CAR_Public/000127.MBX                C L A S S   A C T I O N   R E P O R T E R

               Thursday, January 27, 2000, Vol. 2, No. 19

                              Headlines

AMERICAN EXPRESS: Faces Charges of Gender Bias in NJ & MN; More to Come
COMMERCIALL JET: Miami Workfare Group Sues Training Company
CONNING CORP: Lawsuit May Complicate Metlife-Conning Deal
FEN-PHEN: Interneuron Files Suit in Middlesex V. AHP over Fraud Et. Al.
FIRE DEPT: No Progress at Hearing for CA Firemen’s Grievance over Bias

HOLOCAUST VICTIMS: Germany Presents Draft Bill on Labor Fund to Cabinet
HOLOCAUST VICTIMS: Jewish leaders’ Meeting Coincides with Conference
HOOTERS RESTAURANT: Junk Fax Ruling in Georgia May Have National Impact
LEGATO SYSTEMS: Law Firms File Securities Lawsuits in CA
LEGATO SYSTEMS: Milberg Weiss Says Shareholders Can Join Suit Online

LOS ANGELES: Contract Lawyers Allege Co. Is Sham for Substandard Rates
MICROSOFT CORP: Net Access Lawsuit Expected to be Filed in Chicago
MOBIL OIL: Lawyer Accuses of Misleading And Intimidating Pilots
MOBIL OIL: Warns Aviation Businesses Suit May Jeopardize Compensation
PUBLISHERS CLEARING: Activists Protest Lawyers' Fees In Sweepstakes

SKECHERS U.S.A.: Cauley, Steven Files Securities Lawsuit in CA
SOCIAL SECURITY: FLRA Denies Govt Employees Grievance over Bias
SOUTHWESTERN BELL: Settles Case on Collecting Taxes without Approval
STANFORD U: Learns Identities of Female Academics Charging Bias
SUNTERRA CORP: Wolf Haldenstein Files Securities Lawsuit in FL

TOBACCO LITIGATION: Medicaid Smokers Seek to Gain a Share of Settlement
UICI: Berger & Montague Files Securities Lawsuit in TX
VISA, MASTERCARD: Retailers Seek $8 Bil in Damages for High Cost
XEROX CORP: Wechsler Harwood Files Securities Lawsuit in CT

* A Knowing and Intelligent Waiver of the Right to Counsel
* AAHP Goals:  Patient Protection, Medicare, Privacy, Antitrust
* Mandatory Arbitration in Banks’ Fine-Print Notice Rules out Lawsuits

                            ********

AMERICAN EXPRESS: Faces Charges of Gender Bias in NJ & MN; More to Come
-----------------------------------------------------------------------
Two women in New Jersey have filed charges against American Express
Financial Advisors that raise the same allegations of sex discrimination
as charges filed by four women in Minnesota back in October 1999.

Lawyers representing the women have spoken with women from other states
as well, and believe that more charges in different states will be filed
soon. "These additional charges confirm that the pattern of
discrimination is the same from state to state," said plaintiffs'
attorney Bill O'Brien.

Like the women in Minnesota, these two women claim that male advisors
were given accounts and leads that were not given to female advisors.
The supervisor of one of the women, Liz Bradler, took her to lunch and
tried to persuade her to let him come to her apartment. When she
refused, he said "Don't you want any accounts?" Less than two weeks
later, the supervisor gave her 10 accounts but gave 200 accounts to a
lesser qualified male advisor. The District Manager of the other woman,
Eleni Kulinski, assigned each of her male colleagues 100 new leads, but
kept the 100 that were supposed to go to her. Only after he had tried to
call each of them himself did he turn 21 of the unsuccessful leads over
to her.

This same District Manager told Ms. Kulinski on her first day that, "You
will not make it in this business because you are a woman. Women would
rather stay home and have a man take care of them. The only people who
succeed in this business are white males."

"The experiences of these women are typical of how American Express
Financial Services management has viewed women as not being as capable
as men," said the women's attorney, Susan Stokes.

Like the women in Minnesota, Bradler and Kulinski allege that American
Express Financial Advisors' management used the "tap on the shoulder"
method of promoting lesser qualified males, and that management either
does not have criteria for making promotions or they do not follow their
own criteria. Both were denied promotions.

Bradler was subjected to constant sexual harassment by her supervisor.
When she tried to transfer out of his office to get away from his
harassment, he denied her request, saying, "We can't let you go. We'll
miss your beautiful body around here."

Both women complained to human resources about their discriminatory
treatment, but their complaints were ignored. Because of the
discriminatory treatment, and because American Express requires its
advisors to pay the company for services such as marketing and for
leads, Ms. Kulinski ended up owing the company money. The heat was shut
off in her house and she nearly lost her home.

"I was shocked to see the callousness with which American Express
Financial Advisors treats its female advisors," Stokes said. "I would
think that their management would have learned a lesson from the
lawsuits that were filed against Smith Barney and Merrill Lynch, but it
appears they have not."

The women are represented both by Sprenger & Lang, which also has
offices in Washington, D.C., and Miller-O'Brien-Bloom, an employment
litigation firm in Minneapolis. Sprenger & Lang specializes in class
action litigation and has successfully represented other classes of
women in gender discrimination cases, including the groundbreaking case
of Jenson v. Eveleth Mines, the first sexual harassment lawsuit ever
certified as a class action. Miller-O'Brien- Bloom is a leading
employment law firm specializing in discrimination and other wrongful
termination litigation.

Contact: Bill O'Brien of Miller-O'Brien-Bloom, 800-850-8335, or Susan
Stokes of Sprenger & Lang, 888-285-6222


COMMERCIALL JET: Miami Workfare Group Sues Training Company
-----------------------------------------------------------
The Miami-Dade/Monroe Wages Coalition, created as part of a state
mandate to get welfare recipients back to work, is suing one of five
companies it paid hundreds of thousands of dollars to provide on-the-job
training for 150 welfare recipients. The suit, filed Jan. 11 in
Miami-Dade Circuit Court, alleges the coalition paid Commercial Jet
Inc., an aircraft maintenance and training company in Miami, $ 232,500
to develop and supervise a 16-week, 320-hour training program. One year
after the contract was signed, Commercial Jet has failed to hold up its
end of the bargain, according to the suit. (Miami Daily Business Review,
January 21, 2000)


CONNING CORP: Lawsuit May Complicate Metlife-Conning Deal
---------------------------------------------------------
A shareholder lawsuit aims to throw a monkey wrench into Metlife's plan
to buy complete ownership of Conning Corp.

According to Conning, a lawsuit filed on behalf of shareholders in state
courts in New York charges that Metlife fails to offer a fair price for
Conning, and says the deal lacks adequate procedural protections for
shareholders. The suit also charges Metlife and Conning with
"self-dealing and breaches of fiduciary trust," a Conning press release
says. Conning said the charges are without merit. The identity of the
people bringing the suit remained unrevealed. Conning said that it
hadn't yet been served with a suit.

Conning, based in St. Louis, is the former investment management arm of
General American Life Insurance Co. Metropolitan Life Insurance Co.
bought General American earlier this month, and picked up a 61 percent
interest in Conning as part of the deal.

Metlife offered to buy the remaining publicly traded shares of Conning
for $ 10.50 a share. But the stock closed January 25 at $ 11.06, up 6
cents, and it's been trading above the offer price ever since it was
announced. Metlife's offer values Conning at about $ 146 million, or 11
times last year's profit.

Conning managed the funding agreement strategy that nearly brought
General American to its knees last August and forced it into the arms of
Metlife. General American defaulted on about $ 5 billion in funding
agreements after large money-market funds suddenly demanded their money
back. (St. Louis Post-Dispatch, January 26, 2000)


FEN-PHEN: Interneuron Files Suit in Middlesex V. AHP over Fraud Et. Al.
-----------------------------------------------------------------------
Interneuron Pharmaceuticals Inc., developer of the controversial diet
drug Redux that was pulled off the market in September 1997, on January
24 sued its marketing and distribution partner American Home Products
for fraud, misrepresentation, and breach of contract.

The lawsuit, filed in Middlesex Superior Court, spotlights the simmering
schism between the two companies that followed the highly publicized
removal and lawsuits surrounding Redux, the first diet drug to be
approved by the US Food and Drug Administration in a dozen years.
American Home Products also stopped production of Pondimin, or
fenfluramine, an older, related obesity drug, and was hit with a
nationwide class-action lawsuit by weight-loss patients. As a result,
Lexington-based Interneuron has laid off employees, lost its major
source of new revenues, and watched its stock tumble from an all-time
high of 42 after Redux gained FDA approval in 1996 to less than 2 last
fall.

Interneuron shares were affected by failed merger talks with Procter &
Gamble Co. in addition to the suit

Interneuron, which is seeking unspecified treble damages, has retained
attorney David Boies, who successfully represented the government in its
antitrust trial against Microsoft Corp. His law firm, Boies, Schiller &
Flexner LLP, went to court only after negotiations over Redux liability
broke down, said attorney Jonathan Schiller.

Earlier, a judge rejected a $70 million nationwide settlement of former
Redux users. AHP refused to pick up the tab for Interneuron's drug
liability, according a company official.

A spokesman for AHP said the company has acted properly in its dealings
with Interneuron.

In its suit, Interneuron claims AHP did not reveal for nearly five
months that it had information from the Mayo Clinic in Minneapolis that
a dozen obese patients taking its chemically related weight-reduction
drug called fenfluramine together with another obesity drug called
phentermine had shown signs of heart-valve problems. The combination,
called "fen-phen," was enormously popular, earning AHP significant
profits for fenfluramine, known as Pondimin, with similar expectations
for Redux. "AHP knew broad disclosure of this information would disrupt
brisk and highly profitable sales of Pondimin," the suit said.

Since Pondimin and Redux were chemically similar, medical and safety
officials at Interneuron, AHP, and its subsidiary Wyeth-Ayerst
Laboratories, agreed to meet monthly to discuss any health risks
involving the two drugs.

But when AHP was told by Mayo Clinic officials in February 1997 that a
dozen fen-phen users had developed potentially life-threatening
heart-valve problems, Interneuron claims its partner never passed along
the information and it learned about the health risks during a meeting
with the FDA that July.

