CAR_Public/000323.MBX                 C L A S S   A C T I O N   R E P O R T E R

                 Thursday, March 23, 2000, Vol. 2, No. 58

                              Headlines

AUTODESK, INC: Milberg Weiss Files Securities Suit in California
CUMULUS MEDIA: Bernstein Liebhard Files Securities Suit in PA
D.C. VOTING: Officials Vow Appeal for Congressional Representation
DENVER BOARD: CO Ct Finds No Contract between Parents & Public Schools
DUPONT E: About 150 Cases of Alleged Crop Damage by Benlate)R) Pending

DUPONT E: Contests Penalty upon '94 EPA Complaint on Herbicides Labels
DUPONT E: Disputes with DOJ over Settlement for Oleum Release in KY
DUPONT E: Shareholders' Claims Related to Benlate(R) Pending in FL & HA
FLIR SYSTEMS: Milberg Weiss Extends Period in Securities Suit in OR
HASITNGS ENTERTAINMENT: Steven E. Cauley Files Securities Suit in TX

HASTINGS ENTERTAINMENT: Finkelstein & Krinsk Files Securities Suit
HOLOCAUST VICTIMS: Cash Pledges Falling Short, Says German Talks Chief
JOB DISCRIMINATION: EEOC Obtains $21.2M in Awards for Workers with HIV
KEYSPAN CORP: Must Take Out-of-Pocket Loss in $ 21.5M Bill Reduction
MICROSTRATEGY INC: Abbey, Gardy Files Securities Lawsuit in Virginia

MICROSTRATEGY INC: Announces Filing of Securities Lawsuits
MICROSTRATEGY INC: Berman, DeValerio Files Securities Suit in Virginia
NORTHPORT PUBLIC: MI Ct Finds No Discrimination in School Tax Exemption
NY, MCI: Alleged of Conspiring for Profits on Inmates' Collect Calls
ORANGE UNIFIED: Retired School Administrators Sue for Medical Coverage

SAFETY-KLEEN CORP: Keller Rohrback Files Securities Lawsuit
SAFETY-KLEEN CORP: Schubert & Reed Files Securities Lawsuit in SC
SEARS, ROEBUCK: Judge Dismisses Retirees' Claims over Life Insurance
SPANLINK COMMUNICATIONS: Announces Suit Re Proposed Going Private Deal
TOBACCO LIITGATION: Reaction and Anticipation Re Ruling and Regulation

TOBACCO LITIGATION: Cable News Network on Regulation
TOBACCO LITIGATION: Lorillard Faces about 825 Product Liability Cases
U HAUL: Employees' Claims for OT Pay Set for Trial in July in CA
U.S. INFORMATION: Govt. Agrees to Employment Sex Bias Settlement

                             *********

AUTODESK, INC: Milberg Weiss Files Securities Suit in California
----------------------------------------------------------------
Milberg Weiss (http://www.milberg.com/autodesk/)announced on March 21
that a class action has been commenced in the United States District
Court for the Northern District of California on behalf of purchasers of
Autodesk, Inc. (Nasdaq:ADSK) common stock during the period between
Sept. 14, 1998 and May 4, 1999 (the "Class Period"). The complaint
charges Autodesk and certain of its officers and directors and its
investment banker with violations of the Securities Exchange Act of
1934.

Autodesk creates and sells computer-aided-design software for use in the
mechanical design and engineering, architecture, mapping/geographic
information systems, civil engineering and education markets.

On August 20, 1998, Autodesk announced the Discreet Logic Inc.
("Discreet Logic") acquisition in which it would issue .525 shares of
Autodesk stock for each of the 31 million shares of Discreet Logic stock
outstanding, i.e., 16.3 million shares. Autodesk revealed that it would
also have to sell three million new shares of stock to the public at the
time of the Discreet Logic acquisition in order to use "pooling"
accounting. The complaint alleges that to push Autodesk stock higher,
Autodesk, its top officers and their investment banker/financial advisor
made very positive but false statements about strong continuing demand
for Autodesk's existing AutoCAD R14 product line, strong demand for all
its products in Europe, Autodesk's successful diversification of its
business due to the strong sales of its "vertical" products resulting in
lessened dependence on its AutoCAD product line and thus the elimination
of the AutoCAD "boom/bust" cycle, the successful development and testing
and accelerated commercial release of its new R15/AutoCAD 2000 product,
the beneficial impact of Autodesk VIP upgrade program, the lack of any
negative impact on Autodesk's business due to Y2K issues, plus the
limited dilutive impact of Autodesk's acquisition of Discreet Logic, all
of which would result in Autodesk achieving F00 (to end Jan. 31, 2000)
revenues of $1+ billion, earnings per share ("EPS") of$2.45-$2.55 and
20%-25% yearly EPS growth during F99-F01.

These representations artificially inflated the price of Autodesk stock
to a Class Period high of $49-7/16 in January 1999. This more than 100%
upsurge in Autodesk's stock price not only enabled Autodesk to
successfully complete the Discreet Logic acquisition in March 1999, but
to sell three million new Autodesk shares to the public at $41 per share
for over $120 million. But then on May 4, 1999, Autodesk revealed that
its F00 results were, in fact, going to be much worse than earlier
forecast due to poor sales of R15/AutoCAD 2000 and weak sales in Europe.
Autodesk's stock immediately collapsed, falling by almost 25% in one day
to $22-1/4 and later to as low as $ 19-3/4.

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


CUMULUS MEDIA: Bernstein Liebhard Files Securities Suit in PA
-------------------------------------------------------------
A securities class action lawsuit was commenced on behalf of purchasers
of the common stock of Cumulus Media, Inc. (Nasdaq: CMLS), between May
17, 1999 and March 16, 2000, inclusive, (the "Class Period"), in the
United States District Court for the Eastern District of Pennsylvania.

The complaint charges Cumulus and certain of its directors and executive
officers with violations of the Securities Exchange Act of 1934 and Rule
10b-5 promulgated thereunder. The complaint alleges that the defendants
issued materially false and misleading financial statements that
materially overstated the Company's revenue, earnings and income. As a
result, Cumulus's stock price was artificially inflated throughout the
Class Period. The truth was disclosed after the market closed on March
16, 2000 when Cumulus announced that it would restate its financial
results for the first three quarters of 1999. In response, Cumulus's
stock price plunged over 30% from its prior close of $ 16-15/16 to open
at $11 per share.

Contact: Mark Punzalan, Director of Shareholder Relations of Bernstein
Liebhard & Lifshitz, LLP, 800-217-1522, or 212-779-1414, or
CMLS@bernlieb.com


D.C. VOTING: Officials Vow Appeal for Congressional Representation
------------------------------------------------------------------
When a panel of three federal judges devoted nearly a year to mulling
two historic lawsuits urging congressional representation for D.C.
residents, many in the voteless city dared believe that they actually
had a shot at gaining rights other Americans take for granted, a report
on the Washington Post, March 21 says. March 20's ruling was
exceptionally bitter for those with the highest hopes, the report adds.

According to the Washington Post, the 2 to 1 ruling by the judges fit a
frustrating pattern for those who over the years have seen Congress, the
White House, the courts and the rest of the American people ignore
sporadic attempts to achieve statehood and other measures of local
autonomy.

The two suits relied on never-before-attempted appeals based on
equal-rights arguments. Supporters thought they might produce a historic
victory. "This is a heinous miscarriage of justice," said Adams, a
communications specialist from Burleith, standing outside the federal
courthouse with many fellow plaintiffs. "It has shaken my faith in the
American dream."

George LaRoche, lead attorney in one of the cases, blasted the judges
for "ignoring" his argument that D.C. residents receive unequal
treatment compared with other U.S. citizens not living in states who
still are represented in Congress -- people on military bases abroad,
for example.

Charles A. Miller, a lawyer from Covington & Burling who worked on the
second case, found some hope in defeat. "In the end, two of three do not
rule in our favor," he said. "But they all agree that the case raised
tough questions and very important issues."

Some city residents expressed dismay, others resignation. "It seems like
Congress makes decisions about everything no matter what we have to say,
even though we're the ones affected," said Tiron McKenzie, of Anacostia.
Others said they were only vaguely aware that the suits were pending,
though they had strong opinions about the issues. Linda Fibich, of
Forest Hills, said she knew there was a court case. "I wasn't sitting on
the edge of my seat [waiting for a decision]. But then, I'm looking at
housing in Maryland," she said.

Not everyone endorsed the aim of the lawsuits. "D.C. is unique and
should be treated that way," said Maureen Beckman, of Glover Park. "This
was designed to be the seat of government. There are special
circumstances."

At the seat of District government, One Judiciary Square, indignation
prevailed. Mayor Anthony A. Williams (D) vowed an appeal to the Supreme
Court. D.C. Council Chairman Linda W. Cropp (D) called the ruling round
one. Round two will be before the Supreme Court, she said. "We fell one
vote short, but we were very heartened by the dissenting judge's
argument."

The ruling, the Post says, evoked little surprise or disappointment on
Capitol Hill, where many opponents balk at adding voting D.C.
representatives and diluting their states' clout. The fight has partisan
overtones as well, with both parties presuming that District residents
would elect Democrats to Congress. "The District of Columbia was formed
so it would not have any voting representative in the Congress -- that's
how the founders saw it," said John Feehery, spokesman for House Speaker
J. Dennis Hastert (R-Ill.). (The Washington Post, March 21, 2000)


DENVER BOARD: CO Ct Finds No Contract between Parents & Public Schools
----------------------------------------------------------------------
In an unpublished decision, a Colorado Court of Appeals dismissed a
class action lawsuit filed by a parents' organization, finding that the
courts do not recognize a breach of contract claim in the public school
educational context. Denver Parents Ass'n, et al. v. Denver Bd. of
Educ., et al., No. 98CA1309 (Colo. Ct. App. 02/03/00)

An association, representing 3,400 residents of Denver, filed a class
action suit against the Denver Board of Education and the superintendent
in his official capacity. The association claimed that the Denver school
system had a contractual, statutory, and constitutional obligation to
provide their children with a quality education and that the public
school system breached its obligations. The court added, "as a matter of
law no contractual relationship exists between a public school district
and, its students, and their parents."

