/raid1/www/Hosts/bankrupt/CAR_Public/041228.mbx
C L A S S A C T I O N R E P O R T E R
Tuesday, December 28, 2004, Vol. 6, No. 255
Headlines
ALBERTSON'S INC.: Reaches Settlement For CA Managers' Wage Suit
ALBERTSON'S INC.: New Claims Process Ordered in Wage Suit Pact
APPLE COMPUTER: CA Court Dismisses Class Claims in Consumer Suit
APPLE COMPUTER: Discovery Proceeds in CA Consumer Fraud Lawsuit
APPLE COMPUTER: Plaintiffs Appeal of CA Suit Dismissal Pending
APPLE COMPUTER: Consumers File Consolidated iPod Lawsuit in CA
APPLE COMPUTER: CA Court To Hear Show Cause Order in Fraud Suit
AUSTRIA: Cable Car Victims' Relatives To Fight For Compensation
BEAZER HOMES: Settlement of IN Mold Suit Final, No Appeal Filed
BIG LOTS: Employees Commence Overtime Wage Lawsuit in E.D. TX
BROWN SHOE: CO Court Refuses New Trial For Suit On Redfield Site
CLAUDE LEFEBVRE: Found Guilty Of Wire Fraud, Money Laundering
EDWARD JONES: Pays S75M To Settles SEC Revenue Sharing Charges
ELECTRONICS BOUTIQUE: Reaches Settlement For CA Overtime Lawsuit
FISCHER IMAGING: SEC Lodges Lawsuit V. Ex-Chairman Of The Board
H&R BLOCK: Working To Settle Suits V. Refund Anticipation Loans
H&R BLOCK: Discovery Proceeds in Suit V. Peace of Mind Program
HIX INSURANCE: Faces NC Suit For Forcing Motor Club On Consumers
ILLINOIS: Business Groups Says Suits Declining in Madison County
KAISER VENTURES: Discovery Proceeds in CA Investor Fraud Lawsuit
LONGS DRUGS: CA Court Approves Overtime Wage Lawsuit Settlement
MAXXON INC.: OK Jury Finds Firm, President Guilty Of Stock Fraud
MCDATA CORPORATION: Asks NY Court To OK Stock Lawsuit Settlement
MICROSOFT CORPORATION: SRC Sees Apathy As Reason For Few Claims
NIKU CORPORATION: Asks NY Court To Approve Stock Suit Settlement
NORDSTROM INC.: Final Fairness Hearing Set January 2005 in CA
PAUL DEGENHART: SEC Commences Lawsuit in SC Over Ponzi Scheme
PENNSYLVANIA: Education Department Settles Protracted Lawsuit
PFIZER INC.: Holy Cross-Coach's Widow To Join Suit V. Neurontin
PFIZER INC.: McPhadden Samac Commences $1.2 Bil Celebrex Lawsuit
QUADRAMED CORPORATION: Ex-CFO Settles Revenue Boosting Charges
REMEC INC.: Shareholders Launch Stock Fraud Lawsuits in S.D. CA
REMEDYTEMP INC.: CA Court Approves Franchisees' Suit Settlement
SOUTH KOREA: Supreme Court Sets Out Rules For Class-Action Suits
UTi WORLDWIDE: Named As Defendant in TX Gulf War Chemicals Suit
WALONG MARKETING: Recalls Lily Flower Due To Undeclared Sulfites
WEST HONEST: Recalls Lily Flowers Due To Undeclared Sulfites
New Securities Fraud Cases
ASPEN TECHNOLOGY: Lasky & Rifkind Lodges Securities Suit in MA
CHARLOTTE RUSSE: Lerach Coughlin Lodges Securities Suit in CA
PFIZER INC.: Lerach Coughlin Lodges Securities Fraud Suit in NY
PFIZER INC.: Marc S. Henzel Lodges Securities Fraud Suit in NY
VIMPEL-COMMUNICATIONS: Marc S. Henzel Lodges NY Securities Suit
*********
ALBERTSON'S INC.: Reaches Settlement For CA Managers' Wage Suit
---------------------------------------------------------------
Albertson's, Inc. reached an agreement for the consolidated
class action filed against it in the Superior Court for the
County of Los Angeles, California. The suit also named as
defendants several of the Company's wholly-owned subsidiaries,
namely:
(1) American Stores Company,
(2) American Drug Stores, Inc.,
(3) Sav-on Drug Stores, Inc., and
(4) Lucky Stores, Inc.
The first suit filed against the Company is styled "Gardner, et
al. v. Albertson's, Inc., et al." The Company's bonus-eligible
managers filed the suit, seeking recovery of additional bonus
compensation based upon plaintiffs' allegation that the
calculation of profits on which their bonuses were based
improperly included expenses for workers' compensation costs,
cash shortages, premises liability and "shrink" losses in
violation of California law.
In August 2001 a class action complaint with very similar
claims, also involving bonus-eligible managers, was filed
against the Company as well as Lucky Stores, Inc. and American
Stores Company, wholly-owned subsidiaries of the Company, in the
Superior Court for the County of Los Angeles, California, styled
"Petersen, et al. v. Lucky Stores, Inc., et al."
In June 2002 the cases were consolidated and in August 2002 a
class action with respect to the consolidated case was certified
by the court. On September 17, 2004, the Company and the
plaintiffs entered into a definitive agreement to settle the
consolidated Gardner/Petersen case. The settlement agreement
remains subject to the final approval of the court, which the
Company expects to receive in the fourth quarter of fiscal 2004.
ALBERTSON'S INC.: New Claims Process Ordered in Wage Suit Pact
--------------------------------------------------------------
The United States District Court in Boise, Idaho ordered a
second claims process in the settlement of the consolidated
class action filed against Albertson's, Inc., over various
issues including "off-the-clock" work allegations and
allegations regarding certain salaried grocery managers' exempt
status.
Eight class and/or collective actions were initially filed
against the Company. They were later consolidated. In
September 2000 an agreement was reached and court approval
granted to settle the suits. Under the settlement agreement,
current and former employees who met eligibility criteria have
been allowed to present their off-the-clock work claims to a
settlement administrator. Additionally, current and former
grocery managers employed in the State of California have been
allowed to present their exempt status claims to a settlement
administrator.
The Company mailed notices of the settlement and claims forms to
approximately 70,500 associates and former associates.
Approximately 6,000 claim forms had been returned, of which
approximately 5,000 were deemed by the settlement administrator
to be incapable of valuation, presumed untimely, or both. The
claims administrator was able to assign a value to approximately
1,000 claims, which amount to a total of approximately $14,
although the value of many of those claims is still subject to
challenge by the Company. During the quarter ended July 29,
2004, there was a supplemental mailing and in-store posting
directed toward a narrow subset of current and former
associates. The Company has been advised by the settlement
administrator that approximately 200 of these individuals
submitted the necessary claims documents. Distinct from this
supplemental claims process, a second claim process was ordered
by the Court, but the Company is still waiting for final
instructions from the Court.
The suit is styled "Montgomery v. Albertson's, Inc., case no.
02-CV-496," filed in the U.S. District Court for the District of
Idaho (Southern), under Judge David O. Carter. Lawyers for the
plaintiffs are:
(1) Joseph W. Rohan, HALLIDAY & WATKINS, Western Financial
Ctr #300, 376 E 400 S, Salt Lake City, UT 84111, Phone:
(801) 355-2886
(2) Penny North Shaul, JUST LAW OFFICES, 381 Shoup Ave
#211, Idaho Falls, ID 83405, Phone: (208) 523-9106
Lawyers for the defendants are:
(i) Jason D. Scott, HAWLEY TROXELL ENNIS & HAWLEY, PO Box
1617, Boise, ID 83701, Phone: (208) 344-6000
(ii) W. Mark Gavre, PARSONS BEHLE & LATIMER, PO Box 45898,
Salt Lake City, UT 84145-0898, Phone: (801) 532-1234
APPLE COMPUTER: CA Court Dismisses Class Claims in Consumer Suit
----------------------------------------------------------------
The San Francisco County Superior Court in California dismissed
the class action claims in the lawsuit filed against Apple
Computer, Inc., styled "Davis v. Apple Computer, Inc."
Plaintiff filed this purported class action on December 5, 2002,
alleging that the Company engaged in unfair and deceptive
business practices relating to its AppleCare Extended Service
and Warranty Plan. Plaintiff asserts causes of action for
violation of the California Business and Professions Code
Sections 17200 and 17500, breach of the Song-Beverly Warranty
Act, intentional misrepresentation and concealment. Plaintiff
requests unspecified damages and other relief.
The Company filed a demurrer and motion to strike which were
granted, in part, and Plaintiff filed an amended complaint. The
Company filed an answer on April 17, 2003 denying all
allegations and asserting numerous affirmative defenses.
Plaintiff subsequently amended its complaint. On October 29,
2003, the Company filed a motion to disqualify Plaintiff's
counsel in his role as counsel to the purported class and to the
general public. The Court granted the motion, but allowed
Plaintiff to retain substitute counsel. Plaintiff did engage
new counsel for the general public, but not for the class. The
Company moved to disqualify Plaintiff's new counsel and to have
the Court dismiss the general public claims for equitable
relief. The Court declined to disqualify Plaintiff's new
counsel or to dismiss the equitable claims, but did confirm that
the class action claims are dismissed. The case is stayed
pending an appeal.
The suit is pending in the San Francisco County Superior Court
in California, and is styled "John W. Davis v. Apple Computer,
Inc. et al., case no. CGC-02-415376." The suit also names as
defendants Computer Tech Solutions Corporation and Computer
Technology Solutions Corporation. Lawyers for the defendants
are David F. Gross and Luanne Sacks. Lawyers for plaintiff are
Marcus Daniel Merchasin and Steven Helfand.
APPLE COMPUTER: Discovery Proceeds in CA Consumer Fraud Lawsuit
---------------------------------------------------------------
Discovery relating to class certification is proceeding in the
lawsuit filed against Apple Computer, Inc. and other members of
the computer industry, styled "Goldberg, et al. v. Apple
Computer, Inc., et al. (f.k.a. "Dan v. Apple Computer, Inc."),"
filed in Los Angeles County Superior Court in California.
Plaintiffs filed this purported class action on September 22,
2003 against the Company and other members of the industry on
behalf of an alleged nationwide class of purchasers of certain
computer hard drives. The case alleges violations of Civil Code
Section 17200 (unfair competition), the Consumer Legal Remedies
Act ("CLRA") and false advertising related to the size of the
drives. Plaintiffs allege that calculation of hard drive size
using the decimal method misrepresents the actual size of the
drive. The complaint seeks unspecified damages and other
relief.
Plaintiff filed an amended complaint on March 30, 2004 and the
Company filed an answer on September 23, 2004, denying all
allegations and asserting numerous affirmative defenses. The
Company is investigating this claim.
APPLE COMPUTER: Plaintiffs Appeal of CA Suit Dismissal Pending
--------------------------------------------------------------
Plaintiffs' appeal of the dismissal of the class actions filed
against Apple Computer, Inc. and chief executive officer Steven
P. Jobs is still pending. The securities class actions were
initially filed in the United States District Court for the
Northern District of California and are styled:
(1) Hawaii Structural Iron Workers and Pension Trust Fund
v. Apple Computer, Inc. and Steven P. Jobs;
(2) Young v. Apple Computer, Inc., et al.;
(3) Hsu v. Apple Computer, Inc., et al.
