/raid1/www/Hosts/bankrupt/CAR_Public/050810.mbx
C L A S S A C T I O N R E P O R T E R
Wednesday, August 10, 2005, Vol. 7, No. 157
Headlines
ABBOTT LABORATORIES: Faces Antitrust Suits Pending in DE Court
ADVANCED MEDICAL: Reaches Settlement in Suit Over VISX Purchase
AMERICA ONLINE: Court Affirms NY Lawsuit Certification Denial
AMERICA ONLINE: NY Court Mulls Dismissal For ERISA Fraud Lawsuit
AMERICAN CLASSIC: Recalls 2.85T Bike Wheels Due to Injury Hazard
AXIS CAPITAL: Plaintiffs File Consolidated Securities Suit in NY
BRISTOL-MYERS SQUIBB: NJ Court Mulls Stock Suit Summary Judgment
BRISTOL-MYERS SQUIBB: Finalizes NY Securities Lawsuit Settlement
BRISTOL-MYERS SQUIBB: IL Court Dismisses Securities Fraud Suit
BRISTOL-MYERS SQUIBB: Plaintiffs Seek To End IL Discovery Stay
BRISTOL-MYERS SQUIBB: NY Court Approves ERISA Lawsuit Settlement
BRISTOL-MYERS SQUIBB: Accelerated Discovery Proceeds in AWP Suit
BRISTOL-MYERS SQUIBB: Faces CA Suits For Sale of Consumer Info
BRISTOL-MYERS SQUIBB: Working To Settle PPA Injury Litigation
BRISTOL-MYERS SQUIBB: WV Court Preliminarily OKs SERZONE Pact
CANADA: Couple Launches Second Suit Over Air France Plane Crash
DORCHESTER MINERALS: Plaintiffs Sever Claims in Natural Gas Suit
GOOGLE INC.: Advertisers Launch "Overcharging" Suit In CA Court
HERBALIFE INTERNATIONAL: Faces TCPA Violations Suit in WV Court
HERBALIFE INTERNATIONAL: Unfair Trade Suit Moved To Los Angeles
INTERSTATE BAKERIES: Recalls Cookies For Undeclared Ingredient
MASSACHUSETTS: Settlement Reached For Suit Over Medicaid Program
MERCK FROSST: Motley Rice, Will Barristers File Claim in Ontario
MILBERG WEISS: Federal Officials to Widen Criminal Investigation
NORTH CAROLINA: Appeals Judge, Group Launch Suit V. Finance Law
PRINCIPAL FINANCIAL: IO Court Dismisses Suit V. 2001 Settlement
PULTE HOMES: Price Manipulation Suit Dismissed, To be Re-filed
TIME WARNER: NY Court Preliminarily OKs Consumer Suit Settlement
TIME WARNER: Reaches Settlement For NY Consumer Privacy Lawsuit
TIME WARNER: Inks MOU TO Settle NY ERISA, Stock Fraud Litigation
TIME WARNER: CA Court Dismisses in Part Shareholder Fraud Suit
TIME WARNER: OH Court Grants in Part Stock Suit Dismissal Motion
TIME WARNER: WV Court Yet To Rule on Shareholder Suit Dismissal
TIME WARNER: TX Court Yet To Rule on Shareholder Suit Dismissal
TIME WARNER: AK Court Yet To Rule On Shareholder Suit Dismissal
TIME WARNER: Appeals Court Hears Appeal of CA Lawsuit Dismissal
TIME WARNER: Seeks Review of Refusal To Dismiss NV Proceeding
TIME WARNER: Appeals Injunction V. Consumer Lawsuit Settlement
WAL-MART STORES: Asks CA Appeals Court to Block Sex Bias Lawsuit
WELLCHOICE INC.: FL RICO Suit Certification Discovery Nears End
WELLS FARGO: Loan Customers File CA Racial Discrimination Suit
YELLOW ROADWAY: Pays $7M to Settle Suit Over Terminal Closures
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
* Online Teleconferences
New Securities Fraud Cases
HOST AMERICA: Murray Frank Lodges Securities Fraud Suit in CT
HOST AMERICA: Schatz & Nobel Lodges Securities Fraud Suit in CT
INVESTORS FINANCIAL: Wechsler Harwood Lodges MA Securities Suit
PRESTIGE BRAND: Lerach Coughlin Issues Warning to Shareholders
PRESTIGE BRAND: Schatz & Nobel Files Securities Fraud Suit in NY
*********
ABBOTT LABORATORIES: Faces Antitrust Suits Pending in DE Court
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Abbott Laboratories, Inc., Fournier Industrie et Sante, and
Laboratoires Fournier, S.A. (Fournier) faces ten lawsuits,
including nine class actions filed in the United States District
Court for the District of Delaware alleging antitrust and unfair
competition claims in connection with the sale of fenofibrate
formulations.
The nine purported class actions are:
(1) Allied Services Division Welfare Fund and Hector
Valdes, filed in June 2005;
(2) Diana Kim on behalf of herself and others similarly
situated, filed in June 2005;
(3) Louisiana Wholesale Drug Company, Inc., filed in May
2005;
(4) Meijer, Inc. and Meijer Distribution, Inc., filed in
June 2005;
(5) Painters District Council No. 30 Health and Welfare
Fund and Richard G. Wilde, filed in June 2005;
(6) Pennsylvania Employees Benefit Trust Fund, filed in
June 2005;
(7) Elaine M. Pullman, Neil Perlmutter, Helena Perlmutter
and Lula Ramsey, filed in June 2005;
(8) Rochester Drug Co-Operative, Inc., filed in June 2005;
(9) Vista Healthplan, Inc. and Ross Love, filed in June
2005.
The individual lawsuit is styled "Walgreen Co.; Eckerd
Corporation; The Kroger Co.; and Maxi Drug, Inc.," >filed in
June 2005. These cases seek actual damages, treble damages and
other relief.
ADVANCED MEDICAL: Reaches Settlement in Suit Over VISX Purchase
---------------------------------------------------------------
Advanced Medical Optics Inc., the Santa Ana maker of eye-care
and eye-surgery products reached a settlement in a class action
shareholder lawsuit challenging the purchase of optical laser
maker VISX, Inc., The Orange County Register reports.
Court papers revealed that VISX shareholders sued in November,
claiming that the VISX board violated its fiduciary
responsibility by not trying to get the best possible offer for
the Santa Clara-based company.
Advanced Medical, completed its purchase of VISX in May for
$1.25 billion in cash and stock. VISX stockholders received
0.552 shares of Advanced Medical stock and $3.50 in cash for
every share of VISX common stock they owned.
AMERICA ONLINE: Court Affirms NY Lawsuit Certification Denial
-------------------------------------------------------------
The California Court of Appeals affirmed a lower court ruling
denying class certification to a lawsuit filed against America
Online, Inc. and AOL Community, Inc., styled "Hallissey et al.
v. America Online, Inc.
Two former AOL Community Leader volunteers filed the suit in the
United States District Court for the Southern District of New
York as a collective action under the Fair Labor Standards Act
(FLSA) and as a class action under New York state law. The
plaintiffs allege that, in serving as Community Leader
volunteers, they were acting as employees rather than volunteers
for purposes of the FLSA and New York state law and are entitled
to minimum wages.
On December 8, 2000, defendants filed a motion to dismiss on the
ground that the plaintiffs were volunteers and not employees
covered by the FLSA. The motion to dismiss is pending.
A related case was filed by several of the "Hallissey"
plaintiffs in the U.S. District Court for the Southern District
of New York alleging violations of the retaliation provisions of
the FLSA. This case has been stayed pending the outcome of the
"Hallissey" motion to dismiss. Three related class actions have
been filed in state courts in New Jersey, California and Ohio,
alleging violations of the FLSA and/or the respective state
laws. The New Jersey and Ohio cases were removed to federal
court and subsequently transferred to the U.S. District Court
for the Southern District of New York for consolidated pretrial
proceedings with "Hallissey."
The California action was remanded to California state court,
and on January 6, 2004 the court denied plaintiffs' motion for
class certification. Plaintiffs appealed the trial court's
denial of their motion for class certification to the California
Court of Appeals. On May26, 2005, a three-justice panel of the
California Court of Appeals unanimously affirmed the trial
court's order denying class certification. The plaintiffs have
filed a petition for review in the California Supreme Court.
The suit is styled "In Re: America Online, Inc., Community
Leaders Litigation, case no. 1:02-md-01443-KTD," filed in the
United States District Court for the Southern District of New
York, under Judge Kevin Thomas Duffy. Representing the Company
is James P. Chou of Akin, Gump, Strauss, Hauer & Feld, L.L.P.,
300 West 6th Street, Suite 2100, Austin, TX 78701, Phone: (512)
499-6225. Representing the plaintiffs are Leon Marc Greenberg,
Attorney at Law, 5 Beekman Street, Suite 212, New York, NY
10038, Phone: (212) 227-4841; and Michael Shen of Michael Shen &
Associates, P.C., 225 Broadway, Suite 2515, New York, NY 10007,
Phone: (212) 227-0300, Fax: (212)-227-2714, E-mail:
mshen@employmentlawny-nj.com.
AMERICA ONLINE: NY Court Mulls Dismissal For ERISA Fraud Lawsuit
----------------------------------------------------------------
The United States District Court for the Southern District of
New York has yet to rule on America Online, Inc.'s motion to
dismiss a class action filed against it, alleging violations of
the Employee Retirement Income Security Act (ERISA).
On January 17, 2002, Community Leader volunteers filed a class
action lawsuit in the U.S. District Court for the Southern
District of New York against the Company, Time Warner, Inc. and
AOL Community, Inc. Plaintiffs allege that they are entitled to
pension and/or welfare benefits and/or other employee benefits
subject to ERISA.
In March 2003, plaintiffs filed and served a second amended
complaint, adding as defendants the Company's Administrative
Committee and the AOL Administrative Committee. On May 19,
2003, the Company, America Online and AOL Community, Inc. filed
a motion to dismiss and the Administrative Committees filed a
motion for judgment on the pleadings. Both of these motions are
pending.
The suit is styled "Hallissey, et al v. AOL Time Warner Inc., et
al., case no. 1:02-cv-00423-KTD," filed in the United States
District Court for the Southern District of New York, under
Judge Kevin Thomas Duffy. Representing the plaintiffs are Lynn
Beth Bayard and Lewis Richard Clayton of Paul, Weiss, Rifkind,
Wharton & Garrison LLP (NY), 1285 Avenue of the Americas, New
York, NY 10019, Phone: (212) 373-3215, Fax: (212) 373-2070, E-
mail: lclayton@paulweiss.com. Representing the Company is
Leon Greenberg of Leon Greenberg, P.C., 225 Broadway Suite 612,
New York, NY 10007, Phone: (212) 227-4841.
AMERICAN CLASSIC: Recalls 2.85T Bike Wheels Due to Injury Hazard
----------------------------------------------------------------
In cooperation with the U.S. Consumer Product Safety Commission
(CPSC), American Classic, of Tampa, Florida is voluntarily
recalling about 2,850 units of American Classic road and
mountain bike wheels.
The hub in the bicycle's rear wheel can fail to engage properly,
causing no resistance when pedaling. The bicycle rider could
lose balance, fall and suffer injuries.
The recall includes all American Classic aftermarket rear wheels
and hubs, as well as the following 2005 bike models which use
American Classic rear wheels or hubs: Fuji Team Super Lite (Team
SL); Orbea Aletta, Onix, Lobular 50, Dama Race, Mitis and Mitis
Dama models; Felt F55 and F2C; Fetish Cycles Road and Mountain
Bikes; Argon 18; and Motobecane LeChampion SL. The recalled
models were made at the start of January 2005 and the outside of
the rear hub shell has a serial number that starts with the
letter "S." The serial number is printed on the center of the
hub shell opposite to the American Classic logo. Front wheels
and front hubs are not included in this recall.
Manufactured in Taiwan, the wheels were sold at all bicycle
specialty stores nationwide from January 2005 through June 2005
for about $240 (per rear hub).
Consumers should stop using the bike wheels with the recalled
hubs and contact your local bicycle retailer to receive a free
inspection. If you have a recalled wheel, the dealer will
provide a free repair.
Consumer Contact: For additional information, contact American
Classic at (800) 345-8356 or log on to the firm's Web site at
http://www.amclassic.com.
AXIS CAPITAL: Plaintiffs File Consolidated Securities Suit in NY
----------------------------------------------------------------
Plaintiffs filed a consolidated amended securities class action
against AXIS Capital Holdings Ltd. and certain of its executive
officers in the United States District Court for the Southern
District of New York.
Two suits were initially filed, relating to the practices being
investigated by the Attorney General of the State of New York
and other state regulators. The suits are styled "James Dolan
v. AXIS Capital Holdings Limited, Michael A. Butt and John R.
Charman" (filed on October 28, 2004) and "Robert Schimpf v. AXIS
Capital Holdings Limited, Michael A. Butt, Andrew Cook and John
R. Charman," (filed on November 5, 2004).
The suits were filed on behalf of purchasers of AXIS Capital
Holdings Ltd. (NYSE: AXS) publicly traded securities during the
period between August 6, 2003 and October 14, 2004 (the "Class
Period"). The complaints charge AXIS and certain of its
officers and directors with violations of the Securities
Exchange Act of 1934.
The complaints further allege that during the Class Period,
defendants disseminated materially false and misleading
statements concerning the Company's results and operations. The
true facts, which were known by each of the defendants but
concealed from the investing public during the Class Period,
were as follows:
(1) that the Company was paying illegal and concealed
"contingent commissions" pursuant to illegal
"contingent commission agreements;"
(2) that by concealing these "contingent commissions" and
such "contingent commission agreements," the defendants
violated applicable principles of fiduciary law,
subjecting the Company to enormous fines and penalties
totaling potentially tens, if not hundreds, of millions
of dollars; and
(3) that as a result, the Company's prior reported revenue
and income was grossly overstated.
On April 13, 2005, these lawsuits were consolidated and will now
be known as "In re AXIS Capital Holdings Ltd. Securities
Litigation." The lawsuit alleges securities violations in
connection with the failure to disclose payments made pursuant
to contingent commission arrangements and seeks damages in an
unspecified amount. On May 13, 2005, the plaintiffs filed an
amended, consolidated complaint and added as defendants the
managing underwriters and one of the selling shareholders in the
Company's secondary offering completed in March 2004.
The suit is styled "Dolan v. AXIS Capital Holdings Ltd. et al.,
case no. 1:04-cv-08564-RJH," filed in the United States District
Court for the Southern District of New York, under Judge Richard
J. Holwell. Representing the Company is Benjamin E. Rosenberg
of Swidler Berlin Shereff Friedman, LLP, 405 Lexington Avenue,
New York, NY 10174, Phone: (212) 891-9231, Fax: (212) 891-9519,
E-mail: benjamin.rosenberg@dechert.com. Representing the
plaintiffs is Samuel Howard Rudman of Lerach, Coughlin, Stoia,
Geller, Rudman & Robbins, LLP, 200 Broadhollow Road, Ste. 406
Melville, NY 11747, Phone: 631-367-7100, Fax: 631-367-1173, E-
mail: srudman@lerachlaw.com.
