/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/051011.mbx C L A S S A C T I O N R E P O R T E R Tuesday, October 11, 2005, Vol. 7, No. 201 Headlines ALLIED MUTUAL: Few Policyholders Interested in Insurance Pact AMERICAN INTERNATIONAL: Policyholder Sues Company, Subsidiary AMERICAN SUZUKI: Recalls 1,673 Various SUV's Due to Crash Hazard BROWN-FORMAN: Faces Consumer Lawsuits For Advertising To Minors BROWN-FORMAN: Tableware Purchasers File Antitrust Suit in CA CATHOLIC CHURCH: KY Court Rules For Church in Sex Abuse Lawsuit CIENA CORPORATION: NY Court Approves Securities Suit Settlement COLORADO: Opening Arguments to Start Soon on Rocky Flats Lawsuit CYBERONICS INC.: TX Court Consolidates Securities Fraud Lawsuits DAIMLERCHRYSLER CORPORATION: Recalls 136 Trucks For Crash Hazard ELECTRONICS BOUTIQUE: NY Court Mulls Overtime Lawsuit Dismissal ESTEE LAUDER: Plaintiffs Appeal CA Antitrust Settlement Approval ESTEE LAUDER: Subsidiaries Face False Advertising Lawsuit in CA GAMESTOP CORPORATION: Seeks Transfer of Overtime Lawsuit To TX GENERAL MOTORS: Recalls 123,292 2005-06 Vehicles For Fire Hazard HYUNDAI MOTOR: Recalls 12T Santa Fe Vehicles For Crash Hazard IRWIN UNION: Plaintiffs Appeal Settlement For PA RESPA Lawsuit LONGS DRUG: CA Court Certifies Lawsuit V. Employee Application MEDTRONIC INC.: Faces Litigation Due To Defective Defibrillators MITSUBISHI FUSO: Recalls 1,848 2001-2003 Trucks For Crash Hazard NEWS CORPORATION: Court Preliminarily OKs NY, DE Investor Suits NEWS CORPORATION: Plaintiffs Appeal DE Investor Suit Dismissal NORDSTROM INC.: Plaintiffs Appeal CA Court Settlement Approval ODYSSEUS MARKETING: FTC Seeks Halt To Spyware, Adware Operation OHIO: Judge Certifies Consumer Fraud Suit V. Cincinnati Bengals OKLAHOMA: Court Reverses Certification For Grand Lake Lawsuit ORCA BAY: Recalls Crab Legs, Claws Due to Listeria Contamination PANTRY INC.: Plaintiffs Seek Remand of NC Lawsuit To State Court READER'S DIGEST: Working To Resolve Shareholder Fraud Lawsuits RESIDENTIAL FUNDING: Appeals Court Dismisses Claims in IL Suit RESIDENTIAL FUNDING: IL Court Nixes Stay of Interest Act Lawsuit RESIDENTIAL LOAN: IL Consumer Fraud, Interest Act Lawsuit Stayed SARA LEE: Seeks Review of Refusal To Dismiss IL Securities Suit SECURITY CAPITAL: Plaintiffs Seek Documents Related To DE Suit SERAGEN INC.: Lawsuit Settlement Hearing Set November 2, 2005 SUPREME GREENS: Settles FTC False Marketing, Unfair Trade Suit WAL-MART STORES: Aiming To Settle Suit As CA Court Hears Appeal WAL-MART STORES: Female Employees File Gender Bias Suit in GA WAL-MART STORES: Faces EEOC Gender Discrimination Lawsuit in KY WAL-MART STORES: Faces Several Employee Wage, Overtime Lawsuits New Securities Fraud Cases ARBINET-THEXCHANGE: Schiffrin & Barroway Lodges Fraud Suit in NJ GENERAL MOTORS: Law Firms Lodge Securities Fraud Suit in S.D. NY IMMUCOR INC.: Pomerantz Haudek Files Securities Fraud Suit in GA SPECTRUM BRANDS: Bruce G. Murphy Lodges Securities Suit in GA TEMPUR-PEDIC INTERNATIONAL: Milberg Weiss Files Fraud Suit in KY ********* ALLIED MUTUAL: Few Policyholders Interested in Insurance Pact ------------------------------------------------------------- Though Iowa's largest-ever settlement of a class action lawsuit was approved recently, its payout fund of $100 million to $135 million drew scant attention from potential recipients as of late, The Des Moines Register reports. According to attorneys, they have received 45,000 claims from Allied Mutual Insurance policyholders who are eligible to claim the money, even though at least 305,000 notices have been sent. Brad Brady, an attorney for plaintiffs who sued Allied Mutual in 1998, told The Des Moines Register, "I don't think anybody is satisfied with 45,000 (responses)." The suit had claimed that the policyholder-owned company improperly transferred assets to publicly held Allied Group of Des Moines. Both Allied companies were sold to Columbus, Ohio- based Nationwide Mutual Insurance Co. in 1998 for $1.57 billion. Policyholders of Allied Mutual received $110 million from Nationwide at the time of the sale. They sued though to collect more in a case that went through five judges and saw seven appeals to the Iowa Supreme Court. After all the legal wrangling, both sides finally agreed in July to the settlement that would have Nationwide pay a minimum of $100 million and a maximum of $135 million more to Allied Mutual customers who owned policies as of February 18, 1993. Attorneys told The Des Moines Register that policyholders, both for auto and home insurance, could receive as much as 40 percent of the premiums they paid in during a three-year period between 1990 and 1993. They estimated that as many as 25 percent of potential claimants are from Iowa. Polk County District Judge Donna Paulsen said she was satisfied that both sides have done their best to notify policyholders. The settlement was one of the richest paydays for lawyers involved in a state lawsuit. Judge Paulsen approved $28.5 million for the plaintiffs' attorneys, who said they spent 35,000 hours on the case. Eleven law firms are listed as participants in the Allied Mutual case, including six from Iowa. Nationwide hired four of the Iowa firms, and they did not provide a breakdown of fees they charged. AMERICAN INTERNATIONAL: Policyholder Sues Company, Subsidiary ------------------------------------------------------------- Toni Swain Orrill, a New Orleans resident whose house was severely damaged in Hurricane Katrina, initiated a class action suit against American International Group (AIG) and its subsidiary, Audubon. The suit charges that the company has failed to help its policyholders who are in desperate need of assistance after the hurricane. AIG and Audobon were the underwriters and service providers of Louisiana Citizens Fair Plan (FAIR), which provides homeowners' policies of last resort to those who cannot get insurance elsewhere, including many poor people in New Orleans and the surrounding area. The class action suit is on behalf of Louisiana's FAIR plan policyholders -- about 400,000 people. The suit alleges that AIG has completely failed to provide any way for its policyholders whose homes have been damaged to initiate a claim or even reach its offices to find out how to do that, or to provide temporary disaster relief provided under their policies. Mrs. Orrill's husband, Ray, an attorney who represents his wife in the suit, said, "My wife has called and emailed the insurance company over 60 times, and could never get through. It is outrageous that she, and so many others whose homes were severely damaged in the storm, cannot even get through to their insurers, much less get relief from them. Someone had to take a stand." Ray Orrill said that another insurer, Allstate, provided his wife with a FAIR claim form as a courtesy, after failing to get any response from AIG. She submitted it to AIG almost thirty days ago and has not received a response. Americans for Insurance Reform (AIR) learned of Toni Swain Orrill's situation when she called the hotline it set up to assist Katrina victims when they encountered obstacles to receiving assistance from their insurers. According to AIR co- founder and spokesperson Joanne Doroshow, "This is the worst case that we have seen of a complete failure of an insurance company to respond to the immediate and dire situation of its Katrina policyholders. Many FAIR policyholders were struggling economically before the storm hit, and some are now reaching the point of severe impoverishment due to AIG's failure to help them. Many have still not received the temporary living expenses they are entitled to under their policies." Over a month after Katrina, AIR's hotline is still receiving calls from people who cannot reach AIG insurance adjusters. One woman whose home was devastated reports she's been completely unable to reach any AIG representative to request temporary funds or a visit from an adjuster. Another caller said she's been passed around from number to number and AIG has been largely unresponsive to her. For more details, contact AIR's Hotline: 888-450-5545 or visit http://insurance-reform.org. AMERICAN SUZUKI: Recalls 1,673 Various SUV's Due to Crash Hazard ---------------------------------------------------------------- American Suzuki Motor Corporation in cooperation with the National Highway Traffic Safety Administration's Office of Defects Investigation (ODI) is voluntarily recalling about 1,673 units of 1999-2005 Grand Vitara and 2001-06 XL-7 sports utility vehicles due to crash hazard. According to the ODI, on certain SUVs equipped with 16-inch wheels, the front brake disks may break under severe driving conditions. The breakage can occur in condition where the vehicle is driven on a regular basis on extremely steep paved down-slopes while continuously applying the brakes. The front brakes may become inoperative and the vehicle may pull to one side. This could result in a crash without prior warning. As a remedy dealers will replace the front brake discs on these vehicle. The recall is expected to begin during October 2005. These vehicles are located on St. Thomas Island (Virgin Islands). For more details, contact Suzuki, Phone: 787-622-0600 OR the NHTSA Auto Safety Hotline: 1-888-327-4236 or 1-800-424-9153, Web site: http://www.safecar.gov. BROWN-FORMAN: Faces Consumer Lawsuits For Advertising To Minors --------------------------------------------------------------- Brown-Forman Corporation and many other manufacturers of spirits, wine, and beer are defendants in a series of essentially similar class action lawsuits seeking damages and injunctive relief for alleged marketing of beverage alcohol to underage consumers. Nine lawsuits have been filed to date. The first three were filed against eight defendants, including the Company and styled: (1) Hakki v. Adolph Coors Company, et al., District of Columbia Superior Court No. CD 03-9183 (November 2003); (2) Kreft v. Zima Beverage Co., et.al., District Court, Jefferson County, Colorado, No. 04cv1827 (December 2003); and (3) Wilson v. Zima Company, et.al., U.S. District Court for the Western District of North Carolina, Charlotte Division, No. 3:04cv141 (January 2004). Two virtually identical suits with allegations similar to those in the first three lawsuits were filed in Cleveland, Ohio, in April and June, 2004, respectively, against the original eight defendants as well as an additional nine manufacturers of spirits and beer, and are now consolidated as " Eisenberg v. Anheuser-Busch, U.S. District Court for the District of Northern Ohio, No. 1:04cv1081." Five similar suits were filed in 2005, styled: (i) Elizabeth H. Sciocchette v. Advanced Brands, Albany County, New York Supreme Court No. 102205 (February 16, 2005); (ii) Roger and Kathy Bertovich v. Advanced Brands, Hancock County, West Virginia, Circuit Court No. 05-C-42M (February 17, 2005); (iii) Jacquelin Tomberlin v. Adolph Coors, Dane County (Madison, Wisconsin) Circuit Court, (February 23, 2005); (iv) Viola Alston v. Advanced Brands, Wayne County, Michigan, Circuit Court No. 05-509294, (March, 30, 2005), and (v) Craig Konhauzer v. Adolph Coors Company, Broward County Florida Circuit Court, No. 05004875 (March 30, 2005) In addition, the Company received in February 2004, a pre- lawsuit notice under the California Consumer Protection Act indicating that the same lawyers intend to file a lawsuit there against many industry defendants, including the Company, presumably on the same facts and legal theories. The suits allege that the defendants have engaged in deceptive marketing practices and schemes targeted at underage consumers, negligently marketed their products to the underage, and fraudulently concealed their alleged misconduct. Plaintiffs seek class action certification on behalf of: (a) a guardian class consisting of all persons who were or are parents of children whose funds were used to purchase beverage alcohol marketed by the defendants which were consumed without their prior knowledge by their children under the age of 21 during the period 1982 to present; and (b) an injunctive class consisting of the parents and guardians of all children currently under the age of 21. The lawsuits seek a finding that defendants engaged in a deceptive scheme to market alcoholic beverages to underage persons and an injunction against such alleged practices; disgorgement and refund to the guardian class of all proceeds resulting from sales to the underage since 1982; and judgment to each guardian class member for a trebled award of actual damages, punitive damages, and attorneys fees. The lawsuits, either collectively or individually, if ultimately successful, represent significant financial exposure. The Company, in coordination with other defendants, is vigorously defending itself in these cases, four of which are pending on motions to dismiss. BROWN-FORMAN: Tableware Purchasers File Antitrust Suit in CA ------------------------------------------------------------ Brown-Forman Corporation's subsidiary Lenox, Inc. continues to face a class action filed in the United States District Court for the Northern District of California, on behalf of a class of consumers who purchased tableware sold in the United States from May 1, 2001, through the present. The suit also names as defendants Federated Department Stores, the May Department Stores Company and Waterford Wedgwood U.S.A. In November 2004, plaintiffs filed a consolidated complaint alleging that the defendants violated Section 1 of the Sherman Act by conspiring to fix prices and to boycott sales to Bed, Bath & Beyond. The cases are consolidated in the U.S. District Court for the Northern District of California, Nos. C-04-3514VRW and C-04-3622VRW. Plaintiffs seek to recover an undisclosed amount of damages, trebled in accord with the anti-trust laws, as well as costs, attorney fees and injunctive relief. The suit is styled "Young v. Federated Department Stores, Inc. et al., case no. 3:04-cv-03514-VRW," filed in the United States District Court for the Northern District of California, under Judge Vaughn R. Walker. Representing Lenox, Inc. are Tammy Albarran and Terri Garland, Morrison & Foerster, 425 Market Street, San Francisco, CA 94105, Phone: (415) 268-7657, E-mail: talbarran@mofo.com or tgarland@mofo.com. Representing the plaintiffs are Henry A. Cirillo, Michael P. Lehmann and Alex C. Turan of The Furth Firm LLP, 225 Bush Street 15th Floor, San Francisco, CA 94104, Phone: (415) 433-2070, Fax: 415-982-2076, E-mail: Hcirillo@furth.com, mplehmann@furth.com or aturan@furth.com. CATHOLIC CHURCH: KY Court Rules For Church in Sex Abuse Lawsuit --------------------------------------------------------------- Judge John G. Heyburn II of the U.S. District Court in Louisville, Kentucky ruled that the Holy See is a foreign state that enjoys certain immunity protections in a lawsuit by three men who allege the Vatican covered up the sexual abuse of children by priests, The Associated Press reports. Judge Heyburn essentially rejected the victims' argument that the Holy See is an international religious organization ruling that it is a foreign state subject to provisions of the Foreign Sovereign Immunities Act. The 1976 act restricts when foreign states can be sued in American courts, although it provides exceptions, such as when the states engage in commercial or certain harmful activities in the United States. In addition, the act also requires that service of a lawsuit follow strict protocols. In this case, it required documents to be translated into Latin and served to the Vatican foreign minister, Archbishop Giovanni Lajolo. In his ruling, Judge Heyburn said the suit had actually been sent to Archbishop Lajolo's boss, Cardinal Angelo Sodano, and that "strict compliance" with the act was necessary. In his ruling, Judge Heyburn wrote, "That compliance is admittedly difficult and is made more so by the absence of any accommodation from the Holy See." Because the victims made "good faith efforts," the judge gave them 60 days to properly serve Archbishop Lajolo with the documents. William McMurry, lawyer for the plaintiffs, told The Associated Press that he was encouraged that Judge Heyburn hadn't dismissed the suit outright, and had only found a technical problem with the way the papers were served. In an phone interview, he told The Associated Press, "We have 60 days to correct a technical error, after which we can get to the merit of the case, and ultimately a court will determine that the Vatican can be held accountable in American courts for the sexual abuse of children by Roman Catholic priests in this country." Filed by Mr. McMurry last year on behalf of three men who say they were abused as far back as 1928, the suit alleges a cover up by the Vatican to protect priests who molested American children. The lawsuit argues that the Holy See engaged in both commercial and harmful activity in the United States and that the case should go forward. Mr. McMurry, who in 2003 represented 243 abuse victims in reaching a $25.7 million settlement with the Archdiocese of Louisville, is seeking to have the suit certified as a class action case. The case is thought to be the first sexual-abuse suit to name the Vatican as sole defendant and would be the first class action suit against the Vatican regarding clerical sexual abuse. Judge Heyburn's ruling is significant because it says that the Holy See's religious activity is irrelevant to the immunity protections it enjoys as a foreign state. In the long run the ruling could have implications for other cases in which the Holy See is named as a defendant in the clerical sexual abuse scandal. Individuals though familiar with the matter pointed out that if the judge finds that Archbishop Lajolo was properly served, Mr. McMurry will still have to establish jurisdiction by convincing the court that an exception to the immunity protections of the Foreign Sovereign Immunities Act should be granted. CIENA CORPORATION: NY Court Approves Securities Suit Settlement --------------------------------------------------------------- The United States District Court for the Southern District of New York granted preliminary approval to the settlement of a consolidated securities class action filed against Ciena Corporation, as a result of its merger with ONI Systems Corporation. Beginning in August 2001, a number of substantially identical class action complaints alleging violations of the federal securities laws were filed against ONI Corporation and: (1) Hugh C. Martin, ONI's former chairman, president and chief executive officer; (2) Chris A. Davis, ONI's former executive vice president, chief financial officer and administrative officer; and (3) certain underwriters of ONI's initial public offering The complaints were consolidated into a single action, and a consolidated amended complaint was filed on April 24, 2002. The amended complaint alleges, among other things, that the underwriter defendants violated the securities laws by failing to disclose alleged compensation arrangements (such as undisclosed commissions or stock stabilization practices) in the initial public offering's registration statement and by engaging in manipulative practices to artificially inflate the price of ONI's common stock after the initial public offering. The amended complaint also alleges that ONI and the named former officers violated the securities laws on the basis of an alleged failure to disclose the underwriters' alleged compensation arrangements and manipulative practices. No specific amount of damages has been claimed. Similar complaints have been filed against more than 300 other issuers that have had initial public offerings since 1998, and all of these actions have been included in a single coordinated proceeding. Mr. Martin and Ms. Davis have been dismissed from the action without prejudice pursuant to a tolling agreement. In July 2004, following mediated settlement negotiations, the plaintiffs, the issuer defendants (including Ciena), and their insurers entered into a settlement agreement, whereby the plaintiffs' cases against the issuers are to be dismissed. The plaintiffs and issuer defendants subsequently moved the court for preliminary approval of the settlement agreement, which motion was opposed by the underwriter defendants. On February 15, 2005, the district court granted the motion for preliminary approval of the settlement agreement, subject to certain modifications to the proposed bar order, and directed the parties to submit a revised settlement agreement reflecting its opinion. COLORADO: Opening Arguments to Start Soon on Rocky Flats Lawsuit ---------------------------------------------------------------- With jury selection under way since last week, opening arguments are expected to begin in a federal class action lawsuit filed by Gertrude Babb and several other property owners on behalf of about 13,000 people who owned property near the former Rocky Flats nuclear weapons plant at the time it was shut down in 1989, The Associated Press reports. Court records show that Mrs. Babb, who has been waiting 15 years for her day in court against the companies that operated the plant northwest of Denver, lost tens of thousands of dollars when she and her late husband sold 13 acres near the former Rocky Flats nuclear weapons plant. The couple were worried that plutonium and other hazardous materials were wafting onto their land. Attorneys for the property owners claim that Dow Chemical Co. and Rockwell International Corporation mishandled radioactive waste over four decades, resulting in lower property values in nearby residential areas. However, Dow, Rockwell and the Energy Department deny the allegations, saying plutonium releases never posed a significant health risk or caused significant property damage. They pointed out that the releases were the result of events outside the companies' control, such as a 1969 windstorm. In a recent court filing, defense attorneys even pointed out, "The public good from the operation of the Rocky Flats plant -- including both the economic benefits generated by the plant and the plant's contribution to national security -- has far outweighed any harm to class members from the plant's operation." According to individuals familiar with the matter, the federal government under contracts Dow and Rockwell had with the Energy Department would pay any damages. In addition, the government is also paying the companies' legal bills. The plant made plutonium triggers for nuclear weapons. The property owners say Dow, which operated Rocky Flats from the 1950s through 1975, and Rockwell, which took over in 1975 and operated the plant until it was shut down in 1989, improperly stored or otherwise mishandled plutonium-laced waste, resulting in contamination of soil and groundwater. The plaintiffs claim that large fires at the plant and windstorms and other natural events helped to spread the waste outside the plant's boundaries. That contamination, plus what the property owners said was a stigma attached to houses near the plant, resulted in plummeting property values. According to one of the plaintiffs' attorneys, Merrill Davidoff of Philadelphia, damages could reach $500 million. Though a 14-year, $7 billion cleanup project is to be completed by next year and much of the 6,240-acre site will be transformed into a wildlife refuge, some neighbors and environmentalists believe the cleanup has not gone as smoothly as the government and its contractors have reported. In September for instance, the Energy Department said that crews had found five radioactive "hot spots" outside the established cleanup area. The news prompted contractor Kaiser Hill to remove tons of soil around the site where thousands of barrels of plutonium-tainted oil was stored in the 1950s and 1960s. Attorneys for property owners also stated in a recent court filing, "The releases and contamination began under Dow, continued under Rockwell, persist to the present, and will continue into the indefinite future, as the result of operational and waste-storage practices that Dow and Rockwell conducted intentionally, and which have led and will lead to offsite releases of plutonium and the contamination of area properties." Attorneys for Rockwell and Dow countered though that the property owners couldn't prove their case. They also contend that all plutonium has been removed, which means there is no ongoing, class-wide trespass as the lawsuit claims. In addition, the attorneys also argue that property owners failed to provide evidence of any change in market value that could be blamed on releases of hazardous materials. The suit is styled, "Cook, et al v. Rockwell Intl. Corp., Case No. 1:90-cv-00181-JLK," filed in the United States District Court for the District of Colorado, under Judge John L. Kane. Representing the Plaintiff/s are: (1) Gary B. Blum of Silver & DeBoskey, P.C., 1801 York St., Denver, CO 80206, U.S.A, Phone: 303-399-3000, Fax: 303- 399-2650, E-mail: blumg@s-d.com; (2) Stanley M. Chesley of Waite, Schneider, Bayless & Chesley Co., L.P.A., 1513 Fourth and Vine Tower, One West Fourth St., Cincinnati, OH 45202, U.S.A, Phone: 513-621-0268; (3) Merrill Gene Davidoff, Jennifer E. MacNaughton, Peter B. Nordberg, Ellen T. Noteware, Bernadette M. Rappold, Stanley B. Siegel and David F. Sorensen of Berger & Montague, P.C., 1622 Locust St., Philadelphia, PA 19103, U.S.A, Phone: 215-875-3084, 215-875-3000 and 215-875-3051, Fax: 215-875-4671, 215-875-4604 and 215- 875-5707, E-mail: mdavidoff@bm.net, jmacnaughton@bm.net, pnordberg@bm.net, enoteware@bm.net and dsorensen@bm.net; (4) Bruce H. DeBoskey of Silver & Deboskey, P.C., 1801 York St. #700, Denver, CO 80206-5607, U.S.A, Phone: 303-399 -3000; (5) Kenneth A. Jacobsen of Jacobsen Law Offices, LLC, 12 Orchard Lane, Wallingford, PA 19086, U.S.A., Phone: 610-566-7930, Fax: 610-566-7940; (6) David Evans Kreutzer of Colorado Department of Law, 1525 Sherman St., 5th Floor, Denver, CO 80203, U.S.A, Phone: 303-866-5667, Fax: 303-866-3558, E-mail: david.kreutzer@state.co.us; (7) Louise M. Roselle of Waite, Schneider, Bayless & Chesley Co., L.P.A., 1513 Fourth and Vine Tower, One West Fourth St., Cincinnati, OH 45202, U.S.A, Phone: 513-621-0267, Fax: 513-381-2375, E-mail: louiseroselle@wsbclaw.com; (8) Clisham, Satriana & Biscan, LLC, 1512 Larimer St., #400 Denver, CO 80202, U.S.A, Phone: 303-468-5403, Fax: 303- 942-7290, E-mail: satrianad@csbattorneys.com; (9) Holly Brons Shook of Silver & DeBoskey, P.C., 1801 York St., Denver, CO 80206, U.S.A, Phone: 303-399-3000, Fax: 303-399-2650, E-mail: shookh@s-d.com; (10) Ronald Simon of Simon & Associates, 1707 N. St., N.W. Washington, DC 20036, U.S.A, Phone: 202-429-0094, Fax: 202-429-0075, E-mail: ron@1707law.com; and (11) John David Stoner of Chimicles & Tikellis, L.L.P., 361 West Lancaster Ave., One Haverford Centre, Haverford, PA 19041-0100, U.S.A Representing the Defendant/s are: (i) Joseph John Bronesky and Christopher Lane of Sherman & Howard, L.L.C.- 17th St., Denver, CO, United States District Court Box 12, 633 Seventeenth St., #3000 Denver, CO 80202, U.S.A, Phone: 303-299-8450 and 303- 299-8422, Fax: 303-298-0949 and 303-298-0940, E-mail: jbronesk@sah.com and clane@sah.com; (ii) Wendy S. White, Timothy P. Brooks, Patrick M. Hanlon, Amy Horton, Franklin D. Kramer and Edward J. Naughton Of Goodwin Procter, LLP-DC, 1800 Massachusetts Ave., N.W. #800, Washington, DC 20036, U.S.A, Phone: 202- 828-2000, Fax: 828-2000; (iii) Michael K. Isenman of Goodwin Procter, LLP-DC, 901 New York Ave., NW #700, Washington, DC 20001, U.S.A, Phone: 202-346-4000, Fax: 202-346-4444, E-mail: misenman@goodwinprocter.com; (iv) Lester C. Houtz of Bartlit, Beck, Herman, Palenchar & Scott-Colorado, 1899 Wynkoop St., #800 Denver, CO 80202, U.S.A., Phone: 303-592-3177, Fax: 303-3140, E- mail: lester.houtz@bartlit-beck.com; (v) Douglas J. Kurtenbach, S. Jonathan Silverman and Mark S. Lillie of Kirkland & Ellis-Illinois, 200 East, Randolph Drive, #5400 Chicago, IL 60601, U.S.A, Phone: 312-861-2225 and 312-861-2089, Fax: 861-2200 and 312- 660-0452, E-mail: mlillie@kirkland.com; (vi) Douglas M. Poland of LaFollette, Godfrey & Kahn, P.O. Box 2719, One East Main St., Madison, WI 53703-2719, U.S.A, Phone: 608-257-3911, Fax: 608-257-0609, E-mail: dpoland@gklaw.com; and (vii) Louis W. Pribila of Dow Chemical Company, 2030 Dow Center, Midland, MI 48674, U.S.A, Phone: 517-638-9511, Fax: 638-9410. CYBERONICS INC.: TX Court Consolidates Securities Fraud Lawsuits ---------------------------------------------------------------- The United States District Court for the Southern District of Texas ordered consolidated the two securities class actions filed against Cyberonics, Inc. and certain of its current officers. On June 17, 2005, a putative class action lawsuit was filed against the Company and certain of its current officers in the United States District Court for the Southern District of Texas. The lawsuit is styled "Richard Darquea v. Cyberonics Inc., et al., Civil Action No. H:05-cv-02121." A second lawsuit with similar allegations, styled "Stanley Sved v. Cyberonics, Inc., et al., Civil Action No. H:05-cv-2414," was filed on July 12, 2005. The complaints generally allege, among other things, that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by