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/raid1/www/Hosts/bankrupt/CAR_Public/051219.mbx C L A S S A C T I O N R E P O R T E R Monday, December 19, 2005, Vol. 7, No. 250 Headlines ADVANTAGE PUBLISHERS: Recalls 41T Books Due to Choking Hazard AIRGATE PCS: Plaintiffs File Amended Securities Suit in N.D. GA ALTRIA GROUP: IL High Court Overturns $10.1B "Lights" Judgment AUSTRIA: Starts Holocaust Compensation Process, Sends Letters BEAZER HOMES: NV High Court Overturns Construction Defects Award CALIFORNIA: FAIR Backs Suit V. Tuition Discounts For Illegals CALIFORNIA: SF International Airport Settles With Deaf Advocates CHUBB CORPORATION: Policyholders Sue Over Commission Agreements CITIZENS INC.: TX Court Yet To Rule on Suit Certification Appeal CONSTAR INTERNATIONAL: Continues To Face PA Securities Lawsuit CONSTAR INTERNATIONAL: Trial in FL Injury Suit Set January 2006 DANIER LEATHER: Ontario Appellate Court Dismisses IPO Lawsuit DYNAMICS RESEARCH: Employees Launch FLSA Violations in MA Court EASTMAN KODAK: Securities Fraud Suits Consolidated in W.D. NY GE CONSUMER: Recalls 6.6T Various Gas Ranges Due to Fire Hazard ILLINOIS: Towns to Settle Suit Over Fees on Cellular Phone Bills INDIAN TRUST: Cobell v. Norton Case Still Deadlocked in House ISRAEL: Former Military Chief Faces War Crimes Suit in DC Court ITXC CORPORATION: NY Court Preliminarily OKs Lawsuit Settlement MARQUEE HOLDINGS: Fairness Hearing for MO Suit Settlement Held MINNESOTA CORN: Charities Get Windfall from Unclaimed Settlement MON CHONG: Recalls Dried Vegetables Due to Undeclared Sulfites MORTGAGEIT INC.: Amended Overtime Wage Suit Pending in S.D. NY NATIONAL PHYSICIANS: Faces TCPA Violations Lawsuit in E.D. NY NEW CENTURY: IL Court Dismisses Lawsuit For TCPA Violations NEW CENTURY: CA Court Orders Recovery For Defendants in Lawsuit NEW CENTURY: Mediation in LA Collective Action Set January 2006 NEW CENTURY: NY Court Nixes Mortgage Fees Suit Dismissal Appeal NEW CENTURY: Resolves NJ RESPA Lawsuit, Court Orders Dismissal NEW CENTURY: IL Court Dismisses Suit For Consumer Act Violations NEW CENTURY: IL Court Dismisses Interest Act Violations Lawsuit NEW CENTURY: CA Court Dismisses Overtime Law Violations Lawsuit NEW CENTURY: Plaintiffs Seek Certification for IN FCRA Lawsuit NEW CENTURY: Asks CA Court To Dismiss FCRA Violations Lawsuit NEW CENTURY: Customers Commence Loan Fee Fraud Suit in N.D. IN PUBLIC STORAGE: CA Court Mulls Transfer of Consumer Fraud Suit PUBLIC STORAGE: FL, CA Employee Overtime Wage Lawsuits Pending SECOND CHANCE: Chippewa Township Settles Suit Over Faulty Armor TELLABS INC.: Court Yet To Rule on Appeal of IL Suit Dismissal New Securities Fraud Cases CIPHERGEN BIOSYSTEMS: Marc Henzel Lodges Securities Suit in OH DIEBOLD INC.: Marc S. Henzel Lodges Securities Fraud Suit in OH EVCI CAREER: Stull Stull Files Securities Fraud Suit in S.D. OH FARO TECHNOLOGIES: Goldman Scarlato Lodges Securities Suit in FL STONE ENERGY: Spector Roseman Lodges Securities Fraud Suit in LA ********* ADVANTAGE PUBLISHERS: Recalls 41T Books Due to Choking Hazard ------------------------------------------------------------- In cooperation with the U.S. Consumer Product Safety Commission (CPSC), Advantage Publishers Group, of San Diego, California is voluntarily recalling about 41,000 units of Children's Books. According to the Company, if the clear plastic container is removed from the book's back cover or breaks, young children can access the beads in it. This poses a choking hazard to young children. Advantage Publishers Group has received one report of a child accessing beads in the books' clear plastic containers. No injuries have been reported. The recalled children's activity books are multi-colored with holes in the pages to touch a variety of fabrics and to push a squeaker toy, flaps to lift, and a clear plastic container with beads. The "Amazing Baby Look and Play" activity book has a yellow star on the cover. The "Amazing Baby Touch and Play" book has a brown bear on the cover. The activity books measure about 11-inches by 11-inches, and are for children ages 12 months to 24 months. The recalled "Rattle, Rattle" board book has a magenta car on the cover. The board book measures about 5 1/2- inches by 5 Ť-inches, and is intended for children ages 6 months to 18 months. Manufactured in Thailand, the books were sold at all national book chains, discount department stores, wholesalers and distributors, and membership warehouse clubs nationwide from May 2003 through November 2005 for about $16 for the activity books and about $6 for the board book. Remedy: Consumers should immediately take these recalled activity and board books away from young children and contact the company for a replacement book Consumer Contact: For additional information, contact Advantage Publishers Group toll-free at (866) 748-3731 anytime or visit the company's Web site: http://www.advpubgrp.com. AIRGATE PCS: Plaintiffs File Amended Securities Suit in N.D. GA --------------------------------------------------------------- Plaintiffs filed an amended consolidated securities class action against Airgate PCS, Inc. in the United States District Court for the Northern District of Georgia. The suit also names as defendants: (1) Thomas M. Dougherty, (2) Barbara L. Blackford, (3) Alan B. Catherall, (4) Credit Suisse First Boston, (5) Lehman Brothers, (6) UBS Warburg LLC, (7) William Blair & Company, (8) Thomas Wiesel Partners LLC and (9) TD Securities In May 2002, putative class action complaints were filed, seeking class certification and alleging that the prospectus used in connection with the secondary offering of Company stock by certain former stockholders of iPCS, a former subsidiary of the Company, on December 18, 2001 contained materially false and misleading statements and omitted material information necessary to make the statements in the prospectus not false and misleading. The alleged omissions included: (i) failure to disclose that in order to complete an effective integration of iPCS, drastic changes would have to be made to the Company's distribution channels, (ii) failure to disclose that the sales force in the acquired iPCS markets would require extensive restructuring and (iii) failure to disclose that the "churn" or "turnover" rate for subscribers would increase as a result of an increase in the amount of sub-prime credit quality subscribers the Company added from its merger with iPCS On July 15, 2002, certain plaintiffs and their counsel filed a motion seeking appointment as lead plaintiffs and lead counsel. Subsequently, the court denied this motion without prejudice and two of the plaintiffs and their counsel filed a renewed motion seeking appointment as lead plaintiffs and lead counsel. On September 12, 2003, the court again denied that motion without prejudice and on December 2, 2003, certain plaintiffs and their counsel filed a modified renewed motion seeking appointment as lead plaintiffs and lead counsel. On August 17, 2004 the court granted the plaintiff's motion. Pursuant to a consent scheduling order agreed to by the parties, lead plaintiffs filed a consolidated amended class action complaint on October 15, 2004. As did the original complaints filed in these actions, the Consolidated Complaint alleges that the Company's registration statement and prospectus relating to the December 2001 offering misrepresented and/or omitted adverse facts regarding the anticipated effects of the Company's acquisition of iPCS. The Consolidated Complaint also asserts that the registration statement/prospectus was false and misleading in certain other respects not previously alleged. The legal claims asserted in the Consolidated Complaint remain the same as those in the original complaints, i.e. the registration statement/prospectus violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933. In addition, the class that lead plaintiffs seek to represent remains the same, and the named defendants remain the same. Defendants' responses to the Consolidated Complaint were due on or before December 17, 2004. In the event that any defendant moves to dismiss, lead plaintiffs were to serve their opposition by January 21, 2005, and defendants' reply briefs are due on or before February 22, 2005. On December 30, 2004, defendants filed motions to dismiss the consolidated complaint. The lead plaintiffs have not yet responded to the motions to dismiss, which have not yet been ruled upon by the court and remain pending. On September 30, 2005, the Court issued an opinion and order (the "Order") ruling on these motions. As to the AirGate Defendants, the Court dismissed plaintiffs' claims under Section 12(a)(2) of the Securities Act, and also dismissed the remaining Section 11 and Section 15 claims as to five of the six alleged misstatements pled in the Consolidated Complaint, while declining to dismiss the claims related to allegation (v) above, concerning the iPCS network build-out. As to the Underwriter Defendants, the Court granted the motion to dismiss in its entirety. The Order permitted plaintiffs to file a further amended complaint, which plaintiffs did on October 19, 2005. The Second Amended Complaint repeats the allegations of the Consolidated Complaint, and adds certain additional allegations regarding the Underwriter Defendants and regarding plaintiffs' "allowance for doubtful accounts" claim. Defendants' responses to the Second Amended Complaint have not yet been filed. The suit is styled "In Re: Airgate PCS, Inc. Securities Litigation, case no. 1:02-cv-01291-JOF," filed in the United States District Court for the Northern District of Georgia, under Judge J. Owen Forrester. Representing the defendants are: (a) David Lewis Balser, McKenna Long & Aldridge, 303 Peachtree Street, N.E. One Peachtree Center, Suite 5300, Atlanta, GA 30308-3201, Phone: 404-527-4000, E- mail: dbalser@mckennalong.com; (b) Howard K. Coates, Jr., Milberg Weiss Bershad & Schulman 5355 Town Center Road, Suite 900 Boca Raton, FL 33486, Mail: 561-361-5000 (c) David W.T. Daniels, David DeBold, John C. McMillan, Eric E. Sneider, Gibson Dunn & Crutcher, 1050 Connecticut Avenue, N.W. Washington, DC 20036-5306, Phone: 202-955-8500 (d) James David Dantzler, Jr., J. Timothy Mast, Troutman Sanders LLP, Bank of America Plaza, Suite 5200, 600 Peachtree Street, NE Atlanta, GA 30303, Phone: 404-885- 3314, Fax: 404-962-6799, E-mail: david.dantzler@troutmansanders.com or tim.mast@troutmansanders.com The plaintiff firms in this litigation are: * 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 * Milberg Weiss Bershad Hynes & Lerach, LLP (New York, NY), One Pennsylvania Plaza, New York, NY, 10119-1065, Phone: 212.594.5300, * Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd, PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E- mail: info@sbclasslaw.com * 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 * 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 * 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 ALTRIA GROUP: IL High Court Overturns $10.1B "Lights" Judgment -------------------------------------------------------------- In a highly anticipated ruling, the Illinois Supreme Court reversed 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, The Financial Times reports. The class action award, alleging that smokers were misled about whether such cigarettes were safer, was seen as the most challenging of three big cases remaining against Altria Group Inc., the parent company, and may hasten a proposed corporate break-up. The ruling points to an improving litigation environment for corporate America more broadly, as legislation to reform class action law and a changing mood among judges begins to weaken the power of plaintiff lawyers. Michael Greve, a class action expert at the American Enterprise Institute, which advocates reform of the American litigation system told The Financial Times, "Any industry that confronts cases under consumer protection statutes - and that is every industry in America - will breathe a huge sigh of relief after this ruling." Analysts told The Financial Times that the nature of the ruling was a "best-case scenario" for Altria, since it made it harder to bring similar class actions by smokers of "lights" in other states. Bonnie Herzog of Citigroup told The Financial Times, "The lights case has been the biggest hurdle for Altria's board to break up its company and there is no question that it is now much closer to this event." Other than to say it was "gratified" by the court's decision, Altria declined to comment further on the ruling. However, Louis Camilleri, its chief executive, recently told analysts he thought emerging legal "clarity" should pave the way for an imminent restructuring likely to involve spinning off its Kraft Foods subsidiary and possibly Philip Morris overseas businesses too. The Illinois court's ruling focused on the fact that the Federal Trade Commission, the federal consumer protection watchdog, had authorized tobacco companies to describe their products as "light" or "low tar". The high court found that Illinois state law precludes such suits when a federal agency has acted in this way. The unanimous ruling stated, "The FTC could, and did, specifically authorize all United States tobacco companies to utilize the words 'low', 'lower', 'reduced' or like qualifying terms, such as 'light.'" Legal experts told The Financial Times that the high court's opinion was written in such a way that review by the U.S. Supreme Court is extremely unlikely. Additionally, in the words of two justices who wrote a concurring opinion, the court makes it clear that it disapproved more generally of such lawsuits, in which the plaintiffs fail to establish "that they sustained actual damages." Although the Illinois court's ruling has no direct impact on other state courts, the fact the state has long been among the most plaintiff-friendly jurisdictions means a change of heart by its justices is viewed as significant nationwide. Professor Dick Daynard of the Tobacco Control Resource Centre at Northeastern University law school told The Financial Times, "One would be foolish to bring a tobacco class action in Illinois or most other kinds of consumer class actions in Illinois," says "The court clearly is sending out signals that we don't like these things." The initial billion-dollar judgment in the class action case was handed down against the cigarette maker by a trial court judge in March 2003. The Supreme Court then 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, an earlier Class Action Reporter story (December 14, 2005) reports. 