These lawsuits are substantially identical, and purport to bring
suit on behalf of persons who purchased the Company's publicly
traded common stock between July 19, 2000, and September 28,
2000. The complaints allege violations of the 1934 Securities
Exchange Act and seek unspecified compensatory damages and other
relief.
The Company filed a motion to dismiss on June 4, 2002, which was
heard by the Court on September 13, 2002. On December 11, 2002,
the Court granted the Company's motion to dismiss for failure to
state a cause of action, with leave to Plaintiffs to amend their
complaint within thirty days. Plaintiffs filed their amended
complaint on January 31, 2003, and on March 17, 2003, the
Company filed a motion to dismiss the amended complaint. The
Court heard the Company's motion on July 11, 2003 and dismissed
Plaintiffs' claims with prejudice on August 12, 2003.
Plaintiffs have appealed the ruling.
The lead case in this litigation is styled "Hawaii Structural
Iron Workers Pension Trust Fund v. Apple Computer Inc., et al.,
case no. 4:01-cv-03667, filed in the U.S. District Court
California Northern District (Oakland), under Judge Hon. Claudia
Wilken.
Lawyers for the plaintiffs are:
(1) William S. Lerach, Thomas Edward Egler, Lerach Coughlin
Stoia & 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 tome@lerachlaw.com
(2) Dennis J. Herman, Eli Greenstein, Patrick J. Coughlin,
Randi D. Bandman, Sylvia Wahba Keller, Lerach Coughlin
Stoia & Robbins LLP, 100 Pine Street, Suite 2600, San
Francisco, CA 94111, Phone: 415/288-4545, Fax: 415-288-
4534, E-mail: dennish@mwbhl.com, Elig@mwbhl.com,
patc@mwbhl.com, randib@mwbhl.com
(3) Edwina A. Ebisui, Jr., Law Office of Edwina A. Ebisui,
Jr., 410 Kilani Street, Suite 211, Wahiawa, HI 96786,
Phone: 808-622-3933, Fax: 808-621-6208
(4) Roger B. Greenberg, Schwartz Junell Campbell Oathout,
909 Fannin Ste 2000, Houston, TX 77057, Phone: (713)
752-0017, Email: rgreenberg@schwartz-junell.com
(5) Marc S. Henzel, Law Offices of Marc S. Henzel, 273
Montgomery Ave., Suite 202 Bala Cynwyd, PA 19004,
Phone: 610-660-8000/888-643-6735, Fax: 610-660-8080, E-
mail: mhenzel182@aol.com
(6) Marc A. Topaz, Schiffrin & Barroway, Three Bala Plaza
East, Suite 400, Bala Cynwyd, PA 19004, Phone: 610/667-
7706, Fax: 610-667-7056
(7) Paul J. Geller, Cauley Geller Bowman & Coates LLP, One
Boca Place, Suite 421A, 2255 Glades Road, Boca Raton,
FL 33431, Phone: 561-750-3000, Fax: 561-750-3364
Lawyers for the defendants are David R. Eberhart and George A.
Riley of O'Melveny & Myers LLP, 275 Battery Street, Suite 2600,
San Francisco, CA 94111-3305, Phone: 415-984-8808, Fax:
415-984-8701, Email: deberhart@omm.com or griley@omm.com.
APPLE COMPUTER: Consumers File Consolidated iPod Lawsuit in CA
--------------------------------------------------------------
Apple Computer, Inc. faces a consolidated consumer class action
filed in California Superior Court for the County of San Mateo,
over alleged misrepresentations by the Company over the battery
life of its popular iPod mp3 player.
Eight suits were initially filed, entitled:
(1) Craft v. Apple Computer, Inc., (filed December 23,
2003, Santa Clara County Superior Court);
(2) Chin v. Apple Computer, Inc., (filed December 23, 2003,
San Mateo County Superior Court);
(3) Hughes v. Apple Computer, Inc., (filed December 23,
2003, Santa Clara County Superior Court);
(4) Westley v. Apple Computer, Inc., (filed December 26,
2003, San Francisco County Superior Court);
(5) Keegan v. Apple Computer, Inc., (filed December 30,
2003, Alameda County Superior Court);
(6) Wagya v. Apple Computer, Inc., (filed February 19,
2004, Alameda County Superior Court);
(7) Yamin v. Apple Computer, Inc., (filed February 24,
2004, Los Angeles County Superior Court);
(8) Kieta v. Apple Computer, Inc., (filed July 8, 2004,
Alameda County Superior Court)
The suits include causes of action for violation of California
Civil Code Section 17200 (unfair competition), the Consumer
Legal Remedies Action ("CLRA") and claims for false advertising,
fraudulent concealment and breach of warranty. The complaints
seek unspecified damages and other relief. The Company is
investigating these claims. The cases have been consolidated in
San Mateo County and Plaintiffs have filed a consolidated
complaint.
In addition, a similar complaint relative to iPod battery life,
Mosley v. Apple Computer, Inc.," was filed in Westchester
County, New York on June 23, 2004 alleging violations of New
York General Business Law Sections 349 (unfair competition) and
350 (false advertising). The Company removed the case to
Federal Court and Plaintiff filed a motion for remand, which the
Court has not yet decided.
The consolidated suit is styled "Lisa Chin v. Apple Computer,
Inc., case no. CIV-43-6509. Plaintiffs are Lisa Chin, Andrew E.
Westley, Sylvia Kieta, Steve Yamin, Joseph Smiley and Sam Wagya.
Lawyers for the plaintiffs are Steven N. Williams, Reginald
Terrell, Shannon P. Cereghino, Andrew N. Friedman, Emelike I.
Kalu. Lawyer for the Company is Andrew D. Muhlbach.
APPLE COMPUTER: CA Court To Hear Show Cause Order in Fraud Suit
---------------------------------------------------------------
The Los Angeles County Superior Court in California will hear on
January 29,2005 the show cause order related to the class action
filed against Apple Computer, Inc., styled "Cagney v. Apple
Computer, Inc."
Plaintiff filed this purported class action on January 9, 2004,
alleging improper collection of sales tax in transactions
involving mail-in rebates. The complaint alleges violations of
California Civil Code Section 17200 (unfair competition) and
seeks unspecified damages and other relief.
The Company was served on January 21, 2004, and filed an answer
on February 20, 2004, denying all allegations and asserting
numerous affirmative defenses. The Company is investigating
these allegations. The Company filed a motion to disqualify
Plaintiff's counsel, which the Court denied. The Company filed
a petition for a writ of mandate with respect to this ruling and
the Court of Appeal has issued an order to show cause as to why
the writ should not issue. Plaintiffs lead counsel subsequently
withdrew. The Company also has obtained an opinion on the tax
issue from the State Board of Equalization.
AUSTRIA: Cable Car Victims' Relatives To Fight For Compensation
---------------------------------------------------------------
Relatives of 155 skiers and snowboarders killed in an alpine
cable car fire in November 2000 will press on with civil
lawsuits seeking damages, despite a setback in a U.S. court,
according to a lawyer representing the families, the Associated
Press WorldStream reports.
As previously reported in the December 23, 2004 issue of the
Class Action Reporter, the 2nd U.S. Circuit Court of Appeals in
Manhattan recently ruled that class action status and a single
liability trial are not appropriate for families of victims the
cable car fire in Austria four years ago that killed 155 people.
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 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."
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.
Even though their claims have been dismissed by the appeals
court, attorney Ed Fagan, one of the plaintiff's attorneys, told
the Austria Press Agency that the ruling did not deprive
relatives of other ways to seek compensation. According to him,
Claims against Siemens AG, Siemens USA, Bosch Rexroth AG, Bosch
Rexroth USA and Omniglow have been refiled in U.S. courts.
Victim's Relatives allege the companies, along with
Gletscherbahnen Kaprun AG, which operated the cable car, were
partly responsible for the Nov. 11, 2000, inferno. At least 100
lawsuits have been filed in Austria against Gletscherbahnen
Kaprun AG, Mr. Fagan adds.
BEAZER HOMES: Settlement of IN Mold Suit Final, No Appeal Filed
----------------------------------------------------------------
The Hamilton County Superior Court in the State of Indiana's
approval of the settlement of the mold class action filed
against Beazer Homes Investment Corporation and Trinity Homes
LLC, is deemed final after plaintiffs failed to appeal/oppose
the approval.
Trinity Homes had received 979 construction defect and warranty
complaints related to moisture intrusion and mold. As of
September 30, 2004, there were eleven pending lawsuits related
to these complaints. The class action, styled "Christopher J.
Colon and Mary A. Colon v. Trinity Homes LLC and Beazer Homes
Investment Corp. (formerly filed as Gary Harmon and Sheri Harmon
v. Trinity Homes LLC and Beazer Homes Investment Corp.)" was
filed on August 19, 2003.
As part of that case, the plaintiffs are asserting that the
Company and Trinity and Beazer Homes Investment Corp. violated
applicable building codes. The complaint attempts to define the
purported class to include all owners of a residential structure
in Indiana constructed and marketed by Trinity and Beazer Homes
Investment Corp. in which a one-inch gap with a vapor barrier
does not exist between an exterior brick veneer wall and the
surface of the underlying exterior wall. Excluded from the
class are any residents who suffer personal injuries caused by
mold infestation. No monetary amount was stated in the claim.
The parties in the putative class action engaged in a series of
mediation conferences, which resulted in an agreement for a
proposed settlement of the case. The parties submitted
settlement documents to the court, which the Court preliminarily
approved on August 6, 2004. A Fairness Hearing was held on
October 18, 2004 and the Court approved the settlement agreement
on October 20, 2004.
The settlement class is defined as the current owners of all
Trinity homes that have brick veneer, where the closing of
Trinity's initial sale of the home took place between June 1,
1998 and October 31, 2002. However, the class definition
specifically excludes:
(1) any houses built by Homes by John McKenzie;
(2) any houses owned by Trinity as of August 6, 2004, or
which as of August 6, 2004 were the subject of an
executed agreement for Trinity to purchase the homes;
and
(3) any houses for which a homeowner has executed or agreed
to a release in favor of Trinity as part of a separate
agreement.
The settlement agreement establishes an agreed protocol and
process for assessment and remediation of any external water
intrusion issues at the homes which includes, among other
things, that the homes will be repaired at Trinity's expense. A
licensed engineering firm working on behalf of the homeowners
will be allowed to review the plan for the remediation of each
home as well as the performance of the repair work. The
settlement establishes a time frame within which the work must
be completed and provides a Dispute Resolution Panel to resolve
disputes between a homeowner and Trinity concerning both the
plan to remediate the home and the performance of the work.
Under the settlement, each homeowner releases Trinity, Beazer
Homes Investment Corp. and other affiliated companies from the
claims asserted in the class action lawsuit, claims arising out
of external water intrusion, and claims of improper brick
installation, including property damage claims, loss or
diminution of property value claims, and most personal injury
claims, among others.
