section 10(b) claim was dismissed without leave to amend. In June 2003, Issuers and Plaintiffs reached a tentative settlement agreement and entered a memorandum of understanding, providing for, among other things, a dismissal with prejudice and full release of the Issuers and their officers and directors from all further liability resulting from Plaintiffs' claims, and the assignment to Plaintiffs of certain potential claims that the Issuers may have against the underwriters. In addition, the tentative settlement guarantees that, in the event that the Plaintiffs recover less than $1 billion in settlement or judgment against the underwriter defendants in the IPO Lawsuits, the Plaintiffs would be entitled to payment by each participating Issuer's insurer of a pro rata share of any shortfall in the Plaintiff's guaranteed recovery. In such event, the Company's obligation would be limited to reimbursement of the Company's insurer up to the amount remaining under the deductible of the Company's insurance policy. In September 2003, in connection with the tentative settlement, the Company's officers and directors who had entered tolling agreements with the Plaintiffs agreed to extend those agreements so that they would not expire prior to any settlement being finalized. In June 2004, the Company executed a settlement agreement with the Plaintiffs pursuant to the terms of a memorandum of understanding. The settlement is subject to a number of conditions, including action by the Court certifying a class action for settlement purposes and formally approving the settlement. The underwriters have opposed both the certification of the class and the judicial approval of the settlement. The suit is styled "In re Oplink Communications, Inc. Initial Public Offering Securities Litigation, Case No. 01-CV-9904 (Sas)," filed in the United States District Court for the Southern District of New York, under Judge Shira A. Scheindlin. The plaintiff firms in this litigation are: (1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E. 40th Street, 22nd Floor, New York, NY, 10016, Phone: 800.217.1522, E-mail: info@bernlieb.com (2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York, NY), One Pennsylvania Plaza, New York, NY, 10119-1065, Phone: 212.594.5300, (3) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd, PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E- mail: info@sbclasslaw.com (4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New York, NY, 10005, Phone: 888.759.2990, Fax: 212.425.9093, E-mail: Info@SirotaLaw.com (5) Stull, Stull & Brody (New York), 6 East 45th Street, New York, NY, 10017, Phone: 310.209.2468, Fax: 310.209.2087, E-mail: SSBNY@aol.com (6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270 Madison Avenue, New York, NY, 10016, Phone: 212.545.4600, Fax: 212.686.0114, newyork@whafh.com PROLONG INTERNATIONAL: OH Court Approves Stock Suit Settlement -------------------------------------------------------------- The Court of Common Pleas, Columbiana County, Ohio granted final approval to the settlement of the lawsuit filed against EPL Prolong, Inc. and Prolong International Corporation, styled "Francis Helman et al vs. EPL Prolong Inc. and PIC et al." The operative complaint alleges breach of contract, fraudulent conveyance of corporate assets, breach of fiduciary duties, breach of an alleged novation and fraud in the inducement relating to the alleged novation. Plaintiffs allege that they purchased certain "pre-primary shares" of stock in a Canadian Company known as Prolong Industries Inc. from Defendant Ronald Sloan and other agents of the Canadian Company during the period of May 1985 through October 1987, a period prior in time to the formation of EPL Prolong, Inc. It remains undisputed that the EPL Defendants had no involvement in the solicitation or sale of the pre-primary shares that were allegedly sold to the plaintiffs between 1985 and 1987. A settlement of the dispute as a class action has been reached and the Court has filed a Final Judgment and Order of Dismissal. It is expected that the Company will issue approximately 1,111,538 shares of common stock of the Company to the plaintiffs and their legal counsel coincident to the settlement agreement and pay $24,000 of their litigation expenses. It is anticipated that the issuance of stock will take place during the fourth quarter of fiscal year 2004. The settlement expense has been fully reserved for in prior periods. PSS WORLD: Trial in FL Securities Fraud Lawsuit Set October 2005 ---------------------------------------------------------------- Trial in the securities class action filed against PSS World Medical, Inc. and certain of its current and former officers and directors, styled "Jack Hirsch v. PSS World Medical, Inc., et al., Civil Action No. 3:98-CV 502-J-32TEM," is set for October 2005 in the United States District Court for the Middle District of Florida, Jacksonville Division. The plaintiff seeks indeterminate damages, including costs and expenses. The plaintiff initially alleged, for himself and for a purported class of similarly situated stockholders who purchased the Company's stock between December 23, 1997 and May 8, 1998 that the defendants engaged in violations of certain provisions of the Securities Exchange Act, and Rule 10b-5 promulgated thereunder. The allegations were based upon a decline in the Company's stock price following an announcement by the Company in May 1998 regarding the Gulf South Medical Supply, Inc. merger, which resulted in earnings below analysts' expectations. In December 2002, the Court granted the Company's motion to dismiss the plaintiff's second amended complaint with prejudice with respect to the Section 10(b) claims. The plaintiffs filed their third amended complaint in January 2003 alleging claims under Sections 14(a) and 20(a) of the Exchange Act on behalf of a putative class of all persons who were shareholders of the Company as of March 26, 1998. In May 2003, the Court denied the defendants' motion to dismiss. By order dated February 18, 2004, the Court granted plaintiffs' motion for class certification. Court ordered mediation occurred on June 10, 2004, during which the parties were not able to resolve their dispute. The suit, styled "Hirsch v. PSS World Medical, et al, 3:98-cv- 00502-TJC-TEM," filed in the United States District Court for the Middle District of Florida, Jacksonville Division, under Judge Timothy J. Corrigan. Law firms for the defendants are: (1) Peter Bassett, John A. Jordak, Jr., Alston & Bird, LLP, 1201 W. Peachtree St., N.E., Atlanta, GA 30309-3424, Phone: 404/881-7000, E-mail: jjordak@alston.com (2) Robert Eric Bilik, McGuireWoods LLP, 50 N. Laura St., Suite 3300, Jacksonville, FL 32202-3661, Phone: 904/798-3200, E-mail: ebilik@mcguirewoods.com (3) Darlene DeMelo, Inez H. Friedman-Boyce, Gary M. Grossman, Jordan D. Hershman, Testa, Hurwitz & Thibeault, High Street Tower, 125 High Street, Boston, MA 02110, Phone: 617/248-7000, E-mail: demelod@tht.com or friedman@tht.com (4) Robert Bruce George, Liles, Gavin, Costantino & Murphy 225 Water St., Suite 1500, Jacksonville, FL 32202, Phone: 904/634-1100, Fax: 904/634-1234, E-mail: rgeorge@lgcmlaw.com Law firms for the plaintiffs are: (i) Lee G. Kellison, J Michael Lindell, Lindell & Kellison, P.A., 12276 San Jose Blvd., Suite 126, Jacksonville, FL 32223-8630, Phone: 904/880-4000, fax: 904-880-4013, E- mail: lkellison@lindellkellison.com or mlindel@lindelkellison.com (ii) Seth R. Klein, Jeffrey S. Nobel, Andrew Schatz, Schatz & Nobel, P.C., One Corporate Center, 20 Church St., Hartford, CT 06103, E-mail: sklein@snlaw.net (iii) Richard B. Margolies, Abbey & Gardy, LLP, 2l2 E. 39th St., New York, NY 10016, Phone: 212/889-3700, Fax: 212/684-5191 (iv) James Notis, Lee Squitieri, Abbey & Gardy, LLP 2l2 E. 39th St., New York, NY 10016, Phone: 212/889- 3700, E-mail: jnotis@abbeygardy.com PSS WORLD: FL Court Okays Settlement of Securities Fraud Lawsuit ---------------------------------------------------------------- The United States District Court for the Middle District of Florida approved the settlement of the consolidated securities class action filed against PSS World Medical, Inc. and certain present and former directors and officers, styled "In Re PSS World Medical Inc. Securities Litigation." The amended complaint was filed as a purported class action on behalf of persons who purchased or acquired PSS World Medical, Inc. common stock at various times during the period between October 26, 1999 and October 3, 2000 and alleged, among other things, violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The plaintiffs alleged that the Company issued false and misleading statements and failed to disclose material facts concerning, among other things, the Company's financial condition and that because of the issuance of false and misleading statements and/or failure to disclose material facts, the price of PSS World Medical, Inc. common stock was artificially inflated during the class period. The Court granted the plaintiff's motion for class certification in November 2002. The parties signed a settlement agreement pursuant to which the Company has agreed to pay $6.75 million for the benefit of the class members, of which $6.5 million was covered by the Company's insurance policy. The plaintiff firms in this litigation are: (1) Beatie & Osborne LLP, 599 Lexington Avenue, 42nd Floor, New York, NY, 10022, Phone: 800.891.6305 (2) Berger & Montague, P.C., 1622 Locust Street, Philadelphia, PA, 19103, Phone: 800.424.6690, Fax: 215.875.4604, E-mail: investorprotect@bm.net (3) Berman, DeValerio, Pease, Tabacco Burt & Pucillo (CA), 425 California Street, Suite 2025, San Francisco, CA, 94104, Phone: 415.433.3200, Fax: 415.433.6382 (4) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E. 40th Street, 22nd Floor, New York, NY, 10016, Phone: 800.217.1522, E-mail: info@bernlieb.com (5) Bull & Lifshitz, 18 East 41st St., New York, NY, 10017, Phone: 212.213.6222, Fax: 212.213.9405, (6) Fruchter & Twersky, 60 East 42 Street, New York, NY, 10021, Phone: 212.687.6655, (7) Milberg, Weiss, Bershad, Hynes & Lerach LLP (San Diego, CA), 600 West Broadway, 1800 One America Plaza, San Diego, CA, 92101, Phone: 800.449.4900, E-mail: support@milberg.com (8) Pomerantz,Haudek, Block, Grossman & Gross, 100 Park Avenue, 26th Floor, New York, NY, 10017-5516, Phone: 212.661.1100 PSS WORLD: FL Court Approves Settlement of Overtime Wage Lawsuit ---------------------------------------------------------------- The United States District Court for the Middle District of Florida, Jacksonville Division granted approval to the settlement of the collective action filed against PSS World Medical, Inc. by three former and certain present employees of the Company, entitled "Angione, et al. v. PSS World Medical, Inc." The suit was initially filed on June 4, 2002 in the U.S. District Court for the Central District of California, Santa Ana Division. The Court approved the transfer of venue, and the case is now pending in the United States Court for the Middle District of Florida, Jacksonville Division. The plaintiffs allege that the Company wrongfully classified its purchasers, operations leader trainees, and accounts receivable representatives as exempt from the overtime requirements imposed by the Fair Labor Standards Act and the California Wage Orders, and they seek to recover back pay, interest, costs of suit, declaratory and injunctive relief, and applicable statutory penalties. On February 21, 2003, the Court conditionally allowed the case to proceed as a collective action under the Fair Labor Standards Act. An additional 59 plaintiffs opted into the proceeding, bringing the total number of plaintiffs to 62. Two of the three original named plaintiffs also brought, but subsequently have settled, individual claims for gender discrimination and retaliation under Title VII of the Civil Rights Act of 1964 and the Equal Pay Act of 1963. As a result of mediation in March 2004, the parties agreed on a framework for mediation or arbitration in October 2004 on the issue of the plaintiffs' attorney's fees. The attorney's fee issue was resolved and the parties entered into negotiations for resolution of the plaintiffs' outstanding wage claims. The parties were able to reach agreement on the amount of wages to be paid to the plaintiffs. The $2.9 million settlement payment, which has been accrued by the Company, was approved by the Court on November 5, 2004, and the matter is concluded. PURCHASEPRO.COM INC.: Executives Settle SEC Financial Fraud Case ---------------------------------------------------------------- The Securities and Exchange Commission filed a settled civil injunctive action in the U.S. District Court for the Eastern District of Virginia against four former executives of PurchasePro.com, Inc. for violations of the antifraud, books- and-records, internal accounting controls, periodic reporting and lying-to-auditors provisions of the federal securities laws. According to the complaint, the defendants-R. Geoffrey Layne, James S. Sholeff, Dale Boeth, and Shawn McGhee-participated in a fraudulent scheme to artificially inflate the first quarter 2001 (Q1 2001) revenues of PurchasePro.com, Inc., a Las Vegas-based Internet Company now known as Pro-After, Inc. All four individuals, who were officers or senior employees of PurchasePro, settled the charges without admitting or denying the Commission's allegations. The Commission's complaint alleges that in Q1 2001 and continuing through April 2001, each defendant took knowing and deliberate steps designed to inflate PurchasePro's revenues in contravention of generally accepted accounting principles (GAAP). In particular, the complaint alleges that, Layne, while serving as PurchasePro's Executive Vice President, (1) entered into, and concealed the existence of, reciprocal agreements that rendered it improper to recognize $1 million in revenue from two marketplace license sales to PurchasePro customers; and (2) took steps to make it falsely appear that a purported "Statement of Work" contract between PurchasePro and AOL, valued at $3.65 million, was executed during Q1 2001, when in fact it was never properly executed. The complaint further alleges that Boeth, PurchasePro's Senior Vice President of Consulting Services, and Sholeff, a PurchasePro Vice President, also took steps to make it falsely appear that the Statement of Work agreement was executed during Q1 2001, and that Sholeff took similar steps with respect to a $3.7 million marketplace license sale. According to the complaint, McGhee, PurchasePro's Chief Operating Officer during the relevant period, took steps to (i) make it falsely appear that a $3.5 million marketplace license sale had been entered into during Q1 2001; and (ii) conceal the existence of reciprocal agreements that rendered it improper to recognize any revenue from that sale. Each of these transactions had a misleading impact on the revenues announced and reported by PurchasePro. As reflected in the complaint, by including these transactions, PurchasePro artificially and materially inflated its publicly announced revenues by at least 34% and its reported revenues by over 37%. In addition, the complaint alleges that, during April 2001, Layne and Sholeff attempted to conceal their conduct by destroying certain documents. In particular, the complaint alleges that Sholeff and Layne deleted, or requested others to delete, their AOL-related emails, and that Sholeff shredded all of his AOL related documents and destroyed his laptop. The complaint further alleges that in February 2002, Layne and Sholeff lied to the Commission staff during testimony in order to conceal their fraudulent conduct. Finally, the complaint alleges that in April 2001, PurchasePro paid Layne a $200,000 retention bonus and that at or about the same time, PurchasePro paid Boeth a total of $150,000 in retention bonuses. Based on these factual allegations, the Commission charged: Layne and McGhee with violating Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 (Exchange Act) and Exchange Act Rules 10b-5, 13b2-1 and 13b2-2, and with aiding and abetting PurchasePro's violations of Exchange Act Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B), and of Exchange Act Rules 12b-20 and 13a-13; Sholeff with violating Exchange Act Sections 10(b) and 13(b)(5) and Exchange Act Rules 10b-5 and 13b2-1, and with aiding and abetting PurchasePro's violations of Exchange Act Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B), and of Exchange Act Rules 12b-20 and 13a-13; and (iii) Boeth with violating Exchange Act Sections 10(b) and 13(b)(5) and Exchange Act Rules 10b-5, 13b2-1 and 13b2-2. Without admitting or denying the Commission's allegations, each defendant consented to final judgments that would permanently enjoin each of them from violating the foregoing securities law provisions, and that would: in the case of Layne, permanently bar him from acting as an officer or director of any public Company, and order Layne to pay disgorgement of $200,000 plus prejudgment interest; in the case of Sholeff, permanently bar him from acting as an officer or director of any public Company, and order Sholeff to pay a $35,000 civil penalty; in the case of Boeth, permanently bar him from acting as an officer or director of any public Company, and order Boeth to pay disgorgement of $150,000 plus prejudgment interest, but waive payment, and not impose a civil penalty, based on Boeth's demonstrated inability to pay; and in the case of McGhee, bar him for five years from serving as an officer or director of any public Company. The final judgment against Layne permits him to offset his payment of disgorgement by the corresponding