/raid1/www/Hosts/bankrupt/CAR_Public/000104.MBX                C L A S S   A C T I O N   R E P O R T E R

                Tuesday, January 4, 2000, Vol. 1, No. 2


ABLE TELCOM: Abbey, Gardy Files Securities Suit in Georgia
ARIZONA STATE: Parents’ Suit Re IDEA to Go Without Joinder of Districts
CARIBINER INT’L: Intends to Vigorously Defend Securities Suits in N.Y.
CELESTIAL SEASONINGS: Settles Stockholders’ Suit in Colorado
DELOITTE & TOUCHE: 5th Cir Sends Retaliation Case to Jury

DIASENSOR COM: Faces Securities Lawsuits Filed in Penn. in 1996
DIGITAL ORIGIN: Faces Shareholder Suit in CA Re Splash Common Stock
FRUIT OF: Co. Sued over Hazardous Wastes Files for Bankruptcy
GENERAL ELECTRIC: Not to Incur Debtor Comptech's Liability As Employer
INMATES LITIGATION: Clinton Opposes Appeal of H.I.V. Ruling in Alabama

MACY’S: CA Ct Rules for Remedy & Compliance Plan in ADA Suit
MEXICO MONEY: Fd Ct Refuses to Lift Stay of Cases Pending RICO Action
MONOGRAM CREDIT: Suit Challenges State Bank Status & Export of Rates
NAVIGANT CONSULTING: Finkelstein & Krinsk Files Securities Suit in Il.
PROTECTION ONE: Press Releases Say Securities Suits Have Been Filed

SAFETY COMPONENTS: Finkelstein & Krinsk Files Securities Suit in N.J.
US 1: Faces Investigations under CERCLA Re Hazardous Waste Disposal
Y2K: The Good, the Bad, the Ugly As the World Reboots Into 21st Century


ABLE TELCOM: Abbey, Gardy Files Securities Suit in Georgia
The following statement was issued January 3 by the law firm of Abbey,
Gardy & Squitieri, LLP:

A Class Action has been filed in the United States District Court for
the Northern District of Georgia, Atlanta Division, 1 99-CV-3308, on
behalf of all persons who purchased Able Telcom ("Able") (Nasdaq: ABTE)
or the (Company") common stock from February 24, 1999 through and
including December 1, 1999 (the "Class Period").

The Complaint charges Able and certain of its officers with violating
the federal securities laws. The plaintiff claims that defendants
misrepresented and concealed material facts concerning the Company's
operations, misled investors about the reserves established in
connection with Able's July 1998 acquisition of MFS Network Technologies
and overstated the Company 's income in its 1999 quarterly financial

Contact: Nicholas H. Gilbo, Esq., Abbey, Gardy & Squitieri, LLP, 212
East 39th Street, New York, New York 10016, TELEPHONE: 800-889-3701 or
212-889-3700, FAX: 212-684-5191, E-MAIL: ngilbo@a-g-s.com

ARIZONA STATE: Parents’ Suit Re IDEA to Go Without Joinder of Districts
A class action against state entities arising from their alleged failure
to implement an IDEA-compliant complaint resolution procedure can
proceed without joinder of individual districts, a district court ruled.
Dunajski by Dunajski v. Keegan, 31 IDELR 76 (D. Ariz. 1999).

The parents, representing a class of all school-aged students with known
or suspected disabilities and their parents, guardians and/or
representatives, alleged that the state of Arizona, through its
department of education, failed to implement an adequate complaint
resolution procedure in compliance with the IDEA. They charged that
while the DOE's complaint resolution procedure facially satisfied the
state and federal requirements, the system as implemented failed to meet
those requirements and assure FAPE. More specifically, they alleged that
complainants were not allowed the opportunity to submit additional
information before the DOE reached a final conclusion, failed to ensure
identified violations were corrected in a timely manner and failed to
award compensatory education to students against whom violations were
found to exist.

The DOE contended that the four individual school districts where the
named plaintiffs attended school were parties who should be joined under
Fed.R.Civ.P. 19(a) or, alternatively, that the parents should be made to
join the school districts as defendants. The DOE argued that under the
rule, complete relief could not be granted in the absence of the
individual districts, since any order directing them to force districts
to comply with the law would require an additional order requiring
compliance by the districts themselves. The parents asserted the
litigation challenged the DOE's supervisory authority over the LEAs,
regardless of any school district responsibility.

Because the named defendants bore ultimate responsibility for assuring
compliance with IDEA requirements, the district court ruled the
districts did not have to be joined in order to accord complete relief
among the existing parties. The court further found any interests held
by the districts would not be impaired or impeded by case adjudication
in their absence. The court rejected the DOE's argument that its
responsibilities under the IDEA were so intertwined with district
responsibilities that the court would be unable to provide a meaningful
remedy. Any relief granted would not alter the existing duties of the
various districts. The court did not reach the parents' alternate
argument that joinder was not proper because class actions are generally
exempt from the requirements of Rule 19(a). (The Special Educator
December 21, 1999)

CARIBINER INT’L: Intends to Vigorously Defend Securities Suits in N.Y.
March 25, 1999, a purported shareholder class action was filed in the
United States District Court for the Southern District of New York (the
"Southern District") against the Company and certain of its current and
former officers and one of its directors. On May 7, 1999, a purported
shareholder class action substantially identical to the March 25th
action was filed in the Southern District against the Company and the
same individuals named in the March 25th action. Both lawsuits allege,
among other things, that defendants misrepresented the Company's ability
to integrate various companies it was acquiring and alleges violations
of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and
various rules promulgated thereunder. The lawsuits seek unspecified
money damages, plus costs and expenses, including attorneys' fees and
expert fees. The Company believes it has meritorious defenses to this
action and intends to defend the lawsuit vigorously.