There was a 30-day timeframe, which ended on November 19, 2004,
to appeal the Court's Order approving the settlement. No appeals
were received by the Court within the timeframe established. The
Company expects to send out the claims notices on or about
December 20, 2004 and the Class Members will have 60 days to
file Claims.
BIG LOTS: Employees Commence Overtime Wage Lawsuit in E.D. TX
-------------------------------------------------------------
Big Lots Stores, Inc. faces a class action filed in the United
States District Court for the Eastern District of Texas,
Texarkana Division, alleging that it violated Fair Labor
Standards Act regulations by misclassifying as exempt employees
its furniture department managers, sales managers, and assistant
managers.
The suit, filed by attorney Michael A. Josephson of the Houston
law firm Fibich, Hampton & Leebron on behalf of Deborah Hanks
and Shirley Trahan of Orange, Texas, and Brian Narens of
Texarkana, Texas, alleges that furniture-department managers,
furniture-sales managers and assistant-store managers, were
denied overtime pay even though they worked more than 40 hours a
week and spent more than 90 percent of their time performing
sales, stocking, janitorial and other non-management work,
according to an earlier Class Action Reporter story (November
18,2004). The Columbus-based closeout retailer allegedly
"created and implemented an unlawful payment scheme" to deny
many of its 45,000 workers in 46 states overtime.
Formal discovery has not begun and the Company cannot make a
determination as to the probability of a loss contingency
resulting from this lawsuit or the estimated range of possible
loss, if any. The Company intends to vigorously defend itself
against the allegations levied in this lawsuit, the company said
in a disclosure to the Securities and Exchange Commission.
The suit is styled "Hanks et al v. Big Lots Stores, Inc., case
no. 5:04-cv-00238-DF-CMC," filed in the United States District
Court for the Eastern District of Texas, Texarkana Division,
under Judge David Folsom. Lawyers for the plaintiffs are:
(1) Kenneth T. Fibich, Michael Andrew Josephson, Fibich
Hampton Leebron & Garth, 1401 McKinney, Suite 1800,
Houston, TX 77010, Phone: 713/751-0025, Fax:
17137510030, E-mail: mjosephson@fhl-law.com
(2) Nicholas H. Patton, Patton & Tidwell, 4605 Texas Blvd
PO Box 5398, Texarkana, TX 75505-5398, Phone: 903/792-
7080, Fax: 19037928233, E-mail:
nickpatton@texarkanalaw.com
Lawyer for the Company is David Anthony Scott of Jackson Lewis
LLP, 3811 Turtle Creek Blvd, Ste 500, Dallas, TX 75219-4497,
Phone: 214/520-2400, Fax: 12145202008, E-mail:
scottd@jacksonlewis.com
BROWN SHOE: CO Court Refuses New Trial For Suit On Redfield Site
----------------------------------------------------------------
The Colorado State Court, District Court for the City and County
of Denver refused to allow a new trial in the class action filed
against Brown Shoe Co., Inc., related to the operations of its
Redfield, Colorado site.
The Company is remediating, under the oversight of Colorado
authorities, the groundwater and indoor air at the Redfield site
and residential neighborhoods adjacent to and near the property
that have been affected by solvents previously used at the
facility. Plaintiffs alleged claims for trespass, nuisance,
strict liability, unjust enrichment, negligence and exemplary
damages arising from the alleged release of solvents
contaminating the groundwater and indoor air in the areas
adjacent to and near the site.
In December 2003, the jury hearing the claims returned a verdict
finding one of the Company's subsidiaries negligent and awarded
the class plaintiffs $1.0 million in damages. The Company has
recorded this award along with pre-trial interest on the award
and estimated costs related to sanctions imposed by the court
related to a pre-trial discovery dispute between the parties.
In April 2004, the plaintiffs filed a motion for a new trial;
the court has denied that motion. The plaintiffs have appealed
the judgment to the Colorado Court of Appeals and have asked for
a retrial. The Company has cross-appealed the trial court's
ruling as to the amount of pre-judgment interest, and has
conditionally appealed a number of the trial court's rulings in
the event of a retrial.
CLAUDE LEFEBVRE: Found Guilty Of Wire Fraud, Money Laundering
-------------------------------------------------------------
The Securities and Exchange Commission recently revealed that
Claude Lefebvre was found guilty of wire fraud and engaging in
illegal monetary transactions for his role in a scheme that
misappropriated several million dollars from investors. The
criminal charges against Lefebvre arose out of the same
fraudulent scheme for which the Commission instituted a
securities fraud action against Lefebvre and others in 2002.
The U.S. Attorney's Office for the District of Colorado indicted
Lefebvre and Dennis Herula - who the Commission also named in
the related securities fraud action filed against Lefebvre in
2002 - in a Second Superseding Indictment dated Aug. 25, 2004.
The Indictment alleged that Lefebvre and Herula devised a scheme
to defraud investors and obtain money and property from those
investors by means of materially false and fraudulent pretenses,
representations and promises. The Indictment also alleged that
Lefebvre and Herula misappropriated several million dollars of
those investor funds. For his role in the scheme, Herula pled
guilty and his guilty plea was accepted by U.S. District Court
Judge Robert Blackburn on Oct. 26, 2004. Herula is scheduled to
be sentenced on Feb. 11, 2005. After a bench trial, Judge
Blackburn found Lefebvre guilty on all 15 counts of the
Indictment. Lefebvre is scheduled to be sentenced on Feb. 25,
2005.
On July 31, 2002, the Commission filed a civil injunctive action
against Lefebvre, Herula and others, alleging that they
participated in a fraudulent offering of securities that raised
at least $40 million from investors in July 2002. The Commission
alleged that Lefebvre falsely promised investors exorbitant
returns, such as 100% per week, through a fraudulent prime bank-
type trading program. The Commission further alleged that in the
span of several weeks after obtaining the $40 million, Lefebvre,
Herula and others spent at least $4 million of investor funds on
personal and luxury items such as cars, jewelry and large hotel
bills. On April 12, 2004, a San Francisco federal court entered
a default judgment against Lefebvre, permanently enjoining
Lefebvre from future violations of the antifraud provisions of
the federal securities laws and ordering him to pay
approximately $6 million in disgorgement, prejudgment interest
and a civil penalty.
EDWARD JONES: Pays S75M To Settles SEC Revenue Sharing Charges
--------------------------------------------------------------
The Securities and Exchange Commission issued an Order
Instituting Administrative Proceedings, Making Findings and
Imposing Remedial Sanctions against Edward D. Jones & Co., L.P.,
a brokerage firm headquartered in St. Louis, Missouri, alleging
that it failed to adequately disclose millions of dollars in
incentives, commonly known as revenue sharing payments, that it
received from a select group of mutual fund companies. The
Commission's action is being brought contemporaneously with
actions by the NASD and the New York Stock Exchange who today
also initiated settled disciplinary proceedings against Edward
Jones based on similar allegations relating to the firm's
undisclosed receipt of revenue sharing payments. As part of the
settlement, Edward Jones will pay $75 million in disgorgement
and civil penalties, all of which will be placed in a Fair Fund
for distribution to certain Edward Jones customers.
According to the Commission's Order, Edward Jones, one of the
nation's largest sellers of brokerage-sold mutual funds, entered
into revenue sharing arrangements with seven mutual fund
families. These seven mutual fund families paid Edward Jones
between $44 million and $68 million per year since at least 1999
and Edward Jones designated them as Edward Jones' "Preferred
Mutual Fund Families." Edward Jones told the public and its
clients that it was promoting the sale of the Preferred
Families' mutual funds because of the funds' long-term
investment objective and performance. At the same time, however,
Edward Jones failed to disclose that it received tens of
millions of dollars from the Preferred Families each year, on
top of commissions and other fees, for selling their mutual
funds. Edward Jones also failed to disclose that such payments
were a material factor, among others, in becoming and remaining
an Edward Jones Preferred Mutual Fund Family. Edward Jones
provided the Preferred Families with, among other things,
exclusive access to Edward Jones' investment representatives and
customer base. Edward Jones also exclusively promoted the 529
college savings plans offered by its Preferred Families over all
other 529 plans that that it had available to sell. Over 95% of
Edward Jones' sales of mutual fund shares during the five years
have been sales of the seven Preferred Families.
The Commission simultaneously accepted an offer of settlement
from Edward Jones in which it consents, without admitting or
denying the Commission's findings, to an Order that it shall
cease and desist from committing or causing any violations and
any future violations of Section 17(a)(2) of the Securities Act
of 1933, Section 15B(c)(1) of the Securities Exchange of 1934
and Rule 10b-10 under the Exchange Act and Municipal Securities
Rulemaking Board Rule G-15. The Order also censures Edward Jones
and requires Edward Jones to pay $75 million in disgorgement and
civil penalties. The $75 million will be placed in a
distribution fund for the benefit of certain customers of the
firm. The Order further requires Edward Jones to comply with
certain undertakings, including:
(1) providing heightened disclosures to customers on its
website and in written form; and
(2) retaining an Independent Consultant to conduct a review
of Edward Jones' policies and procedures.
ELECTRONICS BOUTIQUE: Reaches Settlement For CA Overtime Lawsuit
----------------------------------------------------------------
Electronics Boutique of America, Inc. reached a tentative
agreement to settle the class action filed against it in
California Superior Court in Los Angeles County, styled
"Chalmers v. Electronics Boutique of America Inc." The suit
alleged that the Company's subsidiary improperly classified
store management employees as exempt from the overtime
provisions of California wage-and-hour laws and sought recovery
of wages for overtime hours worked and related relief.
The Company denied liability but agreed to participate in non-
binding mediation to attempt to resolve the matter. The
settlement, in the amount of $950,000 which includes payments to
be made to proposed class members, as well as the attorneys'
fees and litigation costs of the plaintiff, is still subject to
final court approval. The Court has heard arguments for the
approval of the settlement this month, but has yet to release a
decision.
FISCHER IMAGING: SEC Lodges Lawsuit V. Ex-Chairman Of The Board
---------------------------------------------------------------
The Securities and Exchange Commission recently filed a subpoena
enforcement action in the U.S. District Court for the District
of Colorado against Morgan Nields, the former CEO and chairman
of the board of directors of Fischer Imaging Corporation
(Fischer). Pursuant to a subpoena issued on Oct. 15, 2004,
Nields was required to appear for testimony before the
Commission on December 17. On December 16, Nields, through
counsel, objected to the Commission's subpoena and notified the
staff that he would not appear to testify. On December 17,
Nields failed to appear to testify as required by the subpoena.
Accordingly, the Commission filed its Application For Order to
Show Cause and For Order to Enforce Administrative Subpoena,
along with a supporting Memorandum and Declaration.
In its Application and supporting filings, the Commission
alleges that on April 29, 2003, the Commission issued its Order
Directing Private Investigation and Designating Officers to Take
Testimony (Formal Order) in the Fischer investigation. The
Formal Order authorizes members of the SEC staff to investigate
whether antifraud and/or reporting provisions of the federal
securities laws have been or are being violated by any persons
or entities in connection with the offer, sale and/or purchase
of securities in Fischer. Pursuant to its Application, the
Commission is seeking an order directing Nields to show cause
why the Court should not enter an order requiring him to appear
for testimony. A hearing on the Commission's application has not
yet been scheduled. The action is titled, SEC v. Morgan Nields,
Civil Action No. 04-D-2628 (MJW), USDC, District of Colorado
(LR-19012).