amount of any restitution he pays in connection with the parallel criminal proceeding described below; while the final judgment against Sholeff permits him to offset his payment of civil penalties by the corresponding amount of any criminal fine he pays in connection with that same parallel criminal proceeding. The final judgments are subject to the approval of the United States District Court. Also today, in a related criminal proceeding, the United States Attorneys' office for the Eastern District of Virginia announced that Layne, McGhee, Boeth and Sholeff have each agreed to plead guilty to single felony counts arising from the same circumstances as the Commission's complaint. In particular, Layne will plead to a single felony count of securities fraud; McGhee and Boeth will each plead to a single felony count of conspiracy to commit securities fraud; and Sholeff will plead to a single felony count of perjury arising from false statements that Sholeff made to the SEC staff during the investigation. The Commission acknowledges the assistance of the United States Department of Justice, the United States Attorney's Office for the Eastern District of Virginia, and the Federal Bureau of Investigation in the investigation of this matter. The action is titled, SEC v. R. Geoffrey Layne, James S. Sholeff, Dale Boeth and Shawn McGhee, C.A. No. 04-1500 (E.D. Va). PURDUE PHARMA: OH Court Denies Class Status For OxyContin Suit -------------------------------------------------------------- The Ohio Supreme Court overturned a lower Court decision in Howland v. Purdue Pharma L.P., et al that had granted class action status to plaintiffs claiming personal injuries as a result of using OxyContin(R) (oxycodone HCl controlled-release) Tablets. The Howland case had been the only case in three years of litigation in which a class of plaintiffs was certified in any OxyContin lawsuit. "We are gratified that the Ohio Supreme Court followed the law with respect to class certification and ruled in our favor," stated Howard R. Udell, Executive Vice President and Chief Legal Officer of Purdue Pharma L.P., the Stamford, Connecticut-based distributor of OxyContin. Every state and federal Court throughout the country to decide class certification involving OxyContin has now rejected the plaintiffs' efforts to have a class certified against Purdue. For more details, regarding the full prescribing information for OxyContin visit: http://www.purduepharma.com/PRESSROOM/PI/OXYCONTIN_PI.PDF. QUICKLOGIC CORPORATION: Asks NY Court To Approve Suit Settlement ---------------------------------------------------------------- Quicklogic Corporation asked the United States District Court for the Southern District of New York to approve the settlement of the consolidated securities class action filed against it, certain of its officers and directors and some investment banks that underwrote the Company's initial public offering. The complaint alleges excessive and undisclosed commissions in connection with the allocation of shares of common stock in QuickLogic's initial and secondary public offerings and artificially high prices through "tie-in" arrangements which required the underwriters' customers to buy shares in the aftermarket at pre-determined prices in violation of the federal securities laws. Plaintiffs seek an unspecified amount of damages on behalf of persons who purchased QuickLogic's stock pursuant to the registration statements between October14, 1999, and December6, 2000. Various plaintiffs have filed similar actions asserting virtually identical allegations against over 300 other public companies, their underwriters, and their officers and directors arising out of each Company's public offering. These actions, including the action against QuickLogic, have been coordinated for pretrial purposes and captioned "In re Initial Public Offering Securities Litigation, 21 MC 92." A stipulation of settlement for the claims against the issuer defendants, including the Company, has been submitted to the Court for preliminary approval. Under the stipulation of settlement, the plaintiffs will dismiss and release all claims against participating defendants in exchange for a contingent payment guaranty by the insurance companies collectively responsible for insuring the issuers in all the related cases, and the assignment or surrender to the plaintiffs of certain claims the issuer defendants may have against the underwriters. Under the guaranty, the insurers will be required to pay the amount, if any, by which $1.0 billion exceeds the aggregate amount ultimately collected by the plaintiffs from the underwriter defendants in all the cases. There is no guarantee that the settlement will become effective, as it is subject to a number of conditions, including Court approval. The suit is styled "In Re Quicklogic Corp. Initial Public Offering Securities Litigation, 01 Civ. 9503 (Sas)," filed in the United States District Court for the Southern District of New York, under Judge Shira A. Scheindlin. The plaintiff firms in this litigation are: (1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E. 40th Street, 22nd Floor, New York, NY, 10016, Phone: 800.217.1522, E-mail: info@bernlieb.com (2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York, NY), One Pennsylvania Plaza, New York, NY, 10119-1065, Phone: 212.594.5300, (3) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd, PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E- mail: info@sbclasslaw.com (4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New York, NY, 10005, Phone: 888.759.2990, Fax: 212.425.9093, E-mail: Info@SirotaLaw.com (5) Stull, Stull & Brody (New York), 6 East 45th Street, New York, NY, 10017, Phone: 310.209.2468, Fax: 310.209.2087, E-mail: SSBNY@aol.com (6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270 Madison Avenue, New York, NY, 10016, Phone: 212.545.4600, Fax: 212.686.0114, newyork@whafh.com REVLON INC.: NY Court Dismisses Stock Lawsuit Without Prejudice --------------------------------------------------------------- The United States District Court for the Southern District of New York dismissed without prejudice the amended class action lawsuit filed against Revlon, Inc., certain of its present and former officers and directors and REV Holdings, Inc. The suit, filed on behalf of Dan Gavish, Tricia Fontan and Walter Fontan individually and allegedly on behalf of all others similarly situated who purchased the securities of Revlon, Inc. and REV Holdings Inc. (a Delaware corporation and the predecessor of REV Holdings) between October 2, 1998 and September 30, 1999, alleged, among other things, that the defendants violated, among other things, Rule 10b-5 under the Securities Exchange Act of 1934, as amended. ROYAL GROUP: Shareholders Launch Securities Fraud Lawsuits in NY ---------------------------------------------------------------- Royal Group Technologies Limited (Royal Group or the Company) (RYG.SV-TSX, RYG-NYSE) face class action lawsuits alleging violations of the U.S. Securities and Exchange Act of 1934. Royal Group has not been served with copies of any of the suits and therefore has not reviewed the allegations being made. The suit was filed in the United States District Court for the Southern District of New York on behalf of purchasers of Royal Group Technologies Limited ("Royal Group") (NYSE:RYG) common stock during the period between February 11, 1999 and October 13, 2004 (the "Class Period"). The complaint charges Royal Group and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Royal Group is a vertically integrated manufacturer of polymer-based home improvement, consumer and construction products. Royal Group's operations are located primarily in Canada and the United States, with international locations in Mexico, South America, Europe and Asia. Royal Group stated that it would not comment on these or any similar suits that may be filed against the Company, but will deal with them through the appropriate legal process. "The filing of such class action suits has become a kind of standard procedure when companies incur difficulties with a consequent adverse impact on their share price," noted V. James Sardo, Royal Group's interim Chief Executive Officer and Chairman of its Special Committee of Independent Directors. "We do not expect these suits to have any impact on Royal Group's operations and business plans." SMART & FINAL: Distributes Settlement Of CA Overtime Wage Suits --------------------------------------------------------------- Smart & Final, Inc. is implementing the settlement of the two class actions filed against it in the Superior Court of the State of California, Los Angeles County on behalf of its employees. On September 13, 2001, a suit styled "Camacho vs. Smart & Final Inc.," was filed by the plaintiff, on his behalf and on behalf of all other store managers and assistant managers in California, alleging that the Company misclassified the status of store managers and assistant managers in California as exempt employees for employment purposes. The action sought to be classified as a "class action" and sought unspecified monetary damages. Another suit, styled "Perea vs. Smart & Final Inc.," was filed by the plaintiff, on his behalf and on behalf of all other employees who participate in the commission program in California, alleging the Company improperly calculated commission payments. The action sought to be classified as a "class action" and sought unspecified monetary damages. In September 2003, the Company entered into a tentative settlement agreement for the resolution of the Camacho and Perea actions. In October 2003, the Court consolidated the Camacho and Perea actions and, on October 27, 2003, preliminarily approved the settlement and set a fairness hearing and final Court certification of the settlement for January 13, 2004. The final approval hearing for the Camacho and Perea actions was heard and granted by the Court on February 26, 2004. Under the terms of the settlement, the Company paid into the settlement fund $7.6 million in cash during the first quarter of 2004 and agreed to issue $1.5 million in scrip redeemable at our Smart & Final stores. Plaintiff's attorney fees, costs and administrative expenses were paid from the settlement amount. In addition, the Company will pay its own attorney fees and certain other expenses. For the purposes of settlement only, the Company is not contesting the class action designation. The cash and scrip payments were distributed to the class members on October 1, 2004 pursuant to the terms of the Court approved settlement. SMART & FINAL: Discovery Proceeds in Overtime Wage Lawsuit in CA ---------------------------------------------------------------- Discovery is proceeding in the class action filed against Smart & Final, Inc. in the Orange County Superior Court of the State of California, styled "Olivas vs. Smart & Final Inc." The plaintiff and another former non-exempt store employee filed the suit on their behalf and on behalf of all non-exempt Smart & Final employees in California, alleging that the Company failed to pay proper overtime and other compensation. The action seeks to be classified as a "class action" and seeks unspecified monetary damages. On August 9, 2001, the Company filed a general denial to these claims and asserted numerous defenses. A hearing on plaintiff's motion for class certification was heard and certification as to nine sub-classes was granted on January 22, 2004. The Company filed a writ of mandate with the Court of Appeal requesting an emergency stay of the trial Court's decision and reversing the class certification. The Court of Appeal denied the writ. The Company petitioned the California Supreme Court for further review, which was also denied. SOS STAFFING: UT Judge Declines To Dismiss Shareholder's Lawsuit ---------------------------------------------------------------- 3rd District Judge Robert K. Hilder declined to dismiss a proposed class action lawsuit filed by disgruntled shareholders of SOS Staffing Services who contend the Company's management last year sold the Salt Lake City-based business for far less than it was worth, the Salt Lake Tribune reports. Legal experts explain, that the judge's ruling enables shareholders to try to show SOS's management failed to look out for their best interests when they agreed in September 2003 to sell the Company to Medford, Ore.-based Hire Calling for $1.37 a share. The $1.37 price was about 50 percent of the $2.64 closing price on the day before the deal was announced. According to Florida attorney Stuart Davidson, who is representing the shareholders, "Even though the merger already has gone through, shareholders still may be entitled to damages if it can be shown the Company and its directors forced through a merger that was detrimental to stockholder interests." He also explains that the shareholder lawsuit, in part, focuses on the share-price drop and argues that any doubts about the unfairness of the agreement were effectively extinguished the day the deal was announced. Under terms of the sales agreement, Hire Calling paid shareholders roughly $3.5 million for their interest in SOS. In addition, Hire Calling agreed to acquire approximately $26 million in SOS debt and pick up another $11.3 million in workers compensation insurance obligations. At the time the sale was announced, SOS's Chief Financial Officer Kevin Hardy, who reiterated that the Company believes the suit is without merit, said SOS management tried to get the most value possible for the Company's shareholders. "And that [$1.37] was the price at which we could get the deal done." SOS Staffing went public in June 1995, selling 2.3 million shares at $6.50 each with the Company expanding rapidly for the next several years through a series of acquisition funded by additional equity offerings and debt. Some of those acquisitions, though, were temporary employee staffing and consulting firms that catered to the information technology industry. Those operations proved vulnerable when the Internet bubble burst and as a result, SOS ran into financial difficulties, thus it was forced to sell its foundering IT businesses at a substantial loss. "We were left with a lot of debt and we had to deal with it," Mr. Hardy said at the time. SOS bankers and the holders of the Company's senior notes would eventually agree to extend payment on $26 million of debt but also required the corporation to hire an investment banking firm to explore recapitalization or restructuring of the struggling business. The recession, however, made financing difficult. "We were left with few alternatives other than a sale of the Company," Mr. Hardy adds. At a special meeting held in October 2003, two-thirds of SOS shareholders voted to approve the sale of the Company. SUPERCONDUCTOR TECHNOLOGIES: Consolidated Lawsuit Filed in CA ------------------------------------------------------------- Plaintiffs filed a consolidated amended class action against Superconductor Technologies, Inc. in the United States District Court for the Central District of California. Several substantially identical class action lawsuits were initially filed, alleging securities law violations by the Company and certain of its officers and directors under SEC Rule 10b-5 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended. The complaint was filed on behalf of a purported class of people who purchased the Company's stock during the period between January 9, 2004 and March 1, 2004. The plaintiffs base their allegations primarily on the fact that the Company did not achieve its forecasted revenue guidance of $10 to $13million for the first quarter of 2004. The complaint seeks unspecified damages. The suits are pending in the United States District Court for the Central District of California, under Judge Dickran Tevrizian. The suits are styled: (1) Marc A Backhaus v. Superconductor Technologies Inc et al., 2:04-cv-02680-DT-JTL, (2) Sandy Goldfine v. Superconductor Technologies Inc et al., 2:04-cv-02848-DT-JTL (3) Aida Alvarez v. Superconductor Technologies Inc et al., 2:04-cv-02927-DT-JTL Lawyer for the Company is Richard H. Zelichov, Irell & Manella, 1800 Avenue of the Stars, Ste 900, Los Angeles, CA 90067-4276, Phone: 310-277-1010, E-mail: rzelichov@irell.com. Lawyers for the plaintiffs are: (i) Arthur R. Angel, Arthur R Angel Law Offices, 1236 North Fairfax Avenue, West Hollywood, CA 90046, Phone: 323- 656-9085 (ii) Stuart W Emmons and William B Federman, Federman and Sherwood, 120 North Robinson, Suite 2720, Oklahoma City, OK 73102, Phone: 405-235-1560, E-mail: wfederman@aol.com (iii) Christopher Kim, Liza J. Yang, Lim Ruger & Kim, 1055 W 7th St, Ste 2800, Los Angeles, CA 90017, Phone: 213- 955-9500, E-mail: ckim@lrklawyers.com or lisayang@lrklawyers.com (iv) Richard A Maniskas, Marc A. Topaz, Schiffrin & Barroway 3 Bala Plaza E Ste 400, Bala Cynwyd, PA 19004, Phone: 610-667-7706 (v) Peter A Binkow, Lionel Z. Glancy, Michael Goldberg, Glancy & Binkow 1801 Avenue of the Stars, Ste 311, Los Angeles, CA 90067, Phone: 310-201-9150, E-mail: info@glancylaw.com (vi) Robert I Harwood, Wechsler & Harwood, 488 Madison Ave, 8th Floor, New York, NY 10022, Phone: 212-935-7400 THRIVENT FINANCIAL: Reaches Settlement Over Policyholder Claims --------------------------------------------------------------- Thrivent Financial for Lutherans, the fraternal insurer formed in 2002 from the merger of Aid Association for Lutherans and Lutheran Brotherhood reached an agreement to resolve class- action litigation first filed against Lutheran Brotherhood in 1999. The United States District Court for the District of Minnesota has preliminarily approved the proposed