/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/991027.MBX C L A S S A C T I O N R E P O R T E R Wednesday, October 27, 1999, Vol. 1, No. 186 Headlines ABERCROMBIE & FITCH: Shepherd & Geller File Securities Suit In Ohio ACT MANUFACTURING: Securities Suit Dismissed And Under Appeal In MA ALZA CORP: Wolf Haldenstein Files Securities Suit In Illinois AMTRAK : Col. Ct Gives Final Approval to Employees Race Bias Settlement BERGEN BRUNSWIG: Kirby McInerney Files Securities Suit In California CHECKERS DRIVE: Defends Vigorously Securities Suit In Kentucky CHECKERS DRIVE: Rally's Shareholders Dela. Suit Dismissed On Merger DAY RUNNER: Schoengold & Sporn File Securities Suit In California GST TELECOMMUNICATIONS: Global Light Rejects Liability In Securities HMO: Philadelphia Ct Dismisses Suit Against Aetna Over RICO Violations HOLOCAUST VICTIMS: Poles Sue Over Swiss Banks' $1.25 Bil Settlement LASERGATE SYSTEMS: Intends To Vigorously Defend Securities Suit In NY MATTEL INC: Lockridge Grindal Files Securities Fraud Suit In New York MCDONALD'S: Co.'s Lawyers In Game Fiasco Case "Fishing", Aussie Ct Says NATIONAL BANK: Prevails in CA Sp Ct Case Alleging Ponzi Scheme RAYTHEON COMPANY: Decries Merit Of Securities Suit In Massachusetts REPUBLIC SERVICES: Chitwood & Harley File Securities Suit In Forida SEATTLE CITY: Hagens Berman Sues Over Fines Based On Defective Meters TOBACCO LITIGATION: BAT Sees No Reason To Settle U.S. Federal Govt Case UNITED CREDITORS: Collection Letter Violates FDCPA & CROA, Il. Ct Rules USDA: Sharks Reeled In To Share In Black Farmers Settlement In Arkansas ********* ABERCROMBIE & FITCH: Shepherd & Geller File Securities Suit In Ohio ------------------------------------------------------------------- The Law Firm of Shepherd & Geller, LLC announced that it has filed a class action in the United States District Court for the Southern District of Ohio on behalf of all individuals and institutional investors that purchased Abercrombie & Fitch Co. (NYSE:ANF) common stock between October 8, 1999 and October 13, 1999, inclusive. The complaint charges that the Company and certain of its officers and directors violated the federal securities laws by providing material information about the Company's sluggish third quarter performance only to certain analysts, without disclosing the information to the investing public as they were legally obligated to do. Contact: Shepherd & Geller, LLC, Boca Raton Jonathan M. Stein, 561/750-3000 Toll Free: 1-888-262-3131 or Scott R. Shepherd, 610/891-9880 Toll Free: 1-877-891-9880 TICKERS: NYSE:ANF ACT MANUFACTURING: Securities Suit Dismissed And Under Appeal In MA ------------------------------------------------------------------- On February 27, 1998, the Company and several of the Company's officers and directors were named as defendants in a purported securities class action lawsuit filed in the United States District Court for the District of Massachusetts. The plaintiffs amended the complaint on October 16, 1998. The plaintiffs purport to represent a class of all persons who purchased or otherwise acquired the Company's Common Stock in the period from April 17, 1997 through March 31, 1998. The amended complaint alleges, among other things, that the defendants knowingly made misstatements to the investing public about the value of the Company's inventory and the nature of its accounting practices. On December 15, 1998, the Company filed a motion to dismiss the case in its entirety based on the pleadings. The Company's motion to dismiss was granted without prejudice on May 27, 1999, and the case was closed by the Court on June 1, 1999. On June 28, 1999 the plaintiffs filed a motion with the Court seeking permission to file a second amended complaint. The Company opposed that motion. On July 13, 1999 the Court denied the plaintiffs' motion to amend, noting "final judgment having entered in this case." On July 26, 1999 the plaintiffs filed a motion with the Court asking the Court to extend the 30-day period for filing an appeal of its ruling dismissing the case. The Company opposed that motion as well, and the Court denied that motion on August 10, 1999. On August 12, 1999, plaintiffs filed a notice indicating their intent to appeal the Court's orders of July 26, 1999 and August 10, 1999. The Company believes the claims asserted in the action and the appeals noticed by the plaintiffs are without merit and intends to continue to defend itself vigorously in this action. ALZA CORP: Wolf Haldenstein Files Securities Suit In Illinois ------------------------------------------------------------- The following was released today by the Law Firm of Wolf Haldenstein Adler Freeman & Herz LLP: Wolf Haldenstein Adler Freeman & Herz LLP announces that it filed a class action lawsuit in the United States District Court for the Northern District of Illinois on behalf of all owners of Alza Corp. common stock as of August 16, 1999, the record date for the vote on approval of a proposed merger between Alza and Abbott Laboratories (the "Merger"). The Merger provided that Alza shareholders would receive 1.2 shares of Abbott stock for each share of Alza. The lawsuit charges Abbott (NYSE:ABT), Alza (NYSE:AZA) and the Chairmen of the two companies with violations of the securities laws and regulations of the United States for failing to inform Alza shareholders, in connection with their vote on the Merger, of material facts concerning Abbott's ongoing negotiations with the Food and Drug Administration ("FDA") concerning one of its manufacturing facilities' compliance with federal regulations. Abbott failed to reveal the difficulties with the FDA until September 28, 1999, i.e. just seven days after Alza shareholders voted to approve the Merger. Upon the release of news concerning these continuing problems with the FDA, Abbott stock, which was trading at $ 43.00 at the time of the September 21, 1999 Merger vote, fell to $ 37.50 on September 29, 1999, thus drastically reducing the value that Alza shareholders would receive for their shares pursuant to the Merger "stock-swap". Additionally, Alza stock dropped from $ 50.25 at the time of the Merger vote to $ 43.625 on September 29, 1999. Plaintiff is represented by the