The association appealed. The appeals court acknowledged that in limited
circumstances a breach of contract claim can be sustained. However,
those claims are usually maintained in the context of private schools
and vocational schools in which specific educational services were
either paid for or promised for by the school.

In this class action case, the court stated that the plaintiffs did not
individually bargain with the school district for educational services.
Consequently, they cannot allege a breach of services for which they did
not bargain. (Your School and the Law, March 15, 2000)


DUPONT E: About 150 Cases of Alleged Crop Damage by Benlate)R) Pending
----------------------------------------------------------------------
In 1991, DuPont E I De Nemours & Co began receiving claims by growers
that use of Benlate(R) 50 DF fungicide had caused crop damage. Based on
the belief that Benlate(R) 50 DF would be found to be a contributor to
the claimed damage, DuPont began paying crop damage claims. In 1992,
after 18 months of extensive research, DuPont scientists concluded that
Benlate(R) 50 DF was not responsible for plant damage reports received
since March 1991. Concurrent with these research findings, DuPont
stopped paying claims. DuPont since has been served with several
hundred lawsuits most of which were disposed of by trial, dismissal or
settlement. As of mid-March 2000, approximately 150 of the cases are
pending. Most of these lawsuits were filed by growers who allege plant
damage from using Benlate(R) 50 DF although some include claims for
alleged damage to shrimping operations and a smaller number of cases
include claims for alleged personal injuries. Also, many of these cases
include general allegations of fraud and misconduct.


DUPONT E: Contests Penalty upon '94 EPA Complaint on Herbicides Labels
----------------------------------------------------------------------
On October 7, 1994, the Environmental Protection Agency (EPA) filed an
administrative complaint against DuPont proposing to assess $1.9 million
in civil penalties for distributing triazine herbicides with product
labels that the EPA alleges were not in compliance with its Worker
Protection Standards. The labels were submitted to the EPA for approval
in July 1993 and accepted by the EPA in November. However, in March of
1994, the EPA notified DuPont of alleged errors in the labels. DuPont
has cooperated with the EPA in making label changes and has issued
supplemental labeling for all products that had been distributed. An
administrative law judge has issued an initial determination affirming
the penalties. DuPont believes the proposed penalties are unwarranted
and is contesting the complaint and proposed civil penalty in an EPA
administrative proceeding.


DUPONT E: Disputes with DOJ over Settlement for Oleum Release in KY
-------------------------------------------------------------------
On September 2, 1997, the U.S. Department of Justice (DOJ) filed suit
against DuPont related to an August 1995 oleum release from DuPont's
plant in Wurtland, Kentucky. DuPont previously paid a $125,000 fine and
agreed to undertake supplemental environmental projects, related to the
oleum release, valued at $460,000. In its complaint, the DOJ alleges
violations under Section 112(r) of the Clean Air Act, Section 103(a) of
the Comprehensive Environmental Response, Compensation and Liability Act
(CERCLA) and Section 304(a)(1) of the Emergency Planning and Community
Right-to-Know Act. DOJ offered to settle this action for $2.7 million.
DuPont denies these alleged violations, believes that DOJ's settlement
offer is inappropriate and excessive and plans to contest this action by
DOJ.

By letter dated July 13, 1999, the U.S. Department of Justice (DOJ)
provided "formal notice" to DuPont that, due to the May 1997 HF release,
DOJ intended to bring a "federal court action" against DuPont under the
Clean Air Act (CAA) Section 112(r) -- General Duty Clause. On May 19,
1997, approximately 11,500 pounds of a hydrogen fluoride (HF)/tar
mixture was released from DuPont's Louisville, Kentucky, fluoroproducts
facility. This release lasted about 40 minutes. There were no on site
injuries, and only one off-site person reported any exposure. No toxic
tort suits were filed as a result of this release. DuPont's incident
investigation concluded that an inadequate valve stem design was a key
factor contributing to the release (the valve stem twisted and the valve
indicted it was in a closed position, when it was actually open).
DuPont's process isolation procedures were also reviewed and modified as
a result of this incident. DOJ proposed a settlement prior to filing its
action for $1.7 million. DuPont sought and received a meeting with EPA
and DOJ in September 1999. Settlement discussions are ongoing. DuPont
will contest the proposed $1.7 million fine as excessive and
unreasonable because there was no environmental harm or human health
impacts associated with the May 1997 incident.


DUPONT E: Shareholders' Claims Related to Benlate(R) Pending in FL & HA
-----------------------------------------------------------------------
In addition, a securities fraud class action was filed in September 1995
by a shareholder in federal district court in Florida against the
company and the then-Chairman. This action is still pending. The
plaintiff in this case alleges that DuPont made false and misleading
statements and omissions about Benlate(R) 50 DF, with the alleged effect
of inflating the price of DuPont's stock between June 19, 1993, and
January 27, 1995. The district court has certified the case as a class
action. Discovery is proceeding.

Also pending is a shareholder derivative action filed in Georgia federal
district court which alleges that DuPont's Board of Directors breached
various duties in connection with the Benlate(R) 50 DF litigation. A
motion to dismiss the complaint was filed. Certain plaintiffs who have
previously settled with the company have filed cases alleging fraud and
other misconduct relating to the litigation and settlement of Benlate(R)
50 DF claims. Approximately 40 such cases are pending. These cases are
in various stages of proceedings in trial and appellate courts in
Florida and Hawaii. DuPont continues to believe that Benlate(R) 50 DF
did not cause the damages alleged in these cases and denies the
allegations of fraud and misconduct. DuPont intends to defend itself in
ongoing matters and in any additional cases that may be filed or
reopened. Dupont admits that the ultimate liabilities from Benlate(R) 50
DF lawsuits may be significant to the company's results of operations,
particularly in the Crop Protection business, in the period recognized,
but tells investors that management does not anticipate that they will
have a material adverse effect on the company's consolidated financial
position or liquidity.


FLIR SYSTEMS: Milberg Weiss Extends Period in Securities Suit in OR
-------------------------------------------------------------------
Milberg Weiss (http://www.milberg.com/flir/)announced that a class
action has been commenced in the United States District Court for the
District of Oregon on behalf of purchasers of FLIR Systems, Inc.
("FLIR") (NASDAQ:FLIR) common stock during the period between April 22,
1999 and March 3, 2000 (the "Class Period").

The complaint charges FLIR and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The complaint
alleges that FLIR announced false financial results during the Class
Period, causing its stock price to increase to as high as$18-5/8 in
February 2000. Then on March 6, 2000, FLIR admitted that its fourth
quarter 1999 results would be much lower than previously forecast due to
"accounting errors," simultaneously announcing the immediate resignation
of the Company's Chief Financial Officer. On these shocking disclosures,
FLIR's stock price declined to as low as$9 per share from $17-1/8 in its
most recent trading session.

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


HASITNGS ENTERTAINMENT: Steven E. Cauley Files Securities Suit in TX
--------------------------------------------------------------------
The Law Offices of Steven E. Cauley, P.A. announced on March 20 that a
class action lawsuit has been filed in the United States District Court
for the Northern District of Texas on behalf of purchasers of Hastings
Entertainment, Inc. (Nasdaq: HAST) publicly traded securities during the
period between June 12, 1998 and March 7, 2000 inclusive, (the "Class
Period.")

The complaint charges Hastings and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The complaint
alleges that during the Class Period, Hastings reported record results,
and up until the end of the Class Period, the defendants maintained that
the Company's growth would continue through the third quarter 1999 and
beyond. While defendants were publicly reporting profits of more than
$12 million during the Class Period, they used Hastings common stock to
keep the fiction of its growth and profitability alive by raising almost
$40 million in an initial public offering ("IPO").

During the Class Period, the complaint alleges that the Individual
Defendants engaged in the scheme to conceal Hastings' badly flagging
growth to prevent the decline in the price of Hastings stock in order to
(i) raise almost $40 million in an IPO to fund Hastings' operations;
(ii) reap $4.6 million in insider trading proceeds for the benefit of
the Individual Defendants and entities they control; and (iii) expand
Hastings' working credit facility by $30 million in order to fund its
expansion. According to the complaint, by March 2000, the defendants
were facing pressure knowing they would have to announce that Hastings
had improperly understated cost of its revenue throughout 1996, 1997,
1998 and 1999, and sought to continue to do so in its to-be-released
fourth quarter results, as Hastings was in its pre-audit stages and
would be forced to come clean once accounting improprieties were
revealed. On March 7, 2000, Hastings revealed that it would restate all
prior periods of the Company's public existence and that it would fall
desperately short of meeting its forecasted earnings for the fourth
quarter 1999, according to the complaint.

Contact: Law Offices Of Steven E. Cauley, P.A., 11311 Arcade Drive,
Suite 201, Little Rock, AR 72212, E-mail: CauleyPA@aol.com
1-888-551-9944 - toll free


HASTINGS ENTERTAINMENT: Finkelstein & Krinsk Files Securities Suit
------------------------------------------------------------------
Hastings Entertainment, Inc. (NASDAQ:HAST) is accused in a class action
lawsuit filed by Finkelstein & Krinsk of violating the federal
securities laws by misrepresenting the Company's true business and
financial condition in order to artificially inflate the price of the
Company's stock. According to the Complaint, the Company and its
controlling insiders issued a series of false and misleading statements
to the market regarding, amongst other things, the Company's publicly
reported profits of more than $12 million during the Class Period, and
accounting improprieties understating costs throughout 1996, 1997, 1998
and 1999. The Class Action alleges that defendants' statements were
false or omitted to state material adverse facts and caused Hastings
stock to trade at artificially inflated levels during the Class Period
of June 12, 1998, through March 7, 2000, and allowed certain Hastings
insiders to reap approximately $4.6 million in insider trading proceeds.

Contact: Finkelstein & Krinsk, San Diego Jeffrey R. Krisnk, 619/238-1333
or 877/493-5366


HOLOCAUST VICTIMS: Cash Pledges Falling Short, Says German Talks Chief
----------------------------------------------------------------------
Manfred Gentz, the co-ordinator of efforts by German business to
compensate Nazi-era forced and slave labourers, admitted on March 21
companies had so far pledged less than half the DM5bn (Pounds 1.6bn)
promised last December. Speaking on the eve of a two-day round of talks
between German business, the Berlin government and victims'
representatives, he said differences over insurance claims were now the
main factor impeding a settlement.

