/raid1/www/Hosts/bankrupt/CAR_Public/050304.mbx
C L A S S A C T I O N R E P O R T E R
Friday, March 4, 2005, Vol. 7, No. 45
Headlines
ADVANCED NEUROMODULATION: Federal Probe's Expos, Prompts Lawsuit
ARIZONA: Taxpayers Raise Money To Fund Suit V. Recreation Center
AUSTRALIA: Local Resellers Monitor U.S. Suit V. Apple Computers
AZTAR CORPORATION: Mediation To Begin in NJ Garage Collapse Suit
AZTAR CORPORATION: Faces NJ Suit Over $1/Day Telephone Surcharge
BURLINGTON RESOURCES: Trial in Natural Gas Suit Expected in 2005
CALIFORNIA: High Court Reviews Deceptive Tobacco Marketing Suit
CALIFORNIA: Resident's Lawsuit Contests Charging For DUI Arrest
CASH AMERICA: Payday Loans Suit Remand To GA State Court Sought
DUPONT CO.: Attorneys Could Pocket Up To $82M From C8 Settlement
EBAY INC.: Asks CA Court To Junk Improper Billing Practices Suit
EBAY INC.: Users Launch CA Suit Due To "Shill Bidding" on Site
GINGER CO.: Recalls 5,900 Light Fixtures Due To Injury Hazard
GLOBAL CROSSING: Citigroup Settles Securities Litigation in NY
HARTFORD FINANCIAL: NY A.G. Spitzer's Suit Fosters Others
HSBC FINANCE: Discovery Proceeds in IL Securities Fraud Lawsuit
HSBC FINANCE: Plaintiffs Appeal IL Shareholder Lawsuit Dismissal
ISRAEL: Passengers Mull Suit V. Swiss Air For "Luggage Policy"
LANDSTAR SYSTEM: Trial in FL Contractors' Suit Set October 2005
LIONBRIDGE TECHNOLOGIES: NY Settlement Preliminarily Approved
LOCKHEED MARTIN: Appeals Court Affirms CA Stock Suit Dismissal
METRO-GOLDWYN-MAYER INC.: Settlement Hearing Set May 2005 in CA
OCEAN DESERT: Recalls 18,500 Stuffed Animals Due To Choking Risk
OKLAHOMA: Area Couple Sued For Ponzi Scheme, Faces Investigation
PAYPAL INC.: Reaches Settlement For Unfair Trade Practices Suit
PIZZA HUT: Certification, Summary Judgment For CA Lawsuit Sought
PREFERRED HEALTH: Enters Consent Order For FTC Antitrust Charges
TACO BELL: CA Court Refuses To Decertify ADA Violations Lawsuit
TCF FINANCIAL: Discovery Proceeds in MN Employees Overtime Suit
UNITED STATES: FTC Lodges Consumer Suit Due To Directory Scheme
Asbestos Alert
ASBESTOS LITIGATION: Hardie Calls on NSW Councils to Lift Bans
ASBESTOS LITIGATION: Bid for New MT Research Centers Gets Boost
ASBESTOS LITIGATION: Florida Looks at Asbestos Liability Reform
ASBESTOS LITIGATION: Study Says Glaucoma Possibly Next Asbestos
ASBESTOS LITIGATION: SDG&E Gets Subpoena for '01 Demolition Case
ASBESTOS LITIGATION: DaimlerChrysler Faces 29,000 Injury Suits
ASBESTOS LITIGATION: James Hardie Denies Newspaper's Allegations
ASBESTOS LITIGATION: Hanson Faces 135,750 Claimants at Year-end
ASBESTOS LITIGATION: Cyprus Agency Denies Illegal Removal Claims
ASBESTOS LITIGATION: Israel Minister Warns Against Razing Homes
ASBESTOS LITIGATION: Laborer Set for MS Trial V. 64 Defendants
ASBESTOS LITIGATION: ACT Asbestos Awareness Campaign Commences
ASBESTOS LITIGATION: 3M Faces Injury Claims from Respirators
ASBESTOS LITIGATION: Appeals Court Junks Case V. GMC, Saberhagen
ASBESTOS LITIGATION: CG&E, PSI Pending Lawsuits Increase to 100
ASBESTOS LITIGATION: Allstate Corp Raises Reserves to US$1.46Bil
ASBESTOS LITIGATION: UIC, Detroit Stoker Named in 21,098 Claims
ASBESTOS LITIGATION: U.S. Steel Continues Defense V. 500 Suits
ASBESTOS LITIGATION: American Standard Resolves 25,389 Claims
ASBESTOS LITIGATION: Georgia-Pacific Shows Profit, Lower Claims
ASBESTOS LITIGATION: TX Jury Rules in Favor of American Biltrite
ASBESTOS LITIGATION: ACT Task Force Investigates Illegal Dumping
ASBESTOS LITIGATION: Commission Detects Low Levels in IL County
ASBESTOS LITIGATION: Tenaris Says 20 Of 21 Dalmine Cases Settled
ASBESTOS LITIGATION: CONSOL Says Fairmont Named in 25,100 Claims
ASBESTOS LITIGATION: Grainger's 700 Asbestos/Silica Suits Junked
ASBESTOS ALERT: Asbestos Found in NSW Air Force Planes at Base
ASBESTOS ALERT: Family of Worker's Daughter Finally Wins Case
ASBESTOS ALERT: Firefighter's Death Linked to Exposure on Duty
ASBESTOS ALERT: Asbestos Scare Follows Tire Warehouse Fire in UK
ASBESTOS ALERT: UK Family Fined for Harboring Illegal Waste Site
ASBESTOS ALERT: Appeals Court Affirms Ruling V. Consultant Firm
New Securities Fraud Cases
ADVANCED NEUROMODULATION: Charles J. Piven TX Lodges Stock Suit
ADVANCED NEUROMODULATION: Charles J. Piven TX Lodges Stock Suit
ADVANCED NEUROMODULATION: Paskowitz & Associates Lodges TX Suit
ASTRAZENECA PLC: Stull Stull Lodges Securities Fraud Suit in MA
BIOGEN IDEC: Schiffrin & Barroway Lodges Securities Suit in MA
BRADLEY PHARMACEUTICALS: Lerach Coughlin Lodges Stock Suit in NJ
BRADLEY PHARMACEUTICALS: Schiffrin & Barroway Lodges Suit in NJ
EPIX PHARMACEUTICALS: Glancy Binkow Lodges Securities Suit in MA
LEADIS TECHNOLOGY: Lerach Coughlin Lodges Securities Suit in CA
MOLEX INC.: Schiffrin & Barroway Lodges IL Securities Fraud Suit
RETEK INC.: Lerach Coughlin Lodges Securities Fraud Suit in MN
SINA CORPORATION: Seeger Weiss Files Securities Fraud Suit in NY
*********
ADVANCED NEUROMODULATION: Federal Probe's Expos, Prompts Lawsuit
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Advanced Neuromodulation Systems faces a class action filed
following the disclosure of a federal investigation, which
caused the stock to lose more than a fifth of its value two
weeks ago, Red Herring reports.
The suit, which also names CEO Chris Chavez and CFO F. Robert
Merrill III as defendants, alleges the Company didn't disclose
billing practices that prompted the investigation. In addition,
it alleges the executives sold their shares at "artificially
inflated prices" prior to disclosing the news. The suit also
alleges that Advanced Neuro improperly paid physicians $1,000
each time they used one of Advanced Neuro's implanted devices in
patients.
The suit was filed by law firm Milberg Weiss Bershad & Shulman
on behalf of those who purchased securities in the Company
between April 24, 2003, and February 16, 2005, when the Company
disclosed news of the investigation in the ninth paragraph of
its quarterly financial report.
Sixteen-year-old Advanced Neuro, based in Plano, Texas, makes
implantable devices that treat chronic pain, much like products
from Metronic, one of the Company's closest competitors.
ARIZONA: Taxpayers Raise Money To Fund Suit V. Recreation Center
----------------------------------------------------------------
The Sun City Taxpayers Association in Arizona is trying to raise
$50,000 in donations to help fund a class action lawsuit against
the Recreation Centers of Sun City, the Associated Press
reports.
Specifically, the class-action suit that is supported by the
taxpayers association is against the Recreation Center's board,
which is responsible for overseeing numerous facilities in the
retirement community. According to the lawsuit, the board was
wrong when it agreed in 2000 to hand over rights to its
groundwater for Central Arizona Project water without seeking a
membership vote. The plaintiffs are thus asking a judge to order
the Recreation Centers board to hold a vote.
The taxpayers association told AP that it is currently seeking
donations, since its reserve fund has sunk below $15,000 and the
lawsuit has already cost them $165,000.
AUSTRALIA: Local Resellers Monitor U.S. Suit V. Apple Computers
---------------------------------------------------------------
After their U.S. counterparts, in conjunction with consumers,
filed a class action suit against Apple Computers, Australian
Apple resellers are watching with interest the unfolding legal
battle, the ARNnet, Australia reports.
The suit alleges that the Company committed unlawful business
practices, misappropriation of trade secrets and breach of
contract. In addition, specific allegations include the selling
of old or refurbished systems as new, improperly calculating
warranty periods and appropriating reseller customer lists.
Total Recall Solutions (TRS) managing director, Adam Conner,
told ARNnet, "I'm not surprised that a class action has been
brought. It is difficult for some resellers because Apple makes
tough decisions from time to time."
Another reseller, Apple Centre Taylor Square director, Ben
Morgan, told ARNnet the action was a sign that communications
between the two parties had broken down to a point of distrust.
He said, "This is happening for a reason, but it has not
happened here yet, so this is a good time for Apple Australia to
review its approach to the channel. It is also a good
opportunity for the resellers to do the same."
Next Byte Director, Adam Steinhardt, said it was difficult to
compare the situations of U.S. and Australian resellers, and
while Apple Centre Broadway manager, David Vanderkley, said
repair rebates and stock allocation were common areas of
concern, ARNnet reports. "The rebate you currently get may only
just cover the cost of the technician fixing a notebook, which
is not ideal when you are trying to make a profit," he adds.
Maccentric Managing Director, Henrik Kocharians, told ARNnet the
cost of repairs in parts and lost time often exceeded the
rebate's worth. "The build and parts quality could become an
issue in time with the increased volume of stock production. I
believe Apple is looking at that, though they haven't changed
their rebates in a long time," he said.
While U.S. resellers are also alleging they have had to compete
with Apple's direct store for stock, Mr. Vanderkley said mass
merchants were a bigger problem for the local channel. According
to him, "There are a few occasions where mass merchants have
been given stock priority over resellers. However, in the case
of iShuffles, I think Apple Centers were given preference over
the mass merchants."
While admitting any Australian action would be some time off,
Taylor Square's Mr. Morgan said the outcome of the US action
could have a local impact. He pointed out, "If it is deemed that
Apple is operating unfairly toward its resellers it could change
the way the Company views the channel. Rather than change its
business practices, it may decide that it doesn't want to
support the channel anymore."
AZTAR CORPORATION: Mediation To Begin in NJ Garage Collapse Suit
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Mediation is expected to begin early this year on the
coordinated proceeding filed against Aztar Corporation and its
affiliate Adamar of New Jersey, Inc., doing business as
Tropicana Casino and Resort in Atlantic City. The suit arose
out of the October 20,2003 collapse of a portion of a parking
garage under construction at the Tropicana Casino and Resort in
Atlantic City, New Jersey.
One suit was filed on March 10, 2004 in the Court of Common
Pleas, Philadelphia County, Pennsylvania. The plaintiff,
Scannicchio's Restaurant, is located in the vicinity of the
October 30, 2003 garage collapse. The lawsuit purported to be a
class action on behalf of Scannicchio's Restaurant and all
neighboring businesses for damages to buildings and loss of
business. The action sought compensatory and punitive damages
in unspecified amounts for negligence and private and public
nuisance. The Company disagreed with the allegations against it
and its affiliated entity and contested the action vigorously on
jurisdictional grounds. As a result, the Philadelphia action
was dismissed without prejudice to the plaintiff filing it in
New Jersey.
On December 29, 2003, the Company and Adamar of New Jersey, Inc.
d.b.a. Tropicana Casino and Resort in Atlantic City were named
as defendants to an action brought by Govathlay Givensin the
Superior Court of New Jersey in Atlantic County. This action
also arose out of the October 30, 2003 garage collapse.
Between June 15, 2004 and January 24, 2005, six lawsuits were
filed for damages incurred by family members as a result of the
deaths of four construction workers. In addition, thirty-one
additional personal injury complaints were filed by other
plaintiffs for unspecified amounts of compensatory and punitive
damages. Other companies involved with the construction of the
garage were also named as defendants. They included:
(1) Keating Building Corporation;
(2) Wimberly, Allison, Tong & Goo;
(3) SOSH Architects;
(4) DeSimone Consulting Engineers;
(5) Mid-State Filigree Systems;
(6) Site-Blauvelt Engineers;
(7) Fabi Construction, Inc.;
(8) Pro Management Group, Inc.;
(9) Liberty Mutual Insurance Co.; and
(10) Mitchell Bar Placement, Inc.
The court is handling these cases in a coordinated fashion as
the Tropicana Parking Garage Collapse Litigation and has issued
a Case Management Order governing various matters concerning
complaints, answers and cross-claims, as well as discovery and
mediation.
AZTAR CORPORATION: Faces NJ Suit Over $1/Day Telephone Surcharge
----------------------------------------------------------------
Aztar Corporation faces a class action filed in the in the
Superior Court of Maricopa County, Arizona, arising from a $1
per day telephone surcharge assessed to certain guests at check-
in at the Tropicana Resort and Casino in Las Vegas, Nevada and
the Tropicana Casino and Resort in Atlantic City, New Jersey
(the "Tropicana Hotels"). The hotels are owned and operated by
subsidiaries of the Company.
Plaintiff, Aaron Dolgin, brings claims based upon:
(1) alleged violation of the Arizona Consumer Fraud Act;
(2) fraudulent advertising;
(3) breach of contract;
(4) breach of the implied-in-law covenant of good faith and
fair dealing; and
(5) unjust enrichment
The cause of action alleging fraudulent advertising has been
dismissed with prejudice. To the extent the complaint alleged
causes of action based upon the assessment of a telephone
surcharge by other properties owned and operated by subsidiaries
of the Company (exclusive of the Tropicana Hotels), those claims
have been dismissed without prejudice.
The plaintiff alleges that he was forced to pay the telephone
surcharge or lose his reservation deposit, whether or not he
intended to use the telephone in his room. The plaintiff claims
that he was in effect charged $1 extra per day for his hotel
room, thus rendering the advertised room rates misleading and in
breach of a contractual obligation to provide him a hotel room
for an advertised price that did not include the telephone
surcharge.
The plaintiff claims that the actual compensatory damages for
the purported class may exceed $3,000,000. The plaintiff also
claims, however, that further discovery and expert analysis is
needed to more accurately compute the amount of compensatory
damages plaintiff seeks on behalf of the purported class. The
plaintiff also seeks declaratory and injunctive relief, punitive
damages, pre- and post- judgment interest and attorneys' fees
and costs of suit.
BURLINGTON RESOURCES: Trial in Natural Gas Suit Expected in 2005
----------------------------------------------------------------
Trial in the consolidated class action filed against Burlington
Resources, Inc. and its former affiliate, El Paso Natural Gas
Company, is expected to begin this year in the District Court of
Washita County, Oklahoma.
Two suits were initially filed, styled "Bank of America, et al.
v. ElPaso Natural Gas Company, et al., Case No. CJ-97-68," and
"Deane W. Moore, et al. v. Burlington Northern, Inc., et. al.,
Case No. CJ-97-132." The suits were subsequently consolidated
by the court.
Plaintiffs contend that defendants underpaid royalties from 1982
to the present on natural gas produced from specified wells in
Oklahoma through the use of below-market prices, improper
deductions and transactions with affiliated companies and in
other instances failed to pay or delayed in the payment of
royalties on certain gas sold from these wells. The plaintiffs
seek an accounting and damages for alleged royalty
underpayments, plus interest from the time such amounts were
allegedly due. Plaintiffs additionally seek the recovery of
punitive damages.
The plaintiffs have not specified in their pleadings the amount
of damages they seek from the Company. However, through pre-
trial discovery, plaintiffs have provided defendants with
alternative theories of recovery claiming monetary damages of up
to $221 million in principal, plus $996 million in interest and
unspecified punitive damages and attorney's fees. The court has
certified the plaintiff classes of royalty and overriding
royalty interest owners, and the parties are proceeding with
pre-trial discovery. It is anticipated that the trial of this
matter will be scheduled during 2005.
CALIFORNIA: High Court Reviews Deceptive Tobacco Marketing Suit
---------------------------------------------------------------
California's Supreme Court has agreed to review a class-action
consumer-protection lawsuit that was filed against tobacco
companies on behalf of a million California children, which had
been previously dismissed by lower courts, the Sacramento Bee
reports.
According to court documents, five young smokers on behalf of
all Californians under age 18 who had smoked at least one
cigarette between April 2, 1994 and December 31, 1999 had filed
the lawsuit. The smokers are contending that the tobacco
industry of engaging in deceptive marketing practices aimed at
underage smokers during that time period.
The young smokers are asking the court to make Philip Morris,
R.J. Reynolds, Brown & Williamson and Lorillard to pay for
smoking-cessation services for a million smokers. A key issue
in the case will be whether California state law is preempted by
weaker federal regulations of tobacco advertising and sales.
CALIFORNIA: Resident's Lawsuit Contests Charging For DUI Arrest
---------------------------------------------------------------
A Scotts Valley, California man has initiated a lawsuit against
the city over a $302 bill for police time spent arresting him
while driving under the influence (DUI), the Santa Cruz Sentinel
reports.
Attorney Matthew Witteman of San Francisco, one of three
attorneys who filed the class-action suit, told the Sentinel
state legislation passed in the mid-1980s allows public safety
agencies to charge those who drive while intoxicated for
emergency responses caused by their drunken driving. In the
February 4 suit, James R. Smith claims a simple arrest is not an
emergency response, though charging for such arrests has become
common. He pointed out that the law was actually intended for
things such as paramedics and traffic control for DUI-related
accidents.
Scotts Valley Police Chief Steve Lind told the Sentinel Scotts
Valley has been charging for officers' time for DUI arrests for
more than 10 years, a practice that the city has stopped
recently pending resolution of the suit. Officers make about 100
such arrests annually, and the costs for each arrest ranges from
$300 to $1,000, he said.
Scotts Valley police believe activation of emergency lights to
pull over a suspected intoxicated driver equals an emergency
response. "That's our opinion. I think people should be paying
for costs associated with a lot of violations, but it's a matter
of interpretation of the law," Chief Lind continued.
Mr. Witteman told the Sentinel he has been litigating the
question in other courts in the San Francisco Bay Area, with
some success and even cited an Alameda County case against the
California Highway Patrol where a judge ruled that the CHP could
not charge arrest costs, even in the case of an accident, but
could only charge for events such as emergency medical care,
rescues and lane closures.
In addition, Mr. Witteman is contending that charging for
arrests is "an abuse" of the law. Part of the fines paid upon
conviction is returned to police agencies to defray costs, and
fines for DUIs are a minimum of $1,000. Also, some defendants
are charged for jail-booking fees, for which the state routinely
reimburses police agencies.
"We view this as kind of a double billing. This is routine
police work, and the broader question is, where do you draw the
line? The history is pretty clear that the framers of this
legislation had in mind an accident or similar incident, and not
just an arrest," Mr. Witteman told the Sentinel.
Court documents indicate that Mr. Smith, 54, was arrested March
24, 2004, then on April 21, he pleaded no contest to misdemeanor
drunken driving and was sentenced to three days in jail and five
years' probation. After that he was ordered to pay a fine of
$1,772, a jail-screening fee of $25, a court security assessment
of $20 and $100 to a fund for crime victims. He has been making
$40 monthly payments to the court with his bill from the city
being sent to a collection agency.
Mr. Witteman, explains, that the suit represents a class of
people charged for DUI arrests that did not involve "emergency
incidents" going back one year from Mr. Smith's complaint, thus
it seeks to have the practice stopped and asks that a ruling
clarify what DUI-related costs can legally be recouped. Also, he
and the other attorneys along with their client, want the city
to return money to those wrongly charged in the past year or so
and credit records of those who failed to pay cleared. It also
asks that the city be required to pay attorneys' fees and costs
for the plaintiff.
