/raid1/www/Hosts/bankrupt/CAR_Public/041223.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, December 23, 2004, Vol. 6, No. 253
Headlines
3M CORPORATION: Employees Lodge Age Discrimination Suit in MN
ACCREDITED HOME: IL Court Mulls Certification For Consumer Suit
ACCREDITED HOME: Appeals Denial of Arbitration For Wage Lawsuit
ACCREDITED HOME: Reaches Settlement For IL Mortgage Loan Lawsuit
AIRSPAN NETWORKS: Asks NY Court To Approve Securities Settlement
AMERICAN SEAFOODS: Plaintiffs Appeal Summary Judgment in Lawsuit
AUSTRIA: Appeals Court Rejects Certification For Cable Car Suit
BEARINGPOINT INC.: VA Approves Securities Fraud Suit Settlement
CENTRAL FREIGHT: Shareholders Lodge Stock Fraud Suits in W.D. TX
CHARTER COMMUNICATIONS: Claims Settlement Deadline Approaches
DIRECT MARKETERS: FTC Lodges Two Actions Against Consumer Fraud
FOUR FLAGS: Discovery To Proceed in Overcharging Lawsuit in IL
GOLF HOST: Plaintiffs Appeal Summary Judgment in Resort Lawsuit
GOODY'S FAMILY: GA Court Retains Jurisdiction in Race Bias Suit
ILLINOIS: Chiropractor's Suit V. Insurers To Be Heard Next Week
IMPAC MEDICAL: Securities Fraud Suits To Be Consolidated in CA
IMPAX LABORATORIES: Shareholders Launch Securities Suits in CA
LEAP WIRELESS: Plaintiffs To Appeal CA Securities Suit Dismissal
MAINE: Supreme Court Returns Hospital Oversight To State
MISSERLI & KRAMER: Faces Lawsuits Over Debt Collection Methods
MIIX GROUP: Enters Mediation For Securities Fraud Lawsuit in NJ
NETGEAR INC.: Reaches Settlement For CA Consumer Fraud Lawsuit
NETGEAR INC.: Faces CA Consumer Lawsuit Over Wireless Products
NEVADA: Judge Wants Revision To Suit Over Yucca Mountain Project
NEW YORK: Court Ruling Allows Easier Access To Legal Aid Groups
OHIO: Group Lodges Suit Over Abuses At Scioto Juvenile Facility
OMNI BIOTECH: Agrees To Halt Sale of Products With False Claims
ORKIN INC.: FL Judge Grants Certification To Homeowner's Lawsuit
PARADIGM MEDICAL: Utah Shareholders Lawsuit Seeks Trial By Jury
PARAGON FINANCIAL: Asks NY Court To Approve Lawsuit Settlement
PNC FINANCIAL: Reaches $30 Mil Settlement in Investor Lawsuit
RCN CORPORATION: Faces ERISA Violations Suits in NY, NJ Courts
SAINT THOMAS: Uninsured Commence Lawsuit Over Billing Practices
SYCAMORE NETWORKS: Asks NY Court To Approve Lawsuit Settlement
UNITED INTERNATIONAL: Reaches Settlement With Unpaid Employees
UNITED STATES: Settles Holocaust Survivor Suit, Pays $25M in Aid
UNITED STATES: Investigation Triggers Review of USDA Settlement
US GRANT: Faces WI Court Judgment On Fraudulent Trade Practices
VASO ACTIVE: Faces Consolidated Securities Fraud Lawsuit in MA
New Securities Fraud Cases
CHARLOTTE RUSSE: Marc S. Henzel Lodges Securities Suit in NY
CONEXANT SYSTEMS: Marc S. Henzel Lodges Securities Suit in NJ
CONEXANT SYSTEMS: Schiffrin & Barroway Lodges Stock Suit in NJ
GEOPHARMA INC.: Marc S. Henzel Files Securities Fraud Suit in NY
GEOPHARMA INC.: Shalov Stone Lodges Securities Fraud Suit in FL
PFIZER INC.: Emerson Poynter Lodges Securities Fraud Suit in NY
*********
3M CORPORATION: Employees Lodge Age Discrimination Suit in MN
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One current and one former 3M Corporation employee initiated a
lawsuit accusing the Company of age discrimination, claiming it
stereotypes older workers and does not offer them the same
opportunities as younger employees, Associated Press reports.
The suit, filed in Ramsey County District Court, is seeking
class-action status, which could potentially extend its effects
to 15,000 current and former employees, attorneys estimated.
The lawsuit though does not seek a specific dollar amount.
The plaintiffs, Clifford Whitaker, 60, and Michael Mucci, 55,
have also taken their age-discrimination complaints to state and
federal agencies, according to 3M. Mr. Whitaker's complaints
were dismissed, and Mr. Mucci's are pending, the Company added.
According to the lawsuit, since at least 2001, 3M acted "to
elevate younger employees to the Company's leadership and to
remove employees over the age of 45 - perceived as less able or
willing to accept and apply new business methodologies adopted
by the Company." Furthermore, the suit argues that 3M
disproportionately select younger employees for a leadership-
training program called "Six Sigma." The lawsuit also charges
that the plaintiffs suffered from 3M's evaluation, pay and
promotion policies.
Susan Coler, an attorney at Sprenger & Lang in Minneapolis,
which represents the plaintiffs even adds, "Participants in Six
Sigma are identified as 'black belts' and 'master black belts,'
and with that they get certain responsibilities and
opportunities that others don't."
Responding to the allegations, Stephen Sanchez, a spokesman for
3M Corporation said the Company is proud of its Six Sigma
program and adds, "Thousands of employees have been trained in
Six Sigma and use the tools and methodology in their daily
jobs."
ACCREDITED HOME: IL Court Mulls Certification For Consumer Suit
---------------------------------------------------------------
The Madison County Superior Court in Illinois heard the motion
for class certification of a lawsuit filed against Accredited
Home Lenders Inc., styled "Wratchford et al. v. Accredited Home
Lenders, Inc."
The suit was filed under the Illinois Consumer Fraud and
Deceptive Business Practices Act and the consumer protection
statutes of the other states in which the Company does business.
The complaint alleges that the Company has a practice of
misrepresenting and inflating the amount of fees it pays to
third parties in connection with the residential mortgage loans
the Company funds.
Plaintiffs claim to represent a nationwide class consisting of
all other persons similarly situated, that is, all persons who
paid money to the Company to pay, or reimburse the Company's
payments of third-party fees in connection with residential
mortgage loans and never received a refund for the difference
between what they paid and what was actually paid to the third
party. Plaintiffs are seeking to recover damages on behalf of
themselves and the class, in addition to pre-judgment interest,
post-judgment interest, and any other relief the Court deems
just and proper.
The Company filed an answer to the complaint on January 17,
2003, and a hearing on the motion for class certification was
been scheduled for December 21, 2004, but there has not yet been
a ruling on the merits of either plaintiffs' individual claims
of the class.
The suit is styled "Paul M. Wratchford, individually and on
behalf of all others similar situated v. Accredited Home
Lenders, Inc., case no. 02-L-001556," filed in Madison County
Superior Court in Illinois, Edwardsville Division, under Judge
Nicholas Byron.
ACCREDITED HOME: Appeals Denial of Arbitration For Wage Lawsuit
---------------------------------------------------------------
Accredited Home Lenders, Inc. appealed the Sacramento County
Superior Court in California's denial of its motion to compel
arbitration in the class action filed against it, styled
"Yturralde v. Accredited Home Lenders, Inc."
The complaint alleges that the Company violated California and
federal law by misclassifying the plaintiff, formerly a
commissioned loan officer for the Company, as an exempt employee
and failing to pay the plaintiff on an hourly basis and for
overtime worked. The plaintiff seeks to recover, on behalf of
himself and all of the Company's other similarly situated
current and former employees, lost wages and benefits, general
damages, multiple statutory penalties and interest, attorneys'
fees and costs of suit, and also seeks to enjoin further
violations of wage and overtime laws and retaliation against
employees who complain about such violations.
The Company has been served with eleven substantially similar
complaints on behalf of other former and current employees of
the Company, which eleven actions have been consolidated with
the Yturralde action. In addition, under current California law,
a private individual who is not a current or former
employee of an employer may bring an action to enforce certain
provisions of California law against that employer. Such a
complaint regarding this matter has been filed and served upon
the Company.
In September 2004, the Company appealed the Court's denial of
the Company's motion to compel arbitration of the consolidated
cases, and a resolution of that appeal is not expected before
early 2006. In the meantime, discussions have resumed between
the parties regarding potential mediation of the claims.
The suit is styled "JONATHAN YTURRALDE, ET AL VS. ACCREDITED
HOME LENDERS, INC., Case No. 04AS00102," filed in Sacramento
County Circuit Court, California. The suit names as defendants
Accredited Home Lenders, Inc. (doing business as Home Funds
Direct). Attorneys for the plaintiffs are Joy C. Rosenquist and
Peter Szabadi, while attorney for the defendants is Merrill F.
Storms, Jr.
ACCREDITED HOME: Reaches Settlement For IL Mortgage Loan Lawsuit
----------------------------------------------------------------
Accredited Home Lenders, Inc. reached a settlement for the class
action filed against it in the Cook County Circuit Court in
Illinois, styled "Aslam v. Accredited Home Lenders, Inc., et
al."
The complaint alleges that the purchase money, first priority
mortgage loan the Company made to the plaintiff violated
Illinois law because the loan, which had an interest rate in
excess of 8%, included a prepayment charge and because the
Company charged certain fees for the loan, which fees allegedly
exceeded 3% of the original loan amount. The plaintiff seeks to
recover, on behalf of himself and all other individuals to which
the Company made loans with the same alleged violations, the
damages allowed by statute, interest, costs and attorneys' fees.
The damages allowed by statute include actual economic damage
and an amount equal to twice the total of all interest, discount
and charges determined by the loan contract or paid by the
obligor, whichever is greater. To the extent the plaintiff's
loan included any provisions or fees, which might otherwise
violate Illinois law, the Company included those provisions or
fees in plaintiff's loan on the basis that federal law preempted
Illinois law with respect to plaintiff's loan. The Company's
position in this regard was consistent with prior case law and
previously announced positions of the Illinois Attorney General
and the Illinois Office of Banks and Real Estate.
However, in a decision filed on March 31, 2004, in "U.S. Bank,
National Association, et al., v. Clark, et al.," consolidated
cases that involve alleged violations of Illinois law similar to
those alleged against the Company, an Illinois appellate Court
held that federal preemption was not available for the non-
purchase money, first priority mortgage loans involved in those
cases. A petition for leave to appeal to the Supreme Court of
Illinois has been filed in the Clark litigation, but, if the
Clark decision is not reversed on appeal, the rationale by which
the Clark Court reached its decision may undermine the Company's
ability to rely on federal preemption with respect to the loans
it made to the plaintiff and other Illinois residents. The suit
named as defendants the Company and:
(1) Mortgage Electronic Regist.
(2) Household Bank FSB
(3) Household Mortgage Service
The Company does not believe the loan it made to the plaintiff
violates Illinois law even if not preempted by federal law, and,
in November 2004, the Aslam suit was settled for a nominal sum.
This settlement was with the individual plaintiff, not on behalf
of any class, and the potential liability to the Company
represented by the Clark decision still exists. If one or more
other Illinois residents were to successfully pursue a class
action against the Company based on the Clark decision, the
potential liability could materially and adversely affect the
Company.
The suit is styled "ASLAM MOHAMMED, ET AL. v. ACCREDITED HOME
LENDERS INC., Case No. 2004-CH-09371," filed in the Circuit
Court of Cook County, Illinois, Chancery Division under Judge
Stephen A. Schiller. Lawyer for the plaintiff is Michael J.
Nachsin, 105 W. Adams St #3000 Chicago IL, 60603, Phone:
(312) 327-1777.
AIRSPAN NETWORKS: Asks NY Court To Approve Securities Settlement
----------------------------------------------------------------
Airspan Networks, Inc. presented the settlement of the
consolidated securities class action filed against it, certain
of the underwriters of its July 2000 initial public offering and
officers:
(1) Eric D. Stonestrom (President and Chief Executive
Officer),
(2) Joseph J. Caffarelli, (former Senior Vice President and
Chief Financial Officer),
(3) Matthew Desch (Chairman) and
(4) Jonathan Paget (Executive Vice President and Chief
Operating Officer
A Consolidated Amended Complaint, which is now the operative
complaint, was filed on April 19, 2002. The complaint alleges
violations of Sections 11 and 15 of the Securities Act of 1933
and Sections 10(b) and 20(a) of the Securities Exchange Act of
1934 for issuing a Registration Statement and Prospectus that
contained materially false and misleading information and failed
to disclose material information.
In particular, Plaintiffs allege that the underwriter-defendants
agreed to allocate stock in our initial public offering to
certain investors in exchange for excessive and undisclosed
commissions and agreements by those investors to make additional
purchases of stock in the aftermarket at pre-determined prices.
The action seeks damages in an unspecified amount.
This action is being coordinated with approximately three
hundred other nearly identical actions filed against other
companies. On July 15, 2002, the Company moved to dismiss all
claims against it and the Individual Defendants. On October 9,
2002, the Court dismissed the Individual Defendants from the
case without prejudice based upon Stipulations of Dismissal
filed by the plaintiffs and the Individual Defendants. This
dismissal disposed of the Section 15 and 20(a) control person
claims without prejudice, since these claims were asserted only
against the Individual Defendants. On February 19, 2003, the
Court dismissed the Section 10(b) claim against the Company, but
allowed the Section 11 claim to proceed.