law firm of Wolf Haldenstein Adler Freeman & Herz LLP (www.whafh.com). If you are a member of the proposed class, you have until December 6, 1999 to participate in the case and ask the Court to appoint you as one of the lead plaintiffs for the Class. In order to serve as lead plaintiff, you must meet certain legal requirements. If you wish to discuss this action or have any questions, please contact Wolf Haldenstein Adler Freeman & Herz LLP at 270 Madison Avenue, New York, New York 10016, by telephone at (800) 575-0735 (Michael Miske, Gregory Nespole, Esq., Fred Taylor Isquith, Esq. or Shane T. Rowley, Esq.), via e-mail at classmember@whafh.com or whafh@aol.com making reference to Alza, or visit website at http://www.whafh.comTICKERS: NYSE:ABT NYSE:AZA AMTRAK : Col. Ct Gives Final Approval to Employees Race Bias Settlement ----------------------------------------------------------------------- During a Fairness Hearing October 25, 1999, Judge Emmett Sullivan of the U.S. District Court for the District of Columbia gave final approval to the settlement reached between Amtrak and the Plaintiffs in a class action lawsuit filed on behalf of African American management employees and African American applicants for management positions. The settlement, in the form of a Consent Decree, provides for an $ 8 million fund to provide economic relief to class members, and requires Amtrak to implement wide-ranging changes in its human resources and EEO procedures. There were no objections to the settlement. The lawsuit, filed in August, 1998, contended that Amtrak discriminated against African Americans in terms of selection for management jobs, pay, promotion, discipline, and toleration of a racially hostile work environment. Amtrak and the Plaintiffs voluntarily entered into mediation shortly after the lawsuit was filed, in an effort to address the concerns raised by Amtrak's African American management employees and to avoid litigation costs. In addition to the $ 8 million fund, Amtrak has agreed to implement changes in its human resources and EEO policies and procedures. It has committed, for example, to hire a consultant to undertake a company-wide compensation study, after which any disparities in compensation found to correlate to race will be eliminated. Substantial changes will also be made in the way that positions are posted, and in the entire hiring process. Amtrak has also created a new position, Vice President of Business Diversity and Strategic Initiatives. Among other things, that department will develop EEO complaint and investigative procedures that will ensure timely resolution of internal complaints. Overall, Amtrak and the Plaintiffs believe that the value of these changes to the Plaintiffs and class members will exceed that of the $ 8 million fund. Lead counsel for plaintiffs, Sprenger & Lang, will monitor Amtrak's compliance with the decree over its four-year term. The Washington Lawyers' Committee for Civil Rights and Urban Affairs also served as class counsel for plaintiffs. Contact: Sprenger & Lang Michael Lieder/Maia Caplan 202/265-8010 or Washington Lawyers' Committee Avis Buchanan, 202/319-1000 or For Amtrak: Cliff Black, 202/906-3855 BERGEN BRUNSWIG: Kirby McInerney Files Securities Suit In California -------------------------------------------------------------------- The Following is an Announcement by the law firm of Kirby McInerney & Squire, LLP: A class action lawsuit has been commenced in the United States District Court for the Central District of California on behalf of all purchasers of Bergen Brunswig Corp. (NYSE: BBC) securities during the period between March 16, 1999 and October 14, 1999, inclusive, including former shareholders of Pharmerica Inc. (NASDAQ: DOSE) who received Bergen Brunswig shares in connection with Bergen Brunswig's April 1999 acquisition of Pharmerica or who were entitled to vote on that transaction. The action asserts claims against Bergen Brunswig, certain of its directors and officers and others for violations of sections 10(b), 14(a) and 20(a) of the Securities Exchange Act of 1934 and rules 10b-5 and 14a-9 of the Securities Exchange Commission as well as sections 11, 12(2) and 15 of the Securities Act of 1933, by reason of material misrepresentations and omissions during the Class Period concerning the financial condition of the Stadtlander Drug Co., which Bergen Brunswig purchased in early 1999 from Counsel Corporation. Plaintiff is represented by Kirby McInerney & Squire, LLP. If you are a member of the class described above, you may, not later than sixty days from October 22, 1999, move the Court to serve as lead plaintiff of the class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements. If you wish to discuss this action, or have any questions concerning this notice or your rights, please contact: Kirby McInerney & Squire, LLP Ira M. Press, Esq. Mark Strauss, Esq. Ms. Danielle Feman, Paralegal 830 Third Avenue 10th Floor New York, New York 10022 Telephone: (212) 317-2300 or Toll Free (888) 529-4787 E-Mail: dfeman@kmslaw.com TICKERS: NYSE:BBC NASDAQ:DOSE CHECKERS DRIVE: Defends Vigorously Securities Suit In Kentucky -------------------------------------------------------------- Report of Checkers Drive In Restaurants Inc. for the quarterly period ended September 6, 1999 filed with the Securities and Exchange Commission as of October 21, 1999: JONATHAN MITTMAN ET AL. V. RALLY'S HAMBURGERS, INC., ET AL. (Case NO. C-94-0039-L-CS). On August 9, 1999, Checkers Drive-In Restaurants, Inc. and Rally's Hamburgers, Inc. completed their merger. Carl Karcher Enterprises Inc., GIANT and an affiliate of Fidelity (Santa Barbara Restaurant Group, Inc.) are the largest stockholders of the Company. In January and February 1994, two putative class action lawsuits were filed, purportedly on behalf of the stockholders of Rally's, in the United States District Court for the Western District of Kentucky, Louisville division, against Rally's, Burt Sugarman and GIANT and certain of Rally's former officers and directors and its auditors. The cases were subsequently consolidated under the case name Jonathan Mittman et al vs. Rally's Hamburgers, Inc., et al, case number C-94-0039-L (CS). The complaints