Interneuron claims not having the Mayo Clinic results made it difficult
to assess the safety of its diet drug, according to the lawsuit. Both
Redux and Pondimin were pulled off the market two months later.

In its 45-page complaint, Interneuron said AHP's protracted delays after
receiving the Mayo Clinic data raised concerns about the safety of Redux
and in turn threatened its marketability. AHP senior vice president of
medical affairs, Dr. Marc Deitch, "lied" about the Mayo Clinic data to
Interneuron officials, the suit alleges, and other AHP officials stopped
sharing Pondimin side-effect reports.

"AHP and Wyeth recognized, however, that if they informed Interneuron of
the preliminary data from the Mayo Clinic - as AHP and Wyeth were
obligated to do - Interneuron might cause prompt, widespread disclosure
of that data through the initiation of clinical studies, proposals for
new product labeling, requests for FDA action, or disclosures to
shareholders and the financial markets," the complaint states.

AHP, based in Madison, N.J., issued a statement that the company acted
properly, while acknowledging its attorneys had not yet reviewed the
complaint. The company is offering former fen-phen users $3.75 billion
as part of a national settlement, although a judge still must determine
whether that settlement is fair. (The Boston Globe, January 25, 2000)


FIRE DEPT: No Progress at Hearing for CA Firemen’s Grievance over Bias
----------------------------------------------------------------------
The six black and Hispanic firefighters who claim their chances to
advance to lieutenant were torpedoed by the Orange County fire
department left a grievance hearing on January 24 without making any
headway.

The next step: a meeting with county officials to settle the issue. If
that fails, a federal arbitrator will be brought in. Just hours before
28 white firefighters were to be promoted to lieutenant on January 21,
County Chairman Mel Martinez, citing the grievance, canceled the
ceremony.

"Everyone deserves their day in court," said Mark Rhame, president of
the Orange County firefighters union, who attended the meeting. "But you
also have these 28 firefighters who did everything they were supposed to
do. The rug was pulled out from under their feet three hours before
their promotions."

The six who filed grievances claimed, among other things, that the
testing that determines firefighter promotions was too subjective, that
some answers had been leaked prior to testing last year and that some
questions were beyond the scope of study materials. But, said Rhame, the
six could not present any evidence supporting their claims at January
24's meeting.

While four of the six firefighters who filed complaints are members of
the firefighters union, none has asked for the union's help in the
matter, Rhame said. "We're here just as observers, to make sure
everyone's rights are protected."

Hiring and promotions at the fire department have long been at issue,
especially when it comes to race. The latest controversy arises over a
test given late last year to 133 firefighters seeking promotions.

In the end, 26 white men and two white women were nominated for the
promotion. Seventeen black and Hispanic firefighters were among those
who took the lieutenant's exam. Six of those - two Hispanic and four
black men - filed a grievance, essentially a formal complaint seeking an
official remedy.

Martinez has said that all promotions will remain on hold until the
grievance matter is resolved. Until then, however, the department's
promotion practices will likely remain under the microscope.

In the early 1990s, county commissioners and others lamented a lack of
diversity in the department's senior ranks and promised to diversify. A
few white firefighters filed reverse-discrimination suits in 1994 and
1996, claiming they were overlooked for promotions. The suits were
settled in 1998 after the county agreed to pay the firefighters and
their attorneys $2.5 million.

"It's all politics," Rhame said. "I thought we'd come a long way in the
last five years. People thought we had corrected our issues. But this is
a problem with administration."

"This is an awkward situation, we're trying to do our best," said
Commissioner Homer Hartage, who has long rallied for a more diverse
department. "We have to make sure we follow the law, and I've been
assured we are."

Salaries for firefighters and lieutenants vary considerably, based on
tenure. The average annual pay is about $35,000 for firefighters,
$40,000 for engineers and $45,000 for lieutenants.

Overall, about 70 percent of the department's 770 employees are white
men. Ten percent are black men and women. Seven percent are Hispanic men
and women. Women make up 16 percent of the department. (The Orlando
Sentinel, January 25, 2000)


HOLOCAUST VICTIMS: Germany Presents Draft Bill on Labor Fund to Cabinet
-----------------------------------------------------------------------
Germany's Cabinet approved a draft law on distributing payments to
survivors of Nazi-era forced and slave labor on January 25, but
officials said there was still room to change the bill to answer the
criticism of lawyers and victims' groups.

The proposed law has come under attack because earlier versions would
count previous compensation against payments victims could received from
the new, 10 billion mark (dlrs 5.2 billion) fund.

About half of the roughly 235,000 slave laborers covered under the fund
are Jews, many of whom have received earlier compensation under the
about dlrs 60 billion Germany has paid since World War II. Up to 2.3
million people, mostly non-Jews from Eastern Europe, stand to receive
payments from the new fund.

The other main issue in contention is a clause that limits compensation
to those deported to the area of Germany's borders in 1937 before Hitler
began his campaign to create a greater German Reich in Europe.

''We're totally open to changes,'' Finance Minister Hans Eichel said on
January 26 in Berlin. Government spokeswoman Charima Reinhardt said both
of the criticisms would be the main issues discussed by German envoy
Otto Lambsdorff in Washington starting January 31, where the next round
of the negotiations over the compensation fund are planned. ''With this
proposed bill, the government confirms its will, together with the
participating companies, to give a further indication of as soon as
possible undoing the wrongs inflicted on many people by Germans during
World War II,'' Reinhardt said.

The bill was not made public, pending possible changes, and will be
reviewed by the Cabinet again in March, she said.

German industry proposed the fund a year ago, under pressure of
class-action lawsuits in the United States. Under the agreement, the
U.S. government has said it will step in to intervene if new cases arise
and suggest to judges that claims be handled by the fund.

More and more companies have been joining the fund, a total of about 130
so far, but Lambsdorff criticized the slow pace of companies stepping up
to join and called on all firms to join. ''There is a total
responsibility of the German economy it's not about whether individual
firms used forced laborers or not,'' Lambsdorff told German radio.

There was also renewed criticism of the bill from a group representing
Roma, or Gypsies. The Central Council of German Sinti and Roma said it
had sent letters to the German Chancellery and the U.S. Embassy in
Berlin complaining that Roma victims would be shut out from compensation
under conditions in the proposed law.

Another criticism was raised by an adviser to the Russian delegation to
the talks, Gerhard Blum, a former German interior minister. He told
German radio a plan to set aside 10 percent of the money for a
foundation that will encourage educational and research projects would
mean payments to individual victims will be reduced. (AP Worldstream,
January 26, 2000)


HOLOCAUST VICTIMS: Jewish leaders’ Meeting Coincides with Conference
--------------------------------------------------------------------
Leaders of the World Jewish Congress said on January 25 that it was
important to settle the distribution of Holocaust restitution funds as
quickly as possible for aging survivors to benefit.

Bronfman criticized class-action lawyers, saying they were holding up
distribution of the funds while arguing over their share.

The distribution and allocation of dlrs 32 million obtained as part of a
settlement with Swiss banks was a primary topic on the agenda of a
two-day meeting of the World Jewish Congress, executive director Elan
Steinberg said.

Jewish groups and Switzerland's two largest commercial banks reached an
agreement in August 1998 to recover unclaimed Swiss bank accounts
deposited by Jews killed in the Holocaust.

Steinberg said the precedent-setting agreement has led to similar
settlements worth a total of more than dlrs 7 billion.

Delegates to the two-day meeting also discussed moral restitution and
the need for more Jewish education to promote tolerance, praising Sweden
for its Holocaust information campaign. ''The first thing obviously is
to pay those whose property it was,'' Bronfman said, adding that he
hoped any leftover money would be used for Jewish education. ''The next
step is to absorb the lesson of the Holocaust.''

The New York-based World Jewish Congress timed the meeting to coincide
with the International Forum on the Holocaust that starts on January 26
and is expected to draw more than 600 participants, including several
heads of state. (AP Worldstream, January 25, 2000)


HOOTERS RESTAURANT: Junk Fax Ruling in Georgia May Have National Impact
-----------------------------------------------------------------------
A pending case by the Georgia Court of Appeals concerning the state's
first class action on junk faxes will be closely watched elsewhere in
the country.

The court is the first state appellate court to give "thoughtful
consideration" to when citizens can sue in state courts over junk faxes,
says Frank M. Lowrey IV, an associate with Atlanta's Bondurant, Mixson &
Elmore who is defending Hooters restaurant, the target of a $12 million
class suit over its faxed lunch coupons.

The only other appellate decision thus far, from New York, gave the
matter just two sentences, Lowrey says.

Augusta sole practitioner Sam Nicholson has pursued the Hooters
restaurant chain for nearly five years after receiving an unsolicited
Hooters' lunch coupon at his law office in 1995.

Now, with a Richmond County judge's certification of a class last year,
Nicholson has company in his quest to stamp out uninvited facsimile
advertisements.

During oral arguments, Nicholson's lawyer, Harry D. Revell of Augusta's
Burnside, Wall, Daniel, Ellison & Revell, told the appeals court he was
speaking on behalf of 1,322 plaintiffs "who want to see their rights
under the Telephone Consumer Protection Act enforced, in an effort to
remedy telemarketing abuse around the country."

But defense counsel Lowrey argued that Georgia law doesn't recognize
such a cause of action.

Lowrey asked the panel to reverse rulings by two Augusta judges denying
the restaurant chain's motions to dismiss the suit and for summary
judgment, and granting Nicholson's motion for class certification.

The panel included Presiding Judge Gary B. Andrews and Judges John H.
Ruffin Jr. and John J. Ellington.

At issue in the suit is a 1991 federal law-the Telephone Consumers
Protection Act, 47 U.S.C. 227(b)(1)(C)-which prohibits advertisers from
soliciting by fax. The law imposes a $500 fine, subject to trebling for
willful and knowing violations.

While Hooters is known in part for its jiggle and bounce, the fax that
roused Nicholson's ire in 1995 wasn't suggestive or lewd, according to
the Augusta civil lawyer. It was just a coupon for lunch, one among
several coupons faxed by a company called Value-Fax of Augusta.

