/raid1/www/Hosts/bankrupt/CAR_Public/050228.mbx
C L A S S A C T I O N R E P O R T E R
Monday, February 28, 2005, Vol. 7, No. 41
Headlines
3M CORPORATION: Reaches Settlement For 12 Antitrust Tape Suits
ADMINISTAFF INC.: TX Court Yet To Rule on Stock Suit Dismissal
AMC ENTERTAINMENT: Forges Settlement For Suits v. Marquee Merger
AMERICAN MULTI-CINEMA: CA Court Refuses To Certify Wage Suits
AMERICA ONLINE: WA Court Reinstates Deceptive Practices Lawsuit
ARTHUR ANDERSEN: Appeal For Conviction To Go Before High Court
CAPITAL CITY: Reaches Settlement For FTC Consumer Fraud Charges
CIBC: Law Firm Files $9M Breach Of Privacy Suit in Ontario Court
CISCO SYSTEMS: Shareholders Launch Securities Fraud Suit in CA
CORNING INC.: NY Court Grants Summary Judgment, Suit Dismissed
CORNING INC.: Plaintiffs Appeal Securities Fraud Suit Dismissal
DIAL CORPORATION: IA Pre-Employment Test Discriminatory To Women
GUNDLE SLT: Pays Settlement For Investor Fraud Suit in DE Court
HAMILTON AGED: Rights Group Launches Lawsuit V. Prison Condition
HARRIS FARMS: CA Court Returns $994T Verdict in Harassment Case
ILLINOIS: First Suit Since S.5's Passage Filed in Madison County
INTERSTATE BRANDS: Recalls Grain Bread For Plastic Contamination
MARSH & MCLENNAN: Keller Rohrback Is Lead Counsel in ERISA Case
MARYLAND: Assembly Asked To Loosen Class Action Restrictions
MCDONALD'S CORPORATION: AZ, NM Franchises Face Harassment Suits
OHIO: Attorney Says Property Owners' Suit Could Include Hundreds
RADIX MARINE: Faces Consumer Suit On Unsolicited Fax in IL Court
SKY FINANCIAL: Named As Defendants in Consumer Fraud Suit in OH
TOYOTA MOTOR: NJ Court Grants Certification To Consumer Lawsuit
UNITED STATES: High Court To Hear Diversity Jurisdiction Case
VIOXX LITIGATION: Shareholder Suits Assigned To NJ Federal Court
WAL-MART STORES: NY Jury Awards Disabled Former Employee $7.5M
New Security Fraud Cases
AUDIBLE INC.: Brodsky & Smith Lodges Securities Fraud Suit in NJ
AUDIBLE INC.: Charles J. Piven Files Securities Fraud Suit in NJ
AUDIBLE INC.: Marc S. Henzel Lodges Securities Suit Fraud in NJ
AUDIBLE INC.: Shalov Stone Lodges Securities Fraud Suit in NJ
AUDIBLE INC.: Schatz & Nobel Lodges Securities Fraud Suit in NJ
AXONYX INC.: Milberg Weiss Lodges Securities Fraud Lawsuit in NY
AXONYX INC.: Wolf Haldenstein Lodges Securities Fraud Suit in NY
ESPEED INC.: Marc S. Henzel Lodges Securities Suit Fraud in NY
ESPEED INC.: Paskowitz & Associates Lodges Securities Suit in NY
MAMMA.COM INC.: Marc S. Henzel Files Securities Suit Fraud in NY
MAMMA.COM INC.: Spector Roseman Lodges NY Securities Fraud Suit
OFFICEMAX INC.: Pomerantz Haudek Lodges Securities Suit in IL
SHURGARD STORAGE: Goodkind Labaton Lodges Securities Suit in WA
SINA CORPORATION: Murray Frank Files Securities Fraud Suit in NY
SIPEX CORPORATION: Spector Roseman Lodges Securities Suit in CA
*********
3M CORPORATION: Reaches Settlement For 12 Antitrust Tape Suits
--------------------------------------------------------------
3M Corporation reached a tentative settlement of 12 antitrust
lawsuits that had sought class action status and was filed by
purchasers of transparent tape, the Associated Press reports.
The suits had claimed that the St. Paul, Minnesota firm competed
unfairly and unlawfully monopolized the market for transparent
tape. It had followed on a verdict requiring 3M to pay
Pittsburgh-based rival LePage's Inc. $96.5 million, which it did
in July 2004 after the Supreme court refused to overturn the
verdict.
Publix Super Markets, owner of hundreds of stores throughout the
Southeast was the named plaintiff in one of the suits is
claiming that 3M chased competitors from the marketplace with a
rebate program that tied the price for its popular Scotch and
Highland tape brands to the quantity of other 3M products sold.
Court documents stated that under the rebate program, if a store
didn't meet 3M sales goals in each of six different product
categories including stationery, home repair, and auto and
health care supplies it would lose rebates on all 3M products.
According to Publix, the possibility of losing those discounts
made it too risky to sell transparent and invisible tape made by
other companies, even if their prices were much lower.
3M said that the 12 suits brought on behalf of indirect
purchasers of tape are pending in California, Pennsylvania,
Florida, Tennessee, Wisconsin, Kansas, South Carolina, New
Mexico, and Iowa. Thus, the proposed settlement does not affect
the class and individual actions brought by direct purchasers of
3M transparent tape that are pending in a federal court in
Pennsylvania.
ADMINISTAFF INC.: TX Court Yet To Rule on Stock Suit Dismissal
--------------------------------------------------------------
The United States District Court for the Southern District of
Texas has yet to rule on Administaff, Inc.'s motion to dismiss
the consolidated securities class action filed against it and
certain of its officers and directors on behalf of purchasers of
the Company's common stock.
The suit alleges violations of the federal securities laws. The
suit alleges that Administaff and certain of its officers and
directors made false and misleading statements or failed to make
adequate disclosures concerning, among other things:
(1) the Company's pricing and billing systems with respect
to recalibrating pricing for clients that experienced a
decline in average payroll cost per worksite employee;
(2) the matching of price and cost for health insurance on
new and renewing client contracts; and
(3) the Company's former method of reporting worksite
employee payroll costs as revenue
The complaint sought unspecified damages, among other remedies.
On March 31, 2004, the court appointed Carpenters Pension Trust
for South California as "lead plaintiff" and Lerach Coughlin
Stoia Geller Rudman & Robbins LLP as "lead counsel." The lead
plaintiff alleges that its losses are $352,000, although the
alleged damages of the purported class have not been specified.
In the consolidated complaint, the lead plaintiff has
essentially abandoned the allegations of fraud contained in the
initial seven lawsuits. Through the consolidated complaint, the
lead plaintiff now generally asserts, among other things, that
Administaff and certain of its officers and directors
fraudulently made false and misleading statements regarding the
cost of its health plan during 2001 and 2002. In June 2004, the
Company filed a motion to dismiss the consolidated complaint.
The suit is styled "Arnone, et al. v. Administaff, Inc., et al.,
case no. 03-CV-2082," filed in the United States District Court
for the Southern District of Texas, under Judge Melinda Harmon.
Representing the Company is Philip J. John, Jr of Baker Botts,
910 Louisiana, Houston, TX 77002, Phone: 713-229-1215, Fax:
713-229-2815 fax, E-mail: philip.john@bakerbotts.com. Lead
counsel for the plaintiffs is Lerach Couglin Stoia Geller Rudman
& Robbins LLP, One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300.
AMC ENTERTAINMENT: Forges Settlement For Suits v. Marquee Merger
----------------------------------------------------------------
AMC Entertainment, Inc. reached a settlement for the
consolidated shareholder class actions filed in Missouri and
Delaware courts, over its merger with Marquee Holdings, Inc.
On July 22, 2004, two lawsuits purporting to be class actions
were filed in the Court of Chancery of the State of Delaware,
one naming the Company, the Company's directors, Apollo
Management and certain entities affiliated with Apollo as
defendants and the other naming the Company, the Company's
directors, Apollo Management and Marquee Holdings as defendants.
Those actions were consolidated on August 17, 2004. The
plaintiffs in the consolidated action filed an amended complaint
in the Chancery Court on October 22, 2004 and moved for
expedited proceedings on October 29, 2004.
On July 23, 2004, three more lawsuits purporting to be class
actions were filed in the Circuit Court of Jackson County,
Missouri, each naming the Company and the Company's directors as
defendants. These lawsuits were consolidated on September 27,
2004. The plaintiffs in the consolidated action filed an
amended complaint in the Circuit Court of Jackson County on
October 29, 2004. The Company filed a motion to stay the case
in deference to the prior-filed Delaware action and separate
motion to dismiss the case in the alternative on November 1,
2004.
In both the Delaware action and the Missouri action, the
plaintiffs generally allege that the individual defendants
breached their fiduciary duties by agreeing to the Merger, that
the transaction is unfair to the minority stockholders of the
Company, that the merger consideration is inadequate and that
the defendants pursued their own interests at the expense of the
stockholders. The lawsuits seek, among other things, to recover
unspecified damages and costs and to enjoin or rescind the
Merger and related transactions.
On November 23, 2004, the parties in this litigation entered
into a Memorandum of Understanding providing for the settlement
of both the Missouri action and Delaware action. Pursuant to
the terms of the Memorandum of Understanding, the parties
agreed, among other things, that:
(1) Marquee would waive Section 6.4(a)(C) of the merger
agreement to permit the Company to provide non-public
information to potential interested parties in response
to any bona fide unsolicited written acquisition
proposals by such parties (which it did),
(2) the Company would make certain disclosures requested by
the plaintiff in the proxy statement and the related
Schedule 13E-3 in connection with the special meeting
to approve the Merger (which it did) and
(3) the Company would pay, on behalf of the defendants,
fees and expenses of plaintiffs' counsel of
approximately $1.7 million (which such amounts the
Company believes are covered by its existing directors
and officers insurance policy).
In reaching this settlement, the Company confirmed to the
plaintiffs that Lazard and Goldman Sachs had each been provided
with the financial information included in the Company's
earnings press release, issued on the same date as the
announcement of the merger agreement. The Memorandum of
Understanding also provided for the dismissal of the Missouri
action and the Delaware action with prejudice and release of all
related claims against the Company, the other defendants and
their respective affiliates. The settlement as provided for in
the Memorandum of Understanding is contingent upon, among other
things, approval by the court.
AMERICAN MULTI-CINEMA: CA Court Refuses To Certify Wage Suits
-------------------------------------------------------------
The Orange County, California Superior court refused to grant
class certification to two lawsuits filed against American
Multi-Cinema, Inc. on behalf of its current and former
employees, alleging overtime wage law violations.
The first suit is styled "Conrad Grant v. American Multi-Cinema,
Inc. and DOES 1 to 100, case no. 03CC00429." On September 26,
2003, plaintiff filed this suit as a purported class action on
behalf of himself and other current and former "senior
managers," "salary operations managers" and persons holding
similar positions who claim that they were improperly classified
by the Company as exempt employees over the prior four years.
On April 28, 2004, William Baer and additional plaintiffs filed
a related case titled "William Baer and Anisnara Hamlzonek v.