Agreement on the highly complex insurance issues was essential to
persuade Germany's powerful insurance sector to join in the financial
settlement, he said. While optimistic on the chances of raising the
DM5bn - half the DM10bn settlement broadly agreed with victims'
representatives last December - he warned disagreements over insurance
could still break the deal.

The German government is providing the other DM5bn. Mr Gentz, finance
director of DaimlerChrysler, said the parties also still had to be
resolve precise allocations of money between the settlement's four main
components. These comprise about DM8bn to compensate forced and slave
labourers; DM1bn for non-labour issues such as property; some DM800m for
a fund for humanitarian projects; and a allocation for administrative
costs, including fees for the US class action lawyers representing some
victims.

He said negotiations were in certain cases additionally complicated by
the need to agree allocations between sub-divisions of the main
categories, exacerbating divisions between many participants.

However, Mr Gentz said the German side was confident the differences
could be resolved, allowing a settlement to be reached by the next round
of talks. The meetings, which started last year, made a breakthrough in
December when the German government and business significantly raised
their previous compensation offers.

But the deal could still collapse because of the highly complex
insurance issues. Simply stated, these centre on settling any remaining
legal or moral claims on German insurers within the framework of the
foundation set up by German business last year.

German insurers are also facing potential claims under separate
talksinvolving a number of Europe's leading insurance groups. Mr Gentz
said he had recently received clear indications the German insurers
would be exempt from participation in broader talks on insurance assets
if they formed part of the German foundation's settlement. German
insurers have argued they have already met all obligations regarding
policies written in Nazi-era Germany under a compensation deal agreed
after the war. However, differences remain over policies written by
eastern Europe subsidiaries.

There is also a dispute over whether the German insurers should be
liable retroactively for pre-war and wartime policies written by other
companies, which have since been acquired by the Germans. German
insurers have argued any remaining justifiable claims are likely to be
relatively small, and well below an aggregate DM100m, meaning they
should be seen as part of the DM10bn settlement. However, Jewish
representatives have argued the liabilities are actually far larger, and
should therefore be treated separately. (Financial Times (London), March
22, 2000


JOB DISCRIMINATION: EEOC Obtains $21.2M in Awards for Workers with HIV
----------------------------------------------------------------------
According to AIDS Policy and Law, March 17, 2000, since the Americans
with Disabilities Act took effect in July 1992, employers have paid 21.2
million to settle HIV discrimination charges through the EEOC, rather
than defend themselves in court. The figures do not take into account
settlements reached after litigation was filed or verdicts arising from
trials - just those reached through EEOC-sponsored conciliation between
employers and aggrieved employees.

A total of 2,151 people have benefited from this conciliation process.
Monetary relief amounts to 9,863 per claimant - a relatively small sum
in comparison with other impairments such as cancer, diabetes and
anxiety disorders. The average award for all types of impairments was
13,407.

Usually, the number of HIV-positive employees benefiting from the
pre-litigation settlements was less than 210 per year. In 1997, however,
the tally was 1,678. Likewise, the total amount of benefits that year
was off the usual pattern. In each of the other full fiscal years, the
dollar value of benefits obtained exceeded 1 million. In 1997, it was
just 925,000. The calculations change dramatically if the exceptional
year of 1997 is excluded. They show that employers had to pay an average
of 42,895 to settle each case of HIV-related discrimination during the
conciliation process. Among the 44 impairments listed in the EEOC
report, HIV ranks third, trailing only back problems and a catch-all
category of "other" disabilities. The probable explanation is that there
was a major class-action settlement that year that benefited a large
number of people, but without the kind of monetary awards that
customarily accompany the settlement of an HIV discrimination charge,
spokesman David Grinberg said. (AIDS Policy and Law, March 17, 2000)


KEYSPAN CORP: Must Take Out-of-Pocket Loss in $ 21.5M Bill Reduction
--------------------------------------------------------------------
The successors to the Long Island Lighting Co. must take an
out-of-pocket loss by lowering electric rates to pay to customers a
shortfall of $ 21.5 million - plus interest - under a 1989 class action
settlement, Senior District Judge Jack B. Weinstein ruled. Judge
Weinstein said that the utility could not take into account tax savings
realized by ratepayers as part of the $ 390 million rate reduction
promised to customers. The ruling comes just weeks before LILCO's
successors were to finally put the $ 390 million rate reduction behind
them.

In his decision in County of Suffolk v. Long Island Lighting Co., CV
87-0646, Judge Weinstein said that even though the class plaintiffs
received bills that were reduced by $ 390 million, not all of that
reduction came from lower rates collected by the utility.

The settlement, which has been reported in the CAR, resolved a class
action in which customers charged the utility with racketeering and
false claims in securing approval of rate hikes from the New York State
Public Service Commission. The false claims allegedly related to costs
of operating LILCO's Shoreham nuclear power plant.

The utility and its corporate successors, MarketSpan and KeySpan Corp.,
made rate reductions beginning in June 1990 and basic rates were lowered
beginning in November 1990. But $ 21.5 million of the reduction was
attributable to tax savings and did not come out of the utility's
pocket.

After a 1998 merger MarketSpan and KeySpan took over functions from
LILCO, inheriting LILCO's obligations, including the settlement.

The successors are corporate entities formed from the merger of LILCO
with Brooklyn Union Gas Co. KeySpan Energy is the current provider of
energy for the Long Island electric system, which is managed by the Long
Island Power Authority.

LILCO argued that it was obliged under the settlement to deliver to
customers bills with charges $ 390 million below a normal rate. Whether
that savings came from less money coming into the utility's coffers or
whether it was the result of tax reductions was of no moment, the
defendant argued.

                             Rate Reduction

But Judge Weinstein disagreed, pointing to language in the settlement
stipulation reading that "LILCO shall pay" to class members "a total of
$ 390 million in the form of rate reductions over a period of 10 years."

"By the express terms of the Stipulation, the $ 390 million was the
amount LILCO agreed to 'pay,'" Judge Weinstein wrote. "In fact, the
Stipulation uses 'rate reduction' and 'revenue reduction'
interchangeably, further suggesting that LILCO was to shoulder the $ 390
million obligation from its revenues."

The court rejected defendants' argument that the Public Service
Commission, when it passes on rate reductions, takes into account
reductions in tax surcharges to customers as a result of the base rate
reduction.

Judge Weinstein said that state regulators' understanding of the term
"rate reduction" was not the natural meaning of the term as contained in
the settlement stipulation. "Applying the PSC's specialized
understanding of 'rate reductions' would effectively undermine LILCO's
obligation to bear the cost of the reduced rates and therefore is not
the natural meaning of the phrase 'rate reductions' as used throughout
the stipulation." No part of the stipulation, the court said, included
any consideration that reduced tax surcharges would count toward LILCO's
obligation.

The class members were represented by Judith P. Vladeck, of Vladeck,
Waldman, Elias & Engelhard in Manhattan. Michael Lesch, of LeBoeuf,
Lamb, Greene & MacRae in Manhattan, was the attorney for one of LILCO's
successor firm, MarketSpan Corp. Cynthia R. Clark, counsel for KeySpan
Corp., also appeared for a successor entity. Assistant U.S. Attorney
Igou M. Allbray of the Eastern District U.S. Attorney's Office appeared
for the federal government. (New York Law Journal, March 10, 2000)


MICROSTRATEGY INC: Abbey, Gardy Files Securities Lawsuit in Virginia
--------------------------------------------------------------------
A class action lawsuit was filed on March 20 in the United States
District Court for the Eastern District of Virginia on behalf of
purchasers of MicroStrategy Incorporated (Nasdaq: MSTR) stock between
June 11, 1998 and March 20, 2000.

The complaint charges defendants with violations of Sections 10(b) and
20(a) of the Securities Exchange Act of 1934, and SEC Rule 10b-5
thereunder. Defendants include MicroStrategy, Michael J. Saylor
(President and CEO), Mark S. Lynch (CFO and VP Finance) and Sanju K.
Bansal (COO and EVP). Among other things, plaintiff claims that
defendants issued materially false and misleading statements regarding
the company's operating results and financial performance.

Contact: Mark C. Gardy, Esq., James S. Notis, Esq., Abbey, Gardy &
Squitieri, LLP, 212 East 39th Street, New York, New York 10016,
Telephone: 800-889-3701 or 212-889-3700, Fax: 212-684-5191, E-Mail:
jnotis@a-g-s.com


MICROSTRATEGY INC: Announces Filing of Securities Lawsuits
----------------------------------------------------------
MicroStrategy Incorporated (Nasdaq: MSTR) announced on March 21 that a
number of lawsuits purporting to be class actions had been filed naming
the Company and certain of its officers and directors as defendants
alleging violations of various securities laws in connection with the
Company's previously announced revision of its 1999 and 1998 revenues
and operating results. The Company has not yet had the opportunity to
review the complaints.


MICROSTRATEGY INC: Berman, DeValerio Files Securities Suit in Virginia
----------------------------------------------------------------------
MicroStrategy Inc. (Nasdaq: MSTR) was charged with overstating its
revenues and earnings in a shareholder class action filed by Berman,
DeValerio & Pease LLP in the United States District Court for the
Eastern District of Virginia on March 22, 2000. The case, which alleges
violations of Sections 10(b) and 20(a) of the Securities Exchange Act of
1934, was filed on behalf of all persons and entities who purchased the
common stock of MicroStrategy Inc. during the period June 11, 1998
through and including March 18, 2000 (the "Class Period") and who
suffered losses on their investments.

According to the complaint, MicroStrategy's financial results for fiscal
years ended December 31, 1998 and 1999 were materially overstated as a
result of prematurely recognizing revenue from software sales and
servicing contracts. On March 20, 2000, before the market opened,
MicroStrategy revealed that it would be restating its financial results
for the entire Class Period because revenues and earnings had been
overstated due to premature and improper revenue recognition.

Contact: Michael Sullivan, Esq., Jeffrey C. Block, Esq. Berman,
DeValerio & Pease LLP One Liberty Square, Boston, MA 02109, E-Mail:
bdplaw@bermanesq.com 800-516-9926 Website at http://www.bermanesq.com


NORTHPORT PUBLIC: MI Ct Finds No Discrimination in School Tax Exemption
-----------------------------------------------------------------------
The Michigan Court of Appeals ruled that the state's taxing statute,
exempting homestead property from school taxes, did not discriminate
against nonresidents because exemption was not based on state residency.
Citizens for Uniform Taxation v. Northport Pub. Sch. Dist., et al, No.
209901 (Mich. Ct. App. 01/07/00).

