/raid1/www/Hosts/bankrupt/CAR_Public/060113.mbx
C L A S S A C T I O N R E P O R T E R
Friday, January 13, 2006, Vol. 8, No. 10
Headlines
21st CENTURY: July 2005 Settlement Ended Securities Fraud Suit
3M CORPORATION: Antitrust Settlement hearing Set April 21, 2006
AEROSONIC CORPORATION: Completes Final Disposition of Litigation
ALABAMA: Attorney General Declines to Issue List of Felonies
AMERICAN FIDELITY: OK Resident Launches Lawsuit V. Cancer Policy
BLUE COAT: NY Court Affirms Suit Settlement Preliminary Approval
BLUE COAT: CA Court Dismisses Consolidated Securities Fraud Suit
BOEING CO.: Settles Toxic Contamination Claims V. CA Facility
CENTRAL GARDEN: Trial in August 2000 Fire Suits Set March 2006
CHORDIANT SOFTWARE: NY Court Affirms Lawsuit Settlement Approval
CROCUS INVESTMENT: Parties Discuss Investor Fraud Trial
CSK AUTO: Continues To Face Overtime Wage Lawsuit in CA Court
DEL MONTE: Settles Linerboard Antitrust Litigation
EASYLINK SERVICES: Faces Third-Party Complaint Filed in IL Court
FLEETWOOD ENTERPRISES: Consumers Sue V. Defective Trailer Roofs
GAMESTOP CORPORATION: Plaintiffs To Appeal Certification Denial
GAMESTOP CORPORATION: Finalizes CA Overtime Lawsuit Settlement
GAMESTOP CORPORATION: Plaintiffs Drop LA Overtime Wage Lawsuit
GENESCO INC.: Reached Positive Settlements For CA Overtime Suits
ISRAEL: Female Smokers Sue Hospitals Over Experimental Treatment
MASSACHUSETTS: National Guardsmen Sue For Post 9/11 Expenses
NATIONAL SECURITIES: Reaches Settlement For CA Securities Suit
NEIMAN MARCUS: Plaintiffs Withdraw TX Securities Fraud Lawsuit
PATTERSON COMPANIES: Faces Consolidated Securities Lawsuit in MN
PETCO ANIMAL: Plaintiffs File Consolidated Securities Suit in CA
PETCO ANIMAL: Plaintiffs File Consolidated Labor Lawsuit in CA
PORTLAND GENERAL: Firm, Multnomah Customers Settle OR Tax Case
SHOPKO STORES: Faces Consolidated Lawsuit V. Goldner Hawn Merger
SOUTH CAROLINA: Lawyer Says Pet Owners Who Sue May Win Refunds
STAPLES INC.: Proposes Unusual Settlement in Item Pricing Case
UNITED STATES: High Court Reviews Gas Price Antitrust Lawsuit
UNIVERSITY OF WASHINGTON: Judge Chides School For E-mail on Suit
VIRGIN ISLANDS: Farmers' $2.8B Suit V. USDA Moving Toward Trial
WAL-MART STORES: PA Judge Approves Off-The-Clock Work Suit
WELLS FARGO: Lawyer Files Disqualification Motion V. Judge Weber
WELLS FARGO: Suit Alleges Deceptive Loan Fee Practices
WORKERS TEMPORARY: Wins FL Labor Pool Act Suit, Asks For Reforms
ZILA CORPORATION: Continues To Face Consumers Suit V. Cold Drug
Asbestos Alert
ASBESTOS LITIGATION: Moen Inc Fends Off 93 Personal Injury Suits
ASBESTOS LITIGATION: RPM Increases Liability Reserves to $101.2M
ASBESTOS LITIGATION: Villagers to Sue for Payout After Discovery
ASBESTOS LITIGATION: UK Victim Seeks Help to Claim Compensation
ASBESTOS LITIGATION: Golden Wonder Staff to Probe Factory Deaths
ASBESTOS LITIGATION: Bush Urges Congress to Adopt Asbestos Bill
ASBESTOS LITIGATION: Men Accused of Illegal Removal at NY Mill
ASBESTOS LITIGATION: EPA Indicts New Yorker for Illegal Disposal
ASBESTOS LITIGATION: USG Moves to Extend Plan Filing to June 30
ASBESTOS LITIGATION: USG Corp. Seeks Debtor Liable for PI Claims
ASBESTOS LITIGATION: USG Corp. Continues Assessment of PD Claims
ASBESTOS LITIGATION: Court to Hear USG Corp. Exclusivity Request
ASBESTOS LITIGATION: RPM Subsidiaries' Suits Increase to 9,501
ASBESTOS LITIGATION: Court Attests Judgment in Discovery Breach
ASBESTOS LITIGATION: UK Families Demand Full Payment Over Deal
ASBESTOS LITIGATION: Large Amounts Found in Bahrain Scrap Yard
ASBESTOS LITIGATION: Landmark Ruling on Welding Rods Suit Upheld
ASBESTOS LITIGATION: CenterPoint, Affiliates Face Exposure Suits
ASBESTOS LITIGATION: Officials Angered Over Illegal Disposal
ASBESTOS LITIGATION: CWU Urges Changes to Asbestos Regulations
New Securities Fraud Cases
GREAT WOLF: Scott + Scott Files Expanded Securities Suit in WI
IMPAC MORTGAGE: Lasky & Rifkind Lodges Securities Suit in CA
IMPAC MORTGAGE: Schatz & Nobel Files Securities Fraud Suit in CA
IMPAC MORTGAGE: Stull Stull Lodges Securities Fraud Suit in CA
SFBC INTERNATIONAL: Vianale & Vianale Files FL Securities Suit
*********
21st CENTURY: July 2005 Settlement Ended Securities Fraud Suit
--------------------------------------------------------------
A July 26, 2005 final hearing approving the $525,000 settlement
between 21st Century Holding Company and plaintiffs alleging the
Company violated securities laws brought the suit to a close.
The securities class action filed against 21st Century Holding
Company in the United States District Court for the Southern
District of New York was lodged on behalf of purchasers of
common stock issued by 21st Century Holding Company between
November 5, 1998 and August 13, 1999. The plaintiffs' claims
arose under Sections 11 and 15 of the Securities Act of
1933, Sections 10(b) and 20(a) of the Securities Exchange Act of
1934, and Rule 10b-5 promulgated by the Securities Exchange
Commission.
The Company actively participated in settlement negotiations.
After the Court issued a Preliminary Order approving the
settlement, the full amount was funded in February 2005 and
notices were sent to all class members.
3M CORPORATION: Antitrust Settlement hearing Set April 21, 2006
---------------------------------------------------------------
Judge Claudia Wilkin of the United States District Court for the
Northern District of California set an April 21, 2006, as the
hearing date to consider final approval of the settlement of a
class action antitrust lawsuit, Conroy vs. 3M Corporation, C-00-
2810 CW, and similar lawsuits in state courts over 3M invisible
and transparent tape.
Under the terms of the proposed Settlement, the Company will
distribute $41 million worth of tape and other products to
charities throughout the United States. If approved, the
proposed settlement resolves a class action lawsuit brought on
behalf of a class of all indirect purchasers of 3M invisible
and/or transparent tape in the United States and its territories
who purchased that tape during the period from January 1, 1993,
to August 5, 2005, for home or office use and who did not
purchase tape for resale.
In advance of the hearing, the settlement is being announced
through a nationwide notice program ordered by the Court to
notify class members whose rights may be affected by the
settlement. Class members have the following legal rights and
options available to them:
(1) Class members who take no action will remain in the
settlement class and will give up the right to sue, or
continue to sue, 3M or those who purchased invisible or
transparent tape from 3M for resale about the claims
that are resolved by the settlement.
(2) Class members have the right to exclude themselves from
the settlement class by sending a Request for Exclusion
letter. The Request for Exclusion must be mailed and
postmarked by March 28, 2006.
(3) Class members who do not exclude themselves may object
to the settlement by sending a letter that is mailed
and postmarked by March 28, 2006.
(4) Class members who do not exclude themselves may appear
at the Final Approval Hearing by sending a letter,
mailed and postmarked by March 28, 2006.
The suit is styled, "Conroy, et al. v. 3M Corporation, et al.,
Case No. 4:00-cv-02810-CW," filed in the United States District
Court for the Northern District of California, under Judge
Claudia Wilken. Representing the Plaintiff/s is Willem F.
Jonckheer Schubert & Reed, LLP, Three Embarcadero Center, Suite
1650, San Francisco, CA 94111, Phone: 415/788-4220, E-mail:
wjonckheer@schubert-reed.com. Representing the Defendant/s are,
Paul Alexander, Marie L. Fiala and M. Laurence Popofsky of
Heller Ehrman White & McAuliffe, LLP, 333 Bush St., San
Francisco, CA 94104-2878, Phone: (415) 772-6000, E-mail:
palexander@hewm.com, mfiala@hewm.com and lpopofsky@hewm.com; and
John L. Cooper of Farella Braun & Martel, LLP, 235 Montgomery
St., 18th Floor, San Francisco, CA 94104, Phone: (415) 954-4400,
E-mail: jcooper@fbm.com.
For more details, call (toll-free) 1-800-393-278 or visit,
http://www.invisibletapesettlement.com.
AEROSONIC CORPORATION: Completes Final Disposition of Litigation
----------------------------------------------------------------
Aerosonic Corporation completed the final disposition of its
securities class action litigation and derivative litigation,
The Tampa Bay Business Journal reports.
These suits were settled earlier in 2005, and were approved by
the United States District Court and the 13th Judicial Circuit
Court of Hillsborough County, Florida, respectively, in November
2005, subject to possible objection and appellate review before
the end of December 2005. According to the Company, there were
no timely objections raised or appeals filed in connection with
the settlements of the suits, a release said.
Previously, the Company reached a settlement for the
consolidated securities class action filed against it in the
United States District Court for the Middle District of Florida.
That suit also names as defendants:
(1) PricewaterhouseCoopers LLP, former independent
registered certified public accounting firm,
(2) J. Mervyn Nabors, a former director and former
President and CEO of the Company,
(3) Eric J. McCracken, a former Chief Financial Officer of
the Company, and
(4) Michael T. Reed, a former Controller of the Company
On November 12, 2003, Sebastian P. Gaeta filed a class action
lawsuit in the United States District Court for the Middle
District of Florida, individually and on behalf of all other
similarly situated. The action alleges violations of Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule
10b-5 promulgated under that act, including, among other things,
that the Company made materially false statements concerning the
Company's financial condition and its future prospects. The
plaintiff alleges that he suffered damages as the result of his
purchase and sale of the Company's Common Stock during the
asserted "Class Period" from November 13, 1998 through March 17,
2003. The action seeks compensatory and other damages, and costs
and expenses associated with the litigation, an earlier Class
Action Reporter story (May 23, 2005) reports.
Shortly after the Gaeta Suit was filed, two other putative class
actions were filed against the same defendants as in the Gaeta
Suit and predicated upon alleged violations of the same
securities laws, asserting that plaintiffs purchased the
Company's stock at artificially inflated prices during the Class
Period and have been damaged thereby. The Pratsch Suit and
Suarez Suit assert a Class Period from May 3, 1999 through March
17, 2003, an earlier Class Action Reporter story (May 23, 2005)
reports.
At a February 27, 2004 hearing, plaintiffs in the Suarez Suit
voluntarily withdrew their complaint. On February 27, 2004, the
Court entered an order consolidating the Gaeta Suit and Pratsch
Suit into one case entitled "In re Aerosonic Corporation
Securities Litigation," appointing the Miville Group as lead
plaintiffs, approving the selection of Lead Plaintiffs' Counsel
(Berger & Montague P.C.), an earlier Class Action Reporter story
(May 23, 2005) reports.
On April 27, 2004, Lead Plaintiffs filed an amended and
consolidated class action complaint that alleges violation of
Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5
including, among other things, that the Company made materially
false statements concerning the Company's financial condition
and its future prospects. The amended complaint also added as a
defendant, Andrew Nordstrud, a former employee of the Company.
On June 28, 2004, the Company responded to the amended complaint
by filing a motion to dismiss, and each of the other defendants
also moved to dismiss the amended complaint. On August 27, 2004
Lead Plaintiffs filed a memorandum of law as a comprehensive
opposition to the motion to dismiss, an earlier Class Action
Reporter story (May 23, 2005) reports.
On April 1, 2005, the Company and the other named defendants in
the litigation filed a Notice of Settlement with the court,
confirming that all parties had executed a Memorandum of
Understanding (MOU) with the plaintiffs to settle the
litigation. The MOU provides for a payment by or on behalf of
the defendants to the plaintiffs of approximately $5.35 million.
Of this amount, the Company is obligated to pay $800,000, which
has been accrued at January 31, 2005. The balance of the
settlement is expected to be paid by Zurich American Insurance
Company on behalf of the Company and the individual defendants
under the Company's directors' and officers' insurance policy,
and by PricewaterhouseCoopers, LLP, an earlier Class Action
Reporter story (May 23, 2005) reports.
Meanwhile, the settlement for the derivative litigation was
reached last July 2005. The agreement provides for appointment
of a new independent director to replace William Parker, who
passed away in April 2005, standing authority to the Audit
Committee to investigate any matters it deems appropriate, and
payment of up to $75,000 in attorneys' fees and costs, which
would be paid by the Company's insurance carrier and its former
auditor. The settlement, according to the Company, should
facilitate the pending settlement of its securities class action
litigation. "We look forward to completing the final phases of
resolving our outstanding litigation so that we can focus our
fullest attention on the growth of the Company," stated David A.
Baldini, Chairman, President and Chief Executive Officer, an
earlier Class Action Reporter story (July 15, 2005) reports.
ALABAMA: Attorney General Declines to Issue List of Felonies
------------------------------------------------------------
Alabama Attorney General Troy King said that he will not issue a
comprehensive list of felonies that would bar convicts from
voting because of the ongoing litigation against Secretary of
State Nancy Worley, who says such a list is greatly needed by
Alabama's registrars, The Associated Press reports.
In a letter delivered to Ms. Worley, the attorney general said
that lawsuits filed against her by convicted felons claiming
Alabama has wrongly denied their voting rights prevent him from
intervening on the issue. He said the issue is now a matter for
the courts. He further says, "It is a longstanding policy of
this Office to decline to issue opinions when matters are in
litigation."
The issue of felons registering to vote came to light after the
state Board of Pardons and Paroles announced in May 20005 that,
according to a 1996 amendment to the Alabama constitution, many
state prisoners convicted of drug and alcohol felonies may be
eligible to vote despite common belief that felons are
prohibited from casting ballots. That board received a March
2005 advisory opinion from Mr. King, who said that only felonies
involving "moral turpitude," meaning the crimes are inherently
immoral, disqualify a convict from voting. The finding caught
state voting officials off guard, prompting a request by Ms.
Worley to Mr. King seeking a comprehensive list of crimes that
forfeit voting rights and those that don't.
Ms. Worley, responding to Mr. King's letter, said she believes
that Alabama's registrars are entitled to a comprehensive list
to help guide them when fielding applicants. She told The
Associated Press, "I guess I find it very disturbing that the
attorney general's office has taken eight months to respond."