CASH AMERICA: Payday Loans Suit Remand To GA State Court Sought
---------------------------------------------------------------
Plaintiff sought the remand of a class action filed against Cash
America International, Inc. and Georgia Cash America, Inc.
(together "Cash America") to the State Court of Cobb County,
Georgia.
James E. Strong filed the suit in Georgia State Court on August
6, 2004. The suit also names as defendants Daniel R. Feehan,
and several unnamed officers, directors, owners and
"stakeholders" of Cash America. The lawsuit alleges many
different causes of action, among the most significant of which
is that Cash America has been making illegal payday loans in
Georgia in violation of Georgia's usury law, the Georgia
Industrial Loan Act and Georgia's Racketeer Influenced and
Corrupt Organizations Act. Community State Bank has for some
time made loans to Georgia residents through Cash America's
Georgia operating locations.
The complaint in this lawsuit claims that Community State Bank
is not the true lender with respect to the loans made to Georgia
borrowers and that its involvement in the process is "a mere
subterfuge." Based on this claim, the suit alleges that Cash
America is the "de facto" lender and is illegally operating in
Georgia. The complaint seeks unspecified compensatory damages,
attorney's fees, punitive damages and the trebling of any
compensatory damages.
Cash America removed the case to federal court and filed a
motion to compel the plaintiff to arbitrate his claim, in
addition to denying the plaintiff's allegations and asserting
various defenses to his claim. The plaintiff has filed a motion
to remand the case to Georgia State Court.
DUPONT CO.: Attorneys Could Pocket Up To $82M From C8 Settlement
----------------------------------------------------------------
Lawyers who represented Wood County residents in a class-action
lawsuit against DuPont Co. could eventually pocket more than $82
million in fees and expenses, the Charleston Daily Mail reports.
In the suit, residents near DuPont's Washington Works alleged
that C8, a substance used to make Teflon, contaminated their
water supplies, an allegation that the Company denies. Under a
recently approved settlement, the lawyers, who brought that
case, are entitled to at least $22.6 million, which when divided
by the amount of time they put into the case, it works out to
roughly $922 an hour.
However, legal observers point out that the sum that the firms
will collect could go much higher, if it is determined that
there is a probable link between C8 exposure and any human
disease. If such a link were established, DuPont would likely
end up paying for medical monitoring, and the lawyers will get
more money, the Daily Mail reports.
The lawyers will receive a sum equivalent to 25.5 percent of the
cost of medical monitoring, according to the settlement. It also
stipulates that if it is deemed necessary to carry out the most
extensive medical monitoring envisioned by the settlement, the
monitoring will cost $235 million and the lawyers will get $59.9
million. Though three law firms represented the residents
namely Hill, Peterson, Carper, Bee & Deitzler of Charleston,
Winter Johnson & Hill of Charleston, and Taft, Stettinius &
Hollister of Cincinnati, it is yet to be determined how the
money will be divided among them.
Harry Deitzler, one of the lead lawyers and who is a former Wood
County prosecutor who now serves on Charleston City Council told
the Daily Mail, "All three kept track of their time and
expenses. There's time, there are expenses -- which is risk --
and there's effectiveness. It's just something we'll work out."
The amount lawyers receive from class-action suits has been a
matter of national debate though, since just recently, President
George W. Bush signed legislation that will attempt to rein in
costs associated with such cases by diverting certain ones from
state to federal courts.
If the new law had been in effect, legal experts explain, the C8
case overseen by Wood County Circuit Court Judge George Hill
probably would have been transferred to federal court. Since,
the experts further explain, the new law calls for class-action
suits seeking $5 million or more to be heard in state court only
if the primary defendant and more than one-third of the
plaintiffs are from the same state. Most of the members of the
class in the C8 case are from West Virginia and Ohio and DuPont
is a Delaware corporation, experts said.
In a document filed with the court, the law firms said that of
the $22.6 million already approved, more than $2 million would
be for expenses, since they has as of January 31 incurred out-
of-pocket costs totaling almost $2.3 million, not including
internal costs for copying, long distance telephone charges and
other items.
In regards to the settlement as a whole, the minimum DuPont will
pay is $107.6 million, which includes $70 million to gather
medical information and blood samples from an estimated 60,000
people who have been exposed to C8, $5 million to help an
independent expert panel determine whether there is a probable
link between C8 and disease, $10 million to provide six water
districts with treatment systems designed to reduce the level of
C8 and the $22.6 million for the attorneys.
If the firms were to divide that amount by the same percentage
as the hours they worked on the case up to January 31, the
lawyers at Taft Stettinius & Hollister would receive almost
$10.4 million, Hill, Peterson, Carper, Bee & Deitzler would
receive almost $5.6 million and Winter Johnson & Hill would
receive just over $4 million. But, if the firms had lost the
case they would have lost all of their out-of-pocket expenses,
all of their internal personnel costs and received no legal
fees.
EBAY INC.: Asks CA Court To Junk Improper Billing Practices Suit
----------------------------------------------------------------
eBay, Inc. asked the Superior Court of the State of California,
County of Santa Clara to dismiss a class action filed by two
eBay users against the Company, alleging that the Company
engaged in improper billing practices as the result of problems
with the rollout of a new billing software system in the second
and third quarters of 2004. The lawsuit sought damages and
injunctive relief.
An amended complaint was filed in January 2005, dropping one
plaintiff, changing the capacity of the other plaintiff to that
of representative plaintiff, and adding seven additional eBay
users as plaintiffs. The amended complaint expanded its claim
to include numerous alleged improper billing practices from
September 2003 until the present. In February 2005, eBay filed a
motion to strike and a demurrer seeking to dismiss the
complaint.
The suit is styled "Cerreta v. Ebay, Inc., case no. 1-04-CV-
022708," filed in the Santa Clara County Superior Court in
California. Representing the plaintiffs is Jeffrey L. Fazio,
Fazio & Micheletti LLP, 1900 South Norfolk Street, Suite 350,
San Mateo, CA 94403. Representing the Company are Grant P.
Fondo, Michael G. Rhodes, Melina K. Patterson, and Arron P.
Arnzen of Cooley Godward LLP , Five Palo Alto Square, 3000 El
Camino Real, Palo Alto, CA 94306-2155.
EBAY INC.: Users Launch CA Suit Due To "Shill Bidding" on Site
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eBay, Inc. faces a class action filed in the Superior Court of
the State of California, County of Santa Clara alleging that
certain bidding features of our site constitute "shill bidding"
for the purpose of artificially inflating bids placed by buyers
on the site. The suit is designated as Case No. 1-05-CV-035930.
The complaint alleges violations of California's Auction Act,
California's Consumer Remedies Act, and unfair competition.
The complaint seeks injunctive relief, damages, and a
constructive trust.
GINGER CO.: Recalls 5,900 Light Fixtures Due To Injury Hazard
-------------------------------------------------------------
In cooperation with the U.S. Consumer Product Safety Commission
(CPSC), Gingerr, of Fort Mill, S.C. is recalling about 5,900
Gingerr Kubicr, K2r and SurfaceT Bathroom Light Fixtures.
The glass shades can separate from the light fixture, posing a
risk that a consumer could be cut by the broken glass if the
shade were to fall and break. The firm has received one report
of a consumer who suffered a minor cut to his foot after
stepping on broken glass from a fallen shade.
The Gingerr Kubicr, K2r and SurfaceT collection light fixtures
feature 8-inch-long, cylindrical, white glass shades that are
about 3-inches in diameter. They have chrome or satin nickel
wall plates, some decoratively encircled with wood. The lights
can be installed horizontally or vertically. The lights use
incandescent bulbs up to 100 watts. No screws are used to attach
these shades. They are glued to a metal base, which screws onto
the fixture. No writing is visible on the mounted light
fixtures. For more information on model numbers and distinctive
features of these fixtures, contact Gingerr.
Assembled in the United States, the fixtures were sold at all
commercial dealers and to consumers through select showrooms and
retailers nationwide from August 2003 through September 2004 for
between $240 and $355.
For a remedy, consumers are advised to contact Gingerr to
receive free replacement shades.
Consumer Contact: Call Gingerr toll free at (800) 842-4872
between 9 a.m. and 5 p.m. ET Monday through Friday, or visit the
firm's Web site at http://www.gingerco.com.
GLOBAL CROSSING: Citigroup Settles Securities Litigation in NY
--------------------------------------------------------------
Citigroup has settled class action litigation brought on behalf
of purchasers of Global Crossing securities which was pending in
the United States District Court for the Southern District of
New York as In re Global Crossing Ltd. Securities Litigation,
No. 02 Civ. 910 (GEL).
Under the terms of the settlement, Citigroup will make a payment
of $75 million pre-tax, approximately $46 million after tax, to
the settlement class, which consists of all investors in
publicly traded securities of Global Crossing or Asia Global
Crossing during the period from February 1, 1999, through and
including December 8, 2003.
The plaintiffs currently contemplate allocating two-thirds of
the settlement amount to investors in underwritten public
offerings of Global Crossing securities and one third to other
investors in Global Crossing securities; the terms of the
settlement and the final plan of allocation will be subject to
review by the Court. Plaintiffs' attorneys' fees will be
determined by the Court and paid out of the settlement amount.
In the settlement agreement, Citigroup specifically denied any
violation of law and stated that it was entering into the
settlement "solely to eliminate the uncertainties, burden and
expense of further protracted litigation." The settlement
payment is covered by existing reserves and is part of
Citigroup's effort to resolve open litigation issues promptly
and fairly whenever possible.
HARTFORD FINANCIAL: NY A.G. Spitzer's Suit Fosters Others
---------------------------------------------------------
The Hartford Financial Services Group, Inc. faces several
actions that arose after New York Attorney General Eliot Spitzer
launch a civil complaint against Marsh, Inc. and Marsh &
McLennan Companies, Inc. on October 14, 2004.
The complaint (the "NYAG Complaint") alleges, among other
things, that certain insurance companies, including the Company,
participated with Marsh in arrangements to submit inflated bids
for business insurance and paid contingent commissions to ensure
that Marsh would direct business to them. The Hartford is not
joined as a defendant in the action.
Two securities class actions have been filed in the United
States District Court for the District of Connecticut alleging
claims against the Company Hartford and five of its executive
officers under Section 10(b) of the Securities Exchange Act and
SEC Rule 10b-5. The complaints allege on behalf of a putative
class of shareholders that the Company and the five named
individual defendants, as control persons of the Company,
"disseminated false and misleading financial statements" by
concealing that "The Hartford" was paying illegal and concealed
"contingent commissions" pursuant to illegal "contingent
commission agreements." The class period alleged is November 5,
2003 through October 13, 2004, the day before the NYAG Complaint
was filed. The complaints seek damages and attorneys' fees.
In addition, three putative class actions have been filed in the
same court on behalf of participants in the Company's 401(k)
plan against the Company, Hartford Fire Insurance Company,
The Hartford's Pension Fund Trust and Investment Committee, The
Hartford's Pension Administration Committee, The Hartford's
Chief Financial Officer, and John/Jane Does 1-15.
The suits assert claims under the Employee Retirement Income
Security Act of 1974, as amended (ERISA), alleging that the
Company and the other named defendants breached their fiduciary
duties to plan participants by, among other things, failing to
inform them of the risk associated with investment in the
Company's stock as a result of the activity alleged in the NYAG
Complaint. The class period alleged is November 5, 2003 through
the present. The complaints seek restitution of losses to the
plan, declaratory and injunctive relief, and attorneys' fees.
Seven putative class actions also have been filed by alleged
policyholders in federal district courts, one in the Southern
District of New York, two in the Eastern District of
Pennsylvania, three in the Northern District of Illinois, and
one in the Northern District of California, against several
brokers and insurers, including the Company. These actions
assert, on behalf of a class of persons who purchased insurance
through the broker defendants, claims under the Sherman Act and
state law, and in some cases the Racketeer Influenced and
Corrupt Organizations Act (RICO), arising from the conduct
alleged in the NYAG Complaint.
The class period alleged is 1994 through the date of class
certification, which has not yet occurred. The complaints seek
treble damages, injunctive and declaratory relief, and
attorneys' fees.
Putative class actions also have been filed in the Circuit Court
for Cook County, Illinois, Chancery Division and in the Circuit
Court for Seminole County, Florida, Civil Division, on behalf of
a class of all persons who purchased insurance from a class of
defendant insurers. These state court actions assert unjust
enrichment claims and violation of state unfair trade practices
acts arising from the conduct alleged in the NYAG Complaint and
seek remedies including restitution of premiums, and, in the
Cook County action, imposition of a constructive trust, and
declaratory and injunctive relief. The class period alleged is
1994 through the present.
The Company has removed the Cook County action to the United
States District Court for the Northern District of Illinois.
Pursuant to an order of the Judicial Panel on Multidistrict
Litigation, it is likely that most or all of these actions will
be transferred to the United States District Court for the
District of New Jersey.
HSBC FINANCE: Discovery Proceeds in IL Securities Fraud Lawsuit
---------------------------------------------------------------
Discovery is proceeding in the consolidated securities class
action filed against HSBC Finance Corporation (formerly known as
Household International, Inc.) in the United States District
Court for the Northern District of Illinois, styled "Jaffe v.
Household International, Inc., et al., Case No. 02 C 5893."
In August 2002, the Company restated previously reported
consolidated financial statements. The restatement related to
certain MasterCard and Visa co-branding and affinity credit card
relationships and a third party marketing agreement, which were
entered into between 1992 and 1999. All were part of the
Company's Credit Card Services segment.
In consultation with the Company's prior auditors, Arthur
Andersen LLP, it treated payments made in connection with these
agreements as prepaid assets and amortized them in accordance
with the underlying economics of the agreements. The Company's
current auditor, KPMG LLP, advised it that, in its view, these
payments should have either been charged against earnings at the
time they were made or amortized over a shorter period of time.
The restatement resulted in a $155.8 million, after-tax,
retroactive reduction to retained earnings at December 31,
1998.
As a result of the restatement, and other corporate events,
including, e.g., the 2002 settlement with 50 states and the
District of Columbia relating to real estate lending practices,
the Company, its directors, certain officers and former
auditors, have been involved in various legal proceedings, some
of which purport to be class actions.
A number of these actions allege violations of federal
securities laws, were filed between August and October 2002, and
seek to recover damages in respect of allegedly false and
misleading statements about the Company's common stock. These
legal actions were later consolidated and the consolidated and
amended complaint was filed on March 7, 2003.
On December 3, 2004, the court signed the parties' stipulation
to certify a class with respect to the claims brought under
Sections 10 and 20 of the Securities Exchange Act of 1934. The
parties stipulated that plaintiffs will not seek to certify a
class with respect to the claims brought under Section 11 and
Section 15 of the Securities Act of 1933 in this action or
otherwise.
The amended complaint purports to assert claims under the
federal securities laws, on behalf of all persons who purchased
or otherwise acquired Company securities between October 23,
1997 and October 11, 2002, arising out of alleged false and
misleading statements in connection with the Company's sales and
lending practices, the 2002 state settlement agreement referred
to above, the restatement and the HSBC merger. The amended
complaint, which also names as defendants Arthur Andersen LLP,
Goldman, Sachs & Co., and Merrill Lynch, Pierce, Fenner & Smith,
Inc., fails to specify the amount of damages sought.
In May 2003, the Company, and other defendants, filed a motion
to dismiss the complaint. On March 19, 2004, the Court granted
in part, and denied in part the defendants' motion to dismiss
the complaint. The Court dismissed all claims against Merrill
Lynch, Pierce, Fenner & Smith, Inc. and Goldman Sachs & Co. The
Court also dismissed certain claims alleging strict liability
for alleged misrepresentation of material facts based on statute
of limitations grounds. The claims that remain against some or
all of the defendants essentially allege the defendants
knowingly made a false statement of a material fact in
conjunction with the purchase or sale of securities, that the
plaintiffs justifiably relied on such statement, the false
statement(s) caused the plaintiffs' damages, and that some or
all of the defendants should be liable for those alleged
statements. The Court has ordered that all factual discovery
must be completed by January 13, 2006 and expert witness
discovery must be completed by July 24, 2006.
The suit is styled "Jaffe v. Household International, Inc., case
no. 1:02-cv-05893," filed in the United States District Court
for the Northern District of Illinois, under Judge Ronald A.
Guzman.
Lawyers for the plaintiffs are Frederic S. Fox and Gary L.
Specks of Kaplan, Kilsheimer & Fox LLP, 805 Third Avenue
New York, NY 10022, Phone: (212) 687-1980. Law firms for the
Company are:
(1) Cahill, Gordon & Reindel, 80 Pine Street, New York, NY
10005, Phone: (212)-701-3000
(2) Eimer Stahl Klevorn & Solberg, LLP, 224 South Michigan
Avenue, Suite 1100 Chicago, IL 60604, Phone: (312) 660-
7600
(3) Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street
New York, HY 10019, Phone: (212)403-1000
(4) Milbank, Tweed, Hadley & McCloy, 1 Chase Manhattan
Plaza, New York, NY 10005, Phone: (212)530-5000
HSBC FINANCE: Plaintiffs Appeal IL Shareholder Lawsuit Dismissal
----------------------------------------------------------------
Plaintiffs appealed the Circuit Court of Cook County, Illinois,
Chancery Division's dismissal of the class action filed against
HSBC Finance Corporation, styled "West Virginia Laborers Pension
Trust Fund v. Caspersen, et al., case no. 03CH10808.
This purported class action names as defendants the directors of
Beneficial Corporation at the time of the 1998 merger of
Beneficial Corporation into a subsidiary of HSBC Finance
Corporation, and claims that those directors' due diligence of
the Company at the time they considered the merger was
inadequate. The Complaint claims that as a result of some of the
securities law and other violations alleged in the Jaffe case,
the Company's common shares lost value. Pursuant to the merger
agreement with Beneficial Corporation, the Company assumed the
defense of this litigation.
In September 2003, the defendants filed a motion to dismiss,
which was granted on June 15, 2004 based upon a lack of personal
jurisdiction over the defendants. The plaintiffs have appealed
this decision.
In addition, on June 30, 2004, a case entitled, "Employer-
Teamsters Local Nos. 175 & 505 Pension Trust Fund v. Caspersen,
et al.," was filed in the Superior Court of New Jersey, Law
Division, Somerset County as Case Number L9479-04. Other than
the change in plaintiff, the suit is substantially identical to
the above lawsuit and is brought by the same principal law firm
which brought that suit. The defendants' motion to dismiss was
granted on February 10, 2005.
The suit is styled ""West Virginia Laborers Pension Trust Fund
v. Caspersen, et al., case no. 03CH10808," filed in the Circuit
Court of Cook County, Illinois, Chancery Division under Judge
Patrick E. McGann.
Representing the plaintiffs is Norman Rifkind, 1002 W. Cedar
Lane, Arlington Heights, IL 60005, Phone: (847) 253-7473.
Representing the defendant Finn Caspersen is McDermott Will & Em
LLP, 227 W. Monroe 31st Fl, Chicago IL 60606, Phone:
(312) 372-2000.
ISRAEL: Passengers Mull Suit V. Swiss Air For "Luggage Policy"
--------------------------------------------------------------
An examination of passenger complaints has revealed that airline
Swiss has a policy of deliberately leaving luggage behind at
Ben-Gurion Airport without notifying the passengers, the
Ha'aretz, Israel reports.
The complaints revealed that this policy of leaving luggage
behind whenever the plane is overweight has been in effect since
November 2004, though only in January 2005 did the media first
report on such a case. The first case, which was reported by
the media in January, involved several Israelis en route to the
World Economic Forum in Davos, who had discovered upon arrival
in Switzerland that their bags had been left behind because the
flight was overweight.
The first complaint apparently came from Prof. Eitan Shilony and
his wife, who are now considering filing a class-action suit
against the airline. In their complaint, the Shilonys stated
that they took a Swiss flight in November 2004 from Tel Aviv to
Zurich, from there continuing on to Tokyo. They traveled in
business class, and each spouse had a suitcase weighing some 15
kilograms. When their bags failed to arrive in Japan, the
customer service representative at Narita Airport told them that
the luggage had been left in Tel Aviv, because the flight was
overweight.
