/raid1/www/Hosts/bankrupt/CAR_Public/051214.mbx
C L A S S A C T I O N R E P O R T E R
Wednesday, December 14, 2005, Vol. 7, No. 247
Headlines
ALTRIA GROUP: IL High Court Set to Make Ruling in "Lights" Case
AQUANTIVE INC.: NY Court Preliminarily Approves Suit Settlement
AQUANTIVE INC.: IL Court Dismisses One Claim in Customer Lawsuit
AUDIBLE INC.: NY Court Preliminarily OKs Stock Suit Settlement
AUDIBLE INC.: Continues To Face Securities Fraud Lawsuits in NJ
AXONYX INC.: Officers Continue To Face Securities Lawsuits in NY
BEAR STEARNS: NY Judge Dismisses Workers' Suit Over NFC Closure
BEDFORD LABORATORIES: Recalls Drugs For Ethylene Glycol Content
CANADA: Settlement Ends B.C. Lawsuit Over Faulty Lab Equipment
CENDANT PRIDES: Lawsuit Settlement Hearing Set January 27, 2006
CHARTONE: IL Court Reaffirms Decision in Medical Records Case
DELPHI CORPORATION: Seeks Consolidation of Investor, ERISA Suits
GENTEK INC.: Reaches Settlement For CA Environmental Injury Suit
GOODY'S FAMILY: TN Court Enters Temporary Injunction For Merger
INDIAN TRUST: Plaintiffs Willing to Settle Fund Case For $27.5B
IVILLAGE INC.: Final Fairness Hearing Set April 24,2006 in NY
LEHIGH VALLEY: Seeks Dismissal of PA Students' Suit Over Loans
LOUISIANA: Judge Orders Extension FEMA Hotel Plan For Evacuees
LOUISIANA: New Orleans Residents File Suit For Inadequate Levees
LOUISIANA CITIZENS: Faces Suit Over Adjustments of Damage Claims
MEDCO HEALTH: Appeals Court Orders Review of $42.5M Settlement
MERCK & CO.: Shares Fall, Mixed Reactions in TX Vioxx Mistrial
MICHIGAN SUGAR: Residents Complain About Odor, Even After Deal
NORTH CAROLINA: County Sues Online Hotel Booking Firms For Taxes
PORTLAND GENERAL: OR Judge Refuses to Dismiss Ratepayers' Suit
PRICELINE.COM: CA Court Dismisses Hotel Taxes Consumer Lawsuit
PRICELINE.COM: Remand of CA Fraud Suit To State Court Affirmed
PRICELINE.COM: DE Court Mulls Consumer Fraud Lawsuit Dismissal
PRICELINE.COM: Philadelphia Seeks To File Amended Fraud Lawsuit
PRICELINE.COM: Consumers File Hotel Tax Fraud Suit in IL Court
PRICELINE.COM: Consumers File Tax Fraud Suit in Cook County, IL
PRICELINE.COM: CT Court Mulls Securities Lawsuit Certification
PRICELINE.COM: NY Court Approves Securities Lawsuit Settlement
PRICELINE.COM: Consumers File Hotel Tax Fraud Suit in OH Court
PRICELINE.COM: Consumers Launch Hotel Tax Fraud Suit in W.D. WA
SEQUENOM INC.: Final Fairness Hearing Set For April 2006 in NY
SKECHERS USA: CA Court Approves Employee Wage Suits Settlements
SKECHERS USA: Plaintiffs Appeal CA Shareholder Lawsuit Dismissal
SUTHERLAND GLOBAL: Former Workers Files Overtime Wage Suit in NY
THESTREET.COM: Final Suit Fairness Hearing Set April 2006 in NY
TREX CO.: Shareholders Launch Securities Fraud Suits in W.D. VA
VALUECLICK INC.: Faces DE Shareholder Suit V. Fastclick Merger
WIRELESS FACILITIES: CA Court Mulls Securities Lawsuit Dismissal
WIRELESS FACILITIES: NY Court Preliminarily OKs Suit Settlement
WOMEN.COM: Final Suit Fairness Hearing Set April 24,2006 in NY
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
* Online Teleconferences
New Securities Fraud Cases
EVCI CAREER: Rosen Law Firm Lodges Securities Fraud Suit in NY
FARO TECHNOLOGIES: Federman & Sherwood Lodges FL Securities Suit
GREAT WOLF: Scott + Scott Lodges New Securities Fraud Suit in WI
HELEN OF TROY: Marc S. Henzel Lodges Securities Fraud Suit in TX
STONE ENERGY: Klafter & Olsen Retained to Commence LA Stock Suit
*********
ALTRIA GROUP: IL High Court Set to Make Ruling in "Lights" Case
---------------------------------------------------------------
The Illinois Supreme Court is scheduled to make a much anticipated ruling on
a $10.1 billion verdict against Philip Morris USA in a case in which the
largest U.S. cigarette maker was found to have fooled smokers into thinking
"light" cigarettes were healthier than regular ones, Reuters reports.
The initial $10.1 billion judgment in the class action case was handed down
against the unit of Altria Group Inc. by a trial court judge in March 2003.
The Supreme Court took the unusual step of bypassing the appellate court and
hearing the case on appeal directly from the trial court. Arguments were
heard in November 2004 and investors and analysts have been awaiting a
ruling ever since.
The case in question is known as Sharon Price and Michael Fruth v. Philip
Morris USA Inc. Madison County Circuit Court Judge Nicholas Byron's $10.1
billion judgment in the case stated that Philip Morris USA violated the
provisions of Illinois' Consumer Fraud Act, when it described Cambridge
Lights and Marlboro Lights as having "lowered tar and nicotine" content,
which, among other statements, had the effect of deceiving 1.1 million
Illinois smokers into believing that the "lights" were safer than the more
full-flavored regular cigarettes, an earlier Class Action Reporter story
(April 21, 2003) reports.
The case is one of the major legal issues that Altria Chairman Louis
Camilleri previously said needs to be resolved before the company executes
plans to break Altria into two or three separate companies, splitting
Altria's Kraft Foods Inc. business from the U.S. and international tobacco
units.
The scheduling of the ruling, which was published in the court's web site,
could give Altria shares a lift even before the actual ruling is released on
December 15, 2005, Bonnie Herzog, tobacco analyst at Citigroup Investment
Research, said in a research note. She noted, "We believe the probability
that Philip Morris wins the appeal is over 75 percent. Therefore, we
recommend investors maintain a long position in the stock heading into a
decision, since we expect the upside in the stock could be over 10 percent
on Thursday."
Altria shares closed at $72.51 on Monday on the New York Stock Exchange, up
30 cents. The stock has gained 22 percent over the past year, in part
because of anticipation of the possible break up of the company once the U.S
. litigation landscape clears.
AQUANTIVE INC.: NY Court Preliminarily Approves Suit Settlement
---------------------------------------------------------------
The United States District Court for the Southern District of New York
granted preliminary approval to the settlement of the consolidated
securities class action filed against aQuantive, Inc. (formerly Avenue A,
Inc.), styled "In re Avenue A, Inc. Initial Public Offering Securities
Litigation.:
This consolidated complaint relates to several previously filed class action
complaints against the Company, the first of which was originally filed on
June 15, 2001. Plaintiffs filed the consolidated complaint on behalf of
themselves and all others who acquired the Company's common stock between
February 28, 2000 and December 6, 2000, pursuant or traceable to the Company
's prospectus dated February 28, 2000. The complaint also named as
defendants:
(1) Morgan Stanley & Co.,
(2) Salomon Smith Barney, Inc.,
(3) Thomas Weisel Partners, LLC, and
(4) RBC Dain Rauscher, Inc.,
(5) Brian P. McAndrews, President and Chief Executive
Officer;
(6) Nicolas Hanauer, Chairman of the Board; and
(7) Robert Littauer, former Chief Financial Officer
The complaint claims violations of of 15 U.S.C. 77k (Section 11 of the
Securities Act of 1933), and violation of 15 U.S.C. 78j(b) (Section 10(b) of
the Securities Exchange Act of 1934) and 17 C.F.R. 240.10b-5 (Exchange Act
Rule 10b-5) against all defendants. The complaint allege violation of 15
U.S.C. 77o (Section 15 of the Securities Act of 1933) and violation of 15
U.S.C. 78t(a) (Section 20(a) of the Securities Exchange Act of 1934) against
the individual defendants. Plaintiffs seek monetary damages.
The complaint alleges violations of federal securities laws in connection
with disclosures contained in the Company's prospectus dated February 28,
2000, for its initial public offering of common stock. The complaint
alleges incorrect disclosure or omissions in the Company's prospectus
relating generally to commissions to be earned by the underwriters and
certain allegedly improper agreements between the underwriters and certain
purchasers of the Company's common stock. It also alleges that the SEC
and/or other regulatory authorities are investigating underwriting practices
similar to those alleged in the complaint.
On July 15, 2002, the issuer defendants as a group filed a motion to dismiss
the claims alleged in the consolidated complaints. On October 8, 2002, the
court entered an order dismissing, without prejudice, all of the claims
against
Mr. McAndrews, Mr. Hanauer and Mr. Littauer. On
February 19, 2003, the court granted the Company's motion to dismiss the
claims against it under Section 10(b) of the Securities Exchange Act of 1934
and denied its motion to dismiss the claims against it under Section 11 of
the Securities Act of 1933.
By action of a special committee of disinterested directors (who were
neither defendants in the litigation nor members of the Company's Board of
Directors at the time of the actions challenged in the litigation), the
Company recently decided to accept a settlement proposal presented to all
issuer defendants. In this settlement, plaintiffs will dismiss and release
all claims against the Company and Mr. McAndrews, Mr. Hanauer and Mr.
Littauer, in exchange for a contingent payment by the insurance companies
collectively responsible for insuring the issuers in all of the consolidated
IPO cases, and for the assignment or release of certain potential claims
that the Company may have against the underwriters. The Company will not be
required to make any cash payments in the settlement, unless the pro rata
amount paid by the insurers in the settlement on our behalf exceeds the
amount of the insurance coverage, a circumstance that the Company believes
is not likely to occur.
On July 31, 2003, the Company conditionally approved the proposed partial
settlement. The settlement would provide, among other things, a release of
the Company and of the individual defendants for the conduct alleged to be
wrongful in the consolidated complaint. The Company would agree to
undertake other responsibilities under the settlement, including agreeing to
assign away, not assert, or release certain potential claims the Company may
have against its underwriters. Any direct financial impact of the proposed
settlement is expected to be borne by the Company's insurance carriers.
In June 2004, an agreement of settlement was submitted to the court for
preliminary approval. The court requested that any objections to
preliminary approval of the settlement be submitted by July 14, 2004, and
the underwriter defendants formally objected to the settlement. The
plaintiffs and issuer defendants separately filed replies to the underwriter
defendants' objections to the settlement on August 4, 2004. The court
granted the motion for preliminary approval, and now notice will be given to
all class members of the settlement, a "fairness" hearing will be held and
if the court determines that the settlement is fair to the class members,
the settlement will be approved.
The suit is styled "In re Avenue A, Inc. Initial Public Offering Sec.
Litigation," related to "In re Initial Public Offering Securities
Litigation, Master File No. 21 MC 92 (SAS)," filed in the United States
District Court for the Southern District of New York under Judge Shira A.
Scheindlin. The plaintiff firms in this litigation are:
(i) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(ii) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300,
(iii) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(iv) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(v) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(vi) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
AQUANTIVE INC.: IL Court Dismisses One Claim in Customer Lawsuit
----------------------------------------------------------------
The United States District Court for the Northern District of Illinois,
Eastern Division dismissed one claim against aQuantive, Inc. in the class
action filed against it, captioned "Stephen Sotelo v. DirectRevenue, LLC,
et. al, Case No. 05CH 05883."
The suit, originally filed in the Circuit Court of Cook County, Illinois,
Chancery Division, alleges that DirectRevenue and certain other named
defendants deceptively downloaded harmful spyware to plaintiffs' and
putative class members' computers, and seeks compensatory and injunctive
relief. Plaintiffs asserted two claims against the Company, unjust
enrichment and trespass to chattels, both of which related to allegations
that the Company sent intrusive advertisements. The company filed a motion
to dismiss these claims, which was granted as to the unjust enrichment
claim. Accordingly, the only claim remaining against the Company is trespass
to chattels.
AUDIBLE INC.: NY Court Preliminarily OKs Stock Suit Settlement
--------------------------------------------------------------
The United States District Court for the Southern District of New York
granted preliminary approval to the consolidated securities class action
filed against Audible, Inc., certain of its officers, directors and former
directors and the underwriters of its initial public offering.
Several suits were filed in June 2001 against the Company, related to its
initial public offering ("IPO") in July 1999. Approximately 300 other
issuers and their underwriters have had similar suits filed against them,
all of which are included in a single coordinated proceeding in the Southern
District of New York (the "IPO Litigations").
The complaints allege that the prospectus and the registration statement for
the IPO failed to disclose that the underwriters allegedly solicited and
received "excessive" commissions from investors and that some investors in
the IPO allegedly agreed with the underwriters to buy additional shares in
the aftermarket in order to inflate the price of the Company's stock. An
amended complaint was filed April 19, 2002. The Company and the officers,
directors, and former directors were named in the suits pursuant to Section
11 of the Securities Act of 1933, Section 10(b) of the Exchange Act of 1934,
and other related provisions. The complaints seek unspecified damages,
attorney and expert fees, and other unspecified litigation costs.
On July 1, 2002, the underwriter defendants in the consolidated actions
moved to dismiss all of the IPO Litigations, including the action involving
the Company. On July 15, the Company, along with other non-underwriter
defendants in the coordinated cases, also moved to dismiss the IPO
Litigations. On February 19, 2003, the Court ruled on the motions. The
Court granted the Company's motion to dismiss the claims against it under
Rule 10b-5, due to the insufficiency of the allegations against the Company.
The motions to dismiss the claims under Section 11 of the Securities Act
were denied as to virtually all of the defendants in the consolidated cases,
including the Company. The individual officers, directors and former
director defendants in the IPO Litigation signed a tolling agreement and
were dismissed from the action without prejudice on October 9, 2002.
In June 2003, a proposed settlement of this litigation was structured
between the plaintiffs, the issuer defendants in the consolidated actions,
the issuer officers and directors named as defendants, and the issuers'
insurance companies. The settlement would provide, among other things, a
release of the Company and of the individual defendants for the conduct
alleged to be wrongful in the amended complaint. The Company would agree to
undertake other responsibilities under the partial settlement, including
agreeing to assign away, not assert, or release certain potential claims the
Company may have against its underwriters. Any direct financial impact of
the proposed settlement is expected to be borne by the Company's insurance
carriers.
In June 2004, an agreement of settlement was submitted to the Court for
preliminary approval. The court requested that any objections to
preliminary approval of the settlement be submitted by July 14, 2004, and
the underwriter defendants formally objected to the settlement. The
plaintiffs and issuer defendants separately filed replies to the underwriter
defendants' objections to the settlement on August 4, 2004.
The court granted preliminary approval on February 15, 2005, subject to
certain modifications. On August 31, 2005, the court issued a preliminary
order further approving the modifications to the settlement and certifying
the settlement cases. The court also appointed the Notice Administrator for
the settlement and ordered that notice of the settlement be distributed to
all settlement class members beginning on November 15, 2005 and completed by
January 15, 2006. The settlement fairness hearing has been set for April 26,
2006. Following the hearing, if the court determines that the settlement is
fair to the class members, the settlement will be approved.
The suit is styled "In Re Audible, Inc. Initial Public Offering Securities
Litigation, Case No. 01 Civ. 5258 (Sas)(Hb)," related " In re Initial Public
Offering Securities Litigation, Master File No. 21 MC 92 (SAS)," filed in
the United States District Court for the Southern District of New York under
Judge Shira A. Scheindlin. The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300,
(3) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
AUDIBLE INC.: Continues To Face Securities Fraud Lawsuits in NJ
---------------------------------------------------------------
Audible, Inc. and two of its executives continue to face several class
actions filed in the United States District Court for the District of New
Jersey. The plaintiffs purport to represent a class consisting of all
persons (other than the Company's officers and directors and their
affiliates) who purchased Company securities between November 2, 2004 and
February 15, 2005.
The plaintiffs allege that the defendants violated Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 thereunder by failing to make
complete and accurate disclosures concerning the Company's future plans and
prospects. The individual defendants are also alleged to be liable under
Section 20(a) of the Exchange Act. All of the defendants are alleged to
have sold stock at inflated prices during the Class Period.
AXONYX INC.: Officers Continue To Face Securities Lawsuits in NY
----------------------------------------------------------------
Certain of Axonyx, Inc.'s officers continue to face several securities class
actions filed in the United States District Court for the Southern District
of New York. The suits name as defendants:
(1) Dr. Marvin M. Hausman, chairman and former chief
executive officer
(2) Dr. Gosse Bruinsma, current president and chief
executive officer and
(3) Mr. S. Colin Neill
Nine suits were initially filed, alleging violations of federal securities
laws, one of which has been voluntarily dismissed. Eight of those lawsuits
remain pending in the U.S. District Court for the Southern District of New
York and assert claims under Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 thereunder on behalf of a class of
purchasers of the Company's common stock during the period from June 26,
2003, through and including February 4, 2005. The complaints allege
generally that the defendants knowingly or recklessly made false or
misleading statements during the Class Period regarding the prospects of a
trial regarding the effectiveness of Phenserine in treating mild to moderate
Alzheimer's disease, which had the effect of, among other things,
artificially inflating the price of Company shares. The complaints seek
unspecified damages.