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 record-setting award spotlighted southern Illinois' reputation for plaintiff-friendly rulings. Business groups and other critics say downstate civil courts, especially in Madison County, are too generous with verdicts against deep-pocketed defendants, an earlier Class Action Reporter story (December 16, 2005) reports. State governments all over America will be watching the Philip Morris verdict, with an eye on their own budgets. This is due to the fact that in 1998 forty-six states entered into a settlement under which the tobacco industry agreed to pay $206 billion over 25 years to cover the states' smoking-related health costs. Most states have come to rely on these annual payments. In theory, these payments could be sharply reduced if Philip Morris, the biggest money-provider in the settlement, goes bankrupt because of a private suit, an earlier Class Action Reporter story (December 16, 2005) reports. The suit is styled "Sharon Price and Michael Fruth, et al. v. Philip Morris Incorporated, No. 00-L-112," now appealed before the Illinois Supreme Court, on direct appeal from the Circuit Court of the Third Judicial Circuit, Madison County, Illinois. Judge Nicholas Byron is the Presiding Judge in the case. Class Counsel is Stephen Tillery of Korein Tillery, Mail: #10 Executive Woods Court, Belleville, IL 62226, Phone: (618) 277-1180, Fax: (618) 222-6939 E-mail: contact@koreintillery.com. Lawyers for the Company are: (1) James R. Thompson, George C. Lombardi, Jeffrey M. Wagner, Julie A. Bauer and Stuart Altschuler of Winston & Strawn LLP, 35 West Wacker Drive, Chicago IL 60601- 9703, Phone: 312-558-5600 (2) Michele Odorizzi, Joel D. Bertocchi, Michael K. Forde of MAYER, BROWN, ROWE & MAW LLP, 190 South LaSalle Street, Chicago, IL 60603-3441, Phone: 312-782-0600 (3) Larry Hepler, Beth A. Bauer of BURROUGHS, HEPLER, BROOM, MacDONALD, HEBRANK & TRUE, LLP, 103 West Vandalia Street, Suite 300, Post Office Box 510, Edwardsville, IL 62025-0510 Phone: 618-656-0184 (4) Kevin M. Forde, KEVIN M. FORDE, Ltd., 111 West Washington Street, Suite 1100, Chicago, IL 60602 Phone: 312-641-1441 AUSTRIA: Starts Holocaust Compensation Process, Sends Letters ------------------------------------------------------------- Austria recently began the process of compensating Holocaust victims robbed under the Nazis by mailing notifications to the first survivors eligible for payments, The Associated Press reports. The General Settlement Fund (GSF), which was created by Austria in 2001 to compensate those stripped of businesses, property, bank accounts and insurance policies under the Third Reich, mailed the letters to 100 of the 19,300 survivors who have applied. The general secretary of the fund, Hannah Lessing, told The Associated Press that the letters say how much the victims will receive, along with a form they must sign and return promising not to sue Austria or Austrian companies that benefited from the taken property In addition, Ms. Lessing told The Associated Press, "This is the first step in payment. Now the first payments can be made in the next 10 days." Andreas Kohl, Austria's parliament speaker and chairman of the fund's board, told The Associated Press that he was determined to see the first payments go out before year's end, and he pledged to devote three hours on signing another 1,300 letters. Earlier this year, the government and Austrian companies pledged to pay $210 million to endow the fund once all Holocaust litigation against Austria was resolved. Vienna was home to a vibrant Jewish community of some 200,000 before World War II. Currently, it numbers about 7,000. A spokeswoman for the community, Erika Jakubovits, told The Associated Press that the group was "very satisfied" that the first payments would soon be made. Previously, the payments were delayed due to pending legal action in the United States. That hurdle was cleared recently due to two events: a New York court's decision essentially dismissed class action lawsuits against Austrian businesses and a ruling last month by a New York appellate court. The December 7, 2005, ruling by the U.S. District Court in New York paved the way for final compensation payments to Holocaust survivors from Austria. It was greeted with relief by survivor organizations and the Conference on Jewish Material Claims Against Germany, parties to a settlement negotiated with the Austrian government, an earlier Class Action Reporter story (December 13, 2005) reports. Gideon Taylor, Claims Conference executive vice president told The Jewish Telegraphic Agency that the resulting legal closure means payments are imminent. Neither the Austrian government nor businesses would agree to payments without insurance against future lawsuits. Mr. Taylor further told The Jewish Telegraphic Agency in a telephone interview, "This fund has been tied up in legal knots in courts in the U.S., and this had deprived many Austrian Holocaust survivors and their heirs of the symbolic payments." He emphasizes though, "like most restitution payments, this is not an issue of money." Mr. Taylor also pointed out, "The amounts are small, but the property losses were large. This is about symbolism. People are frustrated that what was supposed to be a symbolic gesture turned into a legal argument," an earlier Class Action Reporter story (December 13, 2005) reports. All in all, Austrian restitution funds totaled about $500 million. However, the component from the $210 million GSF for Austrian Jews created in January 2001 through negotiations with the Claims Conference was held up until December 7. By that date, Judge Shirley Wohl Kram of the Southern District of New York dismissed the cases brought against the government and industry of Austria by some Jews of Austrian background, and by some heirs, an earlier Class Action Reporter story (December 13, 2005) reports. Judge Kram threw out the suits after the 2nd U.S. Circuit Court of Appeals, which had dismissed remaining Holocaust-related lawsuits against Austria, ordered her on November 23 to resolve the cases within 60 days. The Appeals Court called GSF a preferable method of ensuring payments to victims of Nazism, an earlier Class Action Reporter story (December 13, 2005) reports. In a 2-1 ruling, the 2nd U.S. Circuit Court of Appeals in New York dismissed parts of a class action lawsuit by Austrian Jewish victims of the Nazi regime in a ruling that may clear the way for payouts from a settlement fund. Deferring to U.S. foreign policy interests, the federal appeals court stated in its ruling that it was "particularly mindful" of the federal government's statement that dismissing the case would advance its relations with Austria, Israel and Western, Central and Eastern European nations. According to the court, the lawsuit was the final case holding up implementation of an agreement with Austria that established a fund to compensate Austrian Jews whose property was confiscated during the Nazi era and World War II. Essentially, distributions from the Austrian compensation fund, which included $150 million to cover certain property claims, were contingent on dismissal of the case, an earlier Class Action Reporter story (November 24, 2005) reports. The plaintiffs in the case, which include present and former nationals of Austria and their heirs and successors who suffered from Nazi persecution between 1938 and 1945, brought the lawsuit in October 2000 against the Republic of Austria and an organization through which Austria owns, operates and controls commercial enterprises. Austria asked for dismissal of the lawsuit on the grounds of sovereign immunity, an earlier Class Action Reporter story (November 24, 2005) reports. That lawsuit was the final case holding up implementation of an agreement with Austria that established a fund to compensate Austrian Jews whose property was confiscated during the Nazi era and World War II, according to the appeals court. Distributions from the Austrian compensation fund, which included $150 million to cover certain property claims, were contingent on dismissal of the case, an earlier Class Action Reporter story (November 28, 2005) reports. In 2002, Austrian officials signed an agreement with Ariel Muzicant, the leader of Austria's Jews to compensate his community for property stolen and destroyed during Nazi rule. Under the deal, reached after months of negotiations, Austria's nine provinces are to pay a total of $17 million (18.2 million euros) in five yearly installments to the Jewish community, an earlier Class Action Reporter story (July 17, 2002) reports. The federal government has come to terms with Austrian Jews and their survivors on compensation. After signing the deal at a meeting of governors in the Upper Austria city of Gmunden, some 110 miles west of Vienna, Josef Puehringer, the governor of Upper Austria, said the deal settled an obligation to the country's Jews. We "have fulfilled our moral obligations," according to Mr. Puehringer. "With this agreement, an important chapter has been closed." Local leaders also said that the first installment would be paid only after two wartime-related class actions pending in the United States against the Austrian government are withdrawn, an earlier Class Action Reporter story (July 17, 2002) reports. BEAZER HOMES: NV High Court Overturns Construction Defects Award ---------------------------------------------------------------- A multimillion-dollar construction defects award was recently overturned by a unanimous Nevada Supreme Court decision, which held that the case was improperly given class action status by a lower court judge, The Las Vegas Sun reports. The ruling, which favors Beazer Homes Holding Corporation, went against homeowners who sued the company after finding cracks in foundations, walls and driveways at their North Las Vegas properties allegedly caused by expansive soil conditions. In the ruling, Justice Jim Hardesty wrote, "Because single-family residence constructional defect litigation often raises diverse, individualized claims and defenses, we conclude that, generally, the requirements for class action certification cannot be met." In arguments before the Supreme Court, a Beazer attorney contends that a defect lawsuit involving The Villages at Craig Ranch homes should never have been made a class action case, and that a $7.3 million jury verdict should be overturned. With interest, costs and attorneys fees, the total value of the case is about $15.6 million. However, attorneys for 200 Craig Ranch Village homeowners countered that class action status was appropriate since the damages suffered were predominantly related to concrete pads that did not conform to the subdivision's soil conditions. The homeowners had sought nearly $25 million. Plaintiffs' attorneys are seeking nearly $25 million in damages caused by the soil, including completely replacing the slabs in more than 50 homes and the consequent displacement of those residents. The homeowners claim they were not told about expansive soil conditions at the site of the development, an earlier Class Action Reporter story (November 19, 2002) reports. Robert Carlson, defense attorney, countered that while Beazer Homes recognizes that there are problems with some of the homes at Craig Ranch, the damage is not as extensive as the lawsuit implies. Mr. Carlson noted that Beazer estimates the total cost of repairs to be about $2.9 million, an earlier Class Action Reporter story (November 19, 2002) reports. The case involving Atlanta-based Beazer, which built the homes between 1994 and 1999, resulted in one of the longest and largest construction defect trials in Nevada history. The trial that began in 2002 lasted three months. With the Supreme Court ruling though new trials on all issues in the case will now be necessary. Beazer attorneys have said a retrial of each case would be best for both the court system and the individuals with claims. In the trial that ended in February 2003, a 12-person jury, awarded $7.8 million in home construction defect damages to some 200 homeowners at Craig Ranch Village, a North Las Vegas residential development constructed by Beazer. Attorneys for the homeowners were requesting $23.7 million to repair cracks in foundations, walls and driveways allegedly caused by expansive soil conditions. However, Beazer Homes contended that it would cost only $3.4 million to fix the homes. Less than 10 homes had serious damage. About 50 homes were classified into three categories of damages, an earlier Class Action Reporter story (February 13, 2003) reports. In addition to awarding damages, the jury cleared Beazer of any violations of implied or expressed warranties and found contributing negligence by both the class action members and Beazer. Seven percent contributory negligence was allocated to the homeowners and 93 percent to the builder. After that Judge Allan Earl, the presiding judge in the case said that the jurors performed their duties well, an earlier Class Action Reporter story (February 13, 2003) reports. CALIFORNIA: FAIR Backs Suit V. Tuition Discounts For Illegals ------------------------------------------------------------- The Federation for American Immigration Reform (FAIR) expressed support for some 60,000 U.S. citizens who are seeking damages resulting from California's illegal and discriminatory tuition policies at state-run colleges and universities in a landmark class action lawsuit, The PHXNews reports. According to Dan Stein, president of FAIR, "The in-state tuition policy in California was implemented in brazen disregard for the law. Under the California policy, illegal aliens have greater rights and privileges than American citizens." The California legislature granted in-state tuition benefits to illegal aliens attending schools in the California State and community college systems. The Board of Regents adopted a similar policy for students attending the state's ten top tier University of California institutions. In a clear indication that they knew the policy was illegal, the regents