H&R BLOCK: Working To Settle Suits V. Refund Anticipation Loans
---------------------------------------------------------------
H&R Block, Inc. is working to settle lawsuits filed against it
regarding its refund anticipation loan programs (RAL), asserting
several legal theories, including allegations that, among other
things, disclosures in the RAL applications were inadequate,
misleading and untimely, the RAL interest rates were usurious
and unconscionable, the Company did not disclose that we would
receive part of the finance charges paid by the customer for
such loans.
The litigation alleges breach of state laws on credit service
organizations, breach of contract, unjust enrichment, unfair and
deceptive acts or practices, violations of the Racketeer
Influenced and Corrupt Organizations (RICO) Act, violations of
the Fair Debt Collection Practices Act and the Company's owe and
breached a fiduciary duty to its customers in connection with
the RAL program.
The Company, Beneficial National Bank, and the plaintiffs in the
case styled "Joel E. Zawikowski, et al. v. Beneficial National
Bank, H&R Block, Inc., et al." (renamed "Lynne A. Carnegie, et
al. v. H&R Block, Inc., et al."), Case No. 98-C-2178 in the
United States District Court for Northern Illinois, had agreed
to a settlement class and a settlement of RAL-related claims on
a nationwide basis.
Under that settlement, the Company and the lending bank agreed
to each pay $12.5 million toward a $25.0 million settlement fund
for the benefit of the class members. The settlement was
approved by the District Court in February 2001. Certain class
members who had objected to the settlement appealed the order
approving the settlement to the Seventh Circuit Court of
Appeals.
In April 2002, the Court of Appeals reversed the District
Court's order approving the settlement and remanded the matter
back to the District Court for further consideration of the
fairness and adequacy of the proposed settlement by a new
District Court judge. In April 2003, the District Court judge
declined to approve the $25.0 million settlement, finding that
counsel for the settlement plaintiffs had been inadequate
representatives of the plaintiff class and failed to sustain
their burden of showing that the settlement was fair. The judge
subsequently appointed new counsel for the plaintiffs who filed
an amended complaint and a motion for partial summary judgment.
In March 2004, the court either dismissed or decertified all of
the plaintiffs' claims other than part of one count alleging
violations of the racketeering and conspiracy provision of the
Racketeer Influenced and Corrupt Organizations act. The case is
currently scheduled to go to trial in March 2005.
On September 8, 2004, the Company's Board of Directors approved
a proposed settlement of the case "Joyce Green, et al. v. H&R
Block, Inc., Block Financial Corporation, et al., Case No.
97195023," in the Circuit Court for Baltimore City, Maryland.
The proposed settlement provided for each class member to
receive a small cash payment and a one-time rebate coupon for
tax return preparation services and for the defendants to pay
settlement administration costs and court-approved legal fees of
class counsel. During the process of finalizing the settlement
agreement, the parties were unable to reach agreement regarding
certain settlement terms.
Another suit, styled "Deandra D. Cummins, et al. V. H&R Block,
Inc., et al., Case No. 03-C-134," is pending in the Circuit
Court of Kanawha County, West Virginia. A class certification
hearing commenced in October 2004 and was continued until
December 22, 2004. A decision on class certification is
expected in early 2005, and the case is scheduled to go to trial
in October 2005.
H&R BLOCK: Discovery Proceeds in Suit V. Peace of Mind Program
--------------------------------------------------------------
Discovery is proceeding in the class action filed against H&R
Block, Inc. in the Circuit Court of Madison County, Illinois,
styled "Lorie J. Marshall, et al. v. H&R Block Tax Services,
Inc., et al., Civil Action."
The suit was filed on January 18, 2002, as to which the Court
granted plaintiffs' first amended motion for class certification
on August 27, 2003. Plaintiffs' claims consist of five counts
relating to the defendants' Peace of Mind program under which
the applicable tax return preparation subsidiary assumes
liability for the cost of additional tax assessments
attributable to tax return preparation error.
The plaintiffs allege that defendants' sale of its Peace of Mind
guarantee constitutes statutory fraud by selling insurance
without a license, an unfair trade practice, by omission and by
"cramming" (i.e., charging customers for the guarantee even
though they did not request it and/or did not want it), and
constitutes a breach of fiduciary duty.
In August 2003, the court certified the following plaintiff
classes:
(1) all persons who were charged a separate fee for Peace
of Mind by "H& Block" or a defendant H&R Block class
member from January 1, 1997 to final judgment;
(2) all persons who reside in certain class states and who
were charged a separate fee for Peace of Mind by "H&R
Block," or a defendant H&R Block class member, and that
was not licensed to sell insurance, from January 1,
1997 to final judgment; and
(3) all persons who had an unsolicited charge for Peace of
Mind posted to their bills by "H&R Block" or a
defendant H&R Block class member from January 1, 1997,
to final judgment.
Among those excluded from the plaintiff classes are all persons
who received the Peace of Mind guarantee through an H&R Block
Premium office and all persons who reside in Texas and Alabama.
The court also certified a defendant class consisting of any
entity with the names "H&R Block" or "HRB" in its name, or
otherwise affiliated or associated with H&R Block Tax Services,
Inc., and which sold or sells the Peace of Mind product. The
trial court subsequently denied the defendants' motion asking
the trial court to certify the class certification issues for
interlocutory appeal.
There is one other putative class action pending against the
Company in Texas that involves the Peace of Mind guarantee. This
case is being tried before the same judge that presided over the
Texas RAL Settlement and involves the same plaintiffs attorneys
that are involved in the Marshall litigation in Illinois and
substantially similar allegations. No class has been certified
in this case.
HIX INSURANCE: Faces NC Suit For Forcing Motor Club On Consumers
----------------------------------------------------------------
Hix Insurance Center has tricked thousands of North Carolina
customers into unknowingly buying motor-club memberships, which
generated bonuses for management and staff, according to a
class-action lawsuit that was recently filed in Guilford
Superior Court, the Associated Pres reports.
The suit is specifically accusing the insurance agency of
implementing a policy to sell customers especially Hispanics
without their knowledge a club policy with automobile liability
and worker's-compensation coverage.
According to Michael Williams, one of the Greensboro lawyers who
filed the lawsuit last month, "It's a cash cow." He also told AP
that the N.C. Department of Insurance recently started a
criminal investigation of Hix, which has headquarters in Greer,
S.C., as Poinsett Insurance Agency. Hix has offices in
Greensboro, High Point, Burlington, Charlotte and Raleigh.
Though declining to elaborate, Chrissy Pearson, a spokeswoman
for the insurance department, said that the department began its
investigation after receiving a complaint that Hix sold a motor-
club membership without the customer's knowledge.
Greensboro attorneys Joseph and Michael Williams filed the
lawsuit on behalf of Guilford residents Janiece Perry, Maritza
A. Hernandez and Saul Garcia Marquez. The attorneys asked the
court to expand the lawsuit into a class action so that all Hix
customers in the state would be considered plaintiffs. The club
memberships in question ranged in price from $50 to $800, with
no apparent reason for the price difference, Michael Williams
said.
According to the lawsuit, Hix charged Ms. Perry $194 in May 2003
for her motor-club membership, which she thought was the bulk of
her down payment for her liability-insurance policy. On the
other hand, Ms. Hernandez and Mr. Marquez paid $500 for their
memberships in July 2003, which they unknowingly bought when
buying a worker's-compensation policy for their roofing
business, according to the lawsuit.
A memo obtained by the Mr. Williams' law firm and believed to be
written by Pauline McCoy, the regional director of the Hix
offices in the Triad and a defendant in the lawsuit, to the Hix
staff said that the club "has to be sold to everyone by
everyone" and directs employees to "not discuss the motor club
with the customers." Some employees had a problem with the
practices, according to Michael Williams at least five quit, and
some employees were concerned that Hix was targeting Hispanic
immigrants for the memberships.
The lawsuit also accuses the Company of falsifying customer
signatures on the motor-club applications. Joseph Williams, a
former prosecutor and district judge told AP, "They're preying
on the people of North Carolina." "We're going to put a stop to
it," he adds.
ILLINOIS: Business Groups Says Suits Declining in Madison County
----------------------------------------------------------------
The number of asbestos and class action lawsuits filed in
Madison County declined significantly in 2004, the Belleville
News-Democrat reports. So few were the cases filed this year
that the number of asbestos filings stood at 464, down from 953
lawsuits in 2003, while the number of class actions filed stood
at 71, down from 106 last year.
Ed Murnane, president of the Illinois Civil Justice League, a
business group, thinks that the recent decline, because of the
spotlight that has been shining on the county. Mr. Murnane also
told the Belleville News-Democrat, "It would not be surprising
that some of the lawyers have decided to pull back, to hold off,
maybe even look for other venues."
However, according to Doug Wojcieszak, spokesman for
Edwardsville-based Victims and Families United, a group backed
by plaintiff attorneys, it's too early to speculate on the
reason for the case decline. He even adds taht it's not
surprising Mr. Murnane's group and similar groups are taking
credit. "That's what he's got to say to make his funders feel
happy," Mr. Wojcieszak told the Belleville News-Democrat.
In the past, plaintiffs from across the country have sued in
Madison County for exposure to asbestos, even though they and
the defendants often have little or no connection to the county.
Plaintiff attorneys say that's because Madison County handles
such cases quickly, and time is important because people who
develop asbestos-related cancer generally have about a year to
live. Critics say plaintiff attorneys like the Madison County
court system because it's plaintiff-friendly.
Courthouse insiders say plaintiff attorneys in asbestos cases
are concerned that it will become more difficult to keep an
asbestos case in Madison County. Circuit Judge Dan Stack, who
recently took over asbestos cases after Circuit Judge Nicholas
Byron left the asbestos docket, has ruled in some cases that
out-of-state plaintiffs can't keep their cases here.
Proponents of so-called tort reform have been hammering Madison
County for its volume of lawsuits and big awards. One such
group, the American Tort Reform Association, has even labeled
the county the No. 1 "judicial hellhole" in the country for the
past two years.
The biggest verdict in an asbestos case in the county was $250
million, although the plaintiff later settled for less to avoid
appeals, and the biggest class-action verdict was $10.1 billion
against cigarette maker Philip Morris.
The critics stepped up their campaigns this past year, when
Gordon Maag, a Democrat from Madison County, ran for a 5th
District seat on the Illinois Supreme Court against Lloyd
Karmeier, the eventual winner and a Republican from Washington
County.
According to Mr. Murnane, people have taken notice of what
happened in the election. "Clearly, the wishes of the voters in
Madison County and throughout the 5th District have been
expressed pretty forcefully, and we hope that the plaintiff
lawyers got the message," he said.
However Mr. Wojcieszak countered his comments by saying that "If
Ed Murnane and his funders really want to lower the number of
class-action lawsuits, they can work on cleaning up corporate
corruption and corporate fraud in this country, instead of
spending all this money on public-relations efforts in Madison
County and the metro-east."