making false and misleading statements relating to the Company's Vagus Nerve Stimulation Therapy System device (the "VNS Device"). Specifically, the plaintiffs allege that the defendants failed to disclose that the U.S. Food and Drug Administration (the FDA) had "safety and efficacy concerns" about the use of the VNS Device for the treatment of depression and that the defendants failed to disclose the existence of certain "manufacturing and quality practices," as detailed in the FDA's December 22, 2004 Warning Letter, that negatively impacted the Company's prospects for obtaining FDA approval to use the VNS Device to treat depression. Plaintiffs seek to represent a class of all persons and entities, except those named as defendants, who purchased or otherwise acquired Company securities during the period June 15, 2004 through October 1, 2004. The complainants seek unspecified monetary damages and equitable or injunctive relief, if available. On July 28, 2005, the Court consolidated the two cases under Civil Action No. H-05-2121, styled "In re Cyberonics, Inc. Securities Litigation" and entered a scheduling order. Under the terms of the order, the Court will select a lead plaintiff who will then have 60 days to file an amended complaint. Defendants will have 60 days to answer or respond to the amended complaint. If defendants move to dismiss the amended complaint, lead plaintiff will have 60 days to respond and defendants will have 45 days to file a reply. DAIMLERCHRYSLER CORPORATION: Recalls 136 Trucks For Crash Hazard ---------------------------------------------------------------- DaimlerChrysler Corporation in cooperation with the National Highway Traffic Safety Administration's Office of Defects Investigation (ODI) is voluntarily recalling about 136 units of 2006 Dodge / RAM150 and 2005 Dodge / RAM1500 REGCAB SWB four wheel drive pickup trucks due to crash hazard. According to the ODI, on certain 4-wheel drive pickup trucks, the totally integrated power module (TIPM) may contain incorrect transfer case calibration set points, potentially resulting in inadvertent transfer case default to neutral. If this occurs and the parking brake is not applied, the vehicle may roll away and cause a crash without warning. Dealers will reprogram the TIPM with new software that prevents the potential for this condition. The recall is expected to begin during November 2005. For more details, contact DaimlerChrysler, Phone: 1-800-853-1403 OR the NHTSA Auto Safety Hotline: 1-888-327-4236 or 1-800-424-9153, Web site: http://www.safecar.gov. ELECTRONICS BOUTIQUE: NY Court Mulls Overtime Lawsuit Dismissal --------------------------------------------------------------- The United States District Court for the Western District of New York has yet to rule on Electronics Boutique Holding Corporation's motion to dismiss the class action filed against it and subsidiary Electronics Boutique of America, Inc., on behalf of its current and former employees. On October 19, 2004, Milton Diaz filed a complaint on behalf of a group of current and former employees to whom the Company allegedly failed to pay minimum wages and overtime compensation in violation of the Fair Labor Standards Act (FLSA) and New York law. The plaintiff moved to conditionally certify a group of similarly situated individuals under the FLSA and in March 2005, there was a hearing on this motion. In March 2005, the plaintiff filed a motion on behalf of current and former store managers and assistant store managers in New York to certify a class under New York wage and hour laws. In March 2005, the Company also filed a motion to dismiss the New York state law claims. The suit is styled "Diaz v. Electronics Boutique of America, Inc. et al., case no. 1:04-cv-00840-JTE," filed in the United States District Court for the Western District of New York, under Judge John T. Elfvin. Representing the plaintiffs is Judith Ann Biltekoff of Sullivan, Oliverio & Gioia Mail: 600 Main Place Tower, Buffalo, NY 14202-3706 Phone: (716) 854-5300 Fax: 716-854-5299 E-mail: jbiltekoff@soglawny.com. Representing the Company are John G. Horn and Robert C. Weissflach of Harter, Secrest and Emery LLP, Twelve Fountain Plaza Suite 400 Buffalo, NY 14202-2293 Phone: 716-845-4228 Fax: 716-853-1617 or E-mail: jhorn@hselaw.com or rweissflach@hselaw.com; and Samuel S. Shaulson of Morgan, Lewis & Bockius LLP, 101 Park Avenue 37th Floor New York, NY 10178-0060 Phone: (212) 309-6718 Fax: (212) 309-6001 E-mail: sshaulson@morganlewis.com. ESTEE LAUDER: Plaintiffs Appeal CA Antitrust Settlement Approval ---------------------------------------------------------------- The United States District Court for the Northern District of California granted final approval to the settlement of a class action filed against Estee Lauder Companies, Inc., and other cosmetic manufacturers and retailers. The suit was initially filed in the Superior Court of the State of California in Marin County on behalf of all U.S. residents who purchased prestige cosmetics products at retail for personal use from eight department stores groups that sold such products in the United States (the "Department Store Defendants"). The suit alleged that the Department Store Defendants, the Company and eight other manufacturers of cosmetics (the "Manufacturer Defendants") conspired to fix and maintain retail prices and to limit the supply of prestige cosmetics products sold by the Department Store Defendants in violation of state and Federal laws. The plaintiffs sought, among other things, treble damages, equitable relief, attorneys' fees, interest and costs. The suit was later removed to federal court. On March 30, 2005, the United States District Court for the Northern District of California entered a Final Judgment approving the settlement agreement the Company entered into in July 2003 with the plaintiffs, the other Manufacturer Defendants and the Department Store Defendants. The time to appeal that judgment has not yet expired. Assuming no appeal, the Final Judgment will result in the plaintiffs' claims being dismissed, with prejudice, in their entirety in both the Federal and California actions. There was no finding or admission of any wrongdoing by the Company or any other defendant in this lawsuit. The Company entered into the settlement agreement solely to avoid protracted and costly litigation. In connection with the settlement agreement, the defendants, including the Company, will provide consumers with certain free products and pay the plaintiffs' attorneys' fees. The suit is styled "Azizian et al v. Federated Department Stores, Inc. et al, case no. 4:03-cv-03359," filed in the United States District Court for the Northern District of California, under Judge Saundra Brown Armstrong. Representing the plaintiffs is Guido Saveri of Saveri & Saveri, Inc., 111 Pine Street, Suite 1700, San Francisco, CA 94111-5630, Phone: 415- 217-6810, Fax: 415-217-6813, E-mail: guido@saveri.com. Representing the Company is Larry S. Gangnes, 1420 Fifth Avenue, Ste. 4100, Seattle, WA 98101-2338, Phone: (206) 223-7036, E- mail: gangnesl@lanepowell.com. ESTEE LAUDER: Subsidiaries Face False Advertising Lawsuit in CA --------------------------------------------------------------- Two of Estee Lauder Companies, Inc.'s subsidiaries face a nationwide class action filed in the Superior Court of California for the County of San Diego. The complaint names other defendants, including manufacturers and retailers. The plaintiff is seeking injunctive relief, restitution, and general, special and punitive damages for alleged violations of the California Unfair Competition Law, the California False Advertising Law, and for negligent and intentional misrepresentation. The purported class includes individuals "who have purchased skin care products from defendants that have been falsely advertised to have an 'anti-aging' or youth inducing benefit or effect." GAMESTOP CORPORATION: Seeks Transfer of Overtime Lawsuit To TX --------------------------------------------------------------- The United States District Court for the Northern District of Texas, Fort Worth Division has yet to rule on GameStop Corporation's motion to transfer a collective action filed against it, alleging violations of the Fair Labor Standards Act (FLSA). On October 20, 2004, former Store Manager John P. Kurtz filed a collective action lawsuit against the Company in U.S. District Court, Western District of Louisiana, Lafayette/ Opelousas Division, alleging that the Company's salaried retail managers were misclassified as exempt and should have been paid overtime, in violation of the FLSA. Mr. Kurtz is seeking to represent all current and former salaried retail managers who were employed by the Company for the three years before October 20, 2004. He is seeking recovery of unpaid overtime, interest, penalties, attorneys' fees and costs. On January 12, 2005, the Company filed an answer to the complaint and a motion to transfer the action to the Northern District of Texas, Fort Worth Division. GENERAL MOTORS: Recalls 123,292 2005-06 Vehicles For Fire Hazard ---------------------------------------------------------------- General Motors Corporation in cooperation with the National Highway Traffic Safety Administration's Office of Defects Investigation (ODI) is voluntarily recalling about 123,592 units of 2006 Buick / Rainer, 2006 Cadillac / Escalade, 2005-06 Chevrolet / Corvette, 2006 Chevrolet / Express, 2005-06 Chevrolet / Silverado, 2006 Chevrolet / Tahoe, 2006 Chevrolet / Trailblazer, 2006 Chevrolet / Trailblazer EXT, GMC / Envoy, 2006 GMC / Envoy XL, 2006 GMC / Savana, 2005-06 GMC / Sierra, 2006 GMC / Yukon, 2006 Hummer / H2 and 2006 Isuzu / Ascender vehicles due to fire hazard. According to the ODI, certain vehicles may have been built with a power steering hose that is not to specification. Under extreme steering maneuvers, such as turning the steering wheel fully to the left or right while braking, the hose may fracture and leak fluid. If this were to occur, power steering assist would be lost and increased steering effort would be required. On vehicles equipped with hydro-boost power brakes, it could also result in a loss of power brake assist and increased braking effort would be required. If the power steering fluid spray onto hot engine parts, an engine compartment fire could occur. As a remedy, dealers will inspect the power steering hose(s) for two suspect date codes and replace them if required. The recall will begin on October 14, 2005. For more details, contact Chevrolet, Phone: 1-800-630-2438, GMC, Phone: 1-866-996-9463, Buick, Phone: 1-866-608-8080, Cadillac, Phone: 1-866-982-2339, Isuzu, Phone: 1-800-255-6727, Hummer, Phone: 1-800-732-5493 OR the NHTSA Auto Safety Hotline: 1-888-327-4236 or 1-800-424-9153, Web site: http://www.safecar.gov. HYUNDAI MOTOR: Recalls 12T Santa Fe Vehicles For Crash Hazard ------------------------------------------------------------- Hyundai Motor Company in cooperation with the National Highway Traffic Safety Administration's Office of Defects Investigation (ODI) is voluntarily recalling about 12,000 units of 2005 Santa Fe vehicles due to crash hazard. According to the ODI, on certain vehicles equipped with an advanced airbag feature, the occupant classification (OCS) installed in the right front seat of the vehicle may misclassify a child restraint seat (CRS) as an adult. This may occur if the CRS is installed after an adult has been seated in the right front seat. If there has not been a "key on" "key off" cycle with the right front passenger seat empty prior to installation of the CRS. The possibility of misclassification of a CRS as an adult may allow the right front airbag or side impact airbag to deploy in a crash and could result in injury to the right front occupant. As a remedy, dealers will reprogram the vehicle's OCS Electronic control unit (ECU) to remove the feature that may cause the CRS to be recognized as an adult. The recall is expected to begin during December 2005. For more details, contact Hyundai, Phone: 1-800-633-5151 OR the NHTSA Auto Safety Hotline: 1-888-327-4236 or 1-800-424-9153, Web site: http://www.safecar.gov. IRWIN UNION: Plaintiffs Appeal Settlement For PA RESPA Lawsuit -------------------------------------------------------------- Seven plaintiffs appealed the settlement of the consolidated class action filed against Irwin Union Bank and Trust Co., alleging that the plaintiffs obtained second-lien mortgage loans from either Community Bank of Northern Virginia or Guaranty National Bank of Tallahassee and that they were charged interest rates and fees violating the Pennsylvania Secondary Mortgage Loan Act. Six cases were initially filed. Plaintiffs additionally claim that the banks were not the actual lenders on the loans, but rather that the banks "rented" their banking charters to affiliates for the purpose of facilitating the assessment of "illegal" fees and that the affiliates either split the fees or kicked back the fees in violation of Real Real Estate Settlement Procedures Act (RESPA). Plaintiffs sought to hold the Company's subsidiary liable primarily on the basis that the subsidiary was an assignee of the mortgage loans. In December 2003, the U.S. District Court for the Western District of Pennsylvania gave its final approval to a proposed $41.1 million settlement for all six cases, inclusive of attorney's fees. The settlement represents payment to approximately 44,000 borrowers nationwide. A group of seven plaintiffs' class action counsel appealed the settlement on various grounds. Oral arguments in those appeals occurred in February 2005 and the court's decision is pending. The suit is styled "DAVIS, et al v. COMMUNITY BANK OF NO, et al., case no. 2:02-cv-01201-GLL," filed in the United States District Court for the Western District of Pennsylvania under Judge Gary L. Lancaster. Representing the Company is Larry K. Elliott of Cohen & Grigsby, 11 Stanwix Street, 15th Floor, Pittsburgh, PA 15222-1319, Phone: (412) 297-4900. Representing the plaintiffs are: (1) Eric G. Calhoun, Lawson, Fields, McCue, Lee & Campbell, 14135 Midway Road, Suite 250, Addison, TX 75001, Phone: (972) 490-0808 (2) Michael E. McCarthy, 2500 Lawyers Building, Pittsburgh, PA 15219, Phone: (412) 281-1288 (3) R. Hoyt Rowell, III, Ness, Motley, Loadholt, Richardson & Poole, P.O. Box 1792, Mt. Pleasant, SC 29465, Phone: (843) 216-9471 LONGS DRUG: CA Court Certifies Lawsuit V. Employee Application -------------------------------------------------------------- The California Superior Court for San Diego County granted class certification to the lawsuit