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/raid1/www/Hosts/bankrupt/CAR_Public/070226.mbx C L A S S A C T I O N R E P O R T E R Monday, February 26, 2007, Vol. 9, No. 40 Headlines ACADEMY OF COURT: Students File Suit in Mich. Over Fake Degrees ALABAMA: Jefferson County Seeks Transfer of Property Tax Suit AMERICAS KITCHEN: Recalls Casserole for Possible Contamination AT&T INC: Judge Walker Denies Complete Stay in Surveillance Case AVIS BUDGET: N.J. Judge Dismisses Suit Over Refueling Charge BEST BUY: Recalls Remote Controls for Insignia 100W DVDs BIOMEDICAL TISSUE: Faces More than 100 Complaints in N.J. Court ENRON CORP: Judge Harmon Denies Motion to Delay Trial in "Newby" EXXON MOBIL: MTBE Pollution Suit by Fallston Residents Okayed FIRST HORIZON: Settles Loan Origination Fees Lawsuit for $36.3M KINDER MORGAN: N.Mex. High Court Grants Petition in "Heimann" LARI JEWELRY: Recalls Children's Rings for Lead Poisoning Risk MARRIOTT INTERNATIONAL: Bid to Dismiss Consumer Fraud Suit Fails MASSACHUSETTS: Arguments Heard in Suit Against National Guard METLIFE INC: Ind. Teachers Claim Fraud in 403(b) Plan Investment MICHIGAN: Faces Litigation Over "Flawed" Public Defense Systems NEW CENTURY: Lead Plaintiff Filing Deadline Set April 10 OHIO: Settles Lawsuit Over Legal Representation for Juveniles ROCK HILL: Judge Grants Final OK to Investors' Suit Settlement SALVATION ARMY: Sued by Former Residents of Eden Park Boys Home SONS OF GWALIA: Recent Ruling Raises Status of Investors' Claims SPELTER SMELTER: Parties Agree to Drop Defendant Nuzum Trucking STAR TRIBUNE: Firms File Suit in Minn. Over Advertising Rates SUDDENLINK COMMUNICATIONS: Sued Over High-Speed Internet Billing SUPERVALU INC: Faces Litigation in Minn. Over Mislabeled Meat TRANS CONTINENTAL: Faces Shareholder Suit in Fla. Circuit Court WASHINGTON: Suit Over Daycare Centers Liability Insurance Junked WOODWARD GOVERNOR: Ill. Court Approves $5M Labor Suit Settlement New Securities Fraud Cases NEW CENTURY: Cauley Bowman Announces Securities Suit Filing NOVASTAR FINANCIAL: Schatz Nobel Announces Securities Filing NOVASTAR FINANCIAL: Lerach Coughlin Announces Securities Suit WHITNEY INFO: Gutride Safier Announces Securities Suit Filing ********* ACADEMY OF COURT: Students File Suit in Mich. Over Fake Degrees --------------------------------------------------------------- The Academy of Court Reporting Inc. and three related companies are named defendants in a purported class action alleging that defendants defrauded about 1,500 students of more than $15 million by promising to award degrees it was not authorized to grant. The suit was filed in the U.S. District Court for the Eastern District of Michigan on Feb. 20. It is seeking damages as well as declaratory and injunctive relief. Other defendants in the suit include: -- Delta Career Education Corp., -- Gryphon Colleges Corp., and -- Gryphon Investors, Inc. Plaintiffs in the litigation are three students enrolled at the Clawson, Michigan campus of the Academy. They are: -- Misty Laturnus, -- Sonya Parker, and -- Tashelia Bobbitt According to the complaint, plaintiffs brought the suit on their own behalf and on behalf of the class of all other students who have been enrolled at the Clawson campus since at least 2002. Generally, the suit alleges that defendants fraudulently misrepresented to plaintiffs that the Clawson campus was accredited and authorized to grant Associate Degrees, when, in fact, the State of Michigan has never authorized the campus to grant degrees of any kind. A copy of the complaint is available free of charge at: http://researcharchives.com/t/s?1a4c The suit is "Bobbitt et al. v. Academy of Court Reporting, Incorporated et al., Case No. 2:07-cv-10742-DML-VMM," filed in the U.S. District Court for the Eastern District of Michigan under Judge David M. Lawson with referral to Judge Virginia M. Morgan. Representing the plaintiffs is Thomas H. Howlett of Googasian Law Firm, 6895 Telegraph Road, Bloomfield Hills, MI 48301-3138, Phone: 248-540-3333, Fax: 248-540-7213, E-mail: thowlett@googasian.com. ALABAMA: Jefferson County Seeks Transfer of Property Tax Suit ------------------------------------------------------------- Attorneys for Jefferson County are seeking to transfer to federal court a purported class action filed against the county over the collection of property taxes, The Birmingham News reports. Geneva Geter filed the case back in 2006 in Jefferson County Circuit Court, claming the county failed to notify her that she was due exemptions on her property taxes, then sold the house three times after she failed to pay her taxes. The suit contends that Ms. Geter should have been exempt from property taxes on the home. Ms. Geter claims that every time her home was sold for back taxes, the county failed to notify her of the pending sale, then didn't reimburse her for her costs each time she redeemed the home. She also claims that the county didn't tell her she was due a refund for taxes she had overpaid. Recently, Ms. Geter's attorney, Lee Loder, has sought class- action status for the case. However, the county has asked the state court to dismiss the case and combine it with similar suits pending U.S. District Court for the Northern District of Alabama that is headed toward a settlement. A decision on the request for a transfer has not been made. Lawyers in the federal case have asked Judge R. David Proctor to approve a settlement that includes the county's reimbursing property owners for profits the county made on some property sold for delinquent taxes from 1992 to 2005. The county has a pool of $32.5 million to make the payments, but the actual amount to be paid will be determined by a settlement administrator, who has not been named. J.T. Smallwood, the county's tax collector, estimated payments would total less than $1 million. For more details, contact Lee Wendell Loder, 1809 First Ave., N. Birmingham, AL 35203-3110, Phone: (205) 326-0566. AMERICAS KITCHEN: Recalls Casserole for Possible Contamination -------------------------------------------------------------- Americas Kitchen of Alpharetta, Georgia, is recalling its 32- ounce packages of "Wellsley Farms" Green Bean Casserole sold from Sept. 1, 2006 through Feb. 22, 2007 because they have the potential to be contaminated with Listeria monocytogenes, an organism which can cause illness, mild, moderate or even severe. Although healthy individuals may suffer only short-term symptoms such as high fever, severe headache, stiffness, nausea, abdominal pain and diarrhea, Listeria infection can cause more serious illness in young children, frail or elderly people and may even cause miscarriages or stillbirths. No illnesses have been reported to date in connection with this product. The recalled "Wellsley Farms" Green Bean Casserole was distributed nationwide in BJ's Wholesale Club retail stores. The product comes in a 32-ounce, clear plastic package marked with SKU # 19866. The potential for contamination was noted after routine testing revealed the presence of Listeria monocytogenes in a 32-ounce package of "Wellsley Farms" Green Bean Casserole. The production of the product has been suspended while the problem is being investigated. Consumers who have purchased 32-ounce packages of "Wellsley Farms" Green Bean Casserole marked SKU # 19866 are urged to return them to the place of purchase for a full refund. Consumers with questions may contact the company at 1-770-754- 0707 ext.1235. AT&T INC: Judge Walker Denies Complete Stay in Surveillance Case ---------------------------------------------------------------- U.S. District Judge Vaughn Walker ruled that the Electronic Frontier Foundation can go forward with elements of its class action against AT&T Inc. for collaborating with the government on illegal spying in ordinary Americans. In his ruling, Judge Walker opened the door to beginning the discovery process, allowing EFF to ask "limited and targeted" questions as long as those questions do not overlap with the issues under consideration in the 9th U.S. Circuit Court of Appeals. "The government wanted to put this case in the deep freeze," said EFF Staff Attorney Kurt Opsahl. The government and AT&T had earlier requested to freeze proceedings during an appeal. "Instead, the court has invited us to move forward with some targeted questions. We're glad to accept that invitation, which will allow progress while respecting the government's national security concerns." Judge Walker also refused to implement a blanket stay on the other telecommunications surveillance cases transferred to his court. He ruled