BRISTOL-MYERS SQUIBB: NJ Court Mulls Stock Suit Summary Judgment
----------------------------------------------------------------
The United States District Court for the District of New Jersey
heard Bristol-Myers Squibb Co.'s motion for summary judgment in
its favor in the securities class action filed against it, its
former chairman of the board and chief executive officer,
Charles A. Heimbold, Jr., and its former chief scientific
officer, Peter S. Ringrose, Ph.D.
In April, May and June 2000, a number of class action lawsuits
were filed, alleging violations of federal securities laws and
regulations. These actions have been consolidated into one
action in the U.S. District Court for the District of New
Jersey. The plaintiff claims that the defendants disseminated
materially false and misleading statements and/or failed to
disclose material information concerning the safety, efficacy
and commercial viability of, VANLEV, a drug in development,
during the period November 8, 1999 through April 19, 2000.
In May 2002, the plaintiff submitted an amended complaint adding
allegations that the Company, its former chairman of the board
and current chief executive officer, Peter R. Dolan, its former
chairman of the board and chief executive officer, Mr. Heimbold
and Mr. Ringrose disseminated materially false and misleading
statements and/or failed to disclose material information
concerning the safety, efficacy, and commercial viability of
VANLEV during the period April 19, 2000 through March 20, 2002.
A number of related class actions, making essentially the same
allegations, were also filed in the U.S. District Court for the
Southern District of New York. These actions have been
transferred to the U.S. District Court for the District of New
Jersey.
The Company filed a motion for partial judgment in its favor
based upon the pleadings. The plaintiff opposed the motion, in
part by seeking again to amend its complaint. The court granted
in part and denied in part the Company's motion and ruled that
the plaintiff may amend its complaint to challenge certain
alleged misstatements. The court has certified two separate
classes: a class relating to the period from November 8, 1999 to
April 19, 2000 and a class relating to the period from March 22,
2001 to March 20, 2002. The class certifications are without
prejudice to defendants' rights to fully contest the merits of
plaintiff's claims. The plaintiff seeks compensatory damages,
costs and expenses on behalf of shareholders with respect to the
two class periods.
On December 17, 2004, the Company and the other defendants made
a motion for summary judgment as to all of plaintiff's claims.
The final pre-trial conferences in this matter were held on
December 15, 2004 and June 15, 2005. On June 20, 2005, oral
argument was heard on the Company's motion for summary judgment
and a decision is pending. No trial date has been set.
In January 2005, the plaintiff moved for leave to file a third
amended complaint, seeking to combine the two class periods into
one expanded class period from October 19, 1999 through March
19, 2002 and to add further allegations that the Company, Mr.
Dolan, Mr. Heimbold, and Mr. Ringrose disseminated materially
false and misleading statements and or failed to disclose
material information concerning the safety, efficacy and
commercial viability of VANLEV. The Magistrate Judge denied the
plaintiff's motion. Plaintiffs have appealed to the District
Court.
The suit is styled "In re Bristol-Myers Squibb Securities
Litigation, case no. 3:00-cv-01990-SRC-JJH," filed in the United
States District of District of New Jersey (Trenton), under Judge
Stanley R. Chesler. Representing the plaintiffs are Allyn
Zissel Lite and Michael A. Patunas, LITE, DEPALMA, GREENBERG AND
RIVAS, LCC, Two Gateway Center 12th Floor, Newark, NJ 07102-
5003, Phone: (973) 623-3000, E-mail: alite@ldgrlaw.com, and
mpatunas@ldgrlaw.com; and Robert J. Berg, BERNSTEIN LIEBHARD &
LIFSHITZ, LLP, 2050 Center Avenue Suite 200, Fort Lee, NJ 07024
by Phone: 201-592-3201, by E-mail: berg@bernlieb.com.
Representing the Company is William J. O'Shaughnessy of MCCARTER
& ENGLISH, ESQS., Four Gateway Center, 100 Mulberry Street, PO
Box 652, Newark NJ, 07101-0652, Phone: (973) 622-4444, E-mail:
woshaughnessy@mccarter.com.
BRISTOL-MYERS SQUIBB: Finalizes NY Securities Lawsuit Settlement
----------------------------------------------------------------
Bristol-Myers Squibb Co. has finalized the settlement of the
consolidated securities class action filed against it and
several of its current and former officers in the United States
District Court for the Southern District of New York.
During the period March through May 2002, the Company and a
number of its current and former officers were named as
defendants in a number of securities class action suits. The
suits variously alleged violations of federal securities laws
and regulations in connection with three different matters:
(1) VANLEV (as discussed above),
(2) sales incentives and wholesaler inventory levels, and
(3) ImClone, and ImClone's product, ERBITUX*.
As discussed above, the allegations concerning VANLEV have been
transferred to the U.S. District Court for the District of New
Jersey and consolidated with the action pending there. The
remaining actions have been consolidated and are pending in the
U.S. District Court for the Southern District of New York.
Plaintiffs filed a consolidated class action complaint on April
11, 2003 against the Company and certain current and former
officers alleging a class period of October 19, 1999 through
March 10, 2003. The consolidated class action complaint alleges
violations of federal securities laws in connection with, among
other things, the Company's investment in and relationship with
ImClone and ImClone's product, ERBITUX*, and certain accounting
issues, including issues related to wholesaler inventory and
sales incentives, the establishment of reserves, and accounting
for certain asset and other sales. The plaintiffs seek
compensatory damages, costs and expenses.
On March 29, 2004, the U.S. District Court granted the Company's
motion to dismiss the consolidated class action complaint and
dismissed the case with prejudice. Plaintiffs appealed that
dismissal to the Second Circuit Court of Appeals (Court of
Appeals). While that appeal was pending, the parties reached an
agreement in principle to settle the action. On July 26, 2004,
the Court of Appeals stayed the appeal and remanded the action
to the District Court so that the District Court could consider
the settlement. On July 30, 2004, the District Court vacated the
Clerk's Judgment in order to consider the settlement. Also on
that day, the District Court entered an order preliminarily
approving the settlement and certifying a class for settlement
purposes only. Pursuant to the terms of the proposed
settlement, all claims in the action will be dismissed, the
litigation will be terminated, the defendants will receive
releases, and the Company will pay $300 million to a fund for
class members. On November 9, 2004, after a fairness hearing,
the District Court approved the settlement and a judgment
dismissing the case with prejudice. The settlement has become
final.
In the second quarter of 2005, the Company entered into
agreements with its various insurers and received $230 million
in insurance proceeds which was reflected in its financial
statements in the second quarter of 2005. Approximately 58
million shares were excluded from the class action settlement
discussed above pursuant to requests for exclusion. Of those,
plaintiffs purporting to hold approximately 44.5 million shares
brought four actions in New York State Supreme Court. On June
1, 2005, the parties settled these four actions for a total
payment of $89 million and the cases were dismissed with
prejudice.
The suit is styled "In re Bristol-Myers Squibb Securities
Litigation, case no. 1:02-cv-02251-LAP," filed in the United
States District Court for the Southern District of New York,
under Judge Loretta A. Preska. Representing the plaintiffs are
Frederick Taylor Isquith, Sr., Gustavo Bruckner and Lawrence P.
Kolker, Wolf, Haldenstein, Adler, Freeman & Herz, L.L.P., 270
Madison Avenue, New York, NY 10016, Phone: (212) 545-4600,
Email: isquith@whafh.com or kolker@whafh.com. Representing the
Company are Elizabeth L. Grayer and Evan R. Chesler of Cravath,
Swaine & Moore LLP, 825 Eighth Avenue, New York, NY 10019,
Phone: (212) 474-1000, Fax: (212) 474-3700, Email:
egrayer@cravath.com or echesler@cravath.com.
BRISTOL-MYERS SQUIBB: IL Court Dismisses Securities Fraud Suit
--------------------------------------------------------------
The United States District Court for the Northern District of
Illinois dismissed the class action filed against Bristol-Myers
Squibb Co. and certain of its current and former officers.
The suit was initially filed on October 6, 2004 in the State
Court in Cook County, Illinois. The complaint made factual
allegations similar to those made in the settled federal class
action in the Southern District of New York and asserted common
law fraud and breach of fiduciary duty claims. The complaint
purported to assert those claims on behalf of stockholders who
purchased the Company's stock before October 19, 1999 and held
onto their stock through March 10, 2003.
The Company removed the action to the U.S. District Court for
Northern District of Illinois on February 10, 2005. Plaintiffs
filed a motion to remand. On July 1, 2005, the District Curt
denied the motion to remand and dismissed the case with
prejudice.
The suit is styled "Sered v. Bristol-Myers Squibb Company et al,
case no. 1:05-cv-00857," filed in the United States District
Court for the Northern District of Illinois under Judge Paul E.
Plunkett. Representing the Company is Anthony J. Anscombe of
Sedgwick, Detert, Moran & Arnold, One North Wacker Drive, Suite
4200, Chicago, IL 60606-2841, Phone: (312) 641-9050.
Representing the plaintiffs are Kristi L. Browne and Lawrence
Walner of Lawrence Walner & Associates, Ltd., 150 North Wacker
Drive, Suite 2150, Chicago, IL 60606, Phone: (312) 201-1616.
BRISTOL-MYERS SQUIBB: Plaintiffs Seek To End IL Discovery Stay
--------------------------------------------------------------
Plaintiffs asked the United States District Court for the
Eastern District of Missouri to lift the automatic stay of
discovery in the class action filed against Bristol-Myers Squibb
Co., D & K Healthcare Resources, Inc. (D & K) and several
current and former D & K directors and officers.
The suit was filed on behalf of purchasers of Company stock
between August 10, 2000 and September 16, 2002. The class
action complaint alleges that the Company participated in
fraudulently inflating the value of D & K stock by allegedly
engaging in improper "channel-stuffing" agreements with D & K.
The Company filed a motion to dismiss this case on January 28,
2005. That motion has been fully briefed and argued, and is
under consideration by the court. Under the Private Securities
Litigation Reform Act, discovery is automatically stayed pending
the outcome of the motion to dismiss. The plaintiff filed a
motion to partially lift the automatic discovery stay on
February 22, 2005. The Company filed an opposition to the
motion on March 4, 2005 and plaintiff filed a reply on March 16,
2005. The court is considering the motion.
BRISTOL-MYERS SQUIBB: NY Court Approves ERISA Lawsuit Settlement
----------------------------------------------------------------
The United States District Court for the Southern District of
New York granted preliminary approval to the settlement of the
consolidated class action filed against Bristol-Myers Squibb Co.
and others, alleging violations of the Employee Retirement
Income Security Act (ERISA).
In December 2002 and the first quarter of 2003, the Company and
others were named as defendants in five class actions brought
under the Employee Retirement Income Security Act (ERISA) in the
U.S. District Courts for the Southern District of New York and
the District of New Jersey. These actions have been
consolidated in the Southern District of New York under the
caption "In re Bristol-Myers Squibb Co. ERISA Litigation, 02 CV
10129 (LAP)." An Amended Consolidated Complaint was served on
August 18, 2003. A Second Amended Consolidated Complaint was
brought on behalf of four named plaintiffs and a putative class
consisting of all participants in, or beneficiaries of, the
Bristol-Myers Squibb Company Savings and Investment Program
(Savings Plan) at any time between January 1, 1999 and March 10,
2003 whose accounts included investment in Company stock. The
named defendants are the Company, the Bristol-Myers Squibb
Company Savings Plan Committee (Committee), thirteen individuals
who presently serve on the Committee or who served on the
Committee in the recent past, Charles A. Heimbold, Jr. and Peter
R. Dolan (the past and present Chief Executive Officers,
respectively, and the Company).
The Second Amended Consolidated Complaint generally alleges that
the defendants breached their fiduciary duties under ERISA
during the class period by, among other things:
(1) imprudently investing assets of the Savings Plan in
Company stock;
(2) misrepresenting and failing to disclose truthful and
adequate information about Company stock as a Savings
Plan investment; and
(3) operating under conflicts of interest.
In addition, all defendants except Mr. Heimbold and Mr. Dolan
were alleged to have failed to monitor the other Savings Plan
fiduciaries. These ERISA claims are predicated upon factual
allegations similar to those raised in the consolidated
securities class action filed in the same court, concerning,
among other things: the safety, efficacy and commercial
viability of VANLEV; the Company's sales incentives to certain
wholesalers and the inventory levels of those wholesalers; and
alleged anticompetitive behavior in connection with BUSPAR and
TAXOL.
On June 6, 2005, counsel for plaintiffs and the Company entered
into a Stipulation and Agreement of Settlement (Settlement). The
Settlement provides, among other things, that the Company pay to
the BMS Savings Plan Master Trust approximately $41 million less
plaintiffs' attorneys' fees, costs and certain expenses
(including notice costs). Additionally, the Company agreed to
certain structural changes relating to plan administration and
participant education. The Settlement provides for
certification, for Settlement purposes only, of a class
consisting of all persons who were participants in, or
beneficiaries of, the Bristol-Myers Squibb Company Savings and
Investment Program; the Bristol-Myers Squibb Puerto Rico, Inc.
Savings and Investment Program; and the Bristol-Myers Squibb
Company Employee Incentive Thrift Plan, at any time between
January 1, 1999 and March 10, 2003 and whose accounts in such
plans included investments in the Bristol-Myers Squibb Company
Stock Fund (excluding the individual defendants).
The Court preliminarily approved the Settlement on June 22,
2005. Notice of the Settlement is to be completed by August 22,
2005, and the fairness hearing has been scheduled for October
12, 2005.
BRISTOL-MYERS SQUIBB: Accelerated Discovery Proceeds in AWP Suit
----------------------------------------------------------------
Accelerated discovery is proceeding with regard to Bristol-Myers
Squibb Co. and four other defendants in the consolidated class
action filed in the United States District Court for the
District of Massachusetts, styled "In re Pharmaceutical Industry
Average Wholesale Price Litigation, MDL No. 1456, Civ. Action
No. 01-CV-12257-PBS," before United States District Court Judge
Patti B. Saris.
The Company, together with a number of other pharmaceutical
manufacturers, is a defendant in several private class actions
and in actions brought by the Nevada, Montana, Pennsylvania,
Wisconsin, Kentucky, Illinois and Alabama Attorneys General, the
City of New York and several New York counties that are pending
in federal and state courts relating to the pricing of certain
Company products. The federal cases, and some related state
court cases that were removed to federal courts, have been
consolidated for pre-trial purposes.
On June 18, 2003, the private plaintiffs in the AWP
Multidistrict Litigation filed an Amended Master Consolidated
Complaint (Amended Master Complaint). The Amended Master
Complaint contains two sets of allegations against the Company.