filed against Longs Drug Stores California, Inc., styled "Rankin v. Longs Drug Stores California, Inc." The lawsuit was certified as a class action on July 19, 2005 and alleges that the Company's employment application violates California Labor Code Section 432.8 by inquiring about criminal convictions within the last seven years, without providing an exception for misdemeanor marijuana convictions more than two years old. The plaintiff seeks to recover statutory damages and attorneys' fees for him and all similarly situated individuals who applied for employment with the Company during the class period. MEDTRONIC INC.: Faces Litigation Due To Defective Defibrillators ---------------------------------------------------------------- Medtronic, Inc. faces several lawsuits related to its February 2005 recall of a subset of its implantable cardioverter defibrillators (ICDs) and cardiac resynchronization therapy defibrillators (CRT-Ds), including certain of the Marquis VR/DR and Maximo VR/DR ICDs and certain of the InSync I/II/III Marquis and InSync III CRT-D devices. On February 11, 2005, the Company voluntarily began advising physicians about a potential battery shorting mechanism that may occur in the devices. The Company provided physicians with a list of potentially affected patients and recommended that physicians communicate with those patients so they could manage the potential issue in a manner they felt was appropriate for their individual patients. Subsequent to this voluntary field action, later classified by the FDA as a Class II Recall, putative class actions and individual actions have been filed against the Company in various state and federal jurisdictions, including one case in the United States District Court for the Southern District of Florida seeking to be consolidated for certain purposes under a process known as Multi-District Litigation. Additional putative class actions were also filed in Canada. The complaints generally allege strict liability, negligence, warranty and other common law and/or statutory claims; and seek compensatory and punitive damages. The putative class action complaints also seek class certification. As of the date hereof, the Company is unaware of any confirmed injury or death resulting from a device failure due to the shorting mechanism that was the subject matter of the field action, the Company said in a disclosure to the Securities and Exchange Commission. MITSUBISHI FUSO: Recalls 1,848 2001-2003 Trucks For Crash Hazard ---------------------------------------------------------------- Mitsubishi Fuso Truck of America, Inc., in cooperation with the National Highway Traffic Safety Administration's Office of Defects Investigation (ODI) is voluntarily recalling about 1,848 units of 2001-02 FE640 and 2003 FH210 trucks due to crash hazard. According to the ODI, on certain medium duty trucks, the cylinder head idler gear shaft bolt may have been insufficiently tightened during initial assembly. Continued operation in this condition could cause the bolt to loosen, resulting in abnormal noise from improper gear alignment. The bolt could break, causing the engine to stall and not restart, increasing the risk of a crash. As a remedy dealers will check the idler shaft bolt. If the bolt cannot be removed by hand, a modified idler shaft bolt will be installed. If the bolt is loose enough to be removed by hand, a new idler gear, idler shaft, and a modified idler shaft bolt will be installed. The recall is expected to begin on December 20, 2005. For more details, contact Fuso, Phone: 1-856-467-4500 OR the NHTSA Auto Safety Hotline: 1-888-327-4236 or 1-800-424-9153, Web site: http://www.safecar.gov. NEWS CORPORATION: Court Preliminarily OKs NY, DE Investor Suits --------------------------------------------------------------- The settlement for several consolidated securities class actions filed in received complaints relating to a number of purported class actions filed in Delaware and New York Courts, related to the merger of Fox Entertainment Group, Inc. (FEG) into its direct wholly-owned subsidiary Fox Acquisition Corporation has been preliminarily approved In March 2005, Fox Acquisition completed its offer to the holders of Class A common stock of FEG to exchange 2.04 shares of the Company's Class A common stock for each outstanding share of FEG's Class A common stock validly tendered and not withdrawn in the exchange offer. Shortly thereafter, the Company effected a "short form" merger of FEG with and into Fox Acquisition Corporation. Each share of FEG Class A common stock not acquired in the Offer, other than the shares owned by the Company, was converted in the "short form" merger into 2.04 shares of the Company's Class A common stock. The Company issued approximately 357 million shares of News Corporation's Class A Common Stock valued at approximately $6.3 billion in exchange for the outstanding FEG Class A common shares. After the consummation of the offer and the subsequent merger, Fox Acquisition Corp changed its name to "Fox Entertainment Group, Inc." As a result of the Offer, the Company's ownership interest increased from approximately 82% to 100%. Several suits were initially filed in the Court of Chancery in the State of Delaware. The complaints generally allege, among other things, that the Company and the members of the FEG board of directors have breached fiduciary duties owed to the public stockholders of FEG, including as a result of News Corporation offering to acquire shares of FEG Class A common stock at an unfair price and at a time that disadvantages the FEG stockholders. The complaints generally seek declaratory and injunctive relief and damages in an unspecified amount. The Company is currently aware of 17 purported class action complaints that were filed in January 2005 at the Court of Chancery of the State of Delaware challenging the FEG Offer. The Delaware complaints are captioned: (1) Allen v. News Corp., et al., No. 979-N; (2) Mascarenhas v. Fox Entertainment Group, et al., No. 980-N; (3) Shemesh v. Fox Entertainment Group, et al., No. 981-N; (4) Striffler v. FEG Holdings, et al., No. 982-N; (5) Howard Vogel Ret. Plan v. Powers, et al., No. 984-N; (6) Doniger v. News Corp., et al., No. 985-N; (7) Engle v. Murdoch, et al., No. 986-N; (8) Shrank v. Murdoch, et al., No. 988-N; (9) Blackman v. Fox Entertainment Group, et al., No. 991-N; (10) Fishbone v. News Corp., et al., No. 994-N; (11) Kennel v. News Corp., et al., No. 995-N; (12) Millner v. News Corp., et al., No. 996-N; (13) Pipefitters Locals v. Fox Entertainment Group, et al., No. 1003-N; (14) Molinari v. News Corp., et al., C.A. No. 1018-N; (15) Seaview Services v. Fox Entertainment, et al., C.A. No. 1026-N; (16) Teachers' Retirement System of Louisiana v. Powers, et al., C.A. No. 1033-N; and (17) New Jersey Building Laborers' Pension Fund v. Powers, et al., C.A. No. 1034. The Shrank action, No. 988-N, was voluntarily dismissed on January 19, 2005. The Company is also currently aware of two purported class action complaints raising substantially similar claims that have been filed in the Supreme Court of the State of New York, County of New York, and one that has been filed in the US District Court for the Southern District of New York, which were filed in January 2005. The New York complaints are captioned: "Shrank v. Murdoch, et al., Index No. 600114/2005;" and "Green Meadows Ptr. v. Fox Entertainment, et al., No. 100706/2005." The US Southern District of New York complaint is captioned "Gary Kosseff v. Fox Entertainment Group, Inc., et. al., No. 05 Civ. 1942 (LLS)." On January 21, 2005, certain plaintiffs in the Delaware lawsuits filed a motion that seeks to consolidate the Delaware actions. In addition, the Company has filed motions to dismiss and to stay discovery, and the plaintiffs have filed a motion for expedited proceedings. On February 3, 2005, the Court of Chancery denied the Company's motion to stay discovery, and granted the plaintiffs' motion for expedited discovery and motion to consolidate. The consolidated Delaware complaint was styled "In re Fox Entertainment Group, Inc. Shareholders Litigation, Consol. C.A. No. 1033-N." Each of the consolidated Delaware complaint and the New York Supreme Court complaints generally alleges, among other things, that News Corporation and the members of the FEG board of directors purportedly breached fiduciary duties owed to the public stockholders of FEG in connection with the FEG Offer by: (i) offering to acquire their shares at an unfair price; (ii) offering to acquire their shares at a time that disadvantages the public stockholders; (iii) having FEG appoint directors who are neither independent nor disinterested to a special committee created to consider the FEG Offer; and (iv) failing to adequately disclose information material to the FEG Offer, including disclosure with respect to the FEG 2005 budget. The US Southern District of New York complaint also generally alleges, among other things, some of the foregoing matters. The plaintiffs filed an amended complaint on February 24, 2005 in the US Southern District of New York alleging violations of the federal securities laws in addition to the foregoing matters. On February 24, 2005, the US Southern District of New York denied the plaintiffs' motion for expedited proceedings. As for relief, the plaintiffs seek, among other things, an order that the complaints are properly maintainable as a class action; a declaration that defendants have breached their fiduciary duties and other duties to the plaintiffs and other members of the purported class; injunctive relief; unspecified monetary damages; attorneys' fees, costs and expenses; and such other and further relief as the Court may deem just and proper. A memorandum of understanding setting forth the terms of a settlement with respect to the aforementioned litigation was entered into by the plaintiffs and the named defendants as of March 2, 2005. Among other conditions, the settlement is subject to negotiation of final settlement documentation, confirmatory discovery by the plaintiffs, court approval of the settlement and dismissal with prejudice of the litigation. On June 15, 2005, the parties entered into a stipulation of settlement in the consolidated Delaware action. In an Order dated June 23, 2005, the Chancellor, among other things, (i) preliminarily approved the stipulation of settlement; (ii) preliminarily certified the class for settlement purposes; and (iii) set a hearing for September 19, 2005 Among other conditions, the settlement is subject to final court approval of the settlement and dismissal with prejudice of the litigation. NEWS CORPORATION: Plaintiffs Appeal DE Investor Suit Dismissal -------------------------------------------------------------- Plaintiffs appealed the Court of Chancery of the State of Delaware's ruling dismissing the consolidated class action filed against The News Corporation Limitied (TNCL), predecessor of News Corporation, styled "In re General Motors (Hughes) Shareholders Litigation, Consolidated Civil Action No. 20269- NC." The lawsuit relates to TNCL's acquisition of stock in Hughes Electronics Corporation (DirecTV) on December 22, 2003, which was subsequently transferred to the Fox Entertainment Group (FEG). The complaint alleges that TNCL aided and abetted an alleged breach of fiduciary duty by the Board of Directors of Gemstar (GM) allegedly owed to a class of certain GM shareholders. The plaintiffs allegedly seek "appropriate equitable relief" including rescissory remedies to the extent feasible. On August 30, 2004, TNCL filed a brief in support of its motion to dismiss the complaint. On October 18, 2004, the plaintiffs filed their opposition to the motion. The Company filed its reply on November 17, 2004. The oral argument was heard on March 7, 2005. On May 4, 2005, the court issued its decision granting the motion to dismiss. Plaintiffs have appealed the decision and the Company has cross-appealed on jurisdictional and improper service issues. NORDSTROM INC.: Plaintiffs Appeal CA Court Settlement Approval -------------------------------------------------------------- The United States District Court for the Northern District of California has yet to decide on final approval for the settlement of the antitrust class action filed against Nordstrom, Inc. and other department store and specialty retailers. Nine separate but virtually identical class action lawsuits were initially filed in various Superior Courts of the State of California in May, June and July 1998, and later consolidated in Marin County Superior Court in California. In May 2000, plaintiffs filed an amended complaint naming a number of manufacturers of cosmetics and fragrances and two other retailers as additional defendants. Plaintiffs' amended complaint alleges that the retail price of the "prestige" or "Department Store" cosmetics sold in department and specialty stores was collusively controlled by the retailer and manufacturer defendants in violation of the Cartwright Act and the California Unfair Competition Act. Plaintiffs seek treble damages and restitution in an unspecified amount, attorneys' fees and prejudgment interest, on behalf of a class of all California residents who purchased cosmetics and fragrances for personal use from any of the defendants during the four years prior to the filing of the amended complaint. Defendants, including the Company, have answered the amended complaint denying the allegations. The defendants have produced documents and responded to plaintiffs' other discovery requests, including providing witnesses for depositions. The Company entered into a settlement agreement with the plaintiffs and the other defendants on July 13, 2003. In furtherance of the settlement agreement, the case was re-filed in the United States District Court for the Northern District of California on behalf of a class of all persons who currently reside in the United States and who purchased "Department Store" cosmetics from the defendants during the period May 29, 1994 through July 16, 2003. The Court has given preliminary approval to the settlement. A summary notice of class certification and the terms of the settlement was disseminated to class members. On March 30, 2005, the Court entered a final judgment approving the settlement and dismissing the plaintiffs' claims and the claims of all class members with prejudice, in their entirety. On April 29, 2005, two class members who had objected to the settlement filed notices of appeal from the Court's final judgment to the United States Court of Appeals for the Ninth Circuit. It is uncertain