Value-Fax, owned by Bambi K. Clark, was hired by Hooters and other
businesses to distribute advertisements to Augusta-area fax machines.

Nicholson first sued Hooters and Value-Fax in Richmond County, but
Hooters removed the suit to federal court. In 1998, the 11th Circuit
U.S. Court of Appeals concluded that Congress intended to assign private
causes of action to state courts, not federal courts, and sent it back
to Richmond County. Nicholson v. Hooters of Augusta, Inc. 136 F.3d. 1287
(1998).

Lowrey told the appellate court that Hooters wasn't liable for several
reasons.

                    Hooters Claims Independence

First, he argued, Value-Fax was a low-tech ad agency that functioned as
an independent contractor. Hooters, he said, never even saw the fax
before it was distributed. "We had no more control over Value -Fax than
Macy's has over the Atlanta Journal-Constitution," Lowrey argued.

He also told the panel that the language of the federal statute
permitted private causes of action only if a state passed legislation
specifically authorizing that.

The protection act says a person may, "if otherwise permitted by the
laws or rules of court of a State," bring an action in a court of that
state. ‘Permitting' means affirmative recognition of the right to bring
a private suit, Lowrey argued. "The fact you can't bring suit in federal
court doesn't mean you can bring it in state court," he said.

Georgia opted out of granting its citizens the right to sue over junk
faxes, Lowrey said, because it passed a statute dealing only with live
telephone solicitations, not facsimile solicitations. The state left
regulation of fax advertisements to the Public Service Commission, not
to private citizens' seeking redress in court, he said.

                      Interstate v. Intrastate

He also contended that the fax distribution at issue was an intrastate
activity, and the protection act only deals with interstate faxing,
constituting an additional bar to Nicholson's claim.

The plaintiff, he said, had the burden to show that members of the class
didn't agree to receive the fax.

Revell, however, said developing case law around the country was on his
side. "Federal laws are enforceable laws in state courts," he told the
panel, unless expressly prohibited.

Unless Georgia specifically opted out of the protection act, Revell
argued, state citizens may sue under that law.

While a state may pass laws that are more stringent than the protection
act, "everybody in the U.S. is entitled to the minimum benefits of the
TCPA," he said. "Absent law to the contrary, consumers can file in state
courts."

He told the panel that Hooters' position would render the act
unenforceable by Georgia consumers. Federal court is closed to them,
given the 11th Circuit's 1998 ruling, and no specific Georgia law
authorizes them to sue over junk faxes, he argued. Hooters' argument
would mean, "an act of Congress is a nullity," he said.

Revell said the act does not restrict consumers' right to sue to faxes
sent from another state. The federal statute doesn't say interstate
faxes, he said, but any faxes.

Ellington wanted to know how the plaintiffs' claim of liability reached
Hooters.

Revell responded that the Federal Communications Commission's position
is that the advertiser, not the fax broadcaster, is not responsible for
unsolicited faxes. "You can't set up a shell corporation and say, 'You
do ads, I'm insulated,' " he said.

Revell also defended the case as a class action. "There are no
individual issues here," he told the judges. "There's not a shred of
evidence they got anybody's permission."

                       No 'Express Permission'

Clark may have called some recipients' to see if they wanted to receive
coupons, but not specifically Hooters' coupons, he said. "That cannot
rise to the level of express permission," he said.

"Is the publication of your fax number in a bar directory consent to
receive?" he asked the panel.

Revell, in an interview after the arguments, says such cases should be
brought as class actions because most consumers don't know how to file
suit on their own and the possible recovery-$500-makes it
cost-prohibitive to hire a lawyer. "A class action is the only way to
really slow them down," he says. (Fulton County Daily Report, January
26, 2000)


LEGATO SYSTEMS: Law Firms File Securities Lawsuits in CA
--------------------------------------------------------
Pomerantz Haudek Block Grossman & Gross LLP filed a class action suit in
the United States District Court for the Northern District of California
on behalf of all persons or entities who purchased the common stock of
Legato Systems, Inc. (Nasdaq:LGTO) during the period between October 20,
1999 and January 19, 2000, inclusive. Contact: Andrew G. Tolan, Esq. of
Pomerantz Haudek Block Grossman & Gross LLP, 888 476-6529
(1-888-4-POMLAW) or agtolan@pomlaw.com

The following law firms each filed a class action suit in the United
States District Court for the Northern District of California on behalf
of all persons and entities who purchased the common stock of Legato
Systems, Inc. ("Legato or the "Company") during the period October 21,
1999 through January 19, 2000:


* Berger & Montague, P.C.
  Contact: Sherrie R. Savett, Esq., Arthur Stock, Esq., Kimberly A.
  Walker, Investor Relations Manager of Berger & Montague, P.C. at 1622
  Locust Street Philadelphia, PA 19103; Telephone: 888-891-2289 or 215-
  875- 3000; Fax: 215-875-4604; Website: http://home.bm.netor e-mail
  at InvestorProtect@bm.net

* Lieff, Cabraser, Heimann & Bernstein, LLP
  Contact: James Finberg at jfinberg@lchb.com or Melanie Piech at
  mpiech@lchb.com or Robert Eisler at reisler@lchb.com of Lieff,
  Cabraser, Heimann & Bernstein, LLP; or call 800/541-7358. You may al
  also reach Joshua M. Lifshitz, Esq., or Peter D. Bull, Esq., of Bull
  & Lifshitz, at classlaw@aol.com or call 212/869-9449 (local) or
  888/893-1844 (out of state).

* Rabin & Peckel LLP
  Contact: Joseph V. McBride, Rabin & Peckel LLP, 275 Madison Avenue,
  New York, NY 10016, by telephone at (800) 497-8076 or (212) 682-1818,
  by facsimile at (212) 682-1892, by e-mail at email@rabinlaw.com or at
  the website at http://www.rabinlaw.com

* Savett Frutkin Podell & Ryan, P.C
  Contact: Robert P. Frutkin, Esquire, Barbara A. Podell, Esquire of
  SAVETT FRUTKIN PODELL & RYAN, P.C. at 325 Chestnut Street, Suite 700
  Philadelphia, PA 19106; Telephone: 800/993-3233 or E-mail:
  sfprpc@op.net

* Schubert & Reed LLP
  Contact: Robert C. Schubert, Esq. or Juden Justice Reed, Esq. of
  Schubert & Reed LLP, Two Embarcadero Center, Suite 1050, San
  Francisco, CA 94111; telephone 415-788-4220; fax at 415-788-0161, or
  e-mail at mail@schubert-reed.com

* Shapiro Haber & Urmy LLP
  Contact: Thomas Shapiro, Esq. or Lisa Palin, paralegal, of Shapiro
  Haber & Urmy LLP, 75 State Street, Boston, MA 02109, (800) 287-8119,
  fax at (617) 439- 0134, or e-mail at cases@shulaw.com

* Stull, Stull & Brody
  Contact: Marc L. Godino, Esq. of Stull, Stull & Brody by telephone
  888-388 4605 or info@secfraud.com via e-mail.

* Zwerling, Schachter & Zwerling, LLP
  Contact: Zwerling Schachter by telephone at 800-263-7337 (Ms. Jayne
  C. Nykolyn), via e-mail at zlaw96@ix.netcom.com or website at
  http://www.zsz.com

As consolidated from notices issued by the law firms, the complaint
charges Legato Systems, Inc. and certain of its officers and directors
with violation of Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934 and Rule 10b-5 promulgated thereunder by issuing a series of
materially false and misleading statements concerning the Company's
financial results, as a result of which the price of Legato common stock
was artificially inflated during the Class Period.

Specifically, after the market closed on January 19, 2000, Legato
shocked the investing public with its announcement that it had
improperly recorded revenue from three contracts in the third and fourth
quarters of 1999. At that time, the Company issued a press release
admitting that, as a result of these accounting improprieties, it was
restating its financial results for the third quarter of 1999 to reverse
approximately $5.8 million out of a total of $71.7 million in revenues
that had been reported previously and that its financial results for the
fourth quarter of 1999 had fallen short of expectations.

In response to the Company's announcement, on January 20, 2000, the
market price of Legato common stock, which had reached a high of $82.50
per share during the Class Period, plummeted $23-7/8 per share or 44.52%
to $29-3/4 per share, down from $53-5/8 at the close of trading on the
previous day. As detailed in the complaint, the defendants were
motivated to overstate revenues during the Class Period in order to meet
or exceed financial analysts' estimates of the Company's earnings and
revenues in the third and fourth quarters and for the fiscal year of
1999. Moreover, evidence that a number of corporate insiders sold a
substantial number of their shares of Legato common stock at
artificially inflated prices and reaped proceeds in excess of $14.8
million. In particular shortly after the announcement of the Company's
revenues for the third quarter of 1999, suggests that defendants were
motivated by personal gain to falsely inflate the price of the Company's
shares.


LEGATO SYSTEMS: Milberg Weiss Says Shareholders Can Join Suit Online
--------------------------------------------------------------------
Milberg Weiss today announced that purchasers of Legato Systems Inc.
("Legato")(Nasdaq:LGTO) common stock during the period between Oct. 21,
1999 and Jan. 19, 2000 (the "Class Period") can join the class action
commenced in the United States District Court for the Northern District
of California online at http://www.milberg.com/legato/.

Contact: Milberg Weiss Bershad Hynes & Lerach LLP William Lerach,
800/449-4900 wsl@mwbhl.com


LOS ANGELES: Contract Lawyers Say Co. Is Sham for Substandard Rates
-------------------------------------------------------------------
Employers trying to shave labor costs by using leased workers got a
nasty shock in 1992 when the U.S. Supreme Court recognized "common law
employees," that is, workers whose circumstances qualify them for the
benefits and salary paid "real" employees.

Now a suit brought last spring by municipal lawyers against Los Angeles
County -- ground zero for government downsizing and privatization during
the late 1970s and 1980s -- seeks to apply the common law concept to the
public sector.

"I believe I'm a county employee," says Robert Shiell, a Hastings
College of the Law graduate who in 1987 -- two years after being
admitted to the bar -- began representing the county's Department of
Children and Family Services as an independent contractor.

