/raid1/www/Hosts/bankrupt/CAR_Public/060525.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, May 25, 2006, Vol. 8, No. 103
Headlines
BAXTER INT'L: Continues to Face Various AWP Antitrust Lawsuits
BAXTER INT'L: Continues to Face Various Hemophiliac Injury Suits
BAXTER INT'L: "Higginbotham" Plaintiffs Appeal Suit's Dismissal
BAXTER INT'L: Ill. Court Grants Class Status to ERISA Fraud Suit
BAXTER INT'L: Ill. Court Nixes Motion for Judgment in Stock Suit
BAXTER INT'L: Settles Several Silicone Mammary Implants Lawsuits
BRISTOL-MYERS: Enters $70M Settlement for W.V. Serzone Lawsuit
BRISTOL-MYERS: Talks to Settle P.R. Pollution Lawsuit Continue
CHAPARRAL RESOURCES: Doubts Emerge on Milberg Weiss' Tenure
CHILDREN'S PLACE: July Hearing Set in Calif. Customer Lawsuit
CMS ENERGY: June Hearing Set in Mich. ERISA Suit Settlement
CONSOLIDATED EDISON: N.Y. Court OKs Dismissal of Rimkoski Claim
DREAMWORKS ANIMATION: June Deadline Set for Amended Complaint
ERIE FAMILY: Pa. Insurance Suit Deal Gets Final Court Approval
EXXONMOBIL CORP: Faces Additional Suits Over Md. Gasoline Leak
FANNIE MAE: Settles Accounting Manipulation Charges for $400M
FORD MOTOR: New Judge to Hear Health Care Concessions with UAW
FORD MOTOR: Employees File ERISA Violation Lawsuits in Michigan
GENERAL MOTORS: Several Dex-Cool Lawsuits Await Certification
HERBALIFE INT'L: Facing Calif. Unfair Trade Practices Lawsuit
HERBALIFE INT'L: W.Va. Court Grants Class Status to TCPA Suit
KRAFT FOODS: Faces Suits in 3 States Over Drink's Benzene Level
MOTOROLA INC: Continues to Face Suits Over Wireless Phone Usage
MOTOROLA INC: Iridium Securities Suit in D.C. Gets Class Status
NASHUA CORP: Responds to Appeal in Ill. Stock Suit's Dismissal
NBR ANTITRUST: June Hearing Set in $9.8M Pa. Lawsuit Settlement
NEXTEL PARTNERS: Settles Suits Over Cost-Recovery Line-Item Fees
PRUDENTIAL INSURANCE: Appeals Court Opens Bias Suit to Public
PUTNAM INVESTMENTS: Court Revives Executive Equity Plan Lawsuit
QWEST COMMUNICATIONS: Continues to Face Fiber Optic Lawsuits
QWEST COMMUNICATIONS: Faces Suit in Colo. Over U.S. WEST Merger
QWEST COMMUNICATIONS: $33M Deal Reached in Colo. ERISA Lawsuit
QWEST COMMUNICATIONS: Settles KPNQwest Securities Suit in N.Y.
RED ROBIN: Plaintiffs in Calif. Labor Suit Files Remand Motion
RED ROBIN: Defendants in Col. Stock Suit File Dismissal Motion
REGENCY AFFILIATES: Del. Court Dismisses All Claims in "Gatz"
RL SCREIBER: Issues Allergy Alert on Unnamed Gravy Mix Content
RYLAND HOMES: N.J. Judge Grants Class Status to Homeowners' Suit
SALESFORCE.COM INC: Remand Brief Due Date in Stock Suit Extended
SONY BMG: Judge Okays MediaMax, XCP CDs Litigation Settlement
SOUTH DAKOTA: HEA Provision on Students' Drug Charges Questioned
UNITED STATES: Calif. Lawyer Admits Helping Milberg Hide Payment
VERITAS SOFTWARE: Del. Court Allows Stock Suit to Move Forward
WORLDCOM INC: Disposal of Ex-CEO's Assets Nearing Completion
New Securities Fraud Cases
AMERICAN INT'L: Schiffrin & Barroway Files N.Y. Securities Suit
AMERICAN INT'L: Schiffrin & Barroway Files N.Y. Securities Suit
CHINA ENERGY: Berman DeValerio Files N.Y. Securities Fraud Suit
CHINA ENERGY: Scott + Scott Files Securities Fraud Suit in N.Y.
ESCALA GROUP: Schiffrin & Barroway Files Securities Suit in N.Y.
*********
BAXTER INT'L: Continues to Face Various AWP Antitrust Lawsuits
--------------------------------------------------------------
Baxter International, Inc. is defendant, along with others, in
approximately 50 lawsuits brought in various state and U.S.
federal courts, which allege that the company and other
defendants reported artificially inflated average wholesale
prices (AWP) for Medicare and Medicaid eligible drugs.
These cases have been brought by private parties on behalf of
various purported classes of purchasers of Medicare and Medicaid
eligible drugs, as well as by state attorneys general.
A number of these cases were consolidated in the U.S. District
Court for the District of Massachusetts for pretrial case
management under Multi District Litigation rules, as "In re:
Pharmaceutical Industry Average Wholesale Price Litigation, MDL
1456, Master Docket No. 1:01-CV-12257."
The lawsuits against the company include 11 suits brought by
state attorneys general, which seek unspecified damages,
injunctive relief, civil penalties, disgorgement, forfeiture and
restitution.
The consolidated suit is "In re Average Wholesale Price
Litigation, Case No. 1:01-cv-12257-PBS," filed in the U.S.
District Court in Massachusetts, under Judge Patti B. Saris.
Representing the plaintiffs are David J. Bershad and J. Douglas
Richards and Melvyn I. Weiss of Milberg Weiss Bershad Hynes &
Lerach LLP, One Pennsylvania Plaza, 49th Floor, New York, NY
10119, Phone: 212-594-5300.
Representing the company are:
(1) Merle M. Delancey, Jr. of Dickstein Shapiro Morin &
Oshinsky, LLP, 2101 L. Street N.W., Washington, DC
20037, Phone: 202-828-2282, Fax: 202-887-0689, E-mail:
DelanceyM@dsmo.com;
(2) Kimberly A. Dunne of Sidley Austin Brown & Wood, 555
West 5th Street, Suite 4000, Los Angeles, CA 90013-
1010, Phone: 213-896-6000; and
(3) Peter E. Gelhaar and Jill Brenner Meixel of Donnelly,
Conroy & Gelhaar, LLP, One Beacon Street, 33rd Floor,
Boston, MA 02108, Phone: 617-720-2880, Fax: 617-720-
3554, E-mail: peg@dcglaw.com and jbm@dcglaw.com.
BAXTER INT'L: Continues to Face Various Hemophiliac Injury Suits
----------------------------------------------------------------
Baxter International, Inc. is defendant in a number of lawsuits,
and subject to additional claims brought by individuals and
their families who acquired hemophilia from human blood plasma
(factor concentrates) processed by the company from the late
1970s to the mid-1980s.
The suits are seeking damages for injuries allegedly caused by
anti-hemophilic factor concentrates VIII or IX derived from
human blood plasma.
The typical case or claim alleges that the individual was
infected with the HIV virus by factor concentrates that
contained the HIV virus. None of these cases involves factor
concentrates currently processed by the company.
After concluding a class action settlement with a group of U.S.
claimants for whom all eligible claims have been paid, the
company remained as a defendant in approximately 90 lawsuits and
subject to approximately 128 additional claims.
Among the lawsuits, the company and other manufacturers have
been named as defendants in approximately 70 lawsuits pending or
expected to be transferred to the U.S. District Court for the
Northern District of Illinois on behalf of claimants, who are
primarily non-U.S. residents, seeking unspecified damages for
Human immunodeficiency virus or Hepatitis C infections from
their use of plasma-based factor concentrates.
In March 2005, the District Court denied plaintiff's motion to
certify purported classes. Thereafter, plaintiffs have filed
additional lawsuits on behalf of individual claimants outside
the U.S.
In December 2005, the District Court granted defendants' motion
to return U.K. claimants to their home jurisdiction. That
matter is on appeal.
BAXTER INT'L: "Higginbotham" Plaintiffs Appeal Suit's Dismissal
---------------------------------------------------------------
Plaintiffs in the consolidated securities class action,
"Higginbotham v. Baxter Intl. Inc., et al., Case No. 1:04-cv-
04909," are appealing the dismissal of their case by the U.S.
District Court for the Northern District of Illinois in December
2005.
In July 2004, a series of four purported class actions, now
consolidated, were filed in connection with the company's
restatement of its consolidated financial statements, previously
announced in July 2004, naming Baxter and its current chief
executive officer and chief financial officer and their
predecessors as defendants.
The lawsuits allege that the defendants violated the federal
securities laws by making false and misleading statements
regarding the company's financial results, which allegedly
caused Baxter common stock to trade at inflated levels during
the period between April 2001 and July 2004.
As of December 2005, the District Court had dismissed the last
of the remaining actions. The matter is on appeal.
The suit is "Higginbotham v. Baxter Intl Inc, et al., Case No.
1:04-cv-04909," filed in the U.S. District Court for the
Northern District of Illinois under Judge William T. Hart.
Representing the plaintiffs are:
(1) Marvin Alan Miller, Christopher B. Sanchez and Jennifer
Winter Sprengel of Miller Faucher and Cafferty, LLP, 30
North LaSalle Street, Suite 3200, Chicago, IL 60602,
Phone: (312) 782-4880, E-mail:
mmiller@millerfaucher.com, csanchez@millerfaucher.com,
or jsprenger@millerfaucher.com;
(2) Peter A. Binkow, Glancy & Binkow, LLP, 1801 Avenue of
the Stars, Suite 311, Los Angeles, CA 90067, Phone:
(310) 201-9150;
(3) Marc A. Topaz, Schiffrin & Barroway, LLP, 280 King of
Prussia Road, Radnor, PA 19087, Phone: (610) 667-7706.
Representing the company is Matthew Robert Kipp of Skadden Arps
Slate Meagher & Flom, LLP, 333 West Wacker Drive, Suite 2100,
Chicago, IL 60606, Phone: (312) 407-0700, E-mail:
mkipp@skadden.com.
BAXTER INT'L: Ill. Court Grants Class Status to ERISA Fraud Suit
----------------------------------------------------------------
The U.S. District Court for the Northern District of Illinois
certified a class of participants in a lawsuit against Baxter
International, Inc., alleging violations of Employee Retirement
Income Security Act of 1974.
On Oct. 7, 2004, a purported class action was filed against the
company and its current chief executive officer and chief
financial officer and their predecessors for alleged violations
of ERISA, as amended.
Plaintiff alleges that these defendants, along with the
Administrative and Investment Committees of the company's 401(k)
plans, breached their fiduciary duties to the plan participants
by offering Baxter common stock as an investment option in each
of the plans between January 2001 to October 2004.
Plaintiff alleges that company common stock traded at
artificially inflated prices during this period and seeks
unspecified damages and declaratory and equitable relief.
In March 2006, the trial court certified a class of participants
in the plan, who elected to acquire company common stock through
the plans between January 2001 and the present, and denied
defendants' motion to dismiss.
The suit is "Rogers v. Baxter Intl. Inc., et al., Case No. 1:04-
cv-06476," filed in the U.S. District Court for the District of
Colorado under Judge Joan B. Gottschall. Representing the
plaintiffs are:
(1) Robert D. Allison of Robert D. Allison & Associates,
122 S. Michigan Avenue, Ste. 1850, Chicago, IL 60603,
Phone: 427-4500, E-mail: rdalaw@ix.netcom.com; and
(2) Michael M. Mulder of Meites, Mulder, Mollica & Glink,
20 South Clark Street, Suite 1500, Chicago, IL 60603,
Phone: (312) 263-0272, Fax: (312) 263-2942, E-mail:
mmmulder@mmbmlaw.com.
Representing the defendants is Matthew Robert Kipp of Skadden
Arps Slate Meagher & Flom, LLP, 333 West Wacker Drive, Suite
2100, Chicago, IL 60606, Phone: (312) 407-0700, E-mail:
mkipp@skadden.com.
BAXTER INT'L: Ill. Court Nixes Motion for Judgment in Stock Suit
----------------------------------------------------------------
The U.S. District Court for the Northern District of Illinois
denied Baxter International, Inc.'s motion for judgment on
certain pleadings in the consolidated securities class action
filed against it.
In August 2002, six purported class actions were filed in the
U.S. District Court for the Northern District of Illinois naming
the company and its then chief executive officer and then chief
financial officer as defendants.
These lawsuits, which were consolidated, alleged that the
defendants violated the federal securities laws by making
misleading statements regarding the company's financial guidance
that allegedly caused Baxter common stock to trade at inflated
levels.
The U.S. Court of Appeals for the Seventh Circuit reversed a
trial court order granting the company's motion to dismiss the
complaint and the U.S. Supreme Court declined to grant
certiorari in March 2005.
In February 2006, the trial court denied the company's motion
for judgment on the pleadings.
The suit is "Asher, et al. v. Baxter Intl. Inc., et al., Case
No. 1:02-cv-05608," filed in the U.S. District Court for the
Northern District of Illinois under Judge Blanche M. Manning,
with referral to Judge Arlander Keys. Representing the
plaintiffs is Steven G. Schulman of Milberg Weiss Bershad &
Schulman, LLP, One Pennsylvania Plaza, 49th Floor, New York, NY
10119-0165, Phone: (212) 594-5300.
Representing the defendants is Matthew Robert Kipp of Skadden
Arps Slate Meagher & Flom, LLP, 333 West Wacker Drive, Suite
2100, Chicago, IL 60606, Phone: (312) 407-0700, E-mail:
mkipp@skadden.com.
BAXTER INT'L: Settles Several Silicone Mammary Implants Lawsuits
----------------------------------------------------------------
Baxter International, Inc. settled most class actions seeking
damages for various injuries allegedly caused by silicone
mammary implants previously manufactured by the Heyer-Schulte
division of American Hospital Supply Corporation (AHSC).
AHSC, which was acquired by the company in 1985, divested its
Heyer-Schulte division in 1984.
The majority of the claims and lawsuits against the company have
been resolved. After concluding a class action settlement with
a large group of U.S. claimants, the company will continue to
participate in the resolution of class member claims, for which
reserves have been established, until 2010.
In addition, as of Mar. 31, 2006, Baxter remains a defendant or
co-defendant in approximately 30 lawsuits relating to mammary
implants brought by claimants who have opted out of the class
settlement.
The company also established reserves for these suits. The
company believes that a substantial portion of its liability and
defense costs for mammary implant litigation may be covered by
insurance, subject to self-insurance retentions, exclusions,
conditions, coverage gaps, policy limits and insurer insolvency.