The Company has approved a settlement agreement and related
agreements which set forth the terms of a settlement between
Airspan, the Individual Defendants, the plaintiff class and the
vast majority of the other approximately 300 issuer defendants
and the individual defendants currently or formerly associated
with those companies. Among other provisions, the settlement
provides for a release of Airspan and the individual defendants
for the conduct alleged in the action to be wrongful. Airspan
would agree to undertake certain responsibilities, including
agreeing to assign away, not assert, or release certain
potential claims Airspan may have against its underwriters. The
settlement agreement also provides a guaranteed recovery of $1
billion to plaintiffs for the cases relating to all of the
approximately 300 issuers.
To the extent that the underwriter defendants settle all of the
cases for at least $1 billion, no payment will be required under
the issuers' settlement agreement. To the extent that the
underwriter defendants settle for less than $1 billion, the
issuers are required to make up the difference. It is
anticipated that any potential financial obligation of Airspan
to plaintiffs pursuant to the terms of the settlement agreement
and related agreements will be covered by existing insurance.
The suit is styled "In Re Airspan Networks, Inc. Initial Public
Offering Securities Litigation, 01 Civ. 6747 (SAS) (Jes),"
related to "In re Initial Public Offering Securities Litigation,
Master File No. 21 MC 92 (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, E-mail:
newyork@whafh.com
AMERICAN SEAFOODS: Plaintiffs Appeal Summary Judgment in Lawsuit
----------------------------------------------------------------
Plaintiffs appealed the United States District Court for the
Western District of Washington's decision granting summary
judgment for the class action filed against American Seafoods
Group LLC.
On October 19, 2001, a complaint was filed in the United States
District Court for the Western District of Washington and the
Superior Court of Washington for King County. An amended
complaint was filed in both Courts on January 15, 2002. The
amended complaint was filed against the Company by a former
vessel crew member on behalf of himself and a class of over 500
seamen, although neither the United States District Court nor
the Superior Court certified this action as a class action. On
June 13, 2002, the plaintiff voluntarily dismissed the complaint
filed in the Superior Court.
The complaint filed alleges that the Company breached its
contract with the plaintiffs by underestimating the value of the
catch in computing the plaintiff's s wages. The plaintiff
demanded an accounting of their crew shares pursuant to federal
statutory law. In addition, the plaintiff requested relief
under a Washington statute that would render the Company liable
for twice the amount of wages withheld, as well as judgment
against the Company for compensatory and exemplary damages, plus
interest, attorneys' fees and costs, among other things.
The plaintiff also alleged that the Company fraudulently
concealed the underestimation of product values, thereby
preventing the discovery of their cause of action. The conduct
allegedly took place prior to January 28, 2000, the date the
Company's business was acquired American Seafoods, L.P., the
Company's indirect parent (ASLP).
On September 25, 2003, the Court entered an order granting the
Company's motion for summary judgment and dismissing the
entirety of plaintiff's claims with prejudice and with costs.
The plaintiff filed a motion for reconsideration of this order
that was denied by the Court. The plaintiff then appealed the
District Court decision to the Ninth Circuit Court of Appeals.
The appeal is currently pending.
The suit is styled "Flores, et al v. American Seafoods Co, et
al., case no. 2:01-cv-01684-TSZ," filed in the United States
District Court for the Western District of Washington, under
Judge Thomas S. Zilly.
Lawyers for the plaintiffs are Bradley H. Bagshaw, Scott Edward
Collins of HELSELL FETTERMAN LLP, P.O. Box 21846, Seattle WA
98111-3846, Phone: 206-292-1144, Fax: 340-0902, E-mail:
bbagshaw@helsell.com or scollins@helsell.com. Lawyers for the
defendants are:
(1) Christopher S. McNulty and John David Stahl, MUNDT
MACGREGOR LLP, 999 3rd Ave Ste 4200, Seattle WA 98104-
4082, Phone: 206-624-5950, Fax: FAX 624-5469, E-mail:
cmcnulty@mundtmac.com or jdstahl@mundtmac.com
(2) Jay H. Zulauf, HALL ZANZIG ZULAUF CLAFLIN MCEACHERN,
1200 5th Ave, Ste 1414, Seattle WA 98101, Phone: 206-
292-5900, Fax: 292-5901, E-mail: jzulauf@hallzan.com
AUSTRIA: Appeals Court Rejects Certification For Cable Car Suit
---------------------------------------------------------------
The 2nd U.S. Circuit Court of Appeals in Manhattan ruled that
class action status and a single liability trial are not
appropriate for families of victims of a cable car fire in
Austria four years ago that killed 155 people, the Associated
Press reports. According to the federal appeals Court, a lower
Court judge had made a mistake in analyzing how U.S. laws would
permit such a case to proceed.
Martin J. D'Urso, a lawyer for eight plaintiffs named in the
lawsuit, stated that the appeals Court ruling cuts off an avenue
that more than 100 potential plaintiffs overseas were counting
on and added that he did not know whether the ruling would be
appealed. He also stated that the ruling could force families to
press lawsuits separately in European Courts, rather than as a
group in U.S. Courts, a much very costly proposition.
In the lawsuits, relatives of victims sought unspecified
compensatory and punitive damages against train and train part
manufacturers and operators. They alleged that the companies
were responsible for train and tunnel defects that caused the
deaths in Kaprun, Austria.
U.S. District Judge Shira A. Scheindlin had said in her lower
Court ruling that a class action was necessary in part because
few plaintiffs could afford to bring such a complex lawsuit
against foreign defendants. Judge Scheindlin said the cost
savings for the plaintiffs were so great that the non-Americans
were willing to risk that a U.S. judgment of liability may not
be recognized in their own countries. The judge added that two-
thirds of the victims' families had expressed interest in
joining the class action, including more than 20 German
families, 56 Austrian families and all 10 Japanese families.
However, the appeals Court said Judge Scheindlin's ruling was in
error. It said that she found a legal basis for her ruling in an
earlier case, citing a sentence that would provide support "only
if taken out of context."
As previously reported in the November 29, 2004 edition of the
Class Action Reporter, the victims were headed for a day of fun
on a glacier atop the Kitzsteinhorn mountain near Kaprun, a
popular ski resort 100 kilometers (60 miles) south of Salzburg
in the heart of Austria's Alps, when the cable car bringing them
to the summit caught fire in a tunnel.
Most of those who perished in the November 11, 2000 alpine cable
car fire, which was Austria's deadliest peacetime disaster, were
from Austria and Germany, while eight other victims were
Americans, including a family of four and a newly engaged
couple. The rest came from Japan, Slovenia, the Netherlands and
Britain. Only 12 people managed to escape the crowded car, part
of what is known as a funicular train, which ascended the
mountain on a track while being pulled by a steel cable.
An investigation into the disaster indicated that a defective
space heater in the car caused a heating element to come loose,
causing hydraulic brake oil in nearby pipes to overheat, drip
onto the plastic-coated floor and set it alight.
In the ensuing trial for charges of criminal negligence, sixteen
people, including cable car Company officials, technicians and
government inspectors, were acquitted in February in a verdict
that relatives denounced as a miscarriage of justice. According
to the presiding judge in the case, there was insufficient
evidence to find the defendants, who had all pleaded innocent,
responsible for the conditions that caused the blaze.
Austrian prosecutors in September appealed eight of the 16
acquittals, and lawyers for the victims' families have filed
separate civil proceedings in Germany and the United States
seeking compensation.
The families hold the Austrian government partly responsible for
allegedly having ordered the defective space heater to be
installed in the cable car and having failed to ensure adequate
ventilation in the tunnel.
BEARINGPOINT INC.: VA Approves Securities Fraud Suit Settlement
---------------------------------------------------------------
The United States District Court for the Eastern District of
Virginia granted final approval to the settlement of the
consolidated securities class action filed against BearingPoint,
Inc. and certain of its officers.
Since August 14, 2003, various separate complaints purporting to
be class actions were filed alleging that the defendants
violated Section 10(b) of the Securities Exchange Act of 1934
(the "Exchange Act"), Rule 10b-5 promulgated thereunder, and
Section 20(a) of the Exchange Act. The complaints contain
varying allegations, including that the Company made materially
misleading statements with respect to its financial results for
the first three quarters of fiscal year 2003 in its SEC filings
and press releases. The Plaintiffs' Amended Consolidated
Complaint was filed on December 31, 2003.
Defendants' Motion to Dismiss was filed on February 10, 2004.
On March 31, 2004, the parties filed a stipulation requesting
that the Court approve a settlement of this matter for $1.7
million, all of which is to be paid by the Company's insurer.
On April 2, 2004, the Court considered and gave preliminary
approval to the proposed settlement. Notice of the proposed
settlement has been sent to the purported class of shareholders.
The suit is styled "In Re Bearingpoint, Inc. Securities
Litigation, Case No. 03-CV-1062," filed in the U.S. District
Court, Eastern District of Virginia (Alexandria), under Judge
Judge T. S. Ellis, III.
Lawyers for the plaintiff are Steven Jeffrey Toll and Joshua
Seth Devore of Cohen Milstein Hausfeld & Toll, PLLC, West Tower,
1100 New York Ave NW, Suite 500, Washington, DC 20005-3965,
Phone: (202) 408-4600. Lawyers for the defendants are Warren
Eugene Zirkle, McGuireWoods LLP, 1750 Tysons Blvd, Suite 1600,
McLean, VA 22102-4215, Phone: (703) 712-5000 and John Sabine
DeGroote, KPMG Consulting Inc., 1676 International Dr., McLean,
VA 22102, Phone: (703) 747-3000.
CENTRAL FREIGHT: Shareholders Lodge Stock Fraud Suits in W.D. TX
----------------------------------------------------------------
Central Freight Lines, Inc. and certain of its officers and
directors face several securities class actions filed in the
United States District Court for the Western District of Texas,
issued in connection with or traceable to its December 12, 2003
Initial Public Offering.
The suit generally alleges that false and misleading statements
were made in the Company's initial public offering registration
statement and prospectus, during the period surrounding the
Company's initial pubic offering and up to the press release
dated June 16, 2004. The class actions are in the initial
phases.
The two suits are styled "Udvare v. Central Freight Line, et al,
case no. 04-CV-177," and "Simon v. Central Freight Line, et al,
case no 04-cv-203," filed in the United States District Court
for the Western District of Texas, Waco, under Judge Walter S.
Smith.
Lawyers for the plaintiffs are:
(1) Michael Klein, Smith, Robertson, Elliott & Glen,
L.L.P., 1717 West Sixth Street, Suite 300, Austin, TX
78703, Phone: (512)225-5800;
(2) Marc A. Topaz, Stuart L. Berman, Richard Maniskas, Sean
M. Handler, Darren J. Check of Schiffrin & Barroway,
LLP, Three Bala Plaza East, Suite 400, Bala Cynwyd, PA
19004, Phone: (610) 667-7706
(3) Joe Kendall, Provost Umphrey, 3232 McKinney Ave., Suite
700, Dallas, TX 75204, Phone: (214) 744-3000
(4) Roger F. Claxton, Claxton & Hill, P.L.L.C., 3131
McKinney Ave., Suite 700, Dallas, TX 75204-2471, Phone:
(214) 969-9099
Lawyers for the defendants are:
(i) John L. Malesovas, Malesovas, Martin & Tekell, L.L.P.,
P.O. Box 1709, Waco, TX 76703-1709, Phone: (254) 753-
1777
(ii) Nicole M. Healy, Kent W. Easter, Randolph Gaw of Wilson
Sonsini Goodrich & Rosati, 650 Page Mill Road, Palo
Alto, CA 94304-1050, Phone: (650) 493-9300
CHARTER COMMUNICATIONS: Claims Settlement Deadline Approaches
-------------------------------------------------------------
Charter Communications Inc. subscribers eligible for free
premium services as part of a settlement over questioned charges
are running out of time to cash in on the giveaway, according to
Ariail King, one of the attorneys behind the class-action case,
the Associated Press reports.
Claim forms must be postmarked by Christmas Day, Saturday for
eligible Charter subscribers to get six months of free high-
speed Internet service, service upgrades or movie channel
service. Claimants could also avail of other options that
include six free pay-per-view or video-on-demand selections.
St. Louis-based Charter, which is controlled by Microsoft
Corporation co-founder Paul Allen, is the nation's third-largest
cable TV provider, with more than 6 million customers in 37
states.
Charter in recent months published proof-of-claim forms in
newspaper advertisements and enclosed them months ago in
subscribers' monthly bills. As the deadline nears, the likeliest
way to get a claim form is to call Ariail King of the law firm
of Lewis, Babcock & Hawkins, L.L.P., one of the attorneys behind
the class-action case, at 803-771-8000.
Ms. King though pledged to keep mailing the forms to those who
request them, though she conceded that time was clearly running
out for would-be claimants to receive the form and postmark it
by Saturday. She adds, "I'm not sure how fast the mail is these
days, with the holidays and all, if you're in doubt if you're in
the class or not (and eligible for the freebies), it's better to
fill the claim form out and send it in. If you miss it, you miss
it."
It still remains unclear how many consumers are eligible for the
free services or the settlement's cost to Charter, though the
trade magazine Multichannel News has reported that the amount
may reach as much as $200 million, depending on which
compensation customers choose.
The settlement applies to people who subscribed to Charter's
residential cable TV service before July 8 and paid a fee to
participate in the Company's wire-maintenance plan, or who paid
a fee to rent an analog or digital converter box while getting
basic or expanded basic service.