First, it alleges that the Company's and many other
pharmaceutical manufacturers' reporting of prices for certain
drug products (20 listed drugs in the Company's case) had the
effect of falsely overstating the Average Wholesale Price (AWP)
published in industry compendia, which in turn improperly
inflated the reimbursement paid to medical providers,
pharmacists, and others who prescribed, administered or sold
those products to consumers.
Second, it alleges that the Company and certain other defendant
pharmaceutical manufacturers conspired with one another in a
program called the "Together Rx Card Program" to fix AWPs for
certain drugs made available to consumers through the Program.
The Amended Master Complaint asserts claims under the federal
Racketeer Influenced and Corrupt Organizations Act (RICO) and
antitrust statutes and state consumer protection and fair trade
statutes. The Amended Master Complaint is brought on behalf of
two main proposed classes, whose definitions have been subject
to further amendment as the case has progressed. As of December
17, 2004, those proposed classes may be summarized as:
(1) all persons or entities who, from 1991 forward, paid or
reimbursed all or part of a listed drug under Medicare
Part B or under a private contract that expressly used
AWP as a pricing standard and
(2) all persons or entities who, from 2002 forward, paid or
reimbursed any portion of the purchase price of a drug
covered by the Together Rx Card Program based in whole
or in part on AWP.
The first class is further divided into several proposed
subclasses depending on whether the listed drug in question is
physician-administered, self-administered, sold through a
pharmacy benefits manager or specialty pharmacy, or is a brand-
name or generic drug. On September 3, 2004, plaintiffs in the
AWP Multidistrict Litigation moved for certification of a
proposed plaintiff class. The parties briefed that motion, as it
related to the amended proposed definition of the first main
class and sub-classes discussed above, and motion was heard by
the Court on February 10, 2005.
The Company and other defendants moved to dismiss the Amended
Master Complaint on the grounds that it fails to state claims
under the applicable statutes. On February 24, 2004, the Court
denied this motion in large part, although the Court dismissed
one of the plaintiffs' claims for failure to plead a cognizable
RICO "enterprise." Accordingly, the Court required that the
Company and the other defendants answer the Amended Master
Complaint. The Court subsequently ordered that five defendants,
including the Company engage in accelerated discovery with
respect to the remaining allegations of the Amended Master
Complaint, other than the allegations related to Together Rx,
which are on a more extended discovery schedule. This
accelerated discovery continues for these five defendants until
August 2005.
In addition, the Company and the other defendants have obtained
discovery of the named plaintiffs and of several non-parties,
such as benefits consultants, the federal government, and health
insurers. The current schedule calls for expert reports, expert
depositions and summary judgment briefing on liability issues
during the second half of 2005 into early 2006.
The cases commenced by the Nevada, Montana, Pennsylvania,
Wisconsin, Illinois, Alabama and Kentucky Attorneys General (the
Attorneys General AWP Cases) and the cases commenced by New York
City and several New York counties (the New York City &
County AWP Cases) include fraud and consumer protection claims
similar to those in the Amended Master Complaint. Certain of the
states, city and counties also have made additional allegations
that defendants, including the Company, have violated state
Medicaid statutes by, among other things, failing to provide the
states with adequate rebates required under federal law.
In a series of decisions in June, September, and October 2004,
affecting the Montana Attorney General's case and the New York
City & County AWP Cases which are proceeding in the AWP
Multidistrict Litigation in coordination with the private class
actions, the Court declined to find that the Medicaid rebate
claims were preempted by federal law, but nevertheless dismissed
many of the claims relating to "rebate" payments made by several
drug manufacturers, including those claims relating to the
Company as insufficiently pled. The Court allowed to proceed the
state law claims that allege that the Company misreported AWPs.
The Company has filed its answer to the claims remaining in the
Montana Attorney General's complaint.
On June 15, 2005, New York City and all of the Counties that
have sued thus far (except Suffolk, Nassau and Erie Counties,
which continue to proceed separately) served the Company and
other manufacturers with a Consolidated Complaint. The
Consolidated Complaint contains claims similar to those in the
prior, individual complaints of the City and Counties.
The Company also joined with other defendants in a motion to
dismiss the Pennsylvania Attorney General's action. In a
decision filed February 1, 2005, the Pennsylvania Commonwealth
Court granted the motion to dismiss on the ground that the
plaintiff had failed to plead the complaint with the requisite
particularity. The Attorney General has since served an Amended
Complaint to which defendants have objected. Defendants'
objections to the Pennsylvania Complaint have been fully briefed
and were heard by the Commonwealth Court on June 8, 2005.
On July 16, 2004, the Nevada court denied the Company's and
other defendants' motions to dismiss the complaint except as to
the state RICO claim and granted the Attorney General leave to
replead, in an opinion that was based on the prior rulings of
the AWP Multidistrict Litigation Court. The Nevada court
subsequently entered an order coordinating all discovery in that
case with that in the AWP Multidistrict Litigation.
The Company and other defendants also have made motions to
dismiss in the other Attorneys General AWP Cases. On July 13,
2005, the Company and the other defendants removed all of the
Attorneys General AWP Cases (other than the Nevada case) to the
federal district courts in their respective states based on a
recent U.S. Supreme Court ruling that established federal
jurisdiction over the claims made therein. The Company
anticipates that it and the other defendants will seek to have
the Attorneys General AWP Cases transferred to the AWP
Multidistrict litigation, but that the Attorneys' General will
seek to have the Cases remanded to their respective state
courts.
The Company is also one of a number of defendants in a private
class action making AWP-based claims that was remanded from the
AWP Multidistrict Litigation to Arizona state court. An
individual, Robert J. Swanston, asserts claims under Arizona
state law on behalf of himself and an alleged class of persons
and entities in Arizona who paid for prescription drugs based on
AWP (the Swanston Action), which claims generally allege that
the defendant drug manufacturers have conspired to inflate AWPs.
By order dated August 5, 2004, the Arizona Court denied
defendants' motions to dismiss or stay the proceedings. However,
at the later request of counsel for the plaintiff, the Arizona
Court on March 10, 2005, issued a stay of the proceedings
pending the class determination in the AWP Multidistrict
Litigation.
On October 8, 2004, the Company was added as a defendant in a
putative class action previously commenced against other drug
manufacturers in federal court in Alabama. The case was brought
by two health care providers that are allegedly entitled under a
federal statute, Section 340B of the Public Health Service Act,
to discounted prices on prescription drugs dispensed to the poor
in the providers' local areas. The plaintiff health care
providers contend that they and an alleged class of other
providers authorized to obtain discounted prices under the
statute may in fact not have received the level of discounts to
which they are entitled. The Amended Complaint against the
Company and the other manufacturers asserts claims directly
under the federal statute, as well as under state law for unjust
enrichment and for an accounting. The Company has joined in a
motion to dismiss the Complaint that was filed by the original
manufacturer defendants and that has, with the court's approval
been made applicable to the Amended Complaint.
Finally, the Company is a defendant in related state court
proceedings commenced in New York, New Jersey, California, and
Tennessee. Those proceedings were transferred to the AWP
Multidistrict Litigation for pre-trial purposes. The plaintiffs
in the California and New Jersey actions sought to remand their
cases to the state courts. The California remand motions were
denied, and the New Jersey remand motion remains pending.
BRISTOL-MYERS SQUIBB: Faces CA Suits For Sale of Consumer Info
--------------------------------------------------------------
Bristol-Myers Squibb Co. faces two class actions filed in the
California Superior Court for San Diego, over consumer privacy
issues.
The first is styled "Utility Consumers Action Network on behalf
of the Privacy Rights Clearinghouse, et al. v. Bristol-Myers
Squibb Co., et al." The Utility Consumers Action Network, a
consumer advocacy organization which focuses on privacy issues
filed the suit against the Company and other pharmaceutical
firms. The lawsuit was originally directed only at retail drug
stores but was amended in July, 2004 to add the Company and the
other pharmaceutical companies as defendants.
Another lawsuit, Rowan Klein, a Representative Action on Behalf
of Similarly Situated Persons and the Consuming Public, v.
Walgreen's, et al., was filed in February 2005, also in
California State Superior Court, San Diego County, against
retail pharmacies, the Company and other pharmaceutical
companies, and is substantially the same as the Utility
Consumers Action Network lawsuit.
The Complaints seek equitable relief, monetary damages and
attorneys' fees based upon allegedly unfair business practices
and untrue and misleading advertising under various California
statutes, including the California Confidentiality of Medical
Information Act. Specifically, the Complaints allege that
through the "Drug Marketing Program" retail stores are selling
consumers' confidential medical information to companies. The
Complaints further allege that the companies are using
consumers' medical information for direct marketing that
increase the sale of targeted drugs.
BRISTOL-MYERS SQUIBB: Working To Settle PPA Injury Litigation
-------------------------------------------------------------
Bristol-Myers Squibb Co. is working to resolve litigation filed
over its products that contain the controversial ingredient
phenylpropanolamine (PPA).
In January 2001, the Company was served with its first PPA
lawsuit. The Company currently is a defendant in approximately
20 personal injury lawsuits, filed on behalf of approximately 20
plaintiffs, in federal and state courts throughout the United
States. Many of these lawsuits involve multiple defendants.
Among other claims, plaintiffs allege that PPA causes
hemorrhagic and ischemic strokes, that the defendants were aware
of the risk, failed to warn consumers and failed to remove PPA
from their products. Plaintiffs seek compensatory and punitive
damages.
All of the federal cases have been transferred to the U.S.
District Court for the Western District of Washington, under the
caption "In re Phenylpropanolamine (PPA) Products Liability
Litigation, MDL No. 1407." The District Court has denied all
motions for class certification and there are no class action
lawsuits pending against the Company in this litigation.
On June 18, 2003, the District Court issued a ruling effectively
limiting the plaintiffs' claims to hemorrhagic and ischemic
strokes. Rulings favorable for the defendants included the
inadmissibility of expert testimony in cases alleging injuries
occurring more than three days after ingestion of a PPA-
containing product and cases involving psychoses, seizures and
cardiac injuries. The Company expects to be dismissed from
additional cases in which its products were never used by the
plaintiffs and where plaintiffs' alleged injury occurred more
than three days after ingestion of a PPA-containing product or
where a plaintiff suffered from cardiac injuries or psychoses.
BRISTOL-MYERS SQUIBB: WV Court Preliminarily OKs SERZONE Pact
-------------------------------------------------------------
The United States District Court for the Southern District of
West Virginia granted preliminary approval to the consolidated
class action filed against Bristol-Myers Squibb Co., relating to
its antidepressant drug SERZONE (nefazodone hydrochloride).
The Company launched SERZONE in May 1994 in Canada and in March
1995 in the United States. In December 2001, the Company added
a black box warning to its SERZONE label warning of the
potential risk of severe hepatic events including possible liver
failure and the need for transplantation and risk of death.
Within several months of the black box warning being added to
the package insert for SERZONE, a number of lawsuits, including
several class actions, were filed against the Company.
Plaintiffs allege that the Company knew or should have known
about the hepatic risks posed by SERZONE and failed to
adequately warn physicians and users of the risks. They seek
compensatory and punitive damages, medical monitoring, and
refunds for the costs of purchasing SERZONE.
In May 2004, the Company announced that, following an evaluation
of the commercial potential of the product after generic entry
into the marketplace and rapidly declining brand sales, it had
decided to discontinue the manufacture and sale of the product
in the U.S. effective June 14, 2004.
At present, the Company has approximately 216 lawsuits, on
behalf of approximately 2,625 plaintiffs, pending against it in
federal and state courts throughout the United States. Twenty-
seven of these cases are pending in New York State Court and
have been consolidated for pretrial discovery. In addition,
there are approximately 763 alleged, but unfiled, claims of
injury associated with SERZONE. In August 2002, the federal
cases were transferred to the U.S. District Court for the
Southern District of West Virginia, styled "In re Serzone
Products Liability Litigation, MDL 1477." In June 2003, the
District Court dismissed the class claims in all but two of the
class action complaints. A purported class action has also been
filed in Illinois.
Although a number of the class action complaints filed against
the Company had sought the certification of one or more personal
injury classes, the remaining class action complaints do not
seek the certification of personal injury classes. In addition
to the cases filed in the United States, there are four national
class actions filed in Canada.
Without admitting any wrongdoing or liability, on or around
October 15, 2004, the Company entered into a settlement
agreement with respect to all claims in the United States and
its territories regarding SERZONE. The settlement agreement
embodies a schedule of payments dependent upon whether the class
member has developed a qualifying medical condition, whether he
or she can demonstrate that they purchased or took SERZONE, and
whether certain other criteria apply. The settlement is subject
to final approval by the District Court and any appeals
therefrom. Pursuant to the settlement agreement, plaintiffs'
class counsel filed a class action complaint seeking relief for
the settlement class. On November 18, 2004, the District Court
conditionally certified the temporary settlement class and
preliminarily approved the settlement. The opt-out period ended
on April 8, 2005. Potential class members could have entered
the settlement up to and including May 13, 2005.
The fairness hearing occurred on June 29, 2005. The Court
requested additional submissions from the parties before ruling
on the settlement's fairness. Pursuant to the terms of the
proposed settlement, all claims will be dismissed, the
litigation will be terminated, the defendants will receive
releases, and the Company commits to paying at least $70 million
to funds for class members. Class Counsel will have the right to
petition the court for an award of reasonable attorneys' fees
and expenses; the fees will be paid by the Company and will not
reduce the amount of money paid to class members as part of the
settlement. The Company may terminate the settlement based upon
the number of claims submitted or the number of purported class
members who opt not to participate in the settlement and instead
pursue individual claims.
CANADA: Couple Launches Second Suit Over Air France Plane Crash
---------------------------------------------------------------
A $150-million class action lawsuit was recently launched in
Toronto that accuses Air France, two of its pilots, the Greater
Toronto Airports Authority, Airbus and Nav Canada of negligence
in the crash of a passenger jet that burst into flames last
week, The Canadian Press reports. The suit names Sahar Alqudsi
and her husband Younis Qawasmi of Mississauga, as well as
another couple identified simply as B.B. and I.B., as the
representative plaintiffs.
The suit is the second class action filed in the case. Last
Friday, a $75-million lawsuit against Air France, the GTAA and
Nav Canada was filed in Brampton. Individuals familiar with the
cases told The Canadian Press, if the various lawyers involved
can't agree which lawsuit will continue, the court will decide
for them.
DORCHESTER MINERALS: Plaintiffs Sever Claims in Natural Gas Suit
----------------------------------------------------------------
Dorchester Hugoton Ltd. continues to face a class action filed
against it and several other natural gas companies in the
District Court of Texas County, Oklahoma. The suit initially
named as defendants:
(1) Dorchester Hugoton, Ltd.,
(2) Anadarko Petroleum Corporation,
(3) Conoco, Inc.,
(4) XTO Energy Inc.,
(5) ExxonMobil Corporation,
(6) Phillips Petroleum Company, Incorporated and
(7) Texaco Exploration and Production, Inc.
