/raid1/www/Hosts/bankrupt/CAR_Public/050905.mbx
C L A S S A C T I O N R E P O R T E R
Monday, September 5, 2005, Vol. 7, No. 173
Headlines
ADVANCED NEUROMODULATION: TX Court Consolidates Securities Suits
ALLISON'S GOURMET: Adds Meat Recall For Listeria Contamination
ALLSTATE CORPORATION: Reaches Settlement for CA Overtime Lawsuit
ALLSTATE INSURANCE: Faces Lawsuits v. 1999 Agency Reorganization
AMERICAN GREETINGS: Recalls 120T Sunglasses For Choking Hazard
ANR PIPELINE: Plaintiffs Allowed To File Amended Royalties Suit
ARBINET-THEXCHANGE: Securities Lawsuit Filed in NJ State Court
BELL CANADA: Ontario High Court OKs Dismissal of Debenture Suit
BLUE BIRD: Recalls 5,864 2001-2005 Buses Due to Crash Hazard
COMPUTER SCIENCES: Faces Nationwide Antitrust Suit Filed in AR
COUNTRY COACH: Recalls 45 2005 Motor Homes Due to Crash Hazard
COUNTRY COACH: Recalls 12 Bus Conversions Due to Fire Hazard
CRANE CARRIER: Recalls 2005 DR Vehicles Due to Crash Hazard
DYNAMICS RESEARCH: Employees Launch MA Labor Law Violations Suit
FAKE LIPITOR: Persons, 3 Firms Indicted in Counterfeiting Suit
FLORIDA: Fort Lauderdale Sued For Code Enforcement Practices
FRANKLIN RESOURCES: Asks MD Court To Dismiss Mutual Funds Suit
FRANKLIN RESOURCES: IL Court Dismisses Securities Fraud Lawsuit
FRANKLIN RESOURCES: NJ Court Mulls Mutual Fund Lawsuit Dismissal
FRANKLIN TEMPLETON: Continues To Face Canadian Mutual Fund Suits
GENERAL MOTORS: Recalls 804,000 Vehicles Because of Crash Hazard
HAWAII: Police, Union Officials Say Wage Suit May Cost $25M-$50M
HIBERNIA CORPORATION: Reaches Settlement For LA Investors Suit
INTEL CORPORATION: AMD Antitrust Fraud Suit Spurs Class Actions
INTEL CORPORATION: IL Court Certifies Consumer Fraud Litigation
LOUISIANA-PACIFIC: Continues To Face CA Consumer Fraud Lawsuit
LOUISIANA-PACIFIC: Faces Possible Injury Suit Re: AL Facility
MERCK & CO.: "Irvin" Lawsuit First To Go To Trial in Vioxx MDL
MERCK & CO.: NJ Court Consolidates Securities, ERISA Lawsuits
MERCK & CO.: Asks AL Court To Dismiss Indigent Patients' Lawsuit
MERCK & CO.: Defends Against Vaccine Injury Litigation in US, UK
NEW YORK: Faces Lawsuit Due To August 2005 Parasitic Outbreak
PACKAGING CORPORATION: Linerboard Suit Discovery To End 9/2005
PARADYNE NETWORKS: Revised Suit Settlement Submitted To NY Court
QUEST DIAGNOSTICS: Suit Filed in FL V. "Balance-Bills" Practice
UNITEDHEALTH GROUP: Trial in FL Managed Care Suit Set Jan. 2006
UNUMPROVIDENT CORPORATION: Pretrial Proceedings To End Dec. 2005
UNUMPROVIDENT CORPORATION: MA Court Upholds Certification Denial
UNUMPROVIDENT CORPORATION: Certification Sought For NY Lawsuit
WALT DISNEY: Recalls 12.9T Sunglasses Due to High Lead Content
WESTAR ENERGY: Settles Shareholders', Derivative Lawsuits in KS
New Securities Fraud Cases
AMERICAN ITALIAN: Schneider & Wallace Files MO Securities Suit
ARBINET-THEXCHANGE: Law Firms Launch Securities Complaint in NJ
ARBINET-THEXCHANGE: Murray Frank Issues Notice Regarding NJ Suit
HOST AMERICA: Barrack Rodos Lodges Securities Fraud Suit in CT
HOST AMERICA: Chitwood Harley Lodges Securities Fraud Suit in CT
HOST AMERICA: Schneider & Wallace Lodges Securities Suit in CT
IMMUCOR INC.: Charles J. Piven Files Securities Fraud Suit in GA
IMMUCOR INC.: Rosen Law Firm Lodges Securities Fraud Suit in GA
INTERMIX MEDIA: Lerach Coughlin Lodges Securities Suit in CA
MANNATECH INC.: Murray Frank Lodges Securities Fraud Suit in NM
MERCURY INTERACTIVE: Charles J. Piven Lodges CA Securities Suit
SYMBOL TECHNOLOGIES: Glancy Binkow Lodges Securities Suit in NY
WORLD HEALTH: Barrack Rodos Provides Update Regarding Suit in PA
WORLD HEALTH: Schiffrin & Barroway Lodges Securities Suit in PA
*********
ADVANCED NEUROMODULATION: TX Court Consolidates Securities Suits
----------------------------------------------------------------
The United States District Court for the Eastern District of
Texas ordered consolidated three securities class actions filed
against Advanced Neuromodulation Systems, Inc. and certain of
its officers and directors.
Three suits were initially filed on behalf of purchasers of the
Company's securities between April 24, 2003 and February 16,
2005, inclusive. The suits are styled:
(1) PLA, LLC vs. Advanced Neuromodulation Systems, Inc., et
al, filed March 1, 2005;
(2) RAI Investment Club vs. Advanced Neuromodulation
Systems, Inc., et al, filed March 9, 2005; and
(3) Clifford A. Leavitt vs. Advanced Neuromodulation
Systems, Inc. et al, filed April 28, 2005
In late May 2005, the court granted an order consolidating the
three previously filed class action securities lawsuits into a
single consolidated complaint styled as: "PLA, LLC vs. Advanced
Neuromodulation Systems, Inc., et al." The court also granted an
order appointing lead and liaison counsel and appointing the
lead plaintiff in the lawsuit. The three previously filed suits
each alleged the Company violated federal securities laws by the
issuance of false and misleading statements to the market
regarding the Company's financial performance throughout the
Class Period, which statements allegedly had the effect of
artificially inflating the market price of the Company's
securities. In particular, the claims alleged that improper
marketing and sales practices accounted for the Company's
revenue growth, citing, among other things, the Company's public
announcement made on February 17, 2005 that the Company had
received a subpoena from the Office of the Inspector General,
Department of Health and Human Services, requesting documents
related to sales and marketing, reimbursement, Medicare and
Medicaid billing and other business practices. The plaintiffs
were seeking unspecified compensatory damages and costs and
expenses of litigation.
No class has been certified at this time. The Company currently
anticipates that the lead plaintiff will file an amended
consolidated complaint in September 2005.
The suit is styled "PLA LLC v. Advanced Neuromodulation Systems
Inc et al., case no. 4:05-cv-00078-RAS-DDB," filed in the United
States District Court for the Eastern District of Texas, under
Judge Richard A. Schell. Representing the company is Gerard G.
Pecht of Fulbright & Jaworski - Houston, 1301 McKinney, Suite
5100, Houston, TX 77010, Phone: 713/651-5160, Fax: 17136515246,
E-mail: gpecht@fulbright.com. Representing the plaintiffs are:
(1) Roger F. Claxton, Claxton & Hill, 3131 McKinney, L.B.
103 #700, Dallas, TX 75204, Phone: 214/969-9029, Fax:
12149530583, E-mail: claxtonhill@airmail.net
(2) Elton Joe Kendall, Provost Umphrey Law Firm, 3232
McKinney Ave, Suite 700, Dallas, Tx 75201, Phone:
214/744-3000, Fax: 12147443015, E-mail:
jkendall@provostumphrey.com
(3) Christopher S. Polaszek, Maya Saxena, and Peter E.
Seidman of Milberg Weiss Bershad & Schulman LLP, 5200
Town Center Circle, Suite 600 Tower 1, Boca Raton, FL
33486, Phone: 561/361-5000, Fax: 15613678400, E-mail:
cpolaszek@milbergweiss.com, msaxena@milbergweiss.com,
pseidman@milbergweiss.com
ALLISON'S GOURMET: Adds Meat Recall For Listeria Contamination
--------------------------------------------------------------
Allison's Gourmet Kitchens, Ltd., a Moore, Okla., firm, is
voluntarily expanding its recall of August 23 to include an
additional 18,510 pounds of products that may be contaminated
with Listeria monocytogenes, the U.S. Department of
Agriculture's Food Safety and Inspection Service announced
today. On August 23, the firm recalled approximately 4,925
pounds of ready-to-eat chicken and beef products.
The following products subject to the expanded recall are five-
pound plastic containers of "Allison's Gourmet Kitchens Barbeque
Beans with Beef." The containers bear the use-by date "09 06,"
"09 13," "09 20" or "09 21" and include the establishment
number, "EST. 27404" inside the USDA seal of inspection. Each
case bears the code "04075."
The product was distributed to delicatessens in Arkansas,
Louisiana, Nebraska, Oklahoma and Texas. Products subject to
the expanded recall were produced on various dates between July
26 and August 10.
The products subject to the August 23 recall are:
(1) Five-pound plastic containers of "Allison's Gourmet
Kitchens Barbeque Beans with Beef." The containers bear
the use-by-date "09 28 2005" or "09 29 2005" and each
case bears the code "04075."
(2) Five-pound and 12-ounce plastic containers of
"Allison's HCF Classic Chicken Salad with White Meat."
The containers bear the use-by-date "09 16 2005." Each
case bears the code "08015" or "08018."
(3) Three-pound plastic containers of "Classic Allison's
Gourmet Kitchens Chicken Salad." The containers bear
the use-by-date "09 23 2005" or "10 02 2005." Each
case bears the code "08012."
Containers of barbeque beans and beef bear the establishment
number "EST.27404" inside the USDA seal of inspection.
Containers of chicken salad bear the establishment number "P-
27404" inside the USDA seal of inspection. The products were
produced on August 17 and 18. The chicken salad was distributed
to delicatessens in Oklahoma and Texas. The barbeque was
distributed to delicatessens in Arkansas, Mississippi, Nebraska,
Oklahoma and Texas.
The problem was discovered through company testing. FSIS has
received no reports of illnesses associated with consumption of
these products.
Consumption of food contaminated with Listeria monocytogenes can
cause listeriosis, an uncommon but potentially fatal disease.
Healthy people rarely contract listeriosis. However, listeriosis
can cause high fever, severe headache, neck stiffness and
nausea. Listeriosis can also cause miscarriages and stillbirths,
as well as serious and sometimes fatal infections in those with
weak immune systems, such as infants, the elderly and persons
with HIV infection or undergoing chemotherapy.
Consumers and media with questions about the recall should
contact company President Herb Grimes at (405) 794-2530.
Consumers with food safety questions can call the toll-free USDA
Meat and Poultry Hotline at (888) 674-6854. The hotline is
available in English and Spanish and can be reached from 10 a.m.
to 4 p.m. (Eastern Time) Monday through Friday. Recorded food
safety messages are available 24 hours a day.
ALLSTATE CORPORATION: Reaches Settlement for CA Overtime Lawsuit
----------------------------------------------------------------
Allstate Corporation agreed to pay up to $120 million to settle
a class action lawsuit in California brought by employees for
overtime pay issues, but it still denies any wrongdoing, The
Associated Press reports.
The lawsuit, which was filed in the Superior Court of
California, County of Los Angeles, challenged the overtime
exemption claimed by Allstate Insurance under California wage
and hour laws. It was filed on behalf of all persons who,
between November 27, 1996, and December 31, 2004, were employed
by Allstate Insurance in California as claims adjusters or in
similar positions.
The Northbrook, Illinois-based insurance giant's Allstate
Insurance Co. unit agreed to pay the amount for unpaid overtime
pay, meal and rest break violations, legal fees and other items.
The settlement covers Allstate employees who were claims
adjusters or in similar positions from November 1996 to December
2004.
According to a filing with the Securities and Exchange
Commission, the settlement proceeds are to be paid to class
members, in exchange for a release. In the second-quarter, the
filing says, Allstate established a $120 million reserve for the
settlement.
ALLSTATE INSURANCE: Faces Lawsuits v. 1999 Agency Reorganization
----------------------------------------------------------------
Allstate Insurance Company continues to defend civil rights
litigation in various venues, relating to its agency program
reorganization announced in 1999.
The United States Equal Employment Opportunity Commission (EEOC)
filed a lawsuit in December 2001, alleging retaliation under
federal civil rights laws. Several former employee agents also
filed a class action in August 2001 alleging retaliation and age
discrimination under the Age Discrimination in Employment Act,
breach of contract and Employee Retirement Income Security Act
(ERISA) violations. The EEOC again filed a lawsuit in October
2004, alleging age discrimination with respect to a policy
limiting the rehire of agents affected by the agency program
reorganization.
The Company is also defending another action, in which a class
was certified, filed by former employee agents who terminated
their employment prior to the agency program reorganization.
These plaintiffs have asserted breach of contract and ERISA
claims, and are seeking actual damages including benefits under
Allstate employee benefit plans and payments provided in
connection with the reorganization, as well as punitive damages.
In late March 2004, in the first EEOC lawsuit and class action
lawsuit, the trial court issued a memorandum and order that,
among other things, certified classes of agents, including a
mandatory class of agents who had signed a release, for purposes
of effecting the court's declaratory judgment that the release
is voidable at the option of the release signer. The court also
ordered that an agent who voids the release must return to the
Company "any and all benefits received by the (agent) in
exchange for signing the release." The court also "concluded
that, on the undisputed facts of record, there is no basis for
claims of age discrimination." The EEOC and plaintiffs have
asked the court to clarify and/or reconsider its memorandum and
order. The case otherwise remains pending.
A putative nationwide class action has also been filed by former
employee agents alleging various violations of ERISA, including
a worker classification issue. These plaintiffs are challenging
certain amendments to the Agents Pension Plan and are seeking to
have exclusive agent independent contractors treated as
employees for benefit purposes. This matter was dismissed with
prejudice by the trial court, was the subject of further
proceedings on appeal, and has been reversed and remanded to the
trial court in April 2005. In these matters, plaintiffs seek
compensatory and punitive damages, and equitable relief.
AMERICAN GREETINGS: Recalls 120T Sunglasses For Choking Hazard
--------------------------------------------------------------
In cooperation with the U.S. Consumer Product Safety Commission
(CPSC), American Greetings Corporation, of Cleveland, Ohio is
voluntarily recalling about 120,000 units of Sesame Street Toy
Sunglasses.
The lens in the sunglasses can separate from frames, posing a
choking hazard to young children.