She adds, "We can't have registrars making judgment calls."
Mr. King told The Associated Press that his staff identified 278
felonies listed in the Code of Alabama and had worked on
determining which ones could be deemed crimes of moral turpitude
until the lawsuits were filed late last year. According to him,
convicts who are denied voting privileges still have the
opportunity to appeal decisions by registrars.
However, Ms. Worley told The Associated Press that it would
cause "an extraordinary amount of red tape" in the system. She
pointed out that she should have received a comprehensive list
that only excluded the crimes of the convicts in the lawsuits.
She reasoned that if determining such crimes was a difficult and
time-consuming task for Mr. King's staff, it's even more
difficult for "non-legal folks to attempt to make that
determination."
Mr. King's spokesman Chris Bence told The Associated Press that
the lawsuits are seeking class action status, meaning they would
represent convicts of many felonies, thus preventing Mr. King
from issuing a complete list.
It's unclear how many convicted felons are eligible voters. At
the time of the announcement by the pardons and paroles board,
some 2,000 inmates were in prison for drug possession and about
600 were serving time for felony DUI as their most serious
offenses.
Maine and Vermont are the only two states that don't revoke
voting rights upon conviction, according to The Sentencing
Project, a Washington-based research firm. Alabama also is one
of 15 states that don't automatically restore voting eligibility
upon release from prison.
In 2003, Governor Bob Riley signed a bill that permits most
felons to apply for a certificate of eligibility to register to
vote after their sentences are completed. Prisoners convicted of
murder, rape, sodomy, incest and other similar sex crimes
permanently lose their voting rights unless they are pardoned.
AMERICAN FIDELITY: OK Resident Launches Lawsuit V. Cancer Policy
----------------------------------------------------------------
Oklahoma City resident Dolores Metzger initiated a federal
lawsuit against American Fidelity, challenging its Assurance
Co.'s policy of determining what it deems "actual charges," The
Oklahoman reports.
The suit stems from the actions taken by her late son's
insurance company, which had paid 3 cents for one of his cancer
treatments. Mrs. Metzger believes the Company shorted her
"thousands of dollars."
However, in a response filed in federal court, the Company said
it did not deny or underpay claims associated with Michael
Metzger's policy. American Fidelity Spokesman David Klaassen
said the company's policy is not to publicly discuss pending
lawsuits. He told The Oklahoman, "But I do want to emphasize
that one of American Fidelity's stated core values is that we
are always fair to our customers and policyholders. We believe
we have been very fair in this instance."
The lawsuit claims company directors changed American Fidelity's
policy in 1994 on how it pays for claims on limited benefit
health insurance policies, such as the cancer policy purchased
by Mrs. Metzger's son.
Mr. Metzger bought a cancer benefit policy from American
Fidelity in 1992. He was diagnosed with cancer in November 2004
and died January 4, 2005. His mother, according to court papers,
was the beneficiary of that cancer policy.
According to the suit, before the change, the Company paid
whatever the patient was billed. After the change, the suit
claims that the Company issued benefits based on the often-
discounted amounts that health care providers charged insurance
companies. Mrs. Metzger's attorney, Tony Gould told The
Oklahoman, "They decided they could make it more profitable by
paying reduced benefits based on a new definition of 'actual
charges.'" He adds, "We're alleging that the terms always meant
the same thing -- what's on the bill." State Insurance
Department spokesman Marc Young though told The Oklahoman that
there is no statutory or administrative definition of "actual
charges."
The policy change, according to Mr. Gould, probably was prompted
by the growth of discounted charges that doctors offered to
insurance companies as part of an agreement that granted those
doctors status as preferred providers. He told The Oklahoman,
"American Fidelity suddenly decided the words 'actual charges'
means not what's on the bill, but what the physician agreed to
accept or discount pursuant to an agreement with another
insurance company." He goes on to say, "They're basically
looking into an agreement that's between two other entities that
are not even part of this insurance contract."
The Company, in its filing, admits that before 1994 it paid
certain covered claims based upon a provider's original billed
charge without consideration of discounts. It also agrees that
since 1994, it has paid actual charges benefits on its cancer
policies based on the amount a provider accepts as full payment.
However, the Company in its filing denies the lawsuit's
characterizations that it violated Oklahoma law or public policy
or that it acted in bad faith.
Mrs. Metzger told The Oklahoman that she notified the Company of
her concerns and still hasn't received a response. Her attorney,
Mr. Gould, is seeking class action status for the lawsuit, which
was recently moved from Oklahoma County District Court to
federal court.
The suit is styled, "Metzger v. American Fidelity Assurance
Company, Case No. 5:05-cv-01387," filed in the United States
District Court for the Western District of Oklahoma, under Judge
Vicki Miles-LaGrange. Representing the Plaintiff/s is Tony Gould
of Gould & Ashmore, P.O. Box 2151, Norman, OK 73070-2151, Phone:
405-921-5032, Fax: 866-339-6309, E-mail:
tony@gouldandashmore.com. Representing the Defendant/s are,
Thayla P. Bohn and John R Woodard, III, of Feldman Franden
Woodard Farris & Boudreaux, 525 S. Main St., Suite 1000, Tulsa,
OK 74103-4514, Phone: 918-583-7129, Fax: 918-584-3814, E-mail:
tpbohn@tulsalawyer.com and jwoodard@tulsalawyer.com.
BLUE COAT: NY Court Affirms Suit Settlement Preliminary Approval
----------------------------------------------------------------
The United States District Court for the Southern District of
New York affirmed its ruling granting preliminary approval to
the settlement of the consolidated securities class action filed
against Blue Coat Systems, Inc., the firms that underwrote the
Company's initial public offering, and some of its officers and
directors, styled "In re CacheFlow, Inc. Initial Public Offering
Securities Litigation, Civil Action No. 1-01-CV-5143."
An additional putative securities class action has been filed in
the United States District Court for the Southern District of
Florida. The Court in the Florida case dismissed the Company and
individual officers and directors from the action without
prejudice.
The complaints in the New York and Florida cases generally
allege that the underwriters obtained excessive and undisclosed
commissions in connection with the allocation of shares of
common stock in the Company's initial public offering, and
maintained artificially high market prices through tie-in
arrangements which required customers to buy shares in the
after-market at pre-determined prices. The complaints allege
that the Company and its current and former officers and
directors violated Sections 11 and 15 of the Securities Act of
1933, and Sections 10(b) (and Rule 10b-5 promulgated thereunder)
and 20(a) of the Securities Exchange Act of 1934, by making
material false and misleading statements in the prospectus
incorporated in the Company's Form S-1 Registration Statement
filed with the Securities and Exchange Commission in November
1999. Plaintiffs seek an unspecified amount of damages on
behalf of persons who purchased the Company's stock between
November 19, 1999 and December 6, 2000. A lead plaintiff has
been appointed for the consolidated cases pending in New York.
On April 19, 2002 plaintiffs filed an amended complaint.
Various plaintiffs have filed similar actions asserting
virtually identical allegations against over 300 other public
companies, their underwriters, and their officers and directors
arising out of each company's public offering. The lawsuits
against the Company, along with these other related securities
class actions currently pending in the Southern District of New
York, have been assigned to Judge Shira A. Scheindlin for
coordinated pretrial proceedings and are collectively captioned
"In re Initial Public Offering Securities Litigation Civil
Action No. 21-MC-92."
Defendants in these cases have filed omnibus motions to dismiss.
On February 19, 2003, the Court denied in part and granted in
part the motion to dismiss filed on behalf of defendants,
including the Company. The Court's order did not dismiss any
claims against the Company. As a result, discovery may now
proceed. The Company's officers and directors have been
dismissed without prejudice in this litigation.
In June 2004, a stipulation of settlement and release of claims
against the issuer defendants, including the Company, was
submitted to the Court for approval. Under the settlement, the
plaintiffs would dismiss and release all claims against
participating defendants, including the Company, in exchange for
a contingent payment undertaking by the insurance companies
collectively responsible for insuring the issuer defendants in
the coordinated action, and assignment or surrender to the
plaintiffs of certain claims the issuer defendants may have
against the underwriters. Pursuant to the undertaking, the
insurers would be required to pay the amount, if any, by
which $1 billion exceeds the total amount ultimately collected
by the plaintiffs from the underwriter defendants in the
coordinated action. The settlement is subject to a number of
conditions, including Court approval. If the settlement does not
occur, litigation against the Company would continue.
On August 31, 2005, the court confirmed preliminary approval of
the settlement. The proposed settlement remains subject to a
number of conditions, including final approval of the court.
The suit is styled "In re Blue Coat Systems, Inc. Securities
Litigation," filed in relation to "IN RE INITIAL PUBLIC OFFERING
SECURITIES LITIGATION, Master File No. 21 MC 92 (SAS)," both
pending in the United States District Court for the Southern
District of New York, under Judge Shira N. Scheindlin. The
plaintiff firms in this litigation are:
(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, Mail: 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
BLUE COAT: CA Court Dismisses Consolidated Securities Fraud Suit
----------------------------------------------------------------
The United States District Court for the Northern District of
California dismissed the consolidated securities class action
filed against Blue Coat Systems, Inc. and certain of its current
and former officers.
Beginning on April 11, 2005, several purported securities class
action lawsuits were filed on behalf of purchasers of the
Company's stock between February 20, 2004 and May 27, 2004.
Plaintiffs allege that, during the alleged Class Period,
defendants violated Sections 10(b), 20(a) and 20A of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated
there under, by making false or misleading statements about the
Company's prospects.
The cases were consolidated, and the Court appointed a lead
plaintiff and lead plaintiff's counsel. On October 7, the lead
plaintiff filed a notice of voluntary dismissal of the
consolidated action. On October 18, 2005, the Court endorsed
the lead plaintiff's voluntary dismissal without prejudice,
formally closing the case.
The suit is styled "Dracena Partners, LLC. v. Nesmith et al.,
case no. 3:05-cv-01468-MHP," filed in the United States District
Court for the Northern District of California, under Judge
Marilyn H. Patel. Representing the Company is Krisana M.
Hodges, Wilson Sonsini Goodrich Rosati, RW 2 2 2, 650 Page Mill
Road, Palo Alto, CA 94304-1050, Phone: 650-493-9300 x3302, Fax:
650-493-6811, E-mail: khodges@wsgr.com. Representing the
plaintiffs is Lionel Z. Glancy, Glancy & Binkow LLP, 1801 Avenue
of The Stars, Suite 311, Los Angeles, CA 90067, Phone:
310-201-9150, Fax: 310-201-9160, E-mail: info@glancylaw.com.
BOEING CO.: Settles Toxic Contamination Claims V. CA Facility
-------------------------------------------------------------
The Boeing Co. agreed to pay $30 million to settle claims by
nearly 100 neighbors of the Rocketdyne Santa Susana Field Lab
that radioactive and toxic contamination at the western San
Fernando Valley, California nuclear research site made them ill,
The Daily News reports.
Citing confidential documents provided by one of the plaintiffs,
The Daily News reported that the Company and the plaintiffs
reached agreement on the case back in September 2005, thus
ending an eight-year legal battle with an undisclosed
settlement. Now, however, some plaintiffs are raising concerns
that the settlement award is too small to reimburse people for
their personal losses and medical expenses for treating cancer
and other illnesses, according to The Daily News.
According to court documents that Margaret Ann Galasso provided
to the Daily News, she, who now lives in Florida, would receive
$35,000 from the settlement for developing uterine cancer.
However, after receiving notice of a lien from the state, she
worries she could owe much of that money to Medi-Cal and a
private insurer, which are seeking reimbursement of their
expenditures through her award.
The 1997 lawsuit alleged that toxic and radioactive
contamination released from the field lab from the 1950s to the
1990s caused cancers, and thyroid and autoimmune disorders in
residents who lived near the hilltop lab on the western edge of
the San Fernando Valley.
Ms. Galasso and other members of the class action lawsuit are
also angry because of the legal fees subtracted from the total
settlement. In Ms. Galasso's case, legal fees and costs cut her
original award of $87,500 by 60 percent, according to The Daily
News.
CENTRAL GARDEN: Trial in August 2000 Fire Suits Set March 2006
--------------------------------------------------------------
Trial in the remaining tenant lawsuits filed against Central
Garden & Pet Company is set for March 2006 in the Superior Court
of Arizona, Maricopa County. The suits are related to an August
2, 2000 fire that destroyed its leased warehouse space in
Phoenix, Arizona, and an adjoining warehouse space leased by a
third party.
On July 31, 2001, the adjoining warehouse tenant filed a lawsuit
against the Company and other parties in the Superior Court of
Arizona, Maricopa County, seeking to recover $47 million for
property damage from the fire. Local residents also filed a
purported class action lawsuit alleging claims for bodily injury
and property damage as a result of the fire.
This class action lawsuit has now been settled as to all
parties, and has received Court approval. As part of the
settlement, the company's liability insurers paid $7,825,000 on
behalf of the Company in May 2004.
The building owner and several nearby businesses have also filed
lawsuits for property damage and business interruption, which
are being coordinated with the remaining tenant lawsuit. Each of
these lawsuits is currently pending in the Superior Court of
Arizona, Maricopa County. The trial for the remaining cases is
currently scheduled for March 2006.
CHORDIANT SOFTWARE: NY Court Affirms Lawsuit Settlement Approval
----------------------------------------------------------------
The United States District Court for the Southern District of
New York affirmed its ruling granting preliminary approval to
the settlement of the consolidated securities class action filed
against Chordiant Software, Inc., and certain of its officers
and directors, styled "In re Chordiant Software, Inc. Initial
Public Offering Securities Litigation, Case No. 01-CV-6222."
In the amended complaint, the plaintiffs allege that the
Company, certain of its officers and directors and the
underwriters of its initial public offering (IPO) violated
Section 11 of the Securities Act of 1933 based on allegations
that the Company's registration statement and prospectus failed
to disclose material facts regarding the compensation to be
received by, and the stock allocation practices of, the IPO
underwriters. The complaint also contains a claim for violation
of Section 10(b) of the Securities Exchange Act of 1934 based on
allegations that this omission constituted a deceit on
investors. The plaintiffs seek unspecified monetary damages and
other relief.
Similar complaints were filed in the same court against hundreds
of other public companies that conducted IPOs of their common
stock in the late 1990s. In June 2004, the Company and almost
all of the other issuers entered into a formal settlement
agreement with the plaintiffs. On February 15, 2005, the Court
issued a decision certifying a class action for settlement
purposes, and granting preliminary approval of the settlement
subject to modification of certain bar orders contemplated by
the settlement. In addition, the settlement is still subject to
statutory notice requirements as well as final judicial
approval. On August 31,2005, the Court affirmed its ruling
granting preliminary approval to the settlement.
The suit is styled "In re Chordiant Software, Inc. Initial
Public Offering Securities Litigation, Case No. 01-CV-6222,"
filed in relation to "IN RE INITIAL PUBLIC OFFERING SECURITIES
LITIGATION, Master File No. 21 MC 92 (SAS)," both pending in the
United States District Court for the Southern District of New
York, under Judge Shira N. Scheindlin. The plaintiff firms in
this litigation are:
(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, Mail: 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
CROCUS INVESTMENT: Parties Meet To Discuss Investor Fraud Trial
---------------------------------------------------------------
Just over a year after the beleaguered Crocus Investment Fund
halted trading of its shares, parties involved in a proposed
class action lawsuit against the fund met recently in a
Winnipeg, Canada courtroom, CBC News reports.