BRISTOL-MYERS: Enters $70M Settlement for W.V. Serzone Lawsuit
--------------------------------------------------------------
Bristol-Myers Squibb Co. is party to product liability lawsuits
involving allegations of injury caused by the company's
pharmaceutical and over-the-counter medications.
These lawsuits involve certain over-the-counter medications
containing phenylpropanolamine, while others involve hormone
replacement therapy products, polyurethane-covered breast
implants and smooth-walled breast implants, and the company's
SERZONE prescription drug. In addition to lawsuits, the company
also faces unfilled claims involving these and other products.
SERZONE or nefazodone hydrochloride is an antidepressant that
was launched by the company in May 1994, in Canada and in Mar.
1995, in the U.S. In December 2001, the company added a black
box warning to its SERZONE label warning of the potential risk
of severe hepatic events including possible liver failure and
the need for transplantation and risk of death. Within several
months of the black box warning being added to the package
insert for SERZONE, a number of lawsuits, including several
class actions, were filed against the company.
Plaintiffs allege that the company knew or should have known
about the hepatic risks posed by SERZONE and failed to
adequately warn physicians and users of the risks. They seek
compensatory and punitive damages, medical monitoring, and
refunds for the costs of purchasing SERZONE.
In August 2002, the federal cases were transferred to the U.S.
District Court for the Southern District of West Virginia, "In
re Serzone Products Liability Litigation, MDL 1477." In
addition to the cases filed in the U.S., there are four national
class actions filed in Canada.
In May 2004, the company announced that, following an evaluation
of the commercial potential of the product after generic entry
into the marketplace and rapidly declining brand sales, it had
decided to discontinue the manufacture and sale of the product
in the U.S. effective Jun. 14, 2004.
Without admitting any wrongdoing or liability, on or around Oct.
15, 2004, the company entered into a settlement agreement with
respect to all claims in the U.S. and its territories regarding
SERZONE. Pursuant to the terms of the proposed settlement, all
claims will be dismissed, the litigation will be terminated, the
defendants will receive releases, and the company commits to
paying at least $70 million to funds for class members. On
Sept. 2, 2005, the court issued an opinion granting final
approval of the settlement. The order approving the settlement
was entered on Sept. 9, 2005.
The company has reserves for liabilities for these lawsuits of
$75 million, including reasonable attorney's fees and expenses.
The suit is "In re Serzone Products Liability Litigation, MDL
1477," filed in the U.S. District Court for the Southern
District of West Virginia under Judge Joseph R. Goodwin with
referral to Judge Mary E. Stanley.
BRISTOL-MYERS: Talks to Settle P.R. Pollution Lawsuit Continue
--------------------------------------------------------------
Bristol-Myers Squibb Co. is one of several defendants, including
most of major U.S. pharmaceutical companies, in a purported
class action filed in Superior Court in Puerto Rico in February
2000 by residents of three wards from the municipality of
Barceloneta.
The suit alleges that air emissions from a government-owned and
operated wastewater treatment facility in the municipality have
caused respiratory and other ailments, violating local air rules
and adversely impacted property values.
The company believes its wastewater discharges to the treatment
facility were at all relevant times to the complaint in material
compliance with the terms of the company's permit. In Sept.
2005 the parties stipulated to the dismissal (with prejudice) of
all claims for property damage and personal injury, leaving only
claims related to nuisance remaining in the case.
The court had scheduled a hearing on the class certification
motion for Sept. 30, 2005, but that hearing was adjourned.
Settlement discussions among the parties continued in November
and December but were not successful. In February 2006 a new
judge was appointed due to a potential conflict of interest
involving the prior judge and a case status conference was held
on Apr. 28, 2006, at the conclusion of which the court
instructed the parties to meet and submit to the court by
October 2006 recommendations regarding operations and potential
improvements at the treatment facility.
Settlement negotiations have recently resumed and the company is
optimistic as to a settlement of this matter for an immaterial
amount. However, in the event of an adverse judgment, the
company's ultimate financial liability could be greater than
anticipated.
The company is also responsible under various state, federal and
foreign laws, including CERCLA, for certain costs of
investigating and/or remediating contamination resulting from
past industrial activity at the company's current or former
sites or at waste disposal.
CHAPARRAL RESOURCES: Doubts Emerge on Milberg Weiss' Tenure
-----------------------------------------------------------
Milberg Weiss Bershad & Schulman LLP's roles in class actions it
is handling are put into doubt after its indictment in an
alleged conspiracy to pay kickbacks to plaintiffs, The Wall
Street Journal reports.
Vice Chancellor Stephen Lam of Delaware's Court of Chancery had
already voiced out concerns regarding the company's role as lead
counsel in investors' class action over Chaparral Resources,
Inc.'s proposed merger with LUKOIL Overseas Holding Limited.
Meanwhile, Ohio Attorney General Jim Petro said, he was taking
the company as adviser of the state's public college-savings
fund in a mutual fund class action. The Attorney General said,
"the indictment meant its representation of clients "will be
severely compromised," according to the report.
The firm said it "will seek the court's guidance with respect to
what duties, if any, the firm should continue to have in the
case."
Milberg and senior partners, David Bershad and Steven Schulman,
are accused of paying clients to serve as lead plaintiff in
class actions.
CHILDREN'S PLACE: July Hearing Set in Calif. Customer Lawsuit
-------------------------------------------------------------
The California Superior Court for the County of Stanislaus will
hold a fairness hearing for proposed settlement in the class
action, "In re Children's Place Cases, J.C.C.P. No. 4418" or The
Children's Place Retail Stores, Inc. Litigation.
The case was brought on behalf of all persons who, from Nov. 12,
2003, to Oct. 21, 2005, purchased merchandise from The
Children's Place's stores in the State of California, used a
credit card to make the purchase(s), and whose telephone number
was requested by the firm.
The hearing will be held before the Honorable William A. Mayhew
on Jul. 7, 2006 at 8:30 a.m. to determine whether the proposed
Settlement is fair, reasonable and adequate and should be
finally approved by the court. The hearing will take place in
Department 21 of the Stanislaus County Superior Court at 2744
Second Street, Ceres, CA 95307.
Any objections or exclusion to and from the settlement must be
made by Jun. 16, 2006. The deadline for submitting a proof of
claim is on Oct. 26, 2006.
For more details, contact Gene J. Stonebarger of Lindsay &
Stonebarger, 1107 9th Street, Suite 1020, Sacramento, CA 95814,
Phone: (916) 446-0032, Fax: (916) 446-0034, Web site:
http://www.lspclaw.com/index.jspand The Children's Place Retail
Stores, Inc. Litigation c/o Garden City Group, P.O. Box 91138,
Seattle, WA 98111-9238, Web site:
http://www.gardencitygroup.com/childrensplacesettlement.
CMS ENERGY: June Hearing Set in Mich. ERISA Suit Settlement
-----------------------------------------------------------
CMS Energy Corp. settled consolidated class action pending in
the U.S. District Court for the Eastern District of Michigan,
alleging violations of the Employee Retirement Income Security
Act of 1974 (ERISA).
The company was named defendant, along with Consumers Energy
Co., CMS Marketing, Services and Trading Company, and certain
named and unnamed officers and directors, in two lawsuits, filed
in July 2002 that were brought on behalf of participants and
beneficiaries of the CMS Employees' Savings Plan. The court
later consolidated the two cases.
Plaintiffs allege breaches of fiduciary duties under ERISA and
seek restitution on behalf of the Plan with respect to a decline
in value of the shares of CMS Energy Common Stock held in the
plan, as well as other equitable relief and legal fees.
On Mar. 1, 2006, the company and consumers reached an agreement,
subject to court and independent fiduciary approval, to settle
the lawsuits.
The settlement agreement requires a $28 million cash payment by
CMS Energy's primary insurer that will be used to pay plan
participants and beneficiaries for alleged losses, as well as
any legal fees and expenses.
In addition, the company agreed to certain other steps regarding
administration of the plan. The court issued an order on Mar.
23, 2006, granting preliminary approval of the settlement and
scheduling the fairness hearing for Jun. 15, 2006.
One of the suits is "Schilling v. CMS Energy Corp., et al.,
2:02-cv-72834-GCS," filed in the U.S. District Court for the
Eastern District of Michigan under Judge George Caram Steeh.
Representing the plaintiffs are:
(1) Barry D. Adler of Adler and Assoc. (Farmington Hills),
30300 Northwestern Highway, Suite 304, Farmington
Hills, MI 48334, Phone: 248-855-5090, E-mail:
badler@adlerfirm.com; and
(2) Ellen M. Doyle of Malakoff, Doyle, 437 Grant St., Suite
200, Pittsburgh, PA 15219, Phone: 412-281-8400, E-mail:
edoyle@mdfpc.com.
Representing the defendants are:
(i) Wilber H. Boies of McDermott, Will, (Chicago), 227 W.
Monroe Street, Suite 4400, Chicago, IL 60606-5096,
Phone: 312-372-2000, E-mail: bboies@mwe.com; and
(ii) James E. Brunner of Consumers Power Company, Legal
Department, 212 W. Michigan Avenue, Jackson, MI 49201,
Phone: 517-788-0550, Fax: 517-788-0550.
CONSOLIDATED EDISON: N.Y. Court OKs Dismissal of Rimkoski Claim
---------------------------------------------------------------
The New York County Supreme Court approved the stipulation
consenting to the dismissal of the Rimkoski claim with prejudice
in a purported class action against Consolidated Edison, Inc.
In May 2003, a lawsuit by a purported class of Northeast
Utilities' shareholders, entitled, "Rimkoski, et al. v.
Consolidated Edison, Inc.," was filed in New York County Supreme
Court (State Proceeding) alleging breach of the merger agreement
between the company and Northeast Utilities.
The complaint defined the putative class as holders of Northeast
Utilities' common stock on Mar. 5, 2001, and alleged that the
class members were intended third-party beneficiaries of the
merger agreement.
It sought damages believed to be substantially duplicative of
those sought by Northeast Utilities on behalf of its
shareholders in the First Federal Proceeding pending in the U.S.
District Court for the Southern District of New York and
entitled, "Consolidated Edison, Inc. v. Northeast Utilities, et
al., Case No. 1:01-cv-01893-JGK."
In December 2003, the District Court granted Mr. Rimkoski's
motion to intervene in the First Federal Proceeding and, in
February 2004, the State Proceeding was dismissed without
prejudice.
In January 2004, Mr. Rimkoski filed a motion in the First
Federal Proceeding to certify his action as a class action on
behalf of all holders of Northeast Utilities' common stock on
Mar. 5, 2001 and to appoint Mr. Rimkoski as class
representative.
According to the company's Form 10-Q for or the quarterly period
ended Mar. 31, 2006, in February 2006, counsel for Rimkoski
entered into a stipulation consenting to the dismissal of the
Rimkoski claim with prejudice. In May 2006, the court approved
the stipulation.
DREAMWORKS ANIMATION: June Deadline Set for Amended Complaint
-------------------------------------------------------------
Plaintiffs in the consolidated securities class action against
DreamWorks Animation SKG, Inc. were given until Jun. 12, 2006 to
file an amended complaint on the claims dismissed without
prejudice.
Between Jun. 1 and Aug. 1, 2005, eight purported shareholder
class actions alleging violations of federal securities laws
were filed against the company and several of its officers and
directors. Seven of these lawsuits were filed in the U.S.
District Court for the Central District of California.
The eighth lawsuit, which was originally filed in the Superior
Court of the State of California, was later removed to U.S.
District Court for the Central District of California, and all
of the purported shareholder class actions were thus
consolidated and pending before a single judge.
A lead plaintiff was appointed and a consolidated class action
complaint was filed. The consolidated class action complaint
asserted that the company and certain of its officers and
directors made alleged material misstatements and omissions in
certain press releases, Securities and Exchange Commission
filings and other public statements, including in connection
with the company's initial public offering in October 2004, and
sought to recover damages on behalf of purchasers of the
company's securities during the purported class period (Oct. 28,
2004 to Jul. 11, 2005).
The company, along with certain of its officers and directors,
moved to dismiss the consolidated class action complaint, and in
April 2006, the court granted the company's motion to dismiss on
all claims.
The court dismissed the claims relating to alleged material
misstatements and omissions in connection with the company's
initial public offering with prejudice, and dismissed the
remaining claims without prejudice.
Plaintiffs have 60 days from the order, or until Jun. 12, 2006,
to file an amended complaint on the claims dismissed without
prejudice.
The suit is "Beverly Pfeffer, et al. v. DreamWorks Animation
SKG, Inc., et al., Case No. 05-CV-3966," filed in the U.S.
District Court for the Central District of California.
Plaintiff firms in this or similar case:
(1) Abbey Gardy, LLP, 212 East 39th Street, New York, NY,
10016, Phone: 212.889.3700, E-mail:
info@abbeygardy.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) Faruqi & Faruqi, LLP, 320 East 39th Street, New York,
NY, 10016, Phone: 212.983.9330, Fax: 212.983.9331, E-
mail: Nfaruqi@faruqilaw.com;
(4) 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;
(5) 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;
(6) Schatz & Nobel, P.C., 330 Main Street, Hartford, CT,
06106, Phone: 800.797.5499, Fax: 860.493.6290, E-mail:
sn06106@AOL.com;
(7) Schiffrin & Barroway, LLP, 3 Bala Plaza E, Bala Cynwyd,
PA, 19004, Phone: 610.667.7706, Fax: 610.667.7056, E-
mail: info@sbclasslaw.com;
(8) Scott & Scott, LLC, P.O. Box 192, 108 Norwich Avenue,
Colchester, CT, 06415, Phone: 860.537.5537, Fax:
860.537.4432, E-mail: scottlaw@scott-scott.com;
(9) Wechsler Harwood, LLP, 488 Madison Avenue 8th Floor,
New York, NY, 10022, Phone: 212.935.7400, E-mail:
info@whhf.com; and
(10) 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.
ERIE FAMILY: Pa. Insurance Suit Deal Gets Final Court Approval
--------------------------------------------------------------
The Court of Common Pleas of Philadelphia County, Pennsylvania
gave final approval to the settlement of a civil class action
against Erie Family Life Insurance Company (EFL), which issued a
life insurance policy to the suit's named plaintiff.
Filed on April 2003, the complaint alleges the company charged
and collected annual premium for the first year, but did not
provide 365 days of insurance coverage. It alleges the policy
forms and applications used by the company do not disclose:
"that a portion of the first premium will cover a period of time
during which the company does not provide insurance coverage."