In November, 1999, the court issued an order consolidating the lawsuits
into a single action and appointing lead plaintiffs and by the
plaintiffs lead counsel. It is anticipated that an amended consolidated
complaint will be filed in early 2000.

CELESTIAL SEASONINGS: Settles Stockholders’ Suit in Colorado
On May 5, 1995, a purported stockholder of the Company filed a lawsuit,
Schwartz v. Celestial Seasonings, Inc. et al., in the United States
District Court for the District of Colorado (Civil Action Number:
95-K-1045), in connection with disclosures by the Company concerning the
Company's license agreement with Perrier Group of America, Inc. which
was terminated on January 1, 1995. In addition to the Company, the
complaint names as defendants certain of the Company's present and
former directors and officers, PaineWebber, Inc., Shearson/Lehman
Brothers, Inc., and Vestar/Celestial Investment Limited Partnership. The
complaint, which was pled as a class action on behalf of persons who
acquired the Company's common stock from July 12, 1993 through May 18,
1994, sought money damages from the Company and the other defendants for
the class in the amount of their loss on their investment in the
Company's common stock, punitive damages, costs and expenses of the
action, and such other relief as the court may order.

On November 6, 1995, the federal district court granted a motion by the
Company and the other defendants to dismiss the case. On September 5,
1997, however, the court of appeals reversed the decision of the
district court and returned the case to the district court for further
proceedings. The case has been certified as a class action.

On November 4, 1999, the Company reached a settlement with the
plaintiff. As a result, the Company took a charge to earnings of $1.2
million during the fourth quarter of 1999. The settlement is subject to
completion of a definitive settlement stipulation to be filed in the
district court, court approval of the settlement and finalization of
court proceedings. The Company anticipates that the settlement will be
finalized in the spring of 2000.

DELOITTE & TOUCHE: 5th Cir Sends Retaliation Case to Jury
Some employee complaints are obviously frivolous; others are well
meaning but no more meritorious. But a complaint's apparent merit or
lack thereof should not affect whether or how quickly the response
should be.

There are cases in which an employee who failed to prove discrimination
was still able to prove that he or she was retaliated against because
the employer failed to promptly and/or effectively respond to a
discrimination complaint, whether legitimate or not.


Johnnie Shackelford, an African-American female, worked as a tax
processor for Deloitte & Touche LLP (D&T) from July 1, 1991, until her
termination on October 13, 1995. She was responsible for preparing
income tax returns, attaching filing instructions, ensuring that clients
received necessary documentation, and filing income tax returns on a
backup basis. Her immediate supervisor was Caroline Korioth, the
administrative supervisor and secretary to one of D&T's tax partners.
Korioth reported to Robert Chapman, the partner who headed the company's
tax department.

In May 1995, a class action lawsuit alleging company-wide race
discrimination was filed in federal court against D&T. Shackelford was
the only potential class member in the tax department. In accordance
with a court order, the company's human resources director, Culver
Wilson, read her a statement about discrimination and asked whether she
had ever experienced discrimination while working for D&T. Shackelford
told Wilson that she had experienced mistreatment by Korioth. She then
asked for a meeting with Chapman and Wilson to discuss the alleged

The following day, Shackelford received two negative performance
evaluations. Chapman's evaluation indicated that she was "below
requirements" in her ability to work with others and in her demeanor and
flexibility. Korioth's evaluation indicated that she was "below
requirements" in resolving interpersonal disputes, discussing and
meeting deadlines, and handling stress.

Although both evaluations were dated July 18, 1995, Shackelford did not
receive them until August 25, the day after Wilson read her the
statement about the class action discrimination lawsuit. On that day,
Korioth also attached an addendum to Shackelford's performance
evaluation stating that her performance had improved since July. Until
then, her performance evaluations had been primarily positive; she had
received the "Employee of the Month Award" in April 1995.

According to Shackelford, Korioth's criticism of her ability to resolve
interpersonal disputes arose from her complaint to Korioth about a
Caucasian co-worker, Lisa Stevens. Korioth had also received a complaint
from Stevens about Shackelford, but Stevens' ability to resolve
interpersonal disputes was not criticized on her performance evaluation.

On September 15, Shackelford once again requested a meeting with Wilson
and Chapman to discuss her relationship with Korioth. Wilson replied
that he would be out of the office for 10 days, but that she could wait
for his return or meet with Korioth alone. According to Wilson, he
didn't hear anything further from Shackelford about the meeting.
Apparently, Wilson also failed to follow up with Shackelford upon his

On October 6, Shackelford was listed as a potential witness in the class
action lawsuit. The following week, she removed several income tax
returns from the in/out box. D&T's practice was to leave surplus returns
in the box so that other staff could work on them, and Shackelford was
aware of this practice. Korioth reminded her that penalties would accrue
if the returns were not completed and filed before the October 15
deadline. Shackelford stated that the returns were "90 percent done." In
fact, the returns were timely completed and filed, but Korioth
criticized her for not being a "team player." Korioth and Shackelford
offered conflicting stories about whether Shackelford previously had
difficulty meeting deadlines and whether she ever requested or refused
assistance with the returns at issue in that regard.

On October 12, Shackelford contacted Wilson again to arrange a meeting
with him and Chapman. According to D&T, Korioth informed Wilson on
October 13 about her exchange with Shackelford concerning the completion
of surplus income tax returns, and the company decided to terminate
Shackelford that same day. But Shackelford claimed that Korioth
overheard her conversation with legal counsel for the class action
lawsuit on October 13 before she was terminated.

Shackelford sued D&T, alleging that it discriminated against her on the
basis of her race in violation of Title VII of the Civil Rights Act of
1964 by, among other things, issuing unfair performance evaluations and
firing her. She also alleged that the company retaliated against her in
violation of Title VII by firing her because she complained of
discrimination. The company claimed that she was terminated because of
her inability to get along with co-workers and handle her workload. The
federal district court granted D&T's request to dismiss her lawsuit. She
then asked the U.S. Fifth Circuit Court of Appeals in New Orleans to
review her case.