resolution of the class-action lawsuit. "Resolution of this case includes findings that Thrivent Financial acted in the best interests of the membership," said Woody Eno, senior vice president and general counsel. "Following complex and lengthy litigation, a recent mediation with a segment of the membership produced a proposal that we believe is fair. Today's resolution, we believe, addresses the concerns of that segment while honoring the organization's obligation to be good stewards of Thrivent Financial's resources for every member." In its order granting preliminary approval of the agreement, the Court stated, "Lutheran Brotherhood and Thrivent Financial have consistently met or exceeded all ethical standards in the sale, marketing and maintenance of their insurance products." The agreement creates a process for resolving individual policyholder claims. Class members will receive official notice of the proposed resolution in the first quarter of 2005. The notice will inform them of the agreement, set forth their options for relief, and provide a toll-free telephone number and mailing address for the class-action information center that will be established by Thrivent Financial to assist members with any questions. Thrivent Financial for Lutherans is a not-for-profit Fortune 500 financial services organization helping nearly three million members achieve their financial goals. Thrivent Financial and its affiliates offer a broad range of financial products and services including life insurance, annuities, mutual funds, disability income insurance, bank products and more. As a not- for-profit organization, Thrivent Financial sponsors national outreach programs and activities that support congregations, schools, charitable organizations and needy individuals. For more information, visit http://www.thrivent.com. TULLY'S COFFEE: Employees Launch Overtime Wage Suit in CA Court --------------------------------------------------------------- Tully's Coffee Company faces a class action filed on behalf of current and former salaried Tully's employees in California in California State Court for Los Angeles County, styled "Kenny Lam, Stephanie Larson, in behalf of themselves and others similarly situated v. Tully's Coffee Company and Does 1-50, Case No. BC311114." The complaint alleges that Tully's misclassified its employees as exempt from overtime pay: under California law, employees who spend the majority of their time at work performing "non- managerial" duties are entitled to overtime pay even if they are paid on salary or hold the title of manager. Lawyers for the plaintiffs are Edward J. Wynne, Esq., J.E.B. Pickett, Esq. of Righetti & Wynne, 456 Montgomery St., 14th floor, San Francisco, CA 94104 Phone: 415-983-0900, Fax: 415-397-9005. UNITED STATES: ARTA Releases 3rd "Judicial Hellholes(R)" Report --------------------------------------------------------------- The American Tort Reform Association (ATRA) released its third annual "Judicial Hellholesr " report, a ranking of the worst Courts in the United States. As a result of what happens in the Hellhole Courts, every consumer pays through a higher "tort tax" and compromised access to affordable healthcare. In addition to identifying Judicial Hellholes, places where "Equal Justice Under Law" does not exist, the report also showcases the remarkable turnaround that has occurred in Mississippi, home to several of the worst Judicial Hellholes, including Jefferson County. Jefferson County stands in sharp contrast to Madison County, Illinois, the worst jurisdiction in this year's report -- for the second year in a row. "The report tells an amazing story about the redemption of Mississippi justice," said Sherman Joyce, President of the American Tort Reform Association (ATRA). "Mississippi has managed to pull itself out of the negative spotlight through the resolve of the voters and elected officials in the executive, legislative and judicial branches. Mississippi is a stark contrast to Madison County, Illinois, where problems have only gotten worse." According to the report, the abusive and unfair practices endemic to Madison County have infected neighboring St. Clair County, where the number of class action lawsuits filed in the past two years has increased by an astounding 1100%. This is the first year that St. Clair County has been named a Judicial Hellhole. It is now #2 on the report's list. "Judicial Hellholes are Courtrooms throughout the United States where the law is not applied evenhandedly to all litigants," said ATRA General Counsel Victor Schwartz. "Litigation tourists, guided by their personal injury lawyer agents file lawsuits in Judicial Hellholes because they know they will receive a large reward, a favorable precedent, or both. Defendants declare good reason to fear when sued in Judicial Hellholes." Other report highlights include: (1) Illinois' #1 Madison and #1 St. Clair Counties, where a lawsuit-driven healthcare crisis will have forced 161 physicians to leave the region by the end of the year. (2) Hellhole #3 Hampton County, South Carolina, where 67% of cases filed in 2002 were filed by residents from other counties and other states. (3) Hellhole #4 West Virginia, where the state's Supreme Court ruled that a safety director fired for on-the-job cocaine use could not be terminated, even though the employee lied about his cocaine use and "dishonesty" was grounds for dismissal within the employee's contract. (6) Hellhole #5 Jefferson County, Texas, where a judge upheld a $1 billion award in a healthcare lawsuit -- a blatant deviation from established Texas law; the judge also refused to admit critical evidence that the defendant might not have been responsible for the plaintiff's harm. The report also chronicles abuses in other jurisdictions, including: #6 Orleans Parish, Louisiana; #7 South Florida; #8 Philadelphia; and #9 Los Angeles. "Dishonorable mentions" include Oklahoma, the Utah Supreme Court, the District of Columbia and New Mexico's Appellate Courts. "Just like Mississippi, we need to focus on fixing each individual Hellhole, but we also need a national solution to prevent personal injury lawyers from simply moving on to the next new place they can file their lawsuits," Joyce said. Judicial Hellholes 2004 has an expanded section on solutions for Judicial Hellholes. In addition, the "Points of Light" section describes interventions that have helped stem lawsuit abuse in Judicial Hellholes. Today, each U.S. citizen pays an annual "tort tax" that is more than $800. Lawsuit abuses like those detailed in Judicial Hellholes 2004 contribute to that burden. For a copy of Judicial Hellholes 2004, visit http://www.atra.org. UNITED STATES: ILR Applauds President Bush For Legal Reform ----------------------------------------------------------- The U.S. Chamber of Commerce Institute for Legal Reform (ILR) applauded President George W. Bush, who has made reform of America's civil justice system a centerpiece of this week's White House Economic Summit, the U.S. Newswire reports. "We are gratified that President Bush is making clear his commitment to meaningful legal reform," said Lisa Rickard, president of ILR. "Some of the more important reforms to be considered by the coming Congress include the Class Action Fairness Act, a consensus asbestos litigation reform bill, and medical liability reform." Rampant asbestos litigation has driven almost 70 companies into bankruptcy, costing as many as 60,000 Americans their jobs, according to ILR. Furthermore, during the past decade alone, class action lawsuit filings rose more than 300 percent in federal Courts and more than 1,000 percent in state Courts. America's litigation system is the world's most expensive, draining more than $233 billion from the U.S. economy, and costing the average American family of four more than $3,200 a year in higher prices, higher insurance rates and higher health care costs. The system is bilking small businesses of an astounding $88 billion a year, according to a recent NERA Economic Consulting study conducted for the U.S. Chamber Institute for Legal Reform (ILR). "The President's continued leadership is needed to pass these much-needed reforms," continued Rickard. "Now is the time for Congress to act to bring balance to America's legal system by ending the lawsuit abuse that cripples our employers and hits the pocketbooks of America's working families." The Institute for Legal Reform's mission is to make America's legal system simpler, fairer and faster for everyone. It seeks to promote civil justice reform through legislative, political, judicial and educational activities at the national, state and local levels. The U.S. Chamber of Commerce is the world's largest business federation, representing more than three million businesses and organizations of every size, sector and region. UNITED STATES: President Pushes For Reform To Limit Lawsuits ------------------------------------------------------------ President George W. Bush demanded congressional action on legislation to rein in class action, asbestos and medical malpractice lawsuits, stating to the press that he would make changing the civil tort system a "priority issue" in an economic conference in the White House, the Washington Post reports. President Bush used the first day of the two-day economic gathering to focus on "the class-action meat grinder" and malpractice suits that "are driving really fine, competent people out of the practice of medicine." A series of bills limiting suits in civil cases has been held up in the Senate, mainly by Democrats but also by a handful of Republicans. President Bush further stated, "I am here to ... make it clear as I possibly can that I intend to take a legislative package to Congress, which says we expect the House and the Senate to pass meaningful liability reform on asbestos, on class action and medical liability." The economic conference, which was called to highlight the president's domestic agenda that includes revising the Social Security and tax systems, was divided into several panels. One panel addressed the growing complexity of the tax code, laying out the administration's case for simplifying the code, cutting taxes on dividends, capital gains and business investment and making president's first-term tax cuts permanent. The president appeared at only one of four panels, on "lawsuit abuse," wherein he underscored interest in changing a system the administration says is costing the economy more than $250 billion a year. Even with Republican gains in the House and Senate, he will face a fight, the White House is likely to secure the 60 votes needed to beat a filibuster on a bill shifting class-action lawsuits from state Courts to federal Courts. That would be "a step, but a small step" toward scaling back mass suits on behalf of thousands of plaintiffs, said George Priest, a Yale University professor on the panel. However, Senate Republican leaders couldn't muster even a 50- vote majority on three bills to limit medical malpractice suits, and they appear far from a deal to end the proliferation of suits on behalf of those exposed to asbestos. VALEANT CANADA: Health Canada Recalls Drug V. Manic-Depression -------------------------------------------------------------- The Food and Drug Administration is advising consumers about a Canadian recall of Carbolith (Lithium Carbonate) 150 mg capsules distributed in Canada by Valeant Canada Limited. Although Carbolith is not an FDA-approved product, FDA is investigating several Internet websites advertising Carbolith for sale to U.S. consumers. Carbolith 150 mg capsules are used in the treatment of manic-depressive illness. The Company's recent testing led to the conclusion that the product may not deliver adequate amounts of the drug to ensure effective treatment. As a precaution, Health Canada recently advised individuals taking Carbolith 150 mg capsules to continue taking their medication and to consult their health care professional as soon as possible. This product has been available to the Canadian public with a prescription from physicians. U.S. consumers who have purchased this drug through the Internet and taken it for the treatment of manic-depressive illness could experience adverse events associated with lowered blood lithium levels. These events could include a worsening of manic- depressive illness, a serious psychiatric condition. A worsening of this condition could result in symptoms associated with mania (such as motor hyperactivity, delusions of grandeur, poor judgment and aggressiveness) and depression or suicidal thoughts which may require hospitalization. Additionally, consumers who may have taken the Carbolith product for several weeks or more may experience toxic effects when they switch to a lithium carbonate product that delivers adequate amounts of the drug. Mild toxicity could result in tremors of the hands, thirst and more frequent urination, drowsiness, ringing in the ears and blurred vision. More severe toxicity could result in confusion, muscle twitching, vomiting, diarrhea, seizures, coma and death. Because lithium carbonate requires careful, closely monitored dosing and periodic blood tests to measure the level of the drug in the blood, U.S. consumers who have taken Carbolith 150 mg capsules should continue to take the product and consult their health care provider as soon as possible so that an alternative medication can be prescribed. Consumers and health care professionals are urged to report adverse reactions associated with Carbolith 150 mg capsules to FDA's MedWatch program online www.fda.gov/medwatch/report.htm, fax (800-332-0178) or phone (800-332-1088) and to Health Canada by toll-free telephone at (866) 234-2345 or by toll-free fax at (866) 678-6789. A public advisory issued by Health Canada about this recall can be found at http://www.hc- sc.gc.ca/english/protection/warnings/2004/2004-10-29.html. A Dear Health Care Professional Letter dated November 4, 2004, issued by Valeant Canada Limited can be found at www.hc- sc.gc.ca/hpfb-dgpsa/tpd-dpt/carbolith_hpc_e.html. WASHINGTON GROUP: ID Court Suit Settlement Approval Deemed Final ---------------------------------------------------------------- The United States District Court for the District of Idaho's approval of the settlement of the class action filed against certain of Washington Group International's current and former officers, employees and directors. Two former participants in the Old MK 401(k) Plan and the Old MK Employee Stock Ownership Plan filed the suit, alleging, among other things, that the defendants breached certain fiduciary duties under the Employee Retirement Income Security Act of 1974 ("ERISA"). In October 2003, an agreement in principle was reached to settle the matter. The settlement includes contributions from insurance carriers, the two plan trustees and the Company. In addition, the plaintiffs' claim in the Company's reorganization case has been allowed and plaintiffs are entitled to participate in the distribution of shares of common stock and warrants to unsecured creditors. In August 2004, the settlement was approved by the trial Court in which the class action was pending. No appeal has been taken and therefore the trial Court's decision has become final and non-appealable as of October 1, 2004. The settlement has also been approved by the bankruptcy Court that presides over the Company's reorganization case. WORLDCOM: NY Judge Agrees With Plaintiffs On Banks' Diligence ------------------------------------------------------------- Manhattan Federal Judge Denise Cote who is overseeing the WorldCom securities class action recently ruled that the investment banks that sold billions of dollars of the Company's bonds to investors the year before WorldCom collapsed must persuade a jury that they conducted appropriate due diligence and adequately disclosed the securities' risks to buyers, the New York Times reports. The ruling was a big blow to J. P. Morgan Chase, Deutsche Bank and Bank of America, three banks that had helped to sell $12 billion of the bonds in May 2001 and who had sought to have the case thrown out, arguing that they were not required to do more due diligence on WorldCom, since they had relied on the opinions of Arthur Andersen, the Company's auditor, that its financial statements were accurate. Citigroup, one of the firms that sold the WorldCom bonds, had been a defendant. But it settled with the plaintiffs in May, paying $2.65 billion and as always the firm after settling denied violating any laws. In her opinion, Judge Cote also agreed that the financial statements in the prospectus for the 2001 WorldCom offering were false and misleading. Thus, the banks that underwrote the issue will be liable unless they can show they did adequate due diligence before the offering. The judge wrote, "Underwriters perform a different function from auditors. They have special access to information about an issuer at a critical time in the issuer's corporate life, at a time it is seeking to raise capital. The public relies on the underwriter to obtain and verify relevant information and then make sure that essential facts are disclosed. Acting with a degree of diligence that applies to a prudent man when managing his own property, underwriters should ask those questions and seek those answers that are appropriate in the circumstances." In a press statement, Alan G. Hevesi, state comptroller of New York, said: "Judge Cote's decision reaffirms in forceful terms our assertion that investment banks must thoroughly probe a Company before asking the investing public to buy securities the banks are underwriting for a fee. Our legal team is preparing vigorously for trial in February where