/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/080708.mbx C L A S S A C T I O N R E P O R T E R Tuesday, July 8, 2008, Vol. 10, No. 134 Headlines ALTRIA GROUP: U.S. Supreme Court Grants Certiorari Bid in "Good" ATTITUDE DRINKS: Officers Dismissed From Bravo! Securities Suits BANK OF CYPRUS: Oncology Center Sued Over Claims of Negligence BLACK CAT FIREWORKS: Recalls Fireworks Due to Injury Hazard COCA-COLA: Agrees to Settle Georgia Suit Over Inflated Revenues COUNTRYWIDE FINANCIAL: Delaware Lawsuit Over BofA Merger Settled FIREWORKS OVER AMERICA: Recalls Fireworks Due to Shock Hazard INTERNATIONAL BUSINESS: Sept. 9 Hearing Set for $20MM Settlement JACK DISTRIBUTION: Supplements Recalled for Undeclared Content LOUIS VUITTON: Sued Over Murakami Limited-Edition Prints MATTERHORN GROUP: Recalls Novelty Pops Due to Safety Hazard ORACLE CORP: No Trial Date Set for Calif. Securities Fraud Suit PHILIP MORRIS: Seeks U.S. Supreme Court Review of "Scott" Ruling PHILIP MORRIS: N.Y. Court Mulls Class Certification of "Caronia" PHILIP MORRIS: Mass. Court Yet to Rule on "Donovan" Suit Motions PHILIP MORRIS: Class Certification Denied; Reversed in 57 Cases PHILIPPINES: Court Ruling in Peninsula Siege Lawsuit Appealed QUIZNOS SUB: Franchisees Sue Over Deceptive Business Practices R&G FINANCIAL: Sept. 16 Hearing Set for $51-Mln. N.Y. Suit Deal RICELAND FOODS: Ark. Farmers Sue Over Genetically Modified Rice STATE STREET: Faces Suit in Massachusetts Over Subprime Losses [REDACTED July 8, 2008] WINTERS BROTHERS: Faces N.Y. Suit Over Antitrust Laws Violations New Securities Fraud Cases FIRST AMERICAN: Bronstein Files Securities Lawsuit in New York ********* ALTRIA GROUP: U.S. Supreme Court Grants Certiorari Bid in "Good" ---------------------------------------------------------------- The U.S. Supreme Court granted a petition for a writ of certiorari in the matter, "Good et al. v. Altria Group Inc., et al., Case No. 1:05-cv-00127-JAW," names Altria Group, Inc., and its subsidiary, Philip Morris USA, Inc., as defendants. The plaintiffs in the purported class action suit allege, among other things, that the uses of the terms "Lights" and "Ultra Lights" constitute deceptive and unfair trade practices, common law fraud, or RICO violations, and seek injunctive and equitable relief, including restitution and, in certain cases, punitive damages. The suit was brought on behalf of individuals who purchased and consumed various brands of cigarettes, including Marlboro Lights, Marlboro Ultra Lights, Virginia Slims Lights and Superslims, Merit Lights and Cambridge Lights. In May 2006, a federal trial court in Maine granted PM USA's motion for summary judgment in Good, a purported "Lights" class action, on the grounds that plaintiffs' claims are preempted by the Federal Cigarette Labeling and Advertising Act and dismissed the case. In August 2007, the U.S. Court of Appeals for the First Circuit vacated the district court's grant of PM USA's motion for summary judgment on federal preemption grounds and remanded the case to district court. The district court stayed the case pending the U.S. Supreme Court's ruling on defendants' petition for writ of certiorari with the U.S. Supreme Court, which was granted on Jan. 18, 2008, according to Altria's Form May 9, 2008 10-Q Filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2008. The suit is "Good et al. v. Altria Group Inc., et al., Case No. 1:05-cv-00127-JAW," filed in the U.S. District Court for the District of Maine, Judge John A. Woodcock, JR, presiding. Representing the plaintiffs are: Gerard V. Mantese, Esq. (gmantese@aol.com) Mantese and Associates, P.C. 1361 E. Big Beaver Road Troy, MI 48083 Phone: 248-457-9200 - and - Samuel W. Lanham, Jr., Esq. (slanham@lanhamblackwell.com) Lanham Blackwell, P.A. 470 Evergreen Woods Bangor, ME 04401 Phone: 207-942-2898 Representing the defendants are: Judith Bernstein-Gaeta, Esq. (judith.bernstein-gaeta@aporter.com) Arnold & Porter, LLP 555 Twelfth Street, N.W. Washington, DC 20004-1206 Phone: 202-942-5497 - and - Frances E. Bivens, Esq. (frances.bivens@dpw.com) Davis Polk & Wardwell 450 Lexington Ave. New York, NY 10017 Phone: 212-450-4000 ATTITUDE DRINKS: Officers Dismissed From Bravo! Securities Suits ---------------------------------------------------------------- Certain officers of Attitude Drinks Inc. who previously served as officers in Bravo! Brands, Inc., were dismissed from several purported class action lawsuits filed against Bravo! Brands, according to Attitude Drinks' July 2, 2008 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended March 31, 2008. Roy Warren, Attitude Drinks' chairman, chief executive officer, and president; Tommy Kee, the company's chief financial officer; and Michael Edwards, a company director, all previously served as executive officers of Bravo! Brands. On Sept. 21, 2007, Bravo! Brands reported that it filed a voluntary petition in the U.S. Bankruptcy Court for the Southern District of Florida pursuant to Chapter 7 of Title 11 of the United States Code, Case No. 07-17840-PGH. The filing occurred after Mr. Warren, Mr. Kee and Mr. Edwards ended their relationship with Bravo!. In October 2007, five separate law firms announced the filing of a class action suit on behalf of purchasers of the securities of Bravo! between Nov. 20, 2005, and May 15, 2007. These filings related to alleged violations of provisions of the U.S. Securities Exchange Act of 1934, including Sections 10(b) and 20(a) of the U.S. Securities Exchange Act of 1934 and Rule 10b-5, and allege that the Company issued a series of material misrepresentations to the market which had the effect of artificially inflating the market price of Bravo! common stock. Certain of these complaints allege violations of the U.S. Securities Exchange Act of 1934 by Mr. Warren and Mr. Kee, who served as CEO and Chief Accounting Officer, respectively, of Bravo!. Subsequent to March 31, 2008, the class action suits against Mr. Warren and Mr. Kee were dismissed. However, the bankruptcy trustee has named Mr. Warren and Mr. Kee as defendants in an Adversary Complaint for Damages based upon allegations similar to the dismissed class actions. The proceeding does not involve Attitude and is pending with the U.S. Bankruptcy Court for the Southern District of Florida as part of the Chapter 7 proceedings of Bravo!. BANK OF CYPRUS: Oncology Center Sued Over Claims of Negligence -------------------------------------------------------------- Three cancer patients and three relatives of patients who died from the disease have filed a class action lawsuit against the Cyprus Republic and Bank of Cyprus Oncology Center over claims of negligence, Jacqueline Theodoulou of the Cyprus Mail reports. The plaintiffs claim that the defendants made their or their relatives' health condition worse and causing death due to negligence. They request damages of: -- EUR500,000 claiming the BoC Center was responsible for making their health deteriorate; and -- EUR22 million claiming the center, and consequently the state, was responsible for their relatives' deaths. According to an announcement by Nicosia General Hospital's Cancer Patients and Relatives Association, a formal complaint is being prepared for the EU to report all that is going on in the cancer treatment sector of Cyprus. The plaintiffs maintain that they or their relatives were not provided with the necessary therapy in time; something they say was taking place in the full knowledge of the state. The announcement added that while the Supreme Court had issued a decision in June 2005 for the restoration and modernization of the state Oncology Center in Nicosia in order to accept more patients, nothing has been done about it. "There is an available area in the basement of the new Nicosia General Hospital for the creation of a Radiotherapy Department at a cost of only EUR5 million, however they are pleading ignorance," the Association said. BLACK CAT FIREWORKS: Recalls Fireworks Due to Injury Hazard ----------------------------------------------------------- Black Cat Fireworks, of Prairie Village, Kansas, in cooperation with the U.S. Consumer Product Safety Commission, is recalling about 20,000 Screech and Scream Fountain Fireworks. The company said the firework can produce a loud bang and unexpectedly scatter debris, posing an injury hazard to the user and bystanders. No injuries