When the IRS raised questions in 1989 about the arrangement with Shiell
and others who were supplementing the work of the county counsel's
office, the county created a nonprofit agency called Auxiliary Legal
Services (ALS). Shiell and other lawyers, as well as their support
staff, weren't on the county's payroll, but rather on ALS's. ALS, in
turn, was financed by its contract with the county.

Attorneys representing Shiell and a proposed class of current and former
employees that could number as many as 500 say in their suit, Shiell v.
County of Los Angeles, BC208582, that ALS is a "sham" to get legal
representation illegally by paying substandard salaries and providing
fewer benefits to lawyers who worked side by side with deputy county
counsel.

"This is the most egregious shell I've ever seen," says David Stobaugh
of Seattle's five-lawyer Bendich, Stobaugh & Strong which does common
law employee cases exclusively.

The county vigorously defends the legality, if not the effectiveness, of
ALS, equating the nonprofit with the common government practice of
contracting out specialized work. In November 1998, an independent audit
for the county Board of Supervisors documented that a lawyer with five
years' experience could enter the county counsel's office for about
$71,000, while the corresponding ALS salary level was some $20,000 less.
But it also showed the cost-cutting plan was more expensive in the long
run because of the high ALS turnover rate.

The county counsel who came up with ALS, DeWitt Clinton, has retired.
His successor, Lloyd "Bill" Pellman, is engaged in a juggling act that
has him simultaneously contending that ALS is legal as he phases out ALS
by absorbing its lawyers and staff into the county department.

"We are appreciative of the work performed for us by ALS people, but
there is no way they could be county employees," Pellman says. "Our
relationship with them was and is contractual. County employees have
gone through the civil service system." And, lest anyone anticipate
quick settlement, he adds that the county has hired retired state
appellate court justice Elwood Lui, a partner in the Los Angeles office
of Jones, Day, Reavis & Pogue.

The county's demurrer turns on the civil service aspect, that is, that
the court cannot formally elevate the status of workers who haven't gone
through the civil service procedures without undermining the civil
service system and with it, the state constitution. In a phone
interview, Lui made a further point. "The equal protection argument is
specious because, within civil service, the county offers alternate
plans and benefits," he notes. "Superior court judges can choose between
pension plans." And, he adds, no one forced lawyers to go to work for
ALS. Asked if he has seen any case law recognizing common law employees
in the public sector, Lui replies "absolutely not."

The plaintiffs attorneys are more vague about the precedent for their
assertion that civil service procedures don't trump common law
employment. Rather, they note the success they have had at the trial
court level with a similar suit brought against Washington State's King
County on behalf of workers paid through staffing firms to work for the
county's former Metro agency.

In October 1999, King County Superior Court Judge Kathleen Learned ruled
the Washington workers were legally county employees -- notwithstanding
a civil service defense -- and a hearing is set for Jan. 21 in
Washington on allegedly wrongful terminations of the named plaintiffs.

Los Angeles County Superior Court Judge Paul Boland was set to hear Los
Angeles County's demurrer Jan. 18, but instead took the plaintiffs to
task for overlong briefs and asked for resubmissions.

The Shiell suit is paired with a second proposed class action, also
carried by the Bendich firm, together with their L.A. co-counsel at
Krakow & Kaplan, on behalf of up to 200 women who are past or present
ALS lawyers. The lead plaintiff is Danna Hall, who worked for ALS for
the past decade -- using the same letterhead and business cards as her
county counsel coworkers while purportedly making $30,000 a year less.

Hall v. Los Angeles County, BC208583, alleges violation of the federal
Equal Pay Act as well as sex discrimination barred by state and county
codes.

Because ALS has had more than two times as many women as men working for
it, and the proportion is almost exactly the opposite in the county
counsel's office, the lower salaries and benefits amount to gender
discrimination, the second suit argues.

Market forces offer a more benign explanation, Pellman replies. He notes
that the low turnover in his office has had the effect of freezing the
ratio of men to women lawyers from years past, while the more recent
hires at ALS reflect the increasing percentage of women lawyers in the
workplace.

Last June, the Bendich firm sued in U.S. district court in Los Angeles
on behalf of temporary workers against Atlantic Richfield, accusing the
L.A.- based oil company of misclassifying as many as 1,500 to avoid
paying health and pension benefits.

At the time, the publisher of the California Employment Advisor
newsletter, Larry J. Shapiro of Tiburon, predicted that common law
employment was "the next wave of the employment litigation explosion
because ... so many employers are sitting ducks."

The most famous of the Bendich firm's suits is a seven-year-long crusade
against Microsoft Corp.'s use of long-term temporary workers. A
unanimous panel of the Ninth Circuit U.S. Court of Appeals ruled last
May the software giant must extend to them the stock options available
to regular employees. On Jan. 10, the U.S. Supreme Court, in Vizcaino v.
Microsoft Corp., 98-71388, denied Microsoft's appeal. (The Recorder,
January 24, 2000)


MICROSOFT CORP: Net Access Lawsuit Expected to be Filed in Chicago
------------------------------------------------------------------
A lawsuit claiming Microsoft Corp. overloaded its Internet access
service by signing up hundreds of thousands of new customers without
properly upgrading the system will be filed, said a lawyer representing
a subscriber. The suit, which lawyer Mitchell Wexler said will be filed
in federal court in Chicago, will claim customers spent hours trying to
log on to the Microsoft Network Internet system only to get repeated
busy signals. The suit will seek class-action status and will claim
breach of contract and negligence, Wexler said. The lawsuit will ask the
company to upgrade its network.

Microsoft had advertised that customers who signed up for three years of
MSN Internet service would receive a $ 400 rebate for purchases of
merchandise at stores such as Office Depot Inc. and Best Buy Co.
Customers must "make many, many phone calls before they can get in,"
Wexler said. Microsoft "should have anticipated this. You're lucky if
you can get in at all."

Separately, Microsoft Chairman Bill Gates, the world's richest man, and
his wife Melinda donated $ 5 billion to their namesake foundation,
making it the world's biggest charity with about $ 21.8 billion. The
Bill and Melinda Gates Foundation has surpassed London's Wellcome Trust,
which was No. 1 with $ 21.4 billion in assets, according to the
Chronicle of Philanthropy. It surpassed the $ 13.1-billion Ford
Foundation as the largest U.S. charity when Gates donated $ 6 billion to
it in August, the newspaper about nonprofit groups said. (Los Angeles
Times, January 25, 2000)



MOBIL OIL: Lawyer Accuses of Misleading And Intimidating Pilots
---------------------------------------------------------------
Bernard Murphy, a partner from Maurice Blackburn Cashman, agreed with Mr
Gordon saying Mobil's about-face was offensive. Mr Murphy is
representing about 3000 pilots and firms in a class action filed in the
Federal Court. He said Mobil had promised the acting Prime Minister John
Anderson that it would not require customers to release their right to
take legal action, to be eligible for a compensation pay-out. "I find it
quite offensive from a company their size," he said. "These are little
people they've hurt, they've been unable to fly for 30 days ... it's
clearly going to short change them."

He said if Mobil was a good corporate citizen it would come to the
negotiating table. "We'll invite them to sit down with us to discuss the
compensation package," he said. "There's no need for this case to go to
court."

The case is due for a directions hearing in the Federal Court on March
1. (AAP Newsfeed, January 26, 2000)


MOBIL OIL: Warns Aviation Businesses Suit May Jeopardize Compensation
---------------------------------------------------------------------
Mobil warned aviation businesses involved in legal action over the
contaminated fuel crisis they may jeopardise their chances of
compensation. The warning came as the first of the 5,000 piston-engined
grounded aircraft took off, but not before operators and pilots
expressed their anger at the long delays in getting back in the air.

Only four fuel testing kits were distributed, but Mobil has now
chartered three jets to deliver 65 kits to 13 airports. Another 150 kits
will be distributed overnight.

Mobil has offered the aviation companies access to a $15 million
hardship fund and is now adding the final touches to a separate business
assistance package.

But Mobil's corporate affairs manager Alan Bailey said the financial
assistance could be thwarted by two separate class actions lodged
against the company. Mr Bailey said it was conceivable that the legal
action could freeze any payments from the business assistance package
designed to compensate for losses suffered by aviation firms.

Under class actions, all affected parties are included in the
proceedings unless they formally elect to opt out. "If that's the case
then we are going to be precluded from reimbursing any of our
customers," Mr Bailey said.

It appears the legal action has also frozen any question of liability in
Mobil's view. "I understand that if people are part of a class action
against us then the court as I understand it has to in fact review any
payments that are made to them because the court's responsibility is to
ensure that all people who are part of the class action are treated in
an even-handed manner. "So, it will certainly impose legal roadblocks in
the way of compensating people for their business losses."

The company would not put a price on the work, but the Aircraft
Operators and Pilots Association (AOPA) has put the cost of cleaning a
medium-size twin-engine plane at $15,000.

AOPA general manager Mike Hart said pilots around the nation were
furious at the slow speed of Mobil's distribution of fuel test kits.

Mr Bailey said the distribution was slowed by the need to procure kit
components from overseas, and that sheets of test paper had to be
upgraded to provide clearer results. (AAP Newsfeed, January 25, 2000)


PUBLISHERS CLEARING: Activists Protest Lawyers' Fees In Sweepstakes
-------------------------------------------------------------------
Consumer activists, including one dressed as a shark, protested in front
of the federal courthouse in East St. Louis on January 25 over the
prospect of lawyers getting $ 3 million in fees in a class-action suit
against the Publishers Clearing House sweepstakes.

While the protesters handed out free T-shirts that said "End Lawsuit
Abuse," a hearing was being held in the court of U.S. District Judge G.
Patrick Murphy on the fairness of the proposed settlement of the suit.

Joe Wiegand, of the Illinois chapter of the Citizens For A Sound
Economy, said "the suit is silly. It means people with important
lawsuits can't get in the courtroom. But it's making the trial lawyers
wealthy."

Wiegand's prop was a large phony check for $ 3 million made out to
"Greedy Lawyers" and signed by Joe and Jane Consumer.

