/raid1/www/Hosts/bankrupt/CAR_Public/990607.MBX
C L A S S A C T I O N R E P O R T E R
Monday, June 7, 1999, Vol. 1, No. 87
Headlines
ARCHER DANIELS: $4.8 Million Settlement in Sodium Gluconate Case
CHEMINOVA INC.: Floridians Balk at Contaminated Malathion Spray
CLAIBORNE LIZ: Mademoiselle Employees' Contract Claims Dismissed
DISABILITY ACCESS: Visually Impaired Can't Find Talking ATMs
ESSO: Down Under, Lawyers Argue Over Ad Space for Class Notices
FRANKLIN ELECTRONICS: Consumer Suit Demands Bug-Free Electronics
HYPODERMIC SYRINGES: Makers Blamed for Accidental Punctures
IMMIGRATION LAWS: INS Can Revoke Citizenship Obtained by Fraud
INTERNATIONAL GAME: Las Vegas Suit Charges Gambling is a Racket
ITRON INC.: Insurance Pays $12 Million to Settle Investor Suit
MARRIOTT RESIDENCE: Partners Complain About Merger and Fees
MCI WORLDCOM: Investors Complain About Skytel Disclosures
MERRILL LYNCH: Finds Sex Discrimination in 300 of 900 Claims
NATIVE AMERICANS: Suit Claims Tribes Excluded from Tobacco Funds
PINNACLE MICRO: California Securities Case Settled
THE CASH STORE: Judge Okays Class Action for Payday Loan Claims
ZILOG INC.: Plaintiffs Appeal Dismissal of California Litigation
*********
ARCHER DANIELS: $4.8 Million Settlement in Sodium Gluconate Case
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Archer Daniels Midland Co. and four other companies will pay
$4.8 million over the next 12 months to settle allegations they
conspired to fix the price of sodium gluconate, an organic
chemical used in industrial cleaning agents. The settlement
resolves a 1997 class-action suit filed on behalf of direct
purchasers of the chemical.
Named as defendants are the only U.S. makers, sellers and
distributors of sodium gluconate: ADM, Japan's Fujisawa
Pharmaceutical Co. Ltd., Akzo Nobel NV, based in the
Netherlands, France's Roquette Freres and Swiss-based
Jungbunzlauer Holding Ltd. (Chicago Sun-Times; 05/29/99)
CHEMINOVA INC.: Floridians Balk at Contaminated Malathion Spray
---------------------------------------------------------------
The Orlando Sentinel reported that a class-action lawsuit was
filed in U.S. District Court in Tampa by residents who claimed
they suffered toxic exposure to contaminated batches of
malathion. Plaintiffs in the suit against Wayne, N.J.-based
Cheminova Inc. are seeking reimbursement of medical bills,
future medical-monitoring costs and expenses related to property
damage and relocation outside the malathion spray zones.
An alternative to malathion has been approved to fight the
Mediterranean fruit fly and other exotic pests that threaten
Florida's $7 billion agriculture industry. If there's an
outbreak, spinosad, developed by Dow AgroSciences, would replace
ground applications and aerial spraying of malathion in rural
areas. The Environmental Protection Agency approved the use of
the pesticide last week for use against fruit flies in Florida.
Malathion, which is being blamed for numerous health problems of
residents in the Tampa Bay area, still could be sprayed from the
air in urban areas if there were a widespread outbreak. Even
though Dow says the new product is safe, the company won't allow
spinosad to be sprayed over populated areas to avoid litigation.
"It certainly is encouraging to see a shift away from such a
toxic chemical as malathion," said Elaine Holmes, an attorney
and member of CRAM, Citizens for Responsible Alternatives to
Malathion. "It's more target-specific and less toxic to humans
and beneficial insects, like bees and ladybugs."
According to the manufacturer, spinosad is a natural product
made from fermented soil bacteria. And unlike malathion, which
was blamed for killing fish and a host of other animals in the
Tampa Bay area in 1997, spinosad is more selective, said Joe
Eger, a field development biologist for Dow.
However, spinosad is just as effective as malathion at killing
Medflies, according to the EPA. Plus, Eger said, the bait used
to attract the flies to the spinosad is better than the lure
used with malathion and less damaging to cars.
The Medfly, smaller than a household fly, targets 250 kinds of
vegetables and fruits, especially citrus. It burrows through the
skin to deposit larvae, eventually causing the fruit to rot.