that unless the parties stipulate to a stay, then "defendants will answer or otherwise respond to the complaint" by March 29. Earlier on Feb. 20, Judge Walker denied requests from media groups to unseal critical evidence in the AT&T case. "We're disappointed that the court did not choose to unseal all of the documents that include or refer to the evidence presented by Mark Klein and our expert, J. Scott Marcus. The government has already agreed that the evidence is neither classified nor a state secret, and is only being held under seal because of AT&T's weak trade secrecy claims," said Cindy Cohn, EFF's Legal Director. "Given that the privacy of millions of Americans is at stake, we strongly believe that the public would benefit from seeing this evidence for themselves." Judge Walker did grant the media groups' request to intervene, and said he might revisit the unsealing issue at a later date. For Judge Walker's full order: http://www.eff.org/legal/cases/att/stayorder220.pdf For more on EFF's case against AT&T: http://www.eff.org/legal/cases/att/ In 2006, a judicial panel of multidistrict litigation chaired by Wm. Terrell Hodges ordered the transfer of 17 purported class actions filed against several telecommunication companies to the Northern District of California under Judge Walker for coordinated or consolidated trial proceedings. Twenty-one pending lawsuits have been consolidated under the jurisdiction of a single court. The cases are consolidated as: "In re National Security Agency Telecommunications Records Litigation, MDL-1791." Master consolidated complaints have been filed for: * AT&T Mobility and Cingular Wireless: http://researcharchives.com/t/s?191a * BellSouth http://researcharchives.com/t/s?191b * Sprint Nextel http://researcharchives.com/t/s?191c * T-Mobile, Comcast, Transworld, and McLeod http://researcharchives.com/t/s?191d * Verizon and MCI http://researcharchives.com/t/s?191e Representing the plaintiffs are: (1) Cindy Ann Cohn of Electronic Frontier Foundation, 454 Shotwell Street, San Francisco, CA 94110, Phone: 415- 436-9333 x 108, Fax: (415) 436-9993, E-mail: cindy@eff.org; and (2) Jeff D. Friedman of Lerach Coughlin Stoia Geller Rudman & Robbins, LLP, 100 Pine Street, Suite 2600, San Francisco, CA 94111, Phone: 415-288-4545, Fax: 415-288- 4534, E-mail: JFriedman@lerachlaw.com. Representing the defendants are Bruce A. Ericson and Jacob R. Sorensen of Pillsbury Winthrop Shaw Pittman, LLP, 50 Fremont St., Post Office Box 7880, San Francisco, CA 94120-7880, Phone: (415) 983-1000, Fax: (415) 983-1200, E-mail: bruce.ericson@pillsburylaw.com and jake.sorensen@pillsburylaw.com. AVIS BUDGET: N.J. Judge Dismisses Suit Over Refueling Charge ------------------------------------------------------------ U.S. District Judge William Martini of the District of New Jersey granted a motion by rental company Avis Budget Group Inc. to dismiss a suit over its $5.99-a-gallon refueling charge, Bloomberg News reports. A customer, Andrew Ramon of San Antonio, filed the suit seeking class-action status on a claim that the $5.99-a-gallon cost charged by the company for refueling cars returned with less than full tanks is "unreasonably large" and illegal. The rate is $3.85 a gallon above the market rate. Judge Martini rejected Mr. Ramon's allegation of breach of contract saying the contract was clear and that Mr. Ramon "not only rejected the prepaid fuel option but agreed to the terms of the refueling service charge, an avoidable fee of $5.99 per gallon which was clearly identified and explained in the agreement." Judge Martini also rejected Mr. Ramon's arguments on several legal grounds, including that the charge violated New Jersey consumer fraud law. The complaint "fails to identify or describe any misrepresentations made by Budget with respect to the refueling service charge," Judge Martini wrote. The company operates Avis Rent a Car System, Budget Rent a Car System and Budget Truck Rental System. The suit is "Ramon v. Budget Rent a Car System, Inc., Case No. 2:06-cv-01905-WJM-MF." BEST BUY: Recalls Remote Controls for Insignia 100W DVDs -------------------------------------------------------- Best Buy Co. Inc., of Richfield, Minnesota, in cooperation with the U.S. Consumer Product Safety Commission, is recalling about 10,000 remote controls sold with Insignia 100W DVD Compact Shelf System. The company said that if the batteries are placed backwards in the remote control with the positive and negative sides improperly switched, overheating can result and present a burn hazard. Best Buy has received one report of a remote control overheating. No injuries have been reported. The white remote control has mode l number NS-A1113 and "Insignia" printed on the front. The keypad has black numbers/letters. The recalled remote controls were sold exclusively with the Insignia 100W DVD Compact Shelf System. The remote controls were not sold separately. These recalled remote controls were manufactured in China and are being sold at Best Buy retail stores nationwide, bestbuy.com and at bestbuybusiness.com from May 2006 through January 2007 for between $80 and $130 with the Insignia 100W DVD Players. Picture of recalled remote controls: http://www.cpsc.gov/cpscpub/prerel/prhtml07/07110.jpg Consumers are advised to stop using the remote control immediately and contact Best Buy to receive a free replacement remote. For additional information, contact Best Buy toll-free at (888) 809-7022 anytime or visit the firm's Web site: http://www.BestBuy.com. BIOMEDICAL TISSUE: Faces More than 100 Complaints in N.J. Court --------------------------------------------------------------- The court-appointed overseer of several lawsuits over the nationwide theft of human tissues and bones from cadavers for use in surgeries, is now handling more than a 100 complaints nationwide. The total number of claims sent to Judge William J. Martini of the U.S. District Court for the District of New Jersey has since mushroomed to 110 patients nationwide, according to The Record. The complaints were filed by New Jersey patients who fear they might have been exposed to infectious diseases from tainted tissue and bone taken from cadavers and sold by the now-defunct Biomedical Tissue Services laboratory. The leader of the scheme, Michael Mastromarino, owner of Biomedical Tissue Services, Inc., has been charged of operating a corrupt $4.6 million enterprise to harvest human tissue from funeral homes and sell it for use in transplants and research. Other defendants in the suit include Regeneration Technologies Inc., which processed and sterilized the body parts, and a subsidiary of Medtronic Sofamor Danek that distributed tissues. Plaintiffs are seeking class-action status for the suit. A major issue to be considered by the judge is whether there is a scientific consensus that sterilization of bone and tissue can rid them of all disease. "That could have a significant impact on how this case evolves," according to Judge Martini. One of the first suits to be filed was a federal case brought by Arlene Sechtin of Ventnor City. She filed her case as a class action in January 2006. In June 2006, the Judicial Panel on Multidistrict Litigation ruled that Ms. Sechtin's suit, four other New Jersey cases and one each from Ohio and Oklahoma would go through Judge Martini - - along with all future "tag-alongs." The Judicial Panel on Multidistrict Litigation, which sought to coordinate complex cases filed in numerous states, tapped Judge Martini for the task. Previous issues of the Class Action Reporter, mentions these cases against Biomedical Tissue: -- a suit filed by New Jersey lawyer Ken Andres Jr. in Superior Court in Atlantic County, New Jersey in December; -- a suit filed by plaintiff Brian Springer in Marion, Indiana Superior Court (Class Action Reporter, Feb. 10, 2006); -- a $210 million suit filed by Greg Monforton, President- Elect of the Ontario Trial Lawyers Association, in Windsor, Ontario, Canada (Class Action Reporter, Mar. 24, 2006); -- "Jackson v. Biomedical Tissue Services, Ltd. et al. (2:06-cv-01323-WJM-RJH)," filed in the U.S. District Court of New Jersey (Class Action Reporter, Mar. 27, 2006); and -- "Symonds v. Biomedical Tissue Services, Ltd., et al., Case No. 3:06-cv-03020-MWB," filed in the U.S. District Court for the Northern District of Iowa (Class Action Reporter, Apr. 28, 2006). For more details, contact Lawrence R. Cohan of Anapol, Schwartz, Weiss, Cohan, Feldman & Smalley, P.C., 1040 Kings Highway, N. Cherry Hill, NJ 08034, Phone: 1-866-735-2792, Web site: http://www.anapolschwartz.com/. ENRON CORP: Judge