allege defendants violated the Securities Exchange Act of 1934, among other claims, by issuing inaccurate public statements about Rally's in order to arbitrarily inflate the price of its common stock. The plaintiffs seek unspecified damages. On April 15, 1994, Rally's filed a motion to dismiss and a motion to strike. On April 5, 1995, the Court struck certain provisions of the complaint but otherwise denied Rally's motion to dismiss. In addition, the Court denied plaintiffs' motion for class certification; the plaintiffs renewed this motion, and despite opposition by the defendants, the Court granted such motion for class certification on April 16, 1996, certifying a class from July 20, 1992 to September 29, 1993. In October 1995, the plaintiffs filed a motion to disqualify Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP as counsel for defendants based on a purported conflict of interest allegedly arising from the representation of multiple defendants as well as Ms. Glaser's position as both a former director of Rally's and a partner in Christensen, Miller. Defendants filed an opposition to the motion, and the motion to disqualify Christensen, Miller was denied. A settlement conference occurred on December 7, 1998, but was unsuccessful. Fact discovery was completed in August 1999. Expert discovery is scheduled to be completed in April 2000. Management is unable to predict the outcome of this matter at the present time or whether or not certain available insurance coverage's will apply. The defendants deny all wrongdoing and intend to defend themselves vigorously in this matter. Because these matters are in a preliminary stage, the Company is unable to determine whether a resolution adverse to the Company will have a material effect on its results of operations or financial condition. CHECKERS DRIVE: Rally's Shareholders Dela. Suit Dismissed On Merger ------------------------------------------------------------------- Report of Checkers Drive In Restaurants Inc. for the quarterly period ended September 6, 1999 filed with the Securities and Exchange Commission as of October 21, 1999: HARBOR FINANCE PARTNERS V. GIANT GROUP, LTD. ET al. (Civ. Act. No. 14834). In February 1996, Harbor Finance Partners commenced a derivative action, purportedly on behalf of Rally's against GIANT and certain of Rally's officers and directors before the Delaware Chancery Court. Harbor named Rally's as a nominal defendant. Harbor claims that the directors and officers of both Rally's and GIANT, along with GIANT, breached their fiduciary duties to the public shareholders of Rally's by causing Rally's to repurchase from GIANT certain Rally's Senior Notes at an inflated price. Harbor seeks "millions of dollars in damages", along with rescission of the repurchase transaction. In the fall of 1996, all defendants moved to dismiss the action. The Chancery Court conducted a hearing on November 26, 1996 and denied the motions to dismiss on April 3, 1997. As a result of the merger of Checkers and Rally's, the plaintiffs lost their standing to bring this action and it has been dismissed. DAY RUNNER: Schoengold & Sporn File Securities Suit In California ----------------------------------------------------------------- Schoengold & Sporn, P.C. announced today that a securities class action lawsuit was filed in the United States District Court for the Central District of California on September 2, 1999 against Day Runner, Inc. (Nasdaq: DAYR) and certain of the Company's key officers and directors on behalf of purchasers of the common stock of Day Runner during the period October 20, 1998 through and including August 31, 1999. The securities class action complaint charges the defendants with violations of the federal securities laws (Sections 10(b) and 20 of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder), by, among other things, misrepresenting and/or omitting material information concerning Day Runner's net revenues through accounting "errors" in the treatment of manufacturing variances and certain other costs in the first, second, and third quarters of fiscal year end June 30, 1999, resulting in the Company restating its earnings for said time periods. The price of Day Runner shares were thereby artificially inflating during the Class Period. Plaintiff is represented by the law firm of Schoengold & Sporn, P.C., 233 Broadway, New York, New York 10279, Tel. 800-232-8092, Fax: 212-267-8137, E-Mail: SCHOENGOLD@AOL.COM Website at http://www.schoengoldandsporn.com GST TELECOMMUNICATIONS: Global Light Rejects Liability In Securities -------------------------------------------------------------------- Global Light Telecommunications Inc. (VSE:GGB.U.) (AMEX:GBT) has learned that it is named as a party in one of several class action lawsuits recently filed against GST Telecommunications, Inc. Global has reviewed a copy of the complaint, which is a claim by GST shareholders for compensation arising out of GST's agreement to transfer to Global an interest in Bestel S.A. de C.V., a telecommunications opportunity in Mexico. The transfer of the Bestel opportunity was the subject of prior litigation between Global and GST which was settled earlier this year on terms that have previously been disclosed. Of the several class action lawsuits filed against GST, only one names Global as a party. This action specifically acknowledges that GST has "settled its lawsuit against Global" and makes no claim against Global's interest in Bestel S.A de C.V. In view of the prior settlement, any remaining issue about the Bestel transfer is a matter between GST and its shareholders. Global rejects any suggestion that it is liable to GST's shareholders and will vigorously oppose any attempt to involve it in any class action litigation. In the event that it is formally served with the action, Global will move to have the case against it dismissed. Global Light is an international telecommunications company based in Canada with a focus on investing in strategic early stage telecommunication ventures around the world and developing those ventures using its global competitive telecom arena expertise. No stock exchange has reviewed or approved the contents of this release. HMO: Philadelphia Ct