State agriculture officials battled outbreaks in 1997 and 1998
in Lake, Hillsborough, Sarasota, Manatee and Polk counties.
Malathion was sprayed on the ground and from the air. An
estimated 1 million people lived and worked in the spray zone,
and the state received more than 7,000 complaints of sinus
congestion, rashes, headaches and respiratory problems. (THE
ORLANDO SENTINEL; June 4, 1999)
CLAIBORNE LIZ: Mademoiselle Employees' Contract Claims Dismissed
----------------------------------------------------------------
On May 6, 1998, Mademoiselle Knitwear, Inc. ("Mademoiselle"), a
former knitgoods supplier for the Company, filed suit against
CLAIBORNE LIZ INC and three labor unions. The suit seeks $30
million in compensatory damages, trebling under civil RICO, and
$50 million in punitive damages for a variety of claims against
the Company related to an alleged commitment by the Company to
supply orders to Mademoiselle for a certain number of knitwear
goods during the period June 1992 through June 1998.
On September 30, 1997, a related putative class action, Chun Hua
Mui v. Union of Needletrades Industrial and Textile Employees
(UNITE), et. al., was filed against the Company and the three
unions who are defendants in the Mademoiselle lawsuit noted
above. The employee complaint seeks on behalf of a class of
current and former Mademoiselle employees $30 million in
damages, an injunction requiring the Company to provide knitwear
orders to Mademoiselle through June 1998, and a constructive
trust on certain liquidated damage payments paid by the Company
to UNITE in May 1997.
The Company and the unions moved to dismiss the complaint for
failure to state a claim for relief. On August 18, 1998, the
court issued an opinion dismissing all of the claims against the
Company, including the claim under Section 302 of the NLRA
brought jointly against the Company and the unions.
On September 2, 1998, plaintiffs moved for reargument of the
dismissal of the contract claims against the Company or,
alternatively, for leave to amend the complaint. The Company
responded and the matter was fully briefed and submitted to the
court on October 30, 1998. On December 31, 1998, the court
issued an opinion granting reargument but adhering to its
original determination dismissing the contract claims against
the Company and denying plaintiffs' motion for leave to amend.
In that same opinion, the court granted class certification with
respect to the claims remaining in the case, which are pending
only against various of the union defendants.
The Company believes that these claims are without merit and
intends to defend these actions vigorously.
DISABILITY ACCESS: Visually Impaired Can't Find Talking ATMs
------------------------------------------------------------
PHILADELPHIA - York Daily Record A group of blind Pennsylvanians
filed suit Thursday against two banks, accusing them of
violating federal disability laws because their ATMs are not
accessible to people who cannot see.
The suits ask that Mellon Bank and PNC Bank upgrade or buy new
machines to allow users to plug in headphones or pick up a
receiver to hear step-by-step instructions as they appear on the
screen. They were filed by several individuals and the National
Federation of the Blind of Pennsylvania in the U.S. District
Courts in Pittsburgh and Philadelphia.
The federation is seeking class-action status on behalf of the
estimated 60,000 visually impaired Pennsylvanians.
Officials from both banks refused to comment, saying they hadn't
had time to review the suit. Neither bank could say whether
talking ATM technology had been considered in Pa. (York Daily
Record; 06/04/99)
ESSO: Down Under, Lawyers Argue Over Ad Space for Class Notices
---------------------------------------------------------------
The AAP Information Services Pty. Ltd. reported from Australia
that Victoria's gas crisis was back in court, where lawyers
debated the size of newspaper advertisements to be used to alert
Victorians to the class action claim.
Civil litigation brought by firms Maurice Blackburn and Slater &
Gordon is seeking more than $1 billion in compensation on behalf
of all gas consumers who allegedly suffered financial losses
during the 10-day gas stoppage last year. An explosion and fire
knocked Esso's Longford natural gas plant off line on September
25, leaving most of the state without gas. The accident prompted
a lengthy Royal Commission and a welter of legal cases.
In the Federal Court this morning, lawyers began considering the
form of advertisement which should be used so Victorians knew
how to participate in the case. Because the advertisements will
ask those who do not want to be part of the claim to register,
Esso lawyers argued for a large campaign. The other side, which
is to meet the estimated $1 million cost of placing the
advertisements in Victorian newspapers, was seeking a smaller-
scale approach.