The company contains four counts:
-- In Count I, Plaintiff alleges that the conduct of the
company violated the Pennsylvania Unfair Trade
Practices and Consumer Protection Law;
-- Count II of the company alleges a cause of action for
breach of contract;
-- Count III alleges that the company breached its duty of
good faith and fair dealing;
-- In Count IV of the company, Plaintiff asserts a cause
of action for unjust enrichment and/or restitution.
The company answered the company and denied liability on all
counts.
In early 2004, the parties reached an agreement to settle this
lawsuit. Under the settlement agreement, the company agreed to
provide supplemental life insurance coverage to qualifying class
members in an amount equal to 4.62% of the face value of the
underlying policy for a period of 180 days.
On Apr. 30, 2004, plaintiff filed a motion for preliminary
approval of settlement agreement. After the filing of the
motion for preliminary approval, plaintiff and the company
agreed the company would pay attorneys' fees in an amount up to
$150,000, and to reimburse certain litigation costs and expenses
in an amount up to $15,000.
The court preliminarily reviewed the proposed settlement. As a
result of conferences with the court, the parties engaged in
further settlement negotiations. The parties entered into an
Amended and Re-Stated Class Action Settlement Agreement.
On Mar. 11, 2005, plaintiff filed a motion for preliminary
approval of the Amended and Re-Stated Class Action Settlement
Agreement.
The Amended and Re-Stated Class Action Settlement Agreement
provides qualifying class members the option of choosing the
supplemental life insurance coverage, discussed above, or a cash
payment.
Qualifying class members who select the cash payment option
shall receive a maximum of one cash payment of $10.67 for each
policy, irrespective of number of purchasers and/or owners of
the policy.
If a qualifying class member does not submit a cash payment
selection form within the timeframe set forth in the Amended and
Re-Stated Class Action Settlement Agreement, the qualifying
class member shall automatically receive the supplemental life
insurance coverage.
The company agrees to pay attorneys' fees in an amount up to
$150,000, and will reimburse administrative costs and expenses
in an amount up to $14,000.
In December of 2005, the Court of Common Pleas of Philadelphia
County, Pennsylvania entered a Final Order Approving the Class
Action Settlement and Dismissing the Class Action With
Prejudice. The Court also approved attorneys' fees,
administrative expenses, and costs as part of its Final Order.
The time for filing an appeal expired and no appeal was filed.
The attorneys' fees, administrative expenses and costs were paid
by EFL in February 2006.
EFL mailed refund checks to qualifying class members selecting
the cash refund option in March 2006.
For class members receiving the supplemental death benefit
coverage, the 180-day period for EFL to provide supplemental
life insurance coverage to qualifying class members expires on
Jul. 19, 2006.
EXXONMOBIL CORP: Faces Additional Suits Over Md. Gasoline Leak
--------------------------------------------------------------
ExxonMobil Corp. is facing more than 50 separate lawsuits filed
by families affected by the fuel leak from Jacksonville Exxon
station in Baltimore County, Maryland in January, the WBAL
Channel.com reports.
The families, who said their wells tested positive for
containing the gasoline additive methyl tertiary butyl ether,
are seeking $1 billion in the suit.
State environmental officials said as much as 26,000 gallons of
fuel leaked for more than 30 days from the gas station. The
Maryland Department of Environment has filed a 15-count suit
against the company. It is asking up to $25,000 per day of
fines in addition to costs incurred as a result of the spill.
The suit follows a class action filed by the law firm of Peter
Angelos in March. Three Jacksonville residents in Baltimore
County, Maryland filed the suit in Baltimore County Circuit
Court on Mar. 17, alleging that ExxonMobil's negligence in
monitoring its pipes now threatens the area's drinking water
source. State environmental officials believe gasoline escaped
at the rate of 675 gallons a day for 37 days before it was
reported to state environmental regulators on Feb. 17, according
to the Baltimore Sun (Mar. 21, 2006).
The suit also identifies as defendant Storto Enterprises, a
service station operator. It is seeking punitive damages of
$535 million, and an order against ExxonMobil to clean up the
contamination and pay for well testing and the cost of
connecting affected residents and businesses to an alternative
water supply or the costs of carbon filtration systems.
Representing the plaintiffs is the law firm of Peter G. Angelos.
For more information, contact Mary V. McNamara-Koch of Law
Offices of Peter G. Angelos, One Charles Center, 100 North
Charles Street, 22nd Floor, Baltimore, Maryland 21201,
(Independent City), Phone: 410-649-2000; Phone: 800-252-6622 (
Toll Free); Fax: 410-659-1780, 1781, 1782; Fax: 410-649-2111,
2112.
Representing the families in the most recent suit is Stephen
Snyder of Snyder Slutkin & Snyder, Woodholme Center, Suite 100,
1829 Reisterstown Road, Baltimore, Maryland 21208 (Independent
City), Phone: 410-653-3700, Fax: 410-653-3024, Web site:
http://www.snyderwins.com.
FANNIE MAE: Settles Accounting Manipulation Charges for $400M
-------------------------------------------------------------
The Office of Federal Housing Enterprise Oversight and the U.S.
Securities and Exchange Commission announced a $400 million
civil penalty against Federal National Mortgage Association
(Fannie Mae) for an alleged accounting manipulation of the
company's 2001 through mid-2004 financial statements, the AP
Worldstream reports.
Under the settlement the company agreed to limit the growth of
its multibillion-dollar mortgage holdings and to make "top-to
bottom" changes in its corporate culture, accounting procedures
and ways of managing risk. Several executives and employees at
the company as well as others who have left will be reviewed for
possible disciplinary action or termination.
The law office of Frank J. Johnson is reported to have commenced
a securities fraud class action in District of Columbia federal
court against Fannie Mae last year. The complaint alleges that
Fannie Mae and its top officers violated Sections 10(b) and
20(a) of the Securities and Exchange Act of 1934. Defendants
issued numerous public statements in which they misrepresented
or failed to disclose the true picture of Fannie Mae's financial
condition (Class Action Reporter, Mar. 30, 2005).
Also Attorney General Jim Petro filed a suit on behalf of Ohio's
public pension funds, which invested in Fannie Mae. The class
action was open to anyone who invested in Fannie Mae between
Oct. 11, 2000 and Sept. 22, 2004. He had launched an
investigation into Fannie Mae in September, after suing the
Federal Home Mortgage Co., or Freddie Mae, in 2003. Both
companies are federally chartered corporations that provide
money for home loans. Fannie Mae's investors lost money after
the company's management used improper accounting practices to
inflate the company's stock (Class Action Reporter, Jan. 18,
2005).
Washington-based Fannie Mae neither admitted nor denied
wrongdoing under the settlement but did agree to refrain from
future violations of securities laws.
FORD MOTOR: New Judge to Hear Health Care Concessions with UAW
--------------------------------------------------------------
A second federal judge has excused herself from hearing a
proposed health care settlement between United Auto Workers and
Ford Motor Co., according to DetNews.com.
U.S. District Judge Anna Diggs Taylor in Detroit recused herself
because she is a member of the Board of Trustees of the Henry
Ford Health System, which owns Health Alliance Plan, a health
maintenance organization that covers many Ford retirees. Mark
Baumkel, a lawyer for retirees who oppose the deal, asked the
judge to exempt herself.
In February, U.S. District Court Judge Arthur J. Tarnow granted
tentative approval to the proposed health care settlement
between United Auto Workers and Ford Motor that would lower the
latter's health care expenses by $850 million, annually. It
also allowed some retirement cases to proceed as class action,
according to Associated Press (Mar. 03, 2006).
Judge Arthur Tarnow ordered Ford to inform retirees about the
settlement by Mar. 10, and gave an Apr. 28 deadline for the
workers to file complaint. He set a May 31 fairness hearing.
However, on Mar. 22, Judge Tarnow withdrew from the case for
unknown reasons. On May 4, the case was randomly reassigned to
U.S. District Judge Paul Borman. He must decide whether to keep
the fairness hearing on track for May 31 or reconsider earlier
court rulings.
The class in the suit comprises retirees who left the company
before Dec. 22. About 150,000 people are eligible, according to
a court filing. The settlement requires autoworkers to start
paying monthly contributions, annual deductibles and co-payments
for some medical services up to a maximum of $370 a year for
individuals and $752 for a family.
Hourly workers will have to contribute part of their future wage
increases to a trust for future health care expenses, but they
won't be required to pay deductibles or monthly contributions.
The agreement also raises the cost of prescription drugs and
institutes a $50 emergency room fee for retirees.
Mark Baumkel of 30200 Telegraph Road, Suite 200, Bingham Farms,
Michigan (Oakland Co.) is the lawyer for the retirees.
FORD MOTOR: Employees File ERISA Violation Lawsuits in Michigan
---------------------------------------------------------------
Two purported class actions were filed in the U.S. District
Court for the Eastern District of Michigan on Apr. 7, 2006,
naming as defendants Ford Motor Company and several of its
current or former employees and officers. Defendants in the
suit are:
-- Ford Motor Company,
-- David G. Leitch,
-- Donat R. Leclair,
-- Joseph W. Laymon,
-- Mickey Poli-Bartlett,
-- Roman J. Krygier,
-- William Clay Ford, Jr.
The lawsuits allege that the defendants violated the Employee
Retirement Income Security Act by failing to prudently and
loyally manage funds held in employee savings plans sponsored by
Ford. Specifically, the plaintiffs allege, among other claims,
that the defendants violated fiduciary duties owed to plan
participants by continuing to offer Ford Common Stock as an
investment option in the savings plans.
The suit is "Nowak et al. v. Ford Motor Company et al., Case No.
4:06-cv-11718-PVG-SDP," filed in the U.S. District Court for the
Eastern District of Michigan under Judge Paul V. Gadola with
referral to Judge Steven D. Pepe.
Representing the plaintiffs are:
(1) Jayson E. Blake of The Miller Law Firm (Rochester), 950
W. University Drive, Suite 300, Rochester, MI 48307,
Phone: 248-841-2200, E-mail: jeb@millershea.com;
(2) David H. Fink of The Miller Law Firm (Rochester), 950
W. University Drive, Suite 300, Rochester, MI 48307
Phone: 248-841-2200, Fax: 248-652-2852, E-mail:
dhf@millershea.com; and
(3) E. Powell Miller of The Miller Law Firm (Rochester)
950 W. University Drive, Suite 300, Rochester, MI 48307
Phone: 248-841-2200, E-mail: epm@millerlawpc.com.
Representing the defendant is Kathleen A. Lang of Dickinson
Wright (Detroit), 500 Woodward Avenue, Suite 4000, Detroit, MI
48226-3425, Phone: 313-223-3500, Fax: 313-223-3771, E-mail:
klang@dickinsonwright.com.
GENERAL MOTORS: Several Dex-Cool Lawsuits Await Certification
-------------------------------------------------------------
Fourteen federal and state lawsuits seeking class-action status
have been filed against General Motors Corp. over a variety of
engine problems linked to Dex-Cool, the Detroit Free Press
reports. A ruling on the certification may soon be forthcoming
from U.S. District Court Judge G. Patrick Murphy, the report
said.
The suits stem from General Motor's use of Dex-Cool, a coolant
it first introduced in its vehicles in 1995 and sold in more
than 35 million cars and trucks between 1995 and 2004.
Customers have complained of problems ranging from small coolant
leaks to complete radiator and engine failure.
When General Motors introduced the orange-colored Dex-Cool, it
said in owners' manuals that Dex-Cool could last up to five
years or 100,000 miles without being replaced, and later
extended Dex-Cool's life to 150,000 miles. Dex-Cool uses a
different set of chemicals to protect engine parts than
traditional green-colored coolant, which requires more frequent
replacement, and General Motors was the first U.S. automaker to
use it.
Attorneys for the owners say that clause means General Motors
should repair any Dex-Cool-related problems, even if they crop
up outside the engine's typical 3-year or 36,000-mile engine
warranty.
For its part, the automaker says that the recommend service
interval in the owner's manual is exactly that -- a
recommendation, and not a warranty guarantee.
Court documents show that General Motors has received tens of
thousands of repair requests related to Dex-Cool and engine
gaskets in the affected models and considered recalls for some
models.
Six of the federal lawsuits have been consolidated in the U.S.
District Court for the Southern District of Illinois, which have
about 100 named plaintiffs.
Three similar lawsuits has been filed in Canada, while a state
lawsuit in Missouri has already won class action status, a
decision General Motors is appealing.
The suit is "In Re: GM Corp Dex-Cool Lit v., Case No. 3:03-cv-
01562-GPM-CJP" filed in the U.S. District Court for the Southern
District of Illinois under Judge G. Patrick Murphy, with
referral to Judge Clifford J. Proud.
Representing the plaintiffs are:
(1) Matthew H. Armstrong of Schlichter, Bogard et al., 100
South Fourth Street, Suite 900, St. Louis, MO 63102,
Phone: 314-621-6115, Fax: 314-621-7151, E-mail:
marmstrong@uselaws.com;
(2) Eric H. Gibbs of Girard Gibbs LLP, 601 California
Street, Suite 1400, San Francisco, CA 94108, Phone:
415-981-4800, Fax: 415-981-4846, E-mail:
ehg@girardgibbs.com;
(3) Richard M. Paul of Shughart, Thomson et al., 120 West
12th Street, Twelve Wyandotte Plaza, Kansas City, MO
64105-1929, Phone: 816-421-3355, E-mail:
rpaul@stklaw.com;
(4) Norman E. Siegel of Stueve, Siegel et al., 330 West
47th Street, Suite #250, Kansas City, MO 64112, Phone:
816-714-7100, Fax: 816-714-7101, E-mail:
siegel@sshwlaw.com;
(5) James B. Brown of Herum, Crabtree et al., 2291 West
March Lane, Suite B100, Modesto, CA 95354, Phone: 209-
472-7700 127, Fax: 209-472-7986;
(6) Elizabeth J. Cabraser of Lieff, Cabraser et al., 275
Battery Street, 30th Floor, San Francisco, CA 94111,
Phone: 415-956-1000, Fax: 415-956-1008, E-mail:
klaw@lchb.com; and
(7) Richard T. Dorman of Cunningham, Bounds et al., 1601
Dauphin Street, Mobile, AL 36604, Phone: 251-471-6191,
Fax: 251-479-1031, E-mail: rtd@cbcbb.com.