The Michigan Legislature passed an amendment to section 1211 of the
Revised School Code which "dramatically changed the financing of
Michigan's K-12 public schools." Pursuant to section 1211, local
districts were authorized to levy a maximum of 18 mills for school
operating purposes, but homesteads and qualified agricultural property
were exempt from the tax.

A taxpayer organization, composed of non-exempt nonresident property
owners, filed a class action lawsuit against four school districts, the
state Department of Treasury, and the state Tax Commission. In their
compliant, the plaintiffs alleged that the statute violated the
Privileges and Immunities Clause and Equal Protection Clause of the U.S.
Constitution, in addition to the state constitution.

In order for the plaintiffs to succeed on their Privileges and
Immunities claim, they had to establish that the state's taxing statute
discriminated against nonresidents. In reviewing the statutory language,
the court found that the statute distinguished between homestead
property and non-homestead property, regardless of whether the owners
were residents or nonresidents. "Because nonresidents and residents
[were] not treated differently, the Privileges and Immunities Clause is
not implicated, " said the court. (Your School and the Law, March 15,
2000)


NY, MCI: Alleged of Conspiring for Profits on Inmates' Collect Calls
--------------------------------------------------------------------
MCI WorldCom and New York state were sued on March 21 for allegedly
conspiring to make huge profits on collect calls inmates make to their
families and advisers. Collect calls are the only way the state's 70,000
prisoners can phone the outside world. The telephone company and the
state Department of Correctional Services inflated rates, according to
the federal class action lawsuit, filed on behalf of prisoners' families
and advisers.

It alleges that MCI - the phone company that has had a monopoly inside
the state's 70 correctional facilities since 1986- charges family
members a 60 percent surcharge on calls from their imprisoned loved
ones.

The majority of these families come from the poorest neighborhoods in
New York City and are often unable to pay the inflated rates, the
lawsuit alleges. (Press Journal (Vero Beach, FL), March 22, 2000)


ORANGE UNIFIED: Retired School Administrators Sue for Medical Coverage
----------------------------------------------------------------------
Retired principals and other administrators in the Orange Unified School
District have filed a lawsuit, claiming the school system reneged on a
23-year-old agreement to give free or low-cost lifetime medical
benefits. The suit, filed March 17 in Orange County Superior Court,
seeks class-action status and as much as $ 19 million for retired
principals, assistant principals and other administrators -- as many as
125 of them.

In court papers, lawyers say veteran administrators sacrificed raises or
accepted lower salaries in exchange for a 1977 lifetime medical benefits
plan for themselves and their dependents. Last September, the lawyers
say, the school district issued a memo to retirees that coverage would
be changed, forcing the former employees to pay more out of pocket. "I'm
aiming to get the benefits for those employees who have been promised
them that the school district is threatening to either eliminate or
reduce," said Northridge lawyer Francis E. Smith, who represents the
plaintiffs.

The suit is similar to those filed by retired teachers and classified
employees, both of which seek class-action status. The teachers and
classified employees have filed $ 75-million and $ 35-million suits,
respectively, against the district.

Last month, in the case filed by custodial and clerical workers, Orange
County Superior Court Judge John C. Woolley said medical plans do change
periodically. Orange Unified, he ruled, must provide retirees with the
same care as current employees. Woolley is also scheduled to hear the
administrators' case.

Orange Unified's lawyer, James Bowles, said the same logic should
prevail in the most recent case. "The judge said the principle was you
should provide the retirees the same level of benefits as the active
employees ," Bowles said. "If you reduce the actives' level, you can
lower it for retirees. If you raise it for actives, you've got to raise
it for retirees." (Los Angeles Times, March 21, 2000


SAFETY-KLEEN CORP: Keller Rohrback Files Securities Lawsuit
-----------------------------------------------------------
Seattle's Keller Rohrback L.L.P. filed a class action complaint against
Safety-Kleen Corp. (NYSE: SK) and certain of its officers and directors
on behalf of all persons who purchased shares of Safety-Kleen common
stock between July 7, 1998 and March 6, 2000, inclusive (the "Class
Period").

Shareholders allege that Safety-Kleen and certain of its officers and
directors violated the Securities Exchange Act of 1934 and Rule 10b-(5)
established thereunder, by issuing false and misleading financial
statements that materially overstated the Company's revenues, income and
earnings during the Class Period. On March 6, 2000, Safety-Kleen shocked
the market by announcing that it had "initiated an internal
investigation of its prior reported financial results and certain of its
accounting policies and practices following receipt by the Company's
Board of Directors of information alleging possible accounting
irregularities that may have affected the previously reported financial
results of the Company since fiscal year 1998." In addition, three of
the Company's top executives have been placed on administrative leave
for the duration of the investigation.

Contact: Jen Veitengruber of Keller Rohrback L.L.P., 800-776-6044, or
investor@kellerrohrback.com


SAFETY-KLEEN CORP: Schubert & Reed Files Securities Lawsuit in SC
-----------------------------------------------------------------
A class action suit alleging securities fraud was filed on March 20,
2000, in the United States District Court for the District of South
Carolina against Safety-Kleen, Corp. (NYSE: SK), and Safety-Kleen
officers and directors President and CEO Kenneth Winger, Executive VP
and COO Michael Bragagnolo, and Senior VP - Finance and CFO Paul
Humphreys, by the San Francisco law firm Schubert & Reed LLP. The case
was filed on behalf of all persons who purchased Safety-Kleen common
stock during the period July 9, 1997 through March 6, 2000, inclusive
(the "Class Period").

As alleged in the Complaint, defendants violated 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 Safety-Kleen common stock was artificially inflated
during the Class Period. On March 6, 2000, Safety-Kleen Corp. (and its
controlling shareholder, Laidlaw) announced that Safety-Kleen employees
had notified the company's Board of Directors of accounting
irregularities that may have affected the company's previously reported
financial results since fiscal year 1998. The Safety-Kleen Board placed
CEO Winger, Executive V.P. and COO Bragagnolo, and CFO Humphreys on
administrative leave pending investigation. On the news, the market
price of Safety-Kleen stock dropped more than 44% in a single day's
trading, closing at $ 2. As detailed in the complaint, the defendants
were motivated to overstate revenues during the Class Period because
each of the individual defendants' compensation, including bonuses and
stock options, was dependent on the Company equaling or exceeding
internal budgets and projections of revenues and profits.

Contact: Juden Justice Reed, Esq., of Schubert & Reed LLP, 415-788-4220,
or fax, 415-788-0161, or mail@schubert-reed.com


SEARS, ROEBUCK: Judge Dismisses Retirees' Claims over Life Insurance
--------------------------------------------------------------------
U.S. District Judge James B. Moran has dealt a serious blow to retirees
of Sears, Roebuck and Co., ruling in the giant retailer's favor on two
class-action claims in a lawsuit over reducing life insurance benefits.

Judge Moran agreed with Sears that language in its benefit-plan document
reserved the company's right to reduce or eliminate retiree life
insurance benefits "at any time."

The 80,000 retirees affected by the cuts had argued that other parts of
the plan indicated the life insurance vested upon retirement. In a 1997
cost-cutting move, the Hoffman Estates-based retailer announced it would
begin reducing their company-paid life insurance benefits from a maximum
of $100,000 to $5,000 during a 10-year period.

Because Moran knocked out the lawsuit's only two claims with
class-action status, retirees have little choice but to proceed with
individual lawsuits, a time-consuming and costly process that makes
their case less attractive to lawyers who are working on a contingency
basis, legal sources said.

Despite the obstacles, Everett Buckardt, chairman of the National
Association of Retired Sears Employees, vowed to fight on. "This is just
round No. 1. We expect the court to turn its attention to breach of
fiduciary duty and other claims in the case," he said.

Sears said it expected Judge Moran to rule in its favor because of
several recent similar outcomes for federal cases involving reductions
in retiree benefits.

Separately, Sears disclosed details about its executive compensation in
a filing with the Securities and Exchange Commission. Sears Chief
Executive Arthur Martinez received $4.1 million in total compensation
during 1999, a 73 percent increase from the prior year, according to the
retailer's proxy statement filed with the SEC.

Martinez, who announced last week he would retire before year-end, was
paid a bonus of $2.2 million, more than double the $980,088 bonus he
received in 1998. He received a 4 percent hike in base salary to $1.2
million and long-term incentive compensation of $455,835, among other
items. Sears' directors said Martinez deserved the big raise because the
retailer's 1999 earnings per share surpassed a pre-approved target level
for bonus payouts. Sears' four other top executives also received
bonuses that exceeded their base salaries. (Chicago Tribune, March 21,
2000)


SPANLINK COMMUNICATIONS: Announces Suit Re Proposed Going Private Deal
----------------------------------------------------------------------
Spanlink Communications, Inc. (Nasdaq SmallCap Market:SPLK) announced on
March 21 that Stephen M. Russell, a holder of 2,000 shares of Spanlink's
common stock, has commenced a legal action against Spanlink and others
with respect to Spanlink's proposed going private transaction.

The lawsuit was filed in Hennepin County District Court and names as
defendants Spanlink Communications, Inc., Spanlink Acquisition Corp.,
Brett A. Shockley, Loren A. Singer, Jr., Todd A. Parenteau, Bruce E.
Humphrey, Thomas R. Madison, Joseph D. Mooney and Timothy E. Briggs. The
plaintiff, Stephen M. Russell, asserts that the individual defendants
breached their fiduciary duty to shareholders in approving the proposed
tender offer and merger, and that Spanlink and Spanlink Acquisition
Corp. have aided and abetted the alleged violations of fiduciary duty.
The plaintiff has requested certification of a class action on behalf of
other Spanlink shareholders and that Mr. Russell serve as the
representative of that class. The plaintiff seeks, among other things, a
court order enjoining the defendants from proceeding with the proposed
merger, compensatory damages, costs and attorney's fees.