The Crocus fund, which had 34,000 investors, suddenly halted
trading last December 2004 as questions arose about the true
value of the fund's assets. The fund had issued a $15-million
writedown in its value weeks earlier, and soon announced a
further writedown of $46 million. Shares that were sold for more
than $15 were suddenly estimated to be worth $7, an earlier
Class Action Reporter story (July 13, 2005) reports.
Harvin Pitch, lead lawyer for the plaintiffs in the case, told
CBC News that it will be a long time before investors know
whether they will get back any of the millions of dollars they
lost, but he's optimistic about the eventual outcome. He
explains, "It's like when you have a race, a long-distance race,
and you have the starter's pistol. After all this time, it's
finally started."
The recent courtroom discussion revolved around scheduling
future legal battles. Mr. Pitch expects preliminary technical
battles to take place around April, followed by a major
certification motion, which determines whether the case should
proceed as a class action lawsuit in the fall.
The suit names 22 defendants, including the fund itself, Crocus
directors and officers, the fund's auditors, two brokerage firms
that handled Crocus prospectuses, and the Manitoba Securities
Commission.
Mr. Pitch told CBC News that he believes the suit marks the
first time a securities commission has been named in a Canadian
class action lawsuit. He notes, "Normally, you don't sue
securities commissions, you don't sue governments, because they
have a right to investigate, but have no obligation. If they
don't do anything, you can't sue a government for not doing
something. But in this case, the Securities Commission undertook
a review, and we wouldn't have known this if it wasn't for the
auditor's report. They themselves said we're going to
exhaustively review this ... and having done that, they sat
back, according to the auditor's report, and did nothing." The
provincial government is not named in the suit, although Mr.
Pitch told CBC News that attorneys are "still thinking about"
doing so.
CSK AUTO: Continues To Face Overtime Wage Lawsuit in CA Court
-------------------------------------------------------------
CSK Auto Corporation continues to face a class action filed in
the Superior Court in San Diego, California by a sales associate
in California who resigned in January 2003. The suit purports
to be a class action on behalf of all current and former
California hourly store employees claiming that plaintiff and
those similarly situated were not paid for:
(1) all time worked (i.e. "off the clock" work),
(2) the minimum reporting time pay when they reported to
work a second time in a day,
(3) all overtime due,
(4) all wages due at termination, and
(5) amounts due for late or missed meal periods or rest
breaks.
Plaintiff also alleges that the Company violated certain record
keeping requirements arising out of the foregoing alleged
violations. The lawsuit claims these alleged practices are
unfair business practices, and requests back pay, restitution,
penalties for violations of various Labor Code sections and for
failure to pay all wages due on termination, and interest for
the last four years, plus attorney fees and that the Company be
enjoined from committing further unfair business practices.
DEL MONTE: Settles Linerboard Antitrust Litigation
--------------------------------------------------
Del Monte Foods Co. settled with the remaining defendants in the
class action filed against several manufacturers of linerboard
in the United States District Court for the Eastern District of
Pennsylvania, alleging an illegal conspiracy to fix the price of
linerboard in the 1990s.
The suit had previously been filed against similar defendants on
behalf of purchasers of linerboard. The company elected to opt-
out of the class action and file suit separately. The company
is seeking to recover damages sustained as a result of this
alleged conspiracy. In the fourth quarter of fiscal 2005, the
Company settled with some of the defendants in this litigation.
In the second quarter of fiscal 2006, the Company settled with
the remaining defendants in this litigation.
EASYLINK SERVICES: Faces Third-Party Complaint Filed in IL Court
----------------------------------------------------------------
Easylink Services Corporation faces a third party complaint
filed in the Circuit Court of Cook County, Illinois, County
Department, Chancery Division.
On January 28, 2005, Steven Brin instituted a third party
complaint against the Company and four other companies and two
individuals for implied indemnification and/or contribution. The
case was filed under the Case No. 03 CH 13062. In the
underlying action against Mr. Brin in the same case, titled
"Jerold Rawson et al. v. Steven Brin et al.," the plaintiffs
filed a putative class action against Mr. Brin and the other
defendants for allegedly sending or causing to be sent
unsolicited advertisements to telephone facsimile machines in
violation of the federal Telephone Consumer Protection Act, 47
U.S.C. Section 227, the Illinois Consumer Fraud and Deceptive
Business Practices Act and common law conversion and trespass.
Mr. Brin has denied liability to the plaintiffs.
Mr. Brin alleges in the third party complaint filed against the
Company and the other third-party defendants, however, that, if
he is found liable to the plaintiffs in the underlying
complaint, then the Company and the other third party defendants
should be held liable to Mr. Brin for implied indemnification
and/or contribution. The Company has until April 13, 2005 to
file its answer or otherwise plead to the third-party complaint,
absent an extension. The plaintiff in the underlying lawsuit
made an offer to the defendants to settle the claim for $30,000.
The class action is styled "Rawson v. Steven Brin, case no.
2003-CH-13062, filed in the Circuit Court of Cook County,
Illinois, Chancery Division under Judge Aaron Jaffe.
Representing the plaintiffs is Edelman & Combs, 120 S. Lasalle
18FL, Chicago IL, 60603, Phone: (312) 739-4200. Representing
the defendant is Gardiner Koch & Hines, 53 W. Jackson St. #950,
Chicago IL 60604, Phone: (312) 362-0000.
FLEETWOOD ENTERPRISES: Consumers Sue V. Defective Trailer Roofs
---------------------------------------------------------------
Fleetwood Enterprises faces two consumer fraud class actions
filed in California federal and state courts, alleging defects
in a specific type of plastic roof installed on folding trailers
from 1995 through 2003.
One suit, styled "Brodhead et al v. Fleetwood Enterprises, Inc."
was filed in United States District Court in the Central
District of California on June 22, 2005. The complaint states a
claim for damages growing out of certain California statutory
claims. The plaintiffs recently clarified that the class for
which they are seeking certification extends to all owners of
folding trailers produced by Fleetwood Folding Trailers, Inc.
with this type of roof, as well as any former owners who may
have had to pay to have this type of roof repaired.
The subject matter of the claim is similar to a putative class
action previously filed in California state court, styled
"Griffin et al v. Fleetwood Enterprises, Inc. et al." The
California trial court denied class action certification in the
Griffin matter on April 28, 2005, and the plaintiffs have
appealed that ruling.
GAMESTOP CORPORATION: Plaintiffs To Appeal Certification Denial
---------------------------------------------------------------
Plaintiffs intend to appeal the United States District Court for
the Western District of New York's ruling denying class
certification for the lawsuit filed against Electronics Boutique
of America, Inc., alleging violations of the Fair Labor
Standards Act (FLSA).
On October 19, 2004, Milton Diaz filed the suit on behalf of a
group of current and former employees to whom the Company
allegedly failed to pay minimum wages and overtime compensation
in violation of the FLSA and New York law. The plaintiff,
joined by another former employee, moved to conditionally
certify a group of similarly situated individuals under the FLSA
and in March 2005, there was a hearing on this motion.
In March 2005, plaintiffs filed a motion on behalf of current
and former store managers and assistant store managers in New
York to certify a class under New York wage and hour laws. In
August 2005, the Company filed a motion for summary judgment as
to certain claims and renewed its request that certification of
the claims be denied. On October 17, 2005, the District
Court issued an Order denying plaintiffs' request for
conditional certification under the FLSA and for class
certification of plaintiffs' York claims. Plaintiffs have
requested permission from the Second Circuit Court of Appeals to
appeal the District Court's Order denying class certification of
their New York claims. The company's summary judgment motion
was heard in December 2005.
The suit is styled "Diaz v. Electronics Boutique of America,
Inc. et al., case no. 1:04-cv-00840-JTE," filed in the United
States District Court for the Western District of New York,
under Judge John T. Elfvin. Representing the plaintiffs is
Judith Ann Biltekoff, Brown & Kelly, LLP, 1500 Liberty Building,
Buffalo, NY 14202, Phone: 716-854-2620, x 107, Fax:
716-854-0082, E-mail: jbiltekoff@brownkelly.com. Representing
the company are John G. Horn and Robert C. Weissflach, Harter,
Secrest and Emery LLP, Twelve Fountain Plaza, Suite 400,
Buffalo, NY 14202-2293, Phone: 716-845-4228, Fax: 716-853-1617,
E-mail: jhorn@hselaw.com; and Jill E. Jachera, Samuel S.
Shaulson, Morgan, Lewis & Bockius LLP, 101 Park Avenue, 37th
Floor, New York, NY 10178-0060, phone: (212) 309-6718, Fax:
(212) 309-6001, E-mail: sshaulson@morganlewis.com or
rweissflach@hselaw.com.
GAMESTOP CORPORATION: Finalizes CA Overtime Lawsuit Settlement
--------------------------------------------------------------
GameStop Corporation has fully settled the class action filed
against it and its subsidiary GameStop, Inc. in Los Angeles
Superior Court in California, alleging violations of the state's
wage laws.
On May 29, 2003, former Store Manager Carlos Moreira filed a
class action, alleging that the Company's salaried retail
managers were misclassified as exempt and should have been paid
overtime. Mr. Moreira was seeking to represent a class of
current and former salaried retail managers who were employed by
the Company in California at any time between May 29, 1999 and
September 30, 2004. Mr. Moreira alleged claims for violation of
California Labor Code sections 203, 226 and 1194 and California
Business and Professions Code section 17200. Mr. Moreira was
seeking recovery of unpaid overtime, interest, penalties,
attorneys' fees and costs.
During court-ordered mediation in March 2004, the parties
reached a settlement which defined the class of current and
former salaried retail managers and will result in a cost to the
Company of approximately $2,750,000. On January 28, 2005, the
court granted approval of the settlement. Settlement payments
have been made. A final judgment has been entered by the court
and the settlement process is complete.
GAMESTOP CORPORATION: Plaintiffs Drop LA Overtime Wage Lawsuit
--------------------------------------------------------------
Plaintiffs withdrew the collective action filed against GameStop
Corporation in the United States District Court for the Western
District of Louisiana, Lafayette/Opelousas Division, alleging
violations of the Fair Labor Standards Act (FLSA).
On October 20, 2004, former Store Manager John P. Kurtz filed a
collective action lawsuit against the Company in U.S. District
Court, Western District of Louisiana, Lafayette/ Opelousas
Division, alleging that the Company's salaried retail managers
were misclassified as exempt and should have been paid overtime,
in violation of the FLSA. Mr. Kurtz is seeking to represent all
current and former salaried retail managers who were employed by
the Company for the three years before October 20, 2004. He is
seeking recovery of unpaid overtime, interest, penalties,
attorneys' fees and costs. On January 12, 2005, the Company
filed an answer to the complaint and a motion to transfer the
action to the Northern District of Texas, Fort Worth Division.
In July 2005, Mr. Kurtz filed a voluntary dismissal of his
complaint, which the court approved. The matter has now been
dismissed. The dismissal is with prejudice as to Mr. Kurtz's
individual claims.
GENESCO INC.: Reached Positive Settlements For CA Overtime Suits
----------------------------------------------------------------
Genesco, Inc. is working to settle two overtime class actions
filed in the Superior Court of the State of California, Los
Angeles County.
On October 22, 2004, the Company was named a defendant in a
putative class action filed in the Superior Court of the State
of California, Los Angeles, styled "Schreiner vs. Genesco Inc.,
et al.," alleging violations of California wages and hours laws,
and seeking damages of $40 million plus punitive damages.
On May 4, 2005, the Company and the plaintiffs reached an
agreement in principle to settle the action, subject to court
approval and other conditions. In connection with the proposed
settlement, to provide for the settlement payment to the
plaintiff class and related expenses, the Company recognized a
charge of $2.6 million before taxes included in restructuring
and other, net in the accompanying Consolidated Statements of
Earnings for the first quarter of Fiscal 2006.
On May 25, 2005, a second putative class action, styled "Drake
vs. Genesco Inc., et al.," making allegations similar to those
in the Schreiner complaint on behalf of employees of the
Company's Johnston & Murphy division, was filed by a different
plaintiff in the California Superior Court, Los Angeles.
On November 22, 2005, the `Schreiner' court granted final
approval of the settlement and the Company and the `Drake'
plaintiff reached an agreement on November 17, 2005 to settle
that action. The two matters were resolved more favorably to the
Company than originally expected, as not all members of the
plaintiff class in `Schreiner' submitted claims and because the
court required that plaintiff's counsel bear the administrative
expenses of the settlement, the Company said in a disclosure to
the Securities and Exchange Commission.
ISRAEL: Female Smokers Sue Hospitals Over Experimental Treatment
----------------------------------------------------------------
Two women will submit a class action suit for $22.72 (NIS 105
million) against Beilinson Hospital, Rabin Medical Center in
Petah Tikva and the Clalit Health Maintenance Organization,
claiming that they were given an experimental cocktail of drugs
without their knowledge or consent, Ha'aretz reports.
Both women, who wanted to stop smoking, had allegedly been given
injections without being told that they were participating in an
experiment, and without being asked to sign consent forms, as
required by health regulations. Several people had complained of
varying degrees of side effects after being administered the
injection, and some had even required emergency treatment. The
cocktail included three drugs, one of which stops the heart rate
from dropping and another, which is a psychiatric drug that may
impede judgment.
Following the Haaretz revelation of the affair two-and-a-half
years ago, a committee established by the Health Ministry
ordered a halt to the injection treatments. Prior to that order,
an estimated 4,000 smokers, including Labor MK Benjamin Ben-
Eliezer, had already been given the drug cocktail in injection
form at Beilinson Hospital and at Professor Shimon Spitzer's
private clinic.
The attorney submitting the suit to the Tel Aviv District Court,
Dori Kaspi, based the case on a commission of inquiry report
stating that Beilinson Hospital had only been authorized to
administer the injection to 20 patients. Despite this directive,
Clalit HMO branches recommended the injections to their
patients. The treatment method was based solely on one article
published 20 years ago by a doctor named Nicholas Bashinsky, who
spent several years in an American jail and lost his license to
practice medicine.
A professional opinion by an expert on clinical pharmacology
attached to the suit said that to date, there had been no
professional literature on the use of Dr. Bashinsky's injection,
or any combination of the medications included in it, for
treatment of a smoking addiction. In addition, the expert said
that the experiment did not have a control group, and had not
based the number of people treated on any accepted statistical
system. He also added that there was no way to evaluate the
treatment results, and therefore there was no justification to
give people the treatment.
An edition of the Channel 2 program "Fact," which will be aired
Thursday, reveals that Professor Spitzer continued to administer
the injections despite knowing about the commission of inquiry,
and was even secretly filmed explaining the treatment to a
person who wanted to quit smoking. Dr. Spitzer was subsequently
summoned for a hearing by the Health Ministry and was told to
stop administering the injections. The deputy director-general
of the Health Ministry, Dr. Yitzhak Berlovitch, announced that
he was considering personal action against senior Beilinson
officials.
