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Cypen & Cypen
JANUARY 16, 2004

Stephen H. Cypen, Esq., Editor

Never Forget - September 11, 2001

According to a PricewaterhouseCoopers study reported by, 56 class-action suits had public pension funds as lead plaintiffs in 2002. This number compares with 31 in 2001, 19 in 2000 and 18 in 1999. (In fact, two-thirds of all cases with public pension funds as lead plaintiffs have been filed in the last 3 years!) The real impetus for this trend came in 1995 when the federal Private Securities Litigation Reform Act became law. Intended to curb abusive practices in securities class actions, the law mandates that the entity with the largest financial interest in a class-action suit be named as lead plaintiff. However, the phenomenon of public pensions taking the lead grew swiftly after CalPERS and the New York State Retirement Fund reached a $2.8 Billion settlement with Cendant in 1999 -- over ten times larger than the previous highest settlement. The push by pension funds factors in settlement trends: bigger settlements emerge when funds serve as lead plaintiffs. Since 1995, more than 50 class actions with public pension fund plaintiffs have been settled with an average settlement of $87 Million compared with $13 Million in class-actions suits without public pension funds as lead plaintiffs. Last year, 16 settlements averaging more than $113 Million were reached in cases where a public pension fund was lead plaintiff, more than 15 times the $7.5 Million average settlement otherwise.

Perhaps the folks from Governing (see C&C Newsletter for January 9, 2004, Item 2) didn’t see the “Sperling Stress Index.” From among the 100 largest Metropolitan areas, the Index examines nine different factors that are associated with stress: unemployment rate, divorce rate, commute time, violent and property crime rates, suicide rate, alcohol consumption, self-reported “poor mental health” and number of cloudy days. Based thereon, the top five most stressful cities are Tacoma, Miami, New Orleans, Las Vegas and New York. To quote: “Miami has the highest violent crime rate in our study, as well as one of the highest property crime rates. Making Miami even more stressful is the long commute time, a high unemployment rate, and a high rate of divorce. Despite these factors, Miami residents manage to maintain a positive mental attitude.” And just to balance things out, the top five low-stress cities are Albany-Schenectady, Harrisburg-Lebanon-Carlisle, Orange County (CA), Nassau-Suffolk and Minneapolis-St. Paul.

As we previously reported, Florida’s defined contribution plan, Public Employee Optional Retirement Plan, was not attracting the number of employees anticipated (see C&C Newsletter for June, 2001, Item 12). Even now, only 3.4% of 625,000 state and local workers have opted for PEORP, according to a Tallahassee Democrat report reviewed by However, among nearly 60,000 new hires, who tend to be younger, more than 8% chose PEORP. So, if the recovery continues, as older employees retire and new ones come in, state officials expect PEORP figures to grow. PEORP has about $450 Million in assets. Of course, the Florida Retirement also still offers a defined benefit plan.

Dun & Bradstreet and Entrepreneur have announced the results of their 10th annual search for the nation’s best cities for entrepreneurs. Vaulting from 15th place in 2002, Minneapolis/St. Paul takes the top spot. The survey looked into number of new business starts, small-business growth, risk and job growth. Here are the top 10:

1. Minneapolis/St. Paul
2. Washington, D.C.
3. Atlanta
4. Fort Lauderdale
5. Salt Lake City/Ogden
6. West Palm Beach/Boca Raton
7. Norfolk/Virginia Beach/Newport News
8. Miami (despite the stress!)
9. Charlotte
10. Orlando

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Items in this Newsletter may be excerpts or summaries of original or secondary source material, and may have been reorganized for clarity and brevity. This Newsletter is general in nature and is not intended to provide specific legal or other advice.

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