American Multi-Cinema, Inc. and DOES 1 to 100, case no.
04CC00507."
On December 9, 2004, the Baer Court denied plaintiffs' motion
for class certification, and on January 7, 2005, the Grant Court
granted defendants' motion to strike the class allegations. In
both the Baer and Grant proceedings, individual wage and hour
claims against the Company remain to be litigated.
AMERICA ONLINE: WA Court Reinstates Deceptive Practices Lawsuit
---------------------------------------------------------------
A Washington state appeals court ruled that a lawsuit filed
against America Online and a Spokane Valley call center can move
forward, thus paving the way for the possibility of nationwide
class action, the CRM Buyer reports.
In 2003 two Spokane County residents, Suzy Dix and Jeffry R.
Smith, filed a civil suit alleging that AOL (NYSE: AOL) and call
center ICT Group (Nasdaq: ICTG) together engaged in deceptive
business practices. In their court documents, the duo alleged
that AOL's online software deceptively created spin-off or
secondary personal accounts that led to unnecessary and unwanted
extra subscription costs. The suit also claims that ICT Group
workers who provided customer service for AOL did not give
accurate information on how to halt the double billing and
allowed it to continue.
Attorneys for AOL and ICT Group both denied the allegations and
instead contended in late 2003, that the suit could only be
filed in Virginia, where its headquarters are. Thus, Spokane
County Superior Court Judge Salvatore Cozza ruled early last
year that the lawsuit couldn't be filed in Spokane County.
Unfazed by the ruling, attorneys for Ms. Dix and Mr. Smith filed
an appeal. Last week's ruling by Division Three of the state
appeals court reversed that decision by Judge Cozza's.
The attorneys for Ms. Dix and Mr. Smith asserted that hundreds
of thousands of other AOL customers nationwide faced similar
charges through AOL's actions. With the recent decision by the
appeals court, they are now hoping to establish a class action
to recover those costs for any victim, said Spokane attorney
William Schroeder.
In reversing the earlier ruling, the appeals court judges noted
that the state of Virginia does not allow class-action suits. In
addition, the court also noted that when AOL required customers
to agree to "terms of service" that stipulated any lawsuit had
to be filed in Virginia, the effect was to "undermine the very
purpose of (Washington's) consumer protection act." "This means
we go back to where we were," Mr. Schroeder told the CRM Buyer.
"We move forward and try to get the action certified as a
class."
ARTHUR ANDERSEN: Appeal For Conviction To Go Before High Court
--------------------------------------------------------------
The United States Supreme Court is set to hear arguments on
April 27 regarding whether to overturn the June 2002 obstruction
of justice conviction of the Arthur Andersen accounting firm in
the shredding of Enron documents, The Houston Chronicle reports.
Legal experts point out that the focus of the appeal will be on
how the law was presented to the jury with a decision being
handed down as early as June.
Andersen had served for nearly two decades as the auditor for
WorldCom and its predecessor companies. After WorldCom disclosed
accounting irregularities totally billions of dollars in 2002,
Andersen withdrew its 2001 opinion on the company's annual
report. Since emerging from bankruptcy last year, WorldCom has
been known as MCI.
CAPITAL CITY: Reaches Settlement For FTC Consumer Fraud Charges
---------------------------------------------------------------
A mortgage lender and servicer has settled Federal Trade
Commission (FTC) charges that it deceptively induced consumers
into taking loans secured by their homes, overcharged borrowers,
and, in some instances, caused consumers to lose their homes.
The settlement permanently bans the defendants from future
lending fraud and requires them to pay consumer redress and
other monetary relief totaling at least $750,000.
In January 1998, the FTC filed a complaint against Washington,
DC-based Capital City Mortgage Corporation and its president,
Thomas K. Nash, alleging that the defendants deceived consumers
about various loan terms, resulting in serious injury to
borrowers. According to the FTC, the defendants frequently
targeted consumers with fixed or low incomes with offers for
loans secured by the equity of the borrowers' homes, rather than
their creditworthiness. The FTC charged that the defendants
included phony charges in monthly statements to borrowers, added
phony charges to loan balances, forced consumers to make monthly
payments for the entire loan amount while withholding some loan
proceeds, foreclosed on borrowers who were in compliance with
the terms of their loans, and failed to release liens on
borrowers' homes after the loans were paid off. The complaint
also charged the defendants with violations of the Truth in
Lending Act, the Equal Credit Opportunity Act, and the Fair Debt
Collection Practices Act.
The FTC later amended its complaint to include Eric J. Sanne,
the former General Counsel of Capital City, charging him with
sending letters to borrowers falsely claiming he represented a
third-party debt collector, rather than Capital City, and
seeking to collect money consumers did not owe. In a May 2004
settlement, Sanne was barred from participating in any debt-
collection business and ordered to pay $20,000 in consumer
redress. The FTC also amended its complaint a second time, after
Nash died in 2002, to substitute Nash's estate as a defendant
and add relief defendants.
The stipulated order requires the defendants to pay $750,000 and
set up a $350,000 performance fund that will be available to the
Commission or any borrower if Capital City does not comply with
the order. It also prohibits Capital City from misrepresenting
the terms, conditions, fees, or payment amounts of any loan;
failing to disclose all required fees to borrowers at least
three days before loan closing or assessing any fee, including
interest or real estate taxes, not authorized and disclosed to
consumers; misrepresenting that it will not attempt to take or
take the title to a borrower's home while the borrower is in
compliance with loan obligations; and misrepresenting that it
will maintain accurate loan servicing records that will be
available to borrowers.
The order also prohibits the defendants from failing to require
sufficient escrow amounts and make timely disbursements of
escrow funds; placing insurance on a borrower's property without
first determining whether insurance is already in place and
obtaining the borrower's express consent; increasing the
principal amount of any loan or requiring additional security on
any loan without the borrower's consent; failing to disburse
loan proceeds to a borrower when the borrower has complied with
the terms of the loan; failing to release a lien on property
securing a loan within 30 days of the loan payoff; and
threatening a consumer's loan or property title to induce the
consumer to pay additional amounts not required by the loan or
by law.
In addition, the defendants are barred from violating the Truth
in Lending Act and Regulation Z by failing to identify the
creditor or the annual percentage rate for a loan; failing to
make required disclosures before consummating a consumer credit
transaction; failing to make or correct "good faith"
disclosures; understating the finance charge or annual
percentage rate or overstating the amount financed; failing to
disclose accurately the payment schedule or the existence of a
balloon payment; making disclosures that do not accurately
reflect the legal obligation between the parties; failing to
include courier fees, inspection fees, and certified check fees
in the stated finance charge; and failing to use required
standard loan forms.
The defendants are further barred from violating the Fair Debt
Collection Practices Act by misrepresenting that a Capital City
employee is instead an independent attorney or third party debt
collector; misrepresenting to consumers the amount or legal
status of any payment due; and collecting any amount not
authorized by law.
The order also prohibits the defendants from violating
Regulation B and the Equal Credit Opportunity Act (ECOA) by
failing to take written applications for credit; request certain
required information regarding race, ethnicity, sex, marital
status, and age; inform consumers that this information is
collected to monitor compliance with federal laws that prohibit
creditors from discriminating against applicants; and provide
applicants with a written "adverse action" notice containing the
reasons for the action taken and the contact information for the
federal agency monitoring Capital City's compliance with ECOA.
Additionally, the order requires the defendants to provide
borrowers with a monthly statement that accurately discloses the
total amount of the next payment owed - including fees,
identifies the way in which the consumer's prior payment was
applied to the loan, and identifies a method for consumers to
dispute the charges; an annual accounting status of the loan as
of December 31 each year, identifying the amounts credited
toward repayment of interest and principal, amounts credited to
other purposes such as late fees, and the status of any escrow
account; and at the borrower's request, records to document any
fee and a good faith estimate of the amount required to repay
the loan in full. The order also contains standard
recordkeeping and reporting requirements to assist the FTC in
monitoring the defendants' compliance.
The Commission's amended complaint named Capital City Mortgage
Corp.; Marcia C. Fidis, in her capacity as representative of the
Estate of Thomas K. Nash; and Eric J. Sanne as defendants. The
complaint names Thomas K. Nash Family Trust and Alan W. Nash, in
his capacity as trustee; and Nash Marital Trust under Will of
Thomas K. Nash and Marcia C. Fidis and Caroline Koestner Nash,
in their capacities as co-trustees, as relief defendants.
The Commission vote authorizing staff to file the stipulated
final order was 5-0. The stipulated final order for permanent
injunction was filed in the U.S. District Court for the District
of Columbia on February 23, 2005.
For more details, contact the FTC's Consumer Response Center,
Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580,
by Phone: 1-877-FTC-HELP (1-877-382-4357), or visit the Website:
http://www.ftc.gov. Also contact Jen Schwartzman, Office of
Public Affairs by Phone: 202-326-2674 or Alain Sheer, Division
of Financial Practices by Phone: 202-326-3224
CIBC: Law Firm Files $9M Breach Of Privacy Suit in Ontario Court
----------------------------------------------------------------
A Toronto law firm filed a $9 million class action lawsuit in
the Ontario Superior Court of Justice against CIBC, after
revelations that it had been faxing their confidential RRSP
information to unauthorized individuals, including a now-famous
junkyard in West Virginia, the Ottawa Business Journal reports.
Specifically, the suit alleges that CIBC sent client and other
applications over unsecured fax lines to the junkyard between
2002 and 2004. The applications contained highly personal
information including names, addresses, phone numbers, social
insurance numbers, bank accounts, GIC numbers and amounts, as
well as client signatures. Eventually, copies of the
applications of at least two CIBC customers ended up on an
Internet-accessible court Web site.
According to the statement of claim, even though CIBC became
aware of the disclosure of client information, the bank
apparently took no steps to identify and warn its clients of the
disclosure, or of the risk of identity theft or misuse of their
information until after the federal Privacy Commissioner began
an investigation last November.
In a statement, Ted Speevak, the lead plaintiff in the class
action said, "I feel violated by CIBC's disclosure of my
personal information and I am very concerned that it has been
published on a court Web site." He added, "With the information
that was disclosed, I could be a victim of identity theft at any
time, even years from now. I expected better from one of
Canada's leading financial institutions."
Michael Girard, Mr. Speevak's lawyer and who was highly critical
of the bank also said, "Instead of warning its clients and
helping them protect themselves, CIBC did not tell its clients
anything until the media broke the story and the Privacy
Commissioner became involved. People should be able to rely on
their bank to keep their financial information confidential,"
the Ottawa Business Journal reports.
CISCO SYSTEMS: Shareholders Launch Securities Fraud Suit in CA
--------------------------------------------------------------
Cisco Systems, Inc. and certain of its officers and directors
continue to face a consolidated shareholder class action filed
in the United States District Court for the Northern District of
California.
The consolidated action is purportedly brought on behalf of
those who purchased the Company's publicly traded securities
between August 10, 1999 and February 6, 2001. Plaintiffs allege
that defendants have made false and misleading statements,
purport to assert claims for violations of the federal
securities laws, and seek unspecified compensatory damages and
other relief.