Wiegand didn't identify the three lawyers who have put in for the $ 3
million fee, saying he was afraid they might sue him. The lawyers are
Steven A. Katz, his sister Judy L. Cates, and Douglas Sprong, who have
an office in Swansea. Katz and Cates have sued Post-Dispatch columnist
Bill McClellan over a column he wrote about the proposed settlement.

Katz defended the $ 3 million fee, which has not yet been approved. He
said the protesters "apparently think lawsuits are bad."

Katz said the suit has forced Publishers Clearing House to spend $ 30
million, with "$ 20 million going into the hands of consumers" who
bought magazines. The firm has spent several million dollars on notices
and other expenses, Katz said. "If we are awarded the $ 3 million fee,
it would be less than 10 percent of the benefit created," Katz said.

About 120,000 people were contacted with 27,000 claims filed. The range
of money they spent is from $ 40 to $ 40,000, with the average being $
775, Katz said.

On January 24, 16 states filed suits against Publishers Clearing House
out of fear that the suit's settlement might prevent them from filing
future suits for restitution.

Shannon Ramseth dressed as a shark to suggest some lawyers are like
sharks when filing suits. Several dozen T-shirts went like hot cakes
with courthouse employees snapping up most of them. (St. Louis
Post-Dispatch, January 26, 2000)


SKECHERS U.S.A.: Cauley, Steven Files Securities Lawsuit in CA
--------------------------------------------------------------
The Law Offices of Steven E. Cauley, P.A. filed a class class action
suit in the United States District Court for the Central District of
California on behalf of all purchasers of common stock of Skechers
U.S.A., Inc. (NYSE:SKX) issued in or traceable to Skechers' initial
public offering (the "IPO") on June 9, 1999, or thereafter on the open
market, prior to July 6, 1999.

The complaint charges Skechers and certain of its officers and directors
with violations of Sections 11, 12(a)(2) and 15 of the Securities Act of
1933. The action alleges that Skechers commenced the IPO pursuant to a
Registration Statement and Prospectus that failed to disclose material
facts concerning Skechers' then current business and operations and
artificially inflated the value of Skechers' common stock.

For additional details concerning this lawsuit, you may contact LAW
OFFICES OF STEVEN E. CAULEY, P.A., 2200 N. Rodney Parham Road Suite 218,
Cypress Plaza, Little Rock, AR 72212; by telephone (toll free)
888/551-9944; or e-mail at CauleyPA@aol.com


SOCIAL SECURITY: FLRA Denies Govt Employees Grievance over Bias
---------------------------------------------------------------
The FLRA upheld an arbitrator's decision that denied a grievance
alleging that the agency violated the agreement when it failed to
promote the grievants or provide them with the opportunities for
promotion. AFGE, Local 3615 and SSA, Office of Hearings and Appeals, 100
FLRR 1-1018 (FLRA 12/20/99).

Arbitrator Irving N. Tranen denied a grievance alleging that the Social
Security Administration violated the agreement when it failed to promote
the grievants and/or provide them with the opportunities for promotion.
The American Federation of Government Employees had filed a class action
grievance alleging that the grievants were excluded from a senior
attorney program due to discrimination based on race and handicap.

Tranen concluded that because the grievant class consisted "of a variety
of individuals most of whom are members of different protected
categories, but with no unifying characteristic common to all members,"
it did not constitute a sufficient class for establishing a prima facie
case. Tranen also found that the SSA clearly established
nondiscriminatory reasons for its actions. Also, Tranen determined that
the AFGE failed to demonstrate that membership in a protected class
affected their selection.

On appeal the Federal Labor Relations Authority decided that the award
was not deficient. First, the FLRA construed the AFGE's argument that
Tranen made inaccurate and misleading findings concerning the SSA's
reasons for its actions as an allegation that the award was based on
nonfacts. The FLRA noted that in this case Tranen found that the SSA
decided, for reasons of operational efficiency, the work at issue would
be conducted at the hearing offices, rather than the headquarters office
where the grievants worked. Tranen also found that a regulatory change
would have been required to assign the work to the grievants.

The AFGE disputed these factual determinations. However, these matters
were disputed before Tranen. As Tranen's factual findings resolved
matters disputed by the parties, the FLRA found that the award was not
based on nonfacts.

The AFGE next claimed that the award was contrary to Title VII
discrimination standards. The FLRA noted that Tranen found that the AFGE
had not established a prima facie case, and that the SSA had articulated
legitimate, nondiscriminatory reasons for its actions. Because of this,
the FLRA concluded the AFGE failed to show that the award was contrary
to law.

Finally, the AFGE contended that Tranen improperly failed to address the
SSA's contractual obligations. The FLRA construed these arguments as a
claim that Tranen exceeded his authority. The AFGE asserted that Tranen
was required to address the grievants' contractual EEO rights once a
prima facie case was established.

However, the contractual provisions cited by the AFGE refer to various
prohibitions on discrimination, and the AFGE failed to explain any way
in which the asserted contractual rights differ from statutory rights
regarding discrimination. Tranen's award discussed and applied the
discrimination principles argued by the AFGE.

The AFGE also contended that Tranen failed to address a separate
contractual requirement that employment actions be based on equity and
fairness, and not simply be nondiscriminatory. However, the AFGE did not
argue to Tranen that the agreement created such a separate requirement,
or that the SSA's conduct was not generally fair or equitable. (Federal
Human Resources Week, January 18, 2000)


SOUTHWESTERN BELL: Settles Case on Collecting Taxes without Approval
--------------------------------------------------------------------
Lawyers with Dallas' Lynn Stodghill Melsheimer & Tillotson settled a
class action suit with San Antonio's South-western Bell Telephone Co.
for $ 10 million Dec. 16.

Plaintiffs' lawyer Jeffrey Tillotson, a partner with Lynn Stodghill,
says the suit arose from Southwestern Bell's practice of collecting
taxes from its consumers without approval from the Public Utilities
Commission. The suit alleges the taxes were a pass-through to
municipalities that did not enrich Southwestern Bell. On behalf of
Southwestern Bell's customers, Lynn Stodghill sued SWB in July 1998 in
state district court in Brownsville.

Southwestern Bell disputes that it needed the PUC's approval.

Rather than being split among class members, the settlement will be paid
to the Texas Telecommunications Infra-structure Fund Board (TIFB), minus
attorneys' fees and costs. The settlement is scheduled for final
approval by 357th District Judge Rogelio Valdez on April 18.

TIFB was created by the Public Utility Regulatory Act of 1995 to help
develop the telecommunications infrastructure that connects public
entities such as schools, libraries and the public health care delivery
system.

"The amount of potential recovery for each class member was nominal - a
few cents to a few dollars," Tillotson says. Devoting the money to TIFB
is appropriate because it treats the settlement as public money devoted
to the public good, he says.

Robert Davis, a litigation partner in Dallas' Hughes & Luce, led the
negotiations for Southwestern Bell. Davis says he will oppose attorneys'
fees that exceed $ 2 million. Southwestern Bell is particularly
satisfied that the benefit of the payment will go to the state of Texas,
Davis says. Tillotson was assisted by Michael Cowen, a solo practitioner
in Browns-ville. Davis was assisted by Ruben Pena, of the Law Offices of
Ruben R. Pena in Harlingen, and Juan Hinojosa of McAllen. David Brown,
senior attorney for Southwestern Bell, also participated in the
settlement. (Texas Lawyer, January 10, 2000)


STANFORD U: Learns Identities of Female Academics Charging Bias
---------------------------------------------------------------
Stanford University appears to have won the right to learn the
identities of a group of female professors and researchers whose
allegations of discrimination are under federal investigation.

After nearly a year of resisting Stanford's attempts, including
rejecting the university's Freedom of Information Act request,
Department of Labor investigators have informed at least 20 of the women
that they are releasing their names to Stanford.

The decision, the women contend, violates a pledge of anonymity by the
government. Some fear retaliation by Stanford. "Many of us are no longer
there, and you would think (Stanford) could do nothing directly against
us, but there are other subtle ways in which they can influence who gets
research grants and positions in academic circles," said Dr. Colleen
Crangle, a former medical school senior researcher.

Tom Fenner, a Stanford attorney, said the university is taking "all
necessary, appropriate steps to make sure that no retaliation occurs,"
noting that such action is illegal under federal law.

He said the investigators' earlier refusal to turn over all information
in the complaints had put Stanford in an "impossible situation. . . .
Here we are as an employer with 10,000 employees" and "we're not being
told who the alleged victims are and we're not being told who the
alleged wrongdoers are."

The Labor Department investigation focuses on allegations of widespread
sex discrimination at Stanford in hiring and promotions of women and
alleged violations of affirmative action law.

More than a dozen women brought the original class-action complaint in
November 1998, but their numbers grew to 32, including a few minority
men, by the time the probe was announced in February.

In recent weeks, four women reached out-of-court settlements with
Stanford, and at least one withdrew from the complaint to keep her
identity from being released, according to sources close to the
investigation.

Labor Department spokeswoman Deanne Amaden said in San Francisco that it
is the agency's general policy to give federal contractors such as
Stanford -- which has $500 million in government contracts -- "a full
copy" of any complaint against them.

However, she declined to say what, if any, promises had been made to the
women or why the agency had now decided to release the names to
Stanford, nearly a year after the university had first asked for them.

She said it is also agency policy not to comment on a continuing probe
by the department's investigative arm, the Office of Federal Contract
Compliance Programs. The office is also conducting a separate audit of
Stanford's compliance record in affirmative action.

He said that a number of steps had been taken by Stanford to secure the
names and their detailed complaints, including filing a Freedom of
Information request, which was rejected. When the university appealed,
attorneys were told it could take up to two years to complete.

"We would like to be able to respond rapidly to each and every complaint
that is made," said Fenner. Fenner said his office had received
information in the mail from the Labor Department, but would not say if
it included the women's identities. "We're now evaluating it," he said.

Meanwhile, U.S. Sen. Barbara Boxer and Rep. Anna Eshoo, D-Palo Alto,
have inquired about the investigation at the request of the Stanford
Coalition for Gender and Race, whose members include some of those who
have alleged discrimination.