BEAR STEARNS: NY Judge Dismisses Workers' Suit Over NFC Closure
---------------------------------------------------------------
A New York judge ruled against employees' attempts to get money out of a
major National Finance Corporation (NFC) creditor that was keeping the firm
afloat by lending it money, The Times Union reports.
Court records show that on December 21, 1999, the private mortgage lending
firm suddenly closed, leaving 350 local employees shocked and out of work.
Former NFC Employees are claiming that the lender, Bear Stearns & Co. Inc.
of New York City, ran the company at the end of its life and is therefore
liable for not giving enough warning about the impending job losses.
Despite the dismissal of the suit, employees are not giving up. Lawyers who
filed the class action suit against Bear Stearns in 2002 filed a notice of
appeal a few weeks back. Michael Assaf of the Albany law firm O'Connell and
Aronowitz told The Times Union, "We felt the interpretation by the judge is
incorrect. We felt the facts were open to a number of interpretations."
The lawsuit, filed in U.S. District Court, accused Bear Stearns of violating
a federal labor law known as Worker Adjustment and Retraining Notification
or WARN. Under the law, employers of more than 100 people are required to
give workers at least 60 days' notice before a closure.
The suit, which sought unspecified financial penalties, accused Bear Stearns
of taking an active role in running the company in exchange for lending the
firm money. In the lawsuit, plaintiffs alleges that Bear Stearns demanded to
hand-pick a new NFC management team and forced the relatives of the
company's owner to resign at a time when NFC was on the edge of financial
ruin.
Mr. Assaf told The Times Union of Bear Stearns, "They had the right to do
what they wanted to do. But they didn't just fund money in and direct how it
should be used. They did far more than that."
However, in his October 17 decision, Judge Frederick Scullin, Jr. disagreed.
In the 26-page decision, he wrote, "The record contains no indication that
defendants exercised day-to-day control over NFC's operation ... or decided
that NFC should close its doors." In addition, Judge Scullin also wrote
that, if he had ruled in the plaintiffs' favor, the decision would
discourage other creditors from helping to keep debtors afloat. "The
consequences," according to him, "would be an increase in swift foreclosures
and, consequently, an increase in employment terminations."
Bear Stearns was defended in the case by lawyer Alan Jay Goldberg of the
Albany firm Whiteman Osterman & Hanna, LLP. He told The Times Union, "We
obviously believe the court got it right."
Aside from disagreeing with plaintiffs' arguments, the judge also demanded
Mr. Assaf's firm pay Mr. Goldberg's firm $50,000 in sanctions owing to the
late filing of documents.
National Finance sold loans nationwide, often via telemarketing, to people
with spotty credit records. David B. Silipigno, then 19, started it more
than 15 years ago in the Clifton Park home of his parents. Over the years,
the company grew to occupy a 40,000-square-foot building in Halfmoon.
In 1999, the company lost more than $10 million, according to reports, much
of it from a plan to go public that was later reversed due to poor stock
market conditions. At the time of closure, the company employed around 350
workers locally and 520 nationally.
The sudden closure hurt more than NFC's employees. In 1999, the company was
planning to move into an office building in Arbor Hill owned by the Urban
League. When the company fell apart, the Urban League of Northeastern New
York lost a $2 million loan it had made to the NFC, and was also stuck
without a tenant for a multimillion-dollar building it had paid for. The
organization never recovered, and dissolved in 2001.
In 2003, the NFC founder and another company official pleaded guilty to
federal felonies stemming from charges they steered $5.6 million from
institutional investors into the company's own accounts. Mr. Silipigno, who
could have faced up to 10 years in prison and a $500,000 fine, was released
on probation.
The suit is styled, "Coppola, et al v. Bear Stearns & Co., et al, Case No.
1:02-cv-01581-FJS-RFT," filed in the United States District Court for
Northern District of New York, under Judge F. J. Scullin, Jr., with referral
to Judge Randolph F. Treece. Representing the Plaintiff/s is April M. Wilson
of O'Connell, Aronowitz Law Firm - Albany Office, 54 State St., 9th Floor,
Albany, NY 12207-2501, Phone: 518-462-5601, Fax: 518-462-2607, E-mail:
awilson@oalaw.com; and Margaret Mary Cangilos-Ruiz and Alan Jay Goldberg of
Whiteman, Osterman Law Firm - Albany Office, One Commerce Plaza, Suite 1900,
Albany, NY 12260, Phone: 518-487-7600, Fax: 518-487-7777, E-mail:
MCR@woh.com and agoldberg@woh.com.
BEDFORD LABORATORIES: Recalls Drugs For Ethylene Glycol Content
---------------------------------------------------------------
Bedford Laboratories, a division of Ben Venue Laboratories, Inc., Bedford,
Ohio, announced that it is voluntarily recalling one lot of Methotrexate for
Injection (preservative free), USP 1 gram per vial (NDC 55390-143-01), Lot#
859142, exp 09/07.
Bedford Laboratories was informed by the manufacturer of the Methotrexate
USP active drug substance ("ADS") that the ADS used to manufacture Lot #
859142, contained low levels of ethylene glycol. Human use of preservative
free Methotrexate formulations for intrathecal administration containing
ethylene glycol is not permissible. Consumers that have received this
product and have questions should contact their physicians.
Bedford Laboratories is working with the U.S. FDA on this recall. No serious
health or safety reports have been received that are attributed to this
situation.
The prescription product was distributed throughout the United States in
October and November 2005 to wholesalers and distributors, who further
distribute the product to hospitals. Customers that have any vials of this
one lot of Methotrexate for Injection have been instructed to discontinue
distribution and use of this lot immediately and contact Bedford
Laboratories Customer Service Department (1-800-562-4797) for a returned
goods authorization. Consumers that have questions regarding this recall
should also contact the Bedford Customer Service Department at
1-800-562-4797, between the hours of 8 a.m - 5 p.m (EST).
Bedford Laboratories supplies the US and International markets with
multisource and specialty injectable products. Headquartered in Bedford, OH,
Bedford Laboratories is a division of Ben Venue Laboratories, Inc., a
subsidiary of Boehringer Ingelheim Corporation, based in Ridgefield, CT, and
a member of the Boehringer Ingelheim group of companies.
CANADA: Settlement Ends B.C. Lawsuit Over Faulty Lab Equipment
--------------------------------------------------------------
A Cranbrook woman along with 46 other people are now eligible for
compensation from the manufacturer of a faulty device meant to test for
sexually transmitted disease after the British Columbia Supreme Court
approved a settlement agreement in a class action lawsuit.
Two B.C. health facilities were using the BD Probe Tec ET Instrument, which
was found to provide false positive and false negative results due to
incorrect assembly. Becton Dickinson and Co. found out about the problem
after doing diagnostic tests on the machine, which tests for chlamydia and
gonorrhea. It promptly notified the Interior Health Authority of the
problem, which then notified those who had had the tests that the results
were unreliable.
"[Danielle Cordozo of Cranbrook] got a letter from the health authorities
saying that she received an unreliable result," according to James Hanson,
counsel for the plaintiff, who explained why she launched the lawsuit. Mr.
Hanson told The Vancouver Sun in a recent interview, "The Company notified
the Interior Health Authority who put out the notification."
The device was in use at the Kimberley Regional and District Hospital from
November 2000 to April 2002 and was moved to the East Kootenay Regional
Health Center in Cranbrook, where it was located from May 2002 to July 23,
2002. It was determined that the device produced faulty results at both
locations.
Scott Maidment, counsel for the defendant told The Vancouver Sun, "There was
only one machine in service anywhere in world that was found to have this
problem and that was the machine in use in the East Kootenays." He adds, "It
has been corrected."
Justice J. Miriam Gropper decided the defendant would pay monetary
compensation to eligible class action members who prove that they received
faulty test results or had to have retesting because of the inconclusive
results. Justice Gropper said she is satisfied that the agreement settlement
"is fair and reasonable" and noted it is supported and recommended by
counsel for both parties.
Mr. Hanson told The Vancouver Sun, "We think that the settlement was a fair
balancing of the risks for the different categories of class members." Under
the settlement, plaintiffs will receive in the range of $350 to $575,
depending on how they were affected. The settlement also provided for a
$75,000 payment to charity. Anyone not happy with the proposed settlement
can opt out and pursue an individual claim.
Mr. Maidment told The Vancouver Sun that the Company did its best to deal
with the problem. He adds, "We are pleased that the parties were able to
reach an agreement and that the court approved the settlement."
CENDANT PRIDES: Lawsuit Settlement Hearing Set January 27, 2006
---------------------------------------------------------------
The United States District Court for the District of New Jersey will hold a
fairness hearing for the proposed settlement in the matter, Cendant PRIDES
Litigation II. The case was filed on behalf of all persons and entities, who
purchased Cendant Income PRIDES of Cendant Growth PRIDES during the period
April 16, 1998 through August 28, 1998, and who were injured thereby.
The hearing will be held before Hon. William H. Walls, in Courtroom 4D of
the Martin Luther King, Jr. Federal Building & U.S. Courthouse, 50 Walnut
Street, Newark, NJ, at 10:00 a.m., on January 27, 2006 to determine whether
the proposed Settlement of the above-captioned class action should be
approved by the District Court as fair, reasonable, and adequate, and to
consider the application of Lead Counsel for attorneys' fees and
reimbursement of expenses.
For more details, contact Cendant PRIDES Litigation II c/o Valley Forge
Administrative Services, One Aldwyn Center -- P.O. Box 220, Villanova, PA
19085-0220, Phone: (877) 965-3300 or (610) 520-0866, Fax: (610) 520-0854;
and Roger W. Kirby, Esq. and Randall K. Berger, Esq. of Kirby McInerney &
Squire, LLP, 830 Third Ave., New York, NY 10022, Phone: (212) 371-6600.
CHARTONE: IL Court Reaffirms Decision in Medical Records Case
-------------------------------------------------------------
Former Madison County Circuit Judge Philip Kardis' decision to dismiss a
class action complaint in 2003 was affirmed by the Illinois Appellate Court
on December 7, 2005, The Madison County Record reports.
Lorice Harris, Lamanda Millman and Jack Carson filed the suit on August 19,
2002 against Chartone f/k/a HCC Health information and Smart Corporation
claiming that they were charging excessive fees for copying medical records.
Court documents show that the plaintiffs received invoices, which contained
charges for "clerical fees," a charge per page, and a charge for a shipping
fee, from the defendants, which contained a breakdown of the charges. The
invoices, according to documents, contained a charge for a "basic fee," a
charge for a "retrieval fee," a charge per page, a shipping and handling
charge and a sales tax charge.
The defendants filed motions to dismiss citing the voluntary-payment
doctrine as an affirmative defense to all the counts of the complaint.
Defendants argued that because the plaintiffs' complaint alleged that they
had received and paid the invoices detailing the charges for copies, there
was no question of fact on the face of the pleadings regarding the
applicability of the voluntary-payment doctrine and that the complaint
should be dismissed.
Judge Kardis agreed with the argument and dismissed the case, denying the
plaintiffs' leave to amend their complaint to allege a common law basis for
requiring hospitals to assess only reasonable charges for copying patient
records.
In denying the plaintiffs' motion to reverse Judge Kardis, Judge Stephen
Spomer wrote in the opinion for the court stating, "We find the plaintiffs'
arguments unpersuasive." He continues by writing, "The court found that the
facts were not obscured or inaccessible but, rather, that the plaintiff's
lack of knowledge could be attributed to its lack of investigation into the
defendant's claim of liability and the basis upon which the defendant was
seeking the tax."
Judge Spomer also writes, "We conclude that the plaintiffs had enough
information to determine whether there was a basis to protest or at least to
investigate the exact factual basis for the charges." He continues, "The
plaintiffs or their attorneys paid the invoices voluntarily, knowing the
purported basis for the charges. Furthermore, there is no allegation in the
plaintiffs' complaint setting forth any facts that were not known to them at
the time of payment and that they later discovered. Therefore, the
plaintiffs cannot establish a mistake of fact or fraud under the allegations
of their complaint." Judges Stephen McGlynn and Terrance Hopkins concurred.
Rex Carr and Marty Perron represented the plaintiffs. Bryan Cave Law Firm in
St. Louis represented the defendants.
DELPHI CORPORATION: Seeks Consolidation of Investor, ERISA Suits
----------------------------------------------------------------
Delphi Corporation sought the consolidation of all federal securities and
Employee Retirement Income Security Act of1974 (ERISA) class actions in the
United States District Court for the Southern District of New York.
Several suits were initially filed against the Company, several of its
subsidiaries, certain current and former directors and officers, General
Motors Investment Management Corporation (the named fiduciary for investment
purposes and investment manager to the Company's employee benefit plans),
and several of the Company's or its subsidiaries' current and former
employees in various courts as a result of its announced intention to
restate its financial statements.
These lawsuits fall into three categories. One group has been brought under
the Employee Retirement Income Security Act of 1974, as amended (ERISA),
purportedly on behalf of participants in certain of the Company's and its
subsidiaries' defined contribution employee benefit pension plans who
invested in the Delphi Common Stock Fund. Plaintiffs allege that the plans
suffered losses due to the defendants' breaches of fiduciary duties under
ERISA. To date, the Company has been served in thirteen such lawsuits and is
aware of an additional two that are pending. On October 21, 2005, the ERISA
Actions were consolidated before one judge in the United States District
Court for the Eastern District of Michigan.
The second group of purported class action lawsuits variously alleges that
the Company and certain of its current and former directors and officers
made materially false and misleading statements in violation of federal
securities laws. To date, the Company has been served in three such pending
lawsuits and is aware of five additional lawsuits. The lawsuits were
initially filed in the United States District Court for the Southern
District of New York and the United States District Court for the Southern
District of Florida. On September 30, 2005, a consolidated amended
securities class action complaint was filed in the United States District
Court for the Southern District of New York ("Amended Securities Action").
The Amended Securities Action names several new defendants, including Delphi
Trust II, certain former directors, and underwriters and other third
parties, and includes securities fraud claims regarding additional offerings
of Delphi securities.
The third group of lawsuits pertains to three shareholder derivative cases
and a demand. To date, certain current and former directors and officers
have been named in three such lawsuits. One is pending in Oakland County
Circuit Court in Pontiac, Michigan, a second is pending in the United States
District Court for the Southern District of New York, and a third is pending
in the United States District Court for the Eastern District of Michigan.
In addition, the Company has received a demand letter from a shareholder
requesting that the Company consider bringing a derivative action against ce
rtain current and former officers. The derivative lawsuits and the demand
that the Company consider further derivative action are premised on
allegations that certain current and former officers made materially false
and misleading statements in violation of federal securities laws. The
Company has appointed a special committee of the Board of Directors to
consider the demand.
On August 19, 2005, the Company and the individual defendants named in the
various related federal actions as of that date filed a motion to transfer
all such actions to the United States District Court for the Southern
District of New York for coordinated or consolidated pretrial proceedings. A
hearing on this transfer motion was held before the Judicial Panel on
Multidistrict Litigation on November 17, 2005.
In the derivative actions filed in Oakland County Circuit Court in which the
Company and other defendants have been served, the Court issued an order of
administrative closing on October 14, 2005 due to the bankruptcy stay. In
the other case in Oakland County Circuit Court, where none of the defendants
have been served, the Court issued an order of administrative closing on
October 27, 2005, due to the bankruptcy stay.
GENTEK INC.: Reaches Settlement For CA Environmental Injury Suit
----------------------------------------------------------------
Gentek, Inc. reached a preliminary settlement for the master complaint filed
against it, due to the release of sulfur dioxide and/or sulfur trioxide from
its Richmond, California facility is set for April 26,2005.
Prior to October 2002, lawyers claiming to represent more than 47,000
persons filed approximately 24 lawsuits in several counties in California
state court (Alameda, Contra Costa, San Francisco superior courts), making
claims against the Company and, in some cases, a third party arising out of
May 1, 2001 and/or November 29, 2001 releases of sulfur dioxide and/or
sulfur trioxide from the Company's Richmond, California sulfuric acid
facility. These claims were addressed in the Plan as California Tort
Claims.
The first case was filed in 2001 and subsequent cases were filed from March
through July 2002. On May 1, 2002, a class action lawsuit arising out of
the same facts was also filed. The lawsuits claim various damages for
alleged injuries, including, without limitation, claims for personal injury,
emotional distress, medical monitoring, nuisance, loss of consortium and
punitive damages. The Company filed a petition for coordination to
consolidate the state court cases before a single judge. The petition for
coordination has now been granted and follow-on petitions to add additional
cases to the coordinated proceedings have been granted. The state court
cases were stayed as a result of the Filing.