Justice Ron Merkel is expected to rule on the campaign this
afternoon, making it possible for the claims process to begin.
Meanwhile, Esso's barrister John Middleton, QC, managed to stave
off attempts to have sections of the company's lengthy defense
against the claim removed. The move allowed Esso to start its
case against those it considers share any blame over the crisis.
In a cross-claim, Esso is seeking unspecified damages from the
18 parties it names in its claim as well as a contribution from
them to any successful damages actions brought against the
company arising out of the Longford disaster. Esso is suing gas
retailers and distributors, state government departments,
Treasurer Alan Stockdale and the State of Victoria.
FRANKLIN ELECTRONICS: Consumer Suit Demands Bug-Free Electronics
----------------------------------------------------------------
The San Francisco Examiner reports that a New Jersey class-
action recently challenged a longtime software industry practice
of issuing imperfect titles, in this case forcing a software
publisher to release a free fix.
"There has to be a line drawn between a bug and a design
defect," said Michael Boni, the Philadelphia attorney who filed
the class- action case against Burlington, N.J.-based Franklin
Electronics Publishers Inc. "And the courts have to do that
drawing."
Most computer users expect some software "bugs" - errors that
hamper a software title's performance. Consumers either wait for
the software publisher to issue a "patch" or fix or hope that
the bug is repaired in the next version to appear on store
shelves - which they usually have to pay for. It's an uneasy
relationship that's akin to buying a new car that sometimes
refuses to start. In the case of the car, though, government-
ordered recalls and consumer lawsuits are common remedies. In
the case of defective software, users have been content with
complaining on customer support lines, hunting the Internet for
fixes or simply giving up and buying new software.
New Jersey native Jacob Winigrad refused to follow that route.
In October 1997, Winigrad bought a REX PC companion, a best-
selling credit card-sized electronic organizer that let him
track his phone list, keep a calendar and to prioritize a to-do
list. However, according to court records, Winigrad's REX PC
companion had an annoying habit of scrambling the order of his
to-do lists, contrary to the claims of Franklin Electronics
Publishers, its manufacturer. When Winigrad called Franklin's
product support line, he was told the company knew of the
problem, but that it could not, or would not, fix it - an all-
too-familiar scenario for home software users.
Adding insult to injury, Winigrad alleged he was charged for
every minute he was on Franklin's product support telephone
line. "Thus," his complaint stated, "plaintiff was advised that
he would be billed $2 per minute, just to learn that the product
he purchased, and which was under warranty, was defective and
would not be repaired or replaced by the company."
On Feb. 24, 1998, in what is believed to be a first-of-its-kind
consumer software bug lawsuit, Winigrad filed a class-action
against Franklin in Camden County, N.J., Superior Court. In his
multicount complaint, Winigrad accused Franklin of negligence,
breach of warranty and violation of New Jersey consumer
protection statutes. Winigrad alleged that the REX he and others
bought was defective in design.
In May of this year, in a first-of-its-kind lawsuit settlement,
Franklin announced it would issue a free software upgrade to fix
the REX's to-do list priority problem. "Although Franklin
vigorously denies any liability," the company said, "it has
agreed to settle the case to avoid the burden of continued
litigation." Franklin did not return phone calls seeking further
comment on the settlement.
"This lawsuit brings to a head an important issue," said Boni,
Winigrad's attorney. "We wanted to test the boundaries of what
is considered a bug and what is considered a design defect.
"It's not clear, and this class-action seeks to define that
boundary."
It's a test many home computer users will welcome. According to
a recent PC World magazine poll, almost 80 percent of its
subscribers say they've bought software that contains bugs.
"Buggy software is a huge problem," said Scott Spanbauer, PC
World contributing editor who writes the magazine's monthly
"Bugs and Fixes" column. "It's a massive waste of time and
utterly frustrating, and we pretty much take it lying down."
The software industry counters that producing bug-free software
is impossible, given the different combinations of computers,
printers, scanners, Internet connections and other
configurations that users install software on. "You can test and
retest and retest software in as many configurations that you
can think of, and there will always be someone who will use the
software in a way you didn't anticipate," said Lauren Hall,
chief technology officer for the Software and Information
Industry Association, a Washington, D.C., software publishers
group. "It's just impossible to create bug-free software
titles."