This recall involves DesignWarer child-size sunglasses with
Sesame Street character decals. Sold in quantities of four, each
package contains a yellow, blue, red and green pair of
sunglasses. The bright green cardboard backer has the Sesame
Street and DesignWarer logo on the front, and model number SUN-
1219 on the back. Manufactured in China, the sunglasses were
sold at all discount, toy, drug, grocery, party and
specialty/gift stores nationwide from December 2003 through
August 2005 for about $3.
Consumers should take these sunglasses away from young children
immediately. Consumers can contact the firm for a coupon
redeemable wherever American Greetings' products are sold.
Consumer Contact: For additional information, contact American
Greetings at (800) 777-4891 between 8 a.m. and 5 p.m. ET Monday
through Friday, or visit the firm's Web site at
http://corporate.americangreetings.comor http://www.ag.com.
ANR PIPELINE: Plaintiffs Allowed To File Amended Royalties Suit
---------------------------------------------------------------
The District Court of Stevens County, Kansas allowed plaintiffs
to file a fourth amended class action against ANR Pipeline Co.,
several of its affiliates and other natural gas companies.
The suit, styled "Will Price, et al. v. Gas Pipelines and Their
Predecessors, et al.," was initially filed in 1999, alleging
that the defendants mismeasured natural gas volumes and heating
content of natural gas on non-federal and non-Native American
lands. The suit seeks to recover royalties that plaintiffs
contend they should have received had the volume and heating
value of natural gas produced from their properties been
differently measured, analyzed, calculated and reported,
together with prejudgment and postjudgment interest, punitive
damages, treble damages, attorneys' fees, costs and expenses,
and future injunctive relief to require the defendants to adopt
allegedly appropriate gas measurement practices. No monetary
relief has been specified in this case.
Plaintiffs' motion for class certification of a nationwide class
of natural gas working interest owners and natural gas royalty
owners was denied in April 2003. Plaintiffs were granted leave
to file a Fourth Amended Petition, which narrows the proposed
class to royalty owners in wells in Kansas, Wyoming and Colorado
and removes claims as to heating content. A second class action
petition has since been filed as to the heating content claim.
Motions for class certification have been briefed and argued in
both proceedings, and the parties are awaiting the court's
ruling.
ARBINET-THEXCHANGE: Securities Lawsuit Filed in NJ State Court
--------------------------------------------------------------
Arbinet-thexchange, Inc. (Nasdaq: ARBX) was named as a defendant
in a purported securities class action lawsuit filed in the
Superior Court of New Jersey.
The suit is allegedly brought on behalf of purchasers of the
Company's common stock issued in its Initial Public Offering and
alleges a violation of Section 11 of the Securities Act of 1933.
The complaint also names as defendants certain of the Company's
underwriters and directors. The complaint alleges, among other
things, that the Company made misstatements or omissions in its
Initial Public Offering registration statement filed with the
SEC on December 16, 2004.
For more details, contact Mike Lemberg of Arbinet, Phone:
1-732-509-9220, E-mail: mlemberg@arbinet.com and David Pasquale
or Denise Roche of The Ruth Group, Phone: 1-646-536-7006 or
1-646-526-7008, E-mail: dpasquale@theruthgroup.com or
droche@theruthgroup.com.
BELL CANADA: Ontario High Court OKs Dismissal of Debenture Suit
---------------------------------------------------------------
The Ontario Superior Court of Justice (the "Court") approved the
agreement reached on August 18, 2005 dismissing a class action
lawsuit filed against Bell Canada International Inc. ("BCI") and
BCE Inc. ("BCE") by former holders of BCI's $250 million 6.75%
convertible unsecured subordinated debentures against BCI, BCE
and certain current and former Directors of BCI. The Court
approval provides for the dismissal of the action as against all
Defendants and completely disposes of the litigation without any
payment by any such Defendants in respect of damages.
A similar action commenced by the Caisse de depot et placement
du Quebec ("Caisse") with respect to the Caisse's holdings of
BCI's $150 million 6.5% convertible unsecured subordinated
debentures has been disposed of on the same basis, pursuant to
an agreement previously reached with the Caisse and approved by
the Court today.
The Court also approved the payment by BCI, under its Plan of
Arrangement, of a portion of plaintiffs' counsels' fees and
disbursements, a substantial portion of which will be funded by
BCI's insurer.
For more details, contact Howard Hendrick, Bell Canada
International, Phone: (514) 392-2260, E-mail:
howard.hendrick@bci.ca.
BLUE BIRD: Recalls 5,864 2001-2005 Buses Due to Crash Hazard
------------------------------------------------------------
Blue Bird Body Company in cooperation with the National Highway
Traffic Safety Administration's Office of Defects Investigation
(ODI) is voluntarily recalling about 5,864 units of the 2001-06
All American, 2001-05 TC2000 and 2004-06 Vision buses due to
crash hazard. NHTSA CAMPAIGN ID Number: 05V382000.
According to the ODI, certain of the aforementioned vehicles
manufactured between January 5, 2001 and July 15, 2005, are
equipped with a battery disconnect switch that has connections
that may be loose on the battery switch studs creating the
potential for the bus to shut down while in operation. Should
the bus shutdown while in operation, a vehicle crash could
occur.
As a remedy, Blue Bird will notify owners and instruct them on
how to repair the switch. The recall is expected to begin on
September 30, 2005.
For more details, contact Blue Bird, Phone: 478-822-2242 and
NHTSA Auto Safety Hotline: 1-888-327-4236 or (TTY)
1-800-424-9153, Web site: http://www.safecar.gov.
COMPUTER SCIENCES: Faces Nationwide Antitrust Suit Filed in AR
--------------------------------------------------------------
Computer Sciences Corporation, other vendors to the insurance
industry, and dozens of insurance companies faces a class action
filed on February 11,2005 in Miller County Circuit Court in
Arkansas, styled "Hensley, et al. vs. Computer Sciences
Corporation, et al."
The suit, filed as a putative nationwide class action, alleges
the defendants conspired to wrongfully use software products
licensed by the Company and the other software vendors to reduce
the amount paid to the licensees' insureds for bodily injury
claims. Plaintiffs also allege wrongful concealment of the
manner in which these software programs evaluate claims and
wrongful concealment of information about alleged inherent
errors and flaws in the software. Plaintiffs seek injunctive and
monetary relief of less than $75,000 for each class member, as
well as attorney's fees and costs.
COUNTRY COACH: Recalls 45 2005 Motor Homes Due to Crash Hazard
--------------------------------------------------------------
Country Coach, Inc. in cooperation with the National Highway
Traffic Safety Administration's Office of Defects Investigation
(ODI) is voluntarily recalling about 45 units of the 2005
Affinity and 2005 Magna motor homes due to crash hazard. NHTSA
CAMPAIGN ID Number: 05V373000.
According to the ODI, on certain motor homes, the hydraulic
slide room hoses could blister and leak due to engine heat. Loss
of hydraulic fluid could cause the slide room to unexpectedly
extend while in transit. This can result in a vehicle crash.
As a remedy, dealers will relocate the hydraulic hoses outside
of the engine compartment and replace any hoses that exhibit
signs of blistering or leakage. The recall is expected to begin
on September 1, 2005.
For more details, contact Country Coach, Phone: 1-800-547-8015
and NHTSA Auto Safety Hotline: 1-888-327-4236 or (TTY)
1-800-424-9153, Web site: http://www.safecar.gov.
COUNTRY COACH: Recalls 12 Bus Conversions Due to Fire Hazard
------------------------------------------------------------
Country Coach, Inc. in cooperation with the National Highway
Traffic Safety Administration's Office of Defects Investigation
(ODI) is voluntarily recalling about 12 units of the 2006
Country Coach Bus Conversions due to fire hazard. NHTSA CAMPAIGN
ID Number: 05V369000.
According to the ODI, on certain of the vehicles, the alternate
current power distribution panel buss bar termination screws may
not have been torqued to 35 inch pounds. If the crews are not
torqued properly, the unit could have an erratic power supply or
a complete loss of power. Unexplained power drops, loss of
ground to the system hotspots at points of connection and in
rare circumstances even a fire could occur.
As a remedy, dealers will inspect and re-torque all the buss
termination bars in the vehicle. The recall is expected to begin
on September 1, 2005.
For more details, contact Country Coach, Phone: 1-800-547-8015
and NHTSA Auto Safety Hotline: 1-888-327-4236 or (TTY)
1-800-424-9153, Web site: http://www.safecar.gov.
CRANE CARRIER: Recalls 2005 DR Vehicles Due to Crash Hazard
-----------------------------------------------------------
Crane Carrier Company in cooperation with the National Highway
Traffic Safety Administration's Office of Defects Investigation
(ODI) is voluntarily recalling the 2005 Crane DR vehicles due to
crash hazard. NHTSA CAMPAIGN ID Number: 05V381000.
According to the ODI, on certain vehicles, there may be material
flaws in the drag link assemblies. A failure of the drag link
may cause a loss of steering control, which could result in a
crash.
The manufacturer has not yet provided a remedy or owner
notification schedule for this campaign. For more details,
contact Crane Carrier, Phone: 1-918-836-1651 and NHTSA Auto
Safety Hotline: 1-888-327-4236 or (TTY) 1-800-424-9153, Web
site: http://www.safecar.gov.
DYNAMICS RESEARCH: Employees Launch MA Labor Law Violations Suit
----------------------------------------------------------------
Dynamics Research Corporation faces an employee class action
filed in the United States District Court for the District of
Massachusetts, alleging violations of the Fair Labor Standards
Act and certain provisions of Massachusetts General Laws.
The company believes that its practices comply with the Fair
Labor Standards Act and Massachusetts General Laws. The company
will vigorously defend itself and intends to move to have the
complaint removed from Federal Court and addressed in accordance
with the company's mandatory Dispute Resolution Plan for the
arbitration of workplace complaints, the Company said in a
disclosure to the Securities and Exchange Commission.
The suit is styled "Skirchak et al v. Dynamics Research
Corporation, case no. 1:05-cv-11362-MEL," filed in the United
States District Court for the District of Massachusetts, under
Judge Morris E. Lasker. Plaintiffs Joseph Skirchak and Barry
Aldrich are represented by Elayne N. Alanis, 3rd Floor, 10
Tremont St., Boston, MA 02108, Phone: 617-263-1203, Fax:
617-723-4729, E-mail: ealanislaw@verizon.net. Representing the
Company is Carrie J. Campion, Jeffrey B. Gilbreth, David S.
Rosenthal, Nixon Peabody LLP, 100 Summer Street, Boston, MA
02110, Phone: 617-345-1045, E-mail: ccampion@nixonpeabody.com or
drosenthal@nixonpeabody.com.
FAKE LIPITOR: Persons, 3 Firms Indicted in Counterfeiting Suit
--------------------------------------------------------------
11 individuals, a drug repacker, and two wholesale distributors
were indicted in cases related to the sale of Lipitor, a popular
cholesterol reducing drug, the U.S. Food and Drug Administration
(FDA) and the United States Attorney for the Western District of
Missouri, Kansas City, Missouri announced in a statement.
The indictment alleges numerous charges including conspiracy to
sell counterfeit, illegally imported and misbranded drugs as
well as conspiracy to sell stolen drugs. The conspiracy involved
the manufacture of counterfeit Lipitor at a clandestine facility
in Central America, the purchase of genuine Lipitor intended for
distribution in South America, and the illegal importation into
the United States of both products.
"This case demonstrates that the FDA will take the necessary
steps to protect the drug supply in America," said FDA
Commissioner Dr. Lester Crawford. "I am pleased that the U.S.
Attorney's Office and FDA have been able to put together this
case and stop these fraudulent schemes to sell pharmaceuticals
of unknown safety and efficacy to the public."
In 2003, Albers Medical Distributors, Kansas City, MO, (a drug
wholesaler) distributed over $20 million in illegally imported
and counterfeit Lipitor that was sold to H.D. Smith Wholesale
Drug Company (Wood Dale, IL). H.D. Smith distributed these
Lipitor tablets throughout the U.S. The counterfeit Lipitor was
repackaged by Med-Pro, Lexington, NE., a drug repacker. All
three participants in this scheme were named in the indictment
today. It is believed that these counterfeit Lipitor products
are out of circulation.
In addition, it is alleged in the indictment that members of the
conspiracy distributed pharmaceuticals stolen from
GlaxoSmithKline and Roche Pharmaceuticals and counterfeited
drugs The FDA's Office of Criminal Investigation (OCI) was able
to put together the case by tracing back the various steps in
this scheme. OCI was able to document where the chemicals and
products came from, where the counterfeit was being
manufactured, and how it was distributed.
Working together with the U.S. Attorney's Office in the Western
District of Missouri, these findings led to today's indictment
of all parties involved.
FLORIDA: Fort Lauderdale Sued For Code Enforcement Practices
------------------------------------------------------------
Homeowners are suing the city of Fort Lauderdale for its code
enforcement practices, claiming that poor and elderly residents
of northwest Fort Lauderdale were hit with gigantic fines in a
confusing and unfair process, The Sun-Sentinel.com reports.
Attorney Sharon Bourassa of Legal Aid Service filed the suit in
Broward Circuit Court. The suit, which seeks class action
status, names four owners as the lead plaintiffs. However, Ms.
Bourassa expects about 2,000 homeowners would join. According to
her, "We're going for damages in the multimillions because they
have taken a lot of money from people in that neighborhood." She
adds, "Many have lost their homes."
Additionally, Ms. Bourassa told The Sun-Sentinel.com that she
thinks the city uses code enforcers to shake loose property that
is ripe for redevelopment. Northwest Fort Lauderdale, where her
clients live, is a rapidly gentrifying community with housing
that's among the lowest priced in the county. The city is
spending millions subsidizing new home construction and street
improvements there.
The suit contends that the city's Code Enforcement Department
uses selective enforcement and its notices are a violation of
residents' due process. The inspection notice, which Ms.
Bourassa called "chilling," tells a property owner that if the
violation isn't corrected, the owner is subject to fines or even
"a physical arrest" and a jail sentence of up to 90 days. She
told Sun-Sentinel.com that residents don't get a clear idea of
when their hearings will occur, and the hearings often go on
without them.
One of Ms. Bourassa's clients in the lawsuit, Gizele Bien-Aime,
was cited in 1999 for litter, inoperable vehicles and missing
grass. The suit alleges that after several years she paid a
$32,500 fine and now has another code violation pending. Another
client, Velva Turner, was fined $11,350 at a hearing she did not
attend, according to the suit.
FRANKLIN RESOURCES: Asks MD Court To Dismiss Mutual Funds Suit
--------------------------------------------------------------
Franklin Resources, Inc. and certain of the Franklin Templeton
mutual funds ("Funds"), current and former officers, employees,
and directors asked the United States District Court for the
District of Maryland to dismiss the consolidated market
timing/late trading class action filed against them.
The defendants have been named in multiple lawsuits in different
federal courts in Nevada, California, Illinois, New York, and
Florida, alleging violations of various federal securities and
state laws and seeking, among other relief, monetary damages,
restitution, removal of Fund trustees, directors, advisers,
administrators, and distributors, rescission of management
contracts and 12b-1 plans, and/or attorneys' fees and costs.