we will finally have the opportunity to lay out the evidence of the banks' involvement in the WorldCom debacle." Referring to the internal downgrades and hedges before the deal, Judge Cote wrote: "The lead plaintiff has shown that they help to raise material issues of fact as to whether the 2001 registration statement adequately described the risk of investing in WorldCom." J. P. Morgan Securities, a unit of J. P. Morgan Chase, sold $3.24 billion of bonds while Bank of America Securities, a unit of Bank of America, sold $1.1 billion. Deutsche Bank Alex Brown, that bank's securities arm, sold $808 million. Upon reaching the verdict, Sean Coffey, a lawyer at Bernstein Litowitz Berger & Grossmann in New York, who represents the lead plaintiff said, "In her opinion, Judge Cote rejects the notion that an audit opinion is a 'get out of jail free' card for investment bankers who are on notice that things may not be quite what they appear to be at a Company whose securities they are asking investors to buy." WYETH PHARMACEUTICALS: MT Woman Lodges Hormone Replacement Drugs ---------------------------------------------------------------- Joan Reichert initiated a lawsuit against Wyeth Pharmaceuticals, alleging that the drug manufacturer played down significant health threats while promoting the menopause medications that she says caused her to develop blood clots, the Associated Press reports. Ms. Reichert filed her lawsuit in U.S. District Court in Helena earlier this month and is seeking $10 million in punitive damages, plus unspecified actual damages. In her lawsuit, Ms. Reichert alleges that Wyeth knew, or should have known, that its hormone replacement products, which were sold under the brand names Prempro and Premarin posed more health risks than benefits to users. According to a study by the Women's Health Initiative, released in early October, estrogen-progestin pills double post- menopausal women's chances of developing dangerous blood clots. The results had come from the same government study that was halted two years ago after Prempro estrogen-progestin pills appeared to raise the risk of heart attack, stroke and breast cancer. Ms. Reichert and her attorney say Wyeth was negligent in warning of the dangers, made false representations about the safety of the product and offered a product that was neither safe nor effective and had serious side effects. Since the studies, Wyeth officials have been promoting lower doses of estrogen be used in treating menopause for a shorter period of time than was prescribed in the past. Ms. Richert's lawsuit was part of a class action filing in Arkansas earlier this year, but the judge ordered that the cases be separated. Asbestos Alert ASBESTOS LITIGATION: AIG Inc. Continues to Meet Asbestos Claims --------------------------------------------------------------- The American International Group, Inc. (NYSE: AIG), the world's leading international insurance and financial services organization, continues to receive asbestos claims and environmental claims asserting injuries from toxic waste, hazardous substances, and other environmental pollutants. The Company also claims to answer to alleged damages to cover the cleanup costs of hazardous waste dump sites. This report submitted by the Company to the Securities and Exchange Commission states that the vast majority of these asbestos and environmental claims emanate from policies written in 1984 and prior years. Commencing in 1985, standard policies contained an absolute exclusion for asbestos and pollution related damage. With respect to asbestos claims reserves, AIG has resolved all claims with respect to miners and major manufacturers and payments have been completed or reserves are established to cover future payment obligations. Claims with respect to products containing asbestos are generally very mature losses, and have been appropriately recognized and reserved by AIG's asbestos claims operation. AIG believes that the vast majority of the incoming claims with respect to products containing small amounts of asbestos, companies in the distribution chain and parties with remote, ill-defined involvement with asbestos should not impact its coverage. The New York-based Company further reports that the majority of AIG's exposures for asbestos and environmental claims are excess casualty coverages, not primary coverages. Thus, the litigation costs are treated in the same manner as indemnity reserves. That is, litigation expenses are included within the limits of the liability AIG incurs. Individual significant claim liabilities, where future litigation costs are reasonably determinable, are established on a case basis. Significant factors which affect the trends that influence the asbestos and environmental claims estimation process are the inconsistent Court resolutions and judicial interpretations which broaden the intent of the policies and scope of coverage. Due to this uncertainty it is not possible to determine the future development of asbestos and environmental claims with the same degree of reliability as is with other types of claims. Although the estimated liabilities with respect to asbestos and environmental reserves are subject to a significantly greater margin of error than for other loss reserves, the asbestos and environmental reserves carried at December 31, 2003 of US$2.02 billion gross and US$669 million net are believed to be adequate as these reserves are based on the known facts and current law. With respect to known asbestos and environmental claims, AIG established over a decade ago specialized toxic tort and environmental claims units, which investigate and adjust all such asbestos and environmental claims. These units evaluate these claims utilizing a comprehensive ground up approach on a claim-by-claim basis. AIG believes the majority of its known long-tail environmental exposures have been resolved utilizing a combination of proactive claim-handling techniques including policy buybacks, complete environmental releases, compromise settlements, and, where indicated, litigation. Current and new claims are generally cases of declining severity. Strong coverage defenses and stronger liability defenses are among the factors contributing to declining severity. AIG provides leadership on issues of concern to the global and local economies as well as the insurance and financial services industries. AIG has operations in more than 130 countries and jurisdictions. Its member companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. ASBESTOS LITIGATION: Madison County's Suit Filings Down in 2004 ---------------------------------------------------------------- Critics to the Madison County Circuit Court are taking notice of an emerging trend at the reputed Court. In a review of lawsuits filed in the Court's civil law division, a significant decrease in cases over US$50,000 have been filed year-to-date over previous years. Calling it a trend, however, may be premature, according to Illinois Civil Justice League President Ed Murnane. "It's difficult to measure trends in one year. Certainly one can see peaks and valleys or blips on the radar," he said. "There are a lot of reasons why ?the numbers? could be down," Mr. Murnane added. A peak was reached in 2003, when 2,102 total cases over US$50,000 were filed, including asbestos and class action suits. That compares to 1,350 suits filed so far this year. While last year there were 106 class action suits filed in Madison County, only 69 have been filed so far in 2004. "I think that the increased attention to the judicial system in Madison County eventually was bound to have an impact. Maybe the high level of attention on the judicial system, the medical malpractice issue, the Supreme Court race - maybe that in part is contributing to the decline." Since 1999 when 1,246 cases were filed, there has been a steady increase in the amount of cases filed in Madison County, with the exception of 2002 when only 1,729 cases were filed. In 2000, there were 1,313 suits filed and in 2001 there were 1,876 filed. Mr. Murnane considers the possibility that the reason plaintiff's lawyers are looking somewhere else is the perception that Madison County Courts haven't been as friendly as previously experienced. Neighboring St. Clair County has also seen a slight decrease in cases filed. In 2003, a total of 831 cases were filed in St. Clair County Circuit Court, and as of Dec 8, there had been 698. ASBESTOS LITIGATION: Medical Costs Could Reach $32.2M in Montana ---------------------------------------------------------------- Over the next five years, medical costs for people sickened by asbestos exposure in Libby, Montana are expected to reach US$32.2 million and could run as high as US$90 million, a new study shows. This report was presented last week to a task force of government and medical workers formed two years ago to find out how much health care for the hundreds of ill Libby residents might cost. Gov. Judy Martz's office funded the study, which was prepared by a consulting firm in New Jersey that compiles statistics for insurance companies. That number could be a bit high because the study didn't account for people dying as it projected medical costs from 2005 through 2009, said the presenter, Jim Buck. Of the US$32.2 million in likely costs, some US$10.5 million will be covered by W.R. Grace, the bankrupt owner of the closed Libby vermiculite mine that was the source of widespread asbestos contamination in Libby. W.R. Grace hired a Company called Health Network America to cover the medical costs of sickened residents who pledged not to sue the Company. About half the money HNA has spent so far went to cover the medical bills of the 77 sickest people, the report showed. The rest of the bill, a projected US$21.7 million, is for people not covered by W.R. Grace. Some of those people are covered by Medicare and Medicaid or private insurance. Some are paying for their own treatment, while others are being treated for free at the hospital in Libby as a charity. Mr. Buck said he anticipated more people may fall sick with asbestos-related conditions as the population of Libby ages, but those new diagnoses are reflected in the US$32.2 million projections. Jean Branscum, Martz's health-care policy adviser, said the study is significant because it shows how much money is still needed to take care of the people of Libby. "That's the purpose of our two-year stint," Ms. Branscum told members of the task force. Sen. Conrad Burns, R-Montana, has suggested creating a medical bill trust fund for Libby, now the site of an Environmental Protection Agency Superfund cleanup. For years, Libby was home to a vermiculite mine that provided raw materials for insulation. The vermiculite was tainted with a particularly dangerous kind of asbestos, a mineral that causes lung disease and cancer if breathed in even small quantities. ASBESTOS LITIGATION: Many UK Companies Fail to Follow New Rules ---------------------------------------------------------------- Hundreds of businesses in the Northeast have yet to comply with new rules about managing asbestos in the workplace, an asbestos- surveying expert has warned. Many industrial and commercial companies in Teesside, situated in Stockton-on-Tees, have not yet implemented the Control of Asbestos at Work Regulations. The administrators of publicly owned properties including many others have not assessed the risk of likely exposure to asbestos-containing materials within their premises, according to Gateshead-based asbestos surveyor and management Company Asbesto-Tec. Asbesto-Tec director Michael Nicholson said, "Many of the larger organizations have taken on the task but many more, particularly owners of smaller properties, seem to fear the task is beyond them in terms of cost and time involvement. "Asbestos was widely used in the manufacture of buildings right up to 1999 and the majority of properties in the Northeast are known to contain considerable amounts of it." Mr. Nicholson believes that new regulations are now introduced due to an increased awareness of the inherent dangers of asbestos. Asbesto-Tec assists by carrying out asbestos surveys that can be easily organized and implemented. In addition the Company also reviews existing management plans and in cases where it is considered unnecessary to remove the asbestos-containing material, it provides an annual monitoring service. ASBESTOS LITIGATION: Florida County Case Filings Plummet -------------------------------------------------------- The number of asbestos-related cases has dropped steadily in Palm Beach County since May, when Circuit Judge Timothy McCarthy, who presides over the Court's asbestos division, began questioning why thousands of claims were being filed in South Florida, even though they had no local connection. The division's caseload went down from 1,500 in May to 1,200 as of Dec. 1, according to clerk of Courts figures. Lawyers who specialize in asbestos lawsuits flock to certain Court systems, including Palm Beach, Broward and Miami-Dade counties, which have special divisions to process them. These "rocket dockets" allow large numbers of suits to be set for trial, pressuring the defendant companies to settle 99 percent of the claims rather than risk going to trial. In June, Judge McCarthy decided that Palm Beach County taxpayers shouldn't have to pay for lengthy trials of claims with no local connection and said that he intended to dismiss large blocks of cases if the lawyers couldn't show any link. The Judge had also threatened to disband the division entirely. In the October 22, 2004 edition of the Class Action Reporter, the 4th District Court of Appeal rejected an attempt to remove Judge McCarthy from the asbestos cases that had cited a "longstanding and escalating personal bias and prejudice" against Miami-based Ferraro & Associates lawyers. During the past month, McCarthy dismissed or transferred 94 of 95 cases that had been set for trial. These cases filed by Ferraro & Associates involved clients, most of whom were recruited through advertising in Alabama. On Dec. 1, Chief Judge Edward Fine issued an executive order saying the Court would continue to handle asbestos cases in a separate division and Judge McCarthy would continue to preside over it, in addition to his reassignment to another civil trial division in January. The order also said that, if Judge McCarthy were disqualified or recused, cases would be assigned randomly to other judges, who would not be bound to follow any of the uniform case procedures set up especially for the asbestos division. Corporations and their insurance companies have paid more than US$70 billion in claims since the 1970s, when the health- damaging effects of asbestos fibers became known. Litigation and settlements have contributed to the bankruptcies of more than 70 companies. About 600,000 claims are believed to be active, and estimates of the ultimate potential cost are as high as US$200 billion to US$265 billion. The stakes are high for all involved, said Stephen Carroll, senior economist at the Rand Institute for Civil Justice, who tracks the litigation. "This isn't a case where two or three people sit down around a table and hammer out a compromise," Mr. Carroll said. "You have thousands of defendants, and tens of law firms representing hundreds of thousands of plaintiffs, and very diverse interests in each of those groups. And corporations with significant asbestos liabilities think there has to be some sort of legislation, or they'll all wind up in Chapter 11 bankruptcy," he said. ASBESTOS LITIGATION: Group Seeks $84M Penalty for Johns Manville ---------------------------------------------------------------- The Illinois Dunesland Preservation Society is seeking stiffer penalties for Johns Manville, a former producer of asbestos products in Waukegan, rather than the "disgracefully low" US$145,000 fine being pushed by Attorney General Lisa Madigan. "The public - and the judiciary - should not tolerate this sellout of the public interest," said Paul Kakuris, the environmental group's president. The group believes the pollution fines should amount to no less than US$84 million. The state sued Johns Manville in 2001 for illegal pollution discharges from its closed Waukegan plant, a federal Superfund site where 1 million tons of asbestos are capped. In August 2003, Ms. Madigan amended that complaint by tacking on more than a dozen additional violations, all relating to discharges of cancer-causing asbestos and other contaminants from a pipe that flows into Lake Michigan from chemically tainted lagoons at the Johns Manville site. This fall, the Company and the attorney general's office negotiated the fine to resolve the lawsuit. The call for an US$84 million fine was based on the maximum possible fines per violation allowed under state law - a figure the Attorney General's office contends is grossly too high. Dunesland has been endlessly criticizing state officials for failing to hold Johns Manville accountable for asbestos debris that routinely washes ashore at Illinois Beach State Park and that has turned up in an ecologically sensitive nature preserve at the park and at a nearby, state-leased fishing area that has been closed. The group also has pressed the state to slap the Company for allowing its lagoons to overflow into the nature preserve. Despite one of its own field staffers documenting the phenomenon, the state Environmental Protection Agency has long held that no such overflow occurs. Matthew Dunn, a top environmental attorney in Madigan's office, said the violations cited in the state lawsuit have nothing to do with asbestos on the beaches or at the state park because it cannot be proven