sought and were granted immunity from the legislature, before implementing their policy. Mr. Stein pointed out, "In this California case, there are some 60,000 individuals who are being directly discriminated against, to the tune of many thousands of dollars each, by an overtly illegal policy of the state." He goes on to state, "We believe the facts in this case are clear and the damage to these students is incontrovertible. Congress was very clear about what they had in mind when they approved 8 U.S.C., Section 1623, of the 1996 Immigration Act. We believe the students will prevail and this case will set a precedent that sends a clear message to states that enacting policies favoring illegal aliens over American citizens is illegal." Out-of-state college students initiated the lawsuit challenging the law that lets some illegal immigrants who graduate from California high schools to pay lower in-state fees at the state's public colleges and universities. That 2002 law essentially allows students who attend at least three years of high school in California to qualify for the same in-state fee break given California citizens, regardless of their immigration status. The lower fee levels can save students thousands of dollars a year. For example, out-of-state students pay nearly $24,000 a year to attend the University of California, about $17,000 more than California residents, an earlier Class Action Reporter story (December 16, 2005) reports. Filed in Yolo County, California, the suit, which challenges the law that allows undocumented students to qualify for lower in- state tuition rates, was brought on behalf of 42 plaintiffs, including two children of a former San Diego congressman. Plaintiffs' attorneys say that the discriminatory policy affects 60,000 out-of-state students who pay higher fees than in-state illegal immigrants and will be seeking damages, an earlier Class Action Reporter story (December 16, 2005) reports. At issue is a federal law the plaintiffs claim specifically bars states from offering benefits to illegal immigrants without also making them available to U.S. citizens. California is one of nine states with such laws. A lawsuit filed in federal court in Kansas challenging that state's law was dismissed, but is being appealed, an earlier Class Action Reporter story (December 16, 2005) reports. To qualify for the in-state rate, students must have attended a California high school for at least three years, must graduate from a California high school and must sign an affidavit declaring that they will seek to become legal residents as soon as it is feasible, an earlier Class Action Reporter story (December 16, 2005) reports. The suit filing was triggered when former Rep. Brian Bilbray, R- San Diego, discovered that his children would have to pay more than $2,000 to attend community college after attending private school in Virginia. Asked for comment by The Associated Press, former Assemblyman Marco Firebaugh, D-South Gate, who wrote the California law, did not return a phone call to his Los Angeles office, an earlier Class Action Reporter story (December 16, 2005) reports. CALIFORNIA: SF International Airport Settles With Deaf Advocates ---------------------------------------------------------------- As part of a settlement in a class action lawsuit filed by disability-advocacy groups more than three years ago, San Francisco International Airport will bolster its communications equipment for deaf travelers and pay monetary damages, The San Francisco Examiner reports. Under the agreement, the airport will add 80 visual paging monitors to its domestic and international terminals and boost its number of text telephones. The monitors, which the airport already has 46, enable deaf and hard-of-hearing passengers to access information from the public address system. In addition, the airport also agreed to award $40,000 in combined monetary damages, including $20,000 to the Deaf Counseling, Advocacy and Referral Agency, $8,000 to the California Center for Law and the Deaf and $12,000 to Colin Piotrowski, a deaf San Leandro man who was one of the case's original plaintiffs. Commenting on the agreement, Mr. Piotrowski said in a news release, "With these new changes, SFO is going to be one of the best airports in the country for people who are deaf." The concessions resolve a federal lawsuit filed in April 2002, alleging the airport violated state law and the Americans with Disabilities Act by failing to provide deaf and hard of hearing travelers full access to airport information. The Disability Rights Advocates and the California Center for the Deaf filed the suit in the United States District for the Northern District of California. Accusing the airport of failing to provide adequate access to deaf and hard-of-hearing travelers, the suit, seeks class action status. Additionally, the suit also accuses the airport, which is owned and operated by the city and county of San Francisco, of failing to inform deaf passengers when they are to board, wrongly bumping them from flights and failing to notify them of gate changes, an earlier Class Action Reporter story (April 18, 2002) reports. The suit is styled, "Deaf Counseling, Advocacy and Referral Agency et al v. San Francisco Airport Commission et al, Case No. 3:02-cv-01844," filed in the United States District Court for the District of Northern California, under Judge Maria-Elena James. Representing the Plaintiff/s are, Melissa W. Kasnitz and Kevin Martin Knestrick of Disability Rights Advocates, 2001 Center St., 3rd Floor, Berkeley, CA 94704, Phone: 510-665-8644, Fax: 510-665-8511, E-mail: mkasnitz@dralegal.org and kknestrick@dralegal.org; and J. Kendrick Kresse of California Center for Law and the Deaf, 14895 East 14th St., Suite 220, San Leandro, CA 94578, Phone: 510-483-0922, Fax: 510-483-0967, E- mail: Ken.Kresse@deaflaw.org. Representing the Defendants is Ellen Shapiro, SF City Attorney's Office, 1390 Market St., 6th Floor, San Francisco, CA 94114, Phone: 415-554-3879, E-mail: ellen_shapiro@sfgov.org. CHUBB CORPORATION: Policyholders Sue Over Commission Agreements --------------------------------------------------------------- The Company and several of its subsidiaries continue to face class actions in various federal and state courts, related to the use of contingent commission agreements. The suits also name as defendants several brokers and insurers. One suit is pending in the United States District Court for the District of New Jersey on behalf of the Company's alleged policyholders, or persons who purchased insurance through the broker defendants. The suit asserts claims under the Sherman Act and state law and the Racketeer Influenced and Corrupt Organizations Act ("RICO"), arising from the unlawful use of contingent commission agreements. The complaint seeks treble damages, injunctive and declaratory relief, and attorneys' fees. The Company also has been named in two purported class actions in state court relating to allegations of unlawful use of contingent commission arrangements. The first was filed in Seminole County, Florida. The second, filed on May 17, 2005, was filed in Essex County, Massachusetts. In both actions, the plaintiffs generally allege that the Company and the other non- affiliated defendants unlawfully used contingent commission agreements. The actions seek unspecified damages and attorneys' fees. CITIZENS INC.: TX Court Yet To Rule on Suit Certification Appeal ---------------------------------------------------------------- The Supreme Court of Texas has yet to rule on Citizens, Inc.'s appeal of a lower court decision affirming in part class certification for a lawsuit filed against it, styled "Delia Bolanos Andrade, et al v. Citizens Insurance Company of America, Citizens, Inc., Negocios Savoy, S.A., Harold E. Riley, and Mark A. Oliver, Case Number 99-09099." The suit was filed in Travis County, Texas district court. The suit alleges that life insurance policies offered or sold to certain non-U.S. residents by Citizens Insurance Company of America (CICA) are actually "securities" that were offered or sold in Texas by unregistered dealers in violation of the registration provisions of the Texas securities laws. The suit seeks class action status naming as a class all non-U.S. residents who purchased insurance policies or made premium payments since August 1996 and assigned policy dividends to an overseas trust for the purchase of the Company's Class A common stock. The remedy sought is rescission of the insurance premium payments. In July 31,2002, the court granted class certification to the suit. On April 24, 2003, the Court of Appeals for the Third District of Texas affirmed the ruling in part and modified it in part. The Supreme Court of Texas granted the Company's Petition for Review and heard oral arguments on the case on October 21, 2004. The Company believes the Plaintiffs' claim under the Texas Securities Act is not valid and the class defined is not appropriate for class certification and does not meet the legal requirements for class action treatment under Texas law. Recent decisions from the Texas Supreme Court indicate a more defense-oriented approach to class certification cases, especially in class action cases encompassing claimants from more than one state or jurisdiction. Although a decision is not expected until sometime in 2005, the Company expects the Supreme Court of Texas will ultimately rule in the Company's favor, decertify the class and remand the matter to district court for further action. During the time of the Company's appeal to the Texas Supreme Court, there are no further district court proceedings in the case. CONSTAR INTERNATIONAL: Continues To Face PA Securities Lawsuit -------------------------------------------------------------- Constar International, Inc. continues to face a consolidated securities class action filed in the United States District Court for the Eastern District of Pennsylvania, styled "In re Constar International, Inc. Securities Litigation (Master File No. 03-CV-05020)" after the court refused to dismiss it. The suit also names as defendants certain of its present and former directors, Crown Holdings, Inc., as well as various underwriters of its initial public offering. This action consolidates previous lawsuits, namely "Parkside Capital LLC v. Constar International Inc. et al. (Civil Action No. 03-5020)," filed on September 5, 2003 and "Walter Frejek v. Constar International Inc. et al. (Civil Action No. 03-5166)," filed on September 15, 2003. The consolidated and amended complaint, filed June 17, 2004, generally alleges that the registration statement and prospectus for the Company's initial public offering of its common stock on November 14, 2002 contained material misrepresentations and/or omissions. Plaintiffs claim that defendants in these lawsuits violated Sections 11 and 15 of the Securities Act of 1933. Plaintiffs seek class action certification and an award of damages and litigation costs and expenses. Under the Company's charter documents, an agreement with Crown and an underwriting agreement with Crown and the underwriters, the Company has incurred certain indemnification and contribution obligations to the other defendants with respect to this lawsuit. The court denied the Company's motion to dismiss for failure to state a claim upon which relief may be granted on June 7, 2005 and the Company's answer was filed on August 8, 2005. The suit is styled "In re Constar International Inc. Securities Litigation (Master File No. 03-CV-05020," filed in the United States District Court for the Eastern District of Pennsylvania. The plaintiff firms in this litigation are: (1) Bernard M. Gross, 1500 Walnut Street, Suite 600, Philadelphia, PA, 19102, Phone: 215.561.3600, Fax: 215.561.3000, E-mail: bmgross@BernardMGross.com (2) Cauley Geller Bowman Coates & Rudman, LLP (New York), 200 Broadhollow, Suite 406, Melville, NY, 11747 Phone: 631.367.7100, Fax: 631.367.1173, (3) Federman & Sherwood, 120 North Robinson, Suite 2720, Oklahoma City, OK, 73102 Phone: 405-235-1560, E-mail: wfederman@aol.com (4) Fruchter & Twersky, 60 East 42 Street, New York, NY, 10021, Phone: 212.687.6655, (5) Milberg, Weiss, Bershad, Hynes & Lerach LLP (San Diego, CA), 600 West Broadway, 1800 One America Plaza, San Diego, CA, 92101, Phone: 800.449.4900, E-mail: support@milberg.com (6) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd, PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E- mail: info@sbclasslaw.com CONSTAR INTERNATIONAL: Trial in FL Injury Suit Set January 2006 --------------------------------------------------------------- Trial in the litigation filed against Constar International, Inc. in the Ninth Judicial Circuit Court of Florida is set for January 2006. The Company's former and current employees of its Orlando, Florida facility filed the suit, seeking unspecified monetary damages and alleging bodily injury as a result of exposure to off-gasses from polyvinyl chloride (PVC) during the manufacture of plastic bottles from 1980 to 1987. PVC suppliers and a manufacturer of the manufacturing equipment used to process the PVC are also defendants. The litigation is currently in the discovery stage. On May 5, 2005, the court denied the Company's motion for summary judgment, which had been brought as to one of the plaintiffs. A trial with respect to this plaintiff is scheduled to commence in January 2006. DANIER LEATHER: Ontario Appellate Court Dismisses IPO Lawsuit ------------------------------------------------------------- Danier Leather Inc. (TSX: DL.SV) reports that the Ontario Court of Appeal allowed its appeal from the May 2004 judgment of the Superior Court of Justice (Ontario) in the matter of a class action concerning the Company's initial public offering ("IPO") in 1998. In its unanimous decision, a panel of the Court of Appeal allowed the appeal on three separate grounds, set aside the trial decision and dismissed the class action. The decision stated that the Danier Leather, a leading integrated designer, manufacturer, and retailer of high-quality leather and suede clothing and accessories, had met its statutory disclosure obligations during the IPO process. It noted that the Company's achievement of its financial forecast was a relevant consideration. And it stated that greater deference should