Harmon Denies Motion to Delay Trial in "Newby" ---------------------------------------------------------------- U.S. District Judge Melinda Harmon denied a motion by Merrill Lynch & Co., Credit Suisse First Boston and Barclays Plc in the suit, "Newby et al. v. Enron Corp., (H-01-3624)," to delay a trial while the 5th U.S. Circuit Court of Appeals rules on whether the case can proceed as a class action. On a Feb. 21 ruling, Judge Harmon said there should be no postponement, because of the uncertainty of when the appeals court would rule. Jury selection was set for April 9. The banks and investment firm defendants had requested the postponement saying the 5th Circuit's decision could significantly alter the definition of the lawsuit's class status as well as the claims and defenses to be presented at trial. Several weeks ago, Merrill Lynch & Co. and Credit Suisse First Boston asked the appeals court to end a class action by Enron investors, who are seeking the $40 billion that they lost when the energy trader collapsed in 2001. Both companies argued that Judge Harmon was wrong to allow the Enron investors to sue as a group. The point of the argument is whether the banks were "primary violators" and thus liable for losses from the company's bankruptcy. On Dec. 2, 2001, Enron filed for Chapter 11 bankruptcy. On July 5, Judge Harmon granted class-action status to shareholders' suit. In January, the federal court dismissed from the suit the estate of deceased former Enron Chairman Kenneth Lay and Vinson & Elkins, Enron's former outside law firms. Along with Merrill Lynch and Credit Suisse, the other defendants in the shareholders' suit are Royal Bank of Canada, Royal Bank of Scotland and Toronto-Dominion Bank. The University of California Board of Regents, lead plaintiff in a securities suit, has reached settlements with Lehman Brothers, Bank of America, the Outside Directors, Citigroup, JP Morgan Chase and CIBC totaling over $7 billion for investors. Lerach Coughlin Stoia Geller Rudman & Robbins LLP represents the Regents of the University of California. Representing the plaintiffs is Patrick J. Coughlin of Lerach Coughlin Stoia Geller Rudman & Robbins, LLP, Phone: (415) 288- 4545, E-mail: patc@lerachlaw.com, Web site: http://www.lerachlaw.com. EXXON MOBIL: MTBE Pollution Suit by Fallston Residents Okayed ------------------------------------------------------------- Judge Shira A. Scheindlin certified as class action a suit filed by Fallston (Maryland) residents against Exxon Mobil Corp. for future and past contamination of their wells by the gasoline additive methyl tertiary-butyl ether, Laura Barnhardt of the Baltimore Sun reports. Included in the suit are residents whose wells have been tainted by methyl tertiary-butyl ether and those whose wells have not shown levels of the additive but who may have been affected by declining property values. The suit will cover Fallston homeowners within 20 square miles of the contaminated area. The judge allowed members of the class to seek reimbursement from Exxon Mobil and a former Exxon station for the cost of medical testing to determine whether exposure to tainted water causes medical problems in the future. But the judge said those seeking reimbursement for medical testing couldn't be part of the class on those grounds alone, according to the report. Representing the plaintiffs are Mary V. Koch of Engel & Engel and Brower Piven (http://www.browerpiven.com/). FIRST HORIZON: Settles Loan Origination Fees Lawsuit for $36.3M --------------------------------------------------------------- First Horizon National Corp. reached a preliminary $36.3 million settlement in a class action related to the charging of certain loan origination fees to customers in Missouri. The company said the settlement is subject to court approval and is still subject to a fairness hearing later this year. In 2006, First Horizon entered into a verbal agreement in principle after a mediation, to settle the class action, which has been pending against it since 2000 (Class Action Reporter, Aug. 31, 2006). The case generally concerned the charging of certain loan origination fees, including fees permitted by Kansas and federal law but allegedly restricted or not permitted by Missouri law, when First Horizon Home Loans or its predecessor, McGuire Mortgage Co., made certain second-lien mortgage loans, most of them in the Kansas City market, which straddles Kansas and Missouri. KINDER MORGAN: N.Mex. High Court Grants Petition in "Heimann" ------------------------------------------------------------- The New Mexico Supreme Court granted a petition for writ of certiorari filed by Kinder Morgan in a purported class action filed by J. Casper Heimann, Pecos Slope Royalty Trust and Rio Petro Ltd. against Kinder Morgan CO2 Co., L.P. The suit, No. 04-26-CL., was filed individually and on behalf of all other private royalty and overriding royalty owners in the Bravo Dome Carbon Dioxide Unit, New Mexico. This case -- originally filed in the 8th Judicial District Court, Union County New Mexico -- involves a purported class action against Kinder Morgan CO2 Co., L.P. alleging that it has failed to pay the full royalty and overriding royalty (royalty interests) on the true and proper settlement value of compressed carbon dioxide produced from the Bravo Dome Unit in the period beginning Jan. 1, 2000. The complaint purports to assert claims for violation of the New Mexico Unfair Practices Act, constructive fraud, breach of contract and of the covenant of good faith and fair dealing, breach of the implied covenant to market, and claims for an accounting, unjust enrichment, and injunctive relief. The purported class is comprised of current and former owners, during the period January 2000 to the present, who have private property royalty interests burdening the oil and gas leases held by the defendant, excluding the Commissioner of Public Lands, the U.S. of America, and those private royalty interests that are not unitized as part of the Bravo Dome Unit. Plaintiffs allege that they were members of a class previously certified as a class action by the U.S. District Court for the District of New Mexico in the matter, "Doris Feerer, et al. v. Amoco Production Company, et al., Case No. 95-0012." Plaintiffs also allege that Kinder Morgan CO2 Co.'s method of paying royalty interests is contrary to the settlement of "Feerer." Kinder Morgan CO2 Co. has filed a motion to compel arbitration of this matter pursuant to the arbitration provisions contained in the Feerer suit settlement agreement, which motion was denied by the trial court. Kinder Morgan appealed that ruling to the New Mexico Court of Appeals. Oral arguments took place before the New Mexico Court of Appeals on March 23, 2006, and it affirmed the district court's order on Aug. 8, 2006. Kinder Morgan filed a petition for writ of certiorari in the New Mexico Supreme Court. The New Mexico Supreme Court granted the petition on Oct. 11, 2006. LARI JEWELRY: Recalls Children's Rings for Lead Poisoning Risk -------------------------------------------------------------- Lari Jewelry Co., of New Orleans, Louisiana, in cooperation with the U.S. Consumer Product Safety Commission, is recalling about 115,000 "Claudia Jublot" children's rings. The company said the recalled jewelry contains high levels of lead. Lead is toxic if ingested by young children and can cause adverse health effects. No injuries have been reported. The recalled rings are silver in color with red paint and a simulated diamond cluster on the top. The ring's packaging is a yellow card with "Claudia Jublot" printed on the front and UPC # "1524100121266045" on the back. These recalled children's rings were manufactured in China and are being sold at Big Lots! stores nationwide from October 2004 through January 2006 for about $3. Picture of recalled children's rings: http://www.cpsc.gov/cpscpub/prerel/prhtml07/07114.jpg Consumers are advised to immediately take this jewelry away from children. Further, consumers are advised to return the recalled jewelry to the store where purchased for a full refund. For additional information, contact Lari Jewelry Co. toll-free at (866) 524-0024 anytime or visit the Big Lots! Web site: http://www.biglots.com. MARRIOTT INTERNATIONAL: Bid to Dismiss Consumer Fraud Suit Fails ---------------------------------------------------------------- Judge Gladys Kessler of the U.S. District Court for the District of Columbia denied Marriott International, Inc.'s attempt to dismiss a class action alleging that Marriott misrepresents its room rates at its hotels