CAR_Public/000125.MBX               C L A S S   A C T I O N   R E P O R T E R

              Tuesday, January 25, 2000, Vol. 2, No. 17

                             Headlines

ASBESTOS LITIGATION: UK Lords Will Hear South Africansí Case V. Cape
BLUE CROSS: Mega-Firm Alleges LA Co of Unfair Denial of Needed Coverage
INFORMATION MANAGEMENT: Milberg Weiss Files Securities Suit in CT
INFORMATION MANAGEMENT: Shepherd  Geller Files Securities Suit in CT
LEGATO SYSTEMS: Entwistle & Cappucci Files Securities Suit in CA

LEGATO SYSTEMS: Lowey Dannenberg Files Securities Suit in California
LEGATO SYSTEMS: Spector, Roseman Files Securities Lawsuit in CA
LEGATO SYSTEMS: Yates Law Office Files Securities Suit in California
MOBIL OIL: Faces Suits in Melbourne & Victoria over Grounded Aircraft
PACIFIC BELL: Files Appeal with CPUC Re Staff Action on Sales Practices

PADIATRIX MEDICAL: Fla. Judge Oks Motion to Dismiss Shareholder Lawsuit
XEROX CORP: Kahn & Associates Files Securities Suit in CT

                              *********

ASBESTOS LITIGATION: UK Lords Will Hear South Africansí Case V. Cape
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The long-running battle between Cape, the UK-based multinational, and
4,000 South Africans suing the company over asbestos-related illnesses,
has taken another crucial turn.

The House of Lords has provisionally decided to review a Court of Appeal
ruling that the case cannot be heard in the London courts because South
Africa is the more appropriate venue. A full Lords hearing will now go
ahead unless Cape can persuade the Lords otherwise. The case is being
followed in boardrooms since it goes to the heart of jurisdictional
problems of multinationals and overseas subsidiaries.

If the Lords uphold an appeal and then decide the main trial should be
heard in London, it could herald a new era for large-scale international
class actions in the High Court against some of the top UK companies.

Allen & Overy has claimed a global first with the launch of a
multi-million pound paperless office for deals. The move marks a radical
step forward in law firms using the internet to actually help run their
business, as opposed to selling legal advice to clients.

A&O has spent an estimated Pounds 1.5m to Pounds 2.5m developing
www.newchange.com. It allows the firm to set up a dedicated web site for
a transaction, with password-controlled access for the lawyers, bankers
and clients involved. Much of the development spend has been on a new,
software-based documents system A&O claims will offer "significant"
productivity gains - the drafting time for one agreement, for example,
has been cut from 75 minutes to 6 1/2 minutes.

David Morley, managing partner banking at A&O, claims the new approach
"points the way forward for e-business as it applies to law firms. It
could transform the market".

This may be over-hyping it. But the internet has undeniable potential to
help lawyers cut a swathe through the mountains of paper that accompany
mega-deals, while meeting the deadlines imposed by investment banks.
(Financial Times (London), January 24, 2000)


BLUE CROSS: Mega-Firm Alleges LA Co of Unfair Denial of Needed Coverage

Blue Cross and Blue Shield of Louisiana has been hit with the latest in
a string of class-action lawsuit against managed care companies. The
suit, Crawford vs. Blue Cross and Blue Shield of Louisiana, alleges that
the plan unfairly denied needed coverage.

Unlike other recent lawsuits, Crawford was filed on behalf of individual
policyholders rather than group health plan enrollees, said Maury
Herman, a lawyer with newly formed law firm Herman Middleton Casey
Kitchens LLP, which filed the suit.

Because of this, the plan may not invoke the ERISA shield, which grants
immunity from some lawsuits to employer-sponsored health plans.

Herman Middleton is one of several recently formed "mega-firms" and
partnerships devoted to managed care lawsuits and other litigation. "We
formed a national firm to have the financial muscle and brainpower and
people" necessary to handle complex legal issues, Herman said.