The Shilonys also stated in their complaint that they only
received their luggage 36 hours after arriving in Japan. Since
all their clothes were in the delayed luggage, they had no
clothing appropriate for a Japanese winter and had to go out and
buy some, an expense for which Swiss eventually reimbursed
partially.
The complaint thus concluded, "We view this incident very
gravely. This wasn't force majeure or a mishap at the airport
that was beyond your control; rather ... it was due to poor
judgment by the Swiss ground crew at Ben-Gurion": Instead of
penalizing the passengers who caused the problem by bringing
overweight luggage, the crew loaded these passengers' bags and
left behind the Shilonys' luggage, which was within the
prescribed weight limits.
In its reply, Swiss confirmed that the Shilonys' bags were
selected at random for being left behind because the flight was
overweight, Ha'aretz reports.
Avner Gordon, CEO of Swiss in Israel, told Ha'aretz in response
to this report that the airline's policy is "unequivocal: The
bags acCompany the passenger the entire way." However, he said,
there are exceptional cases in which, "for reasons of flight
safety, the pilot decides at the last minute that he wants to
take on extra fuel" - and in those cases, the extra fuel weight
must be compensated for by removing some of the luggage.
However, even in those cases, Mr. Gordon stressed, the bags
usually arrive within 12 hours, since Swiss has four flights a
day from Israel to Switzerland (two of its own and two via code-
sharing with El Al), and if the delay is more than 24 hours,
passengers are entitled to compensation.
LANDSTAR SYSTEM: Trial in FL Contractors' Suit Set October 2005
---------------------------------------------------------------
Trial in the class action filed against Landstar System, Inc.
and certain of its subsidiaries is set for October 3,2005 in the
United States District Court for the Middle District of Florida.
On November 1, 2002, the Owner Operator Independent Drivers
Association, Inc. (OOIDA) and six individual Independent
Contractors filed a putative class action complaint, alleging
that certain aspects of Company subsidiaries' motor carrier
leases with Independent Contractors violate certain federal
leasing regulations and seeks injunctive relief, an unspecified
amount of damages and attorney's fees.
On March 8 and June 4, 2004, the Court dismissed all claims of
one of the six individual Independent Contractor Plaintiffs on
the grounds that the ICC Termination Act (the "Act") is not
applicable to leases signed before the Act's January 1, 1996,
effective date, and dismissed all claims of all remaining
Plaintiffs against four of the seven Company entities previously
named as defendants (Landstar System, Inc., Landstar Express
America, Inc., Landstar Gemini, Inc. and Landstar Logistics,
Inc.). With respect to the remaining claims, the June 4, 2004
order held that the Act created a private right of action
pursuant to which claims involving certain federal leasing
regulations may be filed in federal court subject to a four-year
statute of limitations.
On November 30, 2004, the Court heard oral argument on a motion
by the remaining Plaintiffs to certify the case as a class
action. On February 10, 2005, the remaining Plaintiffs filed a
motion to amend the Complaint to expand it to include additional
allegations with respect to compliance with certain federal
leasing obligations. On February 11, 2005, the remaining
Defendants filed a motion to amend their previously filed Answer
in the event the Court certifies a plaintiffs' class pursuant to
the remaining Plaintiffs' pending motion. The parties are
opposing each others' motions to amend. The Court is expected
to rule within the next several months on the class-
certification motion and on a motion, previously filed by the
remaining Defendants, for partial summary judgment.
Due to a number of factors, including the recent filing of the
proposed amended Complaint, the related arrival of new discovery
requests from the remaining Plaintiffs, and the lack of
litigated final judgments in a number of similar cases or
otherwise applicable precedents, the Company does not believe it
is in a position to conclude whether or not there is a
reasonable possibility of an adverse outcome in this case or
what damages, if any, the remaining Plaintiffs would be awarded
should they prevail on all or any part of their claims.
LIONBRIDGE TECHNOLOGIES: NY Settlement Preliminarily Approved
-------------------------------------------------------------
The United States District Court for the Southern District of
New York granted preliminary approval to the settlement of the
consolidated securities class action filed against Lionbridge
Technologies, Inc., styled "Samet v. Lionbridge Technologies,
Inc. et al." (01-CV-6770)." The suit also names as defendants
certain of its officers and directors, and certain underwriters
involved in the Company's initial public offering.
The complaint in this action asserted, among other things, that
the Company's initial public offering registration statement
contained misstatements and/or omissions regarding the
underwriters' alleged conduct in allocating shares in the
Company's initial public offering to the underwriters'
customers. In March 2002, the United States District Court for
the Southern District of New York entered an order dismissing
without prejudice the claims against the Company and its
officers and directors (the case remained pending against the
underwriter defendants).
On April 19, 2002, the plaintiffs filed an amended complaint
naming as defendants not only the underwriter defendants but
also the Company and certain of its officers and directors. The
amended complaint asserts claims under both the registration and
antifraud provisions of the federal securities laws relating to,
among other allegations, the underwriters' alleged conduct in
allocating shares in the Company's initial public offering and
the disclosures contained in the Company's registration
statement.
The Company understands that various plaintiffs have filed
approximately 1,000 lawsuits making substantially similar
allegations against approximately 300 other publicly traded
companies in connection with the underwriting of their public
offerings. On July 15, 2002, the Company together with the
other issuers named as defendants in these coordinated
proceedings, filed a collective motion to dismiss the complaint
on various legal grounds common to all or most of the issuer
defendants. In October 2002, the claims against officers and
directors were dismissed without prejudice.
In February 2003, the Court issued its ruling on the motion to
dismiss, ruling that the claims under the antifraud provisions
of the securities laws could proceed against the Company and a
majority of the other issuer defendants. In June 2003, the
Company elected to participate in a proposed settlement
agreement with the plaintiffs in this litigation. If ultimately
approved by the Court, this proposed settlement would result in
a dismissal, with prejudice, of all claims in the litigation
against the Company and against any other of the issuer
defendants who elect to participate in the proposed settlement,
together with the current or former officers and directors of
participating issuers who were named as individual defendants.
The proposed settlement does not provide for the resolution of
any claims against underwriter defendants, and the litigation as
against those defendants is continuing. The proposed settlement
provides that the class members in the class action cases
brought against the participating issuer defendants will be
guaranteed a recovery of $1 billion by insurers of the
participating issuer defendants. If recoveries totaling $1
billion or more are obtained by the class members from the
underwriter defendants, however, the monetary obligations to the
class members under the proposed settlement will be satisfied.
In addition, Lionbridge and any other participating issuer
defendants will be required to assign to the class members
certain claims that they may have against the underwriters of
their IPOs. The proposed settlement contemplates that any
amounts necessary to fund the settlement or settlement-related
expenses would come from participating issuers' directors and
officers liability insurance policy proceeds as opposed to funds
of the participating issuer defendants themselves. A
participating issuer defendant could be required to contribute
to the costs of the settlement if that issuer's insurance
coverage were insufficient to pay that issuer's allocable share
of the settlement costs.
Consummation of the proposed settlement is conditioned upon
obtaining both preliminary and final approval by the Court.
Formal settlement documents were submitted to the Court in June
2004, together with a motion asking the Court to preliminarily
approve the form of settlement. Certain underwriters who were
named as defendants in the settling cases, and who are not
parties to the proposed settlement, have filed an opposition to
preliminary approval of the proposed settlement of those cases.
On February 15, 2005, the court issued an order preliminarily
approving the proposed settlement in all respects but one. The
plaintiffs and the issuer defendants are in the process of
assessing whether to proceed with the proposed settlement, as
modified by the court. If the plaintiffs and the issuer
defendants elect to proceed with the proposed settlement, as
modified by the court, they will submit revised settlement
documents to the court. The underwriter defendants may then have
an opportunity to object to the revised settlement documents. If
the Court approves the revised settlement documents, it will
direct that notice of the terms of the proposed settlement be
published in a newspaper and mailed to all proposed class
members and schedule a fairness hearing, at which objections to
the proposed settlement will be heard. Thereafter, the Court
will determine whether to grant final approval to the proposed
settlement.
The suit is styled "Samet v. Lionbridge Technologies, Inc. et
al. (01-CV-6770)," related to "In re Initial Public Offering
Securities Litigation, 21-MC-92 (Sas)," filed in the United
States District Court for the Southern District of New York,
under Judge Shira A. Scheindlin. The plaintiff firms in this
litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300,
(3) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, newyork@whafh.com
LOCKHEED MARTIN: Appeals Court Affirms CA Stock Suit Dismissal
--------------------------------------------------------------
The United States Ninth Circuit Court of Appeals affirmed the
United States District Court for the Central District of
California's dismissal of the consolidated securities class
action filed against Lockheed Martin Corporation, and certain of
its officers and directors.
According to an earlier Class Action Reporter story (March
11,2003), the suit alleged that the defendants violated US
securities laws by allegedly:
(1) employing devices, schemes and artifices to defraud;
(2) making untrue statements of material facts or omitting
to state material facts necessary in order to make
statements, in light of the circumstances under which
they were made, not misleading; or
(3) engaging in acts, practices and a course of business
that operated as a fraud or deceit upon class members
in connection with their purchases of the Company's
common stock.
According to the suit, class members were damaged, because they
paid artificially inflated prices for Company stock. The
plaintiffs are seeking damages and costs, as well as equitable,
injunctive and other relief.
On March 26,2003, the federal court dismissed the suit. On
February 23, 2005, the U.S. Court of Appeals for the Ninth
Circuit affirmed the District Court's order dismissing the case.
The plaintiffs may seek an en banc review by the Ninth Circuit
or file a petition for a writ of certiorari with the United
States Supreme Court.
METRO-GOLDWYN-MAYER INC.: Settlement Hearing Set May 2005 in CA
---------------------------------------------------------------
The final fairness hearing for the settlement of the class
action filed against Metro-Goldwyn-Mayer, Inc. (MGM) is set for
May 16,2005 in the Los Angeles County Superior Court in
California.
On December 13, 2002, the Company, one of its subsidiaries, and
five retail entities (each of which is indemnified by the
Company), were served with a complaint styled "Warren Eallonardo
v. Metro-Goldwyn-Mayer Inc. et al. (L.A.S.C. Case No.
BC286950)." The suit alleges fraud, false advertising and
unfair business practices under the California Business &
Professions Code and Consumer Legal Remedies Act arising from
representations contained in packaging of certain of the
Company's DVDs that allegedly mislead or deceive consumers
regarding the characteristics of MGM's widescreen DVDs. The
class is alleged to include all those who purchased MGM
widescreen DVDs shot in the aspect ratio of 1:85 or 1:33 between
certain dates.
On July 10, 2003, plaintiff filed its final and Third Amended
Complaint in which it added an additional named plaintiff and
also added a cause of action for breach of the implied warranty
of merchantability. Plaintiffs seek compensatory and punitive
damages and attorneys fees. The court thus far has made no
findings as to the merits of the litigation, or any ruling to
certify a class.
On May 5, 2004, the Court granted plaintiff's unopposed Motion
to Enforce Settlement and subsequently adopted the Company's
Notice Plan. The parties finalized the Long Form Notice and the
Settlement Agreement, and on December 20, 2004, the Court signed
the Order which preliminarily approved the settlement. The 60-
day claim filing window closes on March 31, 2005, and final
approval of the settlement is scheduled for hearing on May 16,
2005. Class-action counsel for plaintiffs also will seek an
award of attorneys' fees.
The suit is styled "Warren Eallonardo v. Metro-Goldwyn-Mayer
Inc. et al. (L.A.S.C. Case No. BC286950)," filed in the Los
Angeles County Superior Court in California, under Judge Peter
D. Lichtman. Representing the defendants are Christensen,
Miller, Fink, Jacobs, Glaser; McDermott Will & Emery; and
Morrison & Foerster LLP. Representing the plaintiffs are The
Law Offices of Girardi & Keese; Law Offices of Clifford H.
Pearson; and Wasserman Comden Casselman & Pearson.
OCEAN DESERT: Recalls 18,500 Stuffed Animals Due To Choking Risk
----------------------------------------------------------------
In cooperation with the U.S. Consumer Product Safety Commission
(CPSC), Ocean Desert Sales Inc., of Philadelphia, Pa. is
recalling about 18,500 Stuffed Yarn Bunny.
The eyes can detach from the stuffed animal, posing an
aspiration hazard to young children. Additionally, the heart and
flower button decorations also can detach, posing a choking
hazard.
The stuffed bunny is about 8-inches tall wearing a skirt or
overall shorts in various colors including purple, turquoise and
pink. The skirt and overall shorts are decorated with heart and
flower buttons, and there is a bow tie at the neck in checked
pattern colors including green and pink. The eyes are round
black beads. A hang tag attached to the stuffed bunny reads in
part, "OCEAN DESERT SALES 5400 TULIP STREET, PHILADELPHIA, PA
19124 ITEM NO.: EST-220 MADE IN CHINA UPC CODE: 0 15381 14220
1."
Manufactured in China, the stuffed animals were sold at all
discount and dollar stores from February 2002 through March 2003
for about $1.
Consumers should immediately take the toy away from young
children and return it the store where purchased for a refund.
Consumer Contact: Contact Ocean Desert Sales at (800) 252-1931
between 8 a.m. and 4 p.m. ET Monday through Friday.
OKLAHOMA: Area Couple Sued For Ponzi Scheme, Faces Investigation
----------------------------------------------------------------
A group of investors has filed a class-action lawsuit to recover
money invested with Marsha and Richard Schubert, claiming the
investment business they started was a Ponzi scheme, the Enid
News & Eagle reports.
Bernie Schnorr filed the lawsuit in Kingfisher County District
Court on behalf of himself and other investors who may have lost
money alleging that the Schuberts, who are now under
investigation by Oklahoma Department of Securities for allegedly
investing clients' money illegally and perpetrating a fraud,
operated a Ponzi scheme causing investors to suffer significant
monetary loss. Thus, they are asking for actual and punitive
damages.
Court documents allege that Schuberts offered and sold
securities in Oklahoma under the name Schubert and Associates,
which is, according to securities department documents, an
unincorporated association purporting to operate, as an
investment program with its principal place of business was
Crescent.
Beginning in 2001, Schubert and Associates engaged in the sale
of securities from Oklahoma to investors as part of an
investment program. The program consisted of investors pooling
and investing funds, with the promise of a return of large
profits. The Schuberts reportedly promised the program was
"foolproof" and promised profits of 30 percent annual interest.
The securities department alleges those who inquired about their
accounts received handwritten notes reflecting the percentage of
profit the Schuberts claimed the investors were making, records
show. Thus, the securities department has asked for a permanent
injunction and other relief against the Schuberts.
Enid attorney Doug Jackson has been appointed receiver and has
retained BKD accounting firm. Mr. Jackson's duties are to find
where the money went and recover it. Also named as defendants
in the class-action lawsuit are Richard Schubert, individually
and doing business as Schubert and Associates, AXA Advisors LLC,
AXA Equitable Life Insurance Co., Pershing LLC, Raymond James
and Associates and Wilbanks Securities Inc.
The lawsuit alleges Mr. Schubert was acting as a licensed
securities dealer and an employee and agent-dealer. Furthermore,
the suit alleges that AXA and its related companies pressured
Schubert to push its insurance products in addition to trading
securities. Also, Mr. Schubert allegedly sold many insurance
products by using investors' money to pay premiums on the
insurance products, instead of investing the money in options
contracts or other types of trading accounts.
In addition, the lawsuit claims that Marsha Schubert induced a
constant stream of investments by misrepresenting the broker-
dealer's performance, giving the appearance of success.
PAYPAL INC.: Reaches Settlement For Unfair Trade Practices Suit
---------------------------------------------------------------
PayPal, Inc. reached a settlement for the consolidated class
action filed against it in the United States District Court for
the Northern District of California, alleging that its
restriction of customer accounts and failure to promptly
unrestrict legitimate accounts violates California state
consumer protection laws and is an unfair business practice and
a breach of PayPal's User Agreement.
One action was initially filed in California state court,
designated as case no CV-808441. A similar action was also
filed in the U.S. District Court for the Northern District of
California in June 2002 (No.C-02-2777). In March 2002, PayPal
was sued in the U.S. District Court for the Northern District of
California (No.C-02-1227) in a purported class action alleging
that its restrictions of customer accounts and failure to
promptly unrestrict legitimate accounts violates federal and
state consumer protection and unfair business practice laws.
The two federal court actions were consolidated into a single
case, and the state court action was stayed pending developments
in the federal case.
In June 2004, the parties announced that they had reached a
proposed settlement. The settlement received approval from the
federal court on November 2, 2004, but the court's approval
could be appealed. In the settlement, the Company does not
acknowledge that any of the allegations in the case are true.
Under the terms of the settlement, certain PayPal account
holders will be eligible to receive payment from a settlement
fund of $9.25 million, less administrative costs and the amount
awarded to plaintiffs' counsel by the court. That sum will be
distributed to class members who have submitted timely claims in
accordance with the settlement's plan of allocation, which still
must be approved by the court. The parties expect that a plan
of allocation will be submitted to the court in the first
quarter of 2005.
The consolidated suit is styled "IN Re PayPal Litigation, case
no. 5:02-cv-01227-JF," filed in the United States District Court
for the Northern District of California, under Judge Jeremy
Fogel.
Representing the plaintiffs are:
(1) Patricia I. Avery, Wolf Popper LLP, 845 Third Avenue,
New York, NY 10022, Phone: 212-759-4600, Fax: 212-486-
2093, E-mail: pavery@wolfpopper.com
(2) A.J. De Bartolomeo, Eric H. Gibbs, Daniel C. Girard,
Rosemary M. Rivas, Ann Saponara of Girard Gibbs & De
Bartolomeo, 601 California Street, Suite 1400, San
Francisco, CA 4108, Phone: 415-981-4800, Fax: 415 981-
4846, E-mail: ajd@girardgibbs.com,
girardgibbs@girardgibbs.com, rmr@girardgibbs.com
(3) James A.N. Smith, The Davis Law Firm, 625 Market St
12FL, San Francisco, Ca 94105-3314, Phone: (415)-278-
1400, E-mail: jsmith@sfdavislaw.com
Representing the Company are David J. Brown, Mikayla Shawn
Connell, David S. Harris, Stephanie Jane Johnson, Molly Moriarty
Lane, Morgan, Lewis & Bockius LLP, One Market, Spear Street
Tower, San Francisco, CA 94105, Phone: 415-442-1222, Fax: 415-
442-1010, E-mail: djbrown@morganlewis.com,
msconnell@morganlewis.com, dsharris@morganlewis.com,
sjjohnson@morganlewis.com, mlane@morganlewis.com
PIZZA HUT: Certification, Summary Judgment For CA Lawsuit Sought
----------------------------------------------------------------
Plaintiff asked the United States District Court for the Central
District of California to certify an additional class, and to
grant summary judgment in a lawsuit filed against Pizza Hut,
Inc., entitled Coldiron v. Pizza Hut, Inc.
Plaintiff Ann Coldiron alleges that she and other current and
former Pizza Hut Restaurant General Managers ("RGM's") were
improperly classified as exempt employees under the U.S. Fair
Labor Standards Act ("FLSA"). There is also a pendent state law
claim, alleging that current and former RGM's in California were
misclassified under that state's law. Plaintiff seeks unpaid
overtime wages and penalties.
On May 5, 2004, the District Court granted conditional
certification of a nationwide class of RGM's under the FLSA
claim, providing notice to prospective class members and an
opportunity to join the class. Approximately 10 percent of the
eligible class members have joined the litigation. Once class
certification discovery is completed, the Company intends to
challenge the propriety of conditional class certification.
On July 20, 2004, the District Court granted summary judgment on
Ms. Coldiron's individual FLSA claim. The Company believes that
the District Court's summary judgment ruling in favor of Ms.
Coldiron is clearly erroneous under well-established legal
precedent. As of February 23, 2005, Ms. Coldiron has also filed
a motion to certify an additional class of current and former
California RGM's under California state law, a motion for
summary judgment on her individual state law claims and a motion
requesting that the District Court enter summary judgment on the
damages that FLSA class members would be due upon successful
prosecution of the class-wide litigation.