in Moscow, Russia. In 2005, the Cullen Law Firm, PLLC initiated a consumer class action in the Superior Court of the District of Columbia against Marriott International, Inc., on behalf of all guests of Marriott's hotels in Moscow since May 13, 2002 (Class Action Reporter, May 17, 2005). The complaint, filed under the District of Columbia Consumer Protection Procedures Act, alleges that Marriott made deceptive and misleading representations through its worldwide, internet- based reservation system on the rates that would be charged at its hotel properties in Russia. According to the complaint, Marriott quotes rates in U.S. dollars knowing that the final hotel bill will be paid in Russian rubles in amounts that are higher than those calculated at the official exchange rate. Hotel guests find out about the problem when they get their credit card statement in dollars. According to the complaint, consumers generally end up paying 18 percent more than the amount quoted by Marriott when their reservations were made. Earlier, Judge Kessler denied Marriott's motion to dismiss the complaint, finding that the District of Columbia has a stronger interest than any other potential jurisdictions in protecting the interests of residents of the District of Columbia and in regulating the business practices of its corporate citizens. The Court rejected Marriott's argument that the claims should be litigated in a Russian court under Russian law because the events occurred in Russia. The court found that the witnesses and evidence necessary to prove plaintiffs' allegations are more convenient to the District of Columbia than to Moscow, stating that the accuracy of information available on Marriott's website and the policies relating to the website are more likely to be formulated at Marriott's headquarters in D.C. than at the Moscow hotel. Judge Kessler determined that the plaintiffs' claims would be governed by the law of the District of Columbia. The court recognized that the plaintiffs were all either American citizens or legal residents, and that Marriott's own representations to the public establish its headquarters in the District of Columbia. The complaint points to numerous public statements made by Marriott that it is headquartered in the nation's capitol. However, it argued to Judge Kessler that it was really headquartered in Maryland. Judge Kessler found that these inconsistent positions further supported the application of District of Columbia law. Additionally, the allegations of wrongdoing are brought under a District of Columbia statute. The court held that the "District of Columbia, with its interests in protecting consumers and promoting fair business practices by corporate entities headquartered within the city limits, has the most significant relationship to this case." The court also found that the D.C. consumer protection law can be applied to residents outside the District of Columbia, citing cases approving the application of the statute in a class action context where potential class members claims arose outside of the District of Columbia. "These findings by the Court will go a long way in supporting class-wide relief for all those who have been harmed by the alleged practices," said Paul D. Cullen, Sr., counsel for the plaintiffs in this case. Mr. Cullen estimates that there have been several hundred thousand of hotel guests victimized by the deceptive practices alleged in the complaint during the period covered by the three- year statute of limitations. The complaint seeks statutory damages of $1,500 per violation of the D.C. Consumer Protection Procedures Act, plus injunctive relief restraining Marriott from continuing the alleged conduct. A copy of the judge's decision is available free of charge at: http://ResearchArchives.com/t/s?1a54 The suit is "Shaw v. Marriott International, Inc., Case No. 1:05-cv-01138-GK," filed in the U.S. District Court for the District of Columbia under Judge Gladys Kessler. Representing the plaintiffs are Daniel Eric Cohen and Paul Damian Cullen, both of The Cullen Law Firm, PLLC, 1101 30th Street, NW, Suite 300, Washington, DC 20007, Phone: (202) 944- 8600, Fax: (202) 944-8611, E-mail: dec@cullenlaw.com or pdc@cullenlaw.com. Representing defendants are (1) Benjamin S. Boyd and Jeffrey E. Gordon both of DLA Piper US, LLP, 1200 19th Street, NW, 7th Floor, Washington, DC 20036-2430, Phone: (202) 861-3900 or (410) 580-3000, Fax: (202) 223-2085, E-mail: benjamin.boyd@piperrudnick.com or jeffrey.gordon@dlapiper.com; and (2) Sonia Cho of DLA Piper Rudnick Gray Cary US, LLP, 6225 Smith Avenue, Baltimore, MD 21209, Phone: (410) 580- 4156, Fax: (410) 580-3156, E-mail: sonia.cho@dlapiper.com. MASSACHUSETTS: Arguments Heard in Suit Against National Guard ------------------------------------------------------------- The U.S. District Court for the District of Massachusetts is to rule soon on whether a lawsuit accusing the state's National Guard of shortchanging soldiers can be turned into a class action, Jack Flynn of The Republican reports. In a Feb. 21 hearing, Judge Richard G. Stearns said that he will decide whether to expand the suit to allow other plaintiffs, transfer it to the U.S. Court of Federal Claims in Washington, D.C., or dismiss it, as requested by the U.S. Attorney's office. Previously, Assistant U.S. Attorney Mark Quinlivan argued that the case, which names the U.S. Department of Defense as a defendant, should be dismissed or transferred to the Court of Federal Claims, which handles suits against the government for monetary damages. However, John Shek, a Boston attorney representing the four lead plaintiffs in the case, argued that the case falls under the jurisdiction of the district court. Case Background In 2006, four soldiers claimed that they were denied reimbursement for meals, travel and lodging while guarding potential targets after the Sept. 11, 2001 terrorist attacks (Class Action Reporter, Oct. 13, 2006). Specific plaintiffs named are Sgt. Steven M. Littlefield, of Manomet; Sgt. Wayne R. Gutierrez, of New Bedford; retired Capt. Louis P. Tortorella, of Brookline, New Hampshire; and Spc. Joseph P. Murphy, of Derry, New Hampshire. They were among many National Guardsmen activated for temporary duty in early December 2001. In the post Sept. 11 anti-terror environment, their assignments included security patrols, lock- downs and construction projects at bases across the state. The suit names the Department of Defense and the Massachusetts National Guard as defendants. It seeks $73 million in compensation and argues there could be as many as 1,000 Massachusetts National Guard soldiers who deserve reimbursements. The suit is "Tortorella et al. v. U.S. of America et al., Case No. 1:06-cv-10054-RGS," filed in the U.S. District Court for the District of Massachusetts under Judge Richard G. Stearns. Representing the plaintiffs are: (1) John R. Shek of Weston, Patrick, Willard & Redding, PA, 84 State Street, 11th Floor, Boston, MA 02109-2299, Phone: 617-742-9310, Fax: 617-742-5734, E-mail: jrs@wpwr.com; and (2) Constance A. Driscoll of Stevens Law Office, 127 Mountain Road, P.O. Box 1200, Stowe, VT 05672, US, Phone: 802-253-8547, Fax: 802-253-9945, E-mail: constance.driscoll@stowelawyers.com. Representing the defendants are: (i) Mark T. Quinlivan, United States Attorney's Office, 1 Courthouse Way, Boston, MA 02210, Phone: 617-748-3606, Fax: 617-748-3969, E-mail: mark.quinlivan@usdoj.gov; and (ii) Brian M. Donovan, Office of the Attorney General, Room 1813, One Ashburton Place, Boston, MA 02108, Phone: 617-727-2200, Fax: 617-727-3076, E-mail: brian.donovan@ago.state.ma.us. METLIFE INC: Ind. Teachers Claim Fraud in 403(b) Plan Investment ---------------------------------------------------------------- Several Indiana teachers filed a lawsuit against Metlife Inc. and the Indiana Teachers' Association Administrative Services over an alleged conspiracy that favored investing retirement funds with Metlife, reports say. Merrillville attorney Glenn Vician represents plaintiffs: -- Daniel Spears, from Porter County; -- Katherine Lang, from Porter County; -- Daniel Massa, from Porter County; -- Jeffrey Yelton, from Lake County; and -- Raymond Commers, from LaPorte County. They accuse the defendants of rigging retirement options to favor Metlife. The suit was filed in Lake County Superior Court in Crown Point, Indiana on Feb. 16, according to Herald-Argus. The Indiana Legislature in June 2002 passed a bill allowing school corporations that fund teacher retirement plans to borrow funds to pay accrued teacher retirement obligations. Teachers could