                          Court's Decision

The court of appeals found that Shackelford failed to offer sufficient
evidence of race discrimination. But the court said her failure to show
she was fired because of her race did not necessarily preclude her from
showing she was fired for complaining of race discrimination. To
establish a claim of retaliation under Title VII, she had to show that:

* she engaged in activity protected by Title VII;
* an adverse employment action occurred; and
* there was a causal connection between her participation in the
  protected activity and the adverse employment action.

D&T then had to show Shackelford was terminated for a legitimate,
nondiscriminatory reason. To rebut that reason, Shackelford had to show
it was false and that her termination was in retaliation for complaining
of race discrimination, whether or not it actually occurred.

D&T presented a legitimate, nondiscriminatory reason for firing
Shackelford: her inability to get along with co-workers and manage her
workload. But she argued that the close timing between her race
discrimination complaint and her termination showed the company's
retaliatory motive. She was fired on October 13, the same day Korioth
allegedly overheard her talking on the phone with counsel for the class
action lawsuit. Additionally, her termination occurred the day after she
tried to arrange a meeting with Wilson and Chapman to discuss what she
perceived as race discrimination. Her termination also occurred one week
after she was identified as a potential witness in the class action
lawsuit. Finally, after four years of favorable performance reviews,
Shackelford received her first negative performance evaluation in August
1995, shortly after the class action lawsuit against D&T was filed.

The court said that D&T needed to offer an explanation for the timing of
Shackelford's termination because of the "tight temporal proximity"
(i.e., timing) at issue in the case. Korioth explained that she
contacted Chapman on October 13, the morning after observing
Shackelford's poor performance (i.e., hoarding work) during the busy
October season. Korioth also claimed that Shackelford had exhibited
similar performance in September and that she counseled her about her
poor work practice. According to Korioth, she recommended on October 13
that Shackelford be terminated after the October 15 deadline. Chapman
explained his immediate reaction (i.e., firing her before the October 15
deadline) by stating that "if we were going to terminate somebody, we
were going to do it now as opposed to later."

Shackelford countered D&T's explanation by alleging that she requested
assistance with the surplus returns on October 12, 1995, but did not
receive that assistance in a timely fashion. According to Shackelford,
it was then too late in the day for anyone to assist her and she had
substantially completed the income tax returns. She also disputed that
she had previously hoarded work, as the company alleged, and D&T
apparently offered no evidence that she had been counseled on that
issue. Shackelford contended that other employees warned her not to get
involved in the class action lawsuit if she wanted to keep her job.
Finally, she reminded the court that Stevens (the Caucasian co-worker)
wasn't given a negative performance evaluation concerning interpersonal
skills although she was involved in the same incident for which
Shackelford was criticized.

The court concluded that the "totality of this evidence" was sufficient
to question the reason offered by D&T for her termination. The evidence
offered by Shackelford, said the court, could support the inference that
the company did not believe her performance was poor, but instead
terminated her in retaliation for complaining of discrimination. The
court noted that the suspicious timing of her termination in combination
"with other significant evidence of pretext" was sufficient to reverse
the district court's dismissal of her retaliation claim.

Therefore, the court reinstated her retaliation claim and sent the case
back to the district court for a trial in which she'll have the
opportunity to convince a jury of her peers that her former employer
retaliated against her for complaining about alleged discrimination.
Johnnie Shackelford v. Deloitte & Touche, L.L.P., 190 F.3d 398 (5th Cir.

                           Bottom Line

The problem for the employer in this case was not just the timing of the
employee's termination (i.e., on the heels of her race discrimination
complaint), but also the fact that it didn't have sufficient evidence to
back up the legitimate, nondiscriminatory reason it offered for her
termination. Had the employer been able to demonstrate that the employee
was previously counseled for her poor performance and failed to improve,
the court may not have found Shackelford's evidence (the timing of her
discharge) sufficient to overcome the employer's reason for her

Moreover, the employee requested meetings with management to discuss the
perceived discrimination on at least three occasions. Although she might
not have had a legitimate complaint of discrimination, the employer
offered no evidence that it promptly or effectively responded to her

This case emphasizes that procedures to promptly and effectively address
employee complaints should be established and consistently followed
(whether or not they are perceived valid) and any discrimination that
has occurred should be remedied. The results of the investigation and
the action, if any, to be taken to resolve employee complaints should be
explained to the employee, even when there's no evidence to support a
complaint or the investigation is inconclusive.

Additionally, employees should be reassured that they will not be
retaliated against for complaining of discrimination and that they
should immediately report any such activity. Finally, all complaints of
discrimination should be treated seriously and equally and in accordance
with consistently applied policies and procedures. A written
antidiscrimination policy serves no purpose if action is not taken
promptly when a complaint is presented under the policy. (Louisiana
Employment Law Letter December, 1999)

DIASENSOR COM: Faces Securities Lawsuits Filed in Penn. in 1996
In April 1996, the Pennsylvania Securities Commission commenced a
private investigation into Diasensor.com's sales of its common stock
pursuant to its public offering in an effort to determine whether any
sales were made improperly to Pennsylvania residents. The Company says
it has been cooperating fully with the state and has provided all of the
information requested. As of the date of its filing with the SEC, no
determinations had been made, and no orders have been issued.

In May 1996, the Company, along with BICO and BICO's individual
directors, including David Purdy and Fred Cooper, who are also officers
and directors of Diasensor.com, was served with a federal class action
lawsuit based on alleged misrepresentations and violations of federal
securities laws. The action is pending in federal district court for the
Western District of Pennsylvania, and remains in the pre-trial pleadings
stage with the consent of all parties. No determinations as to possible
liability or exposure are possible at this time, although the Company
does not believe that any violations of the securities laws have

In April 1998, the Company was served with a subpoena requesting
documents in connection with an investigation by the U.S. Attorneys'
office for the Western District of Pennsylvania. The Company has
submitted various scientific, financial and contractual documents in
response to such requests.