when the appeals will be resolved, but the appeal process could take as much as two years or more. If the Court's final judgment approving the settlement is affirmed on appeal, or the appeals are dismissed, the defendants will provide class members with certain free products and pay the plaintiffs' attorneys' fees, awarded by the Court of $24 million. The suit is styled "Azizian et al v. Federated Department Stores, Inc. et al, case no. 4:03-cv-03359," filed in the United States District Court for the Northern District of California, under Judge Saundra Brown Armstrong. Representing the plaintiffs is Guido Saveri of Saveri & Saveri, Inc., 111 Pine Street, Suite 1700, San Francisco, CA 94111-5630, Phone: 415-217-6810, Fax: 415-217-6813, E-mail: guido@saveri.com. Representing the Company is Larry S. Gangnes, 1420 Fifth Avenue, Ste. 4100, Seattle, WA 98101-2338, Phone: (206) 223-7036, E- mail: gangnesl@lanepowell.com. ODYSSEUS MARKETING: FTC Seeks Halt To Spyware, Adware Operation --------------------------------------------------------------- The Federal Trade Commission asked a U.S. District Court judge to halt an operation that secretly installed spyware and adware that could not be uninstalled by the consumers whose computers it infected. The defendants used the lure of free software they claimed would make peer-to-peer file sharing anonymous. The agency alleges the stealthy downloads violate federal law and asked the court to order a permanent halt to them. According to the complaint filed by the FTC, Odysseus Marketing and its principal, Walter Rines, advertised software they claimed would allow consumers to engage in peer-to-peer file sharing anonymously. With claims like "DOWNLOAD MUSIC WITHOUT FEAR," and "DON'T LET THE RECORD COMPANIES WIN," the defendants encouraged consumers to download their free software. The agency charges that the claims are bogus. First, the software does not make file-sharing anonymous. Second, the cost to consumers is considerable because the "free" software is bundled with spyware called Clientman that secretly downloads dozens of other software programs, degrading consumers' computer performance and memory. Among other things, this accumulated software replaces or reformats search engine results. For example, consumers who downloaded the spyware may try to conduct a Google or Yahoo! search. Their screens will reveal a page that appears to be the Google or Yahoo! search engine result, but the page is a copy- cat site, and the order of the search results is rigged to place the defendants' clients first. The bundled software programs also generate pop-up ads and capture and transmit information from the consumers' computers to servers controlled by the defendants. The FTC charged that the defendants have an obligation to disclose that their "free" software download caused spyware and adware to be installed on consumers' computers. But instead, the FTC alleges, they hide their disclosure in the middle of a two- page end-user licensing agreement buried in the "Terms and Conditions" section of their Web site. In addition, the FTC alleges that the defendants deliberately make their software difficult to detect and impossible to remove using standard software utilities. Although the defendants purport to offer their own "uninstall" tool, it does not work. In fact, it installs additional software, according to the FTC's complaint. The FTC charges that the practices of Odysseus Marketing and Walter Rines are unfair and deceptive and violate the FTC Act. The agency will seek a permanent halt to the practices. The defendants are based in Stratham, New Hampshire. The Commission vote to authorize staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the District of New Hampshire. Copies of the complaint are available from the FTC's Web site at http://www.ftc.govand also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov.The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad. For more details, contact Claudia Bourne Farrell, Office of Public Affairs by Phone: 202-326-2181 or contact Laura Sullivan, Bureau of Consumer Protection by Phone: 202-326-3327 or visit the Website: http://www.ftc.gov/opa/2005/10/odysseus.htm. OHIO: Judge Certifies Consumer Fraud Suit V. Cincinnati Bengals --------------------------------------------------------------- Hamilton County Common Pleas Judge Robert Ruehlman granted class action status to a lawsuit by Cincinnati Bengals fans, which claim that the team improperly refused to allow them to cancel their season tickets, The Associated Press reports. In essence, Judge Ruehlman's ruling allows anyone who purchased tickets based on a 1997 brochure to join the lawsuit, which could end up including as many as 3,000 people. Aside from granting class action status, the judge also dismissed lawsuits filed by the Bengals against some people who stopped paying for their tickets. Attorney Janet Abaray, who represents six people who brought the lawsuit against the Bengals last year, alleging unfair consumer practices told The Associated Press, "This has been very stressful for the people involved, particularly for class representatives who had counterclaims brought against them. This is a huge relief to them." Ms. Abaray also told The Associated Press that a class action lawsuit against the team would seek compensation, payment for emotional distress and punitive damages. The ticket dispute involves fans who bought seat licenses sold to raise money for construction of the new Paul Brown Stadium, which had opened in 2000, based on the brochure, which allowed buyers to lock in prices for six, eight or 10 years. Fans signed an agreement acknowledging they gave up their seat license if they stopped buying tickets. However, a second document that arrived with the seat assignments stated that the fans were obligated to keep buying tickets through the full term of the license, and that disputes must go to arbitration, an earlier Class Action Reporter story (September 29, 2005) reports. The fans eventually sued the team after it sent them letters threatening to turn their cases over to collections agencies, which they said could jeopardize their credit ratings. The Bengals were trying to collect a total of $5.8 million, according to Ms. Abaray. She pointed out, "This is not a trivial amount of money. The Bengals are strong-arming people to collect the money," an earlier Class Action Reporter story (September 29, 2005) reports. The Ohio Supreme Court refused in April to hear an appeal of a decision by the 1st Ohio District Court of Appeals, which said Judge Ruehlman erred when he upheld the Bengals' position that the dispute had to go to arbitration. The decision allowed the lawsuit to go forward, an earlier Class Action Reporter story (September 29, 2005) reports. OKLAHOMA: Court Reverses Certification For Grand Lake Lawsuit ------------------------------------------------------------- The Oklahoma Court of Civil Appeals reversed a lower court's decision to grant class action status to a lawsuit over water quality in Grand Lake O' The Cherokees near Tulsa, The Springdale Morning News reports. The court's ruling means that any relief to individual property owners will be based on the impact, if any, of the poultry companies alleged pollution on individual properties. Janet Wilkerson, a spokeswoman for the poultry companies told The Springdale Morning News that excessive nutrients in the rivers and streams entering lakes in eastern Oklahoma is "a complex issue that must be addressed with specific evidence as opposed to sweeping accusations and generalizations like the ones made in this lawsuit." Earl Hatley, Grand Riverkeeper in Oklahoma and part of the Waterkeepers group founded by Robert F. Kennedy Jr., contends though, "If the court isn't going to accept a class action, how do you deal with the issue." Charles Shipley, a Tulsa environmental attorney, initiated a lawsuit against Arkansas companies Tyson Foods Inc., Simmons Foods Inc. and Peterson Farms Inc. in 2001 on behalf of four property owners around Grand Lake. The suit claims that poultry litter polluted the lake and other poultry waste entering the streams and rivers in Missouri that feed Grand Lake in Oklahoma. Even with the legal setback, Mr. Shipley told The Springdale Morning News that the decision could be appealed to the Oklahoma Supreme Court, or hundreds of individual lawsuits could be filed against the companies. ORCA BAY: Recalls Crab Legs, Claws Due to Listeria Contamination ---------------------------------------------------------------- Orca Bay Foods, Inc. of Renton, Washington is conducting a nationwide voluntary recall of approximately 40,000 pounds of "red king crab legs and claws" because they have the potential to be contaminated with Listeria monocytogenes, an organism which can cause serious and sometimes fatal infections in young children, elderly people, and immuno-compromised individuals. Healthy individuals may suffer only short-term symptoms (fever, headaches, stiffness, nausea, abdominal pain and diarrhea). Listeria infection can cause miscarriages and stillbirths among pregnant women. If persons recently consumed this product and experienced the listed symptoms they should visit their physician. No Illnesses have been reported to date in connection with this problem. The frozen crab legs were sold to retailers and food service in 10 and 20 lb cases labeled "Orca Bay Seafood's, Inc. Renton, WA 98055". Each case was marked with a size, either "4-6", "6-9", "9-12", "12-14" or "selects", "broiler claws", and "splits". The product is sold thawed and/or frozen by weight in the frozen food and/or seafood departments in stores. The recalled crab legs were distributed retail in Florida, Illinois, New York, North Carolina, through Sam's Club; Indiana through Roundy's; New Jersey through Shop-Rite (Wakefern), New York through Wegmans, Michigan through Spartan; Washington State through Associated Grocers, City Fish, Jack's Fish Spot & Metropolitan Markets. The product also entered commerce through food service distributors in Alaska, California, Colorado, Florida, Georgia, Hawaii, Illinois, Indiana, Massachusetts, Maryland, Michigan, Mississippi, Nebraska, Nevada, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Utah, Washington State and Wisconsin. The recalled product would have been in retail outlets on/about May 20, 2005 through August 10, 2005, however the majority of the suspect product is under our direct control in the Renton, WA processing facility. Consumers who have purchased red king crab legs during the specified time period from the retail stores identified are urged to return them to the place of purchase for a full refund. Consumers with questions may contact the company at 1-800-932-ORCA. The potential for contamination was noted after routine testing by the United States Department of Commerce (USDC) revealed the presence of Listeria monocytogenes in our bulk crab legs and claws. Orca Bay retains the USDC for this inspection service to give our customers added assurance through an independent evaluation. The distribution of the suspect product lots has been suspended which FDA and the company continues to investigate the source of the problem. PANTRY INC.: Plaintiffs Seek Remand of NC Lawsuit To State Court ---------------------------------------------------------------- Plaintiffs asked the United States District Court for the Middle District of North Carolina to remand amended class action against Pantry, Inc. in the, styled "Constance Barton, Kimberly Clark, Wesley Clark, Tracie Hunt, Eleanor Walters, Karen Meredith, Gilbert Breeden, LaCentia Thompson, and Mathesia Peterson, on behalf of themselves and on behalf of classes of those similarly situated vs. The Pantry, Inc.," to state court. The suit, filed in June 2004, seeks class action status and asserts claims on behalf of the Company's North Carolina present and former employees for unpaid wages under North Carolina Wage and Hour laws. The suit also seeks an injunction against any unlawful practices, damages, liquidated damages, costs and attorneys' fees. The suit originally was filed in the Superior Court for Forsyth County, State of North Carolina. On August 17, 2004, the case was removed to the United States District Court for the Middle District of North Carolina and on July 18, 2005, plaintiffs filed an Amended Complaint asserting certain additional claims under the federal Fair Labor Standards Act on behalf of present and former store employees in the southeastern United States and adding one additional named plaintiff, Chester Charneski. The Plaintiffs have filed a motion to remand the case to the Superior Court for Forsyth County, which is presently pending before the federal district court. The suit is styled "BARTON, et al v. THE PANTRY, INC., case no. 1:04-cv-00748-NCT," filed in the United States District Court for the Middle District of North Carolina, under Judge N.C. Tilley, Jr. Representing the plaintiffs are Robert M. Elliot and J. Griffin Morgan of ELLIOT PISHKO MORGAN, P.A., 426 Old Salem Road, Winston-Salem, NC 27101, Phone: 336-724-2828, Fax: 336-714-4499, E-mail: rmelliot@epmlaw.com; and Charles Joseph, JOSEPH & HERZFELD, LLP, 757 Third Ave., 25th Floor, New York, NY 10017, Phone: 212-688-5640. Representing the Company are Kimberly Jo Korando, Kirk Alan Parry, Jr., Carl N. Patterson, Kerry A. Shad, Donald Hugh Tucker, SMITH ANDERSON BLOUNT DORSETT MITCHELL & JERNIGAN, POB 2611, Raleigh NC 27602-2611, Phone: 919-821-6671, Fax: 919-821-6800, E-mail: kkorando@smithlaw.com, aparry@smithlaw.com, cpatterson@smithlaw.com, kshad@smithlaw.com, dtucker@smithlaw.com. READER'S DIGEST: Working To Resolve Shareholder Fraud Lawsuits -------------------------------------------------------------- Reader's Digest Association, Inc. is working to resolve four legal actions commenced against it, its directors and the DeWitt Wallace-Reader's Digest Fund, Inc. and the Lila Wallace-Reader's Digest Fund, Inc. (the Funds), challenging the original recapitalization transaction announced in April 2002. Three of the four actions were purported class actions. The fourth action was brought by individual stockholders. On October 15, 2002, the Company entered into a revised agreement with the providing for a series of actions that resulted in all shares of its Class B Voting Common Stock (Class B Stock) and Class A Nonvoting Common Stock (Class A Stock) being recapitalized into a single class of Common Stock with one vote per share. The October 15, 2002 recapitalization agreement replaced the recapitalization agreement that the Company entered into with