have been reported. The recalled Screech and Scream Fountain is a firework item with a yellow and red cylinder with red balls. The model name is printed on the front of the tube. These recalled fireworks were manufactured in China, imported by Shiu Fung Fireworks, of China and were being sold at various fireworks stores nationwide from October 2006 through June 2008 for about $7. A picture of the recalled fireworks is found at: http://www.cpsc.gov/cpscpub/prerel/prhtml08/08325.jpg Consumers are advised to immediately stop using the product and return it to either the place of purchase or Black Cat Fireworks for a full refund. For additional information, call Black Cat Fireworks collect at 913-649-0537 between 9:00 a.m. and 5:00 p.m. CT Monday through Friday, or visit the firm's Web site at http://www.blackcatfireworks.com/ COCA-COLA: Agrees to Settle Georgia Suit Over Inflated Revenues --------------------------------------------------------------- Coca-Cola Co. agreed to settle a class action lawsuit filed in the U.S. District Court for the Northern District of Georgia against the company, which suit alleges that Coca-Cola improperly inflated revenues to boost stock prices, Betsy McKay of The Wall Street Journal reports. The $137.5-million settlement ends an eight-year battle between the Atlanta company and plaintiffs led by Carpenters Health & Welfare Fund, an institutional investor based in Philadelphia, the report said. The company said it settled without admitting wrongdoing. "We maintain these allegations are without merit and no admittance of wrongdoing is a part of the settlement," the company said in a statement e-mailed by its spokesman to to the WSJ. "At this time, we have determined that it is in the best interest of our business to close this matter and put this distraction behind us." Case Background On Oct. 27, 2000, a class action suit, "Carpenters Health & Welfare Fund of Philadelphia & Vicinity v. The Coca-Cola Co., et al.," was filed against the company, alleging that the company, M. Douglas Ivester, Jack L. Stahl and James E. Chestnut violated anti-fraud provisions of the federal securities laws by making misrepresentations or material omissions relating to the company's financial condition and prospects in late 1999 and early 2000. A second, largely identical lawsuit, "Gaetan LaValla v. The Coca-Cola Co., et al.," was also filed in the same court on Nov. 9, 2000. The complaint, which was brought seeking an unspecified amount of damages, alleges that the company and the individual named officers: -- forced certain Coca-Cola system bottlers to accept "excessive, unwanted and unneeded" sales of concentrate during the third and fourth quarters of 1999, thus creating a misleading sense of improvement in the company's performance in those quarters (the practice is called "channel stuffing"); -- failed to write down the value of impaired assets in Russia, Japan and elsewhere on a timely basis, again resulting in the presentation of misleading interim financial results in the third and fourth quarters of 1999; and -- misrepresented the reasons for Mr. Ivester's departure from the company and then misleadingly reassured the financial community that there would be no changes in the company's core business strategy or financial outlook following that departure. On Jan. 8, 2001, the U.S. District Court for the Northern District of Georgia entered an order consolidating the two cases for all purposes as, "Carpenters Health & Welfare Fund of Philadelphia & Vicinity v. The Coca-Cola Co., et al." On July 25, 2001, the plaintiffs filed a consolidated amended complaint, which largely repeated the allegations made in the original complaints and added Douglas N. Daft as an additional defendant. On Sept. 25, 2001, the defendants filed a motion to dismiss all counts of the consolidated amended complaint. On Aug. 20, 2002, the court granted in part and denied in part the defendants' motion to dismiss. The court also granted the plaintiffs' motion for leave to amend the complaint. On Sept. 4, 2002, the defendants filed a motion for partial reconsideration of the court's Aug. 20, 2002 ruling. The court denied the motion on April 15, 2003. On June 2, 2003, the plaintiffs filed an amended consolidated complaint. The defendants moved to dismiss the amended complaint on June 30, 2003. On March 31, 2004, the court granted in part and denied in part the defendants' motion to dismiss the amended complaint. In its order, the court dismissed a number of the plaintiffs' allegations, including the claim that the company made knowingly false statements to financial analysts. The court permitted the remainder of the allegations to proceed to discovery. In 2007, a report made by a financial expert retained by shareholders suing Coca-Cola Co. concludes that investors sustained damages exceeding $1.3 billion when the company improperly inflated revenues to boost stock prices (Class Action Reporter, July 17, 2007). The shareholders damage report was authored by Steven P. Feinstein, a chartered financial analyst and associate professor of finance at Babson College in Wellesley, Mass. It was submitted to a federal judge as part of shareholders' efforts to have the case certified as a class action. Mr. Feinstein's Report Mr. McDonald said in his article that other court pleadings in the case stated Mr. Daft was fully aware of "channel stuffing" practices at Coke Japan where he was president of Coke's Middle East and Far East Group. The practice artificially boosted stock prices by nearly $12 a share, Mr. Feinstein concluded. Total damages to stockholders, not including prejudgment interest, amounted to $1.33 billion, Mr. Feinstein stated in his report. Interest on those anticipated damages has, so far, boosted the total by another $500 million, he said. Mr. Feinstein's report cites a sworn testimony from Mr. Ivester confirming that "channel stuffing" had been a company practice under Mr. Ivester's tenure as far back as 1997. Mr. Ivester admitted in the testimony that he was fired in 1999. Coke spokespeople had insisted publicly that Mr. Ivester had elected to retire. The report said the investors affected are those who bought Coke stock between Oct. 21, 1999, and March 6, 2000. The suit is "Carpenters Health &, et al. v. Coca-Cola Co., et al., Case No. 1:00-cv-02838-WBH," filed in the U.S. District Court for the Northern District of Georgia under Judge Willis B. Hunt, Jr. Representing the plaintiffs are: David Andrew, Esq. (dab@classlaw.com) Bain of Chitwood Harley Harnes, LLP 1230 Peachtree Street, N.E., 2300 Promenade II, Atlanta, GA 30309 Phone: 404-873-3900 - and - Mary K. Blasy, Esq. (maryb@lerachlaw.com) Lerach Coughlin Stoia Geller Rudman & Robbins 655 W. Broadway, Suite 1900 San Diego, CA 92101-4297 Phone: 619-231-1058 Representing the company are: Robert L. Dell Angelo, Esq. Munger Tolles & Olson, 355 South Grand Avenue, 35th Floor Los Angeles, CA 90071 Phone: 213-683-9100 - and - Jeffrey S. Cashdan, Esq. (jcashdan@kslaw.com) King & Spalding, 191 Peachtree Street, N.E. Atlanta, GA 30303-1763 Phone: 404-572-4600 COUNTRYWIDE FINANCIAL: Delaware Lawsuit Over BofA Merger Settled ---------------------------------------------------------------- Countrywide Financial Corp., its directors, and Bank of America have settled a class action lawsuit relating to Countrywide's proposed merger with BofA, Peg Brickley of The Wall Street Journal reports. In April, Countrywide Financial, its directors, and BofA, faced various class action suits relating to Countrywide's proposed merger with BofA (Class Action Reporter, April 4, 2008). The suits have been filed in the state courts of California and Delaware on behalf of a proposed class of Countrywide shareholders. These lawsuits allege that the Company's directors breached their fiduciary duties to the Company's shareholders by entering into the merger agreement with BofA and that BofA allegedly aided and abetted those alleged breaches. Recently, a corporate-law judge granted preliminary approval to a settlement that ends the lawsuit. The settlement at issue is between Countrywide and individual shareholders who sued in Delaware's corporate-law court, challenging the price of the company's sale to BofA. The terms of the settlement say Countrywide cured the problems with the deal by making additional disclosures to shareholders. The