Approximately 73,000 proofs of claim were submitted in the bankruptcy
proceedings on behalf of the Richmond claimants, seeking damages for the May
1, 2001 and/or November 29, 2001 releases. A preliminary review of the
claimant list indicated that the claimants included most of the plaintiffs
in the state court cases, plus several thousand duplicates and some
additional claimants. In addition, one class proof of claim was submitted. A
motion for class certification was filed but the motion was later withdrawn
subject to being re-filed in state court. The Company filed a motion to lift
the automatic stay and discharge injunction to allow liquidation of the
claims to proceed in California State Court. That motion was granted upon
stipulation of the parties, and the action is proceeding in California State
Court.
In June 2004, the plaintiffs filed a Master Complaint that is intended to
supersede the prior pleadings on behalf of individual plaintiffs. The Master
Complaint seeks damages and other remedies arising out of the May 1, 2001
and November 29, 2001 releases based upon causes of action, among others,
for negligence, Business and Professions Code Section 17200, nuisance and
trespass. The Master Complaint also names Latona Associates Inc., Matthew
Friel (GenTek, Inc.'s Chief Financial Officer at the time) and Paul Montrone
(a former director and shareholder of GenTek) as defendants. The class
action complaint was also amended in June 2004 to add these additional
defendants. The Company has answered the complaints. Since that time,
plaintiffs have agreed to dismiss Mr. Friel from the litigation without
prejudice. Pursuant to the provisions of its management agreements with
Latona and other applicable provisions, the Company is also providing a
defense for Latona Associates Inc., Paul Montrone and Matthew Friel in
connection with the master complaint and amended class action complaint.
The state court has entered several case management orders for the first
phase of the cases, including the requirement that plaintiffs complete
questionnaires regarding their claims by October 25, 2004 or their claims
are subject to dismissal upon motion by the Company. The Company recently
filed a motion to dismiss approximately 41,000 of the 73,000 proofs of claim
for failure to submit questionnaires. Hearings on the motion will be held on
March 18, 2005, and April 20, 2005. The parties are in active written and
document discovery. Depositions are expected to commence in the Spring of
2005 and a mediation has been scheduled for April 26, 2005. No trial date
has been set.
In early October 2005, most of the parties, through their counsel, reached
an agreement in principle to settle the case in its entirety subject to
several conditions, including but not limited to the execution of a global
settlement agreement binding on all parties and court approval. In light of
this agreement, the parties further agreed to stay further activity in the
case pending this settlement process and the state court has accommodated
that request, subject to reinstatement of the litigation in the event a
settlement is not consummated.
GOODY'S FAMILY: TN Court Enters Temporary Injunction For Merger
---------------------------------------------------------------
Goody's Family Clothing, Inc. (Nasdaq: GDYS) reports that the Chancery Court
for Knox County, Tennessee, entered a temporary injunction requiring that
$1,000,000 be withheld from the tender offer proceeds (approximately $0.03
per share) in connection with the announced Agreement and Plan of Merger
between Goody's Family Clothing, Inc. and affiliates of GMM Capital LLC, and
Prentice Capital Management, LP (the "Merger Agreement").
The Merger Agreement provides for a price of $9.60 per share. The $1,000,000
amount is to be withheld pending determination of what amount of fees, if
any, Plaintiffs' counsel is entitled to receive. Prentice/GMM have advised
Goody's that they are likely to exercise their right to extend the
expiration of the tender offer for 10 business days. Any extension of the
tender offer will be made pursuant to an announcement and filing with the
Securities and Exchange Commission by Prentice/GMM and this release does not
constitute such an extension.
The temporary injunction was entered in connection with Plaintiffs' fourth
class action lawsuit, which was filed on November 10, 2005 (the "Fee
Complaint") in the consolidated action naming the Company, its directors,
certain of its officers, GMM Capital LLC, Prentice Capital Management, LP,
and Acquisition Corporation as defendants.
The Fee Complaint alleges that the increase in tender offer price of $8.00
per share in the merger agreement previously entered into with affiliates of
Sun Capital Partners, IV to the $9.60 per share in the Merger Agreement with
affiliates of Prentice/GMM was caused by the Plaintiffs' lawsuits and
related actions, and that counsel for the putative class are entitled to an
award of attorneys' fees as a percentage of the total increase in value of
the transaction. The Fee Complaint seeks, among other things, a declaration
that the matter is properly maintainable as a class action, and an
injunction prohibiting consummation of the merger until "an appropriate
amount of the merger proceeds" is set aside for a future award of attorneys'
fees. Plaintiffs' counsel also sought by motion a temporary restraining
order to enjoin the distribution of $10,595,200 of the proceeds of the
tender offer so that funds remain available to be used to pay an award of
attorneys' fees.
At the proceedings, the Chancery Court granted Plaintiffs a temporary
injunction requiring that $1,000,000 be withheld of the tender offer
proceeds and indicated that a further hearing would be scheduled to
determine whether Plaintiffs' counsel are entitled to receive any of such
withheld amount. In determining said amount, the Court rejected Plaintiffs'
contention that fees should be awarded as a percentage of tender offer
proceeds and stated that any award would be on the basis of quantum meruit,
or "as much as deserved," rather than as a percentage of the tender offer
proceeds. In the event that an amount less than $1,000,000 is awarded to
Plaintiffs' counsel, an additional distribution to shareholders could be
made following further proceedings. The Court reserved decision on whether
the shareholder defendants (certain officers and directors of the Company,
including Robert M. Goodfriend) will be excluded from contribution to any
fee award as a matter of law because they have been separately represented
in the action.
Goody's, headquartered in Knoxville, Tennessee, is a retailer of moderately
priced family apparel, and with the temporary closure of one store due to
hurricane damage, currently operates 381 stores in the 21 states of Alabama,
Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky,
Louisiana, Maryland, Mississippi, Missouri, North Carolina, Ohio, Oklahoma,
South Carolina, Tennessee, Texas, Virginia and West Virginia.
For more details, contact Edward R. Carlin, Chief Financial Officer of
Goody's Family Clothing, Inc., Phone: +1-865-966-2000.
INDIAN TRUST: Plaintiffs Willing to Settle Fund Case For $27.5B
---------------------------------------------------------------
House lawmakers met recently to discuss settling the nine-year-old,
multi-billion-dollar Indian Trust lawsuit, which could be the largest class
action suit ever against the federal government, The Cox News Service
reports.
The case involves 500,000 Native Americans who are asking the Interior
Department to account for the billions of dollars in their ancestors' land
and natural resource assets the federal government has held in trust since
1887.
The issue of how to determine what is owed the Indians has gone back and
forth from U.S. District Court Judge Royce Lamberth to the appeals court
repeatedly during the almost 10 years since Blackfeet Indian Elouise Cobell
filed the lawsuit. Filed in 1996, the case styled, Cobell v. Norton, became
the longest and largest class action suit brought against the government,
involves royalties for farming, grazing, mining, logging and other economic
activities on tribal lands. The suit dates back to the 1880s, when the
government, trying to break up reservations, "allotted" some Indian lands,
giving 40 to 160 acres to some individual Native Americans. Back then the
government leased the lands for oil, gas, timber, grazing and coal, and
collected the fees to put into trust funds for Indians and their survivors,
an earlier Class Action Reporter story (November 16, 2005) reports.
California Republican Rep. Richard Pombo, chairman of the House Committee on
Resources and sponsor of the settlement bill, said that he hoped Congress
could finally settle this case, which has taken on "legendary proportions in
its acrimony."
Ms. Cobell, a member of the Blackfeet tribe of Montana and lead plaintiff in
the case, told the House committee that even though the case could yield her
side more than $176 billion, she was willing to have it settled for $27.5
billion. According to her, because of the Interior Department's poor record
keeping over the past 118 years, the government has no idea how much of the
trust fund it has paid out. Ms. Cobell also said that the "discounted" $27.5
billion settlement figure assumes 80 percent of the fund has been paid out.
"Large crimes incur large consequences," Ms. Cobell told the committee, but
she said a legislative settlement would be in the best interest of everyone
involved: for the taxpayers who have footed the government's $100 million
legal and accounting fees to date and the Native Americans who hope to be
reimbursed during their lifetimes. Ms. Cobell also said that she hoped the
House bill would put and end to the Interior Department's "foot-dragging" in
the case. There have been previous attempts by Congress to settle the case
in both 2000 and 2002, but neither yielded any result.
James Cason, associate deputy director of the Interior Department, told The
Cox News Service that his agency is looking forward to overcoming the heated
rhetoric surrounding the Indian Trust and "seeking closure" in the case.
The only lawmaker uneasy about the settlement bill was Rep. John Duncan,
R-Tennessee, who said he was concerned with the "blanks" where dollar
amounts should be. Rep. Duncan said "real strict limits" need to be placed
on how much of the settlement would go to the lawyers involved.
Over the summer, Senators John McCain, R-Arizona, and Byron Dorgan, D-North
Dakota, leaders of the Senate Committee on Indian Affairs, co-authored the
latest bill to settle the case. The recent committee hearing considered the
House version of the bill.
The suit is styled "Elouise Pepion Cobell, et al., on her own behalf and on
behalf of all those similarly situated v. GALE NORTON, Secretary of the
Interior, et al., case no. 96-1285 (RCL)," filed in the United States
District Court for the District of Columbia, under Judge Royce C. Lamberth.
Representing the defendants are Robert E. Kirschman, Jr. and Sandra Peavler
Spooner of the U.S. DEPARTMENT OF JUSTICE, 1100 L Street, NW Suite 10008,
Washington, DC 20005, Phone: (202) 616-0328, E-mail:
robert.kirschman@usdoj.gov or sandra.spooner@usdoj.gov. Representing the
plaintiffs are:
(1) Mark Kester Brown, 607 14th Street, NW Washington, DC
20005-2000, Phone: (775) 542-4938, Fax: 202-318-2372,
E-mail: mkesterbrown@attglobal.net
(2) Dennis M. Gingold, 607 14th Street, NW 9th Floor,
Washington, DC 20005, Phone: (202) 824-1448, Fax: 202-
318-2372, E-mail: dennismgingold@aol.com
(3) Richard A. Guest and Keith M. Harper, NATIVE AMERICAN
RIGHTS FUND, 1712 N Street, NW Washington, DC 20036-
2976, Phone: (202) 785-4166, Fax: 202-822-0068, E-mail:
richardg@narf.org or harper@narf.org
(4) Elliott H. Levitas, KILPATRICK STOCKTON, LLP, 607 14th
Street, NW Suite 900, Washington, DC 20005 Phone: (202)
508-5800, Fax: 202-508-5858, E-mail:
elevitas@kilpatrickstockton.com
IVILLAGE INC.: Final Fairness Hearing Set April 24,2006 in NY
-------------------------------------------------------------
Final fairness hearing for the settlement of the consolidated securities
class action filed against iVillage, Inc., several of its present and former
executives and its underwriters in connection with its March 1999 initial
public offering is set for April 24,2006 in United States District Court for
the Southern District of New York.
The complaint generally asserts claims under the Securities Act, the
Exchange Act and rules and regulations of the SEC. The complaint seeks class
action certification, unspecified damages in an amount to be determined at
trial, and costs associated with the litigation, including attorneys' fees.
In February 2003, the defendants' motion to dismiss certain of the
plaintiffs' claims was granted in part, but, for the most part, denied. In
June 2003, a proposed settlement of this litigation was structured between
the plaintiffs, the issuer defendants, the issuer officers and directors
named as defendants, and the issuers' insurance companies. The proposed
settlement generally provides that the issuer defendants and related
individual defendants will be released from the litigation without any
liability other than certain expenses incurred to date in connection with
the litigation, the issuer defendants' insurers will guarantee $1.0 billion
in recoveries by plaintiff class members, the issuer defendants will assign
certain claims against the underwriter defendants to the plaintiff class
members, and the issuer defendants will have the opportunity to recover
certain litigation-related expenses if the plaintiffs recover more than $5.0
billion from the underwriter defendants. The boards of directors of the
Company approved the proposed settlement in July 2003.
On June 25, 2004, the plaintiffs filed a motion for preliminary approval of
the settlement with the court, which was accompanied by a brief filed by the
issuer defendants in support of the plaintiffs' motion. The court requested
that any objections to preliminary approval of the settlement be submitted
by July 14, 2004, and certain underwriter defendants formally objected to
the settlement. The plaintiffs and issuer defendants separately filed
replies to the underwriter defendants' objections to the settlement on
August 4, 2004. On February 15, 2005, the court issued an opinion and order
granting preliminary approval to the settlement and ordering the plaintiffs
and issuer defendants to submit to the court a revised settlement
stipulation consistent with the court's order. Pursuant to the court's
instruction, the parties to the settlement agreement submitted the revised
settlement stipulation on May 2, 2005. On August 31, 2005, the Court
granted preliminary approval to the amended settlement stipulation. As part
of its August 31, 2005 preliminary order, the court set a deadline of March
24, 2006 for any party to file an objection to the settlement and scheduled
a fairness hearing for April 24, 2006.
The suit is styled "In re iVillage, Inc. Initial Public Offering Sec.
Litigation," related to "In re Initial Public Offering Securities
Litigation, Master File No. 21 MC 92 (SAS)," filed in the United States
District Court for the Southern District of New York under Judge Shira A.
Scheindlin. The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300,
(3) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
LEHIGH VALLEY: Seeks Dismissal of PA Students' Suit Over Loans
--------------------------------------------------------------
The class action lawsuit alleging Lehigh Valley College (LVC) in
Pennsylvania misled students about high-interest loans is based on a few,
flimsy facts and should be thrown out of court, the school's attorneys argue
in a legal filing, The Morning Call reports.
The legal filing further states, "The allegations . are so vague and
non-specific that they do not permit LVC to prepare a defense." A judge will
determine next year whether the suit qualifies for class status that is,
whether one large class action suit is preferable to individual suits filed
by affected people.
Palmer Township law firm Cohen & Feeley, in collaboration with a Lansdale
firm filed the suit in Lehigh County Court back in October. It alleges that
LVC broke Pennsylvania's consumer protection law and seeks triple damages on
behalf of two students in particular "and all others similarly situated."
Filed in the Court of Common Pleas of Lehigh County, Pennsylvania and styled
"McCarten et. al. v. Allentown Business School, Ltd. t/a Lehigh Valley
College," the suit was filed on behalf of all former students of Allentown,
now known as Lehigh Valley College, who received allegedly "high interest
private loans" to fund their tuition requirements. The complaint, filed on
September 28, 2005, alleges that LVC violated Pennsylvania's Unfair Trade
Practices and Consumer Protection Law and engaged in intentional
misrepresentation, negligent misrepresentation, and negligence by allegedly
rushing students through a loan application process, through which such
students applied for and accepted "private, non-federal, non-state loans" at
times when such students were allegedly eligible for low interest federal or
state guaranteed education loans. The plaintiffs, on behalf of the putative
class, seek compensatory and punitive damages in an unspecified amount, an
earlier Class Action Reporter story (November 7, 2005) reports.
The two students named in the suit are Lisa Baran McCarten and I-iesha Leon,
both of Bethlehem. According to the suit, Ms. Leon was 19 in late 2002 when
an LVC recruiter persuaded her, after repeated calls, to enroll at the
1,200-student Center Valley school, which offers technical training and
18-month associate degrees in subjects ranging from massage therapy to
computer networking. She said it wasn't until after graduation that she
learned of the magnitude of her student loan debt. She was on track to pay
$92,910.47 - seven student loans totaling $37,514, plus $55,396.47 in
interest. Some of the loans had an interest rate of more than 15 percent, a
rate in line with credit cards.
Ms. Leon and Ms. McCarten claim that LVC led them to believe they were
getting low-interest government loans when, in fact, they were getting
high-interest private loans. The suit alleges that actual interest rates
were not disclosed on the loan application. Both students, according to the
suit, 'were deliberately 'rushed through' the financial aid application
process and were not afforded the necessary time to carefully read and
understand any or all clauses."
LVC's response to the suit, which is its preliminary objections, was filed
late last month by law firm Greenberg Traurig of Philadelphia. It asks the
court to dismiss the suit for a number of reasons, including a variety of
technicalities.
LVC lawyers argue, among other points, that the applicable two-year statute
of limitations has expired and LVC should not be sued because the loans were
between students and third-party lenders, not LVC. As for the allegations of
misrepresentation, they amount to "merely subterfuge," attorneys said in the
response. To begin with, LVC doesn't have to disclose the terms and
conditions of loans to students, the response states. The students,
according to the Company's response, "have pointed to no facts and no law
suggesting that LVC was under duty to make disclosures . about the loan
arrangements between [them] and their third-party lenders."
In addition, LVC's attorneys contend that the suit is lacking critical
details, such as, what was said to the students, who said it and when. In a
recent telephone interview, LVC lawyer Kenneth Lapatine told The Morning
Call, "We believe the case is entirely without merit. You can't assert fraud
if you don't meet those pleading requirements."
Most of the loans in question originated with an Oklahoma bank and were
processed by SLM Corporation, also known as Sallie Mae, of Reston, Virginia.