the Funds on April 12, 2002. The transactions contemplated by the October recapitalization agreement were completed on December 13, 2002. As a result: (1) the Company repurchased approximately 4.6 million shares of Class B Stock from the Funds for $100.0 in cash in the aggregate; (2) each share of Class A Stock was recapitalized into one share of Common Stock having one vote per share; (3) Each remaining share of Class B Stock was recapitalized into 1.22 shares of Common Stock; (4) the Company amended its charter to, among other things, reflect the reclassification of the stock, divide its Board of Directors into three classes and eliminate action by written consent of its stockholders; and (5) the Company reclassified as long-term debt the $100.0 borrowed under the Term Loan Agreement on May 20, 2002 to repurchase stock. On June 30, 2002, the $100.0 was classified as short-term debt pending completion of the recapitalization transactions. The parties in two of the three class actions, which were brought on behalf of holders of Class B Stock, entered into a settlement agreement, subject to court approval, with respect to the settlement of those actions. The third class action, which was brought on behalf of holders of Class A Stock, was dismissed with prejudice by the Court of Chancery of the State of Delaware pursuant to a comprehensive settlement agreement that was approved by the Court of Chancery on February 12, 2003. The fourth action was voluntarily dismissed. RESIDENTIAL FUNDING: Appeals Court Dismisses Claims in IL Suit -------------------------------------------------------------- The United States Seventh Circuit Court of Appeals dismissed several claims in the class action filed against Residential Funding Corporation, alleging violations of the Illinois Interest Act. The suit was filed in October 2003 in the United States District Court for the Southern District of Illinois, alleging that the originator of the mortgage loan at issue, Mortgage Capital Resources, violated the Illinois Interest Act by assessing fees that were impermissible and unreasonable, and the plaintiffs seek two times the amount of interest, discount and charges assessed the borrowers. In addition, plaintiffs allege the excessive fees caused finance charges to be understated and they seek to rescind the mortgage loans under the Truth in Lending Act. Plaintiffs are attempting to hold the Company liable as the assignee of the mortgage loans, seeking a nationwide class, exclusive of Missouri. The Company filed a motion to dismiss the suit asserting that, among other things, plaintiffs' claim under the Illinois Interest Act was impliedly repealed by a subsequent amendment to this statute. Although the trial court denied this motion, the U.S. Court of Appeals for the Seventh Circuit reversed this denial and granted the motion to dismiss with regard to the Illinois Interest Act claims. The trial court subsequently denied class certification with regard to the remaining claims. The suit is styled "Reiser, et al v. Residential Funding Corporation, case no. 3:03-cv-00619-DRH," filed in the United States District Court for the Southern District of Illinois, under Judge David R. Herndon. Representing the plaintiffs are Eric G. Calhoun of Lawson, Fields et al., Generally Admitted, 14135 Midway Road, Suite 250 Addison, TX 75001, Phone: 972-490-0808, E-mail: ecalhoun@lfclaw.com; and Richard J. Pradarits, Jr., Attorney at Law, 14135 Midway Rd., Suite 250, Addison, TX 75001, Phone: 972-490-0808, Fax: 972-490-9545, E- mail: rpradarits@lfclaw.com. Representing the Company are Thomas L. Allen, Roy W. Arnold, Nina M. Faber, and Peter J. Kennedy of Reed Smith, 435 Sixth Avenue, Pittsburgh, PA 15219- 1886, Phone: 412-288-3169, E-mail: tallen@reedsmith.com, rarnold@reedsmith.com, nfaber@reedsmith.com, and pkennedy@reedsmith.com; and Richard K. Hunsaker, Robert H. Shultz, Jr. and James A. Telthorst, Heyl, Royster et al. - Edwardsville, Generally Admitted, 103 West Vandalia Street, P.O. Box 467, Edwardsville, IL 62025, Phone: 618-656-4646, E-mail: rhunsaker@hrva.com, rshultz@hrva.com, jtelthorst@hrva.com. RESIDENTIAL FUNDING: IL Court Nixes Stay of Interest Act Lawsuit ---------------------------------------------------------------- The Circuit Court of St. Clair County in Illinois refused to stay the class action filed against Residential Funding Corporation. This case asserts the identical Illinois Interest Act claims alleged in "Reiser, et al v. Residential Funding Corporation, case no. 3:03-cv-00619-DRH," filed in the United States District Court for the Southern District of Illinois, but in state rather than federal court. Specifically, this statewide class action lawsuit alleges that all loans originated by Mortgage Capital Resources in Illinois violate the Illinois Interest Act and Illinois Consumer Fraud Act. Plaintiffs seek damages from the Company as the assignee of the loans, in the amount of two times the amount of interest payable over the life of the loans, plus all fees and charges assessed to the borrowers. In August 2004, the trial court granted class certification. In light of the decision in the "Reiser" case, and the pendency of "Clark" case at the Illinois Supreme Court, the Company sought a stay of the suit until the Illinois Supreme Court has ruled in "Clark," a motion which the court denied. RESIDENTIAL LOAN: IL Consumer Fraud, Interest Act Lawsuit Stayed ---------------------------------------------------------------- The Circuit Court of Cook County, Illinois stayed the putative statewide class action filed against Residential Loan Centers of America, alleging violations of the Illinois Interest Act and the Illinois Consumer Fraud Act. The putative statewide class action was filed in July 2004. Plaintiffs allege that the Company violated the Illinois Interest Act and Illinois Consumer Fraud Act on first-lien loans originated with interest rates exceeding 8% when it assessed fees and charges on such loans in excess of 3% of the loan amount. Plaintiffs seek damages in the amount of two times the amount of interest payable over the life of the loans, plus all fees and charges. The Company asserts that it relied on federal law to preempt the Illinois Interest Act at the time of origination. This case has been stayed until the Illinois Supreme Court renders a decision in a similar lawsuit. SARA LEE: Seeks Review of Refusal To Dismiss IL Securities Suit --------------------------------------------------------------- The United States District Court for the Northern District of Illinois, Eastern Division refused to review its ruling, refusing to dismiss the consolidated securities class action filed against Sara Lee Corporation and: (1) C. Steve McMillain, chairman, president and chief executive officer (2) Lambertus M. de Kool, Executive vice president and chief financial officer John Gallo, a purported Sara Lee stockholder, filed a putative class action lawsuit in the United States District Court for the Northern District of Illinois, Eastern Division, on May 13, 2003 on behalf of purchasers of Sara Lee common stock between and including August 1, 2002 and April 24, 2003. The plaintiff sought, among other things, class action certification, compensatory damages in an unspecified amount, and an award of costs and expenses, including counsel fees. Seven other putative class action lawsuits were filed in the same court against the same defendants. The allegations in each of those complaints are substantially similar to the allegations of the lawsuit described in the immediately preceding paragraph. Each of the foregoing actions has been consolidated in a single proceeding, styled "In re Sara Lee Corp. Securities Litigation." On January 20, 2004, plaintiffs filed a consolidated amended complaint. The consolidated amended complaint contains allegations that the defendants violated Sections 10(b) and 20(a) of the United States Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by allegedly misstating or omitting material adverse facts regarding Sara Lee's business, operations, management and financial statements, and the value of Sara Lee common stock, which allegedly enabled Sara Lee to complete securities offerings, enabled the individual defendants to increase their bonus compensation and caused the purported class to purchase Sara Lee common stock at artificially inflated prices. On March 5, 2004, Sara Lee filed a motion to dismiss the consolidated amended complaint, and on December 21, 2004, Sara Lee's motion to dismiss was denied. The Company moved to take an immediate appeal from that ruling, but was denied on May 26, 2005. On June 30, 2005, Sara Lee filed its answer to the complaint, denying all allegations of wrongdoing. Discovery has commenced and is in its initial stages. The suit is styled "In re Sara Lee Corporation Securities Litigation, case no. 1:03-cv-03202," filed in the United States District Court for the Northern District of Illinois, Eastern Division, under Judge Charles R. Norgle, Sr. Law firm for the defendants is Jenner & Block, LLC, One IBM Plaza, 330 North Wabash Avenue, 40th Floor, Chicago, IL 60611, Phone: (312)-222-9350. The plaintiff firms in this litigation are: (1) Ademi & O'Reilly, LLP, 3181 South 27th Street, Milwaukee, WI, 53215, Phone: 866.264.3995, Fax: 414.482.8001, E-mail: inquiry@ademilaw.com (2) Bull & Lifshitz, 18 East 41st St., New York, NY, 10017, Phone: 212.213.6222, Fax: 212.213.9405, (3) Cauley Geller Bowman Coates & Rudman, LLP (New York), 200 Broadhollow, Suite 406, Melville, NY, 11747, Phone: 631.367.7100, Fax: 631.367.1173, (4) Chitwood & Harley, 1230 Peachtree Street, N.E., 2900 Promenade II, Atlanta, GA, 30309, Phone: 888.873.3999, (5) Faruqi & Faruqi LLP, 320 East 39th Street, New York, NY, 10016, Phone: 212.983.9330, Fax: 212.983.9331, E- mail: Nfaruqi@faruqilaw.com (6) Glancy and Binkow, 1801 Avenue of the Stars, suite 311, Los Angeles, CA, 90067, Phone: 310-201-9150, E-mail: info@glancylaw.com (7) Milberg Weiss Bershad Hynes & Lerach, LLP (New York, NY), One Pennsylvania Plaza, New York, NY, 10119-1065, Phone: 212.594.5300, (8) Much Shelist Freed Denenberg Ament & Rubenstein, PC, Chicago, IL, Phone: 800-470-6824, Fax: 312-621-1750, (9) Pomerantz,Haudek, Block, Grossman & Gross, 100 Park Avenue, 26th Floor, New York, NY, 10017-5516, 212.661.1100, (10) Wechsler Harwood LLP, 488 Madison Avenue 8th Floor, New York, NY, 10022, Phone: 212.935.7400, E-mail: info@whhf.com SECURITY CAPITAL: Plaintiffs Seek Documents Related To DE Suit -------------------------------------------------------------- Plaintiffs have submitted their initial request for the production of documents related to the consolidated class action filed against Security Capital Corporation in the Court of Chancery of the State of Delaware, in and for New Castle County. The suit was filed in connection with an offer made by Brian Fitzgerald, the Chairman of the Company's Board of Directors, President and Chief Executive Officer, and, through Capital Partners, the controlling person of the Company's majority stockholder, CP Acquisition, L.P. No. 1 (CPI), to acquire by merger all of the outstanding Class A Common Stock and Common Stock of Security Capital, other than shares held by Mr. Fitzgerald, Capital Partners, CPI and certain other persons, at a price of $9.00 per share. Three complaints were initially filed, also naming as defendants each then-member of its Board of Directors and CPI. Each of the complaints allege that the defendants breached their fiduciary duties to the putative class and that the then-proposed Initial Capital Partners Offer was unfair, inadequate and not the result of arm's-length negotiations. Each complaint sought an injunction against the proposed merger or, if the merger was consummated, the rescission of the merger, as well as money damages, attorneys' fees, expenses and other relief. The Court issued an order of consolidation, consolidating the three complaints into one class action. Mr. Fitzgerald and Capital Partners have increased their offer to $10.60 per share, and offers to acquire the entire Company for $11.00 and $13.00 per share have been submitted by others. In addition, on June 7, 2005, the Company announced that it had retained UBS Securities LLC to conduct a formal sale process for the Company, and that Mr. Fitzgerald and Capital Partners have declared their full support for that sale process and committed to sell the shares they control if appropriate value is achieved in the transaction. SERAGEN INC.: Lawsuit Settlement Hearing Set November 2, 2005 ------------------------------------------------------------- The Court of Chancery of the State of Delaware, on and for New Castle County will hold a fairness hearing for the proposed settlement in the matter Sergio M. Oliver, et al., v. Boston University, et al., C.A. No. 16570-NC, filed on behalf of all holders and beneficial owners of shares of common stock of Seragen, Inc. on November 4, 1997 and on August 12, 1998. The hearing will be held before The Honorable Vice Chancellor Noble, on November 2, 2005 at 2:00 p.m., at the New Castle County Courthouse, 500 North King St., Wilmington, DE 19801. For more details, contact Michael A. Weidinger of Morris, James, Hitchens & Williams, LLP, 222 Delaware Ave., Wilmington, DE 19801, Phone: (302) 888-6995 OR In re Seragen Securities Litigation, c/o The Garden City Group, Inc., Claims Administrator, P.O. Box 9000 #6351, Merrick, NY 11566-9000, Phone: (800) 283-0455. SUPREME GREENS: Settles FTC False Marketing, Unfair Trade Suit -------------------------------------------------------------- Three individuals and two companies have settled Federal Trade Commission charges over their roles in the deceptive marketing of Supreme Greens, an herbal supplement. The FTC has alleged that these defendants and others promoted the product for the prevention, treatment, and cure of cancer, heart disease, arthritis, and diabetes. They also touted Supreme Greens' ability to cause substantial weight loss. In two separate settlement agreements, Supreme Greens developer Alejandro Guerrero and his company, Health Solutions, Inc. (both of Upland, California), and Michael Howell (Fontana, California), Gregory Geremesz (Upland, California) and their company, Healthy Solutions, LLC (Upland, California), have agreed not to make false or unsubstantiated claims about the health benefits, performance, efficacy, or safety of any food, drug, or dietary supplement. Guerrero will also pay $65,000 or transfer to the Commission title to his 2004 Cadillac Escalade. Howell and Geremesz will pay $5,000 and $10,000, respectively, to the Commission. In