Following the expose, the hospital told Ha'aretz that a public
committee should be established to reexamine the treatment,
saying that the commission's conclusions were erroneous, and
that the treatment should be continued for the benefit of the
public.
MASSACHUSETTS: National Guardsmen Sue For Post 9/11 Expenses
------------------------------------------------------------
A group of National Guard soldiers who were ordered to protect
possible targets after the September 11 attacks initiated a
lawsuit against the federal government, seeking tens of millions
of dollars in expenses they say were never reimbursed, The
Associated Press reports.
Guardsmen from Massachusetts and New Hampshire allege in their
suit that they traveled hundreds of miles to security postings
and used their own money to pay for food and lodging with the
expectation that they would be reimbursed. However, they claim
that their requests for compensation were repeatedly denied and
that they eventually were told, "If you don't like the
arrangement, we'll make sure you get taken off this mission."
The suit argues that federal law provides military personnel
with a travel and transportation allowance while away from home
on active duty. It was filed in the U.S. District Court in
Boston by four soldiers and seeks to include hundreds of other
guardsmen as a class action. Defendants in the suit, which seeks
$73 million in unpaid expenses, are the U.S. Department of
Defense and the Massachusetts National Guard.
A spokeswoman for the Defense Department referred calls to the
Justice Department, where a spokesman declined to comment until
after the agency reviews the lawsuit. The Massachusetts National
Guard was investigating the allegations and had no immediate
comment, according to Maj. Winfield Danielson, a spokesman for
the unit.
Plaintiffs in the suit are Steven Littlefield of Plymouth,
Massachusetts, Wayne Gutierrez of New Bedford, Massachusetts,
Louis Tortorella of Brookline, New Hampshire and Joseph Murphy
of Derry, New Hampshire. All but Mr. Tortorella are still in the
National Guard. The areas they patrolled included Boston's
primary water supply.
NATIONAL SECURITIES: Reaches Settlement For CA Securities Suit
--------------------------------------------------------------
National Securities Corporation reached a settlement for the
class action filed against it and other companies relating to a
series of private placements of securities in Fastpoint
Communications, Inc.
The suit was filed in the Superior Court for the State of
California for the County of San Diego. Plaintiffs are seeking
approximately $14.0 million, but no specific amount of damages
has been sought against the Company in the complaint. National
filed its answer in April 2003. In January 2004, the court
entered an order denying class certification. As a result of
this order denying class certification, the only remaining
claims against the Company are the individual claims asserted by
the two class representatives totaling $60,000.
Plaintiffs thereafter filed an appeal of the order denying class
certification. The action in the lower court, including a
pending motion for summary judgment, has been stayed. In May
2005, the California Court of Appeal affirmed the order denying
class certification. As a result, the Company anticipates that
the order staying the action with respect to the remaining
$60,000 in claims will be lifted and the case will move forward.
At that time, the Company will press its pending motion for
summary judgment, the Company said in a disclosure to the
Securities and Exchange Commission.
NEIMAN MARCUS: Plaintiffs Withdraw TX Securities Fraud Lawsuit
--------------------------------------------------------------
Plaintiffs voluntarily dismissed the consolidated securities
class action filed against The Neiman Marcus Group, Inc. and its
directors in the United States District Court for the Northern
District of Texas, styled "NECA-IBEW Pension Fund (The Decatur
Plan) v. The Neiman Marcus Group, Inc. et al. (CA No. 3-05 CV-
0898B)."
On May 1, 2005, the Company's Board of Directors approved a
definitive agreement to sell the Company to an investment group
consisting of Texas Pacific Group and Warburg Pincus, LLC
(collectively, the Sponsors), through a merger of the Company
with an entity owned by the Sponsors. The amended complaint
alleges a cause of action for breach of fiduciary duty against
the Company and its directors, claiming, among other things,
that the defendants are endeavoring to complete the sale of the
Company and its assets at a grossly inadequate and unfair price
and pursuant to an unfair process that fails to maximize
shareholder value. In addition, the amended complaint alleges
that the directors are not independent and breached their
fiduciary duties in connection with the approval of the merger
by, among other things, tailoring the transaction to serve the
interests of the defendants and the family of Richard A. Smith,
chairman of the Company's board of directors and its largest
stockholder, rather than structuring the merger to obtain the
highest price for stockholders, depriving public stockholders of
the value of certain assets (including the credit card business
and its third quarter 2005 profits), failing to realize the
financial benefits from the sale of the credit card business,
not engaging in a fair process of negotiating at arm' s length,
including provisions precluding superior competing bids
(including a termination fee and no solicitation provision) and
structuring a preferential deal for insiders.
The amended complaint further claims that the Company's
financial advisor had a conflict of interest by also acting as a
financing source for the merger, and that its proxy statement in
respect of the merger allegedly omitted material information
purportedly necessary to ensure a fully informed shareholder
vote. The amended complaint currently seeks, among other
things, injunctive relief to enjoin the consummation of the
merger, to rescind any actions taken to effect the merger, to
direct the defendants to sell or auction the Company for the
highest possible price, and to impose a constructive trust in
favor of plaintiffs upon any benefits improperly received by
defendants. The lawsuit is in its preliminary stage and we
expect to file a motion to dismiss the lawsuit in October 2005.
Following the merger's close, plaintiff voluntarily dismissed
the lawsuit with prejudice as moot on December 1, 2005, and
provided a release of all of the defendants for claims arising
out of the merger. The Neiman Marcus Group, Inc. paid
plaintiff's attorneys' fees in connection with certain
disclosures requested by plaintiff and included in the proxy
statement sent to the shareholders regarding the merger.
The suit is styled "NECA-IBEW Pension Fund v. The Neiman Marcus
Group Inc et al., case no. 3:05-cv-00898," filed in the United
States District Court for the Northern District of Texas, under
Judge Sam A. Lindsay. Representing the defendants is William
Mayer Katz, Jr of Thompson & Knight LLP, 1700 Pacific Avenue,
Suite 3300, Dallas, TX 75201-4693, Phone: 214/969-1330, Fax;
214/880-3279, E-mail: william.katz@tklaw.com. Representing the
plaintiffs is Willie Briscoe of Provost Umphrey Law Firm -
Dallas, 3232 McKinney Ave, Suite 700, Dallas, TX 75204, Phone:
214/744-3000, E-mail: Provost_Dallas@yahoo.com.
PATTERSON COMPANIES: Faces Consolidated Securities Lawsuit in MN
----------------------------------------------------------------
Patterson Companies, Inc. and certain of its officers and
directors face a consolidated class action filed in the United
States District Court for the District of Minnesota, alleging
violations of the federal securities laws.
Five purported class action lawsuits were filed during the
second quarter of fiscal 2005. On August 31, 2005, the Court
entered an order consolidating the cases into a single action
captioned "In re Patterson Companies, Inc. Securities
Litigation" docketed as File No. 05cv1757 DSD/NMJ."
On September 16, 2005, a derivative lawsuit was filed in the
United States District Court for the District of Minnesota
captioned `Vance Cadd, Derivatively On Behalf of Patterson
Companies, Inc. vs. James W. Wiltz, et al., docketed as File
No. 05-cv-02155 RHK/AJB.' This lawsuit names certain
officers and directors of the Company as defendants and alleges
breach of fiduciary duty, abuse of control, gross mismanagement,
waste of corporate assets and unjust enrichment.
On October 11, 2005, a class action lawsuit was filed in the
United States District Court for the District of Minnesota
captioned "Tamara Dolliver, On Behalf of Herself and All Others
Similarly Situated vs. Patterson Companies, Inc., et al, File
No. 05-cv-02383 JNE/SRN." This class action lawsuit was brought
on behalf of the participants in the Company's Employee Stock
Ownership Plan against the Company and certain officers and
directors, and alleges violations of the federal Employee
Retirement Income Security Act (ERISA). The "Cadd" and
"Dolliver" cases are predicated on essentially the same factual
allegations alleged in, and are related cases to, the class
action lawsuits consolidated as "In Re Patterson Companies, Inc.
Securities Litigation."
PETCO ANIMAL: Plaintiffs File Consolidated Securities Suit in CA
----------------------------------------------------------------
Plaintiffs filed a consolidated securities class action against
Petco Animal Supplies, Inc. and certain of its officers in the
United States District Court for the Southern District of
California.
On April 18, 2005, the Company and two of its officers, James M.
Myers, its Chief Executive Officer, and Rodney Carter, its Chief
Financial Officer, were named as defendants in a purported class
action, alleging violations of Sections 10 and 20 of the
Securities Exchange Act of 1934. The named plaintiff, Plumbers
and Pipefitters Local 51 Pension Fund, purports to represent a
class of purchasers of our stock during the period November 18,
2004 to April 14, 2005, and alleges that during such period the
defendants misrepresented our financial position and that the
plaintiff and the purported class of purchasers during that
period were damaged by paying artificially and falsely inflated
prices for Company stock. The complaint seeks unspecified
monetary damages.
On April 26, 2005, another class action was filed in the same
court with substantially similar allegations to those described
above. The April 26 suit named Brian K. Devine, the Company's
Chairman, as an additional defendant. The named plaintiffs in
the April 26 suit, Richard and Loretta Hochreiter, purport to
represent an identical class of investors as that identified in
the April 18 lawsuit.
On April 27, 2005, another class action was filed in the same
court with substantially similar allegations to those described
above, naming Roger Lieberman as its representative plaintiff.
On May 5, 2005, an additional class action was filed, with
substantially similar allegations to those described above,
naming Mr. Myers, Mr. Carter and Mr. Devine as defendants. The
May 5 complaint names Dikran Toroser as its representative
plaintiff.
In addition, certain law firms have announced that they are
seeking plaintiffs in order to file a class action lawsuit
against the Company based on unasserted claims similar to those
described above, the Company revealed in a disclosure to the
Securities and Exchange Commission. Over the next several
weeks, three additional purported class actions were filed in
the same court alleging essentially the same claims against the
Company and its officers and adding the Company's Chairman as a
defendant.
These cases were consolidated, and in October 2005, a
consolidated complaint was filed extending the class period from
August 18, 2004 to August 25, 2005, adding additional but
similar causes of action, and naming additional defendants,
including the Company's President and Chief Operating Officer,
several of the Company's Senior Vice Presidents, several former
and current members of the Company's Board of Directors, and two
former stockholders of the Company.
The first identified complaint in the litigation is styled
"Plumbers and Pipefitters Local 51 Pension Fund, et al. v. PETCO
Animal Supplies, Inc., et al.," filed in the United States
District Court for the Southern District of California. The
plaintiff firms in this litigation are:
(1) Brodsky & Smith, LLC, 11 Bala Avenue, Suite 39, Bala
Cynwyd, PA, 19004, Phone: 610.668.7987, Fax:
610.660.0450, E-mail: esmith@Brodsky-Smith.com
(2) Charles J. Piven, World Trade Center-Baltimore,401 East
Pratt Suite 2525, Baltimore, MD, 21202, Phone:
410.332.0030, E-mail: pivenlaw@erols.com
(3) Dyer & Shuman, LLP, 801 E. 17th Avenue, Denver, CO,
80218-1417, Phone: 303.861.3003, Fax: 800.711.6483, E-
mail: info@dyershuman.com
(4) Federman & Sherwood, 120 North Robinson, Suite 2720,
Oklahoma City, OK, 73102, Phone: 405-235-1560, E-mail:
wfederman@aol.com
(5) Glancy Binkow & Goldberg LLP (LA), 1801 Ave. of the
Stars, Suite 311, Los Angeles, CA, 90067, Phone: (310)
201-915, Fax: (310) 201-916, E-mail: info@glancylaw.com
(6) Law Offices of Brian M. Felgoise, P.C., Esquire at 261
Old York Road, Suite 423, Jenkintown, PA, 19046, Phone:
215.886.1900, E-mail: securitiesfraud@comcast.net
(7) Lerach Coughlin Stoia Geller Rudman & Robbins (Los
Angeles), 355 S. Grand Avenue, Suite 4170, Los Angeles,
CA, 90071, Phone: 213.617.9007, Fax: 213.617.9185, E-
mail: info@lerachlaw.com
(8) Lerach Coughlin Stoia Geller Rudman & Robbins (San
Diego), 401 B Street, Suite 1700, San Diego, CA, 92101,
Phone: 619.231.1058, Fax: 619.231.7423, E-mail:
info@lerachlaw.com
(9) Milberg Weiss Bershad & Schulman LLP, 355 South Grand
Avenue, Suite 4170, Los Angeles, CA, 90071, Phone:
213.617.9007, Fax: 213.617.9185, E-mail:
info@milbergweiss.com
(10) Pomerantz,Haudek, Block, Grossman & Gross, 100 Park
Avenue, 26th Floor, New York, NY, 10017-5516, Phone:
212.661.1100,
(11) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, e-mail:
sn06106@AOL.com
(12) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com
PETCO ANIMAL: Plaintiffs File Consolidated Labor Lawsuit in CA
--------------------------------------------------------------
Plaintiffs filed a consolidated amended class action against
Petco Animal Supplies, Inc. in the Superior Court of the State
of California for the County of Los Angeles, alleging violations
of the California Labor Code.
Plaintiffs Wayne Boyd, Anthony Castro, Gilbert Hernandez, and
Daniel Lepkosky filed the first suit, on behalf of all current
and former hourly, non-exempt employees of the Company's
California stores from June 27, 2001 to the present. These
plaintiffs allege that during this period they were not paid all
wages, were not paid overtime, were not authorized and permitted
to take rest breaks as required by law, were not provided meal
breaks as required by law, were not paid "reporting time" pay,
and were not paid all wages upon separation from employment.
The complaint seeks unspecified monetary damages in the form of
unpaid wages, penalties and other relief.
On September 19, 2005, another purported class action alleging
Labor Code violations was filed in the Superior Court of the
State of California for the County of Los Angeles naming the
Company as the defendant. The named plaintiff in the September
19 suit, Natalie Wade, purports to represent a class of current
and former employees of the Company who she alleges were not
paid all wages earned, were not provided meal breaks, were not
authorized and permitted to take rest breaks, and were not
provided with itemized wage statements as required by law. This
complaint also seeks unspecified monetary damages and other
relief.
A first amended complaint was filed on November 16, 2005. This
amendment neither added nor altered any of the causes of action
asserted but appears to have been made in an effort to cure a
failure to comply with certain administrative requirements.
PORTLAND GENERAL: Firm, Multnomah Customers Settle OR Tax Case
--------------------------------------------------------------
Portland General Electric (PGE) settled a class action lawsuit
over a tax collected on Multnomah County residents, which will
refund $10 million to current and former customers at an average
$14 for each residential customer, The Associated Press reports.
Originally, the suit had sought about $7 million that PGE
charged ratepayers for taxes that the complaint alleges were not
paid to Multnomah County, the most populous county in Oregon and
home to the largest utility in the state. In the past, the
Company, attempted to have the case dismissed. But, according to
Dan Meek, one of the attorneys who filed the suit, Multnomah
County Circuit Judge John Wittmayer rejected 11 out of the 12
motions by the Company. The remaining motion he will consider on
technical grounds, according to him, an earlier Class Action
Reporter story (December 14, 2005) reports.