In their suit, however, Ms. Leon and Ms. McCarten say that LVC had a
fiduciary duty toward them because, as students applying for admission and
for financial aid, they trusted and relied on LVC. The two women were
selected by Cohen & Feeley to be the named plaintiffs in the suit after the
law firm ran newspaper ads asking LVC students to contact it. Seventy-five
people have responded so far, according to Richard Gorski, a lawyer at the
firm. He told The Morning Call, "I just got another call this morning. It
was the same story."
LVC students with private loans from Sallie Mae have an average interest
rate of 13 percent, Sallie Mae Vice President Barry Goulding told lawmakers
at the House consumer affairs hearing in Harrisburg. That's 44 percent
higher than the company's statewide average of 9 percent. Consumer advocates
pointed out that over the course of a loan, even a difference of a few
percentage points could translate into additional debt of thousands of
dollars.
LVC students are charged more because, as a group, they have a worse credit
rating and are at a higher risk of defaulting than typical students in the
state, according to Mr. Goulding. He adds that without such financing, some
students would not be able to attend LVC, which is owned by Career Education
Corporation of Hoffman Estates, Illinois. The state attorney general's
Bureau of Consumer Affairs launched its own investigation into the loan
issue this summer.
LOUISIANA: Judge Orders Extension FEMA Hotel Plan For Evacuees
--------------------------------------------------------------
U.S. District Judge Stanwood Duval ruled that a program, which is putting
tens of thousands of Hurricane Katrina evacuees up in hotels must be
extended until February 7, a month beyond the cutoff date set by the Federal
Emergency Management Agency, The Associated Press reports.
After hearing arguments from both parties, the federal judge essentially
ruled that victims must be given more time in hotels because FEMA cannot
guarantee that all applications for other aid, such as rent assistance or
trailers, will be processed by the agency's January 7 deadline.
The temporary restraining order was part of a class action lawsuit filed in
November by advocates for hurricane victims.
Attorneys behind the lawsuit had argued that sticking to a January deadline
would mean homelessness for thousands of evacuees.
The lawsuit, the first filed against FEMA in relation to its response to
Katrina, says that the agency has violated and continues to violate federal
law by failing to discharge its obligations as the federal agency chartered
to care for victims of natural disasters. In addition to preserving the
hotel program, the suit, which was filed in United States District Court for
the Eastern District of Louisiana, seeks a court order to require FEMA to
make it easier for victims to apply for temporary housing assistance, to
improve the agency's outreach and accessibility and immediately to provide
trailers or other alternatives to replace shelters, tents and other
makeshift arrangements. The suit also asks the court to force FEMA to
establish application guidelines under which victims can obtain continued
financial assistance beyond a three-month period and receive adjustments
based on family size and other factors. The plaintiffs also request that the
court order FEMA to eliminate certain rules regarding the use of funds
victims have already received and to cease a policy whereby FEMA makes room
for its housing by evicting and destroying the homes of residents of trailer
parks, an earlier Class Action Reporter story (November 14, 2005) reports.
The legal action was brought by 14 named plaintiffs on their own behalf and
on the behalf of a class of people who lived in Louisiana, Mississippi or
Alabama on August 29, 2005 in areas that were subsequently declared Federal
Disaster Areas, were displaced by Hurricane Katrina and have or will apply
for disaster housing assistance under the Stafford Act, an earlier Class
Action Reporter story (November 14, 2005) reports.
Originally, FEMA set a December 1 deadline for ending the hotel program.
However, stung by critics who said that would result in the eviction of
thousands of poor, extended the deadline to December 15 for evacuees
nationwide. In addition, FEMA also said 10 states - Alabama, Arkansas,
California, Florida, Georgia, Louisiana, Mississippi, Nevada, Tennessee and
Texas - could apply for extensions lasting until January 7, 2006, an earlier
Class Action Reporter story (November 30, 2005) reports.
FEMA continues to pick up the tab for about 41,000 hotel rooms in 47 states
and the District of Columbia at an estimated cost so far of about $350
million. In addition, the agency provided rental assistance to more than
500,000 families who lost their homes to Hurricanes Katrina and Rita,
spokeswoman Nicol Andrews told The Associated Press.
With regards to the recent ruling, Ms. Andrews told the Associated Press
that the agency "will review the judge's decision and continue to reach out
to help those evacuated get the help they need as they get back on their
feet." In addition, a spokesman for the U.S. Justice Department, which
defended FEMA in the lawsuit, told The Associated Press that no decision was
made on whether to appeal as of the moment.
Previously, in their response to the lawsuit, government attorneys contend
that it should be dismissed under sovereign immunity laws that protect
government agencies from liability in the performance of their duties. They
argued that some of the claims in the lawsuit are moot noting the single
household rule and the rules governing use of the initial rent aid checks
were waived after Hurricane Katrina, an earlier Class Action Reporter story
(December 12, 2005) reports.
In his ruling, Judge Duval stated that those who have not yet received FEMA
aid to rent an apartment or move into a trailer can stay in their
government-paid hotel rooms until two weeks after their application is
approved or denied. However, de pointed out that everyone would have to be
out by February 7 at the latest, unless FEMA decides to extend the deadline
again.
Judge Duval noted in his ruling that even those who have FEMA rent money in
hand are finding it difficult to find housing in some areas. He wrote, "FEMA
cannot assure the court that it will process all or most of the applications
of the persons living in hotels and-or motels by January 7, 2006. The court
is convinced that many persons in the putative class will be irreparably
harmed by FEMA's admitted inability to process the pending applications."
Attorneys for evacuees told The Associated Press that victims often got
conflicting information about when they would have to leave. At a recent
hearing, one hotel occupant, Lenora Brantley, said she received a letter
dated December 2, telling her she could stay in her hotel room until January
7. Later she got a December 5-dated letter telling her she would have to
leave by December 15.
Judge Duval also noted in his ruling, "It is unimaginable what anxiety and
misery these erratic and bizarre vacillations by FEMA have caused these
victims, all of whom, for at least one point in time, had the very real fear
of being without shelter for Christmas."
Though the ruling only dealt with Hurricane Katrina victims who applied for
FEMA aid, not victims of Hurricane Rita, Howard Godnick, one of the
attorneys who brought the lawsuit, told The Associated Press that the
decision sets a precedent that Rita victims could use to fight eviction from
a hotel, if necessary.
Despite Judge Duval's favorable ruling, the plaintiffs did not get
everything they sought, since the federal judge refused to order that FEMA
act immediately on more than 84,000 aid applications still listed as
"pending." Judge Duval pointed out that federal law is unclear on when FEMA
must act on such applications.
The suit is styled, "McWaters et al v. Federal Emergency Management Agency
et al., Case No. 2:05-cv-05488-SRD-DEK," filed in the United States District
Court for the Eastern District of Louisiana, under Judge Stanwood R. Duval
Jr. Representing the Plaintiff/s are, John K. Pierre of John K. Pierre,
Attorney at Law, 2900 Westfork Dr., Suite 200, Baton Rouge, LA 70816, Phone:
225-295-5638; and Margaret Ann Pierre of Louisiana Department of Justice,
Litigation Division, 601 Poydras St., Suite 1725, New Orleans, LA 70130,
Phone: (504) 599-1200. Representing the Defendant/s is Michael Sitcov of
U.S. Department of Justice Civil Division, Room 7210, P.O. Box 883,
Washington, DC 20044, Phone: (202) 514-3495.
LOUISIANA: New Orleans Residents File Suit For Inadequate Levees
----------------------------------------------------------------
A proposed class action seeking to represent the interest of all New Orleans
residents affected by Hurricane Katrina's destructive force to the city's
levees was filed in the United States District Court for the Eastern
District of Louisiana, claiming that the Army Corps of Engineers knew that
the levees could not stand up to a "fast moving category three hurricane."
Represented by Joseph M. Bruno and David Scott Scalia of The New Orleans
firm of Bruno & Bruno, the plaintiffs in the suit are, Gary and Laura Greer
and Harold Weiser. The suit, filed on November 17, 2005, was brought on
behalf of all persons of the full age majority and residents of the City of
New Orleans, Orleans Parish, State of Louisiana.
The plaintiffs are also claiming that the federal government's failure to
alert them to the inadequacies of the levees provided a false sense of
security and as a result many homeowners did not purchase flood insurance.
Defendants in the suit are the federal government and the Department of the
Army, Corps of Engineers.
The suit is styled, "Greer et al v. United States of America et al, Case No.
2:05-cv-05709-MVL-JCW," filed in the United States District Court for the
Eastern District of Louisiana, under Judge Mary Ann Vial Lemmon.
Representing the Plaintiff/s are, Joseph M. Bruno and David Scott Scalia of
Bruno & Bruno, 855 Baronne St., New Orleans, LA 70113, Phone: (504)
525-1335, E-mail: jbruno@brunobrunolaw.com and DAVID@brunobrunolaw.com.
LOUISIANA CITIZENS: Faces Suit Over Adjustments of Damage Claims
----------------------------------------------------------------
A lawsuit seeking class action status was initiated in the 24th Judicial
District, Parish of Jefferson, Louisiana against an insurer known as The
Louisiana Citizens Fair Plan.
Filed on November 18, 2005, plaintiffs in the suit are claiming that they
and some 20,000 policyholders failed to receive adjustment or settlement of
their Hurricane Katrina-related property damage claims. In addition, the
policyholders allege that the insurer violated Louisiana statutory time
frames for adjustment and settlement of claims.
The suit's named plaintiffs are Geraldine Oubre and Linda Gentry. The
Louisiana Citizens Fair Plan, the suit's sole defendant is a domestic
insurance company, domiciled in Louisiana, bearing NAIC No. AA1211. It
provides fire and casualty insurance policies to the citizens of Louisiana,
including the two named plaintiffs.
The suit is styled, "Oubre v. Louisiana Citizens Fair Plan,
Case No. 625-567," filed in the 24th Judicial District, Parish of Jefferson,
Louisiana. Representing the Plaintiff/s are, Madro Bandaries, PLC, #25339,
210 Huey P. Long Ave., Gretna, LA 70053, Phone: (504) 361-4287, Fax: (504)
362-1405; and Anna E. Dow, #5040, 10988 N. Harrell's Ferry, Suite 18, P.O.
Box 3456, Baton Rouge, LA 70821, Phone: (225) 272-0707, Fax: (225) 273-3590.
MEDCO HEALTH: Appeals Court Orders Review of $42.5M Settlement
--------------------------------------------------------------
The United States Court of Appeals for the Second Circuit in New York
ordered a federal judge to re-examine a challenge to a $42.5 million
settlement agreement in a class action lawsuit against Medco Health
Solutions, the pharmacy benefits management company, The New York Times
reports.
The ruling by a three-judge panel raised the possibility of upsetting the
settlement, according to plaintiffs' lawyers. The panel essentially ordered
Judge Charles L. Brieant of the United States District Court in White
Plains, New York to re-examine the challenge because he failed to resolve an
issue raised by lawyers who opposed the settlement.
Specifically, the ruling, handed down late last week, ordered Judge Brieant
to review a claim that five plaintiffs did not have legal standing to agree
to the settlement. Citing a constitutional requirement that plaintiffs who
file suits must show they have suffered personal harm, the panel's ruling
said, "Serious questions remain as to whether individual plaintiffs have
demonstrated how Medco's alleged wrongdoings caused any injury to any
individual." The panel added it was ready to consider other objections the
dissenting lawyers raised, after Judge Brieant rules on the issue of
standing.
Linda J. Cahn, a lawyer who contends that the $42.5 million settlement was
too small told The New York Times that the ruling "puts a cloud over the
settlement." Some lawyers argued that Medco pocketed billions of dollars in
rebates and other fees from drug manufacturers that should have gone to
health plans and consumers. Ms. Cahn said it had now become "extremely
likely that the case against Medco would go to trial."
Medco did not admit any liability in agreeing to the settlement. It told The
New York Times that the ruling actually raised technical issues, which could
help it defend itself in 16 lawsuits across the country. If the judge
determines that individuals have no legal standing, about three-fourths of
those cases will very likely evaporate, Jeffrey J. Simek, a Medco spokesman
told The New York Times.
In December 12, 1997, a lawsuit captioned "Gruer v. Merck-Medco Managed
Care, L.L.C.," was filed in the U.S. District Court for the Southern
District of New York. The suit alleges that the Company should be treated as
a "fiduciary" under the provisions of ERISA and that the Company has
breached fiduciary obligations under ERISA in a variety of ways. After the
Gruer case was filed, a number of other cases were filed in the same court
asserting similar claims, an earlier Class Action Reporter story (August 4,
2005) reports.
In December 2002, Merck and the Company agreed to settle the Gruer series of
lawsuits on a class action basis for $42.5 million, and agreed to certain
business practice changes, to avoid the significant cost and distraction of
protracted litigation. The release of claims under the settlement applies to
plans for which the Company has administered a pharmacy benefit at any time
between December 17, 1994 and the date of final approval. However, it does
not involve the release of any potential antitrust claims, an earlier Class
Action Reporter story (August 4, 2005) reports.
The suit is styled, Gruer, et al v. Merck-Medco Managed, et al, Case No.
7:97-cv-09167-CLB," filed in the United States District Court for the
Southern District of New York, under Judge Charles L. Brieant. Representing
the Plaintiff/s are:
(1) Arthur N. Abbey, Mark C. Gardy and Linda J. Cahn of
Abbey Gardy, LLP, 212 East 39th St., New York, NY
10016, Phone: (212) 889-3700, E-mail:
aabbey@abbeygardy.com and mgardy@abbeygardy.com;
(2) Mary E. Alexander and Richard L. Akel of Mary A.
Alexander & Associates, 44 Montgomery St., Suite 1303,
San Francisco, CA 94104, Phone: (415) 433-4440;
(3) Russell M. Herman of Herman, Mathis, Casey, Kitchens &
Gerel, 820 O'Keefe Ave., New Orleans, LA 70113, Phone:
(504) 581-4892;
(4) Stephen J. Herman and David A. McKay of Herman, Mathis,
Casey, Kitchens, & Gerel, 230 Peachtree St., N.W.,
Suite 2260, Atlanta, GA 30303;
(5) Christopher Adam Seeger of Seeger, Weiss, L.L.P., One
William St., New York, NY 10004, Phone: (212) 584-0700;
and
(6) Philippe Z. Selendy of BOIES, SCHILLER & FLEXNER, LLP,
570 Lexington Ave., 16th floor, New York, NY 10022,
Phone: (212) 446-2300.
Representing the Defendant/s are, Bruce B. Kelson of Shearman & Sterling,
555 California St., 20th Floor, San Francisco, CA 94104, Phone: (415)
616-1100; and Kenneth M. Kramer and James P. Tallon of Shearman & Sterling,
L.L.P., 599 Lexington Ave., New York, NY 10022, Phone: (212) 848-4000,
E-mail: jtallon@shearman.com.
MERCK & CO.: Shares Fall, Mixed Reactions in TX Vioxx Mistrial
--------------------------------------------------------------
The mistrial declared in Merck & Co.'s first federal trial over Vioxx drew
mixed reactions from stock analysts, but investors clearly didn't like the
outcome, sending shares down more than 2 percent in heavy trading, The
Associated Press reports.
Analysts told The Associated Press that Merck was widely expected to win the
Houston, Texas, trial because the plaintiff's late husband, Richard Irvin,
53, of St. Augustine, Florida, who suffered his fatal 2001 heart attack
after taking the painkiller for only a month
Evelyn, the widow of Mr. Irvin, who took Vioxx for about a month to relieve
back pain, filed the lawsuit. Her lawyers maintain that Vioxx is the cause
of her husband's heart attack. The case before U.S. District Judge Eldon
Fallon of New Orleans, Louisiana is in Houston, Texas rather than its
original venue of New Orleans because of damage by Hurricane Katrina, an
earlier Class Action Reporter story reports.
In the recent federal trial, the jurors deliberated over three days before
U.S. District Judge Eldon Fallon ruled that they were unable to reach a
verdict. Previously, the presiding judge said that he wanted to wrap the
case up in two weeks.
Independent health-care analyst Hemant Shah of HKS & Co. in Warren, New
Jersey told The Associated Press, "Merck should have won, so in a way this
is a little setback. It's not a loss, but it's not a victory either, which
it should have been." Analyst Catherine Arnold of Credit Suisse First Boston
told The Associated Press that the jury deadlock "isn't very good" for
Merck.
However, Morgan Stanley pharmaceuticals analyst Jami Rubin called the
outcome a bigger setback for the plaintiffs, indicating they didn't prove
their case. Jami Rubin told The Associated Press, "This mistrial sends a
message to the plaintiffs' attorneys that it is going to be very difficult
for plaintiffs to win against Merck" in federal court, which requires a
unanimous verdict, unlike state courts.
Analyst Tony Butler though of Lehman Brothers called the mistrial a "modest
positive" for Merck. He told The Associated Press that if the company can
win cases concerning short-term Vioxx use, that could discourage plaintiffs
with similar cases and reduce pressure on Merck to reach a class action
settlement for such cases.
Whitehouse Station, New Jersey-based company said in a statement that it was
disappointed the jury could not reach a verdict but is prepared for a
retrial.
The Company has been bombarded with lawsuits around the world since it
pulled the $2.5 billion-a-year seller Vioxx from the market in September 30,
2004 after an internal study found it doubled patients' risks of heart
attacks and strokes if taken for 18 months or longer. More than 20 million
people took the drug worldwide before its withdrawal, an earlier Class
Action Reporter story (October 4, 2005) reports.