Johns Manville is the source of that material. Johns Manville spokesman Paul Gennaro declined comment on the proposed US$145,000 fine, but he contended Dunesland's criticisms were proven to be baseless in a federal Courtroom last week. Dunesland suffered a legal setback when U.S. District Judge George Lindberg rejected its efforts to toughen a new federal cleanup order imposed on Johns Manville. The judge ruled the group waited too long to raise its safety concerns and that many of those concerns already were being addressed under the cleanup order. ASBESTOS LITIGATION: Amicus Slams Insurers Evading Compensation --------------------------------------------------------------- Amicus Britain's biggest private sector union last Tuesday spoke of condemning insurers who were attempting to dodge their responsibility to compensate up to 75% of asbestos claims in a High Court challenge. The union also hit out at dubious non- lawyer claims companies that are fuelling insurers claims of a growing compensation culture. The Class Action Reporter has been following this landmark case filed by insurers who are challenging the rights of workers exposed to asbestos to claim compensation for pleural plaques, a calcification of the lungs recognized as the least serious form of asbestos-related illness. There are on average 14,000 pleural plaques cases a year. Amicus General Secretary Derek Simpson said, "Insurers are being given ammunition by unscrupulous ambulance chasers to attack a legitimate class of legal action. Asbestos is not yesterday's problem. Amicus and its lawyers are determined to ensure that workers suffering from asbestos related injuries due to the failure of employers to protect them have the right to compensation. "Amicus is receiving hundreds of calls a week in response to the union stepping up its campaign to compensate asbestos claims and fight back against the claims farmers. The union has created a database which is a structured permanent register detailing cases of asbestos exposure. The database will be used to ensure that union members suffering from asbestos related diseases have a better chance of winning their legal case than other claimants do." Pleural plaques is currently held to be a legitimate injury worthy of compensation because it causes scarring on the lungs; it shows an increased risk of developing a more serious asbestos related injury, and leads to anxiety as a result of fear of developing an incurable asbestos related illness. Insurers are claiming that an increase in pleural plaques cases is evidence of the so-called compensation culture and that scan vans are fuelling the increase. But the real cause of the increase is the widespread and indiscriminate use of asbestos in many industries until the early 1980s, and a failure by employers to protect workers. ASBESTOS LITIGATION: Zurn Continues to Receive Asbestos Claims -------------------------------------------------------------- The leading global manufacturer and distributor of branded bath and plumbing products, Jacuzzi Brands Inc. reports that one of its wholly-owned subsidiary, Zurn Industries, Inc. along with many other unrelated companies, is a co-defendant in numerous asbestos related lawsuits pending in the U.S. Plaintiffs' claims are pointing towards the Company for personal injuries allegedly caused by exposure to asbestos used primarily in industrial boilers formerly manufactured by a segment of Zurn that has been accounted for as a discontinued operation. Zurn did not manufacture asbestos or asbestos components. Instead, the Company purchased it from suppliers. Federal legislation has been proposed for a trust funded by insurers and defendant companies that would remove asbestos claims from the current tort system. But there is currently no assurance yet as to when this will be implemented and what impact it will have on the Company's financial status. During fiscal 2004, about 26,000 claims were paid or pending payment and about 4,900 claims were dismissed or pending dismissal. During fiscal 2003 and as of the end of such period, about 45,000 claims were paid or pending payment and about 3,000 claims were dismissed or pending dismissal. Since Zurn received its first asbestos claim in the 1980s, it has paid or dismissed or agreed to settle or dismiss about 100,600 asbestos claims including dismissals or agreements to dismiss of about 10,600 of such claims through the end of fiscal 2004 compared to 84,000 and 6,400 claims, respectively, through the end of fiscal 2003. Zurn engaged an independent economic consulting firm with substantial experience in asbestos liability valuations to assist in the estimation of its potential asbestos liability. On October 2, 2004, that firm estimated that its potential liability for asbestos claims pending against it and for claims estimated to be filed through 2014 is about US$171 million. That firm estimated Zurn will pay about US$127.6 million through 2014 on such claims, with the balance of the estimated liability being paid in subsequent years. Zurn expects all such payments to be paid by its carriers. The estimated liability of US$171 million is comprised of about US$12 million in claims that had been settled but unpaid as of the end of fiscal 2004; US$26 million in proposed settlements of certain pending and future claims; and US$133 million for other pending and future claims. On September 27, 2003, it was estimated that Zurn's potential liability for asbestos claims pending against it and for claims estimated to be filed through 2013 was about US$160 million. Zurn estimates that its available insurance to cover its potential asbestos liability as of October 2, 2004 is about US$302.1 million. The Company believes, based on its experience in defending and dismissing such claims and the coverage available, that it has sufficient insurance to cover the pending and reasonably estimable future claims. This conclusion was reached after considering its experience in asbestos litigation, the insurance payments made to date by Zurn's insurance carriers, existing insurance policies, the industry ratings of the insurers and the advice of insurance coverage counsel with respect to applicable insurance coverage law relating to the terms and conditions of those policies. As of October 2, 2004, Zurn recorded a receivable from its insurance carriers of US$171 million, which corresponds to the amount of Zurn's potential asbestos liability that is covered by available insurance and is probable of recovery. New claims filed against Zurn in fiscal 2004 were lower year- over-year. During fiscal 2004, about 25,000 new asbestos claims were filed versus 32,400 in fiscal 2003. As of October 2, 2004, the number of asbestos claims pending against Zurn was about 75,500 compared to 59,000 as of September 27, 2003. The increase in pending claims is a result of new claims exceeding the number of claims newly resolved during the period. The claims are handled pursuant to a defense strategy funded by its insurers. The pending claims as of October 2, 2004 were included in about 5,872 lawsuits, in which Zurn and an average of 85 other companies are named as defendants, and which cumulatively allege damages of about US$10.3 billion against all defendants. Principally as a result of the past insolvency of certain of Zurn's insurance carriers, coverage analysis reveals that certain gaps exist in its insurance coverage, but only if and after it uses about US$230.1 million of its remaining US$302.1 million of insurance coverage. The estimate of Zurn's potential liability for asbestos claims pending against it and for claims estimated to be filed through 2014 is US$171 million with the expected amount to be paid through 2014 being US$127.6 million. In order to use about US$277.1 million of the US$302.1 million of its insurance coverage from solvent carriers, the Company estimates that it would need to satisfy about US$14 million of asbestos claims, with additional gaps of US$80million layered within the final US$25 million of the US$302.1 million of coverage. Zurn estimates that its available insurance to cover its potential asbestos liability as of the end of fiscal 2004 is greater than its potential asbestos liability. ASBESTOS LITIGATION: Supreme Court Rules MT State Could Be Sued ---------------------------------------------------------------- State officials faced a major blow when a divided Montana Supreme Court ruled in a 4-3 decision that the government's immunity from being sued was removed by the 1972 Montana Constitution. Hence, they cannot claim protection from the claims of the miners suffering from asbestos exposure in the mine, which W.R. Grace & Co. closed in 1990. The Court also said that state officials held a responsibility to warn miners about decades of dangerous health conditions at the Libby vermiculite mine, but a trial is needed to determine if government officials failed to fulfill that duty. Nine Libby residents, who either worked at the mine or were married to some of its employees, have filed claims for compensation against the state seeking for damages. They had appealed a district judge's ruling in 2001 that dismissed their lawsuit against the state for failing to warn them of the dangers posed by the vermiculite mine. However, the Court did not determine whether the state did anything wrong or whether the government must pay any damages. Still, the Court questioned the lack of action by the state in warning mineworkers about the dangers associated with the mining of vermiculite after conducting four inspections between 1956 and 1964. The plaintiffs contend that the state inspector who visited the mine reported on the toxicity of the vermiculite dust and concluded that the workers' exposure to it would eventually cause pulmonary disease. The plaintiffs argued that the information was never passed on to workers. The Court revealed that the majority had said the state's argument that it could not have foreseen the mine operators' failure to protect workers "rings hollow." Inspections showed nothing was being done by Grace or its predecessor, Zonolite Co., the Court said. "Plainly, the state knew as a result of its inspections that the mine's owner was doing nothing to protect the workers from the toxins in their midst," Justice Patricia Cotter said for the Court. The vermiculite ore contained harmful levels of tremolite asbestos and is blamed for hundreds of illnesses and at least 200 deaths. The Environmental Protection Agency has been cleaning up the mine site and other contaminated areas in the town since 1999. Libby was declared a Superfund site in 2002. In arguments before the state Supreme Court in June 2003, Jon Heberling, an attorney for the plaintiffs, told the justices that the state "stood moot while a human disaster unfolded in Libby." Mr. Heberling said the high Court ruling applies to scores of other miners who developed health problems while working at the mine. "This may mean that the state has a duty to pay part, but not all, of the compensation for the Libby miners," he said. An attorney for the state argued that there was nothing in the law that required the state to warn workers about its findings. The state also contended it should be immune from the lawsuit because the state had a sovereign immunity law in place when the exposures occurred. The dissenting justices agreed, saying the alleged failure to warn miners about the dangerous place they worked occurred before the new constitution abolished government immunity, so the protection applies in this case. In his dissent, Justice John Warner said he sympathizes with the plight of the miners suffering from health problems from asbestos exposure. "But it is simply incorrect as a matter of law for this Court to redefine the doctrine of sovereign immunity, change it, or find a new way around it in an effort to provide a remedy," he said. Mr. Heberling said the case is far from finished. "This is a long-term crusade. It's going to be years before we get a resolution." ASBESTOS LITIGATION: Fears Cause Aussies to Avoid DIY Projects -------------------------------------------------------------- More Australians in its national capital, Canberra, are moving away from do-it-yourself renovation projects and instead, are calling licensed trades persons to do the renovations. Major renovation work in the territory by licensed builders had risen by 8.4% in the third quarter. Fears of asbestos exposure could have been fueled by recent media attention to its deleterious effects, according to ACT/Southern NSW Housing Industry Association executive director Caroline Lemezina. The HIA's quarterly Renovations Monitor recorded $19 million worth of work approved for the quarter. Total renovations, which included all the DIY work, fell in the September quarter from $22 million to $19 million. Work was reportedly being done on ground-floor extensions, new kitchens and external work which included decks and pergolas, and repairs and maintenance jobs. Ms. Lemezina said that the figures showed that adding ground- floor area to existing homes was an attractive proposition, especially given the high transaction costs associated with moving house. "It is clear that homeowners are pulling back from do-it-yourself type activity and are more likely to engage licensed trades people to take on the jobs that in past years they may have had a go at themselves," she added. Next year, renovation activity would be largely dictated by movements in house prices and interest rates and to what degree households addressed record levels of debt. Given the modest outlook for rates and that house price crashes were unlikely, next year was expected to be steady, with activity forecast to fall modestly. A total of 179 households undertook major home renovations over the three months to September at an average value of $106,910 for each job, the highest average value in Australia. The most popular renovation over the three months was a ground-floor extension. ASBESTOS LITIGATION: Crane Co. Warns of Earnings Shortfall in 4Q ---------------------------------------------------------------- Crane Co. (NYSE: CR) warned last Tuesday that its earnings for the fourth quarter could fall below previous forecasts. In a press release issued ahead of its annual conference with analysts, Crane said "there will be challenges to achieving the lower end of fourth quarter 2004 guidance" in the range of 49 cents to 54 cents per share. The diversified Company, which makes fluid handling equipment, aerospace components and other products, did not provide further details. When it issued the guidance in October, the Company said it believed it would have to raise product prices further to offset higher raw material costs. Analysts surveyed by Thomson First Call are looking for earnings of 52 cents per share in the quarter. The Company said earnings for 2004 are expected to be in the US$1.95 to US$2 range, excluding the US$4.02 per share charge taken in the third quarter to settle asbestos and environmental claims. Analysts are expecting earnings of US$1.97 per share. For 2005, the Company expects earnings to be US$2.05 to US$2.15 per share, with sales rising 6 percent to about US$2 billion. The Stamford, Connecticut-based Company said that it forecasts free cash flow, defined as cash flow from operations after capital expenditures, but before dividends, and costs related to asbestos and environmental settlements, of US$150 million, up slightly from the US$140 million expected for 2004. Analysts currently forecast Crane's earnings for 2005 at US$2.13 per share and sales at US$1.96 billion. In its aerospace segment, the Company said its aftermarket or parts business will be down in the fourth quarter while engineering costs will be up. About 85 percent of the segment's business involves commercial aircraft while the rest is for military. ASBESTOS LITIGATION: MA Court Seeks Relocation Area for Workers --------------------------------------------------------------- Middlesex District Attorney Martha Coakley said last week she wants the state to move all her employees, about 70 to 80 of them, out of the Middlesex County Courthouse in Cambridge as quickly as possible amid mounting alarm over asbestos in the 22- story building. Ms. Coakley, oversees 230 employees countywide but has her headquarters at the Courthouse. "I'm not going to play Russian roulette with employees' health and safety," she said. State officials first raised concerns about asbestos used for fireproofing of the Courthouse when the building was under construction in 1969. But the asbestos has raised new concerns in recent months because the state is preparing to remove the carcinogenic substance from the building's elevator shafts as part of a US$14.3 million renovation project scheduled to start next spring. The state plans to remove the asbestos as employees, who number in the hundreds, continue to work in the building. David B. Perini, the head of the state division that oversees government properties, and Robert A. Mulligan, the trial Court's chief justice for administration and management, issued a joint statement saying that tests conducted by the state in October showed no problems with airborne asbestos at the Courthouse. "The health and safety of the occupants and users of the building are the number one priority," the statement said. "We would not be proceeding with the project if we thought that it would risk the health and safety of the building occupants and those who visit the building." Dr. L. Christine Oliver, a specialist in occupational and environmental medicine hired by a pro-bono lawyer representing some employees in the building, concluded that asbestos should be removed