KAISER VENTURES: Discovery Proceeds in CA Investor Fraud Lawsuit
----------------------------------------------------------------
Discovery is proceeding in the class action filed against Kaiser
Ventures LLC in the San Bernardino County District Court in
California, styled "Thomas M. Slemmer, et al v. Fontana Union
Water Company, et al., Case No. SCVSS 086856." The suit also
names as defendants:
(1) Fontana Union Water Company,
(2) Cucamonga County Water Company,
(3) San Gabriel Valley Water and
(4) individuals serving on the Board of Directors of
Fontana Union Water Company
The plaintiffs allege that they are the owners of 175 shares of
the stock of Fontana Union Water Company, a mutual water
company, and that the defendants conspired and committed acts
that constitute an unlawful restraint of trade, a breach of
fiduciary duty by the controlling shareholders of Fontana Union
and fraudulent business practices in violation of California
law. Among other things, plaintiffs have requested $25,000,000
in damages and the trebling of such damages under California
law. In October 2003, the Court ruled that the lawsuit could
proceed as a class action lawsuit.
LONGS DRUGS: CA Court Approves Overtime Wage Lawsuit Settlement
---------------------------------------------------------------
California Superior Court granted final approval to the
settlement of two class actions filed against Longs Drug Stores
Corporation, namely:
(1) Darien Goddard, et al v. Longs Drug Stores Corporation,
et al filed in the Superior Court of California,
Alameda County,
(2) David Robotnick v. Longs Drug Stores California, Inc.,
filed in the Superior Court of California, Los Angeles
County
The lawsuits were filed by plaintiffs who are current or former
store managers or assistant managers on behalf of themselves and
other similarly situated California store managers and assistant
store managers. The lawsuits alleged that the Company
improperly classified such employees as exempt under
California's wage and hour and unfair business practice laws and
sought damages, penalties, restitution, reclassification and
attorneys' fees and costs.
After an initial exchange of information and investigation, the
parties agreed to pursue alternative dispute resolution. The
cases were mediated before a neutral third party in June 2004.
As a result of the mediation, the parties reached a settlement
agreement whereby the Company would pay $11 million to settle
all claims and causes of action of the plaintiffs.
MAXXON INC.: OK Jury Finds Firm, President Guilty Of Stock Fraud
----------------------------------------------------------------
A federal jury in Tulsa, Oklahoma found Maxxon, Inc., a Tulsa-
based company, and its president, Gifford M. Mabie, Jr.,
violated fraud provisions of the federal securities laws by
making false or misleading statements in various media about the
company and a "safety syringe" it was attempting to develop.
The jury reached its verdict after a two-week trial in the
United States District Court for the Northern District of
Oklahoma. The jury declined to find defendant Dr. Thomas R.
Coughlin, Jr., Maxxon's Medical Advisor, liable for securities
law violations.
The jury found that Mabie and Maxxon violated Section 10(b) of
the Securities and Exchange Act of 1934 and Exchange Act Rule
10b-5 beginning on Oct. 7, 1998, by knowingly or recklessly
making false or misleading statements or omissions of material
fact. The jury also found that Mabie and Maxxon violated
Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 in
2002 by negligently making false or misleading statements in
filings with the Commission.
Rhonda R. Vincent, Maxxon's Financial Reporting Manager, reached
a separate settlement with the Commission before the trial.
Without admitting or denying the allegations of the Complaint,
Vincent consented to the entry of a final judgment that
permanently restrains and enjoins her from violating Section
17(a)(2) and (3) of the Securities Act and from aiding and
abetting any violation of Section 13(a) of the Exchange
Act. Vincent also agreed to pay disgorgement plus prejudgment
interest totaling $33,267.18, and a civil penalty of $25,000.
Chief Judge Sven Eric Holmes entered a final judgment regarding
Vincent's settlement on Dec 7, 2004.
A hearing on the remedies to be imposed against Maxxon and Mabie
has not yet been scheduled. The action is titled, SEC v. Maxxon
et al., Civil Action No. 02-CV-975 H(J), U.S.D.C., N.D. Okla.
(LR-19013).
MCDATA CORPORATION: Asks NY Court To OK Stock Lawsuit Settlement
----------------------------------------------------------------
McDATA 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,
(1) John F. McDonnell, the former Chairman of the board of
directors,
(2) Dee J. Perry, a former officer,
(3) Thomas O. McGimpsey, a current officer
(4) Credit Suisse First Boston (CSFB),
(5) Merrill Lynch Pierce Fenner & Smith, Inc.,
(6) Bear, Stearns & Co., Inc. and
(7) FleetBoston Robertson Stephens et al.
Several suits were initially filed, which were substantially
identical to numerous other complaints filed against other
companies that went public in 1999 and 2000. These lawsuits
generally allege, among other things, that the registration
statements and prospectus filed with the SEC by such companies
were materially false and misleading because they failed to
disclose that certain underwriters had allegedly solicited and
received excessive and undisclosed commissions from certain
investors in exchange for which the underwriters allocated to
those investors material portions of shares in connection with
the initial public offerings, or IPOs, and that certain of the
underwriters had allegedly entered into agreements with
customers whereby the underwriters agreed to allocate IPO shares
in exchange for which the customers agreed to purchase
additional Company shares in the aftermarket at pre-determined
prices.
The complaints allege claims against the Company, the named
individuals, and CSFB, the lead underwriter of the Company's
August 9, 2000 initial public offering, under Sections 11 and 15
of the Securities Act of 1933. The complaints also allege
claims solely against CSFB and the other underwriter defendants
under Section 12(a)(2) of the Securities Act of 1933, and claims
against the individual defendants under Section 10(b) of the
Securities Exchange Act of 1934.
In September 2002, plaintiffs' counsel in the above-mentioned
lawsuits offered to individual defendants of many of the public
companies being sued, including the Company, the opportunity to
enter into a Reservation of Rights and Tolling Agreement that
would dismiss without prejudice and without costs all claims
against such persons if the company itself had entity coverage
insurance. This agreement was signed by Mr. McDonnell, the
former Company Chairman, Mrs. Perry, the former chief financial
officer, and Mr. McGimpsey, the current Vice President of
Business Development and General Counsel and the plaintiffs'
executive committee. Under the Reservation of Rights and
Tolling Agreement, the plaintiffs dismissed the claims against
such individuals.
On February 19, 2003, the court in the above-mentioned lawsuits
entered a ruling on the pending motions to dismiss, which
dismissed some, but not all, of the plaintiffs' claims against
the Company. These lawsuits have been consolidated as part of In
Re Initial Public Offering Securities Litigation (SDNY). The
Company has considered and agreed to enter into a proposed
settlement offer with representatives of the plaintiffs in the
consolidated proceeding, and we believe that any liability on
behalf of the Company that may accrue under that settlement
offer would be covered by the Company's insurance policies.
Until that settlement is fully effective, management intends to
vigorously defend against the consolidated proceeding.
The suit is styled "In Re McDATA Corporation Initial Public
Offering Securities Litigation," related to "IN re IPO
Allocation Securities Litigation," filed in the United States
District Court for the Southern District of New York, under
Judge Shira N. Scheindlin. The plaintiff firms in this
litigation are:
(i) 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
(ii) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300,
(iii) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(iv) 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
(v) 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
(vi) 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
MICROSOFT CORPORATION: SRC Sees Apathy As Reason For Few Claims
---------------------------------------------------------------
Millions of laid-back California consumers and companies are
apparently content to let a $1 billion opportunity pass them by.
With only two weeks remaining until the January 8 deadline,
fewer than one million claims have been filed, out of some
fourteen million eligible, for a share of the $1.1 billion fund
arising out of the Microsoft class action settlement in
California.
What's to explain the paltry rate of participation -- around 7
percent -- in one of the largest recoveries ever achieved under
California antitrust laws? Why are the vast majority of eligible
Californians ignoring a potential windfall that is supposed to
be distributed to businesses and consumers who bought Microsoft
software from 1995 through 2001?
Microsoft contends that it's because the software giant is so
popular with consumers. According to the settlement, two-thirds
of the unclaimed proceeds will go to public schools around the
state in the form of Microsoft software and vouchers. Microsoft
will get to keep the remainder, which could amount to a reduced
California payout of hundreds of millions of dollars.
Howard Yellen, founder and CEO of Settlement Recovery Center,
thinks there's a more likely explanation for the lackluster
consumer response. "The Microsoft settlement is great, but it's
not well understood. For one thing, companies don't realize
what's at stake," he says. Based in San Francisco, Settlement
Recovery Center is helping businesses file claims in the
Microsoft settlement.
Individuals can claim up to five eligible software purchases
without providing any proof of purchase. Companies, which are
projected to receive around 80-percent of the settlement funds,
must submit software licensing forms and other documentation to
get their refunds.
A sizable recovery may be worth the effort, particularly for
companies that upgraded their employees' Windows and Office
software between 1995 and 2001. "We have quite a few corporate
clients who will recover over a million dollars each," Yellen
noted.
Anyone who has not yet filed for a refund can download a claim
form at http://www.microsoftcalsettlement.com.Settlement
Recovery Center has posted a list of helpful filing tips at
http://www.settlementrecovery.com/camstips/index.jsp.
The deadline for filing claims is January 8, 2005. Yellen is
urging people not to wait. "Everyone should take advantage of
this opportunity to recover what they are entitled to from
Microsoft."
NIKU CORPORATION: Asks NY Court To Approve Stock Suit Settlement
----------------------------------------------------------------
Niku 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, certain of its officers and directors and the
managing underwriters of the Company's initial public offering:
(1) Goldman, Sachs and Co.,
(2) Dain Rauscher Wessels,
(3) U.S. Bancorp Piper Jaffray and
(4) Thomas Weisel Partners
The consolidated suit arose out of the Company's IPO in February
2000. The suit alleged, among other things, that the
registration statement and prospectus filed with the Securities
and Exchange Commission for purposes of the IPO were false and
misleading because they failed to disclose that the managing
underwriters allegedly solicited and received commissions from
certain investors in exchange for allocating to them shares of
Company stock in connection with the IPO and entered into
agreements with their customers to allocate such stock to those
customers in exchange for the customers agreeing to purchase
additional shares of the Company in the aftermarket at pre-
determined prices.
On August 8, 2001 the Court ordered that these actions, along
with hundreds of IPO allocation cases against other issuers,
underwriters and directors and officers, be transferred to one
judge for coordinated pre-trial proceedings. In July 2002,
omnibus motions to dismiss the complaints based on common legal
issues were filed on behalf of all issuers, underwriters and
directors and officers. By order dated October 8, 2002, the
Court dismissed the Company's officers and directors from the
case without prejudice.
In an opinion issued on February 19, 2003, the Court granted in
part and denied in part the motions to dismiss. The complaints
against the Company and the other issuers and underwriters were
not dismissed as a matter of law. The plaintiffs and the issuer
defendants (along with the individual officer and director
defendants of such issuers) have agreed to settle the cases. In
June 2004, final settlement papers were executed, submitted to
the Court, and the parties are awaiting approval by the Court.