Dismisses Suit Against Aetna Over RICO Violations ---------------------------------------------------------------------- Maybe the City of Brotherly Love isn't everything it's cracked up to be, after all. At least not for the plaintiffs in Maio v. Aetna Inc., a civil RICO suit filed this spring in U.S. District Court in Philadelphia against Hartford- based Aetna U.S. Healthcare. (See "Using RICO to Crack ERISA," The Connecticut Law Tribune, April 26, 1999, page 3.) In dismissing the proposed class action on Sept. 29, Senior U.S. District Judge John P. Fullam finds that the plaintiffs lack standing to bring their complaint. In Maio, three members of the insurer's Pennsylvania HMO accuse Aetna of falsely advertising its pledge to quality care, while allegedly pressuring doctors to cut costs at patients' expense. In doing so, Aetna, they claim, violated the federal Racketeer Influenced and Corrupt Organizations *RICO* Act by relying on U.S. mail carriers and interstate commerce to stage its allegedly deceptive marketing campaign. At the time Maio was filed, the Santa Monica, Calif.-based Foundation for Taxpayer and Consumer Rights, which helped bring the suit, vowed there were no strategic benefits to the choice of venue. Some Connecticut plaintiffs' lawyers, however, gave the locale a thumbs-up because of the U.S. Court of Appeals for the 3rd Circuit's 1995 decision in Dukes v. U.S. Healthcare. The ruling found that a quality-of-care issue in suits against health maintenance organizations is not pre-empted by the Employee Retirement Income Security Act *ERISA* of 1974. Fullam, however, hardly provides the warm Philadelphia reception as some had hoped. "A vague allegation that 'quality of care' may suffer in the future is too hypothetical an injury to confer standing upon plaintiffs, and, in addition, would require this court to assume that in every case, individual physicians . .. will be moved to put their own economic interests ahead of their patients' welfare," Fullam writes in his six-page memorandum and order. Adding insult to injury, Fullam finds other "fatal defects" to the plaintiffs' complaint, such as their failure to plead a proper RICO enterprise. In a written statement released Oct. 1, Aetna calls the decision a "major setback to plaintiffs' class-action lawyers who are seeking to develop broad-based theories of liability against HMOs." Asked if an appeal is planned, Jeffrey L. Kodroff, of Spector & Roseman in Philadelphia, and a member of the plaintiffs' legal team, says the group is considering all of its options. He, however, declines further comment. (The Connecticut Law Tribune 10-11-1999) HOLOCAUST VICTIMS: Poles Sue Over Swiss Banks' $1.25 Bil Settlement ------------------------------------------------------------------- Polish victims of the Holocaust have served legal papers seeking to enter the class action lawsuits against the Swiss banks and objecting to the terms of the settlement agreement under which the Swiss banks have agreed to pay $1.25 billion to the victims of Nazi Germany. Relatively small numbers of victims in such categories as Jehovah's Witnesses and homosexuals were included in the settlement. Ethnic Poles, 80 percent to 90 percent of them Roman Catholic, were not included, even though they constitute the largest category of victims, next to the Jews. The purpose of the intervention is to object to the language in the proposed settlement which excludes the ethnic Poles from the class plaintiffs and to participate in the approval and implementation of the settlement. LASERGATE SYSTEMS: Intends To Vigorously Defend Securities Suit In NY --------------------------------------------------------------------- On or about June 27, 1997, a class action was commenced in the United States District Court for the Eastern District of New York (CV97-3775) by Andrew Petit and Michael A. Lepera, on behalf of themselves individually, and on behalf of all others similarly situated against INTER ALIA, the Company, Sterling Foster, & Co., Inc., the Company's former underwriter, counsel for Sterling Foster and certain issuer defendants for whom Sterling Foster acted as underwriter. The Complaint alleges that in connection with an offering of the Company's securities which became effective on October 17, 1994, Sterling Foster engaged in a campaign to inflate the price of the Company's stock, to create a short position at the inflated price and then cover the short position with shares from shareholders who had been secretly released from "lock-up" agreements. With respect to the Company, the Complaint alleges that it failed to disclose in its Registration Statement that prior to the date the offering became effective, Sterling Foster had secretly agreed to release certain shareholders from "lock-up" agreements for the purpose of selling their shares to Sterling Foster at reduced prices. The Plaintiffs' claims allege that the Company violated Sections 11 and 12(2) of the securities Act of 1933, Sections 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder and Section 349 of the New York General Business law, as well as making negligent misrepresentations. Since the Complaint was filed, it has been amended twice, but the allegations against the Company have remained the same. On August 5, 1999 the Company moved to dismiss The Second Amended and Consolidated Class Action Complaint in its entirety. The Company believes that it has defenses to these claims and intends to vigorously defend itself in this action. MATTEL INC: Lockridge Grindal Files Securities Fraud Suit In New York --------------------------------------------------------------------- Pursuant to Section 21D(a)(3)(A)(i) of the Private Securities Litigation Reform Act of 1995, Lockridge Grindal Nauen P.L.L.P. hereby gives notice that a class action complaint has been filed in the United States District Court for the Southern District of New York on behalf of a class of persons who owned Mattel, Inc. (NYSE:MAT) common stock as of March 15, 1999, the record date for the vote on the merger between Mattel, Inc. and The Learning Company, Inc. The action charges that the Company and certain of its officers violated the securities laws and regulations of the United States