One proposed package of legal remedies for software bugs has
been wending its way through various law groups. Called the
Uniform Computer Information Transaction Act (UCITA), these
model laws will help state lawmakers and courts arbitrate
software defect disputes. The guidelines will be voted on for
adoption in July when the National Conference of Commissioners
on Uniform State Laws meets in Denver. These guidelines, backed
by software industry heavyweights, such as Microsoft and IBM,
have been roundly criticized by consumer groups as favoring
software publishers in computer bug courtroom battles. The
guidelines "permit software sellers to write contracts that
sidestep the usual statutes and case law protecting consumers,"
said Jamie Love, director of the Consumer Project on Technology,
a Washington, D.C., high-tech consumer advocacy group started by
Ralph Nader. "They want to elevate themselves above the law,
basically."
Emery Simon, counselor with the Washington, D.C.-based Business
Software Alliance, disagreed. "UCITA has been drafted by a
committee of professors and experts," said Simon, whose group
represents software companies. "It's designed to reflect the
current statutes and case law in 50 states, so how could Love
possibly be right? UCITA was created to ensure uniformity in
dealing with these problems, not overturn or otherwise do harm
to existing law."
While the software industry continues to wrestle with bugs, Boni
predicts there'll be more software bug lawsuits. "It's a field
that will grow," he said. "With year 2000 coming, attorneys are
focusing on software problems as an area in need of litigation."
(San Francisco Examiner; 06/03/99)
HYPODERMIC SYRINGES: Makers Blamed for Accidental Punctures
-----------------------------------------------------------
Becton Dickinson & Co., American Home Products Corp. and three
other makers and sellers of hypodermic syringes are facing a
lawsuit alleging their needles should have safety features to
protect health-care workers from accidental puncture wounds that
could expose them to disease.
The complaint seeks class-action status on behalf of about one
million health-care workers accidentally pricked by needles each
year and $3,500, plus other damages, for each class member.
(National Post; June 4, 1999)
Additionally, the News and Observer (Raleigh, NC, June 4, 1999)
reported that similar cases have been filed against needle
makers and sellers in at least nine states. In the current case,
the plaintiff, Marilyn Benner, a critical-care nurse, was
reportedly stuck by a needle in 1998 after it was used on a man
infected with HIV, the virus that causes AIDS, and Hepatitis C,
the suit said. While Benner wasn't infected, the suit claims
that she suffered emotional distress from the exposure and the
testing she had to endure.
IMMIGRATION LAWS: INS Can Revoke Citizenship Obtained by Fraud
--------------------------------------------------------------
The Associated Press reported that a federal appeals court ruled
federal immigration authorities can revoke an immigrant's
naturalized citizenship if it was obtained by fraud. The 2-1
ruling by a panel of the 9th U.S. Circuit Court of Appeals
overturned the decision of a Seattle judge who said the power of
the Immigration and Naturalization Service to revoke citizenship
for fraud was open to serious question.
The case arose from a class-action lawsuit that challenged the
INS's authority to revoke the citizenship of immigrants who
failed to disclose their past arrests. The immigrants argued
that only a court could revoke their citizenship. A 1990 law
authorized the INS to grant citizenship to qualified immigrants,
a power that was previously handled by the courts. But the INS
said the power to grant citizenship included the power to revoke
it as well, although that was not expressly stated in the
wording of the statute.
On Friday, the appeals court said the power to revoke was
implicit in the power to naturalize.
The Seattle federal judge, in ruling against the INS, had halted
revocation proceedings involving fraud until the class-action
lawsuit could be tried. Those can now go forward.
Jonathan S. Franklin, a lawyer for the immigrants, said he would
appeal by asking for a hearing before the full appellate court.
The case effects about 4,500 people. "Citizenship is among a
person's most cherished rights," he said. "This is the first
time any court has ever held that the INS may take that right
away on its own, without going before a judge."
INS spokeswoman Elaine Komis said the agency had not seen the
ruling and would not comment. (AP Online; 06/04/99)
INTERNATIONAL GAME: Las Vegas Suit Charges Gambling is a Racket
---------------------------------------------------------------
Along with a number of other public gaming corporations,
INTERNATIONAL GAME TECHNOLOGY is a defendant in three class
action lawsuits, one filed in the United States District Court
of Nevada, Southern Division, entitled Larry Schreier v.
Caesar's World, Inc., et al., and two filed in the United States
District Court of Florida, Orlando Division, entitled Poulos v.
Caesar's World, Inc., et al. and Ahern v. Caesar's World, Inc.,
et al., which have been consolidated into a single action.