(8) Dorchester Minerals Operating L.P.
In January 2002, some individuals and an association called
Rural Residents for Natural Gas Rights, referred to as RRNGR,
filed the suit. The individuals and RRNGR consist primarily of
Texas County, Oklahoma residents who, in residences located on
leases use natural gas from gas wells located on the same
leases, at their own risk, free of cost.
The plaintiffs seek declaration that their domestic gas use is
not limited to stoves and inside lights and is not limited to a
principal dwelling as provided in the oil and gas lease
agreements with defendants in the 1930s to the 1950s.
Plaintiffs' claims against defendants include failure to
prudently operate wells, violation of rights to free domestic
gas, violation of irrigation gas contracts, underpayment of
royalties, a request for accounting, and fraud. Plaintiffs also
seek certification of class action against defendants.
In July 2002, the defendants were granted a motion for summary
judgment removing RRNGR as a plaintiff. On October 1, 2004, the
plaintiffs severed claims against Dorchester Minerals Operating
LP regarding royalty underpayments.
GOOGLE INC.: Advertisers Launch "Overcharging" Suit In CA Court
---------------------------------------------------------------
A proposed class action suit was filed against Google, alleging
accusations that it overcharged advertisers who use the web
search giant's paid search advertising program, The Reuters News
Agency reports.
The suit, filed on August 3 in State Superior Court in Santa
Clara, California, specifically accuses the Company of charging
in excess of advertisers' "daily budgets," under which the
Company allows an advertiser to limit how much it spends each
day. It seeks unspecified monetary damages and was filed on
behalf of CLRB Hanson Industries in Minnesota and other
advertisers.
Additionally, the suit claims that Google "engaged in conduct
which injured members of the general public, including the
plaintiffs" and said it was "impossible ... to determine the
exact amount of the injury without a detailed review of Google's
books and records". It also accuses Google of disputing
complaints from advertisers regarding the company's pricing
practices and for not reimbursing what the suit called
"unlawful" charges.
HERBALIFE INTERNATIONAL: Faces TCPA Violations Suit in WV Court
---------------------------------------------------------------
Herbalife International, Inc. and certain of its distributors
face a purported class action lawsuit filed in the Circuit Court
of Ohio County in the State of West Virginia, styled "Mey v.
Herbalife International, Inc., et al."
The complaint alleges that certain telemarketing practices of
certain Company distributors violate the Telephone Consumer
Protection Act, or TCPA, and seeks to hold the Company
vicariously liable for the practices of its distributors. More
specifically, the plaintiffs' complaint alleges that several of
the Company's distributors used pre-recorded telephone messages
and autodialers to contact prospective customers in violation of
the TCPA's prohibition of such practices.
The Company's distributors are independent contractors and, if
any such distributors in fact violated the TCPA, they also
violated the Company's policies, which require its distributors
to comply with all applicable federal, state and local laws, the
Company stated in a disclosure to the Securities and Exchange
Commission.
HERBALIFE INTERNATIONAL: Unfair Trade Suit Moved To Los Angeles
---------------------------------------------------------------
The class action filed against Herbalife International, Inc. and
certain of its independent distributors has been moved to the
Los Angeles County Superior Court in California.
On February 17, 2005, a suit styled "Minton v. Herbalife
International, et al.," was filed in the Superior Court of
California, County of San Francisco. The suit was served on the
Company on March 14, 2005. The Company moved to transfer the
case to the Los Angeles County Superior Court.
The plaintiff is challenging the marketing practices of certain
Herbalife International independent distributors and the Company
under various state laws prohibiting "endless chain schemes,"
insufficient disclosure in assisted marketing plans, unfair and
deceptive business practices, and fraud and deceit. The
plaintiff alleges that the Freedom Group system operated by
certain independent distributors of Herbalife International
products places too much emphasis on recruiting and encourages
excessively large purchases of product and promotional materials
by distributors. The plaintiff also alleges that Freedom Group
pressured distributors to disseminate misleading promotional
materials. The plaintiff seeks to hold the Company vicariously
liable for the actions of its independent distributors and is
seeking damages and injunctive relief.
INTERSTATE BAKERIES: Recalls Cookies For Undeclared Ingredient
---------------------------------------------------------------
Interstate Bakeries Corporation is voluntarily recalling oatmeal
cookies sold in its retail stores throughout the United States.
Some HOSTESSr oatmeal cookie packages may contain chocolate chip
cookies that contain milk and eggs that are not listed in the
ingredient statement on the package label. People who have an
allergy or severe sensitivity to whey or milk protein or eggs
run the risk of serious or life-threatening allergic reaction if
they consume the product.
The product being recalled is: HOSTESSr Cookies - Oatmeal, 12
Packages of 4 cookies each, Net Wt. 24 oz., UPC 45000 60479,
Code NOV 7, 56132, 06 04
Only the oatmeal variety of cookie with this specific code is
affected by this recall. The company has not received any
complaints or reports of illness related to this labeling error.
People who do not have milk protein or egg allergies can eat the
product without concern.
The packaging error was limited to one day's production, and no
other HOSTESSr products are part of this recall.
Consumers who purchased these cookies and who are known to be
allergic to milk proteins or eggs should contact Interstate
Bakeries Consumer Affairs Office at 800-483-7253 for a refund.
MASSACHUSETTS: Settlement Reached For Suit Over Medicaid Program
----------------------------------------------------------------
A settlement was reached in a federal class action lawsuit
charging that the Massachusetts Medicaid program deprived some
of the state's neediest patients of proper medical care by
paying noncompetitive wages to private-duty nurses, The Boston
Globe reports.
The settlement, which was reached last August 1 is awaiting
approval by a U.S. District Court judge nearly a year after the
state raised that pay by more than 21 percent and created a
management program to better track the efficiency of at-home
patient care. The settlement calls for the state Medicaid
program, MassHealth, to collect data on how well it is using
private-duty nurses, as well as to cover the five plaintiffs'
$30,000 legal fees and costs.
One of the plaintiffs, Peter Zurblis of Mansfield, whose 15-
year-old daughter, Marcie, suffers from a severe form of
epilepsy and requires constant supervision, told The Boston
Globe that he and the other plaintiffs agreed it was time to
settle. Explaining that the plaintiffs' main goal was to boost
pay for the private nurses, Mr. Zurblis also told The Boston
Globe, "We all came to the consensus that it was time to put an
end to it. We probably got as far as we're going to get."
The 2001 lawsuit charged that MassHealth, which administers home
nursing care for children under 21 who are entitled to it under
Medicaid, was making it impossible to attract and keep private-
duty nurses because it did not pay competitive nursing wages or
overtime. At the time, MassHealth mandated that private-duty
nurses hired to care for severely disabled children under the
Medicaid program receive a minimum of $24.92 per hour, which
includes the cost of providing health benefits and liability
insurance. However, the state reimbursed the nursing service
agencies at a rate of $34.92 an hour to cover both wages and
benefits, according to officials.
Additionally, Mr. Zurblis told The Boston Globe that while his
daughter is still not receiving all the care for which she is
eligible, the state's coverage has improved since the pay
increase took effect. According to him, before the pay increase,
his daughter received only about 30 percent of the coverage for
which she was eligible. Now, he says, she receives about 60
percent of the coverage. "I expect that increase to continue as
the effects of the increase in pay attract more nurses," he
added.
MERCK FROSST: Motley Rice, Will Barristers File Claim in Ontario
----------------------------------------------------------------
Nationally known law firm, Motley Rice LLC, together with Will
Barristers: Morin & Miller of Ontario, Canada filed a class
action claim against Merck Frosst Canada & Co., Merck Frosst
Canada Ltd., and Merck & Co. Inc.
The claim was filed in Ontario Superior Court on behalf of The
Electrical Industry of Ottawa Health and Benefit Trust Fund and
members of the class of entities. The claim against the three
Merck companies alleges that the defendants were negligent in
the production, manufacturing, testing and marketing of the drug
Vioxx. The claim, which also alleges that the defendant
misstated the true effectiveness and safety of Vioxx, seeks
reimbursement for the cost of Vioxx and/or difference in cost
compared to safe alternatives.
The Electrical Industry of Ottawa Health and Benefit Trust Fund,
a third-party payer located in the city of Ottawa, is
responsible for administering and paying the healthcare benefits
of its members, unionized electricians or the staff of
electrical contractors. They are responsible to pay for a
prescription (or a part of a prescription) once the
pharmaceutical product is placed on the drug formulary, the list
of drugs that has been approved by the third-party payor as a
pharmaceutical that it will cover in whole or in part. The
third-party payor does not pay for over the counter medication.
The plaintiff claims that they have and will continue to pay for
care costs as a result of insured individuals suffering from
heart attacks, strokes and other ailments as a result of taking
the drug Vioxx.
"Due to a steady rise in the cost of providing health care, we
recognize that it is imperative to recover money paid for
Vioxx," said Motley Rice attorney and executive committee member
Bill Narwold. "According to several reports (The Lancet, the
June 2004 Treatment Options for Osteoarthritis: Scientific
Review) Merck knew of the dangers associated with Vioxx as early
as 1999, yet continued to charge a price 15 times higher than
safer alternatives."
Vioxx, is a non steroidal, anti-inflammatory drug (NSAID) which
was authorized for sale in Canada with an approved usage to
treat pain and provide inflammation relief. Merck marketed Vioxx
as being more effective and safer than other NSAIDs, since it
was gentler on the stomach. The drug was first approved in
Canada, by Health Canada in or about October 1999 and listed on
the Ontario Drug Benefit Formulary in April 2000. It was more
expensive than over the counter and other prescription NSAIDs,
but Merck advocated that there would be an overall cost savings
for health plans as there would be far fewer gastrointestinal
ailments resulting from the ingestion of Vioxx as compared to
other NSAIDs. The claim alleges that this was done by Merck to
convince Provincial Drug Plans, private insurers, etc., to place
Vioxx on their formularies so that the majority of the public
would be able to afford Vioxx through a third-party payor and to
further convince physicians that Vioxx was the best NSAID which
would subsequently increase the rate of prescriptions and
Merck's profits.
The claim alleges that Vioxx was significantly more dangerous
than other NSAIDs as it caused people to suffer from heart
attacks, strokes and other cardiovascular problems. Vioxx was
voluntarily withdrawn from the marketplace on or about September
30, 2004 due to its association with fatal heart attacks and
strokes.
"We believe people of Canada have been misled and deceived by
all three of these Merck corporations. We also believe if they
had been forthright, the drug would not have remained on
formularies and would not have been prescribed at the same rate
or at all," stated Paul Miller, attorney with Will Barristers:
Morin & Miller of Toronto.
For more details, contact Motley Rice, LLC, Phone:
1-800-768-4026, Web site: http://www.motleyrice.comOR Will
Barristers: Morin & Miller, Phone: 1-800-661-7606, Web site:
http://www.willbarristers.com.
MILBERG WEISS: Federal Officials to Widen Criminal Investigation
----------------------------------------------------------------
Federal prosecutors are stepping up their criminal investigation
of Milberg Weiss, one of the nation's largest class actions law
firm in the field of securities litigation, according to a
report published by the Wall Street Journal, The CNN/Money
reports.
The Journal reported that federal investigators are granting
immunity to two former partners of the firm as they intensify
their scrutiny of a third, prominent litigator William Lerach.
The investigation is looking at whether the firm illegally made
payments to plaintiffs to lead a series of shareholder suits.
Plaintiffs in such suits are not permitted to receive payments
beyond those awarded by courts, to avoid conflict between their
interests and those of the rest of the class, the paper reports.
In June, Seymour Lazar, a retired Palm Springs, California
lawyer who was a plaintiff in at least 50 Milberg Weiss
securities cases, was charged with fraud, conspiracy and money
laundering, with prosecutors alleging he had secretly been given
$2.4 million for taking a leading role in those cases. His
attorney though denied the charge, contending that the payment
was legal. The Journal also reported that a federal grand jury
in Los Angeles heard secret testimony three weeks ago from one
of the former partners given immunity, Alan Schulman.
Prosecutors informed Mr. Lerach and two other former partners,
David Bershad and Melvyn Weiss, that they could face indictment
for conspiracy, according to the paper's report. Mr. Lerach, who
split off from Milberg to form his own firm last year, is
representing Enron Corporation investors who have sued the
company for fraud, and so far has won more than $7 billion from
Enron bankers including J.P. Morgan Chase (Research), Citibank
(Research) and Canada's CIBC.
NORTH CAROLINA: Appeals Judge, Group Launch Suit V. Finance Law
---------------------------------------------------------------
A Court of Appeals judge and an anti-abortion group initiated a
lawsuit over North Carolina's public-financing system for
judicial races, arguing that the rules limit free speech and put
candidates who don't participate at a disadvantage, The
Associated Press reports.
According to the clerk's office, Judge Barbara Jackson, who was
elected in November, and North Carolina Right-to-Life filed the
class action lawsuit in Greensboro federal court. At issue in
the case is the state's voluntary public-finance program, which
gives public money to candidates for the Court of Appeals and
N.C. Supreme Court who agree to fundraising restrictions by
outside contributors. Held up as a national model by campaign-
reform groups to reduce the influence of big money on the
judiciary, the program distributed $1.5 million to 12 Supreme
Court and Court of Appeals candidates in 2004, the first time
the method was used. In their complaint the plaintiffs are
contending that provisions in the 2002 law that barred Judge
Jackson from receiving donations and Right-to-Life from making
donations 21 days before Election Day violated their First
Amendment rights.
Seeking to have parts of the law found unconstitutional, James
Bopp Jr., an Indiana attorney with the conservative James
Madison Center for Free Speech who is representing the
plaintiffs said, "The law unfairly disadvantages candidates and
citizens' groups from participating in judicial elections."
Judge Jackson also stated in the complaint that she intended to
participate in the public-financing program, but she failed to
get enough small "qualifying contributions" before the July 2004
primary.
Alan Thornburg, the incumbent whom Judge Jackson defeated
despite being outspent more than 5-to-1, did participate in the
public-financing program, prompting the 21-day ban upon Judge
Jackson's campaign.
The defendants in the case include members of the State Board of
Elections, which carries out election law, Attorney General Roy
Cooper and other district attorneys who prosecute those who
break the law.
PRINCIPAL FINANCIAL: IO Court Dismisses Suit V. 2001 Settlement
---------------------------------------------------------------
The United States District Court for the Southern District of
Iowa granted Principal Financial Group, Inc.'s motion to dismiss
the sales practices class action filed against it and its wholly
owned subsidiaries, Principal Life Insurance Company and
Principal Financial Services, Inc.