The suit is styled "Ann Coldiron v. Pizza Hut Inc., et al., case
no. 2:03-cv-05865-TJH-Mc," filed in the United States District
Court for the Central District of California under Judge Terry
J. Hatter.
Representing the plaintiffs are Bicvan T. Brown, Rex Hwang,
Justian Jusuf, Gregory G. Petersen, and H. Ernie Nishii of
Castle Petersen and Krause, 4675 MacArthur Court, Suite 1250
Newport Beach, CA 92660, Phone: 949-417-5600, E-mail:
justian@cpk-law.com; and Catherine Starr of Catherine Starr Law
Offices, 24325 Crenshaw Blvd, Suite 211, Torrance, CA 90505
Phone: 310-539-4806, Fax: 310-539-2454.
Representing the Company are:
(1) Andra Barmash Greene, Layn R. Phillips, Henry Shields,
Jr. and Bruce A. Wessell, Irell & Manella, 1800 Avenue
of the Stars, Suite 900, Los Angeles, CA 90067-4276,
Phone: 310-277-1010, fax: 310-203-7199, E-mail:
lphillips@irell.com, hshields@irell.com or
bwessell@irell.com
(2) George A McNamee, III, Richard S. Ruben, Ellen Laguerta
Uy, Paula Maxine Weber, Pillsbury Winthrop, 725 S
Figueroa St, Ste 2800, Los Angeles, CA 90017-5406,
Phone: 213-488-7100
PREFERRED HEALTH: Enters Consent Order For FTC Antitrust Charges
---------------------------------------------------------------
Under a consent order announced this week by the Federal Trade
Commission, Preferred Health Services, Inc. (Preferred Health),
a physician-hospital organization consisting of more than 100
doctors and the Oconee Memorial Hospital in northwestern South
Carolina, has been barred from collectively negotiating and
fixing the prices it charges payors on behalf of its doctor
members.
According to the FTC, Preferred Health acts as a "contracting
representative" for its member doctors, developing pricing
contracts that it then presents to health plans and other
payors. Because the organization's doctors make up approximately
70 percent of the independently practicing physicians in and
around Seneca, South Carolina, health plans must have access to
many of its members to provide services for consumers.
Accordingly, the FTC contends, the plans are forced to pay
higher, collectively negotiated prices for health care services.
"The FTC will continue to stand strongly for consumers when the
evidence shows that rival physicians have negotiated
collectively for the fees to charge health plans," said Susan
Creighton, Director of the FTC's Bureau of Competition. "Such
collective negotiation is not only illegal, but may lead to
higher health care costs and limited physician access."
Preferred Health is a physician-hospital organization made up of
more than 100 doctors and Onconee Memorial Hospital. The
organization does business in the Seneca, South Carolina area of
northwestern South Carolina. Under its operating model,
Preferred Health acts as a "contracting representative" for its
physician members in negotiating with health plans, and as a
"collective bargaining unit for the negotiation of managed care
contracts."
While Preferred Health claims that it operates as a "messenger
model" - an arrangement that does not facilitate horizontal
price agreements for its members - the FTC contends that it does
orchestrate such price agreements. In its complaint, the FTC
states that in negotiating contracts with payors, Preferred
Health uses a physician fee schedule created by its executive
director and approved by its board of directors. Doctors who are
part of Preferred Health sign a membership agreement that
automatically binds them to contracts using the fee schedule
approved by the board. If a health plan rejects the agreed-upon
fee schedule, the complaint states, the executive director,
under the supervision of the board, can negotiate a contract
with a "comparable" fee schedule. If this "comparable" fee
schedule is approved by the board and the organization's
doctors, the only way a physician member can reject the contract
is to leave the organization.
According to the complaint, Preferred Health's coordination of
collective agreements and other terms in dealing with health
plans, collective negotiations with health plans, and threatened
refusals to deal with health plans that resist its term are all
acts and practices that violate Section 5 of the FTC Act.
Further, the FTC contends that Preferred Health succeeded in
forcing many health plans to raise the fees paid to its member
doctors, thereby raising the cost of medical care to consumers
in the Seneca area. The FTC alleged that this joint fee
negotiation was done with no efficiency-enhancing integration
that could justify the joint negotiation of fees.
The Commission's consent order remedies the illegal conduct
alleged in the complaint by prohibiting Preferred Health from
entering into or facilitating any agreement between or among any
physicians:
(1) to negotiate with payors on any physician's behalf;
(2) to deal, or not to deal, or threaten not to deal with
payors;
(3) to designate the terms on which to deal with any payor;
or
(4) to refuse to deal individually with any payor, or to
deal with any payor only through an arrangement
involving Preferred Health.
To reinforce these provisions, the order also bars Preferred
Health from helping physicians exchange information regarding
whether, or on which terms, to deal with a payor, and contains
"fencing-in" relief that will be imposed for three years. This
fencing-in relief prohibits Preferred Health from acting as an
agent for any physicians in connection with health plan
contracting; or using an agent with respect to contracting.
As in other Commission orders of this type, the Preferred Health
order excludes certain types of arrangements from the general
bar on joint negotiations. For example, the organization would
not be barred from engaging in conduct that is reasonably
necessary to form or participate in legitimate joint contracting
arrangements among competing physicians in a "qualified risk-
sharing joint arrangement" or a "qualified clinically integrated
joint arrangement." Detailed information about these two types
of arrangements can be found in the consent order's analysis to
aid public comment on the Commission's Web site. For three years
after the order becomes final, Preferred Health is required to
notify the FTC before entering into these types of arrangements.
Finally, for three years after the bar on entering into
messenger arrangements ends, Preferred Health is required to
notify the FTC before entering into any arrangements to act as a
messenger, or as an agent on behalf of physicians, in
negotiating contracts with payors. It also requires Preferred
Health to distribute a copy of the complaint and order to its
participating physicians and to end at any payor's request its
existing contracts with that payor within one year after the
order becomes final. The order will expire in 20 years.
The Commission vote to place the consent agreement on the public
record for comment was 4-0-1, with Chairman Deborah Platt
Majoras not participating. An announcement regarding the
proposed consent agreement will be published in the Federal
Register shortly. The agreement will be subject to public
comment for 30 days, until March 30, 2005, after which the
Commission will decide whether to make it final. Comments should
be addressed to the FTC, Office of the Secretary, 600
Pennsylvania Avenue, N.W., Washington, DC 20580.
A consent agreement is for settlement purposes only and does not
constitute an admission of a law violation. When the Commission
issues a consent order on a final basis, it carries the force of
law with respect to future actions. Each violation of such an
order may result in a civil penalty of $11,000.
For more details, contact the FTC's Consumer Response Center,
Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580
or visit the Website: http://www.ftc.gov. Also contact Mitchell
J. Katz, Office of Public Affairs, by Phone: 202-326-2161 or
Steve Vieux, Bureau of Competition by Phone: 202-326-2306
TACO BELL: CA Court Refuses To Decertify ADA Violations Lawsuit
----------------------------------------------------------------
The United States District Court for the Northern District of
California refused to decertify the class in the lawsuit filed
against Taco Bell Corporation, styled "Moeller, et al. v. Taco
Bell Corp."
On August 4, 2003, plaintiffs filed an amended complaint that
alleges, among other things, that the Company has discriminated
against the class of people who use wheelchairs or scooters for
mobility by failing to make its approximately 220 Company-owned
restaurants in California (the "California Restaurants")
accessible to the class. Plaintiffs contend that queue rails
and other architectural and structural elements of the Taco Bell
restaurants relating to the path of travel and use of the
facilities by persons with mobility-related disabilities
(including parking spaces, ramps, counters, restroom facilities
and seating) do not comply with the U.S. Americans with
Disabilities Act (the "ADA"), the Unruh Civil Rights Act (the
"Unruh Act"), and the California Disabled Persons Act (the
"CDPA").
Plaintiffs have requested:
(1) an injunction from the District Court ordering Taco
Bell to comply with the ADA and its implementing
regulations;
(2) that the District Court declare Taco Bell in violation
of the ADA, the Unruh Act, and the CDPA; and
(3) monetary relief under the Unruh Act or CDPA.
Plaintiffs, on behalf of the class, are seeking the minimum
statutory damages per offense of either $4,000 under the Unruh
Act or $1,000 under the CDPA for each aggrieved member of the
class. Plaintiffs contend that there may be in excess of
100,000 individuals in the class. For themselves, the four
named plaintiffs have claimed aggregate minimum statutory
damages of no less than $16,000, but are expected to claim
greater amounts based on the number of Taco Bell outlets they
visited at which they claim to have suffered discrimination.
On February 23, 2004, the District Court granted Plaintiffs'
motion for class certification. The District Court certified a
Rule 23(b)(2) mandatory injunctive relief class of all
individuals with disabilities who use wheelchairs or electric
scooters for mobility who, at any time on or after December 17,
2001, were denied, or are currently being denied, on the basis
of disability, the full and equal enjoyment of the California
Restaurants. The class includes claims for injunctive relief and
minimum statutory damages.
Pursuant to the parties' agreement, on or about August 31, 2004,
the District Court ordered that the trial of this action be
bifurcated so that stage one will resolve Plaintiffs' claims for
equitable relief and stage two will resolve Plaintiffs' claims
for damages. The parties are currently proceeding with the
equitable relief stage of this action. During this stage, Taco
Bell filed a motion to partially decertify the class to exclude
from the Rule 23(b)(2) class claims for monetary damages. The
District Court denied the motion. Plaintiffs filed their own
motion for partial summary judgment as to liability relating to
a subset of the California Restaurants. The District Court
denied that motion as well.
TCF FINANCIAL: Discovery Proceeds in MN Employees Overtime Suit
---------------------------------------------------------------
Discovery is pending in the class action filed against TCF
Financial Corporation in the United States District Court,
District of Minnesota, by John Matthew Saxe, individually and on
behalf of other similarly situated employees.
The plaintiff, a former consumer loan officer for TCF National
Bank, alleges that he and other consumer lender employees were
not paid overtime compensation in violation of the Federal Fair
Labor Standards Act and the Minnesota Fair Labor Standards Act,
and seeks as damages unpaid back wages, an additional amount
equal to unpaid back wages as liquidated damages, costs and
attorneys' fees.
UNITED STATES: FTC Lodges Consumer Suit Due To Directory Scheme
---------------------------------------------------------------
The Federal Trade Commission has charged several Canadian-based
companies and their principals with targeting United States
consumers in a scheme to trick them into paying for unordered
business directories and listings in the directories. The
defendants allegedly scammed numerous small businesses and
nonprofit organizations out of millions of dollars by billing
them for directories and listings they did not order or
authorize. The FTC alleges that when consumers refused to pay
the invoices, the defendants turned them over to their
collection Company that masqueraded as an independent debt-
collection agency. This in-house collection Company proceeded to
harass consumers in an attempt to get them to pay.
According to the FTC's complaint, the defendants have made
unsolicited telemarketing calls to various businesses and
organizations across the United States since 2003. The
defendants tell consumers that they are merely verifying the
consumer's name, address, and telephone number for a listing in
a business directory. The defendants mislead consumers into
believing that someone in their organization previously
authorized the purchase of the directory and listing. If
consumers are reluctant to verify the listing information, or do
not believe that their Company has ordered the directory and
listing, the defendants assure them that they have a trial
period, typically 30 days, during which they can review the
directory at no cost. The defendants then record consumers
verifying their business information.
The complaint alleges that the defendants subsequently mail
invoices to consumers, typically billing them between $349 and
$459 for the Commutel Business Directory CD-ROM, and between
$249 and $399 for the American Business Solutions Directory CD-
ROM. Unlike the defendants' representation in the initial
telephone call, however, the invoices list the consumer with
whom the defendants spoke as the person who authorized the
order. After receiving these invoices, the FTC alleges, many
consumers realize that no one from their organization ordered a
directory listing. When consumers call to cancel the orders, the
defendants claim that the recorded verification call is a
"binding oral contract," and thus refuse to cancel.
In many instances, according to the complaint, when consumers
refuse to pay the invoices, they are referred to the defendants'
in-house collection Company, which allegedly harasses them with
frequent telephone calls, dunning notices, and threats to
initiate legal action and damage consumers' credit ratings. When
consumers advise these collecting defendants that they do not
owe anything because no one in their organization ordered the
business directory and/or listing, or because they were assured
that they had a trial period during which they could review the
directory, the collecting defendants nevertheless continue their
collection efforts. The FTC contends that many consumers
ultimately pay the invoices because they believe it is the only
way to stop the harassment.
The FTC's complaint names as defendants:
(1) Global Management Solutions;
(2) Commutel Marketing;
(3) American Business Solutions;
(4) Ty Nguyen, a.k.a. Hiep Manh Nguyen;
(5) Cory Kornelson;
(6) Byron Steczko;
(7) Kelly Nguyen, a.k.a. Phu Minh Huy Nguyen; and
(8) Minh Tam Vo
American Business Solutions and Commutel Marketing run
telemarketing operations out of Victoria, British Columbia, and
Montreal, Quebec. Global Management handles debt collection for
American Business Solutions and Commutel Marketing out of
Montreal, Quebec.
The complaint alleges that the defendants violated the FTC Act
by misrepresenting that:
(i) consumers previously authorized the purchase of a
business directory and/or directory listing;
(ii) consumers agreed to purchase a directory and/or
directory listing;
(iii) consumers have a right to review the directory on a
trial basis without incurring financial obligation; and
(iv) consumers owe money to American Business Solutions and
Commutel Marketing for the business directory and/or
directory listing.
The federal district court in Washington has granted an order
temporarily halting the defendants' business practices and
freezing their assets. A preliminary injunction hearing is
scheduled for March 15, 2005. In addition, on February 22, 2005,
the Victoria Police Department executed a criminal search
warrant against the American Business Solutions business
premises and arrested Kelly Nguyen, the Company president, on
fraud charges. The same day, the Canada Competition Bureau
executed a criminal search warrant against the Global Management
Solutions' and Commutel Marketing's business premises.
The FTC received significant assistance in this case from the
Victoria Police Department; the Canadian Competition Bureau in
Montreal, Quebec, and Vancouver, British Columbia; the
Canada Revenue Agency; the Royal Canadian Mounted Police; the
Business Practices and Consumer Protection Authority of British
Columbia; the U.S. Postal Inspection Service; the State of
Nevada Office of the Attorney General; the Washington State
Office of the Attorney General; and the Better Business Bureaus
of the Southland in California; Delaware; Detroit and Eastern
Michigan; Metro Washington, DC; and Eastern Pennsylvania.
The Commission vote to authorize staff to file the complaint was
5-0. The complaint was filed under seal in the U.S. District
Court, Western District of Washington, in Seattle, on February
15, 2005.
For more details, contact the FTC's Consumer Response Center,
Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580
or visit the Website: http://www.ftc.gov. Also contact, Brenda
Mack, Office of Public Affairs by Phone: 202-326-2182 or Charles
Harwood or Kathryn C. Decker, FTC's Northwest Region - Seattle
by Phone: 206-220-6350.
Asbestos Alert
ASBESTOS LITIGATION: Hardie Calls on NSW Councils to Lift Bans
--------------------------------------------------------------
James Hardie's appeal to NSW local councils to lift the bans on
the use of its products was met by mixed responses. Some
councilors were not convinced the signing of an initial
agreement to compensate asbestos victims was enough.
Hardie wrote to more than 140 councils saying that the heads of
agreement with the ACTU and the New South Wales Government
demonstrates its commitment to paying compensation to asbestos
victims.
So far, the Bega Valley Shire Council has lifted its ban on
Hardie products. It had previously joined the consumer boycott
of Hardie's products because of its appalling treatment of
people with asbestos related diseases.
The end of the consumer boycott acknowledges the decision by
Hardie to provide long term funding of asbestos related personal
injury claims for victims of former James Hardie companies.
Greens Councilor Keith Hughes who helped initiate the bans last
August lauded the consumer boycott, which he believes influenced
the decision of the Company.
"The provision of financial compensation for asbestos victims
demonstrates the capacity of consumers' buying power to
encourage companies to realize their financial results can
benefit from ethical and moral business practices," Councilor
Hughes said.
Meanwhile, Sydney Council is waiting for the ACTU to confirm
that the boycott can now be lifted.
Fairchild has already lifted the ban. However, Leichhardt,
Waverley and Baulkham Hills are among those who have not
followed suit.
Those unwilling to pull the pressure from the Company want the
final compensation deal signed first. That agreement is
contingent on the State Government cutting legal costs and
shareholder approval.
ASBESTOS LITIGATION: Bid for New MT Research Centers Gets Boost
---------------------------------------------------------------
US Sen. Max Baucus is soliciting support in Washington D.C. to
establish "new research centers in both Missoula and Libby,"
according to a news release. He expressed his intention to bring
more federal resources to the Libby Center for Asbestos Related
Disease, which he helped establish in 2000.
Sen. Baucus said the two research centers could help develop
long-term solutions for treating people with asbestosis and
related diseases.
Brad Black, director of the Libby facility, said CARD was not
involved in any way and in fact, did not know the details of the
senator's request.
Mr. Black said a group from Libby, including Dr. James Lockey,
who is the director of the Occupational and Environmental
Medicine Division of the University of Cincinnati, visited the
Montana delegation last year at their Washington, D.C., offices.
Dr. Lockey also serves on the CARD advisory Committee for
Asbestos Research.
"The idea was for a research center in Libby. Since that time,
they [congressional delegation] have not asked us anything. We
have an operational plan in place for the next 5 years," said
Mr. Black.
Researchers at the Libby Center have disagreed with those from
the University of Montana on activities and grants shifting to
Missoula rather than being based in Libby. CARD's own board of
directors has discussed the positions and roles of each entity
with the researchers.
CARD's plan is to have all research come through the Libby
facility so that the asbestos victims aren't overrun with
requests from various research organizations. With CARD
coordinating access and providing a database, some research
dollars and employment will be created locally.
More than a year ago, Dr. Lockey and about eight other
researchers volunteered to work with CARD as consultants to help
establish a research center in Libby that would be accessible to
researchers from around the globe.
"We owe it to the community to bring in as much [research]
through here as we can. Our advisors believe it should be an
open research group available to anyone in the country," said
Mr. Black.
The state Legislature passed a resolution in 2003 that urged the
state's congressional delegation "to pursue funding options from
federal sources to develop, build and maintain in Libby,
Montana, a center for the study of asbestos issues and the
treatment of illnesses related to tremolite asbestos."
Sen. Baucus told Mike Leavitt, the former EPA administrator and
new secretary for the Department of Health and Human Services,
that more must be done to help people in Libby afford health
care after being exposed to deadly asbestos fibers by W.R.
Grace.
At a hearing of the Senate Finance Committee, Sen. Baucus ranked
health care as one of the most pressing issues facing Libby
residents. He believes that although the CARD clinic has done a
"tremendous job," more must be done to bring to the residents
the health care they need and deserve.
ASBESTOS LITIGATION: Florida Looks at Asbestos Liability Reform
---------------------------------------------------------------
Fast on the heels of Texas' proposal for a medical criteria
measure, Florida lawmakers will now consider a bill that would
ban punitive damages in civil cases alleging asbestos or silica
injury.
State Rep. Joe Pickens, a Republican whose district consists of
Putnam County and portions of several adjacent counties,
introduced the Asbestos and Silica Compensation Fairness Act of
2005, also known as H.B. 1019 last week.
Aside from banning punitive damages, the measure would require
that claimants meet specific medical criteria before being
permitted to pursue a case. The measure also provides for
potential collateral source offsets in settlements and
judgments.
Ohio is the only state that has set statewide requirement for
medical conditions before pursuing claims. Last year in August,
it established medical criteria for civil actions alleging
asbestos or mixed dust injury.
As reported in last Friday's edition of the Class Action
Reporter, Texas Rep. Joe Nixon introduced H.B. 8, whose purpose
is to "protect the right of people with impairing asbestos-
related and silica-related injuries to pursue their claims for
compensation under our tort principles in a fair and efficient
manner," while "preventing scarce judicial and litigant
resources from being misdirected by the claims of individuals
exposed to asbestos or silica but having no functional or
physical impairment from asbestos-related or silica-related
disease."