have been accorded the business judgment of the Company's senior management, judgment that turned out to be correct. Edwin Hawken, Chairman of the Board of Danier Leather Inc., said, "We're delighted with this decision of Ontario's highest Court. It vindicates the conduct of the Company, its directors and its senior officers during the IPO process." Jeffrey Wortsman, President and Chief Executive Officer of Danier Leather Inc., noted, "I'm pleased with the decision of the Court of Appeal. The Company can continue to focus its attention on the business, on meeting the needs of our customers, and on creating value for our shareholders." For more details, contact Investor Relations Contact: Danier Leather Inc. Jeffrey Wortsman President and Chief Executive Officer, Phone: (416) 762-8175 ext. 302, Fax: (416) 762-7408, E- mail: leather@danier.com; and Danier Leather Inc. Bryan Tatoff Senior Vice-President and Chief Financial Officer, Phone: (416) 762-8175 ext. 328, Fax: (416) 762-6072, E-mail: bryan@danier.com. DYNAMICS RESEARCH: Employees Launch FLSA Violations in MA Court --------------------------------------------------------------- Dynamics Research Corporation faces a class action filed in the United States District Court for the District of Massachusetts alleging violations of the Fair Labor Standards Act and certain provisions of Massachusetts General Laws. The Company believes that its practices comply with the Fair Labor Standards Act and Massachusetts General Laws. The Company has moved to have the complaint removed from Federal Court and addressed in accordance with the company's mandatory Dispute Resolution Program for the arbitration of workplace complaints, the Company stated in a disclosure to the Securities and Exchange Commission. EASTMAN KODAK: Securities Fraud Suits Consolidated in W.D. NY ------------------------------------------------------------- The securities class actions filed against Eastman Kodak Co. and two of its current executives have been consolidated in the United States District Court for the Western District of New York. Several suits were initially filed, alleging claims under the Securities Exchange Act on behalf of a proposed class of persons who purchased securities of the Company between April 23, 2003 and September 25, 2003, inclusive. The substance of the Complaints is that various press releases and other public statements made by the Company during the proposed class period allegedly misrepresented the Company's financial condition and omitted material information regarding, among other things, the state of the Company's film and paper business. The cases have been consolidated in the Western District of New York and the lead plaintiffs are John Dudek and the Alaska Electrical Pension Fund. The first identified suit in the litigation is styled "Herbert T. King, et al. v. Eastman Kodak Company, et al.," filed in the United States District Court for the Central District of California. The plaintiff firms in this litigation are: (1) Goldman Scarlato & Karon, P.C., Phone: 888-753-2796, (2) Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Melville), 200 Broadhollow, Suite 406, Melville, NY, 11747, Phone: 631.367.7100, Fax: 631.367.1173, E-mail: info@lerachlaw.com (3) Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego), 401 B Street, Suite 1700, San Diego, CA, 92101, Phone: 206.749.5544, Fax: 206.749.9978, E-mail: info@lerachlaw.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 GE CONSUMER: Recalls 6.6T Various Gas Ranges Due to Fire Hazard --------------------------------------------------------------- In cooperation with the U.S. Consumer Product Safety Commission (CPSC), GE Consumer & Industrial, of Louisville, Kentucky is voluntarily recalling about 6,600 units of GE Monogramr 36-inch and 48-inch Professional Gas Ranges. According to the Company, these ranges were manufactured with a design flaw that can cause an electrical arc between the wiring and adjacent gas supply tubes at two locations in the control housing of the range, posing a fire hazard. GE has received reports of six incidents of fire in the control area of these ranges. No injuries or property damage have been reported. The recalled GE Monogram built-in ranges include models ZDP48N6RH1SS, ZDP48L6RH1SS, ZDP48N4GH1SS, ZDP48L4GH1SS, ZDP48N6DH1SS, ZDP48L6DH1SS, ZDP36N4DH1SS, and ZDP36L4DH1SS. The recalled ranges have serial numbers starting with DG, FG, GG, HG, LG, MG, RG, SG, TG, VG, ZG, AH, DH, FH, GH, HH, LH, MH, RH, SH. To find the model and serial number, look underneath the top ledge (also called the "bull nose"), above the range controls. They were manufactured from February 1, 2004 to October 1, 2005. Manufactured in the U.S.A., the gas ranges were sold by homebuilders and by appliance stores nationwide from February 2004 through November 2005 for between $4,000 and $6,000. Customers who have purchased one of these recalled ranges should contact GE to schedule a free, in-home repair. Until the repair is completed, consumers should stop using the griddle on the 36- inch and 48-inch models, and the left front burner on the 48- inch models. The large oven and all other burners can be used. Consumer Contact: Consumers should call the Recall Hotline at (866) 696-7583 between 8 a.m. and 8 p.m. ET Monday through Friday and between 8 a.m. and 2 p.m. ET on Saturdays to see if their range is included in this recall, and to arrange for a free service call. Information on the recall is also included in the Recall Information page at http://GEAppliances.com.Firm's Media Contact: All media calls should be referred to Kim Freeman, GE Consumer & Industrial global public relations manager, at (502) 452-7819 or kim_freeman@ge.com. ILLINOIS: Towns to Settle Suit Over Fees on Cellular Phone Bills ---------------------------------------------------------------- Winnetka and most of its North Shore neighbors in the state of Illinois are among nearly 400 municipalities statewide that will pay out more than $16 million to settle a class action lawsuit over the legality of a local fee on cellular telephone bills, The Pioneer Press Online reports. Under terms of the settlement, which was approved by Cook County Circuit Court, the communities will repay 70 percent of the money that they collected in a 1 percent fee on local cell phone bills from January 1, 1998, to February 8, 2002. The fee was created under a 1997 state law that the Illinois Supreme Court eventually ruled unconstitutional. Villages say they are closing the books on money that has been in question for years. In addition, they are also avoiding the possibility of a much larger payout for money collected on landlines. Since it was considered too difficult to link rebates to past customers, most of the money will go into public funds for 911 centers and grants to hospitals for emergency services for poor people. The plaintiffs named in the lawsuit will receive a nominal settlement, while the attorneys will get up to one-third of the settlement. Albert Rigoni, Skokie Village Manager told The Pioneer Press Online, "The municipalities were always facing the fact that the Illinois Supreme Court had declared the cellular tax unconstitutional, so that was sort of the death knell of that whole piece of the lawsuit. Nobody liked to give that money back, but as they say, the cards were not in our favor." Mr. Skokie was appointed to lead the defense for the municipalities in the case. Also under the settlement terms, the villages are required to make an 85-percent payback for fees collected from PrimeCo customers. That company, which is now U.S. Cellular, had more precise records of amounts collected, according to Mr. Rigoni. Villages are supposed to pay the money by December 19, although they have the option to seek an extension to early next year. Most North Shore towns are settling the bill this month, mostly with money set aside in recent years. Skokie itself will pay about $270,000, although it will also receive $60,000 to offset its costs in leading the defense. Wilmette's tab is $122,826. Tim Frenzer, Wilmette village attorney, told The Pioneer Press Online, "We ended up escrowing essentially 80 percent of what we need to pay under the judgments. It doesn't affect our operating budget. If the land line (fees) would have been overturned, that would have been a lot of money. You would have been talking half a million probably." Mr. Frenzer explains that the villages ended up on the hook for the settlement because of a political decision to call the surcharge a fee instead of a tax. Fees are supposed to be tied to costs of using the public right-of-way, and the court found that cellular companies for the most part don't impose on public land. The state fixed that language in a 2002 law, and the money Wilmette has collected on bills since that time is unaffected by the lawsuit settlement. In the coming week, Glencoe will issue checks for a total of $50,299, about half of what was set aside for the lawsuit, according to Finance Director David Clark. Winnetka's share of the settlement was similar, at $54,514, and had been anticipated in the budget. Ed McKee, Winnetka's finance director told The Pioneer Press Online, "It's not going to cause any budgetary problems." INDIAN TRUST: Cobell v. Norton Case Still Deadlocked in House ------------------------------------------------------------- The House Resources Committee heard comments from both the Department of Interior and from plaintiffs in the Cobell v. Norton case on a bill designed to settle the lengthy and expensive trust fund litigation, however neither side offered any new information that would move them off their deadlocked positions, The Indian Country Today reports. Eloise 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, an earlier Class Action Reporter story (December 14, 2005) reports. "Large crimes incur large consequences," Ms. Cobell told the committee. She also said a legislative settlement would be in the best interest of everyone involved, including 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 added 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, an earlier Class Action Reporter story (December 14, 2005) reports. James Cason, associate deputy secretary of the Interior told the committee that his department claims that there is very little discrepancy in the accounting pointing out that some funds are owed to lease holders, others owed to the government. He also told the committee, "It is clear the plaintiff's public claim that $176 billion is owed is inflated, to say the least." The hearing was one of many that will be held to complete work on House Bill 4322, or the Indian Trust Reform Act of 2005. Mr. Cason contends, "The $27.5 billion figure is based on evidence that does not support it." He adds, "There are errors, but not many of them. We asked four of the five largest accounting firms if there was any systemic errors or evidence of fraud and the answers were 'No.'" According to Mr. Cason's testimony, the accounting did not take place for any time period prior to 1994. The federal court opinion required the accounting to be conducted from 1887 forward. "We are trying not to speculate on what happened in older time periods. The accounting is limited in older time periods and what information we have now shows there is no significant problem," according to him. "We are trying not to speculate on the error rate of older periods," he said. Ms. Cobell informed the committee that the government and the plaintiffs agreed with the $13 billion figure that went into the trust and with the compounded interest the $176 billion figure was arrived at by the plaintiffs. According to her, "By failing to acknowledge problems, they continue the century-old tradition. They don't know how much was paid. There [we]re so many records destroyed they know it is impossible to come up with an accounting. That's why the $27.5 billion is a bargain. Don't waste money on what we regard as highly questioned accounting." The government has spent $100 million in litigation and an equal amount in accounting and the documentation of current records and the cost will only continue to rise as the litigation continues. The funds in question belong to the Individual Indian Money (IIM) account holders and are not an entitlement of program funding. It represents money owed to the landowners for lease and royalty payments. "The department [of Interior] knows it can't do an accurate accounting and recent decisions made in the appellate court do not allow for the historic accounting," according to Ms. Cobell. Any errors are not a matter of any malfeasance or nonfeasance, Ms. Cason said in response to a question from Rep. Dale Kildee, D-Michigan. He explains that the problems are a causal effect of statutory history because Congress never included instructions about accounting before 1994. "There are no clear directions of what the expectations are; that's one of the fundamental flaws," he said. The government defines IIM account holders as individuals who had an account open on the date after the 1994 Trust Reform Act. A major problem faced by Interior is the fractionation of land. Fractionation means at times a parcel of land can be owned by up to 1,000 individuals, which makes account reconciliation a difficult task. The issue is further complicated by animosity from both sides and 100 years of administering a fiduciary trust by the federal government, according to Mr. Cason. That animosity has widened the gap between the two sides and made a reasonable settlement difficult at best. He pointed out though that the department has not personalized the issues involved and that it tries to be open and forthright about the situation. "I'm looking for a positive statement, there is a lot of anger on this issue, I am very angry about this. I don't want you to explain to me why people aren't angry, I want you to explain to me what you can do to get off center on this," said Rep. Jay Inslee, D-Washington. Mr. Cason told the committee that the department had been an active participant in a variety of efforts to find solutions, and that the solutions have not been successful because of differences in what is fair and reasonable. He said, "There are reasons for people to be angry on both sides of the fence. I try to be dispassionate and will do and continue to do and work with the committee to find a common ground. I suggest the plaintiffs have the same effort." The plaintiffs regard the role of Interior and of the Justice Department as not a good-faith effort. "Indian country worked to resolve this case," Ms. Cobell said, referring to the Indian Land Working Group that submitted a list of 50 principles and the $27.5 billion settlement figure. The House Resource Committee hearing was to help complete the proposed legislation that committee members offer as a work in progress. Both sides agree legislative action would be acceptable, but when it comes to the money figure the government is opposed and when future administration of the settlement funds are left in the hands of the treasury, the plaintiffs are angered. The U.S. Treasury is named as a defendant in the Cobell case. The plaintiffs want any funds to be distributed and managed by the courts, considered neutral territory. However, from comments made by senators and congressmen, it could be assumed that the courts will not be administering any of the funds, should there be any. Committee Chairman Richard Pombo, R-California, chairman of the House Committee on Resources and sponsor of the settlement bill, said the dollar figure submitted by both sides is an educated guess. Ms. Cobell claims that the government uses figures from $10 billion to $40 billion. At $27.5 million, the plaintiffs are somewhere in the middle. "You don't know how much was paid out, because they don't know how much was paid out," Rep. Pombo said. In the end, Ms. Cobell said she wants to see every dollar accounted for. Despite the outcome of the hearing, committee members agreed that the lawsuit and dispute has gone on too long. 