The lawsuit filed in 2001 by two Spartanburg, South Carolina,
customers accused Charter of charging for a wire-maintenance
service without adequately notifying customers the plan was not
mandatory and also of billing some basic and expanded-basic
customers for unneeded converters. The suit was later joined
with a similar case in Georgia, where a judge on July 8 gave
preliminary approval to the settlement with a judge finalizing
the matter there last month, according to Ms. King.
Reached with help from a San Francisco mediator, the settlement,
according to the Company was decided upon to "avoid the
significant cost in time and money to litigate," and that "we
have been fair and honest in dealing with our customers with
respect to the charges." As part of the settlement, Charter
admits no wrongdoing and said in newspaper ads it "denies that
it has been in any way misleading and raises a number of
defenses to these claims."
For more details, contact Ariail King of Lewis, Babcock &
Hawkins, L.L.P. by Mail: 1513 Hampton Street, Columbia, SC 29201
by Phone: 803-771-8000 by Fax: 803-733-3534 or visit the
settlement Web site: http://www.chartersettlement.com.
DIRECT MARKETERS: FTC Lodges Two Actions Against Consumer Fraud
---------------------------------------------------------------
The Federal Trade Commission (FTC) has put an end to a
fraudulent and misleading pitch for work-at-home envelope
stuffing business opportunities by filing two actions against
several Florida-based defendants. Both actions stemmed from
complaints brought as part of "Operation Pushing the Envelope,"
a law enforcement sweep designed to protect consumers from
opportunities that sound too good to be true - and actually are.
In the action, the FTC has settled its litigation against
several Florida-based defendants through a Court order barring
them from pitching any home-based business opportunities or
helping others to market such opportunities, as well as
requiring them to pay $110,000. The action settles all FTC
charges against the following defendants:
(1) Vinyard Enterprises, Inc., d/b/a Comfort Castle
Enterprises, a Florida corporation;
(2) Sunshine Advertising & Marketing, Inc., d/b/a Dynamic
Data Services, a Florida Corporation;
(3) Ray A. Thompson, as an individual and officer of one or
more of the above-mentioned companies, also d/b/a
Dynamic Data Services, Dectura Direct Service, and D.D.
Service;
(4) Judith Livingston, as an individual and d/b/a Direct
Business Services and Dynamic Data; and
(5) Jason Lunan, as an individual and d/b/a Dynamic Data
Express and Comfort Castle Associates
According to the FTC's complaint, since at least August 1997,
the defendants, or people acting on their behalf, set up
numerous post office boxes and commercial mailboxes in the
greater Miami area, that they used to sell work-at-home mailing
opportunities to consumers through flyers and mail delivered to
consumers' houses. The business opportunity consisted of two or
more "tiers," with instructions for consumers either to recruit
a second or third generation of buyers using flyers or to market
the defendants' book reports on how to make money from home.
The defendants' flyers claimed that consumers could earn "$5,000
Weekly!" simply folding and sending the flyers, which they
called "catalogs." Consumers could supposedly make "$1,000 to
$5,000 Every Week," including $10 for each catalog they mailed,
...[with] Paychecks mailed to you every Wednesday." The
defendants allegedly also claimed that the paycheck was "One
hundred percent GUARANTEED!," and that consumers would "be paid
in advance before you are required to mail any of the reports."
For defendants' business "opportunities," consumers paid between
$20 and $139, plus shipping and handling. The FTC contended
that many of the consumers never received materials to mail, and
none made the $5,000 per week earnings that the defendants
promised.
The stipulated final order contains strong injunctive relief,
barring the defendants from marketing any work-at-home business
opportunity in the future. It also prohibits them from assisting
anyone else in violating Section 5 of the FTC Act and engaging
in the illegal conduct alleged in the complaint. The order
further requires the defendants to pay $110,000 to the
Commission, with a monetary judgment of $4.1 million that would
immediately become due if they are found to have misrepresented
their financial condition. Finally, the order contains standard
monitoring and reporting provisions to ensure the defendants'
compliance with its terms.
The Commission vote authorizing the filing of the stipulated
order was 5-0. The order was filed in the U.S. District Court
for the Southern District of Florida and signed by Judge
Altonaga on December 14, 2004.
For more information, contact the FTC's Consumer Response
Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington,
D.C. 20580 or visit the Website: http://www.ftc.gov. Also
contact Mitchell J. Katz, Office of Public Affairs, Phone:
202-326-2180 or Gary L. Ivens, Bureau of Consumer Protection,
Phone: 202-326-2330.
FOUR FLAGS: Discovery To Proceed in Overcharging Lawsuit in IL
--------------------------------------------------------------
General Motors and Four Flags auto dealership in Glen Carbon,
both accused of overcharging customers for extended warranties,
will be in Court on December 29, 2004 on a plaintiff's motion to
compel discovery, which will be presided by Circuit Judge Andy
Matoesian, the Madison County Record reports.
Filed by Christopher Booher on December 4, 2001, and represented
by Daniel Cohen of The Lakin Law Firm of Wood River, Mr. Booher
claims in his class-action lawsuit that he was charged too much
for an extended warranty when he purchased a car from Four Flags
in 1998. The law firm of Kirkland & Ellis of Chicago represents
General Motors, while Four Flags has retained defense counsel,
Dunham, Bowman & Leskera of Collinsville.
Judge Matoesian recently heard arguments regarding the class
certification but has yet to rule on whether he will certify the
case as a class action.
Four Flags, which sells General Motors vehicles, operates a car
dealership in Glen Carbon on Highway 159. The dealership has
been named in eight class action lawsuits in Madison County,
including another filed by Mr. Booher that Circuit Judge
Nicholas Byron however dismissed that case in November 2003.
Mr. Booher also filed a class action suit in 2001 against Four
Flags and United Life Insurance. However, Four Flags was
dismissed from the complaint, while United Health Care is
awaiting trial in the case that Judge Kardis certified as a
class action.
GOLF HOST: Plaintiffs Appeal Summary Judgment in Resort Lawsuit
---------------------------------------------------------------
Plaintiffs appealed the Circuit Court for the Sixth Judicial
Court's ruling granting summary judgment in favor of Golf Host
Resorts, Inc. in the class action filed against it.
The suit alleged breaches of contract, including breaches in
connection with the Rental Pool Master Lease Agreement. On June
30, 2004, the Westin Innisbrook Golf Resort served as collateral
for a $79 million original balance non-recourse loan Golf Trust
of America made in 1997 to the Resort's predecessor owner, Golf
Host Resorts, Inc. The former owner/borrower entered into an
arrangement with many of the persons who own condominium units
at the Resort whereby the condominiums owned by these persons
are placed in a pool and rented as hotel rooms to guests of the
Resort.
Certain of the condominium owners (as plaintiffs) initiated a
legal action against the Company former borrower and its
corporate parent, Golf Hosts, Inc. (as defendants), regarding
various aspects of this arrangement. The plaintiffs are seeking
unspecified damages and declaratory judgment stating that the
plaintiffs are entitled to participate in the rental pool if one
exists, a limitation of the total number of club memberships and
a limitation of golf course access to persons who are either
condominium owners who are members, their accompanied guests, or
guests of the resort.
Depositions of class members and others, including depositions
of prior executives of the Company, have been taken and
additional discovery remains. The Court has postponed the
previously scheduled trial date of February 3, 2003; a new trial
date has not yet been set.
As of December 31, 2003, the Court had decertified the class and
denied the plaintiffs' subsequent motion to permit additional
owners to intervene in the lawsuit. In addition, the plaintiffs
filed a complaint seeking to "pierce the corporate veil." The
Court dismissed the veil piercing complaint with prejudice. The
plaintiffs appealed the decertification of the class; the denial
to intervene and the veil piercing dismissal to the Florida
Court of Appeals, Second District. The Court of Appeals has
affirmed the lower Court's decertification of the class and has
affirmed the lower Court's dismissal with prejudice of the veil
piercing case.
On June 15, 2004, counsel for the former borrower reargued the
motion for summary judgment to summarily dismiss the claims of
the remaining 80 individual plaintiffs. The judge granted this
motion for summary judgment.
GOODY'S FAMILY: GA Court Retains Jurisdiction in Race Bias Suit
---------------------------------------------------------------
The United States District Court for the Middle District of
Georgia retained jurisdiction over litigation filed against
Goody's Family Clothing, Inc., alleging race discrimination
against its African-American employees.
In February 1999, 20 named plaintiffs filed a lawsuit against
the Company and Robert M. Goodfriend, its Chairman of the Board
and Chief Executive Officer, generally alleging that the Company
discriminated against a class of African-American employees at
its retail stores through the use of discriminatory selection
and compensation procedures and by maintaining unequal terms and
conditions of employment. The plaintiffs further alleged that
the Company maintained a racially hostile working environment.
On February 28, 2003, a proposed Consent Decree was filed with
the District Court for its preliminary approval. The proposed
Consent Decree sets forth the proposed settlement of the class
action race discrimination lawsuit. Ultimately, class action
certification was sought in the lawsuit only with respect to
alleged discrimination in promotion to management positions and
the proposed Consent Decree is limited to such claims.
Generally, the proposed settlement provides for a payment by the
Company in the aggregate amount of $3.2 million to the class
members (including the named plaintiffs) and their counsel, as
well as the Company's implementation of certain policies,
practices and procedures regarding, among other things, training
of employees. The proposed Consent Decree explicitly provides
that it is not an admission of liability by the Company and the
Company continues to deny all of the allegations.
On April 30, 2003, the District Court granted preliminary
approval of the proposed Consent Decree, and a hearing was held
on June 30, 2003, regarding the adequacy and fairness of the
proposed settlement. On March 3, 2004, the United States
District Court for the Middle District of Georgia issued an
Order granting final approval of the Consent Decree. On
February 23, 2004, a purported class member filed an appeal with
the U.S. Court of Appeals for the Eleventh Circuit (the
"Eleventh Circuit"), alleging, among other things, misconduct on
the part of the District Court and the plaintiff's/appellant's
counsel; the Eleventh Circuit dismissed this appeal on March 5,
2004.
On March 12, 2004, a Motion to set aside the dismissal was filed
with the Eleventh Circuit. On May 28, 2004, the Eleventh
Circuit dismissed all appeals regarding this matter. In August
2004, a purported class member filed a Petition for a Writ of
Certiorari with the United States Supreme Court regarding the
Eleventh Circuit's dismissal of all appeals on this matter; the
United States Supreme Court is expected to make a ruling on such
Petition within six (6) months. Pursuant to the terms of the
March 3, 2004 Order, the District Court will maintain
jurisdiction of this matter until July 2006 to monitor the
parties' compliance with the Consent Decree.
The suit is styled "Bonds v. Goody's Family, case no.
1:99-cv-00091-WLS," filed in the United States District Court
for the Middle District of Georgia, under Judge W. Louis Sands.
Lawyer for the defendant is Marcus Benton Calhoun, Jr., P.O. Box
1199, Columbus, GA 31902-1199, Phone: 706-324-0251, E-mail:
mbc@psstf.com. Representing lead plaintiff Cathy Bonds is
Joseph Calhoun Nelson, III, P.O. Box 109, Athens, GA 30603,
Phone: 706-549-5598.
ILLINOIS: Chiropractor's Suit V. Insurers To Be Heard Next Week
---------------------------------------------------------------
Granite City Chiropractor Lawrence Shipley, D.C.'s class action
complaint against CCN Managed Care and First Health Group will
be heard in Court on December 28 on defendant's motion to
dismiss or alternatively stay and compel arbitration.
According to Court documents, since February 26, 2003, Dr.
Shipley has been named a plaintiff in 12 class action suits
filed in Madison County Circuit Court and in all the cases The
Lakin Law Firm represents him.
Dr. Shipley claims in July of 1995 he entered into a provider
agreement with CCN, and at the time, CCN, which is one of the
nation's largest PPO networks, marketed its network as being a
group health and workers' compensation network.
Unbeknownst to him and other class members, Dr. Shipley claims
CCN secretly conspired to increase its profits and the profits
of its insurance Company clients by launching a CCN auto
network. The complaint states, "CCN began selling rights to
discounted rates under its network to auto insurance companies,
secretly setting up an `auto network' unknown to plaintiff in
about 2000 or 2001." After First Health acquired CCN, Dr.
Shipley claims First Health joined in the CCN conspiracy and
continued to market the CCN "auto network" and provide access to
CCN discounts to insurers that First Health knew were not
entitled to take such discounts.
Shipley claims a $42 patient charge on June 29, 2001 for a
Farmers Group Insurance auto policy insured, was paid at $36 and
noted "PPO Svngs" of $6.
Another charge Dr. Shipley submitted to Farmers on September 26,
2001, was reduced by 60 cents, and Dr. Shipley alleges Farmers
reduced the billed amounts pursuant to the purported CCN
agreement. Dr. Shipley claims that in the explanation of
benefits, it states, "CCN Auto Provider Network."
MetLife also reduced the billed amounts pursuant to the
purported CCN agreement, according to Dr. Shipley, who also has
pending class action cases against MetLife and Farmers
Insurance. The benefits explanation in this one states, "A
network discount has been applied in accordance with your CCN
preferred provider contract."
Dr. Shipley alleges that by secretly signing up numerous auto
carriers as payors under the CCN network, CCN breached its payor
agreement with him, and also deceived him. Furthermore, he
claims there is no written payor agreement between CCN and
Farmers, and Farmers had no right to take CCN network discounts
for this additional reason.
"By providing confidential network provider names and rates to
Farmers (or its agents) and enabling Farmers to take improper
network discounts, CCN has breached its contract with plaintiff
and deceived plaintiff," the complaint states.