by causing Mattel to issue a materially false and misleading proxy statement/prospectus in connection with Mattel's merger with the Learning Company. In particular, the complaint alleges that the proxy statement failed to disclose that, prior to the merger, the Learning Company had: (i) been selling products with a right of return and improperly recognizing revenue in connection with such sale; (ii) not reserved for this contingency in accordance with generally accepted accounting principles; and (iii) inadequately reserved for bad debt, thereby causing the Learning Company's earnings to be materially overstated. Defendants withheld these clearly material facts from Class members in order to fraudulently procure their vote in favor of the Company's merger with the Learning Company. On October 4, 1999, Mattel announced that the Learning Company would report an after-tax loss of between $ 50 and $ 100 million and a 2% to 4% revenue decline, due to, among other things, higher than expected product returns and the write-off of bad debts. On May 7, 1999, Mattel shares closed at $ 27-5/16 per share. Following Mattel's October 4, 1999 announcement, Mattel shares closed at $ 11.875 per share, representing a decline of more than 56%. Plaintiffs are represented by the law firm of Lockridge Grindal Nauen P.L.L.P. Any member of the proposed Class who desires to be appointed lead plaintiff in this action must file a motion with the Court no later than sixty (60) days from October 7, 1999. If you owned Mattel common stock as of March 15, 1999, or have questions or information regarding this action, or if you are interested in serving as a lead plaintiff in this action, you may call or write: Karen M. Hanson Lockridge Grindal Nauen P.L.L.P. 100 Washington Avenue South Suite 2200 Minneapolis, MN 55401 (612) 339-6900 kmhanson@locklaw.com TICKERS: NYSE:MAT MCDONALD'S: Co.'s Lawyers In Game Fiasco Case "Fishing", Aussie Ct Says ----------------------------------------------------------------------- BRISBANE, Oct 26 AAP - A Federal Court judge accused lawyers for a class action against fast food chain McDonald's of going on a "fishing expedition". Justice John Dowsett told Simon Couper QC, for the 35 claimants, his cross-examination of a defence witness amounted to a "very luxurious" use of the court's time. Thirty-five people have taken McDonald's to court over the hamburger giant's Monopoly game fiasco. The claimants allege they won prizes, including Honda four-wheel-drives, in this year's McMatch and Win competition but McDonald's deemed their tickets invalid. McDonald's says the claimants used game stamps from last year's competition to claim prizes in this year's game but witnesses have denied deliberately using invalid tickets. Mr Couper spent most of the morning cross-examining defence witness Paul Racivorski, the former manufacturing manager of Anzpak, the company responsible for providing the french fries cartons for both competitions. He told Mr Racivorski a memo in Anzpak's records indicated an apparent discrepancy of 96,000 cartons involved in the 1998 competition. But Mr Racivorski said he had "no memory" of the memo. After about 90 minutes of cross-examination designed to challenge Anzpak's record-keeping, Justice Dowsett accused Mr Couper of a "long and tedious examination of mere possibilities". "I would like to think that the cross-examination was going to a theory and not just a fishing expedition designed to dredge up a theory at some stage in the future," Justice Dowsett said. Mr Couper told the court he was challenging the McDonald's case that record keeping in relation to the 1998 game was infallible. But Justice Dowsett said the control system relating to the competitions was "much better than I ever imagined". He also told Mr Couper it was insufficient just to show that the "odd packet or roll of labels" were unaccounted for from the 1998 game. "You have then got to show that it got into distribution in 1999," Justice Dowsett said. Labels from last year's game were almost identical to those issued this year but lacked a small golden arches symbol. The hearing continues and is expected to go well into next year when the case may head to Sydney or Melbourne. (AAP Newsfeed 10-26-1999) NATIONAL BANK: Prevails in CA Sp Ct Case Alleging Ponzi Scheme -------------------------------------------------------------- San Jose National Bank announced that it was exonerated of charges that it participated in a Ponzi scheme perpetrated by Charles Herpick and Century Loan. On Wednesday, October 20, 1999, the California Supreme Court declined to review a Court of Appeals decision dismissing the class action lawsuit. In the early 1990's, San Jose National Bank and Pacific Western Bank (now known as Comerica Bank-California) provided banking services to Charles Herpick and his mortgage brokerage company, Century Loan. Herpick and his son were indicted and pled guilty to felony charges in the US District Court in San Jose for bilking a group of Peninsula investors out of millions of dollars in a phony mortgage (Ponzi) scheme. With Herpick and his son in prison and Century Loan insolvent, defrauded investors sued the banks in May 1995 alleging that they had aided and abetted Herpick. According to James R. Kenny, President and CEO of San Jose National Bank, the investors' claims were completely groundless. The courts agreed and dismissed the case. In June, the Court of Appeal held that "there was no evidence that SJNB knew of Century's fraudulent scheme or agreed to participate in it." On Wednesday, the California Supreme Court rejected the investors' petition for review of the Court of Appeal decision, ending the litigation. Theresa Stewart, the attorney who defended SJNB said that the courts' rulings show that the justice systems is working. "The courts dismissed the case because there was not a shred of evidence that the bank knew what Herpick was doing, much less that is tried to assist him," she said. "As the courts recognized, the bank was sued as a deep pocket for wrongs it didn't commit, didn't know about and was itself a victim of." RAYTHEON COMPANY: Decries Merit Of Securities Suit In Massachusetts ------------------------------------------------------------------- Statement