This proposed change in the Texas legal system was prompted by
lawmakers and business leaders aiming to stop the flood of
"frivolous lawsuits" in the state's asbestos litigation system.
ASBESTOS LITIGATION: Study Says Glaucoma Possibly Next Asbestos
---------------------------------------------------------------
Glaucoma could become the next long-tail disease to hit
employer's liability insurers. New medical research done in
Japan has established a link between increased risk of
developing this eye disease and long-term computer use.
Published first in the December 2004 issue of the Journal of
Environmental & Community Health, the research contended however
that further study is required to confirm the link and ascertain
the extent of the problem.
The researchers came to this shocking conclusion when they
tested 9,000 workers employed in the electronic and steel
industries. They discovered however, that only those with myopia
or shortsightedness are at increased risk. Surprisingly, it was
noted that those with normal sight had the opposite effect --
the risk actually decreased as computer use increased.
About 5% of the employees surveyed had visual field
abnormalities, one of the symptoms of glaucoma. Those who had
suspected glaucoma comprised a third of this population or 1.8%
of the total, which is almost double the figure of 1% for the
entire population at large.
Smoking and high blood pressure are other risk factors. The risk
increases over time, with those who have used computers for 20
or more years at the greatest risk.
With the increase in display screen use over the past decade,
the findings raise the possibility that glaucoma could become a
long-tail disease issue for insurers in the future.
It is estimated that about 500,000 people in England & Wales
currently suffer from glaucoma. It is caused by a build-up of
pressure on the optic nerve and it is the leading cause of
preventable blindness. If detected early enough it can be
treated with drops, laser or conventional surgery.
Claims could range in value from GBP1,250, where the problem is
detected early and successfully treated, to several hundred
thousand pounds, where the condition causes blindness and the
employee is unable to return to work.
Experience with asbestos has shown that employers can be held
liable for breaches that occurred decades ago. Dating as far
back as the 1930s, claims for asbestos exposure continue to be
brought successfully for breaches of the 1937 Factories Act. The
Courts have in a number of cases found employers liable under
the 1937 Act, notwithstanding the fact that the causal link
between moderate or mild asbestos exposure and conditions such
as mesothelioma and lung cancer were not identified until the
1960s.
According to the Workplace (Display Screen Equipment)
Regulations supported by HSE Guidance L26, employers are to make
workstation assessments regularly. Among the factors to check
are quality of screen images, room lighting, and implementation
of employee breaks.
Free eye tests must also be provided at the employee's request.
However, visual examination only detects 25% of glaucomas, so an
employer will not be able to rely on a satisfactory test result
if the workstation is found to be unacceptable.
If the link between heavy screen use and glaucoma is confirmed,
there will be difficult questions to be dealt with in individual
cases. It is still too soon to say with any certainty what
action will be required to avoid the problem.
Claims for exposure today might not be made for 20 or more
years, so it is important to ensure that there is an adequate
system in place to ensure documents are retained and details of
the relevant insurer and policy numbers are kept.
ASBESTOS LITIGATION: SDG&E Gets Subpoena for '01 Demolition Case
----------------------------------------------------------------
San Diego Gas & Electric Co. and the County of San Diego are
continuing to negotiate the remaining terms of a settlement
relating to alleged environmental law violations by SDG&E and
its contractors in connection with the abatement of asbestos-
containing materials during the demolition of a natural gas
storage facility in 2001.
SDG&E expects that any settlement with the County would involve
payments by SDG&E of less than US$750,000.
In January 2005, Sempra Energy, which distributes gas through
its subsidiary SDG&E, received a grand jury subpoena from the
United States Attorney's Office in San Diego seeking documents
related to this matter. The companies are fully cooperating with
the investigation.
The Southern California-based Company is a regulated utility
that serves 1.3 million electricity customers and 800,000
natural gas customers in San Diego County and a portion of
southern Orange County.
ASBESTOS LITIGATION: DaimlerChrysler Faces 29,000 Injury Suits
--------------------------------------------------------------
Carmaker DaimlerChrysler AG (NYSE: DCX) has experienced a
growing number of lawsuits that seek compensatory and punitive
damages for illnesses alleged to result from direct and indirect
exposure to asbestos used in some vehicle components,
principally brake pads. The number of claims in these lawsuits
increased from about 14,000 at the end of 2001 to about 29,000
at the end of 2004.
According to the filing the Stuttgart, Germany-based Company
submitted to the US Securities and Exchange Commission, these
suits name many other corporate defendants and may also include
claims of exposure to a variety of non-automotive asbestos
products. A single lawsuit may include claims by multiple
plaintiffs alleging illness in the form of asbestosis,
mesothelioma or other illness.
In the majority of these cases, plaintiffs do not specify their
illness and provide little detail about their alleged exposure
to components in its vehicles. Some plaintiffs do not exhibit
current illness, but seek recovery based on potential future
illness.
The Company believes that many of these lawsuits involve
unsubstantiated illnesses or assert only tenuous connections
with components in its vehicles, and that there is credible
scientific evidence to support the dismissal of many of these
claims.
Although DaimlerChrysler's expenditures to date in connection
with such claims have not been material to its financial
condition, it is possible that the number of these lawsuits will
continue to grow, especially those alleging life-threatening
illness, and that the Company could incur significant costs in
the future in resolving these lawsuits.
Formed by the US$37 billion acquisition of Chrysler by Germany's
Daimler-Benz in 1998, the Company makes about 4.3 million
vehicles a year. Chrysler's brands include Dodge, Jeep, and, of
course, Chrysler vehicles; the Mercedes brand includes luxury
sedans, commercial vehicles, and SUVs.
ASBESTOS LITIGATION: James Hardie Denies Newspaper's Allegations
----------------------------------------------------------------
In response to an article that appeared in an Australian
newspaper concerning its exposure to US claims, building firm
James Hardie Industries released a statement asserting that the
story significantly misrepresented the facts.
The filing submitted to the Securities and Exchange Commission
bares Hardie's denial of the issues in the article published in
The Australian newspaper on Feb. 22, 2005, which discussed the
cases pending against the Company in a Californian court.
James Hardie said that it has never manufactured products
containing asbestos in the US nor does it anticipate receiving a
significant number of future legitimate claims from the country.
This is said to correspond with the report outlined by its Chief
Financial Executive, Russell Chenu, during the Company's third
quarter results presentation on Feb. 14, 2005.
The Company also stated that the few asbestos-related cases
pending in California naming James Hardie entities are suits
only against its US subsidiaries, which have never used
asbestos. It affirmed its confidence that any such cases will be
dismissed as either time-barred or wholly lacking in any
evidence of exposure to any asbestos-related product
manufactured or sold by any James Hardie entity.
The Company categorically denied that it recently settled a US
case. Any current compensation claims, from Australia or
overseas, against its former subsidiary companies are received
and assessed by the Medical Research and Compensation
Foundation, not by the Company. It was the MRCF that settled the
case. Neither the Company nor any of its subsidiaries was a
party to this action and it said it did not contribute towards
any settlement.
Likewise, Hardie refutes the claims made by the same newspaper
on Feb. 19, 2005 that the Company is lobbying, directly or
indirectly, the US Government regarding the handling of asbestos
compensation claims.
At the moment, Hardie continues to work with the NSW Government,
ACTU and other parties towards establishing a long-term
financial compensation agreement for all legitimate Australian
claimants.
ASBESTOS LITIGATION: Hanson Faces 135,750 Claimants at Year-end
---------------------------------------------------------------
London-based building materials group Hanson PLC (NYSE: HAN)
stated in the filing it submitted to the Securities and Exchange
Commission that several of the Company's US subsidiaries are
defendants in a number of lawsuits alleging bodily injury due to
exposure to asbestos-containing products before 1984. At the end
of 2004, outstanding claimants totaled about 135,750.
In the US, claimants can often file claims without illness or
product identification. In the absence to date of federal
reform, a number of states have introduced reform measures.
Despite these state level reforms, it continues to believe that
the outstanding number of claimants is more likely to rise than
fall in the near term.
New claimants were 18,700 for 2004 compared to the 28,900 new
claimants received in 2003. The gross cost of resolving asbestos
claims in 2004 was US$59.3 million including legal fees of
US$27.4 million. The net cost of asbestos for the year after
insurance was US$12.8 million.
Of the claimants whose cases were resolved during 2004, about
80% were dismissed without payment. The Company's approach to
accounting for the asbestos claims against these US subsidiaries
is to provide for those costs of resolution which are both
probable and reliably estimable.
The costs of resolving possible claims are accounted for as
contingent liabilities. At present, based on detailed analysis
and various assumptions, the provision for those costs that are
both probable and reliably estimable equates to about eight
years of gross cost at current levels.
In total, the full year increase in the provision for future
asbestos costs was US$222 million, taking the gross provision to
US$480 million before the impact of discounting, which has
reduced the provision by US$79 million. Offsetting this is about
US$26 million of remaining insurance cover.
The Company's assumption at this stage is that most of this
remaining insurance will be used over the next four years. It
continues to use a combination of negotiation and litigation to
maximize this insurance cover. The net cost of resolution is
allowable for US tax at a rate of 39%. Going forward, therefore,
a gross cost of US$60 million is equivalent to about US$36
million post-tax, or GBP20 million, compared to the group's
operating cash flow of GBP559.1 million, including joint-
ventures and associates and before exceptional items.
Hanson is one of the world's leading heavy building materials
companies. It is the largest producer of aggregates and one of
the largest producers of concrete products, clay bricks and
ready-mixed concrete in the world. Its other principal products
include asphalt and concrete roof tiles and its operations are
in North America, the UK, Australia, Continental Europe and Asia
Pacific.
ASBESTOS LITIGATION: Cyprus Agency Denies Illegal Removal Claims
----------------------------------------------------------------
Cyprus Electricity Authority spokesman Costas Gavrielides
vehemently denied accusations by the Green Party that it was
using untrained staff to undertake removal of asbestos material
from a substation without a disposal permit.
The Greens claimed that men working on the site on Mikonos
Street in Nicosia received no specialized training to deal with
the potentially carcinogenic material.
Mr. Gavrielides said that the Labor Ministry had approved the
contractor hired to do the job and the method used to remove
asbestos from the building before work began. "Everything has
been approved by the Labor Ministry first," he said.
Regarding claims that the authority had not secured a license to
dispose of the asbestos material, Mr. Gavrielides said, "In
agreement with the ministry, the arrangement is that the
contractor stores the material until the Labor Ministry tells
him what to do with it. There is no issue of us needing to
require a disposal permit."
The spokesman, evidently vexed by the accusations leveled
against the authority, added, "That is not the proper procedure,
and they should find out first before making claims."
ASBESTOS LITIGATION: Israel Minister Warns Against Razing Homes
---------------------------------------------------------------
With the mention of severe health risks to the public, newly
appointed Israel Environment Minister Shalom Simhon warned
against the disturbance of tons of asbestos if Israel pushes
through with its plans to demolish settlers' homes prior to
handing over evacuated Gaza and West Bank settlements to the
Palestinian Authority.
Prime Minister Ariel Sharon had called for a special meeting on
the issue, indicating that a change in the plan may take place.
Warning of potential ecological damage, Mr. Simhon cited
destruction to ground aquifers and to public health as likely
consequences. He described asbestos as a highly carcinogenic
material that cannot be recycled and liable to cause "real
damage to the citizens of Israel." He added, "We must fervently
hope that the Palestinians agree to us leaving the houses
intact."
Prime Minister Sharon originally added demolition of the
structures as an amendment to his plan after the Likud
referendum voted against the disengagement. The government
decision of June 2004 included the demolition of the structures.
The Palestinian Authority has said it prefers to use the
evacuated areas for high-density inhabitation. However, it
requested that Israel remove rubble from any demolition and not
leave behind environmental pollution.
Vice Premier Shimon Peres is urging Prime Minister Sharon to
leave the buildings intact, and is trying to find an
international third party to buy the properties.
Treasury budgets director Kobi Haber reported that the overall
budget for the disengagement now stands at NIS6.5 billion after
the Knesset Finance Committee increased the compensation to
settlers by some NIS1.2 billion. This includes NIS4.3 billion
for civilian needs, mainly compensation payments, and NIS2.1
billion for military needs. The payments will be made over three
years, from 2005 to 2007.
Participants of that meeting believed that the defense
establishment is leaning towards leaving the buildings intact.
ASBESTOS LITIGATION: Laborer Set for MS Trial V. 64 Defendants
--------------------------------------------------------------
Howard May Sr. and his wife, Jean, are preparing for trial March
7 against 64 defendants in an asbestos-related case seeking at
least half a million dollars in compensation.
Filed last year in Madison County, the case is represented by
Edwardsville Attorney Randy Gori of Goldenberg, Miller, Heller,
& Antognoli. Aside from the US$450,000 plus punitive damages
being sought by Howard May, Jean May is also asking for at least
US$50,000 for loss of consortium, companionship, society and
services of her husband.
Howard May, an Illinois laborer, was diagnosed with mesothelioma
on Dec. 18, 2003. He believes he was exposed to large amounts of
asbestos fibers from products he handled as he worked throughout
the state. As a result of his disease, he had to undergo
expensive medical treatment and he constantly suffers from
tremendous physical pain and mental anguish.
The Mays allege that the defendants did not properly care for
Howard's safety. Some defendants are accused of breaching their
duty to preserve material evidence by destroying documents and
information that could be used in potential civil litigation.
The complaint states further that May has been hindered and
prevented from pursuing his normal course of employment, thereby
losing large sums of money, which he otherwise would have
earned.
If the case goes to trial, asbestos chief, Circuit Judge Daniel
Stack will preside over the case.
ASBESTOS LITIGATION: ACT Asbestos Awareness Campaign Commences
--------------------------------------------------------------
The Australian Capital Territory launched a major campaign
earlier this week aimed at raising community awareness of
asbestos and at new legislation obliging people to pass on
knowledge of its presence. It is estimated three in four houses
and buildings in the ACT contain asbestos in some form, and
almost every home in the territory built before 1988 would
contain the material.
Local television identity Don Burke is the face of the "Asbestos
Awareness: Helping Everyone Breathe Easier" campaign. It comes
into force on April 4 and will require homeowners and occupiers
to inform in writing any prospective tenants or buyers,
tradespeople and maintenance workers of any asbestos in the
premises.
It reinforces the message that materials containing asbestos do
not pose a health risk if they are maintained in good condition
and left alone, but become dangerous when they deteriorate or
are disturbed by activity such as building or renovating.
The new laws initially do not require the owner or occupier to
obtain an inspection report or to provide information beyond
what he or she currently knows. They do not have to discover
information about the presence, location or condition of
asbestos at their premises.
However, that is expected to change from January 16 next year
when a full asbestos audit will be required for all homes sold
or renovated in the ACT. Owners and occupiers will have to
obtain information about asbestos at their premises and give it
to a person undertaking high-risk activities at their premises
such as a builder or renovator. They would also have to obtain
an asbestos inspection report for property being offered for
sale.
This endeavor will be followed next year with the introduction
of fines for property owners and occupiers who do not comply
with the new laws. Failure to pass on their knowledge about
asbestos in their premises could lead to a fine of up to $1,000
for individuals and up to $5,000 for commercial entities.
ACT Asbestos Task Force chairman Bill Wood said, "The ACT
community has a good understanding of health risks related to
asbestos, however very few people are aware that they may have
building materials containing asbestos in their home or
workplace."
The task force is due to report to the Government by August 1 on
the extent and impact of asbestos in the ACT, and make
recommendations.
Property Council of Australia ACT executive director Catherine
Carter said the council was working with the Government to
resolve a major problem it saw in the legislation, which was the
legal ramifications of the phrase "duty of care" being used to
describe the obligations property owners had to inform
interested parties about the presence of asbestos in their
building.
ASBESTOS LITIGATION: 3M Faces Injury Claims from Respirators
-------------------------------------------------------------
St. Paul, MN-based 3M Company (NYSE: MMM) disclosed that the
vast majority of the lawsuits and claims resolved by and
currently pending against it allege use of some of the Company's
mask and respirator products. These claims seek damages for
personal injury from workplace exposures to asbestos, silica,
coal or other occupational dusts, found in products manufactured
by other defendants or generally in the workplace.
According to the filing it submitted to the Securities and
Exchange Commission, in many of these lawsuits and claims, the
Company is named as a defendant with multiple co-defendants
where no product the Company manufactured is involved or where
the Company is determined not to have manufactured the products
identified by the plaintiffs.
The Company's vigorous defense of this litigation has resulted
in:
(1) Dismissals of many lawsuits without any payment by the
Company;
(2) An average settlement value of less than US$1,000 per
claimant for all of the claims and lawsuits that the
Company has resolved, including those dismissed without
payment; and
(3) Jury verdicts for the Company in six of the seven cases
tried to verdict, and an appellate reversal of one jury
verdict adverse to the Company.
As previously reported in the Class Action Reporter edition on
Jan. 28, 2005, the Mississippi Supreme Court reversed the
US$22.5 million jury verdict adverse to the Company that was
returned in Holmes County, Mississippi, in 2001. The Supreme
Court ruled, in part, that the plaintiffs failed to prove any
claim against the Company's respiratory products and in effect
that the trial judge should not have submitted the case to the
jury in the first place.
On Feb. 3, 2005, the plaintiffs filed a petition for rehearing
with the Mississippi Supreme Court to which the Company opposed.
Plaintiffs have asserted specific dollar claims for damages in
about 57% of the 10,967 lawsuits that were pending against the
Company at the end of 2004 in all jurisdictions. A majority of
states restrict or prohibit specifying damages in tort cases
such as these, and most of the remaining jurisdictions do not
require such specification.
The Company has more than 25 years of experience in defending
litigation of this type and has resolved the claims of over
340,000 individuals with a cumulative average settlement amount
of less than US$1,000 per claimant.
As a result of the caseload and the costs of aggressively
defending itself, the Company made payments of US$81 million in
2004 and increased its reserves in the fourth quarter of 2004
for the respirator mask/asbestos liabilities by US$40 million to
US$248 million. No liability had been previously recorded
regarding the now-reversed Mississippi jury verdict and no
liability has been recorded regarding the pending action brought
by the West Virginia Attorney General.
As of Dec. 31, 2004, the Company had receivables for insurance
recoveries related to the respirator mask/asbestos litigation of
US$464 million. The Company increased its receivables in the
fourth quarter of 2004 for insurance recoveries related to
respirator mask/asbestos litigation by US$20 million and
received payments from insurers and one reinsurer of US$4
million in the third quarter of 2004.
ASBESTOS LITIGATION: Appeals Court Junks Case V. GMC, Saberhagen
----------------------------------------------------------------
The Court of Appeals of Washington on Feb. 7, 2005 dismissed the
product liability claim filed by the son of a former truck
mechanic against numerous defendants for failing to file within
three years from the victim's death. The case was brought up on
appeal from the verdict of Hon. Sharon Armstrong of the Superior
Court of King County.
Court documents reveal that Randall Clare, as son and
representative of the estate of Clifford Clare, brought the
lawsuit with Case No. 52871-8-I before Hon. Kenneth Grosse of
the appeals court. The defendants included Saberhagen Holdings,
Inc. and General Motors Corporation.
Matthew Phineas Bergman, from the Law Offices of Matthew
Bergman, of Vashon, WA, David S Frockt, from Bergman & Frockt
PLLC, of Seattle, WA, and Meg Pageler, Attorney at Law, Seattle,
WA, represented the appellant.
Timothy Kost Thorson, of Carney Badley Spellman, Seattle, WA,
Bradford Allen Patrick, of Fowler White Boggs Banker, Tampa, FL,
and Theodore Lee Preg, Preg O Donnell & Gillett PLLC, of
Seattle, WA, represented the respondents.
The Appeals Court wrote that by the time of his father's death,
Randall L. Clare either knew or should have known of the
essential elements of the product liability, negligence,
wrongful death, and survivorship claims arising from that death.
Clifford S. Clare had a number of jobs during his life. Mainly
he had been a truck mechanic, but he also worked as a steel
Company welding assistant and a home reconstruction worker. In
June 1996, he was diagnosed with metastatic mesothelioma. He
died of the disease within six months of the diagnosis.