On Monday, March 20, the Court in this matter heard arguments from the
parties on certain preliminary motions and took the matters presented
under advisement. Spanlink believes the plaintiff's claims lack merit
and intends to defend itself vigorously.

Spanlink designs, develops and markets streamlined computer telephony
software solutions for the use of call centers to automate and manage
the customer interaction process -- via the telephone or the Internet.


TOBACCO LIITGATION: Reaction and Anticipation Re Ruling and Regulation
----------------------------------------------------------------------
The Supreme Court's decision that the Food and Drug Administration has
no authority to regulate tobacco moves cigarette manufacturers toward
the unexpected position of asking Congress to regulate their products in
exchange for new rules that would allow them to sell "safe cigarettes,"
a product that they hope will play a significant role in the future,
according to the Los Angeles Times, March 22, 2000. "What the industry
wants is containment of lawsuits and peace. . . . And the way to get
that is through Congress and by putting themselves in a position where
they are willing to be regulated. They are setting themselves up to
deal," Los Angeles Times cites attorney Mary Aronson, a longtime analyst
of the tobacco industry.

In essence, the companies would like the government to put its stamp of
approval on the "less risky" cigarettes they are trying to develop. But
it is unclear what degree of government regulation they would accept in
return for that imprimatur, the report says. Financial analysts also
said that the industry may look to Congress to put a cap on the costs of
a rising tide of successful litigation by former smokers.

Congress, however, is unlikely to ride to the industry's rescue, at
least this year. Anti-smoking advocates are reluctant to give any ground
to the industry, and conservative lawmakers oppose additional regulation
of business, regardless of whether a particular industry would tolerate
it.

                Small Chance of Cap on Legal Damages

Although there is little chance that Congress would agree to a request
to limit litigation against cigarette manufacturers, which is what the
industry sought in 1997, there is a small chance "that an annual cap in
damages can be legislated by Congress, and the companies would like that
and the investment community would find that appealing," the paper cites
Martin Feldman, a tobacco analyst at Salomon Smith Barney Inc.

The paper remarks that in recent months, the industry has sought to
remake its public image. In keeping with its new role of responsible
corporate citizen, it struck a conciliatory tone in the wake of March
21's court victory. Berlind and Charles Blixt, general counsel of R.J.
Reynolds Tobacco Co., both said that they looked to any negotiations
with Congress to include new criteria for lower-risk cigarettes.

               Florida Suit Could Force Bankruptcies

About the class-action lawsuit in Florida, which is entering its final
stages, the article says it is threatening to bankrupt companies, or at
least force them during the appeal phase to post bond that is so
expensive it could cripple the companies.

And lawsuits brought by individual smokers, which the industry in the
past easily won, now are resulting in million-dollar compensatory
damages and much larger punitive damage awards. The court's decision,
which cited tobacco as the country's "single most significant threat to
public health," could create a new nightmare of sorts for tobacco
companies.

In the absence of federal authority, some states could choose to adopt
their own regulations. Some tobacco experts predicted that, in strong
anti-tobacco states such as California or Massachusetts, bills would be
introduced to regulate the content of cigarettes--for example, limiting
the amount of nicotine.

              Exact Shape Depends on November's Elections

The exact shape of any deal on cigarettes, however, will depend heavily
on the outcome of November's elections. Vice President Al Gore, the
presumptive Democratic nominee, decried the high court's decision and
called on Texas Gov. George W. Bush, his expected GOP opponent, to join
him in calling for FDA regulation of tobacco.

Bush replied with a news release saying that Congress should pass
legislation similar to a Texas law that prosecutes retailers who sell
cigarettes to minors and punishes minors who smoke with fines and
removal of driver's licenses.

Prospects for any form of anti-tobacco legislation also could depend on
whether Republicans retain control of Congress. The dynamics on Capitol
Hill that tore apart comprehensive tobacco control legislation in 1998
are still at work. Many Republicans and the business community are leery
of giving the FDA additional authority to regulate cigarettes--in part
because it would set a precedent for additional regulation of other
products. However, Rep. Henry A. Waxman (D-Los Angeles) has reintroduced
comprehensive tobacco legislation. It includes measures that would give
the FDA explicit authority to regulate tobacco as a drug and to reduce
secondhand smoke.

              Industry Officials Oppose Reviving Bills

In the past, however, similar legislation has gone nowhere, and the
industry has always been reluctant to allow additional restraints, the
report notes. Even today, despite the tobacco industry's conciliatory
tone, tobacco officials explicitly rejected the resuscitation of any
legislation, including a Republican regulatory proposal crafted in 1998
by Sens. Bill Frist (R-Tenn.) and John McCain (R-Ariz.). The tenor of
the battle may be changing, but the end is nowhere in sight, the Los
Angeles Times report says.

The New York Times, March 22, 2000, notes that the Supreme Court
decision comes as cigarette makers are bracing for a possibly
devastating verdict in Florida, where a jury is hearing a class-action
case brought on behalf of smokers there. Analysts have said that the
jury may award tens of billions in punitive damages against tobacco
companies, forcing some producers, if not all, into bankruptcy.

A San Francisco jury held late Monday that Philip Morris and R. J.
Reynolds Tobacco must pay $1.7 million in compensatory damages to a
former smoker there. That same jury is considering punitive damages, and
a decision is expected shortly.

The New York Times reports that one person involved with tobacco
litigation said that Mr. Parrish had met in recent months with several
top Republican leaders, including Senator Trent Lott of Mississippi and
Representative Tom DeLay of Texas. Mr. Parrish declined to say
specifically which members of Congress were approached. A spokesman for
Mr. DeLay confirmed that Mr. DeLay had met with Mr. Parrish. Mr. Lott's
office did not return a telephone call seeking comment.

There is general agreement that Congressional action on a tobacco bill
is unlikely this year, and the makeup of the White House and Congress
after the fall election may determine any bill's shape, the paper
remarks.

For one thing, cigarette makers already have agreed to pay $246 billion
to states over the next two decades to settle lawsuits brought by state
attorneys general seeking to recover health care costs, the report goes
on, but that accord did not cover either cases brought by individual
smokers, like the one decided on Monday by the jury in San Francisco.
And more important, it did not cover class-action lawsuits like the
Florida case.

Cigarette companies have persuaded several tobacco-producing states to
enact laws or consider proposals that would let them appeal the Florida
decision and protect assets like cigarette plants from seizure if they
are not able to post a bond. And state officials, who would see billions
in settlement funds imperiled if bankruptcies occurred, are also taking
steps. This week, they are expected to hire a legal expert to represent
states as creditors in bankruptcy court, reports the New York Times.

               Judge in New York Urges Settlement

According to Financial Times (London), March 22, 2000, a judge in New
York is attempting to secure a broad settlement of a group of tobacco
lawsuits, it emerged March 21, as the industry digested both its latest
legal defeat and an important US Supreme Court victory.

Jack Weinstein, an activist district court judge known for mass injury
cases involving asbestos and the Agent Orange herbicide, has told
plaintiff lawyers and tobacco companies it would now be desirable to
settle the claims. Judge Weinstein is reviewing tobacco cases brought by
Blue Cross and Blue Shield insurance companies, which are seeking up to
Dollars 70bn (Pounds 44.3bn) in damages - one of the three main groups
of lawsuits threatening the American tobacco industry.

Any settlement of those cases would not cover class action suits pending
against the industry. Some plaintiffs' lawyers hope it could, however,
become the basis for a national settlement of other suits.

Analysts expressed doubts that the tobacco companies would want to
settle, given their record in defeating "third party payor" cases.

                   Tobacco As Election Campaign

USA Today of March 22 says that Congress may not have the time or the
will to finish a bill in this election year but tobacco could emerge as
a campaign issue for Democrats if Republicans appear reluctant to take
on an unpopular industry. "It is time for the Republican Congress and
(Texas Gov.) George Bush to show their independence from Big Tobacco and
do the right thing by passing legislation that has had bipartisan
support," Vice President Gore said shortly after the ruling. Bush's
campaign released a statement saying he favors "tough laws" against teen
smoking, similar to those passed in Texas.

The ruling leaves it up to Congress to decide how tobacco products are
made and advertised. FDA regulation could affect teen access to
cigarettes and tobacco ingredients. "It's time for Congress and the
tobacco industry to put up or shut up," said Matthew Myers, president of
the Campaign for Tobacco-Free Kids.

            Industry's Sigh of Relief and Notes of Optimism

According to the Bond Buyer, March 22, public finance bankers and
analysts noted that a class-action suit being argued in a Florida court
and the Justice Department's pending lawsuit against the industry are
continuing to cloud its outlook. News of the Supreme Court decision sent
stock prices for three of the four major tobacco companies higher, but
market participants said securitized tobacco settlement bonds did not
see heavy trading. While few bonds were changing hands, municipal
professionals saw the ruling as good news. "It's definitely a positive"
said Edward K. Flynn, a senior vice president with First Albany Corp.
"It's maintenance of the status quo." The removal of a risk and some of
the uncertainty surrounding the tobacco industry improves the outlook
for the cigarette companies, he added.

The Bond Buyer remarks that even if the judge in the Engle case issues a
final judgment against the companies, where the plaintiffs could attempt
to compel payment, the tobacco industry would still probably be able to
skirt the judgment, according to Herzog. "They may be forced to post a
bond, but they're not going to actually have to do it," she said.
"Either they can ignore it or they can appeal it. And they're ultimately
going to win." Herzog said she expects the details of the Florida case
to be resolved in the next several weeks.

Marc I. Cohen, a tobacco analyst with Goldman, Sachs & Co., said the
Justice Department's suit against the tobacco industry would also
probably fail, owing to many of the same points that hindered the
government's attempt to have the FDA regulate cigarettes.

Herzog said that a nationwide settlement between the tobacco companies
and the federal government is likely.

Shares of three of the four major tobacco companies were up yesterday
from the news of the Supreme Court ruling. Philip Morris was up 3/8 a
point to 20 5/16, RJ Reynolds gained 9/16 to close at 17Z zn, and Loews
Corp. rose 2 to 47 1/8; British American Tobacco was down 11/16 to close
at 9 9/16.

             Ruling May Simply Delay the Inevitable

The Washington Post, March 22, notes that the tobacco industry has
compelling reasons to want some kind of federal regulation.