Specifically, the lawsuits claim breach of duty with respect to
alleged arrangements to permit market timing and/or late trading
activity, or breach of duty with respect to the valuation of the
portfolio securities of certain Templeton Funds managed by the
Company's subsidiaries, allegedly resulting in market timing
activity. The majority of these lawsuits duplicate, in whole or
in part, the allegations asserted in the Administrative
Complaint and the SEC's findings regarding market timing in the
SEC Order. The lawsuits are styled as class actions, or
derivative actions on behalf of either the named Funds or the
Company.
To date, more than 400 similar lawsuits against at least 19
different mutual fund companies have been filed in federal
district courts throughout the country. Because these cases
involve common questions of fact, the Judicial Panel on
Multidistrict Litigation (JPMDL) ordered the creation of a
multidistrict litigation in the United States District Court for
the District of Maryland, entitled "In re Mutual Funds
Investment Litigation" (the "MDL"). The Judicial Panel then
transferred similar cases from different districts to the MDL
for coordinated or consolidated pretrial proceedings.
As of August 8, 2005, the following federal market timing
lawsuits are pending against the Company (and in some instances,
name certain officers, directors and/or Funds) and have been
transferred to the MDL:
(1) Kenerley v. Templeton Funds, Inc., et al., Case No.
03-770 GPM, filed on November 19, 2003 in the United
States District Court for the Southern District of
Illinois;
(2) Cullen v. Templeton Growth Fund, Inc., et al., Case No.
03-859 MJR, filed on December 16, 2003 in the United
States District Court for the Southern District of
Illinois and transferred to the United States District
Court for the Southern District of Florida on March 29,
2004;
(3) Jaffe v. Franklin AGE High Income Fund, et al., Case
No. CV-S-04-0146-PMP-RJJ, filed on February 6, 2004 in
the United States District Court for the District of
Nevada;
(4) Lum v. Franklin Resources, Inc., et al., Case No. C 04
0583 JSW, filed on February 11, 2004 in the United
States District Court for the Northern District of
California;
(5) Fischbein v. Franklin AGE High Income Fund, et al.,
Case No. C 04 0584 JSW, filed on February 11, 2004 in
the United States District Court for the Northern
District of California;
(6) Beer v. Franklin AGE High Income Fund, et al., Case No.
8:04-CV-249-T-26 MAP, filed on February 11, 2004 in the
United States District Court for the Middle District of
Florida;
(7) Bennett v. Franklin Resources, Inc., et al., Case No.
CV-S-04-0154-HDM-RJJ, filed on February 12, 2004 in the
United States District Court for the District of
Nevada;
(8) Dukes v. Franklin AGE High Income Fund, et al., Case
No. C 04 0598 MJJ, filed on February 12, 2004, in the
United States District Court for the Northern District
of California;
(9) McAlvey v. Franklin Resources, Inc., et al., Case No. C
04 0628 PJH, filed on February 13, 2004 in the United
States District Court for the Northern District of
California;
(10) Alexander v. Franklin AGE High Income Fund, et al.,
Case No. C 04 0639 SC, filed on February 17, 2004 in
the United States District Court for the Northern
District of California;
(11) Hugh Sharkey IRA/RO v. Franklin Resources, Inc., et
al., Case No. 04 CV 1330, filed on February 18, 2004 in
the United States District Court for the Southern
District of New York;
(12) D'Alliessi, et al. v. Franklin AGE High Income Fund, et
al., Case No. C 04 0865 SC, filed on March 3, 2004 in
the United States District Court for the Northern
District of California;
(13) Marcus v. Franklin Resources, Inc., et al., Case No. C
04 0901 JL, filed on March 5, 2004 in the United States
District Court for the Northern District of California;
(14) Banner v. Franklin Resources, Inc., et al., Case No. C
04 0902 JL, filed on March 5, 2004 in the United States
District Court for the Northern District of California;
(15) Denenberg v. Franklin Resources, Inc., et al.,
Case No. C 04 0984 EMC, filed on March 10, 2004 in the
United States District Court for the Northern District
of California;
(16) Hertz v. Burns, et al., Case No. 04 CV 02489, filed on
March 30, 2004 in the United States District Court for
the Southern District of New York
Plaintiffs in the MDL filed consolidated amended complaints on
September 29, 2004. On February 25, 2005, defendants filed
motions to dismiss, which are currently under submission with
the court.
The litigation is styled "In re Mutual Funds Investment
Litigation, case no. 1:04-md-15862-AMD," filed in the United
States District Court for the District of Maryland, under Judge
Andre M. Davis. Representing the Company is Meredith Nelson
Landy of O'Melveny and Myers LLP, 2765 Sand Hill Rd, Menlo Park,
CA 94025, Phone: 16504732671, Fax: 16504732601, E-mail:
mlandy@omm.com. Representing the plaintiffs is H. Adam Prussin
of Pomerantz Haudek Block Grossman and Gross LLP, 100 Park Ave
26th Fl, New York, NY 10017-5516, Phone: 12126611100, Fax:
12126618665, E-mail: haprussin@pomlaw.com.
FRANKLIN RESOURCES: IL Court Dismisses Securities Fraud Lawsuit
---------------------------------------------------------------
The United States District Court for the Southern District of
Illinois dismissed one of the class actions filed against
various subsidiaries of Franklin Resources, Inc. as well as
certain Templeton Fund registrants, alleging breach of duty with
respect to the valuation of the portfolio securities of certain
Templeton Funds managed by such subsidiaries and seeking, among
other relief, monetary damages and attorneys' fees and costs.
Several suits were initially filed in Illinois state courts,
styled:
(1) Bradfisch v. Templeton Funds, Inc., et al., Case No.
2003 L 001361, filed on October 3, 2003 in the Circuit
Court of the Third Judicial Circuit, Madison County,
Illinois;
(2) Woodbury v. Templeton Global Smaller Companies Fund,
Inc., et al., Case No. 2003 L 001362, filed on October
3, 2003 in the Circuit Court of the Third Judicial
Circuit, Madison County, Illinois;
(3) Kwiatkowski v. Templeton Growth Fund, Inc., et al.,
Case No. 03 L 785, filed on December 17, 2003 in the
Circuit Court of the Twentieth Judicial Circuit, St.
Clair County, Illinois;
(4) Parise v. Templeton Funds, Inc., et al., Case No. 2003
L 002049, filed on December 22, 2003 in the Circuit
Court of the Third Judicial Circuit, Madison County,
Illinois
In April 2005, defendants removed these lawsuits to the United
States District Court for the Southern District of Illinois. On
July 12, 2005, the court dismissed the Bradfisch case, on the
ground of preemption. Defendants' motions to dismiss the
remaining three lawsuits on the same ground are pending.
FRANKLIN RESOURCES: NJ Court Mulls Mutual Fund Lawsuit Dismissal
----------------------------------------------------------------
The United States District Court for the District of New Jersey
has yet to rule on Franklin Resources, Inc.'s motion to dismiss
the consolidated securities class action filed against it,
certain of its current and former officers, employees, and
directors, styled "In re Franklin Mutual Funds Fee Litigation."
Multiple lawsuits were initially filed, alleging violations of
various securities laws and pendent state law claims relating to
the disclosure of directed brokerage payments and/or payment of
allegedly excessive advisory, commission, and distribution fees.
These lawsuits are styled as class actions and derivative
actions brought on behalf of certain Funds.
The suits are styled:
(1) Stephen Alexander IRA v. Franklin Resources, Inc., et
al., Case No. 04-982 JLL, filed on March 2, 2004 in the
United States District Court for the District of New
Jersey;
(2) Strigliabotti v. Franklin Resources, Inc., et al., Case
No. C 04 0883 SI, filed on March 4, 2004 in the United
States District Court for the Northern District of
California;
(3) Tricarico v. Franklin Resources, Inc., et al., Case No.
CV-04-1052 JAP, filed on March 4, 2004 in the United
States District Court for the District of New Jersey;
(4) Miller v. Franklin Mutual Advisors, LLC, et al., Case
No. 04-261 DRH, filed on April 16, 2004 in the United
States District Court for the Southern District of
Illinois and transferred to the United States District
Court for the District of New Jersey on August 5, 2004
(plaintiffs voluntarily dismissed this action, without
prejudice, on October 22, 2004);
(5) Wilcox v. Franklin Resources, Inc., et al., Case No.
04-2258 WHW, filed on May 12, 2004 in the United States
District Court for the District of New Jersey;
(6) Bahe, Custodian CGM Roth Conversion IRA v.
Franklin/Templeton Distributors, Inc. et al., Case No.
04-11195 PBS, filed on June 3, 2004 in the United
States District Court for the District of
Massachusetts
The United States District Court for the District of New Jersey
consolidated for pretrial purposes three of the above lawsuits
(Stephen Alexander IRA, Tricarico, and Wilcox) into a single
action, entitled "In re Franklin Mutual Funds Fee Litigation."
Plaintiffs in those three lawsuits filed a consolidated amended
complaint on October 4, 2004. Defendants filed a motion to
dismiss the Complaint on November 19, 2004. It is anticipated
that the matter will be heard in the coming months.
FRANKLIN TEMPLETON: Continues To Face Canadian Mutual Fund Suits
----------------------------------------------------------------
Franklin Templeton Investments Corporation, a subsidiary of
Franklin Resources, Inc., and the investment manager of Franklin
Templeton's Canadian mutual funds, faces two class action market
timing lawsuits in Canada, seeking, among other relief, monetary
damages, an order barring any increase in management fees for a
period of two years following judgment, and/or attorneys' fees
and costs.
The suits are styled "Huneault v. AGF Funds, Inc., et al., Case
No. 500-06-000256-046, filed on October 25, 2004 in the Superior
Court for the Province of Quebec, District of Montreal," and
"Heinrichs, et al. v. CI Mutual Funds, Inc., et al., Case No.
04-CV-29700," filed on December 17, 2004 in the Ontario Superior
Court of Justice.
GENERAL MOTORS: Recalls 804,000 Vehicles Because of Crash Hazard
----------------------------------------------------------------
General Motors Corporation in cooperation with the National
Highway Traffic Safety Administration's Office of Defects
Investigation (ODI) is voluntarily recalling about 804,000 units
of 1999-2002 Chevrolet Avalanche, 1999-2002 Chevrolet Silverado,
1999-2002 Chevrolet Suburban, 1999-2002 Chevrolet Tahoe, 1999-
2002 GMC Sierra, 1999-2002 GMC Yukon, 1999-2002 GMC Yukon XL
pickup trucks and sports utility vehicles due to crash hazard.
NHTSA CAMPAIGN ID Number: 05V379000.
According to the ODI, certain vehicles of the aforementioned
vehicles may experience unwanted antilock brake system (ABS)
activation. This condition is more likely to occur in
environmentally corrosive areas. This recall will be launched in
the "Salt belt" states of Connecticut, Illinois, Indiana,
Massachusetts, Maine, Michigan, New Hampshire, New Jersey, New
York, Ohio, Pennsylvania, Rhode Island, Vermont and West
Virginia only. This condition can cause increased stopping
distances during low-speed brake applications, which could
result in crash.
As a remedy dealers, are to remove the wheel speed sensor and
thoroughly apply rust inhibitor to the cleaned surface, grease
the mounting surface, reinstall the wheel speed sensor, and
check the peak-to-peak output voltage to ensure the wheel speed
signal is within specification.
For more details, contact Chevrolet: Phone: 1-800-630-2438, GMC,
Phone: 1-866-996-9463 and NHTSA Auto Safety Hotline:
1-888-327-4236 or (TTY) 1-800-424-9153, Web site:
http://www.safecar.gov.
HAWAII: Police, Union Officials Say Wage Suit May Cost $25M-$50M
----------------------------------------------------------------
The conclusion of a class action lawsuit, which alleges that
Honolulu police officers were not properly paid over a three-
year period could cost the city more than $50 million and is
going to change the way police do business, according to police
and union officials, The Honolulu Advertiser reports.
Alex Garcia, O'ahu chapter chairman of the State of Hawai'i
Organization of Police Officers, told The Honolulu Advertiser,
union attorneys are indicating that a settlement could cost the
city $25 million to $50 million.
Honolulu police Chief Boisse Correa even told The Honolulu
Advertiser that the lawsuit would "change the way police do
business." Though Chief Correa did not elaborate on the possible
changes Mr. Garcia pointed out that any settlement would force
the department to alter work schedules and implement strict
time-management and monitoring measures. Mr. Correa made his
statements to reporters after a City Council Public Safety
Committee hearing on the police budget. He also said, "It's not
going to be palatable or easy for police to change. They are
going to have to change."
The federal lawsuit, which is scheduled for a February 2006
trial, was filed on behalf of more than 1,500 officers under a
provision of the Fair Labor Standards Act. It alleges that from
1999 to 2002, Honolulu didn't pay officers for time they spent
on activities such as work-related travel, command briefings
before and after their shifts, missed meal breaks, and for
cleaning and maintaining vehicles. The suit also alleges that
officials improperly calculated overtime, that employees were
not compensated for all work associated with the job, and that
the city's comp-time policies violate the FLSA. More than 600
Honolulu firefighters have also signed onto the suit.
According to Mr. Garcia, the issues that prompted the lawsuit
date back farther than the current police administration. He
told The Honolulu Advertiser though that union members would
welcome the possible changes, and in the long run, they would be
beneficial to the officers.
Police Capt. Frank Fujii declined to comment about department
policy changes that might be brought about by the lawsuit
because the suit has yet to reach court.
HIBERNIA CORPORATION: Reaches Settlement For LA Investors Suit
--------------------------------------------------------------
Hibernia Corporation reached a memorandum of understanding to
settle the class action filed in the Civil District Court for
the Parish of Orleans, State of Louisiana, on behalf of its
shareholders. The suit also names as defendants each of the
members of the Company's Board of Directors in connection with
the proposed merger of the Company with the Capital One
Financial Corporation.
The complaint alleges, among other things, that the directors of
the Company named in the complaint breached their fiduciary
duties by failing to maximize shareholder value, and by creating
deterrents to third-party offers (including by agreeing to pay a
termination fee to Capital One in certain circumstances under
the merger agreement). Among other things, the complaint seeks
class action status, a court order enjoining Hibernia and its
directors from proceeding with or consummating the merger, or
any other business combination with a third party, a court order
rescinding the merger agreement and any of its terms to the
extent already implemented and the payment of attorneys' and
experts' fees.
In June 2005, the Company, Capital One and the putative class
representative signed a memorandum of understanding with respect
to a settlement of the lawsuit. The memorandum of understanding
provided that the parties would enter into a settlement pursuant
to which Capital One would waive the right to receive $20
million of the $220 million termination fee payable by the
Company under certain circumstances, the Company and Capital One
would agree to make certain additional disclosures in the
preliminary proxy statement/prospectus that was filed with the
SEC in connection with the merger transaction, the plaintiff
agreed on behalf of the class to dismiss with prejudice and
release all of the claims brought in the lawsuit (and any claims
that could have been brought in the lawsuit) and Hibernia agreed
to pay certain legal expenses of the plaintiffs. The agreement
is subject to final approval by the court, a hearing with
respect to which has been scheduled for late November 2005.