The suit is styled "In Re Niku Corp. Initial Public Offering
Securities Litigation, 01 Civ. 7280 (Sas)," related to "IN re
IPO Allocation Securities Litigation," filed in the United
States District Court for the Southern District of New York,
under Judge Shira N. Scheindlin. The plaintiff firms in this
litigation are:
(i) 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
(ii) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300,
(iii) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(iv) 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
(v) 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
(vi) 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
NORDSTROM INC.: Final Fairness Hearing Set January 2005 in CA
-------------------------------------------------------------
Final fairness hearing for the settlement of cosmetics antitrust
class action filed against Nordstrom, Inc. and other department
store and specialty retailers is set for January 11,2005 in the
United States District Court for the Northern District of
California.
The Company was originally named as a defendant along with other
department store and specialty retailers in nine separate but
virtually identical class action lawsuits filed in various
Superior Courts of the State of California in May, June and July
1998 that were consolidated in Marin County Superior Court. In
May 2000, plaintiffs filed an amended complaint naming a number
of manufacturers of cosmetics and fragrances and two other
retailers as additional defendants.
Plaintiffs' amended complaint alleges that the retail price of
the "prestige" or "Department Store" cosmetics sold in
department and specialty stores was collusively controlled by
the retailer and manufacturer defendants in violation of the
Cartwright Act and the California Unfair Competition Act.
Plaintiffs seek treble damages and restitution in an unspecified
amount, attorneys' fees and prejudgment interest, on behalf of a
class of all California residents who purchased cosmetics and
fragrances for personal use from any of the defendants during
the four years prior to the filing of the amended complaint.
Defendants, including the Company, have answered the amended
complaint denying the allegations. The defendants have
produced documents and responded to plaintiffs' other discovery
requests, including providing witnesses for depositions.
The Company entered into a settlement agreement with the
plaintiffs and the other defendants on July 13, 2003. In
furtherance of the settlement agreement, the case was re-filed
in the United States District Court for the Northern District of
California on behalf of a class of all persons who currently
reside in the United States and who purchased "Department Store"
cosmetics from the defendants during the period May 29, 1994
through July 16, 2003. The Court has given preliminary approval
to the settlement. A summary notice of class certification and
the terms of the settlement have been disseminated to class
members.
If approved by the Court, the settlement will result in the
plaintiffs' claims and the claims of all class members being
dismissed, with prejudice, in their entirety. In connection
with the settlement agreement, the defendants will provide class
members with certain free products and pay the plaintiffs'
attorneys' fees, awarded by the Court up to $24 million.
The suit is styled "Azizian et al v. Federated Department
Stores, Inc. et al, case no. 4:03-cv-03359," filed in the United
States District Court for the Northern District of California,
under Judge Saundra Brown Armstrong.
PAUL DEGENHART: SEC Commences Lawsuit in SC Over Ponzi Scheme
-------------------------------------------------------------
The Securities and Exchange Commission filed a complaint in the
U.S. District Court for the District of South Carolina against
defendants Paul V. Degenhart (Degenhart), University Club Group,
Inc. (UC Group) and UC Properties, LLC (UC Properties). Mr.
Degenhart, who resides in Columbia, South Carolina, is an owner
and the controlling person of UC Group and UC Properties. UC
Group is a Delaware corporation with its principal place of
business in Columbia, South Carolina. UC Properties is a South
Carolina limited liability company with its office in Columbia,
South Carolina.
The Complaint alleges that from November 1998 through May 2002,
the defendants operated a Ponzi scheme through a series of
twenty-one securities offerings they made with the assistance of
Southern Financial Group, Inc., a former South Carolina broker-
dealer which served as underwriter for these offerings. The face
value of these offerings totaled approximately $100 million, but
because many of the investments were rolled-over, the actual
amount raised was approximately $29.8 million. The complaint
alleges that the defendants knew, or were severely reckless in
not knowing, but failed to disclose to investors, that the note
offerings operated as a Ponzi scheme, because funds from new
investors were required to pay the returns promised to earlier
investors. The complaint further alleges that the defendants
knew, or were severely reckless in not knowing, that the
information presented to investors in connection with these
offerings failed to disclose that the collateral was
insufficient to secure the payment of the notes, and that the
offering materials presented to investors falsely represented,
among other things, the interest rates and amounts of UC Group
and UC Properties outstanding obligations.
The complaint charges the defendants with violations of Sections
17(a)(1), 17(a)(2) and 17(a)(3) of the Securities Act of 1933,
Section 10(b) of the Securities Exchange Act of 1934 and Rule
10b-5 thereunder. The Complaint seeks, among other relief,
injunctions against future violations against all defendants,
and disgorgement of all ill-gotten gains with prejudgment
interest and the imposition of civil penalties against
Degenhart. The action is titled, SEC v. Paul V. Degenhart,
University Club Group, Inc. and UC Properties, LLC, Civil Action
No. 2:04-CV-23267, DSC (LR-19008).
PENNSYLVANIA: Education Department Settles Protracted Lawsuit
-------------------------------------------------------------
The Pennsylvania Department of Education and advocates for
students with disabilities reached an agreement this week in
federal court to settle a 10-year-old class action lawsuit.
The provisional settlement agreement addresses inclusive
educational practices for students with disabilities and will
establish a new advisory group to the Department of Education to
address such issues.
"We're delighted with the settlement," said Education Secretary
Francis V. Barnes. "We think it results in a win-win situation,
ending years of protracted litigation and improving educational
opportunities for some of Pennsylvania's most vulnerable
students. We deeply appreciate the motives of the parents who
instigated this lawsuit 10 years ago, and we appreciate the
efforts made this year to bring the lawsuit to a healthy and
productive conclusion."
The Gaskin family of Carlisle and other families and advocacy
organizations filed the lawsuit on behalf of "all school-age
students with disabilities in Pennsylvania who have been denied
a free appropriate education in regular education classrooms
with individualized supportive services, or have been placed in
regular education classrooms without the supportive services,
individualized instruction, and accommodations they need to
succeed in the regular education classroom," according to court
documents.
The original class-action lawsuit was filed on June 30, 1994,
against the Pennsylvania Department of Education and members of
the State Board of Education. Under the provisional settlement
agreement presented to the court this week, PDE would undertake
a series of steps designed to assist school districts in
providing appropriate services and supports to special education
students placed for all or part of the day in regular education
classrooms. Under the provisional settlement agreement, PDE
agreed to undertake a series of reforms of its systems for
exercising general supervision over special education,
including:
(1) The implementation of a new form of compliance
monitoring - Least Restrictive Environment monitoring
- a term borrowed from the federal Individuals with
Disabilities Education Act to ensure that districts
comply with federal and state laws protecting the
rights of students with disabilities;
(2) Modifying the state's complaint investigation and
resolution processes;
(3) Providing on-site training and other forms of technical
assistance enabling school districts to build local
capacity in inclusive educational practices; and
(4) Establishing a new advisory panel of parents, advocates
and educators to review a system-wide progress in the
delivery of suitable instruction to students with
disabilities.
Settlement discussions between lawyers for the parties extended
over many months and were supervised for part of the time by a
court-appointed mediator.
The parties expect the court to hold a "fairness hearing," which
may be scheduled for Spring 2005, before a judge of the U.S.
District Court in Philadelphia.
For more details, contact Brian Christopher, Pennsylvania
Department of Education by Phone: +1-717-783-9802.
PFIZER INC.: Holy Cross-Coach's Widow To Join Suit V. Neurontin
---------------------------------------------------------------
Laura Allen, widow of late Holy Cross football coach Dan Allen,
who was diagnosed three years ago with a mysterious neurological
disorder that put him in a wheelchair, suffering from headaches,
nausea, dizziness and memory loss that eventually lead to his
death will appear as a named complainant in a proposed class-
action suit against Pfizer Inc., the manufacturer of Neurontin,
the Boston Herald reports.
According to Mr. Allen's widow, who describes Neurontin, as
"snake oil", the drug, which is touted as an epilepsy treatment
that is widely prescribed for everything from pain relief to
insomnia to depression, was one among other medications her
husband took when he was diagnosed.
The suit, which is expected to be filed Monday in Suffolk
Superior Court will be brought on behalf of nearly 1,000 people
statewide, the suit alleges that Pfizer broke the state's
consumer-protection law. "Pfizer basically sold a sugar pill,
saying it was good medicine," said Robert Bonsignore, a local
consumer activist and lawyer who will file the suit.
Pfizer spokesman Paul Fitzhenry acknowledged that the Company is
the target of a number of class-action complaints that mirror
parts of a successful whistleblower case brought by the federal
government.
Last May, Pfizer paid $240 million in criminal fines as part of
a $430 million settlement for illegally promoting so-called
"off-label" uses for Neurontin.
However, Mr. Fitzhenry told the Boston Herald, "These suits
closely track those allegations, but we do not believe efforts
to certify (them) as class-action are supported by the law. They
hinge on the doctor-patient relationship."
The whistleblower case was set off by a onetime medical liaison
with Parke-Davis Inc., which was later acquired by Pfizer. In
that case the Company was found to have urged its medical
liaisons, or salespeople, to provide doctors with misleading and
even wrong information about Neurontin. The doctors, in turn,
prescribed it for a host of ailments the drug hadn't been
approved to treat.
Dan Allen died at age 48 last May from multiple chemical
sensitivity, which is thought to have been triggered by
hazardous substances used in refinishing a gymnasium floor at
Holy Cross. Laura Allen, the mother of three, ages 11 to 19,
sees the tragedy that befell her husband as a series of wrongs
she is now trying to put right.
She has sued the contractors who refurbished the Worcester
College's field house. Now Mrs. Allen is adding her name to the
suit against Pfizer. "This is the beginning of a long string of
things that need to be investigated," she told the Boston
Herald.
PFIZER INC.: McPhadden Samac Commences $1.2 Bil Celebrex Lawsuit
----------------------------------------------------------------
The Canadian law firm of McPhadden Samac Merner Darling launched
a 1.5 billion dollar ($1.2 billion) class action lawsuit against
US pharmaceutical company Pfizer, on behalf of a woman who
claims she had heart problems after taking Celebrex, AFP
reports.
The complaint was targeted at Pfizer Canada et Pfizer Inc.,
according to Bryan McPhadden, one of the firm's attorney's. It
suit is specifically accusing Pfizer of negligence and claims
the lead complainant, a woman from Mississauga, near Toronto,
suffered loss of earnings because of health problems allegedly
associated with the anti-inflammatory drug.
US regulators earlier called for the use of Pfizer's painkilling
drugs Celebrex and Bextra to be limited, urging doctors to keep
in mind indications of higher heart attack and stroke risks. The
Food and Drug Administration issued a press release saying it
was "recommending limited use of Cox-2 inhibitors." Cox-2
inhibitors are the latest type of non-steroid painkiller. The
only "Cox-2 inhibitors" still on the market are Celebrex and
Bextra, both made by Pfizer. Vioxx, made by Merck and Co., was
withdrawn in September because of increased risk of heart
attacks.