settlement also stipulates that the class-action lawsuit should be dropped. Vice Chancellor John Noble set an October 2008 hearing to weigh final approval of the settlement, after hearing from institutional shareholders who said it was designed to block valid lawsuits against the Company. Countrywide attorneys said shareholders voted to approve the BofA deal, even after being told what they were giving up in terms of the right to sue for damages. BofA closed its $2.5 billion acquisition of the Calabasas, Calif., mortgage lender. A Bank of America spokeswoman said, "The parties have already agreed to the settlement of this suit, the hearing concerned the preliminary approval of that settlement, and the judge approved it." Countrywide Financial Corp. -- http://my.countrywide.com/-- is a holding company, which through its subsidiaries, is engaged in mortgage lending and other real estate finance-related businesses, including mortgage banking, banking and mortgage warehouse lending, dealing in securities and insurance underwriting. The Company operates through five business segments: Mortgage Banking, which originates, purchases, sells and services non-commercial mortgage loans nationwide; Banking, which takes deposits and invest in mortgage loans and home equity lines of credit; Capital Markets, which operates an institutional broker-dealer that primarily specializes in trading and underwriting mortgage-backed securities (MBS); Insurance, which offers property, casualty, life and disability insurance as an underwriter and as an insurance agency, and Global Operations, which licenses and supports technology to mortgage lenders in the U.K. FIREWORKS OVER AMERICA: Recalls Fireworks Due to Shock Hazard ------------------------------------------------------------- Fireworks Over America, of Springfield, Mo., in cooperation with the U.S. Consumer Product Safety Commission, is recalling about 84,250 Oh Chute Parachute with Streamer Fireworks. The company said the parachutes can become entangled in overhead power lines causing a shock hazard to users and bystanders. Fireworks Over America has received one report of entanglement, in which a consumer's hand was burned and shocked. The recalled Oh Chute Parachute with streamers is a firework item with a light blue cylinder with white clouds. The model name is printed in triplicate on the front of the tube and FOA #2085 is on the lower back of the tube. This item is sold separately or in a box of four. These recalled fireworks were manufactured in China and were being sold by various fireworks stores nationwide from April 2007 through June 2008 for about $2.50 each and $8 a box. Pictures of the recalled fireworks are found at: http://www.cpsc.gov/cpscpub/prerel/prhtml08/08322a.jpg http://www.cpsc.gov/cpscpub/prerel/prhtml08/08322b.jpg Consumers are advised to immediately stop using the product and return it to either the place of purchase or Fireworks Over America for a full refund. For additional information, contact Fireworks Over America at 800-345-3957 between 9:00 a.m. and 5:00 p.m, CT Monday through Friday, or visit the firm's Web site at http://www.fireworksoveramerica.com/ INTERNATIONAL BUSINESS: Sept. 9 Hearing Set for $20MM Settlement ---------------------------------------------------------------- The U.S. District Court for the Southern District of New York will hold a fairness hearing on Sept. 9, 2008, at 3:00 p.m., to consider final approval of the proposed $20,000,000 settlement in the matter, "In Re: International Business Machines Corp. Securities Litigation, Case No. 1:05-cv-06279-AKH." The hearing will be held before Judge Alvin K. Hellerstein at Courtroom 14D of the U.S. District Court for the Southern District of New York, Daniel Patrick Moynihan U.S. Courthouse, in 500 Pearl St., New York. The deadline for the submission of a claim form and filing of an objection or an exclusion to and from the settlement is on Aug. 26, 2008. Case Background In July 2005, two lawsuits were filed in the U.S. District Court for the Southern District of New York in relation to International Business Machines Corp.'s disclosures concerning first-quarter 2005 earnings and the expensing of equity compensation (Class Action Reporter, March 12, 2007). One lawsuit named as defendants IBM and IBM's senior vice president and chief financial officer. The other lawsuit named as defendants IBM, its senior vice president and CFO, as well as its chairman and chief executive officer. Both complaints alleged that the defendants made certain misrepresentations in violation of Section 10(b) and 20(a) of the U.S. Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically, the plaintiffs alleged that members of the class were damaged by misrepresentations and omissions in IBM's April 5, 2005 announcement that it would begin stock option expensing in the first quarter of 2005. They alleged that IBM misled investors as to the company's expected financial results and the anticipated size of its stock option expense for the quarter. On Sept. 6, 2005, the counsel in one of these lawsuits filed a motion seeking to have the lawsuits consolidated, and for the appointment of lead plaintiff and lead counsel. On March 28, 2006, the two lawsuits were officially consolidated into a single action captioned, "In Re: International Business Machines Corp. Securities Litigation, Case No. 1:05-cv-06279- AKH." For more details, contact: IBM Securities Litigation c/o A.B. Data, Ltd. Notice Administrator Post Office Box 170500 Milwaukee, WI 53217 Phone: 866-963-9975 Web site: http://ibmsecuritieslit.com/ The suit is "In Re: International Business Machines Corp. Securities Litigation, Case No. 1:05-cv-06279-AKH," filed in the U.S. District Court for the Southern District of New York, Judge Alvin K. Hellerstein, presiding. Representing the plaintiffs are: Christopher J. Keller, Esq. (ckeller@labaton.com) Labaton Sucharow, LLP 140 Broadway New York, NY 10005 Phone: 212-907-0853 Fax: 212-883-7053 - and - Jeffrey Alan Klafter, Esq. (jak@klafterolsen.com) Klafter & Olsen LLP 1311 Mamaroneck Avenue, Suite 220 White Plains, NY 10602 Phone: 914-997-5656 Fax: 914-997-5656 Representing the defendant is: Elizabeth L. Grayer, Esq. (egrayer@cravath.com) Cravath, Swaine & Moore LLP 825 Eighth Avenue New York, NY 10019 Phone: 212-474-1000 Fax: 212-474-3700 JACK DISTRIBUTION: Supplements Recalled for Undeclared Content -------------------------------------------------------------- Jack Distribution, LLC, 1501 Green Road Unit C Pompano Beach, Florida 33064 and its wholesale distributors G & N works, Inc., and Devine Distribution, Inc., are conducting a voluntary nationwide recall of the following lot numbers of the company's supplement products sold under the brand names Rize 2 The Occasion and Rose 4 Her. (Rize 2 lot numbers CG-84 expires 11/10, GD-98 expires 08/10, CC-06 expires 06/10, 709 expires 09/10, CG-79 expires 11/10) (Rose 4 Her lot number CG-78 expires 11/10). Jack Distribution, LLC, is conducting this recall after being informed by representatives of the Food and Drug Administration that lab analysis by FDA of Rize 2 and Rose 4 Her samples from lots manufactured and packaged in 2007 found the product contains potentially harmful, undeclared ingredients. FDA asserts that its chemical analysis revealed that these lots of Rize 2 The Occasion and Rose 4 Her contain thiomethisosildenafil, an analog of sildenafil, the active ingredient of a FDA-approved drug used for Erectile Dysfunction. FDA maintains that this ingredient is close in structure to sildenafil and is expected to possess a similar pharmacological and adverse event profile. This undeclared chemical poses a potential threat to consumers because it may interact with nitrates found in some prescription drugs (such as nitroglycerin) and may lower blood pressure to dangerous levels. Consumers with diabetes, high blood pressure, high cholesterol, or heart disease often take nitrates. ED is a common problem in men with these conditions, and consumers may seek these types of products to enhance sexual performance. Customers who have this product in their possession should stop using it immediately and contact their physician if they have experienced any problems that may be related to taking this product. Any adverse events that may be related to the use of this product should be reported to the FDA's MedWatch Program