DIGITAL ORIGIN: Faces Shareholder Suit in CA Re Splash Common Stock
On January 13, 1999 and January 28, 1999, Digital Origin Inc. and one of
its former directors, Charles Berger, were named as defendants in two
shareholder class action lawsuits against Splash Technology Holdings,
Inc. ("Splash"), various directors and executives of Splash and certain
selling shareholders of Splash. The suits were filed in the United
States District Court in Northern District of California and have been
consolidated and captioned IN RE SPLASH TECHNOLOGY HOLDINGS INC.
SECURITIES LITIGATION (Master File No. C99-0109 SBA). The law firm of
Milberg Weiss Bershad Hynes & Lerach LLP has been designated lead
counsel for the eight lead plaintiffs.

The lawsuit alleges, among other things, that the defendants made or
were responsible for material misstatements, and failed to disclose
information concerning Splash's business, finances and future business
prospects in order to artificially inflate the price of Splash common
stock. The complaint does not identify any statements alleged to have
been made by Charles Berger or the Company. The complaint further
alleges that the Company engaged in a scheme to artificially inflate the
price of Splash common stock to reap an artificially large return on the
sale of the common stock in order to pay off its debt. The Company and
the former director vigorously deny all allegations of wrongdoing and
intend to aggressively defend themselves in these matters. Defendants’
initial motion to dismiss the action was granted with leave to amend and
an amended complaint has been filed by plaintiffs.

FRUIT OF: Co. Sued over Hazardous Wastes Files for Bankruptcy
If you have an interest in the billion-dollar chapter 11 cases filed by
Fruit of the Loom, Inc., and its thirty-some U.S. debtor-affiliates in
Wilmington, Delaware, this past week, a free copy of the first issue of
FRUIT OF THE LOOM BANKRUPTCY NEWS is available at no charge
at             http://www.bankrupt.com/fruit.txt

GENERAL ELECTRIC: Not to Incur Debtor Comptech’s Liability As Employer
Pearson v. Component Technology Corp., PICS Case No. 99-2375 (W.D. Pa.
Dec. 16, 1999) Cohill, S.J. (38 pages)

Although a secured creditor may incur liability as an employer under the
WARN Act when its debtor fails to provide notice before closing a plant,
a secured creditor does not incur such liability where the debtor did
not function as the alter ego or instrumentality of the secured creditor
or where the secured creditor did not exercise direct control over the
debtor. Motion for summary judgment granted. Defendant Component
Technology Corporation (Comp-tech) closed its plastics plant without
giving its employees the notice required under the Worker Adjustment
Retraining Notification Act (WARN Act).

Plaintiffs, employees of bankrupt Comptech, brought a class action
seeking to recover the back pay and benefits to which the WARN Act
entitled them from Comptech's secured creditor, defendant General
Electric Capital Corporation (GE). Plaintiffs argued that GE was liable
as an "employer" under the act and moved for partial summary judgment on
the issue of liability. Contending that it was not an "employer" under
WARN, GE also moved for summary judgment.

The district court granted GE's motion. Agreeing with decisions of the
Eighth and Ninth Circuit courts, the court ruled that the WARN Act's
obligations can attach to a secured creditor and that there is a point
at which a secured creditor's actions can exhibit such a high degree of
control over the debtor corporation that the creditor assumes the
overall management of debtor's business. The court, however, rejected
each theory that plaintiffs advanced to prove that GE exercised such
control over Comptech. Relying on Board of Trustees of Trucking
Employees v. Centra, 983 F.2d 495 (3d Cir. 1992), plaintiffs argued that
GE was directly liable as a matter of law because it possessed an
unconditional right to vote Comptech's stock as of the date on which GE
gained a "bring along call" on the stock of Comptech's president and
thus controlled the company. However, Trucking Employees merely held
that an entity that holds stock options constructively owns the stock
for ERISA purposes, the court noted. Therefore, Trucking Employees was
not controlling law on the question of whether a lender that holds stock
or stock options as security for its loans controls the borrower so as
to incur liability as a WARN Act employer.

The court also rejected other attempts to attach employer liability to
GE. The court held that there was no evidence of a parent-subsidiary
relationship between GE and Comptech, and the court found that
plaintiffs had not proven that GE took total and actual control over
Comptech so that Comptech functioned as GE's alter ego or
instrumentality. The court found that each instance that plaintiffs
cited was consistent with the control a lender is entitled to exercise
to secure a multi-million dollar loan.

Finally, the court rejected plaintiff's contentions that GE was directly
liable as an employer under WARN because it effectively made the
decision to close the plant by refusing to extend credit to Comptech,
because it controlled Comptech as a business enterprise, and because it
acted in ways that are inconsistent with the conduct of a secured
lender. The court reitierated its previous conclusion that the
restrictions found in GE's loan agreement with Comptech did not
constitute evidence that GE controlled Comptech's business activities,
but instead represented legitimate steps taken by a lender to secure its
investment. (The Legal Intelligencer January 03, 2000)

INMATES LITIGATION: Clinton Opposes Appeal of H.I.V. Ruling in Alabama
The Clinton administration has urged the Supreme Court not to hear an
appeal in a discrimination case brought on behalf of hundreds of
H.I.V.-positive prisoners in the Alabama prison system, where all
inmates with the virus that causes AIDS are barred from educational and
recreational programs and even from religious services where they might
mix with the general prison population.

If the court takes the administration's advice, it will leave intact a
sweeping ruling that bars these inmates from more than 70 programs
available to other prisoners, including work-release programs that can
shorten their incarceration.