The settlement, if approved by a Multnomah County judge, will
end a yearlong legal battle between the Enron subsidiary and the
customers who filed the lawsuit, led by Ken Lewis of Portland.
In a prepared statement, Mr. Lewis said, "This is a fair
settlement, and it gives back to ratepayers Multnomah County
taxes they were charged by PGE under Enron."
Mr. Lewis argued that PGE shouldn't have charged customers for
the tax because only a small amount of more than $7 million in
collections was paid to Multnomah County. The settlement covers
seven years of taxes.
PGE sent its estimated tax payments to bankrupt Enron, which
purchased the utility in 1997. Enron used the tax laws to offset
PGE's gains with losses from other ventures. In most of the
years Enron owned PGE, it was able to reduce its federal, state
and local taxes to zero. In early November, PGE had agreed to
drop the charge, which appeared as a line item on monthly bills,
and issue refunds. But the amount remained in dispute.
PGE spokesman Scott Simms told The Oregonian that the settlement
"lets us focus on our future as an independent company, paying
taxes directly to government agencies."
Enron plans to deliver PGE to creditors in April under a
reorganization plan approved by a federal bankruptcy judge in
2004. After that, PGE stock will be publicly traded. Once that
happens, PGE officials say, they will again charge customers for
the tax.
A residential customer who has been a county resident for the
past seven years and has paid an average monthly bill of about
$73 will receive a total refund of $14. PGE has an estimated
200,000 residential customers in Multnomah County. Other
customers, including schools and businesses, also will receive
refunds.
SHOPKO STORES: Faces Consolidated Lawsuit V. Goldner Hawn Merger
----------------------------------------------------------------
ShopKo Stores, Inc. faces a consolidated securities class
actions filed in the Circuit Court for Brown County, Wisconsin,
after the Company announced on April 8, 2005 that it had signed
a definitive merger agreement to be acquired by an affiliate of
Goldner Hawn Johnson & Morrison Incorporated (Goldner Hawn).
Six suits were initially filed, styled:
(1) Thomas Zwicker v. ShopKo Stores, Inc., et al., Case No.
05-CV-677;
(2) Robert Farer v. ShopKo Stores, Inc., et al., Case No.
05-CV-678;
(3) Market Street Investments, L.P. v. ShopKo Stores, Inc.,
et al., Case No. 05-CV-688;
(4) City of Pontiac General Employees' Retirement Systems
v. ShopKo Stores, Inc., et al., Case No. 05-CV-692;
(5) Plumbers and Pipefitters Local 51 Pension Fund v.
ShopKo Stores, Inc., et al., Case No. 05-CV-753; and
(6) Strongbow Capital Ltd. v. ShopKo Stores, Inc., et al.,
Case No. 05-CV-781.
The complaint in each action purports to have been filed by a
shareholder of the Company who seeks to maintain the suit as a
class action on behalf of all holders of the Company's stock,
excluding those related to or affiliated with any of the
defendants. In addition to the Company, each complaint names the
Company's directors as defendants. Goldner Hawn is a defendant
in one of the lawsuits.
The complaints all assert claims arising out of the Company's
April 8, 2005 announcement, and allege that the Company and its
directors breached fiduciary duties to the Company's
shareholders by negotiating and agreeing to the Transaction at a
price that the plaintiffs claim to be inadequate. The
plaintiffs seek, among other things, to enjoin or to rescind the
Transaction, and/or to establish a constructive trust over any
benefits received by the defendants, damages and other monetary
relief.
These six lawsuits were consolidated under the caption "In re
ShopKo Shareholder Litigation, Case No. 05-CV-677," and the
Company, each member of the Company's board of directors and
Goldner Hawn were named as defendants. The consolidated
compliant alleges, among other things, that the Company and its
directors breached their fiduciary duties to the Company's
shareholders by negotiating the Badger merger at a price that
the plaintiffs allege to be inadequate, by supporting the Badger
merger rather than effecting a recapitalization and by failing
to disclose all material information concerning the Badger
merger agreement, the transactions contemplated thereby and the
background of and reasons for the Badger merger. In addition,
the consolidated complaint alleges that Goldner Hawn aided and
abetted the directors' breach of their fiduciary duties. The
consolidated complaint sought, among other relief, rescission of
the Badger merger, an injunction requiring disclosure of all
material information and preventing completion of the Badger
merger, and compensatory damages.
On August 16, 2005 the plaintiffs filed a motion seeking a
preliminary injunction. The hearing on the motion was held on
September 1 and September 2, 2005. Following oral argument, the
court denied the plaintiffs' motion, which would have allowed
the Company's shareholders to vote on the Badger merger had the
Badger merger not been later terminated in favor of the SKO
merger.
On November 30, 2005, the plaintiffs filed a motion claiming
that their attorneys are entitled to $2 million in fees and
expenses because they have benefited the Company and its
shareholders through this litigation. At the same time, the
plaintiffs filed a motion to temporarily enjoin the SKO merger
if their motion for fees and expenses cannot be finally decided
by December 23, 2005, the date of the special meeting of ShopKo
shareholders called to consider approval of the SKO merger, so
that any fees and expenses awarded to them could be satisfied
from the SKO merger consideration.
SOUTH CAROLINA: Lawyer Says Pet Owners Who Sue May Win Refunds
--------------------------------------------------------------
Business that makes or sells tainted pet food generally must pay
legal damages to consumers whose animals are harmed by it even
if the business was not negligent, according to a prominent
attorney, The State reports.
Attorney Ken Suggs, president of the Association of Trial
Lawyers of America, and head of the Columbia office of
Baltimore's Janet, Jenner & Suggs firm told The State that pet
owners who sue makers or sellers of defective pet food could win
reimbursement for the fair market value of lost pets, for vet
bills, and for reasonable expenses to dispose of dead animals.
However, he pointed out that pet owners are unlikely to win
damages for emotional distress caused by animals' deaths,
because laws usually view pets as property.
Product-liability laws in the state and others can hold
businesses automatically liable whenever an "unreasonably
dangerous," defective product causes harm to consumers'
property.
Attorney Carl Epps, of Nelson, Mullins, Riley & Scarborough, the
state's largest law firm, told The State that Diamond Pet Foods
"should be strictly liable ... in most states, including South
Carolina, and probably does not have a defense" against many dog
owners' claims of property loss. However, Mr. Epps noted that
the Company should be careful not to pay for dog deaths or
illnesses not caused by its products.
In addition, Mr. Epps says that the Company might limit
potential liability costs by asking a court to transfer the
costs to any food-ingredient supplier who possibly should share
responsibility.
Pet owners wanting to sue are most likely to find a lawyer
willing to take their case if it can get class action status, in
essence it will represent many pet owners, according to Mr.
Suggs. He pointed out that a case representing a single pet
owner might win only a few hundred dollars, while a class action
could win a more lucrative amount. However, he notes that
litigation won't repay all possible expenses saying, "I don't
see a court allowing some elaborate funeral expenses for a pet.
We usually put them in a shoe box in the back yard."
STAPLES INC.: Proposes Unusual Settlement in Item Pricing Case
--------------------------------------------------------------
Staples, Inc. (NASDAQ: SPLS) is proposing a novel method for
resolving claims that it violated item-pricing regulations in
the state of Massachusetts, The Associated Press reports.
Under the unique deal, the Framingham-based Company agreed to
hand out vouchers for $7.50 to more than 75,000 shoppers. If the
class action settlement is approved, the Company will designate
one future Monday as "Consumer Day." On that day, the first
1,200 customers in each of the chain's 64 Massachusetts stores
would receive a voucher.
The settlement would cost the Company $576,000, if all the
vouchers were distributed and redeemed. The Boston Globe
reported that it would mark the first time that consumers have
received direct compensation from an item-pricing settlement.
UNITED STATES: High Court Reviews Gas Price Antitrust Lawsuit
-------------------------------------------------------------
The Supreme Court recently debated whether two oil companies
could be sued for setting up joint ventures that allegedly
inflated gas prices in the late 1990s, The Associated Press
reports.
The justices, led by Chief Justice John Roberts, seemed
skeptical of arguments by a lawyer representing 23,000 gas
distributors, who say Chevron Corporation and Shell Oil Co.
violated antitrust laws and fixed prices. Justice Roberts
described the gas distributors' arguments as "a very artificial
hook." While other justices, including David Souter and Stephen
Breyer, wondered whether the arguments were weak because the
price was set by the legitimately formed joint venture.
In 1998, when Chevron was still Texaco, the firm joined with
Shell to form Equilon Enterprises and Motiva Enterprises to
handle refining and marketing of their gasoline. Equilon focused
on the western United States, while Motiva handled the eastern
United States and Saudi Arabia. The two ventures charged the
same wholesale price for Texaco and Shell gasoline, which were
sold as separate products under the companies' brand names. The
Equilon and Motiva ventures lasted from 1998 to 2001, when
Texaco sold its share to win approval of its purchase of
Chevron.
Back in 1999, several gas distributors filed a class action
lawsuit in California, alleging that Texaco and Shell used
Equilon to fix gas prices in violation of antitrust provisions
of the Sherman Act.
Justice Antonin Scalia said he did not believe the Federal Trade
Commission would have approved the joint ventures, as it had
done, if the two oil companies had dominated the market.
Joseph M. Alioto, the gas distributors' attorney, however,
countered, "Anybody can fix prices.... It's illegal per se." He
also pointed out to justices that the firms do not have to be
the biggest in the business to control the market.
However, neither Justice Scalia nor Justice Roberts seemed
swayed. Justice Roberts even asked, "If the joint ventures are
not supposed to set the prices, who is?" He also said that the
joint ventures must price their products, and it should not
matter whether they are sold as a new brand or under the Shell
and Texaco labels.
The court's decision could resonate across the business world,
affecting how future joint ventures and mergers were structured,
not just with oil companies. The ruling also could be
significant in signaling how the Roberts court would interpret
antitrust laws.
Mr. Alioto also told the justices that the joint ventures were
launched when crude-oil prices were at their lowest since the
Great Depression. That is why he alleged that the two oil
companies created Equilon and Motiva, to drive up the prices. In
court papers, the gas distributors said that they paid $1
billion or more in excessive charges.
According to court documents, justices were set to start
reviewing the case in October 2005, the court's next term.
Specifically, they would review a lower court ruling that
allowed the class action lawsuit by 23,000 gas station owners to
proceed. The lawsuit accuses Shell and Texaco, now part of
Chevron, of setting up two joint ventures in 1998 to illegally
fix gas prices, an earlier Class Action Reporter story (June 29,
2005) reports.
Previously, the San Francisco-based 9th U.S. Circuit of Appeals
ruled that the suit should go to trial because of evidence
suggesting the venture unfairly restrained trade. In its ruling,
the court noted that when crude oil was at historic lows of $10
to $12 a barrel, the ventures increased the Shell and Texaco
brands by 40 cents a gallon in Los Angeles and by 30 cents in
Seattle and Portland, Oregon, an earlier Class Action Reporter
story (June 29, 2005) reports.
UNIVERSITY OF WASHINGTON: Judge Chides School For E-mail on Suit
----------------------------------------------------------------
A King County Superior Court judge rebuked the University of
Washington (UW) administration for sending an unauthorized e-
mail about a class action lawsuit involving back pay for up to
3,000-plus faculty members, The Seattle Times reports.
In an October partial summary judgment, Judge Mary Yu ruled that
the UW breached its duty by not awarding most faculty members a
2 percent merit increase in the 2002-03 academic year. The
ruling could cost the UW up to $16 million.
On November 30, 2005, UW President Mark Emmert sent a faculty-
wide e-mail to "offer as much clarification as possible" about
the lawsuit. However, Judge Yu recently ordered the UW to send a
corrective e-mail and refrain from further unauthorized
communication.
In her order, Judge Yu stated that the court is concerned about
Mr. Emmert's e-mail, because it was sent to class action members
without notice to counsel. She also said that it discussed the
alleged budgetary impact to the UW, "which on its face appears
to be an attempt to influence class members regarding their
participation" and it didn't include contact information for
class action counsel.
VIRGIN ISLANDS: Farmers' $2.8B Suit V. USDA Moving Toward Trial
---------------------------------------------------------------
A $2.8 billion class action loan-discrimination lawsuit filed
against the United States Department of Agriculture (USDA) on
behalf of 3,000 Virgin Islanders may go to trial by the end of
this year, according to Douglas Inman, one of several attorneys
handling the case.
Originally filed in 2000 in a U.S. District Court, the suit's
plaintiffs alleged that the USDA organized long-term and
systematic discrimination against local residents, who attempted
to apply for home loans under the department's Rural Development
program.
In March 2003, District Court Judge Thomas Moore certified as a
legal class all territorial residents who applied or attempted
to apply for home loans through the USDA's Rural Development
offices from January 1, 1981, through January 10, 2000. The
ruling meant the group can bring a single case against the USDA,
rather than each plaintiff being forced to file separately.
The USDA appealed Judge Moore's ruling arguing that the group
was too broad, that its definition of people who are "black,
Hispanic, women and/or Virgin Islanders," was contradictory, and
that because some of the plaintiffs might not have been eligible
for a loan in the first place, their inclusion was
inappropriate.
However, in September 2004, the 3rd U.S. Circuit Court of
Appeals dismissed the USDA's claim and found that the loan
applicants did meet the legal class action threshold, although
it slightly modified the definition of the class. The court
threw out the racial and gender distinctions, amending the
definition to read: "All Virgin Islanders who applied or
attempted to apply" for the loans.
Mr. Inman told The Virgin Islands Daily News that an all-day
mediation session held early last year ended with USDA attorneys
agreeing to offer a settlement proposal. The USDA was given a
September 12 deadline to get its offer together and get prior
approval. The department though missed that deadline and was
granted a new deadline of November 16. He noted, "At the end of
that time they informed us that they couldn't get all the people
to sign off as needed. They did not communicate the reasons why
they were unable to get approval for the offer. Because of that
I asked the District Court to return us to a tract of active
litigation." District Court Magistrate Judge Geoffrey Barnard
has indicated the target date for trial will be in November or
December, according to Mr. Inman.
Attorneys handling the case are in the process of conducting
discovery, while in the background, the mediator is continuing
work to try to get a settlement, Mr. Inman told The Virgin
Islands Daily News. He says though that he was disappointed that
the federal government failed to make the offer. Mr. Inman
explains, "If they don't give us a settlement offer, we're going
to trial, which we are certain we will win, and we think the
U.S. government knows it. My feeling is either we're going to
settle this case in the next several months or we're going to
win at trial."
According to the lawsuit, the discrimination originated in the
state of Vermont's regional office, which had jurisdiction over
the Virgin Islands during much of the time the residents say
they were discriminated against. Jurisdiction was rotated to
Florida in 1998. The suit states that Vermont officials
recommended a series of tactics to office staff here in the
islands to discourage Virgin Islands residents from applying for
various home ownership opportunities, low-interest loans and
grants for rural borrowers through its Rural Development Office.