"The bottom line is that the industry wants peace--they want their
stocks to be stable," said Mary Aronson, a longtime tobacco analyst in
Washington who advises institutional investors. "The only way they see
to an end of the litigation threat is if Congress is reinvolved. So I
think the industry is positioning itself so it can go to Congress and
ask for some kind of protection from tobacco litigation in exchange for
regulation."

"I have no doubt that in the next two or three years there will be an
overhaul of the entire regulatory environment for tobacco," said Martin
Feldman, tobacco analyst for Salomon Smith Barney. "The fact the
industry won the Supreme Court claim will in the long run make very
little difference."

                  Major Events Since 1964

Published in The News and Observer (Raleigh, NC), March 22, 2000

1964: Surgeon general releases reports concluding that smoking causes
      lung cancer.

1965: Federal Cigarette Labeling and Advertising Act requires warnings
      on cigarette packs.

1971: Broadcast ads for cigarettes are banned.

1972: Officials rule airlines must create non-smoking sections.

1988: Government bans smoking on short domestic airline flights.
      Surgeon general concludes nicotine is an addictive drug.

April 1994: Executives of seven largest U.S. tobacco companies swear in
      congressional testimony that nicotine isn't addictive and deny
      manipulating nicotine levels in cigarettes.

May 1994: Brown & Williamson documents show tobacco executives
      discovered smoking's risks before the surgeon general made
      declaration. Mississippi files first of 24 state lawsuits seeking
      to recoup millions from tobacco companies for smokers' Medicaid
      bills.

March 1996: Liggett Group, smallest of major tobacco companies, settles
      claims with five state attorneys general and promises to help
      them against other companies.

April 1997: Federal judge in Greensboro rules government can regulate
      tobacco as a drug. But industry is allowed to continue
      advertsing.

June 1997: Landmark settlement, subject to congressional approval,
      calls for unprecedented restrictions on cigarettes and on tobacco
      makers' liability in lawsuits. Industry to spend $ 368 billion
      over 25 years, mainly on anti-smoking campaigns, use bold health
      warning on packs, curb advertising and face fines if youth
      smoking doesn't drop enough.

July 1997: Mississippi, first state to settle lawsuit, agrees to $ 3.6
     billion deal with tobacco companies.

August 1997: Florida reaches settlement reported to be $ 11.3 billion.

January 1998: Texas settles with the tobacco industry for $ 15.3
     billion over 25 years. Tobacco executives testify before Congress
     that nicotine is addictive under current definitions of the word
     and smoking may cause cancer.

May 1998: Minnesota and Blue Cross and Blue Shield of Minnesota reach a
     $ 6.6 billion settlement with tobacco industry. Despite pressure
     from President Clinton, Senate rejects a proposed $ 1.50-per-pack
     tax increase on cigarettes.

June 1998: Senate kills settlement bill that would have cost tobacco
     companies at least $ 516 billion over 25 years.

November 1998: Forty-six states embrace a $ 206 billion settlement with
     cigarette makers over health costs for treating sick smokers.

July 1999: In a class-action suit filed on behalf of sick smokers, a
     jury in Miami finds the tobacco companies liable, concluding that
     they made defective and dangerous products and conspired to hide
     their research on the health effects of smoking from the public.

     That same jury is considering the amount of damages.

September 1999: Justice Department sues the tobacco industry to recover
     billions of government dollars spent on smoking-related health
     care, accusing cigarette-makers of a "coordinated campaign of
     fraud and deceit."

December 1999: Government and tobacco industry lawyers argue before the
     Supreme Court over whether the Food and Drug Administration can
     regulate tobacco as a drug, and crack down on cigarette sales to
     minors.

February 2000: Tobacco farmers sue cigarette makers for $ 69 billion,
     contending they conspired to undo the federal system that
     regulates tobacco prices.

March 21, 2000: Supreme Court rules, 5-4,that the government lacks
     authority to regulate tobacco as an addictive drug.


TOBACCO LITIGATION: Cable News Network on Regulation
----------------------------------------------------
Broadcase on CNN on March 22, 2000
GUESTS: U.S. Senator Frank Lautenberg

    JACK CAFFERTY, CNNfn ANCHOR, BEFORE HOURS: So now it is once again
up to the members of the House and the Senate to take the next step, if
there's going to be one, on regulating the tobacco industry. Our next
guest is the co-author of a bill calling for much tougher regulation,
particularly when it comes to warning labels aimed at young people on
cigarette packages. Democratic Senator Frank Lautenberg from New Jersey
joins us now from Washington D.C.

Senator, nice to see you.

    SENATOR FRANK LAUTENBERG (D) NEW JERSEY: Good morning.

    CAFFERTY: Where do we go from here?

    LAUTENBERG: Well, I don't think that the tobacco industry ought to
have too big a party. This is, I believe, a significant change in
attitude. But it also throws down the gantlet for the Congress to get
off their chairs and do something about this; and we've been trying for
a long time. But there is pressure continuing to build against the
tobacco industry. We're all going to watch with interest, the suit in
Florida, class-action, that by some analysts' view, will be the largest
award ever given in a class-action suit. And we're talking about more to
follow.

So what we'd like to do is get on with a sensible piece of legislation.
I was interested to hear that Philip Morris said that they were, would
be interested in working with us to get something done. It seems to me
like our majority leader, my good friend, Trent Lott, is out of step
with where we want to be, even within the industry. So I think we've got
a chance to do something, to give the jurisdiction to the FDA that they
justly should have; and get on with it.

    CAFFERTY: Without politicizing the issue any more than it already
is, where does the solution lie? The tobacco companies want protection
from this liability. If the Florida case goes against them, we're
talking potentially hundreds of billions of dollars could actually
bankrupt these companies. They seem to be in a mood to be agreeable to
some sort of increased government regulation. The Justice Department has
a big case pending. Where's the solution, without just the usual
political rhetoric, how do you resolve this thing?

    LAUTENBERG: Well, since you gave me that limitation, without the
political rhetoric, I think life in real terms is in front of us. These
suits: they can't resolve these suits by now coming to an action that's
retroactive. They're going to have to face up to the fact that there
will be a lot of pressure on them, and they ought to join in to see if
they can save frankly their industry, long term. We want -

    CAFFERTY: Well they've-they've expressed some willingness to do that
though, have they not?

    LAUTENBERG: They have, but we have to see what lies behind the
expression of good will. Thus far, they've been more reluctant than
cooperative. Listen, what we're going to be seeing now is a chance to
get FDA regulation in place, and I think we're going to depend on the
public's interest on what's being said out there, with people who say:
don't addict our children. There's 3,000 a day that are -

    CAFFERTY: I'm sorry to interrupt, but is the FDA the right body to
do the regulation if there is going to be regulation; or as you
suggested in the piece, should there be a different agency to deal with
this?

    LAUTENBERG: Well, I think that that would be a diversion that isn't
going to work right now there.

    CAFFERTY: OK.

    LAUTENBERG: There is interest in getting FDA in place. They're the
agency that can handle it. We want to see that they have the authority
to do so.

   CAFFERTY: Let's assume that you have 100 percent Democrats in the
Senate and the House, and you have a Democrat in the White House.
Outline the piece of legislation that you would write. What would you do
here?

   LAUTENBERG: Well, first of all I remind you, that when the McCain
bill came up regarding tobacco, we did have 58 votes. We were two short
of getting closure. So there are Republicans as well as Democrats who
want to do this. In my view, I think we have to keep the target fairly
simple, and that is to get the FDA involved in the process of regulating
tobacco. And we'll seize an opportunity, whatever it is, that comes
along to start that process. I hope that we'll be able to get the
cooperation of Trent Lott, and the leadership on the other side, because
we don't have that reluctance on our side. And just to put something in
place, because if it gets terribly complicated, I think the industry
wins a little bit, by making the issue too hard to deal with in the
remaining time in this calendar year.

    CAFFERTY: What kind of regulation are you talking about?

    LAUTENBERG: Well, just to say to the FDA, look, take a look a the
product. See what ingredients are in there. I would like to have a bill
that I propose that shows all of the ingredients that go into a pack of
cigarettes - over 500 of them; more than 30 of them carcinogenic - to
say, look, you determine how this product might be made safer. Help us
determine what kind of advertising should be there. We plan to have
something much more strict than was finally put into the bill that the
Supreme Court overturned. They wound up with simply an age restriction.
Well, 50 states have age restrictions, 18 now. We'd like to make sure
there is no advertising in sporting events. We'd like to make sure that
there are no free sample. We'd like to eliminate the possibility of
vending machines being in place. All of that can be taken care of
through the FDA, and we want to give them the opportunity to do just
that.

   CAFFERTY: Senator, we have to leave it there. It's always a pleasure
to speak with you. Thanks for being with us today.

   LAUTENBERG: Good to talk with you.

   CAFFERTY: All right, sir. Senator Frank Lautenberg, a Democrat from
the state of New Jersey.


TOBACCO LITIGATION: Lorillard Faces about 825 Product Liability Cases
---------------------------------------------------------------------
Loews Corp says in its report to the SEC that of approximately 1,225
product liability cases are pending against U.S. cigarette
manufacturers, its subsidiary Lorillard is a defendant in approximately
825.

In these actions, plaintiffs claim substantial compensatory, statutory
and punitive damages, as well as equitable and injunctive relief, in
amounts ranging into the billions of dollars. These claims, Loews says,
are based on a number of legal theories including, among other things,
theories of negligence, fraud, misrepresentation, strict liability,
breach of warranty, enterprise liability, civil conspiracy, intentional
infliction of harm, violation of consumer protection statutes, violation
of anti-trust statutes, and failure to warn of the allegedly harmful
and/or addictive nature of tobacco products.

                 Conventional Product Liability Case

Some cases have been brought by individual plaintiffs who allege cancer
and/or other health effects claimed to have resulted from an
individual's use of cigarettes, addiction to smoking, or exposure to
environmental tobacco smoke. Approximately 715 such actions are pending
against Lorillard.