Dr. Shipley's justification for a class action suit is based on
the numerous healthcare providers who may have unknowingly been
duped. But even if they had been aware of "CCN's sophisticated
scheme...the amount in controversy would be too small to justify
the expense of litigation," according to the suit.
Dr. Shipley and the class are seeking an amount to be determined
at trial but in no event shall the recovery to any class member
exceed $75,000. Circuit Judge Andy Matoesian is set to hear the
motion at 9 a.m. in Courtroom 351.
IMPAC MEDICAL: Securities Fraud Suits To Be Consolidated in CA
--------------------------------------------------------------
Plaintiffs asked the United States District Court for the
Northern District of California to consolidated the securities
class actions filed against IMPAC Medical Systems, Inc. and
certain of its executive officers.
On September 8, 2004, an alleged shareholder of the Company
filed a putative securities class action lawsuit styled
"Operating Engineers Construction Industry and Miscellaneous
Pension Fund (Local 66 - Pittsburgh), on Behalf of Itself and
All Others Similarly Situated v. IMPAC Medical Systems, Inc.,
Joseph K. Jachinowski and Kendra A. Borrego." The lawsuit
relates to the Company's March 1, 2004, announcement of its
intent to restate its financial statements for fiscal years 2000
through 2003, and the Company's subsequent restatement of those
financial statements.
The lawsuit alleges, among other things, that during the period
from November 20, 2002 to May 13, 2004, the Company falsely
reported its results for fiscal years 2000 to 2003 through
improper revenue recognition, and thereby artificially inflated
the price of the Company's stock. The plaintiff purports to
have brought this lawsuit as a class action on behalf of all
persons who purchased the Company's securities on the open
market during the class period.
On September 14, 2004, two individuals filed a second purported
securities class action lawsuit in the same Court that is
substantively identical to the one filed on September 8, 2004,
styled "Alan Lerner and Marvin Rogers, on Behalf of Themselves
and All Others Similarly Situated v. IMPAC Medical Systems,
Inc., Joseph K. Jachinowski and Kendra A. Borrego." The second
lawsuit alleges the same claims against the same defendants on
behalf of the same purported class of shareholders (those who
purchased the Company's securities on the open market during the
period from November 20, 2002 to May 13, 2004) as the prior
lawsuit.
On September 21, 2004, another individual filed a third putative
securities class action lawsuit in the same Court, styled "John
Maras, Individually and On Behalf of All Others Similarly
Situated v. IMPAC Medical Systems, Inc., Joseph Jachinowski,
Kendra Borrego, David Auerbach, and James Hoey." This lawsuit
alleges the same claims under the federal securities laws as the
two earlier-filed lawsuits, and names as defendants, in addition
to the Company and the two executives named in the two earlier-
filed lawsuits, two other executive officers of the Company.
This lawsuit alleges the same class period as the two earlier-
filed actions (i.e., November 20, 2002 to May 13, 2004), and
likewise alleges that during the class period the Company
overstated its financial results for fiscal years 2000 to 2003
through improper revenue recognition, allegedly resulting in
artificial inflation of the price of the Company's stock during
the class period. This action further alleges that each of the
four individual defendants sold shares of the Company's stock
during the class period while in possession of material non-
public information.
Each of these three related cases has been assigned to a single
judge, and the Company anticipates that these three cases will
be consolidated into a single action. On November 8, 2004, an
alleged shareholder filed a motion to consolidate the three
cases and to be appointed as lead plaintiff for the putative
class. No date has been set for a hearing on this motion, and
other shareholders seeking appointment as lead plaintiff may
file similar motions. These lawsuits are still in the pleading
stage, and the Court has entered orders providing that the time
for the Company and the individual defendants to move to
dismiss, answer, or otherwise respond to the complaints is
extended through and including forty-five days after the later
of the appointment of lead plaintiff(s) or the filing of an
consolidated amended complaint.
IMPAX LABORATORIES: Shareholders Launch Securities Suits in CA
--------------------------------------------------------------
Impax Laboratories, Inc. faces several class actions filed in
the United States District Court for the Northern District of
California, alleging violations of federal securities laws.
According to press releases by the plaintiff law firms, the
complaints allege that the Company and certain of its officers
and directors violated the Securities Exchange Act of 1934 by
causing the Company's shares to trade at artificially inflated
levels through the issuance of false and misleading financial
statements. The complaints appear to focus, in part, on the
Company's announcement on November 3, 2004 that it would restate
its earnings for the first and second quarters of 2004 as a
result of a strategic partner's unforeseen revision of revenues
from sales of one of the Company's drugs during such quarters.
The Company has not yet been served with copies of the
complaints.
The suits are:
(1) Elnekave v. IMPAX Laboratories, Inc. et al., Case No.
3:04-cv-05215-MHP, filed under Judge Marilyn H. Patel.
(2) Bhandari v. IMPAX Laboratories, Inc. et al, Case No.
3:04-cv-05252-CRB, under Judge Charles R. Breyer
(3) Rosen v. IMPAX Laboratories, Inc. et al., case no.
5:04-cv-04802-JW, under Judge James Ware
(4) Mihalik v. IMPAX Laboratories, Inc. et al., case no.
5:04-cv-04920-JW, under Judge James Ware
(5) Tetzeli v. IMPAX Laboratories, Inc. et al, case no.
5:04-cv-05057-JW, under Judge James Ware
The plaintiff firms in this litigation are:
(i) Peter A. Binkow, Michael M. Goldberg, Lionel Z. Glancy,
Glancy Binkow & Goldberg LLP, 1801 Avenue of the Stars,
Suite 311, Los Angeles, CA 90067, Phone: 310-201-9150
Fax: 310-201-9160 E-mail: info@glancylaw.com;
(ii) Robert I. Harwood and Jeffrey M. Norton, Wechsler
Harwood LLP, 488 Madison Avenue, New York, NY 10022,
Phone: 212-935-7400, Fax: 212-753-3630
(iii) Charles J. Piven, Law Offices of Charles J. Piven,
P.A., 401 East Pratt Street, Suite 2525, Baltimore, MD
21202, Phone: 410/332-0030, Fax: 410-685-1300 E-mail:
piven@pivenlaw.com
(iv) Patrick V. Dahlstrom, Pomerantz Haudek Block Grossman &
Gross, One North La Salle Street #2225, Chicago, IL
60602, Phone: 312-377-1181, Fax: 312-377-1184
(v) Patrick J. Coughlin, Willow E. Radcliffe, Lerach
Coughlin Stoia Geller Rudman & Robbins LLP, 100 Pine
Street Suite 2600, San Francisco, CA 94111, Phone:
415/288-4545, Fax: 415-288-4534 (fax), E-mail:
patc@mwbhl.com or willowr@lerachlaw.com
(vi) William S. Lerach, Darren J. Robbins, Lerach Coughlin
Stoia Geller Rudman & Robbins LLP, 401 B Street, Suite
1700, San Diego, CA 92101, Phone: 619-231-1058, Fax:
619-231-7423 E-mail: billl@lerachlaw.com or
DRobbins@lerachlaw.com
LEAP WIRELESS: Plaintiffs To Appeal CA Securities Suit Dismissal
----------------------------------------------------------------
Plaintiffs informally indicated their intent to appeal the
United States District Court for the Southern District of
California's dismissal of the consolidated securities class
action filed against two of Leap Wireless International, Inc.'s
former officers, despite the deadline the Court set for them to
file an appeal.
The suit, styled "In re Leap Wireless Securities Litigation,
Case No. 02-CV-2388J (AJB), consolidated into a single action
several securities class action law suits originally filed
between December 5 2002 and February 7, 2003 on behalf of all
persons who purchased or otherwise acquired the Company's common
stock from February 11, 2002 through July 24, 2002.
The amended complaint, which named as defendants only Harvey
White and Susan Swenson, former Company officers, alleged that
the defendants were responsible for the dissemination of a
series of material misrepresentations to the market during the
Class Period, thereby artificially inflating the price of the
Company's common stock in violation of Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder. The amended complaint seeks
compensatory damages for plaintiffs and other members of the
purported class in an amount to be proved at trial, plus
interest costs and expenses.
The Court dismissed the suit on August 26,2004. Although the
Court's dismissal order provided plaintiffs with an opportunity
to amend their complaint, they did not do so within the time
period set by the Court and instead informally indicated that
they intend to appeal the Court's dismissal order.
MAINE: Supreme Court Returns Hospital Oversight To State
--------------------------------------------------------
A ruling of the Maine Supreme Judicial Court returned the
management of the former Augusta Mental Health Institute to the
state, the Bangor Daily News reports.
An independent, Court-appointed receiver has run the facility,
now called the Riverview Psychiatric Hospital, since September
2003, when a lower Court judge found the state in contempt of a
long-standing consent agreement. State officials, who have
maintained that the receivership was inappropriate, unnecessary
and perhaps unconstitutional, met the ruling with approval,
however a leading advocate for the mentally ill commented
recently that patient care at the state's flagship psychiatric
hospital has improved under the receiver and expressed hope that
the momentum can be maintained.
According to Carol Carothers, executive director of the Maine
chapter of the National Alliance of the Mentally Ill, the
receiver, Elizabeth Jones, has brought hope to Mainers living
with mental illness. Ms. Carothers further adds that
improvements in such areas as discharge planning, peer support
groups and relationships with county jails have been addressed
more efficiently absent the cumbersome bureaucracy of state
government.
While returning the hospital to the management of the Department
of Health and Human Services is "mostly good," Ms. Carothers
cautioned consumers to be vigilant in understanding their rights
as the state resumes control.
As previously reported in the December 16, 2004 edition of the
Class Action Reporter, the AMHI consent decree was signed by
state officials in 1990 to settle a class-action lawsuit brought
by patients over deteriorated conditions and several deaths at
AMHI. The state originally promised to comply with the reforms
outlined in the decree by 1995, however after a seven-week trial
in 2002-03 judge Mills rejected the state's claim that it met
the terms of the decree and has promptly held state officials in
contempt for the third time since the consent decree was signed.
The Court agreement set comprehensive goals for improving all
aspects of mental health care, both in the hospital and in the
community, including basic conditions of inpatient care,
treatment plans, medication management, grievance procedures,
staff oversight, discharge planning and follow-up care in the
community. Under the terms of the consent agreement, the state
was, and still is, required to develop and implement a system
for measuring progress toward meeting those goals.
Despite the lifting of the receivership, AMHI and the larger
mental health system will remain under Court oversight until
compliance with the consent agreement is fully demonstrated.
Former Chief Justice Daniel Wathen acts as the liaison between
the beleaguered state agency and the Superior Court.
MISSERLI & KRAMER: Faces Lawsuits Over Debt Collection Methods
--------------------------------------------------------------
Minnesota Attorney General Mike Hatch initiated a lawsuit
against a prominent local law firm for allegedly using unethical
debt collection methods, according to the Star Tribune, the
American City Business Journals reports.
Filed in Ramsey County Court, the attorney general's lawsuit
accuses Minneapolis-based Messerli & Kramer of charging
excessive legal fees for debt recovery and unlawfully attempted
to garnish Social Security benefits, welfare payments, pensions
and other forms of income exempt from debt collection. It also
requests for an injunction to stop the firm from continuing its
current practices and seeks civil penalties for each violation
and restitution for people who were overcharged for legal fees.
Mid-Minnesota Legal Aid, which filed a separate lawsuit on
behalf of several customers, seeks class-action status and
alleges the firm violated state and federal debt collection
laws.
Messerli & Kramer, which calls itself one of the largest debt
collection law firms in the nation with more than 70,000 active
files, represents companies seeking payments on credit card
accounts, car loans, student loans and other debts. The firm
said in a statement saying it had not reviewed the suits and
does not typically comment on pending litigation. The firm
however said that it "is confident that its actions comply with
legal and ethical considerations."
Messerli & Kramer also lobbies for the Minnesota Twins,
Motorola, Philip Morris, Canterbury Park, Qwest and the
Northstar Corridor Development Authority.
MIIX GROUP: Enters Mediation For Securities Fraud Lawsuit in NJ
---------------------------------------------------------------
The MIIX Group, Inc. entered mediation discussions with
plaintiffs in the consolidated securities class action filed
against it and certain of its current and former officers and
directors in the United States District Court for the District
of New Jersey.
On February 5,2003, the suit, styled "GLASSER V. THE MIIX GROUP,
INC. ET AL.," was filed against the Company, present and former
directors and officers of the Company, the Medical Society of
New Jersey ("MSNJ") and Fox-Pitt Kelton, Inc. ("FPK"), which
acted as financial advisor to the Company. The complaint
alleges that the Company and its directors and officers engaged
in securities fraud, breaches of fiduciary duty and violations
of New Jersey antitrust laws in connection with the MIIX
Advantage contracts and alleged misrepresentations and omissions
of material fact in various SEC filings by the Company.
On May 13, 2003, another shareholder of the Company instituted a
separate putative class action in the United States District
Court for the District of New Jersey, styled "WASSERSTRUM V. THE
MIIX GROUP, INC., ET AL.," against the Company and certain of
its officers alleging securities fraud. The law firms
representing plaintiffs in the two actions agreed to consolidate
the plaintiffs' claim against the Company.
On August 12, 2003, a Consolidated Amended Complaint was filed
by the plaintiffs against the Company, present and former
directors and officers of the Company and MSNJ alleging
securities fraud based on alleged misrepresentations and
omissions of material fact in various SEC filings by the
Company concerning the Company's financial condition, its
statement of reserves, the pricing of its policies, the MIIX
Advantage contracts and other matters. The Complaint seeks
certification of a plaintiff class of the Company's shareholders
from July 30, 1999 to September 12, 2002 and unspecified
damages, pre- and post-judgment interest, attorneys' fees and
costs.