The suit is filed in the United States District Court for the
Northern District of California, under Magistrate Judge Bernard
Zimmerman. The plaintiff firms in this litigation are:
(1) Charles J. Piven, World Trade Center-Baltimore,401 East
Pratt Suite 2525, Baltimore, MD, 21202, Phone:
410.332.0030, E-mail: pivenlaw@erols.com
(2) Milberg, Weiss, Bershad, Hynes & Lerach LLP (San Diego,
CA), 600 West Broadway, 1800 One America Plaza, San
Diego, CA, 92101, Phone: 800.449.4900, E-mail:
support@milberg.com
(3) Rabin & Peckel LLP, 275 Madison Avenue, 34th Floor, New
York, NY, 10016, Phone: 212.682.1818, Fax:
212.682.1892, E-mail: email@rabinlaw.com
(4) 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
CORNING INC.: NY Court Grants Summary Judgment, Suit Dismissed
--------------------------------------------------------------
The United States District Court for the Southern District of
New York granted summary judgment in favor of Corning, Inc. and
dismissed the securities class action filed against the Company.
The action was brought in the name of a class of purchasers of
Company stock who allege misrepresentations and omissions of
material facts relative to the silicone gel breast implant
business conducted by Dow Corning. The nominal class consisted
of those purchasers of Corning stock in the period from June 14,
1989 to January 13, 1992. No amount of damages was specified in
the complaint.
In 1997, the Court dismissed the individual defendants from the
case. On December 21, 2004, the Court granted summary judgment
in favor of Corning, dismissing all claims against it.
Plaintiffs may file an appeal to the U.S. Court of Appeals.
The suit is styled "Adams v. Corning Inc., et al., case no.
1:93-cv-07015-AGS-NG," filed in the United States District Court
for the Southern District of New York, under Judge Allen G.
Schwartz. Lead counsel for the plaintiffs is Marian Probst
Rosner, Wolf Popper LLP, 845 Third Avenue, New York, NY 10022,
Phone: (212) 759-4600, E-mail: mrosner@wolfpopper.com.
CORNING INC.: Plaintiffs Appeal Securities Fraud Suit Dismissal
---------------------------------------------------------------
Plaintiffs appealed the United States District Court for the
Western District of New York's dismissal of the consolidated
securities class action filed against Corning, Inc. and three of
its officers and directors.
From December 2001 through April 2002, the Company and three of
its officers and directors were named defendants in lawsuits
alleging violations of the U.S. securities laws in connection
with Corning's November 2000 offering of 30 million shares of
common stock and $2.7 billion zero coupon convertible
debentures, due November 2015. In addition, the Company and the
same three officers and directors were named in lawsuits
alleging misleading disclosures and non-disclosures that
allegedly inflated the price of Corning's common stock in the
period from October 2000 through July 9, 2001.
The plaintiffs in these actions seek to represent classes of
purchasers of Corning's stock in all or part of the period
indicated. On August 2, 2002, the federal court entered an
order consolidating these actions for all purposes, designating
lead plaintiffs and lead counsel, and directing service of a
consolidated complaint. The consolidated amended complaint
requests substantial damages in an unspecified amount to be
proved at trial.
In February 2003, defendants filed a motion to dismiss the
complaint for failure to allege the requisite elements of the
claims with particularity. The Court heard arguments on May 29
and June 9, 2003 and on April 9, 2004 entered a Decision and
Order dismissing the complaint. Plaintiffs appealed to the U.S.
Court of Appeals of the Second Circuit. Oral argument was held
on February 2, 2005, and the Court reserved decision.
DIAL CORPORATION: IA Pre-Employment Test Discriminatory To Women
----------------------------------------------------------------
A federal district court in Iowa has ruled that a pre-employment
strength test used by The Dial Corporation at its Armour meat
packing plant in Fort Madison, Iowa, has a disparate impact
against women, and is therefore illegal under Title VII of the
Civil Rights Act of 1964, the U.S. Equal Employment Opportunity
Commission (EEOC) announced in a statement.
Chief Judge Ronald E. Longstaff of the U.S. District Court,
Southern District of Iowa, ruled on February 3 in EEOC v. The
Dial Corporation (# 3-02-CV-10109) that Dial's "work tolerance
test" (WTS) was passed by 97% of male applicants and less than
40% of female applicants, and that Dial had failed to prove that
the test was necessary for performance of entry-level jobs in
the plant's sausage-making department. The court also approved
the finding of a jury, following a trial in August 2004, that
Dial's use of the test intentionally discriminated against
women.
In Judge Longstaff's words: "Dial has failed to fulfill its
burden to show it had a 'compelling need'for implementation of
the WTS, and that other, non-discriminatory mechanisms namely,
many of the same safety programs actually implemented by Dial
could not produce the same results."
The court's decision rejects the validity of the strength test,
which was implemented by Dial in January 2000. Prior to the
test, nearly half of the people hired for entry-level jobs in
the sausage department of the plant had been female. The job is
physically demanding, requiring the repetitive lifting of a 35-
pound rod of sausages to a height of approximately 65 inches.
Although women had been successfully performing the job for
years, Dial argued that the test was necessary to reduce
injuries. Judge Longstaff rejected that argument, noting that
women had been no more likely than men to be injured prior to
the use of the test, that the test was more difficult than the
job, and that an overall reduction in injuries was likely
related to other safety initiatives implemented by Dial. The
court will now consider appropriate relief for the approximately
50 women who had been rejected at the time of the trial.
Jean P. Kamp, Regional Attorney for the Milwaukee District
Office of the EEOC, which litigates employment discrimination
cases in Iowa, Wisconsin and Minnesota, said, "Disparate impact
cases are somewhat unusual, but they are an important tool when,
as here, an apparently neutral screening test excludes large
numbers of women, or any other protected group, who are able to
perform the job. Judge Longstaff's opinion affirms the right of
women to be judged on their qualifications for the actual
requirements of a job."
The case was brought in 2002 by the EEOC based on a charge of
discrimination filed by Paula Liles, who applied for a position
at Dial in February 2000. Ms. Liles and other unsuccessful
female applicants testified at trial that they had performed
heavy physical work, including lifting, in the past, and that
they had met all the other job requirements and had been made
conditional job offers prior to being rejected by Dial based on
the work tolerance test. Ms. Liles completed the seven-minute
test, but was graded as failing because of her height, which
required her to go on her toes to complete the lifts to 65
inches.
For more details, contact Jean P. Kamp, Milwaukee Regional
Attorney by Phone: (414) 297-1860 or Brian Tyndall, Senior Trial
Attorney by Phone: (414) 297-1130 or (414) 297-1115.
GUNDLE SLT: Pays Settlement For Investor Fraud Suit in DE Court
---------------------------------------------------------------
Gundle SLT Environmental Inc. paid the settlement award for the
consolidated shareholder class action filed against it in the
Delaware Court of Chancery.
The Company, its directors, Code Hennessy & Simmons LLC, GEO Sub
Corporation and GEO Holdings were named in one or more of three
putative class action lawsuits filed in January 2004 in the
Delaware Court of Chancery, styled:
(1) Calhoun v. Gundle/SLT Environmental, Inc., et al., C.A.
No.153-N,
(2) Twist Partners LLP v. Badawi, et al., C.A. No.150-N,
and
(3) Bell v. Gundle/SLT Environmental, Inc., et al., C.A.
No.169-N
These complaints alleged that the Company's directors breached
their fiduciary duties by allegedly failing to auction the
Company, to undertake an appropriate evaluation of the Company
as a merger/acquisition candidate, to act independently to
protect the Company's stockholders and to ensure that no
conflicts of interest existed or that any conflicts were
resolved in "the best interests of the Company's public
shareholders." The complaints sought, among other relief, to
rescind the Merger and to obtain unspecified damages from the
defendants.
On February 10, 2004, the Delaware Court of Chancery entered an
order consolidating the three actions for all purposes and
requiring the plaintiffs to file a consolidated amended
complaint as soon as practicable. The parties to the
consolidated actions executed a Stipulation and Agreement of
Compromise, Settlement and Release dated May 26, 2004, which
provides for dismissal of the actions, on the merits and with
prejudice. At a settlement hearing on August 12, 2004, the
Court:
(i) certified the actions permanently as a class action;
(ii) approved the settlement as fair, reasonable and
adequate;
(iii) entered the order as final judgment, inter alia,
dismissing the actions as to defendants and releasing
the released parties from the settled claims; and
(iv) granted the application of plaintiff's Counsel for an
award of attorneys' fees and reimbursement of expenses
in the aggregate sum of $330,000.
HAMILTON AGED: Rights Group Launches Lawsuit V. Prison Condition
----------------------------------------------------------------
The Atlanta-based Southern Center for Human Rights filed a
lawsuit in the United States District Court in Georgia, claiming
that the 300 inmates of Hamilton Aged and Infirm Correctional
Facility, an Alabama prison, live in an unsanitary facility
designed for 67 prisoners, and are often denied essential
medical treatment, resulting in unnecessary suffering and
premature death, the Reuters AlertNet reports.
The rights group stated in the class action suit that was filed
in U.S. District Court by six prisoners, "Although every
prisoner at Hamilton has some major medical condition or
impairment, the services of a physician are usually not
available." The conditions amount to violation of the
Constitution's prohibition of cruel and unusual punishment, the
suit charged.
The lawsuit charged that prison authorities have refused to
allow Terry Miller, one of the plaintiffs, who had suffered a
car accident before being incarcerated and has a severe wound on
the left side of his abdomen, to have a complete skin graft
treatment and for the past three years have only provided him
with gauze for his wound, which constantly drains.
"In many instances, geriatric prisoners lie in their own urine
and feces for two to three days without receiving assistance,"
the suit said, according to Reuters.
Attorney for the plaintiffs, Joshua Lipman told Reuters several
people had died in the past year because of inadequate treatment
of conditions like diabetes and hepatitis C. While others who
had had limbs amputated received no physical therapy.
Alabama Department of Corrections spokesman Brian Corbett told
Reuters, "It would be inappropriate to speak to any specific
allegation because of the pending litigation. However we feel
the level of health care services at Hamilton rises well above
minimal constitutional standards."
The prisoners have asked the court to order that the prison
provide a full-time doctor and dentist, adequate emergency care,
access to specialists and adequate housing for the disabled. In
addition, Mr. Lipman told Reuters the stench in the infirmary
was unbearable, mold grows on the showers, the toilets often
back up and overflow and urine and feces are allowed to remain
on the infirmary floor. "The infirmary has no emergency call
buttons. When there is a medical emergency, prisoners must pound
on the door leading to the nursing station ... Often,
correctional staff does not respond," the complaint stated.
Furthermore, the suit alleges that prisoners, including the
elderly and disabled, must stand in line for up to 45 minutes to
receive medication and that untrained prisoners change colostomy
bags, bandages and intravenous drips for fellow inmates. The
suit also alleges that about 40 prisoners use wheelchairs but
the van used to transport them to outside medical care is not
handicapped accessible, forcing them to crawl or climb into it
without assistance and that numerous prisoners are blind but the
facility is not equipped to house them.