There are approximately 1,120 cases filed by individual plaintiffs
against manufacturers of tobacco products pending in the United States
federal and state courts in which individuals allege they or their
decedents have been injured due to smoking cigarettes, due to exposure
to environmental tobacco smoke, or due to nicotine dependence.
Approximately 500 of the cases have been filed by flight attendants
purportedly injured by their exposure to environmental tobacco smoke in
the aircraft cabin. Lorillard is a defendant in approximately 715 of
these cases, including each of the approximately 500 flight attendant
cases. Loews is a defendant in eight of the cases filed by individuals,
although five of them have not been served but is not named as a
defendant in any of the flight attendant cases served to date, Loew's
report to the SEC says.

Plaintiffs in most of these cases seek unspecified amounts in
compensatory and punitive damages.

During 1998 and 1999, a total of eight trials were held involving eleven
cases filed by individual plaintiffs. Lorillard and Loews were
defendants in one of the cases and Lorillard was a defendant in a second
case. Juries returned verdicts in favor of the defendants in the cases
tried against Lorillard and Loews. In the nine remaining cases, verdicts
were returned in favor of the defendants in six of the matters. Juries
found in plaintiffs' favor in the remaining three cases. In these three
verdicts, juries awarded plaintiffs a total of $132.8 in actual damages
and punitive damages. One of the three verdicts in favor of plaintiffs
has been vacated on appeal. In the two remaining cases, the courts have
reduced the verdicts to a total of $59.4. Appeals are pending in both of
these actions. Trial is currently underway in one case brought by
individuals. Neither Loews nor Lorillard is a defendant in that matter,
the SEC filing says.

                          Class Actions

There are 60 purported class actions pending against cigarette
manufacturers and other defendants. Lorillard is a defendant in 40 of
the 60 cases seeking class certification. Loews is a defendant in 12 of
the purported class actions in which Lorillard is a defendant. Many of
the purported class actions are in the pre-trial, discovery stage. Most
of the suits seek class certification on behalf of residents of the
states in which the cases have been filed, although some suits seek
class certification on behalf of residents of multiple states. All but
one of the purported class actions seek class certification on behalf of
individuals who smoked cigarettes or were exposed to environmental
tobacco smoke. One case seeks class certification on behalf of
individuals who have paid insurance premiums to Blue Cross and Blue
Shield organizations.

Theories of liability asserted in the purported class actions include a
broad range of product liability theories, including those based on
consumer protection statutes and fraud and misrepresentation. Plaintiffs
seek damages in each case that range from unspecified amounts to the
billions of dollars. Most plaintiffs seek punitive damages and some seek
treble damages. Plaintiffs in many of the cases seek medical monitoring.
Plaintiffs in several of the purported class actions are represented by
a well-funded and coordinated consortium of over 60 law firms from
throughout the United States.

                          The Engle Case

Trial began during July 1998 in the case of Engle v. R.J. Reynolds
Tobacco Co., et al. (Circuit Court, Dade County, Florida, filed May 5,
1994). The trial court has granted class certification on behalf of
Florida residents and citizens, and survivors of such individuals, who
suffered injury or have died from medical conditions allegedly caused by
their addiction to cigarettes containing nicotine. Plaintiffs seek
actual damages and punitive damages estimated to be in the billions of
dollars. Plaintiffs also seek equitable relief including, but not
limited to, a fund to enable Florida smokers' medical condition to be
monitored for future health care costs, attorneys' fees and court costs.

The case is being tried in three phases. The first phase involved
consideration of certain issues "common" to the members of the class and
their asserted causes of action.

On July 7, 1999, the jury returned a verdict against defendants at the
conclusion of the first phase. The jury found, among other things, that
cigarette smoking is addictive and causes lung cancer and a variety of
other diseases, that the defendants concealed information about the
health risks of smoking, and that defendants' conduct "rose to a level
that would permit a potential award or entitlement to punitive damages."
The verdict permitted the trial to proceed to a second phase. The jury
was not asked to award damages in the Phase One verdict.

Phase Two of the trial began on November 1, 1999 and is proceeding
before the same jury which returned the verdict in Phase One. In the
first part of Phase Two, the jury will determine issues of specific
causation, reliance, affirmative defenses, and other individual-specific
issues related to the claims of three named plaintiffs and their
entitlement to damages, if any.

If the jury returns a verdict in favor of any of the three named
plaintiffs and awards compensatory damages, then the trial would proceed
to the second part of Phase Two, which would involve a determination of
punitive damages. By order dated July 30, 1999 and supplemented on
August 2, 1999 (together, the "order"), the trial judge amended the
trial plan in respect to the manner of determining punitive damages. The
order provides that the jury will determine punitive damages, if any, on
a lump-sum dollar amount basis for the entire qualified class. The Third
District of the Florida Court of Appeal rejected defendants' appeals
from these rulings, and the Florida Supreme Court declined to review the
orders at this time.

It is unclear how the order will be implemented, Loew remarks in its SEC
filing. The August 2, 1999 order provides that the lump-sum punitive
damage amount, if any, will be allocated equally to each class member
and acknowledges that the actual size of the class will not be known
until the last case has withstood appeal, i.e., the punitive damage
amount, if any, determined for the entire qualified class, would be
divided equally among those plaintiffs who are ultimately successful.
The order does not address whether defendants would be required to pay
the punitive damage award, if any, prior to a determination of claims of
all class members, a process that could take years to conclude.
Lorillard does not believe that an adverse class-wide punitive damage
award in Phase Two would permit entry of a judgment at that time that
would require the posting of a bond to stay its execution pending appeal
or that any party would be entitled to execute on such a judgment in the
absence of a bond. However, in a worst case scenario, it is possible
that a judgment for punitive damages could be entered in an amount not
capable of being bonded, resulting in an execution of the judgment
before it could be set aside on appeal.

Pursuant to the trial plan, Phase Three would address potentially
hundreds of thousands of other class members' claims, including issues
of specific causation, reliance, affirmative defenses and other
individual-specific issues regarding entitlement to damages, in
individual trials before separate juries.

Lorillard remains of the view that the Engle case should not have been
certified as a class action. That certification is inconsistent with the
overwhelming majority of federal and state court decisions which have
held that mass smoking and health claims are inappropriate for class
treatment. Lorillard intends to challenge the class certification, as
well as other numerous reversible errors that it believes occurred
during the trial to date, at the earliest time that an appeal of these
issues is appropriate under Florida law. Lorillard believes that an
appeal of these issues on the merits should prevail.

                       Flight Attendants' Case

On October 10, 1997, the parties to Broin v. Philip Morris Companies,
Inc., et al. (Circuit Court, Dade County, Florida, October 31, 1991), a
class action brought on behalf of flight attendants claiming injury as a
result of exposure to environmental tobacco smoke, executed a settlement
agreement which was approved by the court on February 3, 1998. Pursuant
to the settlement agreement, among other things, Lorillard has agreed to
pay approximately $30.0 to create and endow a research institute to
study diseases associated with cigarette smoke. In addition, the
settlement agreement permits the plaintiff class members to file
individual suits, but they may not seek punitive damages for injuries
that arose prior to January 15, 1997. To date, approximately 500 such
suits have been filed and served on U.S. cigarette manufacturers,
including Lorillard.

                      Reimbursement Cases

Suits brought by 46 state governments and six other governmental
entities have been resolved or are expected to be resolved by the Master
Settlement Agreement. In addition to these, approximately 55 other suits
are pending, comprised of cases brought by the U.S. federal government,
unions, Indian tribes, private companies and foreign governments filing
suit in U.S. courts, in which plaintiffs seek recovery of funds expended
by them to provide health care to individuals with injuries or other
health effects allegedly caused by use of tobacco products or exposure
to cigarette smoke. These cases are based on, among other things,
equitable claims, including injunctive relief, indemnity, restitution,
unjust enrichment and public nuisance, and claims based on antitrust
laws and state consumer protection acts. Plaintiffs seek damages in each
case that range from unspecified amounts to the billions of dollars.
Most plaintiffs seek punitive damages and some seek treble damages.
Plaintiffs in many of the cases seek medical monitoring. Lorillard is
named as a defendant in most such actions. Loews is named as a defendant
in 13 of them, although two of the cases have not been served.

                   U.S. Federal Government Action

The federal government of the United States filed a reimbursement suit
on September 22, 1999 in federal court in the District of Columbia
against Lorillard, other U.S. cigarette manufacturers, some parent
companies (but not Loew) and two trade associations. Plaintiff asserts
claims under the Medical Care Recovery Act, the Medicare Secondary Payer
provisions of the Social Security Act, and the Racketeer Influenced and
Corrupt Organizations Act. The government alleges in the complaint that
it has incurred costs of more than $20,000.0 annually in providing
health care costs under certain federal programs, including Medicare,
military and veterans' benefits programs, and the Federal Employee
Health Benefits Program. The federal government seeks to recover an
unspecified amount of health care costs, and various types of
declaratory relief, including disgorgement, injunctive relief and
declaratory relief that defendants are liable for the government's
future costs of providing health care resulting from the defendants'
alleged wrongful conduct. On December 27, 1999, defendants filed a
motion to dismiss all claims.

        State or Local Governmental Reimbursement Cases

The Master Settlement Agreement has resolved or is expected to resolve
the cases filed by 46 state governments and six other governmental
entities. Since January 1, 1997, cases brought by four state
governments, Florida, Minnesota, Mississippi and Texas, were settled in
separate agreements. Lorillard was a defendant in each of the 46 cases
filed by state governments and in the six cases brought by other
governmental entities, as well as in the four cases governed by the
separate settlement agreements. Seven local governments also have filed
suit against cigarette manufacturers, although the Master Settlement
Agreement purportedly resolves those actions.

               Private Citizens Reimbursement Cases

There are four suits pending in which plaintiffs are private citizens.
In three of the cases, plaintiffs are private citizens who have filed
suit on behalf of taxpayers of their respective states, although
governmental entities filed reimbursement suits in the states. Loew is a
defendant in two of the pending private citizen reimbursement cases.
Lorillard is a defendant in each of the cases. Three of the cases are in
the pre-trial, discovery stage. One of the matters is on appeal from a
final judgment entered by the trial court in favor of the defendants.