QUADRAMED CORPORATION: Ex-CFO Settles Revenue Boosting Charges
--------------------------------------------------------------
The Securities and Exchange Commission settled cease-and-desist
proceedings against Keith M. Roberts, the former General Counsel
and Chief Financial Officer of Quadramed Corporation, a health
care technology company based in Reston, Virginia (and formerly
of San Rafael, California). According to the Commission's Order
Making Findings and Imposing a Cease-and-Desist Order Pursuant
to Section 21C of the Securities Exchange Act of 1934 (Order),
Roberts negotiated two $5 million roundtrip transactions with a
startup company, in which Quadramed essentially paid for its own
products by funding the customer's purchases. The Commission's
Order finds that Roberts caused Quadramed to recognize revenue
for the first $5 million software license even though Quadramed
had executed a guarantee for a line of credit used by the
customer to fund the purchase, and the customer had no
independent ability to pay for the license. In the second
transaction, Roberts caused Quadramed to wire funds that the
startup used to pay for its $5 million purchase.
The Commission found that, as a result of these transactions,
Quadramed improperly inflated its revenue for the third quarter
of 1998 by 10%, and inflated its revenue for the first quarter
of 1999 by 9%. Quadramed also understated its net loss from
operations by 218% and 12%, respectively, for the same quarters.
The Commission's Order finds that Roberts violated Section
13(b)(5) and Rule 13b2-1 of the Securities Exchange Act of 1934
(Exchange Act), and that Roberts caused Quadramed's violations
of Section 13(a) and 13(b)(2)(A) of the Exchange Act and Rules
12b-20, 13a-1 and 13a-13 thereunder. The Commission ordered him
to cease and desist from committing or causing any violations
and any future violations of those provisions. The Commission
accepted an offer of settlement in which Roberts, without
admitting or denying the Commission's findings, agreed to the
entry of the Order directing him to cease and desist from
committing or causing any violations and any future violations
of the periodic reporting, and books and records provisions of
the federal securities laws.
REMEC INC.: Shareholders Launch Stock Fraud Lawsuits in S.D. CA
---------------------------------------------------------------
Remec, Inc. and certain of its current and former officers face
three class action lawsuits filed in the United States District
Court for the Southern District of California, alleging
violations of federal securities laws.
The complaints assert, among other things, that during that time
period, false and misleading statements were made and material
information was not disclosed regarding the Company's financial
condition and performance, growth, operations, financial
statements, markets, management, earnings and present and future
business prospects.
REMEDYTEMP INC.: CA Court Approves Franchisees' Suit Settlement
---------------------------------------------------------------
The Superior Court of the State of California, County of Los
Angeles granted final approval to the settlement of the class
action filed against RemedyTemp, Inc. and:
(1) Remedy Intelligent Staffing, Inc.,
(2) Remedy Temporary Services, Inc.,
(3) Karin Somogyi,
(4) Paul W. Mikos, and
(5) Greg Palmer
On October 16, 2001, GLF Holding Company, Inc. and Fredrick S.
Pallas filed a Complaint on behalf of all of the Company's
franchisees. The Complaint alleged claims for fraud and deceit,
negligent misrepresentation, negligence, breach of contract,
breach of warranty, conversion, an accounting, unfair and
deceptive practices, restitution and equitable relief.
On December 3, 2002, plaintiffs filed an Amended Complaint
alleging these same causes of action, but adding additional
facts to the Complaint particularly with respect to the
Company's workers' compensation program and adding claims
regarding unfair competition on behalf of the general public in
addition to their existing class action claim. The plaintiffs
claimed that Remedy wrongfully induced its franchisees into
signing franchise agreements and took other action that caused
the franchisees damage.
The Company believed that plaintiffs' claims fell within the
arbitration clause contained in the franchise agreements signed
by plaintiffs. As a result, immediately after plaintiffs filed
suit, the Company filed arbitration demands against plaintiffs
with the American Arbitration Association. On April 1, 2003,
the Company amended its arbitration demands to add claims
against plaintiffs relating to workers' compensation.
The Company denied and continues to deny the allegations in the
Complaint. There has been no finding of wrongdoing by the
Company. Nevertheless, to avoid costly, disruptive, and time-
consuming litigation, and without admitting any wrongdoing or
liability, the Company negotiated and agreed to a settlement
with plaintiffs and stipulated to the certification of a
settlement class comprised of all individuals or entities that
entered into a Franchise Agreement (including renewals or
amendments thereof) with RemedyTemp, Inc. and/or Remedy
Intelligent Staffing, Inc. anytime prior to March 29, 2004.
On April 6, 2004, the Court preliminarily approved the parties'
settlement agreement and conditionally certified the Settlement
Class. All discovery and other proceedings in this action were
stayed, except as may be necessary to implement the Settlement
Agreement.
SOUTH KOREA: Supreme Court Sets Out Rules For Class-Action Suits
----------------------------------------------------------------
South Korea's Supreme Court recently laid out a set of rules
needed for the proceeding of securities-related class action
suits, the Korea Herald reports. The enactments of the rules,
which are to be formally unveiled soon, were designed to prevent
the abuse of the system, save time and cost in the filing
procedures and effectively proceed with the court's ruling,
according to the country's high court.
As Korea is set to put class-action law into effect staring in
January, the rules laid out by the court will serve as a guide
in allowing shareholders to pursue class action suits against
businesses with more than 2 trillion won in assets for
accounting irregularities. Companies with less than 2 trillion
won in assets will be subject to the law from 2007, the high
court said.
As January approaches much of South Korea's business community
fears the introduction of class-action lawsuits in Korea, citing
that it might become a catalyst for an excessive number of cases
filed against companies. So fearful is the community that they
have made petitions, including one to the National Assembly, not
to retroactively apply the law to any wrongdoing committed
before January this year, when the law was proclaimed.
Among the corporate malfeasance that would or ay warrant a
class-action lawsuit are fraud in a registration statement or
prospectus, fraud in an annual, semiannual, or quarterly report,
insider trading, and market manipulation.
Patterned after the U.S. system, the law will call for public
notice of a class action, court appointment of a lead plaintiff
and court approval of any settlement arising from the class
action.
However, the Korean version also imposes a minimum shareholding
requirement on shareholders seeking to initiate the class
action. At least 50 shareholders who have a total of 0.01
percent or more of the equity may bring a class-action lawsuit
against a company.
According to the Financial Supervisory Commission, the law aims
to provide a more effective means of relief for small investors,
while at the same time deterring possible violations of the
Securities Exchange Act and thus enhancing the transparency of
corporate governance.
Under the current legal system, if small investors suffer
losses, it is difficult to institute an action for damage.
Moreover, there has been concern about the possibility of
several investors initiating lawsuits related to the same
company action, resulting in an inefficient use of the court
system.
UTi WORLDWIDE: Named As Defendant in TX Gulf War Chemicals Suit
---------------------------------------------------------------
UTi Worldwide, Inc. is one of approximately 83 defendants named
in two class action lawsuits originally filed on September 19,
1995 and subsequently consolidated in the District Court of
Brazaria County, Texas (23rd Judicial District).
The suits alleged that various defendants sold chemicals that
were utilized in the 1991 Gulf War by the Iraqi army which
caused personal injuries to U.S. armed services personnel and
their families, including birth defects. The lawsuits were
brought on behalf of the military personnel who served in the
1991 Gulf War and their families and the plaintiffs are seeking
in excess of $1 billion in damages. To date, the plaintiffs
have not obtained class certification.
The Company believes it is a defendant in the suit because an
entity that sold the Company assets in 1993 is a defendant. The
Company believes it will prevail in this matter because the
alleged actions giving rise to the claims occurred prior to the
Company's purchase of the assets, the Company said in a
disclosure to the Securities and Exchange Commission. The
Company further believes that it will ultimately prevail in this
matter since it never manufactured chemicals and the plaintiffs
have been unable to thus far produce evidence that the Company
acted as a freight forwarder for cargo that included chemicals
used by the Iraqi army.
WALONG MARKETING: Recalls Lily Flower Due To Undeclared Sulfites
----------------------------------------------------------------
Walong Marketing, Inc. of Buena Park, CA is recalling "Asian
Taste" brand Dried Lily Flower because the product may contain
undeclared sulfites. People who have an allergy or severe
sensitivity to sulfites run the risk of serious or life
threatening allergic reaction if they consume this product.
The recalled Asian Taste Dried Lily Flower was sold in clear,
uncoded, 6 oz. plastic package and is the product of China. The
product was sold to the retail stores throughout the United
States.
The recall was initiated after routine sampling by Florida
Department of Agriculture and Consumer Service Division of Food
Safety revealed the presence of undeclared sulfites in Asian
Taste brand Dried Lily flower in packages, which did not declare
sulfites on the label. The consumption of 10 milligrams of
sulfites per serving has been reported to elicit severe reaction
in asthmatics. Anaphylactic shock could occur in certain
sulfites sensitive individuals upon ingesting 10 milligrams or
more of sulfites. No illnesses have been reported to date in
connection with this problem.
Consumers who have purchased Asian Taste Dried Lily Flower
should return it to the place of purchase. Retailers who have
this product should pull the product from store shelves until
provided further instructions by Walong Marketing, Inc.
Consumers and retailers with questions may contact the company
at 714-670-8899.
WEST HONEST: Recalls Lily Flowers Due To Undeclared Sulfites
------------------------------------------------------------
West Honest International Inc. of City of Industry, CA, is
recalling all 5 ounce and 6 ounce packages of "Dried Lily
Flower" because they may contain undeclared sulfites. People who
have allergies to sulfites run the risk of serious or life-
threatening allergic reaction if they consume these products.
The recalled "Dried Lily Flower" was distributed throughout the
United States. The recall was initiated after the presence of
undeclared sulfites in Dried Lily Flower was discovered in
packages, which did not declare sulfites on the labels. The
consumption of 10 milligrams of sulfites per serving has been
reported to elicit severe reactions in some asthmatics.
Anaphylactic shock could occur in certain sulfite sensitive
individuals upon ingesting 10 milligrams or more of sulfites.
The product comes in 5 ounce or 6 ounce clear unencoded plastic
bag marked with "Dried Lily Flower." The recalled brands are
"TIANDU" distributed by Fujian Fuzhou Tian Shan Foods Co., LTD.,
China, "WeiChuan" distributed by Wei-Chuan U.S.A. Inc., Bell
Garden, CA, "ROXY" distributed by ROXY Trading Inc., and "Asian
Taste" distributed by Walong Marketing Inc., Buena Park, CA. No
illnesses have been reported to date in connection with this
problem.
Consumers who have purchased 5 ounce and 6 ounce packages of
"TIANDU Dried Lily Flower", "WeiChuan Dried Lily Flower", ROXY
Dried Lily Flower" and "Asian Taste Dried Lily Flower" are urged
to return packages to the place of purchase for a full refund.
Consumers with questions may contact the company at 626-961-
9813.
New Securities Fraud Cases
ASPEN TECHNOLOGY: Lasky & Rifkind Lodges Securities Suit in MA
--------------------------------------------------------------
The law firm Lasky & Rifkind, Ltd., reminds investors that the
deadline for purchasers of Aspen Technology, Inc. ("Aspen" or
the "Company") (NASDAQ:AZPNE) to move for lead plaintiff in this
securities fraud class action is rapidly approaching. The
lawsuit was filed against Aspen, Lawrence B. Evans, Lisa W.