throughout the building and that all workers need to be relocated. Though Dr. Oliver said that most longtime occupants of the building have probably been exposed to "very low levels" of airborne asbestos. Maintenance workers and other trades people were probably exposed to higher levels if they lifted ceiling panels. Dr. Oliver inspected the building at the request of Chris A. Milne, who has volunteered to investigate asbestos problems on behalf of the Massachusetts Bar Association, the Massachusetts Academy of Trial Attorneys, and the Middlesex Bar Association. Ms. Coakley, Superior Court Clerk Edward J. Sullivan, and District Court Clerk Robert L. Moscow back the effort. In the matter of the Cambridge Courthouse, Mr. Milne reviewed some 3,500 pages of documents that he obtained through a Freedom of Information Act request. A sample that he provided indicated that asbestos has long been a concern. But nothing was ever done, Mr. Milne said. The building houses about 130 Superior Court employees, 80 district Court employees, and at least 150 employees at the Cambridge Jail, which houses 320 prisoners. In addition, Mr. Milne said, about 200 people visit the building everyday for jury duty. ASBESTOS LITIGATION: Court Upholds Denial of Claim Against Todd ---------------------------------------------------------------- Last Dec. 7, The Ninth Circuit of the U.S. Court of Appeals affirmed the denial of a claim against Todd Pacific Shipyards Corporation and its insurance carriers for death benefits under the Longshore and Harbor Workers' Compensation Act. Shirley Dilts, widow of Henry Dilts, petitioned for a review of the decision by the Benefits Review Board. Mrs. Dilts alleged that her husband died of lung cancer that was caused or contributed to by occupational exposure to asbestos in the course of his employment at Todd from 1965 to 1994. The administrative law judge denied the claim as barred by her failure to obtain Todd's approval of third-party settlements she had reached with asbestos manufacturers as required by Section 33(g) of the Act, 33 U.S.C. It is undisputed that Mrs. Dilts neither notified the employer, nor obtained the approval of the employer for a number of third- party settlement agreements. She now attempts to argue that the statutory requirement of approval, contained in Section 33(g), is unconstitutional because it permits an employer wrongfully to withhold approval of settlements, thereby forcing a claimant to obtain the benefits of a settlement at the cost of forfeiting the right to statutory compensation from the employer. Her position is not consistent with the Supreme Court's holding that the statutory for future provision must be interpreted broadly in accordance with its literal terms. Also named as respondents are the Director for the Benefits Review Board of the U.S. Department of Labor and the Eagle Pacific Insurance Company. ASBESTOS LITIGATION: Disagreements Still Plague Asbestos Bill ------------------------------------------------------------- As the number of asbestos-related claims continues to climb, the prospect for a fair and acceptable solution for all parties involved remains to be elusive. No one seems to know exactly how to solve the problem clogging Courts around the country. Even with Republican gains in the U.S. Senate following the recent election, a cloud still hangs over the passing of legislation to address the issue. The most hopeful are guardedly optimistic. Others say the process to date has been a lie. "It is hard to find a balance of something that will work," said Jim Stengel, an attorney involved with the Asbestos Study Group, an industry group that seeks limits on lawsuits. Mr. Stengel made his comments during a two-day conference on the topic in New York City last week. The leading contender to solve the problem is a proposal to have a government-administered trust fund. The argument is over how much companies should have to put up to pay for claims from sickened workers, said John Libonati, a vice president of Owens Corning. The total figure stands at about US$140 billion, but many lawyers and labor representatives say that is too low to cover everyone who was hurt by the fireproofing, cancer-causing material. However, Matthew Bergman, an attorney who represents some of the sickest plaintiffs, said the proposed plan is a "betrayal." He added, "It remains clear to me that the trust fund ... is a way to let companies off the hook and leave asbestos victims out in the cold." Further, he said, any trust fund could take years to issue payments to sick workers because of Court challenges. Last week's edition of the Class Action Reporter explored the possibility of a rapid vote plan to the asbestos bill as proposed by Sen. Arlen Specter, the incoming chairman of the Senate Judiciary Committee. He intends to introduce his bill on Jan. 4, hold hearings in the committee the following week, move the bill through his committee in another week, and have it ready to put on the Senate floor by the week of Jan. 29. So far, four industry trade groups have expressed their apprehensions, citing substantive problems with the measure. ASBESTOS LITIGATION: Calls for a Probe Hound Site Redevelopment ---------------------------------------------------------------- Asbestos victim champion Jack Bedlington earlier this week called for a public meeting over plans to redevelop the nearly 100-acre site of an asbestos factory at the center of a scandal. His plea comes after Labor MP Fraser Kemp urged the Government to investigate the asbestos controversy after documents exposed a health cover-up by bosses at the Washington Chemical Company. The Houghton and Washington East MP called on the Department of Trade and Industry to investigate fully the scandal after it was revealed how years ago Company directors hid the dangers of asbestos from their workers and tried to stop the Government bringing in stricter regulations. Now former councilor Mr. Bedlington, who has helped hundreds of families claim compensation after relatives were killed by the dust, is concerned the dangers at the Washington factory, later taken over by Cape Insulation, are still present. Mr. Bedlington, who worked at the factory for 36 years and was awarded the MBE for his many years' work helping victims of asbestosis and their families, said he had been present at a poorly-attended meeting at the Bridge women's center in Columbia on November 23 when the developers outlined their plans. He said, "I am 100% in favor of the buildings being demolished. They have been standing there for more than 100 years. I only hope the asbestos dust doesn't get blown on to the Teal Farm estate nearby." Mr. Bedlington suggested that all residents of Teal Farm gather for a public meeting among themselves and also with public health and development control directors from the civic center. He mentioned the need to decide what sanctions to put on and who gets the contracts to clear the site and build houses. A consortium of Hellens, Pattinson Properties and Barratt Homes, has applied to build a development of 200 to 250 homes and a 150,000 sq ft business park to replace Cape Insulation. The developers say they are confident they can rid the site of asbestos before housing is built. A spokesman for Sunderland Council said a full inquiry by environmental health officers would be carried out at the site before any development could take place. ASBESTOS LITIGATION: Pres. Bush Demands Action to Limit Lawsuits ---------------------------------------------------------------- President Bush called for a new system to deal with asbestos- related cases, and new limits on medical malpractice cases and class-action lawsuits involving groups of plaintiffs. Speaking to a panel of enthusiastic supporters, he criticized trial lawyers and demanded congressional action to limit lawsuits. According to him, lawsuits against businesses and manufacturers were a drag on the economy and must be reined in. The President made these remarks during a White House conference on the economy in Washington last Wednesday. The administration is said to harbor hopes of building momentum for Bush's ambitious second-term agenda during this two-day conference. "What you have today is business on one side, and you've got the trial lawyers on the other side. ... You've got deep pockets colliding with shallow principles," said Robert Nardelli, the chief executive at Home Depot and one of several Republican donors at the conference. Todd Smith, the president of the Association of Trial Lawyers of America, issued a statement that said, "President Bush's economic plan pretends that taking away the legal rights of American families will reduce health care costs. He unashamedly advocates legislation that would protect insurance industry profits and prohibit any punishment for the makers of dangerous drugs like Vioxx, while penalizing your mother for being abused in a nursing home or your daughter for having her baby killed by medical malpractice. "That's not an economic plan. It is yet another giveaway to the insurance, drug, HMO and nursing-home industries." The hour-long session on "the high costs of lawsuit abuse" was one of several panels examining various aspects of Bush's second-term domestic agenda. The panelists, all of whom were selected by the White House, unanimously endorsed the president's plans to partially privatize Social Security, permanently extend his first-term tax cuts and limit lawsuits. The Center for Responsive Politics, a nonpartisan group that tracks campaign spenders, found that conference participants donated nearly US$195,000 to various Republican candidates or causes in recent years, including US$40,000 to Bush. Panelists included a Mississippi drugstore owner who said she was driven out of business by lawsuits, an Ohio gynecologist who stopped delivering babies to avoid the cost of malpractice insurance and one of the gynecologist's pregnant patients, who said she was still looking for a backup doctor. All pointed the finger of blame at trial lawyers. "I think we need to hold these people to a higher standard - the same standard that physicians are held to," said gynecologist Barbara Coen of Norton, Ohio. Carlton Carl, a spokesman for the trial lawyers' group, dismissed the White House conference as political theater. "It's not government. It's not seeking solutions," Mr. Carl said. "The only people invited to attend and participate are campaign supporters and people who have been well-rehearsed." Turning the president's agenda into law won't be easy as several powerful interest groups are already gearing up to challenge his ambitious plans. Even some of his fellow Republican lawmakers aren't sold on some issues. There's no consensus plan to revise the federal tax system, and some Republican lawmakers remain wary of any major changes to Social Security. Some of the president's proposals to restrict lawsuits, including his plan to limit damages for "pain and suffering" in medical malpractice cases to US$250,000, stalled in the Republican-controlled Senate in his first term. Mr. Carl said Pres. Bush was "not even close" to legislative victory on medical malpractice changes, but might win congressional approval for his plan to limit class-action lawsuits to federal Court. Legislation to forestall asbestos- related lawsuits by establishing a special fund to deal with injury claims has stalled over the size of the fund, tentatively pegged at about US$140 billion. Trial lawyers, consumer groups and labor unions say that isn't nearly enough to compensate people who have cancers related to their exposure to asbestos, a substance that once was commonly used in insulation, flooring, ceiling tiles and other everyday products. President Bush signaled his determination to push the changes through Congress and promised to say more about them in his State of the Union address early next year. "We expect the House and the Senate to pass meaningful liability reform on asbestos, on class action and medical liability," he said. "I am passionate on the subject. ... And I can assure you all that I intend to make this a priority issue." ASBESTOS LITIGATION: Worksafe Probes Theft from Demolition Site ---------------------------------------------------------------- Worksafe, Western Australia's administrative agency, is currently investigating reports that asbestos-laden material was taken illegally from a demolition site in Mount Alexander Road, Flemington, where fire last month destroyed Lombard The Paper People factory. It is believed that the intruders broke into the site at night and took away "a truckload" of material, including climbing ropes and a photocopying machine, removed from the severely damaged building. Site supervisor Malcolm Wright, from Bay Builders, said he was angry that anyone would breach the site's security because of the danger of disturbing asbestos there. He had reported the matter to police and to WorkSafe, he said. The November 12 fire caused damage to the factory estimated at about $29 million. Also damaged was an adjoining indoor rock- climbing center and pistol range. After the fire, asbestos was found in toilets, pipes and rubble inside the building. Worksafe, a division of the Department of Consumer and Employment Protection, is responsible for the administration of work safety and health laws. This agency also undertakes a wide range of regulatory activities as well as industry and community awareness programs. ASBESTOS LITIGATION: HI School Shuts Down Due to Contamination ---------------------------------------------------------------- King Intermediate School officials decided to shut down the campus for the rest of the week after test results show more widespread asbestos contamination there. At the same time, administrators said the levels of contamination at the school in Kaneohe, Hawaii, are lower than previously found. This decision was prompted by the heated meeting last Monday with the parents and was compounded by the test results they received on Tuesday. It revealed that asbestos was prevalent in three more buildings: the physical education, the band, and the science and math buildings. The Department of Environment said the dust was probably released when contractors began scraping paint off buildings ahead of renovation work. A previous edition of the Class Action Reported last Nov. 26 carried a story relating the evacuation that occurred in this school on Nov. 12 after asbestos was disturbed during the renovations. Earlier tests did not indicate the presence of asbestos so the school management decided to continue classes while the work went on outside. 57 Builders Ltd., a private contractor, has been handling the renovation task. Deputy superintendent Lea Albert said it became clear that the safety of the campus is in question. The school hopes to use the extra closure time to clean up the campus completely. "We want to make sure there is no asbestos at King so people can stop worrying about this and put this behind them," said Principal Cynthia Chun. Teachers met with administrators after school Tuesday to discuss how to handle the end of the quarter. ASBESTOS LITIGATION: Hanson PLC Takes Additional Asbestos Charge ---------------------------------------------------------------- Hanson PLC, an international building materials Company, warned of a further provision for asbestos claims today, saying it would book a full-year pre-tax charge of about US$223 million representing an increase in its provision for asbestos claims to US$480 million from US$317 million as of December 2003. The Company said predicting future liabilities is complex and difficult as it admitted it was possible that gross costs could continue to increase. In the same trading update, Hanson said it expects its pretax profit before exceptional items for the year to end December 2004 to be in line with expectations. However, currency movements have cut full-year pretax pre-exceptional profit by about GBD14 million. Exceptional items for the year will include the asbestos provision. In addition there may be further exceptional charges of about 50 million after tax, including cash costs of about 3 million after tax, it said. About 7,000 new asbestos claimants are expected to file in the second half of 2004, down from 11,700 in the first half and 7,900 in the second half of 2003. About 2,000 claimant resolutions are expected in this half with around 90 percent of these expected to be dismissed, giving an annual average dismissal rate of 75 percent. Outstanding claimants at the end of the year will be 137,400 compared with 132,400 at the end of June 2004. Average gross cost per resolution expected to jump to about US$9,000 from US$5,000 in 2003 reflecting the continuing focus on the most seriously ill claimants. Full-year gross cost for 2004 is expected to rise to about US$60 million. "Operations in Hanson's major markets in the US, UK and Australia are expected to benefit from stable underlying demand in 2005 and from ongoing management initiatives," it said. "Price increases are expected to recover input cost increases and additional cost savings should support margin improvement," it added. Hanson said growth through bolt-on acquisitions remains a priority and that it is also considering further property disposals. The Company, which said central costs have increased about GBD3 million in 2004 and include costs of preparation for Sarbanes- Oxley compliance and for adoption of International Financial Reporting Standards, said it is well prepared for the adoption of IFRS from January 2005. On current trading, Hanson said it experienced increased operating profit and margins in North America compared to the second half