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 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. Filed in 1996 by Blackfeet Indian Elouise Cobell, 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 (December 14, 2005) reports. 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. ISRAEL: Former Military Chief Faces War Crimes Suit in DC Court --------------------------------------------------------------- The former Chief of Staff of Israel's military was charged in a U.S. federal court with war crimes and crimes against humanity, The Free Speech Radio News reports. The class action lawsuit was filed against retired General Moshe Ya'alon in a D.C. federal court in connection to the hundreds of civilian deaths and injuries resulting from the 1996 shelling of the United Nations compound in Qana, south Lebanon. Over 100 civilians who had sought shelter from Israeli shelling were killed in the attack, and hundreds others were wounded, including U.N. personnel. The suit was filed on behalf of the sole survivor of a 10-member family, among others. According to the complaint, as head of Israeli army Intelligence, Gen. Ya'alon participated in the decision to shell the clearly marked U.N. compound at Qana and commanded responsibility for the attack. The suit follows a complaint filed recently against Avi Dichter, Israel's former intelligence chief, for his role in the decision to drop a one-ton bomb on a crowded residential neighborhood in Gaza City in July of 2002. Fifteen Palestinians were killed and hundreds more injured in that attack. Brought by the Center for Constitutional Rights, the suit against Mr. Dichter seeks unspecified damages for what it calls a "targeted assassination" in which the Israeli Air Force dropped a 2,205-pound bomb on an apartment building in the Occupied Palestinian Territory. According to the suit, the bombing killed Saleh Mustafa Shehadeh, purportedly a leader of Hamas, on an upper floor of the building, partially destroyed nine other buildings and damaged 21 more. Eight of the 15 killed were children, and another 150 people were injured. The plaintiffs seek to hold Mr. Dichter responsible under customary international law and the Torture Victim Protection Act. They pointed out that the court would have jurisdiction for human rights violations and war crimes under the U.S. Alien Tort Claims Act, a law that has been used by Holocaust survivors and relatives of people killed or tortured under despotic regimes from South America to the Philippines. Additionally, the lawsuit says that the bombing occurred as part of a series of targeted attacks on suspected terrorists that has killed 327 people and at least 174 non-targeted bystanders, including at least 47 children, since September 2000. It claims that Mr. Dichter had "developed, implemented and escalated the practice of targeted killings," an earlier Class Action Reporter story (December 12, 2005) reports. The suit is styled, "BELHAS et al v. YA'ALON, Case No. 1:05-cv- 02167-PLF," filed in the United States District Court for the District of Columbia, under Judge Paul L. Friedman. Representing the Plaintiff/s are, James R. Klimaski of KLIMASKI & ASSOCIATES, PC, 1819 L. Street NW, Suite 700, Washington, DC 20036-3830, Phone: (202) 296-5600, Fax: (202) 296-5601, E-mail: klimaski@klimaskilaw.com. ITXC CORPORATION: NY Court Preliminarily OKs 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 ITXC Corporation and certain of its former officers and directors. Several purported shareholder class action lawsuits were initially commenced in 2001, alleging, among other things, that, in connection with the Company's public offerings of securities, its prospectus did not disclose certain alleged practices involving its underwriters and their customers. These actions seek compensatory and other damages, and costs and expenses associated with the litigation. No discovery has taken place with respect to the Company and the other issuer defendants. The Company is one of hundreds of companies named in substantially identical lawsuits. All of these cases have been consolidated for pretrial purposes before Judge Scheindlin in the Southern District of New York, who refused to dismiss the cases in an opinion issued in February 2003. All of the individual defendants who had been named as defendants in the Company's case have now been dismissed from the proceeding without prejudice, pursuant to a stipulation with the plaintiffs. Neither the individual defendants nor the Company nor its insurers paid any consideration for these dismissals. The issuer defendants, their insurance carriers and the plaintiffs have negotiated a settlement pursuant to which the insurance carriers would fund any monetary consideration. This settlement was approved by the court on February 15, 2005 on a preliminary basis. Under the terms of the proposed settlement, the Company would be dismissed from the litigation with prejudice and should neither have future liability to plaintiffs nor any significant expenses in connection with the litigation, except for a limited obligation to cooperate in discovery in the plaintiffs' continuing cases against the underwriters. The suit is styled "In Re ITXC Corporation Initial Public Offering Securities Litigation," filed in relation to "IN re IPO Securities Litigation, 21-MC-92 (Sas)," 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 MARQUEE HOLDINGS: Fairness Hearing for MO Suit Settlement Held -------------------------------------------------------------- The Circuit Court of Jackson County, Missouri held a fairness hearing on December 2,2005 for the settlement of the litigation filed against Marquee Holdings, Inc., its directors, Apollo Management and AMC Entertainment, Inc., relating to the Company's merger with Apollo. On July 22, 2004, two lawsuits purporting to be class actions were filed in the Court of Chancery of the State of Delaware, one naming the Company, the Company's directors, Apollo Management and certain entities affiliated with Apollo as defendants and the other naming the Company, the Company's directors, Apollo Management and Holdings as defendants. Those actions were consolidated on August 17, 2004. The plaintiffs in the consolidated action filed an amended complaint in the Chancery Court on October 22, 2004 and moved for expedited proceedings on October 29, 2004. On July 23, 2004, three more lawsuits purporting to be class actions were filed in the Circuit Court of Jackson County, Missouri, each naming the Company and the Company's directors as defendants. These lawsuits were consolidated on September 27, 2004. The plaintiffs in the consolidated action filed an amended complaint in the Circuit Court of Jackson County on October 29, 2004. The Company filed a motion to stay the case in deference to the prior-filed Delaware action and separate motion to dismiss the case in the alternative on November 1, 2004. In both the Delaware action and the Missouri action, the plaintiffs generally allege that the individual defendants breached their fiduciary duties by agreeing to the Merger, that the transaction is unfair to the minority stockholders of the Company, that the merger consideration is inadequate and that the defendants pursued their own interests at the expense of the stockholders. The lawsuits seek, among other things, to recover unspecified damages and costs and to enjoin or rescind the Merger and related transactions. On November 23, 2004, the parties in this litigation entered into a Memorandum of Understanding providing for the settlement of both the Missouri action and the Delaware action. Pursuant to the terms of the Memorandum of Understanding, the parties agreed, among other things, that: (1) the Company would waive Section 6.4(a)(C) of the merger agreement to permit the Company to provide non-public information to potential interested parties in response to any bona fide unsolicited written acquisition proposals by such parties (which it did), (2) the Company would make certain disclosures requested by the plaintiff in the proxy statement and the related Schedule 13E-3 in connection with the special meeting to approve the Merger (which it did) and (3) the Company would pay, on behalf of the defendants, fees and expenses of plaintiffs' counsel of approximately $1.7 million (which such amounts the Company has accrued but believes are covered by its existing directors and officers insurance policy). In reaching this settlement, the Company confirmed to the plaintiffs that Lazard and Goldman Sachs had each been provided with financial information included in the Company's earnings press release, issued on the same date as the announcement of the merger agreement. The Memorandum of Understanding also provided for the dismissal of the Missouri action and the Delaware action with prejudice and release of all related claims against the Company, the other defendants and their respective affiliates. MINNESOTA CORN: Charities Get Windfall from Unclaimed Settlement ---------------------------------------------------------------- Thanks to Brown County District Court and a Minneapolis law firm that represented farmers who once invested in Minnesota Corn Products, a charity or foundation could end up receiving a check for $13,500, The Associated Press reports. The money comes from the settlement of a class action lawsuit against former MCP executives that totaled $5.75 million. The money was originally split among thousands of farmers, however not all those who were entitled to it could be tracked down. Minneapolis attorney Robert C. Moilanen told The Associated Press that his firm attempted to locate people who were due to benefit from the settlement, but some moved or did not cash their settlement checks. Because of that Mr. Moilanen asked Brown County District Court Judge John Rodenberg to donate the leftover settlement money to a regional organization. The class action lawsuit, filed by the farmers, claimed that former MCP executives misled shareholders when they sold the business to Archer Daniels Midland in 2002. The suit further claimed that the farmer-shareholders were not provided full details of how eight executives would personally benefit from the $615 million sale of their ethanol and corn syrup business to ADM, an earlier Class Action Reporter story (April 14, 2005) reports. MCP was on the verge of bankruptcy in 1997, when ADM invested $120 million for a 30 percent, nonvoting interest in the company. After that, MCP enjoyed considerable success with its corn-processing operations in Minnesota and Nebraska, but later on September 2002 ADM acquired the company, an earlier Class Action Reporter story (February 11, 2005) reports. The settlement was reached this summer after Judge Rodenberg dismissed the civil suit alleging that MCP executives misled the co-operative's investors when they sold the company to Archer Daniels. It states that the defendants, including former CEO L. Daniel Thompson, "strenuously deny any fault, wrongdoing or liability," they specifically denied breaching any fiduciary duties and said the sale was in the shareholders' best interest. Mr. Moilanen suggested as possible recipients Southern Minnesota Regional Legal Services, which offers legal services free of charge to eligible people; the Southwest State University Foundation; the University of Minnesota Extension Service or Minnesota Public Radio, which airs some agricultural programming. The judge said he would make a decision in a few days. MON CHONG: Recalls Dried Vegetables Due to Undeclared Sulfites -------------------------------------------------------------- Mon Chong Loong Trading Corporation of Maspeth, NY is recalling all of its Hong Kong Supermarket Brand Dried Vegetable, because they contain undeclared sulfites. People who have severe sensitivity to sulfites run the risk of serious or life- threatening reactions if they consume these products. The Hong Kong Supermarket Brand Dried Vegetable is packaged in uncoded, sealed plastic 12 oz. bags, with labeling in Chinese and English. It is a product of china. The product was distributed in the New York metropolitan area through retail stores. No illnesses have been reported to date in connection with this problem. The recall was initiated after routine sampling by the New York State Department of Agriculture and Markets Food Inspectors and subsequent analysis of the product by food laboratory personnel revealed the presence of sulfites in the product, which were not declared on the label. The consumption of 10 milligrams of sulfites per serving has been reported to elicit severe