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					      Case 3:05-cv-00431-HLH                  Document 86             Filed 11/05/2007            Page 1 of 12



                                    UNITED STATES DISTRICT COURT
                                     WESTERN DISTRICT OF TEXAS
                                          EL PASO DIVISION


IN RE HELEN OF TROY
                                                                     Case No. 3:05-cv-431-HLH
SECURITIES LITIGATION



          PLAINTIFFS’ REPLY TO DEFENDANTS’ OPPOSITION TO MOTION
          FOR CLASS CERTIFICATION AS TO ADEQUACY AND TYPICALITY

         Plaintiffs respectfully submit this reply1 to Defendants‟ Opposition to Plaintiffs‟ Motion

for Class Certification as to Adequacy and Typicality filed on October 22, 2007 (D.E. 82).

I.       PRELIMINARY STATEMENT

         The three Lead Plaintiffs, none of whom will earn a penny more than the class members

they represent, have at all times performed their duties with a high level of diligence,

promptness, courtesy, and cooperation. They are not litigious people, as the record shows that

none of them has ever sued anyone before. But with the fraud committed by Helen of Troy and

its executives, which cost the Lead Plaintiffs combined losses in the millions, they each decided

to volunteer their time and efforts to represent other defrauded shareholders. Each of the Lead

Plaintiffs took the time to travel all the way to Dallas (from New York, Nebraska, and Florida),

stay overnight, and endure a full day of grueling testimony, often laced with attacks and

accusations. Through this they remain strong, and continue to stand willing and able to represent

the class just as they have as Lead Plaintiffs.

         When questioned about the case, the representatives (all non-lawyers) were able to

explain in detail the facts of the case, Helen of Troy‟s business, their duties and responsibilities,


1
  Plaintiffs understand that replies are limited to 5 pages. However, Plaintiffs received permission from the Court
(D.E. 67) to file a 20 page reply, and since Defendants split their response into two briefs, and Plaintiffs‟ reply to the
first brief was only 6 ½ pages, Plaintiffs have a remaining 13 ½ pages remaining to use in this reply brief.


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the proposed class period, and numerous other details. The depositions, one of which

approached the seven hour limit, were designed to defeat and discredit the Lead Plaintiffs, but an

in-context review of each transcript shows the opposite – that one would be hard pressed to find

a better group to represent the class. In addition, the combination of a public pension fund, a

private corporation, and an individual all serving as class representatives offers the best of all

worlds. Finally, the attacks upon lead counsel and Coral Springs regarding possible future illegal

activity (which will also be addressed in a separate motion to strike) are without any merit or

basis whatsoever.

         A.       The Lead Plaintiffs Have Been, and Will Be, Excellent Representatives of the
                  Class of Defrauded Helen of Troy Shareholders

                  1.        Coral Springs Police Pension Fund

         The Coral Springs Police Pension Fund, which has served as an appointed Lead Plaintiff

by the Court since near the beginning of this action, will make an excellent class representative.

Ms. Regina Orlando, the Fund‟s administrator, represented the Fund at the deposition. Ms.

Orlando is a “Certified Public Pension Trustee,” which requires several years of education

beyond traditional schooling to accomplish. (23:2-9)2. She showed detailed knowledge about

the underlying facts of the case (183:11-25; 186:12-17), including describing Helen of Troy‟s

business (55:15-18), and the class period itself (55:13). Besides travelling all the way to Dallas,

she “painstakingly” went through materials related to this case (75:10-15), and understands her

role in the litigation is to “monitor, supervise, and discuss the case with the[] attorneys and know

what is happening when it‟s happening and why it‟s happening.” (102:10-13).

         Defendants attack Coral Springs because they claim that Ms. Orlando “wrongly believed

that this suit had already been certified as a class action.” (Defs‟ Br. at 5). However, the entire

2
 All references to a witnesses testimony are to their own depositions, and unless it is not clear from the text in this
brief Plaintiffs refer to the page and line numbers only.


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conversation shows that Ms. Orlando was a little confused about the exact differences between a

Lead Plaintiff and a class representative, something many attorneys might have trouble

explaining. Here is the exact exchange, with bold indicating that the witness was confused about

the legal terminology.