by phone at 1-800-FDA-1088 or by fax at 1-800-FDA-0178 or by mail to MedWatch, HF-2, FDA, 5600 Fishers Lane, Rockville, MD 20852- 9787. The company advises that any unused portions from these lot numbers be returned to the place of purchase for a full refund of purchase price. G & N Works and Devine Distribution are not shipping any Rize 2 or Rose 4 Her that is in stock while additional samples are being tested, they expect to begin shipping again in 2-4 weeks. Rize 2 and Rose 4 Her are sold in adult stores, vitamin & nutrition shops, convenience stores, and via the internet nationwide. The Rize 2 product is sold as a (single blister pack, three count bottles, twelve count bottles, and thirty count bottles. Rose 4 Her is only available in single blister packs and three count bottles. The Company is taking this voluntary action because it is committed and is always concerned with the health of persons who have consumed this product. The Company is reviewing the procedures and policies of all firms involved with the manufacture of the product to ensure that there will be no future issues with regard to Rize 2 and Rose 4 Her pills composition. The Company is working closely with the FDA in the recall process and is committed to the quality and integrity of its products. It sincerely regrets any inconvenience to consumers and its other customers. LOUIS VUITTON: Sued Over Murakami Limited-Edition Prints -------------------------------------------------------- Louis Vuitton North America is facing a class-action complaint filed in the Los Angeles Superior Court alleging that the luxury retailer did not provide proper documentation for the works sold at its Museum of Contemporary Art boutique, the Los Angeles Times reports. Named plaintiff Clint Arthur alleges that Louis Vuitton failed to take the law into account when selling limited-edition prints by Japanese Pop artist Takashi Murakami at his show at the museum's Geffen Contemporary. He says two limited-edition prints he bought for $6,000 each were signed by Japanese Pop artist Takashi Murakami but not also numbered by the artist as promised in an accompanying certificate. MOCA, he says, provided no documentation at all for two $855 Murakami prints. The Los Angeles Times recounts that since 1970, California law has required dealers who sell limited-edition prints of artists' work to disclose an array of information supporting the prints' authenticity. Mr. Arthur says that because Louis Vuitton North America failed to provide sufficient information, 500 Murakami prints that were on sale for an average of $8,000 lacked the ironclad certification required, making them less valuable for resale. The show -- Vuitton store included -- is now at the Brooklyn Museum in New York. The California law allows triple damages for violations, exposing Louis Vuitton to a potential multimillion-dollar liability. Mr. Arthur, who sued Louis Vuitton on June 23, said he discovered the law on the Internet after having misgivings about the prints he had purchased last winter during the "Murakami" exhibition at MOCA's Geffen Contemporary building. According to the report, the law on fine art prints apparently has been enforced rarely, if ever, since it went on the books in 1970, but on paper it carries considerable clout: It specifically authorizes the state attorney general, district attorneys and city attorneys to bring civil charges carrying fines of up to $1,000 for each violation. A museum spokeswoman told the Los Angeles Times that officials would reserve comment while reviewing the suit. Meanwhile, Louis Vuitton said in a statement that Arthur's suit is "baseless litigation," and that he refused the company's offer of a refund plus interest. Louis Vuitton, a luxury-goods purveyor whose parent company reported a $5.4 billion profit last year, stuck its toe into the art business by partnering with Murakami to produce limited edition prints of designs he had made for Vuitton handbags. The prints were sold at a special boutique set up within the "Murakami" exhibition to highlight how art and commerce intersect in Murakami's work. Representing the plaintiff is: Daniel E. Engel, Esq. Daniel E. Engel, Attorney at Law 18150 Archwood Street Los Angeles, CA 91335-5502 Phone: 818-345-2634 Fax: 866-535-1248 MATTERHORN GROUP: Recalls Novelty Pops Due to Safety Hazard ----------------------------------------------------------- Matterhorn Group Inc is recalling certain date coded product of their Rainbow Glacier "Astro Pops" water ice frozen novelty pops, Cherry Pineapple Swirl 3.5 oz size 12 count bag pack, with tag closure "Best by JUN 03-09", "Best by JUN 04-09" and "Best by JUN 05-09" sold through the Wal-Mart stores located in California and Arizona, Sunnyside Farms "Missile Pops" Cherry Pineapple in 3.5 oz. size 12 count bag packages, with tag closure of "Best By JUN 02-09", "Best by JUN 03-09", and "Best by JUN 04-09" sold through the California stores of grocery retailers Save Mart and Raley�s, and Vitafreze Frozen Astronot Pops 3.5 oz size 12 count bag packages, with tag closure of "Best By JUN 02-09" sold in California. The products are being recalled because they may contain pieces of hard plastic. Only the noted product date codes listed are affected. The small pieces of non-toxic hard plastic were from a part of the processing equipment which broke during the manufacturing process. The majority of the possibly affected product was retrieved from the distribution system before any release to retail stores. However, there were a small number of cases which were shipped to above mentioned locations. There have been no reports of injury. People who bite into or swallow a fragment could possibly be injured, prompting this precautionary recall. Young children are particularly at risk of a choking hazard. Although the company believes the problem is very isolated, we are taking this measure to ensure the safety of our consumers. Consumers in AZ and CA who have purchased the above indicated products should return them to their retailer where purchased for a full refund. For questions and inquiries, consumers may contact us at 1-888-264-0898. ORACLE CORP: No Trial Date Set for Calif. Securities Fraud Suit --------------------------------------------------------------- No trial date was set for a purported securities fraud class action lawsuit filed against Oracle Corp. in the U.S. District Court for the Northern District of California. Initially, stockholder class action suits were filed in the U.S. District Court for the Northern District of California against the company and its chief executive officer on and after March 9, 2001. Between March 2002 and March 2003, the court dismissed the plaintiffs' consolidated complaint, first amended complaint and a revised second amended complaint. The last dismissal was with prejudice. On Sept. 1, 2004, the U.S. Court of Appeals for the Ninth Circuit reversed the dismissal order and remanded the case for further proceedings. The revised second amended complaint named the company's chief executive officer, its then chief financial officer (who currently is chairman of the company's board of directors) and a former executive vice president as defendants. This complaint was brought on behalf of purchasers of the company's stock during the period from Dec. 14, 2000, through March 1, 2001. The plaintiffs alleged that the defendants made false and misleading statements about the company's actual and expected financial performance and the performance of certain of the company's applications products, while certain individual defendants were selling Oracle stock in violation of federal securities laws. The plaintiffs further alleged that certain individual defendants sold Oracle stock while in possession of material non-public information. In addition, they also allege that the defendants engaged in accounting violations. The plaintiffs seek unspecified damages plus interest, attorneys' fees and costs, and equitable and injunctive relief. On July 26, 2007, the defendants filed a motion for summary judgment, and the plaintiffs filed a motion for partial summary judgment against all defendants and a motion for summary judgment against the company's CEO. In August 2007, the plaintiffs filed amended versions of these motions. The parties' summary judgment motions are fully briefed. On Oct. 5, 2007, the