Boxer was assured in a recent letter from the Department of Labor's San
Francisco office that it expects to "reach a just and fair resolution of
all the legitimate issues at the earliest possible time."

A spokesman for Eshoo said her office is looking into some "potential
contradictions" on the issue of anonymity, but, he said, the inquiry has
not been completed.

The women are encouraged by a ruling in Crangle's own federal suit
against Stanford, which alleges that she lost her job because of
discrimination.

Crangle won a U.S. District Court ruling that compels Stanford to
produce the computer logs of e-mail conversations among medical school
personnel around the time of Crangle's departure in 1997, and to
cooperate in accessing them. "It's a significant decision," said her
attorney, Anne Weills of Oakland. "Stanford is so conservative when it
comes to providing documents." The case goes to trial in San Jose in
March. Chronicle news services contributed to this report. (The San
Francisco Chronicle, January 25, 2000)


SUNTERRA CORP: Wolf Haldenstein Files Securities Lawsuit in FL
--------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP filed a securities class
action lawsuit in the United States District Court for the Middle
District of Florida on behalf of investors who bought Sunterra Corp.
stock between October 6, 1998 and January 19, 2000

The lawsuit charges Sunterra and certain officers of the Company, with
violations of the securities laws and regulations of the United States.
The lawsuit alleges that defendants issued a series of false and
misleading statements during the Class Period concerning the Company's
receivables portfolio and internal controls. The complaint alleges that
defendants' false and misleading statements artificially inflated the
price of the Company's stock during the Class Period. On January 20,
2000, just prior to the opening of the market, defendants stunned the
investment community by announcing that Sunterra would have to take a
special charge of between $35 and $48 million related to delinquent
receivables on its balance sheet. Upon the release of this announcement
the Company's stock price sank to a close of $4.00 on January 20, 2000
from a close of $6.1875 on January 19, 2000

For more information regarding this securities lawsuit, please contact
Michael Miske, George Peters, Gregory Nespole, Esq., Fred Taylor
Isquith, Esq. and Shane T. Rowley, Esq. of Wolf Haldenstein Adler
Freeman & Herz LLP at 270 Madison Avenue, New York, New York 10016;
telephone: (800) 575- 0735; e-mail: classmember@whafh.com or website:
http://www.whafh.com


TOBACCO LITIGATION: Medicaid Smokers Seek to Gain a Share of Settlement
-----------------------------------------------------------------------
With 46 states beginning to receive payments from their $206 billion
settlement with the nation's leading cigarette makers, a legal fight is
emerging over whether some smokers are themselves entitled to any of the
money.

Lawyers in eight states are preparing to file coordinated class-action
lawsuits on January 26 maintaining that under federal law, any
settlement to the states above the amount they paid through Medicaid for
treatment of smoking-related diseases should go to Medicaid recipients
who suffered from those illnesses.

None of the 46 states that were parties to the settlement, reached in
1998, plan payments to smokers. And many have begun using the money less
for smoking-related programs like antitobacco education for youths than
for initiatives like tax cuts and construction of roads and bridges.

Similar lawsuits have already been brought recently in states including
California, Florida, Montana, Texas and Wisconsin. Those cases have so
far yielded conflicting results, with one court ruling in favor of the
state's position but another suggesting that the smokers might have
valid claims under federal Medicaid law. In any event, lawyers say these
initial, lower-court skirmishes are not particularly meaningful: the big
questions of law posed by the suits, they say, will be resolved by the
appellate courts.

"This is the latest chapter in the tobacco wars, and it is over the
forgotten class in those wars," said G. Kendrick Macdowell, a lawyer at
the Washington firm of Patton Boggs, which is coordinating the new round
of cases with lawyers from around the country. "These are cases about
the least fortunate and most vulnerable in our society who exhausted
their savings to become eligible for Medicaid, who assigned their claims
to recover expenses to the states and who are entitled to a portion of
recovery under federal law."

But state attorneys general around the nation and lawyers who worked for
the states in developing the settlement say the new plaintiffs will have
to clear high hurdles to prevail. States are generally protected from
most kinds of federal lawsuits for money damages by the 11th Amendment,
which confers sovereign immunity, a defense that the Supreme Court has
been steadily expanding. Moreover, the states have begun maintaining
that the tobacco settlement was not intended to reimburse them for their
Medicaid expenses but instead resolved claims of antitrust, consumer
fraud and racketeering violations by the companies.

"Good luck," said James E. Tierney, the attorney general of Maine from
1980 to 1990, who was a consultant to many state officials during the
tobacco settlement talks. "There's lots of evidence that the settlement
was not for Medicaid reimbursement. The attorneys general sued the
tobacco companies as lawbreakers: this was a law-enforcement action, not
a reimbursement settlement."

The settlement calls for the $206 billion to be paid to the states over
25 years. When it was reached, the states vowed to use much of the
proceeds for antismoking efforts, including programs to educate
teenagers about the hazards of cigarettes. But the National Conference
of State Legislatures says that only about 8 percent of the settlement's
first payments have been budgeted for antismoking campaigns. The rest is
going for general government expenses or to help finance tax cuts.

"The majority of the states have missed an historic opportunity for
using the proceeds of the settlement to reduce tobacco abuse," said
Matthew L. Myers, a lawyer with the Campaign for Tobacco-Free Kids, a
Washington advocacy group. "Of the 30 states which have so far dealt
with the tobacco money, 8 have provided enough new funding for effective
comprehensive tobacco prevention. Eleven other states have dedicated
funds for tobacco prevention, but significantly less than the amount
recommended by the Centers for Disease Control."

The suits to be filed will be in Georgia, North Carolina, Pennsylvania,
Rhode Island, South Carolina, Tennessee, Vermont and West Virginia. None
of the lawyers who are bringing the suits against the states were among
the group of plaintiffs' lawyers who helped the states win the
settlement with the tobacco companies.

Lawyers representing the classes of Medicaid recipients say they will
not know either the size of the potential damages or the number of
members of any given class until they begin the fact-finding phase of
the cases. But they say billions of dollars may ultimately be at stake
for millions of American smokers who were on Medicaid.

The federal Medicaid law on which the class-action suits are being hung
requires the states to pursue any third parties who are responsible for
injuries that require medical expenses. The proceeds of that pursuit are
supposed to go first to cover state expenses, second to cover federal
contributions to Medicaid and third to any individuals harmed by the
third parties. Led by Senator Kay Bailey Hutchison, Republican of Texas,
Congress adopted an appropriations bill last year that waived the
federal government's interest in any proceeds of the settlement.

Now many state officials are maintaining that although the early state
lawsuits against the tobacco companies sought Medicaid reimbursement,
most of the later ones did not, and that the final settlement resolved
only accusations of fraud, racketeering and antitrust violations and is
therefore not subject to the federal Medicaid reimbursement provisions.

Last September a federal court in Wisconsin ruled in favor of the state,
saying the suit against it was barred by the 11th Amendment, which
generally prohibits federal suits against a state by citizens of that
state or any other state for monetary damages. But the sovereign
immunity defense, while strong, is not ironclad, and the case has been
appealed. It is set to be heard later this year by the United States
Court of Appeals for the Seventh Circuit, in Chicago.

In California, meanwhile, lawyers have brought a similar suit in a state
court, partly in an effort to avoid having to cope with the sovereign
immunity defense. In that case, the court has issued a tentative ruling
suggesting that the plaintiffs have a valid claim. A more detailed
ruling by the state court is expected in the next few days; the losing
side is certain to appeal. (The New York Times, January 26, 2000)


UICI: Berger & Montague Files Securities Lawsuit in TX
------------------------------------------------------
Berger & Montague, P.C filed a class action lawsuit for violations of
the federal securities laws in the United States District Court for the
Northern District of Texas against UICI and two of its highest officers,
on behalf of all persons who purchased UICI common stock between May 5,
1999, and December 9, 1999, inclusive.

The Complaint charges that UICI and two of its officers violated
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The
Complaint alleges that defendants issued materially misleading financial
statements which overstated corporate earnings by recording inadequate
reserves for credit card losses at UICI's United CreditServ subsidiary.
The Complaint further alleges that one of the defendants utilized his
inside information regarding the artificial inflation of the Company's
stock price to sell significant amounts of his personal UICI stock
holdings.

For additional information concerning this lawsuit, please contact
Sherrie R. Savett, Esq., Arthur Stock, Esq., Susan Kutcher, Investor
Relations Manager of Berger & Montague, P.C., 1622 Locust Street
Philadelphia, PA 19103; telephone: 888/891-2289 or 215/875-3000; fax:
215/875-4604; Website: http://home.bm.netor via e-mail:
InvestorProtect@bm.net


VISA, MASTERCARD: Retailers Seek $8 Bil in Damages for High Cost
----------------------------------------------------------------
A group of retailers, led by Wal-Mart Stores Inc., is seeking $ 8.1
billion in damages from Visa and MasterCard in an antitrust suit that
accuses the big bank-card associations of using their market dominance
to force stores to accept their high-cost debit cards.

The case, which has been pending since 1996, received new impetus
recently when a federal judge in Brooklyn refused requests from Visa and
MasterCard for further postponement and scheduled a hearing next month
on whether to treat the case as a class action.

The judge also granted a Justice Department request for access to
evidence and other records obtained by the retailers for possible use in
a government antitrust suit that is pending in another federal court in
New York.

The private case, which includes many of the nation's largest retailers,
involves the "interchange fee" banks charge when stores accept a debit
transaction. When a customer uses an ATM card, the transaction is
activated by a personal identification number and processed
electronically, and typically costs about 8 cents.

However, if the customer uses a Visa Check Card or MasterCard's
equivalent--which is often the same piece of plastic as the ATM
card--the transaction is verified by the customer's signature and
processed off-line. In that case the fee is 1.6 percent of the
amount--64 cents for the typical debit transaction amount of $ 40, or $
1.60 for a $ 100 transaction.

The retailers would like to refuse the Visa and MasterCard debit cards,
but both associations have what they call an "honor-any-card" rule
requiring retailers to accept any proffered valid Visa or MasterCard.
Under this rule, if a retailer refuses a valid debit card, it could lose
the right to accept Visa and MasterCard credit cards.