Vioxx is the trade name for rofecoxib, which is part of the class of drugs
called NSAIDs. It was touted as a pain and inflammation reliever that did
not cause ulcers or gastrointestinal bleeding, a side effect of many such
medications. Merck previously said that it tested Vioxx on nearly 10,000
patients during clinical trials and pulled the drug as soon as the danger of
its prolonged use became clear, an earlier Class Action Reporter story (July
13, 2005) reports.
So far, the score sheet for Merck in its civil drug liability trials
concerning Vioxx reads, "won one, lost one." The firm recently won a legal
victory in the second Vioxx trial involving a man who had taken the drug for
around two months, wherein the jury sided with the company, an earlier Class
Action Reporter story (December 2, 2005) reports.
In its verdict, the New Jersey jury found that Vioxx wasn't the "proximate
cause" of a man's heart attack, and promptly rejected the contention by
plaintiff Frederick Humeston that Merck failed to adequately warn physicians
about the product's potential cardiovascular risks. In addition, jurors also
disagreed with the claim by Mr. Humeston that Merck had engaged in consumer
fraud in marketing Vioxx to doctors, an earlier Class Action Reporter story
(November 7, 2005) reports.
The case that the company lost involves Texas resident Carol Ernst. In that
case a Texas jury awarded damages totaling more than $253 million to Mrs.
Ernst after they found Merck guilty of liability, negligence and malice over
the sale of Vioxx. Mrs. Ernst had sought compensation for the death of her
husband Robert, allegedly of arrhythmia, in 2001. Mr. Ernst, a produce
manager at a Wal-Mart near Fort Worth, who ran marathons and worked as a
personal trainer, took Vioxx for eight months to alleviate pain in his hands
until he died in his sleep. Mrs. Ernst's lawsuit alleges that Merck & Co.
knew of the dangers of using Vioxx years before it recalled the drug. But,
the Company allegedly ignored those concerns in favor of aggressive
marketing for a multibillion-dollar seller, an earlier Class Action Reporter
story (July 27, 2005) reports. Although it was ordered to pay $253 million
the amount was subsequently cut to $26 million because of state capping
rules. The case has now gone to appeal.
Analysts suggested the Vioxx litigation could cost Merck up to $50 billion,
since the company is now facing 6,400 individual lawsuits, plus another 160
class action suits, an earlier Class Action Reporter story (December 2,
2005) reports.
MICHIGAN SUGAR: Residents Complain About Odor, Even After Deal
--------------------------------------------------------------
Several months after the company settled a class action lawsuit over odors,
neighbors of the Michigan Sugar plant say it still stinks, The Bay City
Times reports.
Harold Yaroch, a South End Bay City man who complained to the state
Department of Environmental Quality about "gagging" odors from the company's
Monitor Township plant told The Bay City Times, "It's just about as bad as
it ever was."
The former Monitor Sugar plant, which was bought by Michigan Sugar Company,
agreed in late 2004 to pay $1.75 million to residents who complained about
odors and dust from its plant. It also promised to reduce or eliminate dust
and odors that plaintiffs in the suit say came from the pant.
The settlement grants $3,500 to each of seven named plaintiffs in the case
and $1,500 to everyone who's made a complaint to environmental officials
about the pollution or showed written interest in joining the lawsuit, even
if they live outside the designated boundaries, an earlier Class Action
Reporter story (November 26, 2004) reports.
Bay County Circuit Judge Lawrence M. Bielawski granted class action status
and approved the settlement. The details of the agreement were worked out
while Monitor Sugar's parent company, Illovo Sugar Ltd. of South Africa, was
negotiating to sell the company to its growers, said Dick Leach, director of
community and government affairs for Michigan Sugar, an earlier Class Action
Reporter story (November 26, 2004) reports.
Mr. Yaroch told The Bay City Times that he wasn't involved in the class
action suit. But since August, he and other residents have complained about
odors from the plant. Records show that the DEQ has received more than 60
complaints about "terrible, vile, rancid and nauseating" odors.
The company said in a September letter to the DEQ that the odors were caused
by extenuating circumstances, and the plant has reduced its odor problems in
the past two years. President and Chief Executive Officer Mark Flegenheimer
told The Bay City Times that the odors were caused by problems at wastewater
ponds and were addressed by a contractor months ago.
The DEQ, however, says it's still getting complaints, and the odors, as well
as a failure to submit timely reports and operate an odor-fogging trailer,
put the company in violation of a consent agreement over past odor problems.
The case is in the hands of the DEQ's enforcement division, which may decide
to assess fines.
NORTH CAROLINA: County Sues Online Hotel Booking Firms For Taxes
----------------------------------------------------------------
A class action lawsuit in which Pitt County of North Carolina is the lead
plaintiff alleges that online hotel booking companies are shortchanging
local governments on hotel occupancy taxes, The Associated Press reports.
The director of the Greenville-Pitt County Convention and Visitors Bureau
explains that the county made more than a million dollars from its six
percent hotel occupancy tax. The tax is charged on the rental of every hotel
room, funds the convention center and visitors bureau.
Online booking companies contract with hotels for rooms at discounted rates,
then rent the rooms at higher prices to customers who actually occupy the
rooms. The booking companies pay taxes on the reduced rate they negotiate
and not the higher rate they charge customers.
The lawsuit claims though that online booking agents are improperly
pocketing the difference as income, and it seeks payment of the difference,
interest and penalties. The suit is also seeking a declaratory judgment that
the practice is illegal, deceptive and unlawful. In addition, it also seeks
a ruling on which room rate should be used to determine the tax that is owed
the county.
The Blount Law Firm, a local firm, asked the county if it would like to be
lead plaintiff in the lawsuit, county attorney JoAnne Burgdorff told The
Associated Press. Defendants in the case include Hotels.com, Hotwire, Cheap
Tickets, Expedia, Orbitz and Priceline.com.
If the case is accepted as a class action, it would include all
municipalities in the state that collect a room occupancy tax, though it
would be heard in Pitt County court. Similar lawsuits have been filed
elsewhere across the country.
Ms. Burgdorff told The Associated Press, "It's a tax, and the only legal
person that can keep a tax is the taxing authority, so they are illegally
keeping that amount." She goes on to state, "It's not a huge amount of money
if you're talking about just the hotels in Greenville, but if you are
talking about all of the hotels in the state and you do it in a mass number,
it's a lot of money."
PORTLAND GENERAL: OR Judge Refuses to Dismiss Ratepayers' Suit
--------------------------------------------------------------
Am Oregon judge refused to dismiss a class action lawsuit against Enron
Corporation subsidiary Portland General Electric, The Associated Press
reports.
The suit seeks $7 million that PGE charged ratepayers for taxes that the
complaint alleges were not paid to Multnomah County, the most populous
county in Oregon and home to the largest utility in the state.
Dan Meek, one of the lawyers who filed the suit, told The Associated Press
that Multnomah County Circuit Judge John Wittmayer rejected 11 out of the 12
motions by the Company to have the case dismissed. The remaining motion he
will consider on technical grounds, according to him.
Mr. Meek also told The Associated Press, "The fundamental problem is that
PGE doesn't seem to publicly understand what it calls paying taxes is
actually taking money from ratepayers." He adds, "Paying a bankrupt
corporate parent is not paying taxes."
Despite the ruling, PGE officials continue to insist that the utility has
followed tax laws. PGE spokesman Scott Simms, who noted that the utility has
stopped collecting the county tax, told The Associated Press, "If this does
move on to litigation then we look forward to making our point during that
court proceeding."
The lawsuit is part of a larger dispute over whether PGE overcharged
customers more than $900 million since Enron purchased it in 1997.
Portland city commissioners ordered a hearing in February to help determine
why $672 million that PGE collected from ratepayers to cover income taxes
was never actually paid to taxing authorities. A city report presented to
commissioners last week noted that there were about $245 million in claims
against Enron, which were "transferred to Enron, waived, forgiven or
compromised."
Peggy Fowler, the utility's CEO, insisted that PGE sent the money to Enron
and did not keep any of it. However, city commissioners Randy Leonard and
Erik Sten have said they want a better accounting.
The city of Portland tried to buy PGE from its bankrupt parent after state
utility regulators rejected a $2.35 billion leveraged buyout attempt by a
Texas investment firm last March. Enron interim CEO Stephen Cooper rejected
the city offer though and decided to go ahead with a stock distribution plan
approved last year by a federal bankruptcy judge in New York. The
distribution will go to creditors but the plan is expected to keep the
utility intact with its current management.
The Oregon Public Utility Commission is expected to decide whether to
approve the plan before the end of the year.
Paul Graham, state counsel to the PUC, told The Associated Press that the
class action lawsuit would not affect the decision on the stock distribution
plan.
PRICELINE.COM: CA Court Dismisses Hotel Taxes Consumer Lawsuit
--------------------------------------------------------------
The Superior Court for the County of Los Angeles, California dismissed the
class action filed against priceline.com, inc. and other internet travel
firms, alleging violations of the state's consumer fraud laws, for
misjoinder grounds, but allowed plaintiffs to replead.
On December 30, 2004, the City of Los Angeles filed the suit on behalf of
itself and other allegedly similarly situated cities in California, naming
as defendants the Company and:
(1) Hotels.com, L.P.;
(2) Hotel.com GP, LLC;
(3) Hotwire, Inc.;
(4) Cheaptickets, Inc.;
(5) Cendant Travel Distribution Services Group, Inc.;
(6) Expedia, Inc.;
(7) Internetwork Publishing Corp. (d/b/a Lodging.com);
(8) Lowestfare.com, Inc.;
(9) Maupintour Holding LLC;
(10) Orbitz, Inc.;
(11) Orbitz, LLC;
(12) Site59.com, LLC;
(13) Travelocity.com, Inc.;
(14) Travelocity.com LP;
(15) Travelweb, LLC;
(16) Travelnow.com, Inc.
The suit, styled "City of Los Angeles v. Hotels.com, Inc. et al," alleges,
among other things, that each of these defendants violated the Uniform
Transient Occupancy Tax Ordinance of the City of Los Angeles, and allegedly
similar ordinances of other California cities, with respect to the charges
to and remittance of amounts to cover taxes under such ordinances, and that
such violations also constitute acts of unfair competition under California
Business and Professions Code Section 17200, et seq. The complaint seeks
payment of alleged unpaid taxes owed, relief from conversion, including
punitive damages, and imposition of a constructive trust.
The Company and its wholly owned subsidiaries, Lowestfare.com and Travelweb,
have been served with the complaint. A case management conference was held
on May 19, 2005 at which the Court scheduled a hearing for motions
challenging the Complaint on misjoinder grounds for September 14, 2005 and
ordered limited discovery. On September 26, 2005, the court sustained the
defendants' motion to dismiss on misjoinder grounds, but allowed the City of
Los Angeles the opportunity to replead.
PRICELINE.COM: Remand of CA Fraud Suit To State Court Affirmed
--------------------------------------------------------------
The United States Ninth Circuit Court of Appeals affirmed a lower court
ruling remanding the amended class action against priceline.com, inc. and
other internet travel firms on behalf of similarly situated California
consumers to the California Superior Court in Los Angeles. The suit is
styled "Bush et al. v. Cheaptickets, Inc. et al."
The complaint alleges each of the defendants engaged in acts of unfair
competition in violation of Section 17200 relating to their respective
disclosures and charges to customers to cover taxes under the above
ordinances of City of Los Angeles and other California cities, and service
fees. The complaint seeks restitution under Section 17200, relief for
alleged conversion, including punitive damages, injunctive relief, and
imposition of a constructive trust.
The Company was served with the complaint on February 25,
2005. The defendants removed this action to the United States District
Court for the Central District of California. On May 9, 2005, the District
Court issued an order remanding the action to state court. Defendants
timely appealed to the Ninth
Circuit, which on July 13, 2005 agreed to hear the appeal. On October 6,
2005, the appeals court affirmed the order of the District Court. The case
will therefore proceed in the state court.
On July 1, 2005, Plaintiffs filed an amended complaint, adding claims
pursuant to California's Consumer Legal Remedies Act, Civil Code 1750, et
seq. and claims for breach of contract and the implied duty of good faith
and fair dealing. A case management conference has been scheduled for
December 2, 2005. At that conference it is anticipated that the court will
address the staging and scheduling of motions challenging the amended
complaint and appropriate discovery, if any.
PRICELINE.COM: DE Court Mulls Consumer Fraud Lawsuit Dismissal
--------------------------------------------------------------
The Superior Court of the State of Delaware for New Castle County has yet to
rule on priceline.com, Inc.'s motion to dismiss the amended class action
filed against it by Jeanne Marshall and three other individuals on behalf of
themselves and a putative class of allegedly similarly situated consumers
nationwide against the Company, styled "Marshall, et al. v. priceline.com,
Inc."
The complaint alleges that the Company violated the Delaware Consumer Fraud
Act, Del. Code Ann. Tit. 6, Sections 2511, et seq., relating to its
disclosures and charges to customers to cover taxes under city hotel
occupancy tax ordinances nationwide, and service fees.
The Company was served with the complaint on March 2, 2005 and moved to
dismiss the complaint on April 21, 2005. The Company was also moved to stay
discovery until a determination of its motion to dismiss the complaint and
the Court granted that stay on May 11, 2005. On June 10, 2005, Plaintiffs
filed an amended complaint that asserts claims under the Delaware Consumer
Fraud Act and for beach of contract and the implied duty of good faith and
fair dealing. The amended complaint seeks compensatory damages, punitive
damages, attorneys' fees and other relief. On July 15, 2005, the Company
filed a motion to dismiss the amended complaint on the basis that it fails
to allege sufficient facts to state a cause of action. The motion has been
fully briefed. The Company's motion to dismiss was heard by the Court on
November 4, 2005 and the parties are awaiting a decision.
PRICELINE.COM: Philadelphia Seeks To File Amended Fraud Lawsuit
---------------------------------------------------------------
The City of Philadelphia asked the Court of Common Pleas for Philadelphia
County, Pennsylvania for leave to file an amended class action against
priceline.com, Inc., alleging violations of the hotel tax provisions of the
city's municipal code. The suit also names as defendants:
(1) Hotels.com;
(2) Hotels.com GP, LLC;
(3) Hotwire.com;
(4) Cheaptickets, Inc.;
(5) Cendant Travel Distribution Services Group, Inc.;
(6) Expedia, Inc.;
(7) Internetwork Publishing Corp. (d/b/a Lodging.com);
(8) Lowestfare.com, Inc.;
(9) Maupintour Holding LLC;
(10) Orbitz, Inc.;
(11) Orbitz, LLC;
(12) Site59.com, LLC;
(13) Travelocity.com, Inc.;
(14) Travelocity.com LP;
(15) Travelweb, LLC and
(16) Travelnow.com, Inc.
The suit, styled "City of Philadelphia, Pennsylvania v. Hotels.com, et al.,"
alleges, among other things, that each of these defendants violated the
hotel room rental tax provisions of Section 19-2401, et seq., of the
Philadelphia Municipal Code with respect to the charges to and remittance of
amounts to cover taxes under the Code. The complaint also asserts claims
for conversion, imposition of a constructive trust, and a demand for a legal
accounting.
The complaint seeks payment of alleged unpaid taxes owed, disgorgement and
restitution of all funds allegedly owed to Plaintiff, an accounting,
attorneys' fees, and other relief. The Company has been served with the
suit, but its wholly owned subsidiaries, Lowestfare.com and Travelweb, have
not.
The defendants removed this action to the United States District Court for
the Eastern District of Pennsylvania. On October 11, 2005, the District
Court issued an order remanding the action to state court. On October 19,
2005, the City of Philadelphia moved for leave to file an amended complaint.
PRICELINE.COM: Consumers File Hotel Tax Fraud Suit in IL Court
--------------------------------------------------------------
priceline.com, Inc. faces a class action filed in the Circuit Court,
Twentieth Judicial Circuit, St. Clair County, Illinois, alleging violations
of the state's consumer protection laws.
On October 5, 2005, the City of Fairview Heights filed a putative class
action complaint on behalf of itself and other similarly situated taxing
entities in Illinois, against the Company and:
(1) Orbitz, Inc.;
(2) Orbitz, LLC;
(3) Hotels.com, L.P.;
(4) Hotels.com GP, LLC;
(5) Hotwire, Inc.;
(6) Cheaptickets Inc.;
(7) Cendant Travel Distribution Services Group, Inc.;
(8) Expedia, Inc.;
(9) Internetwork Publishing Corp. (d/b/a Lodging.com);
(10) Lowestfare.com, Inc.;
(11) Maupintour Holding, LLC;
(12) Site59.com, LLC;
(13) Travelocity.com, Inc.;
(14) Travelocity.com, L.P.;
(15) Travelweb, LLC and
(1^) Travelnow.com, Inc.
The suit, styled "City of Fairview Heights v. Orbitz, Inc., et al.,"
alleges, among other things, that each of these defendants violated Section
36-2-1, et seq., of the Revised Ordinances of the City of Fairview Heights,
Illinois and similar laws of other Illinois taxing entities with respect to
the charges and remittance of amounts to cover taxes under the ordinances.