reactions in some asthmatics. Anaphylactic shock could occur in certain sensitive individuals upon ingesting 10 milligrams or more of sulfites. Analysis of the Hong Kong Supermarket Brand Dried Vegetable revealed it contained 327 milligrams per serving. Consumers who have purchased Hong Kong Supermarket Brand Dried Vegetable are urged to return it to the place of purchase for a full refund. Consumers with questions may contact the company at 718-417-1668. MORTGAGEIT INC.: Amended Overtime Wage Suit Pending in S.D. NY -------------------------------------------------------------- MortgageIT, Inc. continues to face an amended class action filed in the United States District Court for the Southern District of New York. The suit also names as defendant IPI Skyscraper Mortgage, which was, at the time, a subsidiary of, and has now been merged with and into, the Company. The case was filed by four former loan officers of a Company branch in Newburgh, New York, and seeks to recover allegedly unpaid minimum wage and overtime under both federal and New York labor laws. The case was filed as a putative class action; a motion for certification of a class under New York law and for collective action under federal law was filed on March 11, 2005. The suit is styled "Lacon v. Mortgage It, Inc. et al, case no. 1:04-cv-07847-VM-GWG," filed in the United States District Court for the Southern District of New York under Judge Victor Marrero. Representing the plaintiffs is Dan Charles Getman, Law Office of Dan Getman, 9 Paradies Lane, New Paltz, NY 12561 Phone: 845-255-9370 Fax: 845-255-8649 E-mail: dgetman@getmanlaw.com. Representing the plaintiffs are: (1) Andrew G. Celli, Kathleen Rosenfield, Emery Celli Brinckerhoff & Abady, LLP 545 Madison Avenue New York, NY 10022 Phone: 212-763-5000 Fax: 212-763-5001 E-mail: acelli@ecbalaw.com or krosenfeld@ecbalaw.com (2) Sally D. Garr and Alyssa T. Senzel, Patton Boggs LLP (DC) 2550 M Street, N.W. Washington, DC 20037 Phone: 202 457 6525 Fax: 202-457-6315 E-mail: sgarr@pattonboggs.com or asenzel@pattonboggs.com NATIONAL PHYSICIANS: Faces TCPA Violations Lawsuit in E.D. NY ------------------------------------------------------------- National Physicians Datasource LLC faces a class action filed in the United States District Court for the Eastern District of New York, alleging violations of the Telephone Consumer Protection Act (TCPA). The suit is styled "Ari Weitzner, M.D., P.C. et al. v. National Physicians Datasource LLC." Dr. Ari Weitzner filed the suit on May 24, 2005 as a class action, alleging that faxes allegedly sent by the Company, which publishes "The Little Blue Book," were sent in violation of the TCPA. The suit is styled `Weitzner v. National Physicians Datasource LLC, case no. 1:05-cv-02531-CBA-SMG," filed in the United States District Court for the Eastern District of New York, under Judge Carol B. Amon. Representing the Company is Richard A. Johnston Wilmer Cutler Pickering Hale and Dorr LLP, 399 Park Avenue, New York, NY 10022, Phone: 212 230-8800, Fax: 212 230-8888. Representing the plaintiffs is Todd C. Bank, Law Office of Todd C. Bank, 119-40 Union Pike, Fourth Floor, Kew Gardens, NY 11415, Phone: 718-520-7125, E-mail: TBLaw101@aol.com. NEW CENTURY: IL Court Dismisses Lawsuit For TCPA Violations ----------------------------------------------------------- The Circuit Court for Cook County, Illinois approved the settlement of the class action filed against New Century Mortgage Corporation, alleging violations of the Telephone Consumer Protection Act, 47 U.S.C. Section 227, and the Illinois Consumer Fraud Act, or ICFA. Paul Bernstein filed the suit in April 2002, seeking damages for receiving unsolicited advertisements to telephone facsimile machines. The plaintiffs filed an amended complaint on May 1, 2003 and, on September 18, 2003, the judge granted the Company's motion to dismiss with respect to the ICFA count and permitted the plaintiff to re-plead on an individual, not consolidated, basis. On September 30, 2003, the plaintiff filed a motion for class certification and second amended complaint. The court has consolidated similar cases into three groups. The Company sought and obtained an order permitting it to join other defendants in this consolidated action and filed a motion to dismiss the second amended complaint. Oral argument on the Company's consolidated motion was heard on March 30, 2004. The judge dismissed the ICFA count. At the class certification hearing on August 10, 2004, the plaintiffs' motion for class certification was withdrawn pursuant to a settlement between the parties. Pursuant to the settlement, the plaintiffs filed a third amended complaint seeking a nationwide class. The parties executed the written settlement agreement that the judge approved on April 5, 2005. This case was dismissed by an order dated October 27, 2005. NEW CENTURY: CA Court Orders Recovery For Defendants in Lawsuit --------------------------------------------------------------- The Superior Court for Alameda County ordered recovery of costs for all New Century entities named in a class action filed in September 2002, alleging violations of the state's consumer fraud laws. The suit named as defendants New Century Mortgage Corporation, New Century TRS Holdings, Inc., U.S. Bancorp, Loan Management Services, Inc., and certain individuals affiliated with Loan Management Services. In September 2002, Robert E. Overman and Martin Lemp filed the class action complaint in the Superior Court for Alameda County, California, alleging violations of the California Consumers Legal Remedies Act, Unfair, Unlawful and Deceptive Business and Advertising Practices in violation of Business & Professions Code Sections 17200 and 17500, Fraud-Misrepresentation and Concealment and Constructive Trust/Breach of Fiduciary Duty and damages including restitution, compensatory and punitive damages, and attorneys' fees and costs. The plaintiffs filed an amended complaint in July 2003 and, in September 2003, the judge granted New Century TRS's and the Company's demurrer challenging their claims in part. The Consumers Legal Remedies Act claim was dismissed and the plaintiffs withdrew the Constructive Trust/Breach of Fiduciary Duty claim. New Century TRS and the Company filed their answer to the plaintiffs' amended complaint in September 2003. New Century TRS and the Company then filed a Section 128.7 sanctions motion seeking dismissal of the case. On December 8, 2003, the court granted the motion for sanctions against the plaintiffs for filing a first amended complaint with allegations against New Century TRS and the Company that were devoid of evidentiary support and ordered all those claims stricken without prejudice. On January 27, 2004, the court entered a judgment of dismissal without prejudice in favor of New Century TRS and the Company. The plaintiffs filed a notice of appeal on February 20, 2004 from the judgment entered in New Century TRS and the Company's favor and the order granting New Century TRS and the Company's motion for sanctions. The plaintiffs also filed a motion with the appellate court to consolidate this appeal with three additional appeals they have sought in similar cases against other lenders. On May 28, 2004, the court denied the motion. The plaintiffs/appellants filed their opening brief in July 2004. The appeal has now been fully briefed. New Century TRS and the Company filed a request for oral argument on January 13, 2005. On June 10, 2005, the Court of Appeals dismissed plaintiff's appeal for lack of appellate jurisdiction. On August 10, 2005, the court entered an order holding that the New Century Entities should recover their costs. NEW CENTURY: Mediation in LA Collective Action Set January 2006 --------------------------------------------------------------- Mediation for the collective action filed against New Century Financial Corporation, alleging violations of the Fair Labor Standards Act (FLSA) is set for January 2006 in the United States District Court for the Middle District of Louisiana. In April 2003, two former, short-term employees, Kimberly A. England and Gregory M. Foshee, filed a complaint seeking class action status against the Company, Worth Funding Incorporated (now known as New Century Credit Corporation), and The Anyloan Company. The action was removed on May 12, 2003 from the 19th Judicial District Court, Parish of East Baton Rouge, State of Louisiana to the U.S. District Court for the Middle District of Louisiana in response to the Company's, Worth's and Anyloan's Petition for Removal. The complaint alleges failure to pay overtime wages in violation of the FLSA. The plaintiffs filed an additional action in Louisiana state court (19th Judicial District Court, Parish of East Baton Rouge) on September 18, 2003, adding James Gray as a plaintiff and seeking unpaid wages under state law, with no class claims. This second action was removed on October 3, 2003 to the U.S. District Court for the Middle District of Louisiana, and was ordered consolidated with the first action. In April 2004, the U.S. District Court unilaterally de- consolidated the James Gray individual action. In September 2003, the plaintiffs also filed a motion to dismiss their claims in Louisiana to enable them to join in a subsequently filed case in Minnesota entitled "Klas vs. New Century Financial Corporation, et al. New Century, Worth and Anyloan" opposed the motion and the court agreed with their position and refused to dismiss the plaintiffs' case, as it was filed first. The Klas case has now been consolidated with this case and discovery is proceeding. The Company, Worth and Anyloan filed a motion to dismiss Worth and Anyloan as defendants. The court granted the motion to dismiss in April 2004. On June 28, 2004, the Company filed a motion to reject conditional certification of a collective action and oral argument was heard on February 15, 2005. Plaintiffs have dismissed with prejudice forty individual plaintiffs from the action. The Company's motion to reject the class was granted on June 30, 2005. The plaintiffs had 30 days to file individual actions against New Century TRS and the Comapny, and 426 actions were filed. The parties agreed to mediate and mediation is set for January 2006. The suit is styled "England v. New Century Financial Corporation et al., case no. 3:05-cv-00490-FJP-SCR," filed in the United States District Court for the Middle District of Louisiana, under Judge Frank J. Polozola. Representing the plaintiffs are Stanley P. Baudin, Christopher L. Coffin and Patrick Wayne Pendley, Pendley Law Firm, P.O. Drawer 71, 24110 Eden St., Plaquemine, LA 70764-0071, Phone: 225-687-6396, Fax: 225-687-6398, E-mail: sbaudin@pendleylawfirm.com, ccoffin@pendleylawfirm.com or pwpendley@pendleylawfirm.com. NEW CENTURY: NY Court Nixes Mortgage Fees Suit Dismissal Appeal --------------------------------------------------------------- The Appellate Division of the Supreme Court of the State of New York located in Brooklyn, New York refused plaintiffs' motion seeking to appeal its ruling upholding the dismissal of the class action filed against New Century Mortgage Corporation, alleging breach of fiduciary duties and fraud. Plaintiff Elaine Lum filed the suit in the State Court in Suffolk County, New York in December 2003, alleging that certain payments the Company makes to mortgage brokers, sometimes referred to as yield spread premiums, interfered with the contractual relationship between Ms. Lum and her broker. The complaint also sought damages related thereto for fraud, wrongful inducement/breach of fiduciary duty, violation of deceptive acts and practices, unjust enrichment and commercial bribing. The complaint seeks class certification for similarly situated borrowers in the State of New York. The Company filed a motion to dismiss on January 30, 2004. The judge granted the motion and dismissed all claims on March 23, 2004. On April 12, 2004, the plaintiff filed a notice of appeal, seeking review of the court's order granting the motion to dismiss. The appeal has been fully briefed and the Company awaits a ruling. On July 20, 2005, the Appellate Division of the Supreme Court of the State of New York located in Brooklyn, New York, affirmed the order granting the Company's motion to dismiss the complaint. Plaintiff/appellant filed a motion with the appellate division for reargument and/or for leave to appeal to the Court of Appeals, which the Court denied in October 2005. NEW CENTURY: Resolves NJ RESPA Lawsuit, Court Orders Dismissal -------------------------------------------------------------- New Century Mortgage Corporation and New Century TRS Holdings, Inc. resolved the class action filed in the United States District Court for the District of New Jersey against them, alleging violations of the Real Estate Settlement Procedures Act, or RESPA, the Truth-in-lending Act, or TILA and the New Jersey Consumer Fraud Act, and unjust enrichment. Joseph and Emma Warburton filed the suit in June 2004. The suit also alleges certain other violations against defendants unrelated to New Century TRS and the Company, including Foxtons, Inc., Foxtons North America, Foxtons Realtor and Foxtons Financial, Inc., referred to collectively as Foxtons, and Worldwide Financial Resources, Inc. The plaintiffs allege, among other things, that Foxtons, acting as their broker, charged fees and received a yield spread premium without disclosing the same to them until the time of closing. The class is defined as all persons in the state of New Jersey who have purchased, or sought to purchase, a home listed for sale by Foxtons and who have paid a prequalification application fee, or who have received and accepted an offer from Foxtons for a fixed interest rate mortgage loan that Foxtons failed to deliver as promised and who have suffered damages as a result. The complaint seeks to enjoin the wrongful conduct alleged, recovery of actual and statutory damages, and attorneys' fees and costs. On July 28, 2004, New Century TRS and the Company filed a motion to dismiss the complaint for failure to state a claim. On June 13, 2005, the court entered an order dismissing the federal claims (RESPA & TILA). On July 13, 2005, plaintiffs filed a motion for leave to file their first amended complaint in state court. The parties have agreed to resolve