Representing the defendants are:
(1) Peter H. Burke of Whatley Drake, LLC, 2323 Second
Avenue North, P.O. Box 10647, Birmingham, AL 35202-
0647, Phone: 205-328-9576, E-mail:
pburke@whatleydrake.com;
(2) Richard M. Paul of Shughart, Thomson et al., 120 West
12th Street, Twelve Wyandotte Plaza, Kansas City, MO
64105-1929, Phone: 816-421-3355, E-mail:
rpaul@stklaw.com;
(3) Joe R. Whatley, Jr. of Whatley Drake, 2323 Second
Avenue North, P.O. Box 10647, Birmingham, AL 35202-
0647, Phone: 205-328-9576, E-mail:
jwhatley@whatleydrake.com;
(4) Lawrence S. Buonomo of General Motors Corporation, 400
Renaissance Center, P.O. Box 400, MC 482-026-601,
Detroit, MI 48265-4000
(5) Robert B. Ellis, Scott F. Hessell and Brandi L. Chudoba
of Kirkland & Ellis, 200 East Randolph Drive, Suite
5800, Chicago, IL 60601, Phone: 312-861-2000 and 312-
861-3284, Fax: 312-861-2200, E-mail:
rellis@kirkland.com, shessell@kirkland.com and
bchudoba@kirkland.com;
(6) Martin K. Morrissey of Reed, Armstrong et al., 115
North Buchanan, P.O. Box 368 Edwardsville, IL 62025,
Phone: 618-656-0257, E-mail:
mmorrissey@reedarmstrong.com; and
(7) John J. O'Donnell of Lavin, O'Neil et al., 190 North
Independence Mall West, 6th & Race Streets, Suite 500
Philadelphia, PA 19106, Phone: 215-627-0303.
HERBALIFE INT'L: Facing Calif. Unfair Trade Practices Lawsuit
-------------------------------------------------------------
Herbalife International, Inc. and certain of its independent
distributors continue to face a class action in the Los Angeles
County Superior Court in California.
On Feb. 17, 2005, a suit, "Minton v. Herbalife International, et
al.," was filed in the Superior Court of California, County of
San Francisco. The suit was served on the company on Mar. 14,
2005. The company moved to transfer the case to the Los Angeles
County Superior Court.
The suit is challenging the marketing practices of certain
Herbalife International independent distributors and the company
under various state laws prohibiting "endless chain schemes,"
insufficient disclosure in assisted marketing plans, unfair and
deceptive business practices, and fraud and deceit.
Plaintiff alleges that the Freedom Group system operated by
certain independent distributors of Herbalife International
products places too much emphasis on recruiting and encourages
excessively large purchases of product and promotional materials
by distributors.
Plaintiff also alleges that Freedom Group pressured distributors
to disseminate misleading promotional materials. Plaintiff
seeks to hold the company vicariously liable for the actions of
its independent distributors and is seeking damages and
injunctive relief.
HERBALIFE INT'L: W.Va. Court Grants Class Status to TCPA Suit
-------------------------------------------------------------
The Circuit Court of Ohio County in the State of West Virginia,
certified as a class action the suit, "Mey v. Herbalife
International, Inc., et al.," which was filed against Herbalife
International, Inc. and certain of its distributors.
Filed on Jul. 16, 2003, the complaint alleges that certain
telemarketing practices of certain company distributors violate
the Telephone Consumer Protection Act (TCPA), and seeks to hold
the company vicariously liable for the practices of its
distributors.
More specifically, the plaintiffs' complaint alleges that
several of the company's distributors used pre-recorded
telephone messages and autodialers to contact prospective
customers in violation of the TCPA's prohibition of such
practices.
The company's distributors are independent contractors and, if
any such distributors in fact violated the TCPA, they also
violated the company's policies, which require its distributors
to comply with all applicable federal, state and local laws, the
company stated in a disclosure to the U.S. Securities and
Exchange Commission.
On Apr. 21, 2006, the court granted plaintiff's motion for class
certification in West Virginia, the company stated in its Form
10-Q to the Securities and Exchange Commission for the quarterly
period ended Mar. 31, 2006.
KRAFT FOODS: Faces Suits in 3 States Over Drink's Benzene Level
---------------------------------------------------------------
Lawyers have filed class actions against Kraft Foods Inc. in
Massachusetts, Florida and California over allegations that
Kraft Foods Inc.'s Crystal Light Sunrise Classic Orange drink
contained cancer-causing benzene above the legal limit for tap
water, Food&Drink Europe.com reports.
U.S. Food and Drug Administration re-opened the benzene case
after receiving results from independent lab tests on drinks
last autumn that show batches of Kraft's Crystal Light Sunrise
Classic Orange drink is contaminated with benzene at more than
14 times America's legal limit for benzene in drinking water.
According to Kraft Foods, they knew of the situation early this
year and has stopped producing and shipping Crystal Light
Sunrise Orange single serve bottles in early February.
Similar lawsuits were also filed in Boston, Florida and
Washington, D.C. The lawsuits were filed against Talking Rain
Beverage, of Washington; Zone Beverages, of Georgia; and Polar
Beverages, of Massachusetts. They were lodged in U.S. District
Court in Kansas City, Kansas (Class Action Reporter, May 3,
2006).
PepsiCo Inc. also faces a similar lawsuit in California.
Lawyers Howard Hewell and Howard Rubinstein filed a class action
in against PepsiCo Inc. alleging its Pepsi Twist Drink contain
cancer-causing chemical benzene above America's legal limit for
drinking water, the Food Consumer reports (Class Action
Reporter, May 10, 2006).
MOTOROLA INC: Continues to Face Suits Over Wireless Phone Usage
---------------------------------------------------------------
Motorola, Inc. is defendant in several cases arising out of its
manufacture and sale of wireless telephones.
On May 26, 2000, a purported nationwide class action, "Naquin,
et al., v. Nokia Mobile Phones, et al.," was filed against the
company and several other cellular phone manufacturers and
carriers in the Civil District Court for the Parish of Orleans,
State of Louisiana.
The case alleges that the failure to incorporate a remote
headset into cellular phones rendered the phones defective by
exposing users to biological injury and health risks and
plaintiffs seek compensatory damages and injunctive relief.
Similar state class actions were filed:
-- On Apr. 19, 2001, in the Circuit Court for Baltimore
City, Maryland, styled, "Pinney and Colonell v. Nokia,
Inc., et al.";
-- On Apr. 19, 2001, Pennsylvania Court of Common Pleas,
Philadelphia County, styled, "Farina v. Nokia, Inc.,
et al."; and
-- On Apr. 20, 2001, in the Supreme Court of the State of
New York, County of Bronx, styled, "Gilliam, et al., v.
Nokia, Inc., et al."
In late 2005 and early 2006, plaintiffs in "Farina" and "Pinney"
amended their complaints to add allegations that cellular
telephones sold without headsets are defective because they
present a safety risk when used while driving and to seek
punitive damages. "Farina" also seeks declaratory relief and
treble and statutory damages.
During 2001, after removal to federal court, the Judicial Panel
on Multidistrict Litigation (MDL Panel) transferred these four
cases to the U.S. District Court for the District of Maryland
(MDL Court) for coordinated or consolidated pretrial proceedings
in the matter called, "In re Wireless Telephone Radio Frequency
Emissions Products Liability Litigation," (MDL Proceeding).
In 2005, as a result of a decision of the U.S. Court of Appeals
for the Fourth Circuit, the "Pinney," "Gilliam," and "Farina"
cases were remanded to the state courts from which they were
removed (Maryland, New York, and Pennsylvania, respectively).
The Fourth Circuit decision also reversed the MDL Court's
dismissal of the "Naquin" case on preemption grounds. "Naquin"
was remanded to the MDL Court for further proceedings.
On Feb. 17, 2006, a newly added defendant to the "Farina" and
"Pinney" cases removed the cases to federal court. The company
asserted additional grounds for the "Pinney" removal in papers
filed on Feb. 22, 2006.
On Apr. 6, 2006, plaintiffs dismissed the "Pinney" case without
prejudice. On Mar. 13, 2006, the MDL Panel conditionally
transferred the newly removed Farina case to the MDL Court.
On Apr. 7, 2006, the "Farina" plaintiffs filed a motion to
vacate the conditional transfer order. On Mar. 30, 2006,
plaintiffs dismissed the Gilliam case without prejudice.
On Feb. 15, 2006, the MDL Court issued a suggestion to the MDL
Panel to transfer "Naquin" from the MDL Court to the federal
court in Louisiana. On Feb. 22, 2006, defendants filed a motion
to reconsider that suggestion based on the removal of "Farina"
and "Pinney" to the federal court.
On Mar. 9, 2006, the MDL Court withdrew the suggestion of remand
of "Naquin." On Mar. 13, 2006, the MDL Panel withdrew its
previously entered order granting a conditional remand of
"Naquin."
MOTOROLA INC: Iridium Securities Suit in D.C. Gets Class Status
---------------------------------------------------------------
The U.S. District Court for the District of Columbia granted
class action status to the consolidated securities suit,
"Freeland v. Iridium World Communications, Inc., et al.," filed
against Motorola, Inc.
The company was named as one of several defendants in securities
class actions arising out of alleged misrepresentations and
omissions regarding the Iridium satellite communications
business, which on Mar. 15, 2001, was filed in the U.S. District
Court for the District of Columbia under the caption, "Freeland
v. Iridium World Communications, Inc., et al.," originally filed
on Apr. 22, 1999.
The lawsuit alleges violations of the Federal securities laws
arising from alleged material misrepresentations or omissions
regarding difficulties in the satellite communications business
of Iridium World Communications, LTD, Iridium LLC and Iridium
Operating LLC. The alleged class consists of purchasers of all
Iridium securities during the period from Sept. 9, 1998 to
Mar. 29, 1999.
On Jan. 9, 2006, the court granted plaintiff's motion for class
certification.
The suit is "Freeland, et al. v. Iridium World Comm, et al.,
Case No. 1:99-cv-01002" filed in the U.S. District Court for the
District of Columbia under Judge Nanette K. Laughrey.
Representing the plaintiffs are:
(1) Douglas Graham Thompson, Jr. of Finkelstein, Thompson &
Loughran, 1050 30th Street, NW Washington, DC 20007,
Phone: (202) 337-8000, Fax: 202-337-8090, E-mail:
dgt@ftllaw.com; and
(2) Eric J. Belfi of Murray, Frank & Sailer, LLP, 275
Madison Avenue, Suite 801, New York, NY 10016, Phone:
(212) 682-1818, Fax: (212) 682-1892, E-mail:
ebelfi@murrayfrank.com.
Representing the defendants are:
(i) Jeffrey L. Willian of Kirkland & Ellis, 200 East
Randolph Drive, Chicago, IL 60601, Phone: 312-861-2000,
Fax: 312-861-2200, E-mail: jwillian@kirkland.com; and
(ii) James F. Moyle of Clifford Chance U.S. LLP, 31 West
52nd Street, New York, NY 10019, Phone: (212) 878-8508,
Fax: 212-878-8375, E-mail:
james.moyle@cliffordchance.com.
NASHUA CORP: Responds to Appeal in Ill. Stock Suit's Dismissal
--------------------------------------------------------------
Nashua Corp. filed its response to plaintiffs' appeal of the
Circuit Court of Cook County, Illinois' ruling that dismissed
the consolidated class action filed on behalf of all persons who
purchased the common stock of Cerion between May 24, 1996 and
Jul. 9, 1996.
In August and September 1996, two individual plaintiffs filed
suits. These two were later consolidated. The suit was filed
against the company, Cerion Technologies, Inc., certain
directors and officers of Cerion, and the company's underwriter.
In March 1997, the same individual plaintiffs joined by a third
plaintiff filed a consolidated amended class action complaint.
The consolidated complaint alleged that, in connection with
Cerion's initial public offering, the defendants issued
materially false and misleading statements and omitted the
disclosure of material facts regarding, in particular, certain
significant customer relationships.
In October 1997, the Circuit Court, on motion by the defendants,
dismissed the consolidated complaint.
The plaintiffs filed a second amended consolidated complaint
alleging similar claims as the first consolidated complaint
seeking damages and injunctive relief.
On May 6, 1998, the Circuit Court, on motion by the defendants,
dismissed with prejudice the Second amended consolidated
complaint. The plaintiffs filed with the Appellate Court an
appeal of the Circuit Court's ruling.
On Nov. 19, 1999, the Appellate Court reversed the Circuit
Court's ruling that dismissed the second amended consolidated
complaint. The Appellate Court ruled that the second amended
consolidated complaint represented a valid claim and sent the
case back to the Circuit Court for further proceedings.
On Dec. 27, 1999, the company filed a petition with the Supreme
Court of Illinois. In that petition, the company asked the
Supreme Court of Illinois to determine whether the Circuit Court
or the Appellate Court is correct. That petition was denied and
the case was sent to the Circuit Court for trial.
On Oct. 8, 2003, the Circuit Court heard motions on a summary
judgment motion and a class action certification motion. On
Aug. 16, 2005, the Circuit Court issued an order granting the
defendants' motion for summary judgment and dismissed the
plaintiffs' complaint.
On Sept. 15, 2005, the plaintiffs appealed the Circuit Court's
grant of summary judgment with the Appeals Court. On Apr. 21,
2006, the company filed its brief in response to the plaintiff's
appeal.
The suit is styled "ILL Student Assist v. Nashua Corporation, et
al., Case No. 1994-M1-146053," filed in the Circuit Court of
Cook County, Illinois under Judge Robert Quinn. Representing
the plaintiffs is Wexler & Wexler, 500 W. Madison #2910,
Chicago, IL 60661, Phone: (312) 474-1000.
NBR ANTITRUST: June Hearing Set in $9.8M Pa. Lawsuit Settlement
---------------------------------------------------------------
The U.S. District Court for the Western District of Pennsylvania
will hold a fairness hearing for the proposed $9.8 million
settlement with defendants Bayer AG, Bayer Corp. and Bayer
Polymers, LLC, in the matter: "In Re NBR Antitrust Litigation,
Civil Action No. 03-1898."
The case was brought on behalf of all individuals or entities,
excluding government entities, that directly purchased
acrylonitrile butadiene rubber (NBR) in the U.S. or form a
facility located in the U.S. from any defendant from Jan. 1,
1995 to Jun. 30, 2003.
The hearing will be held in the U.S. Post Office and Courthouse,
Seventh Ave., and Grant St., Courtroom 7A, Pittsburgh, PA 15219,
at 1:00 p.m., on Jun. 1, 2006.
For more details, contact:
(1) In Re NBR Antitrust Litigation (Bayer) c/o Gilardi &
Co., LLC, P.O. Box 808071, Petaluma, CA 94975-8071;
(2) Michael D. Hausfeld of Cohen, Milstein, Hausfeld &
Toll, P.L.L.C., 1100 New York Avenue, N.W. Suite 500,
West Tower, Washington, DC 20005-3964 Phone: 202-408-
4600, Fax: 202-408-4699;
(3) Robert N. Kaplan of Kaplan Fox & Kilsheimer, LLP, 805
Third Ave., New York, NY 10022, Phone: 800-290-1952 or
212-687-1980, Fax: 212-687-7714, E-mail:
rkaplan@kaplanfox.com; and
(4) Steven O. Sidener, Esq. and Joseph M. Barton, Esq. of
Gold Bennett Cera & Sidener, LLP, 595 Market Street,
Suite 2300, San Francisco, California 94105, Phone:
415-777-2230, Fax: 415-777-5189, Web site:
http://www.gbcslaw.com.