INTEL CORPORATION: AMD Antitrust Fraud Suit Spurs Class Actions
---------------------------------------------------------------
Intel Corporation faces various class actions, related to a
lawsuit filed by rival computer chip-maker Advanced Micro
Devices, Inc. (AMD), alleging that it violated federal antitrust
laws.
In June 2005, AMD filed a complaint in the United States
District Court for the District of Delaware alleging that the
Company and its Japanese subsidiary engaged in various actions
in violation of the Sherman Act and the California Business and
Professions Code, including providing secret and discriminatory
discounts and rebates and intentionally interfering with
prospective business advantages of AMD. AMD's complaint seeks
unspecified treble damages, punitive damages, an injunction and
attorney's fees and costs. Subsequently, AMD's Japanese
subsidiary also filed suits in the Tokyo High Court and the
Tokyo District Court against Intel's Japanese subsidiary,
asserting violations of Japan's Antimonopoly Law and alleging
damages of approximately $55 million, plus various other costs
and fees.
At least 61 separate class actions, generally repeating AMD's
allegations and asserting various consumer injuries, including
that consumers in various states have been injured by paying
higher prices for Intel microprocessors, have been filed in the
U.S. District Courts for the Northern District of California,
Southern District of California and the District of Delaware as
well as in various California and Tennessee state courts.
INTEL CORPORATION: IL Court Certifies Consumer Fraud Litigation
---------------------------------------------------------------
The Third Judicial Circuit Court for Madison County, Illinois
certified against Intel Corporation an Illinois-only class in
the lawsuit filed against the Company and other computer chip
makers, alleging false statements about Intel Pentium 4
processors.
Various plaintiffs filed the suit in June 2002, also naming as
defendants Gateway Inc., Hewlett-Packard Company and HPDirect,
Inc. The suit alleges that the defendants' advertisements and
statements misled the public by suppressing and concealing the
alleged material fact that systems containing Intel Pentium 4
processors are less powerful and slower than systems containing
Intel Pentium processors and a competitor's microprocessors.
In July 2004, the Court certified against the Company an
Illinois-only class of certain end-use purchasers of certain
Pentium 4 microprocessors or computers containing such
microprocessors. The Court denied plaintiffs' motion for
reconsideration of this ruling. The plaintiffs seek unspecified
damages and attorneys' fees and costs.
In January 2005, the Court granted a motion filed jointly by the
plaintiffs and the Company that stayed the proceedings in the
trial court pending appellate review of the Court's class
certification order.
LOUISIANA-PACIFIC: Continues To Face CA Consumer Fraud Lawsuit
--------------------------------------------------------------
Louisiana-Pacific Corporation continues to face a class action
filed in the Superior Court for Stanislaus County, California,
styled "Nature Guard Cement Roofing Shingle Cases."
The plaintiffs in this action are a class of persons owning
structures on which Nature Guard Fiber Cement Shakes were
installed as roofing. The complaint in this action asserts
claims for breach of express and implied warranties, unfair
business practices, and violation of the Consumer Legal Remedies
Act and seeks general, compensatory, special and punitive
damages, disgorgement of profits and the establishment of a fund
to provide restitution to the purported class members.
In a regulatory filing, the Company said it no longer
manufactured or sold fiber cement shakes. The dollar amount of
the referenced claims cannot presently be determined. The
complaint in this action does not quantify the relief sought by
the plaintiffs individually or on behalf of the class, discovery
in this action has not been completed, no determination of
liability has been made and no process for the submission of
individual claims in connection with this action has been
established. Counsel for the plaintiffs in this action has
stated that the plaintiffs "seek as damages the cost of
replacing all of the roofs, estimated to be approximately $100
million, plus punitive damages."
In addition to denying liability for the replacement of the
affected roofs, the Company said in the filing that it believes
that the foregoing estimate of related cost is significantly
overstated, and that it has substantial defenses to this action.
LOUISIANA-PACIFIC: Faces Possible Injury Suit Re: AL Facility
-------------------------------------------------------------
Louisiana-Pacific Corporation received during the third quarter
of 2004, a letter from a law firm purporting to represent more
than 1,400 potential plaintiffs who allegedly experienced
various personal injuries and property damages as a result of
the alleged release of chemical substances from our wood
treatment facility in Lockhart, Alabama during the period from
1953 to 1998.
The letter is characterized as a "pre-litigation settlement
demand" to the Company and Pactiv Corporation, from whom the
Company acquired the facility in 1983. In a filing with the
Securities and Exchange Commission, the company said that it
intends to defend vigorously any legal proceedings that may be
commenced against it by the potential plaintiffs. As of the
date of this report, the Company and the potential plaintiffs
have agreed to refrain from commencing any legal proceedings in
respect of the potential plaintiffs' allegations and to the
tolling of applicable statutes of limitations, the filing
stated. These agreements are terminable by either party upon 30
days notice.
MERCK & CO.: "Irvin" Lawsuit First To Go To Trial in Vioxx MDL
--------------------------------------------------------------
The United States District Court for the Eastern District of
Louisiana has designated the lawsuit filed against Merck & Co.
styled "Evelyn Irvin v. Merck" as the first suit in the
multidistrict litigation to go to trial. The trial is scheduled
to begin on November 28, 2005.
The Company already faces numerous federal and state product
liability lawsuits involving individual claims, as well as
several putative class actions with respect to Vioxx. As of
June 30, 2005, the Company has been served or is aware that it
has been named as a defendant in approximately 4,100 lawsuits,
which include approximately 7,500 plaintiff groups alleging
personal injuries resulting from the use of Vioxx. Certain of
these lawsuits include allegations regarding gastrointestinal
bleeding, cardiovascular events, thrombotic events or kidney
damage.
The Company has also been named as a defendant in approximately
120 putative class actions alleging personal injuries or seeking
medical monitoring as a result of the putative class members'
use of Vioxx, disgorgement of certain profits under common law
unjust enrichment theories, and/or various remedies under state
consumer fraud and fair business practice statutes, including
recovering the cost of Vioxx purchased by individuals and third-
party payors such as union health plans (all of the actions
discussed in this paragraph are collectively referred to as the
"Vioxx Product Liability Lawsuits"). The actions filed in the
state courts of California and New Jersey, respectively, have
been transferred to a single judge in each state for coordinated
proceedings. In addition, on February 16, 2005, the Judicial
Panel on Multidistrict Litigation (JPMDL) transferred all Vioxx
Product Liability Lawsuits pending in federal courts nationwide
into one Multidistrict Litigation (MDL) for coordinated pre-
trial proceedings. The MDL has been transferred to the United
States District Court for the Eastern District of Louisiana
before District Judge Eldon E. Fallon.
More Vioxx product liability suits are expected against the
controversial pharmaceutical company, in the wake of a $253
million damage award given by a Texas court to the first ever
injury suit to go to trial.
The Texas Superior Court in Angleton gave the award to Texan
Carol Ernst, who sought compensation for the death of her
husband Robert, allegedly of arrhythmia, in 2001. Mr. Ernst, a
produce manager at a Wal-Mart near Fort Worth, who ran marathons
and worked as a personal trainer, took Vioxx for eight months to
alleviate pain in his hands until he died in his sleep, an
earlier Class Action Reporter story (July 27, 2005) reports.
Mrs. Ernst's lawsuit alleges that Merck & Co. knew of the
dangers of using Vioxx years before it recalled the drug. But,
the Company allegedly ignored those concerns in favor of
aggressive marketing for a multibillion-dollar seller. The case
was the first of 4,200 other suits that have been filed in the
United States and thousands more from other countries that are
being prepared to reach trial after the drug's withdrawal, an
earlier Class Action Reporter story (July 27, 2005) reports.
The Company has said it intends to appeal the decision and fight
litigation coming after the landmark decision.
Mrs. Evelyn Irvin Plunkett filed the Irvin case, on behalf of
her late husband Richard Irvin, Jr., who died from an apparent
heart attack. Plaintiff alleges that Mr. Irvin took Vioxx for
approximately one month.
Meanwhile, the Company has entered into a tolling agreement with
the MDL Plaintiffs' Steering Committee which establishes a
procedure to halt the running of the statute of limitations
(tolling) as to certain categories of claims allegedly arising
from the use of Vioxx by non-New Jersey citizens. This Agreement
applies to individuals who have not filed lawsuits and may or
may not eventually file lawsuits and only to those claimants who
seek to toll claims alleging injuries resulting from a
thrombotic cardiovascular event that results in a myocardial
infarction or ischemic stroke. The agreement provides counsel
additional time to evaluate potential claims. The agreement
requires any tolled claims to be filed in federal court.
On July 29, 2005, a New Jersey state trial court certified a
nationwide class of third-party payors (such as unions and
health insurance plans) that paid in whole or in part for the
Vioxx used by their plan members or insureds. The named
plaintiff in that case seeks recovery of certain Vioxx purchase
costs (plus penalties) based on allegations that the purported
class members paid more for Vioxx than they would have had they
known of the product's alleged risks. The Company said in its
regulatory filing that it believes that the class was improperly
certified and intends to seek appellate review of the decision.
The trial court's ruling is procedural only; it does not address
the merits of plaintiffs' allegations, which the Company intends
to defend vigorously.
Based on media reports and other sources, the Company
anticipates that additional Vioxx Product Liability Lawsuits,
Vioxx Shareholder Lawsuits and Vioxx Foreign Lawsuits will be
filed against it and/or certain of its current and former
officers and directors in the future. Additionally, the Company
said in its filing that it anticipates that one or more
additional Vioxx Product Liability Lawsuits may go to trial in
the second half of 2005.
The suit is styled "In re Vioxx Product Liability Litigation,
MDL 1657." Representing the plaintiffs is Russ M. Herman,
Herman, Herman, Katz & Cotlar, LLP, 820 O'Keefe Ave., Suite 100
New Orleans, LA 70113, Phone: 504-581-4892, Fax: 504-561-6024,
E-mail: rherman@hhkc.com. Representing the defendants is
Phillip Wittmann, Stone Pigman Walther Wittmann, LLC, 546
Carondelet St., New Orleans, LA 70130, Phone: 504-581-3200, Fax:
504-581-3361 E-mail: pwittmann@stonepigman.com
MERCK & CO.: NJ Court Consolidates Securities, ERISA Lawsuits
-------------------------------------------------------------
The United States District Court for the District of New Jersey
ordered consolidated into two separate proceedings the
securities fraud and Employee Retirement Income Securities Act
(ERISA) class actions filed against Merck & Co., Inc. and
certain of its current and former officers and directors.
A number of putative class action lawsuits were filed in late
2003 and early 2004 by several shareholders in the United States
District Court for the Eastern District of Louisiana. After the
announcement of the withdrawal of "Vioxx," the Company was named
as a defendant in additional securities lawsuits filed in (or
removed to) various federal courts. On February 23, 2005, the
JPML transferred all of these securities lawsuits (the "Vioxx"
Securities Lawsuits), along with related lawsuits discussed
below, to the United States District Court for the District of
New Jersey before District Judge Stanley R. Chesler for
inclusion in a nationwide multidistrict litigation (MDL) for
coordinated pretrial proceedings. Judge Chesler has
consolidated the "Vioxx" Securities Lawsuits for all purposes.
On June 9, 2005, plaintiffs in the "Vioxx" Securities Lawsuits
filed a Fourth Consolidated and Amended Class Action Complaint
superseding prior complaints in the various cases (the
"Complaint"). Plaintiffs request certification of a class of
purchasers of Company stock between May 21, 1999 and October 29,
2004. The Complaint, which names additional current and former
officers and directors of the Company, alleges that the
defendants made false and misleading statements regarding Vioxx
in violation of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, and seeks unspecified compensatory damages
and the costs of suit, including attorneys' fees. The Complaint
also asserts a claim under Section 20A of the Securities and
Exchange Act against certain defendants relating to their sales
of Merck stock. In addition, the Complaint includes allegations
under Sections 11, 12 and 15 of the Securities Act of 1933 that
certain defendants made incomplete and misleading statements in
a registration statement and certain prospectuses filed in
connection with the Merck Stock Investment Plan, a dividend
reinvestment plan.
In addition, as previously disclosed, after the announcement of
the voluntary worldwide withdrawal of Vioxx, putative class
actions were filed against the Company and certain current and
former officers and directors of the Company in the United
States District Court for the Eastern District of Louisiana and
in the United States District Court for the District of New
Jersey (the "Vioxx ERISA Lawsuits" and, together with the "Vioxx
Securities Lawsuits" and the "Vioxx Derivative Lawsuits," the
"Vioxx Shareholder Lawsuits") on behalf of certain of the
Company's current and former employees who are participants in
certain of the Company's retirement plans asserting claims under
the Employee Retirement Income Security Act (ERISA). The
lawsuits make similar allegations to the allegations contained
in the Vioxx Securities Lawsuits and claim that the defendants
breached their duties as plan fiduciaries.
On February 23, 2005, the JPML transferred all "Vioxx ERISA
Lawsuits" to the Shareholder MDL. Judge Chesler has ordered
that the Vioxx ERISA Lawsuits be consolidated for all purposes.
A consolidated and amended complaint was filed in the Vioxx
ERISA Lawsuits on August 2, 2005.
As previously disclosed, in addition to the lawsuits discussed
above, the Company has been named as a defendant in litigation
relating to Vioxx in various countries in Europe, Canada,
Brazil, Australia, Turkey and Israel.
The suit is styled "Merck & Co., Inc., Securities Derivative and
ERISA Litigation, case no. 3:05-cv-01151-SRC-TJB," filed in the
United States District Court for the District of New Jersey
under Judge Stanley R. Chesler. Representing the Company is
Edward Cerasia II, PROSKAUER ROSE LLP, One Newark Center, 18th
floor, Newark NJ 07102-5211, Phone: 973 274-3200, E-mail:
ecerasia@proskauer.com; and John N. Poulous HUGHES HUBBARD &
REED LLP, 101 Hudson St. Suite 3601, Jersey City, NJ 07302-3918,
Phone: (201) 536-9220, E-mail: poulos@hugheshubbard.com.
Representing the plaintiffs is Irma Lois Bradley-Klein,
LEMMON LAW FIRM, LLC, 650 Poydras St. Suite 2335, New Orleans,
LA 70130, Phone: (985) 783-6789, Fax: (985) 783-1333.
MERCK & CO.: Asks AL Court To Dismiss Indigent Patients' Lawsuit
----------------------------------------------------------------
Merck & Co., Inc. asked the United States District Court in
Alabama to dismiss a class action filed by two providers of
health services to needy patients, alleging that 15
pharmaceutical companies overcharged the plaintiffs and a class
of those similarly situated, for pharmaceuticals purchased by
the plaintiffs under the program established by Section 340B of
the Public Health Service Act.
The Company and the other defendants have filed a motion to
dismiss the complaint on numerous grounds.