Before Clare died, his physician noted in Clare's medical
records that Clare worked as a truck mechanic for about 30
years, including brake repair, which likely exposed him to
asbestos dust. The physician also noted there was no other
significant overt asbestos exposure.
On October 16, 2002, almost six years after Clare's death, Vola
I. Clare, as surviving spouse and the prospective personal
representative of Clare's estate, filed a complaint against a
number of defendants, including Saberhagen Holdings, Inc. Later
amendments to the complaint changed the plaintiff to Randall L.
Clare as personal representative, and added General Motors
Corporation as a defendant.
The trial court granted summary judgment to GMC and Saberhagen
after it determined that reasonable minds could reach only one
conclusion with respect to application of the statute of
limitations, despite potential application of the discovery
rule.
Randall L. Clare contended that proper application of the
discovery rule should result in a holding that the claims were
not time barred.
Since the action was not filed for a period of almost six years,
the claims are barred by the applicable three-year statute of
limitations.
ASBESTOS LITIGATION: CG&E, PSI Pending Lawsuits Increase to 100
---------------------------------------------------------------
Subsidiaries of energy holding Company Cinergy, Cincinnati Gas &
Electric Co. and PSI Inc. have been named as defendants or co-
defendants in lawsuits related to asbestos at their electric
generating stations. Currently, there are about 100 pending
lawsuits. In these lawsuits, plaintiffs claim to have been
exposed to asbestos-containing products in the course of their
work at the CG&E and PSI generating stations.
The plaintiffs further claim that as the property owner of the
generating stations, CG&E and PSI should be held liable for
their injuries and illnesses based on an alleged duty to warn
and protect them from any asbestos exposure. A majority of the
lawsuits to date have been brought against PSI.
Of these lawsuits, one case filed against PSI has been tried to
verdict. The jury returned a verdict against PSI in the amount
of about US$500,000 on a negligence claim and a verdict for PSI
on punitive damages. PSI received an adverse ruling in its
initial appeal of the negligence claim verdict, but the Indiana
Supreme Court accepted the transfer of the case, and heard oral
argument in June 2004.
In addition, PSI has settled a number of other lawsuits for
amounts, which neither individually nor in the aggregate, are
material to PSI's financial position or results of operations.
At this time, CG&E and PSI are not able to predict the ultimate
outcome of these lawsuits or the impact on CG&E's and PSI's
financial position or results of operations.
Cinergy Corp. was created on October 24, 1994, from the
combination of The Cincinnati Gas & Electric Company and PSI
Energy, Inc., the largest electric utility in Indiana. Based in
Cincinnati, Ohio, Cinergy Corp. (NYSE:CIN), is one of the
leading diversified energy companies in the U.S.
ASBESTOS LITIGATION: Allstate Corp Raises Reserves to US$1.46Bil
----------------------------------------------------------------
The Allstate Corporation (NYSE: ALL), the second largest US
personal lines insurer, divulged in its latest filing to the
Securities and Exchange Commission that its reserves for
asbestos claims increased from US$1.08 billion to US$1.46
billion, net of reinsurance recoverables of US$963 million and
US$504 million at Dec. 31, 2004 and 2003, respectively.
Reserves for environmental claims were US$232 million and US$257
million, net of reinsurance recoverables of US$49 million and
US$58 million at Dec. 31, 2004 and 2003, respectively. About 62%
and 60% of the total net asbestos and environmental reserves at
Dec. 31, 2004 and 2003, respectively, were for incurred but not
reported estimated losses.
Headquartered in Northbrook, IL, the Company's exposure to
asbestos, environmental and other discontinued lines claims
arises principally from assumed reinsurance coverage written
during the 1960s through the mid-1980s, including reinsurance on
primary insurance written on large US companies, and from direct
excess insurance written from 1972 through 1985, including
substantial excess general liability coverages on Fortune 500
companies. Additional exposure stems from direct primary
commercial insurance written during the 1960s through the mid-
1980s.
In 2004, Allstate decreased its reserve estimates for prior
years. Favorable reserve estimates were due to Allstate
Protection auto injury severity and late reported loss
development that was less than what was anticipated in previous
reserve estimates. Decreased reserve reestimates for Allstate
Protection more than offset increased estimates of losses
primarily related to asbestos and environmental liabilities.
Last year, the underwriting loss was primarily due to
reestimates of asbestos reserves totaling US$463 million, and an
increase of US$136 million in the allowance for future
uncollectible reinsurance. The cost of administering claims
settlements totaled US$22 million, US$23 million and US$39
million for the years ended Dec. 31, 2004, 2003 and 2002,
respectively.
Reserve additions for asbestos in 2004, totaling US$463 million,
were for products-related coverage. Increased claim activity
over prior estimates has also resulted in an increased estimate
for future claims reported.
These trends are consistent with the trends of other carriers in
the industry. During 2004, reserve reestimates, including an
increase in the allowance for future uncollectible reinsurance
recoverables, included US$150 million for other discontinued
lines exposures in run-off, and US$22 million related to the
cost of administering claim settlements and miscellaneous run-
off exposures.
The Company's three-year net average survival ratio excluding
commutations, policy buy-backs, and settlement agreements is
viewed to be another measure of current reserve adequacy. Now at
28.4 years for asbestos as of Dec. 31, 2004, the Company
considers it to represent a strong reserve position. A one-year
increase in the three-year average asbestos survival ratio at
Dec. 31, 2004 would require an after-tax increase in reserves of
about US$34 million.
Allstate Financial sells life insurance, retirement and
investment products to individual and institutional customers.
Individual retail products include traditional life, interest-
sensitive life, supplemental accident and health insurance,
variable life, long-term care insurance, variable and fixed
annuities and funding agreements.
ASBESTOS LITIGATION: UIC, Detroit Stoker Named in 21,098 Claims
---------------------------------------------------------------
United Industrial (NYSE: UIC) and Detroit Stoker Company, a
wholly owned subsidiary of United Industrial, have been named as
defendants in asbestos-related personal injury litigation. As of
Sept. 30, 2004, United Industrial and Detroit Stoker were named
in asbestos litigation pending in Arkansas, Illinois, Michigan,
Minnesota, Mississippi and North Dakota. There were about 21,098
pending claims, compared to about 19,161 pending claims as of
Dec. 31, 2003.
On July 2, 2004, a single case containing 154 claims was filed
against Detroit Stoker in Arkansas, which was recently named as
a defendant in two Arkansas cases alleging personal injuries to
one and about 199 plaintiffs, respectively, as a result of
asbestos, silica and/or refactory ceramic fiber exposure. The
pleadings name about 32 and 68 defendants, respectively, and
include no allegations specific to Detroit Stoker.
As of the date of this filing, no asbestos claims against United
Industrial or Detroit Stoker have gone to trial and some
previously pending claims have been dismissed with or without
prejudice or settled.
The Hunt Valley, MD-based Company recorded an undiscounted
liability for asbestos related matters through 2012 in the
amount of US$31,334,000 at Sept. 30, 2004, including estimated
damages and defense costs.
The Company denies having fabricated, milled, mined,
manufactured or marketed asbestos. It also denies having made or
sold insulation products or other construction materials that
have been identified as the primary cause of asbestos-related
disease in the vast majority of claimants. Rather, Detroit
Stoker made several products, some of the parts and components
of which used asbestos-containing material fabricated and
provided by third parties. Detroit Stoker stopped the use of
asbestos-containing materials in its products in 1981.
Management continues to believe that a majority of the claimants
in pending cases will not be able to demonstrate that they have
been exposed to the Company's and Detroit Stoker's asbestos-
containing products or suffered any compensable loss as a result
of such exposure.
The Company recorded an estimated insurance recovery as of Dec.
31, 2002, of US$20,343,000 reflecting the estimate determined to
be probable of being available to mitigate the Company's and
Detroit Stoker's potential asbestos liability through 2012.
ASBESTOS LITIGATION: U.S. Steel Continues Defense V. 500 Suits
--------------------------------------------------------------
U. S. Steel Corporation (NYSE: X) is a defendant in about 500
active cases, involving about 11,000 plaintiffs. Many of these
cases involve multiple defendants. More than 10,300, or about 94
percent, of these claims are pending in jurisdictions which
permit filings with massive numbers of plaintiffs.
According to the filing to the Securities and Exchange
Commission, based upon the Company's experience in such cases,
it believes that the actual number of plaintiffs who ultimately
assert claims against it will likely be a small fraction of the
total number of plaintiffs.
These claims fall into three major groups:
(1) Claims made under certain federal and general maritime
laws by employees of the Great Lakes Fleet or
Intercoastal Fleet, former operations of U. S. Steel;
(2) Claims made by persons who allegedly were exposed to
asbestos at U. S. Steel facilities; and
(3) Claims made by industrial workers allegedly exposed to
products formerly manufactured by U. S. Steel.
While the Pittsburgh, PA-based steelmaker has excess casualty
insurance, these policies have multimillion-dollar self-insured
retentions. To date, the Company has not received any payments
under these policies relating to asbestos claims. In most cases,
this excess casualty insurance is the only insurance applicable
to asbestos claims.
Based on alleged exposure to asbestos, these cases cite a
variety of respiratory and other diseases of which 215
plaintiffs claim to be suffering from mesothelioma. In many of
these cases, the plaintiffs have been unable to establish any
causal relationship to U. S. Steel or its products or premises.
In addition, the plaintiffs have been unable to demonstrate that
they have suffered any identifiable injury or compensable loss
at all; that any injuries that they have incurred did in fact
result from alleged exposure to asbestos; or that such alleged
exposure was in any way related to U. S. Steel or its products
or premises.
In each of these cases, the complaints are filed against
numerous named defendants and generally do not contain
allegations regarding specific monetary damages sought. About 89
percent of the cases against U. S. Steel stated that the damages
sought exceeded the amount required to establish jurisdiction of
the court in which the case was filed. Jurisdictional amounts
generally range from US$25,000 to US$75,000.
The Company also stated that it has been subject to a total of
about 34,000 asbestos claims over the past 13 years that have
been administratively dismissed or are inactive due to the
failure of the plaintiffs to present any medical evidence
supporting their claims. Over the last several years, the total
number of pending claims has generally declined.
U. S. Steel does not consider the amount of damages alleged to
be relevant in assessing its potential exposure to asbestos
liabilities. The Company aggressively pursues grounds for the
dismissal of U. S. Steel from pending cases and litigates cases
to verdict where it believes litigation is appropriate. It also
makes efforts to settle appropriate cases, especially
mesothelioma cases, for reasonable, and frequently nominal,
amounts.
ASBESTOS LITIGATION: American Standard Resolves 25,389 Claims
-------------------------------------------------------------
American Standard Companies Inc. (NYSE: ASD) stated that from
receipt of its first asbestos claim more than twenty years ago
to Dec. 31, 2004, the Company has resolved 25,389 claims, and
settlements of about US$51 million have been made, for an
average payment per claim of US$2,003.
American Standard Companies is a leading manufacturer of air-
conditioning systems, plumbing products, and automotive braking
systems.
The Piscataway, NJ-based Company has been named as a defendant
in numerous asbestos-related personal injury claims arising
primarily from sales of boilers and railroad brake shoes. In
these lawsuits, the Company is usually named as one of a large
group of defendants, often in excess of one hundred companies.
Many of these lawsuits involve multiple claimants, do not
specifically identify the injury or disease for which damages
are sought and do not allege a connection between any Company
product and a claimed injury or disease. As a result, numerous
lawsuits have been placed and may remain on inactive or deferred
dockets, which some jurisdictions have established.
In the fourth quarter of 2004, the Company retained Dr. Francine
F. Rabinovitz of Hamilton, Rabinovitz & Alschuler, Inc. to
assist it in calculating an estimate of the Company's total
liability for pending and unasserted potential future asbestos-
related claims.
Dr. Rabinovitz calculated a total estimated liability for the
Company to resolve all pending and unasserted potential future
claims through 2055, which is the reasonable best estimate of
the time it will take to resolve asbestos-related claims, of
US$699 million. This amount is on a pre-tax basis, not
discounted for the time-value of money, and excludes legal fees.
Based on the analysis, in the fourth quarter of 2004 the Company
increased its recorded liability for asbestos claims by US$616
million, from US$83 million to US$699 million.
As of Dec. 31, 2004, the Company recorded an increase in the
receivable for probable asbestos-related insurance recoveries of
US$309 million. This represents amounts due to the Company for
previously settled and paid claims and the probable
reimbursements relating to its estimated liability for pending
and future claims.
In the 4th quarter of 2004, the Company recorded a non-cash
charge to income of US$307 million or US$188 million after tax,
which is the difference between the amount by which the Company
increased its total estimated liability for pending and
projected future asbestos-related claims and the amount the
Company expects to recover from insurers with respect to that
increased liability. This difference is due primarily to gaps in
coverage, deductibles associated with the policies and
settlements for less than the full coverage limits with carriers
in insolvency proceedings and carriers with questionable credit-
worthiness.
In February 2005, the Company reached agreement with Equitas,
the London-based entity responsible for certain pre-1993 Lloyd's
of London policies in its insurance coverage, in the amount of
US$84.5 million. During the first quarter of 2005, US$10 million
of this will be paid directly to the Company to cover past
asbestos and environmental costs, and US$74.5 million will be
placed in a trust until Jan. 3, 2007.
If during the trust period there is federal legislation that
takes asbestos claims out of the courts and requires Equitas to
make a duplicate payment to the asbestos trust, this money will
be used by Equitas for the legislative payment less some
allowance to the Company for claims settlements that may be made
in the period Jan. 1, 2005 through Jan. 3, 2008. If there is no
such legislation by Jan. 3, 2007, the funds in the trust,
including accrued interest, will be disbursed to the Company.
ASBESTOS LITIGATION: Georgia-Pacific Shows Profit, Lower Claims
----------------------------------------------------------------
Paper and building products giant, Georgia-Pacific Corp. (NYSE:
GP), disclosed that the number of asbestos claims filed against
it continued to decline in 2004, even as the amount of money it
paid on claims hit the US$200 million mark.
The Company said in its annual report filed with the Securities
and Exchange Commission that the total number of new claims
filed against the Atlanta-based Company last year was 32 percent
below 2003 levels. At the end of 2004, there were 59,700 pending
claims, a considerable decrease from 64,300 at the end of 2003.
During 2004, 26,500 new claims were filed against the Company,
down from 39,000 new claims filed in 2003.
Compared with 2003, the average per-claim payment for
mesothelioma cases fell 27 percent, cancer per-claim averages
fell 16 percent, and average per claim payments for non-
malignant diseases fell 20 percent.
Total payments to resolve and defend asbestos claims in 2004
were US$200 million, compared with US$189 million in 2003. The
Company said it paid almost 33 percent more mesothelioma and
cancer claims during 2004 than it had projected.
Georgia-Pacific reported that from the beginning of asbestos
litigation through Jan. 1, 2005, it has either settled,
dismissed or was in the process of settling about 344,300
asbestos claims. During this time its asbestos payments for
liability, defense and administration, before insurance
recoveries and tax benefits, totaled around US$830 million.
Georgia-Pacific's asbestos liabilities relate to products
manufactured by Bestwall Gypsum Co. and Georgia-Pacific's gypsum
business that contained small amounts of asbestos fiber.
Georgia-Pacific acquired Bestwall Gypsum Co. in 1965, and
discontinued using asbestos in the manufacture of these products
in 1977.
But Georgia-Pacific's profit actually climbed in 2004, despite
flat annual sales and a fourth-quarter increase in funds to
cover asbestos lawsuits. It reported net income of US$623
million on US$19.7 billion in sales, compared with net income of
US$254 million on US$19.7 billion in sales in 2003. Results for
2004 included a pretax charge of US$159 million related to
asbestos litigation, which includes an increase of US$48 million
to add the 10th year to the Company's asbestos reserve, a US$109
million increase in reserves for its asbestos defense spending
through 2014 and a net US$2 million reduction of its asbestos
insurance receivables.
The Asbestos Alliance, a national organization made up of
companies defending against asbestos claims, reports 37
companies have gone bankrupt since 2000 because of asbestos
litigation. Between 1982 and 2002, asbestos-related litigation
costs in the United States jumped from US$1 billion to US$70
billion.
ASBESTOS LITIGATION: TX Jury Rules in Favor of American Biltrite
----------------------------------------------------------------
A Fort Worth, Texas jury returned a defense verdict for American
Biltrite, Inc. (AMEX: ABL) and the three other defendants in the
suits filed by siblings Paul and Suzanne Verret, who claimed
that their asbestos-related cancer mesothelioma was caused by
exposure from the floor tiles that the Company makes.
The Wellesley Hills, MA-based Company, which was represented by
Lane Young of Hawkins & Parnell in Atlanta and Ed Slaughter of
Hawkins, Parnell & Thackston in Dallas, successfully
demonstrated however, that neighborhood exposures to
crocidolite, or "blue" asbestos from a nearby factory were the
more likely cause of their cancer.
Plaintiffs claimed that from the time they were children until
the 1980s, they were exposed to asbestos-containing construction
materials that were used by their family business, West Side
Home Improvement. These construction materials were marketed by
each of the defendants.
During the month-long trial, the defense brought evidence
suggesting a more likely cause of the injury. A half-mile from
the Verrets' family home was a Johns Manville manufacturing
facility where crocidolite asbestos was used in making cement
pipe. Asbestos tailings from that plant were commonly used in
driveways and parking lots in the neighborhood where the
plaintiffs lived in their youth.
Testifying defense experts further reinforced the role that
crocidolite asbestos from the Johns Manville plant played. The
presence of at least 19 other cases of mesothelioma near the
plant represented a significant cancer cluster which supported
their opinion about the cause of the Verrets' disease.
The defense also referred to any exposure to floor tile as
insignificant. The plaintiffs' own experts were forced to admit
that studies of floor tile show no greater release of asbestos
than occurs naturally in the ambient air of any American urban
area.
Aside from the distribution of jewelry and the manufacture of
industrial products, American Biltrite Inc. also produces
Congoleum-brand vinyl tile flooring and sheet-vinyl floors. The
Company owns 55% of Congoleum. The Congoleum unit has filed for
Chapter 11 Bankruptcy protection to deal with asbestos claims.
ASBESTOS LITIGATION: ACT Task Force Investigates Illegal Dumping
----------------------------------------------------------------
The Australian Capital Territory Government's Asbestos Task
Force is investigating the illegal practice of dumping asbestos-
containing materials around Canberra by tradesmen and home
handymen unwilling to meet strict regulations for its proper
disposal.
An alert ensued earlier this week as a pile of broken fibro
sheets was found dumped behind a factory in Geelong Street,
Fyshwick. These sheets were in the middle of a dirt track near
the railway line and have been driven over by cars and broken up
further. Alarmingly, the sheets lie less than 50 meters from
entrances to factories on Geelong Street.
The fibro sheets are labeled Hardiflex, which is manufactured by
controversial Company James Hardie Industries. If manufactured
before 1988, these sheets will contain between 5 and 7 percent
asbestos fibers.
A City Ranger from the Department of Urban Services had already
visited the site. A licensed contractor, overseen by Environment
Protection Authority officials, was assigned to clean up the
area. It has not yet been determined whether the fibro contains
asbestos, but all precautions will be taken.
Currently in the ACT, asbestos materials can be disposed of only
one morning a week, at West Belconnen, at a minimum cost of
about $50. Strict requirements exist for the disposal of
asbestos. All asbestos products must be double-bagged in
plastic, and labeled. Asbestos materials are charged at $99 a
ton or $49.50 for loads of up to half a ton.
Some contractors believe a just-launched awareness campaign
about its dangers could inspire a rash of illegal dumping.
Licensed asbestos-removal contractors said the illegal dumping
of possible asbestos materials was not a common problem, but
occurred between six and 10 times a year.
At present, materials containing asbestos are accepted at the
West Belconnen Landfill only on Thursdays, and then only with
written notification at least two days previously.
NoWaste ACT is considering building facilities at the Mugga Lane
Landfill to accept asbestos products.
Members of the Asbestos Task Force met with NoWaste ACT to
discuss the disposal regime for materials containing asbestos.
Task Force chairman Bill Wood said his organization would assess
the present regime to see if it needed improvement, but it was
too early to say whether it needed reform.