plaintiffs filed a motion seeking a default judgment against the defendants or various other sanctions because of the defendants' alleged destruction of evidence. This motion is fully briefed. A hearing on all these motions was held on Dec. 20, 2007. The court has not yet ruled on any of these motions. On April 7, 2008, the case was reassigned to a new judge, who has scheduled a status conference for July 18, 2008. On June 27, 2008, the court ordered supplemental briefing on the plaintiffs' sanctions motion. Currently, no date has been set for trial, according to the company's July 2, 2008 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended May 31, 2008. The suit is "In Re: Oracle Corp. Securities Litigation, Case No. 01-CV-0988," filed in the U.S. District Court for the Northern District of California, Judge Martin J. Jenkins, presiding. Representing the plaintiffs is: Jennie Lee Anderson, Esq. (jennie@libertylawoffice.com) Andrus Liberty & Anderson LLP 1438 Market Street San Francisco, CA 94102 Phone: 415-896-1000 Fax: 415-896-2249 Representing the defendants is: Dorian Daley, Esq. 500 Oracle Parkway Redwood City, CA 94065 Phone: 650-506-5200 Fax: 650-506-7114 PHILIP MORRIS: Seeks U.S. Supreme Court Review of "Scott" Ruling ---------------------------------------------------------------- Philip Morris USA, Inc., a subsidiary of Altria Group, Inc., along with several others, filed a petition for writ of certiorari before the U.S. Supreme Court in connection with a decision by the Louisiana Supreme Court in the matter, "Gloria Scott, et al. v. American Tobacco Co., Inc., et al., Case No. 96-8461." The case is a statewide class action suit certified in Louisiana state court. The plaintiffs asked that the defendants pay billions of dollars to fund a 25-year medical monitoring program (Class Action Reporter, Feb. 22, 2007). In July 2003, following the first phase of the trial in the Scott class action, in which the plaintiffs sought the creation of a fund to pay for medical monitoring and smoking cessation programs, a Louisiana jury returned a verdict in favor of the defendants, including PM USA, in connection with the plaintiffs' medical monitoring claims, but also found that the plaintiffs could benefit from smoking cessation assistance. The jury also found that cigarettes, as designed, are not defective but that the defendants failed to disclose all they knew about smoking and diseases and marketed their products to minors. In May 2004, in the second phase of the trial, the jury awarded the plaintiffs approximately $590 million and directed all defendants jointly and severally, to fund a 10-year smoking cessation program. In June 2004, the court entered judgment, which awarded the plaintiffs the approximately $590 million jury award plus prejudgment interest accruing from the date the suit commenced. As of Feb. 15, 2007, the amount of prejudgment interest was approximately $444 million. PM USA's share of the jury award and prejudgment interest has not been allocated. The defendants, including PM USA, appealed. Pursuant to a stipulation of the parties, the trial court entered an order setting the amount of the bond at $50 million for all defendants in accordance with an article of the Louisiana Code of Civil Procedure, and a Louisiana statute (Bond Cap Law), fixing the amount of security in civil cases. Under the terms of the stipulation, the plaintiffs reserved the right to contest, at a later date, the sufficiency or amount of the bond on any grounds including the applicability or constitutionality of the bond cap law. In September 2004, the defendants collectively posted a bond in the amount of $50 million. In February 2007, the Louisiana Court of Appeal issued a ruling on the defendants' appeal that, among other things: -- affirmed class certification but limited the scope of the class; -- struck certain of the categories of damages that comprised the judgment, reducing the amount of the award by approximately $312 million; -- vacated the award of prejudgment interest, which totaled approximately $444 million as of Feb. 15, 2007; and -- ruled that the only class members who are eligible to participate in the smoking cessation program are those who began smoking before, and whose claims accrued by Sept. 1, 1988. As a result, the Louisiana Court of Appeal remanded for proceedings consistent with its opinion, including further reduction of the amount of the award based on the size of the new class. In March 2007, the Louisiana Court of Appeal rejected the defendants' motion for rehearing and clarification. In January 2008, the Louisiana Supreme Court denied the plaintiffs' and defendants' petitions for writ of certiorari. Following the Louisiana Supreme Court's denial of the defendants' petition for writ of certiorari, PM USA recorded a provision of $26 million in connection with the case. In March 2008, the plaintiffs filed a motion to execute the approximately $279 million judgment plus post-judgment interest or, in the alternative, for an order to the parties to submit revised damages figures. The defendants filed a motion to have judgment entered in their favor based on accrual of all class member claims after Sept. 1, 1988 or, in the alternative, for the entry of a case management order. In April 2008, the Louisiana Supreme Court denied the defendants' motion to stay proceedings and the defendants filed a petition for writ of certiorari with the U.S. Supreme Court, according to Altria's Form May 2008 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2008. Altria Group, Inc. -- http://www.altria.com/-- is the holding company of Philip Morris USA Inc. (PM USA) and John Middleton, Inc., which are engaged in the manufacture and sale of cigarettes and other tobacco products. Philip Morris Capital Corp. (PMCC), another wholly owned subsidiary, maintains a portfolio of leveraged and direct finance leases. The Company's segments are U.S. tobacco; European Union; Eastern Europe, Middle East and Africa; Asia; Latin America, and Financial Services. PHILIP MORRIS: N.Y. Court Mulls Class Certification of "Caronia" ---------------------------------------------------------------- The U.S. District Court for the Eastern District of New York has yet to rule on a motion that sought for the certification of a class in the matter, "Caronia et al. v. Philip Morris USA, Inc., Case No. 1:06-cv-00224-JBW-SMG," which names Philip Morris USA, Inc., a subsidiary of Altria Group, Inc., as a defendant. The purported class action lawsuit was filed by a group of heavy Marlboro smokers demanding tests for early detection of lung cancer. It was brought on behalf of current and former Marlboro smokers over 50 years old who smoked a pack or more a day for 20 years. The plaintiffs want an annual low-dose CT scan of the chest, which is used to minimize cancer-causing side effects of an actual CT scan. Studies indicate that a low-dose CT scan can help in the early detection of cancer, although this finding remains to be firmly established (Class Action Reporter, Jan. 23, 2006). Annual scans cost about $500 each, according to Jerome Block, Esq., a New York attorney representing the plaintiffs. The class size, meanwhile, is about "tens of thousands." The plaintiffs, from New York, are not seeking compensatory or punitive damages, Reuters reports. The plaintiffs' motion for class certification is pending, according to Altria's Form May 2008 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2008. The suit is "Caronia et al. v. Philip Morris USA, Inc., Case No. 1:06-cv-00224-JBW-SMG," filed in the U.S. District Court for the Eastern District of New York, Judge Jack B. Weinstein, presiding. Representing the plaintiffs is: Steven J. Phillips, Esq. (sphillips@lpklaw.com) Levy, Phillips & Konigsberg, LLP 800 Third Ave., 13th Floor New York, NY 10022 Phone: 212-605-6200 PHILIP MORRIS: Mass. Court Yet to Rule on "Donovan" Suit Motions ---------------------------------------------------------------- The U.S. District Court for the District of Massachusetts has yet to rule on motions for summary judgment and judgment on the pleadings in the matter, "Donovan et al. v. Philip Morris USA, Inc., Case No. 1:06-cv-12234-NG," which names Philip Morris USA, Inc., a subsidiary of Altria Group, Inc., as a defendant. The purported class action suit was filed by Marlboro smokers who want the cigarette