The justices will decide this month whether to hear the appeal in the
closely watched, nearly 15-year-old case, which presents the question of
how to assess whether a disability is a "significant risk" to others
that cannot be eliminated by the "reasonable accommodation" ordinarily
required under federal laws that prohibit discrimination on the basis of

A federal appeals court ruled last year that the categorical exclusion
of the H.I.V.-infected inmates from prison programs did not violate the
Rehabilitation Act of 1973, given the fatal nature of AIDS and the
prospect that prisoners could transmit the virus to one another.

The administration told the court that, although the appeals court might
have ruled too broadly, its approach was generally correct and its
decision should not be reviewed.

The United States Court of Appeals for the 11th Circuit, in its 8-to-3
ruling last April, said, "When the adverse event is the contraction of a
fatal disease, the risk of transmission can be significant even if the
probability of transmission is low," adding, "death itself makes the
risk significant."

The Americans with Disabilities Act of 1990, enacted after the Alabama
lawsuit was filed, incorporated the same "significant risk" defense
against a discrimination charge.

A coalition made up of public health organizations and AIDS specialists
is supporting the appeal by the Alabama prisoners, arguing that the
circuit court relied on "subjective fear and stigma" rather than the
objective, scientific risk assessment that the Supreme Court insisted on
in a 1998 ruling that was its first look at AIDS in the context of
federal disability law.

In that case, a suit by an H.I.V.-positive woman against a dentist who
refused to treat her in his office, the court said the assessment of
"significant risk" should be made in light of the views of public health
authorities, based on "objective, scientific information."

The brief for the coalition, filed by the Lambda Legal Defense and
Education Fund, a gay advocacy group in New York, said the appeals
courts had ignored the 1998 ruling by relying on a theoretical risk of
transmission without regard to the particular circumstances. That
approach, the brief said, "threatens to justify virtually any
discrimination against persons with H.I.V. in employment, health care,
education, and every other aspect of community life."

Alabama, Mississippi and South Carolina automatically segregate
H.I.V.-positive inmates. The federal prison system, like those of most
states, evaluates inmates individually and decides, on the basis of
their history and psychological profile, whether to exclude them from
particular activities.

The administration filed its brief in response to a request from the
court for the federal government's views. The appeals court's ruling
"may well be overbroad," Seth P. Waxman, the solicitor general, told the
justices, adding that "the court should have carefully examined the
circumstances and effect" of participation of inmates in the programs.

The brief said such an examination might have shown that there was no
danger in permitting H.I.V.-positive inmates to participate in such
activities as religious services, data processing classes, and testing
for high school equivalency diplomas. Nonetheless, the brief said, there
was no need for the court to take the case because the appeals court's
opinion, even if questionable in the particulars, was generally correct
in deferring to Alabama prison officials the assessment of the risk
presented by "the violence that is an inescapable part of prison life."

The solicitor general said the case presented the question of "whether
behavior that is concededly high-risk is likely to occur if
H.I.V.-positive and non-H.I.V.-positive prisoners are integrated in a
number of prison programs." The brief continued: "The answer to that
question turns not on medical judgments about the risk inherent in
certain behaviors, but on prison management judgments about the ability
of prison authorities to control prisoners in various settings and

In defending its policy, Alabama points to a much lower rate of H.I.V.
transmission in its prison population than in states that do not
segregate infected inmates. The state told the court that over eight
years, out of 30,000 inmates who did not have H.I.V. when they entered
prison, only two became infected while in prison.

Their decision on whether to take this case may depend on whether the
justices see implications beyond the prison context and on the extent of
their concern about whether their ruling in the 1998 dental patient
case, Bragdon v. Abbott, had provided sufficient guidance to the lower

The current case is called Davis v. Hopper, No. 98-9663. For many years,
it was known as the Onishea case, but the lead plaintiff in the
class-action lawsuit, Lydia Onishea, is no longer in custody, and
another inmate, Arion Davis, was substituted.

The inmates, represented by the National Prison Project of the American
Civil Liberties Union, have argued that decisions about exclusion or
inclusion should be based on individualized assessments of the inmate
and the program. (The New York Times January 3, 2000)

MACY’S: CA Ct Rules for Remedy & Compliance Plan in ADA Suit
certain types of employers must also be sensitive to the regulations in
Title III of the ADA, which applies to "places of public accommodation."
As shown below, retail and other employers whose services are available
to the public must ensure not only that reasonable accommodation is
afforded to applicants and employees, but also that the facilities are
accessible to the public. The process is similar. For example, a
retailer must review its current accessibility and assess how it can
provide access through "alternative methods."


In the first ADA class action to target a retailer, a class of persons
with mobility disabilities alleged that Macy's Union Square store in San
Francisco contained numerous barriers, making it and its merchandise
inaccessible to persons with disabilities. The claim, which was filed in
the Northern District of California, alleged that Macy's failed to
comply with Title III of the ADA and its Access Guidelines (ADAAG) with
respect to merchandise sales counters, fitting rooms, restrooms,
entrances, signage, public telephones, and main and secondary aisles.

During the trial, Macy's admitted many of the ADA violations. The most
contested issue concerned the width of aisles between merchandise
display units and the placement of display units in the aisles. The
disabled persons alleged that Macy's spacing and layout made it
difficult or impossible for persons with disabilities to access
merchandise. One of the disabled persons gave an in-court demonstration
of how impossible it was to maneuver within Macy's aisles in a
wheelchair. The judge apparently then asked, "Is this the point at which
you leave Macy's and go over to Nordstrom's?"