then choose to invest into 403(b) plans. The suit alleges Metlife and the Indiana Teachers' Financial Services Corp. is in violation of the Indiana Securities Act, the Indiana Consumer Deceptive Practices Act and the Rackateer Influence and Corrupt Organization Act. It contends Metlife paid Indiana Teachers' Association Administrative Services to promote Metlife over other insurance options in an effort to control up to $1 billion in retirement funds. It asks for "an amount equal to three times the actual damage, the cost of this action, attorney fees and punitive damages." Glenn S. Vician is with Bowman, Heintz, Boscia & Vician, 8605 Broadway, Merrillville, IN 46410-5598, Phone: (219) 769-6671 or (800) 228-8996, Fax: (219) 738-3044 or (317) 231-6570. MICHIGAN: Faces Litigation Over "Flawed" Public Defense Systems --------------------------------------------------------------- The State of Michigan and Governor Jennifer Granholm were named as defendants in a purported class action alleging that they failed to fulfill their constitutional obligation to provide adequate defense services to those who cannot afford private counsel. The suit, "Duncan et al. v. State of Michigan," was filed in Ingham County Circuit Court. It does not ask any monetary damages, but seeks class-action status with the aim of improving indigents' defense system statewide. It claims that the state has long abdicated its constitutional duty to ensure that citizens accused of crimes receive timely, qualified, appropriately-resourced lawyers for their defense. Plaintiffs in the case are individuals facing felony charges in Berrien, Muskegon and Genesee Counties who cannot afford private counsel. They brought the suit on behalf of themselves and all defendants in Berrien, Muskegon, and Genesee Counties, who are charged or will be charged with felony crimes and who cannot afford private counsel, and are instead relying on public defenders. According to the suit, public defenders are burdened by overwhelming caseloads and don't meet with clients or have enough time to prepare for important proceedings. Essentially, the suit calls on the court to declare the current public defense systems of three counties - Muskegon County, Berrien County, and Genesee County - unconstitutional and compel the state to provide representation consistent with national standards and constitutional norms. Backing the plaintiffs in the litigation is the newly formed Michigan Coalition for Justice, a diverse group of organizations and individuals committed to reform of Michigan's public defense system. Michigan Coalition for Justice members include the American Civil Liberties Union, the ACLU of Michigan, the Brennan Center for Justice, the law firm of Cravath, Swaine & Moore, and the National Association of Criminal Defense Lawyers. A copy of the complaint is available free of charge at: http://researcharchives.com/t/s?1a4d For more details, contact Stephanie Chang of The Michigan Coalition for Justice, 60 W. Hancock, Detroit, MI 48201 Phone: (313) 578-6808, E-mail: schang@aclumich.org, Web site: http://www.micoalitionforjustice.org/. NEW CENTURY: Lead Plaintiff Filing Deadline Set April 10 -------------------------------------------------------- Pomerantz Haudek Block Grossman & Gross LLP reminds investors of New Century Financial Corp. (NEW) that April 10, 2007 is the deadline to ask the court for appointment as lead plaintiff. Pomerantz filed a class action in the U.S. District Court, Central District of California, against New Century and certain officers, on behalf of purchasers of the common stock of the company during the period from May 4, 2006 through Feb. 7, 2007, inclusive. The complaint alleges violations of Section 10(b) and Section 20(a) of the U.S. Securities Exchange Act, and Rule 10b-5 promulgated there under. New Century is a real estate investment trust and mortgage finance company with headquarters in Irvine, California. The company operates nationwide through its mortgage origination subsidiaries, New Century Finance Corporation and Home123 Corporation. The complaint alleges that defendants materially overstated earnings, understated loan repurchases losses, failed to establish a sufficient load repurchase loss reserve, and violated Generally Accepted Accounting Principals in various press releases and quarterly reports filed with the U.S. Securities and Exchange Commission. In particular, defendants: -- failed to include the expected discount upon disposition of loans when estimating allowances for loan repurchase losses; and -- refused to properly consider the increasing volume of repurchase requests and thereby failed to apply the proper methodology for estimating the volume of anticipated repurchase claims for calculating the repurchase reserve calculation. On Feb. 7, 2007, defendants issued a press release admitting that they had failed to properly apply GAAP, withdrawing reliance on the previously-filed 10-Q quarterly reports for the first three quarters of 2006, and conceding that they would have to materially restate New Century's financials to reflect the proper accounting for loan repurchase losses. The Pomerantz Firm on the Net: http://www.pomerantzlaw.com, Contact Teresa L. Webb (tlwebb@pomlaw.com) or Carolyn S. Moskowitz (csmoskowitz@pomlaw.com), Toll-free number: 888.476.6529 (or 888.4-POMLAW). OHIO: Settles Lawsuit Over Legal Representation for Juveniles ------------------------------------------------------------- A federal court preliminarily approved on Jan. 12 a settlement between the state's Department of Youth Services and plaintiffs in a suit alleging the government illegally denies legal representation to juvenile offenders, according to Associated Press. A final approval hearing is set March 6. Under the settlement, the department will create a formal program to make it easier for offenders to find lawyers and file claims over the length or conditions of their detention. The state did not admit wrongdoing. The Children's Law Center, the American Civil Liberties Union and private lawyers representing the juveniles will get $190,000 in fees and expenses under the settlement. The suit was filed three years ago by the Children's Law Center, an advocacy group in Covington, Kentucky. It claims that the plaintiffs were routinely denied access to lawyers when they wanted to pursue grievances against Youth Services in court. The lead plaintiff had been sexually assaulted by a guard while in custody. She won an undisclosed settlement last year in the Ohio Court of Claims, said her lawyer, Benson Wolman executive director of the Equal Justice Foundation in Columbus. Because of that settlement, a separate federal lawsuit was recently dismissed, according to the report. ROCK HILL: Judge Grants Final OK to Investors' Suit Settlement -------------------------------------------------------------- The settlement of two class actions brought by shareholders of the now-defunct Rock Hill Bank and Trust (RHB&T) was given final approval recently, WIS TV reports. At a Feb. 23, 2007 final hearing at the York County Courthouse in South Carolina, 5th Circuit Judge Ernest Kinard Jr. of Camden approved the settlement of two class actions brought by shareholders of RHB&T. Under the settlement, 1,100 shareholders will split $1.3 million or $1.02 per share. Lawsuits were filed against RHB&T after irregularities were found in the commercial loan department of the company. Named in the suits are two bank officers and eight directors, former president Rob Herron, and the accounting firm of Tourville Simpson and Caskey, which was dissolved and sold. The class action states that the bank had losses two straight years because of employee misconduct. It also claims officers and directors failed to monitor employees and loan activity. Rock Hill was subsequently sold to the South Financial Group, which held 22% of RHB&T's stock at the time, for $8.8 million as part of a recovery plan. A $2.1 million preliminary settlement was reached later for two class actions brought by shareholders (Class Action Reporter, Dec. 22, 2006). Court documents revealed that the agreement essentially gives members of one of the suits about $2,095,000, or $1.02 per share after expenses and fees. Another $100,000 is proposed for settling the second lawsuit, which was thrown out of court in January and is currently being appealed (Class Action Reporter, Feb. 20, 2007). Plaintiffs are represented by T. English McCutchen, 1414 Lady Street Columbia, South Carolina 29201, Phone: (803) 799-9791, Fax: (803) 253-6084, E-mail: emccutchen@mbjb.com, Web site: http://www.mbjb.com. SALVATION ARMY: Sued by Former Residents of Eden Park Boys Home --------------------------------------------------------------- The Salvation Army is facing a class action filed by 13 former residents at the former Eden Park Boys Home in Mt. Barker, Adelaide Hills, Australia. The plaintiffs claim they were abused by workers while at the center, the Sunday Mail (SA), reports. The lawsuit is seeking several millions in compensation. A case conference is set on March 8 and 9 in Adelaide. The Salvation Army and the South Australian Government jointly ran the home, which was closed in 1982. Representing the plaintiffs is lawyer Peter Humphries. SONS OF GWALIA: Recent Ruling Raises Status of Investors' Claims ---------------------------------------------------------------- The High Court of Australia dismissed appeals by administrators of Sons of Gwalia Limited and ING Investment Management LLC -- a major unsecured creditor of the company -- against earlier judgments by the Federal Court of Australia in a fraud suit filed by a shareholder against the company. On March 1, 2006, Luka Margaretic initiated a legal action against Sons of Gwalia claiming that the company has breached continuous disclosure obligations and engaged in misleading and deceptive conduct. An earlier ruling by a federal court in the case stated that a claim by a shareholder on the basis of misrepresentations by the company was not brought in his capacity as a shareholder and therefore was not subordinate to the claims of conventional unsecured creditors. In recent developments, Chief Justice Murray Gleeson said in his ruling that it is important that defrauded shareholders had equal standing with creditors since they are most in need of protection when a company goes bust, according to The Australian. The decision effectively elevated a group of shareholder claims to equality with the claims of the general body of unsecured creditors. It means that shareholders of the Western Australian gold mining company who are part of an IMF (Australia) Ltd.- funded class action will rank equally with unsecured creditors for any distribution. On Nov. 26, 2004, IMF announces its decision to proceed with litigation funding for shareholders of Sons of Gwalia, claiming damages by virtue of the failure of the company to keep the market continuously informed as to its gold reserves and resources and its forward sale commitments, according to information posted at the Web site of deListed, a division of BRG Pacific Pty Ltd. In February 2006, Sons of Gwalia -- http://sog.com.au/-- announced that it will undertake an operational restructure. It is under a Deeds of Company Arrangement. SPELTER SMELTER: Parties Agree to Drop Defendant Nuzum Trucking --------------------------------------------------------------- All parties involved in the Spelter Smelter class action agreed to dismiss defendants Joe Paushel and Nuzum Trucking Co. from the suit during a monthly status hearing held on Feb. 22 in Harrison County Circuit Court, WBOY-TV (West Virginia) reports. The parties did not agree to formally dismiss T.L. Diamond and Co., but will discuss their involvement at a later date. Another issue in the hearing concerns the parties that have opted out of the case. Attorneys for the plaintiffs said there were about 7,200 properties affected by this case, 133 of them have opted out of the suit. In the suit, plaintiffs who are residents in West Virginia allege that hazardous substances from the Spelter Smelter facility, located in Spelter, Harrison County, West Virginia, have been released onto private real property in the Class Area, and that these substances have health risks. Plaintiffs allege that the released hazardous substances include arsenic, cadmium and lead. Name plaintiffs are Lenora Perrine, Carolyn Holbert, Waunona Messinger Crouser, Rebeccah Morlock, Anthony Beezel, Mary Montgomery, Mary Luzader, Truman r. Desist, and Larry Beezel, and Joseph Bradshaw. Defendants dispute that hazardous substances from the Spelter Smelter facility have covered the entire class area, and dispute that plaintiffs are entitled to any damages, medical monitoring, or other relief. On Sept. 14, 2006, Honorable Thomas A. Bedell certified two classes, and determined that the claims in this case be maintained as a class action: -- The Property Class consists of those who currently own, or who on or after Dec. 1, 2003 have owned, private real property lying within the Class Area; -- The Medical Monitoring Class consists of those who currently reside, or who at any time in the past have resided for a total of 277 days on private real property lying within the Class Area. Excluded from the Property Class are those who owned property within the class area, but only before Dec. 1, 2003 or only after Sept. 14, 2006. Excluded from the Medical Monitoring Class are persons who resided in the Class Area less than a total of 277 days. Also excluded from the class action are defendants in this case, any entity in which a defendant has a controlling interest, or a current employee, officer, director, legal representative, heir successor, assign, or spouse of a defendant in this case. Parties will decide what issues to bring up on the jury questionnaires at next month's status hearing, according to the report. The remaining defendants, excluding T.L. Diamond & Company, Inc., are: * E.I. Du Pont Nemours and Co., * Meadowbrook Corp., * Matthiessen & Hegeler Zinc Company, Inc. The suit is Case No. 04-C-296-2. Representing the plaintiffs are: (1) Mike Papantonio, Virginia Buchanan, Steven A. Medina, Neil E. McWilliams, Jr. at Levin, Papantonio, Thomas, Mitchell, Echsner & Proctor, P.A., P.O. Box 12308 316 S. Baylen Street, Suite 600, Pensacola, Florida 32591, Toll-free: 1-888-435-7001, Fax: 850-436-6074; (2) J. Farrest Taylor and Angela Mason at Cochran, Cherry, Givens, Smith, Lane & Taylor, P.C., 163 W. Main Street Dothan, Alabama 36302, Toll-free: 1-888-526-2472, Fax: 334-793-8280; (3) Gary W. Rich at the Law Office of Gary W. Rich, L.C., Brock, Reed & Wade Building, 212 High Street, Suite 223 Morgantown, West Virginia 26505, Phone: 304-292-1215; (4) Perry Jones at West & Jones, 360 Washington Avenue Clarksburg, West Virginia 26302, Phone: 304-624-5501; (5) Robert F. Kennedy, Jr. and Kevin Madonna at Kennedy & Madonna, L.L.P., 48 Dewitt Mills Road, Hurley, New York 12443, Phone: 845-331-7514. STAR TRIBUNE: Firms File Suit in Minn. Over Advertising Rates ------------------------------------------------------------- The Star Tribune of Minneapolis, Minnesota faces a purported class action filed by advertisers who are claiming that the newspaper overstated circulation figures and charged excessively high advertising rates, The Pioneer Press reports. Coon Rapids Lincoln Mercury, Inc. and Custom Search Inc. filed the suit. However, just recently an attorney revealed that Custom Search is pulling out of case. The suit was filed in Hennepin County District Court back in October 2006. It seeks class-action status for all Star Tribune advertisers from 2001 through 2006. Basically, the suit alleges that the Star Tribune dumped excess newspapers on businesses such as hotels and on schools, inflating its circulation figures during key reporting times that help determine advertising rates. For its part, Ben Taylor, Star Tribune's senior vice president for marketing and communications, has stated that circulation audits by an industry group showed that no adjustments were required for newspaper's reported numbers. According to Mr. Taylor, The Audit Bureau of Circulations has stated that they are "squeaky clean." "That will be our position in court," he adds. SUDDENLINK COMMUNICATIONS: Sued Over High-Speed Internet Billing ---------------------------------------------------------------- Internet customer Laura Alvis of Charleston, West Virginia is suing Suddenlink Communications, formerly Cebridge Communications, claiming she was overcharged $10 a month for high-speed Internet service, Kris Wise of the Daily Mail reports. Ms. Alvis claim she was billed $39.99 a month to subscribe to the company's 384K high-speed Internet service that the company allegedly advertised for $29.99 a month. She wants to represent a class of Suddenlink customers who subscribed to the same service and were overcharged. The suit was filed in Kanawha County Circuit Court on Feb. 8 and already has been assigned to Judge Tod Kaufman. Ms. Alvis is seeking no more than $75,000 in damages. All potential plaintiffs in the class action are altogether seeking no more than $5 million in damages, according