The suit claims that instead of being given applications,
residents seeking loans were placed on an illegal waiting list.
If they eventually received an application, according to the
suit, the USDA office staff in the Virgin Islands would make it
difficult, if not impossible, for the applicants to file the
application and receive a response.
WAL-MART STORES: PA Judge Approves Suit Over Off The Clock Work
---------------------------------------------------------------
A judge approved a class action lawsuit against Wal-Mart Stores
Inc. by employees in Pennsylvania who claim that the Company
pressured them to work off the clock, The Associated Press
reports.
The suit, which contains claims that mirror those in suits filed
around the country, alleges that employees worked through breaks
and after quitting time - eight to 12 unpaid hours a month, on
average - to meet work demands. Dolores Hummel, who worked at a
Sam's Club in Reading from 1992-2002, reportedly told The
Associated Press, "One of Wal-Mart's undisclosed secrets for its
profitability is its creation and implementation of a system
that encourages off-the-clock work for its hourly employees..."
Philadelphia Common Pleas Court Mark I. Bernstein approved the
suit for class certification late last month. The class could
include nearly 150,000 current or former employees who worked at
a Wal-Mart or Sam's Club in the state since March 19, 1998.
In a prepared statement regarding the matter, the Company said,
"We strongly deny the allegations in this lawsuit. Wal-Mart's
policy is to pay associates for every minute they work."
The class certification decision followed days of hearings that
examined Wal-Mart's pay records, break policies and even
electronic systems that show when employees are signed on to
cash registers or other machines, according to plaintiff's
attorney Michael Donovan. He told The Associated Press, "There's
a lot of electronic evidence, that when you examine it shows
that these people aren't getting breaks, but they're continuing
to run the cash register or do inventory or whatever."
Wal-Mart may pursue an appeal of the class action certification
in Philadelphia, according to lawyer Martin D'Urso. The Company
notes that the certification alone does not prove any
wrongdoing.
The suit was initially filed in 2002, at that time the Company
employed more than 31,600 people in 123 stores in Pennsylvania.
Ms. Hummel had to work off the books to meet quotas on cakes she
made in the bakery, Mr. Donovan said. He adds that she was
eventually dismissed due to her productivity level. Ms. Hummel's
suit cites a Wal-Mart corporate policy that gives hourly
employees one paid 15-minute break during a shift of at least
three hours and two such breaks, plus an unpaid 30-minute meal
break, on a shift of at least six hours. However, the Company's
break policies can vary according to state law, spokesman Kevin
Thornton pointed out.
WELLS FARGO: Lawyer Files Disqualification Motion V. Judge Weber
----------------------------------------------------------------
The Lakin Law Firm filed a petition requesting the substitution
of a judge in the class action case, Katherine Lee Henderson v.
Wells Fargo Home Mortgage, because the Wood River plaintiff's
firm represented a client that sued Circuit Judge Don Weber in
1992, The Madison County Record reports.
Judge Weber, who was appointed by the Supreme Court in
September, took over the docket handled by now-retired Circuit
Judge Phillip Kardis. In the motion dated January 5, 2006, Gary
Peel of the Lakin Law Firm, states that his firm represented
Linda Condray who sued Judge Weber for using a rare photo of
child killer Paula Sims for personal profit.
Judge Weber, former Madison County State's Attorney,
successfully prosecuted Ms. Sims. The photo taken by Ms.
Condray, which was introduced into evidence, was the only known
picture of Ms. Sims with her children. The judge went on to
publish a book called Precious Victims detailing the events of
the case.
Ms. Sims was found guilty of two counts of first-degree murder,
two counts of obstructing justice, and one count of concealing
homicide on February 2, 1990. She killed her 13-day-old daughter
Loralei Marie in June 1986 while living in Jersey County. In
April 1989, Ms. Sims, who then lived in Alton, killed her 6-
week-old daughter, Heather Lee. Originally, Ms. Sims told
authorities that both of the children were kidnapped, but the
trash bag in which Heather Lee's body was found was manufactured
within seconds of and by the same machine as other bags found in
the Ms. Sims' Alton home.
The suit filed by Ms. Condray claimed that the same photograph
that Judge Weber introduced as evidence appeared on the front
cover illustration of his book. She claimed Judge Weber was
liable for damages for misappropriating her rights to the
photograph. The judge settled with Ms. Condray in September 1992
for $25,000.
In Mr. Peel's motion for a new judge, he states, "Although Judge
Weber initially denied any liability, he eventually extended an
offer of judgment of $25,000 to the Lakin Firm's client who
accepted the offer." He also states, "A judge's duty is to hear
and decide, impartially and fairly, the case assigned to him
without giving even the appearance of having been influenced or
biased. Thus, the objective appearance of bias or prejudice is a
ground for disqualifying a judge from hearing a cause."
In addition, Mr. Peel pointed out that Illinois Court Rules and
Procedures require a judge to disqualify himself where his
impartiality to a party their lawyer might reasonably be
questioned.
WELLS FARGO: Suit Alleges Deceptive Loan Fee Practices
------------------------------------------------------
The case filed by Katherine Lee Henderson of Alton, alleges that
Wells Fargo charged her a $1,101.50 loan discount fee, but
failed to lower the interest rate in exchange for the fee. She
also alleges that the Company should not be permitted to keep
the loan discount fee it collected since it did not lower
interest rates for that fee.
In addition, Ms. Henderson claims that the Company intended to
create the impression that it had reduced the interest rate in
exchange for the fee, and engaged in deceptive practices by
concealing the fact that it did not reduce interest rates in
exchange for the fee they charged. She also claims that had she
known that the Company would not have reduced rates in exchange
for the fee, and it was just simply another source of profit;
she would have refused to pay the fee or would have sought
alternative financing.
The day Peel filed the motion, Judge Weber was going to hear a
motion to dismiss the case, which was filed by Wells Fargo, but
before the hearing Mr. Peel filed the motion. Pursuant to
Illinois statute, Judge Weber sent the case to Chief Judge
Edward Ferguson for assignment to another judge to hear Mr.
Peel's motion. In so doing, Judge Ferguson assigned Circuit
Judge Nicholas Byron to only hear the motion for a new judge.
Aside form Mr. Peel, Ms. Henderson also is represented by
Bradley Lakin, Gerald Walters and Paul Marks all of The Lakin
Firm in Wood River. Timothy Campbell of Godfrey and Phil Bock,
Paul Weiss and Tod Lewis of Chicago, Illinois also represent Ms.
Henderson. Robert Schultz and Joseph Whyte of Heyl, Royster,
Voelker & Allen in Edwardsville represent Wells Fargo. Mark
Blocker and Michael Andolina of Sidley Austin Brown & Wood also
represent the Company.
WORKERS TEMPORARY: Wins FL Labor Pool Act Suit, Asks For Reforms
----------------------------------------------------------------
Workers Temporary Staffing (WTS), Lake Mary, Florida won a class
action lawsuit filed by a former day laborer with the resulting
order finding the Florida Labor Pool Act (F.S. 448.24)
unconstitutional due to vague language and substantive due
process.
Passed in 1995, the Labor Pool Act states, "no labor pool may
charge a laborer more than a reasonable amount to transport a
worker to or from the designated worksite, but in no event shall
the amount exceed the prevailing rate for public transportation
in the geographic area." The law also provides that any worker
aggrieved by a violation of the act "shall be entitled to
recover actual and consequential damages, or $1,000, whichever
is greater, for each violation of this part and costs."
The suit was filed by a laborer who worked for WTS at job sites
throughout Miami-Dade, Broward and Palm Beach counties between
2002 and 2004 (the company at present has a total of 24
locations throughout the Southeast). At the time, WTS offered
van service or carpooling to and from the job sites. The price
for either was $1.50 each way and $3 for a round-trip.
The plaintiff claimed that WTS violated provisions of the act by
overcharging its team members for transportation, claiming $265
in actual damages and $177,000 in statutory damages, plus costs.
The WTS' counter-suit refuted the plaintiff's claim, noting that
ambiguities in the law's language regarding "prevailing rate"
made establishing a dollar amount impossible, and put a burden
on WTS and other staffing agencies by expecting them to
calculate such a rate for each municipality in which they do
business.
WTS further argued that it is unreasonable to require temporary
labor companies to base a transportation fee on the prevailing
local public transportation rate because many job sites are not
served by city bus lines, or bus transportation is unable to get
workers to the job site on time. Final judgment was found in
favor of WTS on November 18, 2005, in the Circuit Court of the
17th Judicial Circuit.
Although Mark Lang, CEO and President of WTS, considers the
ruling a victory for the temporary staffing industry, he says
the potential remains for further legal action challenging the
ruling. For that reason, he is supporting Florida House Rep.
Baxter Troutman (R-Winter Haven) in his sponsorship of HB 219 --
which, among its provisions, places a limit on the amount a
labor pool may charge a laborer for transportation to or from a
designated worksite.
"Representative Troutman's bill removes the ambiguity from the
Labor Pool Act to ensure that both the worker and staffing
company are treated fairly," Mr. Lang said. "By establishing a
set amount for transportation costs, we would no longer be
dealing with apples-to-oranges comparisons of prevailing rates
and geographic areas in relation to timely, efficient
transportation to and from job sites. While I am glad that
common sense prevailed, the ruling was achieved at a great
expense that I would like to see the rest of the industry
spared."
For more details, contact Denise Salvaggio, EVOK Advertising,
Inc., Phone: +1-407-302-4416 ext. 401, Fax: +1-407-302-4417, E-
mail: denise@evokad.com, for Workers Temporary Staffing. Also
visit, http://www.workerstemp.com.
ZILA CORPORATION: Continues To Face Consumers Suit V. Cold Drug
---------------------------------------------------------------
Zila Corporation, Zila Swab Technologies, Inc., dba Innovative
Swab Technologies (IST), Matrixx Initiatives, Inc. and other
defendants continue face a class action filed in the Superior
Court of the State of Arizona for Maricopa County, alleging that
the Zicam Cold Remedy Product manufactured by Matrixx
Initiatives, Inc., a former customer of IST, caused damage to
the sense of smell and/or taste of the plaintiffs.
Other defendants in the lawsuit include manufacturers and
retailers. IST produced swabs and containers for the Zicam Cold
Remedy Product for a limited period that ended in March 2004.
Asbestos Alert
ASBESTOS LITIGATION: Moen Inc Fends Off 93 Personal Injury Suits
----------------------------------------------------------------
Moen Inc., a subsidiary of Fortune Brands, Inc., has been
dismissed as a defendant in about 93 lawsuits claiming personal
injury from asbestos, according to a Securities and Exchange
Commission report.
The Company is currently named a defendant in about 130
lawsuits. In most cases, in excess of 75 defendants were named
in addition to Moen.
The Lincolnshire, IL-based Company asserted that it is not
possible to predict the outcome of pending litigation and it is
possible that some of these actions could be decided
unfavorably. It believes it has meritorious defenses to these
actions and that these actions will not have a material adverse
effect upon its results of operations, cash flows or financial
condition. These actions are being vigorously contested.
Fortune Brands, Inc. (NYSE: FO) manufactures and distributes
distilled spirits and golf equipment. Fortune also owns home
products companies that account for about half of the Company's
sales.
ASBESTOS LITIGATION: RPM Increases Liability Reserves to $101.2M
----------------------------------------------------------------
RPM International Inc. took a pre-tax charge of US$15.0 million
in the second quarter of fiscal 2006 to increase its asbestos
liability reserves, which now total US$101.2 million, according
to a Securities and Exchange Commission report.
In the second quarter of fiscal 2005, RPM took a US$47 million
pre-tax charge for asbestos liabilities. Before tax asbestos-
related payments were US$13.4 million during the second quarter
and US$29.9 million in the first half of fiscal 2006, both of
which are lower amounts versus the comparable prior year periods
and sequentially.
"The company evaluates its asbestos reserves on an ongoing basis
to support its more aggressive defense strategy, which is
beginning to result in declining total costs," said president
and CEO Frank C. Sullivan.
"It also appears that the U.S. Senate will bring the FAIR Act to
the floor in early calendar 2006, which could result in a more
permanent resolution to the asbestos litigation crisis facing a
host of manufacturers and small businesses," he added.
Medina, OH-based RPM International Inc. (NYSE: RPM) operates
more than 70 factories worldwide. The Company is divided into
two units: industrial (waterproofing, corrosion resistance,
floor maintenance, and wall finishing) and consumer products
(caulks and sealants, rust-preventative and general-purpose
paints, patch and repair products, and hobby paints).
ASBESTOS LITIGATION: Villagers to Sue for Payout After Discovery
----------------------------------------------------------------
A group of Frizington, UK residents revealed their intent to
fight for compensation for the stress they have suffered since
the discovery of potentially lethal asbestos in their homes,
News & Star reports.
In November 2005, resident William Rogers alerted other
residents after finding what British Gas confirmed was asbestos
material in the boiler cupboard at his home.
Surveys carried out in more than 100 Home Housing properties in
Moor Place, Griffin Close and Priory Close revealed that nine
houses contain asbestos in the ceiling boards of warm air
heating cupboards.
Home Housing said that precautionary tests have been carried out
to determine if asbestos fibers had been released. No fibers
were found.
The Health and Safety Executive said that once West Coast
Thermal completes the asbestos removal, the homes would have to
be assessed to determine whether they are thoroughly clean for
the tenants to return to.
ASBESTOS LITIGATION: UK Victim Seeks Help to Claim Compensation
---------------------------------------------------------------
Eileen Wharton, the wife of an asbestos-illness sufferer, is
seeking information to find the insurers of her husband's former
employer for him to be able to claim compensation, the Norwich
Evening News reports. She has been told that her husband will
not be paid if she is unsuccessful.
Sixty-six-year old Brian Wharton worked as an electrician for 24
years in the 1950s and 1960s for Norwich Electrical where he
came into contact with asbestos. He left Norwich Electrical,
which later closed down in 1977, and was an electrician for
other companies before he retired five years ago.
Mr. Wharton was diagnosed with pleural plaques, a benign
scarring of the lung lining, three years ago.
The Wharton family put in a compensation claim through Yorkshire
solicitors Corrie's. However, they had been told the claim could
not be taken to court because Norwich Electrical's insurers
cannot be traced.
Kim Daniels, who runs asbestos claims at Corrie's solicitors,
has backed 61-year-old Mrs. Wharton's appeal. Mrs. Wharton said
she knew two other former employees of Norwich Electrical who
had contracted the disease, and is hopeful someone will come
forward with information.
ASBESTOS LITIGATION: Golden Wonder Staff to Probe Factory Deaths
----------------------------------------------------------------
Former Golden Wonder employees, who fear that they were exposed
to asbestos, called for an inquiry after uncovering information
about an industrial incident that occurred 20 years ago on the
Company's Broxburn factory in West Lothian, the Evening News
reports.
The plant closed in 1985 after the workers feared they might
have been exposed to asbestos. At the time, there was no
evidence that employees of the crisp-making factory had been
exposed.