Louisiana Blues spokesman John Maginnis noted that it does not comment
on pending litigation, adding, "We consider that the suit has no merit."

Call Herman at (504) 581-4892. (Managed Care Week, January 10, 2000)


INFORMATION MANAGEMENT: Milberg Weiss Files Securities Suit in CT
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The law firm of Milberg Weiss Bershad Hynes  Lerach filed a class action
lawsuit in the United States District Court for the District of
Connecticut, on behalf of all persons who purchased, or otherwise
acquired, the common stock of Information Management Associates, Inc
between August 12, 1999, and November, 18, 1999, inclusive.

The complaint charges IMA and certain of its senior officers and
directors with violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The
complaint alleges that defendants issued a series of materially false
and misleading statements concerning the Company's financial condition,
revenues and earnings. Because of the issuance of a series of materially
false and misleading statements the price of IMA common stock was
artificially inflated during the Class Period. Prior to the disclosure
of the adverse facts described above certain insiders sold thousands of
shares of IMA common stock to unsuspecting investors at artificially
inflated prices.

For more details concerning this action, you may contact Milberg Weiss
Bershad Hynes  Lerach, Shareholders Services Dept., Toll Free:
1-800-320-5081, or through E-mail: endfraud@mwbhlny.com


INFORMATION MANAGEMENT: Shepherd  Geller Files Securities Suit in CT
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The Law Firm of Shepherd  Geller, LLC filed a class action in the United
States District Court for the District of Connecticut on behalf of all
individuals and institutional investors that purchased or otherwise
acquired the common stock of Information Management Associates, Inc.
between August 12, 1999 and November 18, 1999, inclusive.

The complaint charges that the Company and certain of its officers and
directors violated the federal securities laws by providing materially
false and misleading information about the Company's financial
condition, revenues and earnings. As a result of these false and
misleading statements the Company's stock traded at artificially
inflated prices during the class period. Prior to the disclosure of the
above mentioned adverse facts, certain insiders took advantage of the
inflated stock price by selling thousands of shares of the Company's
common stock to the unsuspecting investing public. When the truth about
the Company was revealed, the price of the stock dropped significantly.

For more information on the above mentioned securities suit, you may
contact Jonathan M. Stein, SHEPHERD  GELLER, LLC, 7200 West Camino Real,
Suite 203, Boca Raton, FL 33433, (561) 750-3000, Toll Free: 1-
888-262-3131, E-mail: jstein@classactioncounsel.com


LEGATO SYSTEMS: Entwistle & Cappucci Files Securities Suit in CA

Entwistle & Cappucci LLP (http://www.entwistle-law.com),a prominent New
York law firm specializing in securities litigation, announced on
January 21 that a class action has been commenced in the United States
District Court for the Northern District of California on behalf of
purchasers of Legato Systems, Inc. ("Legato") (Nasdaq: LGTO) common
stock during the period between October 21, 1999 and January 19, 2000
(the "Class Period").

The complaint charges Legato and certain of its officers and directors
with violations of the federal securities laws, and includes allegations
that company insiders improperly realized $11.5 million in profits from
insider trading activities. Specifically, the complaint alleges that the
defendants issued a series of materially false and misleading statements
concerning Legato's business, earnings growth and financial statements
and its ability to achieve profitable growth, principally in order to
use Legato's artificially inflated stock as currency to fund the
Company's acquisition of companies in stock-for-stock transactions.

In order to inflate the price of Legato's stock, defendants also caused
the Company to falsely report its result for the third quarter of 1999
and continued to attempt to improperly recognize revenue throughout the
Class Period. As Legato continued to report "record" profits and
defendants falsely asserted that they were achieving 150% growth in net
income, the price of Legato stock rose to a Class Period high of $79-1/4
on December 23, 1999.

On January 19, 2000, Legato shocked the investment community by
announcing that it would restate its third quarter earnings and that it
would fall desperately short of meeting its forecasted earnings for the
fourth quarter In response to this announcement, Legato stock halted on
Nasdaq and ultimately plummeted to $29 per share in after-hours trading,
a decline of 63% from its Class Period high.

Contact: Vincent R. Cappucci, Esq. of Entwistle & Cappucci LLP, 400 Park
Avenue, 16th Floor, New York, New York 10022 (Telephone: 212-894-7200)
or by e-mail to the firm's Shareholder Relation's Department.


LEGATO SYSTEMS: Lowey Dannenberg Files Securities Suit in California
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Lowey Dannenberg Bemporad  Selinger, P.C. has filed a securities class
action lawsuit in the United States District Court for the Northern
District of California against Legato Systems, Inc. and certain officers
and directors of the Company on behalf of purchasers of Legato common
stock during the period commencing October 21, 1999 through January 20,
2000, inclusive.

Plaintiff's complaint alleges that defendants violated the federal
securities laws by misrepresenting or failing to disclose material
information concerning the Company's contract revenues and revenue
recognition policies. Specifically, the complaint alleges that
defendants issued false and misleading press releases and filed a Report
on SEC Form 10-Q for the Third Quarter of fiscal year ended September
30, 1999 which contained false and misleading material information
regarding the Company's contract revenues. These material misstatements
and omissions inflated the price of Legato's common stock purchased by
investors during the Class Period. Moreover, individual officers and
directors profited on material non-public information by selling more
than 226,000 shares of Legato common stock at inflated prices just one
month after the false and misleading press release relating to the
Company's revenues and just weeks prior to the disclosure to the public
about the improper revenue recognition. These defendants reaped over $14
million from the improper sales.

For additional information concerning on this securities suit, you may
contact Richard W. Cohen or Michelle Rago, Lowey Dannenberg Bemporad
Selinger, P.C., The Gateway, 11th Floor, One North Lexington Avenue,
White Plains, New York 10601-1714, Telephone: 914.997.0500, Telecopier:
914.997.0035, e-mail: rcohen@ldbs.com or mrago@ldbs.com


LEGATO SYSTEMS: Spector, Roseman Files Securities Lawsuit in CA
---------------------------------------------------------------
Spector, Roseman  Kodroff, P.C. filed a class action lawsuit in the
United States District Court for the Northern District of California on
behalf of all purchasers of the common stock of Legato Systems, Inc
during the period from October 21, 1999 and January 19, 2000, inclusive.

The Complaint alleges that Legato and certain of its officers and
directors violated Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934. According to the Complaint, during the Class Period,
defendants issued a series of materially false and misleading public
representations about the Company's business, earnings growth, financial
statements and its ability to continue to achieve rapid growth. The
issuance of these false and misleading statements caused the price of
Legato's common stock to be artificially inflated during the Class
Period. Defendants sought to use this inflated stock to fund
acquisitions of other companies and personally benefited through the
sale of over 178,000 shares reaping proceeds of $11.5 million. On
January 19, 2000, only one week after the Company's management assured
analysts that revenues and earnings would meet expectations, Legato
shocked the investment community when it revealed that it would have to
restate its third quarter earnings and that it would fall desperately
short of meeting its forecasted earnings for the fourth quarter of 1999.
Upon these revelations, Legato stock was halted on NASDAQ and then
collapsed to $29 per share in after-hours trading, a decline of over 44%
in one day and 63% from its Class Period high of $79.25

For more information concerning this lawsuit, please contact plaintiff's
counsel Robert M. Roseman or Joshua H. Grabar toll free at 888/844-5862
or via E-mail at classaction@spectorandroseman.com


LEGATO SYSTEMS: Yates Law Office Files Securities Suit in California
--------------------------------------------------------------------
The following class action lawsuit was filed in the United States
District Court for the Northern District of California on behalf of all
persons who purchased or otherwise acquired common stock (collectively
the "common stock") of Legato Systems, Inc. (Nasdaq: LGTO) between
October 21, 1999 through January 19, 2000, inclusive.

The complaint charges Legato Systems, Inc. and certain of its officers
and directors with violations of the federal securities laws by making
misrepresentations about Legato's business, earnings growth and
financial statements and its ability to continue to achieve profitable
growth. During the Class Period, the Individual Defendants (Louis C.
Cole, Kent D. Smith, Stephen C. Wise and Nora M. Denzel), who controlled
and were senior officers of Legato, engaged in the scheme to conceal
Legato's badly flagging growth to prevent the decline in the price of
Legato stock in order to: (i) use Legato's artificially inflated stock
as currency to fund the Company's acquisition of companies in
stock-for-stock transactions; and (ii) receive $11.5 million in insider
trading proceeds.

Contact: Alfred G. Yates Jr, Esq., 519 Allegheny Building, 429 Forbes
Avenue, Pittsburgh, Pennsylvania 15219, TELEPHONE toll free at
800-391-5164, or 412-391-5164, or via e-mail at yateslaw@aol.com or fax
at 412-471-1033.


MOBIL OIL: Faces Suits in Melbourne & Victoria over Grounded Aircraft
---------------------------------------------------------------------
Only four of 5,000 light aircraft grounded for two weeks were cleared to
start flying again Monday after a contaminated fuel crisis which
Australia's aviation industry says has cost up to $ 65 million so far.
Tests approved by aviation authorities at the weekend and carried out on
the first 80 aircraft on January 24 confirmed the worst fears of most
owners. Civil Aviation Safety Authority (CASA) spokesman Peter Gibson
said the aircraft may still be grounded for weeks for repairs.

Lawyers representing some 80 companies which own 500 of the aircraft
earlier on January 24 launched a class action suit in Federal Court
against the Australian arm of the world's biggest oil company,
Mobil-Exxon.

The Aircraft Owners and Pilots Association lodged a second action in the
Supreme Court of Victoria later in the day against the subsidiary, Mobil
Australia Ltd, based in Melbourne.

Lawyers and industry officials believe the proceedings will be
protracted and that regardless of their outcome, the consequences of the
crisis will be felt by many firms for years.

Mobil has already offered a settlement of 10,000 dollars per plane from
a 15 million dollar emergency fund it set up last week. But lawyer
Bernard Murphy, who lodged the class action in the Federal Court in
Melbourne, said firms losing 5,000 dollars and more a day regarded
Mobil's offer as "woefully inadequate". "Mobil is trying to stem a
haemorrhage with a Band-aid." He described the case as "a walk-up
start", adding: "This crisis is entirely the result of Mobil's failure
to properly supply fuel of a proper quality and standard."

The CASA ordered the grounding of aircraft using Mobil avgas 100/130 on
January 10 -- for the second time in 17 days -- because of the discovery
of a white gel-like substance and an oily black contaminant that causes
blockages of fuel systems. Two-thirds of Australia's piston engined
fleet were immediately grounded and at least 1,000 pilots stood down.
Search and rescue aircraft, firefighting support services, flying
doctors, regional charter services, flying schools, freight and crop
dusting companies, and even air force transports, were subject to the
ban.

CASA at the weekend pronounced the white substance harmless, previously
always present but overlooked -- leaving the black oily contaminant
known as ethylene diamine (EDA) to be dealt with.

Sinclair said those aircraft unaffected by contaminated fuel would be
able to fly immediately, but tests had proved positive for the vast
majority.

Typical of the companies is the Navair flying college which has had 35
aircraft on the ground at Sydney's Bankstown airport since the emergency
began at a cost of tens of thousands of dollars to the company and the
disruption of the career prospects of scores of trainee pilots.

One of the litigants, Barry Foster, of Woorayl Air Services in Victoria,
said his firm has been losing at least 5,000 dollars a day after being
forced to ground three fire-bombers, four charter aircraft and two
agricultural aircraft. "It's in the middle of our season and for most of
the ag. operators, it's their busiest time," he said. "Other operators
are losing a lot more than us."

Another litigant, Vas Nikolovski, of Direct Air, which operates 12
charter aircraft, said he was losing 50,000 dollars a month. "As far as
the medium operators are concerned our situation has been nothing short
of catastrophic," he said. (Agence France Presse, January 24, 2000)



PACIFIC BELL: Files Appeal with CPUC Re Staff Action on Sales Practices
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Company Urges Commission To Reject Staff Recommendation; Defends Sales
Practices As Ethical, Honest And In Compliance

Calling the decision legally flawed, anti-competitive and dangerous to
California businesses, Pacific Bell appealed on January 21 a CPUC staff
member's recommendation critical of the company's sales and marketing
practices.

The company's appeal asks the California Public Utilities Commission to
overturn a Dec. 22 staff recommendation that Pacific Bell be penalized
for its sales and marketing practices.

The CPUC's staff recommendation also has been criticized by business
advocates, labor leaders and experts on sales and marketing as
anti-competitive, anti-labor and anti-business.

Pacific Bell's appeal attacks the proposed ruling on several grounds,
including:

A lack of factual evidence. Despite active solicitation for complaints
from thousands of customers, plaintiffs provided no customers who had
actually been harmed by alleged practices.

The opinion finds violations of law where no rules, order or decision
existed on the point previously; this is akin to an ex post facto law
(law passed after the alleged act) and is unconstitutional

All services were tariffed and previously approved by the Commission so
the Commission cannot retroactively invalidate this pre-approval.

The cap on sales representative incentives exceeds the Commission's
authority and is preempted by federal law.

Any fines or restitution must be linked to actual identifiable customer
harm or extrinsic evidence (such as a customer survey), not speculation.

In filing its appeal, Pacific Bell asked the California Public Utilities
Commission to reject the December 22 proposed ruling by a CPUC staff
member, which included a multi-million dollar fine.

"There's nothing more important to Pacific Bell than providing our
customers with excellent service and delivering quality products that
help them manage their day-to-day communications," said William Blase,
president of Pacific Bell. "Providing the best service possible ensures
customer satisfaction, and it is something Pacific Bell and its 56,000
employees work hard at achieving every day. Which is why we are
appealing this decision."

"Our sales and marketing practices are ethical and legally sound.
Pacific Bell's customers say they are satisfied that we are empowering
them to make informed decisions about our products and services," Blase
said.

Blase said that Pacific Bell's sales and marketing practices - built
under the guidance and approval of the CPUC - should be acknowledged for
ensuring customer protections, not penalized. He also said the ruling
attempts to put the company at a disadvantage in a highly competitive
industry.

"The processes we have in place are a model for ensuring customer
satisfaction," Blase said.

"We are proud to provide our customers with the most advanced
telecommunications services available anywhere," Blase added. "Pacific
Bell has invested nearly $30 billion to build the world's most reliable
network, including more than 640,000 miles of fiber-optic cable and a
high-speed broadband network more extensive than that of any other
telecommunications company."

"Just like any other business, we will continue working hard to ensure
we provide our customers - our friends and neighbors - with the best
possible service," Blase said.

Staff Recommendations Legally Flawed and Contradict Evidence

In its wide-ranging appeal, Pacific Bell notes several instances in
which the staff member's ruling defies evidence and sound reasoning.

                   Lack Of Factual Evidence

In testimony during the hearings, it was made clear that Pacific Bell
customer service representatives first establish dial tone with new
customers, then afterwards talk with customers about other optional
products and services. Yet in her ruling, the staff member sided with
critics who produced only 15 complaints asserting that customers are
being misled into accepting products and services they don't want.

"Those 15 complaints cover a span of time in which we fielded 36 million
customer calls," Blase said. "Our customers understand the difference
between telephone service, or dial tone, and optional services such as
Call Waiting or Caller ID."

             Forced Compliance With Unwritten Rules

In another instance cited in the appeal, the staff member asserted that
Pacific Bell customer service representatives should be telling new
customers about both complete and selective blocking options for their
telephones, even though the Commission's own rules do not require it.
Pacific Bell contends it provides appropriate information about the
blocking options, in line with current Commission guidelines.

"If the commission wants to change the guidelines for all providers,
Pacific Bell will follow them," Blase said, "but it's unreasonable to
suggest that we - or any company - should be held accountable for
following guidelines that do not exist."

             Product Offerings Approved By CPUC

While the staff member's decision concludes that optional service
packages such as the "Basics Saver Pack" or the "Essential Saver Pack"
are confusing to consumers, it fails to recall that the packages
themselves are tariffed and were approved by the CPUC.

The appeal notes, "the packages of optional services that the ALJ's
Opinion condemns as creating a 'potential for confusion' are tariffed
and have been approved previously by the Commission. Local exchange
service (flat rate or measured) is marketed and identified separately.
Nevertheless, the ALJ's Opinion concludes that the tariffed packages
violate another Pacific tariff, Rule 12. The ALJ's Opinion would thus
have this Commission hold that, in approving Pacific's tariffed
packages, the Commission itself sanctioned a violation of Rule 12;
furthermore, the ALJ's Opinion would apply that conclusion
retroactively. The ALJ's Opinion fails even to address either the
unfairness or potential legal implications of its conclusion."

           Unlawful Intrusion Into Business Operations

Pacific Bell criticized the staff member's recommendation to place caps
on what employees can earn through incentive programs as "an unlawful
intrusion" into the company's day-to-day business operations.

"The Commission should not be forcing a private company to limit
incentives with the intent to decrease sales volume," said Blase. "Any
company singled out for regulations its competitors don't face cannot
compete fairly and will lose its top employees to competitors who do not
face the same restrictions."

         Sweeping Customer Service Improvements Since 1986

The proposed ruling is particularly flawed in its comparison of Pacific
Bell's current sales and marketing practices to those from 1986, when
the Commission previously took action against the company. Since that
time, Pacific Bell has implemented numerous checks and balances that
make it a model for ensuring customer satisfaction.

The first priority for Pacific Bell customer service representatives in
dealing with new customers is establishing fundamental dial tone
service. Once that is completed, customers are offered information about
other optional services and products. The company then takes significant
steps to ensure that customers understand the services they have
ordered.

For example, every customer receives a confirmation letter that
identifies each service that has been ordered. Charges for optional
services are itemized separately from local exchange service. The
charges are itemized on every monthly bill so that customers know
exactly what services they are receiving, and how much they are paying
for them.

These changes were implemented in cooperation with the CPUC after the
1986 case - and there is clear evidence that they are working. Out of
more than 36 million customer service calls per year, only 15 customer
complaints were identified in hearings that led to the proposed ruling.

"We have made sweeping changes in our sales and marketing practices
since 1986. As a result, during the period in review, we had the
enviable record of less than one complaint for every 2 million calls,"
said Blase. "Rather than condemn Pacific Bell, the CPUC should
acknowledge our sales and marketing practices for their ability to not
only provide customers with the information they say they need and want
to better understand evolving technology, but to ensure their overall
satisfaction."

         Business Advocates, Sales Experts Condemn Ruling

The proposed ruling was criticized by leading business advocates, union
officials and experts on sales and marketing as anti-competitive,
anti-labor and anti-business.

Alan Zaremberg, president of the California Chamber of Commerce, said
the chamber has "serious concerns" about the proposed CPUC action,
adding that he "would strongly encourage the full Commission to review
this decision and correct the unjustified penalties and limitations
against Pacific Bell."

"Not only is the decision anti-business and anti-employee, we believe
that the decision is anti-consumer," Zaremberg said in a Jan. 12 letter
to the CPUC.

Tony Bixler, vice president of the Communications Workers of America,
AFL-CIO District No. 9, said the ruling sets a dangerous precedent.

"The complaints about our sales practices are not based on legitimate
concerns - they are being pushed by competitors in an attempt to tarnish
Pacific Bell's image in a competitive marketplace," Bixler said. "The
evidence of that is in the number of actual complaints brought before
the Commission. Out of 36 million sales calls, they were only able to
turn up 15 complaints."