The complaint also asserts claims for violation of the Illinois Consumer
Fraud and Deceptive Practices Act, 815 ILCS 505/1, similar laws in other
states, conversion and unjust enrichment. The complaint seeks compensatory
damages, attorneys’ fees and other relief. Travelweb has been served
with the complaint, but the Company and Lowestfare.com have not.
PRICELINE.COM:
----------------------------------------------------------------
priceline.com, Inc. faces a complaint filed in the Circuit Court of Cook
County, Illinois, alleging violations of the state's consumer fraud laws.
On November 1, 2005, the City of Chicago, Illinois, filed a complaint
against the Company and:
(1) Hotels.com, L.P.;
(2) Hotwire, Inc.;
(3) Cheaptickets, Inc.;
(4) Cendant Travel Distribution Services Group, Inc.;
(5) Expedia, Inc.;
(6) Internetwork Publishing Corp. (d/b/a Lodging.com);
(7) Lowestfare.com, Inc.;
(8) Maupintour Holding, LLC;
(9) Maupintour, LLC;
(10) Orbitz, Inc.;
(11) Orbitz, LLC;
(12) Site59.com, LLC;
(13) Travelocity.com, Inc.;
(14) Travelocity.com LP;
(15) Travelweb, LLC and
(16) Travelnow.com, Inc.
The suit, styled "City of Chicago, Illinois v. Hotels.com, L.P., et al.,"
alleges, among other things, that each of these defendants violated the
Chicago Hotel Accommodations Tax Ordinance of Chapter 3-24 of the Municipal
Code of Chicago with respect to the charges and remittance of amounts to
cover taxes under the Code. The complaint also asserts claims for
conversion, imposition of a constructive trust, and a demand for a legal
accounting. The complaint seeks payment of alleged unpaid taxes owed,
disgorgement and restitution of all funds allegedly owed to Plaintiff, an
accounting, penalties, attorneys' fees, and other relief. The Company and
its wholly owned subsidiaries, Lowestfare.com and Travelweb, have not been
served with a copy of the complaint.
PRICELINE.COM: CT Court Mulls Securities Lawsuit Certification
--------------------------------------------------------------
The United States District Court for the District of Connecticut has yet to
rule on plaintiffs' motion for class certification of the lawsuits filed
against priceline.com, Inc. and certain of its officers and directors,
following its announcement on September 27, 2000 that revenues for the third
quarter 2000 would not meet expectations.
The suits are styled:
(1) Weingarten v. priceline.com Incorporated and Jay S.
Walker, 3:00 CV 1901
(2) Twardy v. priceline.com, Inc., Richard S. Braddock,
Daniel H. Schulman and Jay S. Walker, 3:00 CV 1884
(3) Berdakina v. priceline.com, Inc., Richard S. Braddock,
Daniel H. Schulman and Jay S. Walker, 3:00 CV 1902
(4) Mazzo v. priceline.com, Inc., Richard S. Braddock,
Daniel H. Schulman and Jay S. Walker, 3:00 CV 1924
(5) Fialkov v. priceline.com, Inc., Richard S. Braddock,
Daniel H. Schulman and Jay S. Walker, 3:00 CV 1954
(6) Ayach v. priceline.com, Inc., Richard S. Braddock,
Daniel H. Schulman and Jay S. Walker, 3:00 CV 2062
(7) Zia v. priceline.com, Inc., Richard S. Braddock, Daniel
H. Schulman and Jay S. Walker, 3:00 CV 1968
(8) Mazzo v. priceline.com, Inc., Richard S. Braddock,
Daniel H. Schulman and Jay S. Walker, 3:00 CV 1980
(9) Bazag v. priceline.com, Inc., Richard S. Braddock,
Daniel H. Schulman and Jay S. Walker, 3:00 CV 2122
(10) Breier v. priceline.com, Inc., Richard S. Braddock,
Daniel H. Schulman and Jay S. Walker, 3:00 CV 2146
(11) Farzam et al. v. priceline.com, Inc., Richard S.
Braddock, Daniel H. Schulman and Jay S. Walker, 3:00 CV
2176
(12) Caswell v. priceline.com, Inc., Richard S. Braddock,
Daniel H. Schulman and Jay S. Walker, 3:00 CV 2169
(13) Howard Gunty Profit Sharing Plan v. priceline.com,
Inc., Richard S. Braddock, Daniel H. Schulman and Jay
S. Walker, 3:00 CV 1917
(14) Cerelli v. priceline.com, Inc., Richard S. Braddock,
Daniel H. Schulman and Jay S. Walker, 3:00 CV 1918
(15) Mayer v. priceline.com, Inc., Richard S. Braddock,
Daniel H. Schulman and Jay S. Walker, 3:00 CV 1923
(16) Anish v. priceline.com, Inc., Richard S. Braddock,
Daniel H. Schulman and Jay S. Walker, 3:00 CV 1948
(17) Atkin v. priceline.com, Inc., Richard S. Braddock,
Daniel H. Schulman and Jay S. Walker, 3:00 CV 1994
(18) Lyon v. priceline.com, Inc., Richard S. Braddock,
Daniel H. Schulman and Jay S. Walker, 3:00 CV 2066
(19) Kwan v. priceline.com, Inc., Richard S. Braddock,
Daniel H. Schulman and Jay S. Walker, 3:00 CV 2069
(20) Krim v. priceline.com, Inc., Richard S. Braddock,
Daniel H. Schulman and Jay S. Walker, 3:00 CV 2083
(21) Karas v. priceline.com, Inc., Richard S. Braddock,
Daniel H. Schulman and Jay S. Walker, 3:00 CV 2232
(22) Michols v. priceline.com, Inc., Richard S. Braddock,
Daniel H. Schulman and Jay S. Walker, 3:00 CV 2280
All of these cases have been assigned to Judge Dominick J. Squatrito. On
September 12, 2001, Judge Squatrito ordered that these cases be consolidated
under the Master File No. 3:00cv1884 (DJS), and he designated lead
plaintiffs and lead plaintiffs' counsel. On October 29, 2001, plaintiffs
served a Consolidated Amended Complaint. On February 5, 2002, Amerindo
Investment
Advisors, Inc., who was one of the lead plaintiffs in the consolidated
action, made a motion for leave to withdraw as lead plaintiff. The Court
granted that motion on May 30, 2002. On February 28, 2002, the Company
filed a motion to dismiss the Consolidated Amended Complaint. On October 7,
2004, the Court issued a Memorandum of Decision granting, in part, and
denying, in part, the Company's motion. A scheduling order was entered by
the Court on November 2, 2004 and the parties are now proceeding with
discovery. Plaintiffs filed a motion for class certification on January 7,
2005, to which the Company's opposition is due on April 8, 2005.
The master complaint is styled "Twardy, et al v. Priceline.com, Inc, et al,
case no. 3:00-cv-01884-DJS," filed in the United States District Court for
the District of Connecticut under Judge Dominic J. Squatrito. Representing
the plaintiffs are:
(i) Michael D. Donovan, Donovan Searles 1845 Walnut St.
Suite 1100 Philadelphia, PA 19103 Phone: 215-732-6067
Fax: 215-732-8060 E-mail: mdonovan@donovansearles.com;
(ii) Justin Scott Kudler, Schatz & Nobel-Htfd One Corporate
Center 20 Church St., Suite 1700 Hartford, CT 06103
Phone: 860-493-6292 Fax: 860-493-6290 E-mail:
justin@snlaw.net
(iii) Patrick A. Klingman, Sheperd Finkelman Miller & Shah-
Chester 65 Main St. Chester, CT 06412 Phone: 860-526-
1100 Fax: 860-526-1120 E-mail: pklingman@sfmslaw.com
Representing the Company are:
(a) Evan R. Chesler, Kevin J. Kehoe, Daniel Slifkin,
Cravath, Swaine & Moore 825 8Th Ave., Worldwide Plaza
New York, NY 10019-7415 Phone: 212-474-1000 E-mail:
dslifkin@cravath.com;
(b) Joseph L. Clasen, William J. Kelleher Robinson & Cole
Financial Centre, 695 E. Main St., Pobx 10305 Stamford,
CT 06904-2305 Phone: 203-462-7510 Fax: 203-462-7599 E-
mail: jclasen@rc.com;
PRICELINE.COM: NY Court Approves Securities Lawsuit Settlement
--------------------------------------------------------------
The United States District Court for the Southern District of New York
granted preliminary approval to the settlement of the consolidated
securities class action filed against priceline.com, Inc. and:
(1) Richard S. Braddock,
(2) Jay Walker,
(3) Paul Francis,
(4) Nancy B. Peretsman,
(5) Timothy G. Brier,
(6) Morgan Stanley Dean Witter & Co.,
(7) Goldman Sachs & Co.,
(8) Merrill Lynch, Pierce, Fenner & Smith, Inc.,
(9) Robertson Stephens, Inc. (as successor-in-interest to
BancBoston),
(10) Credit Suisse First Boston Corp. (as successor-in-
interest to Donaldson Lufkin & Jenrette Securities
Corporation),
(11) Allen & Co., Inc. and Salomon Smith Barney, Inc.
Four suits were initially filed, alleging that that the Company and the
individual defendants violated the federal securities laws by issuing and
selling priceline.com common stock in priceline.com's March 1999 initial
public offering without
disclosing to investors that some of the underwriters in the offering,
including the lead underwriters, had allegedly solicited and received
excessive and undisclosed commissions from certain investors.
By Orders of Judge Mukasey and Judge Scheindlin dated August 8, 2001, these
cases were consolidated for pre-trial purposes with hundreds of other cases,
which contain allegations concerning the allocation of shares in the initial
public offerings of companies other than priceline.com, Inc. By Order of
Judge Scheindlin dated August 14, 2001, the suits were consolidated for all
purposes.
On April 19, 2002, plaintiffs filed a Consolidated Amended Class Action
Complaint in these cases. This Consolidated Amended Class Action Complaint
makes similar allegations to those described above but with respect to both
the Company's March 1999 initial public offering and its August 1999 second
public offering of common stock.
The defendants together with other issuer defendants in the consolidated
litigation, filed a joint motion to dismiss on July 15, 2002. On November
18, 2002, the cases against the individual defendants were dismissed without
prejudice and without costs. In addition, counsel for plaintiffs and the
individual defendants executed Reservation of Rights and Tolling Agreements,
which toll the statutes of limitations on plaintiffs' claims against those
individuals.
On February 19, 2003, Judge Scheindlin issued an Opinion and Order granting
in part and denying in part the issuers' motion. None of the claims against
the Company were dismissed. On June 26, 2003, counsel for the plaintiff
class announced that they and counsel for the issuers had agreed to the form
of a Memorandum of Understanding (the "Memorandum") to settle claims against
the issuers. The terms of that Memorandum provide that class members will
be guaranteed $1 billion dollars in recoveries by the insurers of the
issuers and that settling issuer defendants will assign to the class members
certain claims that they may have against the underwriters. Issuers also
agree to limit their abilities to bring certain claims against the
underwriters. If recoveries in excess of $1 billion dollars are obtained by
the class from any non-settling defendants, the settling defendants'
monetary obligations to the class plaintiffs will be satisfied; any amount
recovered from the underwriters that is less than $1 billion will be paid by
the insurers on behalf of the issuers.
The Memorandum, which is subject to the approval of each issuer, was
approved by a special committee of the Company's Board of Directors on
Thursday, July 3, 2003. Thereafter, counsel for the plaintiff class and
counsel for the issuers agreed to the form of a Stipulation and Agreement of
Settlement with Defendant Issuers and Individuals ("Settlement Agreement").
The Settlement Agreement implements the MOU and contains the same material
provisions. On June 11, 2004, a special committee of the Company's Board of
Directors authorized its counsel to execute the Settlement Agreement on the
Company's behalf. The Settlement Agreement is subject to final approval by
the Court and the process to obtain that approval is still pending.
The suit is styled "In Re: Priceline.com IPO Securities Litigation,
1:01-cv-02261-SAS," filed in the United States District Court for the
Southern District of New York, under Judge Shira A. Scheindlin.
Representing the defendants are:
(i) Andrew B. Clubok of Kirkland & Ellis, 655 Fifteenth
Street, N.W., Washington, DC 20005, Phone: (202) 879-
5000, representing Morgan Stanley Dean Witter & Co.,
Incorporated
(ii) Brendan Joseph Dowd of O'Melveny & Myers, L.L.P., 153
East 53rd Street, New York, NY 10022-4611 Phone: (212)
326-2000, E-mail: bdowd@omm.com, representing Robertson
Stephens, Inc.
(iii) Howard Fetner of Kirkland & Ellis, 153 East 53rd
Street, New York, NY 10022, Phone: 212-446-4800,
representing Morgan Stanley Dean Witter & Co.,
Incorporated
(iv) Andrew Jay Frackman, O'Melveny & Myers LLP, Seven Times
Square, New York, NY 10036, Phone: 212-326-2000, Fax:
212-326-2061, E-mail: afrackman@omm.com, representing
Robertson Stephens, Inc.
(v) Mark Holland, Clifford Chance US LLP, 200 Park Avenue,
New York, NY 10166, phone: (212) 878-8000, representing
Merrill, Lynch, Pierce, Fenner & Smith Incorporated
(vi) Penny Shane, Sullivan & Cromwell, 125 Broad Street, New
York, NY 10004-2498, Phone: (212) 558-4000,
representing Goldman Sachs & Co.
(vii) Kevin J. Toner, Heller, Ehrman, White & McAuliffe,
L.L.P., 120 West 45th Street, New York, NY 10036,
Phone: (212) 832-8300, E-mail: ktoner@HEWM.com,
representing Allen & Co., Incorporated
The plaintiff firms in this litigation are:
(a) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(b) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(c) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(d) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(e) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(f) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
PRICELINE.COM: Consumers File Hotel Tax Fraud Suit in OH Court
--------------------------------------------------------------
priceline.com, Inc. faces a consumer class action filed in the Common Pleas
Court of Hancock County, Ohio, alleging violations of the state's consumer
protection laws.
On October 25, 2005, the City of Findlay filed a putative class action
complaint on behalf of itself and other similarly situated taxing entities
in Ohio, against the Company and:
(1) Hotels.com, L.P.;
(2) Hotels.com GP, LLC;
(3) Hotwire, Inc.;
(4) Cheaptickets, Inc.;
(5) Cendant Travel Distribution Services Group Inc.;
(6) Expedia, Inc.;
(7) Internetwork Publishing Corp. (d/b/a Lodging.com);
(8) Lowestfare.com, Inc.;
(9) Maupintour Holding, LLC;
(10) Orbitz, Inc.;
(11) Orbitz, LLC;
(12) Site59.com, LLC;
(13) Travelocity.com, Inc.;
(14) Travelocity.com, L.P.;
(15) Travelweb, LLC and
(16) Travelnow.com, Inc.
The suit, styled "City of Findlay v. Hotels.com, L.P., et al.," alleges,
among other things, that each of these defendants violated Ohio Revenue Code
5739 and the Certified Ordinances of the City of Findlay and other putative
class members with respect to the charges and remittance of amounts to cover
taxes under the Ohio transient occupancy tax ordinances. The complaint also
asserts claims for violation of Ohio Revised Code Chapter 1345, et seq,
conversion, a constructive trust and a declaratory judgment. The complaint
seeks compensatory damages, disgorgement, penalties available by law,
attorneys' fees and other relief. The Company has been served with a copy
of the complaint, but its wholly owned subsidiaries, Lowestfare.com and
Travelweb, have not.
PRICELINE.COM: Consumers Launch Hotel Tax Fraud Suit in W.D. WA
---------------------------------------------------------------
priceline.com, Inc. faces a class action filed in the United States District
Court for the Western District of Washington, alleging violations of the
state's consumer protection laws.
The City of Bellingham, Washington filed the suit initially in the Superior
Court of Washington for Whatcom County on September 21, 2005 on behalf of
itself and other similarly situated taxing entities in Washington, against
the Company and:
(1) Hotels.com, L.P.;
(2) Hotels.com GP, LLC;
(3) Hotwire, Inc.;
(4) Cheaptickets Inc.;
(5) Cendant Travel Distribution Services Group, Inc.;
(6) Expedia, Inc.;
(7) Internetwork Publishing Corp. (d/b/a Lodging.com);
(8) Lowestfare.com, Inc.;
(9) Maupintour Holding, LLC;
(10) Orbitz, Inc.;
(11) Orbitz, LLC;
(12) Site59.com, LLC;
(13) Travelocity.com, Inc.;
(14) Travelocity.com, L.P.;
(15) Travelweb, LLC and
(16) Travelnow.com, Inc.
The suit, styled "City of Bellingham v. Hotels.com, L.P., et al.," alleges,
among other things, that each of these defendants violated Section 4.62.010,
et seq., of the Bellingham Municipal Code and similar laws of other
Washington taxing entities with respect to the charges and remittance of
amounts to cover taxes under the Municipal Code. The complaint also asserts
claims for violation of the Washington Consumer Protection Act RCW
19.86.010, et seq., conversion and unjust enrichment. The complaint seeks
compensatory damages, statutory treble damages, penalties, attorneys' fees
and other reflief. Travelweb has been served with the complaint, but the
Company and Lowestfare.com have not. On November 3, 2005, the Company,
Lowestfare.com, Travelweb and certain other defendants removed this action
to the United States District Court for the Western District of Washington.