of the company regarding purported class action lawsuit: Raytheon Company (NYSE: RTNA; RTNB) confirmed that several purported shareholder class action complaints have been filed against Raytheon and certain of its officers in the United States District Court for the District of Massachusetts. In the one complaint with which the company has been served, the plaintiff claims to represent purchasers of Raytheon's Class A and Class B common stock during the period from January 28, 1999 to October 12, 1999 and seeks unspecified damages. The complaint contains allegations that the defendants allegedly made misleading statements or omissions concerning the company's financial performance during the purported Class Period. The company believes that it and the individual defendants have meritorious defenses and intends to contest the lawsuit vigorously. REPUBLIC SERVICES: Chitwood & Harley File Securities Suit In Forida ------------------------------------------------------------------- You are hereby notified that Chitwood & Harley has filed a securities class action in the United States District Court for the Southern District of Florida on behalf of a class of persons and entities, other than Defendants, who purchased Republic Services, Inc.'s common stock between January 28, 1999 and August 28, 1999, inclusive. The complaint alleges that Republic and certain of its officers and directors have violated certain provisions of the Securities Exchange Act of 1934. The complaint alleges that Defendants manipulated Republic's reported revenues, expenses and earnings through improper and misleading accounting practices in violation of Generally Accepted Accounting Principles in order to achieve their goal of reporting substantially increased revenue in earnings during the Class Period and to artificially inflate and maintain the price of Republic's stock. Republic represented that its acquisition of Waste Management Inc.'s assets would be beneficial to earnings. These representations that caused Republic's stock to trade at artificially inflated prices throughout the Class Period were false and misleading, the complaint alleges. The Company could not meet analysts' earning estimates due to the poor quality of Waste Management Inc.'s assets, the complaint alleges. Contrary to Republic's positive representations, its acquisitions were not contributing to the Company's purported "record" reported financial results during the Class Period, but, to the contrary, were having a negative impact on the Company's profitability, the complaint alleges. The complaint alleges that Defendants' misrepresentations and/or omissions caused the price of Republic's stock to be artificially inflated during the Class Period. Plaintiff is represented by Chitwood & Harley. Any member of the proposed class who wishes to move the Court to serve as a lead plaintiff must do so no later than November 15, 1999. In order to serve as lead plaintiff, however, you must meet certain legal requirements. If you wish to discuss this action or have any questions concerning this notice or your rights with respect to this matter, you may contact: Corey D. Holzer (888) 873-3999 (toll-free), CHITWOOD & HARLEY 2900 Promenade II, 1230 Peachtree Street, N.E., Atlanta, Georgia 30309or by e-mail at cdh@classlaw.com SEATTLE CITY: Hagens Berman Sues Over Fines Based On Defective Meters --------------------------------------------------------------------- The following is being released by Hagens Berman: It looks like the meter has finally run out on the City of Seattle -- and it looks like it's time to pay the penalty too. Seattle attorney Steve Berman, known for his work in national class-action lawsuits and representing states in the tobacco litigation, today filed a class-action lawsuit in the King County Superior Court against the City of Seattle for unlawfully fining the parking public for overdue parking on defective city parking meters. The suit charges that the city has cheated Seattle drivers out of millions of dollars in parking fines for overdue parking on defective parking meters. The class-action, if approved by the court, would include anyone ticketed by the city for allegedly expired parking meters between October 25, 1993 to October 25, 1999. Berman's suit charges that the city has breached its contract with those using parking meters by failing to provide the public their full due when plugging the city's parking meters. According to Berman, the city has continued issuing overdue parking fines, despite its knowledge that the meters were shortchanging drivers, and that as a result the fines are often improper. "The city has long been aware that its meters were cheating drivers, yet it has failed to make repairs and continues to ticket drivers for overdue parking," Berman says. "By the city's own admission up to 40 percent of our parking meters are defective at any given time, but rather than fix them, the city continues to fraudulently fine unsuspecting drivers." According to the suit, the city's own investigation of the problem has revealed that a shockingly high number of meters - as high as 40 percent or more -- do not accurately elapse time. The suit cites the city's findings that in some cases the meter time expired in just 38 minutes, when money for a full hour of parking was inserted. "A parking meter right in front of city hall provided only 38 minutes of parking time for an hour's paid parking," Berman says. "That's not what a meter user expects. To then get a ticket based on being short-changed is not right." The suit alleges that in 1999 alone, the city will write half a million parking tickets, and collect up to $13 million in fines. The suit also estimates that the city collects as much as $5.2 million in parking fines each year based on its estimate of a 40 percent parking meter error rate. In response to a local television newscast investigation earlier this year, the city admitted that at least 30 percent of its meters did not function properly. In response to the report, city officials stated that it would take measures to correct the problem. However, in August 1999, a city official stated that the problem was fixed. A subsequent