NEXTEL PARTNERS: Settles Suits Over Cost-Recovery Line-Item Fees
----------------------------------------------------------------
Nextel Partners, Inc., Nextel Communications, Inc. and Nextel
West Corporation, and other Nextel companies are working to
settle all litigation regarding the misrepresentation of certain
cost-recovery line-item fees as government taxes.
Initially, these suits were filed:
(1) "Rolando Prado v. Nextel Communications, et al., Civil
Action No. C-695-03-B," filed on Apr. 1, 2003, in the
93rd District Court of Hidalgo County, Texas;
(2) "Steve Strange v. Nextel Communications, et al., Civil
Action No. 01-002520-03," filed May 2, 2003, in the
Circuit Court of Shelby County for the Thirtieth
Judicial District at Memphis, Tennessee;
(3) "Christopher Freeman and Susan and Joseph Martelli v.
Nextel South Corp., et al., Civil Action No. 03-
CA1065," filed on May 3, 2003, in the Circuit Court of
the Second Judicial Circuit in and for Leon County,
Florida against Nextel Partners Operating Corporation
d/b/a Nextel Partners and Nextel South Corporation
d/b/a Nextel Communications;
(4) "Nick's Auto Sales, Inc. v. Nextel West, Inc., et al.,
Civil Action No. BC298695," filed on Jul. 9, 2003 in
Los Angeles Superior Court, California against the
Company, Nextel Communications, Nextel West, Inc.,
Nextel of California, Inc. and Nextel Operations, Inc;
(5) "Andrea Lewis and Trish Zruna v. Nextel Communications,
Inc., et al., Civil Action No. CV-03-907," filed on
Aug. 7, 2003, in the Circuit Court of Jefferson
County, Alabama against the company and Nextel
Communications, Inc.; and
(6) "Joseph Blando v. Nextel West Corp., et al., Civil
Action No. 02-0921," (the "Blando Case") filed in the
U.S. District Court for the Western District
of Missouri. The amended complaint filed on Oct. 3,
2003, named the company and Nextel Communications, Inc.
as defendants; Nextel Partners was substituted for the
previous defendant, Nextel West Corp.
All of these complaints alleged that the company, in conjunction
with the other defendants, misrepresented certain cost-recovery
line-item fees as government taxes.
Plaintiffs sought to enjoin such practices and sought a refund
of monies paid by the class based on the alleged
misrepresentations. They also sought attorneys' fees, costs
and, in some cases, punitive damages.
The company believes the allegations are groundless. In October
2003, the court in the Blando Case entered an order granting
preliminary approval of a nationwide class action settlement
that encompasses most of the claims involved in these cases.
In April 2004, the court approved the settlement. Various
objectors and class members appealed to the U.S. Court of
Appeals for the Eighth Circuit, and in February 2005 the
appellate court affirmed the settlement.
One of the objectors petitioned for a rehearing and in March
2005, the Eighth Circuit denied the petition for rehearing and
rehearing en banc.
Thereafter, one of the objectors filed a motion to stay the
mandate for 90 days. The Eighth Circuit denied that motion in
April and in June 2005 that objector filed with the U.S. Supreme
Court a petition for writ of certiorari.
On Oct. 3, 2005, the Supreme Court denied the objector's writ of
certiorari, which constitutes a "final order" resolving all
appeals in these cost recovery fee cases.
In accordance with the terms of the settlement, the company
began distributing settlement benefits within 90 days from the
final order and completed the distribution of benefits by March
2006.
The "Prado v. Nextel Communications case, Civil Action No. C-
695-03-B" was dismissed with prejudice in November 2005. In
addition, the "Freeman v. Nextel South Corp. case, Civil Action
No. 03-CA1065" was dismissed with prejudice in March 2006.
The remaining cases are subject to immediate dismissal according
to the terms of the final order, which directs the plaintiffs to
dismiss their actions.
PRUDENTIAL INSURANCE: Appeals Court Opens Bias Suit to Public
-------------------------------------------------------------
New Jersey's appellate court ordered on May 10 the opening of
records of an alleged "sweetheart deal" between Prudential
Insurance Co. and a mediation law firm, and sent the case back
to Superior Court, according to NorthJersey.com.
Some 358 Prudential employees and former manager Lawrence
Lederman -- who accused his employer of repeatedly telling him
to stop selling auto insurance in Hudson and Essex counties in
the mid-1990s -- hired Long Island law firm Leeds, Morelli &
Brown to represent it in an arbitration with Prudential in 2001.
In 2002, Mr. Lederman filed a class action alleging that
Prudential paid Leeds, Morelli $5 million to cap the settlement
at $10 million. Mr. Lederman received $500,000 in the
arbitration, his lawsuit states.
The appellate court, in a separate action, sent the case back to
Superior Court, reversing an order by Essex County Superior
Court Judge Theodore Winard for closed-door arbitration.
Originally, the case was sealed to protect what the firms say as
confidential information that could embarrass them. But the
appellate court did not support the argument. It allegations of
fraud and racial discrimination is a matter that concerns the
public. The order is also a victory for media companies The
Record, ABC News and Bloomberg which sued to get access to the
court records.
Mr. Lederman's lawyer is Ken Thyne, 77 Jefferson Place
Livingston, New Jersey (Essex Co.).
PUTNAM INVESTMENTS: Court Revives Executive Equity Plan Lawsuit
---------------------------------------------------------------
An appeals court recently reversed a decision to dismiss a case
filed by a former Putnam Investments money manager, Nathan
Eigerman, over a private executive equity plan that did not turn
out well.
The suit, originally filed in 2004 in Suffolk Superior Court,
sought to become a class action representing hundreds of current
and former Putnam executives who lost money through the scheme.
A key document in the case is a 2002 memorandum writer by former
chief Larry Lasser that allegedly amounted to a threat against
managers to sell shares after the stock market crisis in 2001.
Hundreds of Putnam executives received some of their
compensation in company stock awards that vested over several
years. The shares have no real market, making the company its
only buyer. The system works with the company setting the price
on its private shares every quarter using an established formula
that relied on Putnam's business profits over the previous 12
months. The company, however, retained the right to refuse any
sale.
After the stock market dived, the Lasser memo appeared,
emphasizing that Putnam stock was meant to be a long-term
investment. According to the report, the memo said that in the
absence of personal tax obligations, it said, executives who
wanted to sell would have to ''discuss the reasons" with a boss.
Mr. Eigerman's suit claims the Lasser memo discouraged
executives from selling Putnam stock during the critical period.
As a result, the executives lost money when they finally cashed
out their shares.
Putnam is owned by Marsh & McLennan Cos.
QWEST COMMUNICATIONS: Continues to Face Fiber Optic Lawsuits
------------------------------------------------------------
Qwest Communications International, Inc. is defendant in several
putative class actions in state and federal courts in relation
to the installation of fiber optic cable in certain rights-of-
way.
Several these actions were filed against the company on behalf
of landowners on various dates and in various courts in
California, Colorado, Georgia, Illinois, Indiana, Kansas,
Mississippi, Missouri, Oregon, South Carolina, Tennessee and
Texas.
For the most part, the complaints challenge the company's right
to install its fiber optic cable in railroad rights-of-way.
Complaints in Colorado, Illinois and Texas, also challenge the
company's right to install fiber optic cable in utility and
pipeline rights-of-way.
The complaints allege that the railroads, utilities and pipeline
companies own the right-of-way as an easement that did not
include the right to permit the company to install the company's
fiber optic cable in the right-of-way without the plaintiffs'
consent.
Most actions -- filed in California, Colorado, Georgia, Kansas,
Mississippi, Missouri, Oregon, South Carolina, Tennessee and
Texas -- purport to be brought on behalf of statewide classes in
the named plaintiffs' respective states. Several actions
purport to be brought on behalf of multi-state classes.
The Illinois state court action purports to be on behalf of
landowners in Illinois, Iowa, Kentucky, Michigan, Minnesota,
Nebraska, Ohio and Wisconsin. The Illinois federal court action
purports to be on behalf of landowners in Arkansas, California,
Florida, Illinois, Indiana, Missouri, Nevada, New Mexico,
Montana and Oregon.
The Indiana action purports to be on behalf of a national class
of landowners adjacent to railroad rights-of-way over which the
company's network passes.
The complaints seek damages on theories of trespass and unjust
enrichment, as well as punitive damages.
QWEST COMMUNICATIONS: Faces Suit in Colo. Over U.S. WEST Merger
----------------------------------------------------------------
Qwest Communications International, Inc. faces a class action
filed on behalf of purchasers of its stock between Jun. 28, 2000
and Jun. 27, 2002 and owners of U.S. WEST stock on Jun. 28, 2000
in the District Court for the County of Boulder, Colorado.
Plaintiffs allege, among other things, that the defendants
issued false and misleading statements and engaged in improper
accounting practices in order to accomplish the U.S. WEST/Qwest
merger, to make the company appear successful and to inflate the
value of its stock. Plaintiffs seek unspecified monetary
damages, disgorgement of illegal gains and other relief.
QWEST COMMUNICATIONS: $33M Deal Reached in Colo. ERISA Lawsuit
--------------------------------------------------------------
Qwest Communications International, Inc. settled the
consolidated class action filed in the U.S. District Court for
the district of Colorado, on behalf of all participants and
beneficiaries of the Qwest Savings and Investment Plan and
predecessor plans.
Seven putative class actions purportedly brought on behalf of
all participants and beneficiaries of the Qwest Savings and
Investment Plan and predecessor plans from Mar. 7, 1999 until
Jan. 12, 2004 were later consolidated into a single action in
the U.S. District Court for the District of Colorado.
Other defendants in this action include current and former
directors of Qwest, former officers and employees of Qwest and
Deutsche Bank. These suits also purport to seek relief on
behalf of the Plan.
The first of these actions was filed in March 2002. Plaintiffs
assert breach of fiduciary duty claims against the company and
others under the Employee Retirement Income Security Act of
1974, as amended, alleging, among other things, various
improprieties in managing holdings of the company's stock in the
Plan. Plaintiffs sought damages, equitable and declaratory
relief, along with attorneys' fees and costs and restitution.
Counsel for plaintiffs indicated that the putative class would
seek billions of dollars of damages.
On Apr. 26, 2006, the company, the other defendants, and the
putative class representatives entered into a stipulation of
settlement that, if implemented, will settle the consolidated
ERISA action.
Under the proposed settlement agreement, the company would pay a
total of $33 million in cash no later than 90 days after
preliminary approval of the proposed settlement by the federal
district court in Colorado.
Deutsche Bank would pay a total of $4.5 million in cash to
settle the claims against it. No parties admitted any
wrongdoing as part of the proposed settlement.
If the court approves the proposed settlement, the company will
receive certain insurance proceeds as a contribution by
individual defendants to this settlement, which will offset $10
million of the company's $33 million payment.
In addition to the $33 million cash settlement, the company also
agreed to pay, subject to certain contingencies, the amount (if
any) by which the Plan's recovery from the settlement of the
consolidated securities action is less than $20 million.
If approved by the district court, the proposed settlement will
settle and release the claims of the class against the company
and all defendants in the consolidated ERISA action. The
proposed settlement, which is subject to preliminary and final
approval by the district court, is also subject to review on
appeal if the district court were finally to approve it.
The suit is "Stuhr v. Qwest Comm Intl Inc, et al., Case No.
1:02-cv-02120-REB," filed in the U.S. District Court for the
District of Colorado, under Judge Robert E. Blackburn.
Representing the plaintiffs is Josiah Oakes Hatch, III of
Ducker, Montgomery, Aronstein & Bess, P.C., 1560 Broadway #1400,
Denver, CO 80202, U.S.A., Phone: 303-861-2828, Fax: 303-861-
4017, E-mail: jhatch@duckerlaw.com.
Representing the company are William T. Hankinson and William
Albert Wright of Sherman & Howard, L.L.C.- 17th Street Denver
CO, U.S. District Court Box 12, 633 Seventeenth Street, #3000,
Denver, CO 80202 U.S.A., Phone: 303-299-8468 and 303-299-8086,
Fax: 303-298-0940, E-mail: bhankinson@sah.com or
wwright@sah.com.
QWEST COMMUNICATIONS: Settles KPNQwest Securities Suit in N.Y.
--------------------------------------------------------------
Qwest Communications International, Inc. settled a purported
class action over its failed European joint venture KPNQwest
N.V., which filed for bankruptcy in May 2002.
Initially, a putative class action was filed in the U.S.
District Court for the Southern District of New York against the
company, certain of its former executives who were also on the
supervisory board of KPNQwest, N.V., of which the company was a
major shareholder, and others. This suit was filed on Oct. 4,
2002.
The current complaint alleges, on behalf of certain purchasers
of KPNQwest securities, that, among other things, defendants
engaged in a fraudulent scheme and deceptive course of business
in order to inflate KPNQwest's revenue and the value of KPNQwest
securities. Plaintiffs sought compensatory damages and/or
rescission as appropriate against defendants, as well as an
award of plaintiffs' attorneys' fees and costs.
On Feb. 3, 2006, the company, certain other defendants and the
putative class representative in this action executed an
agreement to settle the case.
Under the settlement agreement, the company will pay $5.5
million in cash to the settlement fund no later than 30 days
following preliminary court approval, and no later than 30 days
following final approval by the court, the company will issue
shares of the company's stock to the settlement fund then valued
at $5.5 million as additional consideration for the settlement.
The settlement agreement would settle the individual claims of
the putative class representative and the claims of the class
that the plaintiff purports to represent against the company and
all defendants except Koninklijke KPN N.V. a/k/a Royal KPN N.V.,
Willem Ackermans, Eelco Blok, Joop Drechsel, Martin Pieters, and
Rhett Williams.
The settlement agreement is subject to a number of conditions
and future contingencies. Among others, it:
-- requires both preliminary and final court approval;
-- provides the company with the right to terminate the
settlement if class members representing more than a
specified amount of alleged securities losses elect to
opt out of the settlement;
-- provides the company with the right to terminate the
settlement if the company do not receive adequate
protections for claims relating to substantive
liabilities of non-settling defendants; and
-- is subject to review on appeal even if the district
court were finally to approve it.
No parties admitted wrongdoing as a part of the settlement
agreement.