this matter and the resolution will not have a material impact on the Company's financial position. This case has been dismissed by order of October 21, 2005. The suit is styled "WARBURTON et al v. FOXTONS, INC. et al., case no. 1:04-cv-02474-FLW-AMD," filed in the United States District Court for the District of New Jersey, under Judge Freda L. Wolfson. Representing the Company is Jannett D. Pateiro, REED SMITH, LLP, 136 Main Street, Princeton NJ 08540, Phone: (609) 524-2040, E-mail: jpateiro@reedsmith.com. Representing the plaintiffs are Nicole M. Acchione, Donna Siegel Moffa, TRUJILLO RODRIGUEZ & RICHARDS, LLP, 8 Kings Highway West, Haddonfield, NJ 08033, Phone: (856) 795-9002, E-mail: nicolem@trrlaw.com or donna@trrlaw.com. NEW CENTURY: IL Court Dismisses Suit For Consumer Act Violations ---------------------------------------------------------------- The Circuit Court of Cook County, Illinois dismissed the class action filed against New Century Mortgage Corporation, alleging violations of the Illinois Interest Act. In November 2004, Nancy Doherty, Krysti Lyn Randall, Robert Elibasich and Alice Elibasich filed a class action complaint against the Company, two of its employees and Nations Title Agency of Illinois. The complaint alleges that defendants violated Section 4.1a of the Illinois Interest Act by charging more than 3 points on a loan with an interest rate of 8% or higher. The complaint also alleges that defendants engaged in unfair acts and practices, in purported violation of Section 2 of the Illinois Consumer Fraud Act (ICFA) by charging plaintiffs and others points in excess of the number permitted by the Illinois Interest Act and seeks restitution for such alleged overpayments. Individual plaintiff, Doherty, also alleges violation of Section 2 of ICFA, and asserts a claim for unjust enrichment by failing to refund excess recording fees to Doherty. The complaint seeks recovery of statutory, compensatory and punitive damages, restitution and attorneys' fees and costs. The Company filed a motion to stay the case pending a final decision in the precedential case styled "U.S. Bank v. Clark," pending in the Illinois Supreme Court. The court granted the motion to stay on January 20, 2005. Oral argument occurred in the Clark case on May 11, 2005. On July 5, 2005 the court granted the motion to consolidate this case with the Brown case. On September 22, 2005 the Illinois Supreme Court issued its opinion, reversing the Appellate Court ruling in the Clark case. On October 21, 2005, the Court dismissed this case with prejudice. The suit is styled "Doherty v. New Century Mortgage, et al., case no. 2004-CH-19237," filed in the Circuit Court of Cook County, Illinois, Chancery Division, under Judge Martin S. Agran. Representing the plaintiffs are EDELMAN COMBS & LATTURNER, 120 S LASALLE 18FL, CHICAGO IL, 60603, Phone: (312) 739-4200. Representing the Company is WARDELL LAURIE ARDEN, 100 N LASALLE #600, CHICAGO IL, 60602, Phone: (312) 630- 9744 NEW CENTURY: IL Court Dismisses Interest Act Violations Lawsuit --------------------------------------------------------------- The Circuit Court of Cook County, Illinois dismissed the class action filed against New Century Mortgage and loan originator Residential Loan Centers of America, Inc., alleging violations of the Illinois Interest Act. In February 2005, Judy Brown filed the suit, alleging that that the defendants violated Section 4.1(a) of the Illinois Interest Act by charging more than 3% in charges on a loan with an interest rate of 8% or higher and violated the same provision by collecting payments on the loan. The proposed class is defined as all persons who entered into loans secured by their real property in Illinois with an interest rate of 8% or more and "charges" in excess of 3% of the principal, and for which one or more of the defendants knowingly contracted and/or received and/or are currently receiving payments. The complaint seeks an award of damages, interest, reasonable attorneys' fees, costs and other relief. On July 5, 2005, the Company's motion to consolidate with Doherty was granted. On September 22, 2005, the Illinois Supreme Court issued its opinion, reversing the Appellate Court ruling in the "U.S. Bank vs. Clark" case. On October 21, 2005, the Court dismissed this case with prejudice. The suit is styled "Judy Brown v. New Century Mortgage, et al., case no. 2005-L-001701" filed in the Circuit Court of Cook County Illinois, Chancery Division, under Judge Anthony L. Young. Representing the plaintiffs is MEITES AND FRACKMAN, 208 S LASALLE #1410, CHICAGO IL, 60604, Phone: (312) 263-0272. Representing the Company is WARDELL LAURIE ARDEN, 100 N LASALLE #600, CHICAGO IL, 60602, Phone: (312) 630-9744. NEW CENTURY: CA Court Dismisses Overtime Law Violations Lawsuit --------------------------------------------------------------- Plaintiffs filed an amended class action against New Century Mortgage Corporation in the Superior Court of Orange County, California, alleging violations of the state's labor laws. In March 2005, Daniel J. Rubio, a former employee of the Company filed the suit, alleging failure to pay overtime wages, failure to provide meal and rest periods, and that the Company engaged in unfair business practices in violation of the California Labor Code. The complaint seeks recovery of unpaid wages, interest, and attorneys' fees and costs. The Company was served on March 22, 2005. The Company filed a motion to strike and demurrer to the complaint in May 2005. On July 8, 2005, the court overruled the demurrer and granted the motion to strike. The amended complaint was filed in July 2005 and New Century Mortgage filed its answer in August 2005. NEW CENTURY: Plaintiffs Seek Certification for IN FCRA Lawsuit -------------------------------------------------------------- Plaintiffs asked the U.S. District Court, Northern District of Indiana, Hammond Division to grant class certification for the lawsuit filed against New Century Mortgage Corporation, alleging violations of the Fair Credit Reporting Act, or FCRA. Perrie Bonner and Darrell Bruce filed the suit in April 2005, claiming that the defendants accessed consumer credit reports without authorization because the prescreened offers of credit did not qualify as firm offers of credit. The proposed class consists of all persons in Indiana, Illinois and Wisconsin who received the prescreened offers from April 20, 2003 to May 10, 2005. The Company and Home 123 filed their answer to the complaint on June 30, 2005. In September 2005, plaintiffs filed a motion for class certification and the Company and Home123's response is due in November 2005. On November 1, 2005, the Company and Home123 filed a motion for judgment on the pleadings. The suit is styled "Bonner et al v. Home123 Corporation et al, case no. 2:05-cv-00146-PPS-APR," filed in the United States District Court for the Northern District of Indiana, under Judge Philip P Simon. Representing the plaintiffs are Daniel A Edelman, Jeremy P. Monteiro, Edelman Combs Latturner & Goodwin LLC, 120 S LaSalle Street Suite 1800, Chicago, IL 60603, Phone: 312-739-4200, Fax: 312-419-0379, E-mail: CourtECL@aol.com or jmonteiro@edcombs.com. Representing the Company are Victoria R Collado PHV, Lucia Nale PHV, Diane R. Sabol PHV, Mayer Brown Rowe and Maw LLP, 71 S Wacker Drive, Chicago, IL 60606, Phone: 312-782-0600, Fax: 312-701-7711, E-mail: vcollado@mayerbrownrowe.com, lnale@mayerbrownrowe.com, drsabol@mayerbrownrowe.com. NEW CENTURY: Asks CA Court To Dismiss FCRA Violations Lawsuit ------------------------------------------------------------- New Century Mortgage Corporation, New Century TRS Holdings, Inc. and Home123 Corporation asked the United States District Court for the Central District of California to dismiss a class action filed against them, alleging violations of the Fair Credit Reporting Act (FCRA). In July 2005, Pamela Phillips filed the suit, claiming that New Century TRS, New Century Mortgage and Home123 accessed consumer credit reports without authorization because the prescreened offers of credit did not qualify as firm offers of credit. The case also alleges that certain disclosures were not made in a clear and conspicuous manner. The complaint seeks damages of not more than $1,000 for each alleged violation, declaratory relief, injunctive relief, interest, attorneys' fees and costs. The suit is styled "Pamela Phillips v. New Century Financial Corporation et al., case no. 8:05-cv-00692-DOC-RNB," filed in the United States District Court for the Central District of California, under Judge David O. Carter. Representing the Company are Daniel Alberstone, David Bryan Dreyfus, Bruce A. Friedman, Pauline A. Massih, Alschuler Grossman Stein and Kahan, Water Garden - North Tower, 1620 26th Street, 4th Floor, Santa Monica, CA 90404-4060, Phone: 310-907-1000, Fax: 310-907-2000. Representing the plaintiffs are: (1) Douglas Bowdoin, 255 South Orange Avenue, Suite 800 Orlando, FL 32801, Phone: 407-422-0025, E-mail: ctassi@bowdoinlaw.com (2) Kathleen Clark Knight, Terry Smiljanich, James Hoyer Newcomer & Smiljanich, 1 Urban Centre, 4830 W Kennedy Blvd, Ste 550, Tampa, FL 33609, Phone: 813-286-4100, E- mail: kknight@jameshoyer.com or tsmiljanich@jameshoyer.com (3) Nicholas A Siciliano or David Edward Weeks, Masry & Vititoe, 5707 Corsa Ave, 2nd Fl, Westlake Village, CA 91362-0903, Phone: 818-991-8900 NEW CENTURY: Customers Commence Loan Fee Fraud Suit in N.D. IN -------------------------------------------------------------- New Century Mortgage Corporation faces a class action lawsuit filed in the U.S. District Court, Northern District Of Indiana. The plaintiffs allege that the Company violated the Indiana High Cost Loan Act by allegedly making loans with fees greater than permitted by law unless certain disclosures are made. Patricia and Stephen Jeppesen filed the suit in October 2005 on behalf of all persons who obtained a mortgage loan from the Company after January 1, 2005 on their principal residence in Indiana. A second claim in the complaint alleges that the Company improperly charged a document preparation fee. The class also consists of all persons in Indiana who paid a document preparation fee to the Company in the six years prior to the filing of the complaint. The complaint seeks statutory damages, attorneys' fees, costs, restitution and other relief. The suit is styled "Jeppesen et al v. New Century Mortgage Corporation et al., case no. 2:05-cv-00372-RL-PRC," filed in the United States District court for the Northern District of Indiana, under Judge Rudy Lozano. Representing the plaintiffs are Daniel A. Edelman and Heather A. Piccirilli, Edelman Combs Latturner & Goodwin LLC, 120 S LaSalle Street Suite 1800, Chicago, IL 60603, phone: 312-739-4200, Fax: 312-419-0379, E- mail: CourtECL@aol.com or hpiccirilli@edcombs.com. Representing the Company are Richard E Gottlieb and Arthur F. Radke, Dykema Gossett Rooks Pitts PLLC, 10 South Wacker Drive Suite 2300 Chicago, IL 60606, Phone: 312-627-2196, Fax: 312-627-2302, E- mail: rgottlieb@dykema.com or aradke@dykema.com. PUBLIC STORAGE: CA Court Mulls Transfer of Consumer Fraud Suit -------------------------------------------------------------- The California Superior Court for Orange County has yet to rule on Public Storage, Inc.'s motion to remove the class action filed against it in the California Superior Court for Orange County, styled "Serrao v. Public Storage, Inc.," to federal court. The plaintiff in this case filed a suit against the Company on behalf of a putative class of renters who rented self-storage units from the Company. Plaintiff alleges that the Company misrepresented the size of its storage units, has brought claims under California statutory and common law relating to consumer protection, fraud, unfair competition, and negligent misrepresentation. The suit seeks monetary damages, restitution, and declaratory and injunctive relief. On November 3, 2003, the court granted the Company's motion to strike the plaintiff's nationwide class allegations and to limit any putative class to California residents only. In August 2005, the Company filed a motion to remove the case to federal court. PUBLIC STORAGE: FL, CA Employee Overtime Wage Lawsuits Pending -------------------------------------------------------------- Public Storage, Inc. continues to faces two class actions filed in the California and Florida courts, alleging violations of the states' wage lawsuits. The suits are: (1) Brinkley et al v. Public Storage, Inc., (filed April 2005 in the Superior Court of California - Los Angeles County) (2) Inhan et al v. Public Storage, Inc. (filed May 2005 in the United States District Court - Southern District of Florida) The Brinkley plaintiffs are suing the Company on behalf of a purported class of California property managers who claim that they were not compensated for all the hours they worked. The Brinkley suit is based upon California wage and hour laws. The Inhan plaintiffs are suing the Company in Florida on behalf of a purported class of property managers who claim they were not compensated for all hours worked. The Inhan suit is based upon the Federal Fair Labor Standards Act. The maximum potential liability cannot be estimated, but would be increased if a class or classes are certified or, in California, if claims are permitted to be brought on behalf of others under the California Unfair Business Practices Act. SECOND CHANCE: Chippewa Township Settles Suit Over Faulty Armor --------------------------------------------------------------- Several months after joining a federal class action lawsuit against Second Chance Body Armor Inc., which allegedly sold defective bullet-resistant vests to the agencies, Chippewa Township officials recently agreed to a settlement, The Beaver County Times reports. Chippewa Township police were given two settlement options to replace the 12 defective protective vests the department bought from Second Chance. The Michigan-based Company was accused of manufacturing and selling defective vests to law enforcement agencies. The company filed for Chapter 11 bankruptcy protection and sold all assets recently. Township solicitor George A. Verlihay told The Beaver County Times that Zylon, the material used to make the protective vests, degrades in heat. He adds that police officers have