"It's a tying case," said Lloyd Constantine, of Constantine & Partners,
the retailers' lead attorney. "Visa and MasterCard both say, 'If you
take our credit cards, you have to take our debit cards and you can't
refuse to take them.'

"The issue in a tying case is whether or not [the company involved] has
market dominance," he added, and "with a retailer the size of Wal-Mart,
if they are forced to take them, then where does a small retailer fall?"

Constantine said retailers treat the higher costs as part of their
overhead; those costs are paid by all customers, not just Visa and
MasterCard debit-card users.

Both Visa and MasterCard said the honor-all-cards rule ensures that
consumers have the choices they want, and they expressed confidence that
they will prevail if the case goes to trial.

Kelly Presta, a senior vice president at Visa, said Visa's rules don't
prevent a merchant from "prompting" a consumer to use a PIN so that the
transaction gets the lower fee. "You can incent for other payments, you
just can't refuse the card" if the customer wants to use it, he said.

"Visa will vigorously defend the honor-all-cards rule because it is the
cornerstone of what Visa stands for and is essential to the enormous
benefits Visa and its members deliver to merchants and consumers,"
Presta said.

Constantine said that if the case is certified as a class action, it
will probably include as many as 3.5 million to 4 million retailers
"with 6,000 banks on the other side."

"Basically it's the retail industry against the banking industry, and
that's good because it'll settle things once and for all," he said.

If the retailers prevail, the $ 8.1 billion value they put on their
actual damages, a figure first reported by the Wall Street Journal,
would be tripled to $ 24.3 billion under antitrust law.

Presta called the $ 8.1 billion figure "wildly irresponsible and
inaccurate," and "based on a number of assumptions that all assume the
worst case for Visa."

The Justice Department's case, filed in 1998, accuses big banks, which
often belong to both Visa and MasterCard and issue cards under both
names, of controlling both associations and acting to restrain
innovation and stifle competition. (The Washington Post, January 26,
2000)


XEROX CORP: Wechsler Harwood Files Securities Lawsuit in CT
-----------------------------------------------------------
Wechsler Harwood Halebian & Feffer LLP filed a securities class action
lawsuit on January 21, 2000 in the United States District Court for the
District of Connecticut on behalf of those persons and entities who
purchased the securities of Xerox Corporation between January 25, 1999
and December 10, 1999, inclusive.

The complaint charges Xerox and certain of its officers and directors
with violations of the Securities Exchange Act of 1934 Sections 10(b)
and 20(a), and Rule 10b-5 promulgated thereunder. The complaint alleges
that defendants failed to disclose to plaintiff and the class known
material adverse facts in regard to declining sales trends. Prior to the
disclosure of adverse facts described herein, certain insiders sold
hundreds of thousands of shares of Xerox common stock to the investing
public at artificially inflated prices. The inside sellers realized over
$51.7 million in proceeds from these sales.

For additional information with respect to this matter, please contact
WECHSLER HARWOOD HALEBIAN & FEFFER LLP at 488 Madison Avenue, New York,
New York 10022; Telephone 877-935-7400 (toll free) or 212-935-7400 John
Halebian, Esq. or via e-mail jhalebian@whhf.com


* A Knowing and Intelligent Waiver of the Right to Counsel
----------------------------------------------------------
Here's what every single justice of the Georgia Supreme Court called "a
knowing and intelligent waiver" of the right to counsel:

A man charged with a crime that could send him to jail for up to a year
appears in court alone, unable to afford a lawyer. A bailiff hands him a
form called "Waiver of Rights for Plea," and, when his case is called,
the prosecutor tells him the charges and asks how he pleads. No one has
yet told him he has a right to a lawyer, much less a free one because he
is poor. The right to court-appointed counsel is listed as one of the
waived rights on the form but it reads as if that right applies only for
trials. No one tells him, on paper or by spoken word, that he can get a
lawyer to help him decide how to plead. Nor does anyone explain that
getting a lawyer might be a good idea or why going it alone is not.

The defendant pleads guilty. The solicitor asks whether he's read the
waiver and understands it. The judge talks to him about many of the
rights he's giving up, questions him to make sure the facts fit the plea
and determines that the plea is knowing and voluntary. But never does he
tell him of the dangers of self-representation, though case law requires
it. The defendant still could change his plea, although no one tells him
of that right, either. He signs the waiver; the judge accepts his plea
and sentences him.

Sound like critical corners were cut? Not according to the state Supreme
Court. Ruling in a case from Americus three weeks ago, the justices
declared unanimously that convictions and sentences obtained this way
are "constitutionally valid." Parks v. McClung, No. S99A0712 (Sup. Ct.
Ga. Nov. 30, 1999).

How can it be that defendants, even in misdemeanor cases, have no right
to be told before they declare a plea that they can have a lawyer to
help them choose among the possible pleas?

                     Ruling '100 Percent Wrong'

The ruling "was just 100 percent wrong," says Robert E. Toone, a lawyer
with the Southern Center for Human Rights who brought the case. The
opinion, written by Justice Hugh P. Thompson, reaches its conclusion by
misstating undisputed law and misunderstanding undisputed facts, says
Toone.

Unless he persuades the court to reconsider, the case the Southern
Center filed to stop the common practice of shortcutting defendants'
rights in misdemeanor courts may help spread it further. "These problems
are going on all across Georgia," says Toone. Now the state's highest
court has given its blessing.

At least there's one place in Georgia that will not be conducting
arraignments that way, despite the high court's blessing: Sumter County.
This is ironic, because it was Sumter's state court practices that gave
rise to the suit in the first place.

But last year, Sumter changed its practices because, while officials
defended the suit that went to the Supreme Court, they also were signing
a consent agreement to resolve a different but related case Toone
brought.

The case the Supreme Court heard stemmed from state habeas corpus
petitions filed for two men who had pleaded guilty and were trying to
set aside their convictions and sentences.

The now-settled suit, on the other hand, was a class action filed in
federal court asking that state officials be enjoined from accepting
guilty pleas without fully informing the accused of their right to
counsel.

                            Waiver Form Tossed

To settle the federal case, officials agreed to inform misdemeanor
defendants-on paper and out loud-that they can have a lawyer before they
decide which way to plead. The Waiver of Rights form was tossed and
replaced by a neutral, more complete statement explaining the rights a
criminal defendant has in misdemeanor court.

The form specifically states, "You have the right to meet with a lawyer
before your arraignment."

Under the agreement, the judge also informs the accused of the value of
legal representation and dangers of going pro se. Parks, v. Fennessy,
No, 1:96-cv-182-3(WLS) (M.D. Ga. Sept. 30, 1998). "It didn't hurt
anything" to change the procedure in Sumter, says County Attorney George
R. Ellis Jr. of Americus. But he says it didn't help anything, either,
because nothing was wrong with the old system. "I think the difference
in what they're doing is in form and not in substance," he says.

Ellis insists it did not matter that defendants were asked to announce
their guilt first, because they could change their minds after hearing
their rights and before the judge accepted their pleas.

But surely it's more than mere form for defendants to know they can get
legal advice to help them decide which way to plead. And surely it's a
matter of some substance to tell them it can be hazardous to proceed pro
se.

Some of the risks of a defendant faces by going pro se at the plea stage
are listed in Toone's motion for reconsideration: "there is no attorney
to advise him of the applicable law, potential defenses, potential
punishments, or even the possibility of plea negotiations for reduced
charges or dismissal of some counts."

                         Substantial Change

And while there has not been a flood of calls for court-appointed
lawyers since Sumter changed its routine, at least the defendants know
they can get one if they want one.

Since the consent agreement with Sumter County in the federal case, says
Toone, "The court's doing a much better job of informing people of their
rights." And that's a substantial change.

Before the Southern Center sued, its monitors watched about 100
defendants arraigned in five days in 1996, none of whom were told of
their right to counsel before declaring a plea. Not surprisingly, none
asked for counsel.

But it would be wrong to assume they did not want legal advice. At an
arraignment I attended in 1996, Sumter State Court Judge Michael A.
Fennessy repeatedly asked a man charged with drunken driving which way
he wanted to plead, while the defendant kept asking about the
consequences of a guilty plea. "I can't tell you how to plead," the
judge said at one point.

No one told the defendant he had a right to ask a lawyer how to plead,
not until the judge discovered he'd already been scheduled for trial. At
that point, Fennessy gave him a form to fill out for court-appointed
counsel and entered a not guilty plea for him. (Daily Report, Sept. 23,
1996)

The two habeas corpus petitioners, Shelby L. Parks and Curtis W. Baker,
who also were the lead plaintiffs in the federal suit, likewise appeared
before Fennessy for arraignment without lawyers. Parks pleaded guilty to
several counts of deposit account fraud in 1996; Baker pleaded guilty in
1995 to DUI and driving with a suspended license. Each received short
jail sentences and 24 months on probation, which eventually was revoked
in both cases. Parks served six months; Baker, nine.

The waiver form that each received when they came to court mentions the
right to appointed counsel. But while it's clear that right applies to a
defendant who wants to go to trial, nowhere does the form say a lawyer
could be named at arraignment, before the plea is entered.

                         Form Favors Waiver

The form had a signature line for the defendant to make clear he or she
wants no lawyer. There was no place to show the defendant wants to
exercise the right to counsel. Although the county continues to maintain
that this form adequately explained a defendant's rights, it obviously
was written not to explain but to help waive them.

Of course, the judge did not rely completely on the paper to inform the
defendants. Fennessy testified that, while he did not recall Parks and
Baker specifically, he normally explained all of the rights-including
the right to counsel-before accepting guilty pleas.

Parks and Baker say they were not told they could have lawyers. Toone
has written, "Had Parks and Baker been informed of their right to
counsel, they would have exercised it," Toone said in a brief, citing
the testimony of the two men.

Even if they had been told they had the right to counsel, they were not
told why they might want to exercise that right. Fennessy acknowledged
in testimony that "there possibly could be" risks in a defendant going
pro se. Nonetheless, the judge acknowledged that he did not warn
defendants of those risks when advising them they have a right to a
lawyer.