The suit is "Taft v. Ackermans, Case No. 1:02cv7951," filed in
the U.S. District Court for the Southern District of New York,
under Judge Peter K. Leisure with referral to Frank Maas.
Representing the plaintiffs are:
(1) Ira M. Press and Mark Booker of Kirby, McInerney &
Squire, LLP, 830 Third Avenue, 10TH Floor, New York, NY
10022 USA, Phone: (212) 317-2300;
(2) Jacob A. Goldberg, Schiffrin & Barroway, LLP, Three
Bala Plaza East, Suite 400, Bala Cynwyd, PA 19004, USA,
Phone: (610) 667-7706; and
(3) Lionel Z. Glancy and Robert M. Zabb, Glancy, Binkow &
Goldberg, LLP, 1801 Avenue of the Stars, Suite 311, Los
Angeles, CA 90067, USA, Phone: (310) 201-9150.
Representing the company are Barry Howard Goldstein of O'Melveny
& Myers LLP, Seven Times Square, New York, NY 10036, USA, Phone:
212-326-2000, Fax: 212-326-2061, E-mail: Bgoldstein@omm.com; and
Matthew W. Close, O'Melveny & Myers LLP, 400 S Hope Street, Los
Angeles, CA 90071, USA, Phone: (213) 430-6000.
RED ROBIN: Plaintiffs in Calif. Labor Suit Files Remand Motion
--------------------------------------------------------------
Red Robin Gourmet Burgers, Inc., is defendant in a purported
class action, "Huggett v. Red Robin International, Inc.," in the
Superior Court of the State of California.
Filed on January 2006, the suit is related to an alleged failure
of the company to comply with California wage and hour
regulations, including those governing meal and rest periods,
payment of wages upon termination and provision of itemized
statements to employees, as well as unlawful business practices
and unfair competition. The complaint states claims for
damages, including punitive and exemplary damages, and
injunctive relief.
The company filed an answer to the Huggett complaint and removed
the case to the U.S. District Court for the Central District of
California. On Mar. 13, 2006, Matthew Huggett filed a motion to
remand the case to the California state court.
The federal suit is "Matthew Huggett v. Red Robin International
Inc., et al., Case No. 8:06-cv-00181-JVS-RNB," filed in the U.S.
District Court for the Central District of California under
Judge James V. Selna with referral to Judge Robert N. Block.
Representing the plaintiffs are:
(1) Heather K. Rowell, Richard E. Quintilone, II, and Devin
R. Lucas of Quintilone and Associates, 15 Studebaker,
Suite 100, Irvine, CA 92618-2013, Phone: 949-458-9675;
and
(2) Mike M. Arias, J. Paul Gignac and Mark A. Ozzello of
Arias Ozzello & Gignac, 6701 Center Dr. W., Ste. 1400,
Los Angeles, CA 90045-1558, Phone: 310-670-1600, Fax:
310-670-1231, E-mail: jpgignac@aogllp.com.
Representing the defendants are J. Kevin Lilly, Darren E. Nadel,
Fermin H. Llaguno, Elizabeth Staggs-Wilson and James E. Hart of
Littler Mendelson, 2049 Century Park E, 5th Fl., Los Angeles, CA
90067-3107, Phone: 310-553-0308, Fax: 310-553-5583, E-mail:
klilly@littler.com.
RED ROBIN: Defendants in Col. Stock Suit File Dismissal Motion
--------------------------------------------------------------
Red Robin Gourmet Burgers, Inc., its former chief executive
officer and former chief financial officer, are defendants in a
consolidated shareholder class action in the U.S. District Court
for the District of Colorado.
On Aug. 15, 2005, Andre Andropolis filed the suit on behalf of
himself and all other purchasers of the company's common stock
during the putative class period of Nov. 8, 2004 through Aug.
11, 2005. On Sept. 30, 2005, Mark Baird filed a similar
purported class action complaint in the same court on behalf of
himself and the same class of stockholders as defined in the
Andropolis Complaint.
Both complaints allege that the company and defendants Michael
J. Snyder and James P. McCloskey violated Sections 10(b) and
20(a) of the Securities Exchange Act of 1934 and Rule 10(b)(5)
adopted pursuant to the Exchange Act by disseminating false and
misleading financial reports on behalf of the company, by
withholding adverse financial information on behalf of the
company from the class, and the individual defendants were
control persons who caused the company to engage in such acts
for their own benefit.
The plaintiffs further allege that, because of the actions of
the company's former chief executive officer and former chief
financial officer, the company's stock price became inflated
between Nov. 8, 2004 and Aug. 11, 2005, and on Aug. 12, 2005,
the company's stock price fell sharply following their
departures from their positions with the company.
The class has not been certified and no discovery has occurred.
Lead counsel and lead plaintiff were recently appointed and have
received an extension to Feb. 28, 2006 to file a consolidated
complaint.
On Feb. 28, 2006, the Lead Plaintiff, City of Philadelphia Board
of Pensions and Retirement, filed a consolidated complaint.
In addition to the allegations in the initial Andropolis
Complaint against the company and the company's former chief
executive officer and former chief financial officer, the
consolidated compliant alleges that the company and the
company's current chief executive officer and current chief
financial officer violated Sections 10(b) and 20(a) of the
Exchange Act in connection with the company's announcement on
Jan. 10, 2006 that it was lowering its guidance for the quarter
ended Dec. 25, 2005, alleges claims against the company's former
controller and alleges violations of Section 14(a) of the
Exchange Act.
The consolidated complaint seeks damages on behalf of a putative
class of purchasers of the company's common stock during the
putative class period of Aug. 13, 2004 and Jan. 9, 2006,
inclusive. All defendants have filed motions to dismiss the
consolidated complaint that are currently pending before the
court.
The suit is "Andropolis v. Red Robin Gourmet Burgers, Inc., et
al., Case No. 1:05-cv-01563-EWN-BNB," filed in the U.S. District
Court for the District of Colorado under Judge Edward W.
Nottingham, with referral to Judge Boyd N. Boland. Representing
the plaintiffs are:
(1) Gerald L. Bader, Jr. and Renee Beth Taylor of Bader &
Associates, P.C., 14426 East Evans Avenue #200, Denver,
CO 80014-1160, U.S.A, Phone: 303-534-1700, Fax: 303-
534-1701, E-mail: gbader@bader-associates.com and
rtaylor@bader-associates.com; and
(2) F. James Donnelly of the Law Offices of F. James
Donnelly, P.C., 6076 South Chester Way, Greenwood
Village, CO 80111, U.S.A, Phone: 720-493-9814, Fax:
720-493-9815, E-mail: fjamesdonnelly@comcast.net;
(3) Kip Brian Shuman of Dyer & Shuman, LLP, 801 East 17th
Avenue, Denver, CO 80218-1417, U.S.A, Phone: 303-861-
3003, Fax: 303-830-6920, E-mail:
KShuman@DyerShuman.com;
(4) Karen Jean Cody-Hopkins and Jessica Lee Hoff of Charles
Lilley & Associates, P.C., 1600 Stout Street #1100,
Denver, CO 80202, U.S.A, Phone: 303-293-9800, Fax: 303-
298-8975, E-mail: jhoff@lilleylaw.com and
kcody-hopkins@lilleygarcia.com; and
(5) Sherrie R. Savett of Berger & Montague, P.C., 1622
Locust Street, Philadelphia, PA 19103, U.S.A, Phone:
215-875-3071, Fax: 215-875-5715, E-mail:
ssavett@bm.net.
Representing the defendants are:
(i) Andrew Ryan Shoemaker, Thomas Lee Strickland and Coates
Lear of Hogan & Hartson, LLP, Phone: 720-406-5360, 303-
899-7300 and 303-454-2479, Fax: 720-406-5301 and 899-
7333, E-mail: arshoemaker@hhlaw.com,
tlstrickland@hhlaw.com and CLear@hhlaw.com; and
(ii) Rachel M. Vorbeck of Katten Muchin Rosenman, LLP, 525
West Monroe Street #1600, Chicago, IL 60661-3693,
U.S.A, Phone: 312-902-5200, Fax: 902-1061, E-mail:
rachel.vorbeck@kattenlaw.com.
REGENCY AFFILIATES: Del. Court Dismisses All Claims in "Gatz"
-------------------------------------------------------------
The New Castle County Court of Chancery in Delaware dismissed
the sole remaining claim in the purported derivative and class
action filed against Regency Affiliates, Inc.'s current and
former directors.
The suit, "Gatz et al. v. Ponsoldt, Sr., et al., C.A. No. 174-
N," was filed on Jan. 20, 2004 by two dissident company
shareholders, Edward E. Gatz and Donald D. Graham. Their suit
named as defendants certain current and former directors of the
company, Royalty Holdings, LLC and certain of its affiliates,
Statesman Group, Inc. and, nominally, the company.
The complaint alleged various breaches of fiduciary duties by
theformer directors and Statesman, and that Royalty and its
affiliates knowingly participated in certain of the alleged
breaches.
In November 2004 the court dismissed all but one claim alleged
in the complaint. The company was not a defendant with respect
to the sole surviving claim, which related to the 2001 sale of a
cache of previously quarried and piled aggregate rock by
National Resource Development Corporation to Iron Mountain
Resources, Inc. (the Aggregate Sale).
On Oct. 16, 2005, the Court dismissed plaintiffs' sole remaining
claim for failure to state a claim for relief. The dismissal
was without prejudice and the plaintiffs were given leave to
file an amended complaint attacking the Aggregate Sale.
RL SCREIBER: Issues Allergy Alert on Unnamed Gravy Mix Content
--------------------------------------------------------------
R.L. Schreiber, Inc. of Pompano Beach, Florida is recalling
1,368 (12 oz.) packages of Beef Gravy Mix because it may contain
undeclared soy and milk ingredients.
The company said individuals with allergies or sensitivity to
soy or milk run the risk of serious or life-threatening allergic
reaction if they consume these products. No illnesses have been
reported to date in connection with this problem.
The recall was initiated after it was discovered that the
product containing soy and milk ingredients was distributed in
packaging that did not reveal the presence of soy and milk.
Subsequent investigation indicates the problem was caused when
an incorrect material was used in the company's production and
packaging process for this single lot only.
The product comes in a 12 oz. white plastic bag labeled R. L.
Schreiber, Inc. Beef Gravy Mix Bar Code 1270 marked with lot
code number "E04A1" on the package label.
The Beef Gravy Mix was distributed in Colorado Florida, Hawaii,
Idaho, Maryland, North Carolina, Oklahoma Pennsylvania, and West
Virginia through foodservice distributors.
Foodservice users who have purchased the E04A1 lot code of the
12-ounce package of Beef Gravy Mix are urged to return them to
their distributor for a full refund.
Users with questions may contact the company at 1-800-624-8777.
RYLAND HOMES: N.J. Judge Grants Class Status to Homeowners' Suit
----------------------------------------------------------------
William Drier, a retired appellate judge from New Jersey, has
certified a class action against national homebuilder Ryland
Homes in Florida, including approximately 6,000 homes Ryland
built across Florida since January 2000.
Plaintiffs in the case claim serious leakage issues in their
homes during summer storms.
Judge Drier heard five days of live testimony and arguments,
reviewed more than 30 volumes of documentary evidence and
received hundreds of pages of legal briefs. His findings will
soon be posted at: http://www.adr.org/sp.asp?id=26611.
Estimates to fix the leaks are expensive and Ryland's efforts to
address the leakage problems are unsatisfactory, the plaintiffs
say.
The plaintiffs allege houses Ryland built won't keep water out
during rainstorms, although often there is no apparent source
for the leaks. Water simply appears on the baseboards of
exterior walls.
California-based Ryland, which has built houses in many states
since 1967, has 30 days to challenge the order in Florida state
court, but the review is limited to determining if the
arbitrator "manifestly disregarded the law or facts" in the
case.
More than 70 owners of Ryland-built homes are listed as parties
to the case and also say they represent "all others similarly
situated."
Various engineers have proposed ways to fix the leaks, the
homeowners say. Even the cheapest of those suggested repairs
would cost thousands of dollars per house.
More than 100 homeowners complained to Ryland through mid-2004
about leaks during summer storms. During the 2004 hurricane
season, the problem reached epic proportions, the homeowners
say.
Ryland, which has acknowledged having more complaints than any
other builder in the Orlando area, fielded more than 1,000 calls
in August and September 2004. Still, many homes continue to
leak, despite limited repairs provided by Ryland, the homeowners
allege.
The plaintiffs in the arbitration asked Ryland to fix the leaks
in their houses in the fall of 2004. When Ryland refused, they
hired Frank Rapprich, an Orlando lawyer. Rapprich sent legal
demands to Ryland, and the company again refused to fix the
leaks.
The case began formally in March 2005, when owners of more than
70 Ryland-built homes filed suit in Orlando. The complaint
sought class status.
Ryland responded by pointing out that most of the plaintiffs
signed binding arbitration agreements. Those plaintiffs
voluntarily dismissed their lawsuit claims and filed identical
claims with the American Arbitration Association in June 2005.
The class is represented by:
-- Francis X. Rapprich of Fisher, Rushmer, Werrenrath,
Dickson, Talley & Dunlap, P.A., of Orlando;
-- Gary W. Jackson of The Jackson Law Group in Charlotte,
NC; and
-- William Dixon Robertson III of Columbia, SC.
Jackson and Robertson have been granted limited admission to
practice in Florida, to represent the class described in the
original complaint.
For more information, contact Francis X. Rapprich of Fisher,
Rushmer, Werrenrath, Dickson, Talley & Dunlap, P.A., Phone: +1-
407-843-2111, E-mail: frapprich@fisherlawfirm.com; or Gary W.
Jackson of The Jackson Law Group, Phone: +1-704-377-6680, E-
mail: gjackson@thejacksonlawgroup.com; or William Dixon
Robertson III, Phone: +1-803-988-0040, E-mail:
Dixon.robertson@wdrlaw.com
SALESFORCE.COM INC: Remand Brief Due Date in Stock Suit Extended
----------------------------------------------------------------
The U.S. Court of Appeals for the Ninth Circuit granted lead
plaintiff's request for an extension of time to file its opening
brief in relation to the motion for limited remand of the
consolidated securities class action filed against
salesforce.com, inc., its chief executive officer and its chief
financial officer.
On Jul. 26, 2004, a purported class action complaint was filed
in the U.S. District Court for the Northern District of
California, entitled, "Morrison v. Salesforce.Com, Inc. et al.,"
against the company, its Chief Executive Officer and its Chief
Financial Officer.
The complaint alleged violations of Section 10(b) and Section
20(a) of the Securities Exchange Act of 1934, as amended (the
1934 Act), purportedly on behalf of all persons who purchased
salesforce.com common stock between Jun. 21, 2004 and Jul. 21,
2004, inclusive.