MERCK & CO.: Defends Against Vaccine Injury Litigation in US, UK
----------------------------------------------------------------
Merck & Co. continues to face litigation in the United States
and the United Kingdom, alleging injury as a result of being
vaccinated with various bivalent vaccines.
The Company is a party in claims brought under the Consumer
Protection Act of 1987 in the United Kingdom, which allege that
certain children suffer from a variety of conditions as a result
of being vaccinated with various bivalent vaccines for measles
and rubella and/or trivalent vaccines for measles, mumps and
rubella, including the Company's M-M-R II. The conditions
include autism, with or without inflammatory bowel disease,
epilepsy, diabetes, encephalitis, encephalopathy, deafness,
chronic fatigue syndrome and transverse myelitis.
In early September 2003, the Legal Services Commission (the LSC)
announced its decision to withdraw public funding of the
litigation brought by the claimants. This decision was
confirmed on appeal by the Funding Review Committee (FRC) on
September 30, 2003. The claimants' application for judicial
review of the decision to withdraw public funding was dismissed
in February 2004 and the April 2004 trial date was vacated. The
lead claimants have decided not to apply to the Court of Appeal
for permission to appeal the decision. As a result, legal aid
for all lead claimants has now been discharged.
The non-lead claimants were subject to a "show cause" procedure
to withdraw legal aid unless the claimants could show cause as
to why it should not be withdrawn. The FRC heard 37 of the "show
cause" appeals by the non-lead claimants in October 2004. The
appeals involving autism (26) were unsuccessful, but funding was
reinstated for 11 appeals involving other non-autism conditions,
such as epilepsy, deafness, encephalitis and transverse
myelitis. In light of the 11 successful appeals, the LSC has
reconsidered the cases of some other claimants and, to date,
funding has been reinstated in approximately 30 non-lead, non-
autism cases against the Company, in most cases to the limited
extent necessary to allow solicitors to provide a report on the
individual cases to the LSC. The LSC is still considering
reinstating funding for 2 additional cases against the Company.
Directions for further conduct of the litigation were made at a
case management hearing on March 17, 2005. As a result of the
judge's ruling following the case management hearing,
approximately 530 cases against the Company have been brought to
an end leaving approximately 40 active cases.
As previously disclosed, the Company is also a party to
individual and class action product liability lawsuits and
claims in the United States involving pediatric vaccines (e.g.,
hepatitis B vaccine) that contained thimerosal, a preservative
used in vaccines. Merck has not distributed thimerosal-
containing pediatric vaccines in the United States since the
fall of 2001.
As of June 30, 2005, there were approximately 285 active
thimerosal related lawsuits with approximately 800 plaintiffs.
Other defendants include vaccine manufacturers who produced
pediatric vaccines containing thimerosal as well as
manufacturers of thimerosal. In these actions, the plaintiffs
allege, among other things, that they have suffered neurological
injuries as a result of exposure to thimerosal from pediatric
vaccines. Two state court cases and two Federal District Court
cases were scheduled for trial in 2005. All of these cases
have been dismissed. Certain of the dismissals have been
appealed. Currently, one case is set for trial in 2006.
The Company has been successful in having cases of this type
either dismissed or stayed on the ground that the action is
prohibited under the National Childhood Vaccine Injury Act. The
Vaccine Act prohibits any person from filing or maintaining a
civil action (in state or federal court) seeking damages against
a vaccine manufacturer for vaccine-related injuries unless a
petition is first filed in the United States Court of Federal
Claims (hereinafter the "Vaccine Court"). Under the Vaccine
Act, before filing a civil action against a vaccine
manufacturer, the petitioner must either pursue his or her
petition to conclusion in Vaccine Court and then timely file an
election to proceed with a civil action in lieu of accepting the
Vaccine Court's adjudication of the petition or timely exercise
a right to withdraw the petition prior to Vaccine Court
adjudication in accordance with certain statutorily prescribed
time periods. The Company is aware that there are numerous cases
pending in Vaccine Court involving allegations that thimerosal-
containing vaccines and/or the M-M-R II vaccine cause autism
spectrum disorders. All of the cases referred to in the
preceding paragraph as having been dismissed or being scheduled
for trial have been brought by plaintiffs who claim to have made
a timely withdrawal of their Vaccine Court petition. The Company
is not a party to these Vaccine Court proceedings because the
petitions are brought against the Department of Health and Human
Services.
NEW YORK: Faces Lawsuit Due To August 2005 Parasitic Outbreak
-------------------------------------------------------------
Attorneys from Rochester and Seattle banded together and filed a
notice with the state attorney general's office that they intend
to pursue a class action lawsuit against the state of New York
for the massive parasitic outbreak that struck Seneca Lake State
Park's Sprayground last month, The Rochester Democrat and
Chronicle reports.
Tricia Van Putte of Greece, who is the only named plaintiff,
appears in the lawsuit on behalf of her two small children who
attended the Sprayground on August 11 and contracted
cryptosporidiosis, the gastrointestinal illness that is caused
by the parasite. According to the notice, a class action
lawsuit involving other clients could be started through Mrs.
Van Putte's claim. Legal experts though point out that a notice
of claim is not a lawsuit it is a document that allows attorneys
more time to file a lawsuit.
In mid-August, the state found the parasite in the Sprayground's
two water tanks and since then the state has said its
investigation into how the parasite got there. State officials
though are hesitant to place time frames on the ongoing
investigation, citing the need for a thorough analysis of the
problem. The park was closed August 15, but the illness has
shown up in people who visited the park as far back as June, an
earlier Class Action story (August 26, 2005) reports.
With an estimated 2,700 people affected by the outbreak and 197
cases confirmed, the situation recently gained national
attention, including coverage in The New York Times and on CNN,
however area tourism staffs are optimistic that such exposure
will not hurt business around the area, an earlier Class Action
story (August 26, 2005) reports.
PACKAGING CORPORATION: Linerboard Suit Discovery To End 9/2005
--------------------------------------------------------------
Fact discovery in the consolidated opt-out direct antitrust
lawsuit filed against Packaging Corporation of America in the
United States District Court for the Eastern District of
Pennsylvania is expected to close this month.
On May 14, 1999, the Company was named as a defendant in two
Consolidated Class Action Complaints which alleged a civil
violation of Section 1 of the Sherman Antitrust Act. The suits,
then captioned "Winoff Industries, Inc. v. Stone Container
Corporation, MDL No. 1261" (E.D. Pa.) and "General Refractories
Co. v. Gaylord Container Corporation, MDL No. 1261," (E.D. Pa.),
name PCAthe Company as a defendant based solely on the
allegation that it is successor to the interests of Tenneco
Packaging Inc. and Tenneco Inc., both of which were also named
as defendants in the suits, along with nine other linerboard and
corrugated sheet manufacturers. The complaints allege that the
defendants, during the period October 1, 1993 through November
30, 1995, conspired to limit the supply of linerboard, and that
the purpose and effect of the alleged conspiracy was to
artificially increase prices of corrugated containers and
corrugated sheets, respectively.
On November 3, 2003, Pactiv Corporation (formerly known as
Tenneco Packaging), Tenneco and the Company entered into an
agreement to settle the class action lawsuits. The settlement
agreement provides for a full release of all claims against the
Company as a result of the class action lawsuits and was
approved by the Court in an opinion issued on April 21, 2004.
Approximately 160 plaintiffs opted out of the class and together
filed about ten direct action complaints in various courts
across the country. All of the opt-out complaints make
allegations against the defendants, including the Company,
substantially similar to those made in the class actions.
The settlement agreement does not cover these direct action
cases. These actions have all been consolidated as "In re
Linerboard, MDL 1261 (E.D. Pa.)" for pretrial purposes. These
actions have almost all been consolidated as "In re Linerboard,
MDL 1261 (E.D. Pa.)" for pretrial purposes.
On June 30, 2005, Pactiv, Tenneco, and the Company entered into
an agreement to settle one of the opt-out suits, styled
"Conopco, Inc., et al. v. Smurfit-Stone Container Corporation,
et al., Case No. 03-CV-3549," (E.D. Pa.). The settlement
agreement provides for a full release of all claims against PCA
as a result of the action and was approved by order of the Court
on July 28, 2005. The Company has made no payments to the
plaintiffs as a result of the settlement of any of the opt-out
suits. Fact discovery is proceeding and is currently set to
close September 30, 2005.
The litigation is styled "In re Linerboard Antitrust Litigation,
case no. 2:10-md-01261-JD," filed in the United States District
Court for the Eastern District of Pennsylvania under Judge Jan
E. Dubois.
PARADYNE NETWORKS: Revised Suit Settlement Submitted To NY Court
----------------------------------------------------------------
Parties submit revised settlement documents to the United States
District Court for the Southern District of New York for the
consolidated securities class action filed against Paradyne
Networks, Inc., certain of its executive officers and the former
Chairman of the Company's board, and the underwriters of its
initial public offering.
The suit alleges that the defendants during the period from July
15, 1999 through December 6, 2000, violated federal securities
laws by allocating shares of our initial public offering to
favored customers in exchange for their promise to purchase
shares in the secondary market at escalating prices. The suit
seeks damages in an unspecified amount for the purported class
for the losses suffered during the class period as a result of
an alleged inflated stock price.
On June 5, 2003, the IPO Defendants agreed to participate in a
global settlement of this case (along with the settlement of
hundreds of other similar IPO allocation cases pending in the
Southern District of New York). The settlement is subject to
certification of a settlement class, notice to class members and
an opportunity to opt out, objections by any class members to
the terms of the settlement, and final approval by the Court.
The parties submitted a revised settlement to the Court in May
2005 and the Court has set January 9, 2006 for the final
approval hearing.
The suit is styled "In re Paradyne Networks, Inc. Initial Public
Offering Sec. Litigation," related to "In re Initial Public
Offering Securities Litigation, Master File No. 21 MC 92 (SAS),"
filed in the United States District Court for the Southern
District of New York under Judge Shira A. Scheindlin. The
plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300,
(3) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
QUEST DIAGNOSTICS: Suit Filed in FL V. "Balance-Bills" Practice
---------------------------------------------------------------
Boca Raton class action attorney Paul Geller initiated a class
action lawsuit in federal court in West Palm Beach against Quest
Diagnostics, the nation's largest diagnostic laboratory,
alleging that the company "balance-bills" patients, The Palm
Beach Post reports.
A health care provider balance-bills when it charges a patient
for the difference between the rate it negotiated with a managed
care provider and the amount it normally would charge. In most
cases, the negotiated rate is one-third to two-thirds of the
health care provider's usual fee. Quest Diagnostics, with
corporate headquarters in New Jersey, performs 250 million
diagnostic tests every year. Last year alone, the company
reported revenues of $5.1 billion.
Mr. Geller, who filed the suit on behalf of all Floridians, told
The Palm Beach Post, "We think this is a widespread practice.
These companies make enormous profits by doing this."
However, the company disputes his claim. According to company
spokesman Gary Samuels, "We generate thousands of bills every
day throughout Florida. My understanding is that one patient in
Florida has a billing dispute regarding testing we performed in
2004. We have promptly investigated and addressed all complaints
brought to our attention, and we expect to do the same in this
case."
UNITEDHEALTH GROUP: Trial in FL Managed Care Suit Set Jan. 2006
---------------------------------------------------------------
Trial in the consolidated class action filed against
UnitedHealth Group, Inc. and virtually all major entities in the
health benefits business has been moved to January 2006 in the
United States District Court for the Southern District of
Florida, Miami Division. The litigation is styled "In Re:
Managed Care Litigation: MDL No. 1334."
Beginning in 1999, a series of class action lawsuits were filed.
In December 2000, a multidistrict litigation panel consolidated
several litigation cases involving the Company and its
affiliates. Generally, the health care provider plaintiffs
allege violations of the Employee Retirement Income Security Act
(ERISA) and the Racketeer Influenced and Corrupt Organizations
Act (RICO) in connection with alleged undisclosed policies
intended to maximize profits. Other allegations include breach
of state prompt payment laws and breach of contract claims for
failure to timely reimburse providers for medical services
rendered. The consolidated suits seek injunctive, compensatory
and equitable relief as well as restitution, costs, fees and
interest payments.
The trial court granted the health care providers' motion for
class certification and that order was reviewed by the Eleventh
Circuit Court of Appeals. The Eleventh Circuit affirmed the
class action status of the RICO claims, but reversed as to the
breach of contract, unjust enrichment and prompt payment claims.
Through a series of motions and appeals, all direct claims
against the Company have been compelled to arbitration. The
trial court has denied the Company's further motion to compel
the secondary RICO claims to arbitration and the Eleventh
Circuit affirmed that order. A trial date was initially set for
September 2005, but later the date was changed to January 2006.
The trial court has ordered that the trial be bifurcated into
separate liability and damage proceedings. At a hearing before
the trial court in July 2005, the plaintiffs confirmed that they
would not seek damages against the Company with respect to
capitation-related claims.
The suit is styled "In Re Humana Inc. Managed Care Litigation,
MDL 1334," filed in the United States District Court for the
Southern District of Florida, Miami Division, under Judge
Federico Moreno. The suit names as defendants Humana, Inc.,
Aetna, Inc., Aetna-USHC, Inc., Cigna, Health Net, Inc., Human
Health Plan, Inc., Pacificare Health Systems, Inc., Prudential
Insurance Company of America, United Health Group, United Health
Care and Wellpoint Health Networks, Inc. Cigna and Aetna have
entered settlements with the plaintiffs. Lead Plaintiffs'
Attorneys are Barry Meadow of Podhurst, Orseck, et al., Harley
Tropin of Kozyak, Tropin & Throckmorton and Archie Lamb.
UNUMPROVIDENT CORPORATION: Pretrial Proceedings To End Dec. 2005
----------------------------------------------------------------
The United States District Court for the Eastern District of
Tennessee entered a schedule providing for the completion of all
pretrial proceedings in the consolidated class action filed
against UnumProvident Corporation, several of its subsidiaries
and some of their officers and directors by December 2005.
On May 22, 2003, the Company, several of its subsidiaries, and
some of their officers and directors filed a motion with the
Judicial Panel on Multidistrict Litigation seeking to transfer
more than twenty class actions and derivative suits now pending
against them in various federal district courts to a single
district for coordinated or consolidated pre-trial proceedings.
Each of these actions, contends, among other things, that the
defendants engaged in improper claims handling practices in
violation of the Employee Retirement Income Security Act (ERISA)
or various state laws or failed to disclose the effects of
those practices in violation of the federal securities laws.
On September 2, 2003, the Judicial Panel on the Multidistrict
Litigation entered an order transferring these cases to the U.S.
District Court for the Eastern District of Tennessee for
coordinated or consolidated pretrial proceedings.
On February 12, 2003, the first of five virtually identical
alleged securities class action suits styled "Knisley v.
UnumProvident Corporation, et al.," was filed in the United
States District Court for the Eastern District of Tennessee. On
February 27, 2003, a sixth complaint entitled "Martin v.