The Court granted the defendants' motion to transfer venue of
the consolidated action to Las Vegas.
The actions allege that the defendants have engaged in
fraudulent and misleading conduct by inducing people to play
video poker machines and electronic slot machines, based on
false beliefs concerning how the machines operate and the extent
to which there is an opportunity to win on a given play. The
amended complaint alleges that the defendants' acts constitute
violations of the Racketeer Influenced and Corrupt Organizations
Act, and also give rise to claims for common law fraud and
unjust enrichment, and seeks compensatory, special,
consequential, incidental and punitive damages of several
billion dollars.
In December 1997, the Court denied the motions that would have
dismissed the Consolidated Amended Complaint or that would have
stayed the action pending Nevada gaming regulatory action. The
defendants filed their consolidated answer to the Consolidated
Amended Complaint on February 11, 1998. At this time, motions
concerning class certification are pending before the Court.
ITRON INC.: Insurance Pays $12 Million to Settle Investor Suit
--------------------------------------------------------------
Itron Inc. has resolved a class-action investor lawsuit for $12
million, a sum to be paid by its insurance carriers. The lawsuit
was filed in May 1997 on behalf of all investors who bought
Itron stock between September 1995 and October 1996. The price
of Itron shares soared to $60 in early 1996. By October, they
had fallen to $15.
The complaint claimed the wild ride was prompted by misleading
company reports about its technology and the reason sales were
below expectations. The complaint said Itron was covering up
shortcomings in its remote meter-reading equipment and customer
disappointment with its performance. The stock price began to
suffer, finally hitting $15 when Itron reported a loss for the
third quarter of 1996, the end of the class period. Subsequent
losses pushed the price lower. Shares closed at $7 Thursday, off
44 cents.
Spokeswoman Mima Scarpelli told The Spokesman Review that the
agreement with attorneys representing company shareholders was
reached last Thursday in negotiations mediated by federal
Magistrate Lonnie Suko. The company and Chairman Johnny
Humphreys, also named in the lawsuit, admitted no wrongdoing or
liability in making the settlement, she noted. "We've believed
since day one that the allegations were without merit,"
Scarpelli said. She said the deal will remove an ongoing
distraction for management and end legal expenditures, also
covered by insurance.
Scarpelli said the company's technology has been vindicated by
operations in the Pittsburgh area and in Virginia. Also, the
Itron reported a profit the past two quarters.
Seattle attorney Steven Toll said the settlement avoids the
risks and delay of taking the case to trial. Preliminary
agreement documents should be forwarded to U.S. District Court
Judge Robert Whaley this month, he said. Because many shares are
held by brokers for clients, Toll said, there is no way of
knowing how many Itron shareholders are part of the settlement
until notices are mailed. He said the number is likely in the
thousands. Itron had more than 12 million shares outstanding
during the period in question. No one is likely to see checks
before next year, he said. (Spokesman Review; 06/04/99)
MARRIOTT RESIDENCE: Partners Complain About Merger and Fees
-----------------------------------------------------------
On February 11, 1998, four individual limited partners in
partnerships sponsored by Host Marriott Corporation ("Host
Marriott") filed a class action lawsuit, styled Ruben, et al. v.
Host Marriott Corporation, et al., Civil Action No. 16186, in
Delaware State Chancery Court against Host Marriott and the
general partners of Courtyard by Marriott Limited Partnership,
Courtyard by Marriott II Limited Partnership, Marriott Residence
Inn Limited Partnership, Marriott Residence Inn II Limited
Partnership, and Fairfield Inn by Marriott Limited Partnership
(collectively, the "Five Partnerships").
The plaintiffs alleged that the proposed merger of the Five
Partnerships (the "Merger") into an umbrella partnership real
estate investment trust proposed by CRF Lodging Company, L.P. in
a preliminary registration statement filed with the Securities
and Exchange Commission, dated December 22, 1997, constituted a
breach of the fiduciary duties owed to the limited partners of
the Five Partnerships by Host Marriott and the general partners
of the Five Partnerships. In addition, the plaintiffs alleged
that the Merger breached various agreements relating to the Five
Partnerships. The plaintiffs sought, among other things, the
following: certification of a class; injunctive relief to block
consummation of the Merger or, in the alternative, rescission of
the Merger; and damages.