HARRIS FARMS: CA Court Returns $994T Verdict in Harassment Case
---------------------------------------------------------------
A jury in U.S. District Court for the Eastern District of
California in Fresno returned in January 2005 a $994,000 verdict
in favor of the U.S. Equal Employment Opportunity Commission
(EEOC), Olivia Tamayo and her private counsel, W.J. Smith &
Associates, in their sexual harassment lawsuit against Coalinga-
based Harris Farms, one of the largest integrated farming
operations in the Central San Joaquin Valley.
According to the United Agribusiness League, Harris Farms is one
of the largest agribusinesses in the nation and is California's
largest cattle feeding operation. This case is one of nine
sexual harassment lawsuits filed by the EEOC's San Francisco
District Office against a California agricultural employer, and
the first such case to go to trial.
The jury found Harris Farms liable for sexual harassment,
retaliation and the constructive termination of Ms. Tamayo and
awarded her $53,000 in back pay, $91,000 for front pay (what she
would have earned if she had continued working at her job) and
$350,000 in compensatory damages for emotional pain and
distress. The jury also awarded $500,000 in punitive damages
against Harris Farms to Mrs. Tamayo.
A Mexican immigrant who began picking crops for Harris Farms as
a seasonal farmworker and later became a regular employee in
1985, Mrs. Tamayo testified that her supervisor forcibly raped
her several times. He also subjected her to continuous verbal
sexual harassment and intimidation. In addition, she described
sexually offensive and threatening gossip from co-workers, as
well as retaliation and a constructive discharge being given no
choice than to quit in order to escape the workplace harassment.
After the jury verdict was read, Mrs. Tamayo, a married woman
and mother of five children, recalled how her supervisor and
workplace environment caused her to fear for her family and her
personal safety: "For a long time, I remained silent about what
my supervisor did and said to me. He carried a gun and a knife,
and bragged that he had fought another woman's husband before
and gotten away with it. Only later, after he attacked me out of
jealousy for speaking with another male supervisor, I decided I
had to speak out."
Mrs. Tamayo continued, "This was very hard and very frightening
for me, but I finally reported his attacks, and I reported the
talk and threats that some co-workers were saying about me.
That's why it was so devastating when the company failed to
protect me, let me work alone in the fields, and instead
punished me with a suspension." She concluded, "I thank the EEOC
and my attorney, William Smith, for all their work on my case. I
hope that today's result will help other women fight their fears
and break their silence."
The suit (Civil Action No. F-02-6199 AWI), filed by EEOC in
September of 2002, alleged that Harris Farms violated Title VII
of the Civil Rights Act of 1964 by failing to prevent or end
sexual harassment by a supervisor. The EEOC further charged that
Harris Farms allowed Mrs. Tamayo to work isolated in the fields
and to endure co-worker harassment until, in March 2001, she
felt compelled to quit her job, her primary employment for more
than 15 years. EEOC's Regional Attorney William Tamayo (no
relation to Mrs. Tamayo) noted, "This is a major victory for the
EEOC and for farm workers nationwide. As immigrant women with
limited education and limited English, female farmworkers are
particularly vulnerable to sexual harassment because they are
often unfamiliar with the laws protecting them, and fearful of
the financial and social consequences for themselves and their
families. To overcome these obstacles to speak out against one's
harasser takes a great deal of courage. We are happy that the
jury recognized this and sent the message that employers need to
stop sexual harassment and not retaliate against employees who
complain."
Joan Ehrlich, Director of the EEOC's San Francisco District
Office, noted: "Agriculture is California's second largest
industry, after high tech, and the EEOC has received many
charges of sexual harassment in this sector. We are doing our
best, through aggressive litigation and extensive education for
employers and workers both, to ensure that this trend changes.
This jury's near million dollar verdict sends a strong message
to Harris Farms and other employers that EEOC will vigorously
prosecute employers who fail to investigate reports of
harassment and instead choose retaliation to deal with any
complaints."
Private counsel William Smith of Fresno, who joined with EEOC to
represent Mrs. Tamayo, said, "This was a blatant example of
prohibited discrimination in the workplace. The outcome of this
case sends a clear message that harassment and retaliation have
serious consequences. We can never stop discrimination in the
workplace if the very people who have the courage to oppose it
are silenced."
ILLINOIS: First Suit Since S.5's Passage Filed in Madison County
----------------------------------------------------------------
A recent class-action suit in Madison County Circuit Court may
be the first filed in the nation since President George W. Bush
signed into law a bill moving many such suits to federal courts
from state courts, the St. Louis Post-Dispatch reports.
The suit, filed on behalf of lead plaintiff Locklear Electric, a
Wood River company, by the Alton law firm of Schrempf, Blaine,
Kelly & Darr, identifies additional plaintiffs as "all persons
and entities within the state of Illinois." Specifically, the
suit alleges that the National Association of Preferred
Providers and its registered agent, Michael Rable, of Houston,
unlawfully sent unsolicited fax advertisements to the
plaintiffs. The suit also alleges that the unsolicited faxes
consumed the plaintiff's paper, toner and electricity, thus they
are seeking compensation from $500 to $1,500 per unsolicited
fax.
Under the new class-action law, cases brought by plaintiffs from
multiple states would move from state court to federal court,
which are considered less receptive to them. Madison County
Chief Judge Edward Ferguson said he was uncertain under the new
law if the county was the appropriate venue for the class
action. He told the Madison County Record, "When someone files a
lawsuit here, we accept it and take their fee. I haven't read
the new law to know its ins and outs. It's way too soon to know
if this belongs here. If it doesn't, we'll move it."
In the signing ceremony of the Class Action Fairness Act, S. 5
Friday, President Bush made several negative references to the
Madison County court's reputation as a magnet for class-action
litigation.
INTERSTATE BRANDS: Recalls Grain Bread For Plastic Contamination
----------------------------------------------------------------
Interstate Brands Corporation is voluntarily recalling 20oz
packages of Meritar Autumn Grain bread distributed to
approximately 3500 stores in Northern Florida, Southeastern
Georgia and the Hilton Head area of South Carolina.
The recall, which is due to possible contamination with small
pieces of plastic, affects only a single day's production of one
variety of bread. No other products or geographic regions were
affected.
Interstate Brands has not received any reports of injury related
to this incident. Packages of the recalled bread are marked
with the sell by date of February 28. UPC 12200 04050. The first
line of the ink jet code reads: Feb 28 45 047
Customers who purchased this bread should contact Interstate
Brands Corporation's consumer affairs office at 800-483-7253.
MARSH & MCLENNAN: Keller Rohrback Is Lead Counsel in ERISA Case
---------------------------------------------------------------
The law firm of Keller Rohrback L.L.P. reports that the
Honorable Shirley Kram of the United States District Court for
the Southern District of New York recently appointed Keller
Rohrback L.L.P. as Lead Counsel for the Class in this ERISA
class action brought on behalf of the participants and
beneficiaries in the Marsh & McLennan Companies, Inc. Stock
Investment Plan (the "Plan"), who held and/or purchased Marsh &
McLennan Companies, Inc. ("Marsh") (NYSE:MMC) stock in their
Plan accounts between October 19, 1998 and the present (the
"Class Period").
Judge Kram also appointed the law firms of Cohen, Milstein,
Hausfeld & Toll, P.L.L.C. and Schatz & Nobel, P.C. to serve on
an executive committee for the plaintiffs, and appointed
Goodkind Labaton Rudoff & Sucharow LLP to the executive
committee and as liaison counsel for the plaintiffs.
Plaintiffs allege that the Defendants breached their ERISA
fiduciary duties by imprudently permitting the Plan to hold and
acquire hundreds of millions of dollars in Marsh stock. They did
so despite the fact that Defendants knew or should have known
that Marsh and/or its wholly-owned subsidiaries were engaging in
highly risky if not illegal activities such as bid rigging and
price fixing, which artificially inflated the value of Marsh
stock, and, thus, that Marsh stock no longer was a prudent and
appropriate investment for participants' and beneficiaries'
retirement savings.
For more details, contact Jennifer Tuato'o, Paralegal of Keller
Rohrback L.L.P. by Phone: (800) 776-6044 by E-mail:
investor@kellerrohrback.com or visit their Web sites:
http://erisafraud.com/marshor
http://www.seattleclassaction.com.
MARYLAND: Assembly Asked To Loosen Class Action Restrictions
------------------------------------------------------------
Maryland's Attorney General asked the General Assembly to allow
Maryland consumers to recover their losses when companies
illegally fix prices, which is currently impossible with the
statutes in place, the Business Gazette reports.
Actually, current statute limits lawsuits over price gouging to
"direct purchasers," which in essence means that this are
purchasers who obtain the product or service from the person or
company that illegally fixed the prices. However, according to
Assistant Attorney General Ellen Cooper, who oversees the
antitrust division, because price gouging tends to happen at the
manufacturing, wholesale or distribution level and consumers
usually buy at the retail level, the current statute effectively
bars consumers from suing. "The current law is shutting out
consumers from any recovery, which is unfair," she told the
Gazette.
Maryland's exclusion from the Relafen lawsuit crystallized the
problem with the current law, Ms. Cooper added. In that case a
federal judge had preliminarily approved a $75 million
settlement that GlaxoSmithKline would have to pay consumers in
several states, including Vermont and Massachusetts. The drug
firm had been charged of filing sham lawsuits to keep cheaper,
generic versions of the anti-inflammatory drug Relafen off the
market, resulting in millions of dollars in overcharges to
consumers. However, the judge had also ruled that Maryland
consumers could not participate in the Relafen lawsuit, owing to
restrictions in Maryland's own statute on consumers' rights to
sue.
After that decision Ms. Cooper said, "The decision by the judge
drove us crazy. His opinion said the Maryland General Assembly
clearly does not want consumers to recover losses" in price-
gouging cases.
As a counterstrike, Ms. Cooper told the House Judiciary
Committee that the attorney general is backing a proposal from
Del. James W. Hubbard (D-Dist. 23A) of Bowie that would expand
the consumers' rights. Though previous proposals to amend the
statute have failed, Ms. Cooper pointed out that her office
seeks to change the law only as it applies to suits against
pharmaceutical and a few other industries, where price-gouging
is most prevalent.
J. William Pitcher, representing the Pharmaceutical Research and
Manufacturers of America, told the committee that he objects to
being singled out from other business sectors, the Gazette
reports. According to him, "The fact remains that there are
allegations of price-fixing in all industries. What we're afraid
of here, that ... these class-action suits are joined state by
state, creating such gigantic liability problems for these
companies that they have no choice but to settle."
Industry representatives even say that by opening up Maryland's
price-fixing statute to consumer claims, the state would leave
companies at the mercy of hungry private lawyers and zealous
attorney generals. Jeff Miles, a Washington-based corporate
attorney specializing in antitrust cases pointes out, "This bill
would vastly increase the number of large, complex antitrust
cases. Most would be class-action cases."
However, Ms. Cooper noted that 27 states and the District of
Columbia already permit consumers to sue manufacturers and
wholesalers who illegally fix prices.