SEQUENOM INC.: Final Fairness Hearing Set For April 2006 in NY
--------------------------------------------------------------
Final fairness hearing for the settlement of the consolidated securities
class action filed against Sequenom, Inc. and certain of its current or
former officers and directors, styled "In re Sequenom, Inc. IPO Securities
Litigation Case No. 01-CV-10831.," is set for April 24,2006 in the United
States District Court for the Southern District of New York.
Similar complaints were filed in the same Court against hundreds of other
public companies that conducted initial public offerings of their common
stock in the late 1990s and 2000. In the complaint, the plaintiffs allege
that the Company's underwriters, certain of its officers and directors and
the Company violated the federal securities laws because our registration
statement and prospectus contained untrue statements of material fact or
omitted material facts regarding the compensation to be received by and the
stock allocation practices of the underwriters. The plaintiffs seek
unspecified monetary damages and other relief.
In October 2002, the Company's officers and directors were dismissed without
prejudice pursuant to a stipulated dismissal and tolling agreement with the
plaintiffs. In February 2003, the court dismissed the claim against the
Company brought under Section 10(b) of the Securities Exchange Act of 1934,
without giving the plaintiffs leave to amend the complaint with respect to
that claim. The court declined to dismiss the claim against the Company
brought under Section 11 of the Securities Act of 1933.
In June 2003, pursuant to the authorization of a special litigation
committee of the Company's Board of Directors, the Company approved in
principle a settlement offer by the plaintiffs. In June 2004, the Company
entered into a settlement agreement with the plaintiffs. On February 15,
2005, the Court issued a decision certifying a class action for settlement
purposes and granting preliminary approval of the settlement subject to
modification of certain bar orders contemplated by the settlement. In
addition, the settlement is still subject to statutory notice requirements
as well as final judicial approval.
On August 31, 2005, the Court reaffirmed class certification and preliminary
approval of the modified settlement. In addition, the Court approved the
form of Notice to be sent to members of the settlement classes, which will
be published and mailed beginning November 15, 2005. The Court has set a
Final Settlement Fairness Hearing on the settlement for April 24, 2006. The
settlement is still subject to statutory notice requirements as well as
final judicial approval.
The suit is styled "In re Sequenom, Inc. IPO Securities Litigation Case No.
01-CV-10831" related to "In re Initial Public Offering Securities
Litigation, Master File No. 21 MC 92 (SAS)," filed in the United States
District Court for the Southern District of New York under Judge Shira A.
Scheindlin. The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300,
(3) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
SKECHERS USA: CA Court Approves Employee Wage Suits Settlements
---------------------------------------------------------------
The Superior Court for the State of California approved the settlement for
the class actions filed against Skechers USA, Inc., alleging violations of
the state's Labor Code and wage laws.
On December 2, 2002, a class action complaint entitled "OMAR QUINONES v.
SKECHERS USA, INC. et al., case no. 02CC00353," was filed in the Superior
Court for the State of California for the County of Orange. The complaint,
as amended, alleges overtime and related violations of the California Labor
Code on behalf of managers of Skechers' retail stores and seeks, inter alia,
damages and restitution, as well as injunctive and declaratory relief. On
February 25, 2003, another related class action complaint entitled "MYRNA
CORTEZ v. SKECHERS USA, INC. et al., case no. BC290932," was filed in the
Superior Court for the State of California for the County of Los Angeles,
asserting similar claims and seeking similar relief on behalf of assistant
managers. On July 7, 2004, a third class action complaint entitled "MYRNA
CORTEZ et al. v. SKECHERS USA, INC. et al., case no. BC318101," was filed in
the Superior Court for the State of California for the County of Los
Angeles. The complaint alleges wage violations of the California Labor Code
and unfair business practices relating to deductions for uniforms on behalf
of employees of Skechers' retail stores and seeks, inter alia, damages and
civil penalties, as well as injunctive relief.
On December 20, 2004, the parties agreed to a preliminary settlement that
fully resolves all claims brought by the plaintiffs in each of the three
lawsuits. Under the terms of the preliminary settlement, which is still
subject to court approval, the Company will pay a potential maximum
settlement amount of $1.8 million, which was recorded to other expense in
the consolidated statement of operations during the fourth quarter of 2004,
to cover claims made by eligible class members, plaintiff attorneys' fees
and costs, and costs of a third-party administrator. On July 18, 2005, the
court approved the preliminary settlement, and all claims from eligible
class members have been received. The revised aggregate amount of all claims
and other costs is not expected to exceed approximately $1.7 million, which
have already been accrued in the financial statements.
SKECHERS USA: Plaintiffs Appeal CA Shareholder Lawsuit Dismissal
----------------------------------------------------------------
Plaintiffs appealed the United States District Court for the Central
District of California's dismissal of the consolidated securities class
action filed against Skechers USA, Inc. and certain of its officers and
directors.
On March 25, 2003, a shareholder securities class action complaint captioned
"HARVEY SOLOMON v. SKECHERS USA, INC. et al., case no. 03-2094 DDP," was
filed against the Company and certain of its officers and directors. On
April 2, 2003, a shareholder securities class action complaint captioned
"CHARLES ZIMMER v. SKECHERS USA, INC. et al., case no. 03-2296 PA" was
filed. On April 15, 2003, a shareholder securities class action complaint
captioned "MARTIN H. SIEGEL v. SKECHERS USA, INC. et al., case no. 03-2645
RMT" was filed. On May 6, 2003, a shareholder securities class action
complaint captioned "ADAM D. SAPHIER v. SKECHERS USA, INC. et al., case no.
03-3011 FMC" was served on the Company and certain of its officers and
directors. On May 9, 2003, a shareholders securities class action complaint
captioned "LARRY L. ERICKSON v. SKECHERS USA, INC. et al., case no. 03-3101
SJO," was filed.
Each of these class action complaints alleged violations of the federal
securities laws on behalf of persons who purchased publicly traded
securities of the Company between April 3, 2002 and December 9, 2002. In
July 2003, the court in these federal securities class actions, all pending
in the United States District Court for the Central District of California,
ordered the cases consolidated and a consolidated complaint to be filed and
served. On September 25, 2003, the plaintiffs filed a consolidated complaint
entitled "In re SKECHERS USA, Inc. Securities Litigation, Case No.
CV-03-2094-PA."
The complaint names as defendants the Company and certain officers and
directors and alleges violations of the federal securities laws and breach
of fiduciary duty on behalf of persons who purchased publicly traded
securities of the Company between April 3, 2002 and December 9, 2002. The
complaint seeks compensatory damages, interest, attorneys' fees and
injunctive and equitable relief.
The Company moved to dismiss the consolidated complaint in its entirety. On
May 10, 2004, the court granted the motion to dismiss with leave for
plaintiffs to amend the complaint. On August 9, 2004, plaintiffs filed a
first amended consolidated complaint for violations of the federal
securities laws. The allegations and relief sought were virtually identical
to the original consolidated complaint. The Company has moved to dismiss
the first amended consolidated complaint and the motion was set for hearing
on December 6, 2004. On March 21, 2005, the court granted the motion to
dismiss the first amended consolidated complaint with leave for plaintiffs
to amend one final time. On April 7, 2005, plaintiffs elected to stand on
the first amended consolidated complaint and requested entry of judgment so
that an appeal from the court's ruling could be taken. On April 26, 2005,
the court entered judgment in favor of Skechers and the individual
defendants, and on May 3, 2005, plaintiffs filed an appeal with the United
States Court of Appeals for the Ninth Circuit. Plaintiffs have filed their
opening brief and defendants have filed their answering brief. Discovery
has not commenced in the underlying action.
SUTHERLAND GLOBAL: Former Workers Files Overtime Wage Suit in NY
----------------------------------------------------------------
Sutherland Global Services of Rochester, New York is facing a lawsuit
launched by former workers, who accuse the local outsourcing company of
allegedly denying them overtime wages.
The plaintiffs' attorney in the case, Stanley Matusz, is asking the U.S.
District Court in New York to grant the lawsuit class action status. That,
according to Mr. Matsuz, would open the lawsuit up to several thousand
current and former workers both on staff and temporary who worked for
Sutherland facilities in New York in the past six years, in positions such
as inside sales representative and customer service.
The suit is styled, "Sherrill et al v. Sutherland Global Services, Inc. et
al, Case No. 6:05-cv-06537-DGL-MWP," filed in the United States District
Court for the Western District of New York, under Judge David G. Larimer,
with referral to Judge Marian W. Payson. Representing the Plaintiff/s is
Stanley J. Matusz, 161 Rutgers St., Rochester, NY 14607, Phone:
585-271-5460, Fax: 585-426-4653, E-mail: smatusz@rochester.rr.com.
Representing the Defendant/s is Linda T. Prestegaard of Phillips Lytle, LLP,
1400 First Federal Plaza, Rochester, NY 14614, Phone: 585-238-2029, Fax:
585-232-3141, E-mail: lprestegaard@phillipslytle.com.
THESTREET.COM: Final Suit Fairness Hearing Set April 2006 in NY
---------------------------------------------------------------
Final fairness hearing for the settlement of the consolidated securities
class action filed against TheStreet.com, Inc. is set for April 24,2006 in
the United States District Court for the Southern District of New York. The
suit also names as defendants certain of the Company's former officers and
directors and James J. Cramer, a current director, and certain underwriters
of the Company's initial public offering:
(1) The Goldman Sachs Group, Inc.,
(2) Chase H& Q,
(3) Thomas Weisel Partners LLC,
(4) FleetBoston Robertson Stephens, and
(5) Merrill Lynch Pierce Fenner & Smith, Inc.
On December 5, 2001, a class action lawsuit alleging violations of the
federal securities laws was filed. Plaintiffs allege that the underwriters
of the Company's initial public offering violated the securities laws by
failing to disclose certain alleged compensation arrangements (such as
undisclosed commissions or stock stabilization practices) in the offering's
registration statement. The plaintiffs seek damages and statutory
compensation against each defendant in an amount to be determined at trial,
plus pre-judgment interest thereon, together with costs and expenses,
including attorneys' fees.
Similar suits were filed against over 300 other issuers that had initial
public offerings between 1998 and December 2001, and they have all been
consolidated into a single action. Pursuant to a Court Order dated October
9, 2002, each of the individual defendants to the action, including Mr.
Cramer, has been dismissed without prejudice. On June 8, 2004, the Company
and its individual defendants (together with the Company's insurance
carriers) entered into a settlement with the plaintiffs. The settlement is
subject to a hearing on fairness and approval by the court overseeing the
litigation.
Although the lawsuit against the Company is an independent cause of action
vis-a-vis the lawsuits pending against other issuers in the consolidated
proceeding, and no issuer is liable for any wrongdoing allegedly committed
by any other issuer, the proposed settlement between the plaintiffs and the
issuers is being done on a collective basis and includes all but one of the
299 issuer defendants eligible to participate. Generally, under the terms of
the settlement, in exchange for the delivery by the insurers of the Company
and the other defendants of an undertaking guaranteeing that the plaintiffs
will recover, in the aggregate, $1 billion from the underwriters (the
"Recovery Deficit"), and the assignment to the plaintiffs by the issuers of
their interests in claims against the underwriters for excess compensation
in connection with their IPOs, the plaintiffs will release the non-bankrupt
issuers from all claims against them (the bankrupt issuers will receive a
covenant not to sue) and their individual defendants. The Recovery Deficit
payable by the insurers to the plaintiffs will be equal to the difference,
if any, between $1 billion and the actual amount the plaintiffs recover from
the underwriters by reason of the IPO litigation and the assigned claims.
Neither the Company nor any other issuer will be required to pay any portion
of the Recovery Deficit, if any, and the insurers will cover all further
legal defense costs incurred by the issuers, as well as notice costs and
administrative costs and expenses.
Pursuant to an Opinion and Order dated February 15, 2005, the settlement was
preliminarily approved by the court, subject to certain minor modifications.
Such modifications have been made and were approved by the Court pursuant to
an Order dated August 31, 2005. A fairness hearing has been scheduled for
April 24, 2006.
The suit is styled "In re TheStreet.com, Inc. IPO Securities Litigation Case
No. 01-CV-10831" related to "In re Initial Public Offering Securities
Litigation, Master File No. 21 MC 92 (SAS)," filed in the United States
District Court for the Southern District of New York under Judge Shira A.
Scheindlin. The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300,
(3) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
TREX CO.: Shareholders Launch Securities Fraud Suits in W.D. VA
---------------------------------------------------------------
Trex Company faces two class actions filed in the United States District
Court for the Western District of Virginia, alleging violations of federal
securities laws. The suits also name as defendants Robert G. Matheny, a
director and the former Chairman and Chief Executive Officer of the Company,
and Paul D. Fletcher, Senior Vice President and Chief Financial Officer of
the Company.
Plaintiffs and defendants have agreed that the two lawsuits should be
consolidated, and the plaintiffs in each lawsuit have filed motions seeking
to be designated as "lead plaintiff." The complaints principally allege that
the Company, Mr. Matheny and Mr. Fletcher violated Sections 10(b) and 20(a)
of and Rule 10b-5 under the Securities Exchange Act of 1934 by, among other
things, making false and misleading public statements concerning the Company
's operating and financial results and expectations. The complaints also
allege that certain directors of the Company sold shares of the Company's
common stock at artificially inflated prices. The plaintiffs seek
unspecified compensatory damages.
VALUECLICK INC.: Faces DE Shareholder Suit V. Fastclick Merger
--------------------------------------------------------------
Valueclick, Inc. faces a class action filed in the Court of Chancery, County
of New Castle, State of Delaware, prior to its acquisition of Fastclick,
Inc. The suit names the Company, Fastclick and its former directors as
defendants.
Walter Parrisch filed the suit on August 17,2005, on behalf of himself and
the other Fastclick stockholders. The complaint alleges, among other things,
that the offer and merger would be a breach of fiduciary duty and that the
indicated exchange ratio is unfair to the stockholders of Fastclick. The
complaint seeks, among other things, injunctive relief against consummation
of the offer and merger, damages in an unspecified amount and rescission in
the event the offer and merger occurs.
WIRELESS FACILITIES: CA Court Mulls Securities Lawsuit Dismissal
----------------------------------------------------------------
The United States District Court for the Southern District of California has
yet to rule on Wireless Facilities, Inc.'s motion to dismiss the second
amended consolidated securities class action filed against it and certain of
its officers and directors.
Several securities class action lawsuits were initially filed on behalf of
those who purchased, or otherwise acquired, the Company's common stock
between April 26, 2000 and August 4, 2004. The lawsuits generally allege
that, during that time period, Defendants made false and misleading
statements to the investing public about the Company's business and
financial results, causing its stock to trade at artificially inflated
levels. Based on these allegations, the lawsuits allege that Defendants
violated the Securities Exchange Act of 1934, and the plaintiffs seek
unspecified damages. These actions have been consolidated into a single
action in "In re Wireless Facilities, Inc. Securities Litigation Master File
No. 04CV1589-JAH."
The plaintiffs filed their consolidated complaint in January 2005 and did
not name the Company a defendant in that complaint. After the individual
defendants filed their motion to dismiss, the plaintiffs requested leave to
amend their complaint to add the Company as a defendant. Plaintiffs filed
the First Amended Consolidated Class Action Complaint on April 1, 2005.
Defendants filed their motion to dismiss this first amended complaint on
April 14, 2005. Defendants then requested leave to amend their first
amended complaint. The plaintiffs filed their second amended complaint on
June 9, 2005. Defendants filed their motion to dismiss this second amended
complaint on July 14, 2005. The motion to dismiss was taken under
submission on October 20, 2005 and the Defendants are currently awaiting the
ruling on this motion.
The first identified complaint is styled "Cole, et al. v. Wireless
Facilities, Inc., et al. case no. 04-CV-1589," filed in the United States
District Court for the Southern District of California. The plaintiff firms
in this litigation are:
(1) Brodsky & Smith, LLC, 11 Bala Avenue, Suite 39, Bala
Cynwyd, PA, 19004, Phone: 610.668.7987, Fax:
610.660.0450, E-mail: esmith@Brodsky-Smith.com
(2) Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (Washington,
DC), 1100 New York Avenue, N.W., Suite 500, West Tower,
Washington, DC, 20005, Phone: 202.408.4600, Fax:
202.408.4699, E-mail: lawinfo@cmht.com
(3) Goodkind Labaton Rudoff & Sucharow LLP, 100 Park
Avenue, New York, NY, 10017 Phone: 212.907.0700, Fax:
212.818.0477, E-mail: info@glrslaw.com
(4) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com
(5) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(6) Shalov, Stone & Bonner, 276 Fifth Avenue, Suite 704,
New York, NY, 10001, Phone: 212.686.8004, Fax:
212.686.8005, E-mail: lawyer@lawssb.com
(7) Spector, Roseman, & Kodroff (San Diego), 600 West
Broadway, Suite 1800, San Diego, CA, 92101, Phone:
619.338.4514,
(8) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(9) Wolf Popper, LLP, 845 Third Avenue, New York, NY,
10022-6689 Phone: 877.370.7703, Fax: 212.486.2093, E-
mail: IRRep@wolfpopper.com
WIRELESS FACILITIES: NY Court Preliminarily OKs Suit Settlement
---------------------------------------------------------------
The United States District Court for the Southern District of New York
granted preliminary approval to the settlement of the consolidated
securities class action filed against Wireless Facilities, Inc. and certain
of its directors and officers.