The defendants, in light of market conditions, decided to
abandon their efforts to complete the Merger. As a result of
this decision, the plaintiffs voluntarily dismissed the lawsuit.
On March 16, 1998, limited partners in several partnerships
sponsored by Host Marriott filed a lawsuit, styled Robert M.
Haas, Sr. and Irwin Randolf Joint Tenants, et al., v. Marriott
International Inc., et. al., Case No. 98-CI-04092 (the "Haas
Case"), in the 57th Judicial District Court of Bexar County,
Texas against Marriott International, Inc. ("Marriott
International"), Host Marriott, various of their subsidiaries,
J.W. Marriott, Jr., Stephen Rushmore, and Hospitality Valuation
Services, Inc. (collectively, the "Defendants"). The lawsuit
relates to the following limited partnerships: Courtyard by
Marriott Limited Partnership, Courtyard by Marriott II Limited
Partnership, Marriott Residence Inn Limited Partnership,
Marriott Residence Inn II Limited Partnership, Fairfield Inn by
Marriott Limited Partnership, Desert Springs Marriott Limited
Partnership, and Atlanta Marriott Marquis Limited Partnership
(collectively, the "Seven Partnerships").
The plaintiffs allege that the Defendants conspired to sell
hotels to the Seven Partnerships for inflated prices and that
they charged the Seven Partnerships excessive management fees to
operate the Seven Partnerships' hotels. The plaintiffs further
allege, among other things, that the Defendants committed fraud,
breached fiduciary duties, and violated the provisions of
various contracts. The plaintiffs are seeking unspecified
damages.
The Defendants, which do not include the Seven Partnerships,
believe that there is no truth to the plaintiffs' allegations
and that the lawsuit is totally devoid of merit. The Defendants
intend to vigorously defend against the claims asserted in the
lawsuit. They have filed an answer to the plaintiffs' petition
and asserted a number of defenses.
A related case concerning Courtyard by Marriott II Limited
Partnership was filed by the plaintiffs' lawyers in the same
court, involves similar allegations against the Defendants, and
has been certified as a class action. Trial in this related case
is presently scheduled for May 1999. Due to the prosecution of
the related case, there has been no meaningful activity in the
Haas case.
Although the Seven Partnerships have not been named as
defendants in the lawsuit, the partnership agreements relating
to the Seven Partnerships include an indemnity provision which
requires the Seven Partnerships, under certain circumstances, to
indemnify the general partners against losses, expenses and
fees.
MCI WORLDCOM: Investors Complain About Skytel Disclosures
---------------------------------------------------------
MCI WorldCom is being sued by investors and may be facing a
federal probe over whether it improperly concealed its plans to
buy paging company Skytel Communications, according to an
Associated Press story.
A class-action suit was announced by a group of investors
charging they made money-losing trades after MCI WorldCom made
misleading statements. Regulators, meanwhile, are reportedly
investigating whether MCI WorldCom intentionally mislead
investors with its statements regarding the Web address on May
25, three days before announcing the $1.3 billion purchase of
Skytel.
According to the Atlanta Journal and Constitution, the suit
alleges MCI Worldcom violated securities law by falsely denying
any intentions to acquire SkyTel. On May 25, the news agency
Company Sleuth said MCI had registered skytelworldcom.com as an
Internet domain name. The plaintiffs' attorneys said the name
was a sign of MCI's intention to acquire Skytel. The attorneys
said Skytel shares shot up about 16 percent, from $18.87 a share
to $21.87 a share after the registration. As reported, MCI
Worldcom said the registration was not an indication of the
company's intention to acquire Skytel. Plaintiffs' attorneys
said MCI's denial was a deliberate ploy to reduce the price of
Skytel shares and thereby reduce the amount MCI would have to
pay for Skytel. The attorneys said after MCI issued the denial
Skytel shares fell to $18.69. MCI agreed to acquire SkyTel for
$1.27 billion in stock, about $21.50 a share.
MERRILL LYNCH: Finds Sex Discrimination in 300 of 900 Claims
------------------------------------------------------------
The Associate Press writes that Merrill Lynch & Co. will begin
settlement negotiations with about 300 of the 900 women who
filed sex discrimination claims against the firm earlier this
year as part of a nationwide class-action lawsuit. Merrill
Lynch, the nation's largest brokerage firm, acknowledged in a
memo Friday to its national sales staff that "in some instances,
where it is clear that co-workers or managers did not treat
women properly, Merrill Lynch will take appropriate action
against those responsible for the improper conduct."