MCDONALD'S CORPORATION: AZ, NM Franchises Face Harassment Suits
---------------------------------------------------------------
The U.S. Equal Employment Opportunity Commission (EEOC)
initiated a lawsuit against two McDonald's franchise holders in
Arizona and New Mexico, accusing them of allowing managers to
sexually harass teen workers, the Associated Press reports. One
class action lawsuit was filed in federal court in Phoenix while
the other one was filed in Albuquerque, New Mexico, neither one
though named McDonald's Corporation as a defendant.
According to Mary Jo O'Neill, EEOC regional attorney, harassment
in the fast food industry is widespread, in part because young
workers don't know what is illegal. "This behavior is not just
morally wrong but illegal," Ms. O'Neill told AP.
Court documents reveal that in the Arizona case, a manager at a
McDonald's restaurant in Cordes Junction is accused of touching
young female workers inappropriately. Ms. O'Neill said when the
workers complained to other managers, nothing was done.
Meanwhile in the New Mexico case, a manager there allegedly
harassed a group of male teens, Ms. O'Neill said. The EEOC is
seeking for back pay and compensatory and punitive damages and
is estimating that the cases will likely take one to two years
to get to trial.
OHIO: Attorney Says Property Owners' Suit Could Include Hundreds
----------------------------------------------------------------
Michigan attorney Dennis M. O'Bryan, a lawyer for two couples
whose properties near Hockingport underwent severe erosion after
a barge accident lowered water levels in the Ohio River said
that a class-action suit against a giant electric utility could
potentially include many more plaintiffs, The Athens News
reports.
Mr. O'Bryan is currently representing Hockingport residents John
and Patricia Davis, as well as Athens lawyer Frank Lavelle and
his wife Jean Ann, who own property in Hockingport, stated, "A
few hundred, I would imagine."
Last February 15, Mr. O'Bryan initiated a lawsuit against
American Electric Power and affiliated companies in the U.S.
District Court for the Southern District of West Virginia in
Huntington. Invoking an admiralty law, the suit, which is styled
as a class action, alleges that a tugboat that was used to move
barges up the Ohio River had insufficient power to do the job,
which helped lead to the accident.
Mr. O'Bryan told Athens News, for them to win the suit, "we're
going to need to establish that the unsafe conduct that caused
this disaster was something that was within the knowledge of the
home office of the boat company."
Named, as defendants are the AEP POWER CO., INC., AEP RESOURCES,
INC., AEP MEMCO, L.L.C., and B&H TOWING, INC. While the first
three are related companies, B&H is a Kentucky corporation with
offices located in Paducah. Mr. O'Bryan claims, however, that
the towing company's alleged wrongdoing was committed as a paid
agent of the power company.
As previously reported in the February 2, 2005 edition of the
Class Action Reporter, three loaded coal barges slammed into the
Belleville Lock and Dam on January 6 after breaking loose from a
12-barge tow. A fourth barge sank near the dam. The barges
jammed open the gates that regulate the pool above the dam, and
the water has fallen about 14 feet below normal.
Court documents state that as the water receded in a stretch of
the Ohio and its tributaries, riverbanks battered by earlier
flooding began eroding and collapsing. The dropping water level
also has halted river traffic between Belleville and the Willow
Island Lock and Dam, about 21 miles above Parkersburg, stranding
more than 290 barges and costing an estimated $4.5 million a day
in economic damages. The towboat is owned by Memco and leased to
B & H Towing.
The plaintiff class includes all owners or residents of real
property fronting the Ohio River from the Willow Lock and Dam,
located 3.4 miles upstream from Waverly, W. Va., to the
Belleville Lock and Dam, one-half mile downstream of Belleville,
W. Va., or property fronting any of the Ohio's tributaries in
that stretch, according to the suit. That would include
Hockingport, which occupies a small strip of riverfront inside
Athens County.
The suit lays out seven legal and factual issues at stake. These
include the cause of the barge accident on January 6, whether
each of the defendants is liable for damages to the plaintiffs,
whether the defendants were negligent, whether their actions
constituted a nuisance, whether those actions were "abnormally
dangerous activity", whether they should be liable for punitive
damages, and whether their actions were the "proximate cause" of
injuries to the plaintiffs.
RADIX MARINE: Faces Consumer Suit On Unsolicited Fax in IL Court
----------------------------------------------------------------
Radix Marine, Inc. continues to face a class action filed in the
Circuit Court of the Eighteenth Judicial Circuit of Dupage
County, State of Illinois, styled "Spencer vs. Radix Marine,
Inc."
The suit alleges the Company sent out unsolicited advertisements
via telephone facsimile machines in violation of the United
States Telephone Consumer Protection Act. The complaint seeks to
have class action certified. Each member of the affected class
could assert a claim of $500.
In a filing with the Securities and Exchange Commission, the
Company said that it did not authorize the sending of the
unsolicited material. Management has retained an attorney to
represent them in this matter and management believes that class
action status will not be granted.
SKY FINANCIAL: Named As Defendants in Consumer Fraud Suit in OH
---------------------------------------------------------------
Sky Financial Group, Inc. faces a class action filed in the
Court of Common Pleas, Erie County, Ohio, styled "Scott M.
Lukouski, et. al. vs. National Marine, Inc., Sky Financial
Group, Inc., et. al., Case No. 2004 CV 685."
In October 2004, the Company was one of the named defendant
lenders in the purported class action complaint seeking remedies
related to the financing of watercraft by Second National Bank
of Warren, a predecessor of Sky Bank. In the acquisition, Sky
Financial assumed a portfolio of indirect boat loans originated
through National Marine, Inc.
The complaint alleges that defendants engaged in fraudulent
activities in connection with the purchase, sale and financing
of watercraft, and that defendant lenders failed to follow
prudent banking practices in the purchase of commercial paper
from National Marine. The complaint seeks injunctive and
equitable relief, compensatory and punitive damages, and other
remedies on behalf of a class of borrowers.
TOYOTA MOTOR: NJ Court Grants Certification To Consumer Lawsuit
---------------------------------------------------------------
The New Jersey Superior Court granted class certification to the
lawsuit filed against Toyota Motor Insurance Services, styled
"Jorge v Toyota Motor Insurance Services (TMIS)." The suit,
filed in November 2002, claims that the TMIS Gold Plan Vehicle
Service Agreement ("VSA") is unconscionable on its face and
violates the New Jersey Consumer Fraud Act.
In September 2004, the case was certified as a class action
consisting of all New Jersey consumers who purchased a VSA. The
plaintiffs are seeking injunctive relief as well as actual
damages and treble damages.
UNITED STATES: High Court To Hear Diversity Jurisdiction Case
-------------------------------------------------------------
A hot topic in the class action reform debate, the issue of
diversity jurisdiction is now on its way to the Supreme Court in
the 4th U.S. Circuit Court of Appeals case Roche v. Lincoln
Property Co., the New York Law Journal reports.
The central question in the case is which court should hear the
case federal or state. When plaintiffs file suit in state court,
defendants have the option of removing the case to federal court
under federal law (28 U.S.C. 1447), which is done to avoid
local court prejudice. Removal, however, requires that the
parties be "diverse," or from different states.
The 4th Circuit's holding in the Roche case, which is in line
with the 7th and 9th circuits, could foreclose the option of the
alternate federal forum for certain business entities. According
to Lincoln Property's counsel of record, David Frederick of
D.C.'s Kellogg, Huber, Hansen, Todd, Evans & Figel, at stake are
"perhaps 5,000 diversity cases in the [4th Circuit] alone among
the approximately 60,000 diversity cases litigated nationwide."
In the Roche case, plaintiffs Christopher and Juanita Roche
originally filed suit in Virginia state court, claiming personal
injury and property damage from "toxic levels of mold" in their
apartment, which was owned by the defendants. Lincoln, a Texas-
based corporation, asked that the case be moved to federal
court.
After the federal court ruled in favor of Lincoln, the Roches
appealed to the 4th Circuit, arguing that the case should be in
state court because the diversity requirement for federal court
was lacking. In other words, they claimed both parties were
citizens of the same state, which was Virginia. A unanimous
three-judge 4th Circuit panel agreed in its June 30 decision and
sent the case back to Virginia state court.
Written by Judge Roger Gregory, the decision turned on the
definition of citizenship. The court said that despite Lincoln's
Texas incorporation, the company was in fact a citizen of
Virginia, since the court had found that Lincoln owned a
subsidiary in Virginia and that the subsidiary, though unnamed
in the petition, was the "real and substantial party in
interest." Furthermore, the court reasoned that the subsidiary
owned land and conducted business in Virginia, creating a "very
close nexus" with the state.
However, in its appeal, Lincoln argues that the subsidiary was
never mentioned in the complaint and so cannot be a basis for
denying diversity. Additionally, the attorneys for Lincoln
write, "here the Fourth Circuit not only considered the
citizenship of such a non-party; it actively sought out that
non-party to create a basis for declaring ... that diversity
jurisdiction was improper." Lincoln attorneys also argue that
the 4th Circuit "concocted out of whole cloth an additional
'nexus' factor not found in any of ... [the Supreme Court's]
decisions."
Lincoln and a host of real estate businesses that filed an
amicus brief in support claim that the 4th Circuit's decision,
if left to stand, will deepen "an existing conflict among the
circuits." Lincoln and amicus attorneys also say the decision
will lead to uncertainty about jurisdiction. Hogan & Hartson's
Bruce Parmley writes in the amicus brief, "Uncertainty leads to
business risks which create new costs. Lenders, investors, and
other market participants in the real estate industry
accordingly abhor unnecessary risks."
The Roches, on the other hand, argue that Lincoln failed in its
burden to prove its Texas citizenship and, thus, the diversity
necessary for removal to federal court. And they claim that
Lincoln is exaggerating the split among appeals courts to
persuade the Court to take the case.
"The 'very close nexus' words used by the Petitioner were ...
spun by Petitioner in its attempt to hopefully make its petition
'certworthy,' " writes Jerry Phillips of Fairfax, Va.'s
Phillips, Beckwith, Hall and Chase, who represents the Roches.
VIOXX LITIGATION: Shareholder Suits Assigned To NJ Federal Court
----------------------------------------------------------------
The Judicial Panel on Multidistrict Litigation (JPMDL) assigned
to a federal judge in Trenton, New Jersey all shareholder
lawsuits filed against pharmaceutical giant Merck & Co., Inc.,
stemming from the recall of the company's blockbuster arthritis
drug Vioxx, the Associated Press reports.
In September 2004, the Company recalled Vioxx from the market,
after its own research showed the drug sharply increased risk of
heart attacks and strokes with long-term use. After the recall,
the Company's stock plunged nearly 27%, which amounted to a $28
billion loss in shareholder value.
Several suits were filed soon afterwards, including securities,
shareholder derivative and Employee Retirement Income Security
Act lawsuits, and generally accuse company officers of making
misleading statements about Vioxx, ultimately leading to a sharp
decline in its stock price. The Company and some of the
plaintiffs ask the JPMDL to consolidated the suits in New
Jersey.
In the order, 20 federal cases that had been filed in New
Jersey, Pennsylvania and Louisiana were grouped in New Jersey.