On October 21, 2003, the Company filed a motion to dismiss the
Complaint, which is currently pending. On December 11, 2003,
the Court ordered that the case be submitted to mediation and
stayed all proceedings pending mediation. The parties are
engaging in mediation discussions.
NETGEAR INC.: Reaches Settlement For CA Consumer Fraud Lawsuit
--------------------------------------------------------------
NetGear, Inc. reached a settlement for the class action filed
against it in the Superior Court of California, County of
Alameda, styled "Weaver v. NetGear, Civil Action RG04161382."
The complaint purports to be a class action on behalf of persons
who obtained any consumer product manufactured by the Company
and sold in California on or after January 1, 2004. Plaintiff
alleges that the Company violated California law because it did
not disclose on its website that the failure to register a
product does not diminish the product's warranty. The complaint
seeks unspecified damages and injunctive relief.
In October 2004, the Company and the plaintiff reached a
tentative settlement which provides for a payment of $17,500 by
the Company. The proposed settlement is subject to final
documentation mutually agreeable to both parties and final Court
approval.
NETGEAR INC.: Faces CA Consumer Lawsuit Over Wireless Products
--------------------------------------------------------------
NetGear, Inc. faces a class action filed in the Superior Court
of California, County of Santa Clara, styled "Zilberman v.
NetGear, Civil Action CV-02-1230."
The complaint purports to be a class action on behalf of all
persons or entities in the United States who purchased the
Company's wireless products other than for resale. Plaintiff
alleges that the Company made false representations concerning
the data transfer speeds of its wireless products when used in
typical operating circumstances. Similar lawsuits have been
filed against other companies within our industry. The Company
has filed an answer to the complaint denying the allegations.
Limited discovery is currently under way and no trial date has
been set.
NEVADA: Judge Wants Revision To Suit Over Yucca Mountain Project
----------------------------------------------------------------
A federal judge wants revisions to a lawsuit claiming
contractors exposed workers and visitors to toxic dust during
tunneling at the site of a planned national nuclear waste dump
known as the Yucca Mountain project, which is 90 miles northwest
of Las Vegas, Nevada, the Associated Press reports.
US District Judge James Mahan ruled the lawsuit on behalf of
North Las Vegas resident Gene Griego and seven others seeking
class action status was overstated. A January 10th hearing will
let Bechtel National, Bechtel S-A-I-C and other Yucca Mountain
project contractors respond to the revised complaint.
A Bechtel S-A-I-C spokeswoman says the Company's gratified by
the Court ruling. Griego notes the judge didn't throw out the
case. He blames chronic lung ailments on inhaling dust
containing silica, as well as the fibrous mineral erionite and a
sister mineral, mordenite.
As previously reported in the September 6, 2004 edition of the
Class Action Reporter, two former industrial hygienists in their
Court filings, claimed that they were fired after warning
government contractors about toxic dust in the first test tunnel
at the site of the Yucca Mountain project.
According to the Court fillings, one account by Judy Kallas, a
former industrial hygienist for Omaha, Nebraska-based Kiewit
Construction Co., alleged that her supervisor ordered her in
1996 to change her notes about toxic silica levels in tunnels,
who would be later that year fired. Another industrial
hygienist, Wilbert L. Townsend, formerly of Bechtel SAIC Co. was
also dismissed in March 2002 after warning supervisors that
workers were being overexposed to silica and other harmful dust.
Joe Egan, an attorney representing workers, who are claiming
that they were exposed to dangerous silica dust, said that the
contractors completed the test tunnel for the proposed national
nuclear waste repository in 1997. He further adds, "They
sacrificed the workers to save time and money."
The companies involved in the project denied the allegations,
which were first made in a civil lawsuit filed in March that
seeks class-action status and unspecified damages in Clark
County District Court.
Mr. Egan estimates that through the years about 1,200 or more
workers and visitors could have been exposed to dangerous levels
of the silica dust, which can cause Silicosis, an incurable and
fatal lung disease that can develop years after exposure.
NEW YORK: Court Ruling Allows Easier Access To Legal Aid Groups
---------------------------------------------------------------
A recent ruling by U.S. District Judge Frederic Block in
Brooklyn has made it easier for low-income people and immigrants
to get access to local legal services groups, the Newsday, Inc.
reports. Under the terms of the ruling, three legal services
groups will be able to provide certain kinds of assistance more
easily from the same office complex and not run afoul of federal
funding laws.
Manhattan lawyer Peter Fishbein predicts that the decision will
likely be used as a precedent for more Court challenges by
scores of legal services groups around the country. Kaye,
Scholer, Fierman, Hays & Handler, LLP, where Mr. Fishbein is
special counsel, teamed with the Brennan Center for Justice to
represent the local groups who brought the suit.
Until the ruling, local legal services organizations had to go
through the expense of renting separate office facilities with
separate employees in order to file class action lawsuits or
help certain classes of immigrants. That restriction has been in
place since 1996, when Congress passed a law that barred local
legal service groups from using federal money for those
activities. The groups had to set up separate offices and use
private funding to handle legal matters for which federal funds
couldn't be used, a step that proved too onerous for many.
According to Burt Neuborne, legal director of the Brennan Center
for Justice, "It was like a bad Marx Brothers movie," who
directed his comments on the convoluted and expensive steps non-
profit groups had to take to set up separate offices.
Under the ruling, separate non-profit corporations with separate
financial records will still be required, however even those
requirements would be less expensive and easier to work with,
advocates said.
Three non-profit groups had brought the suit namely: Legal
Services for New York City, South Brooklyn Legal Services, and
Farmworker Legal Services of New York. Their suit was directed
against the federal Legal Services Corporation, the group that
dispenses funding.
New York Legal Services, the largest of the three, has a budget
of about $34 million a year, said executive director Andrew
Scherer with about one-third of it coming from federal funding,
one third from private donors and one third from local
governments.
"This will allow us to use private [non-federal] dollars to
service clients we have been unable to serve since the
restrictions of 1996," added Mr. Scherer, who referred
specifically to undocumented immigrants.
OHIO: Group Lodges Suit Over Abuses At Scioto Juvenile Facility
---------------------------------------------------------------
Six girls with the help of the Children's Law Center have
initiated a lawsuit against the state of Ohio, claiming that
they were physically, sexually and verbally abused at state's
only prison for girls and officials repeatedly refused to
correct the problems, the Associated Press reports.
According to Kim Brooks Tandy, executive director of the
Children's Law Center, a regional advocacy group in Covington,
Kentucky that filed the case, the lawsuit is asking the Court to
stop the state from sending girls to the Scioto Juvenile
Correctional Facility until changes are made.
Meanwhile, Tom Stickrath, interim director of the Department of
Youth Services, said changes are coming for the prison about 15
miles north of Columbus. He adds, "There are so many things
under way, so many things I want to bring to the table that I
think will hopefully prove helpful."
The facility houses about 130 girls ages 12 to 21. Most girls
were committed for minor or nonviolent offenses, and many were
in the state's foster care system.
In their lawsuit, the girls, who are identified only by first
and last initials, say they have been subjected to verbal and
physical abuse, denied medical and mental health treatment and
disciplined inappropriately. The lawsuit seeks class action
status on behalf of the girls at the prison, along with future
offenders.
The suit said male guards were allowed under prison policy to
strip search inmates, in violation of privacy rights, and use
excessive force. In the case of one inmate who tried to stab
herself with a pen, the suit details how a corrections officer
"choked her around the neck, tackled her to the ground, kneed
her forcefully and sat atop her with his crotch area in her
face."
The Law Center in July filed a separate lawsuit in U.S. District
Court in Columbus, seeking a Court order to create a system for
juvenile inmates to have access to attorneys and complain about
problems.
Following the lawsuit, a consultant hired by the state issued a
report where he found guards at Scioto used excessive force and
authorities conducted incomplete and meaningless investigations
into reports of abuse.
OMNI BIOTECH: Agrees To Halt Sale of Products With False Claims
---------------------------------------------------------------
A Marysville Company that made unsubstantiated claims about the
effectiveness of body-enhancement products it sold over the
Internet has agreed to stop offering the products in Washington,
state Attorney General Christine Gregoire announced in a
statement.
Omni BioTech International, Inc., which also did business as
Small Breast Solutions (SBS), targeted consumers who desired
breast enlargement, weight loss, and sexual dysfunction cures.
The products ranged from $14.95 for a supply of breast-
enhancement soap to $349.90 for a six-month supply of the
"Complete System."
"Products that claim to improve physical appearance will always
be an easy sell," Gregoire said. "Unfortunately, the evidence to
back up the claims is often less than skin deep."
A lawsuit against Omni Bio Tech and the simultaneous settlement
were filed today by the Attorney General's Consumer Protection
Division in Snohomish County Superior Court.
The lawsuit alleges that the defendants marketed their products
with unsubstantiated claims of effectiveness. For example, the
defendants claimed that the SBS Breast Enhancement Capsules were
"packed with the only four herbs that actually build healthy new
cells and tissues in the breasts, making them larger and
firmer." The defendants also claimed that the changes in breast
size were permanent and completely safe.
SBS products included breast enhancement capsules, liquid, Fenu-
Fennel Spray Lotion, tea and soap, and Sher Breast Cream. In
addition to breast enhancement products, SBS also sold
DreamaLEAN, Simply Slender Body Wraps, and sexual performance
products called Veletrin, Velotrex and Stimulaire. DreamaLEAN
promised to break up fatty pockets and cellulite in specific
areas of the body such as the hips, thighs, stomach, buttocks,
back of the arms, and any other areas with excessive fatty
deposits."
The Company sold products on a variety of websites, including
http://www.sbsproducts.com,http://www.weightloss-formulas.com,
http://www.dreamalean.com,http://www.mdjournals.com,
http://www.breastenhancement-solutions.com,and
http://www.velotrim.com. Also named in the lawsuit and
settlement are Bailey Rosson-Gray, President of Omni BioTech and
her husband Robert Rosson, secretary of the corporation.
Under the settlement, Omni BioTech agreed to pay $34,000 in
civil penalties and legal costs, to pay refunds to dissatisfied
consumers, and to stop selling its products in Washington.
Refunds will be offered to hundreds of customers who have
already filed complaints with the Company, the Attorney
General's Office or the Better Business Bureau, or who file
complaints with the business or the AG's Office within the next
three months.
Omni BioTech is the second Internet-based, body-enhancement
business to face action by the Attorney General's Consumer
Protection Division this year. The office earlier settled with a
Snohomish County business that marketed a product called
Nature's Advantage, which claimed to increase breast size
without surgery.
ORKIN INC.: FL Judge Grants Certification To Homeowner's Lawsuit
----------------------------------------------------------------
Florida Circuit Court Judge Emmett L. Battles recently granted
class action status to a civil lawsuit accusing Orkin, Inc. pest
control of defrauding its customers, the Associated Press
reports.
According to Judge Battles, Floridians who have had a contract
with Orkin since March 9, 1995, can join the 1999 suit that
accuses the pest control giant of deceiving customers regarding
treatments allegedly made and then reneging on guarantees
against termite damage.
The attorneys who brought the case against Orkin estimate as
many as 100,000 Florida homeowners could seek damages for
deceptive and unfair trade practices under Judge Battles'
recently issued ruling.
Upon the issuance of the ruling, Orkin told AP that it was
appealing the ruling and will continue to fight the lawsuit.
Furthermore, in a statement to the Associated Press, the
Atlanta-based Company said, "The heart of Orkin's business is
protecting homes, and we do so with diligence, pride and care
for 1.6 million customers. Orkin's practices, policies and
structure encourage our employees to be hardworking, honorable
and provide our customers with the best pest and termite
protection available."
Dan Clark, a Tampa attorney who represents the four homeowners
who originally sued, did not return calls for comment.
Judge Battles' ruling is the second time a Hillsborough judge
has granted class-action status to the lawsuit brought by the
four, who blame Orkin for termite damage to their homes. The 2nd
District Court of Appeal in Lakeland had ruled a 2002 ruling
that granted class-action status was insufficient and returned
the case to the lower Court for more proceedings.
The lawsuit claims Orkin never provided re-inspection or re-
treatment services although customers were charged for the
program and that Orkin workers forged customers signatures
saying the services had been provided. The four plaintiffs from
Tampa are also claiming that they were lured by false
advertising and Company promises, only to suffer damages when
their homes became infested.
The ruling creates the latest trouble for the pest control
Company, which is battling a deluge of Court actions over its
work and a racketeering investigation by the Florida Attorney
General Charlie Crist.
Earlier this year, a federal judge also upheld a $2 million
arbitration judgment in favor of a customer from Ponte Vedra.
Orkin also settled a $6.7 million lawsuit in 2003 over a termite
damaged apartment complex in Clearwater. Its terms though that
was reached in Florida Circuit Court in Tampa, were
confidential.
PARADIGM MEDICAL: Utah Shareholders Lawsuit Seeks Trial By Jury
---------------------------------------------------------------
Paradigm Medical Industries, Inc. faces an action filed in the
Third Judicial District Court, Salt Lake County, State of Utah,
captioned "Albert Kinzinger, Jr., individually and on behalf of
all others similarly situated vs. Paradigm Medical Industries,
Inc., Thomas Motter, Mark Miehle, Randall A. Mackey, and John
Hemmer, Case No. 030922608."