On December 23, 2004, a lawsuit was filed in Iowa state court on
behalf of a proposed class comprised of the settlement class in
the Principal Life sales practices class action settlement,
which was approved in April 2001 by the United States District
Court for the Southern District of Iowa. This new lawsuit claims
that the treatment of the settlement costs of that sales
practices litigation in relation to the allocation of
demutualization consideration to Principal Life policyholders
was inappropriate. Demutualization allocation was done pursuant
to the terms of a plan of demutualization approved by the
policyholders in July 2001 and Insurance Commissioner of the
State of Iowa in August 2001. The lawsuit further claims that
such allocation was not accurately described to policyholders
during the demutualization process and is a breach of the sales
practices settlement.
On January 27, 2005, the Company filed a notice to remove the
action from state court to the United States District Court for
the Southern District of Iowa. On July 22, 2005, the
plaintiff's motion to remand the action to state court was
denied, and the Company's motion to dismiss the lawsuit was
granted.
The suit is styled "Sofonia v. Principal Life Insurance Company
et al., case no. 4:05-cv-00040-RP-TJS," filed in the United
States District Court for the Southern District of Iowa, under
Judge Robert W. Pratt. Representing the Company are Brian L.
Campbell of Faegre & Benson - DM, 801 Grand Avenue, Suite 3100
Des Moines, IA 50309-8002, Phone: 515 248 9000, Fax:
515 248 9010, E-mail: bcampbell@faegre.com; and Carl Micarelli
of Debevoise & Plimpton LLP, 919 Third Avenue, New York, NY
10022, Phone: 212 909 6000, Fax: 212 909 6836, E-mail:
cmicarelli@debevoise.com. Representing the plaintiffs is David
J. Darrell of the Baudino Law Group, PLC, 2600 Grand Avenue,
Suite 300, Des Moines, IA 50312, Phone: 515 282 1010, Fax: 515
282 1066, E-mail: darrell@baudino.com.
PULTE HOMES: Price Manipulation Suit Dismissed, To be Re-filed
--------------------------------------------------------------
A lawsuit against Pulte Homes, wherein about 100 plaintiffs
claimed they suffered financial losses when Pulte lowered home
prices last fall because demand for the homes was down, was
recently dismissed, The KLAS-TV, NV reports.
However, plaintiff's attorney reiterated that despite of the
dismissal without prejudice of class action suit, it would be
re-filed as five separate cases. They argued that it is not
suitable to have one lawsuit for five subdivisions.
TIME WARNER: NY Court Preliminarily OKs Consumer Suit Settlement
----------------------------------------------------------------
The United States District Court for the Southern District of
New York granted preliminary approval to the settlement of a
nationwide consumer class action filed against Time Warner, Inc.
and Time Warner Cable, Inc.
On October 7, 2003, a suit, styled "Kim Sevier and Eric M. Payne
vs. Time Warner Inc. and Time Warner Cable Inc.," was filed in
the U.S. District Court for the Southern District of New York.
On October 23, 2003, another suit, styled "Heidi D. Knight v.
Time Warner Inc. and Time Warner Cable Inc." was filed in the
same court. In each case, the plaintiffs allege that defendants
unlawfully tie the provision of high-speed cable Internet
service to leases of cable modem equipment, because they do not
provide a discount to customers who provide their own cable
modems, in violation of Section 1 of the Sherman Act and the New
York Donnelly Act, and, further, that defendants' conduct
resulted in unjust enrichment.
On November 19, 2003, the court ordered plaintiffs' complaints
to be consolidated. Plaintiffs filed their amended consolidated
class action complaint on December 17, 2003, seeking
compensatory damages, disgorgement, attorneys' fees and
injunctive and declaratory relief. On February 6, 2004, the
Company moved to compel arbitration and to stay the matter
pending arbitration or, alternatively, to dismiss the case; the
court denied this motion on April 19, 2004, and the Company
filed a notice to appeal the decision on arbitration to the U.S.
Court of Appeals for the Second Circuit.
On March 7, 2005, the Second Circuit remanded the case to the
district court so that the parties may seek approval of a
proposed classwide settlement. The district court granted
preliminary approval of the settlement on May 18, 2005.
The suit is styled "Sevier, et al v. Time Warner, Inc., et al,
case no. 1:03-cv-07747-JES," filed in the United States District
Court for the Southern District of New York, under Judge John E.
Sprizzo. Representing the Company are Jay Allen Cohen, Stacey
A. Shortall, and Joseph J. Simmons of Paul, Weiss, Rifkind,
Wharton & Garrison LLP (NY), 1285 Avenue of the Americas, New
York, NY 10019, Phone: (212)-373-3163, Fax: (212)-373-2399, E-
mail: jaycohen@paulweiss.com, sshortall@paulweiss.com, and
jsimons@paulweiss.com. Representing the plaintiffs are:
(1) Eric James Belfi, Murray, Frank & Sailer, LLP, 275
Madison Avenue, Ste. 801, New York, NY 10016, Phone:
212-682-1818, Fax: 212-682-1892, E-mail:
ebelfi@murrayfrank.com;
(2) Kenneth A. Elan, 217 Broadway, Suite 606, New York, NY
10007, Phone: (212) 619-0261
(3) Mark Reinhardt, Reinhardt, Wendorf & Blanchfield, E-
1250 First National Bank Building, St. Paul, MN 55101,
Phone: (651) 287-2100
TIME WARNER: Reaches Settlement For NY Consumer Privacy Lawsuit
---------------------------------------------------------------
Time Warner Entertainment Company, L.P. reached a settlement for
the purported nationwide class action filed against it and Time
Warner Cable in the United States District Court for the Eastern
District of New York, styled "Andrew Parker and Eric DeBrauwere,
et al. v. Time Warner Entertainment Company, L.P. and Time
Warner Cable."
The suit alleges that the Company sold its subscribers'
personally identifiable information and failed to inform
subscribers of their privacy rights in violation of the Cable
Communications Policy Act of 1984 and common law. The
plaintiffs are seeking damages and declaratory and injunctive
relief.
On August 6, 1998, the Company filed a motion to dismiss, which
was denied on September 7, 1999. On December 8, 1999, the
Company filed a motion to deny class certification, which was
granted on January 9, 2001 with respect to monetary damages, but
denied with respect to injunctive relief. On June 2, 2003, the
U.S. Court of Appeals for the Second Circuit vacated the
District Court's decision denying class certification as a
matter of law and remanded the case for further proceedings on
class certification and other matters. On May 4, 2004,
plaintiffs filed a motion for class certification, which the
Company has opposed.
The suit is styled "Parker, et al v. Time Warner Entertai, et
al, case no. 1:98-cv-04265-ILG-JMA," filed in the United States
District Court for the Eastern District of New York, under Judge
I. Leo Glasser. Representing the plaintiffs are Michael G.
Lenett of Cuneo Waldman & LaDuca LLP, 507 C Street, N.E.,
Washington, DC 20002, Phone: 202-789-3960; and Peter Steven
Linden of Kirby McInerney & Squire, LLP, 830 Third Avenue, New
York, NY 10022, Phone: (212) 371-6600. Representing the Company
are Landis Cox Best and Jonathan D. Their of Cahill Gordon &
Reindel LLP, 80 Pine Street, New York, NY 10005, Phone:
(212) 701-3694, Fax: (212) 269-5420, E-mail: lbest@cahill.com or
jthier@cahill.com; and George W. Sampson of Hagens Berman LLP,
1301 Fifth Avenue, Suite 2900, Seattle, WA 98101, Fax
(206) 623-0594.
TIME WARNER: Inks MOU TO Settle NY ERISA, Stock Fraud Litigation
----------------------------------------------------------------
Time Warner, Inc. entered a memorandum of understanding to
settle the massive shareholder fraud and Employee Retirement
Income Security Act (ERISA) litigation coordinated in the United
States District Court for the Southern District of New York.
As of August 1, 2005, 31 shareholder class action lawsuits have
been filed naming as defendants the Company, certain current and
former executives of the Company and, in several instances,
America Online. These lawsuits were filed in U.S. District
Courts for the Southern District of New York, the Eastern
District of Virginia, the Eastern District of Texas and the
Southern District of Florida.
The complaints purport to be made on behalf of certain
shareholders of the Company and allege that the Company made
material misrepresentations and/or omissions of material fact in
violation of Section 10(b) of the Securities Exchange Act of
1934, Rule 10b-5 promulgated thereunder, and Section 20(a) of
the Exchange Act. Plaintiffs claim that the Company failed to
disclose America Online's declining advertising revenues and
that the Company and America Online inappropriately inflated
advertising revenues in a series of transactions. Certain of
the lawsuits also allege that:
(1) certain of the individual defendants and other insiders
at the Company improperly sold their personal holdings
of Time Warner stock,
(2) the Company failed to disclose that the America Online-
Historic TW Merger was not generating the synergies
anticipated at the time of the announcement of the
merger and,
(3) the Company inappropriately delayed writing down more
than $50 billion of goodwill.
The lawsuits seek an unspecified amount in compensatory damages.
All of these lawsuits have been centralized in the U.S. District
Court for the Southern District of New York for coordinated or
consolidated pretrial proceedings (along with the federal
derivative lawsuits and certain lawsuits brought under the ERISA
under the caption "In re AOL Time Warner Inc. Securities and
ERISA Litigation. Additional lawsuits filed by individual
shareholders have also been consolidated for pretrial
proceedings.
The Minnesota State Board of Investment (MSBI) has been
designated lead plaintiff for the consolidated securities
actions and filed a consolidated amended complaint on April 15,
2003, adding additional defendants including additional officers
and directors of the Company, Morgan Stanley & Co., Salomon
Smith Barney Inc., Citigroup Inc., Banc of America Securities
LLC and JP Morgan Chase & Co. Plaintiffs also added additional
allegations, including that the Company made material
misrepresentations in its registration statements and joint
proxy statement-prospectus related to the America Online-
Historic TW Merger and in its registration statements pursuant
to which debt securities were issued in April 2001 and April
2002, allegedly in violation of Section 11 and Section 12 of the
Securities Act of 1933.
On July 14, 2003, the defendants filed a motion to dismiss the
consolidated amended complaint. On May 5, 2004, the district
court granted in part the defendants' motion, dismissing all
claims with respect to the registration statements pursuant to
which debt securities were issued in April 2001 and April 2002
and certain other claims against other defendants, but otherwise
allowing the remaining claims against the Company and certain
other defendants to proceed. On August 11, 2004, the court
granted MSBI's motion to file a second amended complaint. On
July 30, 2004, defendants filed a motion for summary judgment on
the basis that plaintiffs cannot establish loss causation for
any of their claims, and thus plaintiffs do not have any
recoverable damages. That motion is pending. On April 8, 2005,
MSBI moved for leave to file a third amended complaint to add
certain new factual allegations and four additional individual
defendants. That motion is also pending.
The Company has reached an agreement in principle with MSBI for
the settlement of the consolidated securities actions. The
tentative settlement is reflected in a Memorandum of
Understanding dated as of July 29, 2005 between the lead
plaintiff and the Company. Under the proposed settlement, $2.4
billion will be paid by the Company into a settlement fund for
the members of the class represented in the action. In addition,
the $150 million previously paid by the Company into a fund in
connection with the settlement of the investigation by the DOJ
will be made available to the class, and the Company will use
its best efforts to have the $300 million it previously paid in
connection with the settlement of its SEC investigation
transferred to the settlement fund for the class. The proposed
settlement is subject to completion of final documentation and
preliminary and final court approval as well as other
conditions. At this time, there can be no assurance that these
conditions will be met and that the settlement of the securities
class action litigation will receive preliminary or final court
approval. Ernst & Young also has agreed to a settlement in this
litigation matter and will pay $100 million.
As of August 1, 2005, three putative class action lawsuits have
been filed alleging violations of ERISA in the United States
District Court for the Southern District of New York on behalf
of current and former participants in the Time Warner Savings
Plan, the Time Warner Thrift Plan and/or the TWC Savings Plan
(the "Plans"). Collectively, these lawsuits name as defendants
the Company, certain current and former directors and officers
of the Company and members of the Administrative Committees of
the Plans.
The lawsuits allege that the Company and other defendants
breached certain fiduciary duties to plan participants by, inter
alia, continuing to offer Time Warner stock as an investment
under the Plans, and by failing to disclose, among other things,
that the Company was experiencing declining advertising revenues
and that the Company was inappropriately inflating advertising
revenues through various transactions. The complaints seek
unspecified damages and unspecified equitable relief.
The ERISA actions have been consolidated as part of the "In re
AOL Time Warner Inc. Securities and ERISA Litigation," described
above. On July 3, 2003, plaintiffs filed a consolidated amended
complaint naming additional defendants, including Time Warner
Entertainment (TWE), certain current and former officers,
directors and employees of the Company and Fidelity Management
Trust Company. On September 12, 2003, the Company filed a
motion to dismiss the consolidated ERISA complaint. On March 9,
2005, the court granted in part, and denied in part, the
Company's motion to dismiss. The court dismissed two individual
defendants and TWE for all purposes, dismissed other individuals
with respect to claims plaintiffs had asserted involving the TWC
Savings Plan, and dismissed all individuals who were named in a
claim asserting that their stock sales had constituted a breach
of fiduciary duty to the Plans. The Company filed an answer to
the consolidated ERISA complaint on May 20, 2005.
As of August 1, 2005, 11 shareholder derivative lawsuits have
been filed naming as defendants certain current and former
directors and officers of the Company, as well as the Company as
a nominal defendant. Three have been filed in New York State
Supreme Court for the County of New York, four have been filed
in the U.S. District Court for the Southern District of New York
and four have been filed in the Court of Chancery of the State
of Delaware for New Castle County. The complaints allege that
defendants breached their fiduciary duties by causing the
Company to issue corporate statements that did not accurately
represent that America Online had declining advertising
revenues, that the America Online-Historic TW Merger was not
generating the synergies anticipated at the time of the
announcement of the merger, and that the Company inappropriately
delayed writing down more than $50 billion of goodwill, thereby
exposing the Company to potential liability for alleged
violations of federal securities laws. The lawsuits further
allege that certain of the defendants improperly sold their
personal holdings of Company securities. The lawsuits request
that all proceeds from defendants' sales of Time Warner common
stock, all expenses incurred by the Company as a result of the
defense of the shareholder class actions discussed above and any
improper salaries or payments, be returned to the Company. The
four lawsuits filed in the Court of Chancery for the State of
Delaware for New Castle County have been consolidated under the
caption, "In re AOL Time Warner Inc. Derivative Litigation." A
consolidated complaint was filed on March 7, 2003 in that
action, and on June 9, 2003, the Company filed a notice of
motion to dismiss the consolidated complaint. On May 2, 2003,
the three lawsuits filed in New York State Supreme Court for the
County of New York were dismissed on "forum non conveniens"
grounds and plaintiffs' time to appeal has expired. The four
lawsuits pending in the U.S. District Court for the Southern
District of New York have been centralized for coordinated or
consolidated pre-trial proceedings with the securities and ERISA
lawsuits described above under the caption "In re AOL Time
Warner Inc. Securities and ERISA Litigation." On October 6,
2004, plaintiffs filed an amended consolidated complaint in
three of these four cases.