W & J Furse, the contractor hired to remove lagged pipes with
asbestos from the factory's boiler room, was fined GBP200 in
1986 for not holding a license to remove asbestos and for
failing to ensure its employees' safety.
Former employee Alex Horne uncovered witness' statements, which
suggest that some workers might have been exposed to asbestos.
Mr. Horne hopes the testimony will be enough to convince the
Health and Safety Executive to launch an inquiry.
In a 1988 letter written to the Department of Health and Senior
Services, Golden Wonder boiler man Charles Heggie testified that
the employees were present when Furse workers were removing the
asbestos. He alleged that no safety equipments were provided as
the supervisors told them that the material was non-hazardous to
health.
The Trades Union Congress said workers were concerned asbestos
exposure might have accounted for the high death rate among ex-
employees. However, no post-mortem examinations were performed
on any of the alleged victims, making it difficult to determine
exposure.
ASBESTOS LITIGATION: Bush Urges Congress to Adopt Asbestos Bill
---------------------------------------------------------------
Citing the nation's need to reform its legal system to better
compete in the global economy, President George W. Bush drives
Congress to curb asbestos lawsuits in 2006, Reuters reports.
Senate Majority Leader Bill Frist, a Tennessee Republican, has
pledged to tackle, early in 2006, a bill to create a US$140
billion fund to compensate victims harmed by asbestos exposure
while ending thousands of injury lawsuits. However, the claims,
including some claimants who were exposed but are not ill, have
bankrupted dozens of U.S. firms.
The US$140 billion compensation, proposed by Senators Arlen
Specter and Patrick Leahy, would be funded by defendant
companies and their insurers.
Former Republican Senator and Common Interest Group spokesman
Don Nickles, said, "I agree with President Bush that Congress
should enact positive asbestos reform this year. Unfortunately,
the bill reported out of the Judiciary Committee is seriously
flawed, and I believe unconstitutional, because it takes more
than US$7 billion in assets from court-approved bankruptcy
reorganization settlements set aside in trusts to pay asbestos
claims.
"Hopefully, when the Senate takes up the asbestos bill it will
fix this problem and pass a bill that does not confiscate these
assets and will abide with the Constitution."
Before the 1970s, asbestos was widely used for insulation and
fireproofing. Scientists link inhaled fibers to cancer and other
diseases.
ASBESTOS LITIGATION: Men Accused of Illegal Removal at NY Mill
--------------------------------------------------------------
Assistant U.S. Attorney Craig Benedict charged two men for
alleged illegal removal of asbestos from the former Mohawk
Furniture Mill in Broadalbin, The Leader-Herald reports.
Filed on December 2005 in the Northern District Court, the suit
names John Brewer and Frank Russo as defendants. In an
affidavit, an informant told EPA Special Agent Michael K. Dwyer
that around August 17, Mohawk Furniture General Manager Patash
Ghimire informed employees to ready the facility for an August
19 asbestos removal.
The informant told Mr. Dwyer that during the week of August 22,
he noticed asbestos pipe insulation had been removed. After
investigating, the EPA concluded an illegal asbestos abatement
had occurred. Mr. Dwyer said the workers never notified the
public.
In interviews, the defendants told Mr. Dwyer that the building's
owner, Gem Industries President Michael F. Rolla, hired Mr.
Brewer to remove asbestos at the 88,000-square-foot Mohawk
Furniture Mill and at a factory in Gardner, Massachusetts.
Mr. Brewer told Mr. Dwyer that Mr. Rolla paid US$40,000 for the
two jobs and that Mr. Rolla told Mr. Brewer before removal in
Broadalbin, "Not to worry, that there had never been an asbestos
survey conducted, and that no one would know that Mr. Brewer was
conducting the illegal asbestos abatement."
In the affidavit, Mr. Brewer told Mr. Dwyer that he, Mr. Russo
and about 12 employees of the Aulson Co. drove in a rented truck
to Broadalbin on August 19. The crew removed about 2,000 linear
feet of asbestos pipe insulation from the factory.
Investigators contend that on August 21, the crew loaded several
hundred bags of asbestos into the truck and drove the material
back to Boston, where the Aulson Co. was conducting a legal
asbestos abatement. Investigators state the bags were put on a
box truck owned by the Aulson Co.
Mr. Dwyer's affidavit states Mr. Brewer is a licensed asbestos
abatement supervisor in Massachusetts, but not in New York, and
that Mr. Brewer has worked intermittently for the Aulson Co.
since 1997.
ASBESTOS LITIGATION: EPA Indicts New Yorker for Illegal Disposal
----------------------------------------------------------------
The US Environmental Protection Agency charged a 51-year-old
Syracuse resident for ordering the illegal removal and disposal
of asbestos from a downtown building, The Post-Standard reports.
Defendant Glen Middleton appeared in the court of U.S.
Magistrate George Lowe.
EPA Special Agent Michael Dwyer said in an affidavit that, in
2005, the EPA received an anonymous phone call, in which the
tipster hinted that people had been removing asbestos from the
basement at 243-249 E. Water St., below a business called "Jack
the Tailor."
The affidavit stated that more than 50 bags of asbestos were
dumped at trash bins at three apartment complexes in the area
for disposal.
ASBESTOS LITIGATION: USG Moves to Extend Plan Filing to June 30
---------------------------------------------------------------
USG Corporation and the other Debtors asked Judge Judith
Fitzgerald to further extend the period during which they have
the exclusive right to file a plan of reorganization to and
including June 30, 2006 and the period during which they have
the exclusive right to solicit acceptances of that plan to and
including September 1, 2006.
Paul N. Heath, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, relates that although the vastly different
perspectives regarding the estimated amount of asbestos personal
injury claims have made the path to emergence from the Debtors'
Chapter 11 cases difficult, the parties are now moving steadily
down that path. Specifically, the parties are engaged in
discovery in the estimation proceedings and the United States
District Court for the District of Delaware has indicated that
it intends to conduct the hearings on estimation shortly after
the conclusion of discovery.
The Debtors anticipate that once the District Court has
estimated the Asbestos PI Claims liability, they will be able to
develop and file a plan of reorganization that will fairly
address the interests of all stakeholders.
"The process for estimation of the Asbestos PI Claims is even
more defined now, and, accordingly, the bases for the
continuation of the Exclusive Periods are equally clear," Mr.
Heath says. "Furthermore, during the next six-month period, the
creditors will not be at risk because the Debtors' businesses
continue to perform at a record pace, resulting in growing
estates in which all stakeholders will share," he assures the
Court.
According to Mr. Heath, the Asbestos PI Claimants have served
the Debtors with an expansive document request, interrogatories
and requests for admissions. The Debtors have undertaken a
massive effort to provide the Asbestos PI Claimants with the
materials they require, which has already resulted in the
production of over 700,000 pages of documents.
Moreover, in October 2005, the Debtors have already served
questionnaires to gather the pertinent facts from a sample of
2,000 present claimants, Mr. Heath tells Judge Fitzgerald.
Pursuant to District Judge Joy Flowers Conti's order, the
responses to the questionnaires are due on January 9, 2006. In
addition, the parties have exchanged lists of prospective expert
and fact witnesses, and the Debtors are continuing to develop
the evidence they will present during the estimation hearing.
Mr. Heath notes that the Asbestos PI Claimants' views on how
estimation should be conducted are dramatically different than
the Debtors' views. Thus, Mr. Heath says, only through an
extended period of briefing and argument, which started soon
after Judge Conti's appointment and continued until October
2005, were the Debtors able to secure the right to present the
evidence that they are now gathering. That result will ensure
that the interests of all stakeholders are duly considered
before a plan of reorganization is formulated and later
approved.
Under Judge Conti's discovery schedule, fact discovery will
close on June 30, 2006. There will be a hearing before the
District Court on July 18, 2006, to set the expert discovery
schedule, and the tentative date for the exchange of expert
reports is August 4, 2006.
(USG Bankruptcy News, Issue No. 101; Bankruptcy Creditors'
Service, Inc., 215-945-7000)
ASBESTOS LITIGATION: USG Corp. Seeks Debtor Liable for PI Claims
----------------------------------------------------------------
USG Corporation and the other Debtors have asked Bankruptcy
Court to determine which Debtor is liable for any allowed
Asbestos PI Claims, Paul N. Heath, Esq., at Richards, Layton &
Finger, P.A., states.
The PI Claimants have sought to dismiss the Declaratory Relief
Action.
Over the past six months, the Debtors have been actively engaged
in a discovery process with respect to the Action. Mr. Heath
points out that it is uncertain whether the Court will decide on
the issue prior to the filing of a plan of reorganization in the
Debtors' Chapter 11 cases.
(USG Bankruptcy News, Issue No. 101; Bankruptcy Creditors'
Service, Inc., 215-945-7000)
ASBESTOS LITIGATION: USG Corp. Continues Assessment of PD Claims
----------------------------------------------------------------
Mr. Heath reports that the Debtors also continue to make
progress in narrowing the issues on the asbestos property damage
claims. As of the end of December 2005, the Debtors have filed
five omnibus objections to PD Claims based on the absence or
inadequacy of product identification information. These
objections have led to the disallowance of over 400 PD Claims.
In addition, as a result of discussions with counsel purporting
to represent a large number of PD Claimants, more than 100 PD
Claims have been withdrawn.
The Debtors have continued to pursue, informally, both
discussions and access to information intended to facilitate the
resolution of additional PD Claims. The Debtors envision the
likely need to pursue additional objections to PD Claims that
they believe are factually or legally deficient, and as to which
the Debtors and the PD Claimants have been unable to reach a
consensual resolution.
(USG Bankruptcy News, Issue No. 101; Bankruptcy Creditors'
Service, Inc., 215-945-7000)
ASBESTOS LITIGATION: Court to Hear USG Corp. Exclusivity Request
----------------------------------------------------------------
The Bankruptcy Court will convene a hearing on February 21,
2006, to consider USG Corporation's and the other Debtors'
request for an extension of the Exclusive Periods.
Paul N. Heath, Esq., at Richards, Layton & Finger, P.A. asserts
that absent a merits-based evaluation of the Asbestos PI Claims
liability, the value of the estates cannot be allocated fairly
among the Debtors' stakeholders. Therefore, the filing of any
plan of reorganization in the Debtors' cases at this time would
be premature, and would, by necessity, be contentious and not
confirmable.
Moreover, the plan process in the Debtors' bankruptcy cases
cannot proceed without first resolving the issues surrounding
the nature and extent of U.S. Gypsum Co.'s alleged asbestos
liability, Mr. Heath says. Given this fact, the Debtors' request
for an extension of the Exclusive Periods is warranted.
(USG Bankruptcy News, Issue No. 101; Bankruptcy Creditors'
Service, Inc., 215-945-7000)
ASBESTOS LITIGATION: RPM Subsidiaries' Suits Increase to 9,501
--------------------------------------------------------------
Some of RPM International, Inc.'s subsidiaries, mainly Bondex
International, Inc., are currently defending against 9,501
active asbestos-related bodily injury lawsuits as of November
30, 2005, according to a SEC report.
This represents an increase of claims as compared to 7,523 cases
as of November 30, 2004.
For the quarter ended November 30, 2005, the subsidiaries
secured dismissals or settlements of 234 claims and made total
payments of US$13.4 million, which included defense costs paid
during the current quarter of US$5.4 million.
As compared to the November 30, 2004 period, dismissals or
settlements covered 290 claims and total payments were US$15.4
million, which included defense costs of US$5.2 million paid
during the quarter.
The majority of these suits are pending in Illinois, Ohio,
Mississippi, Texas, and Florida. These cases seek unspecified
damages for asbestos-linked diseases based on alleged exposures
to asbestos-containing products previously made by RPM's
subsidiaries. In such cases, the subsidiaries are generally
dismissed without payment.
Settlement or dismissal statistics on a per case basis are not
necessarily reflective of the payment amounts on a per claimant
basis and the amounts and rates can vary widely depending on a
variety of factors including the mix of malignancy and non-
malignancy claims and the amount of defense costs incurred
during the period.
Medina, OH-based RPM International, Inc. (NYSE: RPM)'s makes
home repair products. The Company is divided into two units:
industrial products (waterproofing, corrosion resistance, floor
maintenance, and wall finishing) and consumer products (caulks
and sealants, rust-preventative and general-purpose paints,
patch and repair products, and hobby paints).
ASBESTOS LITIGATION: Court Attests Judgment in Discovery Breach
---------------------------------------------------------------
In reply to a plaintiff's assertion, Division One of the
Washington Court of Appeals sanctioned Alcoa, Inc. for
violations in the discovery phase of an asbestos personal injury
lawsuit.
Decided on December 27, 2005, Case No. 54743-7-I was heard by
Judges Anne L. Ellington, Marlin J. Appelwick, and Susan R.
Agid.
As a child, plaintiff Dawna Fox helped her grandmother wash the
clothes her grandfather wore to his job at Alcoa's Wenatchee
plant, where asbestos was present. She developed mesothelioma in
2003. She sued Alcoa the same year.
The court granted Mrs. Fox's request for an expedited trial
schedule. Alcoa stated that the information needed could be
found in documents that would be available to Mrs. Fox's counsel
at an agreed time.
Alcoa advised her that all the documents were located in
Houston, Texas. The Court ordered Alcoa to produce the documents
in Seattle and to answer Mrs. Fox's interrogatories. The Court
found Alcoa in contempt and ordered it to produce the privilege
log and to revise its interrogatory answers.
Mrs. Fox contended a default sanction was mandatory because
Alcoa intentionally violated the rules and the court's order.
She did not respond that Alcoa's discovery violations precluded
her from presenting a greater degree of evidence.
The trial judge permitted the conspiracy claim to proceed. Mrs.
Fox, however, voluntarily withdrew the claim without explanation
and without arguing that its withdrawal was necessitated by
Alcoa's discovery violations.
Mrs. Fox contended that the Court should have granted a default
judgment or have given an adverse inference jury instruction.
ASBESTOS LITIGATION: UK Families Demand Full Payment Over Deal
--------------------------------------------------------------
Campaigners for bereaved families in Clydebank, Scotland want an
end to a deal that costs them thousands of pounds from their
asbestos compensation, the Evening Times reports.
However, campaigners and the families of asbestos victims say
the deal is unfair and the full amount should be paid.
Clydebank Action On Asbestos is among those demanding for fair
settlements. A group representative Jimmy Cloughley said, "We
were not happy with the deal brokered between the insurance
firms and the Government and we have not forgotten about it."
The Government would pay only 90% of settlements, some totaling
up to GBP50,000, in a reluctantly agreed deal that was reached
after insurance firm Chester Street Holdings closed in 2001.
Chancellor Gordon Brown then set up a fund to pay victims who
lost out.
The Evening Times reported in December 2005 that asbestos
campaign groups were fighting to end a clause, which stopped
victims' families pursuing their own claims if the victim
claimed for personal compensation while still alive.
ASBESTOS LITIGATION: Large Amounts Found in Bahrain Scrap Yard
--------------------------------------------------------------
The Askar scrap yard area in Manama, Bahrain revealed large
amounts of potentially deadly blue asbestos, the Gulf Daily News
reports.