The complaint is a "Class Action Complaint for Violations of
Utah Securities Laws and Plaintiffs Demand a Trial by Jury."
The Company has retained legal counsel to review the complaint,
which appears to be focused on alleged false or misleading
statements pertaining to its Blood Flow Analyzer(TM). More
specifically, the complaint alleges that the Company falsely
stated in Securities and Exchange Commission filings and press
releases that it had received authorization to use an insurance
reimbursement CPT code from the CPT Code Research and
Development Division of the American Medical Association in
connection with the Blood Flow Analyzer(TM), adding that the CPT
code provides for a reimbursement to doctors of $57.00 per
patient for the Blood Flow Analyzer(TM).
The purpose of these statements, according to the complaint, was
to induce investors to purchase shares of the Company's Series E
preferred stock in a private placement transaction at
artificially inflated prices. The complaint contends that as a
result of these statements, the investors that purchased shares
of the Company's Series E preferred stock in the private
offering suffered substantial damages to be proven at trial. The
complaint also alleges that the Company sold Series E preferred
shares without registering the sale of such shares or obtaining
an exemption from registration. The complaint requests
rescission, compensatory damages and treble damages, including
interest and attorney's fees.
PARAGON FINANCIAL: Asks NY Court To Approve Lawsuit Settlement
--------------------------------------------------------------
Paragon Financial Corporation asked the United States District
Court for the Southern District of New York to grant preliminary
approval to the settlement of the consolidated securities class
action filed against it and certain of its former directors and
officers.
In mid-2001, the Company, and certain of its former directors
and officers were named as defendants in class action complaints
alleging violations of the federal securities laws. In mid-
2002, the complaints against the Company were consolidated into
a single action. The essence of the complaint is that in
connection with the Company's initial public offering in October
1999 ("IPO"), the defendants issued and sold the Company's
common stock pursuant to a registration statement which did not
disclose to investors that certain underwriters in the offering
had solicited and received excessive and undisclosed commissions
from certain investors acquiring the Company's common stock in
connection with the IPO.
The complaint also alleges that the registration statement
failed to disclose that the underwriters allocated Company
shares in the IPO to customers of the underwriters in exchange
for the customers' promises to purchase additional shares in the
aftermarket at pre-determined prices above the IPO price. The
action seeks damages in an unspecified amount.
The action is being coordinated with approximately 300 other
nearly identical actions filed against other companies that had
initial public offerings of securities between 1997 and 2000
same time period. The Company has approved a Memorandum of
Understanding ("MOU") and related agreements which set forth the
terms of a settlement between the Company, the plaintiff class
and the vast majority of the other approximately 300 issuer
defendants.
Among other provisions, the settlement contemplated by the MOU
provides for a release of the Company and the individual
defendants for the conduct alleged in the action to be wrongful.
The Company would agree to undertake certain responsibilities,
including agreeing to assign away, not assert, or release
certain potential claims the Company may have against its
underwriters. The MOU and related agreements are subject
to a number of contingencies, including the negotiation of a
settlement agreement and its approval by the Court.
PNC FINANCIAL: Reaches $30 Mil Settlement in Investor Lawsuit
-------------------------------------------------------------
PNC Financial Services Group Inc. agreed to a $30 million
settlement to resolve a class action investor lawsuit that
accused the Company of using improper insurance contracts to
hedge against volatile earnings, the Associated Press reports.
According to PNC officials, insurers for Company will place the
money in a settlement fund while insurance giant American
International Group Inc., will pay an additional $4 million to
the fund. AIG was alleged to have been improperly selling
insurance contracts to two companies, PNC and Brightpoint Inc.,
to help them smooth earnings volatility from quarter to quarter.
Meanwhile, in an accord with the Securities and Exchange
Commission, AIG also recently agreed to pay $46 million to
settle allegations of civil securities fraud over several 2001
transactions it made with PNC that allegedly helped the regional
bank artificially inflate its earnings.
Explaining the terms of the settlement, Company spokesman Brian
Goerke told AP that PNC does not control the fund, which will
pay shareholders that were affected by the transactions. He
adds, "We're pleased that we have reached a settlement on these
matters. The financial impact will be realized in the fourth
quarter."
The federal investigation of AIG's dealings with PNC involved
three 2001 transactions in which the Pittsburgh-based bank
increased its earnings by shifting $762 million of poorly
performing loans and other assets off its balance sheet,
allegedly in violation of generally accepted accounting
principles.
RCN CORPORATION: Faces ERISA Violations Suits in NY, NJ Courts
--------------------------------------------------------------
Certain of RCN Corporation's officers and directors face four
class actions filed in New York and New Jersey Federal Courts,
relating to alleged breach of fiduciary duties in relation to
management of RCN's Savings & Stock Ownership Plan during the
periods from April 1, 2000 to the present. The suits are
styled:
(1) Debra Craig v. John D. Filipowicz, et al, (Civil Action
No. 04-CV-07875, U.S. District Court for the Southern
District of New York), filed October 9, 2004,
(2) Stephanie Thomas v. David C. McCourt, et al, (Civil
Action No. 04-5068, U.S. District Court for the
District of New Jersey), filed October 15, 2004,
(3) Robert M. Maguire v. John D. Filipowicz, et al, (Civil
Action No. 1:04-cv-08454, U. S. District Court for the
Southern District of New York), filed October 27, 2004
and
(4) Harold Hill v. David C. McCourt, et al, (Civil Action
No. 04-5368(SRC), U.S. District Court for the District
of New Jersey), filed November 3, 2004
The suits allege the defendants, as fiduciaries of the 401(k)
Plan, breached their duties as fiduciaries under the Employee
Retirement and Income Security Act, 29 U.S.C. Section 1132.
Many of the named defendants in these cases are officers and/or
directors of RCN or its subsidiaries and as such may be entitled
to indemnification from RCN for costs incurred in defense of
such litigation and any award to the plaintiffs resulting from
such litigation.
SAINT THOMAS: Uninsured Commence Lawsuit Over Billing Practices
---------------------------------------------------------------
Saint Thomas Hospital has been recently served with a class
action lawsuit over its fee structure and its billing of the
uninsured, the nashvillecitypaper.com reports
The nonprofit hospital is one of more than 400 hospitals in 23
states that have been served this year, and the only one in
Tennessee thus far. The controversy has reached the point that
ABC's Primetime Live aired a special just recently that examines
both allegations of widespread price gouging against the
uninsured and the use of abusive collection methods, primarily
in Mississippi and Georgia.
A large group of law firms throughout the nation are involved
with the suits, including Scruggs Law Firm in Oxford,
Mississippi and Barrett Law Offices in Nashville, who were both
heavily involved in the successful and massive lawsuits against
the tobacco industry.
According to Robert Siegfried, spokesman for the attorney
groups, "Many of the nonprofits are not fulfilling the mandate
given by the government . and are abusing their tax-exempt
status. The nonprofits are really for-profit, charging the
uninsured substantially more than the insured, and earning
hundreds of millions."
The Saint Thomas suit was amended in late summer to include the
American Hospital Association (AHA) as a defendant, which it
accuses of "aiding and abetting" the nonprofit hospitals through
its lobbying efforts.
In a prepared statement, the AHA, which has vehemently disagreed
with the suits against the hospitals and against itself said,
"When all the facts are known, the reality of what's happening
will be found out to be far different than the charges outlined
in these lawsuits."
Though describe as a legitimate and noble cause on behalf of the
uninsured, some in health care believe the suits to be more
about money than it is about fairness. According to Richard
Baker, chairman of the health law department for the Nashville
law firm Baker, Donelson, Bearman, Caldwell and Berkowitz, "The
system was working to fix the problem." Referring to the suits
against the for-profit hospitals, also filed recently, Mr. Baker
said, "If this is over in a year, then the litigants are
interested in changing the billing practices, but if this is
about making them money, it can go on for 10 years."
SYCAMORE NETWORKS: Asks NY Court To Approve Lawsuit Settlement
--------------------------------------------------------------
Sycamore Networks, Inc. presented the settlement of the
consolidated securities class action filed against it, certain
of its officers and directors and the underwriters for its
initial public offering on October 21, 1999 and its follow-on
offering on March 14, 2000 to the United States District Court
for the Southern District of New York for preliminary approval.
Beginning on July 2, 2001, several purported class action
complaints were filed. The complaints were consolidated into a
single action and an amended complaint was filed on April 19,
2002. The amended complaint, which is the operative complaint,
was filed on behalf of persons who purchased the Company's
common stock between October 21, 1999 and December 6, 2000.
The amended complaint alleges claims against the Company,
several of the Individual Defendants and the underwriters for
violations under Sections 11 and 15 of the Securities Act of
1933, as amended (the "Securities Act"), primarily based on the
assertion that the Company's lead underwriters, the Company and
several of the Individual Defendants made material false and
misleading statements in the Company's Registration Statements
and Prospectuses filed with the Securities and Exchange
Commission, or the SEC, in October 1999 and March 2000 because
of the failure to disclose the alleged solicitation and receipt
of excessive and undisclosed commissions by the underwriters in
connection with the allocation of shares of common stock to
certain investors in the Company's public offerings and that
certain of the underwriters allegedly had entered into
agreements with investors whereby underwriters agreed to
allocate the public offering shares in exchange for which the
investors agreed to make additional purchases of stock in the
aftermarket at pre-determined prices.
The suit also alleges claims against the Company, the Individual
Defendants and the underwriters under Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), primarily based on the assertion that the
Company's lead underwriters, the Company and the Individual
Defendants defrauded investors by participating in a fraudulent
scheme and by making materially false and misleading statements
and omissions of material fact during the period in question.
The amended complaint seeks damages in an unspecified amount.
The action against the Company is being coordinated with
approximately three hundred other nearly identical actions filed
against other companies. Due to the large number of nearly
identical actions, the Court has ordered the parties to select
up to twenty "test" cases. To date, along with sixteen other
cases, the Company's case has been selected as one such test
case. As a result, among other things, the Company will be
subject to broader discovery obligations and expenses in the
litigation than non-test case issuer defendants.
On October 9, 2002, the Court dismissed the Individual
Defendants from the case without prejudice based upon
Stipulations of Dismissal filed by the plaintiffs and the
Individual Defendants. This dismissal disposed of the Section
15 and Section 20(a) claims without prejudice, because these
claims were asserted only against the Individual Defendants. On
October 13, 2004, the Court denied the certification of a class
in the action against the Company with respect to the Section 11
claims alleging that the defendants made material false and
misleading statements in the Company's Registration Statement
and Prospectuses. The certification was denied because no class
representative purchased shares between the date of the IPO and
January 19, 2000 (the date unregistered shares entered the
market), and thereafter suffered a loss on the sale of those
shares.
The Court certified a class in the action against the Company
with respect to the Section 10(b) claims alleging that the
Company and the Individual Defendants defrauded investors by
participating in a fraudulent scheme and by making materially
false and misleading statements and omissions of material fact
during the period in question. The Company, the Individual
Defendants, the plaintiff class and the vast majority of the
other approximately three hundred issuer defendants and the
individual defendants currently or formerly associated with
those companies have approved, and submitted to the Court for
its approval, settlement and related agreements (the "Settlement
Agreement") which set forth the terms of a settlement between
these parties.
Among other provisions, the Settlement Agreement provides for a
release of the Company and the Individual Defendants for the
conduct alleged in the action to be wrongful and for the Company
to undertake certain responsibilities, including agreeing to
assign away, not assert, or release, certain potential claims
the Company may have against its underwriters. In addition, no
payments will be required by the issuer defendants under the
Settlement Agreement to the extent plaintiffs recover at least
$1 billion from the underwriter defendants, who are not parties
to the Settlement Agreement and have filed a memorandum of law
in opposition to the approval of the Settlement Agreement. To
the extent that plaintiffs recover less than $1 billion from the
underwriter defendants, the approximately three hundred issuer
defendants are required to make up the difference.
The suit is styled "In Re Sycamore Networks, Inc. Initial Public
Offering Securities Litigation, 01 Civ. 6001 (Sas) (Dc),"
related to "In re Initial Public Offering Securities Litigation,
Master File No. 21 MC 92 (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, E-mail:
newyork@whafh.com
UNITED INTERNATIONAL: Reaches Settlement With Unpaid Employees
--------------------------------------------------------------
A settlement has been reached in a lawsuit, Coleman v. UIIS on
behalf of United International Investigative Services, Inc.
("UIIS") employees who failed to receive pay during 2002. "The
settlement was reached to bring the matter to a full and
complete resolution for the employees," said Lyle F. Greenberg,
the attorney representing the plaintiffs.
A settlement fund has been established to provide relief to UIIS
employees who provided security services to California agencies
from February 2002 to March 2002 and remain unpaid or underpaid.
Individuals who were compensated as independent contractors
during that period of time are not included in the settlement.
Former employees of UIIS brought the lawsuit after failing to
receive compensation. UIIS had contracted with the State of
California to provide security services at various California
agencies. However, in late February and early March 2002 some
UIIS employees were not paid for their services. Many employees
filed claims with the California Labor Commissioner, but the
Labor Commissioner was unable to secure compensation for the
employees.
If you were an employee of UIIS from February 2002 to March
2002, you provided security services to a California agency, and
you remain unpaid or underpaid for that service, you may have a
claim and be entitled to receive payment. "The amount each UIIS
employee may receive will depend on the number of claims that
are filed by the deadline," according to Greenberg.
If you wish to receive a claim form and notice detailing the
settlement, please contact the settlement administrator, The
Trumbull Group at 860/687-7593 or in writing at Coleman / UIIS,
c/o The Trumbull Group, P.O. Box 127, Windsor, CT 06095-0127.