Zappala, David L. McQuillin and Charles F. Kane ("Defendants").
If you purchased or otherwise acquired publicly traded
securities of Aspen between January 25, 2000 and October 29,
2004, inclusive, (the "Class Period") and wish to be a lead
plaintiff in the case you must move to serve as a lead plaintiff
by filing a motion in the United States District Court for the
District of Massachusetts no later than January 10, 2005.
The complaint alleges that Defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. Specifically, the complaint alleges that
Defendants issued a series of materially false and misleading
statements during the Class Period regarding the Company's
financial performance. More specifically, Defendants failed to
disclose that Aspen had improperly recognized revenue for
certain software license and service agreement transactions
entered into with certain alliance partners during the period
2000-2002, and that as a result the Company's revenues and
earnings were materially overstated.
On October 27, 2004, Aspen announced that its Audit Committee
had begun a review of accounting for certain software license
and service agreement transactions. According to the Company,
the review could lead to a restatement. Then on October 29,
2004, Aspen announced that federal prosecutors launched a probe
into the Company's accounting practices from 2000 through 2002.
The Company also received a subpoena from the U.S. Attorney's
Office for the Southern District of New York requesting
documents related to the transactions the Company entered into
in those years.
For more details, contact the law firm of Lasky & Rifkind by
Phone: (800) 495-1868.
CHARLOTTE RUSSE: Lerach Coughlin Lodges Securities Suit in CA
-------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin") initiated a class action in the United
States District Court for the Southern District of California on
behalf of purchasers of Charlotte Russe Holding Inc. ("Charlotte
Russe") (NASDAQ:CHIC) publicly traded securities during the
period between October 23, 2003 and December 6, 2004 (the "Class
Period").
The complaint charges Charlotte Russe and certain of its
officers and directors with violations of the Securities
Exchange Act of 1934. Charlotte Russe is a rapidly growing mall-
based specialty retailer of fashionable, value-priced apparel
and accessories targeting young women between the ages of 15 and
35. Charlotte Russe operates two retailing concepts: Charlotte
Russe, which comprises 80% of the Company's business, and
Rampage, which comprises 20% of the Company's business.
The complaint alleges that during the Class Period, defendants
caused Charlotte Russe's shares to trade at artificially
inflated levels through the issuance of false and misleading
statements about the Company's turnaround initiatives. The true
facts, which were known by each of the defendants but concealed
from the investing public during the Class Period, were as
follows:
(1) the Company's merchandise was receiving very poor
acceptance by consumers in favor of the Company's
competitors;
(2) the Company's attempted "turnaround" of its Rampage
stores was a disaster;
(3) the Company's inventory was grossly overvalued and its
new product line had received disastrous reviews which
defendants knew would result in declining margins and
revenues in current and future quarters;
(4) the Company's top creative personnel and merchants had
fled the Company, leaving the Company in a state of
decay;
(5) the Company's turnaround initiatives, including its
repositioning of Rampage, proved to be a disaster;
(6) any positive effects from its initiatives would take a
longer time to impact the Company's operations;
(7) the Company did not anticipate comparable same store
sales increases for Q4, but rather, expected a decline
in comparable same store sales;
(8) Rampage, which comprised only 20% of the Company, had
been performing so poorly that this factor alone would
negatively impact Charlotte Russe's Q4 earnings by
$0.14; and
(9) as a result, the Company's earnings guidance for Q4
2004 of $0.28 to $0.32 per share was grossly
overstated; in fact, the Company would ultimately
adjust its forecast drastically downward to $0.11 to
$0.13 per share.
On December 6, 2004, after the markets closed, Charlotte Russe
announced another executive departure and a dramatic reduction
in Q1 2005 earnings forecasts. On this news, Charlotte Russe's
stock collapsed to as low as $8.84 per share.
For more details, contact William Lerach or Darren Robbins of
Lerach Coughlin by Phone: 800/449-4900 or 619/231-1058 by E-
mail: wsl@lerachlaw.com or visit their Web site:
http://www.lerachlaw.com/cases/charlotterusse/.
PFIZER INC.: Lerach Coughlin Lodges Securities Fraud Suit in NY
---------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin") initiated a class action in the United
States District Court for the Southern District of New York on
behalf of purchasers of Pfizer Inc. ("Pfizer") (NYSE:PFE)
publicly traded securities during the period between October 31,
2000 and December 16, 2004 (the "Class Period").
The complaint charges Pfizer and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Pfizer is a research-based, global pharmaceutical company
that discovers, develops, manufactures and markets prescription
medicines for humans and animals, as well as consumer healthcare
products.
The complaint alleges that during the Class Period, defendants
issued false and misleading statements and omissions regarding
the safety and marketability of Pfizer's Celebrex and Bextra
COX-2 inhibitor products. Throughout the Class Period,
defendants were made aware of strong indicators that Pfizer's
COX-2 inhibitor drugs posed serious undisclosed health risks to
patients who were prescribed the drugs. As a result of the
defendants' false statements, Pfizer's stock traded at inflated
levels during the Class Period.
The true facts, which were known by each of the defendants but
concealed from the investing public during the Class Period,
were as follows:
(1) that although the information does not appear in the
U.S. package insert and prescribing information,
Celebrex increases the potential for causing adverse
cardiovascular events, since it is a selective COX-2
inhibitor capable of creating a metabolic imbalance
between prothrombic cyclo-oxygenase-1 (COX-1) and
antithrombotic cyclo-oxygenase-2 (COX-2) metabolism;
(2) that prior clinical studies, including the CLASS study
where concurrent low-dose aspirin therapy, ibuprofen or
diclofenac controls were employed, were flawed and
defective, since non-steroidal anti-inflammatory drug
("NSAID") use also impacts the metabolic balance
between COX-1 and COX-2 metabolism, potentially
lowering the observed number of cardiovascular events
in those studies;
(3) that even as defendants promoted Celebrex to
physicians, patients and investors on the basis of its
safety and efficacy, health authorities continued to
receive alarming reports of observed cardiovascular and
cerebrovascular adverse reactions in patients not
predisposed to cardiovascular disease;
(4) that even as defendants heralded the safety of Celebrex
following the recall of Vioxx, another anti-arthritic
drug marketed by Merck, defendants knew that, unlike
the scientifically valid clinical studies triggering
the Vioxx recall, previous clinical trials pointing to
the cardiovascular safety of Celebrex, including the
CLASS study, were so flawed and defective that
additional clinical studies looking at cardiovascular
safety were required; and
(5) that even as defendants intensified their retail
advertising campaign and public statements following
the Vioxx recall, including publishing full-page
advertisements in major newspapers heralding the safe
use of the drug, overwhelming and indisputable data and
results pointed to a class-specific cardiovascular
health risk for COX-2 inhibitors, including the adverse
cardiovascular safety data defendants had already
generated for Bextra, the Company's other selective
COX-2 inhibitor drug, and nearly completed specific
safety studies of Celebrex that would demonstrate that
Celebrex suffered from the class-specific
cardiovascular risks attributable to COX-2 inhibitors.
On December 17, 2004, Pfizer announced it had "received new
information ... about the cardiovascular safety of its COX-2
inhibitor Celebrex (celecoxib) based on an analysis of two long-
term cancer trials." On this news, Pfizer shares fell to as low
as $22 per share.
For more details, contact William Lerach or Darren Robbins of
Lerach Coughlin by Phone: 800/449-4900 or 619/231-1058 by E-
mail: wsl@lerachlaw.com or visit their Web site:
http://www.lerachlaw.com/cases/pfizer/.
PFIZER INC.: Marc S. Henzel Lodges 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 all persons who purchased the
common stock of Pfizer, Inc. (NYSE: PFE) between November 1,
2000 and December 16, 2004, inclusive, (the "Class Period")
against defendants Pfizer and certain officers and directors of
the Company.
The complaint arises out of defendants' false and misleading
statements and omissions concerning the safety and marketability
of Pfizer's Celebrex and Bextra products. At all times during
the Class Period, defendants were aware that Celebrex and
Bextra, drugs known as "Cox-2 inhibitors," posed serious
undisclosed health risks to consumers. Defendants knew or
recklessly disregarded that the undisclosed health risks posed
by these drugs would limit their marketability, and that
potential financial liability Pfizer faced from the harms these
drugs caused posed a serious threat to the Company's financial
condition. Nonetheless, defendants concealed these facts from
the investing public, thereby damaging Plaintiff and the Class.
Toward the close of the Class Period, a series of factual
revelations from several sources caused the market to gradually
perceive the truth about Pfizer's Bextra and Celebrex products.
On December 17, 2004, Pfizer issued a press release announcing
the Company has discovered an increased risk of heart problems
with patients taking its painkiller Celebrex. The press release
came after a study revealed that the use of Celebrex in patients
taking 400mg to 800mg of the drug daily were found to have a
risk of 2.5 times greater of experiencing major heart problems
than those who were not. This level of risk was even greater
than the one found in patients taking Vioxx that led Merck to
withdraw Vioxx from the marketplace.
For more details, contact the law offices of Marc S. Henzel by
Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 610-
660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com.
VIMPEL-COMMUNICATIONS: Marc S. Henzel Lodges NY Securities Suit
---------------------------------------------------------------
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 all persons who purchased or
otherwise acquired the securities of Open Joint Stock Company
"Vimpel-Communications"(NYSE: VIP) between March 25, 2004 and
December 7, 2004, inclusive (the "Class Period"), seeking to
pursue remedies under the Securities Exchange Act of 1934 (the
"Exchange Act").
The action is pending in the United States District Court for
the Southern District of New York against defendants VimpelCom,
Alexander V. Izosimov (CEO) and Elena A. Shmatova (CFO).
According to the complaint, defendants violated sections 10(b)
and 20(a) of the Exchange Act, and Rule 10b-5, by issuing a
series of material misrepresentations to the market during the
Class Period.
VimpelCom is an Open Joint Stock Company organized under the
laws of the Russian Federation that maintains principal
executive offices in Moscow. The primary trading market for its
securities is the New York Stock Exchange where its shares trade
as American Depositary Receipts ("ADR"s), with each ADR
representing one quarter of a share of VimpelCom common stock.
The Company provides wireless telecommunications services under
the Bee Line and EXCESS brands. Most of the Company's operating
income is generated by its wholly-owned subsidiary, KBI Impulse
("KBI").
The complaint alleges that at all relevant times the Company's
financial statements were materially false and misleading
because defendants failed to report millions of dollars of
contingent tax liability arising from intra-company transfers
between VimpelCom and KBI, despite defendants' knowledge or
reckless disregard of the Company's tax exposure. The truth was
revealed on December 8, 2004, when defendants disclosed that the
Company had received "an act with preliminary conclusions"
stating that the Company owes approximately $90 million in
unpaid tax and $67 million in fines and penalties. On this
announcement, the Company's ADR price dropped 32%, from an
opening price of $40.30 on December 7, 2004 to a closing price
of $27.10 on December 8, 2004 on extremely heavy trading volume.
For more details, contact the law offices of Marc S. Henzel by
Mail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 610-
660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-Mail:
mhenzel182@aol.com.
*********
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*********
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Copyright 2004. All rights reserved. ISSN 1525-2272.
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