               Q. Do you understand what a class representative is?

               A. Yes.

               Q. Is the police fund, to your understanding, a class representative
               in this litigation?

               A. They're the lead plaintiff of this class.

               Q. (BY MR. EVEN) But are they a class representative?

               A.    I would have to look at the exact verbiage of my
               documentation.

               Q. (BY MR. EVEN) Do you know as you sit here today whether
               a class has been certified in this litigation?

               A. Yes.

               Q. You have an understanding or you believe that one has?

               A. I believe one has.


(102:17-103:10). To claim that a layperson should be denied class representative status because

they become confused about legal terminology when under a high-pressure near-interrogation

examination by sophisticated defense counsel who litigate class actions every day is not a

persuasive argument.

               2.        E&J Lawrence Corporation

       E&J Lawrence Corporation, which is also a Lead Plaintiff, will make an excellent class

representative. Mr. Joseph Khezrie, the company president, represented E&J at the deposition.

Mr. Khezrie came to the United States from Lebanon by himself in 1960 after graduating high


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school and studying English at the American University in Beirut. (19:16-24) He was trained by

E.F. Hutton, and worked as a broker until 1967, when he became a United States citizen. (8:8;

10:10-11; 11:15-16; 23:1-7). He then became an entrepreneur in the retailing business, and in

1973 he opened E&J. (10:10-21). Since then, he has built the company from a single store to

over 67 stores in New York, New Jersey, Pennsylvania, Georgia, Virginia, and Illinois, totaling

$18 million in annual sales and employing one thousand people. (9:15-25; 15:10-18; 72:1-4). A

review of his transcript shows that Mr. Khezrie is a very experienced businessman and investor.

       When questioned about the case, Mr. Khezrie was repeatedly able to explain in detail the

facts of the litigation and Helen of Troy‟s business, correctly explaining how Defendants

orchestrated their fraud, in exchanges such as this one:

               Q. What exactly is the fraudulent behavior?

               A. They inflated their sales and they shrunk their chargeback.
               They inflated their actual sales in shipping more merchandise to
               their customers. And there was an understanding that if these
               goods is not sold, it would be returned. So now we're at a
               situation where, after Rubin sold his stock, lots of merchandise
               that is sent to these people where they have no responsibility on
               it came back to them. Now he -- the earnings that were reported
               on that basis, because the sales were inflated and the
               chargebacks were much bigger than generally should have been,
               the earnings report came very deceiving.

       (164:3-15; see also 80:17). He did this numerous times, and stood strong in Defendants‟

numerous attempts to confuse him. (62:11-13, 62:22-63:25; 67:3-6; 113:22-115:5; 127:22-

128:10; 164:16-170:8; 184:24-185:10; 187:11-189:19). He also understands his duties in the

case perfectly, testifying that “I would have to be available to the court. I have to select a

lawyer. And I have to be acquainted as much as I can of the case.” (193:6-8). He identified

Judge Hudspeth as the judge pressing in this action (49:1-2), identified all the Defendants




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(47:20-21; 49:5-6), and discussed Defendant Rubin‟s insider trading in detail (68:12-21; 69:11-

20; 70:1-12; 71:9-21).


       Defendants attack Mr. Khezrie saying that he “was uninformed as to his obligations.”

(Def‟s Br. at 3). As explained above, when questioned about his duties, he explained exactly

what his obligations are in the case. The truth of the matter is simply that Mr. Khezrie was not

familiar with the word “fiduciary” (which defense counsel correctly described in the deposition

as a “legal concept”) and defense counsel chose not to define the term for him despite his request

for counsel to do so. (159:2-160:8). It is a far cry to conclude that just because Mr. Khezrie did

not know a single legal term that he does not understand he is representing others in that

capacity, because clearly he does. Further grasping at straws, defense counsel claim that Mr.