Southern Municipality acting director-general Atef Abdullatif
said that the Public Commission for the Protection of Marine
Resources, Environment and Wildlife was informed but the agency
did not have the equipment to dispose of the asbestos. He added
that the substance is so dangerous it is banned internationally.
Southern Municipal Council chairman Khalid Al Buainain said that
environmental authorities must be able to identify the source,
but had not done so. He added that the source of the blue
asbestos has not been identified.
ASBESTOS LITIGATION: Landmark Ruling on Welding Rods Suit Upheld
----------------------------------------------------------------
The Appellate Division of the New York Supreme Court affirmed
the first jury decision that asbestos-containing welding rods,
sold up to the early 1980s, had caused lung cancer and
mesothelioma, announced Jerome H. Block of Levy Phillips and
Konigsberg, LLP, in a press release.
On December 29, 2005, the Court upheld the judgments awarding
plaintiffs Angel Gomez and Daniel Tucker, through Christine
Wiegman, damages against A C & S, Inc. and The Lincoln Electric
Company. Both men worked with asbestos-containing welding rods.
The jury awarded Mr. Gomez about US$3.19 million against
Lincoln, reduced 25% since Mr. Gomez was a cigarette smoker. Mr.
Tucker's estate was awarded about US$3.5 million split between
Lincoln and Hobart Brothers Company.
Mr. Block said that Lincoln and Hobart, a wholly owned
subsidiary of Illinois Tool Works, Inc., "had argued that their
asbestos product was different and incapable of causing lung
cancer and mesothelioma. The jury rejected these arguments, and
now their verdict has been unanimously upheld by the appellate
court."
The welding rods in the Gomez and Tucker cases, known by their
American Welding Society Classification "6010," were and
continue to be top-selling rods. Up to the early 1980s, these
rods were coated with 5% to 15% asbestos mixture, according to
trial testimony.
From the 1930s through the early 1980s, Lincoln manufactured
billions of asbestos-containing welding rods, which were
commonly used in industry, Mr. Block noted. He added that these
rods endangered others who worked around the welders.
ASBESTOS LITIGATION: CenterPoint, Affiliates Face Exposure Suits
---------------------------------------------------------------
CenterPoint Energy, Inc. (NYSE: CNP), or its subsidiaries, has
been named as a defendant in lawsuits filed by a large number of
individuals who claim injury from asbestos exposure, according
to a Securities and Exchange Commission report.
Most claimants have been workers who worked in the construction
of various industrial facilities, including power plants. Some
of the claimants have worked at locations owned by the Company,
but most existing claims relate to facilities previously owned
by the Company but currently owned by Texas Genco LLC.
Under the separation agreement between the Company and Texas
Genco, ultimate financial responsibility for uninsured losses
relating to these claims has been assumed by Texas Genco.
However, under the terms of its agreement to sell Texas Genco to
Texas Genco LLC, the Company has agreed to continue to defend
such claims to the extent they are covered by insurance
maintained by the Company, subject to reimbursement of the costs
of such defense from Texas Genco LLC.
Houston, TX-based CenterPoint Energy, Inc. (formerly Reliant
Energy), through its regulated utilities, distributes natural
gas and electricity to about 4.8 million customers in six
states, primarily in the southern US.
ASBESTOS LITIGATION: Officials Angered Over Illegal Disposal
------------------------------------------------------------
Officials of Armagh, Northern Ireland expressed anger over the
illegal dumping of asbestos in a remote area in the city's
south, BBC News reports.
An undisclosed quantity of asbestos was found on a lane in a
forest at Mullaghbane, near Forkhill.
Sinn Fein councilor Anthony Flynn said dumping such material was
a "highly irresponsible act."
"Whoever dumped it there has put the community at risk," he
said. This is highly dangerous waste and thankfully nobody,
particularly a child, came into contact with it. I am led to
believe that it will cost a considerable amount to remove the
asbestos," Mr. Flynn said.
Local people said the asbestos had been there for several days.
However, the area has not been cordoned off. The Forest Service
owns the land. Local people said they believed someone who knew
the area had dumped the material from the back of a lorry or
trailer.
ASBESTOS LITIGATION: CWU Urges Changes to Asbestos Regulations
--------------------------------------------------------------
The Communication Workers Union responds to the Health and
Safety Commission's proposed changes to the UK's Asbestos Laws,
which National Health and Safety Officer Dave Joyce described as
a very "mixed bag," according to a CWU press release.
The Government had to revise the Laws to accommodate a new
European Asbestos Worker Protection Directive and the HSC
simplified and rationalized the legislative regime by combining
the three sets of current asbestos regulations, on controls,
licensing and prohibitions, into one.
Mr. Joyce said, "Although asbestos is no longer imported or used
and has been banned for some time, there is still cause for
concern. It's estimated that about half a million non-domestic
premises contain some form of asbestos and as such around 1.5
million workers performing building repairs, installation,
maintenance and engineering work may be exposed including CWU
members."
The Regulations need to put greater emphasis on the importance
of worker training and a greater emphasis on the importance of
consultation with Safety Representatives also.
An Early Day Motion on the proposed regulation changes has been
put down in the House of Commons by Labor MP Michael Clapham.
The motion calls for the controversial change to be dropped from
the proposals.
New Securities Fraud Cases
GREAT WOLF: Scott + Scott Files Expanded Securities Suit in WI
--------------------------------------------------------------
The law firm of Scott + Scott, LLC, which filed the initial
lawsuit against Great Wolf Resorts, Inc. (NASDAQ: WOLF) on
November 21, 2005, filed an expanded securities class action
complaint in the United States District Court for the Western
District of Wisconsin (05-C-0687-C) against Great Wolf Resorts,
Inc. ("Great Wolf" or the "Company"). Shareholders Have Until
January 23, 2006 To Join The Action With Scott + Scott, LLC
The updated complaint reveals additional facts about Great
Wolf's 2004 Initial Public Offering ("IPO"), which allegedly was
based on false statements in the IPO registration statements,
and adds new defendants, including underwriters of the 2004 IPO,
such as Citigroup Global Markets, Inc., A.G. Edwards & Sons
Inc., Raymond James & Associates Inc., Calyon Securities (USA),
Societe Generale, ThinkEquity Partners, LLC, as well as auditors
Rubin, Brown, Gornstein & Co., LLP and Deloitte & Touche. The
complaint was filed on behalf of all investors who purchased
Great Wolf securities between December 14, 2004, and July 28,
2005, inclusive (the "Class Period"), but any purchaser of Great
Wolf securities may contact Scott+Scott as this class period can
change as information is revealed.
The complaint alleges that defendants' registration statements
issued in connection with the Company's 2004 IPO contained
untrue statements of material fact. According to the complaint,
the Company provided misleading, unreliable and unpredictable
quarterly and annualized guidance based on its preferred non-
GAAP EBITDA measure, or "earnings before interest, taxes,
depreciation, and amortization," which is a measure of a
company's cash flow. According to the complaint, the Company's
business prospects actually were in doubt because the value of
the Company was based on a defective valuation measure. It is
alleged that the Company used this defective measure to convince
investors to buy the Company's stock during the IPO. The
complaint alleges that defendants were fully aware of the true
magnitude of the earnings miss at the same time they were
marketing clients for the IPO, but failed to publicly disclose
the materiality of the problem at that time. On July 28, 2005,
the Company's stock price sank as investors learned the true
magnitude of the Company's earnings shortfall and its cause. On
the news of July 28, 2005, the Company's stock price plunged
$6.12 to $13.65, on extremely heavy volume. The price has
continued to decline since July and today trades at $10.10.
For more details, contact Neil Rothstein or David R. Scott,
Phone: 800-404-7770, E-mail: scottlaw@scott-scott.com or
drscott@scott-scott.com.
IMPAC MORTGAGE: Lasky & Rifkind Lodges Securities Suit in CA
------------------------------------------------------------
The law firm of Lasky & Rifkind, Ltd., initiated a lawsuit in
the United States District Court for the Central District of
California, on behalf of persons who purchased or otherwise
acquired publicly traded securities of Impac Mortgage Holdings,
Inc. ("Impac Mortgage" or the "Company") (NYSE:IMH) between May
13, 2005 and August 9, 2005, inclusive, (the "Class Period").
The lawsuit was filed against Impac Mortgage 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
during the Class Period, the Company failed to disclose and
misrepresented that the Company lacked an adequate internal
controls system and was not able to determine its true financial
condition, that the Company's quarterly guidance concealed the
Company's true financial standing, and as such the Company's
statements with respect to its future prospects lacked any
reasonable basis.
On August 9, 2005, Impac Mortgage stunned the market when it
announced a net loss of $55 million, or $(0.78) per share,
compared to a profit of $143.2 million, or $2.17 per share, and
forecasted a reduced dividend of $0.50 to $0.60 per share versus
its previous dividend of $0.75 per share. Impac Mortgage shares
reacted negatively to the news, falling from $16.37 per share to
$13.98 per share, a one-day decline of 14.6%.
For more details, contact Leigh Lasky, Esq. of The Law Firm of
Lasky & Rifkind, Ltd., Phone: 800-495-1868, E-mail:
investorrelations@laskyrifkind.com.
IMPAC MORTGAGE: Schatz & Nobel Files Securities Fraud Suit in CA
----------------------------------------------------------------
The law firm of Schatz & Nobel, P.C., initiated a lawsuit
seeking class action status in the United States District Court
for the Central District of California on behalf of all persons
who purchased the publicly traded securities of Impac Mortgage
Holdings, Inc. ("Impac" or the "Company") (NYSE:IMH) between May
13, 2005 and August 9, 2005, inclusive (the "Class Period").
The Complaint alleges that defendants violated federal
securities laws by issuing a series of materially false
statements concerning Impac's business condition. Specifically,
defendants failed to disclose and misrepresented the following
facts:
(1) that Impac lacked an adequate internal controls system
and was not able to determine its true financial
condition;
(2) that the Company's quarterly guidance concealed the
Company's true financial standing; and
(3) as a result of the foregoing, the Company's statements
with respect to its future prospects lacked any
reasonable basis.
Rather than disclose this adverse information to investors,
Impac insiders, including defendants, took the opportunity to
sell more than 300,000 shares of their personally held Company
stock, reaping more than $5.5 million in proceeds.
On August 9, 2005, Impac announced a net loss of $55 million, or
$(0.78) per share, compared to a profit of $143.2 million, or
$2.17 per share, and forecasted a reduced dividend of $0.50 to
$0.60 per share versus its previous dividend of $0.75 per share.
On this news, Impac shares fell 14.6% from $16.37 per share to
$13.98 per share.
For more details, contact Wayne T. Boulton or Nancy A. Kulesa of
Schatz & Nobel, P.C., Phone: (800) 797-5499, E-mail:
sn06106@aol.com, Web site: http://www.snlaw.net.
IMPAC MORTGAGE: Stull Stull Lodges Securities Fraud Suit in CA
--------------------------------------------------------------
The law firm of Stull, Stull & Brody initiated a class action
lawsuit in the United States District Court for the Central
District of California on behalf of all persons who purchased
the securities of Impac Mortgage Holdings, Inc. (NYSE: IMH)
("Impac" or the "Company") during the period between May 13,
2005 and August 9, 2005 (the "Class Period"), both dates
inclusive.
The complaint charges defendants with violations of Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule
10b-5 promulgated thereunder. More specifically, the complaint
alleges that, during the Class Period, the Company failed to
disclose and misrepresented the following material adverse facts
that were known to defendants or recklessly disregarded by them:
(1) that the Company lacked an adequate internal system of
controls necessary to accurately ascertain the
Company's overall condition;
(2) that the Company's quarterly guidance concealed the
true financial health of the Company;
(3) that as a consequence of the foregoing, the Company's
statements with respect to its future prospects and the
intrinsic value of its business lacked in all
reasonable basis.
IMH is a mortgage real estate investment trust ("REIT") that
acquires, originates, sells and invests primarily in non-
conforming, Alt-A mortgages, small-balance, multi-family
mortgages, and sub-prime or B/C mortgages. The Company also
provides warehouse and repurchase financing to originators of
mortgages.
According to the complaint, while the Company was unabashedly
positive in its public statements, the defendants knew but
failed to reveal that material indicators of the Company's true
financial condition would be lower than expected for the second
fiscal quarter of 2005, as compared to previous quarters. Rather
than disclose this adverse information to investors, Company
insiders, including defendants, took the opportunity to sell
more than 300,000 shares of their personally held Company stock,
reaping more than $5.5 million in proceeds. Shortly thereafter,
on August 9, 2005, IMH shocked the market, revealing that it was
posting a net loss of $55 million, or 78 cents per share,
compared to a profit of $143.2 million, or $2.17 per share, a
year earlier and forecasted a reduced dividend of .50 cents to
.60 cents a share in the third quarter (down from the previous
.75 cents per share). On this news, IMH shares plunged
approximately 40% from a Class Period high of $22.32 to close at
$13.46 on August 10, 2005 on volume of nearly 6.5 million shares
- or roughly 13 times above average daily volume.
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.
SFBC INTERNATIONAL: Vianale & Vianale Files FL Securities Suit
--------------------------------------------------------------
The law firm of Vianale & Vianale, LLP, filed a class action
lawsuit in the United States District Court for the Southern
District of Florida, on behalf of purchasers of the securities
of SFBC International, Inc. (NASDAQ: SFCC) between February 17,
2004 and December 15, 2005, inclusive.
The action, case no. 06-20059-CIV-Ungaro-Benages/O'Sullivan, is
pending in Miami federal court against defendants SFBC, Lisa
Krinsky, Arnold Hantman and E. Cooper Shamblen. The complaint
alleges that defendants violated the Securities Exchange Act of
1934 by issuing false statements about SFBC's ability to recruit
participants for human drug testing. SFBC had contracts with
major drug manufacturers to recruit people for clinical drug
testing. SFBC reported increasing revenue and higher profit
margins during the class period, citing its strength in
recruiting people willing to undergo drug trials so that data
could be compiled for manufacturers. On April 17, 2005, SFBC
sold common stock to the public at $38 per share, for a total of
$116.8 million. Insiders reaped $16.3 million on their SFBC
stock sales in this offering.
On November 2, 2005, Bloomberg News published an article
entitled "Big Pharma's Shameful Secret," exposing SFBC's
recruitment techniques as a sham: SFBC had paid drug trial
participants to discourage them from reporting adverse reactions
to the drug tests -- a scheme that led manufacturers to continue
with testing. Over the next several weeks, more information
became public about SFBC's improper recruiting techniques,
resulting in the resignation of Gerald Seifer, SFBC's Vice-
President of Legal Affairs. SFBC's stock fell from $41.49 on
November 2, 2005 to $15.78 on December 15, 2005, a drop of over
60%.
For more details, contact Kenneth J. Vianale, Esq. or Julie Prag
Vianale, Esq. of Vianale & Vianale, LLP, 2499 Glades Road, Suite
112, Boca Raton, FL 33431, Phone: (561) 392-4750 or
888-657-9960, Website: http://www.vianalelaw.com.
*********
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asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
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*********
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Class Action Reporter is a daily newsletter, co-published by
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Copyright 2006. All rights reserved. ISSN 1525-2272.
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