of 2003. U.S. operating profit for the full year is expected to benefit from GBD8 million of property profit and a reduction of GBD8 million in the pension charge compared to 2003, but these will be offset by about 20 million of adverse foreign exchange impact. While in the UK, full-year operating profit is anticipated to include GBD4 million of property profit and an additional GBD14 million of pension costs compared with 2003. Hanson said Australia's strong performance continues but that operating profit for the Asian operations is behind last year amid continuing difficult market conditions. The Continental Europe division is forecast to report improved operating profit and margins slightly ahead of last year, despite continued market weakness in Israel. The Company added that net debt at the end of the year is anticipated to be about GBD750 million compared with GBD942 million at end December 2003, with about GBD85 million of this reduction coming from foreign exchange movements. ASBESTOS ALERT: Inquest Reveals Coal Worker Died Due to Exposure ---------------------------------------------------------------- A 70-year-old man who died as a result of asbestosis, a scarring of the lungs that leads to breathing problems and heart failure, had spent 11 years of his working life exposed to the carcinogenic fibers, an inquest heard. Dennis George Parker had worked for the National Coal Board at Altham and the Central Electricity Generating Board at Padiham. He had described to his wife Kathleen how on one job the asbestos particles could be seen floating in the air and on another, at Padiham Power Station, asbestos dust would be piled up on the floor. Recording a verdict of death as a result of industrial disease deputy coroner Carolyn Singleton said it is now known that asbestos is an extremely dangerous substance. Mrs. Parker, of Dill Hall, Church, told how her husband had done his national service with the Royal Engineers and during his working life had worked in power stations all over the world including Saudi Arabia and Borneo. The medical cause of death was given as bronchopneumonia as a result of lung disease due to asbestosis. ASBESTOS ALERT: Council Pursues Fly-tipper as Plant Rouses Fear --------------------------------------------------------------- Risking human lives, a developer ignored tough new laws governing the disposal of hazardous material and dumped broken asbestos slates on a rural part of Groarty Road in Derry. Sinn Fein councilor Billy Page hit out at the person responsible when he raised the issue during a meeting of Derry City Council last week. He said the incident comes as apprehensions continue to grow over plans for a new asbestos storage facility at Campsie. Justice for Asbestos, a local pressure group that offers support to victims of asbestosis, has expressed its concerns regarding proposals to build a plant that will hold the product in storage prior to its removal and disposal elsewhere. John Meehan, Derry City Council's Chief Environmental Officer, stressed that the Council would scrutinize the planning proposal very closely. Mr. Meehan's colleague, John Kelpie, said the proposed Campsie operation would provide a service to contractors wanting to off load properly controlled asbestos. The material would remain at the facility ahead of its removal to a proper landfill site for disposal. At present, there is no such site in the North. In a bid to allay local concerns, the senior council official said the plant would have to adhere to a strict waste management license if it got the all clear from the Planning Service. Referring to the Groarty Road incident, Mr. Kelpie said the local authority was forced to call in a specialist contractor to remove the asbestos waste. He said the material was transported to a storage facility in Belfast at a "considerable" cost to the Council. He said, "We have a difficulty because there are unscrupulous contractors out there who continue to defy the law and dump along rural roads in the city and in our community." SDLP's Mary Bradley, who demanded the cost of the cleanup operation, said Council must do all in its power to track down the dumper responsible. Mr. Kelpie, who said the Council has been in regular contact with the Department of Regional Development over the asbestos issue, added, "This is not just an issue of us going out and cleaning up the waste." He vowed, "Any clues we find that might lead us to the culprit will be rigorously pursued." ASBESTOS ALERT: Widow Sues UC Board Over Exposure in Los Alamos ---------------------------------------------------------------- The widow of state Rep. Raymond Ruiz of Albuquerque, New Mexico, has filed a wrongful death lawsuit against the University of California's board of regents. The lawsuit seeks an undisclosed amount of damages. Harriet Ruiz, whose husband died last May 9 at the age of 65, alleges that his lung cancer was related to his work with asbestos at the laboratory more than 30 years ago. She asserts that Mr. Ruiz was directly exposed to the material for ten years without adequate protection while he worked at Los Alamos National Laboratory. His job involved mixing hazardous materials by hand while making lead shields for bomb testing during the 1960s and 1970s. UC spokesman Chris Harrington said the university's lawyers would review the case. The university runs the lab for the U.S. Department of Energy. EPA has called asbestos a "highly potent carcinogen" that causes "severe health effects after even short-term, high-level or longer-term, low-level exposure." ASBESTOS ALERT: Court Reverses Dismissal of Case V. Agilent, HPQ ---------------------------------------------------------------- The Superior Court of Delaware ruled last November 16, 2004 that the appeal on a decision of the Industrial Accident Board to dismiss a former Hewlett-Packard employee's occupational asbestos exposure claim has been reversed and remanded to the Board for further proceedings. In the suit specified as Case No. Civ.A. 03A-07-005RRC, Albert DelPizzo, the appellant, had brought a case against Agilent Technologies (NYSE: A) and Hewlett-Packard Company (NYSE: HPQ) seeking for compensation due on jurisdictional grounds. Mr. DelPizzo alleges that he had been exposed to asbestos while working in Delaware and was later exposed to the same substance while working in Pennsylvania. His action before the Board was against the successors-in-interest to his previous Delaware employer. On August 20, 2002, Mr. DelPizzo filed a petition seeking compensation due from Agilent with the Board. A petition was also filed against Hewlett-Packard on January 30, 2003. Agilent is the successor-in-interest to Hewlett-Packard. The two petitions were consolidated and a hearing was heard before the Board on June 3, 2003. The Board issued its decision on June 30, 2003 granting the appellees' motion to dismiss because of lack of jurisdiction and an application of the "last injurious exposure" rule. This appeal followed. Richard T. Wilson, from the Law Offices of Peter G. Angelos, is representing the appellant. Scott A. Simpson and Scott R. Mondell, are similarly representing Agilent and R. Stokes Nolte comes in behalf of Hewlett Packard. In June of 1959, Mr. DelPizzo was hired by F & M Scientific Corporation at the New Castle County Airbase. Between June and September of 1961, F & M relocated to Avondale, Pennsylvania. Hewlett Packard acquired F & M in August 1965 and that effectively made Mr. DelPizzo an HP employee. By early 1973, cutting of insulation sheets containing asbestos was no longer performed however; it was only in 1977 that use of insulated wires was stopped, which brought an end to the Company's use of asbestos altogether. It was in October 1992 that Hewlett Packard moved to Little Falls Corporate Center, Delaware. Mr. DelPizzo retired under a voluntary severance incentive plan on January 30, 1999. On August 2001, Agilent acquired Hewlett Packard. The Industrial Accident Board had dismissed Mr. DelPizzo's claim because it found that it was statutorily barred from exercising jurisdiction. It formed its decision on the basis that it believes the former employee was not able to meet the conditions for the claim to qualify under the Workers' Compensation Act, which "envelops industrial accidents or exposures occurring outside the borders of the state as though they occurred within Delaware's borders." The Board held in effect that the "last injurious exposure" rule acted as a jurisdictional bar to an award of workers' compensation benefits by divesting the Board of jurisdiction to hear a claim brought by an employee who had been exposed while working Delaware but who later was exposed to the same substance while working in another state. Even assuming that the claimant had any asbestos exposure in Delaware, the Board believed that any remaining or final exposures occurred in Pennsylvania. The Superior Court of Delaware noted that the Board's finding that the employee was not exposed to asbestos while working in Delaware is not supported by the record. The Board went beyond the stipulated facts and the petition when it found that he was not exposed to asbestos while employed in Delaware from 1959 to 1961. The Superior Court emphasized that the "last injurious exposure" rule, recognized in Delaware, is not a jurisdictional rule to bar recovery but is rather a way for the Board to determine which employer or insurance carrier was "on risk." The rule facilities a claimant's ability to receive workers' compensation benefits due to an occupational disease. The Court continued to explain that unlike a typical physical injury, it would be difficult to determine when an occupational disease injury occurred or to apportion liability to several employers. The "last in-state employer" corollary also follows the legislative intent to provide workers' compensation benefits to employees for "all occupational diseases regardless of the length of time for them to develop and become manifest." Other Courts that have adopted the corollary have done so on the basis that "it would have been futile for [their legislatures] to have provided that the last employer in time, no matter in what state located, 'shall alone be liable,' if it intended to refer to out-of-state employers over which it had no jurisdiction." It logically follows that Delaware Courts interpret the "last employer" language in the rule to mean Delaware employers and not out-of-state employers. It would be similarly futile for the Courts to adopt a rule to refer to out-of-state employers over which it had no jurisdiction. This Court now adopts the majority rule: in Delaware the "last employer" language of the "last injurious exposure" rule means the last in-state employer subject to the jurisdiction of the Workers' Compensation Act. Company Profile: Hewlett-Packard Company (NYSE: HPQ) 3000 Hanover St. Palo Alto, CA 94304 Phone: 650-857-1501 Fax: 650-857-5518 http://www.http.com/ Fiscal Year-End October 2003 Sales (mil.) : GBD43,069.5 1-Year Sales Growth : 29.1% 2003 Net Income (mil.) : GBD1,496.7 2003 Employees : 142,000 Description: HP provides enterprise and consumer customers a full range of high-tech products, including personal computers, servers, storage devices, printers, networking equipment, and software. It also boasts an IT service organization that is among the world's largest. Company Profile: Agilent Technologies, Inc. (NYSE: A) 395 Page Mill Rd. Palo Alto, CA 94306 Phone: 650-752-5000 Fax: 650-752-5633 Toll Free: 877-424-4536 http://www.agilent.com/ Description: A leading manufacturer of scientific instruments and analysis equipment, Agilent is the #1 supplier of electronic test and measurement products, including data generators, multimeters, and oscilloscopes. The Company also makes an array of semiconductor products, such as light-emitting diodes (LEDs), optoelectronic components, and RF chipsets. Its life sciences and chemical analysis unit manufactures laboratory equipment and other scientific instruments. ASBESTOS ALERT: Judge Affirms Dismissal of Case V. Intl Paper Co ---------------------------------------------------------------- Judge Andree Layton Roaf from Division IV of the Court of Appeals of Arkansas affirmed a decision by the Workers' Compensation Commission denying a claim made by a man who alleged that the environmental conditions at his workplace aggravated his lung disease. Appellant John Tutt alleged that he had been exposed to dust and chemicals while employed by International Paper Company from 1942 to 1978. He worked at its Camden, Arkansas mill for over 36 years in the caustic and wet rooms. These areas reportedly had little ventilation. Mr. Tuff's coworkers, James Lee Bryant and Jessie Morris Looney, testified that they suffered in these conditions for several years and that the Company did not even provide them with protective masks. Mr. Tutt admitted to being a smoker since the start of his service in World War II until he stopped sometime in 1964-1965. In 1968, he was diagnosed with chronic obstructive pulmonary disease or COPD. However, he continued his employment until 1978 when he retired from the Company due to medical problems. He experienced breathing difficulties since the early 1970s and sought treatment for the pneumonia-related complications. Mr. Tutt died on November 20, 1983 with his cause of death listed as respiratory arrest and COPD with emphysema. Mr. Tutt's wife continued this claim on his behalf. His pulmonologist, Dr. James Adamson, who treated him from 1978 until his death, believes that "occupational exposure to the chemicals at the mill could have been a contributing agent to his severe lung obstruction." But he added that nothing in the records allowed him to determine the exposure to these chemicals. Also at his family's request, Dr. Christopher John reviewed his medical records and concluded that his exposure to the multiple pollutants, irritants, and asbestos precipitated and aggravated his smoking-induced COPD with emphysema. Dr. John also stated that he suffered from asbestosis, due to his industrial exposure to asbestos, which was never diagnosed during his lifetime. Dr. David Hewitt, a consultant with the Center for Toxicology and Environmental Health, said that without sufficient evidence in the record regarding Mr. Tutt's asbestos exposure, he was unwilling to state that his condition resulted from asbestos exposure. He noted that Mr. Tutt did not exhibit symptoms consistent with an asbestos-related illness. After considering Dr. John's opinion, Dr. Jay Gandy, a foremost toxicologist, concluded that Dr. John had failed to identify these chemicals and determine what doses of any of the chemicals were significant to cause the illness. The administrative law judge ruled that there was no proof of asbestosis and that Mr. Tutt did not present sufficient evidence to establish a causal connection between his employment and COPD with emphysema. The judge also found that he failed to sustain his burden of proof by clear and convincing evidence that his employment precipitated, aggravated, or accelerated his lung disease. Company Profile: International Paper Company (NYSE: IP) 400 Atlantic St. Stamford, CT 06921 Phone: 203-541-8000 Fax: 203-541-8200 Toll Free: 800-223-1268 http://www.ipaper.com/ Fiscal Year-End : December 2003 Sales (mil.) : GBD14,158.2 1-Year Sales Growth : 0.8% 2003 Net Income (mil.) : GBD169.8 2003 Employees : 83,000 Description: International Paper is the world's largest forest products Company. It produces plywood, paper, pulp, and packaging, and processes chemicals such as crude tall oil and crude sulfate turpentine. International Paper controls more than 8 million acres of forestlands in the US and 1.5 million in Brazil; it also holds interests in 795,000 acres in New Zealand. ASBESTOS ALERT: Victim's Wife Files Lawsuit V. Timken Company -------------------------------------------------------------- A woman is attempting to claim compensation for the deadly asbestos-related cancer she claims to have developed from washing her husband's clothes. Her husband had worked in the TI Desford tube plant firm, now known as the Timken Company, a world-leading producer of seamless steel tubing. Maureen Percy, aged 72, said that her husband was an employee at the tube plant for nearly 37 years. She said that doctors told her she has contracted mesothelioma from her contact with his work clothes, but she cannot claim related benefits. Colin Percy, aged 75, from Kirby Muxloe, Leics, said, "It's time the government did something to address this problem for relatives." He has vowed to continue calling on the government to do more to help people like his wife who had been affected. Mrs. Percy is now taking legal action to try to win compensation for contracting the deadly disease. She said that she would wash her husband's clothes in a separate washing tub every weekend because they were so covered in dust from the factory. Liz Darliston, from the Macmillan Mesothelioma Resource Center at Glenfield Hospital in Leicester, said, "The whole disease is an injustice, irrespective of how you have been exposed to asbestos. But if you add to that that you can't claim the same benefits as another sufferer just because you were exposed to asbestos washing your husband's clothes, that adds to the injustice of the disease." A spokeswoman for the Department of Work and Pensions said, "There are no current plans to extend the scope of the Industrial Injuries Scheme to the family members of asbestosis sufferers, or to people who have been exposed to asbestos outside of their work." Company Profile: Timken Company 1835 Dueber Ave. SW P.O. Box 6932 Canton, OH 44706-0932 United States