maker to pay for their screenings that may detect the early stages of lung cancer (Class Action Reporter, Dec. 26, 2006). The suit, filed on Dec. 14, 2006, identified these smokers as plaintiffs, all represented by attorneys at Thornton & Naumes and Todd & Weld: -- James Teague, -- Kathleen Donovan, and -- Patricia Cawley. The class action suit was filed on behalf of current and former Marlboro smokers over 50 years old who smoked a pack or more a day for 20 years, and have not been diagnosed with lung cancer. Attorneys for Thornton & Naumes estimated that as many as 80,000 at-risk Massachusetts residents may become part of the litigation. The suit demands that the tobacco company pay for their annual computerized X-ray chest scan. The low-dose and non-invasive scans cost about $500, but are rarely covered by health insurance. The plaintiffs do not demand any monetary damages. The plaintiffs said they targeted Philip Morris since the cigarette maker accounts for half of all tobacco product sales. According to Neil Leifer, Esq., at Thornton & Naumes, Philip Morris could have manufactured a safer cigarette with fewer carcinogens. Mr. Leifer explains that their clients have smoked those cigarettes that have carcinogens in them for years and now they are at great risk for lung cancer because of the Philip Morris product. He adds that because of that fact, it seems reasonable to the plaintiffs that Philip Morris provide this sort of early detection measure that might save their lives. The defendants' motions for summary judgment and judgment on the pleadings are still waiting for court rulings, according to Altria's Form May 2008 10-Q Filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2008. The suit is "Donovan, et al. v. Philip Morris USA, Inc., Case No. 1:06-cv-12234-NG," filed in the U.S. District Court for the District of Massachusetts, Judge Judge Nancy Gertner, presiding. Representing the plaintiffs are: Neil T. Leifer, Esq. (nleifer@tenlaw.com) Michael A. Lesser, Esq. (mlesser@tenlaw.com) David C. Strouss, Esq. (dstrouss@tenlaw.com) Thornton & Naumes, LLP 30th Floor, 100 Summer Street Boston, MA 02110 Phone: 617-720-1333 Fax: 617-720-2445 - and - Kevin T. Peters, Esq. (kpeters@toddweld.com) Christopher Weld, Jr., Esq. (cweld@toddweld.com) Todd & Weld 31 Floor, 28 State Street Boston, MA 02109 Phone: 617-720-2626 Fax: 617-227-5777 PHILIP MORRIS: Class Certification Denied; Reversed in 57 Cases --------------------------------------------------------------- Class certification has either been denied or reversed by courts in 57 smoking and health class action lawsuits involving Philip Morris USA, Inc., a subsidiary of Altria Group, Inc., according to Altria's Form May 2008 10-Q Filing with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2008. Since the dismissal in May 1996 of a purported nationwide class action suit brought on behalf of allegedly addicted smokers, plaintiffs have filed numerous putative smoking and health class action suits in various state and federal courts. In general, these cases purport to be brought on behalf of residents of a particular state or states (although a few cases purport to be nationwide in scope) and raise addiction claims and, in many cases, claims of physical injury as well. Class certification has been denied or reversed by courts in 57 smoking and health class actions involving PM USA in: -- Arkansas (1), -- the District of Columbia (2), -- Florida (2), -- Illinois (2), -- Iowa (1), -- Kansas (1), -- Louisiana (1), -- Maryland (1), -- Michigan (1), -- Minnesota (1), -- Nevada (29), -- New Jersey (6), -- New York (2), -- Ohio (1), -- Oklahoma (1), -- Pennsylvania (1), -- Puerto Rico (1), -- South Carolina (1), -- Texas (1), and -- Wisconsin (1). The plaintiffs' allegations of liability in smoking and health cases are based on various theories of recovery, including negligence, gross negligence, strict liability, fraud, misrepresentation, design defect, failure to warn, nuisance, breach of express and implied warranties, breach of special duty, conspiracy, concert of action, violations of deceptive trade practice laws and consumer protection statutes, and claims under the federal and state anti-racketeering statutes. The plaintiffs in the smoking and health actions seek various forms of relief, including compensatory and punitive damages, treble or multiple damages and other statutory damages and penalties, creation of medical monitoring and smoking cessation funds, disgorgement of profits, and injunctive and equitable relief. Defenses raised in these cases include lack of proximate cause, assumption of the risk, comparative fault and contributory negligence, statutes of limitations and preemption by the Federal Cigarette Labeling and Advertising Act. Altria Group, Inc. -- http://www.altria.com/-- is the holding company of Philip Morris USA Inc. (PM USA) and John Middleton, Inc., which are engaged in the manufacture and sale of cigarettes and other tobacco products. Philip Morris Capital Corp. (PMCC), another wholly owned subsidiary, maintains a portfolio of leveraged and direct finance leases. The Company's segments are U.S. tobacco; European Union; Eastern Europe, Middle East and Africa; Asia; Latin America, and Financial Services. PHILIPPINES: Court Ruling in Peninsula Siege Lawsuit Appealed ------------------------------------------------------------- Philippine media practitioners who filed a class action suit for their arrest while covering last year's stand-off at the Manila Peninsula Hotel are set to go to higher courts or even to the United Nations Organization to seek the reversal of a lower court ruling that junked their lawsuit, the McClatchy-Tribune Information Services reports. The Class Action Reporter reported on Jan. 31, 2008, that Philippine media practitioners filed a class action suit before the Makati Regional Trial Court Branch 56 against: -- Interior Secretary Ronaldo Puno, -- Justice Secretary Raul Gonzalez, -- Defense Secretary Gilberto Teodoro Jr., -- Philippine National Police Director Avelino Razon, -- National Capital Region Police Office Chief Geary Barias, -- Southern Police District Director Luizo Ticman, -- PNP-Special Action Force commander C/Supt. Leocadio Santiago, and -- PNP-Criminal Investigation and Detection Group-National Capital Region Director S/Supt Asher Dolina for arresting journalists who were covering a mutiny attempt at The Peninsula Manila hotel in Makati City in 2007. The CAR report recounted that on Nov. 29, 2007, members of the media were arrested by police authorities after the stand-off at the Manila Pen. About 50 journalists were arrested but were released later. The journalists asserted that their right to freedom of speech was threatened and asked the court to compensate them for their supposed illegal arrests during the hotel siege. Authorities had explained that the arrest was done to separate and identify legitimate media practitioners from members of the mutineers who they alleged were posing as media identity to escape authorities. In a follow-up story on Feb. 19, 2008, the CAR reported that Defense Secretary Gilberto Teodoro Jr. asked the Court to dismiss the PHP10-million suit, saying the lawsuit, plus a petition for a writ of preliminary injunction against the government, lacked merit. In yet another update, Sun.Star Daily related that the Makati Court, on June 27, 2008, dismissed the class action suit. In his decision, Makati RTC Branch 56 Judge Reynaldo Laigo junked the complaint citing lack of evidence (Class Action Reporter, July 1, 2008). Judge Laigo said the order of the authorities for all those inside the hotel, including the plaintiffs-journalists, to vacate the hotel's premises were "lawful" considering the "dangerous situation" at the time. "Under the given dangers, that order issued by defendant NCRPO (National Capital Region Police Office) Director Geary Barias was but lawful and appeared to have been disobeyed by all of those, including some of the plaintiffs, when they intentionally refused to leave the hotel premises for which an applicable criminal charges under Article 151 of the Revised penal Code," said Judge Laigo. The ruling further stated, "thus, the plaintiffs (Ellen Tordesillas, Charmaine Deogracias, Ashzel Hachero, James Galvez and Vergel Santos) having been handcuffed and brought to Camp Bagong Diwa, Bicutan, Taguig