UnumProvident Corporation, et al.," was filed in the United
States District Court for the Southern District of New York, and
later was transferred to the Eastern District of Tennessee by
agreement of the parties. In two orders dated May 21, 2003 and
January 22, 2004, the district court consolidated these actions
under the caption "In re UnumProvident Corp. Securities
Litigation."
On November 6, 2003, the district court entered an order
appointing a Lead Plaintiff in the consolidated action. On
January 9, 2004, the Lead Plaintiff filed its consolidated
amended complaint. The Lead Plaintiff seeks to represent a
putative class of purchasers of UnumProvident Corporation
publicly traded securities between March 30, 2000 and April 24,
2003. The plaintiffs allege, among other things, that the
Company issued misleading financial statements, improperly
accounted for certain impaired investments, failed to properly
estimate its disability claim reserves, and pursued certain
improper claims handling practices. The complaint asserts
claims under Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934 and Rule 10b-5 thereunder. On March 19, 2004, the
defendants filed a motion to dismiss the consolidated amended
complaint, which has not as of yet been ruled upon by the court.
On May 7, 2003, "Azzolini v. CorTs Trust II for Provident
Financial Trust, et al.," was filed in the Southern District of
New York. This is a federal securities law class action brought
by the plaintiff on behalf of himself and a purported Class
consisting of all persons who purchased UnumProvident Corporate-
Backed Trust Securities (CorTs) certificates pursuant to an
initial public offering by an entity unaffiliated with the
Company on or about April 18, 2001 through March 24, 2003.
Plaintiff seeks to recover damages caused by the Company's and
certain underwriter defendants' alleged violations of the
Securities Act of 1933 and the Securities Exchange Act of 1934.
Plaintiff asserts that the Company issued and/or failed to
correct false and misleading financial statements and press
releases concerning the Company's publicly reported revenues and
earnings directed to the investing public.
Three additional actions alleging similar claims and purporting
to be class actions were filed, two in the Southern District of
New York, styled "Strahle v. CorTs Trust II for Provident
Financing Trust I, et al.," and "Finke v. CorTs Trust II for
Provident Financing Trust I, et al.," filed on March 23, 2003
and May 15, 2003, respectively, and the third in the Eastern
District of New York, styled "Bernstein v. CorTs for Provident
Financing Trust I, et al.," filed on July 7, 2003. These
actions all have been transferred to the Eastern District of
Tennessee for coordinated pre-trial proceedings. On February 18,
2004, the court consolidated each of these actions other than
the "Bernstein" action under the "Azzolini" caption. The
"Bernstein" action makes identical allegations as the other
actions, but with respect to a different series of CorTs
securities.
On March 19, 2004, amended complaints were filed in both the
"Azzolini" and "Bernstein" actions. The amended complaints
assert claims under Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 thereunder against the
Copany and one of its officers. The "Azzolini" plaintiff seeks
to represent a putative class of purchasers of certain CorTs
certificates between March 21, 2001 and March 24, 2003. The
"Bernstein" plaintiff seeks to represent a putative class of
purchasers of a different series of CorTs certificates between
February 8, 2001 and March 10, 2003. On April 19, 2004, the
defendants moved to dismiss the complaints in each of these
actions. The court has not as of yet ruled on those motions.
Discovery is stayed in each of these actions pursuant to the
Private Securities Litigation Reform Act of 1995. The court
entered a schedule providing for the completion of all pretrial
proceedings in these actions by December 2005.
On July 15, 2002, the case of "Rombeiro v. Unum Life Insurance
Company of America, et al.," was filed in the Superior Court of
Sonoma County, California. It was subsequently removed to the
United States District Court for the Northern District of
California. On January 21, 2003, a First Amended Complaint was
filed, purporting to be a class action. This complaint alleges
that plaintiff individually was wrongfully denied disability
benefits under a group long-term disability plan and alleges
breach of state law fiduciary duties on behalf of himself and
others covered by similar plans whose disability benefits have
been denied or terminated after a claim was made. The complaint
seeks, among other things, injunctive and declaratory relief and
payment of benefits.
On April 30, 2003, the court granted in part and denied in part
the defendants' motion to dismiss the complaint. On May 14,
2003, the plaintiff filed a Second Amended Complaint seeking
injunctive relief on behalf of a putative nationwide class of
long-term disability insurance policyholders. This action was
transferred to the Eastern District of Tennessee as part of the
multidistrict litigation transfer order.
On November 4, 2002, the case of "Keir, et al. v. UnumProvident
Corporation, et al.," was filed in the United States District
Court for the Southern District of New York. This case purports
to be a class action on behalf of a putative class of group
long-term disability participants insured under ERISA plans
whose claims were denied or terminated on or after June 30,
1999. The amended complaint alleges that these claimants had
their claims improperly challenged and allege that the Company
and its insurance subsidiaries breached certain fiduciary duties
owed to these participants in ERISA plans in which the Company
is the claims adjudicator. On April 29, 2003, the court denied
the defendants' motion to dismiss the complaint. This action was
transferred to the Eastern District of Tennessee as part of the
multidistrict litigation transfer order.
On February 11, 2003, the case of "Harris, et al. v.
UnumProvident Corporation, et al.," was filed in the Circuit
Court of St. Clair County, Illinois. This case purports to be a
class action. The complaint alleges that individuals were
wrongfully denied benefits and alleges causes of action under
breach of contract, breach of the covenant of good faith and
fair dealing, violation of the Illinois Consumer Fraud Act,
common law fraud, intentional misrepresentation, and breach of
fiduciary duty on behalf of a putative class of policyholders.
Alternatively, the complaint alleges violations of ERISA. The
complaint seeks injunctive and declaratory relief as well as
restitution and punitive damages. On April 4, 2003, the case was
removed to the United States District Court for the Southern
District of Illinois. This action was transferred to the Eastern
District of Tennessee as part of the multidistrict litigation
transfer order.
On February 25, 2003, the case of "Davis, et al. v.
UnumProvident Corporation, et al.," was filed in the United
States District Court for the Eastern District of Pennsylvania.
The plaintiffs are seeking representative status as a class of
disability participants insured under ERISA plans. The complaint
alleges that these claimants had their claims improperly denied
or terminated and that the Company breached certain fiduciary
duties owed to these participants in ERISA plans. The complaint
also alleges violations under the federal Racketeer Influenced
Corrupt Organizations Act (RICO). The complaint seeks reversal
of claim denials or contract rescissions and re-determination by
an independent person of claims of the named plaintiffs and
others similarly situated, appointment of a master to oversee
certain claim handling matters, and treble damages under RICO.
This action was transferred to the Eastern District of Tennessee
as part of the multidistrict litigation transfer order.
On April 30, 2003, the case of "Taylor v. UnumProvident
Corporation, et al.," was filed in the Circuit Court for Shelby
County, Tennessee in the Thirteenth Judicial District at
Memphis. The plaintiff seeks to represent all individuals who
were insured by long-term disability policies issued by
subsidiaries of UnumProvident and who did not obtain their
coverage through employer sponsored plans and who had a claim
denied, terminated, or suspended by a UnumProvident subsidiary
after January 1, 1995. Plaintiff alleges that UnumProvident
Corporation and its subsidiaries employed various unfair claim
practices in assessing entitlement to benefits by class members
during this period and, as a result, wrongfully denied
legitimate claims. The plaintiff and the class seek contractual,
equitable, and injunctive relief. On June 9, 2003, the
defendants removed this action to the United States District
Court for the Western District of Tennessee. This action was
transferred to the Eastern District of Tennessee as part of the
multidistrict litigation transfer order.
On July 18, 2003, "Contreras v. UnumProvident Corporation, et
al.," was filed in the Southern District of New York. Plaintiffs
allege claims on behalf of a putative class of ERISA plan
participants, beneficiaries, third-party beneficiaries, or
assignees of group long-term disability insurance issued by the
insuring subsidiaries of UnumProvident, who have had a
disability claim denied, terminated, or suspended by
UnumProvident on or after June 30, 1999. Plaintiffs assert bad
faith claims practices by UnumProvident in violation of ERISA.
Plaintiffs seek equitable and injunctive relief to require,
among other things, that UnumProvident re-evaluate all
previously denied, terminated, or suspended claims. This action
was transferred to the Eastern District of Tennessee as part of
the multidistrict litigation transfer order.
On September 17, 2003, the case of "Rudrud, et al. v.
UnumProvident Corporation, et al.," was filed in the United
States District Court for the District of Massachusetts. The
plaintiffs assert claims on behalf of a putative class of
disability participants insured under ERISA plans. The complaint
alleges that these claimants had their claims improperly denied
or terminated and that the Company breached certain fiduciary
duties owed to these participants in ERISA plans. The complaint
also alleges violations under the Racketeer Influenced and
Corrupt Organizations Act (RICO) and Massachusetts state law.
The complaint seeks payment of benefits, reversal of claim
denials or contract rescissions and re-determination by an
independent person of claims of the named plaintiffs and others
similarly situated, appointment of a master to oversee certain
claim handling matters, restitution and damages, and treble
damages under RICO. This action was transferred to the Eastern
District of Tennessee as part of the multidistrict litigation
order.
On November 13, 2003, the case of "Dauphinee, et al. v.
UnumProvident, et al.," was filed in the United States District
Court for the Eastern District of Tennessee. This action is
brought as a putative class action lawsuit on behalf of
representative plaintiffs and all disabled individuals insured
under a UnumProvident long-term disability plan. The complaint
alleges that UnumProvident and its subsidiaries fraudulently and
otherwise unlawfully denied and terminated long-term disability
insurance benefits. Additionally, the complaint alleges misuse
of authority as an ERISA claims fiduciary. The complaint seeks
injunctive and declaratory relief to require, among other
things, that UnumProvident re-evaluate all previously denied,
terminated, or suspended claims.
On December 22, 2003, the Tennessee Federal District Court
entered an order consolidating all of the above actions other
than the "Taylor" action for all pretrial purposes under the
caption "In re UnumProvident Corp. ERISA Benefit Denial
Actions." Among other things, the court in that order appointed
a lead counsel in the actions and directed lead counsel to file
a consolidated amended complaint in the "ERISA Benefit Denial
Actions," which was filed on February 20, 2004. On March 26,
2004, the defendants answered the complaints in these actions,
and simultaneously filed a motion for judgment on the pleadings
in the "ERISA Benefit Denial Actions." The court has not yet
ruled upon that motion. The parties have engaged in certain
limited discovery in connection with ongoing court-ordered
mediation, as well as certain discovery on the merits of the
claims asserted in the actions.
On April 9, 2004, the plaintiffs in "Taylor" and in the "ERISA
Benefit Denial Actions" separately filed motions seeking
certification of a plaintiff class. The defendants opposed each
of those motions. The court has not yet ruled upon the motions.
On July 1, 2005, the defendants also filed motions for summary
judgment in each action. The court entered a schedule providing
for the completion of all pretrial proceedings in these actions
by December 2005.
The suit is styled "In re UnumProvident Corporation ERISA
Benefit Denial Actions, case no. 1:03-md-01552," filed in the
United States District Court for the Eastern District of
Tennessee, under Judge Curtis L. Collier. Representing the
plaintiffs is Robert I. Harwood of Wechsler Harwood LLP, 488
Madison Avenue, Eight Floor, Suite 801, New York, NY 10022,
Phone: 212-935-7400, Fax: 212-753-3630, E-mail:
rharwood@whesq.com.
UNUMPROVIDENT CORPORATION: MA Court Upholds Certification Denial
----------------------------------------------------------------
The Massachusetts Court of Appeals upheld a lower court ruling
refusing class certification to the lawsuit filed against
UnumProvident Corporation, styled "Jewel, et al. v.
UnumProvident Corporation, et al."
The suit was initially filed on December 11, 2003 in the
Worcester County Superior Court, Commonwealth of Massachusetts.
The Company received service of this matter on March 8, 2004.
Plaintiffs seek to represent all individual long-term disability
policyholders and all participants in group long-term disability
plans which are not covered by the Employee Retirement Income
Security Act (ERISA) who had coverage issued by an insuring
subsidiary and whose claims for long-term disability benefits
were denied, or whose payments of long-term disability benefits
were terminated or suspended, on or after July 1, 1999.
Plaintiffs allege that the defendants employed various unfair
claim practices and seek declaratory, contractual, and
injunctive relief.
On April 20, 2004, the defendants answered the complaint by
denying generally the allegations and asserting various
defenses. On July 15, 2004, plaintiffs filed a motion seeking to
certify a plaintiff class. On February 18, 2005, the Court
denied that motion. The plaintiffs appealed the decision to the
Massachusetts Court of Appeals. On April 8, 2005, the Court of
Appeals upheld the trial court's decision. On July 18, 2005,
the Jewel plaintiffs filed a motion to intervene in the
multidistrict litigation proceeding entitled "Taylor v.
UnumProvident Corp. et al.," currently pending in the United
States District Court for the Eastern District of Tennessee. No
ruling has been made on that motion.
UNUMPROVIDENT CORPORATION: Certification Sought For NY Lawsuit
--------------------------------------------------------------
Plaintiffs asked the Supreme Court of the State of New York to
grant class certification to the lawsuit filed against
UnumProvident Corporation, styled "Jeffrey A. Weiller v. New
York Life Insurance Company, UnumProvident Corporation, and The
Paul Revere Life Insurance Company."
This complaint, filed in December 2004, is brought by the
plaintiff on behalf of himself and a purported class alleging
that the Company schemed to improperly deny or terminate
legitimate claims filed under policies issued by several non-
UnumProvident insurers on behalf of whom UnumProvident
administers claims.
On February 18, 2005, the defendants filed a motion to dismiss
this action. On June 20, 2005, the plaintiff filed a motion
seeking certification of a putative class. These motions remain
pending.
WALT DISNEY: Recalls 12.9T Sunglasses Due to High Lead Content
--------------------------------------------------------------
In cooperation with the U.S. Consumer Product Safety Commission
(CPSC), Walt Disney Parks and Resorts, LLC of Lake Buena Vista,
Florida is voluntarily recalling about 12,900 units of Red
Sunglasses/Toddler Cap Sets.
According to the recall, the paint on the red sunglasses
contains high levels of lead. Lead is toxic if ingested by young
children and can cause adverse health effects. There have been
no injuries or incidents reported.
The recalled sunglasses are a solid red color and have dark
plastic lenses. They were sold with either a navy blue toddler
cap featuring the character Mickey Mouse or a light blue toddler
cap featuring the character Stitch. Both toddler caps have red
bills. The recalled sunglasses are attached to the bills of the
caps by a red strap with a hook and loop fastener. "Walt Disney
Worldr" or "Disneylandr Resort" is stitched on the back of the
toddler caps. Other styles and colors of hats and sunglasses are
not included in this recall.
Manufactured in Taiwan, the sunglasses were sold at the
Disneyland Resort in California, The Walt Disney World Resort in
Florida, Disney's Vero Beach Resort in Florida, and the Disney
Cruise Line based in Florida, from November 2004 through June
2005 for about $16.
Consumers should immediately take the recalled red sunglasses
away from children and contact Walt Disney World Co. for a free
replacement pair of sunglasses and 20 Disney Dollarsr.