                   'Readily Achievable' Standard

As a "place of public accommodation," Macy's, like other large
retailers, is subject to Title III of the ADA, which provides that "[n]o
individual shall be discriminated against on the basis of disability"
and defines discrimination as "failure to remove barriers . . . where
such removal is readily achievable." "Readily achievable" means "as
easily accomplishable and able to be carried out without much difficulty
or expense," considering various factors, including the overall
financial resources of the entity and/or any parent corporation and the
effect on operations. Examples of readily achievable barrier removal
include rearrangement of temporary or movable structures, such as
furniture, equipment, or display racks. If barrier removal is not
readily achievable, then retailers must provide access to merchandise
through "alternate methods."

                   'Accessible Route' Standard

The ADAAG requires retailers to provide an "accessible route" of at
least 36 inches to self-service display units. Macy's conceded that the
Union Square store provides only 24 to 30 inches of clear space between
its merchandise display units. The store contended that its selling
strategy is to place all inventory on the floor when it arrives and to
leave it out until it sells. Due to the large volume of merchandise, the
display units are placed close together to maximize sales. In addition,
it admitted that it selects display units based on how they "look" to
the customer rather than space efficiency.

                         Hardship Defense

None of Macy's attempted defenses were successful. Retailers have a
"hardship" defense: If the retailer can demonstrate that removal of
barriers causes significant loss of selling or serving space, then the
removal is not "readily achievable." Macy's claimed that 15 to 25
percent of its display units would have to be removed just to provide a
30-inch clear space and that the reduction of merchandise displayed on
the floor would have an equivalent effect on sales.

The court handily rejected Macy's defense, finding the opinions of its
in-house "lay witnesses" speculative and unreliable. It found that
Macy's did not present any evidence that it had even attempted to
rearrange display units, much less any expert opinion as to lost sales.

                           Court's Decision

Like the ADA regulations governing employment that require an employer
to assess the functions of an employee's job and determine what
accommodations might be provided, Title III requires a retailer to
review its current accessibility and assess how removing barriers or
providing access through alternate methods would affect its operations.
The court found that Macy's had not made any effort to review access to
its display areas nor to assess the feasibility of alternate methods
that would improve access. The court noted with approval "alternate
methods" used by Nordstrom, a competitor of Macy's, that provide better
access without significant burden, such as more stock rooms,
transferring merchandise to other stores, using clearance centers, and
more careful planning.

Additional customer service to retrieve inaccessible merchandise is
another "alternate method" to barrier removal permitted by the
regulations. Macy's claimed it provides customer service to the extent
it fails to provide actual physical access. The court rejected that
defense, finding that the store had no personnel designated to provide
such customer service, no training program for sales clerks, and no
procedures to ensure disabled shoppers actually received assistance.

Having found Macy's liable for most of the ADA violations alleged, the
court required it to remedy the violations and to work with the disabled
persons to develop a compliance plan. In addition, the store must
designate a person to review accessibility within displays on an ongoing
basis to ensure customers with disabilities have effective access. The
damages phase of the trial has yet to be scheduled.

                             Bottom Line

Two other class actions targeting 80 Macy's stores in California are
pending. Disability advocates are hailing this decision as a major
victory and vow that more lawsuits in other states will follow.

Although this is a California case, the regulations at issue also govern
Indiana retailers. Retail employers should note the deficiencies in
Macy's practices that could have alleviated liability if properly cared
for: failing to design and implement a training program for sales clerks
about the needs of disabled customers and failing to designate personnel
to study and assess accessibility issues on an ongoing basis. (Indiana
Employment Law Letter December, 1999)

MEXICO MONEY: Fd Ct Refuses to Lift Stay of Cases Pending RICO Action
The U.S. District Court for the Northern District of Illinois refused to
lift a preliminary injunction to stay pending state and federal actions
while the court considered a proposed class action settlement in a RICO
case. The RICO action involved a class of approximately 5 million
persons nationwide who had allegedly been defrauded by undisclosed fees
for wire transfers of money. (In re Mexico Money Transfer Litigation,
Nos. 98 C 2407, 98 C 2408 (N.D. Ill. 10/19/99).)

In this class action, the plaintiffs alleged that MoneyGram Payment,
Western Union Financial Services Inc. and other defendants violated RICO
by illegally collecting undisclosed fees for wire transfers of money
from the United States to Mexico. (Other allegations included breach of
written contracts, misrepresentation, conversion, unjust enrichment and
discrimination based on national origin.)

After successful negotiations between the parties, the District Court
granted preliminary approval to a proposed settlement and class
certification. The court also temporarily enjoined parallel state and
federal lawsuits, including seven class action lawsuits already pending
in courts across the country.

Plaintiffs in two pending California state court actions intervened and
sought to lift the injunction staying their cases. (These cases had been
dismissed without prejudice by federal courts for failure to adequately
plead their federal claims. They could be amended and refiled, if the
parties so desired.)

A group of California elected officials, community leaders and other
organizations filed amici briefs arguing that California courts were in
a better position to protect California citizens from violations of
California law. (Civil RICO Report December 23, 1999)

MONOGRAM CREDIT: Suit Challenges State Bank Status & Export of Rates
A class action against a GE Capital subsidiary challenges the way the
Federal Deposit Insurance Corp. defines a "state bank" and may
jeopardize the ability of credit card banks to impose their rates and
fees on customers outside their home states.

The plaintiffs, led by consumer Patricia Heaton, are arguing that
Monogram Credit Card Bank of Georgia violated state usury law by
exporting its interest rates and late fees to customers in Louisiana.
The suit alleges the GE Capital unit, which holds a state charter in
Georgia, does not fit the definition of a state bank laid out in the
Federal Deposit Insurance Act and is therefore not entitled to export
its rates and fees across state lines.

FDIC officials said they consider the lawsuit groundless. FDIC General
Counsel William Kroener took issue with a judge's finding that Monogram
is not a state bank in a recent speech to the Federal Bar Association,
saying, "If it stands, there are likely to be class-action suits against
a lot of credit card banks."

