Tuesday, March 18, 2003, Vol. 5, No. 54
AUSTRALIA: Experts Held Liable For Statements In Apartment Prospectus
CHARTER COMMUNICATIONS: Two Women Commence Suit Over Billing Practices
CREDIT CARDS: MasterCard Seeks Separate Trial In Debit Card Fees Suit
DAIMLERCHRYSLER: Faces Lawsuit Over Defective Gen3 SUV Seat Belt Buckle
DUPONT: Reaches Agreement To Settle Benlate Shareholder Suit For $77Mil
EMPLOYEES UNION: NLRB Says Hospital's Vandalism Claims Are Unsupported
FORD MOTOR: State Farm Files Suit To Recover Monies Paid for Fires
GENERAL MOTORS: Faces Nationwide Antitrust Suits Over Pricing Practices
ILLINOIS: Tape Of 911 Calls During Club Stampede To Be Used As Evidence
MERCK-MEDCO MANAGED: Gained $3B in Rebates From Parent, Court Docs Say
MONSANTO CO.: Asks For Dismissal of Herbicide Antitrust Lawsuits in MO
MONSANTO CO.: Arguments Held on Writ of Certiorari for Veteran's Suit
MONSANTO CO.: Appeal Filed On Dismissal of Veterans Suit by Korea Court
PEMCO AVIATION: EEOC Appeals AL Federal Court's Summary Judgment Ruling
PENNSYLVANIA: Settlement Orders Detainees' Diabetes Care In City Jails
PEROT SYSTEMS: NY Court Dismisses in Part Consolidated Securities Suit
PEROT SYSTEMS: Suits For Securities Violations Consolidated in N.D. TX
SMITHFIELD FOODS: Court Partly Dismisses Appeal of RICO Suit Dismissal
WORLD FINANCIAL: Settles Cardholder Suit For Finance Charges in S.D. FL
WR GRACE: Bankruptcy Court Sets Litigation Schedule for Asbestos Suits
*Judicial Conference Introduces Revisions For Class Action Litigation
New Securities Fraud Cases
ANDRX CORPORATION: Vianale & Vianale Lodges Securities Suit in S.D. FL
CAMINUS CORPORATION: Cauley Geller Commences Securities Suit in S.D. NY
CARREKER CORPORATION: Goodkind Labaton Files Securities Suit in N.D. TX
CARREKER CORPORATION: Wechsler Harwood Files Securities Suit in N.D. TX
COSI INC.: Goodkind Labaton Commences Securities Fraud Suit in S.D. NY
INTERCEPT INC.: Brian Felgoise Lodges Securities Fraud Suit in N.D. GA
INTERCEPT INC.: Holzer Holzer Commences Securities Lawsuit in N.D. GA
KING PHARMACEUTICALS: Milberg Weiss Launches Securities Suit in E.D. TN
KING PHARMACEUTICALS: Brian Felgoise Lodges Securities Suit in E.D. TN
KING PHARMACEUTICALS: Cauley Geller Launches Securities Suit in E.D. TN
KING PHARMACEUTICALS: Wolf Haldenstein Files Securities Suit in E.D. TN
KING PHARMACEUTICALS: Schiffrin & Barroway Lodges Securities Suit in TN
MONTEREY PASTA: Schiffrin & Barroway Lodges Securities Suit in N.D. CA
PARAMETRIC TECHNOLOGY: Schatz & Nobel Commences Securities Suit in MA
PROVIDENT FINANCIAL: Charles Piven Commences Securities Suit in S.D. OH
ROYAL AHOLD: Brian Felgoise Commences Securities Fraud Suit in S.D. NY
UNUMPROVIDENT CORPORATION: Stull Stull Commences Securities Suit in NY
VITALWORKS INC.: Charles Piven Commences Securities Lawsuit in CT Court
VOICEFLASH NETWORKS: Holzer Holzer Launches Securities Fraud Suit in GA
Australian Federal Court Judge Roger Gyles found that comments made by
Pannell Kerr Forster Consulting Australia, put forth as an independent
expert in an apartment hotel prospectus, were relied upon in the same
way comments by promoters of a project might be relied upon, Australian
Financial Review reports.
Judge Gyles' judgment found that these expert comments made by Pannell
Kerr, and contained in a prospectus for the Goldsbrough Building hotel
and apartment plan in Sydney were misleading and deceptive, making them
liable for compensation of $3 million to investors they misled and
deceived by such comments.
The case was a class action brought on behalf of the 147 owners of the
Goldsbrough Building apartments. The owners were encouraged in the
lead-up to the Sydney Olympics to pool their properties to form an
apartment hotel. They were promised the returns would be two to three
times those of long-term residential tenancies. Such claims failed to
materialize and investors received little or no returns.
Partner Ken Fowlie of the law firm Slater & Gordon, who represented the
investors, said the judgment means that independent experts "have to
make sure their opinions have a sound basis; otherwise, they could be
liable."
"This is the first time there has been a judgment in Australia dealing
with the exposure to liability of authors of an independent expert's
report," Mr. Fowlie said.
The case focused on "negative assurances" by Pannell Kerr Forster
Consulting Australia, which stated that they were not aware of any
questionable forecasts in the prospectus. The judge found that an
ordinary person should be able to find a measure of comfort in such
assurances that the independent experts had properly reviewed the
prospectus's forecasts.
Slater & Gordon has settled out of court smaller claims against the
company that issued the prospectus, Astor Goldsbrough Funds Management
and two of its directors, Kenneth Gresham and Andrew Veron. The lead
plaintiff in the class action, Marlene Reiffel, who owned a studio
apartment, will receive $18,602 damages.
After failing to file a formal answer and losing by default the class
action brought against them by lawyers representing two Spartansburg,
South Carolina residents, Charter Communications' attorneys
consistently have been on the losing side in their court bouts with the
lawyers representing the two plaintiffs, the Spartansburg Herald-
Journal reports.
Geraldine Barber and Nikki Nicholls, in their lawsuit, accuse the cable
television company of illegally requiring customers to rent unnecessary
equipment and/or to pay an alleged bogus wire maintenance fee. Ever
since they won the first round of this litigation by default, the
Company has continued to lose every other round in state, federal and
appellate courts.
Much more court action is expected before a judge determines how much
money is due the two plaintiffs and the other class members. However,
the two women are seeking equitable relief; that is, refunds and a
permanent injunction against the billing practices that gave rise to
their lawsuit. They do not seek punitive monetary damages.
Michael Spears, of the Columbia, South Carolina law firm, Spears,
Littlejohn, and lead counsel for the plaintiffs, estimates Ms. Barber
and Ms. Nicholls, each, stands to gain only a few hundred dollars from
the lawsuit. However, multiply that by about 246,000 Charter customers
in South Carolina, and it adds up to tens of millions of dollars.
Lawyers' fees in such cases typically are 20 to 33 percent of the
class's recovery.
The Company's annual revenues are in the billions, therefore, these
figures do not represent a threat to the company's survival. However,
the figures, as well as plaintiffs' consistent success might encourage
lawyers for the company's 6.5 million subscribers in 39 other states to
venture forth to do battle with the Goliath.
Ms. Nicholls and Ms. Barber, are "standard bearers" for the legal
class, becoming something akin to celebrities. They receive many
interview requests from broadcast and print media, and telephone calls
from well wishers. Their attorney, Michael Spears, said his office has
received hundreds of phone calls from individuals asking how they can
join the women as plaintiffs in the case.
"We tell them that they are already members of the class by virtue of
being Charter customers, because the suit has been certified as a
class action lawsuit," Mr. Spears said. "A successful outcome, after
all the appeals, would bring an adjustment to their monthly cable
bills."