Some 17 other cases, in New Jersey, Illinois and Louisiana, have
recently been filed and may also be added, the panel of federal
judges said, according to AP. The panel assigned the case to
U.S. District Judge Stanley R. Chesler, a former federal
prosecutor. He was appointed by President Bush in 2002 after
serving as a federal magistrate in Newark since 1987.
The panel on February 16 consolidated over a hundred other
lawsuits charging that Vioxx harmed patients, and sent them to
Judge Eldon E. Fallon of the U.S. District Court for the Eastern
District of Louisiana in New Orleans. Fallon, who has experience
in major pharmaceutical litigation, will coordinate discovery
and other pretrial proceedings.
Last week, a government advisory panel concluded that the
benefits of Vioxx, as well as other popular painkillers made by
other companies, outweigh the risks. If the Food and Drug
Administration agrees, Vioxx could return to the market.
WAL-MART STORES: NY Jury Awards Disabled Former Employee $7.5M
--------------------------------------------------------------
A New York jury has ordered Wal-Mart Stores, Inc. to pay $7.5
million in damages to 21-year-old Long Island resident Patrick
Brady, who suffers from cerebral palsy, in a class-action
lawsuit in which he claimed the retailer unfairly reassigned him
to garbage duty even though he was hired to work in the pharmacy
department, the CNN International reports.
According to the plaintiff's attorney Douglas Wigdor, Mr. Brady
had applied for a position in the pharmacy unit of a Wal-Mart
store in Centereach, New York and was eventually hired in the
summer of 2002. However, Mr. Brady, who worked for just four
days before he quit, claimed he was soon reassigned to other
responsibilities that included collecting garbage and shopping
carts in the Wal-Mart parking lot.
The jury's multi-million dollar award to Mr. Brady includes $5
million in punitive damages, which is likely to be reduced to
between $300,000 and $800,000, according to Mr. Wigdor.
After the jury verdict was handed down, Wal-Mart spokeswoman
Christi Davis Gallagher told CNN, "We appreciate the service of
the jurors, but disagree with their decision. We feel very
strongly that Mr. Brady did not suffer discrimination in our
store. Wal-Mart does not tolerate discrimination of any kind."
In addition, Mr. Gallagher also told CNN, "As soon as Mr. Brady
expressed dissatisfaction with his position, we transferred him
to another position that he requested. Although the jury has
reached a decision, we do not expect the court to enter a final
judgment until we have the opportunity to establish how the jury
was wrong. We are optimistic that the award will be
substantially reduced or eliminated altogether."
New Security Fraud Cases
AUDIBLE INC.: Brodsky & Smith Lodges Securities Fraud Suit in NJ
----------------------------------------------------------------
The Law offices of Brodsky & Smith, LLC initiated a securities
class action lawsuit on behalf of shareholders who purchased the
common stock and other securities of Audible, Inc. ("Audible" or
the "Company") (Nasdaq:ADBL), between November 2, 2004 and
February 15, 2005 inclusive (the "Class Period"). The class
action lawsuit was filed in the United States District Court for
the District of New Jersey.
The Complaint alleges that defendants violated federal
securities laws by issuing a series of material
misrepresentations to the market during the Class Period,
thereby artificially inflating the price of Audible securities.
For more details contact Marc L. Ackerman, Esq. or Evan J.
Smith, Esq. of Law offices of Brodsky & Smith, LLC by Phone:
877-LEGAL-90 or by E-mail: clients@brodsky-smith.com.
AUDIBLE INC.: Charles J. Piven Files Securities Fraud Suit in NJ
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The Law Offices Of Charles J. Piven, P.A. initiated a securities
class action on behalf of shareholders who acquired shares of
Audible, Inc. ("Audible" or the "Company") (Nasdaq:ADBL) between
November 2, 2004 to February 15, 2005, (the "Class Period").
The case is pending in the United States District Court for the
District of New Jersey. The action charges that defendants
violated federal securities laws by issuing a series of
materially false and misleading statements to the market
throughout the Class Period, which statements had the effect of
artificially inflating the market price of the Company's
securities. No class has yet been certified in the above action.
For more details, contact the Law Offices Of Charles J. Piven,
P.A. by Phone: 410/986-0036 or by E-mail: hoffman@pivenlaw.com.
AUDIBLE INC.: Marc S. Henzel Lodges Securities Suit Fraud in NJ
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The Law Offices of Marc S. Henzel initiated a class action
lawsuit in the United States District Court for the District of
New Jersey on behalf of purchasers of the securities of Audible,
Inc. (Nasdaq: ADBL) between November 2, 2004 to February 15,
2005, inclusive (the "Class Period") seeking to pursue remedies
under the Securities Exchange Act of 1934 (the "Exchange Act").
The action, is pending against defendants Audible, Donald R.
Katz (CEO, Chairman) and Andrew P. Kaplan (CFO). The Complaint
alleges that, throughout the Class Period, Audible reported
increased revenues and earnings, growth that defendants
represented would continue as the Company capitalized on
increasing demand for its products and a growing customer base.
Unbeknownst to investors, however, throughout the Class Period,
defendants' representations about the Company's operations, made
in Audible press releases and elsewhere, were materially false
and misleading because they failed to disclose that the
Company's heady growth could not continue without material
investments in expensive strategic initiatives that would
severely erode the Company's earnings in the foreseeable future
and the Company was about to embark on expensive strategic
initiatives that would constitute a material risk to the
Company's growth and its stock price.
On February 15, 2005, after the close of trading, Audible
announced that in 2005 it would be undertaking several
initiatives requiring substantial investments in infrastructure,
new business units and marketing, among other areas, and that
these initiatives would depress earnings and cash flow at least
until 2006. In reaction to this announcement, the price of
Audible common stock plummeted, falling from $26.70 per share on
February 15, 2005 to $17.32 on February 16, 2005, a one-day
decline of 35%, on unusually heavy trading volume of 20.9
million shares. Prior to this disclosure, defendants Katz sold
150,000 Audible shares for gross proceeds of $3,675,000, while
defendant Kaplan sold 125,000 shares for gross proceeds of
$3,062,500 in the Company's secondary offering on November 18,
2004.
For more details, contact Law Offices of Marc S. Henzel by Mail:
273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004, by Phone:
610.660.8000 or 888.643.6735 by Fax: 610.660.8080 or by E-Mail:
mhenzel182@aol.com.
AUDIBLE INC.: Shalov Stone Lodges Securities Fraud Suit in NJ
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The Law Firm Shalov Stone & Bonner LLP initiated a class action
lawsuit was filed on behalf of purchasers of the securities of
Audible, Inc. ("Audible" or the "Company") (Nasdaq: ADBL)
between November 2, 2004, and February 15, 2005, inclusive (the
"Class Period"), seeking to pursue remedies under the Securities
Exchange Act of 1934.
The lawsuit is pending in the United States District Court for
the District of New Jersey against defendants Audible, CEO and
Chairman Donald R. Katz, and CFO Andrew P. Kaplan.
The Complaint alleges that, throughout the Class Period, Audible
reported increased revenues and earnings, growth that defendants
represented would continue as the Company capitalized on
increasing demand for its products and a growing customer base.
Unbeknownst to investors, however, throughout the Class Period,
defendants' representations about the Company's operations, made
in Audible press releases and elsewhere, were materially false
and misleading because they failed to disclose that the
Company's heady growth could not continue without material
investments in expensive strategic initiatives that would
severely erode the Company's earnings in the foreseeable future
and the Company was about to embark on expensive strategic
initiatives that would constitute a material risk to the
Company's growth and its stock price.
For more details, contact Thomas G. Ciarlone, Jr. of Shalov
Stone & Bonner LLP by Mail: 485 Seventh Avenue, Suite 1000, New
York, New York 10018 by Phone: (212) 239-4340 or by E-mail:
tciarlone@lawssb.com.
AUDIBLE INC.: Schatz & Nobel Lodges Securities Fraud Suit in NJ
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The law firm of Schatz & Nobel, P.C., initiated a lawsuit
seeking class action status has been filed in the United States
District Court for the District of New Jersey on behalf of all
persons who purchased the securities of Audible, Inc. (Nasdaq:
ADBL) ("Audible") between November 2, 2004 and February 15,
2005, inclusive (the "Class Period"). Also included are all
those who acquired Audible's shares in the secondary offering on
November 18, 2004.
The Complaint alleges that Audible violated federal securities
laws by issuing false or misleading public statements.
Specifically, Audible reported increased revenues and earnings,
growth that defendants represented would continue as the Company
capitalized on increasing demand for its products and a growing
customer base. Throughout the Class Period, defendants failed to
disclose that Audible's growth could not continue without
material investments in expensive strategic initiatives that
would severely erode the Company's earnings in the foreseeable
future and Audible was about to embark on expensive strategic
initiatives that would constitute a material risk to the
Company's growth and its stock price.
On February 15, 2005, after the close of trading, Audible
announced that in 2005 it would be undertaking several
initiatives requiring substantial investments in infrastructure,
new business units and marketing and that these initiatives
would depress earnings and cash flow at least until 2006. On
this news, Audible stock plummeted, falling from $26.70 per
share on February 15, 2005 to $17.32 on February 16, 2005, a
decline of 35%. Prior to this disclosure, defendant Katz sold
150,000 Audible shares for gross proceeds of $3,675,000, while
defendant Kaplan sold 125,000 shares for gross proceeds of
$3,062,500 in the secondary offering.
For more details, contact Wayne T. Boulton or Nancy A. Kulesa by
Phone: (800) 797-5499 by E-mail: sn06106@aol.com or visit their
Website: http://www.snlaw.net.
AXONYX INC.: Milberg Weiss Lodges Securities Fraud Lawsuit in NY
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The law firm of Milberg Weiss Bershad & Schulman LLP initiated a
class action lawsuit on behalf of all persons who purchased or
otherwise acquired the securities of Axonyx Inc. ("Axonyx")
(Nasdaq: AXYX), between June 26, 2003 and February 4, 2005,
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 Axonyx,
Marvin S. Hausman (CEO and Chairman), Gosse B. Bruinsma
(President, COO, and Vice President), and S. Colin Neill (CFO
and Treasurer). 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.