The crux of the plaintiff's argument is the assertion that the FDIC made
a mistake when it determined that Monogram, which services store credit
cards for retailers, is a state bank and therefore eligible for deposit

According to the Federal Deposit Insurance Act, a "state bank" must be
"engaged in the business of receiving deposits." Monogram receives
deposits from only two sources, both of which are units of its parent

U.S. District Court Judge Carl J. Barbier found the plaintiffs' claim
persuasive enough to remand the case in late November to a state court
for a decision on the bank's status.

"Because case law appears silent on this precise point, the court relies
upon a reading of the plain language of the statute and concludes that,
although Monogram receives 'deposits' from its parent company, it is not
engaged in the ' business of receiving deposits' from its customers.
Accordingly, under the plain language of the statute, Monogram is not a
'state bank,' " the judge wrote.

According to an FDIC motion to intervene filed in U.S. District Court in
New Orleans, the suit threatens the interests not only of Monogram but
also of "hundreds of institutions." "A decision adverse to Monogram may
literally open the floodgates of litigation and deluge the institutions
regulated by the FDIC with a torrent of similarly frivolous suits," the
agency wrote.

In an interview, FDIC Deputy General Counsel Douglas Jones said the
agency has examined the question of whether institutions with a small
number of depositors can rightly be considered state banks under the
law. "The conclusion has always been that limited deposits, whether they
are from affiliates or employees, have been sufficient to qualify a bank
as being in the business of receiving deposits," he said.

Still, the FDIC is considering an amendment to its policies that would
specifically allow banks with as little as one depositor to be
considered "in the business of receiving deposits." The proposal was to
have been considered by the agency's board on Dec. 14 but was withdrawn
from the agenda at the last minute. FDIC officials refused to discuss
the proposal, why it was withdrawn, or whether it would be presented at
a future board meeting.

Monogram's lawyers appealed the ruling to the Fifth U.S. Circuit Court
of Appeals on Dec. 13. In a statement, a spokesman for the bank said,
"GE Capital believes the decision is clearly wrong on the law, and the
FDIC agrees with our position."

Louis L. Plotkin of the New Orleans firm Gertler, Gertler, Vincent &
Plotkin represented the plaintiff, Ms. Heaton. "We believe that the
judge was correct in the ruling, and we believe the ruling will be
vindicated on appeal," he said.

The appeals court is not expected to act on the appeal for months. (The
American Banker January 3, 2000)

NAVIGANT CONSULTING: Finkelstein & Krinsk Files Securities Suit in Il.
An announcement on December 31, 1999 says that Navigant Consulting, Inc.
(NYSE: NCI) is accused in a class action lawsuit filed by Finkelstein &
Krinsk of violating the federal securities laws by misrepresenting the
Company's true business condition in order to inflate the price of the
Company's stock. According to the Complaint, the Company and its
controlling insiders issued a series of false and misleading statements
to the market or omissions to disclose facts regarding, amongst other
things, that the Company and certain of its insiders participate in a
scheme to improperly obtain large loans from the Company and thereafter
used these funds to purchase NCI stock, artificially inflate the value
of the stock and, in at least one case, repaid such loans by using a
large portion of NCI holdings. Additionally, the Complaint alleges that
the Company misrepresented its financial results for the first three
quarters of 1999 by using improper accounting methods to artificially
inflate both the Company's earnings and growth rate.

Defendants' statements and conduct were improper and caused the
Company's stock to trade at artificially inflated levels during the
Class Period (May 6, 1999 - November 23, 1999). When the truth about
defendants' misrepresentations and omissions became known to investors,
the price of NCI stock dropped dramatically from Class Period prices of
over $53 per share to less than $10 per share.

The Complaint particularizes plaintiff's allegations of how the
Company's management violated the Securities Exchange Act of 1934, and
specifies the Company's false statements and omitted material facts. The
Complaint has been filed in United States District Court for the
Northern District of Illinois and represents a class comprised of all
individual and institutional investors for the pertinent time period.

Contact: Jeffrey R. Krinsk at Finkelstein & Krinsk, the Koll Center, 501
West Broadway, Suite 1250, San Diego, CA 92101 by calling toll free
877-493-5366 or E-Mail - fk@class-action-law.com or fax 619-238-5425.

PROTECTION ONE: Press Releases Say Securities Suits Have Been Filed
Public releases say that purported class action lawsuits have been filed
against Protection One Inc. and certain of its officers and directors
alleging violations of federal securities laws arising from the
Company’s public announcement that it has decided to restate its
financial statements for the year ended December 31, 1997 and each of
the first three quarters of 1998. The Company says it has not been
served with process and, therefore, cannot provide more details with
respect to these or any other claims alleged in these actions.

SAFETY COMPONENTS: Finkelstein & Krinsk Files Securities Suit in N.J.
Safety Components International, Inc. (NASDAQ:ABAG) is accused in a
class action lawsuit filed by Finkelstein & Krinsk of violating the
federal securities laws by misrepresenting the Company's true business
condition in order to inflate the price of the Company's stock.
According to the Complaint, the Company and its controlling insiders
issued a series of false and misleading statements to the market or
omissions to disclose facts regarding, amongst other things, the nature
of the Company's operations and financial statements. Defendants'
statements and conduct were improper and caused the Company's stock to
trade at artificially inflated levels during the Class Period (August
14, 1997 - November 9, 1999).

The Complaint has been filed in United States District Court for the
District of New Jersey and represents a class comprised of all
individual and institutional investors for the pertinent time period.

Contact: Jeffrey R. Krinsk at Finkelstein & Krinsk, the Koll Center, 501
West Broadway, Suite 1250, San Diego, CA 92101 by calling toll free
877-493-5366 or E-Mail - fk@class-action-law.com or fax 619-238-5425.