The claims were based upon allegations that defendants failed to
disclose an allegedly declining trend in its revenues and
earnings.
Subsequently, four other substantially similar class action
complaints were filed in the same district based upon the same
facts and allegations, asserting claims under Section 10(b) and
Section 20(a) of the 1934 Act and Section 11 and Section 15 of
the Securities Act of 1933, as amended.
The actions were later consolidated under the caption, "In re
salesforce.com, inc. Securities Litigation, Case No. C-04-3009
JSW (N.D. Cal.)."
On Dec. 22, 2004, the Court appointed Chuo Zhu as lead
plaintiff. On Feb. 22, 2005, lead plaintiff filed a
consolidated and amended class action complaint.
The consolidated and amended complaint alleged violations of
Section 10(b) and Section 20(a) of the 1934 Act, purportedly on
behalf of all persons who purchased salesforce.com common stock
between Jun. 23, 2004 and Jul. 21, 2004, inclusive.
As in the original complaints, the claims in the consolidated
and amended complaint were based upon allegations that
defendants failed to disclose an allegedly declining trend in
its revenues and earnings. On Apr. 14, 2005, defendants filed a
motion to dismiss the CAC. On Apr. 15, 2005, the court granted
lead plaintiff leave to file an amended/superseding complaint.
On Apr. 22, 2005, lead plaintiff filed a Corrected and
Superceding [sic] first amended class action complaint (FAC).
As in the consolidated and amended complaint, the first amended
complaint alleged violations of Section 10(b) and Section 20(a)
of the 1934 Act, purportedly on behalf of all persons who
purchased salesforce.com common stock between Jun. 23, 2004 and
Jul. 21, 2004, inclusive.
The claims in the first amended complaint were based upon
allegations that defendants failed to disclose an internal
forecast that earnings for fiscal year 2005 would decline from
the prior fiscal year.
On Apr. 29, 2005, defendants filed a motion to dismiss the first
and amended complaint. On Dec. 22, 2005, the court entered an
order granting defendants' motion to dismiss, with prejudice,
and directing the clerk to close the file.
On Jan. 23, 2006, lead plaintiff filed a motion for leave to
file a motion for reconsideration, as well as a notice of appeal
to the U.S. Court of Appeals for the Ninth Circuit.
On Jan. 26, 2006, the Ninth Circuit entered a time schedule
order for the appeal, requiring, inter alia, lead plaintiff to
file his opening brief on May 11, 2006, and defendants to file
their responsive brief on Jun. 12, 2006.
On Jan. 27, 2006, defendants filed a motion to strike as
untimely lead plaintiff's motion for leave to file a motion for
reconsideration.
On or about Feb. 2, 2006, lead plaintiff filed a motion with the
Ninth Circuit requesting a stay of appellate proceedings pending
the district court's determination of lead plaintiff's motion
for leave and defendants' motion to strike. Defendants opposed
that motion.
On Feb. 9, 2006, the Ninth Circuit denied the lead plaintiff's
motion for a stay of appellate proceedings, without prejudice to
making a motion for limited remand.
On Mar. 1, 2006, the district court denied the lead plaintiff's
motion for leave and defendants' motion to strike on grounds of
lack of jurisdiction. Also on Mar. 1, 2006, the lead plaintiff
filed a motion with the district court seeking certification to
the Ninth Circuit for limited remand.
Defendants opposed this motion, which was denied by the district
court on Apr. 3, 2006. On May 2, 2006, the Ninth Circuit
granted lead plaintiff's request for an extension of time to
file his opening brief. Lead plaintiff's opening brief is now
due on May 25, 2006 and defendants' response is due Jun. 26,
2006.
The suit is "In re salesforce.com, inc. Securities Litigation,
Case No. C-04-3009 JSW," filed in the U.S. District Court for
the Northern District of California under Judge Jeffrey S.
White. Chuo Zho was appointed as lead plaintiff in the suit.
The plaintiff firms in this litigation are:
(1) Green & Jigarjian LLP (proposed liaison counsel), 235
Pine Street, 15th Floor, San Francisco, CA, 94104,
Phone: 415.477.6700, Fax: 415.477.6710;
(2) Schiffrin & Barroway, LLP (proposed lead counsel) 3
Bala Plaza E, Bala Cynwyd, PA, 19004, Phone:
610.667.7706, Fax: 610.667.7056, E-mail:
info@sbclasslaw.com;
(3) Brian Felgoise, 230 South Broad Street, Suite 404,
Philadelphia, PA, 19102, Phone: 215.735.6810, Fax:
215/735.5185;
(4) Glancy and Binkow, 1801 Avenue of the Stars, Suite 311,
Los Angeles, CA, 90067, Phone: 310-201-9150, E-mail:
info@glancylaw.com;
(5) Kirby McInerney & Squire, LLP, 830 Third Ave., 10th
Floor, New York Ave, NY, 10022, Phone: 212.317.2300;
(6) Law Offices of Charles J. Piven, P.A., World Trade
Center-Baltimore, 401 East Pratt Suite 2525, Baltimore,
MD, 21202, Phone: 410.332.0030, E-mail:
pivenlaw@erols.com;
(7) Lerach Coughlin Stoia Geller Rudman & Robbin (San
Francisco), 100 Pine St., Suite 2600, San Francisco,
CA, 94111, Phone: 415.288.4545, Fax: 415.288.4534, E-
mail: info@lerachlaw.com;
(8) Murray, Frank & Sailer, LLP, 275 Madison Ave., 34th
Flr., New York, NY, 10016, Phone: 212.682.1818, Fax:
212.682.1892, E-mail: email@murrayfrank.com;
(9) Stull, Stull & Brody (Los Angeles), 10940 Wilshire
Boulevard - Suite 2300, Los Angeles, CA, 90024, Phone:
310.209.2468; and
(10) Weiss & Yourman (Los Angeles, CA), 10940 Wilshire
Blvd., 24th Floor, Los Angeles, CA, 90024, Phone:
310.208.2800, Fax: 310.209.2348, E-mail: info@wyca.com.
Representing the company is John P. Stigi, III of Wilson Sonsini
Goodrich & Rosati, 650 Page Mill Road, Palo Alto, CA 94304-1050,
Phone: (650) 493-9300, E-mail: jstigi@wsgr.com.
SONY BMG: Judge Okays MediaMax, XCP CDs Litigation Settlement
-------------------------------------------------------------
U.S. District Court for the Southern District of New York Judge
Naomi Reice Buchwald granted final approval to the class action
settlement of the consolidated cases concerning XCP and MediaMax
CD software, the Associated Press World Stream reports.
The software, manufactured by Sony BMG Music Entertainment, is
found to have defective anti-piracy technology. The terms of
the deal will let consumers who bought the CDs receive
replacement discs without the anti-piracy technologies and will
let them choose one of two incentive packages that provide cash
or free music downloads. Sony BMG will stop manufacturing the
CD software.
The company recalled the discs with XCP in November and released
a way to remove the files from users' computers. Some 4.7
million CDs on 52 Sony BMG titles had been made with the
technology, and 2.1 million had been sold.
In January, Judge Buchwald of the U.S. District Court for the
Southern District of New York preliminarily approved the
settlement of the class actions brought against SONY BMG over
music CDs that contained XCP and MediaMax content protection
software. U.S. residents who purchased, received, came into
possession of or otherwise used one or more MediaMax CDs and/or
XCP CDs since Aug. 1, 2003, were eligible for settlement
benefits (Class Action Reporter, Feb. 17, 2006).
The suit is "Michaelson et al. v. Sony BMG Music, Inc. et al.,
Case No. 1:05-cv-09575-NRB," filed in the U.S. District Court
for the Southern District of New York under Judge Naomi Reice
Buchwald. Representing the plaintiffs are: Scott Adam Kamber of
Kamber & Associates, LLC, 19 Fulton St., Suite 400, New York, NY
10038, Phone: (646)-441-7100, Fax: (212)-202-6364, E-mail:
skamber@kolaw.com; and Jonathan K. Levine of Girard
Gibbs & De Bartolomeo, LLP, 601 California St, Suite 1400, San
Francisco, CA 94108, Phone: 415-981-4800; Fax: 415-981-4846; E-
mail: jkl@girardgibbs.com.
Representing the defendant(s) are Jeffrey S. Jacobson of
Debevoise & Plimpton, LLP (NYC), 919 Third Avenue, New York, NY
10022, Phone: 2129096479; Fax: 2129096836; E-mail:
jsjacobs@debevoise.com.
SOUTH DAKOTA: HEA Provision on Students' Drug Charges Questioned
----------------------------------------------------------------
The South Dakota Department of Education has until the end of
the month to respond to a lawsuit challenging the
constitutionality of a federal law that denies financial aid to
any college student convicted of a drug offense, according to
Keloland TV.
The suit was filed by The American Civil Liberties Union in
March. It is asking the court to strike down a provision of the
Higher Education Act (HEA) which blocks financial aid to
hundreds of thousands of would-be students to students convicted
of a drug offense while in school and receiving aid. The HEA
took effect in 2000.
Before the provision's enactment, judges had the ability to
revoke student aid as part of the sentence for a drug
conviction, but chose not to do so in 99.8 percent of cases.
Congress added the aid elimination provision to the HEA in 2000
in order to make denial of aid mandatory in all cases.
ACLU stated at its legal papers that such a ban:
-- unconstitutionally punishes people twice for the same
offense, violating the double jeopardy clause of the
Fifth Amendment to the U.S. Constitution;
-- irrationally designates a class of people, those with
drug convictions, as unworthy of educational aid,
violating the equal protection guarantee of the Fifth
Amendment's due process clause; and
-- has a disproportionate effect on working class students,
who rely on financial aid to complete their educations.
The ACLU brought its lawsuit as a class action on behalf of
thousands of students nationwide who will be denied aid under
the provision. Among them are several individual students and a
national organization, Students for Sensible Drug Policy, whose
membership includes students affected by the law.
Margaret Spellings, Secretary of the U.S. Department of
Education, is named as the defendant in the suit.
The ACLU complaint may be viewed online at:
http://aclu.org/drugpolicy/gen/24712lgl20060322.html
The suit is "Students for Sensible Drug Policy Foundation et al.
v. Spellings," filed in the U.S. District Court for the District
of South Dakota under Judge Charles B. Kornmann. Representing
the plaintiffs is Ronald Arthur Wager of Bantz, Gosch & Cremer,
L.L.C. PO Box 970, Aberdeen, SD 57402-0970, PHone: 225-2232;
Fax: 225-2497; E-mail: rwager@bantzlaw.com.
UNITED STATES: Calif. Lawyer Admits Helping Milberg Hide Payment
----------------------------------------------------------------
Los Angeles, California attorney Richard R. Purtich pled guilty
to a felony tax offense in connection with his participation in
an alleged kickback scheme by Milberg Weiss Bershad & Schulman
LLP, AP Worldstream reports.
In court papers filed Monday, prosecutors accused Mr. Purtich of
receiving more than $2.5 million from New York-based Milberg
Weiss to help hide a payment the company made to Steven G.
Cooperman, a former client who served as a plaintiff in several
class actions.
Mr. Purtich was charged with one count of impeding the due
administration of Internal Revenue Service laws by concealing in
tax forms Mr. Cooperman's receipt of Milberg Weiss payments. He
faces up to three years in prison, one year of probation and a
fine.
Milberg Weiss and two of its senior partners were indicted on
May 18 by a federal grand jury for allegedly participating in a
scheme in which several individuals were paid millions of
dollars in secret kickbacks in exchange for serving as named
plaintiffs in more than 150 class actions and shareholder
derivative lawsuits. The firm allegedly received well over $200
million in attorneys' fees from these lawsuits over the past 20
years (Class Action Reporter, May 22, 2006).
The indictment charges the firm and the partners of conspiracy
with several objects, including obstructing justice, perjury,
bribery and fraud. The conspiracy count outlines a scheme in
which individuals received secret kickback payments to serve, or
cause friends and relatives to serve, as named plaintiffs in
lawsuits filed by Milberg Weiss (Class Action Reporter, May 22,
2006).
The federal probe into allegations against Milberg Weiss, which
once dominated class action law in the U.S., accounting for 85%
of all such suits filed in California and 60% elsewhere in 2001,
came to light in January 2002, when a flurry of subpoenas went
out to scores of lawyers and stockbrokers from major firms and
plaintiffs who had participated in Milberg Weiss lawsuits.
(Class Action Reporter, Jun. 29, 2005).
In June 2005, Seymour Lazar, a Palm Springs investor and former
entertainment lawyer was indicted, accused of collecting $2.4
million in "secret and illegal kickback payments" for his role
in dozens of lawsuits. (Class Action Reporter, Jun. 29, 2005)
In August 2005, Federal prosecutors stepped up their criminal
investigation of Milberg Weiss. The investigation looked at
whether the firm illegally made payments to plaintiffs to lead a
series of shareholder suits. Plaintiffs in such suits are not
permitted to receive payments beyond those awarded by courts, to
avoid conflict between their interests and those of the rest of
the class. (Class Action Reporter, Aug. 10, 2005)
The 1995 Private Securities Litigation Reform Act, which was
drafted with Milberg Weiss in mind, limits plaintiffs to no more
than five class actions in three years.
VERITAS SOFTWARE: Del. Court Allows Stock Suit to Move Forward
--------------------------------------------------------------
The U.S. District Court for the District of Delaware ruled
against VERITAS Software Corp.'s motion to dismiss the
consolidated securities class action filed against it, alleging
violations of federal securities laws, MarketWatch reports.
In a written opinion, District Court Judge Sue L. Robinson said
charges in the complaint, if proven, raised a "strong inference"
of fraud by Veritas executives who had a hand in the alleged
revenue inflation. Defendants in the suit includes Veritas;
Gary L. Bloom, president, chairman and chief executive at the
time of the alleged wrongdoing; Chief Financial Officer Edwin J.
Gillis; and John Brigden, general counsel.
On Jul. 7, 2004, a purported class action complaint was filed
against Veritas. The lawsuit alleges violations of federal
securities laws in connection with the company's announcement on
Jul. 6, 2004 that it expected its results of operations for the
fiscal quarter ended Jun. 30, 2004 to fall below estimates that
were earlier provided by the company. The complaint sought
unspecified amount of damages (Class Action Reporter, Feb. 17,
2006).