On July 1, 2003, a suit styled "Stichting Pensioenfonds ABP v.
AOL Time Warner Inc. et al." was filed in the U.S. District
Court for the Southern District of New York against the Company,
current and former officers, directors and employees of the
Company and Ernst & Young LLP. Plaintiff alleges that the
Company made material misrepresentations and/or omissions of
material fact in violation of Section 10(b) of the Exchange Act
and Rule 10b-5 promulgated thereunder, Section 11, Section 12,
Section 14(a) and Rule 14a-9 promulgated thereunder, Section 18
and Section 20(a) of the Exchange Act. The complaint also
alleges common law fraud and negligent misrepresentation. The
plaintiff seeks an unspecified amount of compensatory and
punitive damages.
This lawsuit has been consolidated for coordinated pretrial
proceedings under the caption "In re AOL Time Warner Inc.
Securities and ERISA Litigation" described above. On July 16,
2004, plaintiff filed an amended complaint adding certain
institutional defendants, including Historic TW, and certain
current directors of the Company. On November 22, 2004, the
Company filed a motion to dismiss the complaint.
On November 11, 2002, Staro Asset Management, LLC filed a
putative class action complaint in the U.S. District Court for
the Southern District of New York on behalf of certain
purchasers of Reliant 2.0% Zero-Premium Exchangeable
Subordinated Notes for alleged violations of the federal
securities laws. Plaintiff is a purchaser of subordinated notes,
the price of which was purportedly tied to the market value of
Time Warner stock. Plaintiff alleges that the Company made
misstatements and/or omissions of material fact that
artificially inflated the value of Time Warner stock and
directly affected the price of the notes. Plaintiff seeks
compensatory damages and/or rescission. This lawsuit has been
consolidated for coordinated pretrial proceedings under the
caption "In re AOL Time Warner Inc. Securities and ERISA
Litigation" described above.
On May 23, 2003, a suit styled "Treasurer of New Jersey v. AOL
Time Warner Inc. et al.," was filed in the Superior Court of New
Jersey, Mercer County, naming as defendants the Company, certain
current and former officers, directors and employees of the
Company, Ernst & Young LLP, Citigroup Inc., Salomon Smith
Barney, Morgan Stanley, JP Morgan Chase and Banc of America
Securities. The complaint is brought by the Treasurer of New
Jersey and purports to be made on behalf of the State of New
Jersey, Department of Treasury, Division of Investments and
certain funds administered by the Division.
Plaintiff alleges that the Company made material
misrepresentations in its registration statements in violation
of Sections 11 and 12 of the Securities Act of 1933. Plaintiff
also alleges violations of New Jersey state law for fraud and
negligent misrepresentation. Plaintiffs seek an unspecified
amount of damages.
On October 29, 2003, the Company moved to stay the proceedings
or, in the alternative, dismiss the complaint. Also on October
29, 2003, all named individual defendants moved to dismiss the
complaint for lack of personal jurisdiction. The parties have
agreed to stay this action and to coordinate discovery
proceedings with the securities and ERISA lawsuits described
above under the caption "In re AOL Time Warner Inc. Securities
and ERISA Litigation."
On February 24, 2004, a suit, styled "Commonwealth of
Pennsylvania Public School Employees Retirement System
et al. v. Time Warner Inc. et al." was filed in the Court of
Common Pleas of Philadelphia County naming as defendants the
Company, certain current and former officers, directors and
employees of the Company, America Online, Historic TW, Morgan
Stanley & Co., Inc., Citigroup Global Markets Inc., Banc of
America Securities LLC, J.P. Morgan Chase & Co and Ernst & Young
LLP.
Plaintiffs had previously filed a request for a writ of summons
notifying defendants of commencement of an action. Plaintiffs
allege that the Company made material misrepresentations in its
registration statements in violation of Sections 11 and 12 of
the Securities Act of 1933. Plaintiffs also allege violations of
Pennsylvania law, breach of fiduciary duty and common law fraud.
The plaintiffs seek unspecified compensatory and punitive
damages.
Plaintiffs dismissed the four investment banks from the
complaint in exchange for a tolling agreement. The remaining
parties have agreed to stay this action and to coordinate
discovery proceedings with the securities and ERISA lawsuits
described above under the caption "In re AOL Time Warner Inc.
Securities and ERISA Litigation." Plaintiffs filed an amended
complaint on June 14, 2005.
The suit is styled "In Re: AOL Time Warner, Inc. Securities and
ERISA Litigation, case no. 1:02-cv-05575-SWK," filed in the
United States District Court for the Southern District of New
York under Judge Shirley Wohl Kram. Representing the Company is
Rachel G. Skaistis, Cravath, Swaine & Moore LLP, 825 Eighth
Avenue New York, NY 10019, Phone: (212) 474-1000, Fax:
(212) 474-3700, E-mail: rskaistis@cravath.com. Representing the
plaintiffs is Samuel D. Heins of Heins Mills & Olson, P.L.C.,
700 Northstar East 608 Second Avenue South Minneapolis, MN
55402, Phone: 612-338-4605.
TIME WARNER: CA Court Dismisses in Part Shareholder Fraud Suit
--------------------------------------------------------------
The California Superior Court for the County of Los Angeles
dismissed in part the lawsuit filed against Time Warner, Inc.,
styled "Regents of the University of California et al. v.
Parsons et al." The suit also names as defendants certain of
the Company's current and former officers, directors and
employees of the Company, Ernst & Young LLP, Citigroup Inc.,
Salomon Smith Barney Inc. and Morgan Stanley & Co.
Plaintiffs allege that the Company made material
misrepresentations in its registration statements related to the
America Online-Historic TW Merger and stock option plans in
violation of Sections 11 and 12 of the Securities Act of 1933.
The complaint also alleges common law fraud and breach of
fiduciary duties under California state law. Plaintiffs seek
disgorgement of alleged insider trading proceeds and restitution
for their stock losses.
Three related cases have been filed in California Supreme Court
and have been coordinated in the County of Los Angeles. On
January 26, 2004, certain individuals filed motions to dismiss
for lack of personal jurisdiction. On September 10, 2004, the
Company filed a motion to dismiss plaintiffs' complaints and
certain individual defendants (who had not previously moved to
dismiss plaintiffs' complaints for lack of personal
jurisdiction) filed a motion to dismiss plaintiffs' complaints.
On April 22, 2005, the court granted certain motions to dismiss
for lack of personal jurisdiction and denied certain motions to
dismiss for lack of personal jurisdiction.
TIME WARNER: OH Court Grants in Part Stock Suit Dismissal Motion
----------------------------------------------------------------
The Ohio Court of Common Pleas For Franklin County granted in
part Time Warner, Inc.'s motion to dismiss the lawsuit filed
against it, styled "Ohio Public Employees Retirement System et
al. v. Parsons et al." The suit also names as defendants
certain of the Company's current and former officers, directors
and employees of the Company, Citigroup Inc., Salomon Smith
Barney Inc., Morgan Stanley & Co. and Ernst & Young LLP.
Plaintiffs allege that the Company made material
misrepresentations in its registration statements in violation
of Sections 11 and 12 of the Securities Act of 1933. Plaintiffs
also allege violations of Ohio law, breach of fiduciary duty and
common law fraud. Plaintiffs seek disgorgement of alleged
insider trading proceeds, restitution and unspecified
compensatory damages.
On October 29, 2003, the Company moved to stay the proceedings
or, in the alternative, dismiss the complaint. Also on October
29, 2003, all named individual defendants moved to dismiss the
complaint for lack of personal jurisdiction. On October 8,
2004, the court granted in part the Company's motion to dismiss
plaintiffs' complaint; specifically, the court dismissed
plaintiffs' common law claims but otherwise allowed plaintiffs'
remaining statutory claims against the Company and certain other
defendants to proceed.
TIME WARNER: WV Court Yet To Rule on Shareholder Suit Dismissal
---------------------------------------------------------------
The West Virginia Circuit Court for Kanawha County has yet to
rule on Time Warner, Inc.'s motion to dismiss the lawsuit filed
against it, styled "West Virginia Investment Management Board v.
Parsons et al." The suit also names as defendants certain of
the Company's current and former officers, directors and
employees of the Company, Citigroup Inc., Salomon Smith Barney
Inc., Morgan Stanley & Co., and Ernst & Young LLP.
Plaintiff alleges the Company made material misrepresentations
in its registration statements in violation of Sections 11 and
12 of the Securities Act of 1933. Plaintiff also alleges
violations of West Virginia law, breach of fiduciary duty and
common law fraud. Plaintiff seeks disgorgement of alleged
insider trading proceeds, restitution and unspecified
compensatory damages.
On May 27, 2004, the Company filed a motion to dismiss the
complaint. Also on May 27, 2004, all named individual defendants
moved to dismiss the complaint for lack of personal
jurisdiction.
TIME WARNER: TX Court Yet To Rule on Shareholder Suit Dismissal
---------------------------------------------------------------
The District Court of Cass County, Texas has yet to rule on Time
Warner, Inc.'s motion to dismiss the class action filed against
it, styled "McClure et al. v. AOL Time Warner Inc. et al." The
suit, filed purportedly on behalf of several purchasers of
Company stock, also names as defendants certain of the Company's
current and former officers, directors and employees.
Plaintiffs allege that the Company made material
misrepresentations in its registration statements in violation
of Sections 11 and 12 of the Securities Act of 1933. Plaintiffs
also allege breach of fiduciary duty and common law fraud.
Plaintiffs seek unspecified compensatory damages.
On May 8, 2004, the Company filed a general denial and a motion
to dismiss for improper venue. Also on May 8, 2004, all named
individual defendants moved to dismiss the complaint for lack of
personal jurisdiction.
TIME WARNER: AK Court Yet To Rule On Shareholder Suit Dismissal
---------------------------------------------------------------
The Superior Court in Juneau County, Alaska has yet to rule on
Time Warner, Inc.'s motion to dismiss the class action filed
against it, styled "Alaska State Department of Revenue et al. v.
America Online, Inc. et al." The suit also names as defendants
certain of its current and former officers, directors and
employees, America Online, Historic TW, Morgan Stanley & Co.,
Inc., and Ernst & Young LLP.
Plaintiffs allege that the Company made material
misrepresentations in its registration statements in violation
of Alaska law and common law fraud. The plaintiffs seek
unspecified compensatory and punitive damages.
On July 26, 2004, all named individual defendants moved to
dismiss the complaint for lack of personal jurisdiction. On
August 13, 2004, the Company filed a motion to dismiss
plaintiffs' complaint.
TIME WARNER: Appeals Court Hears Appeal of CA Lawsuit Dismissal
---------------------------------------------------------------
The United States Ninth Circuit Court of Appeals has fully
briefed plaintiffs' appeal of the dismissal of an amended
consolidated class action filed against Time Warner, Inc. and
two former employees of its America Online division.
On November 15, 2002, the California State Teachers' Retirement
System (CalSTeRS) filed an amended consolidated complaint in the
U.S. District Court for the Central District of California on
behalf of a putative class of purchasers of stock in
Homestore.com, Inc. Plaintiff alleges that the Company engaged
in a scheme to defraud its shareholders in violation of Section
10(b) of the Exchange Act.
The Company and two former employees of its America Online
division were named as defendants in the amended consolidated
complaint because of their alleged participation in the scheme
through certain advertising transactions entered into with
Homestore. Motions to dismiss filed by the Company and the two
former employees were granted on March 7, 2003, and a final
judgment of dismissal was entered on March 8, 2004. On April 7,
2004, plaintiff filed a notice of appeal in the Ninth Circuit
Court of Appeals; that appeal was fully briefed as of January
10, 2005.
The suit is styled "T. Jeffrey Simpson, et al v. Homestore.Com,
Inc., et al., case no. 2:01-cv-11115-RSWL-CW," filed in the
United States District Court for the Central District of
California, under Judge Ronald S.W. Lew. Representing the
defendants are:
(1) George Borden, F. Whitten Peters, Ana C. Reyes and Ryan
T. Scarborough of Williams & Connolly, 725 12th St NW
Washington, DC 20005-5901, Phone: 202-434-5000, E-mail:
gborden@wc.com or areyes@wc.com
(2) Thad Alan Davis and John B. Quinn of Quinn Emanuel
Urquhart Oliver & Hedges, 865 S Figueroa St, 10th Fl
Los Angeles, CA 90017-2543 Phone: 213-624-7707
Representing the plaintiffs are Peter E. Borkon, Joseph W.
Cotchett, Robert B. Hutchinson, Mark Cotton Molumphy, and Bruce
L. Simon of Cotchett Pitre Simon & McCarthy, San Francisco
Airport Office Center 840 Malcolm Rd Ste 200 Burlingame, CA
94010 Phone: 650-697-6000 E-mail: bsimon@cpsmlaw.com,
swilliams@cpsmlaw.com
TIME WARNER: Seeks Review of Refusal To Dismiss NV Proceeding
-------------------------------------------------------------
Time Warner, Inc. asked the United States Bankruptcy Court for
the District of Nevada to reconsider its ruling denying its
motion to dismiss the adversary proceeding filed by
PurchasePro.com, Inc., in relation to the second amended class
action filed on behalf of a putative class of purchasers of
stock in PurchasePro.com, Inc.
Plaintiffs allege that PurchasePro engaged in a scheme to
defraud its shareholders in violation of Section 10(b) of the
Exchange Act. The Company and four former officers and employees
were added as defendants in the second amended complaint and are
alleged to have participated in the scheme through certain
advertising transactions entered into with PurchasePro.
Three similar putative class actions had previously been filed
against the Company, America Online and certain former officers
and employees, and have been consolidated with the Nevada
action. On February 17, 2005, the Judge in the consolidated
action granted the Company's motion to dismiss the second
amended complaint with prejudice.
On September 13, 2004, in a related matter, PurchasePro filed an
adversary proceeding against the Company in the U.S. Bankruptcy
Court for the District of Nevada alleging fraudulent conveyance
and unjust enrichment in connection with PurchasePro warrants
issued to the Company. On December 15, 2004, the Bankruptcy
Court granted the Company's motion to dismiss the complaint
without prejudice.
On January 26, 2005, the Company filed an amended complaint. On
March 18, 2005, PurchasePro filed a second amended complaint,
and on June 29, 2005, the Bankruptcy Court denied the Company's
motion to dismiss the second amended complaint. The Company
filed a motion for reconsideration on July 11, 2005. That
motion is pending.
TIME WARNER: Appeals Injunction V. Consumer Lawsuit Settlement
--------------------------------------------------------------
Plaintiffs in the consumer class action lawsuits filed against
Time Warner, Inc. or America Online obtained an injunction
barring the Company from seeking final approval for the proposed
settlement of the suits.