been injured and killed as a result of the defect, an earlier Class Action Reporter story (August 2, 2005) reports. The federal suit named the Japan-based company Toyobo, supplier of the protective material. The Japan-based company agreed to contribute $29 million to settle the lawsuit, according to documents posted at http://www.zylonvestclassaction.com. Chippewa agreed to take an $8,884 voucher, rather than $8,040 in cash, to replace the vests for $6,468 through Armor Holdings of Jacksonville, Florida, a manufacturer and distributor of security products selected exclusively as part of the settlement. The police department will be able to use the voucher surplus for additional equipment. Mr. Verlihay told The Beaver County Times that Chippewa could have decided to opt out of the class action and pursue its own lawsuit, though he recommended against it. If Toyobo settles on more favorable terms with any other party, according to him, the company would have to provide the same settlement for those named in the federal suit. "Nobody knows for sure how many claimants there are out there," according to Mr. Verlihay, an earlier Class Action Reporter story (August 2, 2005) reports. Mr. Verlihay pointed out that purchasers can accept a 50 percent settlement reimbursement from Toyobo or use the equivalent amount from the settlement fund to buy replacements from Armor Holdings Inc. at discounts of 50 percent to 60 percent, with measurement charges waived, an earlier Class Action Reporter story (August 2, 2005) reports. TELLABS INC.: Court Yet To Rule on Appeal of IL Suit Dismissal -------------------------------------------------------------- The United States Seventh Circuit Court of Appeals has yet to decide on plaintiffs' appeal of the dismissal of a consolidated class action filed against Tellabs, Inc., Michael Birck and Richard Notebaert, its former chief executive officer, president and director, and certain of its other officers and directors. The suit was filed in the United States District Court of the Northern District of Illinois, alleging that during the class period (December 11, 2000-June 19, 2001) the defendants violated the federal securities laws by making materially false and misleading statements, including, among other things, allegedly providing revenue forecasts that were false and misleading, misrepresenting demand for the Company's products, and reporting overstated revenues for the fourth quarter 2000 in the Company's financial statements. Further, certain of the individual defendants were alleged to have violated the federal securities laws by trading the Company's securities while allegedly in possession of material, non-public information about the Company pertaining to these matters. On January 17, 2003, the Company and the other named defendants filed a motion to dismiss the consolidated amended class action complaint in its entirety. On May 19, 2003, the Court granted the motion and dismissed all counts of the consolidated amended complaint, while affording plaintiffs an opportunity to replead. On July 11, 2003, plaintiffs filed a second consolidated amended class action complaint against the Company, Mr. Birck and Mr. Notebaert, and many (although not all) of the other previously named individual defendants, re-alleging claims similar to those contained in the previously dismissed consolidated amended class action complaint. The Company filed a second motion to dismiss on August 22, 2003, seeking the dismissal with prejudice of all claims alleged in the second consolidated amended class action complaint. On February 19, 2004, the Court issued an order granting that motion and dismissed the action with prejudice. On March 18, 2004, the plaintiffs filed a Notice of Appeal to the United States Federal Court of Appeal for the Seventh Circuit appealing the dismissal. The appeal was fully briefed, oral argument was heard on January 21, 2005 and the parties are awaiting a decision. The suit is styled "Johnson, et al v. Tellabs Inc, et al., case no. 1:02-cv-04356," filed in the United States District Court for the Northern District of Illinois, under Judge Amy J. St. Eve. Representing the Company is David F. Graham, Sidley Austin Brown & Wood LLP, 10 South Dearborn Street, Bank One Plaza, Chicago, IL 60603, Phone: (312) 853-7000. Representing the Company is Steven G. Schulman, Milberg Weiss Bershad & Schulman LLP, One Pennsylvania Plaza, 49th Floor, New York, NY 10119- 0165, Phone: (212)594-5300. New Securities Fraud Cases CIPHERGEN BIOSYSTEMS: Marc Henzel Lodges Securities Suit in OH -------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a class action lawsuit in the United States District Court for the Northern District of California against Ciphergen Biosystems, Inc. (NasdaqNM: CIPHE) and certain of its officers and directors, on behalf of all persons or entities who purchased the publicly traded common stock of Ciphergen between August 8, 2005 and November 16, 2005 (the "Class Period"). The complaint alleges that during the Class Period, defendants violated Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934 by publicly issuing a series of false and misleading statements regarding the Company's financial condition, thus causing Ciphergen's shares to trade at artificially inflated levels. The complaint alleges that on November 16, 2005, Ciphergen disclosed, inter alia, that its Audit Committee had determined that the Company's previously reported results for the quarter-ended June 30, 2005 should no longer be relied upon and would need to be restated because revenue was recognized on certain transactions "in a manner inconsistent with the Company's revenue recognition policy." Indeed, the Company indicated that the restatement would reduce previously reported revenues for such quarter by $503,000 or 7% and result in an increase in the Company's previously reported net loss for such quarter by $301,000 or 3%. The Company also advised that the Audit Committee's investigation was not yet complete and that it was also "reviewing the appropriateness of revenue recognition in connection with certain transactions that took place in the fourth quarter of fiscal 2004 and in fiscal 2005." On November 17, 2005, as a result of these disclosures, the complaint alleges that the price of Ciphergen common stock declined from a prior day close of $1.73 to close at $1.36 per share, a decline of approximately 21%, on unusually heavy volume. 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. DIEBOLD INC.: Marc S. Henzel Lodges Securities Fraud Suit in OH --------------------------------------------------------------- The Law Offices of Marc S. Henzel initiated a class action lawsuit in the United States District Court for the Northern District of Ohio against Diebold Inc. (NYSE: DBD) and individual defendants who purchased Diebold securities between October 22, 2003, and September 21, 2005, inclusive (the "Class Period"). The complaint alleges that defendants violated provisions of the United States securities laws causing artificial inflation of the Company's stock price. According to the complaint, during the Class Period, the Company lacked a credible state of internal controls and corporate compliance and remained unable to assure the quality and working order of its voting machine products. It is further alleged that the Company's false and misleading statements served to conceal the dimensions and scope of internal problems at the Company, impacting product quality, strategic planning, forecasting and guidance and culminating in false representations of astonishingly low and incredibly inaccurate restructuring charges for the 2005 fiscal year, which grossly understated the true costs and problems defendants faced to restructure the Company. The complaint also alleges over $2.7 million of insider trading proceeds obtained by individual defendants during the Class Period. Finally, investors learned the truth about the adverse impact of the Company's alleged defective and deficient inventory-related controls and systems on Diebold's financial performance. As a result of defendants' shocking news and disclosures of September 21, 2005, the price of Diebold shares plunged 15.5% on unusually high volume, falling from $44.37 per share on September 20, 2005, to $37.47 per share on September 21, 2005, for a one- day drop of $6.90 per share on volume of 6.1 million shares -- nearly eight times the average daily trading volume. 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. EVCI CAREER: Stull Stull Files Securities Fraud Suit in S.D. OH --------------------------------------------------------------- The law firm of Stull, Stull & Brody initiated a class action lawsuit in the United States District Court for the Southern District of New York on behalf of all persons who purchased the common stock of EVCI Career Colleges Holdings Corporation ("EVCI" or the "Company") (NASDAQ: EVCI) during the period November 14, 2003 through and including October 19, 2005 (the "Class Period"), against EVCI and certain individual defendants. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between November 14, 2003 and October 19, 2005, thereby artificially inflating the price of EVCI common stock. Specifically, the complaint alleges that during the Class Period, EVCI omitted and misrepresented material facts concerning the manner in which its educational business was being run, including facts concerning the degree of student support it provided, its admission practices and its graduation rates. EVCI's practices have led to criticism by the New York State Education Department, and adverse action which, when revealed, led to sharp declines in the price of the stock. For more details, contact Tzivia Brody of Stull, Stull & Brody, 6 East 45th Street, New York, NY 10017, Phone: 1-800-337-4983, Fax: 212/490-2022, E-mail: SSBNY@aol.com. FARO TECHNOLOGIES: Goldman Scarlato Lodges Securities Suit in FL ---------------------------------------------------------------- The law firm of Goldman Scarlato & Karon, P.C., initiated a lawsuit in the United States District Court for the Middle District of Florida, on behalf of persons who purchased or otherwise acquired publicly traded securities of FARO Technologies Inc. ("FARO" or the "Company") (NASDAQ: FARO) between May 6, 2004 and November 3, 2005, inclusive, (the "Class Period"). The lawsuit was filed against FARO and certain officers and directors ("Defendants"). The complaint alleges that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically, the complaint alleges that FARO repeatedly issued false and misleading quarterly and annualized financial guidance during the Class Period in reckless disregard of the Company's deficient internal control systems. The complaint alleges that FARO represented itself as having implemented lean manufacturing principles that had brought about numerous operating and efficiency improvements in its production capacity. However, theses statements were materially false and misleading because the Company's internal inventory and accounting controls were defective during the class period. On November 3, 2005, investors learned the truth regarding the adverse impact of the Company's deficient control systems and poor financial performance. After the market closed, the Company disclosed that it had incurred $1.6 million in inventory costing and consumption variances due to processing problems related to the implementation of a new ERP system. As a result of this disclosure, FARO stock fell $5.88 per share to close at $16.50 per share on November 7, 2005. For more details, contact Mark S. Goldman, Esq. of The Law Firm of Goldman Scarlato & Karon, P.C., Phone: 888-753-2796, E-mail: info@gsk-law.com. STONE ENERGY: Spector Roseman Lodges Securities Fraud Suit in LA ---------------------------------------------------------------- The law firm of Spector, Roseman & Kodroff, P.C., initiated a securities class action lawsuit in the United States District Court for the Western District of Louisiana, on behalf of purchasers of the common stock of Stone Energy Corporation ("Stone Energy" or the "Company") (NYSE:SGY) between June 17, 2005, through October 6, 2005, inclusive (the "Class Period"). The Complaint alleges that defendants violated the federal securities laws by issuing materially false and misleading statements contained in filings with the Securities and Exchange Commission and press releases during the Class Period. Specifically, defendants failed to disclose and misrepresented the following adverse facts that: (1) Stone Energy was materially overstating its financial results by overvaluing its oil reserves through improper and aggressive reserve methodologies; (2) the Company lacked adequate internal controls and was therefore unable to ascertain its true financial condition; and (3) as a result of the foregoing, the values of the Company's proven reserves, assets and future net cash flows were materially overstated at all relevant times. On October 6, 2005, Stone Energy issued a press release announcing that it intends to take a significant reserve write- down, among other things. On this news, the price of Stone Energy stock fell $7.93 per share, or almost 14%, to close at $48.14 per share. Then, on November 8, 2005, Stone Energy issued a press release announcing that it will restate its financial statements for the periods from 2001 to 2004 and for the first six months of 2005. As a result of this disclosure, Stone Energy initiated an internal investigation into its reserve practices. For more details, contact Robert M. Roseman or Andrew Abramowitz of Spector, Roseman & Kodroff, P.C., Phone: (888) 844-5862, E- mail: classaction@srk-law.com, Web site: http://www.srk-law.com. ********* A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the Class Action Reporter. Submissions via e-mail to carconf@beard.com are encouraged. Each Friday's edition of the CAR includes a section featuring news on asbestos-related litigation and profiles of target asbestos defendants that, according to independent researches, collectively face billions of dollars in asbestos-related liabilities. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Glenn Ruel Senorin, Aurora Fatima Antonio and Lyndsey Resnick, Editors. Copyright 2005. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *