/raid1/www/Hosts/bankrupt/CAR_Public/000113.MBX                 C L A S S   A C T I O N   R E P O R T E R

                Thursday, January 13, 2000, Vol. 2, No. 9


APPOLLO COLORS: EEOC Sues Rockdale Firm On Racial Harassment at Factory
AUTO INSURANCE: OEM Parts Cost More Than Car; Competition Is Critical
CA LANDLORD: To Pay Damages for Denying Renting to Family with Children
DAIMLERCHRYSLER: PA Judge Upholds $ 60 Mil Verdict for Defective Airbag
DIRECTV INC: Golden Sky and Pegasus Communications Sue for NRTC Class

FEN-PHEN: AHP Says Litigation Stands in the Way of Proposed Merger
HOLOCAUST VICTIMS: Art Objects in Austrian Museum Could Be from Nazis
HOME DEPOT: 12 Minority Employees Allege Bias In Southfield Store
JUNK FAX: Aggregating Recipients of Ads Makes Case More Interesting
MORTGAGE LENDERS: May Charge a Document-Review Fee, NJ Sp Ct Holds

SHELL OIL: Spencer National Settlement Gives Relief to Property Owners
SIMI VALLEY: Settles with Bikers Claiming Bias at Hells Angels Event
STATES: Sp Ct Rejects Age Bias Lawsuits by Employees in Federal Courts
TOBACCO LITIGATION: MI Ct Denies Class for Health Case V. Philip Morris
TOBACCO LITIGATION: Mother Sues Canadian Firms over Paper Safety

TOYSRUS.COM: Hagens Berman Files Suit over Failure to Deliver at X’mas
VITHAL SHAH: Physician on Trial For Faulty Diagnoses of Lyme Disease

* Three Cheers For Class Actions Published in Legal Times


APPOLLO COLORS: EEOC Sues Rockdale Firm On Racial Harassment at Factory
When Franklin Thompson opened his locker at the ink manufacturing
factory where he works near Joliet, he was dumbfounded. Somebody had
broken in, drawn nooses around photographs of his young son, left a
noose hanging, and then filled the locker with racist scribbling.

He called over his boss at Apollo Colors in Rockdale, who at first
merely laughed when he saw what had happened, according to Thompson. "
That was another shock. It was just disrespectful, and hateful," said
Thompson, recalling the September 1998 incident.

Citing the racial harassment of the 23-year-old Thompson and 10 other
African-American employees at the 250-worker factory, formally known as
Scientific Colors Inc., the U.S. Equal Employment Opportunity Commission
on January 11 filed a class action lawsuit accusing the company of
violating civil rights law.

Since 1993, agency officials said, African-American workers have
regularly faced racist graffiti and messages as well as "racially
offensive" statements made by workers in front of supervisors.
Meanwhile, only one worker was recently fired for remarks made about the
plant's Hispanic workers, they said.

The company denied the agency's claims, saying it had taken numerous
steps to deal with the problem. These ranged, it said, from calling
local police and the FBI, to offering a $5,000 reward, to holding
diversity training sessions for supervisors. "It is clear that this
lawsuit is only about money and publicity, and has been from the
beginning," said the company's statement. All of the steps that it has
taken so far, the company claimed, "go beyond what the EEOC has

John Hendrickson, the agency's regional attorney based in Chicago,
countered: "This is less about what the employees did. The real issue is
why the company didn't put a stop to it."

The agency said it would seek punitive and compensatory damages for some
50 African-Americans who worked at the plant in recent years. Eight
workers filed a similar suit against the company last year, a case that
has been put on hold pending the EEOC suit, said Christian Spesia, an
attorney for the eight workers.

Among the thousands of cases the federal agency handles across the U.S,
cases in which a business is charged with failing to protect its workers
are relatively rare, according to EEOC officials.

The only other such case filed by the agency in the Chicago area within
the last two years was a 1998 lawsuit against Foster-Wheeler
Constructors for incidents that had taken place at a work site in
Robbins, Ill. That case was recently resolved with a $1.3 million
consent decree, officials said.

Norman Jones, who joined in the agency's lawsuit against Apollo Colors,
said he quit his job at the factory in the summer of 1998, "because I
was afraid I was going to die there." So many harassing incidents had
taken place, Jones said, he was convinced "the only thing left was to
kill me." The 30-year-old worker saidhe sometimes finds himself
apprehensive around white colleagues at his new factory job. "I wonder
when is it going to start, and I never felt that way before," he said.
(Chicago Tribune January 12, 2000)

AUTO INSURANCE: OEM Parts Cost More Than Car; Competition Is Critical
Rebuilding a 1999 Toyota Camry with original equipment manufacturer
parts isn't cheap. Indeed, the cost of the interior trim is $ 6,566.61,
the engine assembly costs nearly $ 5,000 and the instruments panel,
which includes the radio, speedometer, gauges and controls, rings in at
a hefty $ 4,383.78.

All in all, although the Camry has a suggested retail price of $ 23,263,
the cost of rebuilding one from scratch using OEM parts is a whopping $
101,355.55, according to the Alliance of American Insurers in Downers
Grove, Ill.

The Alliance and other insurance industry groups believe that OEM parts
are vastly overpriced and would cost even more if non-original equipment
manufacturers weren't offering cheaper alternatives.

"These prices are with car manufacturers anticipating having competition
[from non-OEM part makers]. If aftermarket parts didn't exist, the price
of the Camry would be closer to $ 200,000," said Kirk Hansen, director
of claims for the Alliance.

"If you go back 15 years, when there were no aftermarket parts, the
manufacturers were making 700 to 800 percent in markups. Grocery stores
have 5 percent markups, if that," he added.

Bob Hurns, associate counsel for the National Association of Independent
Insurers in Des Plaines, Ill., was in total agreement.

"That's an obvious fact of what competition creates," he said. "We have
documentation that shows when aftermarket parts are available, prices of
OEM parts drop."

Toyota priced its 1994 Camry fender at $ 265, while a non-OEM fender
fitting the same car cost $ 209. As the price of the aftermarket fender
dropped over the next two years to $ 60, the OEM fender also fell to $
143, according to a study by the Alliance cited by Mr. Hansen.

However, according to Mr. Hansen, the 12-person jury at the Williamson
County Circuit Court in Illinois that ruled against State Farm in a
class-action lawsuit in October over the use of non-OEM parts never
heard any of the evidence about the benefits of auto part competition
for the consumer. Therefore, he contends, the ruling should be
overturned on appeal. "The judge blocked all mention of the word
'competition' during the trial," Mr. Hansen said.

The jury found State Farm Mutual Insurance Company guilty of installing
inferior replacement parts in its insureds' automobiles and of violating
the Illinois Consumer Fraud Act by failing to advise policyholders of
their actions. The jury awarded $ 456.1 million in compensatory damages
to the 4.7 million plaintiffs in the class action. The judge added $ 730
million in punitive damages, far below the $ 3 billion to $ 4 billion
that plaintiffs' attorneys were requesting. (See NU, Oct. 11, page 1 and
Oct. 18, page 5.)

However, the judge acted properly because competition had no bearing on
the case, countered Patricia Littleton, a plaintiff attorney who worked
on the State Farm case. "This is not about competition. We have never
said that non-OEM parts should be banned. We agree that if the parts
were banned, it would hurt competition," Ms. Littleton said. "The case
was about lying and fraud. Be honest about the parts. Don't ban them."

However, Ms. Littleton also rejected the insurance industry's argument
that if aftermarket parts were banned, the consumer would automatically
pay the price via higher premiums. "It would not be a threat to
consumers. [Insurers] want to scare the public, but in testimony [State
Farm] said using OEM parts would cost around $ 8 to $ 12 per
policyholder," Ms. Littleton said. "First State Farm said it was
impossible to trace what the premium difference would be and then they
say it would cost around $ 12 and now they try and scare the public."

Ms. Littleton also said State Farm was lying when it said non-OEM parts
were as good as OEM parts. In some instances the parts are unsafe and
that is why the prices are lower, she contends.

But Hr. Hansen said the parts in the Alliance study were approved by the
Certified Automotive Parts Association in Washington, and are therefore
safe and sound. "Some aftermarket parts are certified and some are not.
To be sure the part is of quality, at times of better quality, ask for a
CAPA part," Mr. Hansen said. "CAPA rejects plenty of parts that are not
up to their standards and we won't use them in our study."

But CAPA certification means little to Ms. Littleton, who accused the
organization of being a tool of the industry. Additional suits filed
since the State Farm ruling echoed this charge.

Mr. Hansen called such allegations absurd and said Ms. Littleton's
charges are unfounded. (See NU, Dec. 13, page 2 for a full discussion of
the debate over CAPA's credibility.)

Mr. Hansen also blasted Ms. Littleton's assertion that policyholders
would save very little if aftermarket parts were banned. "About 40 to 50
percent of an auto policy cost is based on [repair] claims costs. If you
take an auto accident and reduce repair parts by 33 percent, that is a
significant savings for customers. The costs of OEM parts [as a factor
in setting] premiums are significant," Mr. Hansen said. "Not only do OEM
parts cost more, but more vehicles get totaled," he added. "Where
otherwise cars that are roadworthy would get fixed, the cars are dumped
because it is not feasible to repair. This is not the best for society
at large."

Diana Lee, vice president of research at the NAII, added that if OEM
parts had to be used for repairs, there would be an initial premium rate
hike of approximately 5 percent. "Depending on how much a policyholder
pays for car insurance, that is a lot of money," Ms. Lee said. "Also, if
OEMs were to become a monopoly, the prices would rise further and the
rate increase would end up higher than the initial 5 percent."

But Ms. Littleton said insurance companies have not used the price of
replacement parts to determine rates in the past. "This is all they have
left. It's the Robin Hood defense and it's the best they can do," Ms.
Littleton said. "In their rate making, they do not base rates on whether
replacement parts are being used. That is what a State Farm actuary said
in testimony. It's very odd that now they can come up with a number
regarding how much premiums will rise." (National Underwriter, Property
& Casualty/Risk & Benefits Management Edition, January 3, 2000)

CA LANDLORD: To Pay Damages for Denying Renting to Family with Children
A Peninsula landlord who refused to rent a Palo Alto house to a family
with children has agreed to pay $ 10,000 in damages to them in the
latest victory for families with children that have a hard time renting
apartments and homes in the Bay Area.

Under terms of an agreement reached with California Department of Fair
Employment and Housing, the landlord, Mary Jackson of Menlo Park,
admitted no wrongdoing. But she did agree to use a management agency to
screen her tenants from now on and not to discriminate against families
with children, said Winter Dellenbach, a specialist at the non-profit
Midpeninsula Citizens for Fair Housing.

Housing advocates say they hope the settlement will be a deterrent for
any landlords who refuse to rent to families with children. They say
hundreds of parents are refused rentals each year in the region because
they have young children.

Dellenbach said the couple, Patrick Killelea and his wife, came to the
agency after they had been turned down by Jackson in the fall of 1998.

According to the fair housing organization, the couple had tried to rent
a home on Cowper Ave. in Palo Alto when they were searching for housing
in September 1998. When they mentioned they had a two-year-old,
according to the fair-housing agency, the owner apparently stated "she
could not have a toddler tearing up the place."

Although refusing to rent to families because they have children is
illegal under the Federal Fair Housing Act, such occurances are not
rare, said Dellenbach. Her agency received about 110 complaints last
year from parents who suspect they were being turned down on rental
properties because they have children. The problem is further
exacerbated by Silicon Valley's tight housing market.

But many who believed they're refused rent are now taking their cases to
the courts. In September, an Alameda County Superior Court judge
approved a $ 575,000 settlement in a class action law suit against the
Conference Claimants Endowment Board, which owned the South Shore Garden
Apartments in Alameda. A couple in that lawsuit had contended that they
were refused an apartment because they were black and because the
complex did not rent to families with children. (San Jose Mercury News
January 12, 2000)

DAIMLERCHRYSLER: PA Judge Upholds $ 60 Mil Verdict for Defective Airbag
In a one-sentence order, Philadelphia Common Pleas Court Judge Mark I.
Bernstein disposed of more than 100 post-trial motions filed in the wake
of a jury's verdict against DaimlerChrysler Corp. awarding a class of
approximately 80,000 Pennsylvanians a total of about $ 60 million.
Bernstein upheld the verdict, denying all motions except the plaintiffs'
request for attorney's fees.

The class action alleged that DaimlerChrysler, between 1988 and 1990,
knowingly sold cars with airbags that could severely burn the hands and
wrists of drivers even though equally effective, safer airbags were
available. The jury's verdict, reached on Feb. 18, 1999, represents
about $ 730 per class member, enough to buy a new airbag, said
plaintiffs' lawyer Martin J. D'Urso, of Kohn Swift & Graf.

The plaintiffs pressed three claims: one for common-law fraud, one for
breach of warranty and one under Pennsylvania's Unfair Trade Practices
and Consumer Protection Act. D'Urso, Isaac Green of Moody & Anderson,
Kohn Swift partner Joseph C. Kohn and several associates were busy for
months after the verdict was entered responding to more than 100
post-trial motions filed by DaimlerChrysler's lawyers, Keith D. Heinold
of Marshall Dennehey Warner Coleman & Goggin; Terri Reiskin and James A.
Hourihan of Washington, D.C.'s Hogan & Hartson; and Charles A. Newman of
Bryan Cave in St. Louis, who was brought in for the post-trial work.

Among DaimlerChrysler's contentions, as reported by D'Urso and Kohn:

That "the class action was not properly certified and that the
procedures for handling class actions in the Philadelphia court system
violate statewide rules of civil procedure."

That the plaintiffs had presented insufficient evidence to support the
jury's finding that the airbag in issue was defective.l That, contrary
to the jury's verdict, there was not clear and convincing evidence of
fraud on DaimlerChrysler's part.

That DaimlerChrysler had no duty to disclose safety studies of the

That plaintiffs' expert witnesses should not have been allowed to

That an expert witness of DaimlerChrysler's should have been permitted
to testify, "despite," D'Urso said, "his failure to file a timely expert

D'Urso said he had never before seen a case in which so many post-trial
motions were filed. The defendant "protested virtually every decision
entered against it during the long pre-trial process and during the
trial itself," he said. DaimlerChrysler's lawyers thus preserved a
bounty of issues for appeal. "We expect that Chrysler will pursue all
its appellate options and then some," D'Urso said. Defense lawyer
Reiskin confirmed on January 12 that her team had filed about 60 briefs
treating about a hundred points of appeal in the case. She said
DaimlerChrysler's "intention is to appeal the entirety of Judge
Bernstein's decision." D'Urso tallied up the briefs on the plaintiffs'
side at 53, including briefs that introduced a few motions of their own,
including the motion for attorneys' fees, a motion to treble the
compensatory damages under the UTPCPA and petitions for what D'Urso
described as "certain types of equitable relief." The motions and
opposition briefs were all filed by June, D'Urso said, and Bernstein
heard arguments in two days of hearings in July and August.

Ultimately, Bernstein denied all post-verdict motions except the request
for attorneys' fees. The amount of the fee award has not yet been
determined. "We anticpate that the court will hold a hearing or ask for
related submissions," D'Urso said. Asked if the fee award would cover
the time spent on post-trial motions, D'Urso said, "I certainly hope
so." (The Legal Intelligencer January 12, 2000)

DIRECTV INC: Golden Sky and Pegasus Communications Sue for NRTC Class
Golden Sky Holdings, Inc. (Golden Sky) announced on January 11 that it
and Pegasus Communications Corporation (Nasdaq: PGTV) have filed a class
action lawsuit against DIRECTV, Inc. and Hughes on behalf of themselves
and as representatives of a class of those similarly situated within the
National Rural Telecommunications Cooperative (NRTC) affiliate and
member universe. The action is asserting various claims, including
intentional interference with contractual relations, interference with
prospective economic advantage and declaratory relief.

Rodney Weary, Chairman and President of Golden Sky commented, "The suit
does not reflect a lack of confidence in the merits of the NRTC's
separate actions. Rather, it is designed to improve the options
available to NRTC members as a whole and to improve Golden Sky's, and
Pegasus' direct position with regard to the issues at hand."

"This suit was filed because DIRECTV is in violation of a number of
aspects of its obligations to the NRTC, and by extension, Pegasus," said
Marshall W. Pagon, President, Chairman and CEO of Pegasus. "It positions
Pegasus, and all members and affiliate members of the NRTC, to obtain
class standing, making us eligible to participate more directly in any
remedies awarded including punitive damages."

Mr. Pagon further commented, "This action demonstrates our intention to
vigorously and fully defend our rights under our agreements with NRTC
and DIRECTV and to pursue any and all remedies available to us."

Golden Sky Holdings, Inc. (http://www.gssdirectv.com) is an independent
provider of programming services from DIRECTV, the nation's leading
direct broadcast satellite company. Golden Sky currently provides
DIRECTV programming to more than 345,000 subscribers and has
approximately 70 offices throughout the United States serving 57 rural
markets. DIRECTV offers subscribers access to more than 200 channels via
satellite, including cable and broadcast networks, sports packages,
movies, and other premium services, using an 18-inch satellite antenna
dish and digital receiver.

Pegasus Communications Corporation (http://www.pgtv.com) is the largest
independent provider of DBS services to rural parts of the United States
on the DIRECTV platform, serving approximately 1.1 million DBS
subscribers in 41 states. Pegasus is also a broadcaster operating and/or
programming ten TV stations serving 2 million TV households in smaller
markets in 10 states affiliated with FOX, UPN and the WB.

FEN-PHEN: AHP Says Litigation Stands in the Way of Proposed Merger
AHP company officials say the class-action lawsuit -- filed on behalf of
thousands who say the diet drug combination caused potentially fatal
heart-valve troubles -- stood in the way of AHP's proposed $ 71 billion
merger with New Jersey neighbor Warner-Lambert.

Though a federal judge has given preliminary approval of AHP's offer to
settle legal claims for $ 4.8 billion, the litigation could still be an
obstacle. Plaintiffs' attorneys have objected that the offer isn't
generous enough.

AHP spokesman Lowell Weiner says merger negotiations began in May,
months before the proposed settlement was announced. "It's probably fair
to say that it was necessary to announce a settlement before any other
company could effectively move into serious discussions with AHP," he

As AHP attorneys try to put the company's legal troubles in the past,
lawyers for the plaintiffs say many may reject the settlement and go to
court. "It's a lousy settlement," says New York lawyer Marc Bern, who
represents 5,000 plaintiffs. "Virtually everybody I speak to says
they'll opt out."

Bern says the settlement is so rigidly structured that relatively few
people would qualify for damages.

To qualify for the maximum $ 1.5 million, he says, a plaintiff would
have to have taken the diet drugs, had valve surgery and suffered even
more dire consequences -- dying, falling into a coma or undergoing a
heart transplant.

Douglas Petkus, a spokesman for AHP subsidiary Wyeth-Ayerst, which
marketed the drugs, counters that the settlement offers a refund program
for the drugs and a rich package of medical monitoring and treatment --
with significant compensation for those with serious valve problems.
"It's a settlement for the patients," Petkus says, "not the lawyers."

AHP has had a run of high-profile problems: it recently recalled a new
rotavirus vaccine after doctors reported a link to serious bowel
conditions in dozens of babies; in August it settled lawsuits filed by
thousands of women who allegedly suffered side effects from its Norplant
implantable contraceptive; and bin 1998 it recalled the short-term pain
reliever Duract after 12 people suffered kidney failure.

Sidney Wolfe of the non-profit watchdog organization Public Citizen
Health Research Group says the cascade of calamities -- and how each was
handled -- raises serious questions about AHP and its pharmaceutical
subsidiary, Wyeth-Ayerst, and how they do business. "Why did they have
such an unprecedented number of drugs go wrong?" Wolfe asks.

                       Lessons of limitations

While the four cases are different, he notes, each opens a revealing
window into the limitations of the industry and government safeguards
meant to protect consumers from the hazards of prescription drugs. For
instance, each case:

* Illustrates the conflict that arises when a company must choose
between its loyalty to a profitable new drug and its responsibility to
report side effects when they arise.

* Displays weaknesses in the government's voluntary system for tracking
side effects that often emerge after drugs are approved for sale.

* Hints at how many doctors exploit their power to enrich themselves by
writing popular prescriptions, often without medical justification.

Many smaller companies might not survive even one such crisis. For AHP,
which earned $ 2.5 billion on $ 13.5 billion in sales last year, risk
and litigation have become facts of life. "Pharmaceuticals can be a
high-risk business, that's obvious," says Robert Essner, AHP's vice
president of pharmaceutical research and development. "It can be a
rewarding business, too."

                          A Risky Business

Consumers may encounter substantial risks and have more at stake than
money, research shows.

Last year, the Journal of the American Medical Association reported that
100,000 Americans die annually of adverse reactions to prescription
drugs. By that accounting, adverse drug reactions are the fourth-leading
cause of death in the USA.

Food and Drug Administration officials say side effects often emerge
after a drug is approved. They say it would take studies involving tens
of thousands of patients, many more than the 5,000 who participate in
most large-scale drug studies, to detect subtle side effects. Since the
FDA's adverse-event reporting system isn't mandatory, the agency depends
on drug companies to voluntarily report worrisome side effects.

The first hint of trouble with fen-phen emerged just over a year after
Redux was approved. In July 1997, Mayo Clinic researchers reported that
24 women who had taken the drug duo had developed a rare heart-valve
disease. By September, dozens of similar reports had surfaced. When the
FDA notified corporate officials of the problem, they yanked the drugs
from the market.

Soon, thousands filed suit. The first lawsuit to reach a verdict, filed
by Debbie Lovett of Canton, Texas, ended in a $ 23.4 million award to
compensate Lovett for leaky heart valves.

Although the lawsuit was settled for less, the Lovett case and another
in New Brunswick, N.J., yielded testimony suggesting that AHP received
numerous reports of heart-valve and other problems without alerting the

Frederick Wilson, one of AHP's medical monitors for Pondimin, testified
that by 1994 the company had received reports of 41 Pondimin users with
potentially fatal primary pulmonary hypertension -- and that AHP did not
update the drug's package insert with a warning about that problem for
two years. AHP officials countered that the company was awaiting data
from a large study on the lung disorder.

In 1995, Wilson testified, the company received reports of heart-valve
problems from Belgium. AHP experts responded that the European reports
weren't alarming because the leaks were mild and typical of those
commonly found in the general population.

An FDA investigative report that emerged in the Lovett case found
numerous deficiencies in AHP's adverse-event reporting in the USA.

The December 1997 report lists 15 examples of adverse events that AHP
failed to submit to the FDA within 15 days, as required by law. In some
cases, reports were more than 100 days late. Other reports apparently
were overwritten in the company's computer system and temporarily lost,
only to turn up with different manufacturer's control numbers for the
medicines used.

AHP's Essner says the fen-phen case prompted the company to "put in
place a brand-new computer tracking system that allows us to more easily
categorize (reports) and look for trends."

Still, he says, the company is at the mercy of the doctors and nurses
who file the reports. "Many times reports are late because information
is physically missing," he says. "Sometimes we have to send an
individual out to get the information."

                             Larger concerns

The safety-monitoring concerns that have emerged in court are
symptomatic of a much larger problem that extends through the
pharmaceutical industry, says Raymond Woosley, a professor of
pharmacology at Georgetown University in Washington, D.C "Our drug
safety system is able to pick up signals, but it isn't able to quantify
anything," Woosley says.

The system, run by the FDA, is called MedWatch. It conducts passive
surveillance, meaning that it relies on "doctors, dentists, nurses,
pharmacists and other health professionals to pass on to FDA details of
serious adverse reactions," according to an FDA report.

Woosley calls MedWatch the best voluntary system in the world, but he
says it's not enough. "In France, they have 30 centers around the
country with people trained to look for adverse drug effects. They go
into hospitals, look at charts, talk to patients, talk to doctors, fill
out forms and enter them in a database. We don't have one site like

FDA deputy director Peter Honig says the agency plans to graft a similar
program onto MedWatch. In the new program, trained staff members would
actively seek out unexpected drug reactions. Honig says a mandatory
reporting system would generate too much information for the agency to
handle efficiently.

Doctors also must share blame for the fen-phen mess, experts say,
because they prescribed the diet-drug combination even though the drugs
weren't tested together or recommended for tandem use. As many as 6
million people are believed to have obtained prescriptions for the drug

The Duract tragedy also occurred because the drug was misprescribed.
Many doctors offered it for long-term relief of chronic pain, although
AHP warned against using the drug for longer than 20 days.

"The doctors structured those treatments," says George Sasic, an
industry analyst who tracks AHP for Dominick & Dominick in New York.

Woosley says it should come as no surprise that doctors misuse medicine.
Few receive sufficient training in pharmacology, he says, noting that of
120 U.S. medical schools, 100 offer a one-semester course in
pharmacology. Most doctors, he says, also are flooded with information
from drug companies, trade publications and journals, which they must
evaluate as best they can.

That can be a challenge in an era of fast change. "The average physician
is 45. Seventy-five percent of the medicines prescribed today were not
known when they were in medical school."

The only way to ensure that drugs are safe, Woosley says, is to stop
taking safety for granted. (USA Today January 12, 2000)

HOLOCAUST VICTIMS: Art Objects in Austrian Museum Could Be from Nazis
A year of research at a museum in Austria's second-largest city has
turned up around 70 art objects that are believed to have been looted by
the Nazis from their Jewish owners, a museum official said.

Gottfried Biedermann, who heads the Joanneum Museum's commission looking
into art looted by the Nazis, said the works include paintings and
drawings by Auguste Rodin, Gustav Klimt, Alfred Kubin, Rudolf and Franz
Alt and lesser-known artists. He said the objects are worth between five
and 10 million schillings (dlrs 400,000 to dlrs 800,000).

''They are not particularly spectacular and therefore not particularly
valuable, in terms of money,'' he said, in a telephone interview. ''But
of course the sentimental value for those who were forced to give them
up is infinitely greater.''

The Joanneum and other museums are examining the origins of arts objects
possibly coerced or forcibly taken by the Nazis before and during World
War II under terms of a 1998 law providing restitution of such works.
The Joanneum commission has drawn up a 400-page report listing works
falling under that category.

Biedermann said that owners or heirs have been established for about
half of the objects. Photos of the others will be posted on the Internet
if no owners can be found, he said.

Thousands of objects, mainly from Jewish families, were confiscated in
Austria, part of Nazi Germany before regaining independence after World
War II. The works have been on display at sites such as the Belvedere
palace, home to Austria's former royalty, the Vienna Museum of Art and
regional museums like the Joanneum, in the southern city of Graz.

Hundreds of pieces have been returned, including 250 objects last year
that were taken from the Rothschild family worth millions of dollars.

Still, some demands are not being met.

Austria is being sued over its refusal to return five paintings by
Klimt, valued at dlrs 160 million and hanging in the state-run
Belvedere. Lawyers for the heirs of Ferdinand Bloch-Bauer say the works
should be returned to the heirs of the late industrialist, who fled
Austria in 1938, amid the Nazi takeover, leaving most of his art
collection behind.

The Austrian government says the paintings were given to the museum
through Bloch-Bauer's wife's will before the Nazis seized power in 1939.
In that case, officials said, the works would not fall under the 1998
restitution law.

Klimt, an Austrian artist who died in 1918, was among the founders of a
modern art movement called the Secession, which rejected academic
painting for Impressionist and Art Nouveau styles.

For decades after the war, Austria presented itself as Nazi Germany's
first victim, pointing to its annexation by Germany in 1938 as an act of
aggression. Only in recent years have Austrians generally begun to
accept that most of the country welcomed the annexation.

As in Germany, several banks in Austria that profited from the sale of
gold taken from Holocaust victims have settled class action suits or are
negotiating on them. Lawsuits also are being prepared against some
Austrian firms on behalf of survivors of forced labor during the Nazi
era and their relatives. (AP Worldstream January 12, 2000)

HOME DEPOT: 12 Minority Employees Allege Bias In Southfield Store
A dozen Metro Detroiters are suing the nation's largest home-improvement
chain over allegations of racial discrimination at a branch store in

A spokesman for Home Depot Inc. said the Atlanta-based company cannot
comment on the $ 120-million lawsuit filed with the U.S. District Court
in Detroit.

The suit alleges a five-year pattern of denying raises, training and
promotions to African-American employees at the Southfield Road store
while providing all three benefits to less-experienced white employees.

The Michigan Department of Civil Rights is investigating the
accusations. Department officials are scheduled to meet with Home Depot
corporate executives on Jan. 20 in Detroit to discuss the complaints,
said Rachel Nusser, department spokeswoman. "It's hard to believe this
could go on in the year 2000," said Sean Tate, a Southfield attorney
representing the 12 plaintiffs.

The lawsuit follows in the wake of another major discrimination suit
against the home-improvement giant. Home Depot agreed to a $ 65-million,
class-action settlement in 1998 over complaints that the company
discriminated against female employees in 10 Western states.

A company spokesman said Home Depot is committed to equal opportunity.
"The company has a zero-tolerance policy against any discrimination,"
Tom Gray said.

The suit names former store manager Ed Whitaker, who now works in Home
Depot's regional office in Detroit, several assistant managers and
personnel director Tim Connolly.

Plaintiffs in the case are: Robert Mitchell, Tracy Stevenson, Kimberly
Petite and Daniel Sowell of Pontiac; Lisa Reynolds, Ollie Gardiner, Rev.
Gregory Franklin and Brian Jones of Detroit; Johnnie Martin of
Southfield; the Rev. Stanley Perry of Bloomfield Hills; William White of
Novi; and Eric Ott of Canton Township.

All but three of the plaintiffs still work at the store, Tate said.

Reynolds, Gardiner and Sowell have since been fired. Sowell was fired
because his supervisors found him to have a 0.08 percent blood alcohol
level while at work, Tate said, attributing the results to cough syrup
Sowell had taken earlier in the day.

Among the employees' allegations:

Stevenson claims an assistant manager would not allow her daughter to
apply for a job because he said the company didn't let relatives work in
the same store. But the wife of a white male employee was hired a month
later, according to the lawsuit.

Martin claims a white manager hired in March 1998 harassed him and used
racial slurs in his presence. The lawsuit claims the manager, when
confronted by Whitaker, admitted being prejudiced, but the suit does not
say he admitted making racist remarks. The manager was later transferred
to another store.

All 12 claim they were denied training and advancement opportunities
despite receiving high marks on employee reviews.

All claim they have faced harassment and retaliation since making
complaints to the state civil rights department.

Tate, their attorney, said the plaintiffs want Home Depot executives to
acknowledge the situation. (The Detroit News, January 12, 2000)

JUNK FAX: Aggregating Recipients of Ads Makes Case More Interesting
Unwanted fax advertisements, outlawed by a little-known federal statute,
may be an irritant to recipients but plaintiffs' attorneys hope they'll
be a boon for business. One key case involves an Augusta, Ga., sole
practitioner who is taking on Hooter's restaurant.

Congress banned the sending of uninvited advertisements by facsimile in
the Telephone Consumer Protection Act of 1991, 47 U.S.C. 227(b)(1)(C),
which also cracked down on some telemarketing practices.

The law against sending so-called junk faxes-which vests exclusive
jurisdiction in state courts-imposes a $500 fine that is subject to
trebling for willful and knowing violations. But in nine years, the
penalties have hardly deterred large fax distribution companies that
have thrived despite the ban, plaintiffs' lawyers note.

Irritated owners of fax machines have had a hard time getting lawyers to
take their cases because the stakes are so small, says Robert
Biggerstaff, an engineer in Charleston, S.C., who has filed four pro se
junk-fax cases over uninvited promotions that he received at his home

                           The Class Solution

Aggregating the fax recipients into a plaintiff class makes the cases
more interesting to lawyers, says Biggerstaff. His lawyer agrees.

Biggerstaff is named plaintiff in a class action in South Carolina state
court against a Charleston Ramada Inn and a fax service. Biggerstaff v.
Ramada Inn-Coliseum, No. 98-CP-10-4722 (Ct. of Common Pleas, Charleston
County, S.C.).

The fax, promoting a New Year's Eve bash, was sent to as many as 2,700
fax machines, says plaintiffs' lawyer Joseph C. Wilson, of the civil
litigation firm Pierce, Herns, Sloan and McLeod in Charleston. A written
order is yet to come, but the judge has said from the bench that he will
certify the class, the lawyers in the case say. "An individual case
isn't worth that much," Wilson says. "Just getting them certified as a
class really changes the whole complexion of a case."

The attorney defending Ramada, J.R. Murphy, of Murphy & Grantland, an
insurance defense firm in Columbia, S.C., says he can understand why
plaintiffs' lawyers are more interested in junk-fax class actions than
individual cases. "As a lawyer, who wants to litigate a case for $500?"
Murphy says.

                         Hassle-Free Forum

But he contends that the bill's sponsor, U.S. Sen. Ernest Hollings,
D-S.C., says that the law's intent was to provide a hassle-free forum
for private citizens, such as small claims court-not a financial boon
for attorneys.

Plaintiffs' attorneys say that they know of only one other junk-fax case
to be certified: a closely watched suit by Augusta attorney Sam
Nicholson against Hooters of Augusta. Hooters of Augusta v. Nicholson
No. A00A0429 (Ct. App. Ga. Oct. 12,1999).

Nicholson's lawyer, Harry D. Revell of Augusta's Burnside, Wall, Daniel,
Ellison & Revell, says that the plaintiffs-about 1,400 businesses in
Georgia and South Carolina-are seeking $12 million in damages for repeat
faxes of a Hooters discount coupon.

Defense lawyer Mark C. Wilby of the Augusta firm of Fulcher, Hagler,
Reed, Hanks & Harper, did not return a call. The case is scheduled for
argument on Jan. 19 before the Georgia Court of Appeals.

Junk-fax class actions are "fertile territory," Revell says, but there
are no certainties. However, "if you're going to win, you'll win big."

Among the questions that the cases must resolve are whether states must
pass laws specifically allowing or disallowing the suits and whether the
federal statute regulates interstate as well as intrastate faxes.

                         Law Unsettled

"It's still a very much unclear area of the law," says Chris A. LaVoy,
plaintiff's co-counsel in a recently filed junk-fax case seeking class
status in Phoenix.

The plaintiff, an office supply company, has sued two defendants: United
Artists Theater Circuit, for a movie ticket promotion; and American
Blast Fax, a Texas company that allegedly sent the fax.

American Blast Fax's lawyer, Dean F. Hunt, a senior associate in the
Houston office of New York's Weil, Gotshal & Manges L.L.P., declined to
comment, as did the attorney for United Artists, Keith Beauchamp, a
partner at Lewis & Roca in Phoenix.

Junk-fax cases are "groundbreaking" but risky because the law is
unsettled, says plaintiffs' lawyers LaVoy, a partner at LaVoy & Chernoff
in Phoenix, and co-counsel Edward Moomjian II, an associate at Chandler,
Tullar, Udall & Redhair, a civil litigation firm in Tucson, Ariz. "This
is not our meal ticket," Moomjian says. "We're in it for the long haul."
(Fulton County Daily Report, January 12, 2000)

MORTGAGE LENDERS: May Charge a Document-Review Fee, NJ Sp Ct Holds
N.J.S.A. 46:10A-6(d) permits a lender to charge for reviewing loan
documents regardless of whether (1) the borrower has an attorney or (2)
"extra work" has been created for the lender's attorney. However, the
statute also is preempted by federal regulations concerning federal
savings and loan associations.

N.J.S.A. 46:10A-6(d), as amended in 1993, applies to a loan to a person
primarily for personal, family, or household purposes secured by real
property. "Section (d)" provides that "the lender shall not require the
borrower to reimburse the lender for, or to pay all or any portion of,
any fee or expense charged by the lender's attorney except to the extent
of a fee for the review of the loan documents prepared or submitted by
or at the direction of the borrower's attorney or such other work or
services as requested by borrower or borrower's attorney."

Loan documents include "a promissory note, loan agreement, mortgage,
affidavit of title, power of attorney, survey and survey affidavit,
title documents and searches and commitments for title insurance and
modification of any promissory note, mortgage or loan agreement."

Three separate Law Division class actions involving Section (d) were
consolidated in the Appellate Division. Suzanne Turner sued First Union
National Bank, formerly First Fidelity Bank NA NJ. Daniel Iversen and
Lawrence and Terri Cohen sued Collective Bank, which is federally
chartered. In addition, Thomas Kelly sued Chase Manhattan Mortgage

According to the stipulated facts, the plaintiffs were residential
mortgage borrowers who secured loans from the defendant lenders. The
lenders made the borrowers pay fees ranging from $ 100 to $ 170 to
reimburse the lenders for their attorneys' fees concerning the review of
title and other loan documents that the borrowers submitted. Turner did
not have a lawyer. The borrowers claimed that the lenders had violated
Section (d).

In Turner's case, the Law Division held that the lender could not charge
an unrepresented borrower a review fee. The court cited the "clear and
unambiguous" language of the statute.

The Iversen and Kelly cases were tried to the same judge. The judge held
that the lenders could not charge a review fee "unless the borrowers'
attorneys prepared or submitted documents, using their legal skills and
judgment, that created 'extra work' for the lenders' attorneys." The
judge also held that federal regulations did not preempt Section (d)
regarding Collective. Thus, the Law Division granted summary judgment to
the borrowers.

The Appellate Division reversed all three decisions on the
interpretation of Section (d). The appeals court held that a lender may
pass along its attorneys' fees regardless of whether the loan documents
are submitted by or at the direction of the borrower or the borrower's
attorney and regardless of whether extra work is involved. In contrast,
the appeals court affirmed on the preemption issue.

The New Jersey Supreme Court granted the borrowers leave to appeal.
Collective cross-appealed. The Supreme Court then modified the Appellate
Division's judgment regarding preemption and affirmed.

The Supreme Court pointed out that @ 46:10A-6 was enacted in 1975 to end
the practice by which lenders required borrowers to use and pay for
lenders' attorneys. The statute prohibited lenders from requiring a
borrower to use an attorney chosen by the lenders. It also guaranteed
borrowers the right to use attorneys of their own choice. However, the
statute allowed lenders to be reimbursed for the costs of having their
attorneys review documents prepared by the borrowers' attorneys.

In 1987, the Advisory Committee on Professional Ethics ruled that it
violated the Rules of Professional Conduct for a lender's attorney to
charge the lender a fee, which the lender would pass on to the borrower
-- notwithstanding that the lender intended to notify the borrower that
the attorney represented the lender and to advise the borrower to find
his own attorney.

In 1993, the Legislature passed the Attorney Disclosure and Fee
Limitation Act, amending @ 46:10A-6. The Supreme Court then stated that
the amended statute superseded the Committee's opinion and the
supplement to the Committee's opinion. However, the Supreme Court in
this case indicated that no previous case had interpreted the 1993

The Supreme Court began with the language of Section (d). It observed
that the statute provides "two limited exceptions" to the "blanket
statement prohibiting lenders from requiring borrowers to reimburse
lenders for all or any portion of their attorneys' fees." The court
added that the exceptions should be narrowly construed because they are
exceptions to a consumer protection law.

The Supreme Court then observed that, by a literal reading, the statute
applies only if "the loan documents are prepared or submitted only by a
borrower's attorney, or where other services are requested either by the
borrower or the borrower's attorney." The court declared that the
literal interpretation "contradicts the statutory purpose" of @ 46:10A-6
and "the public policy of the State."

The Supreme Court explained that the terms and structure of the 1993
amendment to @ 46:10A-6 show "three overriding legislative purposes."
The purposes are (1) to allow borrowers to be represented by their own
attorneys, (2) to require lenders to disclose that their interests are
inconsistent with the borrowers' interests and that a lender's attorney
represents only the lender, and (3) to "limit lenders' ability to shift
their legal fees to borrowers, except in defined circumstances, and to
require greater disclosure of the basis" for the attorneys' fees.

Then the Supreme Court declared that the borrowers' interpretation
contradicted the policy of encouraging borrowers to obtain attorneys.
The court pointed out that the borrowers' interpretation would have
borrowers with attorneys pay two sets of attorneys' fees and borrowers
without attorneys pay no attorneys' fees. The court held that the
exception for loan documents "applies to both represented and
unrepresented borrowers."

Next, the Supreme Court discussed when fees may be shifted. It ruled
that the Law Division's "extra work" interpretation in the Iversen and
Kelly cases was "flawed" and "ignores the plain language of Section (d),
specifically the terms 'submit' and 'loan documents.'"

The Supreme Court pointed out that the statutory definition of "loan
documents" includes documents that the borrower's attorney would not
have prepared, such as title commitments. Thus, the court indicated that
the Legislature "clearly expressed its view that review fees can be
charged" for documents "submitted by the borrower's attorney or others."

Using the "natural meaning" of "submit," the Supreme Court also ruled
that "Section (d) allows a fee whenever an enumerated 'loan document' is
turned over to lenders' counsel." Accordingly, "the Legislature clearly
intended to allow review fees even where the loan documents are prepared
by third parties rather than by the borrower's attorney."

Further, the Supreme Court agreed with the Appellate Division that the
"extra work" interpretation "eviscerates" the @ 46:10A-6(c)(2)
"requirement that a lender disclose 'a good faith estimate of any charge
which the borrower will be expected to pay to the lender's attorney'"
for "services" before obtaining a commitment from the borrower. The
Supreme Court quoted the appeals court's statement that a lender "could
not possibly predict in advance the extra work that a borrower might ask
it to perform."

Consequently, the Supreme Court held that Section (d) permits a review
fee for "loan documents prepared, or submitted by, or at the direction
of the borrowers' attorneys or the borrowers." The court emphasized that
the review fees in the cases before it "were modest."

Finally, the Supreme Court considered the circumstances of Collective, a
federally chartered institution. Collective argued that it was regulated
by the Office of Thrift Supervision, the successor of the Federal Home
Loan Bank Board, and that federal law preempts Section (d). The Supreme
Court agreed.

The Supreme Court relied on Fidelity Fed. Sav. and Loan Ass'n v. de la
Cuesta, 458 U.S. 141 (1982), in its discussion of the federal Home
Owners' Loan Act, which established a system of federal savings and loan
associations. The Act created the Federal Home Loan Bank Board and gave
the Board "broad power to promulgate rules and regulations." According
to Fidelity, the creation of the Board expressed the intention of
Congress that "federal law would govern the terms of loan instruments
issued by federal savings and loan associations."

At the time of the Iversen loan, 12 C.F.R. @@ 545.32 and 563.35 were in
effect. Section 545.32(b)(5) allows "necessary initial charges connected
with making a loan" unless otherwise provided in @ 563.35(d). It adds
that a federal savings association "may collect the charges from the
borrower and pay the persons rendering the services."

In turn, @ 563.35(d)(1) "specifically allows federal banks to charge
borrowers for attorney's fees . . . as long as those fees are
'attributable to processing and closing' " a loan. Section 563.35(d)(2)
caps the fee at $ 100 unless the attorney provides a supporting

The Supreme Court also quoted 12 C.F.R. @ 545.2, which states that Part
545 was promulgated pursuant to the Office of Thrift Supervision's
"plenary and exclusive authority . . . to regulate all aspects of the
operations of Federal saving associations" and that the Office's
authority is "preemptive of any state law" about "the operations of a
Federal savings association."

The Supreme Court added that the Fidelity court held that a Board
regulation preempted a permissive California regulation and that state
courts also have held that the federal regulations for federal savings
and loan associations preempt state law.

The Supreme Court observed that @ 545.32(b)(5) "unambiguously allows
federal savings and loan associations to shift fees for initial charges,
including the costs of title examination and the drawing of papers,"
except as @ 563.35(d) provides. Further, the Supreme Court determined
that @ 545.32(b)(5) "specifically includes" attorneys' fees within
"initial loan charges" but requires that the attorneys' fees be fixed
according to @ 563.35(d).

Then, because @ 545.2 expressly preempts state law, the Supreme Court
concluded that "Section (d) is preempted by the fee shifting provisions
of Section 545.32(b)(5)." The Supreme Court added that "recent
revisions" of the regulations were more evidence of preemption.

The Supreme Court also observed that a prudent lender "cannot issue a
loan without first reviewing closing documents"; a lender that cannot
pass along the costs of the review will have to raise its interest
rates, forgo document review, or change its lending practices. Moreover,
"a federal savings and loan association's ability to extend loans may be
seriously compromised" if it cannot "set its own fee regulations."

For appellants/cross-respondents: John M. Donnelly and Arthur M. Brown
(Levine, Staller, Sklar, Chan, Brodsky & Donnelly and Schiffrin, Craig &
Barroway, Ltd.; Marc A. Topaz on the briefs). For respondent First
Union: Gregory R. Haworth (Duane, Morris & Heckscher). For respondent
Chase Manhattan Mortgage Corp.: George E. McDavid (Reed Smith Shaw &
McClay; Leonard A. Bernstein and Robert M. Jaworski of counsel; Kathleen
F. Doran on the briefs). For respondent/cross-appellant Collective Bank:
Gerald A. Liloia (Riker, Danzig, Scherer, Hyland & Perretti and McCarter
& English; Glenn P. Callahan on the brief). For amici curiae New Jersey
Bankers Association and New Jersey League of Community and Savings
Bankers: Dennis R. Casale (Jamieson Moore Peskin & Spicer; Dominick A.
Mazzagetti on the letter brief). For amici curiae Mortgage Bankers
Association of New Jersey and League of Mortgage Lenders: Wayne A.
Watkinson (Goldman, Levy, Zolotorofe & Corcoran). (New Jersey Lawyer
December 20, 1999)

SHELL OIL: Spencer National Settlement Gives Relief to Property Owners
The settlement of a national class action lawsuit (Spencer, et. al. v.
Shell Oil, et. al.) allows owners of certain houses, mobile homes and
other structures with polybutylene (PB) plumbing systems possible
eligibility for reimbursement.

Homeowners with PB pipes connected with acetal plastic insert fittings
that were replaced within 15 years of installation may be eligible for a
partial reimbursement for repairs and property damage costs. PB is a
plastic that was used in the manufacturing of plastic pipe for use in
plumbing systems, beginning in the late 1970s. Some property owners
across the country have experienced leaks in their PB plumbing systems.
The Spencer Class settlement provides certain financial relief for
property owners who replaced their PB plumbing systems.

PB pipe is flexible, sometimes curved, usually gray and occasionally
black. PB pipes were used in interior water supply plumbing systems. PB
pipes are not used for sewer drains, waste or vent piping applications.

The acetal plastic insert fittings are used to join pipes. Insert
fittings are fittings where a portion of the fitting is inserted into
the PB pipe. The outside of the pipe is then clamped with an aluminum or
copper crimp ring. Acetal fittings are made of hard gray (sometimes
white) plastic. There are also metal insert fittings available, which
are not covered by Spencer. PB plumbing systems with gray acetal plastic
insert fittings may be visible in the attic or basement or near the hot
water heater of the homes or structures in which they were installed.

Contact: Spencer Class Facility P.O. Box 81448 Atlanta, GA 30366
1-800-490-6997 Or visit the Web site at http://www.spencerclass.com

To receive more information concerning the terms of the settlement and
reimbursements, contact: Bill Steers at 770/431-6246. Established to
implement the terms of the Spencer Class Action settlement, the Spencer
Class Facility will arrange for property owners to receive pertinent
information on the settlement and/or receive a claim form package. The
Spencer Class Facility reviews all submitted claim forms for eligibility
and issues reimbursement checks to all property owners who qualify under
the terms of the settlement.

SIMI VALLEY: Settles with Bikers Claiming Bias at Hells Angels Event
Motorcyclists who claimed they were unfairly treated by Simi Valley
police during a 1997 Hells Angels charity event have agreed to settle
their class-action lawsuit against the city for $ 40,000.

Simi Valley City Manager Mike Sedell said in a written statement that a
federal judge in Los Angeles approved a tentative settlement on January
11 that offers far less money than the lawsuit sought. About 60
plaintiffs will share $ 10,000, and the remaining $ 30,000 will be
divided among their attorneys, the statement said. The original claim
was for $ 11 million.

The lawsuit stems from a so-called "Poker Ride" held Sept. 7, 1997, to
an Elks Lodge in Simi Valley. During the event, which attracted 1,500
riders, six people were arrested, 45 people were given citations and 27
drivers were verbally warned.

In the suit, the riders alleged that officers were overzealous and
violated the bikers' civil liberties by singling them out for minor
traffic violations, such as not having a headlight on or failing to
signal for a turn.

The situation followed an incident in the summer of 1997 in which eight
Simi Valley police officers returned their Officer of the Year awards to
the Elks Lodge after learning that lodge members had agreed to host the
Hells Angels charity event.

Simi Valley officials said the settlement was made to avoid further
legal costs, which they estimated could have exceeded $ 250,000. In the
settlement, neither side admits liability. (Los Angeles Times, January
12, 2000)

STATES: Sp Ct Rejects Age Bias Lawsuits by Employees in Federal Courts
The Supreme Court ruled that a federal law cannot override states' 11th
Amendment protection against being sued in federal courts. Whittling
away more of the federal government's power over states, the U.S.
Supreme Court ruled on January 11 that state employees cannot go into
federal court to file lawsuits alleging age bias.

The court, by a 5-4 vote, ruled that Congress exceeded its authority
when allowing such lawsuits against the states under 1974 amendments to
the Age Discrimination in Employment Act of 1967. The ruling killed
three federal cases from Florida and Alabama. The federal law cannot
trump states' 11th Amendment immunity against being sued in federal
courts, Justice Sandra Day O'Connor wrote for the court. January 11's
ruling extended a series of recent decisions that by identical votes
have eroded the federal government's sway over states.

Joining O'Connor again were Chief Justice William H. Rehnquist and
Justices Antonin Scalia, Anthony M. Kennedy and Clarence Thomas. Again
dissenting were the court's more liberal justices - John Paul Stevens,
David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer.

The Supreme Court decided Congress does not have the same power to
enforce the 14th Amendment's equal-protection guarantee when seeking to
protect people against age discrimination as it does when the bias is
based on race, national origin, religion or sex.

"Older persons ... have not been subjected to a history of purposeful
unequal treatment," O'Connor said. "Old age also does not define a
discrete and insular minority because all persons, if they live out
their normal life, will experience it."

Laurie McCann, an attorney for the American Association of Retired
Persons, said the justices made protection against age bias "a
second-class civil right." "Once you are old, there's no going back. In
that way, it's just as immutable as race," she said. "The justices have
lifetime tenure. It's easy for them to say, "What's the big deal?"'

The decision did not discuss whether another federal anti-bias law, the
Americans with Disabilities Act, could be enforced with federal lawsuits
against state employers.

The court announced its decision only minutes before hearing arguments
in another states' rights case - a dispute over Congress' power to give
rape victims the right to sue their attackers in federal court. The
decision spelled defeat for three groups of state employees.

In one of the three disputes, 36 current and former faculty members and
librarians at Florida State University and Florida International
University, including lead plaintiff J. Daniel Kimel Jr., sued the
Florida Board of Regents. They alleged age bias was why they didn't get
certain salary increases given to younger faculty members.

In another dispute, associate professors Roderick MacPherson and Marvin
Narz sued state-run Montevallo University in Alabama. They alleged
younger faculty members were treated more favorably in salary and
promotion decisions.

And in a third, Florida prison guard Wellingron Dickson said he was
denied a promotion largely because of his age. (The Stuart News/Port St.
Lucie News (Stuart,FL) January 12, 2000)

TOBACCO LITIGATION: MI Ct Denies Class for Health Case V. Philip Morris
A Michigan judge has refused to grant class certification in a smoking
and health lawsuit filed against Philip Morris Inc. and other members of
the tobacco industry, saying the individual circumstances of each smoker
override any common issues they may have as a group.

"Having concluded that common issues in a class action would not
predominate over individual issues, and that a class action would not be
a superior means to resolve the asserted claims, the plaintiffs' motion
for class certification is denied," wrote Judge William J. Giovan of the
Third Judicial Circuit of Michigan.

John J. Mulderig, an associate general counsel for Philip Morris, said
Giovan's well-reasoned opinion "makes it clear that these types of cases
are simply unsuitable, and unmanageable, as class actions, and no amount
of anti-tobacco rhetoric should convince courts to ignore established
rules of law that govern such cases."

Mulderig said Giovan's decision is further evidence of the skepticism
with which courts across the country have viewed attempts by plaintiffs'
attorneys to try smoking and health cases as class action lawsuits.

For a court to certify a class, it must determine that several legal
requirements are met - various requirements for insuring that the
class-action mechanism can work and will be an efficient and just manner
to decide the class members' claims.

But Giovan, who cited numerous other tobacco cases in which class action
status was denied, pointed out that "litigants in that class are
probably better served by the more prompt adjudication of their claims
that is possible without the complexities attendant to a class action,
not the least of which is the possibility of an appeal and reversal of
class action certification."

Giovan's decision was in Taylor v. American Tobacco Co., et al (The
Third Judicial Circuit of Michigan Civil No. 97 715975 NP). Contact:
Laurie Guzzinati (917) 663-2144

TOBACCO LITIGATION: Mother Sues Canadian Firms over Paper Safety
The mother of two children who were killed in a house fire blamed on a
smouldering cigarette is suing Canada's tobacco companies, claiming they
could make cigarette paper safer, CBC-TV's The National reported last
night. The news comes on the same day that U.S. tobacco giant Philip
Morris announced that it will test-market cigarettes designed to cut the
risks of smoking-related fires. The fire in Scarborough in 1998 claimed
the lives of Ravena Ragoonanan's two children, daughter Jasmine, 3,
Philip, 16, and his 15-year-old friend.

Ragoonanan and her husband filed a suit against Canada's three cigarette
companies on January 11. It was their first step in organizing a
class-action suit involving anyone in the country killed or injured by
fires caused by cigarettes. ''I would like to know why it's not
regulated, why the government hasn't taken steps to change it, . . . why
innocent people are being hurt or killed over something that could be
changed years ago,'' Ravena Ragoonanan said of cigarette paper.

Fire department officials in Ontario have called for a fireproof
cigarette in the wake of a number of fires in the province that have
been blamed on cigarettes. ''Tobacco companies have known about this
problem for a very long time,'' Doug Lennox, the Ragoonanans' lawyer
told the CBC.

South of the border, Philip Morris said that within six months it will
begin offering a test version of Merit cigarettes that will burn cooler
than standard smokes, making them less prone to ignite home furnishings.

The move will likely pressure rival cigarette companies to make
improvements of their own for fire safety, observers say. (The Toronto
Star, January 12, 2000)

TOYSRUS.COM: Hagens Berman Files Suit over Failure to Deliver at X’mas
Internet toy retailer fails to deliver thousands of toys despite
Christmas guarantee. According to a class-action suit filed in
Washington state, Toysrus.com, a subsidiary of Toys "R" Us (NYSE:TOY),
acted more like the grinch that stole Christmas than one of the nation's
largest retailers of children's toys.

The suit, filed in King County Superior Court, claims the e-retailer
knowingly and deceptively accepted orders for Christmas presents the
company knew it could not deliver.

Seattle attorney Steve Berman, known for his national expertise in
class-action lawsuits, filed a lawsuit on behalf of Kimberly Alguard and
other consumers claiming Toysrus.com breached its contract with
thousands of customers, using deceptive practices to lure shoppers into
doing their Christmas shopping with Toysrus.com.

The class, if approved, would represent all Toysrus.com website
customers who purchased toys on the website by the cutoff date
Toysrus.com set for guaranteed Christmas delivery -- but did not receive
their purchases by Dec. 25, 1999.

"There are a lot of things in life that are excusable, but ruining
Christmas for thousands of children isn't one of them," Berman said.
"The thought that Toysrus.com had full knowledge they couldn't keep the
Christmas Eve date but continued to accept orders makes it even worse.
To thousands of kids, Toysrus.com is the e-grinch who stole Christmas."

Alguard of Lynnwood, Wash., ordered Christmas gifts for her
four-year-old son through the Toysrus.com website by Dec. 7, requesting
3-6 day delivery. However, when she never received e-mail confirmation
of her order, nor her order after several days, she became suspicious
that there was trouble.