ASBESTOS LITIGATION: Commission Detects Low Levels in IL County
---------------------------------------------------------------
Members of the Environmental Commission assured Glen Ellyn
residents that they are in no immediate danger from the "fairly
small" asbestos potentially released in the air when houses are
torn down.
"We could become afraid of every little thing that happens,"
said Michelle Thorsell, environmental commission chairwoman.
"But those who were diagnosed were people who worked in the
industry."
The commission was tasked to study the issue in October after
Mike Wilson, a resident who also works as a developer, expressed
concern that the high number of teardowns in the village could
expose the neighborhood to potential health dangers. There were
358 houses torn down between 1998 and October 2004.
As previously reported in the Sept. 17, 2004 edition of the
Class Action Reporter, Mr. Wilson voiced out his complaints
hoping to convince county officials to impose control over home
demolitions. DuPage County, unlike neighboring Cook County, has
no laws protecting neighborhoods from dust particles like
asbestos that can be released during teardowns.
"There was a fear of the unknown by the questions being raised,"
said Assistant Village Manager Curt Barrett.
Asbestos can be found in many household products, but becomes
dangerous when broken or pulverized. Particles become airborne
and can be inhaled. That's why current regulations focus on
wetting debris to keep it from getting into the air, Ms.
Thorsell said.
The commission also gave several suggested future regulations.
These include:
(1) Making requirements to wet the debris before tearing
down;
(2) Verifying that the building's remains after tear down
stay wet;
(3) Giving specific time notification as to when a house
will be torn down; and
(4) Educating Glen Ellyn residents on understanding and
implementing safe home remodeling and demolition
practices.
"These will be the most stringent rules by a municipality in
DuPage County," Mr. Barrett said.
Village President Greg Mathews agreed. "I think the suggestions
made to the board were great suggestions and should be acted on
by the village."
ASBESTOS LITIGATION: Tenaris Says 20 Of 21 Dalmine Cases Settled
----------------------------------------------------------------
Tenaris SA, a manufacturer and distributor of seamless steel
pipes, disclosed that its subsidiary, Dalmine S.p.A. is
currently subject to eleven civil proceedings for work-related
injuries arising from the use of asbestos in its manufacturing
processes from 1960 to 1980. Three former Dalmine managers are
also subject to a consolidated criminal proceeding before the
Court of Bergamo, Italy.
Of the 21 civil parties related consolidated criminal
proceeding, 20 have been settled.
In addition to the civil and criminal cases, another 21 asbestos
related out-of-court claims have been forwarded to Dalmine.
Dalmine estimates that its potential liability in connection
with the claims not yet settled or covered by insurance is about
EUR9.4 million or US$12.8 million.
Headquartered in Bergamo, Italy, Dalmine S.p.A., which does
business as TenarisDalmine, produces drawn carbon steel pipes,
fiberglass pipes, welded and seamless stainless steel pipes, and
gas cylinders from seamless tubes. Luxembourg-based holding
Company Tenaris S.A. owns 99% of Dalmine.
The Company operates in 38 countries worldwide. Dalmine has 3185
employees, produces 950,000 annual tons of finished products,
and has an annual turnover of EUR850 million.
ASBESTOS LITIGATION: CONSOL Says Fairmont Named in 25,100 Claims
----------------------------------------------------------------
One of CONSOL Energy's subsidiaries, Fairmont Supply Company,
currently is named as a defendant in about 25,100 asbestos
claims in state courts in Pennsylvania, Ohio, West Virginia,
Maryland, New Jersey and Mississippi.
According to the Securities and Exchange Commission filing
submitted by CONSOL Energy (NYSE: CNX), one of the US's largest
coal mining companies, it has been difficult for Fairmont to
determine how many of the cases actually involve valid claims or
plaintiffs who were exposed to asbestos-containing products
supplied by Fairmont.
The Company rationalizes that this difficulty is because a very
small percentage of products manufactured by third parties and
supplied by Fairmont in the past may have contained asbestos and
many of the pending claims are part of mass complaints filed by
hundreds of plaintiffs against a hundred or more defendants.
In addition, while Fairmont may be entitled to indemnity or
contribution in certain jurisdictions from manufacturers of
identified products, the availability of such indemnity or
contribution is unclear at this time and, in recent years, some
of the manufacturers named as defendants in these actions have
sought protection from these claims under bankruptcy laws.
Fairmont has no insurance coverage with respect to these
asbestos cases.
To date, payments by Fairmont with respect to asbestos cases
have not been material. However, payments in the future with
respect to pending or future asbestos cases could be material to
its financial position, results of operations or cash flows of
CONSOL Energy.
Headquartered in Canonsburg, PA, Fairmont Supply Company is a
full line distributor of industrial maintenance, repair and
operating supplies.
ASBESTOS LITIGATION: Grainger's 700 Asbestos/Silica Suits Junked
----------------------------------------------------------------
W.W. Grainger, Inc. (NYSE: GWW) has been named, along with
numerous other nonaffiliated companies, as a defendant in
litigation in various states involving asbestos and silica.
These lawsuits typically assert claims of personal injury
arising from alleged exposure to these materials as a
consequence of products purportedly distributed by Grainger.
As of January 28, 2005, the Lake Forest, IL-based Company was
named in cases filed on behalf of about 3,700 plaintiffs
alleging exposure to asbestos or silica. In addition, during
2004, five cases previously filed against Grainger alleging
exposure to cotton dust were amended to include allegations
relating to asbestos; these cases involve about 2,100
plaintiffs.
The Company has denied, or intends to deny, the allegations in
all of these lawsuits. In 2004, lawsuits involving about 700
plaintiffs were dismissed, typically based on the lack of
product identification. If a specific product distributed by
Grainger is identified in any of these lawsuits, it would
attempt to exercise indemnification remedies against the product
manufacturer.
Grainger believes that a substantial portion of these claims is
covered by insurance. It is engaged in active discussions with
its insurance carriers regarding the scope and amount of
coverage. While it is unable to predict the outcome of these
lawsuits, it believes that the ultimate resolution will not have
a material adverse effect on the Company's consolidated
financial position or results of operations.
W.W. Grainger distributes maintenance, repair, and service
equipment, components, and supplies. Its FindMRO sourcing
service locates products through its database of 4,000 suppliers
and 5 million products. Grainger has more than 500 branches in
the US, Canada, and Mexico.
ASBESTOS ALERT: Asbestos Found in NSW Air Force Planes at Base
--------------------------------------------------------------
Hundreds of defense personnel may have come into contact with
asbestos at a New South Wales training base over the past six
years.
In a routine maintenance inspection, three aircraft used to
train air force engineers have been found to contain asbestos,
the Defense Department said.
The deadly substance was found in Fairchild Metroliner aircraft,
used since 1999 as training aids at the Royal Australian Air
Force School of Technical Trades in Wagga Wagga, NSW.
The Defense Department released a statement saying that aviation
technical staff and students, serving and former, as well as
non-Defense civilian staff, may have been exposed to the
potentially deadly material. As a precaution, the aircraft
involved have been sealed and experts are assisting Defense to
conduct tests to determine potential levels of exposure.
Initial indications suggested any exposure was likely to be
minimal, but Defense said it would provide current staff and
trainees with medical advice. The department is now actively
locating all personnel who may have been at risk.
"The existing Defense asbestos information hotline will be
updated to address any concerns of former service personnel,"
the department said.
The Defense Association says it is not surprised by the asbestos
finding, but says the Defense Department is well equipped to
deal with hazardous materials.
ASBESTOS ALERT: Family of Worker's Daughter Finally Wins Case
-------------------------------------------------------------
The tragic death of a woman who was poisoned by asbestos dust as
a little girl has led to a GBP107,500 payout.
Sylvie Tapley's exposure stemmed from early childhood when she
used to sit on her father's knee after he returned from work at
an asbestos factory. Unknowingly, she inhaled from his clothes
the dust that would eventually prove fatal.
Mrs. Tapley, from Scarborough, was diagnosed with mesothelioma
in 2000 and died from the disease less than a year later in
April 2001 at the age of 59.
Her father, William Harknett, used to work at the Central
Asbestos Company Ltd. in Bermondsey, southeast London, in the
1950s and early 60s where he ground and bagged blue asbestos.
Solicitor Pauline Chandler, a specialist in industrial disease
cases with Manchester-based law firm Pannone and Partners,
handled the case that successfully led to the substantial
compensation.
Husband Terry Tapley, aged 64 and a retired signwriter and
printer, said the money from the asbestos Company's public
liability insurer would be used to help out their two children
Mark and Louise and his three grandchildren.
"I would never have believed the obstructions put in our path in
what seemed to us an obvious case. Anyone else facing the same
situation should do as I did and seek the specialist legal
advice needed to succeed with a claim," said Mr. Tapley.
Pauline Chandler, from Pannone and Partners, said, "We had to
prove that Sylvie's father's employers should have been aware of
the dangers employees' family members faced. This, like other
cases of people developing asbestos-related disease from a loved
one's clothing, was extremely difficult to deal with."
Since the sufferers were never employees of the Company, Ms.
Chandler said, they are not covered by employers' liability
insurance policies and can only get compensation from either the
Company itself if it is still trading, or the Company's public
liability insurer.
"Public liability insurance has never been compulsory and even
when it is in existence there is likely to be a dispute over
whether it covers cases like this. In addition, sufferers are
not entitled to industrial injuries disablement benefit because
they didn't get the condition through employment," added Ms.
Chandler.
ASBESTOS ALERT: Firefighter's Death Linked to Exposure on Duty
--------------------------------------------------------------
Exposure to asbestos had been cited as a major contributory
factor in the death of a former Shropshire firefighter who
helped tackle a huge blaze at the Donnington military base in
1983.
An inquest determined that Stephen Loftus, aged 86, died of
asbestosis at the Princess Royal Hospital in Telford on Dec. 8,
2004. He had been a member of the team of firefighters who
battled to extinguish one of the biggest blazes in the county.
Fallout from this incident and other fires had caused
irreparable damage to Mr. Loftus' lungs.
Palls of smoke 1,000 feet high hung over Telford and explosions
ripped through the military warehouse. Asbestos in the roof of
the burning building was scattered over 15 sq m of east
Shropshire and more than GBP165 million worth of damage was
caused.
Telford & Wrekin coroner Mr. Michael Gwynne recorded a verdict
of industrial disease during the inquest at Edgbaston House in
Wellington.
ASBESTOS ALERT: Asbestos Scare Follows Tire Warehouse Fire in UK
----------------------------------------------------------------
Police and fire officers are continuing to investigate the cause
of a blaze that destroyed a tire warehouse in Weston and started
an asbestos scare.
Forty firefighters were called to the blaze at the Cut Price
tire depot on Winterstoke Road last week as flames gutted the
building before spreading to Jewson's Timber yard next door. Ten
cars and a large amount of stock in the yard were also damaged
by the blaze and dozens of homes lost power when an electrical
substation behind the depot was affected.
A fire brigade spokesman described the incident as very serious,
and said firefighters were at the scene until after rush hour
the following morning. He said, "Gas cylinders were involved and
hundreds of motorists were stuck in traffic jams when police
closed off the Winterstoke dual carriageway between Drove Road
and Marshfield's Way."
The spokesman explained that protocol requires them to wear
breathing apparatus when smoke is present. This is normal
procedure that also entails ensuring safety through measures and
devices to protect the firefighters, even when they're outside
the building. He assured that the fire department has called the
Environment Agency to investigate the presence of asbestos.
North Somerset Council spokesman, Steve Makin, said, "We are
investigating whether low-risk asbestos cement was present in
the roof. Samples have been sent away for analysis."
ASBESTOS ALERT: UK Family Fined for Harboring Illegal Waste Site
----------------------------------------------------------------
Ending a 15-month investigation, the Environment Agency imposed
a GBP71,844 fine to a family from Reading found guilty of
illegally dumping, storing and disposing poisonous waste near
the Kennet and Avon Canal. More than 350 skips or 6,000 cubic
meters of waste including asbestos, car batteries and demolition
debris were either burned or stockpiled there.
George Rawlings, aged 65, and his wife Christine, of Kirtons
Farm Cottages at Pingewood, and their son Jimmy, aged 36, of
Garston Close, Southcote, admitted to 17 offenses under the
Environmental Protection Act when they appeared before Newbury
magistrates last week.
Complaints from neighbors and canal users in May 2003 about
dust, a foul stench, fires and acrid smoke pouring from the
former gravel pit off Green Lane prompted the investigation.
Agency investigators discovered the Rawlings were allowing their
son to run his business, First Skip Hire Ltd., from the site.
Environment Agency solicitor Barry Kochanek said there was a
"very real risk" of contamination to the River Kennet. He added,
"The motives of the family responsible were purely financial and
they had no regard at all for the well-being of the neighboring
community or the surrounding ecology."
George and Christine Rawlings were each fined GBP10,000 with
GBP2,461 costs and their son was fined GBP42,000 and ordered to
pay GBP4,922 costs.
ASBESTOS ALERT: Appeals Court Affirms Ruling V. Consultant Firm
---------------------------------------------------------------
The Court of Appeals of Washington on Jan. 10, 2005 upheld the
decision of the King County Superior Court to hold an asbestos
consultant firm liable for unsafe asbestos work practices and
conditions.
Martinez Melgoza and Associates worked as an asbestos consultant
on a Port of Seattle asbestos abatement project. The Department
of Labor and Industries cited MMA for unsafe asbestos work
practices and conditions in violation of the Washington
Industrial Safety and Health Act, and the Board of Industrial
Insurance Appeals affirmed.
MMA appealed the superior court's order, arguing that as a
consultant, it is not subject to penalties for WISHA violations.
But a business entity that controls a jobsite may be liable for
safety violations, and substantial evidence shows that, in
practice, MMA controlled the jobsite.
In 1999, Host Marriott, an airport concessions company, began
remodeling concession areas in the north and south satellites of
the SeaTac International Airport. The project required interior
demolition and asbestos abatement, so the Port of Seattle
contracted originally with three companies to coordinate the
asbestos removal.
After the project began, Host Marriott significantly increased
the scope of work and shortened the completion schedule,
requiring the Port to contract with five more asbestos abatement
contractors. The Port also contracted with project designer
Argus Pacific to provide asbestos support services.
MMA provided asbestos consulting services to the Port under
three separate contracts. According to these, MMA was to provide
professional and technical assistance and "work through the
Asbestos Program Manager to ensure a quality project within
regulatory compliance, time and cost guidelines."
MMA's duties included facility surveys, bulk sampling, air
sampling, project inspection and coordination, project
monitoring, cost estimates, emergency response, compliance
guidance, and analysis services. MMA was also tasked to maintain
a monitoring, analysis, and inspection log. The contracts
granted ultimate responsibility for all decision-making to the
Port's Asbestos Program Manager and Project Engineer.
MMA monitored the work on all shifts, and its employees were
present at all hours. Because the project was so rushed, the
firm allegedly reduced the frequency and thoroughness of its
inspections, authorized the contractors to stop working before
all asbestos-containing material was removed, and instructed the
contractors to work without proper safeguards.
After the abatement project was completed, the general
construction contractor came in and found asbestos debris in
various places. Asbestos abatement contractors returned to the
site to clean up the remaining asbestos, but because they were
behind schedule, MMA again allegedly instructed them to perform
their work without the required safeguards.
In April 1999, a project employee filed a complaint with the
Department of Labor and Industries alleging unsafe asbestos work
practices and conditions at the airport. In October 1999, after
inspecting the project sites, the department cited MMA for seven
violations of WISHA regulations. These violations involved:
(1) Allowing, and even directing, the employees to perform
asbestos-related work without required safeguards;
(2) Directing abatement workers to leave asbestos materials
in wall cavities;
(3) Failing to fully inspect all areas;
(4) Failing to ensure that all areas were adequately
encapsulated;
(5) Failing to demonstrate that clearance samples were
taken as required; and
(6) Failing to institute the necessary quality assurance
programs.
The department imposed a US$63,000 fine against MMA. It cited
MMA, rather than other contractors on the site, because it was
the on-site asbestos abatement consultant and project agent for
the Port and thus had the authority to and responsibility for
ensuring that appropriate procedures were followed.
MMA appealed the citation to the Board of Industrial Insurance
Appeals. In August 2002, the Board affirmed the citation but
reduced three of the violations from willful to serious and
imposed a total penalty assessment of US$38,700. In October
2003, the King County Superior Court affirmed the Board's
decision. Still, MMA appealed to this Appeals Court.
In this case, the department argues that explicit contractual
provisions made MMA a controlling employer. Although the
contracts did not grant it the authority to stop work, they did
allow it to request a stop work order if it concluded the
abatement activities did not meet the regulatory requirements.
Douglas Hales, from Olympia, WA, represented the appellant,
Martinez Melgoza & Associates.
Bourtai Hargrove, also from Olympia, WA, stood in behalf of the
respondent, the Department of Labor and Industries.
This lawsuit with Case No. 53388-6-I was brought before Judge
Susan R. Agid. Judges Kenneth Grosse and Joseph Coleman
concurred with the ruling.
New Securities Fraud Cases
ADVANCED NEUROMODULATION: Charles J. Piven TX Lodges Stock Suit
---------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a securities
class action on behalf of shareholders who purchased, converted,
exchanged or otherwise acquired the common stock of Advanced
Neuromodulation Systems, Inc. (NASDAQ:ANSI) between April 24,
2003 and February 16, 2005, inclusive (the "Class Period").
The case is pending in the United States District Court for the
Eastern District of Texas against defendant Advanced
Neuromodulation and one or more of its officers and/or
directors. 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 by E-mail: hoffman@pivenlaw.com.
ADVANCED NEUROMODULATION: Charles J. Piven TX Lodges Stock Suit
---------------------------------------------------------------
The law firm of Goldman Scarlato & Karon, P.C., initiated a
lawsuit in the United States District Court for the Eastern
District of Texas, on behalf of persons who purchased or
otherwise acquired publicly traded securities of Advanced
Neuromodulation Systems Inc. ("Advanced Neuromodulation" or the
"Company") (Nasdaq: ANSI) between April 24, 2003 and February
16, 2005, inclusive, (the "Class Period"). The lawsuit was filed
against Advanced Neuromodulation, Christopher G. Chavez and F.
Robert Merrill III ("Defendants").
The complaint alleges that Defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. Specifically, the complaint alleges that
Defendants' statements regarding the Company's performance and
financial results were materially false and misleading because
as a part of its marketing strategy, the Company improperly paid
certain physicians a $1,000 incentive for each device implanted
in patients, that the Company's growth was materially driven by
improperly paying physicians to recommend and implant the
Company's products in patients, and that the Company's
relationship with its physicians was based upon improper
payments and not growing market acceptance of its products.
On February 17, 2005, before the market opened, Defendants
revealed that the Company had received a subpoena from the
Inspector General, Department of Health and Human Services,
requesting documents related to the Company's sales and
marketing, reimbursement, Medicare and Medicaid billing and
other business practices. In addition, the Company announced
that revenues in the first quarter of 2005 could be below
expectations. In reaction to these announcements, shares of
Advanced Neuromodulation fell from $37.60 per share on February
16, 2005 to $29.37 per share on February 17, 2005, representing
a decline of 22%.
For more details, contact Mark S. Goldman, Esq. of The Law Firm
of Goldman Scarlato & Karon by Phone: +1-888-753-2796 or by E-
mail: goldman@gsk-law.com.
ADVANCED NEUROMODULATION: Paskowitz & Associates Lodges TX Suit
---------------------------------------------------------------
The law firm of Paskowitz & Associates initiated a class action
lawsuit in the United States District Court for the Eastern
District of Texas on behalf of purchasers of the securities of
Advanced Neuromodulation Systems, Inc. ("ANSI" or the "Company")
(Nasdaq:ANSI) between April 24, 2003 and February 16, 2005,
inclusive (the "Class Period") seeking to pursue remedies under
the Securities Exchange Act of 1934 (the "Exchange Act").