The suit is "Kuck v. Veritas Software, et al., Case No. 1:04-cv-
00831-SLR," filed in the U.S. District Court for the District of
Delaware under Judge Sue L. Robinson. Representing the
Plaintiff/s is Carmella P. Keener of Rosenthal, Monhait, Gross &
Goddess, Citizens Bank Center, Suite 1401, P.O. Box 1070,
Wilmington, DE 19899-1070, Phone: (302) 656-4433, E-mail:
CKeener@rmgglaw.com.
The defendants are represented by Erica Niezgoda Finnegan of
Cross & Simon, LLC, 913 North Market Street, 11th Floor, Suite
1001, Wilmington, DE 19801, Phone: (302) 777-4200, (302) 777-
4224, E-mail: efinnegan@crosslaw.com; and Peter J. Walsh, Jr. of
Potter Anderson & Corroon, LLP, 1313 N. Market St., Hercules
Plaza, 6th Flr., P.O. Box 951, Wilmington, DE 19899-0951, Phone:
(302) 984-6037, Fax: (302) 658-1192, E-mail:
pwalsh@potteranderson.com.
WORLDCOM INC: Disposal of Ex-CEO's Assets Nearing Completion
------------------------------------------------------------
The sale of the properties of former WorldCom Inc. chief
executive under a class action mandate is nearing the final
stages, according to the Daily Leader.
Several offers have been made on the property of Bernie Ebbers
in Lincoln County, said John Wheeler, a senior consultant for
Development Specialists Inc., of Chicago, the firm hired to
handle the sale.
The suit filed against Mr. Ebbers by investors who lost money
when WorldCom collapsed in 2002, calls for him to pay $5 million
up front and to place the remainder of his assets in a trust
that is expected to be sold for an estimated $25 million to $40
million.
An advertisement that appeared in The Daily Leader on May 7 and
10 revealed that Development Specialists has received a
qualified bid on approximately 823 acres in Lincoln County for
$1,111,050. Any competing bids must start at $1,186,050,
according to the report.
All monies from the sale of Mr. Ebber's property is to be
deposited in a fiduciary fund for disbursement to plaintiffs in
the class action, Mr. Wheeler said.
New Securities Fraud Cases
AMERICAN INT'L: Schiffrin & Barroway Files N.Y. Securities Suit
---------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class
action in the U.S. District Court for the Eastern District of
New York on behalf of all those who purchased MFS mutual funds
from the AIG Advisor Group (Parent company is defendant American
International Group, Inc. (NYSE: AIG)) from Jun. 30, 2000
through Jun. 8, 2005, inclusive.
During the Class Period, the AIG Advisor Group consisted of the
following broker-dealers: Royal Alliance, Inc., SunAmerica
Securities, Inc., FSC Securities Corp., Sentra Securities
Corporation, Spelman & Co., Inc., and Advantage Capital Corp.
On Jun. 8, 2005, the NASD announced that it had fined AIG in
connection with the receipt of directed brokerage in exchange
for preferential treatment for certain mutual fund companies and
certain mutual fund families (the Shelf-Space Funds).
The Shelf-Space Funds included the following mutual fund
families: AIG SunAmerica, AIM, AllianceBernstein, American
Funds, American Skandia, Columbia, Fidelity, Franklin Templeton,
Hartford, John Hancock, MFS, NationsFunds, Pacific Life,
Pioneer, Putnam, Oppenheimer, Scudder, Van Kampen, and WM Funds
Distributor, Inc.
The complaint charges AIG and certain of its affiliated entities
with violations of the Securities Exchange Act of 1934. More
specifically, the complaint alleges that the defendants, in
clear contravention of their disclosure obligations and
fiduciary responsibilities, failed to properly disclose that
they had been aggressively pushing sales personnel to sell the
Shelf-Space Funds that provided financial incentives and rewards
to AIG and its personnel based on sales.
Instead of offering fair, honest and unbiased recommendations to
investors, the AIG Financial Advisors gave pre-determined
recommendations, pushing clients into a pre-selected limited
number of mutual funds so that the Financial Advisors could reap
millions of dollars in kickbacks from the Shelf-Space Funds,
with which they had struck secret, highly lucrative deals to
profit at shareholders' expense.
The defendants' sales practices created a material
insurmountable conflict of interest between the defendants and
their clients by providing substantial monetary incentives to
sell Shelf-Space Funds, sales of which increased the defendants'
overall profits, but diminished investors' returns in the
process.
While Shelf-Space Funds were aggressively sold to investors, the
defendants failed to disclose any of these financial incentives
for selling such funds. The conflict of interest created by the
defendants' failure to disclose the incentives is a clear
violation of federal securities laws.
Interested parties may, no later than Jun. 6, 2006, move the
Court to serve as lead plaintiff of the class.
For more details, contact Darren J. Check, Esq. or Richard A.
Maniskas, Esq. of Schiffrin & Barroway, LLP, Phone: 1-888-299-
7706 or 1-610-667-7706, E-mail: info@sbclasslaw.com, Web site:
http://www.sbclasslaw.com.
AMERICAN INT'L: Schiffrin & Barroway Files N.Y. Securities Suit
---------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP, initiated a class
action in the U.S. District Court for the Eastern District of
New York on behalf of all those who purchased SunAmerica mutual
funds from the AIG Advisor Group (Parent company is defendant
American International Group, Inc. (NYSE: AIG)) from Jun. 30,
2000 through Jun. 8, 2005, inclusive.
During the Class Period, the AIG Advisor Group consisted of the
following broker-dealers: Royal Alliance, Inc., SunAmerica
Securities, Inc., FSC Securities Corp., Sentra Securities
Corporation, Spelman & Co., Inc., and Advantage Capital Corp.
On Jun. 8, 2005, the NASD announced that it had fined AIG in
connection with the receipt of directed brokerage in exchange
for preferential treatment for certain mutual fund companies and
certain mutual fund families (the Shelf-Space Funds).
The Shelf-Space Funds included the following mutual fund
families: AIG SunAmerica, AIM, AllianceBernstein, American
Funds, American Skandia, Columbia, Fidelity, Franklin Templeton,
Hartford, John Hancock, MFS, NationsFunds, Pacific Life,
Pioneer, Putnam, Oppenheimer, Scudder, Van Kampen, and WM Funds
Distributor, Inc.
The complaint charges AIG and certain of its affiliated entities
with violations of the Securities Exchange Act of 1934. More
specifically, the complaint alleges that the defendants, in
clear contravention of their disclosure obligations and
fiduciary responsibilities, failed to properly disclose that
they had been aggressively pushing sales personnel to sell the
Shelf-Space Funds that provided financial incentives and rewards
to AIG and its personnel based on sales.
Instead of offering fair, honest and unbiased recommendations to
investors, the AIG Financial Advisors gave pre-determined
recommendations, pushing clients into a pre-selected limited
number of mutual funds so that the Financial Advisors could reap
millions of dollars in kickbacks from the Shelf-Space Funds,
with which they had struck secret, highly lucrative deals to
profit at shareholders' expense.
The defendants' sales practices created a material
insurmountable conflict of interest between the defendants and
their clients by providing substantial monetary incentives to
sell Shelf-Space Funds, sales of which increased the defendants'
overall profits, but diminished investors' returns in the
process.
While Shelf-Space Funds were aggressively sold to investors, the
defendants failed to disclose any of these financial incentives
for selling such funds. The conflict of interest created by the
defendants' failure to disclose the incentives is a clear
violation of federal securities laws.
Interested parties may, no later than Jun. 6, 2006, move the
Court to serve as lead plaintiff of the class.
For more details, contact Darren J. Check, Esq. or Richard A.
Maniskas, Esq. of Schiffrin & Barroway, LLP, Phone: 1-888-299-
7706 or 1-610-667-7706, E-mail: info@sbclasslaw.com, Web site:
http://www.sbclasslaw.com.
CHINA ENERGY: Berman DeValerio Files N.Y. Securities Fraud Suit
---------------------------------------------------------------
Berman DeValerio Pease Tabacco Burt & Pucillo initiated a class
action against China Energy Savings Technology, Inc. (Nasdaq:
CESV.PK) in the U.S. District Court for the Southern District of
New York, accusing the company of securities law violations.
The complaint, filed as 06-cv-3890 on May 22, 2006, seeks
damages for violations of federal securities laws on behalf of
all investors who acquired China Energy securities from Apr. 21,
2005 through and including Feb. 15, 2006.
The lawsuit claims that China Energy and a number of individual
defendants violated Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. Sections 78j(b)
and 78t, and SEC Rule 10b-5, 17 C.F.R. Section 240.10b-5,
promulgated thereunder.
Based in Hong Kong, China Energy develops, manufactures, and
markets energy savings products to businesses in China.
According to the complaint, the defendants made materially false
and misleading statements about China Energy's financial results
during the Class Period, some contained in Securities and
Exchange Commission (SEC) filings.
In particular, the complaint says defendants failed to disclose
that:
-- insiders of the company were engaged in massive self-
dealing involving the company's January 2006 private
placement; and
-- the company was in violation of SEC Rules regarding
limitations on sales of restricted stock and, as a
result of this violation, trading of the company's
stock would be halted by Nasdaq.
In addition, the complaint accuses the defendants of falsely
stating that they had complied with the reporting requirement of
the SEC and U.S. Generally Accepted Accounting Principles and
had voluntarily complied with the reporting requirements of the
U.S. Sarbanes-Oxley Act.
On Feb. 15, 2006, as a result of the above-mentioned fraudulent
activities, Nasdaq announced that trading in shares of China
Energy had been halted, the complaint said.
Interested parties may move the court no later than Jun. 30,
2006 for appointment as lead plaintiff.
For more details, contact Jeffrey C. Block, Esq., Abigail R.
Romeo, Esq. and Jonathan Simpson, Esq. of Berman DeValerio Pease
Tabacco Burt & Pucillo, One Liberty Square, Boston, MA 02109,
Phone: (800) 516-9926, E-mail: law@bermanesq.com, Web site:
http://www.bermanesq.com/pdf/ChinaEnergy-Cplt.pdf.
CHINA ENERGY: Scott + Scott Files Securities Fraud Suit in N.Y.
---------------------------------------------------------------
Scott + Scott, LLC, filed a class action against China Energy
Savings Technology Inc. (CESV) and certain officers in the U.S.
District Court for the Southern District of New York. The
action is on behalf of China Energy securities purchasers during
the period Apr. 21, 2005 through Feb. 15, 2006, inclusive, for
securities law violations.
The complaint alleges that defendants made false and misleading
statements and material omissions regarding the company's
financial performance, including that the company's recent $50
million private placement was fraught with self-dealing. As a
result, the price of the company's securities was inflated
during the Class Period, thereby harming investors.
On Jan. 17, 2006, the company announced an underwriting
agreement to raise $50 million through a private placement of
company stock. The very same day, China Energy announced that
defendant Sun Li resigned as Chairman and CEO of the company and
immediately appointed defendant Kwun Luen Siu to replace him.
The complaint alleges, however, that the company did not
disclose that at the core of the $50 million private placement
was massive self-dealing -- over 6 million of the shares to be
sold were indirectly owned by defendant Li.
Moreover, the complaint details, defendants did not disclose
that defendant Li had recommended defendant Siu as his
replacement and that, prior to being vetted by defendant Li for
the role of China Energy CEO, defendant Siu had played an active
role in facilitating defendants' self-dealing.
According to the complaint, prior to the announcement of the
company's $50 million private placement, defendant Siu
introduced the investment group that would underwrite the
company's $50 million private placement offering to defendant Li
and the company.
Interested parties must move the Court no later than Jun. 30,
2006 for appointment as lead plaintiff.
For more details, contact Scott + Scott, LLC, Phone: (800) 404-
7770 and (860) 537-5537, E-mail: scottlaw@scott-scott.com, Web
site: http://www.scott-scott.com.
ESCALA GROUP: Schiffrin & Barroway Files Securities Suit in N.Y.
----------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP initiated a class
action in the U.S. District Court for the Southern District of
New York on behalf of all securities purchasers of Escala Group,
Inc. (ESCL) between Sept. 5, 2003 and May 10, 2006, inclusive.
The complaint charges Escala, its majority shareholder, its
auditor, and certain of its officers and directors with
violations of the Securities Exchange Act of 1934. More
specifically, the complaint alleges that the company failed to
disclose and misrepresented the following material adverse
facts, which were known to defendants or recklessly disregarded
by them:
-- that the company's business model was based on a fraud;
-- specifically, that Afinsa Bienes Tangibles, S.A.
(Afinsa), Escala's majority shareholder, was
overvaluing its stamp inventory in order to attract
investors and paying its investors with money from
newly arrived investors rather than generated revenue;
-- that Afinsa's revenue was generated through fraudulent
activities;
-- that the company lacked adequate internal controls; and
-- that, as a result of the above, the company's financial
statements were materially false and misleading.
On May 9, 2006, while the market was open, Escala announced that
Spanish judicial authorities, as part of what appeared to be an
investigation into the company's stamps-collectibles sector,
collected documents from Afinsa, Escala's majority shareholder.
In what the company believed was an extension of this process,
Spanish authorities also collected documents at Escala offices
in Madrid, during which time normal operations at these
locations were suspended.
The company also reported that it had been advised that certain
members of the board of directors of Afinsa, including Carlos de
Figueiredo, an Afinsa representative on Escala's board, were
being questioned.
Also on May 9, 2006, before the market closed, Spanish police
announced that they had arrested nine people in an anti-fraud
swoop.
Spanish police stated that the people under investigation were
suspected of pocketing a "substantial" amount of the money that
investors put into guaranteed-return funds run by Forum
Filatelico and Afinsa.
On this news, shares of Escala plummeted $19.77, or 61.78
percent, to close, on May 9, 2006, at $12.23 per share, on heavy
trading volume. Shares of Escala sank an additional $5.68, or
46.44 percent, the next day, to close, on May 10, 2006, at $6.55
per share, on heavy trading volume.
On May 11, 2006, Spanish authorities charged 11 people for their
involvement in the pyramid scheme, including 5 Afinsa
executives. On this news, shares of Escala dropped $2.21, or
33.74 percent, to close, on May 11, 2006, at $4.34 per share, on
heavy trading volume.
Interested parties may no later than Jul. 10, 2006, move the
Court to serve as lead plaintiff of the class.
For more details, contact Darren J. Check, Esq. and Richard A.
Maniskas, Esq. of Schiffrin & Barroway, LLP, 280 King of Prussia
Road, Radnor, PA 19087, Phone: 1-888-299-7706 or 1-610-667-7706,
E-mail: info@sbclasslaw.com, Web site:
http://www.sbclasslaw.com.
*********
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.
Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland
USA. Glenn Ruel Senorin, Maria Cristina Canson, and Janice
Mendoza, Editors.
Copyright 2006. All rights reserved. ISSN 1525-2272.
This material is copyrighted and any commercial use, resale or
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