The case, originally filed on behalf of eight women, covered
financial consultants who worked for Merrill Lynch between
January 1994 through June 1998. Of the 2,900 women eligible to
join the case, 31 percent came forward and claimed the firm gave
men more walk-in clients, referrals, leads, departing brokers'
accounts and initial public offerings.
"This has been a long hard fight, and we are pleased to see, for
the first time, Merrill is acknowledging that in fact there were
legitimate claims and there was mistreatment of women at the
firm," said Linda Friedman, a plaintiff lawyer for with Stowell
& Friedman in Chicago.
Merrill Lynch, however, found the remaining two-thirds of the
complaints did not have the information to "support the
allegations made in the claims," according to the memo, which
was signed by Launny Steffens, vice chairman of the New York-
based company. Those 600 women have 90 days in which to request
mediation, after which, if they are still not satisfied with the
outcome, can request a hearing.
The closely watched case is helping change the way
discrimination cases are handled on Wall Street. Until recently,
nearly all cases were handled through industry arbitration a
system criticized as biased in favor of companies because most
of the arbitrators were men. Under the settlement, Merrill Lynch
became the first Wall Street firm to end mandatory arbitration
for civil rights claims.
Merrill Lynch is making other changes too. "We have recently put
into place a variety of initiatives intended to foster success
and fairness, including new policies for account distribution
and leaves of absence," Steffens wrote in the memo. "We will be
announcing more initiatives shortly." (AP Online; 06/04/99)
NATIVE AMERICANS: Suit Claims Tribes Excluded from Tobacco Funds
----------------------------------------------------------------
The Associated Press reports that American Indians have filed a
$1 billion lawsuit against the tobacco industry, claiming they
were unfairly excluded from the massive settlement reached by
states. Representatives of more than 20 American Indian tribes
and groups said they were snubbed in the tobacco industry's $200
billion settlement with the states, and they're suing for what
they claim is their fair share.
"Once again in Indian country we have been left clear out of the
process," said Wilfred Louie, one of several tribal officials
who appeared at a news conference Thursday to discuss the class
action federal suit filed on behalf of 20 tribes and pueblos.
The suit, filed in San Francisco, demands $1 billion in
compensation and punitive damages from several tobacco
companies.
The suit stems from an agreement reached last November in which
the tobacco industry promised to pay $40 billion over 25 years
to settle four state lawsuits and another $206 billion in a
broader deal with the other 46 states. According to the suit,
Indians were counted in census data used to determine how the
money would be distributed but were not allotted their own share
of the money. The suit claims that is a violation of Indian
sovereignty and amounts to racial discrimination.
A spokesman for the tobacco industry said officials had not seen
the suit and could not comment on its allegations.
Nathan Barankin, a spokesman for California Attorney General
Bill Lockyer, said the assumption that Indians won't benefit
from the settlement is "perhaps a premature conclusion, at least
for California."
According to the suit, Indians traditionally have used tobacco
for ceremonial and medicinal purposes only. But during World War
II, Indian soldiers were introduced to cigarettes and tobacco
companies began targeting that population, the suit charges.
Today, American Indians smoke at a rate of 39 percent, compared
to 26 percent for blacks, 25 percent for whites, 18 percent for
Hispanics and 15 percent for Asians, the suit says. (AP Online;
06/03/99)
Additionally, the San Francisco Chronicle reported that the
press conference announcing the class action suit was held at
the American Indian Public Charter School in Oakland. Wilfred
Louie, vice chairman of the Coleville Confederacy of Tribes,
reportedly said "Once again we are seeing Indian people left out
of the process, and yet we bury our people every day (because of
tobacco)."
The Chronicle explained that the sum being demanded by the
tribes was calculated by applying a per capita formula to the
$206 billion settlement, according to Michael McShane, an
attorney with the San Jose firm Alexander, Hawes and Audet.
Lawyers for the tribes also want a court order prohibiting the
release of the money they say should go to the Indians until the
matter is resolved, McShane said. If the Indians prevail, tribal
officials said the money would be funneled into health and
education programs that address the problem of tobacco addiction
within their community.