Khezrie is “uninformed regarding this case,” but they only cite to testimony concerning his wife,

Selli Khezrie, who was formerly a Lead Plaintiff. It is very common for one spouse to handle all

of the investments, and since Mrs. Khezrie is by Mr. Khezrie‟s description a “housewife” who

“leaves all business decisions to me,” there was nothing to be gained (and more time and

expense to be wasted having yet another person fly across the country) by having her continue to

serve along with Mr. Khezrie. At any rate, absolutely nothing referenced in Mr. Khezrie‟s

testimony regarding his wife would in any way affect the ability of E&J Lawrence Corporation

to serve as a class representative.


               3.        Dennis Angleton

       Mr. Dennis Angleton, who is also personally serving as a Lead Plaintiff, will make an

excellent class representative. Mr. Angleton was born in 1941, and “took the armed forces

GED” before serving in the United States military from 1959 to 1962. (8:19-20; 11:18; 12:24).

He worked in manufacturing at AT&T for 30 years, and also drove a commercial semi-truck


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until about seven months ago. (13:4-14:13). Mr. Khezrie testified about the details of the case,

including Rubin‟s insider trading (34:1-18), and also displayed a complete understanding of

Helen of Troy‟s business (88:7-21). In addition, he is very willing to serve as a class

representative, as is evidenced by his travel to Dallas, as well as the time he spent to study for his

deposition. (25:4). He understood and explained why the time period for this lawsuit was

chosen (104:12-18), and he even understood the legal distinction between losses and damages

(109:1-7). He also understands that he “represents the other plaintiffs to the best of [his] ability,”

that he needs to “get the right attorneys,” (210:14-19), that “I try to keep up on all the --

everything that they -- they're doing,” that Lead Counsel are “keeping me well informed, and

they're sending me documents as they come available, and I'm reading them, and they're…

keeping me very up to date on everything.” (214:15-20).

       Similar to Mr. Khezrie, Defendants attack Mr. Angleton, also saying that he “was

uninformed as to his obligations.” As seen above, this is clearly false, and the only thing

Defendants can point to is that Mr. Angleton had only recently learned about the mediation in

this action. (Defs‟ Br. at 5). This single item hardly rises to the level of Mr. Angleton being

uninformed regarding the case. Defendants also make the same “fiduciary” argument as they

propounded in their attack on the adequacy of Mr. Khezrie to serve as a class representative, but,

again, just because Mr. Angleton did not know the meaning of the legal term “fiduciary” does

not in any way render him inadequate to serve as a class representative.

       B.      Defendants Case Citations Are Not Helpful

       Defendants refer the Court to Umsted v. Intelect Communs., Inc., 2003 U.S. Dist. LEXIS

218 (N.D. Tex. 2003) and Krim v. Pcorder.com, Inc., 210 F.R.D. 581 (W.D. Tex. 2002), which

they repeatedly rely on throughout their brief for numerous points. A simple review of even the

summary of these cases makes it clear that they are totally inapplicable in this situation. In


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Umstead, the court found Plaintiffs‟ three-year delay in filing their motion for class certification

“bears strongly on the adequacy of representation that . . . class members might expect to

receive.” 2003 U.S. Dist. LEXIS 218 at *3-4. The court further observed that the first class

representative “could not identify the names of the attorneys who represented him,” was

“unaware of the earlier motion that sought and eventually had him appointed a lead Plaintiff,”

“could not identify the claims asserted in the Complaint or any alleged misrepresentations or

omissions,” exhibited “a complete lack of knowledge” of certain facts, had “poor understanding

of his fiduciary role and responsibilities to other members of the purported class,” and “did not

appear at the class certification hearing,” Id. at *5-6. The second class representative was not

much better, as the court observed that he “did not know the names of the attorneys who had

been acting on his behalf as lead Plaintiffs' counsel,” “failed to inquire about any costs or

expenses involved with this litigation,” “could not name any cause of action asserted in this case

nor could he reference any specific misrepresentations or omissions, demonstrated “a complete

lack of knowledge of the refiling of [certain] claims in a separate suit” in which he “also seeks to

be named a lead plaintiff,” showed a “poor understanding of his fiduciary role and

responsibilities to other members of the purported class,” and did not “appear at the class

certification hearing” due to “business matters.” Id. at *6-8.