Consumer Contact: Consumers should call Walt Disney World Co. at
866-802-2782 between 9 a.m. and 5 p.m. ET Monday through Friday,
or visit the Web site: http://www.disneyworld.com.
WESTAR ENERGY: Settles Shareholders', Derivative Lawsuits in KS
---------------------------------------------------------------
In back-to-back lawsuit settlements in U.S. District Court in
Knasas City, Westar Energy got $12.5 million from David Wittig,
Douglas Lake and Westar board members and executives, but the
utility paid out $30 million to its shareholders, The Capital-
Journal reports.
In a class action lawsuit against Westar, the utility agreed to
pay $30 million to Local 812 IBT Pension Fund, the American
Radio Association Pension Fund and others who were investors in
Westar between March 29, 2000, and November 8, 2002.
The lawsuit was filed back in July 15, 2003, against Westar, Mr.
Wittig, Mr. Lake, and other officers and board directors. It
alleged that investors weren't told key details about a plan to
restructure Westar in 2001, in which Westar would have merged
its regulated utility with a New Mexico utility and spun off its
unregulated operations into Westar Industries.
In that suit shareholders alleged the new company would have
left its debt with the regulated utility, and key executives
pushing the deal, including Mr. Wittig, would receive huge cash
payments from the change. Eventually, Kansas regulators were
able to stopped the deal but not before stock prices dropped.
Of the $30 million figure, plaintiffs' attorneys received 30
percent, or roughly $9 million. Additionally, U.S. District
Judge Julie A. Robinson also awarded expenses of $226,877 to
attorneys representing the shareholders.
In the second suit, technically called a shareholder derivative
lawsuit, $12.5 million was paid to Westar by Mr. Wittig, former
president, chief executive officer and board chairman; Mr. Lake,
former executive vice president and chief strategic officer;
current and past board members Charles Q. Chandler IV, Frank J.
Becker, Gene A. Budig, John C. Nettels Jr., Roy A. Edwards and
John C. Dicus; former chief administrative officer Carl M.
Koupal Jr.; general counsel Larry D. Irick; and Cleco Corp.
Plaintiffs in the derivative lawsuit were Mark Epstein and Leon
Brazin and Westar stockholders, who filed the lawsuit on behalf
of the utility.
According to Richard Weiss, an attorney representing Mr. Epstein
and Mr. Brazin, insurance companies paid the $12.5 million to
Westar. The Westar board members and executives were covered by
insurance policies for company directors and officers, he adds.
In their suit, Mr. Epstein and Mr. Brazin had alleged the
officers and board members "breached their fiduciary duties to
Westar and its stockholders by participating in, approving, or
not preventing various schemes by certain defendants to obtain
excessive and improper compensation and benefits and to
restructure the company for their personal benefit." Plaintiff
attorneys in that case received $2.5 million in fees, which is
roughly 20 percent of the $12.5 million.
New Securities Fraud Cases
AMERICAN ITALIAN: Schneider & Wallace Files MO Securities Suit
--------------------------------------------------------------
The law firm of Schneider & Wallace initiated a class action
suit in the United States District Court for the Western
District of Missouri against American Italian Pasta Company
(NYSE: PLB) and certain of its officers and directors, on behalf
of all persons or entities who purchased the publicly traded
securities of AIPC between October 25, 2000 and August 9, 2005
(the "Class Period").
The complaint alleges that during the Class Period, defendants
violated Sections 10(b) and 20(a) of the Securities and Exchange
Act of 1934 by publicly issuing a series of false and misleading
statements regarding the Company's financial condition, thus
causing AIPC's securities to trade at artificially inflated
levels. On August 9, 2005, after the close of trading, AIPC
disclosed that it was "delaying the release of its full
financial results for the third fiscal quarter ended July 1,
2005, and is also delaying the filing of its third quarter Form
10-Q with the Securities and Exchange Commission (SEC)." The
Company stated that "it will not achieve in fiscal year 2005 the
expected range of margin performance, overall profitability and
free cash flow as set forth in the Company's earnings release on
April 27, 2005." AIPC also disclosed that the Company's "Audit
Committee has recently commenced an internal investigation,
undertaken at the Committee's own initiative, of certain matters
including: certain accounting procedures and practices including
those relating to material weaknesses in internal controls
identified by the Company. financial statement adjustments. and
the circumstances surrounding such adjustments; and, certain
transactions and possible past accounting errors and their
causes." The Company "indicated that the investigation relates
to transactions and other matters occurring as early as the
Company's 2000 fiscal year. The internal investigation has not
yet been completed and the Company indicated that financial
statement adjustments might be necessary in addition to those
outlined in this release. Until the internal investigation is
completed by the Audit Committee and any financial statement
adjustments and their causes are determined, the Company's third
quarter results and any impact on prior period results cannot be
finalized." In addition, the Company stated "that in late 2004
and early 2005, it received inquiries from the Philadelphia and
New York Stock Exchanges concerning trading activity in the
Company's stock, by persons outside of the Company, during time
periods surrounding certain of the Company's public
announcements." The Company stated that "[s]ome of the issues
under discussion with the SEC staff relate" to "financial
statement adjustments" by the Company.
On August 10, 2005, the following trading day, shares of AIPC
declined from $20.94 to $13.28 per share, a decline of
approximately 37%, on unusually heavy volume.
For more details, contact Todd Schneider of Schneider & Wallace,
180 Montgomery St., Suite 2000, San Francisco, CA 94104, Phone:
(415) 421-7100, Fax: (415) 421-7105, TTY: (415) 421-1655, E-
mail: info@schneiderwallace.com, Web site:
http://www.schneiderwallace.com/Stock-Investigations/American-
Italian-Pasta-Investigation.htm.
ARBINET-THEXCHANGE: Law Firms Launch Securities Complaint in NJ
---------------------------------------------------------------
The law firm of Shalov Stone & Bonner LLP and Sarraf Gentile LLP
initiated a securities class action lawsuit against Arbinet-
thexchange Inc. (NASDAQ: ARBX) on behalf of purchasers of the
company's common stock issued in its initial public offering.
The complaint names as defendants the company and certain of its
underwriters and directors. The lawsuit alleges, among other
things, that the company made material misstatements or
omissions in its registration statement for its initial public
offering, filed with the Securities and Exchange Commission on
December 16, 2004. The lawsuit is pending in the Superior Court
of New Jersey.
For more details, contact Thomas G. Ciarlone, Jr. of Shalov
Stone & Bonner LLP, 485 Seventh Ave., Suite 1000, New York, NY
10018, Phone: (212) 239-4340, E-mail: tciarlone@lawssb.com, Web
site: http://www.lawssb.comand Joseph Gentile of Sarraf Gentile
LLP, 485 Seventh Ave., Suite 1005, New York, NY 10018, Phone:
(212) 868-3610, E-mail: joseph@sarrafgentile.com, Web site:
http://www.sarrafgentile.com.
ARBINET-THEXCHANGE: Murray Frank Issues Notice Regarding NJ Suit
---------------------------------------------------------------
The law firm of Murray, Frank & Sailer, LLP, is issuing a notice
to clarify investor uncertainty as to who filed a class action
lawsuit against Arbinet-thexchange, Inc. (Nasdaq:ARBX) on behalf
of purchasers of the company's common stock issued in its
initial public filing on December 16, 2004.
Despite other firms having issued press releases, Murray, Frank
& Sailer LLP has filed the only complaint against Arbinet-
thexchange, Inc., which is currently pending in the Superior
Court of New Jersey.
For more details, contact Eric J. Belfi, Christopher S. Hinton,
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.
HOST AMERICA: Barrack Rodos Lodges Securities Fraud Suit in CT
--------------------------------------------------------------
The law firm of Barrack, Rodos & Bacine, which initiated a class
action in the United States District Court for the District of
Connecticut on behalf of purchasers of the publicly traded
securities of Host America Corporation (Nasdaq: CAFE) ("Host
America" or the "Company") between July 12, 2005 to July 22,
2005, inclusive (the "Class Period"), is proving an update
regarding the status of the litigation.
According to the firm, new disclosures by Host America
Corporation (Nasdaq: CAFE) ("Host America" or the "Company")
provide further support for the claims asserted in the class
action commenced by Barrack, Rodos & Bacine in the United States
District Court for the District of Connecticut on behalf of
purchasers of the publicly traded securities of Host America
between July 12, 2005 and July 22, 2005, inclusive (the "Class
Period"). In a press release issued by Host America on August
31, 2005, the Company confirmed facts alleged in the complaint
filed by Barrack, Rodos & Bacine concerning the Company's
materially false and misleading press release issued on July 12,
2005. Specifically, the Company admitted in its August 31, 2005
press release that "[W]hile Host believed that there was an oral
understanding between Host and Wal-Mart Stores, Inc. that Host
would begin surveying 10 Wal-Mart stores, there is not, and
never has been, a formal, written agreement with Wal-Mart
concerning the proposed 10- store survey that was the subject of
the [Company's] July 12, 2005 press release nor is there any
agreement for the installation of LightMasterPlus(R). To date,
neither Host nor its wholly owned energy management subsidiary
R.S. Services, Inc. has received from Wal-Mart a list of the 10
stores to be surveyed. Further, it is Host's understanding that
any purchase and/or installation of the LightMasterPlus(R) will
require approval by Wal-Mart senior management." In addition,
the Company stated that, based upon the findings of a Special
Committee of the Company's Board of Directors, defendant
Geoffrey Ramsey, the Company's Chief Executive Officer and
President, had been placed on administrative leave without pay
pending the completion of the Special Committee's investigation
and its determination regarding what further personnel actions
are necessary and appropriate.
The complaint filed by Barrack, Rodos & Bacine charges Host
America and certain of its officers and directors with
violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder in
connection with the July 12, 2005 press release. The complaint
seeks to recover damages on behalf of all persons who purchased
Host America securities during the Class Period.
For more details, contact Leslie Bornstein Molder, Esq. of
Barrack, Rodos & Bacine, 3300 Two Commerce Square, 2001 Market
Street, Philadelphia, PA 19103, Phone: 215-963-0600, Fax:
215-963-0838, E-mail: lmolder@barrack.com, Web site:
http://www.barrack.com.
HOST AMERICA: Chitwood Harley Lodges Securities Fraud Suit in CT
----------------------------------------------------------------
The law firm of Chitwood Harley Harnes, LLP, initiated a lawsuit
seeking class action status in the United States District Court
for the District of Connecticut on behalf of all persons (the
"Class") who purchased the securities of Host America (NASDAQ:
CAFE) ("Host America" or the "Company") during the period from
July 12, 2005 through July 22, 2005, inclusive (the "Class
Period"). The Defendants are Host America, EnergyNSync, Geoffrey
Ramsey, David Murphy, Roger Lockhart and Peter Sarmanian.
The Complaint alleges that during the Class Period, Host America
violated Sections 10(b) and 20(a) of the Securities Exchange Act
of 1934 and SEC Rule 10b-5. 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, 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 Complaint alleges that the 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
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, the Complaint charges, 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. 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. At the time
trading was halted, Host America stock was priced at $13.92 per
share, down from $16.88 on July 19, 2005. Trading resumed on
September 1, 2005. Already, the price is down to $4.17 per
share.
For more details, contact Nichole Browning Adams, Esq. or Lauren
S. Antonino, Esq. of Chitwood Harley Harnes, LLP, Phone:
1-888-873-3999 ext. 4873 or 1-888-873-3999 ext. 6888, E-mail:
nadams@chitwoodlaw.com or lantonino@chitwoodlaw.com, Web site:
http://www.chitwoodlaw.com.
HOST AMERICA: Schneider & Wallace Lodges Securities Suit in CT
--------------------------------------------------------------
The law firm of Schneider & Wallace initiated a class action
suit in the United States District Court for the District of
Connecticut against Host America Corporation (NASDAQ: CAFE) and
certain of its officers, directors and certain shareholders, on
behalf of all persons or entities who purchased the publicly
traded common stock of Host America between July 12, 2005 and
July 22, 2005, inclusive (the "Class Period").
The complaint alleges that during the Class Period, Host America
and certain of its officers, directors and/or certain
shareholders violated Sections 10(b) and 20(a) of the Securities
and Exchange Act of 1934 (the "Exchange Act") by making a series
of materially false and misleading statements concerning the
nature and scope of the Company's business relationship with
Wal-Mart, resulting in the price of Host America's stock being
artificially inflated during the Class Period. According to the
press on August 31, 2005, Host America announced that there
never was a written agreement with Wal-Mart. It is further
alleged that certain defendants violated Section 20A of the
Exchange Act by improperly selling vast amounts of their
respective stock holdings in the Company during the Class
Period, reaping millions of dollars in proceeds.
On July 22, 2005, the Securities and Exchange Commission ordered
a suspension of trading in Host America securities and on July
25, 2005, the Company disclosed that "the SEC had commenced a
formal investigation of Host, certain of its officers, directors
and others in connection with a press release issued by Host on
July 12, 2005 relating to dealings between Host and Wal-Mart
Stores Inc."
On August 5, 2005, Host America announced that it "was notified
by the Nasdaq Stock Market ("Nasdaq") that based on a review of
public documents and information provided by Host to Nasdaq,
related to the issuance of a July 12, 2005 press release, the
staff of Nasdaq Listing Investigations and Listing
Qualifications has determined that Host no longer qualifies for
inclusion in the Nasdaq stock market and its securities are
therefore subject to delisting...."
NASDAQ later decided to allow Host America to resume trading on
September 1, 2005. As of 1 PM EST on September 1, 2005, after
resuming trading Host America had dropped over 70%.
Host America announced in a press release that its Board of
Directors has placed Geoffrey Ramsey, Chief Executive Officer
and President of Host, on administrative leave without pay as of
August 30, 2005, and that he has resigned as a member and
Chairman of the Board of Directors.
For more details, contact Todd Schneider of Schneider & Wallace,
180 Montgomery St., Suite 2000, San Francisco, CA 94104, Phone:
(415) 421-7100, Fax: (415) 421-7105, TTY: (415) 421-1655, E-
mail: info@schneiderwallace.com, Web site:
http://www.schneiderwallace.com/Stock-Investigations/Host-
America.htm.
IMMUCOR INC.: Charles J. Piven Files Securities Fraud Suit in GA
----------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a securities
class action on behalf of shareholders who purchased, converted,
exchanged or otherwise acquired the common stock of Immucor,
Inc. (NASDAQ: BLUD) between January 7, 2005 and August 29, 2005,
inclusive (the "Class Period").
The case is pending in the United States District Court for the
Northern District of Georgia. The action charges that defendants
violated federal securities laws by issuing a series of
materially false and misleading statements to the market
throughout the Class Period, which statements had the effect of
artificially inflating the market price of the Company's
securities. No class has yet been certified in the above action.
For more details, contact the Law Offices Of Charles J. Piven,
P.A., The World Trade Center-Baltimore, 401 East Pratt St.,
Suite 2525, Baltimore, MD 21202, Phone: 410/986-0036 E-mail:
hoffman@pivenlaw.com.