The Complaint alleges that defendants' Class Period statements
about the Company's strong performance, made in quarterly press
releases and SEC filings, were materially false and misleading
because:
(1) as part of its marketing strategy, the Company
improperly paid certain physicians $1,000 for each
device implanted in patients;
(2) the Company's strong growth was driven, in material
part, by improperly paying off physicians to recommend
and implant ANSI products in patients;
(3) the Company's growth was dependent on an improper and
unethical practices that were inherently unsustainable,
presenting a material and undisclosed risk to ANSI's
business and stock price; and
(4) the Company's much-touted relationship with its
physician customers was, in fact, based on payments to
physicians for recommending the Company's products and
did not, as defendants represented, reflect growing
acceptance of its products based on their benefits.
According to the complaint, defendants engaged in the alleged
wrongdoing so that they could profit by selling their personally
held ANSI shares at artificially inflated prices. During the
Class Period, ANSI insiders, including defendants Chavez and
Merrill, sold a total of 700,759 shares of ANSI stock for gross
proceeds of $28,617,666.
On February 17, 2004, before the open of trading, defendants
revealed that the Company had received a subpoena from the
Inspector General, Department of Health and Human Services,
"requesting documents relating to the Company's sales and
marketing, reimbursement, Medicare and Medicaid billing, and
certain other business practices." In addition, defendants
announced that revenues in the first quarter of 2005 could be
below previous expectations, based on early indications. In
reaction to this announcement, the price of ANSI common stock
plummeted, falling from $37.60 per share on February 16, 2005 to
$29.37 per share on February 17, 2005, a one-day drop of 22% on
unusually heavy trading volume of more than 7.9 million shares.
Formore details, contact, Paskowitz & Associates by Phone:
800-705-9529 or by E-mail: classattorney@aol.com.
ASTRAZENECA PLC: Stull Stull Lodges Securities Fraud Suit in MA
---------------------------------------------------------------
The law firm of Stull, Stull & Brody initiated a class action
lawsuit in the United States District Court for the District of
Massachusetts, on behalf of all persons who purchased American
Depository Receipts ("ADRs") of AstraZeneca, PLC ("AstraZeneca")
(NYSE:AZN) between April 2, 2003 and October 11, 2004, (the
"Class Period"). Also included are investors who acquired
securities on foreign markets.
The Complaint alleges that AstraZeneca, a pharmaceutical
research Company, and certain of its officers and directors
issued materially false statements concerning the results of the
clinical trials of the Company's investigational oral
anticoagulant Exanta, and the status and likelihood of the
approval of the New Drug Application for Exanta. These
statements caused the Company's stock/ADR prices to rise until
September 9, 2004, when the U.S. Food & Drug Administration
("FDA") posted briefing documents on the FDA's website which
raised previously unheard-of problems with Exanta. Then, on
October 11, 2004, AstraZeneca issued a press release stating,
that they received an Action Letter from the FDA for Exanta. The
release stated that "the US Food and Drug Administration (FDA)
did not grant approval for the investigational oral
anticoagulant EXANTA(R) (ximelagatran)." On this news,
AstraZeneca stock fell to $38 per share. During the Class
Period, AstraZeneca traded as high as $51.20 per share on March
9, 2004.
For more details, contact Tzivia Brody, Esq. at Stull, Stull &
Brody by Phone: 1-800-337-4983 by Fax: 212/490-2022 or by E-
mail: SSBNY@aol.com.
BIOGEN IDEC: Schiffrin & Barroway Lodges Securities Suit in MA
--------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class
action lawsuit in the United States District Court for the
District of Massachusetts on behalf of all securities purchasers
of Biogen Idec Inc., (Nasdaq: BIIB) ("Biogen" or the "Company")
between February 18, 2004 and February 25, 2005, inclusive (the
"Class Period").
The complaint charges Biogen, William Rastetter, and James
Mullen 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 TYSABRI posed serious immune-system side effects;
(2) that TYSABRI, like other MS drugs, made patients
susceptible to progressive multifocal
leukoencephalopathy ("PML") by changing the way certain
white blood cells function, thereby allowing PML, a
normally dormant virus, to run rampant within the human
body;
(3) that defendants knew and/or recklessly disregarded
documented facts that MS drugs can cause greater
incidents of PML to occur; and
(4) that defendants concealed these facts in order to fast
track TYSABRI for FDA approval so that they could reap
the financial benefits from the sales of the drug.
On February 28, 2005, before the market opened, Biogen announced
a voluntary suspension in the marketing of TYSABRI(R)
(natalizumab), a treatment for multiple sclerosis (MS), because
of two serious adverse events that have occurred in patients
treated with TYSABRI in combination with AVONEX(R) (Interferon
beta-1a) in clinical trials. News of this shocked the market.
Shares of Biogen fell $28.63 per share, or 42.44 percent, to
close at $38.65 on unusually high trading volume.
For more details, contact Marc A. Topaz, Esq. or Darren J.
Check, Esq. of Schiffrin & Barroway, LLP by Mail: 280 King of
Prussia Road, Radnor, PA 19087 by Phone: 1-888-299-7706 or 1-
610-667-7706 or by E-mail: info@sbclasslaw.com.
BRADLEY PHARMACEUTICALS: Lerach Coughlin Lodges Stock Suit in NJ
----------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin") initiated a class action lawsuit in the
United States District Court for the District of New Jersey on
behalf of purchasers of Bradley Pharmaceuticals, Inc. ("Bradley
Pharmaceuticals" or the "Company") (NYSE: BDY) common stock
during the period between October 8, 2003 and February 25, 2005
(the "Class Period").
The complaint charges Bradley Pharmaceuticals and certain of its
officers and directors with violations of the Securities
Exchange Act of 1934. Bradley Pharmaceuticals is a specialty
pharmaceutical Company that acquires, develops and markets
prescription and over-the-counter products in select markets.
The complaint alleges that, during the Class Period, defendants
issued materially false and misleading statements regarding the
Company's increasing financial performance and future prospects.
As alleged in the complaint, these statements were materially
false and misleading because they failed to disclose and/or
misrepresented the following adverse facts, among others, which
were known to defendants, or recklessly disregarded by them, at
all relevant times:
(1) that the Company was materially overstating its
financial results by engaging in improper accounting
practices;
(2) that the Company's future sales growth from its Keralac
franchise would be hindered by generic competition; and
(3) as a result of the foregoing, there was no reasonable
basis for the Company's revenue and earnings guidance.
Then, on February 28, 2005, the Company issued a press release
announcing that the staff of the Securities and Exchange
Commission ("SEC") is conducting an informal inquiry to
determine whether there have been violations of the federal
securities laws by the Company. In connection with the inquiry,
the SEC staff has requested that the Company provide it with
certain information and documents concerning issues related to
revenue recognition and capitalization of certain payments. In
light of the ongoing SEC staff inquiry and separate counsel's
review, the Company also announced that it be delaying the
release of its 2004 earnings.
Market reaction to this announcement was swift and severe. On
February 28, 2005, shares of Bradley Pharmaceuticals common
stock closed at $9.75 per share, a decline of $3.50 per share,
or almost 30%, from the previous trading day's close.
For more details, contact Samuel H. Rudman or David A. Rosenfeld
of Lerach Coughlin by Phone: 800/449-4900 or 619/231-1058 by E-
mail: wsl@lerachlaw.com or visit their Web site:
http://www.lerachlaw.com/cases/bradleypharm/.
BRADLEY PHARMACEUTICALS: Schiffrin & Barroway Lodges Suit in NJ
---------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class
action lawsuit in the United States District Court for the
District of New Jersey on behalf of all purchasers of the common
stock of Bradley Pharmaceuticals, Inc. (NYSE: BDY) ("Bradley" or
the "Company") from April 29, 2004 through February 25, 2005,
inclusive (the "Class Period").
The complaint charges Bradley, Daniel Glassman, and R. Brent
Lenczycki with violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder. The complaint alleges that defendants, during the
Class Period, issued a series of material misrepresentations to
the market concerning the Company's financial condition thereby
artificially inflating the price of Bradley's common stock. More
specifically, the Complaint alleges that the Company failed to
disclose and misrepresented the following material adverse facts
known to defendants or recklessly disregarded by them:
(1) that the Company had improperly recognized revenue
during the Class Period;
(2) that the Company had improperly capitalized certain
payments;
(3) that as a result of the items stated in (1) and (2),
the Company's financial statements were not prepared in
accordance with Generally Accepted Accounting
Principles ("GAAP");
(4) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company; and
(5) that as a result, the value of the Company's net income
and financial results were materially overstated at all
relevant times.
On February 28, 2005, Bradley announced that the staff of the
SEC was conducting an informal inquiry relating to the Company
to determine whether there have been violations of the federal
securities laws. In connection with the inquiry, the SEC staff
had requested that the Company provide it with certain
information and documents, including with respect to revenue
recognition and capitalization of certain payments. In light of
the ongoing SEC staff inquiry and separate counsel's review, the
Company would not be releasing its 2004 earnings at this time,
as originally anticipated. News of this shocked the market.
Shares of Bradley fell $3.50 per share, or 26.42 percent, to
close at $9.75 per share on February 28, 2005.
For more details, contact Marc A. Topaz, Esq. or Darren J.
Check, Esq. of Schiffrin & Barroway, LLP by Mail: 280 King of
Prussia Road, Radnor, PA 19087 by Phone: 1-888-299-7706 or
1-610-667-7706 or by E-mail: info@sbclasslaw.com.
EPIX PHARMACEUTICALS: Glancy Binkow Lodges Securities Suit in MA
----------------------------------------------------------------
The law firm of Glancy Binkow & Goldberg LLP, initiated a Class
Action lawsuit in the United States District Court for the
District of Massachusetts on behalf of a class (the "Class")
consisting all persons or entities who purchased or otherwise
acquired securities of EPIX Pharmaceuticals, Inc. (f/k/a EPIX
Medical, Inc.) ("EPIX" or the "Company") (NYSE: EPIX) between
July 10, 2003 and January 14, 2005, inclusive (the "Class
Period").
The Complaint charges EPIX, Michael D. Webb, Peyton J. Marshall
and Andrew Uprichard with violations of federal securities laws.
Plaintiff claims defendants' omissions and material
misrepresentations concerning the Company's prospects
artificially inflated the Company's stock price, inflicting
damages on investors. EPIX is a developer of targeted contrast
agents designed to improve the diagnostic quality of images
produced by magnetic resonance imaging. The Complaint alleges
that during the Class Period defendants misrepresented material
adverse facts concerning the likelihood of U.S. Food and Drug
Administration (FDA) approval for MS 325 (gadofosveset
trisodium), the Company's principal product in development.
Defendants knowingly or recklessly failed to disclose that:
(1) non-contrast magnetic resonance angiography comparator
scans used in Phase III clinical trials varied
significantly, which caused the efficacy of MS-325 to
be compromised;
(2) the Phase III trials generated a large number of
uninterpretable images, which too caused the efficacy
of MS-325 to be compromised;
(3) the problems described above resulted in varying and
questionable statistical treatment of the images seen
during the Phase III trials; and
(4) as result of the above, FDA approval for MS-325's New
Drug Application (NDA) was highly unlikely.
On January 14, 2005, EPIX announced that the FDA had completed
its review of the NDA for MS-325, and found it to be approvable.
However, the FDA also requested additional clinical studies to
demonstrate MS-325's efficacy prior to approval. This news
shocked the market and, as a result, EPIX shares fell $3.98 per
share or 27.17 percent, to close at $10.67 per share, on
unusually high trading volume.
The law firm of Lionel Z. Glancy or Michael Goldberg of Glancy
Binkow & Goldberg LLP by Phone: (310) 201-9150 or (888) 773-9224
by E-mail: info@glancylaw.com or visit their Web site:
http://www.glancylaw.com.
LEADIS TECHNOLOGY: Lerach Coughlin Lodges Securities Suit in CA
---------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin") initiated a class action in the United
States District Court for the Northern District of California on
behalf of those who acquired Leadis Technology, Inc. ("Leadis")
(NASDAQ:LDIS) common stock pursuant to the Company's false and
misleading Registration Statement and Prospectus for its initial
public offering ("IPO") on June 16, 2004.
The complaint charges Leadis and certain of its officers and
directors with violations of the Securities Act of 1933. Leadis
designs, develops and markets mixed-signal semiconductors that
enable and enhance the features and capabilities of small panel
displays. The Company's core products are color display drivers
with integrated controllers, which are critical components of
displays used in mobile consumer electronics devices.
The complaint alleges that on June 16, 2004, Leadis accomplished
its IPO of 6 million shares for net proceeds of $76.6 million,
pursuant to a Registration Statement and Prospectus. The
Registration Statement and Prospectus failed to disclose that
Leadis was engaging in overshipments of its OLED product.
Then, on October 22, 2004, Leadis announced that its fourth
quarter results would be much lower than analysts' expectations.
Leadis admitted that a drop in sales from OLED was going to hurt
profit in the quarter as handset makers bought less expensive
equipment. The shares fell $8.15 to $8.79 on October 22, 2004.
Later, on January 10, 2005, Leadis announced it was not
comfortable with the First Call estimates of its revenues for
the first quarter of 2005. On this news, Leadis stock dropped
further to below $8 per share.
For more details, contact Samuel H. Rudman or David A. Rosenfeld
of Lerach Coughlin by Phone: 800/449-4900 or 619/231-1058 by E-
mail: wsl@lerachlaw.com or visit their Web site:
http://www.lerachlaw.com/cases/leadis/.
MOLEX INC.: Schiffrin & Barroway Lodges IL Securities Fraud Suit
----------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class
action lawsuit in the United States District Court for the
Northern District of Illinois on behalf of all purchasers of the
common stock of Molex Incorporated (Nasdaq: MOLXE) ("Molex" or
the "Company") between July 27, 2004 to February 14, 2005
inclusive (the "Class Period").
The complaint charges Molex, J. Joseph King and Diane S. Bullock
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
known to defendants or recklessly disregarded by them:
(1) that the Company hid $5.8 million in inventory expenses
in order to inflate its earnings;
(2) that as a result the foregoing Molex had to take an
$9.1 million inventory charge;
(3) that, in addition to hiding inventory expenses, the
Company improperly accounted for its accrual for
vacation pay, its recording of a contingent gain, and
its recording of the first quarter profit-in-inventory
charge;
(4) that the Company's financial results were in violation
of Generally Accepted Accounting Principles ("GAAP");
(5) that the Company lacked adequate internal controls; and
(6) that as a result of the above, the Company's financial
results were materially inflated at all relevant times.
On November 11, 2004, Molex announced that it was delaying the
filing of its Quarterly Report on Form 10-Q for the quarter
ended September 30, 2004 and that Diane S. Bullock had been
replaced as Chief Financial Officer. The Company also revealed
that it identified certain improper accounting practices. On
November 15, 2004, Molex issued a press release announcing that
Deloitte & Touche LLP had resigned as the Company's independent
auditor. On February 14, 2005, Molex released its financial and
operational results for the second quarter ended December 31,
2004 and the restated results for the Company's first fiscal
quarter ended September 30, 2004, which reflected the
appropriate adjustments given the accounting irregularities.
News of this shocked the market. Shares of Molex fell $3.34 per
share or 11.60 percent, on February 15, 2005, to close at $25.45
per share.
For more details, contact Marc A. Topaz, Esq. or Darren J.
Check, Esq. of Schiffrin & Barroway, LLP by Mail: 280 King of
Prussia Road, Radnor, PA 19087 by Phone: 1-888-299-7706 or
1-610-667-7706 or by E-mail: info@sbclasslaw.com.
RETEK INC.: Lerach Coughlin Lodges Securities Fraud Suit in MN
--------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin") initiated a class action in the Fourth
Judicial District Court of the Minnesota State Court on behalf
of holders of Retek, Inc. (NASDAQ:RETK) common stock.
The complaint was filed on behalf of the holders of Retek, Inc.
("Retek" or the "Company") common stock against Retek and its
directors arising out of their alleged attempts to provide
certain Retek insiders and directors with preferential treatment
in connection with their efforts to complete the sale of Retek
to SAP AG (the "Acquisition"). The complaint alleges that by
2002, defendants had nearly destroyed the Company and incurred
potentially hundreds of millions of dollars in liabilities.
Defendants faced both a shareholder class action and a
derivative action. According to the complaint, defendants knew
that by selling the Company cheaply and agreeing to a
termination fee, they could negotiate indemnification agreements
for themselves -- in essence, by selling the Company in this
matter, they could buy themselves out of their prior misdeeds.
In addition, the complaint alleges that the defendants
structured the Acquisition so that the Company would be sold
before the shares could reflect the true value of the Company
(i.e., before release of the Company's Q1 05 financial results).
According to the complaint, in light of the foregoing, the
director defendants must, as their fiduciary obligations
require:
(1) rescind the acceleration of vesting terms of
defendants' stock option grants;
(2) withdraw their consent to the sale of Retek and allow
the shares to trade freely, reflecting the Company's
preliminary Q1 05 results, without impediments;
(3) act independently so that the interests of Retek's
public stockholders will be protected, including, but
not limited to, the retention of truly independent
advisors and/or the appointment of a truly independent
Special Committee;
(4) adequately ensure that no conflicts of interest exist
between defendants' own interests and their fiduciary
obligation to maximize stockholder value or, if such
conflicts exist, to ensure that all conflicts be
resolved in the best interests of Retek's public
stockholders;
(5) terminate the termination fee and no-shop clause; and
(6) rescind all indemnity agreements.
Plaintiff Don Blakstad seeks to enjoin defendants actions. Mr.
Blakstad is a major investor both in Twin Cities companies and
around the world. Mr. Blakstad is represented by Lerach
Coughlin, who has expertise in prosecuting investor class
actions and extensive experience in actions involving corporate
misconduct.
For more details, contact Samuel H. Rudman or David A. Rosenfeld
of Lerach Coughlin by Phone: 800/449-4900 or 619/231-1058 or by
E-mail: wsl@lerachlaw.com.
SINA CORPORATION: Seeger Weiss Files Securities Fraud Suit in NY
----------------------------------------------------------------
The law firm Seeger Weiss LLP initiated a class action lawsuit
in the United States District Court for the Southern District of
New York on behalf of all purchasers of the common stock of Sina
Corporation ("Sina")(Nasdaq:SINA), between October 26, 2004 and
February 7, 2005, inclusive (the "Class Period"), seeking to
pursue remedies under the Securities Exchange Act of 1934 (the
"Exchange Act") against defendants Sina, Wang Yan (CEO, Pres.),
and Charles Guowei Chao (CFO).
The complaint alleges that Sina is an online media Company and
"value-added" information services provider in China and for
Chinese communities worldwide. The Company reported robust
earnings and revenue growth during the third quarter of 2004 and
guided analysts to expect substantial revenue and earnings
growth during the fourth quarter as well. The complaint alleges
that at the time the defendants made these statements and
representations, they knew or recklessly disregarded, and failed
to disclose, the very material extent to which the Company's
financial performance and prospects were dependent on revenue
and earnings derived from SMS (short message services) related
to "fortune-telling" type horoscopes services. The complaint
further alleges that defendants knew or recklessly disregarded,
and failed to disclose, the very material risk that the Chinese
government would shut down radio and television advertisement of
such services, thereby preventing Sina from promoting its
primary revenue generator. The complaint further alleges that
defendants also knew or recklessly disregarded, but failed to
disclose, that recent changes to China Mobile Communications
Corp. billing process, would have a materially adverse effect on
the Company's financial performance.
On February 7, 2005, defendants reported preliminary results
that were consistent with their 4th quarter guidance but
disclosed for the first time an anticipated sequential revenue
decline of 17% to 24% in the first quarter of 2005 and
attributed the decline to the Chinese government's ban on
fortune-telling advertising and billing changes. In reaction to
this news, the Company's share price fell by more than 21%.
During the class period, insiders sold Sina shares at
artificially inflated prices for proceeds in excess of $31
million.
For more details, contact Stephen A. Weiss, Esq. or Eric T.
Chaffin, Esq. of Seeger Weiss LLP by Mail: One William Street,
New York, New York 10004 by Phone: (212) 584-0700 by Fax:
(877) 541-3273 by E-Mail: sweiss@seegerweiss.com or
echaffin@seegerweiss.com or visit their Web site:
http://www.seegerweiss.com.
*********
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via e-mail to carconf@beard.com are encouraged.
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news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.
*********
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Class Action Reporter is a daily newsletter, co-published by
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Resnick, Editors.
Copyright 2004. All rights reserved. ISSN 1525-2272.
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