to the report. Ms. Alvis' attorney is Harry F. Bell of Bell & Bands PLLC -- http://www.belllaw.com/ -- in Charleston. Suddenlink Communications on the Net: http://www.suddenlink.com/ SUPERVALU INC: Faces Litigation in Minn. Over Mislabeled Meat ------------------------------------------------------------- Supervalu Inc. faces a purported class action in Anoka County, Minnesota over allegations that it has mislabeled beef at Cub Foods stores in the state, KARE 11 reports. Michael Olson and John Wylde, a pair of grocery store shoppers filed the suit, claiming that ordinary beef was labeled as a more expensive Black Angus cut. According to plaintiffs' attorney Guy Burns, two former meat department employees who worked at several Cub stores said the practice was widespread and dated back at least five years. The meat cutters were not named in the lawsuit, which seeks class- action status. Mr. Wylde, who was asked to put his name on the lawsuit, since he lives in Coon Rapids and buys meat at Cub Foods, said that his main goal in filing the suit is just to have the alleged fraudulent labeling practice stopped. Mr. Burns and his colleagues are hoping that through the use an audit trail, they will be able prove that meat, which was labeled as Black Angus in the store actually came from boxes of meat that were not Black Angus. TRANS CONTINENTAL: Faces Shareholder Suit in Fla. Circuit Court --------------------------------------------------------------- Two investors of Trans Continental Airlines filed a lawsuit seeking class-action status against the company and its owner Lou Pearlman, Tampa Bay's 10 reports. The shareholders are Nickolas Epsilantis of Palm Harbor, Florida and Steven Sarin, a New York dentist. They filed the claim Feb. 24. It was filed in Orange Circuit Court, according to Scott Powers of The Sentinel. Attorney for the plaintiff, Clay Townsend, is seeking certification of the suit as a class action on behalf of 1400 investors in Trans Continental. The suit is the first to seek class-action status, according to reports. Also, approximately 75 other investors have hired Tampa attorney James Lowy to sue Mr. Pearlman and additional defendants in federal court. Mr. Pearlman has resigned from the company, according to a court record, which appeared last week in a suit by Integra Bank of Indiana in U.S. District Court in Orlando. Integra is suing Mr. Pearlman and Trans Continental Airlines on claims that the company and Mr. Pearlman defaulted on a loan. The company is also facing charges of defrauding investors and depositors of more than $100 million by Florida's Office of Financial Regulation. Clay M. Townsend is with Morgan & Morgan, P.A., 20 N. Orange Avenue, 16th Floor, P.O. Box 4979, Orlando, Florida 32802-4979 (Orange Co.), Phone: 407-420-1414, 16th Fax: 407-425-8171, 9th Fax: 407-841-9520, 10th Fax: 407-425-9858. WASHINGTON: Suit Over Daycare Centers Liability Insurance Junked ---------------------------------------------------------------- Judge J. Robin Hunt of the Court of Appeals of the state of Washington, Division II, dismissed a class action against the state for alleged failure to implement a state statute that would provide liability insurance for daycare providers unable to get private insurance. The suit was filed on March 3, 2006 in behalf of Terry Linville, his wife, their child, and two other children's families supposedly on behalf of a class of children sexually abused in private, state-licensed, daycare facilities whose private liability insurance policies excluded coverage for such abuse. The Linville plaintiffs sued the State of Washington, without naming a specific state agency. They claim that the State failed to act on a mandate to create a Joint Underwriting Agency that would provide liability insurance for daycare providers otherwise unable to obtain insurance in the private market. The Linville plaintiffs did not, however, also sue the individual daycare providers where the children were abused. The Linville plaintiffs argue that a trial court wrongly denied their request for class certification, erred in its discovery rulings, and erroneously granted the State's motion for summary judgment based on plaintiffs' failure to show that the State owed them a duty to provide insurance coverage for their claims. The appeals court held that the state has no common law duty to the Linvilles, the statute creates no duty to victims of sexual abuse by private daycare providers, and the Linvilles failed to establish an implicit duty. The three named plaintiff children were sexually abused while attending two private, Pierce County, daycare facilities. The suit is "Terry Linville, et al. v. DSHS, State Of Washington (Docket Number: 34654-1)," on Appeal from Thurston Superior Court (Docket No: 05-2-02268-7) under Judge H. Christopher Wickham. Counsel for appellants is James Francois Leggett at Leggett and Kram, 1901 S I St. Tacoma, WA, 98405-3810. Counsel for respondents are: Michael E. Johnston, Office of the Attorney General, P.O. Box 40126, Olympia, WA, 98504-0126; and Peter John Helmberger, Office of the Attorney General, P.O. Box 40126, Olympia, WA, 98504-0126. WOODWARD GOVERNOR: Ill. Court Approves $5M Labor Suit Settlement ---------------------------------------------------------------- The U.S. District Court for the Northern District of Illinois has given final approval to a $5 million settlement resolving a consolidated class action against Woodward Governor. About 86 current and former minority company employees brought the original suit back in May 8, 2003. They alleged that Woodward Governor discriminated against African-Americans, Hispanics, and Asians at its Rockford and Rockton, Illinois, facilities with respect to pay, promotions, and training. Jennifer Soule of the Chicago law firm Soule, Bradtke & Lambert is representing those workers (Class Action Reporter, Dec. 22, 2005). In October 2006, the U.S. Equal Employment Opportunity Commission sued Woodward Governor, affirming the same charges and adding a charge of discrimination against women. The court consolidated the two suits for litigation purposes. According to company spokesperson Rose Briani-Burden, with Judge Philip G. Reinhard's consent decree in regards to the settlement Woodward Governor can now move forward with the stipulations of the agreement. Essentially, the settlement calls for the establishment of a $2.4 million fund for minority employees who worked at the two plants any time since May 1999, and a $2.6 million fund for female employees who worked at the plants since June 2002. It will also require the company utilize a psychologist to perform an analysis of production jobs that were at issue in the case and develop written job descriptions for those jobs as well as a performance appraisal and compensation review process. Upon completion of the job analysis, the company is required to review the job assignments of its current production employees and adjust them as necessary based on the new job descriptions. The deal will also include "process enhancements" to the company's human resources program. Specifically, Woodward Governor will be required to implement a procedure for investigating complaints of discrimination. In addition, the company will be required to provide training to employees regarding its anti-discrimination policy and complaint procedure. The suit is "Bell, et al. v. Woodward Gov Co., et al., Case No. 3:03-cv-50190," filed in the U.S. District Court for Northern District of Illinois under Judge Philip G. Reinhard with referral to Judge P. Michael Mahoney. Representing the plaintiffs are: (1) Jennifer Kay Soule of Soule, Bradtke & Lambert, 155 N. Michigan Ave., 500 Chicago, IL 60601, Phone: (312) 616- 4422, Fax: (312) 616-4422, E-mail: jenksoule@aol.com; and (2) 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. Representing the defendant are: (i) Thomas F. Hurka and Keenan Jakarta Saulter of Baker & McKenzie, LLP, (Chicago), One Prudential Plaza, 130 East Randolph Drive, Suite 3500, Chicago, IL 60601, Phone: (312) 861-8000 and (312) 861-8035, E-mail: thomas.f.hurka@bakernet.com and keenan.j.saulter@bakernet.com; (ii) Dax Lopez, Nancy E. Rafuse and Daniel E. Turner of Ashe, Rafuse & Hill, LLP, 1355 Peachtree Street, NE Suite 500, Atlanta, GA 30309-3232, Phone: 404-253-6009 and 404-253-6000, E-mail: daxlopez@asherafuse.com and danturner@asherafuse.com. New Securities Fraud Cases NEW CENTURY: Cauley Bowman Announces Securities Suit Filing ----------------------------------------------------------- A class action was filed in the U.S. District Court for