MasterCard International's lawyers filed papers in federal court in
Brooklyn, New York, arguing that MasterCard should not be a co-
defendant in the civil case accusing both it and Visa USA of conspiring
to monopolize the debit-card market, the Associated Press Newswires
reports.
The trial in the case in which MasterCard and Visa are named as co-
defendants is scheduled to start on April 28, 2003. The lawyers for
MasterCard argue MasterCard should have a separate trial because the
plaintiff retailers had failed to produce credible evidence that
MasterCard had joined in a conspiracy. Therefore, forcing the Company
to face trial with Visa would prejudice and confuse a jury, the court
papers on the motion said.
"MasterCard believes that if given the opportunity to have a full and
fair trial based purely on its own acts, the case against it will
fail," MasterCard's general counsel, Noah Hanft.
Lloyd Constantine, a lawyer for the retailers accused MasterCard of
stalling, saying, "It's an attempt to delay this case from going to
trial . This is not a serious motion."
Meanwhile, there is another motion under consideration by US District
Court Judge John Gleeson, who is presiding over this case. In January,
Visa and MasterCard asked Judge Gleeson to throw out the case. The
judge has reserved decision.
Wal-Mart Stores Inc., Sears Roebuck and Co. and other merchants
nationwide are seeking billions of dollars in damages in a class action
brought in 1996 against MasterCard and Visa. The retailers allege the
defendants secretly schemed to extend their dominance to debit cards by
mandating an "honor all cards policy." This policy means that any
merchant who accepts the defendants' credit cards must accept their
look-alike debit cards as well. The merchants claim that the excessive
transaction fees have cost them more than $15 billion in the past
decade -- costs ultimately passed on to the consumer.
The card associations argue that the "honor all cards" policy is
necessary to ensure consumer choice.
A Visa USA Ms. Nicholls and Ms. Barber, are "standard bearers" for a
legal class Vice President, Daniel Tarman, said he had not seen
MasterCard's latest motion. "Our current focus is on preparing to
defend in court the consumers' rights to choose how they pay at the
checkout counter," Mr. Tarman said.
Two Houston families commenced a lawsuit against DaimlerChrysler today
over the deaths of two women and injuries to three children during a
holiday trip when their seat belts popped open during a collision,
allowing all five to be ejected.
The Gen3 seat belt buckle, which is standard equipment in an estimated
16 million Jeep, Dodge and Chrysler products, has been blamed for at
least 14 deaths and 19 serious injuries. National and statewide
consumer groups urged DaimlerChrysler to recall the buckle voluntarily.
Three years ago, a Texas jury said the Gen3 was designed defectively
and responsible for the death of a Corpus Christi man.
"The Gen3 seat belt is patently unsafe and should be recalled
immediately," said Tom "Smitty" Smith, executive director of Texas'
Public Citizen, a consumer advocacy group.
Sisters-in-law Denise Mendoza, 34, and Maria Mendoza, 38, died as the
result of a rollover crash near Beeville, TX, on December 29, as the
two families were returning from a Christmas trip to Mexico. Their
1996 Chrysler Town and Country minivan, driven by Martin Mendoza,
struck a culvert in the fog and flipped. Although all the passengers
were wearing their seat belts, the two women and all three children in
the rear seat were ejected when their seat belt buckles released.
Denise Mendoza died instantly. Maria Mendoza died 11 days later. The
three children, Hector, 16; Daniel, 15; and Amy, 8, were injured
seriously. Hector remains paralyzed.
According to the lawsuit filed in State District Court in Harris
County, all of the Mendozas were wearing their seat belts at the time
of the crash. Six of the seven buckles failed to stay latched,
however, allowing five passengers to be ejected and the driver to be
thrown into the windshield before landing between the seats.
"We have been living with unimaginable pain since that day, especially
since knowing that their deaths could have been prevented, had the seat
belts done their jobs," said Martin Mendoza. Mendoza's wife, Denise,
and his sister-in-law, Maria, were seated in the two middle captain's
chairs when the crash occurred.
"We all made a habit of buckling up and making sure our children were
buckled up, just like most families," Mendoza said. "We didn't fail to
buckle. Our buckles failed us."
The Gen3 buckle is distinguished by a button that protrudes
significantly beyond the button cover, enough so that a falling object
or flailing arms during a crash can unlatch the buckle by striking the
button. In other seat belt buckles, the buttons are more flush with
the button cover and must be depressed below the cover to unlatch.
According to Clarence Ditlow, head of the Washington D.C.-based Center
for Auto Safety (CAS), the defect can be deadly and escapes detection
because, after the crash, it appears that the occupant was not wearing
a seat belt.
"In terms of seat belt defects, this is one of the worst that I've ever
seen," Mr. Ditlow said. "Seat belts are your last line of defense in a
crash and never should fail. Yet, Chrysler's Gen3 seat belt buckles
are like a perfect crime because dead men tell no tales. After a fatal
crash, the occupant is not alive to say the buckle came apart."
In 2002, CAS began calling on DaimlerChrysler to recall all Gen3 seat
belt buckles and replace them with the safer Gen4 buckle. A Texas jury
in 2002 found the Gen3 to be "defective as designed" and responsible
for the death of 33-year-old Bart Moran, Corpus Christi, in a low-
speed rollover collision in 1996.
Testing by an independent engineering firm hired by a national TV news
network, showed that the Gen3 fails "100 percent of the time" a
standard auto industry test for unintentional unlatching. In this
test, a 30mm ball, which is meant to simulate an elbow, is pressed
against a seat belt buckle. If it unlatches, the buckle has failed the
Court documents show Chrysler threw out this standard for the Gen3 and
began installing them in most of their cars, starting with 1993 models.
According to Chrysler engineers who testified in the Corpus Christi
case, the automaker upgraded the buckles in the Dakota and Durango,
beginning with 1999 models, after DaimlerChrysler engineers found that
the Gen3 buckles unlatched during routine crash tests. The buckles
also unlatched in subsequent US and Canadian government crash tests.
"Why Chrysler did not upgrade the seat belts in its other models
remains a mystery," said Billy Edwards, the attorney in the Corpus
Christi case. In today's Dodge and Chrysler minivans, for example, all
models since 2000 have different, improved buckles in the front seats,
but still have Gen3 seat belts in the middle and rear seats.
"What is particularly alarming is that, in addition to unlatching
during collisions, we have been inundated with reports from people who
tell us that the Gen3 seat belt unlatches around child and infant car
seats," Mr. Edwards added. "We especially want to alert consumers with
young children to this fact."
A web site set up to collect information about the Gen3 has collected
138 reports to date of Gen3 unlatchings, mostly instances involving
children, Mr. Edwards said. The reports have come from 35 states and
On July 3, 2002, a Texas judge granted national class action status to
Gen3 owners, a development that could lead to a recall, however,
DaimlerChrysler has appealed the ruling. Meanwhile, Bart Moran's
widow, Yvonne Moran, announced that she is forming a consumer coalition
to recall the Gen3 to raise the visibility of the Gen3 defect and to
encourage DaimlerChrysler to recall the buckle.
For more details, contact Mike Kelly of the Edwards Law Firm, LLP by
Phone: (512) 327-6788 or visit the Website: http://www.unsafebelts.com
or http://www.NHTSA.gov
DuPont recently agreed to pay $77 million to settle a shareholder class
action, filed in the United States District Court in Florida, over its
Benlate fungicide, the Associated Press Newswires reports.
The shareholders allege in their lawsuit that DuPont made false and
misleading statements about Benlate that had the effect of inflating
stock prices. Company spokesman Clif Webb said the period of inflation
of the stock price was between June 1993 and January 1995.
DuPont ordered, in 2001, that Benlate production be halted after 32
years of manufacturing the product. The company has paid out more
than $1 billion in settlements and legal fees to settle claims that the
fungicide destroyed crops. The latest suit, according to Mr. Webb, was
set to be tried in June.
The company said the $ 77 million settlement with its shareholders
would decrease first-quarter earnings by about five cents a share.
Company officials said the company is seeking recovery from its
insurers for the settlement.
Pomona Valley Hospital Medical Center's objections to recognition by
the National Labor Relations Board (NLRB) of their nurses' vote to
unionize, were turned aside by the NLRB, according to a report by the
Associated Press Newswires.
The hospital told the regional NLRB that supporters of the Service
Employees International Union had vandalized opponents' cars,
threatened them with lawsuits, smeared feces on a bathroom wall,
defaced anti-union literature and videotaped the polling area. A
regional hearing officer said the hospital had failed to prove that
union supporters were responsible for any of the actions the hospital
alleged were taken against union opponents.
"Simply, the employer has failed to demonstrate that (non-supporting)
employees were harassed, intimidated and threatened for opposing" the
union, Lisa McNeill recently wrote in a decision. The linkage between
the acts complained of and union supporters was not made, she said.
The hospital, which employs 750 registered nurses, has until March 25,
to appeal Ms. McNeill's report to the labor board's national
headquarters, which will then determine whether to certify the
election. Last fall, the nurses at Pomona Valley Hospital Medical
Center voted 393 to 275 to organize.
State Farm Insurance, the nation's largest insurance company, is suing
Ford Motor Co. to recover nearly $500,000 paid to policyholders because
of vehicle fires caused by ignition switches which, the insurance
company alleges, were flawed, Associated Press reports. State Farm
recently filed 82 separate lawsuits in McClean County Circuit Court to
recover payouts from vehicle fires that damaged the vehicles and other
company-insured property in Illinois.
The lawsuit contends ignition switches on numerous models manufactured
from the early 1980s to the early 1990s made the vehicles "unreasonably
dangerous." These ignitions, according to the lawsuit, developed
electrical shorts due to improper design and manufacturing defects.
The lawsuit further alleges that the said parts were flammable and
prone to deteriorate. Payments from State Farm to their affected
policyholders ranged from $67 to more $46,000, according to court
records.
"If someone else is liable for these damages they should pay, and to
the extent they do . it lowers the cost for all our customers," said
company spokesman Richard Luedke.
Mr. Luedke said the alleged defect referred to in the instant case is
unrelated to a Ford ignition system problem that led to an estimated
$2.7 billion settlement of a class action in 2001. Ford, at that time,
agreed to pay customers for repairs of the ignition systems, which that
lawsuit alleged caused vehicles to stall without warning.
General Motors Corporation was named as a defendant in several
nationwide class actions filed on behalf of all purchasers of new motor
vehicles in the United States since January 1, 2001. Those actions
were filed in federal courts in California, Illinois, New York,
Massachusetts and Florida. The suit also names as defendants:
(1) General Motors of Canada, Ltd.,
(2) Ford,
(3) DaimlerChrysler,
(4) Toyota,
(5) Honda,
(6) Nissan,
(7) BMW,
(8) the defendant companies' Canadian subsidiaries,
(9) the National Automobile Dealers Association and
(10) the Canadian Automobile Dealers Association,
A parallel purported statewide class action on behalf of all purchasers
of new motor vehicles in California since January 1, 2001, was filed
against the same defendants in a state court in California.
The nearly identical complaints allege that the manufacturer
defendants, aided by the association defendants, conspired among
themselves and with their dealers to prevent the sale to United States
citizens of vehicles produced for the Canadian market and sold by
dealers in Canada. The complaints allege that new vehicle prices in
Canada are ten to thirty percent lower than those in the United States
and that preventing the sale of these vehicles to United States
citizens resulted in the payment of supracompetitive prices by United
States consumers. The complaints seek treble damages under the
antitrust laws, but do not specify damages.
No determination has been made to certify any of these cases as a class
action. The Company believes its actions have been lawful and intends
to vigorously defend these cases.
A tape of 911 calls made during last month's E2 nightclub stampede in
Chicago, Illinois presents a chilling contrast of screaming clubbers
fearful for their lives and begging for help, and a calm club employee
telling authorities that police on the scene had the situation under
control, the Associated Press Newswires reports.
The tape, containing about 30 calls, paints a picture of the wild
disorder, panic, uncontrollable fear, that took place, on February 17,
punctuated by a cool observation that all is "under control." The tape
was released by the city's Office of Emergency Management and
Communications, and probably will find its way as evidence in some of
the civil suits already filed and yet to be filed.
No criminal charges have been filed, and investigation is ongoing.
Several civil lawsuits have been filed against the club's owners and
The police are still investigating the disaster in which 21 people died
and more than 50 were injured, when an irritant was used by a security
guard to break up a fight that had started in the second-story club on
Chicago's south side. The spray, sometimes described as a "pepper
spray," caused the attendees to start gasping for breath and running to
find air, some vomiting, some in panic, and in this state they
converged on the stairway to the exit door, with some falling and some
of these trampled.
At this point, the facts become difficult to sort out. Some survivors
have said the door was padlocked. One 911 caller said there were
padlocks on the door and that patrons could not immediately get out.
She said that when emergency officials arrived at the club, then, and
only then, did the security guards use a key to remove the locks.
Another woman, more upset, screamed at a 911 dispatcher, "There's no
way to get out, they've got padlocks on the door, that's a fire
hazard."
Club owners have disputed the claim that some of the doors were locked.
Andre M. Grant, an attorney for club owner Dwain Kyles did not
immediately return calls for comment.
Merck-Medco Managed Care allegedly was paid more than US$3 billion in
rebates from parent company Merck & Co., Inc. and other drug makers
seeking to promote sales of certain treatments, court documents state,
according to a New York Times report.
The drug plan management Company faces a class action that alleges
that, in the late 1990s, the Company then persuaded doctors to
prescribe those drugs to patients at the expense of similar medicines
that often cost less. Court documents state that the Company
especially promoted Merck & Co.'s own drugs. In a three-month period
Medco persuaded doctors to switch more than 71,000 prescriptions from
Lipitor, a cholesterol treatment from Pfizer Inc, to Zocor, a
competing, more costly drug from Merck, according to Merck-Medco
records referred to in the court documents.
Medco also promoted the Vioxx analgesic of Merck ahead of Celebrex from
Pharmacia Corp, as well as Prilosec, an ulcer treatment Merck formerly
marketed in a joint venture with Pharmacia, ahead of Prevacid, a
competing drug made by a joint venture of Abbott Laboratories and
Takeda Chemical Industries of Japan, the Times quoted the documents as
stating. The Merck-Medco records are cited in documents that have been
under court seal and heavily edited at Medco's request, the newspaper
Company officials yesterday did not dispute the figures in unedited
versions of the documents. Photocopies of these versions were sent to
the Times.
Monsanto Co. has asked the United States District Court for the Eastern
District of Missouri to dismiss prior to class certification
determination several suits which allege that, beginning in 1988, the
Company and the former Monsanto Company conspired with competitors,
through a series of negotiations and legal settlements, to fix the
price of glyphosate-based herbicides and paraquat-based herbicides at
prices higher than the market would otherwise bear. These lawsuits
all seek money damages.
The following two cases were filed alleging claims on behalf of all
direct purchasers of glyphosate-based herbicides or paraquat-based
herbicides in the United States from March 1, 1988 to the present:
(1) a suit filed by S&M Farm Supply, Inc. on Nov. 21, 2001, in
United States District Court for the Northern District of
California; and
(2) a suit filed by Orange Cove Ag-Chem and Sidehill Citrus Grove,
Inc., on March 11, 2002, in United States District Court for
the Eastern District of California.
These lawsuits were transferred to the United States District Court for
the Eastern District of Missouri, as a result of motions by the
Company. The Company is at the conclusion of the first phase of
discovery in both of these cases, and has moved to dismiss prior to
class certification determination. In addition, various purported
class action lawsuits alleging the same facts have been filed by
individuals, and are pending in state courts.
Oral arguments on the writ of certiorari for the class action filed
against Monsanto Co., and other manufacturers of herbicides used by the
US armed services during the Vietnam war. The suit was filed on behalf
of veterans and others alleging injury from exposure to the herbicides.
In the United States this litigation has been assigned to Judge
Weinstein of the United States District Court for the Eastern District
of New York, as part of In re "Agent Orange" Product Liability
Litigation, MDL 381, a multidistrict litigation proceeding established
in 1977 to coordinate Agent Orange-related litigation in the United
In 1984, a settlement in the MDL proceeding concluded all class action
litigation filed on behalf of US and certain other groups of
plaintiffs. However, various other claims by veterans or civilians
alleging personal injury from exposure to herbicides used in Vietnam
have been filed since that settlement.
Two suits filed by individual US veterans contesting the denial of
their claims subsequent to the class action settlement have been
consolidated in the MDL and were dismissed by the district Court. In
an opinion dated November 2001, the United States Court of Appeals for
the Second Circuit vacated the District Court's dismissal and remanded
the cases for further proceedings.
On November 4, 2002, the manufacturers' petition for writ of certiorari
was granted by the US Supreme Court. Oral argument was held on
February 26, 2003. All proceedings in the litigation have been stayed
pending the final decision by the US Supreme Court.
Plaintiffs in the class action against Monsanto Co. and Dow Chemical
Company on behalf of 13,800 Korean veterans of the Vietnam War filed an
appeal of the dismissal of the suit by the Seoul District Court in
Korea.
The Korean veterans commenced the suit, alleging that they were exposed
to herbicides and suffered injuries as a result. The suit involves
three separate complaints which were filed and are being handled
collectively in Seoul District Court. The complaints fail to assert
any specific causes of action but seek damages of 300 million won
(approximately $250,000) per plaintiff. Other ancillary actions are
also pending in Korea, including a request for provisional relief
pending resolution of the main action.
In May 2002, the Seoul District Court ruled in favor of the
manufacturers and dismissed all claims of the petitioners on the basis
of lack of causation and statutes of limitations. Petitioners have
filed an appeal de novo and have requested the waiver of certain legal
conditions ordinarily associated with the pursuit of any appeal. The
court has declined to grant the full procedural relief sought by
petitioners to facilitate their appeal and petitioners have filed a
motion to appeal this procedural matter.
The US Equal Employment Opportunity Commission (EEOC) appealed the
United States District Court for the Northern District of Alabama's
decision granting summary judgment in favor of PEMCO Aviation Group,
Inc. in a discrimination class action filed against it and its Pemco
Aeroplex.
In December 1999, a class action was filed, seeking declaratory,
injunctive relief and other compensatory and punitive damages based
upon alleged unlawful employment practices of race discrimination and
racial harassment by the Company's managers, supervisors, and other
employees. The complaint sought damages in the amount of $75 million.
In July 2000, the court determined that the group would not be
certified as a class and the plaintiffs withdrew their request for
class certification.
The EEOC subsequently filed a complaint in court, claiming parallel
grievances for all employees affected. The court denied consolidation
of these two cases for trial purposes. Nine plaintiffs elected to
settle with the company prior to the trial.
In June 2002 a jury determined that there was no hostile work
environment with regard to any of the 22 plaintiffs in the original
case and granted verdicts for the company. The court granted the
company summary judgment.
That judgment has now been appealed to the 11th Circuit Court of
Appeals. The Company has taken effective remedial and corrective
action, and acted promptly in respect to any specific complaint by any
The city of Philadelphia reached a proposed settlement with former
detainees in city jails who are diabetics, who claimed they were denied
proper medical care while detained by city police, the Associated Press
Newswires reports.
The city has agreed to pay $206,000 to compensate the plaintiffs,
numbering several hundred people detained between February 1998 and
March 2001, who could collect amounts from $200 and $5,000, depending
on the length and severity of their deprivation, said Alan L. Yarvin,
an attorney for the plaintiffs.
The federal class action was filed in the United States District Court
by Stephen Rosen of Cheltenham and others, who alleged they were
deprived of diabetes testing and treatment while in custody, and
requires final approval by the court. The American Diabetes
Association joined in the lawsuit to seek changes in the way people
with diabetes are treated if arrested.
The city agreed that diabetic detainees will not be held in lockups
without medical services but would be taken to the city's main offender
processing unit and would get blood sugar testing, food and medication,
and would be hospitalized if necessary. A video on the needs of people
would be incorporated into police training under the agreement.
Deputy city solicitor Jeffrey M. Scott said in a statement that the
city welcomed the agreement, which "positively supplements previously
instituted training and written policies and procedures (for diabetic
detainees)."
The United States District Court for the Southern District of New York
dismissed in part the consolidated securities class action pending
against Perot Systems, some of its current and former officers and the
investment banks that underwrote its initial public offering. The
consolidated suit alleges violations of Rule 10b-5, promulgated
under the Securities Exchange Act of 1934, and Sections 11, 12(a)(2)
and 15 of the Securities Act of 1933. The suit focuses on alleged
improper practices by the investment banks in connection with the
Company's initial public offering in February 1999.
The plaintiffs allege that the investment banks, in exchange for
allocating public offering shares to their customers, received
undisclosed commissions from their customers on the purchase of
securities and required their customers to purchase additional Company
shares in aftermarket trading. The lawsuit also alleges that the
Company should have disclosed in its public offering prospectus the
alleged practices of the investment banks, whether or not it was aware
that the practices were occurring.
Approximately 300 issuers and 40 investment banks have been sued in
similar cases. The suits against the issuers and underwriters have
been consolidated for pretrial purposes in the IPO Allocation
Securities Litigation. The Company believes the claims against it are
without merit and will vigorously defend itself in this case.
During 2002, the individual Company defendants were dismissed from the
case. In exchange for the dismissal, the individual defendants entered
agreements with the plaintiffs that toll the running of the statute of
limitations and permit the plaintiffs to refile claims against them in
the future. In February 2003, in response to the defendant's motion to
dismiss, the court dismissed the plaintiffs' Rule 10b-5 claims against
the Company, but did not dismiss the remaining claims.
Several securities suits charging Perot Systems with conspiring with
energy traders to manipulate the California energy market have been
District of Texas, Dallas Division.
In June 2002, a class action was filed in the Superior Court of
California, County of San Diego. The suit was later removed to the
United States District Court for the Southern District of California.
In June, July and August 2002, the Company, Ross Perot and Ross Perot,
Jr., were named as defendants in eight purported class actions that
allege violations of the Securities Exchange Act and Rule 10b-5 filed
thereunder, and, in some of the cases, common law fraud. These suits
allege that the Company's SEC filings contained material misstatements
or omissions of material facts with respect to the Company's activities
related to the California energy market. Two lawsuits were filed in
the United States District Court for the Southern District of New York.
Four lawsuits, were filed in the United States District Court for the
Northern District of Texas, Dallas Division, while two lawsuits were
filed in the United States District Court for the Eastern District of
Texas, Sherman Division. All of these eight cases have been
consolidated in the Northern District of Texas, Dallas Division.
The Company believes that the claims against it are without merit.
The 11th Circuit Court of Appeals dismissed the appeal as to certain
plaintiffs of a lower court's decision dismissing the class action
pending against Smithfield Foods, Inc. and Joseph W. Luter, III.
The suit, filed in March 2001 in the United States District Court for
the Middle District of Florida, Tampa Division, purports to allege
violations of various laws, including the Racketeer Influenced and
Corrupt Organizations Act (RICO), based on the Company's alleged
failure to comply with certain environmental laws. The complaint seeks
treble damages that are unspecified. The plaintiffs filed an amended
complaint on May 1, 2001.
In February 2002, the court granted the Company's and Mr. Luter's
motion to dismiss, giving the plaintiffs 20 days within which to file
an amended complaint. On March 15, 2002, the plaintiffs filed their
second amended complaint, which the court again dismissed, this time
with prejudice. The court further issued an order imposing monetary
sanctions against the plaintiffs' attorneys.
The appeals court granted the Company's and Mr. Luter's motion to
dismiss the appeal as to certain plaintiffs. The parties await oral
argument. The Company continues to believe that the Suit is baseless
and without merit and will defend the suit vigorously.
World Financial Network National Bank settled a class action filed in
the United States District Court, Southern District of Florida, Miami
Division by a group of World Financial cardholders, behalf of all
others similarly situated.
The suit alleges that the Bank engaged in a systematic program of
false, misleading, and deceptive practices to improperly bill and
collect consumer debts from thousands of cardholders, stemming from
Its alleged practices involved in calculating finance charges and in
crediting cardholder payments on the next business day if received
after 6:30 a.m.
The settlement did not have a material impact on the Bank. The suit
was later dismissed with prejudice.
The United States Bankruptcy Court set a litigation schedule for the
class actions filed against W.R. Grace & Co., on behalf of all owners
of homes containing ZAI, a product formerly sold by the Company that
may contain trace amounts of asbestos.
The first of the suits was filed in the United States District Court
for the Eastern District of Massachusetts, seeking damages and
equitable relief, including the removal, replacement and/or disposal of
all such insulation. After the first suit was filed, nine similar
suits were initiated against the Company prior to its Chapter 11
filing. The nine lawsuits were filed in various state and federal
courts asserting similar claims and seeking damages similar to those in
the first suit. One of the purported federal class actions has been
consolidated with the first suit.
As a result of the Company's Chapter 11 filing, all of these cases have
been transferred to the US Bankruptcy Court for the District of
Delaware. The plaintiffs in the ZAI lawsuits assert that this product
is in millions of homes throughout the US and that the cost of removal
could be several thousand dollars per home. While the Company has not
completed its investigation of the claims described in these lawsuits,
testing and analysis of this product by the Company and others supports
the Company's belief that the product was and continues to be safe for
its intended purpose and poses little or no threat to human health.
In July 2002, the Bankruptcy Court approved special counsel to
represent the ZAI claimants, at Grace's expense, in a proceeding to
determine certain threshold scientific issues regarding ZAI. The court
has set a litigation schedule that would result in pretrial hearings on
these issues in the third quarter of 2003.
At this time, the Company is not able to assess the extent of any
possible liability related to this matter.
Every year hundreds of class actions are filed and millions of dollars
awarded because of alleged wrongdoings by brokers and corporations
dealing in activities of every conceivable kind. The lawyers do walk
away with substantial fees -- a fact, even though one may agree in
principle with the concept of class actions.
The class members, however, may receive pennies on the dollar, or even
vouchers toward some future purchase from some entity which already has
wronged them, sometimes both. The question for some may be, does it
pay to stay in or "opt out" of the lawsuit? -- a question recently
treated by Lauren Foster writing in the Financial Times, along with
some reforms recommended by the US Judicial Conference on opting out
and other matters related to improving class action lawsuits.
Investors, for example, do not "join" the litigation, but are
automatically signed up if their transaction is covered by the case.
If they do not want to participate, they must opt out.
Class actions, where one case is made on behalf of multiple plaintiffs,
have an early opt-out period, before plaintiffs know the settlement
terms or any other data that might help them decide whether they might
be better served by bringing an individual lawsuit. However, there is
some momentum to change how the opt out functions so that it would be a
better tool than it now seems to be.
Last year, the US Judicial Conference, the policy-making body for the
federal judiciary, recommended the most important revision of the class
action rules (known as Rule 23), since the modern class action came
into being in 1966.
The key change the Judicial Conference recommended was to allow
individuals a second opt out. Plaintiffs would be able to opt out when
they have incurred damages in excess of what is covered by the class
action, and, therefore, may prefer to file their own lawsuit with the
chance of receiving more in damages. Plaintiffs are currently bound by
the settlement and may not opt out on their own after the original opt-
out period has passed.
Some other important changes recommended by the Judicial Conference
(1) that judges be given more influence over the selection of the
lawyers who represent the class;
(2) that they have more discretion to reject a proposed
settlement; and
(3) that they be granted more control over the fees plaintiffs'
lawyers command.
The Judicial Conference's proposals are being considered by the Supreme
Court, which has until May 1 to submit them to Congress. If submitted
to Congress and not rejected or modified by that body, the rules will
become federal law on December 1.
The question of whether to opt out comes down to money, since finding
legal representation usually involves significant personal expense.
"Typically, it is only going to make sense (to opt out) if they (the
class members) have a very large claim," says Michael A. Perino, a
specialist in securities law and an associate professor at St. Johns
University School of Law in Queens, New York. "For small claimants,
the cost of pursuing an individual law suit will be larger than the
amount they could recover in a lawsuit; so, only very large claimants,
such as institutional investors, have the practical ability to opt
For most claimants, "the choice is getting pennies on the dollar in a
class action or getting nothing," Professor Perino said.
Even for the large investors, Melvyn Weiss, senior partner at Milberg,
Weiss Bershad Hynes & Lerach, perhaps the biggest of the class-action
specialist law firms, said that deciding whether to opt out depended on
the case and was a "sophisticated decision."
In the WorldCom case, for example, big institutional plaintiffs chose
to prosecute separately. Last year, three California pension funds
filed suit against the investment banks that underwrote a $12 billion
corporate bond issue for WorldCom, and Milberg Weiss is representing
the pension funds. In February, Abbey Gardy filed a class action on
behalf of investors who bought "12 percent GOALs Equity Linked Notes,
linked to the common stock of WorldCom" between May 17, 2001 and June
Another example of Mr. Weiss's appraisal of what factors enter into a
decision to opt out -- that it depended on the case and was a
"sophisticated decision" -- presented itself in the Coca-Cola case, two
years ago, when plaintiffs in the discrimination class-action lawsuit
against that company, faced the dilemma of staying in or opting out.
In the end, 23 members of about 2,200 plaintiffs opted out in order to
sue on their own or join another lawsuit, and perhaps receive a higher
settlement amount; perhaps not.
A lawyer representing some of that number said: "While the settlement
terms were adequate for the class as a whole, our 17 clients suffered
indignities and injustices . that would not be fairly and adequately
compensated by the class settlement."
Coca-Cola ultimately agreed to pay $192.5 million to settle the class
action, an average of about $38,000 each plaintiff. The lawsuits of
the 17 are still pending.
Vianale & Vianale LLP initiated a securities class action on behalf of
purchasers of the securities of Andrx Corporation (NASDAQ: ADRX)
between October 31, 2002 and March 4, 2003, inclusive. The action is
pending in the United States District Court, Southern District of
Florida, against the Company, Richard J. Lane and Angelo C. Malahias.
According to the suit, defendants artificially inflated the price of
Andrx securities by failing to disclose that Andrx's generic version of
Wellbutrin SR had a short expiration period and that the Company's
stockpile of this drug would likely expire before the Company had
obtained FDA approval to market the drug. Andrx had told investors
that it expected FDA approval to market its generic version of
Wellbutrin(R) SR, an antidepressant, by year-end 2002. Mr. Lane told
investors on October 31, 2002 that Andrx was "continu(ing) to build
inventories of [Wellbutrin] and other generic products prior to their
launches."
No disclosure was made, however, of the drug's short commercial life
and the likelihood that if the Company's stockpile of the drug was not
soon sold, the Company would need to write off the inventory's value or
record a charge against it. On March 5, 2003, Andrx announced that it
would take a $26.3 million charge against its generic versions of
Wellbutrin(R) SR/Zyban(R) that were produced but not marketed because
of FDA concerns over the drugs' expiration dating. Andrx would also
have to resubmit its applications to produce generics of these drugs.
The Company's stock price sank 31% on the news.
For more details, contact Kenneth J. Vianale or Julie Prag Vianale by
Mail: 5355 Town Center Road, Suite 801, Boca Raton, Florida 33486 by
Phone: 561-391-4900 by E-mail: info@vianalelaw.com.
Cauley Geller Bowman Coates & Rudman, LLP initiated a securities class
action in the United States District Court for the Southern District of
New York, on behalf of purchasers of Caminus Corporation (Nasdaq: CAMZ)
publicly traded securities during the period between February 12, 2002
and July 8, 2002, inclusive.
The complaint alleges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market between February 12, 2002 and July 8, 2002, thereby artificially
inflating the price of Caminus' securities. Specifically, as alleged
in the suit, defendants issued numerous statements regarding the
Company's future prospects and describing how demand for the Company's
products continued to be strong.
As alleged in the suit, these statements were each materially false and
misleading because defendants failed to disclose and misrepresented,
among other things, the following material adverse facts which were
known to defendants or recklessly disregarded by them:
(1) that the Company's business was coming under increasing
pressure as many of Caminus' clients were deferring product
purchases and/or determining not to proceed at all with
planned purchases;
(2) that the Company's strategic consulting business was not
performing to the Company's expectations and would not be able
to contribute the revenues and earnings that were anticipated;
(3) that the market for Caminus' products was quickly
deteriorating as many energy companies were being heavily
scrutinized by regulatory authorities, experiencing declining
financial condition and grappling to fix the deficiencies in
their respective businesses.
Moreover, energy trading -- an area where Caminus provided software
systems -- was in steep decline as many of the major players exited the
field amid scandal.
On July 8, 2002, the last day of the class period, Caminus shocked the
market when it announced that revenues for the second quarter would be
$7 million less than previously promised and that the Company now would
experience a loss, as compared to the $0.03 per share profit previously
represented. The Company attributed the earnings shortfall to "delays
in timing of several sizeable software deals." The market's reaction
to this announcement was immediate and punitive, with shares of Caminus
common stock falling from $5.95 per share to $2.99 per share, on
extremely heavy trading volume.
For more details, contact Samuel H. Rudman, David A. Rosenfeld, Jackie
Addison, Heather Gann or Sue Null by Mail: P.O. Box 25438, Little Rock,
AR 72221-5438 by Phone: 1-888-551-9944 by E-mail: info@cauleygeller.com
or visit the firm's Website:
http://cauleygeller.com/template8.asp?pcode=6&pp=1
Goodkind Labaton Rudoff & Sucharow LLP initiated a securities class
action, pursuant to Section 21D(a)(3)(A)(i) of the Securities Exchange
Act of 1934, in the United States District Court for the Northern
District of Texas, Dallas Division on behalf of all who purchased or
otherwise acquired Carreker Corporation (NASDAQ:CANIE) common stock
between May 20, 1998 and December 10, 2002 inclusive. The named
defendants are the Company, Terry L. Gage and John D. Carreker.
The complaint charges Defendants with violations of Sections 10(b) and
20 of the Securities Exchange Act of 1934. The Company provides
consulting and software services to banks. The complaint alleges that
between May 20, 1998 and December 10, 2002, defendants engaged in a
scheme to artificially inflate the value of Carreker securities by
issuing misleading financial reports to investors.
The complaint alleges that defendants failed to accurately account for
revenue attributable to certain contracts and that as a result of this
misleading accounting practice, the Company inappropriately recognized
revenue. The complaint then alleges that defendants issued financial
statements containing the misleading revenue figures to the market.
On December 10, 2002, Carreker issued a press release announcing it was
reviewing its financial statements, principally focusing on the timing
of its recognition of revenues during 'prior periods.' The Restatement
Press Release also stated that the Company believed it may be required
to restate its financial statements for prior periods and that if
required, the Company would file amendments to its Form 10-Ks and Form
10-Qs for the affected periods. The Company cautioned that its
historical financial statements for prior periods should not be relied
upon. Carreker also announced that it was postponing its earnings
release for the third quarter ended October 31, 2002.
Following the issuance of the Restatement Press Release, the price of
the Company's stock fell from $5.08 to $3.98 (22%). The complaint also
alleges that defendants took advantage of the artificially inflated
share price in order to issue four million six hundred thousand shares
pursuant to an offering on October 3, 2000.
On December 17, 2002, Carreker reported in a Form 8-K that the
Securities and Exchange Commission had commenced an investigation into
the timing of the Company's revenue recognition. On December 24, 2002,
Carreker issued a press release announcing that due to the delayed
filing of its Form 10-Q, it had received notification from the NASDAQ
that its securities were subject to de-listing.
For more details, contact Henry J. Young by Mail: 100 Park Avenue, 12th
Floor New York, New York 10017-5563 by Phone: (212) 907-0700 by E-mail:
hyoung@glrslaw.com or visit the firm's Website: http://www.glrslaw.com
Wechsler Harwood LLP initiated a securities class action on behalf of
persons or entities who purchased or otherwise acquired the securities
of Carreker Corporation (Nasdaq:CANIE) during the period between May
20, 1998 through and including December 10, 2002, in the United States
District Court for the Northern District of Texas. The suit names as
defendants the Company and certain of its officers and directors.
The complaint charges Carreker and certain of its officers and
directors with violations of federal securities laws. Among other
things, plaintiff claims that defendants' material omissions and the
dissemination of materially false and misleading statements regarding
the nature of Carreker's revenues and earnings caused Carreker's stock
price to become artificially inflated, inflicting enormous damages on
investors.
More specifically, the plaintiff alleges that defendants misrepresented
Carreker's financial performance by improperly deferring delinquent
loans to avoid customer defaults so Carreker could have access to cash
that otherwise would have been restricted. As a result of defendants'
scheme, the plaintiff complains, defendants maintained inadequate cash
reserves.
For more details, contact David Leifer by Mail: 488 Madison Avenue, 8th
Floor, New York, New York 10022 by Phone: (877) 935-7400 or by E-mail:
dleifer@whesq.com
New York, on behalf of all who purchased or otherwise acquired Cosi,
Inc. (NASDAQ:COSI) common stock pursuant to or traceable to a
registration statement and prospectus filed in connection with Cosi's
initial public offering (IPO) which were declared effective on November
25, 2002, through February 3, 2003 inclusive. The named defendants are
the Company and certain officers and directors of the Company.
The complaint charges Defendants with violations of Section 11,
12(a)(2) and 15 of the Securities Act of 1933 as amended. Cosi owns
and operates 83 restaurants in 11 states and the District of Columbia.
On November 25, 2002, the Securities and Exchange Commission declared
effective a Registration Statement and Prospectus pursuant to Cosi
offering 5,555,556 shares of common stock.
The Offering Documents touted the business prospects of the Company and
represented that Cosi intended to expand its business by opening
restaurants. The Offering Documents stated that Cosi intended to open
25 new restaurants in 2002 and 59 restaurants in 2003 and that the
expansion would be financed by approximately $19 million dollars raised
in the IPO.
Then, on February 3, 2003, less than three months after the IPO, Cosi
surprised investors by announcing it had abandoned its growth strategy
and would be shifting its business strategy to a plan which relied
primarily on franchisees and developers. Cosi added that instead of
the expected 59 new restaurants in 2003, the Company intended to open
just 6 new restaurants in the same period.
Following the announcement that Cosi was to abandon its business plan,
the price of Cosi's shares fell from $4.47 to $3.10 (30%).
The Law Offices of Brian M. Felgoise, PC initiated a securities class
action on behalf of shareholders who acquired InterCept, Inc.
(Nasdaq:ICPT) securities between September 16, 2002 and January 9,
2003, inclusive, in the United States District Court for the Northern
District of Georgia, against the Company and certain key officers and
directors.
The action charges that defendants violated the federal securities laws
by issuing a series of materially false and misleading statements to
the market throughout the class period which statements had the effect
of artificially inflating the market price of the Company's securities.
For more details, contact Brian M. Felgoise by Mail: 261 Old York Road,
Suite 423, Jenkintown, Pennsylvania, 19046, by Phone: 215-886-1900 or
by E-mail: securitiesfraud@comcast.net
Holzer Holzer & Cannon, LLC initiated a securities class action in the
United States District Court for the Northern District of Georgia, on
behalf of purchasers of InterCept, Inc. (Nasdaq:ICPT) publicly traded
securities during the period between September 16, 2002 and January 9,
2003, inclusive.
The complaint alleges that, during the class period, InterCept and
certain of its officers and/or directors violated the federal
securities laws by making material misrepresentations and/or omitting
to make material disclosures. Specifically, the complaint alleges that
defendants made false assurances regarding the significance of their
adult pornography Internet portion of the Company's merchant processing
business and failed to disclose that VISA regulations implemented on
November 1, 2002 caused a material loss of business.
The complaint further alleges that defendants knew, by the time their
fourth quarter earnings estimate was issued on November 4, 2002, that
InterCept would suffer a material loss of business because defendants
were aware by November 1, 2002 which of their customers had met the
deadline to become sponsored merchants under the new VISA regulations.
On January 9, 2003, InterCept announced that it was revising its fourth
quarter 2002 earnings per share estimate downward. The Company cited
"reduced revenues in our merchant area result(ing) primarily from the
iBill operations, which experienced a large loss of merchant customers
following the implementation of a new credit card association rule in
mid-November."
Following these disclosures, shares of InterCept declined by more than
half of its pre-disclosure value on extraordinarily high trading
For more details, contact Corey D. Holzer or Michael I. Fistel by
Phone: 888-508-6832 or by E-mail: cholzer@holzerlaw.com or
mfistel@holzerlaw.com
Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class
action in the United States District Court for the Eastern District of
Tennessee on behalf of purchasers of King Pharmaceuticals Inc.
(NYSE:KG) publicly traded securities during the period between Feb. 16,
2000 and March 10, 2003.
The complaint charges the Company and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. King
Pharmaceuticals is a vertically integrated pharmaceutical company that
develops, manufactures, markets and sells primarily branded
prescription pharmaceutical products. The complaint alleges that
during the class period, defendants caused King Pharmaceuticals' shares
to trade at artificially inflated levels through the issuance of false
and misleading financial statements.
While the stock was inflated, King Pharmaceuticals completed two
secondary stock offerings, raising more than $900 million in proceeds.
The Registration Statements and Prospectuses issued pursuant to these
offerings contained the Company's false financial statements.
Ultimately, on March 11, 2003, the Company disclosed an SEC
investigation into the Company's rebates to distributors in prior
years. On this news the Company's stock price declined to as low as
$11.60 before closing at $12.17, on volume of $19.5 million shares, a
decline of 73% from the class period high of $46.05.
For more details, contact William Lerach by Phone: 800/449-4900 by E-
mail: wsl@milberg.com or visit the firm's Website:
http://www.milberg.com
action on behalf of shareholders who acquired King Pharmaceuticals,
Inc. (NYSE:KG) securities between February 16, 2000 and March 10, 2003,
inclusive, in the United States District Court for the Eastern District
of Tennessee, against the Company and certain key officers and
Tennessee, Northeastern Division at Greeneville, on behalf of
purchasers of King Pharmaceuticals (NYSE: KG) publicly traded
securities during the period between February 16, 2000 and March 10,
The suit alleges that defendants violated sections 10(b) and 20(a) of
the Securities & Exchange Act of 1934 by issuing materially false and
misleading statements during the class period and violated sections 11
and 15 of the Securities Act of 1933 by issuing a materially false and
misleading Registration Statement and Prospectus in connection with the
Company's acquisition of Jones Pharma, Inc.
Specifically, the complaint alleges that defendants issued statements
regarding the Company's financial performance and future prospects and
the strong demand for its branded pharmaceutical products, notably
Altace and Levoxyl. Moreover, the complaint alleges that the Company
failed to disclose that certain of its rebate and pricing practices
subjected it to heightened governmental scrutiny.
As alleged in the Complaint, these statements were each materially
false and misleading when made as they misrepresented and/or omitted
the following adverse facts which then existed and disclosure of which
was necessary to make the statements made not false and/or misleading,
(1) that the Company's rebate practices and "best price" lists
subjected it to heightened regulatory scrutiny as governmental
agencies increased their activity in this area;
(2) that the Company had understated the level of generic
competition for Levoxyl; and
(3) that the Company had engaged in questionable sales to VitaRx
and Prison Health Services during 1999 and 2000.
On March 11, 2003, King Pharmaceuticals shocked the market when it
revealed that it was subject to an SEC investigation for, among other
(i) the sales of its products to VitaRx and Prison Health Services
during 1999 and 2000;
(ii) its "bestprice" lists;
(iii) all documents related to the pricing of its pharmaceutical
products to any governmental Medicaid agency during 1999; and
(iv) the accrual and payment of rebates on Altace from 2000 to the
In response to this announcement, the price of King Pharmaceuticals
common stock declined precipitously, falling from $15.90 per share to
$12.17 per share.
or visit the Website:
Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class
securities during the period between March 31, 1999 and March 10, 2003,
inclusive.
The complaint alleges that the defendants violated sections 10(b) and
20(a) of the Securities & Exchange Act of 1934 and 78t(a)] and Rule
10b-5 promulgated thereunder by the Securities and Exchange Commission
by issuing materially false and misleading statements during the class
period. Specifically, the Complaint alleges that King mislead the
investing public as to its accounting and revenue for fiscal years
1999-2002. Defendants misstated their financial results by improperly
recognizing revenues contrary to Generally Accepted Accounting
The purpose of the scheme was to allow King to report continued growth
and to conceal weaknesses in its revenues and product lines,
particularly its flagship drug Altace, and to inflate the market price
of King securities.
(1) the sales of its products to VitaRx and Prison Health Services
(2) its "bestprice" lists;
(3) all documents related to the pricing of its pharmaceutical
(4) the accrual and payment of rebates on Altace from 2000 to the
For more details, contact Fred Taylor Isquith, Gustavo Bruckner,
Michael Miske, George Peters or Derek Behnke by Mail: 270 Madison
Avenue, New York, New York 10016, by Phone: (800) 575-0735 by E-mail:
classmember@whafh.com or visit the firm's Website:
http://www.whafh.com. All e-mail correspondence should make reference
to King Pharmaceuticals.
Schiffrin & Barroway, LLP initiated a securities class action in the
United States District Court for the Eastern District of Tennessee,
Northern Division at Greenville on behalf of all purchasers of the
common stock of King Pharmaceuticals, Inc. (NYSE:KG) from February 16,
2000 through March 10, 2003, inclusive.
Specifically, the suit alleges that defendants issued statements
Altace and Levoxyl. Moreover, the suit alleges that the Company failed
to disclose that certain of its rebate and pricing practices subjected
it to heightened governmental scrutiny.
As alleged in the suit , these statements were each materially false
and misleading when made as they misrepresented and/or omitted the
following adverse facts which then existed and disclosure of which was
necessary to make the statements made not false and/or misleading,
For more details, contact Marc A. Topaz or Stuart L. Berman by Phone:
(888) 299-7706 (toll free) or (610) 667-7706 or by E-mail:
info@sbclasslaw.com
United States District Court for the Northern District of California on
behalf of all purchasers of the common stock of Monterrey Pasta Company
(Nasdaq:PSTA) from July 11, 2002 through December 16, 2002, inclusive.
misleading statements throughout the class period concerning the
Company's financial performance and future prospects. Specifically,
the Complaint alleges that defendants described the Company's
dependence on two of its largest customers for continued revenue
growth, but failed to disclose that one its major customers had adopted
a new pilot purchasing program which would negatively impact the
Company's earnings growth in both the short and long- term.
When, at the end of the class period, defendants finally disclosed that
its revenues were being negatively impacted by this new purchasing
program, its shares fell $2.59 per share, or 37.8%, to close at $4.26
per share, on extraordinarily high trading volume.
For more details, contact Marc A. Topaz, Stuart L. Berman by Phone:
Schatz & Nobel PC initiated a securities class action in the United
States District Court for the District of Massachusetts on behalf of
all persons who purchased the securities of Parametric Technology
Corporation (Nasdaq: PMTC) from October 19, 1999 through December 31,
The suit alleges that Parametric, a company that develops, markets and
supports product lifecycle management (PLM) software solutions, and
certain of its officers and directors issued materially false and
misleading statements concerning Parametric's financial condition and
business prospects. Specifically, defendants failed to disclose that
Parametric had cumulatively overstated its previously recognized
maintenance revenue from its service contracts by approximately $33.4
million.
It is also alleged that Parametric lacked adequate internal controls
and was therefore unable to ascertain the true financial condition of
the Company. As a result, the value of Parametric's income and
financial results were materially overstated during the class period.
On December 31, 2002, Parametric announced that it had identified "$20
to $25 million of previously recognized maintenance revenue which
should have been deferred and recognized in fiscal 2003 and later
periods." Accordingly, Parametric announced that it expected to report
a corresponding reduction in maintenance revenue in prior periods,
primarily in fiscal year 2002. On January 2, 2003, Parametric closed
at $2.19 per share, as compared with a class period high of $32.88 per
For more details, contact Nancy A. Kulesa by Phone: 1-800-797-5499 by
E-mail: sn06106@aol.com or visit the firm's Website:
http://www.snlaw.net
The Law Offices Of Charles J. Piven, P.A. initiated a securities class
action has been commenced on behalf of shareholders who purchased,
converted, exchanged or otherwise acquired the common stock of
Provident Financial Group, Inc. (Nasdaq:PFGI) between March 30, 1998
and March 4, 2003, inclusive, in the United States District Court for
the Southern District of Ohio, Western Division, against Provident
Financial Group, Inc. and certain of its officers and directors.
The action charges that defendants violated federal securities laws by
issuing a series of materially false and misleading statements to the
market throughout the class period which statements had the effect of
artificially inflating the market price of the Company's securities.
For more details, contact Charles J. Piven, PA by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202, by Phone: 410-986-0036 or by E-mail:
hoffman@pivenlaw.com
action on behalf of shareholders who acquired Koninklijke Ahold N.V.
(NYSE:AHO) securities between May 15, 2001 and February 21, 2003,
inclusive, in the United States District Court for the Southern
District of New York, against the Company and certain key officers and
Stull Stull & Brody initiated a securities class action in the United
States District Court for the Southern District of New York, on behalf
of purchasers of UnumProvident Corporation (NYSE:UNM) securities
between May 7, 2001 and February 4, 2003, inclusive against the Company
and certain of its officers and directors.
The complaint charges defendants with violations of the Securities
Exchange Act of 1934 by issuing a series of material misrepresentations
to the market resulting in plaintiff and the class purchasing their
UnumProvident stock at artificially inflated prices. UnumProvident
provides group disability and special risk insurance, as well as group
life insurance, long-term care insurance, and payroll-deducted
voluntary benefits offered to employees at their worksites.
UnumProvident operates around the world.
The complaint alleges that during the class period, defendants caused
UnumProvident's shares to trade at artificially inflated levels through
the issuance of false and misleading financial statements. The Company
failed to properly record the impairment to its investments and
operated "long-term denial factories," causing the Company's financial
results to be inflated. As a result, the Company's shares traded at
inflated prices enabling UnumProvident to raise proceeds of $250
million on June 13, 2002 in its bond offering.
UnumProvident and its top officers inflated the prices of the Company's
securities in order to pursue an accelerated securities sale program.
Defendants knew that by concealing UnumProvident's true financial
results they could foster the perception in the business community that
UnumProvident was a "growth company," i.e., it was the only way
UnumProvident could post the revenue and earnings per share growth
claimed by defendants. On February 5, 2003, UnumProvident announced
that it had recorded investment losses of $93 million and also reported
that it was responding to Securities and Exchange Commission requests
for information relating to its investment disclosures.
For more details, contact Howard T. Longman by Mail: 6 East 45th Street,
New York, NY 10017 by Phone: 1-800-337-4983 by Fax: 212-490-2022 or by
E-mail: TSVI@aol.com.
The Law Offices of Charles J. Piven, PA initiated a securities class
action on behalf of shareholders who purchased, converted, exchanged or
otherwise acquired the common stock of VitalWorks, Inc. (Nasdaq:VWKS)
between April 24, 2002 and October 23, 2002, inclusive, in the United
States District Court for the District of Connecticut.
For more details, contact Charles J. Piven by Mail: The World Trade
Maryland 21202, by Phone: 410-986-0036 by E-mail: hoffman@pivenlaw.com
Holzer Holzer & Cannon, LLC commenced a securities class action on
behalf of purchasers of the securities of VoiceFlash Networks, Inc.
(Other OTC:VFNX) between March 15, 2002 and January 24, 2003,
inclusive, in the United States District Court in Atlanta, Georgia.
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
market between March 15, 2002 and January 24, 2003, thereby
artificially inflating the price of VoiceFlash securities.
For more details, contact Corey D. Holzer or Michael Fistel, Jr. by
Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and
Beard Group, Inc., Washington, D.C. Enid Sterling, Aurora Fatima
Antonio and Lyndsey Resnick, Editors.
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