All claim forms must be filed by the deadline in early 2005.
UNITED STATES: Settles Holocaust Survivor Suit, Pays $25M in Aid
----------------------------------------------------------------
The United States government reached a settlement with Holocaust
survivors who sued for the loss of their valuables seized from
the Nazis' Gold Train at the end of World War II, agreeing to
pay $25 million in humanitarian aid to Hungarian Jews rather
than individual damages, the Associated Press reports.
The agreement will cover basic services such as healthcare for
Hungarian Jews now living in the United States, Canada, Hungary,
Israel and other countries, according to people familiar with
the negotiations between government and plaintiffs' lawyers.
The parties involved are still working on financial and other
details of the settlement, which was reached after three years
of legal skirmishes in Miami federal Court. Both parties though
must report to U.S. District Judge Patricia Seitz with the final
resolution by February 18, 2005. If approved by the judge,
notices of the settlement will be sent to members of the
proposed class-action case in 60 to 90 days.
Miami attorney Sam Dubbin, who filed the suit on behalf of
Hungarian Jews living in South Florida and elsewhere, declined
to comment about the ongoing negotiations. The Department of
Justice also declined to comment. Their mediation is
confidential.
David Mermelstein, 76, of Kendall - among hundreds of Florida
plaintiffs who joined the case against the United States over
the confiscation of their personal belongings from the Gold
Train - told The Miami Herald that the reparations are not about
money. "We love this country more than Americans do," said
Mermelstein, a Holocaust survivor. "But our government didn't do
the right thing."
As their lawsuit was filed, about 30,000 to 50,000 Hungarian
Jews or their survivors in the United States and other countries
might have been eligible to receive a maximum of $10,000 each in
damages if they had succeeded at trial and survived all appeals.
But under terms of the settlement, they won't be receiving
individual payouts, sources said.
As previously reported in the October 14, 2004 edition of the
Class Action Reporter, the suit had stated that the 29 boxcars
laden with the Jewish treasures, which were headed to Austria
from Hungary were taken over by U.S. troops, who promised to
protect the cargo, but have instead been used as decorations for
officers' clubs and villas, while some have been sold at auction
and some simply disappeared.
In 1999, the Presidential Advisory Commission of Holocaust
Assets exposed the scandal in a published report that provided
the backbone of the federal lawsuit. Since then, the government
has been under mounting political pressure to settle the suit.
Proof of the mounting pressure were letters by the plaintiffs
David Mermelstein, Baruch Epstein and Alex Moskovic that urges
President Bush to personally intervene in the unequivocal
settlement of the suit.
Political pressure was also increasing in the form of Sen. John
Kerry, who in one of his presidential campaign stops accused the
Bush administration of "dragging its feet." A bipartisan group
of 17 senators and the Florida congressional delegation were
also urging the administration to settle.
UNITED STATES: Investigation Triggers Review of USDA Settlement
---------------------------------------------------------------
An investigation into a public defender that was practicing
without a law license could have wide-ranging implications for
one of the largest civil rights settlements in U.S. history, the
Associated Press reports.
Public defender Margaret O'Shea, who is the focus of the local
investigation, had worked for the U.S. Justice Department on a
series of settlements with black farmers who claim they were
denied federal loans because of their race.
Two national groups representing the farmers, including one
based in North Carolina, are calling on Congress and the U.S.
Justice Department to investigate Ms. O'Shea's involvement two
years ago in the historic class-action settlement. To date,
thousands of black farmers have received awards totaling more
than $650 million.
According to John Boyd, a Virginia farmer who is president of
the National Black Farmers Association, "It's a disgrace. It's a
shame that after all we've been through; we had an unlicensed
attorney reviewing cases and affecting the lives of black
farmers across the country. ... She should have been checked out
before she was assigned to work on these cases."
Ms. O'Shea, who lives in Santa Cruz, was charged with one felony
count of grand theft for cashing paychecks under false pretenses
and one misdemeanor count for practicing law without a license
after her supervisors learned she wasn't an accredited attorney.
Monterey County is reviewing 86 cases she handled during a
three-week period ending in late September. She is to be
arraigned in Monterey County Superior Court in Salinas.
As previously reported in the September 13, 2004 edition of the
Class Action Reporter, the national case involved thousands of
black farmers, most from the South and Midwest, who sued the
U.S. Department of Agriculture in 1997. The farmers had alleged
discrimination when they applied for crop loans and subsidies.
In 1999, the department agreed to a landmark settlement with
22,000 farmers, awarding each farmer $50,000 each, if they could
demonstrate that they didn't receive the same treatment as
comparable white farmers.
About 40 percent of the 22,000 farmers were denied payments.
Some 73,000 others claim they were shut out because the
settlement deadline wasn't advertised widely enough, according
to an Environmental Working Group report. The report claims that
the Justice Department, which represented the Department of
Agriculture, spent at least 56,000 staff hours and $12 million
contesting individual farmer's claims.
According to Gary Grant, president of the Black Farmers and
Agriculturalists Association, based in Tillery, N.C., "The
government is trying to get out of paying the farmers, they had
no intention of paying in the first place."
It's still unclear though exactly how Ms. O'Shea was involved in
the case and whether her involvement could lead to individual
settlements being overturned. Ms. O'Shea, 38, and her attorney,
Enda Brennan, did not respond to multiple telephone calls over
several days seeking comment.
Justice Department spokesman Charles Miller confirmed that Ms.
O'Shea was hired specifically to work on the case, known as
Pigford vs. Veneman, from April to September 2002. The
department hired her as a "general attorney," according to
personnel records obtained by the environmental group through
the Freedom of Information Act.
Ms. O'Shea was hired by the Monterey County Public Defender's
Office in August after indicating on her application and during
interviews that she was licensed to practice law in California.
Shortly after she started, a co-worker tried to research
O'Shea's legal background and discovered she wasn't listed as a
licensed attorney.
Monterey County Assistant District Attorney Terry Spitz said his
office investigated Ms. O'Shea's background and could not find
evidence that she was licensed in any state. If convicted of the
two charges, Ms. O'Shea faces up to three years in prison, he
adds.
US GRANT: Faces WI Court Judgment On Fraudulent Trade Practices
---------------------------------------------------------------
Wisconsin Attorney General Peg Lautenschlager obtained a
judgment against a fraudulent grant marketing service that
cheated Wisconsin consumers. The Company, U.S. Grant Resources,
was based in New Orleans and was run by a husband-and-wife team,
John and Laurel Rodgers, who cheated consumers nationwide.
AG Lautenschlager's office worked in cooperation with the
Federal Trade Commission and the Lousiana Attorney General's
office, all of which filed separate cases in state and federal
Court and negotiated settlements that shut the fraudulent
operation down.
"Working together, federal and state law enforcement agencies
have succeeded in helping stop a fraud affecting thousands of
U.S. consumers," AG Lautenschlager said in a statement. "I am
pleased Wisconsin consumers victimized by this fraud may now
receive the refunds to which they are entitled."
AG Lautenschlager's complaint alleged that defendants violated
Wisconsin's consumer protection laws through a deceptive scheme
to market grant procurement services. Specifically, the
complaint alleged that at least since September 2001, defendants
advertised "free" government grants through classified ads in
flyers and newspapers. The ads read "FREE GRANTS Never Repay -
acceptance guaranteed."
The ads told consumers to call a number; and when a consumer
called, he or she would be asked for personal information and
told how many grants they qualified for. However, in order to
receive more information on the grants for which they supposedly
qualified, consumers were told to pay a fee between $75 and
$200. They were also told that if they did not receive a grant,
their money would be refunded.
Contrary to many consumers' expectations, the "grant package"
they received from defendants did not contain grant
applications, but only lists of agencies and organizations that
offer grants. Many of these organizations do not offer grants
to individuals, and consumers who actually followed through and
applied for grants were turned down or received no response at
all.
Further, the "grant package" contained a written refund policy
that contained many more limitations and restrictions than
consumers were told by phone. In fact, the restrictions in the
refund policy made it all but impossible for a consumer to get a
refund request to the Company within the allotted time.
However, even those consumers that did never received a refund.
The Court's order prohibits defendants from fraudulently
misrepresenting products or services as "free," from
misrepresenting the likelihood of a consumer's success in
obtaining a grant, from misrepresenting that consumers will
receive refunds, from misrepresenting material terms of the
agreement, and from accepting money for products or services and
then not delivering said products or services. The order also
requires U.S. Grant Resources to give money back to the
Wisconsin consumers they cheated, out of a restitution fund
operated by the FTC. The order further requires defendants to
reimburse the state $5,000 for its costs of investigation and
litigation.
Wisconsin consumers who filed complaints about this Company with
the Wisconsin Department of Agriculture, Trade and Consumer
Protection ("DATCP") will be contacted directly by the FTC via a
letter inviting them to participate in the FTC's refund program.
Wisconsin consumers who have not filed complaints, but who sent
this Company money, may also qualify. To file a complaint and
find out whether you qualify for a refund, contact DATCP's
consumer protection hotline at 1-800-422-7128, Monday - Friday
7:45 a.m. - 4:30 p.m.
The order was signed on December 17, 2004, by Walworth County
Circuit Court Judge James Carlson. It prohibits defendants from
operating such a scheme in Wisconsin again. This judgment was
obtained by Lautenschlager's Office of Consumer Protection with
investigative assistance from the Department of Agriculture,
Trade and Consumer Protection. Assistant Attorneys General Jim
Jeffries and Meredith Earley represented the state.
VASO ACTIVE: Faces Consolidated Securities Fraud Lawsuit in MA
--------------------------------------------------------------
Vaso Active Pharmaceuticals, Inc. faces a consolidated
securities class action filed in the United States District
Court for the District of Massachusetts, styled "IN RE VASO
ACTIVE PHARMACEUTICALS SECURITIES LITIGATION , Civ. No. 04-10708
(RCL)," pending under Judge Reginald C. Lindsay.
In April, May, and June 2004, the Company and certain of its
officers were sued in several securities class action lawsuits
seeking an equitable and monetary relief, an unspecified amount
of damages, with interest, attorneys fees and costs. The suits
were allegedly filed on behalf of purchasers of the Company's
Class A common stock during the period December 11, 2003 to
March 31, 2004.
The complaints allege that during the period in question the
Defendants violated the federal securities laws by allegedly
failing to make accurate and complete disclosures concerning the
Company, its financial condition, its business operations and
future prospects, the clinical trial and endorsement of the
Company's Termin8 anti-fungal product (previously known as
"deFEET") and the institutional demand for the Company's
securities. These complaints are captioned as follows:
(1) DENNIS E. SMITH V. VASO ACTIVE PHARMACEUTICALS, INC.,
ET AL., Civ. No. 04-10708 (RCL) (D. Mass.);
(2) RICHARD SHAPIRO V. VASO ACTIVE PHARMACEUTICALS, INC.,
ET AL., Civ. No. 04-10720 (RCL) (D. Mass.);
(3) CHRISTOPHER PEPIN V. VASO ACTIVE PHARMACEUTICALS, INC.,
ET AL., Civ. No. 04-10763 (RCL) (D. Mass.);
(4) MODHI GUDE, ET AL. V. VASO ACTIVE PHARMACEUTICALS,
INC., ET AL., Civ. No. 04-10789 (RCL) (D. Mass.);
(5) KIM BENEDETTO, ET AL. V. VASO ACTIVE PHARMACEUTICALS,
INC., ET AL., Civ. No. 04-10808 (RCL) (D. Mass.);
(6) DEAN DUMMER V. VASO ACTIVE PHARMACEUTICALS, INC., ET
AL., Civ. No. 04-10819 (RCL) (D. Mass.);
(7) EDWARD TOVREA V. VASO ACTIVE PHARMACEUTICALS, INC., ET
AL., Civ . No. 04-10851 (RCL);
(8) KOUROSH ALIPOR V. VASO ACTIVE PHARMACEUTICALS, INC., ET
AL., Civ. No. 04-10877 (RCL);
(9) PAUL E. BOSTROM V. VASO ACTIVE PHARMACEUTICALS, INC.,
ET AL., Civ. No. 04-10948 (RCL);
(10) IRA A. TURRET SEP-IRA DATED 01/24/02 V. VASO ACTIVE
PHARMACEUTICALS, INC., ET AL., Civ. No. 04-10980 (RCL);
(11) RICHARD PAGONA V. VASO ACTIVE PHARMACEUTICALS, INC., ET
AL., Civ. No. 04-11100 (RCL);
(12) JAMES KARANFILIAN V. VASO ACTIVE PHARMACEUTICALS,., ET
AL. , Civ. No. 04-11101 (RCL); and
(13) CHARLES ROBINSON V. VASO ACTIVE PHARMACEUTICALS, INC.,
ET AL., Civ. No. 04-11221 (RCL)
The Court has consolidated the above-referenced cases, other
than the TOVREA and KARANFILIAN complaints in the United States
District Court for the District of Massachusetts. On November
4, 2004, the Court appointed Schiffrin & Barroway LLP as lead
counsel for the Consolidated Action and appointed Shapiro, Haber
& Urmy LLP as liason and local counsel. The Court also
appointed Ewin Choi, Richard Ching, and Joe H. Huback as interim
co-lead plaintiffs, pending a determination of whether the
Consolidated Action may proceed as a class action. The Court
further ordered that co-lead plaintiffs file a consolidated
amended complaint in the Consolidated Action no later than
December 4, 2004.