"When the sixth day passed and I hadn't received my order or their
promised confirmation message, I knew something was wrong," Alguard
says. "I was told repeatedly by representatives that my order would be
received by December 22, but it wasn't until 9:30 p.m. on December 22 I
found out that my order was not going to arrive by Christmas," she

Alguard then spent the next 48 hours scrambling to replace the gifts she
had ordered for her son's Christmas, hopping between Toys R Us stores
throughout the Puget Sound region.

"This was the first Christmas where my son could really grasp what it's
all about," she said. "For me, Christmas is about the kids, and it
wrecked my Christmas that I was out until 1:30 a.m. December 23rd just
to get some of the gifts Toysrus.com promised would be delivered."

According to the lawsuit, Toysrus.com heavily promoted its Internet site
during the Christmas shopping season, inviting shoppers to avoid the
problems of Christmas shopping by using the the Toysrus.com site. The
suit alleges that between Nov. 22, 1999, and Dec. 12, 1999, Toysrus.com
attracted 1.75 million visitors weekly. The site guaranteed Christmas
delivery by standard shipping for toys ordered by Dec. 11, 1999, and
premium shipping for toys ordered by Dec. 14, 1999.

The suit alleges Toysrus.com president John Barbour announced on
December 22 that the company would not be able to deliver promised
gifts, after the company had already secured customers' holiday dollars.

"Barbour's announcement was too little too late," Berman says.
"Toysrus.com's confession came too late for most shoppers, especially
those sending gifts out of town."

According to Berman, Barbour's announcement included an offer of a $100
certificates redeemable at Toys R Us stores. "That left very little time
to find a store and pick through the remains left of the shelves. If you
didn't live near a store, you were out of luck."

Berman notes the irony in Toysrus.com's explanation that distribution
problems were due to the site's success. "They were very successful in
running up big sales, based on their promise to deliver the toys on
time. As far as fulfilling their promises, they left lumps of coal in a
lot of stockings."

According to the class-action complaint, Toys R Us maintains 1450 stores
worldwide and has sales of $11 billion annually. In order to boost
sagging profits and recapture market share, Toys R Us launched its
Internet site, Toysrus.com. As the Christmas 1999 retail season
approached, Toysrus.com made an aggressive turn in its Internet retail
site to bolster its sales and match its Internet competitors.

The suit also claims that Toysrus.com pushed its website and began
making guarantees concerning Christmas deliveries, despite earlier
problems with its website and knowledge of its inability to fulfill
orders. According to the suit, in early 1999 Toysrus.com was forced to
limit traffic at its site halted an advertising campaign after it became
swamped with online shoppers. Later, in November 1999, Toysrus.com
issued a press release with a headline proclaiming "Temporary Site
Slowdown Experienced as Company Expands Capacity to Keep Up With

According to the class-action suit, these problems were early signs to
Toysrus.com executives that the Internet retailer would not possibly be
able to meet its Christmas delivery promises.

Berman is managing partner of Hagens Berman and Hagens Berman & Mitchell
of Phoenix. Berman's practice is focused on securities, antitrust,
ERISA, and consumer and environmental matters, with a heavy emphasis on
class actions. Berman represented 13 states in suits against Big
Tobacco, and was one of the prime architects of the groundbreaking
Ligget settlement. Other class actions the firm handled include matters
involving The Boeing Company, the Exxon Valdez oil spill, Egghead,
Nordstrom, Boston Chicken, Noah's Bagels, Louisiana Pacific and
Washington Public Power Supply (WPPSS). For more information, visit
website http://www.hagens-berman.com
VITHAL SHAH: Physician on Trial For Faulty Diagnoses of Lyme Disease
A former West Milford physician whose license was once suspended for
repeatedly misdiagnosing Lyme disease went on trial on January 11,
accused of medical malpractice by six patients.

During opening statements, attorneys told jurors in Superior Court,
Paterson, that Dr. Vithal Shah diagnosed the disease even in people who
did not have it. Shah advised these people to undergo at-home treatments
with intravenous antibiotics, sending the patients to companies that
paid him for every referral.

Attorney Dermot Doyle, who represents two plaintiffs, said that in 1992
and the beginning of 1993, Shah made more than $ 134,000 from such

Attorneys for Shah said the doctor made good diagnoses because the
patients got better after treatments, according to records they kept of
their own progress. The defense called Shah the kind of doctor who made
house calls, spent an hour on an office visit, and gave out his number
on vacation "just in case."

What no one is telling the jury is that Shah has had problems with his
medical license: The trial court judge ruled that such information is
too prejudicial.

Shah's license was suspended in 1994 by 1 NEW3 the state Board of
Medical Examiners after it found that he had "obsessively" misdiagnosed
Lyme disease and had "inappropriately" prescribed narcotic painkillers
that contributed to the deaths of two patients.

Shah was allowed to resume practicing medicine in 1996. He lives in
Edison, but his attorneys would not give the location of his office.

In the civil case, the alleged victims are seeking unspecified damages.
The case is expected to last three to four weeks.

Jurors also will not hear about a similar case that went to trial this
summer: A jury found Shah guilty of medical malpractice and awarded $
5,000 to the family of a 7-year-old boy who was Shah's patient.

Doyle, the lead plaintiff's attorney in the case, said Shah diagnosed
patients with late-stage Lyme disease even before blood tests were back
from the lab and then stood by his diagnoses even if patients didn't get

Shah had never even heard of the disease until 1991, Doyle said; the
next year, Shah treated about 300 people for the disease, including
himself and several relatives.

Doyle and the other attorneys said their clients lost trust in their
doctors, lost time on the job from the unnecessary treatments, and lost
money from repeated office visits. They also accused Shah of marking up
the cost of routine tests and blood work.

Shah's attorneys argued against the charges that the doctor made false
diagnoses. People went to Shah with at least a dozen of the warning
signs of Lyme, the lawyers noted, and many lived in areas where the
disease would be likely. Shah also told each of his patients to get a
second opinion, said E. Burke Giblin, one of the defense attorneys.

Giblin told the jury that in the 1990s, blood tests were not very good
at indicating whether someone had Lyme disease, so a negative test did
not automatically mean the person was disease-free. Shah based his
diagnoses on symptoms and case histories, plus the fact that patients
reported feeling better after taking the antibiotics.

Giblin said Shah felt comfortable prescribing antibiotics because the
drugs carry little risk compared with untreated Lyme disease, which can
result in problems with the heart, joints, and nervous system. The
disease is spread by tiny 1 NEW3 deer ticks.

The defense attorneys did not directly address the issue of the money
Shah took from the home IV drug companies. They did note that one
patient used an IV provider that did not pay Shah for referrals.

Giblin posed a series of questions to jurors: If Shah was motivated by
greed alone, why did he start his patients on oral antibiotics before
moving them to the home IV programs? If he was motivated by money alone,
why didn't he diagnose all his patients with Lyme disease? And what
disease did the patients have if not Lyme? (The Record (Bergen County,
NJ), January 12, 2000)

* Three Cheers For Class Actions Published in Legal Times
In an article on the Legal Times, Richard H. Middleton Jr.Savannah, Ga.
President, Association of Trial Lawyers of America Washington, D.C. says
class actions play an important role in making the courts available to
all Americans. If a company has injured many people - hundreds or
thousands of individuals - and the harm done to each of them is
relatively small, a class action may be the only way for them to seek
compensation for fraud or call attention to and prevent other people
from being physically or economically injured.

The class action, in effect, enables and empowers many Davids to go up
against a corporate Goliath.

Past class actions have helped end fraudulent activities and discourage
the defrauding of loyal customers and policyholders. Such cases have
forced auto manufacturers to design minivan latches that safeguard
passengers against preventable ejections. And industries-like those that
manufactured asbestos products-have been exposed and held accountable
for hiding the deadly, known dangers of their products from workers and
consumers they knowingly injured and killed. (Legal Times December 6,


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.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to be
reliable, but is not guaranteed.

The CAR subscription rate is $575 for six months delivered via e-mail.

Additional e-mail subscriptions for members of the same firm for the
term of the initial subscription or balance thereof are $25 each.  For
subscription information, contact Christopher Beard at 301/951-6400.

                    * * *  End of Transmission  * * *