City for investigation, and released thereafter was justified, it being in accordance with the police procedure." "We are willing to go to the higher courts or even to the United Nations to seek the reversal of a lower court ruling on our case," a united statement of print and broadcast journalists said, which they issued during a round-table discussion at the Fort in Taguig City. The McClatchy-Tribune Information Services recounts that at this roundtable discussion, journalists tackled the recent court decision junking their PHP-10 million class suit against high- ranking government officials and military and police officers. "Definitely we will appeal to the higher courts the unjust ruling of the Makati court. We will go to the Court of Appeals or we can file a motion for certiorari at the Supreme Court," lawyer Harry Roque said. Mr. Roque said what made the lower court ruling more damaging to press freedom is it gave the police the authority to bar journalists from covering similar events by invoking the concept of "dangerous situation or crime scene." Yet, he cautioned the authorities against using the ruling to prevent the media from covering similar events, adding that the decision is not "final and executory." "The ruling has no jurisprudence since that is only reserved to decisions of the Supreme Court," he said. QUIZNOS SUB: Franchisees Sue Over Deceptive Business Practices -------------------------------------------------------------- Owners of shuttered local Quiznos Sub stores sue the company before the U.S. District Court in Pittsburgh (Penna.), accusing the company of engaging in deceptive business practices to lure people into buying franchises -- practices that invariably cause the store to fail, Bill Vidonic of the Beaver County Times reports. Rene and Gwen Vela of Enon Valley -- the owners of the former Chippewa Township Quiznos store -- and Andrew Schry of Ellport, who owned the sub sandwich shop along Wagner Road in Center Township, claim that the company: -- "engages in a policy of fraudulently and deceptively inducing franchisees to purchase Quiznos franchises" as it intentionally misrepresents terms of the franchise contract, changes policies with no warning, and also misrepresents financial predictions and the likelihood a franchise will succeed; -- oversaturates a geographical area with more franchises than the market can support and doesn't conduct research into whether an area can support even a single franchise; -- forces stores to buy food and supplies at a high price from company-mandated suppliers and won't allow stores to get cheaper products from other suppliers; -- forces stores to accept coupons for free or discounted food but doesn't reimburse the stores, cutting into the stores' profits; and -- once a store fails and closes, threatens to make year agreement. franchises liable for royalty payments laid out in a 15- According to the complaint, the Velas were promised by Quiznos representatives in 2005 that they could expect annual profits of "over $100,000" from the store, and could pay off their mortgage in three years. In the lawsuit, an attorney wrote that in the spring of 2007, the Velas were concerned about the lower-than-expected business at their store, but were told by a local Quiznos representative to "sit tight," that sales would improve in the summer, and that the company would do what it could to help. The lawsuit says that Quiznos engaged in racketeering and seeks relief. Attorneys for the local franchisees also seek to have the lawsuit declared a class-action suit, meaning they can join groups of others who have already sued Quiznos. Denver-based Quiznos has more than 4,900 locations in 15 countries and 425 in Canada, where it boasts it is growing fastest among quick-service restaurant chains. R&G FINANCIAL: Sept. 16 Hearing Set for $51-Mln. N.Y. Suit Deal --------------------------------------------------------------- The U.S. District Court for the Southern District of New York will hold a fairness hearing on Sept. 16, 2008, at 3:00 p.m., to consider final approval of the combined $51,000,000 settlement by R&G Financial Corp. ($39,000,000) and PricewaterhouseCoopers LLP ($12,000,000) of the matter, "In re R&G Financial Corporation Securities Litigation, Case No. 1:05-cv-04186-JES." The hearing will be held before Judge John E. Sprizzo, at the U.S. District Court for the Southern District of New York, in 500 Pearl St., New York. Any objection or exclusions to and from the settlement must be submitted by Sept. 2, 2008. Deadline for the submission of a claim form is on Sept. 26, 2008. Case Background On May 26, 2005, investors sued R&G Financial, claiming that the financial holding company issued false and misleading financial statements to the investing public (Class Action Reporter, March 4, 2008). The class action suit was filed in the U.S. District Court for the Southern District of New York seeking damages for violations of federal securities laws on behalf of all investors who purchased R&G common stock from April 21, 2003, through and including April 25, 2005. The lawsuit claims that the defendants violated Sections 10(b) and 20(a) of the U.S. Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder, including U.S. Securities and Exchange Commission Rule 10b-5. According to the complaint, R&G's financial statements were materially false and misleading when made because the defendants failed to disclose: -- that the company's earnings quality had been significantly weakened by the company's use of more aggressive assumptions to generate gain on sale income, as well as to the value it retained in its interest only residuals in securitization transactions; -- that R&G's methodology used to calculate the fair value of its IO residual interests was incorrect and caused the company to overstate its financial results by at least $50 million; -- that the company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles; -- that the company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the company; and -- that as a result, the value of the company's net income and financial results were materially overstated at all relevant times. On April 25, 2005, after the close of trading, R&G shocked the investing public when it announced that it would restate its earnings for 2003 and 2004. On this news, R&G stock fell $8.14 per share, or 35 percent, to close at $15.04 on April 26, 2005, a two-year low. On June 27, 2005, competing motions for the appointment of lead plaintiff and lead counsel were filed in court. Judge John Sprizzo heard oral arguments on July 25-26, 2005, signed an order consolidating all related cases into one class action, as "In re R&G Financial Corporation Securities Litigation, Master File No. 05 Civ. 4186 (JES)," and appointing lead plaintiffs and lead counsel (Class Action Reporter, Oct. 24, 2006). Representing the plaintiffs are: Jeffrey Alan Barrack, Esq. (jbarrack@barrack.com) Barrack, Rodos & Bacine Two Commerce Square 2001 Market Street, Suite 3300 Philadelphia, PA 19103 Phone: 215-963-0600 Fax: 215-963-0838 - and - Eric Todd Kanefsky, Esq. (erick@blbglaw.com) Bernstein Litowitz Berger & Grossmann LLP 1285 Avenue of the Americas New York, NY 10019 Phone: 212-554-1467 Fax: 212-554-1444 Representing the defendants are: Maite Aquino, Esq. (aquinom@sullcrom.com) Sullivan & Cromwell, LLP 125 Broad Street New York, NY 10004 Phone: 212-558-4000 - and - Diana L. Weiss, Esq. (dweiss@orrick.com) Orrick, Herrington & Sutcliffe, LLP Columbia Center 1152 15th Street, N.W., Washington, DC 20005-1706 Phone: 202-339-8984 Fax: 202-339-8500 RICELAND FOODS: Ark. Farmers Sue Over Genetically Modified Rice --------------------------------------------------------------- Arkansas rice farmers filed a class-action lawsuit against Riceland Foods Inc. in Lonoke County Circuit Court, seeking compensatory and punitive damages for the tainted rice that entered the 2006 rice crop, press reports say. Arkansas News Bureau's Jason Wiest writes that Riceland Foods in Stuttgart subjected the state's rice farmers to an "ultrahazardous risk" when it experimented with genetically modified rice that contaminated the commercial supply. John Henry of the Arkansas Business Online says that the contaminated, genetically engineered rice that got into the crop could not be exported to numerous countries and the price fell. "While