The Company has also been named as a nominal defendant in three
shareholder derivative actions. The first action was filed in
the United States District Court for the District of
Massachusetts in April 2004 against the Company's directors and
certain of its officers and against BioChemics, Inc. styled
JOSEPH ROSENKRANTZ V. BIOCHEMICS, INC., ET AL., Civ. No. 04-
10792 (RCL) (D. Mass.); the second - filed in June 2004, also
against the Company's directors and certain of its officers and
against BioChemics, Inc. styled WILLIAM POMEROY V. BIOCHEMICS
INC., ET AL., Civ. No. 04-11399 (RCL) (D. Mass.); and the third
- in the Court of Chancery for the State of Delaware in
September 2004 against its directors and certain of its officers
entitled DOUGLAS WEYMOUTH V. VASOACTIVE ET AL., Civ. No. 682-N
(collectively, the "Complaints").
The Complaints allege, among other things, that the alleged
conduct challenged in the securities cases pending against the
Company in Massachusetts constitutes a breach of the Defendants'
fiduciary duties to the Company. The Complaints seek equitable
and monetary relief, an unspecified amount of damages, and
attorneys and other fees, costs and expenses, ostensibly on
behalf of the Company. On October 29, 2004, the Massachusetts
Court approved a joint motion to consolidate the two
Massachusetts derivative actions. The Delaware Court has
approved the parties' stipulated stay of all proceedings in the
Delaware derivative action, at least until the resolution of the
motion to dismiss the consolidated securities fraud litigation.
New Securities Fraud Cases
CHARLOTTE RUSSE: Marc S. Henzel Lodges Securities Suit in NY
------------------------------------------------------------
The law offices of Marc S. Henzel initiated a class action
lawsuit in the United States District Court for the Southern
District of California, and 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 Charlotte Russe
Holding Inc. (NasdaqNM: CHIC) between January 22, 2004 and
December 6, 2004 (the "Class Period"), including all persons who
acquired shares in the April 20, 2004 equity offering.
The Complaint alleges that Charlotte Russe violated federal
securities laws by issuing false or misleading public
statements. Specifically the complaint alleges that the
Charlotte Russe's statement were false or misleading because it
failed to disclose that the fact that the strategic
repositioning of Rampage stores was failing to produce tangible
results and because other measures, promoted by management as
actions designed to improve operations, were proving futile in
both merchandising and store organizations. On September 9,
2004, Charlotte Russe revised its financial guidance for the
quarter ending September 25, 2004. On this news, Charlotte Russe
shares fell from a close of $14.63 per share on September 8,
2004, to close at $11.20 per share on September 9, 2004. On
December 6, 2004, Charlotte Russe Executive Vice President Donna
Desrosiers resigned and Charlotte Russe forecasted a decline in
comparable store sales for the quarter ending December 25, 2004.
On this bad news, Charlotte Russe fell from a close of $10.91
per share on December 5, 2004, to close at $10.09 per share on
December 6, 2004.
For more details, contact the Law Offices of Marc S. Henzel by
Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by
Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by
E-Mail: mhenzel182@aol.com.
CONEXANT SYSTEMS: Marc S. Henzel Lodges Securities Suit in NJ
-------------------------------------------------------------
The law offices of Marc S. Henzel initiated a class action
lawsuit in the United States District Court for the District of
New Jersey on behalf of all persons who purchased the publicly
traded securities of Conexant Systems, Inc. (NasdaqNM: CNXT)
between March 1, 2004 and November 4, 2004 (the "Class Period"),
including all former holders of GlobespanVirata, Inc.
("Globespan") who acquired Conexant shares in the merger
completed March 1, 2004.
The complaint alleges that Conexant violated federal securities
laws by issuing false or misleading statements concerning its
integration with Globespan. Specifically, the complaint alleges
that Conexant repeatedly stated that the integration was
successful when in fact there were significant problems with
respect to the combined companies' parallel DSL and wireless
technology offerings, as well as their sales and administration
functions. The complaint alleges that Conexant issued false and
misleading statements when it claimed that its wireless LAN
("WLAN") business was experiencing reduced growth due to
competition from Taiwan-based chip suppliers when, in fact, the
problem was actually caused by the combined companies' WLAN
business not being properly integrated in the merger.
On November 4, 2004, Conexant released its financial and
operational results for the fourth quarter ended October 1,
2004, reporting that its "fourth fiscal quarter 2004 revenues of
$213.1 million decreased 20 percent from the third fiscal
quarter revenues of $267.6 million," and stating that
"Conexant's sequential decline in revenues to $213.1 million in
the fourth fiscal quarter was largely due to excess channel
inventory that resulted from lower-than-expected customer
demand. . . ." On this news Conexant stock fell from a close of
$1.76 on November 4, 2004, to close at $1.60 on November 5,
2004.
For more details, contact the Law Offices of Marc S. Henzel by
Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by
Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by
E-Mail: mhenzel182@aol.com.
CONEXANT SYSTEMS: Schiffrin & Barroway Lodges Stock Suit in NJ
--------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class
action lawsuit in the United States District Court for the
District of New Jersey on behalf of all securities purchasers of
Conexant Systems, Inc. (Nasdaq: CNXT) ("Conexant" or the
"Company") between March 1, 2004 and November 4, 2004, inclusive
(the "Class Period").
The complaint charges Conexant, Dwight W. Decker, and Armando
Geday with violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. 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 merger between Conexant and GlobespanVirata
was plagued by integration problems;
(2) that the performance of the Company's WLAN unit, the
top producer of WLAN chips, was being materially
impacted by the GlobespanVirata merger rather than a
merely difficult market;
(3) that the integration issues with the merger caused the
Company to experience diminished revenue streams as
demand for products diminished;
(4) that Conexant remained vulnerable to the effects of
weak bargaining power, commoditization and pricing
pressures across most of its product portfolio, despite
the Company's continuing efforts to achieve
differentiation based on product features and
functionalities in several main target markets; and
(5) that as a result of the above, the defendants' fiscal
projections were lacking in any reasonable basis when
made.
On July 6, 2004, Conexant announced that it expected revenues
for its third fiscal quarter, which ended July 2, 2004, to be
lower than anticipated due primarily to weakness in its wireless
local area network ("WLAN") business. The news shocked the
market. Shares of Conexant fell $1.77 per share, or 43.38
percent, on July 6, 2004, to close at $2.31 per share. On
November 4, 2004, Conexant released its financial and
operational results for the fourth quarter ended October 1,
2004. Fourth fiscal quarter 2004 revenues of $213.1 million
decreased 20 percent from the third fiscal quarter revenues of
$267.6 million. This announcement sent shares of Conexant
tumbling $0.16 per share, or 9.09 percent on November 5, 2004,
to close at $1.60 per share.
For more details, contact Marc A. Topaz, Esq. or Darren J.
Check, Esq. of Schiffrin & Barroway, LLP by Mail: Three Bala
Plaza East, Suite 400, Bala Cynwyd, PA 19004 by Phone:
1-888-299-7706 or 1-610-667-7706 or by E-mail:
info@sbclasslaw.com.
GEOPHARMA INC.: Marc S. Henzel Files Securities Fraud Suit in NY
----------------------------------------------------------------
The law offices of Marc S. Henzel initiated a class action
lawsuit in the United States District Court for the Southern
District of New York on behalf of purchasers of GeoPharma Inc.
(NASDAQ: GORX) common stock during the period between December
1, 2004 and December 2, 2004 (the "Class Period").
The complaint charges GeoPharma and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. GeoPharma manufactures, packages, repackages and
distributes a wide array of health-related products. GeoPharma's
wholly owned subsidiary, Belcher Pharmaceuticals, manufactures
and distributes over-the-counter and generic drugs.
The complaint alleges that during the Class Period, defendants
caused GeoPharma's shares to trade at artificially inflated
levels through the issuance of a false and misleading press
release about FDA approval of Mucotrol, a product in development
the Company had previously described publicly as a prescription
"drug." On December 1, 2004, prior to the market opening, the
Company issued a press release announcing that "Belcher
Pharmaceuticals, Inc., a wholly-owned subsidiary of GeoPharma,
Inc. has received approval from the United States Food and Drug
Administration ("FDA") for Mucotrol(TM), a prescription product
for the management of oral mucositis/stomatitis .... It is
estimated that approximately 300,000 cancer patients in the U.S.
suffer from mucositis associated with cancer treatments. Based
on this, the estimated U.S. oncology market potential for
Mucotrol(TM) sales are between $75 million and $300 million per
annum and the estimated global market is between $250 million
and $1 billion per annum."
The Company's stock jumped to $11.25 per share on this news, an
increase of 153%. Early in the afternoon, the stock tumbled and
was subsequently halted at $6.81 after FDA officials told media
outlets that they had no record of Mucotrol. The agency later
clarified, saying Mucotrol had been cleared for marketing on
November 24th -- not as a drug, but as a device. The FDA had
only granted Mucotrol so-called 510(k) marketing clearance
because of its substantial similarity to a product already on
the market.
On December 2, 2004, after the markets closed, the Company and
certain of the individual defendants held an investor conference
call to discuss the misstatements and omissions in its December
1, 2004 press release. On the call, GeoPharma's Chief Executive
Officer finally made it clear the Mucotrol was a device, not a
drug. The day after the conference call, the Company's stock
collapsed to as low as $5.37 per share.
For more details, contact the Law Offices of Marc S. Henzel by
Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 by
Phone: 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by
E-Mail: mhenzel182@aol.com.
GEOPHARMA INC.: Shalov Stone Lodges Securities Fraud Suit in FL
---------------------------------------------------------------
The law firm of Shalov Stone & Bonner LLP commenced a securities
fraud class action lawsuit on December 20, 2004, in Tampa,
Florida federal Court on behalf of purchasers of the securities
of GeoPharma, Inc. ("GeoPharma") (NasdaqSC: GORX) between July
13, 2004 to December 2, 2004, inclusive.
The complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934. On July 13,
2004, before the market opened for trading, GeoPharma and its
wholly-owned subsidiary, Belcher Pharmaceuticals, Inc., issued a
press release reporting that GeoPharma had met with success in a
clinical study of its drug, MF5232, later named "Mucotrol," in
treating patients with mucositis. Mucositis is an inflammation
of the mucosa of the mouth that develops in cancer patients
receiving radiation therapy and some patients with HIV/AIDS. In
the press release, GeoPharma's President, Dr. Kotha Sekharam,
described Mucotrol (which he invented), as a "drug." The stock
rose 13% on the news and closed on July 13, 2004 at $5.44.
On December 1, 2004, GeoPharma announced in a press release that
its subsidiary, Belcher Pharmaceuticals, Inc., had received FDA
approval for its "prescripition drug," Mucotrol. GeoPharma
estimated that sales to the U.S. oncology market for Mucotrol
could reach $75 million to $300 million per year. GeoPharma
stock rose to $11.25, or 153%, on the news. On December 2, 2004,
however, financial reporters learned after questioning the
Company that Mucotrol was not a "drug" at all, but a device,
making it far less attractive to market than a new drug.
GeoPharma's claim that it had obtained FDA approval of Mucotrol
was also untrue, as well as GeoPharma's announcement of
potential annual U.S. sales of $75 million to $300 million.
GeoPharma recanted its claim that Mucotrol was a drug in a
December 2, 2004 press release. GeoPharma's stock price dropped
from $11.25 to $6.81, on inordinate volume of 42 million shares
traded.
For more details, contact Lee S. Shalov, Esq. of Shalov Stone &
Bonner LLP by Mail: 485 Seventh Ave., Suite 1000, New York, NY
10018 by Phone: (212) 239-4340 or by E-mail: LShalov@lawssb.com.
PFIZER INC.: Emerson Poynter Lodges Securities Fraud Suit in NY
---------------------------------------------------------------
The law firm of Emerson Poynter, LLP initiated a securities
fraud class action lawsuit in the United States District Court
for the Southern District of New York on behalf of shareholders
who purchased or otherwise acquired Pfizer, Inc ("Pfizer" or the
"Company") (NYSE:PFE) securities between November 1, 2000 and
December 16, 2004. In addition, Emerson Poynter LLP has
initiated an investigation into possible violations of the
Employee Retirement Income Security Act of 1974 ("ERISA").
The securities class action complaint alleges that defendants
misrepresented and omitted material facts about the safety and
marketability of Pfizer's Celebrex and Bextra products. In fact,
on November 4, 2004, the Calgary Herald reported that,
"Celebrex, which was touted as a safe alternative pain drug
after Vioxx was pulled from the market, is suspected of causing
at least 14 deaths and numerous heart and brain side effects."
The New York Times also reported that a study revealed that
"...incidents of heart attacks and strokes among patients given
Pfizer's painkiller Bextra was more than double that of those
given placebos. Then, prior to the stock market opening on
December 17, 2004, Pfizer revealed that in a recent trial,
"patients taking 400mg and 800mg of Celebrex daily had an
approximately 2.5 fold increase in their risk of experiencing a
major or not-fatal cardiovascular event compared with those
patients taking placebos."
Yesterday, according to the Company's website, Pfizer
voluntarily pulled its Celebrex ads from all media after the
safety of the product came under question. The price of Pfizer's
shares dropped precipitously all day in response to this news.
For more details, contact Michelle Raggio, Charles Gastineau or
Tanya Autry of Emerson Poynter LLP by Phone: (800) 663-9817 by
E-mail: epllp@emersonpoynter.com or visit their Web site:
http://www.emersonpoynter.com.
*********
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.
*********
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Class Action Reporter is a daily newsletter, co-published by
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Resnick, Editors.
Copyright 2004. All rights reserved. ISSN 1525-2272.
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