June 2004, the FTC filed a lawsuit in the United States District Court for the District of Massachusetts alleging that Direct Marketing Concepts, Inc., ITV Direct, Inc., and their president, Donald W. Barrett; and Alejandro Guerrero, Michael Howell, Gregory Geremesz, and their companies, Health Solutions, Inc., and Healthy Solutions, LLC, had deceptively marketed Supreme Greens. The Commission also alleged that Direct Marketing Concepts, Inc., ITV Direct, Inc., and Donald W. Barrett; and Allen Stern and his companies, Triad ML Marketing, Inc. and King Media, Inc., had deceptively marketed Coral Calcium Daily. The Commission subsequently amended its complaint to name Robert Maihos as an additional liability defendant, and Lisa Stern, Steven Ritchey, and BP International, Inc. as relief defendants. (The litigation continues against all of the defendants other than Guerrero, Howell, Geremesz, and their companies.) The original Supreme Greens infomercial ran on cable television (including the Outdoor Channel and the PAX Television network), beginning in August 2003. In that infomercial, Guerrero and host Donald Barrett claimed the product can prevent, treat, and cure cancer, heart disease, arthritis, and diabetes. They also touted Supreme Greens as causing substantial weight loss, and claimed that the product was safe for use by pregnant women, children - including those as young as one year old - and any person taking any type of medication. The settlements announced today prohibit Guerrero, Health Solutions, Inc., Howell, Geremesz, and Healthy Solutions, LLC from making the types of claims alleged in the FTC's complaint for Supreme Greens or any substantially similar product. The orders also prohibit them from misrepresenting that any dietary supplement can prevent, treat, or cure any disease, or that Guerrero is a medical doctor, Doctor of Oriental Medicine, or Ph.D. In addition, the orders enjoin them from making false or unsubstantiated health benefit, performance, efficacy, or safety claims for any food, drug, or dietary supplement. Finally, the orders prohibit these five defendants from misrepresenting the existence, contents, validity, results, conclusions, or interpretations of any test or study, in connection with the marketing or sale of any food, drug, or dietary supplement. The Guerrero/Health Solutions, Inc. order provides for judgment in the amount of $65,000 in favor of the Commission. That judgment can be satisfied either by a payment of that amount to the Commission, or by Guerrero transferring to the Commission free and unencumbered title to his 2004 Cadillac Escalade. The order also contains a $1.47 million avalanche clause, which will become due immediately if the court finds that Guerrero or Health Solutions, Inc. misrepresented their financial condition. The order also requires them to notify current and future dietary supplement distributors, resellers, and sales agents of the settlement, and to stop doing business with them if they use any of the promotional materials prohibited by the order. The Howell/Geremesz/Healthy Solutions, LLC order provides for judgment against Howell in the amount of $5,000, and against Geremesz in the amount of $10,000. This order also contains a $2.7 million avalanche clause and a distributor notification provision. Finally, both orders contain various record-keeping requirements to assist the FTC in monitoring the defendants' compliance with the orders. The Commission vote authorizing staff to file the Guerrero/Health Solutions, Inc. stipulated final order was 5-0; the vote authorizing staff to file the Howell/Geremesz/Healthy Solutions, LLC stipulated final order was also 5-0. Both orders were filed in the U.S. District Court for the District of Massachusetts, and they were entered by the Court on September 28, 2005, and September 29, 2005, respectively. Copies of the stipulated final order are available from the FTC's Web site at http://www.ftc.govand also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov.The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad. For more details, contact Mitchell Katz, Office of Public Affairs by Phone: 202-326-2161 or Heather Hippsley or Shira Modell, Bureau of Consumer Protection, by Phone: 202-326-3285 or 202-326-3116 or visit the Website: http://www.ftc.gov/opa/2005/10/supreme.htm. WAL-MART STORES: Aiming To Settle Suit As CA Court Hears Appeal --------------------------------------------------------------- Wal-Mart Stores, Inc. is in settlement talks for the class action filed against it in the United States District Court for the Northern District of California, styled "Dukes v. Wal-Mart Stores, Inc." The suit was filed in June 2001 on behalf of all past and present female employees in all of the Company's retail stores and wholesale clubs in the United States. The complaint alleges that the Company has engaged in a pattern and practice of discriminating against women in promotions, pay, training and job assignments. The complaint seeks, among other things, injunctive relief, front pay, back pay, punitive damages, and attorneys' fees. Following a hearing on class certification on September 24, 2003, on June 21, 2004, the District Court issued an order granting in part and denying in part the plaintiffs' motion for class certification. The class, which was certified by the District Court for purposes of liability, injunctive and declaratory relief, punitive damages, and lost pay, subject to certain exceptions, includes all women employed at any Wal-Mart domestic retail store at any time since December 26, 1998, who have been or may be subjected to the pay and management track promotions policies and practices challenged by the plaintiffs. The class as certified currently includes approximately 1.6 million present and former female Associates. The Company believes that the Court's ruling is incorrect, the Company said in a disclosure to the Securities and Exchange Commission. The United States Court of Appeals for the Ninth Circuit has granted the Company's petition for discretionary review of the ruling. The Court of Appeals heard oral argument from counsel in the case on August 8, 2005. There is no indication at this time as to when a decision will be rendered. If the Company is not successful in its appeal of class certification, or an appellate court issues a ruling that allows for the certification of a class or classes with a different size or scope, and if there is a subsequent adverse verdict on the merits from which there is no successful appeal, or in the event of a negotiated settlement of the litigation, the resulting liability could be material to the Company. The plaintiffs also seek punitive damages which, if awarded, could result in the payment of additional amounts material to the Company. According to a March 14,2005 Class Action Reporter story, the Company started settlement talks with attorneys for the plaintiffs in the suit, which has the potential of representing 1.6 million female employees. Settlement talks have been ongoing for several months and recently gained momentum, according to The Recorder. Both sides allegedly hired a well- known class-action mediator, Hunter Hughes III of Atlanta, to handle the negotiations. The suit is styled "Dukes et al v. Wal-Mart Stores, Inc., case no. 3:01-cv-02252," filed in the United States District Court for the Northern District of California, under Judge Martin J. Jenkins. Representing the plaintiffs is Brad Seligman of The Impact Fund, 125 University Avenue, Berkeley, CA 94710, Phone: 510-845-3473 ext 304, Fax: 510-845-3654, E-mail: bs@impactfund.org. Representing the Company is Nancy L. Abell of Paul, Hastings, Janofsky & Walker LLP - Employment, 555 South Flower Street, 25th Floor, Los Angeles, CA 90071-2371, Phone: 213 683-6162, Fax: (213) 627-0705, E-mail: nancyabell@paulhastings.com. WAL-MART STORES: Female Employees File Gender Bias Suit in GA ------------------------------------------------------------- Wal-Mart Stores, Inc. faces a class action filed in the United States District Court for the Northern District of Georgia, styled "Mauldin v. Wal-Mart Stores, Inc., alleging gender discrimination. The suit was filed on October 16,2001 on behalf of female Wal- Mart Associates who were participants in the Associates Health and Welfare Plan at any time from March 8, 2001, to the present and who were using prescription contraceptives. The class seeks amendment of the Plan to include coverage for prescription contraceptives, back pay for all members in the form of reimbursement of the cost of prescription contraceptives, pre- judgment interest, and attorneys' fees. The complaint alleges that the Company's Health Plan violates Title VII's prohibition against gender discrimination in that the Health Plan's Reproductive Systems provision does not provide coverage for prescription contraceptives. The class was certified on August 23, 2002. On September 30, 2003, the court denied the Company's motion to reconsider that ruling. The suit is styled "Mauldin v. Wal-Mart Stores, case no. 1:01- cv-02755-JEC," filed in the United States District Court for the Northern District of Georgia, under Judge Julie E. Carnes. Representing the plaintiffs are: (1) Kirk E. Chapman, Douglas J. Hoffman, Janine L. Pollack, Jennifer Templeton Schirmer, Milberg Weiss Bershad & Schulman, One Pennsylvania Plaza, 48th Floor, New York, NY 10119-0165, Phone: 212-594-5300 (2) George Albert Stein, Office of George Albert Stein, 1355 Peachtree Street, NE Suite 150, Atlanta, GA 30309, Phone: 404-881-6500 (3) Sigmund Wissner-Gross, Heller Horowitz & Feit, 292 Madison Avenue, New York, NY 10017, Phone: 212-685-7600 Representing the Company are Mark A. Casciari, Allen William Groves, Alissa Lipson and Antonia-Anna R. Palmer of Seyfarth Shaw, 55 East Monroe Street, Suite 4200, Chicago, IL 60603-5803, Phone: 312-346-8000, E-mail: agroves@seyfarth.com or apalmer@seyfarth.com. WAL-MART STORES: Faces EEOC Gender Discrimination Lawsuit in KY --------------------------------------------------------------- Wal-Mart Stores, Inc. continues to face a lawsuit filed in the United States District Court for the Eastern District of Kentucky, styled "EEOC (Janice Smith) v. Wal-Mart Stores, Inc." The suit brought by the Equal Employment Opportunity Commission (EEOC) on behalf of Janice Smith and all other females who made application or transfer requests at the London, Kentucky, Distribution Center from 1995 to the present, and who were not hired or transferred into the warehouse positions for which they applied. The class seeks back pay for those females not selected for hire or transfer during the relevant time period. The class also seeks injunctive and prospective affirmative relief. The complaint alleges that the Company based hiring decisions on gender in violation of Title VII of the 1964 Civil Rights Act as amended. The EEOC can maintain this action as a class without certification. The suit is styled "EEOC v. Wal-Mart Stores Inc, case no. 3:01- cv-00065-JMH," filed in the United States District Court for the Eastern District of Kentucky, under Judge Joseph M. Hood. Representing the plaintiffs are Michelle Eisele, E. Paige Freitag, Gwendolyn Young Reams, and Laurie A. Young of the Equal Employment Opportunity Commission, 101 W. Ohio Street, Suite 1900, Indianapolis, IN 46204-4203, Phone: 317-226-7949, Fax: 317-226-5571. Representing the Company is Kathryn A. Quesenberry of Woodward, Hobson & Fulton, LLP, 101 S. Fifth Street, 2500 National City Tower, Louisville, KY 40202, Phone: 502-581-8025, Fax: 502-581-8111, E-mail: kquesenberry@whf- law.com. WAL-MART STORES: Faces Several Employee Wage, Overtime Lawsuits --------------------------------------------------------------- Wal-Mart Stores, Inc. continues to face numerous cases containing class-action allegations in which the plaintiffs have brought claims under the Fair Labor Standards Act (FLSA), corresponding state statutes, or other laws. The plaintiffs in these lawsuits are current and former hourly Associates who allege, among other things, that the Company forced them to work "off the clock," or failed to provide work breaks, or otherwise claim they were not paid for work performed. The complaints generally seek unspecified monetary damages, injunctive relief, or both. Class certification has yet to be addressed in a majority of the cases. Class certification has been denied or overturned in cases pending in Arizona, Arkansas, Florida, Georgia, Indiana, Louisiana, Maryland, Michigan, Nevada, North Carolina, Ohio, Texas, West Virginia, and Wisconsin. Some or all of the requested classes have been certified in cases pending in California, Colorado, Massachusetts, Minnesota, New Mexico, Oregon, and Washington. Conditional certifications for notice purposes under the FLSA have been allowed in cases in Georgia, Michigan, and Texas. The Company is a defendant in "Savaglio v. Wal-Mart Stores, Inc.," a class-action lawsuit in which the plaintiffs allege that they were not provided meal and rest breaks in accordance with California law, and seek monetary damages and injunctive relief. The case is set for jury trial beginning on September 6, 2005, in the Superior Court of Alameda County, California. The Company believes that it has substantial factual and legal defenses to the allegations at issue. A putative class action is pending in California challenging the methodology of payments made under various Associate incentive bonus plans, and a second putative class action in California asserts that the Company has omitted to include bonus payments in calculating Associates' regular rate of pay for purposes of determining overtime. The Company is currently a defendant in four putative class actions brought on behalf of assistant store managers who challenge their exempt status under state and federal laws, which are pending in California, Michigan, New Mexico, and Tennessee. Conditional certification for notice purposes under FLSA has been granted in one of these cases (Comer v. Wal-Mart Stores, Inc.). Otherwise, no determination has been made as to class certification in any of these cases. New Securities Fraud Cases ARBINET-THEXCHANGE: Schiffrin & Barroway Lodges Fraud Suit in NJ ---------------------------------------------------------------- The law firm of Schiffrin & Barroway, LLP, initiated a class action lawsuit in the United States District Court for the District of New Jersey on behalf of all securities purchasers of Arbinet-thexchange, Inc. (Nasdaq: ARBX) ("Arbinet" or the "Company") who bought pursuant and/or traceable to the Company's Initial Public Offering ("IPO") on or about December 16, 2004 and between December 16, 2004, and June 21, 2005 inclusive (the "Class Period"). The complaint charges Arbinet-thexchange, Inc., J. Curt Hockemeier and John J. Roberts with violations of the Securities Exchange Act of 1934. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts known to defendants or recklessly disregarded by them: (1) that Arbinet was experiencing a shorter than average call duration and a mix shift to wireless calls from wired calls, which led to a decrease in the average number of minutes the Company transacted on the exchange; (2) that the Company due to credit problems was forced to suspend trading for two of its largest customers; (3) that the Company's international offerings were not adequately differentiated from its competitors, thereby jeopardizing Arbinet's ability to grow abroad; and (4) that a result of the foregoing, the defendant's positive statements about the Company's condition and progress lacked in all reasonable basis. On June 21, 2005, Arbinet lowered its guidance for both the second quarter and all of 2005. On this news, shares of Arbinet fell $4.00 per share, or 34.78 percent, on June 22, 2005, to close at $7.50 per share. 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. GENERAL MOTORS: Law Firms Lodge Securities Fraud Suit in S.D. NY ---------------------------------------------------------------- The law firm of Murray, Frank & Sailer LLP and the Law Offices of Avv. Pietro Adami initiated a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of shareholders who purchased or otherwise acquired the securities of General Motors Corporation ("General Motors" or the "Company" (NYSE:GM) between February 25, 2002 and March 16, 2005, inclusive (the "Class Period"). Murray, Frank & Sailer LLP and the Law Offices of Avv. Pietro Adami are seeking to pursue remedies under the Securities Exchange Act of 1934 against defendants General Motors, General Motors Acceptance Corporation, Peter R. Bible, Walter G. Borst, John M. Devine, and G. Richard Wagoner, Jr. The complaint alleges that defendants issued or caused to be issued materially false and misleading statements to the investing public with respect to the Company's financial performance and condition during the relevant time. In addition, the Complaint alleges that during the fourth quarter of 2004 and the first quarter of 2005, defendants, with knowledge or reckless disregard of facts then in their possession, disseminated materially false and misleading projections with respect to GM's first quarter and year 2005 revenues, earnings, and cash flow. During the Class Period, defendants capitalized on the advantageous debt ratings assigned to the Company as a result of defendants' materially false and misleading statements and omissions, by causing GM to issue more than $18 billion in debt securities. When the true facts finally began to come out at the end of the Class Period, the price of GM stock, which had closed at $32.71 on March 15, 2005, declined by $4.57 per share, or 14 percent, to close at $28.14 per share on March 16, 2005. The prices of the Company's debt securities also declined in the market. Murray, Frank & Sailer LLP and its predecessor firms have devoted its practice to shareholder class actions and complex commercial litigation for more than 15 years and have recovered hundreds of millions of dollars for shareholders in class actions throughout the United States. For more details, contact Eric J. Belfi, Christopher S. Hinton or Bradley P. Dyer of Murray, Frank & Sailer LLP, Phone: (800) 497-8076 or (212) 682-1818, Fax: (212) 682-1892, E-mail: info@murrayfrank.com, Web site: http://www.murrayfrank.com/CM/NewCases/NewCases.asp. IMMUCOR INC.: Pomerantz Haudek Files Securities Fraud Suit in GA ------------------------------------------------------------- The law firm of Pomerantz Haudek Block Grossman & Gross, LLP, initiated a class action lawsuit in the United States District Court, Northern District of Georgia, Atlanta Division, against Immucor, Inc. ("Immucor") or the "Company") (Nasdaq:BLUD) (Nasdaq:BLUDE) and certain of its officers and directors, on behalf of purchasers of the common stock of Immucor during the period from January 7, 2005 to August 29, 2005, inclusive (the "Class Period"). The Complaint alleges that throughout the Class Period, defendants knowingly or recklessly misrepresented the Company's prospects, financial results and operations. The Company also concealed certain internal control problems, all of which caused the Company's stock price to trade at artificially inflated prices in violation of Section 10(b) and 20(a) the Securities Exchange Act of 1934 (the Exchange Act). The true facts, which were known by the defendants during the Class Period but concealed from the investing public, were: (1) the Company lacked requisite internal controls to issue accurate financial results and projections and to prevent insider trading violations by its officers and directors; (2) the Company lacked the necessary personnel to issue accurate financial reports and projections; and (3) the Company's financial statements were presented in violation of Generally Accepted Accounting Principles (GAAP"). These false statements caused Immucor stock to trade at artificially inflated levels during the Class Period, trading as high as $ 34.98, which allowed top officers to reap millions of dollars in insider trading proceeds. As the market learned the true information about Immucor, the inflation caused by defendants' misrepresentations was removed and the price of Immucor common stock fell by nearly 13% from its Class Period high. On Friday, August 26, 2005, Immucor announced that the SEC had formalized its probe into payments made by its Italian subsidiary to people associated with government medical facilities. The fact that the SEC upgraded its investigation from an informal inquiry into a formal investigation indicates the severity of Immucor's actions. On August 29, 2005, after the market closed, Immucor announced that it had revised its net income for fiscal 2005 to account for a previously unrecorded accrual for employee bonuses and furthermore made an announcement that it had accepted the resignation of defendant Steven Ramsey from the post of Chief Financial Officer. On this news, Immucor's stock collapsed to as low as $22.67 per share before closing at $24 per share on a staggering volume of 6.2 million shares. This volume is nearly ten times the average daily volume, wherein the average trading volume in Immucor common stock over the previous three months was 791,802 shares. For more details, contact Teresa Webb or Carolyn S. Moskowitz of Pomerantz Haudek Block Grossman & Gross, LLP, Phone: (888) 476-6529, E-mail: tlwebb@pomlaw.com or csmoskowitz@pomlaw.com. SPECTRUM BRANDS: Bruce G. Murphy Lodges Securities Suit in GA ------------------------------------------------------------- The Law Offices of Bruce G. Murphy initiated a class action lawsuit on behalf of all persons who purchased or otherwise acquired the securities of Spectrum Brands, Inc. ("Spectrum Brands" or the "Company") between January 4, 2005 and September 6, 2005, inclusive (the "Class Period"), and sustained damages. The action is pending in the United States District Court for the Northern District of Georgia against the Company, and certain of its former officers and directors. According to the complaint, defendants violated sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5, by issuing a series of material misrepresentations to the market during the Class Period. The complaint alleges that throughout the Class Period, defendants were well aware that the Company's growth model depended upon strong and consistent sales of its core battery products, while at the same time acquiring and integrating diversified brands. Accordingly, throughout the Class Period, defendants consistently represented (1) that the Company was growing through acquisitions and diversifying revenues while maintaining sales of existing products and leveraging existing brands; (2) that the combination of Rayovac and United presented a "compelling value proposition"; (3) that management of the Company had an outstanding track record for successfully integrating acquired brands "while maintaining marketplace momentum" of its legacy brands; (4) that defendants were able to drive revenue growth of its core brands by cross selling its legacy products to accounts acquired through acquisitions; (5) that the representations and warranties contained in the United Merger Agreement were true and accurate at all relevant times; (6) that the Company was achieving "record" sales during the Class Period with double-digit increases in battery sales, "exceptional performance" across the board and with integrations proceeding according to plan; and (7) that by the end of the Class Period the integration of United was substantially complete and also proceeding according to plan. The representations concerning defendants' ability to acquire and integrate diverse brands such as United and Tetra, while maintaining robust sales of its core battery products, were either patently untrue, or Defendants recklessly disregarded the Company's true operational and financial condition. Unbeknownst to investors, throughout the Class Period, the Company suffered from a host of undisclosed adverse factors that negatively impacted its business and caused it to report financial results that were materially less than the market expectations defendants had caused and cultivated. It was only at the end of the Class Period that investors ultimately learned that the Company was operating far below expectations and realized that Spectrum Brands had significantly inflated sales of its battery products during the 1st and 2nd quarter of 2005. Accordingly, on July 28, 2005, when defendants reported results for the 3rd fiscal quarter of 2005, the price of Spectrum Brands stock declined over $8.00, falling over 20% to closing at $30.10 per share. The bad news, however, was not over. On September 7, 2005, prior to the market opening, defendants revealed that earnings for the fourth quarter ending September 30, 2005 would be "substantially lower" than the guidance previously reported. Defendants attributed the shortfall to weak sales and "high (retail) inventory levels." The unexpected news prompted additional analyst downgrades. Analyst William Schmitz noted that "(a)fter two earning warnings in six weeks, we believe already low investor faith in this roll-up is likely to dissipate." In response to the September 7, 2005 news, the stock dropped another 13% on volumes of 4.26 million. In total, the stock lost 31% of its value in response to the disclosures. For more details, contact The Law Offices of Bruce G. Murphy, Esq., 265 Llwyds Lane, Vero Beach, FL 32963, Phone: (828) 737-0500, E-mail: bgm@brucemurphy.biz. TEMPUR-PEDIC INTERNATIONAL: Milberg Weiss Files Fraud Suit in KY ---------------------------------------------------------------- The law firm of Milberg Weiss Bershad & Schulman, LLP, initiated a class action lawsuit on behalf of purchasers of the securities of Tempur-Pedic International, Inc. ("Tempur-Pedic" or the "Company") (NYSE: TPX) between April 22, 2005 and September 19, 2005, inclusive (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act"). The action is pending in the United States District Court for the Eastern District of Kentucky, against defendants Dale E. Williams (CFO), Robert B. Trussell Jr., (CEO), H. Thomas Bryant (President) and P. Andrews McLane (Chairman). The Honorable Karl S. Forester is the Judge presiding over the action. The Complaint alleges that by the beginning of the Class Period investors became concerned that well-heeled competitors, such as Sealy, Serta and Simmons, were making significant inroads into the visco-elastic market that could challenge Tempur-Pedic's dominance or, at the very least, erode its profits if it was forced to slash prices in order to compete. Defendants allayed these concerns by misrepresenting that its business was not suffering from the effects of competition and would continue to grow strongly. Well into the Class Period, defendants reiterated aggressive sales and earnings guidance for 2005, even after the Company had begun to experience a slowdown. Defendants' Class Period representations were materially false and misleading when made because they failed to disclose that: (1) demand for Tempur-Pedic's products was slowing as competitors were gaining a foothold in the visco- elastic market; (2) defendants' repeated express assurances that the competition was not having a materially negative, or any, impact on the Company, even in response to express concerns raised by analysts, were untrue and provided false comfort to investors while inflating the price of Tempur-Pedic stock so insiders could sell their shares; and (3) in light of increasing competition that was already having a noticeable effect on the Company's business, defendants' guidance, reiterated on July 21, 2005, lacked any reasonable basis. Defendants were motivated to commit the wrongdoing alleged herein in order to sell their personally held Tempur-Pedic stock at artificially inflated prices. During the Class Period, insiders and entities associated with insiders, sold a total of 5,620,591 shares of Tempur-Pedic common stock at artificially inflated prices, for proceeds of $131,910,207. Of that amount, $124,550,000 was sold by TA Associates, a controlling shareholder that has two nominee directors on Tempur-Pedic's board of directors - Jeffrey S. Barber and Chairman P. Andrews McLane, who is also a managing director of TA Associates. On September 19, 2005, Tempur-Pedic issued lower guidance for 2005, which it attributed to a number of factors, including competition that it had said was not and would not have a negative impact, at least not one large enough to cause it to lower its 2005 guidance, which was reiterated less than a month before this announcement. In response to this announcement, the price of Tempur-Pedic common stock plummeted, falling 28.5% in one day, to $11.70 per share on July 20, 2005 from $16.38 per share on July 19, 2005, on unusually heavy trading volume. For more details, contact Steven G. Schulman, Peter E. Seidman or Andrei V. Rado of Milberg Weiss Bershad & Schulman, LLP, One Pennsylvania Plaza, 49th fl., New York, NY, 10119-0165, Phone: (800) 320-5081, E-mail: sfeerick@milbergweiss.com, Web site: http://www.milbergweiss.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. 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