       And in Krim, the court first found that two of the three proposed class representatives

didn‟t even have standing to bring the suit. In addition, “all [the first class representative] knew

was pcOrder.com had conducted bad business, the second class representative “did not

demonstrate a familiarity with the complaint,” and the third was “too ill to make the trip to

testify,” “has endured five bypass surgeries and „8 million other things of various diseases,‟ and

no longer possesses stamina.” 210 F.R.D. 581. As seen above, and in the deposition transcripts,




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the three proposed class representatives know exactly what this case is about, who their lawyers

are, understand their responsibilities and duties, and are in perfect condition to serve as class

representatives.3

        C.       The Lead Plaintiffs, Who are Not Lawyers, Professional Investigators, or
                 Forensic Accountants, Can Not Possibly Add to the Factual Allegations

        Defendants claim that the proposed class representatives should have reviewed and

commented on draft filings. (Defs‟ Br. at 3). This argument is not based in any realm of

practical reality. Lead Counsel is highly experienced in securities class actions. Lead Counsel

also retained professional investigators and forensic accountants who are highly experienced in

securities fraud. To think that one of the class representatives will be able to edit complex legal

documents prepared by these professionals is ludicrous, and reflects a misinformed view of how

complex cases are litigated.4 See, e.g., Berger v. Compaq Computer Corp., 257 F.3d 475, 483

(5th Cir. 2001) (“class representatives need not be legal scholars and are entitled to rely on

counsel.”).

        D.       The Proposed Class Representatives Understand Costs and Fees

        Defendants assert that the proposed class representatives do not understand their

responsibility for costs and fees, and then try to cast a negative light on the lack of a written

retainer agreement between the Lead Plaintiffs and lead counsel. (Defs‟ Br. at 4-5). Despite

this, there is no requirement to negotiate fees, and, in any case, fees will be awarded by the

Court. See Fed.R.Civ.P. 23. In addition, the proposed class representatives‟ testimony shows

that they do understand issues relating to the costs and fees. (Coral Springs Depo 175:7-8


3
  Defendants claim that because the Lead Plaintiffs have not communicated with each other, then they may not be
appointed as class representatives. Neither Krim, Umstead, or any other authority cited by Defendants stand for this
proposition, and there is no such requirement.
4
  Defendants also claim that Coral Springs somehow violated the PSLRA and unspecified Fifth Circuit authority by
agreeing that Saxena White has control over their work product. This argument makes no sense, as the legal work
that Saxena White generates would be work product regardless of whether this agreement was in place or not.


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     Case 3:05-cv-00431-HLH              Document 86           Filed 11/05/2007         Page 9 of 12



(testifying that “at no time [is] the plan is responsible for making any such compensation”);

Angleton Depo 222:4-7 (Q. “Do you understand whether you individually have any

responsibility for fees, costs, or expenses in this case? A. I have -- I had none.”); Khezrie Depo

201:6-202:22 (exhibiting complete understanding of fee and expense issues).

        E.      No One Has Committed Perjury

        Aggressive arguments are one thing, but accusing these three individuals of perjury is

absurd. (Defs‟ Br. at 6-7). Coral Springs and Mr. Angleton had an immaterial discrepancy in

their listed trades that was later voluntarily corrected as soon as they were discovered. The

discrepancies were minor, and were certainly unintentional. As for the accusation that Mr.

Khezrie “admitted” he lied, his testimony referred to the later filed amended complaint when he

was answering the question that Defendants reference. (See 107:1-21 putting 56:7-12 in context).

        F.      Coral Springs is Not a Professional Plaintiff and There is Nothing Wrong
                With Monitoring Agreements

        Defendants discuss the PSLRA and its intent to eliminate “professional plaintiffs.”

(Defs‟ Br. at 7). However. it is unclear as to how this argument is relevant as before this case

Coral Springs has never sued anyone -- ever. Defendants also try and convince the Court that

there is something wrong or unseemly about monitoring agreements, and go so far as to claim it

“potentially implicates” bar disciplinary rules. (Defs‟ Br. at 7, n. 13). Texas Rule 1.08(d)

(which tracks ABA Model Rule 1.8(e)) clearly states that “financial assistance” is prohibited,

and the monitoring agreement in no way provides any financial assistance whatsoever. In

addition, numerous large firms have these monitoring agreements in place, and have publicized

them for many years. 5 It is preposterous to claim that the agreement violates bar rules.