IMMUCOR INC.: Rosen Law Firm Lodges Securities Fraud Suit in GA
---------------------------------------------------------------
The Rosen Law Firm initiated a class action lawsuit in the
United States District Court for the Northern District of
Georgia on behalf of purchasers of Immucor, Inc. (NASDAQ: BLUD)
("Immucor'' or the "Company") publicly traded securities during
the period between January 7, 2005 and August 29, 2005 (the
"Class Period''), against defendants Immucor and certain of its
current and former officers and directors.
The Complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") by misrepresenting that Immucor's financial statements and
disclosures fairly and accurately reflected the Company's
results of operations as required by Generally Accepted
Accounting Principles ("GAAP") and the Exchange Act. The
Complaint also charges that Defendants' Sarbanes-Oxley
certifications during the Class Period were false and
misleading, as the Company, knowingly or with severe
recklessness, lacked adequate internal controls and failed to
keep proper books and records in violation of their well-
publicized Code of Corporate Conduct.
On August 26, 2005 the Company announced that the Securities and
Exchange Commission (the "SEC") had launched a formal
investigation into payments made by its Italian unit and its
president, Defendant De Chirico, in October 2003 to a physician
connected with a hospital with which the Company was doing
business. After the market closed on August 29, 2005, the
Company revealed further that its Chief Financial Officer had
resigned, that it would be revising its previously issued
results for at least two quarters in order to account for a
previously unrecorded accrued bonus, and that its Form 10-K for
fiscal year 2005 would be further delayed due to additional
accounting and auditing procedures the Company claimed was
necessary to properly reflect the accrued bonus and to render
the internal controls report required by Section 404 of Sarbanes
Oxley.
As a result of the alleged fraud, the price of Immucor common
stock dropped from a closing price of $28.61 on August 25, 2005
before the market learned of the SEC's formal investigation to
close at $24.00 per share on August 30, 2005.
For more details, contact Laurence Rosen, Esq. of The Rosen Law
Firm P.A., P.C., Phone: (212) 686-1060 or 1-866-767-3653, Fax:
(212) 202-3827, E-mail: lrosen@rosenlegal.com, Web site:
http://www.rosenlegal.com.
INTERMIX MEDIA: Lerach Coughlin Lodges Securities Suit in CA
------------------------------------------------------------
The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP ("Lerach Coughlin") filed a class action lawsuit in the
Superior Court of the State of California, County of Los
Angeles, against members of the Board of Directors of Intermix
Media, Inc., formerly known as eUniverse, Inc. ("Intermix" or
the "Company") (AMEX:MIX), and its controlling shareholder
VantagePoint Partners in connection with their efforts to sell
Intermix to News Corp. pursuant to a Merger Agreement that was
timed, negotiated and structured in violation of defendants'
fiduciary duties.
Specifically, the complaint alleges that instead of complying
with their fiduciary duty to maximize shareholder value for
Intermix's public shareholders, defendants instead have
structured the proposed acquisition so that Intermix's public
shareholders receive just $12 per share, while tens of millions
of dollars are being diverted in the form of:
(1) premium payments to Intermix's controlling shareholder
for its illiquid block of convertible preferred shares;
(2) the acceleration of unvested options held by
defendants; and
(3) the potential elimination of millions of dollars of
liability arising out of defendants' prior misconduct
through a merger designed to wrest Intermix
shareholders of standing to maintain derivative
litigation against defendants and a "deeper pocket" to
indemnify them, all in exchange for agreeing to a fire
sale of Intermix.
The complaint further charges that defendants' prior misconduct,
which arose out of a series of false financial statements filed
with the Securities and Exchange Commission ("SEC") between July
30, 2002 and May 5, 2003, resulted in the Company being forced
to restate its financial results for three quarters in the
fiscal year ended March 31, 2003, exposing it to millions of
dollars in potential liabilities. As a result, the Company was
investigated by the SEC and delisted by the NASDAQ as a result
of its failure to provide necessary financial information to the
market in a timely manner. The complaint alleges that as a
direct result of this illegal course of conduct, the Company
became the target of multiple lawsuits, alleging, among other
things,
(i) that the Company had materially overstated its net
income and earnings per share;
(ii) that the Company lacked adequate internal controls and
was therefore unable to ascertain the true financial
condition of the Company; and
(iii) that as a result, the value of the Company's net income
and financial results were materially overstated at
certain relevant times.
For more details, contact William Lerach or Darren Robbins of
Lerach Coughlin Stoia Geller Rudman & Robbins, LLP, Phone:
800-449-4900 or 619-231-1058, E-mail: wsl@lerachlaw.com, Web
site: http://www.lerachlaw.com.
MANNATECH INC.: Murray Frank Lodges Securities Fraud Suit in NM
---------------------------------------------------------------
The law firm of Murray, Frank & Sailer, LLP, initiated a class
action lawsuit in the United States District Court for the
District of New Mexico on behalf of shareholders who purchased
or otherwise acquired the securities of Mannatech, Inc.
("Mannatech" or the "Company") (Nasdaq:MTEX) between August 10,
2004 and May 8, 2005, inclusive (the "Class Period").
The Complaint charges Mannatech and Samuel L. Caster with
violations of federal securities laws. Plaintiff claims
defendants issued false or misleading statements concerning the
Company's business and operations, which caused Mannatech's
stock price to become artificially inflated, inflicting damages
on investors. Mannatech operates in the field of
"glyconutrients" and designs and develops proprietary
nutritional supplements, topical products, and weight management
products, sold primarily by purportedly independent sales
associates and members through a network marketing system --
commonly known as "multilevel marketing."
The Complaint alleges Mannatech failed to adequately supervise
and/or monitor the conduct of its associates, including those
who maintain websites that prominently display misleading
testimonials and/or falsely suggest that Mannatech products are
effective in the treatment and prevention of certain specific
diseases. The Complaint alleges that, unbeknownst to public
investors, the true facts which defendants knew and/or
recklessly disregarded and failed to disclose to the investing
public during the Class Period, included:
(1) that the Company's internal controls were inadequate
and failed in several key aspects, resulting in
inadequate monitoring and supervision of the Company's
associates;
(2) as a consequence of defendants' failure to supervise,
Mannatech associates made false and unfounded claims
concerning the efficacy of the Company's products; and
(3) as a result of the foregoing, defendants' statements
with respect to Mannatech's operations, performance,
and prospects were lacking in any reasonable basis when
made.
On May 9, 2005, an article published in Barron's revealed the
misleading nature of claims made on certain Mannatech
associates' websites. This news shocked the market, causing the
price of Mannatech shares to plummet more than 26 percent in one
day, thereby damaging investors. The next day, May 10, 2005,
Mannatech shares fell an additional 19 percent as a result of
this news.
For more details, contact Eric J. Belfi, Christopher S. Hinton,
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.
MERCURY INTERACTIVE: Charles J. Piven Lodges CA Securities Suit
---------------------------------------------------------------
The Law Offices Of Charles J. Piven, P.A. initiated a securities
class action on behalf of shareholders who purchased, converted,
exchanged or otherwise acquired the common stock of Mercury
Interactive Corporation (NASDAQ: MERQE) between October 22, 2003
and August 23, 2005, inclusive (the "Class Period").
The case is pending in the United States District Court for the
Northern District of California. The action charges that
defendants violated federal securities laws by issuing a series
of materially false and misleading statements to the market
throughout the Class Period, which statements had the effect of
artificially inflating the market price of the Company's
securities. No class has yet been certified in the above action.
For more details, contact the Law Offices Of Charles J. Piven,
P.A., The World Trade Center-Baltimore, 401 East Pratt St.,
Suite 2525, Baltimore, MD 21202, Phone: 410/986-0036 E-mail:
hoffman@pivenlaw.com
SYMBOL TECHNOLOGIES: Glancy Binkow Lodges Securities Suit in NY
---------------------------------------------------------------
The law firm of Glancy Binkow & Goldberg LLP initiated a class
action lawsuit in the United States District Court for the
Eastern District of New York on behalf of a class (the "Class")
consisting of all persons or entities who purchased or otherwise
acquired securities of Symbol Technologies, Inc. ("Symbol
Technologies" or the "Company") (NYSE:SBL), between May 10, 2004
to August 1, 2005, inclusive (the "Class Period").
The Complaint charges Symbol Technologies and certain of the
Company's executive officers with violations of federal
securities laws. Symbol engages in the design, development,
manufacture and service of products and systems used in
enterprise mobility solutions. The Complaint alleges that,
following major accounting scandals between 1998 and 2003,
Symbol settled government and private litigation and, as set
forth in the Complaint, promised a "new" Symbol Technologies --
one which, in the two years prior to the start of the Class
Period, had "implemented various initiatives intended to
materially improve its internal controls and procedures, address
the systems and personnel issues raised in the course of the
restatement and help ensure a corporate culture that emphasizes
integrity, honesty and accurate financial reporting." The
Company announced that "These initiatives address Symbol's
control environment, organization, staffing, policies,
procedures, documentation and information systems."
Contrary to these reassurances, Symbol Technologies' internal
controls and financial systems were inadequate and inaccurate.
During the Class Period, Symbol Technologies was required to:
(1) revise financial statements for the first three
quarters of 2004;
(2) revise financial projections for much of fiscal 2005 by
understating expenses requiring massive charges against
earnings; and
(3) acknowledge, finally, that its financial and internal
controls were defective and inadequate for the purpose
of providing any meaningful and accurate financial
projections.
Additionally, the Complaint alleges defendants failed to
disclose that demand for the Company's products was materially
declining such that its earnings guidance was lacking a
reasonable basis and therefore materially false and misleading.
As the true information concerning Symbol Technologies was
revealed to the market, the share-price inflation caused by
Defendants' misrepresentations was removed and the price of
Symbol Technologies common stock fell nearly 50% from its Class
Period high.
For more details, contact Lionel Z. Glancy or Michael Goldberg
of Glancy Binkow & Goldberg, LLP, 1801 Avenue of the Stars,
Suite 311, Los Angeles, CA 90067, Phone: (310) 201-9150 or
(888) 773-9224, E-mail: info@glancylaw.com, Web site:
http://www.glancylaw.com.
WORLD HEALTH: Barrack Rodos Provides Update Regarding Suit in PA
----------------------------------------------------------------
The law firm of Barrack Rodos & Bacine, which initiated a class
action in the United States District Court for the Western
District of Pennsylvania on behalf of purchasers of the publicly
traded securities of World Health Alternatives, Inc. (WHAI.OB)
("World Health Alternatives" or the "Company") is providing
updates regarding the status of the litigation.
According to the firm, new disclosures by World Health
Alternatives, Inc. (OTC Bulletin Board: WHAIE) ("World Health
Alternatives" or the "Company") provide further support for the
claims asserted in the class action commenced by Barrack, Rodos
& Bacine in the United States District Court for the Western
District of Pennsylvania on behalf of purchasers of the publicly
traded securities of World Health Alternatives. In a Form 8-K
filed with the SEC on August 31, 2005, the Company revealed that
its former auditors, Daszkal Bolton LLP ("Daszkal Bolton") had
previously informed the Company's Audit Committee of
difficulties it had encountered in performing the audit of the
Company's financial statements for the year ended December 31,
2004 with respect to the timely receipt of finalized documents
such as asset acquisition documents, board of directors
resolutions, and confirmations from management. The Form 8-K
said that, despite encountering these difficulties, Daszkal
Bolton's reports on the Company's financial statements for the
two most recent fiscal years did not contain an adverse opinion
or a disclaimer of opinion, nor were they modified as to
uncertainty, audit scope or accounting principles.
Barrack, Rodos & Bacine, which filed the first class action
lawsuit against World Health Alternatives, Daszkal Bolton, and
certain of the Company's present and former officers arising
from material misstatements in the Company's publicly filed
financial statements, further announces that the Class Period
has been expanded to June 23, 2003 through August 18, 2005. The
complaint alleges that the Company's publicly filed financial
statements during the Class Period were materially false and
misleading in that, among other things, the Company underpaid
more than $4 million in taxes during the Class Period, and net
income was consequently overstated by a comparable amount; that
the Company was in breach of its lending agreements as a result
of having misrepresented its financial condition to its lenders,
resulting in the Company having fraudulently obtained more than
$6.5 million from its lenders; and that the Company misstated
the amount of debenture and warrants associated with the
Company's preferred stock. The complaint seeks to recover
damages on behalf of all persons who purchased World Health
Alternatives securities during the Class Period.
For more details, contact Leslie Bornstein Molder, Esq. of
Barrack, Rodos & Bacine, 3300 Two Commerce Square, 2001 Market
Street, Philadelphia, PA 19103, Phone: 215-963-0600, Fax:
215-963-0838, E-mail: lmolder@barrack.com, Web site:
http://www.barrack.com.
WORLD HEALTH: Schiffrin & Barroway Lodges Securities Suit in PA
---------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP, initiated a class
action lawsuit in the United States District Court for the
Western District of Pennsylvania on behalf of all securities
purchasers of World Health Alternatives, Inc. (OTC Bulletin
Board: WHAIE) ("World Health" or the "Company") between June 26,
2003 and August 18, 2005 inclusive (the "Class Period").
The complaint charges World Health, Richard E. McDonald, John C.
Sercu, Marc D. Roup, and Daszkal Bolton LLP with violations of
the Securities Exchange Act of 1934. More specifically, the
Complaint alleges that the Company failed to disclose and
misrepresented the following material adverse facts which were
known to defendants or recklessly disregarded by them:
(1) that the defendants misstated the amount of the
Company's outstanding shares;
(2) that the defendants failed to properly account for
convertible debt and warrant agreements;
(3) that defendants underpayed tax liabilities in the
amount of $4 million; and
(4) that defendants' misstatements to the Company's lenders
resulted in $6.5 million in excess funding under the
loan agreements.
As a result of this activity, the Company had terminated its
outside auditor, Daszkal Bolton LLP, and Defendant McDonald had
resigned as CEO. The Company retained outside counsel and the
Board of Directors had retained special counsel to assist it
with its investigation. The Company would be restating its prior
financial statements due to the material misstatements outlined
above and has warned investors not to rely on the information
contained therein. The Company's restatement announcement
shocked the market and the price of its common stock plummeted
an astonishing 86% on August 19, 2005, trading as low as $0.25
per share after closing on August 18, 2005 at $1.85 per share.
Trading on a volume 15 times greater than its average, on August
19, 2005, 32 million shares changed hands.
For more details, contact Darren J. Check, Esq. or Richard A.
Maniskas, Esq. of Schiffrin & Barroway, LLP, 280 King of Prussia
Road, Radnor, PA 19087, Phone: 1-888-299-7706 or 1-610-667-7706,
E-mail: info@sbclasslaw.com, Web site:
http://www.sbclasslaw.com.
*********
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Glenn Ruel Senorin, Aurora Fatima Antonio and Lyndsey
Resnick, Editors.
Copyright 2005. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
The CAR subscription rate is $575 for six months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
* * * End of Transmission * * *