The complaint alleges that Axonyx, a biopharmaceutical company,
engaged in two late-stage Phase III clinical trials of
Phenserine, an experimental drug for the treatment of mild to
moderate Alzheimer's disease. On June 26, 2003, the first day of
the Class Period, Axonyx announced the commencement of its first
Phase III Phenserine trial, a randomized placebo-controlled
double-blind trial designed to evaluate the safety and efficacy
of two different dosages of Phenserine, 10 milligrams and 15
milligrams, each administered twice daily for six months, in 375
patients with mild to moderate Alzheimer's disease. The patients
were to then undergo a series of memory and cognition tests
which would serve as the trial's primary endpoints. Axonyx
stated that the purpose of the first Phase III trial was to
substantiate the purportedly positive safety and efficacy
results from an earlier Phenserine trial. During the Class
Period, defendants claimed that the results from the first Phase
III trial provided them with "ongoing confidence and commitment
to bring Phenserine to approvable (New Drug Application)
status," and that the clinical trial "is on course and we are
optimistic that the final data package will support the
potential approval of Phenserine." In October 2004, at a
healthcare conference, defendant Marvin Hausman distinguished
Phenserine from other Alzheimer's drugs on the market, claiming
that unlike the other drugs, Phenserine, if approved by the FDA,
would be the first drug to treat Alzheimer's disease, not just
its symptoms. When asked about the price of Axonyx's common
shares, Hausman responded that given Phenserine's purported
blockbuster potential, Axonyx shares and market capitalization
were greatly undervalued. Unbeknownst to investors, however,
these statements were materially false and misleading because as
defendants knew or recklessly disregarded, and as the results
from the first Phase III clinical studies of Phenserine would
demonstrate, the 10 milligrams and 15 milligrams dosages of the
drug administered twice daily were not effective in treating
patients with mild to moderate Alzheimer's disease.
The truth emerged on February 7, 2005, nearly two months after
the completion of the first Phase III Phenserine trial. On that
date, Axonyx was forced to issue a press release announcing that
the trial "did not result in a statistically significant
improvement over placebo for the protocol's primary endpoints
following 26 weeks of treatment." In reaction to this news, the
price of Axonyx common stock dropped dramatically, falling $3.04
per share, or 62%, from its closing price on the previous
trading day, February 4, 2005, to close at $1.81 per share on
February 7, 2005, on unusually high trading volume. Defendants
were motivated to engage in this fraudulent and illegal conduct
to complete three private placements of Company common stock and
warrants to purchase Axonyx stock, reaping total proceeds of $95
million. In addition, defendants' fraudulent scheme enabled
Company insiders to sell more than 367,000 shares of their
personally-held Axonyx shares at artificially inflated prices
for proceeds in excess of $2.4 million.
For more details, contact Steven G. Schulman, Peter E. Seidman
or Andrei V. Rado by Mail: One Pennsylvania Plaza, 49th fl., New
York, NY 10119-0165 by Phone: (800) 320-5081 by E-mail:
sfeerick@milbergweiss.com or visit their Web site:
http://www.milbergweiss.com.
AXONYX INC.: Wolf Haldenstein Lodges Securities Fraud Suit in NY
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The law firm of Wolf Haldenstein Adler Freeman & Herz LLP filed
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 Axonyx, Inc.
("Axonyx" or the "Company") (Nasdaq: AXYX) between June 26, 2003
and February 4, 2005, inclusive, (the "Class Period") against
defendants Axonyx and certain officers of the Company.
The case name and civil action number is Bisschops v. Axonyx,
Inc., et al, 05cv2361. The complaint alleges that defendants
violated the federal securities laws by issuing materially false
and misleading statements throughout the Class Period that had
the effect of artificially inflating the market price of the
Company's securities.
The complaint alleges that the statements made by defendants
during the Class Period were materially false and misleading
when made because defendants failed to disclose or indicate the
following:
(1) that the Company's only viable drug candidate,
Phenserine: a acetylcholinesterase ("AChE") inhibitor,
failed to curb symptoms of Alzheimer's disease;
(2) that the Company knew or recklessly disregarded the
fact that Phenserine failed to partially blocking the
effects of AChE, an enzyme that breaks down a
neurotransmitter in the brain important for memory and
cognition;
(3) that as a consequence of the foregoing, the Company
would not be able to commercialize Phenserine,
currently its only potential source of revenue; and
(4) that as a result the Company's positive statements
about the development and potential approval of
Phenserine were lacking in all reasonable basis when
made.
For more details, contact Fred Taylor Isquith, Esq., Gregory M.
Nespole, Esq., Christopher S. Hinton, Esq., or Derek Behnke of
Wolf Haldenstein Adler Freeman & Herz LLP by Mail: 270 Madison
Avenue, New York, New York 10016 by Phone: (800) 575-0735 by E-
mail: classmember@whafh.com or visit their Web site:
http://www.whafh.com.
ESPEED INC.: Marc S. Henzel Lodges Securities Suit Fraud in NY
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The Law Offices of Marc S. Henzel initiated class action lawsuit
in the United States District Court for the Southern District of
New York on behalf of all purchasers who, from August 12, 2003
to July 1, 2004, purchased eSpeed, Inc. (NasdaqNM: ESPD)
securities. The lawsuit, which alleges violations of sections
10(b) and 20(a) of the Securities and Exchange Act of 1934 was
filed against eSpeed, Inc. (``eSpeed'' or ``the Company''), its
top executives, Howard Lutnick and Lee Amaitis, and eSpeed's
controlling shareholders.
The Complaint alleges that during the Class Period (August 12,
2003 to July 1, 2004), the defendants touted eSpeed as an
unmitigated success story, a company which had achieved record
revenues and earnings and, most importantly, a company that had
established its infrastructure and business model as an
unqualified success in the high volume automated trading of
government securities and foreign exchange. In repeated press
releases, the defendants represented that the eSpeed business
model was in place and performing as anticipated. The true facts
were that the business model was not working, and eSpeed was
losing market share to its principle competitor, ICAP Plc, and
its BrokerTec division. In fact, eSpeed did not have a viable
business model. This was revealed on July 1, 2004 when
defendants were forced to admit that revenues, earnings and
market share were decreasing, that its business plan was not
working, that it was being forced to develop a new business plan
and pricing structure, and its competitive efforts with respect
to ICAP were not successful. In the two trading days following
this announcement, eSpeed shares dropped more than $6 per share
on trading volume of over 9 million shares, a loss in market
value for the Company of almost $350 million. As a result of the
materially false positive statements made during the Class
Period, class members purchased eSpeed shares at inflated
prices, and as a result were damaged thereby.
For more details, contact Law Offices of Marc S. Henzel by Mail:
273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004, by Phone:
610.660.8000 or 888.643.6735 by Fax: 610.660.8080 or by E-Mail:
mhenzel182@aol.com.
ESPEED INC.: Paskowitz & Associates Lodges Securities Suit in NY
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The law offices of Paskowitz & Associates initiated a class
action lawsuit in the United States District Court for the
Southern District of New York on behalf of all purchasers who,
from August 12, 2003 to July 1, 2004, purchased eSpeed, Inc.
(NASDAQ:ESPD) securities.
The lawsuit, which alleges violations of sections 10(b) and
20(a) of the Securities and Exchange Act of 1934 was filed
against eSpeed, Inc. ("eSpeed" or "the Company), its top
executives, Howard Lutnick and Lee Amaitis, and eSpeed's
controlling shareholders. The civil case number is 05 CV 2091
(SAS), and the Judge assigned is the Hon. Shira Scheindlin.
The Complaint alleges that during the Class Period (August 12,
2003 to July 1, 2004), the defendants touted eSpeed as an
unmitigated success story, a company which had achieved record
revenues and earnings and, most importantly, a company that had
established its infrastructure and business model as an
unqualified success in the high volume automated trading of
government securities and foreign exchange. In repeated press
releases, the defendants represented that the eSpeed business
model was in place and performing as anticipated. The true facts
were that the business model was not working, and eSpeed was
losing market share to its principle competitor, ICAP Plc, and
its BrokerTec division. In fact, eSpeed did not have a viable
business model. This was revealed on July 1, 2004 when
defendants were forced to admit that revenues, earnings and
market share were decreasing, that its business plan was not
working, that it was being forced to develop a new business plan
and pricing structure, and its competitive efforts with respect
to ICAP were not successful. In the two trading days following
this announcement, eSpeed shares dropped more than $6 per share
on trading volume of over 9 million shares, a loss in market
value for the Company of almost $350 million. As a result of the
material false positive statements made during the Class Period,
class members purchased eSpeed shares at inflated prices, and as
a result were damaged thereby.
For more details, contact Paskowitz & Associates by Phone:
800-705-9529 or by E-mail: classattorney@aol.com.
MAMMA.COM INC.: Marc S. Henzel Files Securities Suit Fraud in NY
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The Law Offices of Marc S. Henzel initiated a class action
lawsuit in the United States District Court for the Southern
District of New York on behalf of purchasers of Mamma.com Inc.
(NASDAQ:MAMA) publicly traded securities during the period
between March 2, 2004 and February 15, 2005 (the "Class
Period").
The complaint charges Mamma.com and certain of its officers and
directors with violations of the Securities Exchange Act of
1934. Mamma.com provides information retrieval on the Internet
through its metasearch engine www.mamma.com. The Company is
focused on being a provider of online marketing solutions to
advertisers.
The complaint alleges that during the Class Period, defendants
caused Mamma.com's shares to trade at artificially inflated
levels through the issuance of false and misleading financial
statements. As a result of this inflation, Mamma.com was able to
complete a private offering, raising proceeds of $16.6 million
on the sale of stock and warrants in June 2004.
On February 16, 2005, the Company issued a press release
announcing that "it has been unable to reach an agreement on the
terms of the audit engagement with PricewaterhouseCoopers LLP
("PWC") for the year ended December 31, 2004. Accordingly, PWC
will not act as the Company's independent auditor for the audit
of the Company's financial statements for the year ended
December 31, 2004.... As a result of these developments, it is
unlikely that the Company will file its audited financial
statements for the year ended December 31, 2004 and related
disclosures within the timeframe prescribed by Canadian
securities rules." The stock dropped below $4 per share on this
news.
For more details, contact Law Offices of Marc S. Henzel by Mail:
273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004, by Phone:
610.660.8000 or 888.643.6735 by Fax: 610.660.8080 or by E-Mail:
mhenzel182@aol.com.
MAMMA.COM INC.: Spector Roseman Lodges NY Securities Fraud Suit
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The law firm of Spector, Roseman & Kodroff, P.C. initiated a
securities class action lawsuit in the United States District
Court for the Southern District of New York, on behalf of
purchasers of the common stock of Mamma.com Inc. ("Mamma.com" or
the "Company") (Nasdaq: MAMA) between May 12, 2004 through
February 16, 2005, inclusive (the "Class Period").
The Complaint alleges that defendants violated the federal
securities laws by issuing materially false and misleading
statements contained in press releases and filings with the
Securities and Exchange Commission during the Class Period.
Specifically, the Complaint charges Mamma.com, Guy Faure, David
Goldman, and Daniel Bertrand with violations of the Securities
Exchange Act of 1934. Mamma.com provides information retrieval
on the Internet through its metasearch engine,
http://www.mamma.com.The Company derives its revenues from two
sources, including search services and banner advertising
services, with customers located in the United States and
Canada. According to the complaint, the defendants failed to
disclose and misrepresented the following material adverse facts
which were known to defendants or recklessly disregarded by
them:
(1) that Irving Kott ("Kott"), a legendary Canadian stock
promoter with a long history of stock manipulation, had
a significant undisclosed interest in the Company;
(2) that Kott and his associates were manipulating the
Company's stock price by engaging in a classic "pump
and dump" scheme to defraud; and
(3) that the Company itself was manipulating its financial
results in order to maintain its artificially inflated
share price so that the "pump and dump" scheme would
endure.