PINNACLE MICRO: California Securities Case Settled
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On March 15, 1996, a complaint was filed against PINNACLE MICRO
INC and certain of its current and then directors and executive
officers in a securities class action lawsuit which alleges that
Company management engaged in improper accounting practices and
made certain false and misleading statements. The complaint was
filed in the United States District Court for the Central
District of California under the case name Wills, Cohen, et al.
v. William Blum et al., Case No. SACV96-261GLT.
On or about November 10, 1997, the Company reached an agreement
in principle with the plaintiffs to settle the lawsuit.
Plaintiffs have agreed to accept payment of $2,325,000 in
exchange for a complete release of all claims arising from the
allegations set forth in the plaintiffs' complaint. All of the
terms of the settlement are not final, and the settlement is
subject to preliminary and final approval by Court as well as
approval by the members of the class.
The Company's insurers have agreed to advance all settlement and
defense costs, including the Company's attorneys' fees and
expenses, subject to the Company's agreement to reimburse the
insurers for up to approximately $577,000 of those settlement
and defense costs if the Company achieves certain positive
financial results prior to the Federal Court's final approval of
the settlement.
Although the Company does not concede that any portion of the
class action settlement is allocable to the Company, the Company
has agreed to the terms of the settlement to avoid further
costs. The Company's portion of the settlement, which totaled
$232,000, has been included in the results of operations for the
fourth quarter ended December 27, 1997.
THE CASH STORE: Judge Okays Class Action for Payday Loan Claims
---------------------------------------------------------------
The Wisconsin State Journal reports that a federal judge has
cleared the way for about 10,000 people to pursue a class-action
lawsuit against a Texas loan company with about 15 offices in
Wisconsin. U.S. District Judge John Shabaz decided that people
who borrowed money from The Cash Store's state offices from Oct.
1, 1997, to Dec. 1, 1998, can jointly sue the company in federal
court. "This is a case where many plaintiffs have identical
potential claims and where each individual claim is too small to
warrant separate prosecution," Shabaz wrote in an opinion
released Wednesday.
The lawsuit against the loan company was filed in December by
Jim and Renata Davis of Beloit who borrowed $600 from the
company in 1997 for Christmas presents for their three children.
They paid about $1,500 in interest before going bankrupt about
six months later.
The Cash Store and similar companies often are called payday
loan companies because low-income working people strapped for
cash use them to borrow money with plans to pay it back out of
their next paycheck. The borrowers must give the companies a
postdated check for the amount of the loan, plus a fee of about
20 percent of the loan. The loans, usually less than $1,000,
often can be renewed every two weeks with payments of another 20
percent fee.
The lawsuit claims The Cash Store violated state law by not
giving customers a signed copy of the loan agreement and
violated federal law in not conspicuously disclosing the finance
charge and annual interest rate of more than 500 percent. The
company changed its forms in December to meet the complaints in
the lawsuit.
The Davises have dropped a third claim that said the loans were
unconscionable under court-made law and the Wisconsin Consumer
Act. The state has no limit on interest rates.
Shabaz rejected The Cash Store's argument that borrowers could
recover greater damages in separate lawsuits. "Ever solicitous
of its borrowers' interest in pursuing claims against it,
defendant argues that class certification is inferior to
separate actions because it will yield too small a recovery
compared to what the claimants could receive in separate
actions," the judge wrote. "This argument, of course, ignores
the reality that potential greater individual recovery is
probably not sufficient incentive for individual claims."
(Wisconsin State Journal; 06/03/99)
ZILOG INC.: Plaintiffs Appeal Dismissal of California Litigation
----------------------------------------------------------------
ZILOG INC. has been named as a defendant in a purported class
action lawsuit that was filed on January 23, 1998 in the U.S.
District Court for the Northern District of California. Certain
executive officers of the Company are also named as defendants.
The plaintiff purports to represent a class of all persons who
purchased the Company's Common Stock between June 30, 1997 and
November 20, 1997.
The complaint alleges that the Company and certain of its
executive officers made false and misleading statements
regarding the Company that caused the market price of its Common
Stock to be "artificially inflated." The complaint does not
specify the amount of damages sought.
On March 24, 1999, the district court granted ZiLOG's motion to
dismiss and entered judgment in favor of all defendants. On
April 16, 1999, the plaintiffs filed their notice of appeal to
the Ninth Circuit Court of Appeals.
*********
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
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Group, Inc., Washington, DC. Peter A. Chapman, Editor. Kent L.
Mannis, Project Editor.
Copyright 1999. All rights reserved. ISSN 1525-2272.
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