As of August 1, 2005, 22 putative consumer class action suits
have been filed in various state and federal courts naming as
defendants the Company or America Online. Plaintiffs allege
that America Online violated various consumer protection laws by
charging members for services or goods without authorization,
including unauthorized secondary accounts offered in connection
with America Online's "Spin-Off a Second Account" (SOSA)
program, and/or by continuing to charge members for services
after receiving requests for cancellation.
Motions to dismiss have been denied in "O'Leary v. America
Online, Inc.," which was filed in the Circuit Court for St.
Clair County, Illinois, and "White v. America Online, Inc.,"
which was filed in the Circuit Court for Madison County,
Illinois. Eleven class actions involving SOSA accounts have
been transferred by the Judicial Panel on Multidistrict
Litigation to the U.S. District Court for the Central District
of California for consolidated or coordinated pretrial
proceedings ("In re America Online Spin-Off Accounts
Litigation"), and the Company's motion to dismiss that complaint
has been denied.
On January 5, 2004, the SOSA case pending in the Superior Court
of Washington, Spokane County, titled "Dix v. ICT Group and
America Online," was dismissed without prejudice based on the
forum selection clause set forth in the plaintiffs' Member
Agreement with AOL. On February 17, 2005, the Washington Court
of Appeals reversed the lower court's s dismissal; the Company
intends to file a motion for reconsideration of the Court of
Appeals' decision. On October 12, 2004, the SOSA case pending in
the Court of Common Pleas of Hamilton County, Ohio, titled
"Robert Schwartz v. America Online, Inc.," was dismissed based
on the forum selection clause and that dismissal is now final.
"McCall v America Online, Inc.," the SOSA case which was pending
in the Superior Court of Cape May County, New Jersey, has been
voluntarily dismissed.
America Online has filed or will file motions to dismiss in the
remaining cases. On April 7, 2005, the Circuit Court for St.
Clair County, Illinois entered orders that permit an amended
filing and consolidation of several cases and preliminarily
approve a proposed nationwide class settlement. Plaintiff in
the consolidated action has since obtained an injunction from
the California district court that purports to bar the parties
from seeking final approval of that settlement. America Online
has filed an expedited appeal of this decision before the U.S.
Court of Appeals for the Ninth Circuit, which is now pending.
WAL-MART STORES: Asks CA Appeals Court to Block Sex Bias Lawsuit
----------------------------------------------------------------
Wal-Mart Stores recently tried to disrupt the nation's largest
sex discrimination suit by arguing that a single trial on the
claims of 1.6 million women would be neither fair nor
manageable, The San Francisco Chronicle reports.
However, the Arkansas-based retailer got little apparent
sympathy from the three-member panel of the Ninth U.S. Circuit
Court of Appeals in San Francisco, during a recent 45-minute
hearing. That hearing was very critical to the future of the
suit, which is claiming that the company had a systematic bias
against women in pay and promotions. The court took the case
under submission and gave no hint of when it might rule.
At the heart of the case is whether Wal-Mart must defend against
lawsuits by six individual plaintiffs or against a single,
massive class action on behalf of nearly every woman who worked
at one of its 3,400 stores nationwide, including 16 stores in
the Bay Area since December 26, 1998. If a San Francisco
federal judge's decision last year to grant class action status
is upheld by the three-member panel, the retailer will face the
financial uncertainty of a jury trial, unless it reaches a
settlement that could run into the billions of dollars.
As previously reported in the June 21, 2001 edition of the Class
Action Reporter, six current and former Wal-Mart employees from
California, Illinois, Ohio, Texas and Florida filed the massive
nationwide sex discrimination class action lawsuit in U.S.
District Court for the Northern District of California against
Wal-Mart Stores, Inc. The case, which is believed to be the
largest such suit ever filed against a private employer, was
styled, Dukes v. Wal-Mart Stores, Inc. (Case No. C 012252 MJJ).
The class action suit charges that Wal-Mart discriminates
against its female employees in promotions, compensation and job
assignments in violation of Title VII of the Civil Rights Act of
1964 (Title VII). It also claims that women are largely
relegated to lower paying jobs and systematically denied
advancement opportunities. Despite the fact that women comprise
over 72% of the Wal-Mart sales workforce, a very small
percentage are represented in the supervisory and managerial
ranks:
(1) Men hold 90% of Wal-Mart store manager positions.
(2) Less than one-third of store management overall at Wal-
Mart is female -- a percentage far lower than the
number of female managers employed by Wal-Mart's major
competitors (56%), and lower than the percentage
employed by its competitors back in 1975.
(3) There is only one woman among Wal-Mart's 20 top
officers.
The class in the case includes more than an estimated 500,000
current and former female employees of Wal-Mart retail stores in
America, including Wal-Mart discount stores, supercenters,
neighborhood stores, and Sam's Club, making this action
potentially the largest sex discrimination case ever litigated
against a private employer.
According to Theodore Boutrous, a lawyer for the retailer, U.S.
District Judge Martin Jenkins' class action ruling stripped Wal-
Mart of its right to defend itself by effectively erasing the
differences between individually managed stores. Mr. Boutrous
told The San Francisco Chronicle that the trial would be a
battle of statistics, and women who were paid less than some
national average would get damages even if they had suffered no
discrimination. He further stated, "Wal-Mart would then not be
allowed to put on live testimony by a (store) manager who said,
'I didn't discriminate,'" since according to him, "That violates
due process."
The three-member panel presiding over Wal-Mart's appeal includes
Judge Michael Hawkins, Judge Harry Pregerson and Judge Andrew
Kleinfeld.
At the conclusion of the hearing, the lead plaintiff in the
case, Betty Dukes, told The San Francisco Chronicle, "I think we
are on the road to victory." Ms. Dukes, 55, an 11-year employee
who now works as a greeter of customers in Wal-Mart's Pittsburg
store, alleged that she frequently trained men for positions
that were never offered to her and that her complaints were met
by unfair discipline, a demotion and a pay cut. Her goal in the
suit, she said, is a system "where all women can be treated
equally and fairly."
WELLCHOICE INC.: FL RICO Suit Certification Discovery Nears End
---------------------------------------------------------------
Class certification discovery is almost complete for the class
action filed against Wellchoice, Inc. and other health
management organizations in the United States District Court for
the Southern District of Florida, Miami Division.
In May 2003, a class action, styled "Thomas, et al. v. Empire,
et al.," was commenced against the Blue Cross Blue Shield
Association, Empire HealthChoice, Inc. (EHC) and substantially
all of the other Blue plans in the country. The named
plaintiffs have brought this case on their own behalf and also
purport to bring it on behalf of similarly situated physicians
and seek damages and injunctive relief to redress their claim of
economic losses which they allege is the result of defendants,
on their own and as part of a common scheme, systemically
denying, delaying and diminishing claim payments.
More specifically, plaintiffs allege that the defendants deny
payment based upon cost or actuarial criteria rather than
medical necessity or coverage, improperly downcode and bundle
claims, refuse to recognize modifiers, intentionally delay
payment by pending otherwise payable claims and through
calculated understaffing, use explanation of benefits that
fraudulently conceal the true nature of what was processed and
paid and, finally, by use of capitation agreements which they
allege are structured to frustrate a provider's ability to
maximize reimbursement under the capitated agreement. The
plaintiffs allege that the co-conspirators include not only the
named defendants but also other insurance companies, trade
associations and related entities such as Milliman and Robertson
(actuarial firm), McKesson (claims processing software company),
National Committee for Quality Assurance, Health Insurance
Association of America, the American Association of Health Plans
and the Coalition for Quality Healthcare. In addition to
asserting a claim for declaratory and injunctive relief to
prevent future damages, plaintiffs assert several causes of
action based upon civil RICO and mail fraud.
The plaintiffs have subsequently amended their complaint, adding
several medical societies as additional plaintiffs and a cause
of action based upon an assignment of benefits, adding several
additional defendants including WellChoice, Inc. and two of its
other subsidiaries, WellChoice Insurance of New Jersey, Inc. and
Empire HealthChoice HMO, Inc. and dropping their direct RICO
claim, but instead base their RICO claim solely on a conspiracy
theory.
In October 2003, the action was transferred to District Court
Judge Federico Moreno, who also presides over "Shane v. Humana,
et al.," a class-action lawsuit brought against other insurers
and HMOs on behalf of health care providers nationwide. The
"Thomas" case involves allegations similar to those made in the
"Shane" action.
In the "Shane" case, the 11th Circuit Court of Appeals, on
September 1, 2004, upheld class certification as to RICO related
claims but decertified a class as to state law claims. On
October 15, 2004, the "Shane" defendants filed a petition for a
writ of certiorari, seeking U.S. Supreme Court review of the
11th Circuit decision. The U.S. Supreme Court has declined to
take the case and, therefore, the 11th Circuit decision stands.
On June 14, 2004, the court ordered the commencement of
discovery. The defendants filed motions to dismiss on October 4,
2004, which are still pending before the court. Meanwhile,
class certification discovery is almost complete. Plaintiffs'
motion for class certification was served on December 31, 2004
and the Company's response was served on March 15, 2005. The
Company is awaiting further direction from the court as to
whether oral argument will be heard on the motion for class
certification. In addition, Plaintiffs recently filed a motion
to open merits discovery before the court rules on the pending
class certification motion. The discovery motion has been fully
briefed and argued and the Company is awaiting a decision.
In November 2003, another class action "Solomon, et al. v.
Empire, et al." was filed in the same court against the Blue
Cross Blue Shield Association, EHC and substantially all other
Blue plans in the country. This case is similar to "Thomas, et
al. v. Empire, et al," except that this case is brought on
behalf of certain ancillary providers, such as podiatrists,
psychologists, chiropractors and physical therapists. Like the
Thomas plaintiffs, the Solomon plaintiffs allege that the
defendants, on their own and as part of a common scheme,
systematically deny, delay and diminish payments to these
providers. The plaintiffs' allegations are similar to those set
forth in Thomas but also include an allegation that defendants
have subjected plaintiffs claims for reimbursement to stricter
scrutiny than claims submitted by medical doctors and doctors of
osteopathy. Plaintiffs are seeking compensatory and monetary
damages and injunctive relief. The complaint was subsequently
amended to add several new parties, including the Company and
two of its other subsidiaries, WellChoice Insurance of New
Jersey, Inc. and Empire HealthChoice HMO, Inc. By an Order
dated January 7, 2004, the case was transferred to Judge Moreno,
but not consolidated with the other pending actions. The Court,
on its own initiative, deemed this action a "tag along" action
to the "Shane" litigation.
On June 14, 2004, the court ordered the commencement of
discovery. The defendants filed motions to dismiss on August 27,
2004 which are pending before the court. Meanwhile, class
certification discovery is winding down. Plaintiffs' motion for
class certification was served on January 17, 2005 and the
Company's response was served on April 5, 2005. The Company is
awaiting further direction from the court as to whether oral
argument will be heard on the motion for class certification. In
addition, Plaintiffs recently filed a motion to open merits
discovery before the court rules on the pending class
certification motion. The discovery motion has been fully
briefed and argued and the Company is awaiting a decision.
WELLS FARGO: Loan Customers File CA Racial Discrimination Suit
--------------------------------------------------------------
Wells Fargo loan customers in minority communities in Los
Angeles filed a class action lawsuit against the lender on,
charging Wells Fargo with discriminatory loan practices.
The complaint says Wells Fargo consistently and knowingly
discriminated against borrowers in minority neighborhoods
resulting in borrowers paying more for their loans than
borrowers in other parts of Los Angeles County (Opal Jones, et.
al v. Wells Fargo Bank, N.A., Wells Fargo Home Mortgage, et.
al).
According to the complaint, Wells Fargo introduced a program in
2002 called "Loan Economics." The program gave loan officers the
authority to offer discounts to loan applicants that lowered
overall loan coasts. The program made Wells Fargo's loan
packages more attractive to potential customers in a highly
competitive refinance market. The discounts included lower
application and origination fees and lower mortgage interest
rates.
"The savings amounted to anywhere from $500 to as much as
$10,000 per loan in origination charges," says attorney A. Barry
Cappello, partner with Santa Barbara's Cappello & Noel and who
is representing the borrowers with attorney Jeffrey Fleitman of
the Law Office of Jeffrey Fleitman in Beverly Hills. "We believe
many borrowers continue to be penalized. Some were charged
higher interest rates than borrowers who were offered the
discount program. Higher rates mean thousands of dollars lost
over the life of the loan," says Mr. Cappello. The complaint
charges that the Los Angeles area Wells Fargo manager refused to
allow loan officers operating in certain Los Angeles minority
neighborhoods to offer the program.
"Since 2002, thousands of loans have closed in minority
communities and thousands of borrowers have been affected by the
Wells Fargo policy," says Mr. Cappello. "That's why we're filing
this lawsuit as a class action."
The suit charges that Wells Fargo's loan practices violate a
host of laws designed to protect borrowers including the Fair
Employment and Housing Act, the Unruh Civil Rights Act, the
Holden Act, the Consumer Legal Remedies Act and the Unfair
Competition Law.
"It is our belief that Wells Fargo thought minority borrowers
were less savvy than non-minority borrowers and would not
question excessive fees and charges," says Mr. Fleitman.
As representatives of the class, the plaintiffs are seeking,
among other damages, an injunction barring Wells Fargo from
continuing its discriminatory lending practices and restitution
of the costs they incurred because of these practices.
"Redlining communities has long been an issue with insurance
companies when setting policy premiums," notes Mr. Fleitman.
"Now it appears that the same type of discriminatory practice is
being applied by Wells Fargo when selling loans."
For more details, contact A. Barry Cappello of Cappello & Noel,
LLP, Phone: 805-564-2444, E-mail: abc@cappellonoel.com OR
Jeffrey Fleitman of Law Office of Jeffrey Fleitman, Phone:
310-399-2889, E-mail: fleitmanlaw@yahoo.com OR Diane Rumbaugh of
Rumbaugh Public Relations, Phone: 805-493-2877, E-mail:
rumbaugh@earthlink.net.
YELLOW ROADWAY: Pays $7M to Settle Suit Over Terminal Closures
--------------------------------------------------------------
Yellow Roadway agreed to pay $7 million to settle a class action
suit brought last year by 1,900 employees, including some
workers in Allentown, The Allentown Morning Call reports.
The trucking company will pay the claims on behalf of USF
Corporation, which it acquired in May. Workers brought the case
against USF, the former parent company of unionized USF Red
Star, because it closed 26 freight terminals, including one in
Allentown, and laid off the workers without advance notice.
According to Charles Ercole, an attorney with Klehr, Harrison,
Harvey, Branzburg and Ellers, which was one of the firms that
negotiated the settlement, the Worker Adjustment and Retraining
Notification Act requires large companies to provide 60 days of
notice if they plan to lay off 50 or more employees at a
particular location. He pointed out that workers, who filed a
claim under the act would receive an average of $3,000.