                           Faretta Ruling

The U.S. Supreme Court said in 1975 that for defendants to waive their
right to counsel, the judge must ask whether they understand the dangers
involved. Faretta v. California, 422 US 806., 835 (1975). That ruling
came in a case involving a waiver of trial counsel, but the court has
made clear that the same principle applies at arraignments. Godinez v.
Moran, 509 U.S. 389 (1993). This, the county knew. Asked at a hearing
whether Faretta applies to arraignments, Sumter Solicitor Howard S.
McKelvey said, "It applies at all times." No one has argued to the
contrary in the case. No one, that is, other than the Georgia Supreme
Court. "Relying upon Faretta v. California," Thompson wrote,
"petitioners assert the trial court should have made them aware of the
dangers of proceeding pro se. We disagree."

                     Judicial Discretion Cited

The court said Faretta requires judges to make sure lay people
understand it's risky to proceed pro se at trial because they may lack
sufficient knowledge of courtroom procedure, but that such an inquiry is
"out of place at the guilty stage plea." That's an assertion the county
never made, County Attorney Ellis acknowledges. Instead, he cited case
law that gives the trial judge discretion as to how best to conduct a
Faretta inquiry given individual circumstances. But he never argued that
a Faretta inquiry was unnecessary.

And so, Toone's motion for reconsideration begins by calling the
decision "completely inconsistent with Godinez v. Moran," which had not
been previously cited because no one had challenged the applicability of
Faretta.

In Godinez, the U.S. Supreme Court said Faretta inquiries into whether
pro se defendants understand the risks of self-representation is
critical not just because of the intricacies of courtroom procedures,
but "to determine whether the defendant actually does understand the
significance and consequences of a particular decision." This includes
whether to plead guilty.

                       Facts 'Misapprehended'

Beyond misquoting the law, Toone asserts, the state's justices
"misapprehended the undisputed facts." The court stated that Shelby and
Parks declared their pleas only after signing the waiver. That's at odds
with McKelvey's testimony that he'd first ask for a plea and then ask
whether they had read the waiver form.

Likewise, Fennessy testified that defendants were first asked for their
pleas before he told them of their right to counsel, figuring they could
still change their plea after hearing their rights.

But there was no form distributed to inform defendants they could switch
their pleas; nor was there any testimony that the judge or the solicitor
routinely informed them of this right.

"This court cannot expect that lay persons, upon learning about the
right to counsel, will exercise another right that they do not even know
they have -the right to withdraw their pleas-in the very limited time
before their sentences are imposed," Toone wrote in his motion.

But Ellis counters that the forms and the judge's standard colloquy told
defendants everything they needed to know. "The majority also come to
court knowing they did something wrong and they want to get done with
it."

As for advising defendants that a lawyer might come up with a defense
the defendant would not recognize, or negotiate with the prosecutor, or
explain ramifications of a plea, Ellis maintains, "That goes without
saying." Thank goodness it's no longer going without saying in Sumter
County. We can only hope that the state Supreme Court will recognize it
should not go without saying elsewhere. (Fulton County Daily Report,
December 13, 1999)


* AAHP Goals: Patient Protection, Medicare, Privacy, Antitrust
--------------------------------------------------------------
Helping to shape legislation and regulations on patient protection,
Medicare, medical records confidentiality and provider antitrust are
among key goals for the American Assn. of Health Plans in 2000,
according to President Karen Ignagni.

Among the trade group's objectives in the 2000 congressional session:

Emphasize key new developments in patient protection since passage of
the House and Senate bills.

With the recent spate of class-action lawsuits and the Institute of
Medicine study of medical errors, Ignagni contended that the legislative
landscape has changed since Congress was last in session.

"The Institute of Medicine study indicates that the legislation missed
the mark," Ignagni said, referring to the "culture of blame" cited in
the study as a barrier to reform. She likened it to HMO liability
provisions in the House version of pending patient protection
legislation.

In addition, she argued that recent class-action law-suits are
preempting Congress' role. "You can't legislate through litigation," she
said.

In pointing to the Institute of Medicine report, Ignagni emphasized that
the association is not saying to Congress, "Let's take managed care off
the hot seat and look at someone else." Instead, it was simply trying to
"enlarge the discussion." But she said the association did not have its
own proposal for more appropriate legislation.

Encourage Congress to continue to shore up the Medicare+Choice program.
The association will try to focus attention on the "fairness gap"
between reimbursement under managed care vs. fee-for-service; encourage
further refinement to the Balanced Budget Act of 1997; and improve
prescription drug coverage under Medicare.

Ignagni also expressed hope that Congress would pass additional measures
aimed at restructuring the Balanced Budget Act, saying that when the
1999 refine ment legislation was introduced, a number of members of
Congress said they would consider further measures in 2000.

Ignagni said give-back funds made available through the 1999 refinement
act simply prevented Medicare+Choice programs from losing more ground,
rather than enabling benefit expansion, such as increased prescription
drug programs.

Issue comments on HHS' proposed rule governing medical records
confidentiality. The association is currently reviewing the proposed
rule and plans to submit comments in the next few weeks.

Among the organization's concerns are inconsistencies in the rule. For
example, health care organizations are required to transmit the minimum
amount of information necessary to complete a task. But it is unclear
how the entity should establish what the minimum amount is, particularly
since a partner may need full information to ensure the quality of
health services rendered to a patient. In addition, managed care
companies are held directly responsible for monitoring business
partners' uses of information. But the rule does not make clear how this
provision would work if both business partners are directly governed by
the rule to monitor each other.

The association hopes to get clarification on these issues and others
from HHS.

Ignagni also expressed concern about the Campbell bill (H.R. 1304)
pending before Congress, which would have "major implications throughout
the economy," she warned.

                   Patient Bill of Rights Atop Agenda

Already routinely discussed on the campaign trail, patient protection
legislation is expected to be at the top of Congress' to-do list in
2000. Congress reconvenes Jan. 24, with the President's State of the
Union address on Jan. 27.

House and Senate conferees have been meeting informally on proposed
patient protection legislation, said a House Ways and Means Committee
staffer. But more movement is expected once a formal meeting schedule is
announced after Congress returns. Call the association at (202)
778-3274. (Managed Care Week, January 10, 2000)


* Mandatory Arbitration in Banks’ Fine-Print Notice Rules out Lawsuits
----------------------------------------------------------------------
MBNA has instituted mandatory arbitration for customer disputes. New
customers have been subject to the rule since December. Starting Feb. 1,
existing customers will be covered, too, unless the bank got a letter
from them by Jan. 25, rejecting the process. Few customers probably read
MBNA's fine-print notice, even though it was headed "Important
Amendments to Your Credit Card Agreement." They accepted arbitration by
default.

MBNA isn't the only bank to require arbitration of customer disputes.
American Express imposed it on cardholders last June, without giving
them the choice of opting out. First USA, Discover and some others have
done the same.

Under compulsory arbitration, one cannot sue to right a wrong. Any
unresolved dispute has to go before a panel of arbitrators.

The big issue here isn't the individual lawsuit. A single customer
rarely sues a major institution, especially over a modest sum. But a
lawyer might bring a class-action lawsuit, on behalf of all customers
who were defrauded of, say, $ 100 each. That's what compulsory
arbitration aims to stop.

In theory, arbitration is a better way of settling individual disputes.
It's quicker, hence cheaper, than a full-blown lawsuit. In practice,
however, it all depends. If you have a very small claim, it's often
cheaper to go to small-claims court, says Ken McEldowney, head of
Consumer Action in San Francisco. But under compulsory arbitration, you
can't.

Arbitration does work well when a claim is too big for small-claims
court but isn't worth the price of getting a lawyer. But where there's
generic wrongdoing, a small sum owed to all customers or a violation of
consumer rights, arbitration gives no relief.

"Class actions are the classic consumer remedy," Genden says. They cost
consumers nothing, because lawyers take their fees out of the
settlement. There have been class-action abuses, where lawyers cleaned
up and consumers got little. But there also have been arbitration
abuses, where the company manipulated the process. The banks aren't
letting customers choose the best approach for their particular case.
It's arbitration or nothing.

Compulsory arbitration clauses are fairly new in banking, says San
Francisco attorney James Sturdevant. Bank of America tried to impose
them in California in 1992. The bank had just lost an expensive
class-action suit and didn't want to see another. Until then, imposing
arbitration on existing customers "had not been tried by any major
banking institution in the country," Sturdevant says.

Sturdevant sued the bank, arguing that arbitration couldn't be forced on
customers who hadn't previously agreed to it. After years of litigation,
California's Court of Appeals upheld that view. Last February, the
state's Supreme Court let the decision stand.

In April 1999, Delaware's legislature took up the cause of the credit
card banks. The state passed a law declaring that the many banks
domiciled there (including MBNA) could legally impose arbitration on
customers.

Potentially, this opens the door to imposing arbitration everywhere.
Banks can usually go by their home-state rules when doing business in
other states. "They've tried to get around the Bank of America
decision," Sturdevant says, "but the issue is going to be litigated."
"Arbitration is clearly a movement within the financial services
industry," says Steve Gallagher, senior vice president of the American
Arbitration Association. Brokerage firms have required it for several
years. Among banks, telephone companies and others, "it's now taking
off," he says. You might find it in any new consumer contract.

But Gallagher worries that companies may overreach, leading courts to
conclude that consumers aren't getting a fair shake. "Pretty much anyone
can provide arbitration," Gallagher says, and "that is of concern to us.
Arbitration can be fabulous, but all dispute resolution is not equal and
all is not fair and equitable." Most consumer disputes won't even go to
arbitration. They're too small to be worth it, or the company will
settle them in advance.

At MBNA, which has 40 million customers, customer representatives
settled all but 140 disputes in 1999, says Vice Chairman David Spartin.
Of those, two wound up in court. The rest were resolved without
arbitration.

But do customers even realize they can arbitrate? If they don't read
fine-print notices, probably not. (Sun-Sentinel (Fort Lauderdale, FL),
January 25, 2000)




                               *********








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


Class Action Reporter is a daily newsletter, co-published by Bankruptcy
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