In June and July 2001, the Company and certain of its directors and officers
were named as defendants in five purported class action complaints filed in
the United States District Court for the Southern District of New York on
behalf of persons and entities who acquired the Company's common stock at
various times on or after November 4, 1999. The respective complaints
allege that the registration statement and prospectus issued by the Company
in connection with the public offering of its common stock contained untrue
statements of material fact or omissions of material fact in violation of
the Securities Act of 1933 and the Securities Exchange Act of 1934.
Specifically, these claims allege that the Company failed to disclose that
the offering's underwriters had:
(1) solicited and received additional and excessive
compensation and benefits from their customers beyond
what was listed in the registration statement and
prospectus and
(2) entered into tie-in or other arrangements with certain
of their customers which were allegedly designed to
maintain, distort and/or inflate the market price of
the Company's common stock in the aftermarket.
The complaints seek unspecified monetary damages and other relief. This case
is among the over 300 class action lawsuits pending in the United States
District Court for the Southern District of New York that have come to be
known as the IPO laddering cases.
On October 9, 2002, the court signed Stipulations and Orders of Dismissal,
which dismissed the Company's named individual officers and directors from
the action, without prejudice, but the Company remained a defendant in the
case. On February 19, 2003, the court issued its decision on the joint
motion to dismiss the IPO laddering cases. The decision allowed the
plaintiffs to pursue their claim against the Company based on its alleged
issuance of a registration statement and prospectus that failed to disclose
a fraudulent scheme by the offering's underwriters and dismissed, with leave
to amend, the plaintiffs' claim against the Company based on its alleged
knowledge and intent to defraud investors so as to benefit from an inflated
price for the Company's common stock in the aftermarket.
The plaintiffs, the Directors & Officers' insurance underwriters and the
Company, among other issuer co-defendants, have agreed in principle to a
form of settlement that would dismiss the Company and its individual
directors and officers from the litigation without requiring that the
Company fund the settlement. The settlement documents are presently being
drafted, and will be submitted to the court for approval once they have been
finalized.
On March 10, 2005, the court signed an order certifying the proposed
settlement classes and the tentative proposed settlement was approved
contingent on changes required in the order. The final settlement is
expected to occur in the first half of 2005. The company does not expect the
settlement to have a material impact on its operations or cash flow.
The suit is styled "IN RE WIRELESS FACILITIES, INC. INITIAL PUBLIC OFFERING
SECURITIES LITIGATION," filed in relation to "IN RE INITIAL PUBLIC OFFERING
SECURITIES LITIGATION, Master File No. 21 MC 92 (SAS)," both pending in the
United States District Court for the Southern District of New York, under
Judge Shira N. Scheindlin. The plaintiff firms in this litigation are:
(i) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(ii) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300
(iii) Schiffrin & Barroway, LLP, Mail: 3 Bala Plaza E, Bala
Cynwyd, PA, 19004, Phone: 610.667.7706, Fax:
610.667.7056, E-mail: info@sbclasslaw.com
(iv) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(v) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(vi) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
WOMEN.COM: Final Suit Fairness Hearing Set April 24,2006 in NY
--------------------------------------------------------------
Final fairness hearing for the settlement of the consolidated securities
class action filed against Women.com, Inc., several of its present and
former executives and its underwriters in connection with its March 1999
initial public offering is set for April 24,2006 in United States District
Court for the Southern District of New York.
The complaint generally asserts claims under the Securities Act, the
Exchange Act and rules and regulations of the SEC. The complaint seeks class
action certification, unspecified damages in an amount to be determined at
trial, and costs associated with the litigation, including attorneys' fees.
In February 2003, the defendants' motion to dismiss certain of the
plaintiffs' claims was granted in part, but, for the most part, denied. In
June 2003, a proposed settlement of this litigation was structured between
the plaintiffs, the issuer defendants, the issuer officers and directors
named as defendants, and the issuers' insurance companies. The proposed
settlement generally provides that the issuer defendants and related
individual defendants will be released from the litigation without any
liability other than certain expenses incurred to date in connection with
the litigation, the issuer defendants' insurers will guarantee $1.0 billion
in recoveries by plaintiff class members, the issuer defendants will assign
certain claims against the underwriter defendants to the plaintiff class
members, and the issuer defendants will have the opportunity to recover
certain litigation-related expenses if the plaintiffs recover more than $5.0
billion from the underwriter defendants. The boards of directors of the
Company approved the proposed settlement in July 2003.
On June 25, 2004, the plaintiffs filed a motion for preliminary approval of
the settlement with the court, which was accompanied by a brief filed by the
issuer defendants in support of the plaintiffs' motion. The court requested
that any objections to preliminary approval of the settlement be submitted
by July 14, 2004, and certain underwriter defendants formally objected to
the settlement. The plaintiffs and issuer defendants separately filed
replies to the underwriter defendants' objections to the settlement on
August 4, 2004. On February 15, 2005, the court issued an opinion and order
granting preliminary approval to the settlement and ordering the plaintiffs
and issuer defendants to submit to the court a revised settlement
stipulation consistent with the court's order. Pursuant to the court's
instruction, the parties to the settlement agreement submitted the revised
settlement stipulation on May 2, 2005. On August 31, 2005, the Court
granted preliminary approval to the amended settlement stipulation. As part
of its August 31, 2005 preliminary order, the court set a deadline of March
24, 2006 for any party to file an objection to the settlement and scheduled
a fairness hearing for April 24, 2006.
The suit is styled "In re Women.com, Inc. Initial Public Offering Sec.
Litigation," related to "In re Initial Public Offering Securities
Litigation, Master File No. 21 MC 92 (SAS)," filed in the United States
District Court for the Southern District of New York under Judge Shira A.
Scheindlin. The plaintiff firms in this litigation are:
(1) Bernstein Liebhard & Lifshitz LLP (New York, NY), 10 E.
40th Street, 22nd Floor, New York, NY, 10016, Phone:
800.217.1522, E-mail: info@bernlieb.com
(2) Milberg Weiss Bershad Hynes & Lerach, LLP (New York,
NY), One Pennsylvania Plaza, New York, NY, 10119-1065,
Phone: 212.594.5300,
(3) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
(4) Sirota & Sirota, LLP, 110 Wall Street 21st Floor, New
York, NY, 10005, Phone: 888.759.2990, Fax:
212.425.9093, E-mail: Info@SirotaLaw.com
(5) Stull, Stull & Brody (New York), 6 East 45th Street,
New York, NY, 10017, Phone: 310.209.2468, Fax:
310.209.2087, E-mail: SSBNY@aol.com
(6) Wolf, Haldenstein, Adler, Freeman & Herz LLP, 270
Madison Avenue, New York, NY, 10016, Phone:
212.545.4600, Fax: 212.686.0114, E-mail:
newyork@whafh.com
Meetings, Conferences & Seminars
* Scheduled Events for Class Action Professionals
-------------------------------------------------
January 23-24, 2005
ADVANCED INSURANCE COVERAGE ISSUES
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INSURANCE INSOLVENCY AND REINSURANCE ROUNDTABLE
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September 28-30, 2006
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------------------------
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December 01-30, 2005
CONSTRUCTION DISPUTES: TEXAS RESIDENTIAL CONSTRUCTION DEFECT LIABILITY
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IN-HOUSE COUNSEL AND WRONGFUL DISCHARGE CLAIMS:
CONFLICT WITH CONFIDENTIALITY?
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BAYLOR LAW SCHOOL PRESENTS: 2004 GENERAL PRACTICE INSTITUTE --
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New Securities Fraud Cases
EVCI CAREER: Rosen Law Firm Lodges Securities Fraud Suit in NY
--------------------------------------------------------------
The Rosen Law Firm initiated a class action in the United States District
Court for the District of Southern District of New York on behalf of
purchasers of EVCI Career Colleges Holdings Corp. ("EVCI") (Nasdaq:EVCI)
common stock during the period between November 14, 2003 and October 19,
2005, inclusive (the "Class Period").
The complaint charges that during the Class Period, EVCI, through its
subsidiary, Interboro Institute, Inc. ("Interboro"), violated federal
securities laws, in that the Company misrepresented and failed to disclose
that Interboro did not maintain, among other things, adequate equipment,
libraries, admissions control, and teaching staff to support its growing
enrollment, in violation of the New York State Education Department's
("NYSED") educational minimum standards. As a result, defendants misled
investors concerning EVCI's earning and enrollment growth and obtained
millions of dollars in proceeds from the sales of EVCI's inflated stock
price, when the Company knew or recklessly disregarded that it would have to
limit its growth and spend substantial sums to meet the NYSED minimum
requirements.
For more details, contact Laurence Rosen, Esq. and Phillip Kim, Esq. of The
Rosen Law Firm P.A., Phone: (212) 686-1060 or 1-866-767-3653, Fax: (212)
202-3827, E-mail: lrosen@rosenlegal.com and pkim@rosenlegal.com, Web site:
http://www.rosenlegal.com.
FARO TECHNOLOGIES: Federman & Sherwood Lodges FL Securities Suit
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The law firm of Federman & Sherwood initiated a class action lawsuit in the
United States District Court for the Middle District of Florida against FARO
Technologies, Inc. (Nasdaq: FARO).
The complaint alleges violations of federal securities laws, Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, including
allegations of issuing a series of material misrepresentations to the market
which had the effect of artificially inflating the market price. The class
period is from May 6, 2004 through November 3, 2005.
For more details, contact William B. Federman of FEDERMAN & SHERWOOD, 120 N.
Robinson, Suite 2720, Oklahoma City, OK 73102, Phone: (405) 235-1560/FAX:
(405) 239-2112, E-mail: wfederman@aol.com, Web site:
http://www.federmanlaw.com.
GREAT WOLF: Scott + Scott Lodges New Securities Fraud Suit in WI
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The law firm of Scott + Scott, LLC, filed a new securities fraud complaint
in the United States District Court for the Western District of Wisconsin
(05-C-0687-C) against Great Wolf Resorts Inc. ("Great Wolf" or the
"Company") (Nasdaq: WOLF). Scott + Scott's new complaint adds parties
including: Citigroup Global Markets, Inc., A.G. Edwards & Sons Inc., Raymond
James & Associates Inc., Calyon Securities (USA), Societe Generale,
ThinkEquity Partners, LLC, Rubin Brown Gornstein & Co., LLP, and Deloitte
and Touche.
The complaint seeks to represent all of those investors who purchased or
acquired Great Wolf securities between December 14, 2004, and July 28, 2005,
inclusive (the "Class Period"), but any purchaser of Great Wolf securities
may contact the firm as this class period can change as information is
revealed.
Great Wolf owns, operates, and develops drive-to family resorts featuring
indoor water parks and other family-oriented entertainment activities. The
Company is headquartered in Madison, Wisconsin. Scott+Scott's complaint
alleges that defendants' registration statements issued in connection with
the Company's 2004 Initial Public Offering ("IPO") contained untrue
statements of material fact. According to the complaint, the Company
provided misleading, unreliable and unpredictable quarterly and annualized
guidance based on its preferred non-GAAP EBITDA measure. Since defendants'
EBITDA number was allegedly unreliable, both the Company's business
prospects and in fact the value of the underlying business was in doubt
because the value of the Company was based on a defective valuation measure.
It is alleged that the Company used this defective measure to convince
investors to buy the Company's stock during the IPO.
EBIDTA, which stands for "earnings before interest, taxes, depreciation, and
amortization" is a measure of cash flow. However, according to Richard
McCaffrey of the Motley Fool, EBIDTA is of "fairly limited usefulness."
On July 28, 2005, the Company's stock price sank as investors' learned the
true magnitude of the Company's earnings shortfall and its cause -- the
alleged unreliability of defendants' EBITDA projections. Worse, analysts
concluded that defendants were fully aware of the true magnitude of the
earnings miss when they were out marketing clients at the end of June but
failed to publicly disclose the materiality of the problem at that time.
According to the Associated Press, analysts point to the Company's inability
to handle the increased competition, saying it contributed to other
problems, such as a second-quarter earnings miss and questions about the
company's internal controls. On the news of July 28, 2005, the price of the
Company's stock plunged $6.12 to $13.65, on extremely heavy volume. The
price has continued to decline since July and today trades at $10.37.
For more details, contact Neil Rothstein of Scott + Scott, LLC, Phone:
+1-800-332-2259, ext. 22 or (Cell) +1-619-251-0887, E-mail:
nrothstein@scott-scott.com, (Institutional Investors)
InstitutionalInvestors@scott-scott.com or
GreatWolfSecuritiesLitigation@scott-scott.com.
HELEN OF TROY: Marc S. Henzel Lodges Securities Fraud Suit in TX
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The Law Offices of Marc S. Henzel initiated a class action lawsuit in the
United States District Court for the Western District of Texas, El Paso
Division on behalf of all persons who purchased or otherwise acquired the
securities of Helen of Troy, Ltd. (NASDAQ: HELE) between October 12, 2004,
through October 10, 2005
The action is pending against the Company, its Chief Executive Officer,
Gerald J. Rubin, and its Chief Financial Officer, Thomas J. Benson.
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 Defendants engaged in a scheme to defraud
shareholders through the issuance of positive earnings guidance intended to
artificially inflate Company stock for which their was no legitimate
support. Guidance for 2006 was announced as part of the fiscal third quarter
of 2005 results, the inflation of which mislead the investing public.
Immediately following this increase in the stock price to its class period
high, Defendant Rubin sold almost 400,000 shares at its peak price of $33.00
per share- netting proceeds of almost $13 million on the improper guidance.
On October 11, 2005, the Company substantially lowered its unattainable
guidance for 2006 and reported a year over year decline in revenues during
its second quarter. On this news, the stock lost 21%, falling to $15.55 per
share on a volume of 4.4 million shares - more than 15 times its daily
average.
For more details, contact Marc S. Henzel, Esq. of The Law Offices of Marc S.
Henzel, 273 Montgomery Ave, Suite 202 Bala Cynwyd, PA 19004-2808, Phone
(888) 643-6735 or (610) 660-8000, Fax: (610) 660-8080, E-mail:
Mhenzel182@aol.com, Web site: http://members.aol.com/mhenzel182.
STONE ENERGY: Klafter & Olsen Retained to Commence LA Stock Suit
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The law firm of Klafter & Olsen, LLP, was retained to commence a securities
fraud class action against Stone Energy Corporation ("Stone Energy") (NYSE:
SGY) and certain of its officers in the U.S. District Court for the Western
District of Louisiana on behalf of investors who purchased the publicly
traded securities of Stone Energy during an expanded period beginning March
9, 2005 through and including October 5, 2005 (the "Class Period"). As
described below, if you purchased Stone Energy publicly traded securities
during the Class Period, you have until January 30, 2006 to move to be
appointed as a Lead Plaintiff.
Stone Energy is an oil and gas company engaged in the acquisition,
exploration, development, operation and production of oil and gas
properties. In its Form 10-K filed with the SEC on March 9, 2005, for its
year ended December 31, 2004, Stone Energy claimed to have proved oil and
gas reserves of approximately 825 billion cubic feet equivalent (Bcfe).
Before the opening of the market on October 6, 2005, however, Stone Energy
revealed its proven reserves as of December 31, 2004 had been overstated by
161 Bcfe or 20% less. On the announcement of this significant overstatement,
Stone Energy stock plunged by $7.93 to close at $48.14 on October 6.
On November 8, 2005, Stone Energy announced that as a result of its
overstatement of proven reserves, it will be filing an amended Form 10-K for
2004 and amended quarterly reports for its quarters ended March 31, 2005 and
September 30, 2005. On November 10, Stone Energy announced that the SEC is
conducting an informal inquiry into its restatement of its proven reserves.
Most significantly, on December 5, Stone Energy announced the results of an
investigation into its proven reserve overstatement, which found, among
other things, that "there was an optimistic and aggressive 'tone from the
top' with respect to estimating reserves;" Stone management had failed to
"fully grasp" the SEC's requirements for booking reserves; and that Stone
Energy "lacked adequate internal guidance and training" on the SEC standards
for booking reserves.
Klafter & Olsen LLP seeks to recover damages on behalf of purchasers of
Stone Energy securities during the Class Period for violations of the
federal securities laws by Stone Energy and certain of its officers as a
result of its public dissemination of false and misleading proven oil and
gas reserves. No class has yet been certified in the above action.
For more details, contact Kurt B. Olsen of Klafter & Olsen, LLP, Phone:
+1-202-261-3553, Web site: http://www.klafterolsen.com.
*********
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collectively face billions of dollars in asbestos-related
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Copyright 2005. All rights reserved. ISSN 1525-2272.
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