Court papers revealed that USF closed facilities in Allentown,
Philadelphia, Wilkes-Barre and Harrisburg in May 2004, affecting
at least 50 people who worked at the Allentown facility. The
papers revealed that the closures came after the International
Brotherhood of Teamsters held a one-day strike in Philadelphia
that eventually spread to the company's other Red Star
facilities. The Teamsters stated it called the strike because
the company would not permit 15 office workers to join the
union.
The Company said that the strike caused it so much financial
damage it had to close the terminals. Furthermore, in its
defense, USF said it was not required to provide notice of the
closures because of an "unforeseen business circumstance,"
referring to the strike.
Mr. Ercole told The Allentown Morning Call that a judge at the
U.S. District Court for the Eastern District of Pennsylvania in
Philadelphia still has to approve the settlement before amounts
are dispensed. He also adds that workers will probably not
receive money from the deal until the end of the year and that
employees, who had seniority or a better-paying position with
the company will receive a larger payout from the settlement.
USF reopened the closed facilities back in September but Mr.
Ercole told The Allentown Morning Call that some of the
employees involved in the lawsuit were not rehired. He also
pointed out that the Allentown facility employed at least 50
people, but fewer than 200.
Meetings, Conferences & Seminars
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-------------------------------------------------
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CIVIL LITIGATION PRACTICE: 21ST ANNUAL RECENT DEVELOPMENTS #1
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CIVIL LITIGATION PRACTICE: 21ST ANNUAL RECENT DEVELOPMENTS #2
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CIVIL LITIGATION PRACTICE: 21ST ANNUAL RECENT DEVELOPMENTS #3
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CIVIL LITIGATION PRACTICE: 22ND ANNUAL RECENT DEVELOPMENTS
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PUNITIVE DAMAGES: MAXIMIZING YOUR CLIENT'S SUCCESS OR MINIMIZING
YOUR CLIENT'S EXPOSURE
CEB Online
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EFFECTIVE DIRECT AND CROSS EXAMINAITON
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STRATEGIC TIPS FOR SUCCESSFULLY PROPOUNDING & OPPOSING WRITTEN
DISCOVERY
CEB Online
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CACI: CALIFORNIA'S NEW CIVIL JURY INSTRUCTIONS
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ADVERSARIAL PROCEEDINGS IN ASBESTOS BANKRUPTCIES
LawCommerce.Com/Mealey's
Online Streaming Video
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ASBESTOS BANKRUPTCY - PANEL OF CREDITORS COMMITTEE MEMBERS
LawCommerce.Com/Mealey's
Online Streaming Video
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EXPERT WITNESS ADMISSIBILITY IN MOLD CASES
LawCommerce.Com/Mealey's
Online Streaming Video
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INTRODUCTION TO CLASS ACTIONS AND LARGE RECOVERIES
Big Class Action
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NON-TRADITIONAL DEFENDANTS IN ASBESTOS LITIGATION
Online Streaming Video
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PAXIL LITIGATION
Online Streaming Video
LawCommerce.Com/Mealey's
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RECENT DEVELOPMENTS INVOLVING BAYCOL
Online Streaming Video
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RECOVERIES
Big Class Action
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SELECTION OF MOLD LITIGATION EXPERTS: WHO YOU NEED ON YOUR TEAM
Online Streaming Video
LawCommerce.Com/Mealey's
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SHOULD I FILE A CLASS ACTION?
LawCommerce.Com / Law Education Institute
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THE EFFECTS OF ASBESTOS ON THE PULMONARY SYSTEM
Online Streaming Video
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THE STATE OF ASBESTOS LITIGATION: JUDICIAL PANEL DISCUSSION
Online Streaming Video
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TRYING AN ASBESTOS CASE
LawCommerce.Com
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THE IMPACT OF LORILLAR ON STATE AND LOCAL REGULATION OF TOBACCO
SALES AND ADVERSTISING
American Bar Association
Contact: 800-285-2221; abacle@abanet.org
________________________________________________________________
The Meetings, Conferences and Seminars column appears in the
Class Action Reporter each Wednesday. Submissions via
e-mail to carconf@beard.com are encouraged.
New Securities Fraud Cases
HOST AMERICA: Murray Frank Lodges Securities Fraud Suit in CT
-------------------------------------------------------------
The law firm of Murray, Frank & Sailer LLP initiated a class
action lawsuit in the United States District Court for the
District of Connecticut, on behalf of shareholders who purchased
or otherwise acquired the securities of Host America Corporation
("Host America" or the "Company") (Nasdaq:CAFE) between July 12,
2005 and July 22, 2005, inclusive (the "Class Period"). Murray,
Frank & Sailer LLP is seeking to pursue remedies under the
Securities Exchange Act of 1934 against defendants Host America,
EnergyNSync, Geoffrey Ramsey, David Murphy, Roger Lockhart, and
Peter Sarmanian.
Host America provides food service management, energy management
conservation, and pre-employment background screening. The
company operates in four divisions: Host America Business
Dining, Lindley Food Service (Lindley), SelectForce, and
GlobalNet Energy Investors (GlobalNet). The GlobalNet division
markets, sells, and installs control panels and other electrical
energy saving devices to commercial and industrial users.
From May 12, 2004 to June 15, 2005, the Company often announced
agreements to install their LightMasterPlus product or perform
other energy saving services for various companies. The Company
claims that the LightMasterPlus "efficiently runs your lighting
systems by reducing kilowatt consumption yet maintaining visible
light. It also allows for fully automated dimming or accent
lighting throughout your building."
On July 12, 2005, the first day of the Class Period, Host
America filed a Form 8-K with the SEC, and issued a press
release titled "Host America's Energy Division Announces Wal-
Mart Transaction Ten Store First-Phase for LightMasterPlus."
Market reaction to this announcement, unlike reactions to
previous announcements in 2004 and 2005 regarding potential
contracts for installing LightMasterPlus, was drastic. Trading
volume increased from 41,000 trades on July 11, 2005, to
13,813,100 on July 12, 2005. Furthermore, the Company's stock,
which opened at $4.25 on July 12, 2005 prior to the
announcement, closed at $6.35, after reaching a high of $7.47.
Over the next eight trading days, volume reached a high of
approximately 32,569,600 shares on July 18, 2005, and the
Company's stock price reached a high of $16.88 on July 19, 2005.
The above statements in the July 12, 2005 Form 8-K and press
release were false and misleading because they misrepresented
the nature of the "Wal-Mart Transaction" as one whereby the
Company had a firm commitment by Wal-Mart to purchase the
Company's LIGHTMasterPlus for installation in Wal-Mart stores.
The true facts which were not disclosed are that Wal-Mart was
not a customer of the Company's in connection to purchasing the
LightMasterPlus and that the "Wal-Mart Transaction" was limited
to a test installation unrelated to any commitment by Wal-Mart
to install the LightMasterPlus in any of its facilities on a
permanent basis. In fact, Wal-Mart had made no commitment to
purchase or install the LightMasterPlus outside of the test
installation. As a result, defendants had no basis for stating
that the test installation was a "first-phase roll-out" or that
"the next phase will involve a significant number of stores."
Moreover, defendants lacked any basis for stating that the Wal-
Mart test installation was a "major event for our company." In
fact, such test installations in the past had resulted in no
future customer relationship and no actual purchases of the
LightMasterPlus by the party solicited for the test
demonstration.
On July 22, 2005, trading of Host America securities was halted,
pending SEC review. In halting trading, the SEC cautioned
brokers, dealers, shareholders, and prospective purchasers that
they should carefully consider the foregoing information along
with all other currently available information, and any
information subsequently issued by the company," the SEC
statement read. At the time trading was halted, Host America
stock was priced at $13.92 per share, down from $16.88 on July
19, 2005.
For more details, contact Eric J. Belfi, Christopher S. Hinton
or Bradley P. Dyer of Murray, Frank & Sailer, LLP, Phone:
(800) 497-8076 or (212) 682-1818, Fax: (212) 682-1892, E-mail:
info@murrayfrank.com, Web site:
http://www.murrayfrank.com/CM/NewCases/NewCases.asp.
HOST AMERICA: Schatz & Nobel Lodges Securities Fraud Suit in CT
---------------------------------------------------------------
The law firm of Schatz & Nobel, P.C. initiated a lawsuit seeking
class action status in the United States District Court for the
District of Connecticut on behalf of all persons who purchased
the publicly traded securities of Host America Corporation
(Nasdaq: CAFE - News; "Host America") from July 12, 2005 through
July 22, 2005 inclusive, (the "Class Period").
The Complaint alleges that Host America and certain of its
officers and directors knowingly or recklessly made a series of
material misrepresentations concerning the nature of the
business relationship between Host America and Wal-Mart.
Moreover, Defendants and employees of Host America profited
handsomely from those misrepresentations, selling over $6.92
million of Host America securities during the Class Period. Host
America is a company that, among other things, manufactures and
sells a computerized controller capable of reducing energy
consumption and demand fluctuations of electrical inductive
loads on motors and certain lighting systems.
For more details, contact Schatz & Nobel, Phone: (800) 797-5499,
E-mail: sn06106@aol.com, Web site: http://www.snlaw.net.
INVESTORS FINANCIAL: Wechsler Harwood Lodges MA Securities Suit
---------------------------------------------------------------
The law firm of Wechsler Harwood LLP initiated a Federal
Securities fraud class action on behalf of persons or entities,
who purchased or otherwise acquired the securities of Investors
Financial Services Corporation (Nasdaq:IFIN) ("IFIN" or the
"Company") from October 15, 2003, through and including July 15,
2005 (the "Class Period").
The action, entitled The Archdiocese of Milwaukee Supporting
Funds v. Investors Financial Services Corp., et al., Case No.
1:05-cv-11627-RCL, is pending in the United States District
Court for the District of Massachusetts and names as defendants,
the Company, its Chairman and Chief Executive Officer, Kevin J.
Sheehan, its President, Michael F. Rogers, its Senior Vice
President and Chief Financial Officer, John N. Spinney Jr., its
Senior Vice President, Robert D. Mancuso, and its Senior Vice
President, Edmund J. Maroney.
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, by issuing a series of false and
material misrepresentations to the market, thereby artificially
inflating the price of IFIN securities. The Company's statements
served to convince investors that the Company's financial
statements were accurate, including results for revenues, growth
and interest income, and the Company had shrewdly built into its
models and assumptions the impact of continued interest rate
compression and flattening of the US interest rate yield curve.
IFIN is a bank holding company for Investors Bank & Trust
Company and provides asset managers with services including
global custody, multi-currency accounting and mutual fund
administration in the United States. In October 2004, the
Company surprised the market when they finally revealed the need
to restate financial results over a three-year period. On
October 21, 2004, the price of IFIN stock plummeted, from its
previous close of $43.70 to $36.50, on volume of over 11 million
shares. Later, the Company revealed that during the period from
2001 to 2004, Investors had overstated net interest income by as
much as $6.2 million.
On July 14, 2005, IFIN dropped 15% after the financial back-
office company slashed earnings guidance, citing interest rate
pressure. Once again, the Company announced an unprecedented
"reset" of their 2005 quarterly and 2005 yearly guidance.
Defendants did this, allegedly, to bring their numbers in line
with the "new" realities of market-driven rates and rate
spreads. The Complaint alleges further that IFIN's assertions
that an interest rate event peculiar to the second quarter
served as the purported "trigger" for the Company's changed
circumstances. This was false. In fact, the Complaint alleges,
the change in the Company's fortunes was a direct result of the
dramatic flattening of the yield curve and contraction of rate
spreads. The Company cited a flatter-than-expected yield curve;
narrower-than-expected reinvestment spreads; weaker-than-
expected market-sensitive revenues, which included fees, linked
to both the equity and foreign currency markets; and continued
investments in headcount and technology to support new and
existing clients.
On July 15, 2005, the price of IFIN shares plummeted from its
previous close of $41.52 to $34.05 for a loss 17.9% percent of
their value on unprecedented volume of over 22 million shares.
The Class Period high was $53.44; it now trades under $35 per
share.
For more details, contact Jeffrey M. Norton of Wechsler Harwood,
LLP, 488 Madison Avenue, 8th Floor, New York, N.Y. 10022, Phone:
(877) 935-7400, E-mail: jmn@whesq.com.
PRESTIGE BRAND: Lerach Coughlin Issues Warning to Shareholders
--------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin"), which filed a complaint on behalf of
purchasers of Prestige Brand Holdings, Inc. ("Prestige")
(NYSE:PBH) on August 3, 2005, issues warning to past and current
shareholders of Prestige.
The complaint alleges a series of false and misleading
statements made by defendants regarding the company's business
and prospects and follows a lengthy investigation by Lerach
Coughlin.
Since Lerach Coughlin filed a complaint, Schatz & Nobel has
issued a press release claiming to offer "information" about
joining the suit. Be advised that the firm of Schatz & Nobel has
not even filed a complaint. Rather, the press release appears to
be an advertisement designed to solicit clients so that this
firm can participate in this case.
For more details, contact Samuel H. Rudman or David A. Rosenfeld
of Lerach Coughlin, Phone: 800/449-4900 or 619/231-1058, E-mail:
wsl@lerachlaw.com, Web site:
http://www.lerachlaw.com/cases/prestige/.
PRESTIGE BRAND: Schatz & Nobel Files Securities Fraud Suit in NY
----------------------------------------------------------------
The law firm of Schatz & Nobel, P.C. initiated a lawsuit seeking
class action status in the United States District Court for the
Southern District of New York on behalf of all persons who
purchased the publicly traded securities of Prestige Brand
Holdings, Inc. (NYSE: PBH) ("Prestige") traceable to the
Company's initial public offering on or about February 9, 2005
(the "IPO") through July 28, 2005 inclusive, (the "Class
Period").
The Complaint alleges that Prestige, certain of its officers and
directors and other insiders, violated federal securities laws
by issuing misleading public statements. Specifically, the
prospectus (the "Prospectus") filed with the SEC in connection
with the IPO of Prestige common stock, was materially false and
misleading. The complaint alleges that the Prospectus failed to
disclose the following:
(1) that demand for the Company's products was declining
and certain brands, including Compound W products were
failing to maintain their market position and/or
initial product sales levels;
(2) that Prestige was planning to withdrawal several
products from the market, including Comet-brand
housecleaning products that had proved unsuccessful,
thus further eroding the Company's revenues and market
share; and
(3) as a result of the foregoing, Defendants' statements
and opinions concerning the Company's sales, earnings,
profitability and future prospects were lacking in
reasonable basis.
On July 27, 2005, Prestige announced its financial results for
the quarter ended June 30, 2005. Prestige reported sales
declines in each of its three business segments. The Company
also lowered its earning guidance for the remainder of fiscal
2005. On this news, the price of Prestige stock fell to close at
$11.90 per share on July 28, 2005, a decline of over 40% from
the previous day's close.
For more details, contact Wayne T. Boulton or Nancy Kulesa,
Phone: (800) 797-5499, E-mail: sn06106@aol.com, Web site:
http://www.snlaw.net.
*********
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.
*********
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Copyright 2005. All rights reserved. ISSN 1525-2272.
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