Additionally, the complaint alleges that during the Class
Period, and with its stock trading at artificially inflated
levels, the Company was able to acquire Digitalarrow LLC and
High Performance Broadcasting Inc. (collectively "Digital
Arrow") for $1,050,000 and the issuance of 90,000 common shares
of Mamma.com, and was able to enter into a letter of intent
("LOI") whereby Mamma.com would acquire all of the shares of
Copernic Technologies for a combination of cash and shares of
Mamma.com. Moreover, the Company was able to raise $16.6 million
through a private placement while its shares traded at
artificially inflated levels.
Midday, on February 16, 2005, shares of Mamma.com were halted.
Shortly thereafter, Mamma.com announced that it had been unable
to reach an agreement on the terms of the audit engagement with
PricewaterhouseCoopers LLP ("PWC") for the year ended December
31, 2004. Accordingly, PWC would not act as the Company's
independent auditor for the audit of the Company's financial
statements for the year ended December 31, 2004. News of this
sent the stock into a downward spiral. Shares of Mamma.com fell
$2.02 per share, or 32.27% to close at $4.25 per share.
For more details, contact Robert M. Roseman by Phone:
888-844-5862 or by E-mail: classaction@srk-law.com or visit
their Web site: http://www.srk-law.com.
OFFICEMAX INC.: Pomerantz Haudek Lodges Securities Suit in IL
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The law firm of Pomerantz Haudek Block Grossman & Gross LLP
(www.pomerantzlaw.com) filed a class action lawsuit in the
United States District Court for the Northern District of
Illinois Eastern Division, against OfficeMax Inc. ("OfficeMax"
or the "Company") (NYSE:OMX) and certain of its executive
officers and directors, for violations of the Securities
Exchange Act of 1934. The class period in this case is January
22, 2004 to January 11, 2005. The lead plaintiff deadline is
March 14, 2005.
OfficeMax, formerly Boise Cascade Corporation ("Boise"), is a
multinational contract and retail distributor of office
supplies, paper, technology products and office furniture.
The complaint alleges that during the class period, defendants
made materially false and misleading statements concerning the
Company's operations and financial performance. Each of the
defendants, however, knew or recklessly disregarded, but
concealed from the investing public, the true facts. The true
facts include
(1) for a period of two years, the Company fraudulently
booked millions of dollars as legitimate sales;
(2) the Company was using -- and manipulating its use of -
"vendor allowances" (monies paid by suppliers for
promotions, prime shelf space, discounts and rebates)
in order to manipulate the Company's earnings and
timing of revenue recognition;
(3) the Company's fourth quarter 2004 results and those
beyond were being eroded by the Company's internal
investigation costs and the halting of the Company's
abusive vendor allowance scheme;
(4) the Company lacked the necessary internal controls to
insure all revenue reported complied with generally
accepted accounting principles ("GAAP"); and
(5) the Company had entered into a long term-paper supply
contract with Boise Cascade, LLC -- the Company's
timber successor company -- which, unbeknownst to
investors, was not commensurate with the market rate.
As a result of defendants' false statements, OfficeMax's stock
price traded at inflated levels during the Class Period,
increasing to as high as $32.52 on December 16, 2004, whereby
the Company's top officers and directors arranged to sell nearly
$1.5 billion worth of the Company's notes.
For more details, contact Teresa L. Webb or Carolyn S. Moskowitz
of the Pomerantz Firm by Phone: 888.476.6529 by Phone:
tlwebb@pomlaw.com or csmoskowitz@pomlaw.com.
SHURGARD STORAGE: Goodkind Labaton Lodges Securities Suit in WA
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The law firm of Goodkind Labaton Rudoff & Sucharow LLP, reminds
investors that the deadline for purchasers of Shurgard Storage
Centers Inc. ("Shurgard" or the "Company") (NYSE:SHU) to move
for lead plaintiff in the securities fraud class action is
rapidly approaching.
The lawsuit was filed against Shurgard, Charles K. Barbo and
Harrell L. Beck ("Defendants") in the United States District
Court for the Western District of Washington. If you purchased
or otherwise acquired publicly traded securities of Shurgard
between May 9, 2001 and March 26, 2004, inclusive, (the "Class
Period") and wish to be a lead plaintiff in the case you must
make a motion with the court to serve as a lead plaintiff by
March 21, 2005. A lead plaintiff is an individual or group of
investors that represent the class and act on behalf of the
class in directing and monitoring the litigation. The lead
plaintiff is appointed by the court. There are several factors
used by the court to evaluate whether or not the lead plaintiff
applicant is adequate to serve the class and has typical claims
as the other class members. Additionally, the court looks at the
amount of financial losses sustained by the lead plaintiff
applicant.
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
during the Class Period, Defendants materially misled the
investing public by issuing false and misleading statements
regarding the business and financial results of Shurgard. More
specifically the complaint alleges:
(1) the Company lacked sufficient internal controls and
therefore was unable to ascertain its true financial
standing;
(2) the Company's U.S. owned entities should have been
accounted for using a consolidated accounting method
since the inception of each entity;
(3) the Company's European operations incurred operating
losses which were not supported but sufficient evidence
of future profitability to recognize loss carry
forwards;
(4) net income for 2001, 2002 and for the nine-month period
ended September 30, 2003 had been seriously overstated
due to the improper accounting for the Tax Retention
Operating Lease;
(5) because of these errors, the value of the Company's
balance sheet and income statement had been materially
overstated at all relevant times;
(6) Shurgard's quarterly and annual filings and press
releases had not conformed to Generally Accepted
Accounting Principles ("GAAP"); and,
(7) at the time the Company presented its earnings
guidance, it knew or should have known that it had no
adequate basis to make those statements.
On March 26, 2004, Shurgard began to reveal the extent of its
accounting irregularities by announcing that it would be unable
to file its Form 10-K for the year ended December 31, 2003. It
further stated that as a result of its audit process certain
accounting adjustments having a material effect on reported
financials would have to be made. Then on May 17, 2004, Shurgard
announced that management had reviewed previously reported
historical financial data and related descriptions for certain
accounting errors. Shurgard announced that it had conducted a
re-audit of the financial statements for the years ended
December 31, 2001 and 2002 and for the quarters ended March 31,
June 30, September 30, 2003 and 2002 as well as the quarter
ended December 21, 2002. It also indicated that it had
incorrectly assessed certain accounting policies applied to its
consolidated financial statements which were required to be
restated. In addition, the Company's newly appointed auditors,
PricewaterhouseCoopers, had identified other accounting errors
impacting prior periods which were required to be restated.
Shurgard's shares fell to $33.30 per share in response to the
news that the Company's previously-reported financial results,
which had already been restated, may not in fact be what they
seemed.
For more details, contact Christopher Keller, Esq. by Phone:
800-321-0476 or visit their Web site:
http://www.glrslaw.com/get/?case=Shurgard.
SINA CORPORATION: Murray Frank Files Securities Fraud Suit in NY
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The law firm of Murray, Frank & Sailer LLP initiated a class
action lawsuit in the United States District Court for the
Southern District of New York on behalf of shareholders who
purchased or otherwise acquired the securities of SINA Corp.
("SINA" or the "Company") (Nasdaq:SINA) between October 26, 2004
and February 7, 2005, inclusive (the "Class Period"). The action
is numbered 05-CV-2374.
The complaint charges SINA, Wang Yan, and Charles Chao, with
violations of the Securities Exchange Act of 1934. More
specifically, the Complaint alleges that the Company failed to
disclose and misrepresented the following material adverse facts
which were known to defendants or recklessly disregarded by
them:
(1) that the Company was increasingly relying on services
related to "fortune telling" advertising, like
horoscopes and astrology, in order to meet its earnings
forecasts and generate a positive revenue stream;
(2) that the Chinese government had clamped down on
"fortune telling" advertising and the resulting
clampdown on "fortune telling" advertising would have a
material effect on the Company's revenue stream;
(3) that China Mobile Communication Corp.'s recent change
in its billing process for multimedia messaging
services SINA provides to China Mobile subscribers had
a material effect on the Company's business; and
(4) that as a result of the above, the defendants' positive
statements about the growth and prospectus of SINA were
lacking in any reasonable basis when made.
On February 7, 2005, after the markets closed, SINA announced
its financial results for the fourth quarter and full year ended
December 31, 2004. The results and the Company's business
outlook shocked the market. Shares of SINA fell $2.96 per share,
or 10.82 percent, to close at $24.39 per share on unusually high
trading volume.
For more details, contact Eric J. Belfi or Aaron D. Patton of
Murray, Frank & Sailer LLP by Phone: (800) 497-8076 or
(212) 682-1818 by Fax: (212) 682-1892 or by E-mail:
info@murrayfrank.com.
SIPEX CORPORATION: Spector Roseman Lodges Securities Suit in CA
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The law firm of Spector, Roseman & Kodroff, P.C. initiated a
securities class action lawsuit was commenced in the United
States District Court for the Northern District of California,
on behalf of purchasers of the common stock of Sipex Corporation
("Sipex" or the "Company") (Nasdaq: SIPX) between April 11, 2003
through January 20, 2005, inclusive (the "Class Period").
The Complaint alleges that defendants violated the federal
securities laws by issuing materially false and misleading
statements contained in press releases and filings with the
Securities and Exchange Commission during the Class Period.
Specifically, the Complaint names as defendants Sipex, Walid
Maghribi (former President and Chief Executive Officer), Phil
Kagel (former Chief Financial Officer), and Ray Wallin (current
Chief Financial Officer). According to the Complaint, defendants
violated sections 10(b) and 20(a) of the Exchange Act, and Rule
10b-5 promulgated thereunder, by issuing a series of material
misrepresentations to the market during the Class Period.
Sipex designs, manufactures and markets high-performance
semiconductors that are used by original equipment manufacturers
operating in the computing, consumer electronics, communications
and networking infrastructure markets. Throughout the Class
Period, Sipex reported positive results in SEC filings and
publicly disseminated press releases. Defendants attributed
these results to increased semiconductor sales and cost savings
resulting from a restructuring of its operations. The Complaint
alleges, however, that unbeknownst to the Class, the Company's
seeming success was the result of improper accounting that
artificially inflated Sipex's reported results.
The Complaint further alleges that the truth began to emerge on
January 20, 2005 when, after the market closed, Sipex issued a
press release announcing that it might need to restate its
reported financial statements for fiscal 2003, and for the first
three quarters of fiscal 2004. The Company stated that it had
discovered "improper recognition of revenue during these periods
on sales for which price protection, stock rotation and/or
return rights may have been granted," and that the Company's
audit committee and board of directors had commenced an internal
investigation of the matter. As a result of the investigation,
Sipex stated that it would not be able to file its 2004 annual
report with the SEC on time. In reaction to this news, the price
of Sipex common stock dropped on unusually high volume, falling
from $0.90 per share, or 23%, from its previous trading day's
closing price of $3.84, to close at $2.94 on January 21, 2005.
For more details, contact Robert M. Roseman by Phone:
888-844-5862 or by E-mail: classaction@srk-law.com or visit
their Web site: http://www.srk-law.com.
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Copyright 2004. All rights reserved. ISSN 1525-2272.
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