investigation revealed that the problem, in fact, had not been addressed. According to the suit, when a Seattle transportation manager was confronted recently, he admitted that 30-40 percent of the city's parking meters are defective at any time. The money the city collects in parking fines is not just loose change. In 1999, the city will collect an estimated $9 million in revenue from parking meters. The city is also estimated to write approximately half a million parking tickets and collect as much as $13 million in parking fines. A substantial portion of those fines -- as much as 40 percent or $13 million in parking fines. For more information, visit www.hagens-berman.com. CONTACT: Steve Berman of Hagens Berman, 206-623-7292; or press, Mark Firmani of Firmani & Associates, 206-443-9357, or mark@firmani.com, for Hagens Berman. TOBACCO LITIGATION: BAT Sees No Reason To Settle U.S. Federal Govt Case ----------------------------------------------------------------------- BAT PLC chief executive Martin Broughton has dispelled any lingering notion that it will cave in to the U.S. government which is seeking damages for smoking related illnesses. "We see absolutely no advantage whatsoever even contemplating settling the case with the Federal Government, contrary to the views of some analysts," said Broughton, speaking at a press and analysts meeting. The meeting followed the publication of the group's third quarter figures and set out the company's stall so far as the U.S. legal action is concerned. The chief executive said the Federal case, raised by Attorney General Janet Reno earlier this year, was based on "decidedly thin legal grounds" and that BAT unit Brown & Williamson would defend the claim "vigorously". Turning to the Engle class action, he said last week's Florida Appeal Court ruling did not, contrary to popular belief, open U.S. tobacco companies to mass punitive damages. Broughton said the judges in the case had in fact deferred an earlier ruling that damages would be decided on an individual basis. He predicted this decision would be upheld after further legal argument. The BAT chief executive called the behaviour of the trial judge in the Engle class action "outrageous" but said a gagging order prevented him from elaborating upon his opinion. He seemed to suggest that Judge Kaye was attempting to force the defendants B&W, Phillip Morris and RJ Reynolds -- to come to a settlement, and the court process also seemed to be pointing the firms in that direction. "Let's be unequivocal about this, Brown & Williamson have informed me that they have absolutely no intention of settling," Broughton said. The chief executive predicted that the class action may even be discertified. (Extel Examiner 10-26-1999) UNITED CREDITORS: Collection Letter Violates FDCPA & CROA, Il. Ct Rules ----------------------------------------------------------------------- A collection letter that encourages a debtor to accept its offer of settlement by promising that the settlement will repair the consumer's credit is misleading and false under both the Fair Debt Collection Practices Act and the Credit Repair Organizations Act. Nielsen v. United Creditors Alliance Corp., et al., No. 98 C 5910 (N.D. Ill. 8/23/99). United Creditors Alliance Corp. mailed Ann L. Nielsen a standard form collection letter regarding her AMEX-STRATUS/TRIUMP account. The dunning letter read, "In a final effort to help you liquidate your account, our client has authorized us to accept the sum of 2,574.53 as full and final settlement. ... Take advantage of this opportunity to repair your credit at a substantial savings." Contending that the "take advantage" language was a false representation or deceptive means to collect a debt, Nielsen sued under 1692e(10) of the FDCPA. She claimed in her class action that the language also violated the CROA. The defendant moved to dismiss for failure to state a claim and the U.S. District Court for the Northern District of Illinois examined the sufficiency of the complaint. First, the District Court considered the FDCPA claim and United Creditors' argument that even an unsophisticated consumer could not have misinterpreted the disputed language. United Creditors' claimed that its letter did not represent that payment of Nielsen's delinquent debt would eliminate all unfavorable information from her credit report. Additionally, the defendant contended that Nielsen could not deny that the continuing delinquency of her debt would adversely affect her credit report. The court also considered Nielsen's claim that the "take advantage" sentence in the dunning letter was false because a settlement of the debt would not repair her credit rating. Applying the unsophisticated consumer standard, the District Court concluded that Nielsen sufficiently stated a claim under Section 1692e(10) of the FDCPA. Therefore, the court denied United Creditors' motion to dismiss on this claim. Regarding Nielsen's claim that United Creditors' collection letter violated the CROA, the District Court reviewed the statute. The act states that no person may make an untrue representation of the services of the credit repair organization or engage in a practice that results in the commission of a fraud in connection with the offer or sale of services of the credit repair organization. The CROA defines a credit repair organization as "any person who uses any instrumentality of interstate commerce ... to sell, provide or perform any service, and in return for the payment of money ... for the express or implied purpose of" improving a consumer's credit history or providing consumers with assistance. United Creditors contended on appeal that it was not a credit repair organization subject to the CROA and that Nielsen failed to establish that it was a credit repair organization. The District Court reached an opposite conclusion. It found that Nielsen sufficiently claimed that the defendant was a credit repair organization in her allegation that United Creditors "regularly use[s] the mails to provide or offer to provide consumers with a service, in return for money, which purports to improve the consumer's credit record." Furthermore, the District Court held that Nielsen sufficiently alleged that the "take advantage" language was false because she stated a settlement would not repair her credit. Again, the court denied United Creditors' motion to dismiss. Daniel A. Edelman and James S. Harkness of Edelman, Combs & Latturner in Chicago represented the plaintiff. Edward Harmening of Clausen Miller in Chicago represented the defendant. (Consumer Financial Services Law Report 10-19-1999) USDA: Sharks Reeled In To Share In Black Farmers Settlement In Arkansas ----------------------------------------------------------------------- An effort to compensate black farmers for discrimination they suffered at the hands of Department of Agriculture, or USDA, field offices has been slowed by a snag: In trolling for victims to share in the $375 million settlement, the plaintiffs' lawyers evidently also have reeled in some sharks. People have stepped forward to share in the settlement, it seems, who don't know a plow from a pickup truck and never farmed a day in their lives, making it tougher for the department, in assessing who deserves compensation, to sort the wheat from the chaff. "The government has attorneys who were expecting this and they're on the lookout for cases of fraud , which takes more time for all of us," says attorney Othello Cross, who is handling claims in Arkansas. Cross and other lawyers involved in the lawsuit initially expected that fewer than 20,000 individuals in 25 states would come forward for a slice of the settlement pie, but that number has topped 30,000 in the last few months and may rise higher. We're just glad someone caught it this early, a spokesman for USDA said of the bumper crop of con artists the settlement is producing. Surprise! Doj's Antitrust Division Not Too Effective Government trustbusters have been in the news as they pursue juicy targets such as Microsoft. But some are questioning whether the Department of Justice's antitrust division is cost-effective; indeed, some are suggesting Justice's antitrust bulldogs have been less than open in detailing their own finances. Some free-market economists, of course, argue that the activism of the Department of Justice, or DOJ, may not be justified, given today's high level of business competition and corresponding low prices. However, a citizens' watchdog group is maintaining that whatever one's opinion of trustbusting, the DOJ's trustbusting unit has been spending tax money too freely. In a Sept. 28 letter to the fiscal 2000 Commerce Justice State Appropriations conference committee, the Council for Citizens Against Government Waste, or CCAGW, urged conferees to freeze the budget for the DOJ's antitrust division. The antitrust division got $98 million in 1999. "DOJ has been less than forthcoming about the activities of the antitrust division," says CCAGW President Thomas Schatz. "Without full disclosure, how can Congress justify any increase in expenses for the antitrust division?" CCAGW is the lobbying arm of Citizens Against Government Waste, a Washington-based nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government. For nearly a year, CCAGW has attempted to get the antitrust division to disclose the cost of DOJ's lawsuit against Micro-soft. CCAGW places the cost of the lawsuit at $30 million to $60 million. Taxpayers are slated to spend $4.9 million to $11.8 million on the DOJ's antitrust division in the next year alone. Reports indicate that the House version of the Commerce-Justice-State appropriations bill would increase the antitrust-division budget by 5 percent. The Senate would boost this increase to 12 percent. According to Schatz, the antitrust division has simply failed to make the case for such exorbitant increases. "The antitrust division has displayed nothing but arrogance and contempt in the face of reasonable requests for basic financial information," Schatz argued in his letter. "Conferees need to think twice before giving the antitrust division carte blanche to pursue litigation in practical secrecy." When The Feathers Hit The Fan It's always interesting when otherwise-simpatico special interests suddenly come to loggerheads - as in California, where the save-the-condor crowd is squaring off with the wind-power people over a plan to erect zephyr-propelled turbines in the Tehachapi Mountains north of Los Angeles. The giant pinwheels, spinning 200 feet above the ground, threaten to make mincemeat of endangered California condors, according to the National Audubon Society, which is fighting any plans to build the turbines in the Tehachapies. "It is hard to imagine a worse idea than putting a condor Cuisinart next door to critical condor habitat," said David Beard, an Audubon Society spokesman. "The survival of the condor must come first." Enron, the Houston-based company that builds the turbines, denies plans are in the works to place them in the mountains. But the Audubon Society, taking no chances, is targeting for alteration the Wind Energy Tax Credit, up for an extension this year, which makes the windmills possible by paying their investors 1.5 cents per kilowatt-hour generated. Without the subsidy, wind power becomes far less profitable. Audubon reportedly hopes to narrow the tax break, denying it to any windmills built within 10 miles of condor habitat, and says the Tehachapi project is too close to where condors are known to congregate. Problem is, the condors can ride the winds for up to 100 miles in search of a ripe animal carcass, which effectively could close down large swaths of prime wind-power territory. Thanks to a $1.7 million annual assistance program, the birds have made a fitful comeback since the 1980s, when only 21 were known to survive. Finding compromise between the dueling agendas of animal conservation and renewable energy is going to be a tough one, according to one U.S. Fish and Wildlife official, because both windmills and the wide-winged condors favor the same kind of wide, sloping terrain. (Insight on the News 10-25-1999) ********* 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., Princeton, NJ, and Beard Group, Inc., Washington, DC. Theresa Cheuk and Peter A. Chapman, editors. Copyright 1999. 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 301/951-6400. * * * End of Transmission * * *