5
 See, e.g, http://www.csgrr.com/csgrr-cgi-bin/mil?templ=inst-invest/pmp.html (Coughlin Stoia Portfolio
Monitoring ProgramSM service) and http://www.blbglaw.com/html/portfolio_monitoring.html (Berstein Litowitz
Portfolio Monitoring and Case Evaluation service).


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      Case 3:05-cv-00431-HLH         Document 86         Filed 11/05/2007       Page 10 of 12



        G.     There is Nothing Wrong With the Cypen Agreement

        Again, Defendants try and make a mountain out of a molehill, although in this instance

there isn‟t even a molehill. They falsely label the “Cypen agreement” as a secret side deal. Mr.

Cypen and Saxena White entered into the agreement in full view. The agreement is a public

document that is available to anyone, and Plaintiffs had no problem or objection in producing it.

This is because there is absolutely nothing wrong with it. Under Texas Rules, and in every other

jurisdiction in the United States, it is very clear that such an agreement is permissible. See Texas

Disc. R. Prof‟l Conduct 1.04(f), including Comments 12-15 which specifically discuss this type

of referral arrangement). In addition, the accusation by Defendants that the Coal Springs Police

Pension Fund might receive an illegal kickback of funds from Mr. Cypen and/or Lead Counsel is

unfounded and without any basis in fact. The fact that other attorneys have been implicated in

such schemes is no reason to accuse the lawyers of this firm in engaging in such behavior. In

addition, none of the kickback schemes ever involved public pension funds, let alone a police

fund. The fact is that three Saxena White lawyers left Milberg Weiss shortly after the indictment

of two lawyers in another office, in another city, for matters and conduct unrelated to the Saxena

White lawyers, and the Lead Plaintiffs exercised excellent judgment in firing Milberg Weiss for

those attorney‟s actions.

II.     CONCLUSION

        Plaintiffs respectfully submit that Plaintiffs‟ Motion for Class Certification should be

granted.




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Case 3:05-cv-00431-HLH       Document 86        Filed 11/05/2007    Page 11 of 12



  Respectfully submitted this 5th day of November, 2007.



                                       SAXENA WHITE P.A.

                                       By: /s/ Maya Saxena______
                                           Maya Saxena
                                           Joseph E. White III
                                           Christopher S. Jones
                                           Ariel Acevedo
                                           2424 N. Federal Highway, Suite 257
                                           Boca Raton, Florida 33431
                                           Telephone: 561-394-3399
                                           Facsimile: 561-394-3382

                                           Lead Counsel for Lead Plaintiffs

                                           MALONE LAW FIRM
                                           A Professional Corporation
                                           Daniel R. Malone
                                           300 East Main Street, Suite 1100
                                           El Paso, Texas 79901
                                           Telephone: 915-533-5000
                                           Facsimile: 915-533-5009

                                           Local Counsel for Lead Plaintiffs




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    Case 3:05-cv-00431-HLH       Document 86        Filed 11/05/2007    Page 12 of 12



                              CERTIFICATE OF SERVICE

       I HEREBY CERTIFY that, on November 5, 2007, I filed the foregoing document with
the Clerk of the Court using the CM/ECF system, which will serve a copy on the following
counsel.

                                                /s/ Maya Saxena




H. Christopher Mott                           Noel M. Hensley
cmott@gordonmottpc.com                        noel.hensley@haynesboone.com
GORDON & MOTT, P.C.                           Nicholas Even
4695 North Mesa                               nick.even@haynesboone.com
El Paso, Texas 79912                          Barrett Howell
Telephone: 915-545-1133                       barrett.howell@haynesboone.com
Facsimile: 915-545-4433                       David Dodds
                                              david.dodds@haynesboone.com
Counsel for Defendants                        Cecelia Madej
                                              cecelia.madej@haynesboone.com
                                              HAYNES AND BOONE, LLP
                                              901 Main Street, Suite 3100
                                              Dallas, Texas 75202
                                              Telephone: 214-651-5045
                                              Facsimile: 214-651-5940

                                              Counsel for Defendants




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