           Foreign Governments' Cases in U.S. Courts

Cases have been brought in U.S. courts by the nations of Bolivia,
Ecuador, Guatemala, Nicaragua, Panama, Thailand, Venezuela and Ukraine,
as well as by the Brazilian States of Goias, Rio de Janeiro and Sao
Paolo. Lorillard is a defendant in the cases filed by Bolivia, Ecuador,
Ukraine, Venezuela and the three Brazilian states. Loew is a defendant
in the cases filed by Bolivia, Ukraine and Venezuela, as well as those
filed by the three Brazilian states, although Loew has not received
service of process of the cases filed by the State of Sao Paolo, Brazil,
or Venezuela. None of the defendants have received service of process to
date of the case filed by Ecuador. The suit filed by Thailand has been
voluntarily dismissed by the plaintiffs. In 1977, Lorillard sold its
major trademarks outside of the United States and the international
sales business in cigarettes associated with those brands. Performance
by Lorillard of obligations under the 1977 agreement was guaranteed by
Loew. Lorillard and Loew have received notice from Brown & Williamson
Tobacco Corporation, which claims to be a successor to the purchaser,
that indemnity will be sought under certain indemnification provisions
of the 1977 agreement with respect to suits brought by various of the
foregoing foreign jurisdictions, concerning periods prior to June 1977
and during portions of 1978.

              Reimbursement Cases by Indian Tribes

Indian Tribes have filed eleven reimbursement suits. Most of these cases
have been filed in tribal courts. Four of the eleven cases have been
dismissed. Lorillard is a defendant in each of the cases. Loew says it
is not named as a defendant in any of the tribal suits filed to date.
Each of the pending cases is in the pre-trial, discovery stage.

        Reimbursement Cases Filed By Private Companies

Private companies have filed six reimbursement suits against cigarette
manufacturers, two of such cases, brought by self insured employers,
have been terminated. Three of the six suits filed to date have been
brought by various Blue Cross and/or Blue Shield entities, while another
case was brought by a health maintenance organization. The plaintiffs in
two of the cases filed by Blue Cross entities have noticed appeals from
orders by their trial courts that dismissed the cases. Lorillard has
been named as a defendant in each of the six cases filed to date by
private companies. Loew says it has not been named as a defendant in any
of the actions filed to date by private companies. Two of the cases are
in the pre- trial, discovery stage, and both are scheduled for trial
during 2000.

             Reimbursement Cases by Labor Unions

Approximately 30 reimbursement suits are pending in various federal or
state courts in which the plaintiffs are labor unions, their trustees or
their trust funds. Lorillard is a defendant in each of these suits. Loew
is named as a defendant in three of them. Nine of the approximately 30
cases are on appeal from final judgments entered in defendants' favor by
the trial courts. The Second, Third, Fifth, Seventh and Ninth Circuit
Courts of Appeal have affirmed various rulings entered by trial courts
that dismissed several of the labor union actions, and the U.S. Supreme
Court has denied petitions for writ of certiorari that sought review of
some of these decisions. Each of the remaining cases is in the
pre-trial, discovery stage. Trial is scheduled to be held during 2000 in
one of the cases.

On March 18, 1999, the jury in Iron Workers Local Union No. 17 Insurance
Fund, et al. v. Philip Morris, Inc., et al. (U.S. District Court,
Northern District, Ohio, Eastern Division, filed May 20, 1997) returned
a verdict in favor of the defendants, which included Lorillard, on all
counts of plaintiffs' complaint. The trial was the first against
cigarette manufacturers in a case filed by union trust funds. During
pre-trial proceedings, the court granted plaintiffs' motion for class
certification on behalf of funds in Ohio established under the
Taft-Hartley Act. Plaintiffs have voluntarily dismissed the appeal they
noticed following the verdict.

In addition to the reimbursement cases, some suits have been filed
contesting the Master Settlement Agreement. Certain other actions have
been filed in which plaintiffs seek to intervene in cases governed by
the Master Settlement Agreement in order to achieve a different
distribution of the funds allocated by the Master Settlement Agreement
to the respective states.

                    Contribution Claims

In addition to the foregoing cases, nine cases are pending in which
private companies seek recovery of funds expended by them to individuals
whose asbestos disease or illness was alleged to have been caused in
whole or in part by smoking-related illnesses. Lorillard is named as a
defendant in each action, although it has not received service of
process of one of them. Loew is named as a defendant in four of the
cases, although it has not received service of process of one of the
actions. Each of these cases is in the pre-trial, discovery stage. Trial
is scheduled to be held during 2000 in three of the cases.

                          Filter Cases

A number of cases have been filed against Lorillard seeking damages for
cancer and other health effects claimed to have resulted from exposure
to asbestos fibers which were incorporated, for a limited period of
time, ending more than forty years ago, into the filter material used in
one of the brands of cigarettes manufactured by Lorillard. Approximately
25 such cases are pending in federal and state courts. Allegations of
liability include negligence, strict liability, fraud, misrepresentation
and breach of warranty. Plaintiffs in most of these cases seek
unspecified amounts in compensatory and punitive damages. Trials have
been held in 13 such cases. Two such trials were held in 1999 and one
trial was held in 2000. Juries have returned verdicts in favor of
Lorillard in 10 of the 13 trials. Three verdicts have been returned in
plaintiffs' favor, including in one of the cases tried during 1999. In
the 1999 trial, plaintiffs were awarded $2.2 in actual damages.
Lorillard has noticed an appeal from this verdict.

       California Business And Professions Code Cases

Two California cities, Los Angeles and San Jose, suing on behalf of the
People of the State of California, have filed suits alleging cigarette
manufacturers, including Lorillard, have violated a California statute,
commonly known as "Proposition 65," by failing to warn California
residents of the health risks of environmental tobacco smoke. Plaintiffs
in both suits further allege defendants violated certain provisions of
the California Business and Professions Code. Two other cases that make
similar allegations against manufacturers of other types of tobacco
products have been filed. The four suits have been transferred to a
coordinated proceeding in the Superior Court of San Diego County,
California. The court has entered an order dismissing the "Proposition
65" claims but certain causes of action remain pending. The four cases
are set for trial on June 2, 2000.

                      Antitrust Cases

Wholesalers and Direct Purchasers Suits - Lorillard and other domestic
and international cigarette manufacturers and their parent companies,
including Loew, have been named as defendants in four separate federal
court actions brought by tobacco product wholesalers for violations of
U.S. antitrust laws and international law. The complaints allege that
defendants conspired to fix the price of cigarettes to wholesalers since
1988 in violation of the Sherman Act. The action seeks certification of
a class including all domestic and international wholesalers similarly
affected by such alleged conduct, and seeks damages, injunctive relief
and attorneys' fees.

Twenty-five suits in various state courts have also been filed alleging
violations of state antitrust laws which permit indirect purchasers,
such as retailers and consumers, to sue under price fixing or consumer
fraud statutes. Approximately 18 states permit such suits.

                    Tobacco Growers Case

A purported class action on behalf of tobacco growers and quota holders
has been filed against the major U.S. cigarette manufacturers, their
parent companies (including Loew) and other affiliated entities in which
the plaintiffs allege the defendants conspired through the Master
Settlement Agreement and other related activities to displace the
tobacco quota and price support system that is administered by the
federal government; that the defendants misled plaintiffs into
supporting their legislative and settlement positions; and that the
defendants violated their fiduciary obligation to represent plaintiffs'
interests.

                          Defenses

Lorillard believes that it has a number of defenses to pending cases and
Lorillard will continue to maintain a vigorous defense in all such
litigation. These defenses, where applicable, include, among others,
pre-emption, statutes of limitations or repose, assumption of the risk,
comparative fault, the lack of proximate causation, the lack of any
defect in the product alleged by a plaintiff, defenses based upon the
Master Settlement Agreement and defenses available under general
antitrust law. Lorillard believes that some or all of these defenses
may, in many of the pending or anticipated cases, be found by a jury or
court to bar recovery by a plaintiff. Application of various defenses
are likely to be the subject of further legal proceedings in the
litigation.


U HAUL: Employees' Claims for OT Pay Set for Trial in July in CA
----------------------------------------------------------------
On June 24, 1997, five current and/or former Moving Center General
Managers and one Area Field Manager (AFM) filed suit in Marin County
Superior Court, Case No. BC 203532, entitled Sarah Saunders, et al. vs.
U-Haul Company of California, Inc., claiming that they were entitled to
be compensated for all overtime hours worked in excess of forty hours
per week. In addition, these Plaintiffs sought class action status
purporting to represent all persons employed in California as either a
salaried GM or AFM since September 1993.

On September 30, 1997, a virtually identical lawsuit was filed in Los
Angeles County Superior Court, Case No. BC 178775, entitled Wyatt
Crandall vs. U-Haul International, Inc. and U-Haul Co. of California.
This action did not include AFMs, but did purport to be brought on
behalf of GMs and GM trainees.

These cases were consolidated by the Court in Los Angeles on October 15,
1998. On June 10, 1999, Plaintiff's motion to certify the AFMs as a
class was denied and the motion to certify the GMs as a class was
granted. Notice of class certification was mailed on or about August 24,
1999. The class opt-out period ended on October 11, 1999. Trial is set
for July, 2000.


U.S. INFORMATION: Govt. Agrees to Employment Sex Bias Settlement
----------------------------------------------------------------
The federal government on March 22 agreed to a $508 million settlement
in a 23-year-old sex discrimination case, Justice Department officials
said. The settlement came in a suit filed in 1977 against the
now-defunct United States Information Agency. The class-action suit
charged the agency ''rejected employment applications from women based
on their sex'' in violation of the 1964 Civil Rights Act.

The proposed settlement, which is subject to approval by U.S. District
Judge James Robertson, comes 16 years after a federal court found the
government guilty of discriminating against women.

The women had applied for jobs as international radio broadcasters,
radio or electronic technicians, writers, editors and production
specialists with USIA between 1974 and 1984. Many of them were
experienced broadcasters, technicians, producers and qualified writers
and reporters who had worked for national news outlets, network
television and radio and the British Broadcasting Corp.

The court ordered the government to pay back pay and interest totaling
$22.7 million in individual awards to the more than 1,100 women who
sought relief, in addition to the $508 million settlement. Many of the
women also were awarded job relief and federal government retirement
accounts. (AP Online, March 22, 2000)


                              *********


S U B S C R I P T I O N  I N F O R M A T I O N
Class Action Reporter is a daily newsletter, co-published by Bankruptcy
Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc.,
Washington, DC. Theresa Cheuk, Managing Editor.

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

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