Riceland Foods is a very important corporation in Arkansas, they breached the trust of their farmer members - and that of all rice farmers -- by failing to act in a timely and proper manner regarding the tainted rice," said Paul Byrd, Esq., managing counsel of the Arkansas office of the Hare Wynn Newell & Newton Law Firm. According to Mr. Byrd, their case is based on their belief: -- that Riceland is responsible for the LL62 contamination of non-genetically engineered long-grain rice in Arkansas in 2006; -- that Riceland, in collaboration with Aventis (previously known as Bayer), tested LL62 rice in such a way as to permit cross-pollination with non-GE long-grain rice; -- that Riceland, in its collaboration with Aventis, and in its 2000-2001 testing, planting, growing, harvesting, storing, transporting and disposal of LL62 rice, permitted the commingling of LL62 rice with non-GE rice such as to contaminate the 2006 Arkansas long-grain rice crop; and -- that Riceland was negligent or otherwise legally responsible in its handling of LL62 rice such that the U.S. long-grain rice crop was contaminated by LL62 and GE rice in 2006. "Riceland Foods knew that that (European) market would not accept it, and they knew that there was a risk of contamination, but they still engaged in the collaboration," Mr. Byrd said, "obviously hoping that there would be customer acceptance by the time it ultimately was found that it was going to be contaminated." The Arkansas News Bureau recounts that Riceland was alerted to the contamination in January 2006 when the genetically modified rice from Arkansas was detected in Europe. The company did not disclose the contamination publicly until August, when rice planted in April and May that year was being harvested. If the contamination had been made public earlier, farmers could have planted alternate varieties or different crops, or there could have been an industry-wide approach to segregating the rice, Mr. Byrd said. According to Mr. Byrd, rice sales are about $2 billion each year, and about 50% of the rice grown is exported. Arkansas is the leading rice-producing state in the nation and grows about 60% of the long-grain variety. Mr. Byrd said that in 2005 the European Union, bought about $800 million worth of U.S. long-grain rice. With the contamination, the plaintiffs were unable to sell all their long-grain crop for the higher price it would have brought if it had not been tainted. The Arkansas News Bureau says that Riceland Vice President Bill Reed declined to comment on the lawsuit, saying the company had not yet been served papers. Riceland Foods, located in Stuttgart, Arkansas, U.S.A., is an agricultural marketing cooperative and the world's largest miller and marketer of rice. STATE STREET: Faces Suit in Massachusetts Over Subprime Losses -------------------------------------------------------------- On June 30, 2008, a shareholder has filed a putative class action lawsuit in the U.S. District Court for the District of Massachusetts against State Street Corporation and State Street Global Advisors over subprime losses, PR-inside.com reports. The suit was filed on behalf of all shareholders who bought shares of the SSgA Yield Plus Fund. The suit accuses defendants of making false statements and material omissions in communications pertaining to the sale of shares in one of their funds. The complaint also alleges that defendants solicited investors to purchase shares of the SSgA Yield Plus Fund by making statements in the Registration Statement and subsequent supplemental prospectuses. Shareholders accuse state Street described the "investment objective" of the SSgA Yield Plus Fund as investments "primarily in a diversified portfolio" with "high-quality debt securities" that include "high credit quality," "sophisticated credit analysis" and "team based decision making by experienced investment professionals", while these statements were materially false and misleading because State Street Corp. did not adequately disclose the risks associated with investing in the Fund and because the Fund was so heavily invested in high- risk mortgage-related or mortgage-backed securities. The State Street Corporation manages $2 trillion for pension funds and other institutions. State Street Global Advisors is the investment advisor to the entire group of mutual funds under the State Street name. The suit is "Yu v. State Street Corporation et al., Case Number: 1:2008cv11108," filed in the U.S. District Court for the District of Massachusetts, Judge Joseph L. Taur, presiding. [REDACTED July 8, 2008] WINTERS BROTHERS: Faces N.Y. Suit Over Antitrust Laws Violations ---------------------------------------------------------------- Winters Brothers Waste Systems Inc. is facing a class-action complaint filed in U.S. District Court in Central Islip (New York), accusing the Westbury-based garbage company and its affiliates of violating antitrust laws, which forbid a business from monopolizing the market or restraining free trade, the McClatchy-Tribune Information Services reports. In the lawsuit, three Suffolk business owners said Winters Brothers engaged in a "relentless campaign to restrain and coerce" customers from switching to competitors who offer lower prices. The plaintiffs in the lawsuit are: -- All Star Carts and Vehicles Inc., a manufacturer of food and beverage carts based in Bay Shore; -- Kussmaul Electronics Co. Inc. of West Sayville; and -- H.B. Millwork Inc. of Yaphank. According to the complaint filed on May 5, "Defendants conduct has caused and will continue to cause injury to the competition in [Long Island and New York] in the form of higher prices, reduced competition, innovation and consumer choice." The business owners alleged certain provisions Winters Brothers included in contracts are illegal: -- A provision giving Winters Brothers exclusive rights to collect and dispose of all customers' solid waste and recylables. -- A lengthy initial term of, in many instances, between seven and 10 years. -- A provision that automatically renews the contract, typically for an additional seven to 10 years, unless the customer sends Winters Brothers a written notice of cancellation by certified mail 90 days before the end of contract. -- A provision requiring a customer who terminates a contract to pay Winters Brothers a sum equal to the remainder of the contract plus another 50 percent. The plaintiffs seek unspecified damages. Winters Bros. Waste Systems provides the same scope and diversity of professional waste removal services that the large national conglomerates offer, but with the individualized attention and reliability none of their competitors can match. New Securities Fraud Cases FIRST AMERICAN: Bronstein Files Securities Lawsuit in New York -------------------------------------------------------------- Bronstein, Gewirtz & Grossman, LLC, commenced a class action lawsuit in the United States District Court for the Southern District of New York against First American Corporation and various individuals on behalf of purchasers of First American securities who purchased between April 26, 2006 and November 6, 2007. The complaint alleges First American and certain of its officers and directors engaged in an illegal scheme with Washington Mutual, Inc. ("WaMu") to artificially inflate appraisals of homes for use in connection with mortgages issued by WaMu. As a result of the foregoing, and in ignorance of the falsity of First American's statements concerning the operating results along with the performance of the Company, the market price of First American was artificially inflated during the Class Period. As the market became aware of First American's wrongful acts, First American stock price declined from a Class Period high of $55.11 per share on June 1, 2007 to a low of $30.07 per share on November 7, 2007, a decline of 45%, wiping out over $2 billion in market capitalization. For more information, contact: Peretz Bronstein, Esq. Eitan Kimelman Bronstein, Gewirtz & Grossman, LLC 60 East 42nd Street, Suite 4600 New York, NY 10165 Phone: 212-697-6484 ********* 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 research, 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 S. Senorin, Janice M. Mendoza, Freya Natasha F. Dy, and Peter A. Chapman, Editors. Copyright 2008. 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 * * *