"Our competitors want to appear as the best choice for California
consumers, and they will stop at nothing to advance those aims -
including trying to manipulate the CPUC to impose unfair regulatory
controls on Pacific Bell. Our members will outshine any competitor on an
even playing field," Bixler said.

In hearings that led to the proposed ruling, Pacific Bell's customer
service and marketing programs were praised by Carol A. Scott, a
professor of marketing at UCLA's Anderson School of Management.

"It is my opinion that Pacific Bell's policies and procedures related to
the selling of its customer service inquiries at its business office are
appropriate," Scott said in testimony submitted to the Commission.
"Further, these policies and procedures are being executed in such a way
as to result in a high level of customer satisfaction with service
received."

Specifically, Scott offered the following analysis about the company and
its sales practices:

"Pacific Bell has achieved a high level of customer satisfaction with
customer service provided through its business office.

"Pacific Bell has achieved a higher level of customer satisfaction than
almost all other local telephone companies.

"Pacific Bell customer service is rated highly along specific dimensions
of service that customers believe are important,

"Pacific Bell service representatives are respectful of customers,

"Pacific Bell management has taken appropriate steps to ensure that
providing quality service is the top priority for its sales
representatives."

        Pacific Bell Customer Service Representatives React

The proposed ruling also was criticized by Pacific Bell customer service
representatives who feel unfairly maligned by the CPUC staff
recommendation. Hundreds of employees have responded by sending letters
to the CPUC.

"I refuse to be told by anyone that what I do is dishonorable," said
Krista DiFede, a customer service representative from San Diego. "I am
proud of the service I provide to Pacific Bell and Pacific Bell's
customers, and I disagree wholeheartedly that we are engaging in any
underhanded practices."

Blase said Pacific Bell will continue providing quality service to its
10 million customers in California.

"We value our relationship with our customers, and would not do anything
to jeopardize that," he said. "We are hopeful that the commissioners
will agree with us, and reject the flawed logic offered by the proposed
ruling."


PADIATRIX MEDICAL: Fla. Judge Oks Motion to Dismiss Shareholder Lawsuit

Pediatrix Medical Group, Inc., (NYSE: PDX), announced on January 21 that
the U.S. District Court for the Southern District of Florida, has
dismissed the class action complaint filed against it and several of its
officers last year. The complaint had alleged federal securities law
violations in connection with the company's billing practices.

The court's opinion permits the plaintiffs to attempt to cure the
deficiencies that the court found in their pleadings by filing a further
amendment to their complaint by no later than February 3, 2000. If the
plaintiffs fail to do so the dismissal will become final, subject only
to any appeal the plaintiffs may take. (The Washington Post, January 24,
2000)


XEROX CORP: Kahn & Associates Files Securities Suit in CT
---------------------------------------------------------
A class action has been commenced in the United States District Court
for the District of Connecticut on behalf of purchasers of the publicly
traded securities of Xerox Corporation ("XRX") during the period January
25, 1999 to December 10, 1999 (the "Class Period").

The complaint charges that Xerox, its senior management and certain of
its directors violated the Securities Exchange Act of 1934 by issuing
false and misleading statements and omissions concerning Xerox's
financial condition. Throughout the Class Period, the complaint alleges
that, among other things, Xerox misled investors by claiming that
Xerox's business was being bolstered by: a new focus on digital
products; a focus on sales by industry rather than by geographic
locations; and an increase in demand for Xerox products and services.
The Complaint alleges that while they were making these false
statements, defendants knew or were reckless in not knowing that the
truth was far different.

Plaintiffs are represented by Kahn & Associates, Ltd., a Chicago-area
firm. Kahn & Associates has substantial expertise in prosecuting
investor class actions involving financial fraud and has been actively
engaged in commercial litigation in federal and state courts throughout
the United States for more than 20 years.

Contact plaintiff's counsel, David B. Kahn or Mark E. King of Kahn &
Associates at 800-536-0499 or e-mail at DBKLAW@FLASH.NET


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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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