US 1: Faces Investigations under CERCLA Re Hazardous Waste Disposal
Certain present and former operating sites, or portions thereof,
currently or previously owned and/or leased by current or former
operating units of US 1 Industries Inc. are the subject of
investigations, monitoring or remediation under the federal
Comprehensive Environmental Response, Compensation and Liability Act of
1980 ("CERCLA" or "superfund"), the federal Resource Conservation and
Recovery Act or comparable state statutes or agreements with third
parties. These proceedings are in various stages ranging from initial
investigations to active settlement negotiations to implementation of
the clean-up or remediation of sites.

A number of present and former operating units of the Company have been
named as Potentially Responsible Parties ("PRPs") at 20 Superfund sites
under CERCLA or comparable state statutes in a number of federal and
state proceedings. In each of these matters the operating unit of the
Company is working with the governmental agencies involved and other
PRPs to address environmental claims in a responsible and appropriate
manner. Under CERCLA and other similar statutes, any generator of
hazardous waste sent to a hazardous waste disposal site is potentially
responsible for the clean-up, remediation and response costs required
for such site in the event the site is not properly closed by its owner
or operator, irrespective of the amount of waste which the generator
sent to the site. No information currently available reasonably suggests
that projected expenditures associated with these proceedings, whether
for any single site or for those in the aggregate, will have a material
adverse effect on the Company's financial condition, results of
operations or cash flows.

Y2K: The Good, the Bad, the Ugly As the World Reboots Into 21st Century
Power plants and warheads passed the Y2K test at midnight New Year's
Eve. If the many complex computer systems that are turned on do the
same, we can breathe a collective $ 100 billion sigh of relief.

But the defeat of the Y2K computer bug would leave a vacuum to be filled
by the good and bad consequences.

                            The Good

Millions of corporate dollars and many teams of techno-minds will be
freed of tedious Y2K patchwork. Just as the end of World War II marked
the real dawn of TV, the end of Y2K may be the historic starting line of
computers and Web sites that dramatically change lives.

An estimated 500,000 specialists who have been diligently fixing Y2K
problems will be out of work. But at just the right time. There are
350,000 unfilled technology jobs, and surveys indicate that about 80% of
Y2K workers will be retained by their employers. The other 100,000
should find jobs with little retraining.

Y2K was the only thing standing in the way of the roaring U.S. economy,
which is now three weeks from a record 107-month expansion.

You can't even feel sorry for the lawyers. Most Y2K legal fees have
already been collected from advising companies on how to make themselves
lawsuit-proof, says Randy Lipsitz, who is author of articles on Y2K
class-action lawsuits. He has already moved on to Web site and
e-commerce law, where "there is a ton of work to do."

Nike has joined GTE, Xerox and Unisys in suing property insurance
companies for the millions of dollars spent making the day uneventful.

The "sue and labor" clause that dates back to 17th century shipping is
meant to encourage policyholders to minimize damage ahead of disasters.
For example, if a ship breaks down in the path of a hurricane, the
insurance company would reimburse the expense of having it towed out of
harm's way.

Lawyer Bob Carter of McKenna & Cuneo says the majority of the $ 70
billion spent by U.S. businesses is recoverable even if Y2K fears were

Some of the Y2K worry may yet prove justified. "It's the applications
deep in the bowels of the average company that will need the remedial
work," says John Gantz, chief research officer for information
technology company International Data.

"Nowhere in the history of computer software maintenance has anybody
touched such a large body of code and not induced errors," Y2K
consultant Howard Rubin says.

"Statistically, more stuff should have happened. Either it was
miraculously clean code, or it breaks the entire tradition of software."

"My biggest fear," Rubin says, "is that this will unravel as a thousand
bee stings."

                        More Bad Consequences

Computers are marching toward other confusing dates. Feb. 29 is the
first leap day in a turn-of-the-century year since 1600. 2000 will be
the first year with 54 business weeks because its 366 days include Jan.
1 on a Saturday and Dec. 31 a Sunday. Such examples go on. Interest
rates are headed up if Y2K glitches don't slow the economy.

If paranoia is a staple of life, something must fill the void left by
Y2K. The public is probably inoculated to other warnings of computer
problems. But sunspots, dubbed Sky2K, will peak between now and April.
Such flares can have as much energy as 40 billion Hiroshima-size atomic
bombs and could cause more havoc to cellular phones and satellite TVs
than Y2K.

With no signs of a Cold War comeback, the next worldwide paranoia could
be biotechnology and other fears of scientists gone mad, says Gerald
Celente, editor of Trends Journal.

But he's betting on terrorism. "That's an easy one to predict," and it
had already risen to No. 1 in the last weeks of 1999 as Y2K fears waned,
Celente says. "If they can't stop tons of drugs or millions of (illegal)
immigrants from flooding over the border, how are they going to stop
suitcase-size weapons of mass destruction?" Celente asks. It won't take
much more fear of terrorism to have a dramatic impact on business, which
might spend billions of dollars more protecting people and property.

Good or bad, the Y2K void is certain to be filled by second-guessing.

The Year 2000 computer problem was heroically defeated by one of the
great feats of government, management and technology. OR

If 10-year-old VCRs and $ 10 watches still work and countries from
Myanmar to Moldova escape unscathed, a half-trillion dollars was

Let the debate begin.

On the bad side of Y2K's exit, 10 years from now, there may not be a
definitive answer. On the good side, next Dec. 31 we can pretend. At
midnight, we'll turn out the lights and worry about the next thing to go
bump in the night. (USA Today January 3, 2000)


S U B S C R I P T I O N  I N F O R M A T I O N

Class Action Reporter is a daily newsletter, co-published by Bankruptcy
Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc.,
Washington, DC.  Theresa Cheuk and Peter A. Chapman, editors.

Copyright 1999.  All rights reserved.  ISSN 1525-2272.

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