Phone: 1-800-223-1954 Fax: 1-330-471-3069 http://www.timken.com/ Description: The Timken Company (NYSE: TKR) is a leading international manufacturer of highly engineered bearings, alloy and specialty steels and components, as well as a provider of related products and services. With operations in 24 countries, the Company employs about 18,700 people worldwide and recorded 2001 sales of US$2.4 billion. ASBESTOS ALERT: GTC Chemical fined GBD1,800 for Act Violations -------------------------------------------------------------- Bathgate-based firm, GTC Chemical Services, has been fined GBD1,800 after it admitted failing to deal properly with asbestos at Aberdeen Royal Infirmary. The Company admitted four of seven charges raised against it under the Control of Asbestos at Work Act at Aberdeen Sheriff Court late last week. The offenses occurred in a workshop, at the hospital's Ashgrove House at Foresterhill in November last year. Fiscal depute, Jonathan Ward, told the Court that joiners discovered the asbestos when cutting into a fire door with a power saw. A sample of the asbestos was sent for analysis and GTC Chemical Services was called in to clean the workshop as an emergency late on a Friday afternoon. However, it was later discovered there was also brown asbestos, a more dangerous strain of the chemical. More precautions should have been taken to tackle it, said Mr. Ward. He said asbestos-related illnesses were still the most common industrial illnesses in the UK, and the chemical was "inherently dangerous." Mr. Ward said the law required the firm to at least view the analysis of the asbestos before beginning work, but the supervisor had accepted the word of the hospital trust estate manager that only white asbestos, the least dangerous kind, had been found. Appearing before Sheriff Douglas Cusine, the firm admitted not carrying out a suitable and sufficient risk assessment, not providing a written plan and not training staff sufficiently to deal with the situation. Defense agent, Diane Turner, said two of the three GTC staff involved were trained to supervisory level, but none had been involved in an emergency situation before. Had it not been deemed an emergency by the hospital, the men would simply have sealed off the workshop. The brown asbestos was found when Health and Safety Executive inspectors carried out tests. A further clean-up was carried out and the workshop has been made completely safe. Company Profile: GTC Chemical Services Ltd. Whitburn Road, Birniehill, BATHGATE, EH48 2HR Phone: 01506-633233 ASBESTOS ALERT: Inquest Deferred as Cause of Disease is Disputed ---------------------------------------------------------------- A family has demanded further investigation into the death of a man who had worked with asbestos after the cause of his illness was disputed at an inquest. Andrew King, aged 51, of Lane Ends Farm, Salterforth had worked with the substance at Albert Hartley Ltd, Barnoldswick, for around a decade in the 1960s and 1970s. The illness first became evident throughout the September and October period of 2001. The local doctors had failed to diagnose the disease early and had confirmed that Mr. King had mesothelioma, an illness recognized as a result of prolonged exposure to asbestos, only in 2002. At this point, he underwent chemotherapy and lung removal operation. But the cancer had already spread into his pleura and abdomen. He died on July 3, 2003, from a lung infection caused by the disease. However, tests conducted by the Environmental Lung Disease Research Group showed only normal levels of asbestos fibers in his lungs. The pathologist, Dr. Zuhair Twaij, was so taken aback by this result that he ordered further tests to be conducted. During the inquest held in Burnley, Dr. Twaij rationalized that 90 percent of mesotheliomas are related to asbestos, but the other 10 percent are known as idiopathic cases. "In the tests, we did not have evidence of occupational asbestos exposure," he said. He added that everyone has a low level of asbestos fiber in their lungs, and that the fiber had to reach a certain level before it was classed as occupational exposure. Mr. Kings brother, Peter, asked for the inquest to be adjourned, to give time for tissue analysis to be studied from a lung removed at a Leicester hospital just before the death. The two brothers had worked together at the Barnoldswick firm, where one of their duties was to remove, inspect and replace asbestos boiler coverings. The new evidence will be presented when the inquest is reopened in the New Year. A date has not yet been set. Company Profile: Albert Hartley Ltd Crownest Mill Barnoldswick BB18 5RH Lancashire Phone: 01282 666000 Fax: 01282 666002 http://www.alberthartley.co.uk/ Description: Albert Hartley Ltd. is a leading printer and finisher of fabrics. The Company prints up to a 250,000 meters of fabrics a week with a wide range of home furnishing applications using both rotary and flat bed printers. ASBESTOS ALERT: Swindon Asbestos Victim Wins GBD50T Settlement -------------------------------------------------------------- In an out-of-Court settlement, a victim of the so-called Swindon Disease has been awarded GBD50,000 after years of exposure to hazardous asbestos. Dennis Mulholland, 72 years old and a former railway man and hospital engineer, told how colleagues in Swindon regularly threw "snowballs" made from the deadly material. Doctors diagnosed him in August 2001; he was then told that he had diffused thickening of the lungs. He said that he still lives with the knowledge that he is slowly dying from work he did more than 50 years ago. Between 1951 and 1954 Mr. Mulholland worked for the Swindon and District Hospital Management Committee as an engineering improver at Elm Court and Stratton Hospital. His job was to strip down boilers lined with asbestos, which he had to remove with a hammer and chisel. The asbestos was then replaced after mixing it in a bucketful of water. Brigitte Chandler, a leading industrial disease lawyer with Swindon firm Charles Lucas and Marshall said, "During this work Dennis Mulholland was given neither masks, protective clothing nor warnings about the danger of working with asbestos which should have been well-known by this time. On occasions, when the cloud of asbestos dust was very thick in the air he was reduced to putting a scarf over his nose to try to afford himself some protection." Unaware of the risks, Mr. Mulholland then went on to work for British Rail in Swindon from 1961 to 1971 as a fitter in the shop carriage and wagon works. He was tasked with repairing alarm and brake systems and would often work inside compartments where paneling was removed and in so doing, exposed blue asbestos. This was followed by two years stripping and rebuilding steam engines where he was again exposed to large amounts of asbestos. Finally, Mr. Mulholland joined Roussel Laboratories where he helped to remove asbestos ceiling tiles. A trial had been scheduled to proceed but BRB Residuary Ltd (British Rail), Swindon Primary Care Trust and Roussel Laboratories agreed to pay the settlement sum plus costs. Company Profile: Roussel Laboratories Ltd North Orbital Rd, Broadwater Park Denham Uxbridge Middlesex, England Ub95hp United Kingdom Description: Roussel Laboratories Ltd. is one of UK's importers of raw pharmaceuticals. The Company is also known for the wholesale of pharmaceuticals supplies. Company Profile: BRB Residuary Ltd Whittles House 14 Pentonville Road London N1 9RP Phone: 020 7904 5100 Fax: 020 7904 5040 http://www.brb.gov.uk/ Description: Under the 1993 Railways Act, the old British Rail was split up and sold off. By November 1997, British Rail had been divested of all its operating railway functions. The remaining functions of the British Railways Board are now discharged by BRB (Residuary) Ltd, a wholly owned subsidiary of the Strategic Rail Authority. Company Profile: Swindon Primary Care Trust Health Clinics And Centres Westrop Surgery Newburgh Place Highworth Swindon SN6 7DN Phone: 01793 762 600 Description: Swindon PCT was set up in April 2002 and is one of 303 Primary Care Trusts in England - they all have the funding to plan and commission health services for their local communities - a role previously carried out by health authorities. In addition, they are responsible for integrating health and social care so the two systems work together for patients. ASBESTOS ALERT: EPA Cites PCS for Clean Air Act Violations in MD ---------------------------------------------------------------- The U.S. Environmental Protection Agency has cited Big Spring School District and Power Component Systems Inc. of Hanover, Md., for violating Clean Air Act asbestos regulations during renovations at the former Big Spring High School. EPA announced that the violations occurred last May and proposed a US$17,584 penalty. Big Spring and PCS could still contest the alleged violations and proposed penalty. "These violations are the responsibility of the contractor, who will also be responsible for taking care of any fines that may be levied," Big Spring Superintendent William Cowden said this morning. Mr. Cowden said he's "unhappy and disappointed that the citation includes the school district as if the school district is somehow responsible for the alleged violations. It gives the appearance that the school district somehow should have known something was amiss. We didn't do anything incorrectly here." Big Spring last April accepted a low bid of US$160,000 from PCS to remove about 82,000 square feet of asbestos-containing floor tile and 750 feet of asbestos-containing pipe insulation at the old high school. The building is being renovated for use as a middle school. EPA's regulations require that materials that may release asbestos fibers during demolition or renovation must be adequately wetted during removal and carefully handled. They must remain wet until securely bagged prior to disposal. At a May 11 inspection at the school, an EPA inspector saw dry, crushed asbestos tile debris in the halls and rooms. The inspector observed mechanical chipping machines and noted the floor tile had been subject to sanding, grinding, cutting and abrading during removal, an EPA press release said. The inspector also saw dry asbestos pipe insulation in bags in the school's mechanical room. The building was empty at the time of the alleged violations except for district administration offices at the western end. Venting and daily air quality testing was conducted in those offices, Mr. Cowden said. "None of the allegations have to do with the health and well- being of any of us who remained in the building," he said. Company Profile: Power Component Systems, Inc. 7526-R Connelley Drive Hanover MD 21076 Phone: +410 760 0022 Fax: +410 760 0028 http://www.powercomponentsystems.com/ Description: With headquarters in Maryland and Pennsylvania, PCS, Inc. is licensed to provide environmental remediation and selective demolition services throughout Maryland, Pennsylvania, Virginia, West Virginia, Delaware, New Jersey and the District of Columbia. New Securities Fraud Cases MERCK & CO.: Scott + Scott Lodges Securities Fraud 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 to recover losses that current and former Merck employees have suffered in their retirement accounts. Merck plans to slash 5,100 jobs at the Company by year end and plans to take other drastic measures to cut costs at the Company, a move that has many employee plaintiffs concerned. The retirement losses and job cuts are due in large part to Merck's deteriorating outlook following the recall of Vioxx, one of Merck's best-selling drugs. Scott + Scott's investigation of this case is ongoing and the firm expects that there may be exposure in other ways as well. The lawsuit was filed in the United States District Court for the District of New Jersey. Merck said it would have eliminated 5,100 positions by year end, 700 more than previously planned. The job cuts are expected to save $300 million a year starting in 2005. Merck's cost-cutting program is expected to amount to more than $3 billion through 2008, which is of little concern to those plaintiffs who are now unemployed. Merck has lost about half its share value in the past two years. The deteriorating outlook of Merck is based in large part on Merck's difficulties over Vioxx. The Vioxx withdrawal has weighed heavily on the Company, causing it to lose its AAA credit rating and prompting criminal and civil investigations, lawsuits, legal liability and congressional hearings. 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. For more details, contact Neil Rothstein of Scott + Scott, LLC by Phone: (800) 404-7770 (EST) or (800) 332-2259 (PST) or (619) 233-4565 (California) by Fax: (619) 233-0508 by E-mail: nrothstein@scott-scott.com. ROYAL GROUP: Charles J. Piven Lodges Securities Fraud Suit in NY ---------------------------------------------------------------- The law offices of Charles J. Piven, P.A. initiated a securities class action on behalf of shareholders who purchased, converted, exchanged or otherwise acquired the common stock of Royal Group Technologies Limited (NYSE:RYG) between February 11, 1999 and October 13, 2004, inclusive (the "Class Period"). The case is pending in the United States District Court for the Southern District of New York against defendant Royal Group Technologies Limited and certain of its executive officers. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the Class Period, which statements had the effect of artificially inflating the market price of the Company's securities. No class has yet been certified in the above action. For more details, contact the Law Offices Of Charles J. Piven, P.A. by Phone: The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, MD 21202 by Phone: 410/986-0036 or by E-mail: hoffman@pivenlaw.com. ROYAL GROUP: Schatz & Nobel Lodges Securities Fraud Suit in NY -------------------------------------------------------------- The law firm of Schatz & Nobel, P.C. initiated a lawsuit seeking class action status has been filed in the United States District Court for the Southern District of New York on behalf of all persons who purchased the publicly traded securities of Royal Group Technologies Limited (NYSE: RYG) ("Royal Group") between February 11, 1999 and October 13, 2004 (the "Class Period"). The complaint alleges that Royal Group violated United States securities laws by issuing false or misleading public statements. Specifically, the Complaint alleges that Royal Group and certain of its top executive officers were engaged in a conspiracy to defraud shareholders as disclosed on October 15, 2004 when Royal Group announced that it had received a Royal Canadian Mounted Police ("RCMP") production order relating to alleged violations of the Criminal Code for fraud and conspiracy between January 1996 and January 2004. When this was revealed, Royal Group stock fell to $7.85 per share, down from a close of $8.97 on the previous trading day. For more details, contact Schatz & Nobel by Phone: (800) 797-5499 by E-mail: sn06106@aol.com or visit their Web site: http://www.snlaw.net. SUPPORTSOFT INC.: Schiffrin & Barroway Lodges CA Securities Suit ---------------------------------------------------------------- The law firm of Schiffrin & Barroway, LLP initiated a class action lawsuit in the United States District Court for the Northern District of California on behalf of all securities purchasers of SupportSoft, Inc. ("SupportSoft" or the "Company")(Nasdaq: SPRT) between January 20, 2004 and October 1, 2004, inclusive (the "Class Period"). The complaint charges SupportSoft, Radha R. Basu, and Brian M. Beattie with violations of the Securities Exchange Act of 1934. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts, which were known to defendants or recklessly disregarded by them: (1) that the Company failed to close two $4.5 million transactions, due to major flaws in SupportSoft's internal controls; (2) that the Company was experiencing sales execution issues; (3) that SupportSoft's product pipeline was heavily weighted toward perpetual deals; (4) that due to the saturation of the domestic broadband market, the Company was facing a more challenging software spending environment of authorization signatures and longer sales cycles; and (5) that as a result of the above, the defendants' fiscal 2004 projections were lacking in any reasonable basis when made. On October 4, 2004, SupportSoft announced preliminary financial results for the quarter ended September 30, 2004. The Company expected total revenues for the third quarter 2004 to be in the range of $11.9 million to $12.3 million versus $13.5 million for the same period last year. GAAP loss per share was expected to be in the range of $0.01 to $0.04, this was well below expectations. News of this shocked the market. Shares of SupportSoft fell $3.41 per share, or 35.45 percent, to close at $6.21 per share. For more details, contact Marc A. Topaz, Esq. or Darren J. Check, Esq. of Schiffrin & Barroway, LLP by Phone: 1-888-299-7706 or 1-610-667-7706 or by E-mail: info@sbclasslaw.com. ********* A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the Class Action Reporter. Submissions via e-mail to carconf@beard.com are encouraged. Each Friday's edition of the CAR includes a section featuring news on asbestos-related litigation and profiles of target asbestos defendants that, according to independent researches, collectively face billions of dollars in asbestos-related liabilities. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Glenn Ruel Se�orin, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2004. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *