Lieff Cabraser: Consumer Law Newsletter Issue No. 13

Consumer Law Newsletter:
Issue No. 13

September 22, 2003

Top News

Investors File Suit Against Janus, Bank of America's
Nations Funds and Strong Funds; Investigations of
Invesco and Banc One Mutual Funds Ongoing
Amended Complaint Filed in Global Hemophilia Lawsuit
Hundreds of Millions of Dollars in Class Action
Settlement Funds Still Available for Homeowners with
Defective Hardboard Siding
Trucking And Air Freight Conglomerate CNF Alleged To
Have Caused Retirees to Lose Millions in Pension
Benefits
Gun Distributors And Dealers Enter Into Settlement
Aimed At Curbing Sales to Straw Purchasers And Gun
Traffickers
Court Grants Preliminary Approval to $75 Million
Settlement in Cemwood Roofing Shakes Litigation
Court Permits Lawsuit Alleging Pre-Paid Legal Services
Operates As A Pyramid Scheme to Advance
Governor Davis Signs Bill Aimed At Curbing Discriminatory Auto Loan Mark Ups

Introduction

The Consumer Law Newsletter is published quarterly by the national law firm of Lieff Cabraser Heimann & Bernstein, LLP. We hope you find the newsletter of interest. The newsletter is sent to all persons that have contacted our law firm via the internet and agreed to receive the newsletter. We do not sell to third parties or transfer in any way your personal information, including email addresses. If you do not wish to receive any future editions of this newsletter, there are instructions at the bottom on how to remove yourself from our recipient list.

Top News

Investors File Suit Against Janus, Bank of America's Nations Funds and Strong Funds; Investigations of Invesco and Banc One Mutual Funds Ongoing

On September 3, 2003, New York Attorney General Eliot Spitzer alleged that mangers of several large mutual fund companies allowed certain large institutional investors and extremely wealthy individuals to manipulate the mutual fund trading system to their advantage at the expense of long-term fund investors.

The alleged manipulation occurred through so-called "late trading" and "market timing" by large investors. Late trading involves purchasing mutual fund shares at the 4 p.m. price after the market closes, a practice which is illegal. As described by Attorney General Spitzer, late trading it is "like allowing betting on a horse race after the horses have crossed the finish line." Market timing is an investment technique involving short-term, "in and out" trading of mutual fund shares, which has a detrimental effect on the long-term shareholders for whom mutual funds are designed. When the two practices are engaged in by the favored investors simultaneously, these investors can reap extraordinary returns, all of which comes at the expense of long term investors who do not "game" the system.

At present, the full extent of the alleged fraud in the mutual fund industry is not known. However, the trading practices of the many leading mutual fund families -- including Bank of America’s Nations Funds, Banc One, Invesco, Janus and Strong Funds -- are under investigation.

Lieff Cabraser has filed suit on behalf of fund holders in Bank of America's Nations Funds, Janus and Strong Funds. The lawsuits charge that the fund managers breached their fiduciary duties to fund investors, and seek damages for investors along with restitution of the ill-gotten gains made by fund managers. Investigations of Banc One and Invesco are ongoing.

The specific funds under investigation include the following (this should not be considered an exhaustive list):

Banc One Funds: One Group Diversified International Fund;
One Group International Equity Index Fund; One Group
Diversified Mid Cap Fund; One Group Mid Cap Growth Fund;
One Group Mid Cap Value Fund; Small Cap Growth Fund;
Bank of America Funds: Nations Convertible; Nations
International Equity; Nations Emerging Markets; Nations
Small Cap;
Invesco Funds: Health Sciences Fund; Dynamics Fund; and
other Invesco equity and bond funds;
Janus Funds: Mercury Funds; High Yield Funds; and
Strong Funds: Strong Growth 20 Fund; Strong Growth Fund;
Advisor Mid Cap Growth Fund; Strong Large Cap Growth Fund; Strong Dividend Income Fund.

Amended Complaint Filed in Global Hemophilia Lawsuit

On behalf of hemophiliacs, or their families, who became infected with HIV and/or Hepatitis C ("HCV") from contaminated blood products, Lieff Cabraser filed on August 28, 2003, an amended complaint against the American companies that manufactured and exported the blood products. The lawsuit, brought in United States court, includes claims by citizens of Argentina, Germany, Italy, Israel, the United Kingdom and the United States.

For full details on the allegations raised in this lawsuit, and to contact Lieff Cabraser, please visit hemophilia-litigation.com.

Hundreds of Millions of Dollars in Class Action Settlement Funds Still Available for Homeowners with Defective Hardboard Siding

Lieff Cabraser has obtained compensation for homeowners across America from manufacturers of home building products such as hardboard siding and roof shingles that failed to perform as promised. Hundreds of millions of dollars in settlement funds are currently available to qualified class members. In particular, homeowners should be aware of two class action settlements involving allegedly defective hardboard siding.

The first settlement covers owners of structures on which Weyerhaeuser-brand exterior hardboard siding was applied at any time from January 1, 1981, through December 31, 1999. Weyerhaeuser will pay all timely and qualified claims for damages associated with its siding. There is no cap, or limit, on the total monetary damages to be paid.

Under the Weyerhaeuser settlement, three different deadlines govern the submission of claims. The more recently your siding was installed, the longer you will have to file your claim. Property owners whose siding was installed January 1, 1981, through December 31, 1987, have until December 2003 to submit their claim. For Weyerhaeuser siding installed between January 1, 1988, and December 31, 1993, claims are due December 2006. Finally, for siding that was installed between January 1, 1994, and December 31, 1999, the deadline is December 2009.

For complete information on the Weyerhaeuser settlement, and to request claim forms, please visit http://www.weyerclaims.com.

The second nationwide class action settlement, approved in 1998, compensates homeowners for the cost of repairing and replacing failing Masonite hardboard siding installed on homes and other structures between January 1, 1980, and January 1, 1998. To date, the settlement, valued at up to $1 billion, has paid out hundreds of millions of dollars to homeowners.

Like the Weyerhaeuser settlement, the Masonite settlement also has staggered deadlines for submitting claims. If you own Masonite hardboard siding installed between January 1, 1980, and December 31, 1989, you must file your claim by January 2005. Persons with Masonite hardboard siding installed between January 1, 1990, and January 15, 1998, have until January 2008 to file a claim.

To learn more about the Masonite settlement, please visit http://www.masoniteclaims.com or call the claims administrator toll-free at 1-800-330-2722.

Trucking And Air Freight Conglomerate CNF Alleged To Have Caused Retirees to Lose Millions in Pension Benefits

On August 28, 2003, former employees of the CNF, Inc., filed suit against the company and its actuarial firm, Towers, Perrin, Forster & Crosby, Inc., for allegedly causing the pension plan of Consolidated Freightways Company, Inc., to become under-funded, costing retirees millions of dollars in lost pension benefits.

"The complaint charges that CNF and Towers Perrin used overly-aggressive and unrealistic assumptions about the expected rate of return on pension plan assets and when employees were likely to retire," stated a Lieff Cabraser partner.

Lieff Cabraser represents employees and retirees across America in lawsuits against pension and 401K plan managers for breach of fiduciary duties.

Gun Distributors and Dealers Enter Into Settlement Aimed at Curbing Sales to Straw Purchasers and Gun Traffickers

On August 21, 2003, the Cities of Los Angeles, San Francisco and 10 other California cities and counties have entered into an unprecedented settlement in which several gun distributors and dealers have agreed to take steps to prevent firearms from being sold to criminals.

Two of the state's leading gun dealers -- Traders' Sports Inc. in San Leandro and Andrew's Sporting Goods in Southern California -- agreed to adopt as store policy verification of the identity of the actual purchaser of a firearm and to end the sale of firearms at gun shows. In addition, three major gun distributors have agreed to restrictions on sales that go beyond state and federal regulations. Lieff Cabraser serves as co-counsel for the California cities and counties.

For further information on the lawsuit, please click here.

Court Grants Preliminary Approval to $75 Million
Settlement in Cemwood Roofing Shakes Litigation

On August 12, 2003, California Superior Court Judge Carter P. Holly granted preliminary approval to an additional settlement in the Cemwood shakes litigation. The settlement, which is subject to final review by the Court, provides $75 million, inclusive of attorneys' fees and costs, to an estimated 30,000 owners of housing and other structures with the roofing shake. Combined with an earlier approved settlement, the total settlement of the litigation is for $140 million.

The litigation involves Cemwood's manufacture and sale of roofing shakes that are composed of approximately 2/3 Portland cement and 1/3 wood fiber. The shakes were marketed under various brand names including, among others, Cemwood Shakes, Permatek Shakes, Permatek II Shakes, Royal Shakes, Cascade Shakes, Trieste Tile, and Pacific Slate. Plaintiffs allege that the shakes are inherently defective. As a result, tens of thousands of class members allegedly have roofs that are prematurely failing and causing damage to the underlying structures. Defendants deny the allegations. Under the settlement, there is no admission of liability.

To learn more about the settlement, including how to
make a claim, please click here.

Court Permits Lawsuit Alleging Pre-Paid Legal Services Operates As A Pyramid Scheme to Advance

On July 23, 2003, U.S. District Court Judge Robin J. Cauthron denied in part and granted in part Pre-Paid Legal Services, Inc.'s motion to dismiss a class action lawsuit, and denied Pre-Paid's motion to strike the class allegations. Plaintiffs allege that the Pre-Paid marketing program is an illegal pyramid scheme, and participants, who are called "associates," are deceived into buying an "opportunity" to sell Pre-Paid's legal plans and recruit others to do the same.

The Court held that the "determination of whether the marketing program is a legitimate, product-based structure or a pyramid scheme will likely turn more on the practices and experiences of associates rather than on corporate documents ... [t]hus, the Court finds that plaintiffs' allegations that Pre-Paid is a pyramid scheme are not facially defective or clearly refuted by defendants' arguments or evidence."

There has been no decision on the merits of Plaintiffs’ claims.

Governor Davis Signs Bill Aimed at Curbing Discriminatory Auto Loan Mark Ups

On July 14, 2003, Governor Gray Davis of California signed into law a bill to curb inflated interest rates on auto loans that car dealers charge minority customers. The new statute is the nation's first to take aim at discriminatory lending that can result from a practice known as dealer markup. In a dealer markup, car dealers raise interest rates above the rates they are quoted by auto lending giants or other big financing companies. Frequently, the customers that incur the highest mark-ups are allegedly African Americans and Latinos.

Lieff Cabraser partner Bill Lann Lee testified in favor of the legislation before the California legislature. We are representing car buyers in litigation against auto finance companies for unfair lending. Please click here to learn more.

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