the Central District of California against New Century Financial Corp. (NEW) on Feb. 22, 2007. The complaint alleges violations of federal securities laws, Sections 10(b) and 20(a) of the U.S. Securities Exchange Act of 1934 and Rule 10b-5, including allegations of issuing a series of material misrepresentations to the market which had the effect of artificially inflating the market price. The class period is from April 7, 2006 to Feb. 7, 2007. On Feb. 7, 2007, New Century Financial Corp. shocked the market by announcing that it will have to restate its financial results for the first three quarters of 2006 due to misstatements and misrepresentations in the way the Company makes allowances for loan repurchase losses. On the news of this restatement, New Century's stock dropped approximately 36% on heavy trading volume. Plaintiff seeks to recover damages on behalf of the class. Lead plaintiff filing deadline is April 10, 2007. Cauley Bowman Carney & Williams, PLLC is at 11311 Arcade Drive, Suite 200 P.O. Box 25438 Little Rock, Arkansas 72221-5438 501- 312-8500. On the Net: http://www.cauleybowman.com. Contact: S. Gene Cauley. NOVASTAR FINANCIAL: Schatz Nobel Announces Securities Filing ------------------------------------------------------------ The law firm of Schatz Nobel Izard, P.C. announces that a lawsuit seeking class-action status has been filed in the U.S. District Court for the Western District of Missouri on behalf of all persons who purchased or otherwise acquired the common stock of NovaStar Financial, Inc. (NFI) between May 4, 2006 and Feb. 20, 2007 inclusive. The complaint alleges that NovaStar and certain of its officers and directors violated Federal Securities laws. Specifically, defendants concealed the following facts: -- NovaStar lacked requisite internal controls, and, as a result, the projections and reported results were based upon defective assumptions about loan delinquencies; -- NovaStar's financial statements were materially misstated due to its failure to properly account for its allowance for loan losses; -- given the deterioration and the increased volatility in the subprime market, NovaStar would be forced to tighten its underwriting guidelines which would have a direct material negative impact on its loan production going forward; and -- given the increased volatility in the lending market, NovaStar had no reasonable basis to make projections about its ability to maintain its Real Estate Investment Trust (REIT) taxable income, which drives dividends, and potentially even its very status as a REIT. As a result, NovaStar's projections issued during the Class Period about its REIT taxable income and dividends were at a minimum reckless. On Feb. 20, 2007, after the markets closed, NovaStar announced disappointing fourth quarter and year-end 2006 results and further warned that it expected to earn little, if any, taxable income in the next five years. On this news, NovaStar's stock fell 42% to close at $10.10 per share on Feb. 21, 2007. Lead plaintiff filing deadline is April 24, 2007. Schatz Nobel Izard, P.C. has not filed a lawsuit against the defendants. Schatz Nobel Izard, P.C. on the Net; http://www.snlaw.net,toll- free number: (800) 797-5499, E-mail: firm@snlaw.net. NOVASTAR FINANCIAL: Lerach Coughlin Announces Securities Suit ------------------------------------------------------------- Lerach Coughlin Stoia Geller Rudman & Robbins LLP announces that a class action has been commenced in the U.S. District Court for the Western District of Missouri on behalf of purchasers of NovaStar Financial, Inc. (NFI) common stock during the period between May 4, 2006 and Feb. 20, 2007. The complaint charges NovaStar and certain of its officers and directors with violations of the U.S. Securities Exchange Act of 1934. NovaStar operates as a specialty finance company that originates, purchases, invests in and services residential nonconforming loans. The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company's business and financial results. As a result of defendants' false statements, NovaStar stock traded at artificially inflated prices during the Class Period, reaching a high of $37.59 per share in May 2006. On Feb. 20, 2007, after the markets closed, NovaStar announced disappointing fourth quarter and year-end 2006 results and further warned that the company expected to earn little, if any, taxable income in the next five years. On this news, NovaStar's stock collapsed to close at $10.10 per share on Feb. 21, 2007, a one-day decline of 42%, on volume of 22.4 million shares, 15 times the average three-month volume. According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: -- the company lacked requisite internal controls, and, as a result, the Company's projections and reported results issued during the Class Period were based upon defective assumptions about loan delinquencies; -- the company's financial statements were materially misstated due to its failure to properly account for its allowance for loan losses; -- given the deterioration and the increased volatility in the subprime market, the company would be forced to tighten its underwriting guidelines which would have a direct material negative impact on its loan production going forward; and -- given the increased volatility in the lending market, the company had no reasonable basis to make projections about its ability to maintain its Real Estate Investment Trust taxable income, which drives dividends, and potentially even its very status as a REIT. As a result, the company's projections issued during the class period about its REIT taxable income and dividends were at a minimum reckless. Plaintiff seeks to recover damages on behalf of all purchasers of NovaStar common stock during the Class Period. The plaintiff is represented by Lerach Coughlin, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud. Lerach Coughlin Stoia Geller Rudman & Robbins LLP on the Net: http://www.lerachlaw.com/,Phone: 800/449-4900 or 619/231-1058, E-mail: wsl@lerachlaw.com. WHITNEY INFO: Gutride Safier Announces Securities Suit Filing ------------------------------------------------------------- Gutride Safier LLP announces that a class action has been commenced in the U.S. District Court for the Middle District of Florida on behalf of all those who purchased stock (or bought call or sold put options) in Whitney Information Network (OTC Bulletin Board: RUSS) between Nov. 18, 2003 and Dec. 15, 2006. The lawsuit claims that Whitney, its chief executive officer Russell Whitney and its former chief operating officer, Nicholas S. Maturo, violated Section 10(b) of the U.S. Securities Exchange Act of 1934 by issuing false and misleading statements to the investing public. The lawsuit alleges that defendants issued a series of false and misleading statements, emphasizing the success of its marketing programs and its acquisitions of related companies. Capitalizing on the rapid increase in the company's stock price resulting from these positive announcements, defendants completed a private placement of Whitney stock in December 2005, in which defendant Whitney sold 1.25 million of his own holdings for proceeds of over $5.6 million. Between Nov. 21, 2006 and Dec. 15, 2006, the truth concerning the company and its fraudulent business practices began to surface. On Nov. 21, 2006, defendants revealed that the U.S. Securities and Exchange Commission had begun an investigation to determine whether the company violated any securities laws in connection with: (a) the efficacy or trading success of the company's stock market education programs; and (b) the company's acquisition of certain other companies. Then, on Dec. 15, 2006, it was revealed that the U.S. Attorney for the Eastern District of Virginia had launched a grand jury investigation into the marketing activities of the company, stretching back to 2002. A few days later, it was announced that defendant Mr. Maturo as well as Whitney's vice president of sales had "departed" from the company. In response to the news, Whitney stock plunged from $8.20 per share to less than $4 per share on Dec. 18, 2006 on unusually heavy trading volume. Interested parties may move the court no later than Feb. 27, 2007 for lead plaintiff appointment. For more information, contact Michael Reese of Gutride Safier LLP, Phone: 212-579-4625, E-mail: michael@gutridesafier.com, Website: http://www.gutridesafier.com. ********* 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, Ma. Cristina Canson, and Janice Mendoza, Editors. Copyright 2007. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *