/raid1/www/Hosts/bankrupt/CAR_Public/000405.MBX                  C L A S S   A C T I O N   R E P O R T E R

                  Wednesday, April 5, 2000, Vol. 2, No. 67


ARMY CORPS: EEOC Approves Black Workers' on Discrimination
AURORA FOODS: Berman DeValerio to File Expanded Securiteis Suit in CA
BABY FORMULA: High Ct Oks Transfer to Fed Ct; Case over Price Killed
BANK WEST: Judge Agrees with Plaintiffs But Says Filing Is Too Late
ECONNECT, INC: Bernstein Liebhard Files Securities Suit in California

ECONNECT: Faruqi & Faruqi Files Securities Lawsuit in California
GLENDALE ELEMENTARY: School Retirees Told to Work for Medical Benefits
HALACO ENGINEERING: CA Dept Alleges Hazardous Waste Incineration
HOME SHOPPING: Angry PC Buyers Sue Defunct Proteva and TV Channel
ILIFE.COM, INC: Vows to Defend Vigorously Shareholder Suit in New York

INMATES LITIGATION: Former Representative for OK Prison Replaced
INMATES LITIGATION: Teen Testifies for Widespread Fighting at DJJ in SC
KTI, INCORPORATED: Donovan Miller Files Securities Suit in New Jersey
MICROSOFT CORP: Some Believe Ruling Could Stall Company With Legalities
MICROSOFT CORP: Vows to Fight Ruling on Antitrust

MICROTEST INC: Arguments for Dismissal of Securities Suits in AZ Heard
SEATTLE CITY: Parking Meter Lawsuit Dismissed; Faulty Equipment Fixed
TOBACCO LITIGATION: Forces Arrayed Threaten Bankruptcy
TOBACCO LITIGATION: Legislation Proposed to Shield Assets in NC
WA STATE: Judge OKs Class over Foster Child Treatment


ARMY CORPS: EEOC Approves Black Workers' Appeal on Discrimination
About 75 black workers have won approval from the Equal Employment
Opportunity Commission to move forward with a class action complaint
against the U.S. Army Corps of Engineers. Lee et al v. Dept. of the
Army, EEOC No.01990384, Feb. 23, 2000.

The employees claim that blacks in Vicksburg, Miss., are consistently
underpaid and denied promotional and training opportunities. Josh
Bowers, an attorney for the employees, said blacks in the agency go "so
far, but no further," regardless of education. "It's really a 21st
century practice," said Bowers. "They'll hire African-Americans, but
they won't promote them."

The complaint was initially filed with the agency's EEO office in 1997.
It was appealed to the EEOC's Office of Federal Operations in
Washington, after being dismissed by the agency and a local EEOC
administrative judge. The AJ found the employees had not met the EEOC's
rules for a class action complaint. For example, they failed to meet the
"adequacy of representation" requirement because the AJ had given their
attorney a 30-day extension to file his brief, and yet it was not
submitted on time.

The AJ's decision was overturned, however, at EEOC headquarters. OFO
found the employees had indeed met the necessary requirements, including
having an attorney who could "adequately" represent all the members of
the class. "The attorneys representing the complainants have extensive
litigation experience," the EEOC ruling says. OFO agreed with the
attorneys that their brief was filed on time. It also noted that they
had obtained a 1,000,000 settlement for 16 blacks in a previous case
against the Army of Corps of Engineers in Memphis, Tennessee.

Bowers, a partner with Washington-based Passman & Kaplan, was reluctant
to form "stereotypes" about the agency, but he said it has a "culture of
its own" that is historically tied to the Mississippi River. "It seems
to attract people with that way of thinking," he said.

About 200 of the agency's approximately 1,300 employees in Vicksburg are
black. Of those, 70 have already signed the class complaint.

As far as working out a settlement, Bowers said the agency had "not
contacted us at this time." It was "premature," he said, to talk about
remedies, but the employees will at least be looking for monetary
compensation and job opportunities they claim they were denied. (Federal
Human Resources Week, March 30, 2000)

AURORA FOODS: Berman DeValerio to File Expanded Securiteis Suit in CA
Aurora Foods, Inc. (NYSE: AOR) announced on April 3 that it would be
restating its 1998 third and fourth quarter financial statements and its
financial statements for the first three quarters of 1999. The
restatement will result in a reduction of earnings by an aggregate
amount of $81.6 million. Berman DeValerio & Pease, LLP, which has
already filed a class action in the United States District Court for the
Northern District of California, on behalf of all persons who purchased
common stock of Aurora Foods, Inc. (NYSE: AOR) between April 28, 1999
and February 17, 2000, will file an expanded class action to include
purchasers during the period October 28, 1998 through February 17, 2000
(the "Class Period").

The action charges Aurora and certain of its officers with violations of
the federal securities laws. Specifically, the complaint alleges that
the Company improperly accounted for its promotional expenses paid to
retailers of the Company's food products. As a result, expenses were
allegedly understated and thereby earnings were materially inflated in
violation of Generally Accepted Accounting Principles.

Contact:  Jennifer L. Finger, Esq., Jeffrey C. Block, Esq., Berman,
DeValerio & Pease LLP, One Liberty Square, Boston, MA 02109, Email:
800-516-9926 or Jennifer S. Abrams, Esq., Berman, DeValerio, Pease &
Tabacco PC, 425 California St., San Francisco, CA 94104, E-Mail:
415-433-3200  Website: http://www.bermanesq.com

BABY FORMULA: High Ct Oks Transfer to Fed Ct; Case over Price Killed
An evenly divided Supreme Court on April 3 killed a lawsuit that had
accused three companies of illegally conspiring to raise the price of
baby formula.

The 4-4 decision was a defeat for a couple who had filed the lawsuit and
had argued that it should have been handled in a Louisiana state court,
not a federal court.

The justices had been expected to use the case to clarify when some
lawsuits filed in state courts can be transferred to federal courts. But
the 4-4 vote, announced without any opinion, simply upheld a lower
court's ruling that allowed the baby formula case to be transferred to a
federal court, where it was dismissed.

The high court deadlock came about because Justice Sandra Day O'Connor
excused herself from the case. Although she did not explain her
disqualification, her most recently filed financial disclosure form
indicates that she owns between $15,000 and $50,000 worth of stock in
one of the three sued companies, Bristol-Myers Squibb.

The court, as is its custom after such votes, did not disclose which
justices voted on what side of the issue. Such 4-4 votes are considered
of little precedential value because of the possibility that the court
will someday return to the issue with all nine justices participating.

Robin and Renee Free sued in a Louisiana court in 1993, accusing
Bristol-Myers Squibb, Abbott Laboratories and Mead Johnson & Co. of
conspiring to raise the price of baby formula an alleged violation of
Louisiana antitrust law. Their lawsuit was a class action seeking up to
$20,000 in damages for each person.

The companies sought to move the case to federal court, but the Frees
argued that the amount of their claim did not meet the $50,000 minimum
required at the time for federal court jurisdiction.

The minimum has since been raised by Congress to $75,000.

The 5th U.S. Circuit Court of Appeals ruled that the case belonged in
federal court. Both sides later reached a $4.3 million settlement, but a
federal judge threw it out on grounds the settlement had not been proven
fair for all class members.

The judge then dismissed the case, saying Louisiana antitrust law did
not allow price-fixing lawsuits by people who only indirectly bought a
product from a manufacturer. The 5th Circuit court upheld the dismissal
last year. The case is Free v. Abbott Laboratories, 99-391. (AP Online,
April 3, 2000)

BANK WEST: Judge Agrees with Plaintiffs But Says Filing Is Too Late
Though he agreed with the plaintiffs suing a Michigan bank, a judge
dismissed their truth-in-lending case, saying they had filed too late.
News of the dismissal was announced by the Company and reported in the

A lawyer for the plaintiffs in the class action said they would appeal.

At issue was a $250-per-loan fee charged by Bank West of Grand Rapids.
The plaintiffs said the $237 million-asset bank misrepresented the fee
to make its loans more attractive.

The bank called it a document-preparation fee, but $250 was an "absurdly
high" sum to charge for that purpose, the plaintiffs said. They claimed
it was really a loan processing fee. These, unlike document-preparation
fees, must be included in interest rate calculations.

Kent County Judge Donald A. Johnston agreed. "The plaintiffs have an
argument which is hard to beat," he wrote. "The fee is simply an
inappropriate one under the Truth-in-Lending Act. ... Bank officials
themselves have suggested that the fee is considerably beyond that

Judge Johnstone wrote that he ruled in the bank's favor only because the
one-year statute of limitations in such cases had expired.

Chris Harding, a partner at Drew, Cooper & Anding, the law firm
representing the class of more than 500 plaintiffs, said the ruling
would be appealed. Mr. Harding declined to give specifics, but sources
said the appeal would focus on the judge's interpretation of the statute
of limitations.

Ronald A. Van Houten, president and chief executive officer of Bank
West, said he agreed with the dismissal but disagreed that the
plaintiffs' case had merit. He also predicted the bank would prevail in
any appeals. (The American Banker, April 4, 2000)

ECONNECT, INC: Bernstein Liebhard Files Securities Suit in California
A securities class action lawsuit was commenced on behalf of purchasers
of the common stock of eConnect, Inc.(Nasdaq: ECNC), between November
23, 1999 and March 13, 2000 inclusive, (the "Class Period"), in the
United States District Court for the Central District of California.

The complaint charges eConnect 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 information and
projections concerning the Company's business, earnings, growth and
prospects. Specifically, the complaint charges that defendants
misrepresented the daily revenue generated by the Company's websites as
well as the nature of certain of the Company's purported acquisitions
and alliances with other firms. On March 13, 2000 the SEC halted trading
in eConnect shares and commenced a civil action against the Company on
March 27, 2000. When trading in EConnect's shares resumed, EConnect's
stock price collapsed, losing approximately 91% of their value.

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

ECONNECT: Faruqi & Faruqi Files Securities Lawsuit in California
The law firm of Faruqi & Faruqi, LLP gives notice that a class action
lawsuit was commenced in the United States District Court for the
Central District of California on behalf of all purchasers of eConnect,
Inc. (NASDAQ: ECNC) common stock between November 23, 1999 and March 13,
2000, inclusive (the "Class Period").

The Complaint charged eConnect and certain of its executive officers
with violations of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. Among other things, plaintiff claims that
defendants issued a series of materially false and misleading statements
in press releases and SEC filings concerning the Company's business,
earnings, growth and prospects. Specifically, the complaint charges that
defendants misrepresented the daily revenue generated by the Company's
websites as well as the nature of certain of the Company's purported
acquisitions and alliances with other firms, including
misrepresentations regarding its licensing agreement with Palm Pilot. As
a result, the price of eConnect's common stock was inflated throughout
the Class Period. On March 13, 2000 the United States Securities and
Exchange Commission halted trading in eConnect shares and commenced a
civil action against the Company on March 27, 2000. When trading in
eConnect's shares resumed, eConnect's stock price plummeted, declining
approximately 91% in value.

Contact: Anthony Vozzolo, Esq. Faruqi & Faruqi, LLP 320 East 39th Street
New York, NY 10016 Telephone: (877) 247-4292 or (212) 983-9330 Fax:
(212) 983-9331 e-mail at FaruqiLawAV@aol.com

GLENDALE ELEMENTARY: School Retirees Told to Work for Medical Benefits
A Glendale school district has told more than 80 retired teachers and
staff members that they must return to work for up to 70 days a year --
without pay -- or lose their medical benefits.

The employees, some in poor health, signed early retirement packages
with Glendale Elementary as long as 11 years ago. They OK'd the deals
with the understanding that they would receive insurance until they
reached 65.

Superintendent Perry Hill says the issue popped up as he and district
lawyers were creating a separate early retirement plan that requires 20
days of work annually in order to retain health insurance. That's when
Hill realized that no work was being required of the 82 people who had
signed papers since 1989. Letters were then sent out to the group,
saying they'd have to report back in the 2000-01 school year. That might
be difficult for some, like Alberta McCartney, 60, who worked in the
district's accounting office. She has had a liver transplant, and the
anti-rejection medication she takes has caused partial kidney failure.

Retiree Truman Brewster, 56, is a diabetic, and the sores on his feet
have at times confined him to a wheelchair. He is using a walker. "When
you teach junior high school, you don't spend a lot of time sitting
down," said Brewster, who taught math and science at Landmark Middle

If retirees refuse to return, it could cost them as much as $700 a month
for insurance premiums.

                      New interpretation

District lawyers cited attorneys general opinions, some of which were
issued almost two decades ago, that it is illegal to pay benefits to
school personnel who are not working. Some of these same opinions were
read by teachers, who claim no such language speaks directly to their
situation. The subject apparently has not been revisited in years. Work
requirements and compensation vary widely throughout the state. Some
districts pay the retirees for working in addition to providing the
benefits. Glendale Union High School District, for example, requires no
work, and neither does Peoria Unified. The Phoenix Union High School and
Alhambra districts say teachers must work one day, but they are paid, as

Former teacher Nancy Haley told Hill at a recent meeting that the
retirement packages are not gifts. "It's a benefit we earned," she said.
"So many of us had faith that if we took the early retirement the
benefits would be there. We had faith in you, and you let us down."

                     A Broken Promise

Mary Ellen Signorille, an attorney for the American Association of
Retired Persons, said when someone leaves a job under certain retirement
rules and there is a change, it constitutes a broken promise.

"It's bad enough when there's a change when people are still working,
but it's another thing to change after retirement," she said. "When you
take retirement, it's with the expectations that the benefits are going
to be maintained. "Of course it's not fair. It's changing the rules in
the middle of the game. Unfortunately, from a legal perspective,
participants have not been very successful in arguing that to a court."

She said she is unaware of any other public sector situation similar to
the one in Glendale. In the private sector, however, she said it has
happened many times over. The courts have said that employers do have
the right to change the rules unless the complainants can show that they
were promised a lifetime benefit.

In general, employees have reason to worry no matter what their
profession, according to Earline Foster, human resources staff
consultant in the employee/labor relations division of SRP. "It's
getting to be more and more that many employers do not offer medical
regardless of the age when you retire," she said. "There have been many
changes and cost conservation as far as that benefit goes."

                    A Change in Strategy

Hill emphasized that this change is by no means a strategy to streamline
the budget, and a spokeswoman in his office said it had nothing to do
with rumors of an impending teacher shortage in the district. "The
question came out when studying this with our attorney: Why do the
present people (on the new plan) have to work and the present retirees
do not," Hill said.

Hill said he was advised that giving a benefit that does not require
work is a gift of public funds. "We can't do that," he said. "To receive
benefits, you have to work. We're not doing this based on what other
districts do, that's their responsibility. The issue is we have to be
legal. . . . When you find out you're doing something that's not legal,
you have to stop the practice right then."

Jim Kieffer, Glendale Union superintendent, said he has never
entertained notions of making early retirees work again. When people
retire, he said, they retire.

                     Class-action Suit

The retirees are thinking about filing a class-action lawsuit. Their
union, the Glendale Education Association, has said it would assist the
retirees in any way it could, including letter-writing and picketing.
The group has met with the Arizona Education Association, and another
session was planned.

Officials at the AEA say they are monitoring the situation. "We would
argue that (the health benefit) was part of their compensation package,"
said Raquel Altreche, an organization consultant. "There is nothing in
the law that says you have to work dollar for dollar."

Altreche has compassion for those employees who have to return: "What
about the retirees who have moved out of state? And what about those who
are disabled?"

Glendale Elementary's new plan involves issuing credits, valued between
$115 to $250 per day, based on the type of job performed. That means
someone who either retired at a lower pay rate or decides to do a task
on the lower end of the scale would have to put in at least 70 days a
year. Former administrators, meanwhile, might have to work as few as 20
days to qualify for benefits.

There are two potential catches here: If workdays are missed, the
credits will be pro-rated, and all who return will face job evaluations.

                      Flexibility Promised

Hill said the GESD would be flexible, and that each case would be
considered separately. Even that's not enough for McCartney, whose
doctor has classified her as "lifetime disabled." Hill said: "In today's
market, it's very difficult to develop a one-for-all attitude. There are
still things we have to resolve, like disability issues. We're going by
the ground rules that people will need to return."

Problems may be lurking on that front. Many retirees have moved out of
state, and others are caregivers. Health issues are paramount for some
-- one woman had to go the hospital after she received her notice in the
mail. Then there's Kathleen Stewart, who is a missionary in Peru.

Hill said he would listen to concerns, and that he has until July 1 to
work out everyone's case. "But we have to be careful that we just don't
make exceptions for everything," he said. "It was not the intent of the
board to go to extremes but to obey the law. To us, it is a legal issue,
not a punitive issue."

In addition, it has been reported that at least 34 other district
employees have agreed in recent months to a similar deal, and they
apparently will have to return to work when their retirements become
official. (The Arizona Republic, March 28, 2000)

HALACO ENGINEERING: CA Dept Alleges Hazardous Waste Incineration
The state Department of Toxic Substances Control alleges that Halaco
Engineering Co. in Oxnard has illegally incinerated hazardous wastes in
its furnaces for up to 20 years. The state agency and the Ventura County
District Attorney's Office seized oil samples and records as part of a
search warrant executed March 22 at Halaco's foundry at Ormond Beach.

Search warrant documents state that Halaco spread used waste oil and a
highly flammable, dangerous petroleum product called naphtha over tons
of scrap magnesium and aluminum that it burns and recycles at the plant.
The documents also indicate that Halaco plant manager Dave Gable lied to
regulators - including the Oxnard Fire Department during a Dec. 28
inspection - about having such hazardous wastes at the plant and also
falsely claimed he had a county Air Pollution Control District permit to
conduct such burns.

Gable denied telling inspectors he had such a permit. He referred other
questions to Halaco attorney Arthur Fine. Fine acknowledged that Halaco
has used oil and naphtha at the site. (AP)

HOME SHOPPING: Angry PC Buyers Sue Defunct Proteva and TV Channel
Larry Loftis believed the TV host who extolled the quality, the ease of
use and the lifetime of technical support Home Shopping Network offered
for a Proteva personal computer. And when he paid about $2,000 for his
first computer last year, Loftis assumed HSN was selling him a new one.
"Then I found some pictures of somebody else's family vacation stored in
the hard drive," said the 41-year-old Ohio resident. "Since then it's
been a nightmare dealing with one problem after another."

Loftis has plenty of company. Enough that a Chicago law firm has filed a
class-action suit against the now-defunct Proteva and the TV shopping
channel that sold thousands of computers to viewers.

The suit accuses both companies of consumer fraud and deceptive trade
practices by selling defective computers, refusing to honor rebates and
providing shoddy customer service. The case undermines HSN's five-year
effort to shed its bargain-basement image by promoting its
quality-assurance lab, selling more brand-name goods and beefing up its
selection of state-of-the-art consumer electronics.

HSN denies it has misled anybody, saying it has made extra efforts to
remedy any problems since Proteva filed for Chapter 11 bankruptcy
protection in August. It says it fronted another vendor $835,000 to
honor Proteva warranties for technical support. Proteva went out of
business awash in debt and unpaid suppliers ranging from Microsoft to

Proteva filed for bankruptcy protection shortly after the lawsuit was
filed and at about the same time HSN stopped selling its products. (The
News & Observer Raleigh, March 28, 2000)

ILIFE.COM, INC: Vows to Defend Vigorously Shareholder Suit in New York
ilife.com, Inc. (NASDAQ:ILIF) announced on April 3 that it has received
details of a shareholder class action lawsuit filed against the Company
and certain of its officers, directors, auditor and underwriters in the
U.S. District Court for the Southern District of New York on March 28,

G. Cotter Cunningham, interim Chief Executive Officer of ilife.com,
stated: "We have reviewed the complaint and believe the claims are
unfounded and the lawsuit is without merit. This lawsuit represents the
very type of shareholder strike suits, instigated by class action
plaintiff's lawyers, that Congress has recognized as abusive. Ilife.com
will vigorously defend itself against this litigation."

The complaint alleges that ilife.com violated the federal securities
laws by, among other things, misrepresenting and/or omitting material
information concerning ilife.com's results for the quarter ended March
31, 1999 in its registration statement filed with the Securities and
Exchange Commission in connection with the company's initial public
offering. The complaint was filed by a single shareholder, Brian
DeMaria, purportedly on behalf of all shareholders who purchased shares
of ilife.com's stock during the period from May 13, 1999 through March
27, 2000.

INMATES LITIGATION: Former Representative for OK Prison Replaced
The man who filed a lawsuit challenging Oklahoma's prison conditions has
been removed as the class representative in the landmark case.

The Battle vs. Anderson class-action lawsuit was filed by Bobby Battle
in 1972, alleging the Department of Corrections failed to provide
adequate medical care for inmates. But Battle hasn't been in state
custody since 1982, which attorney Louis Bullock argued showed Battle is
no longer a member of the affected class of prisoners.

U.S. District Judge Michael Burrage agreed and made Mike Williams, an
inmate at the Lawton Correctional Center, the class representative for
prisoners in the case. Williams' claims "are typical of the claims of
the class," Burrage said. The judge also ruled that Bullock may continue
to represent prisoners in the lawsuit, despite Battle's request to get
Bullock removed.

Battle said Bullock didn't keep him adequately informed about the case,
especially in the past year when Bullock and the Department of
Corrections began to work out a settlement.

Bullock maintained that Battle became angry with him after it became
clear that the former inmate would not receive "pro se" attorney's fees
in the settlement. "He wanted money," Bullock testified.

Battle called that allegation "flat lying" on Bullock's part. Battle
said Bullock's legal fees raised questions about where the attorney's
interests lie. The state, which pays Bullock's fees, has paid him more
than half a million dollars in the case. "I feel deeply that this case
has gone on for 28 years not for the benefit of the prisoners but for
the benefit of Mr. Bullock," Battle said. (The Associated Press, March
29, 2000)

INMATES LITIGATION: Teen Testifies for Widespread Fighting at DJJ in SC
A 15-year-old inmate in South Carolina's juvenile justice system said
that fights at system facilities are frequent and that guards rarely
prevent or stop them. The boy, referred to only as Robert, said in
federal court on April 4 that he has been in 62 fights in the seven
months he has been held at the John G. Richards facility in Columbia. He
says he's witnessed many more. "A lot of the fights are over nothing,
over stupid stuff," said Robert, who had a bandage on his forehead to
cover an injury suffered in a fight on Saturday.

Robert's testimony came on the first day on a non-jury trial in front of
Judge Joe Anderson. Lawyer and child advocate Gaston Fairey has asked
Anderson to order the state Juvenile Justice Department to increase
staff at all agency facilities and change the way it reports injuries
and sexual assaults.

Fairey said the department underreports the number and severity of
injuries. He said there are "extreme levels of violence and out of
control behavior" at the facilities. Fairey filed a class-action lawsuit
in 1990 to end overcrowding at department facilities.

Fairey said in court that an inmate's face injury described in agency
records as a "laceration to the lip with sutures" was actually a jaw
broken in three places that required a two-week hospitalization and the
jaw wired shut for two months.

Department director Gina Wood said in a statement that agency facilities
are safe and secure. "Although juveniles sometimes get into conflicts or
horseplay, we provide the supervision and counseling needed to curtail
these behaviors," she said.

Robert was 14 when he first went to Richards for violating probation on
an assault charge. He said fighting at the facilities was almost
inevitable because if you don't fight, other inmates take advantage of
you by stealing clothes, food and other possessions. He described
"blitzing," when as many as 10 others beat a single inmate with body
blows so they don't leave bruises on the face.

Lawyer Chris Mills asked where the guards are during the fights. Robert
said "You're guess is as good as mine." Robert said inmates rarely
report fights because they are afraid guards will not believe them or
that they will get beaten again for going to authorities.

Earlier, a former guard at the Richards facility said he saw new bruises
and scratches on Robert three days in a row. James E. Burkett testified
the boy said he was beaten as part of a gang initiation in his dorm.
Burkett said he quit his job as a guard because his superiors would do
nothing to stop the beatings. However, Robert testified that he was
never beaten as part of a gang initiation. Burkett currently works for
the department in a different capacity.

The trial is expected to last until the end of the week. The trial is
expected to last until the end of the week. (The Associated Press, April
4, 2000)

KTI, INCORPORATED: Donovan Miller Files Securities Suit in New Jersey
The law firm of Donovan Miller, LLC, announced on April 3 that a class
action lawsuit was filed in the United States District Court for the
District of New Jersey against KTI, Incorporated and Casella Waste
Systems, Inc. (Nasdaq - CWST - news), and certain of their Officers and
Directors, on behalf of all persons who purchased KTI securities between
January 1, 1998 and April 14, 1999 inclusive (the "Class Period").

The plaintiff in the case is a stock purchaser who is alleged to have
sustained losses as a result of defendants' alleged violations.

The Complaint alleges that, during the Class Period, KTI and the three
officer defendants (collectively, the "Individual Defendants") violated
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by,
among other things, intentionally concealing material facts about KTI's
fourth quarter 1998 financial and operating results and KTI's true
financial and operating condition during 1998.

The complaint further alleges that at some time prior to its April 14,
1999 public announcement of the termination of the merger agreement
between KTI and Casella, Casella knew or should have known KTI's
financial condition was materially worse than had been represented to
the public and failed to disclose it. The Complaint further alleges that
the price of KTI's shares was artificially inflated as a result of
Defendants' omissions of material fact.

Contact: Donovan Miller, LLC, Philadelphia Michael D. Donovan,
215/732-6020 Fax: 215/732-8060 E-mail mdonovan@dmlaw.com  Website

MICROSOFT CORP: Some Believe Ruling Could Stall Company With Legalities
Microsoft Corp's violation of antitrust laws will have no immediate
effect on the company's operations, but the focus it will have to take
on legal issues could hamper its future prospects, industry-watchers

Analysts agreed with Microsoft's verdict that the result was "not
unexpected," and with the whole legal process likely to take another two
years to resolve, the company's best weapon against the potential
breakup of the group will be time, they said.

However, with the software industry moving away from Microsoft's 'local
power' model to remote delivery and application service provision, some
viewers think Microsoft's time, effort and resources spent in court may
lead it lose its leading position to smaller more web-focused
competitors. "It took Bill Gates to personally turn Microsoft around two
years ago when the company had no internet focus whatsoever," said one
analyst, adding: "If all its energy is now invested in fighting in the
courts, then maybe that kind of strategic maneuvering couldn't happen."

Kevin Fogarty, business editor of Computercenter, said the only
short-term benefactors from the ruling would be lawyers. He commented:
"The whole process is going to take a long time. We've got several
months to go before we'll know the remedies, and Microsoft is fighting
back instantly by appealing to higher courts." Fogarty added that he
believes the case against Microsoft has "some weak underpinnings" which
would not stand up to appeals court scrutiny.

Analysts now view the threat of spurious litigation as Microsoft's
biggest immediate problem, with more than 115 class-action suits
launched against Microsoft since the findings of fact were issued last

Lawyers say many of these civil suits are unlikely to be sustainable --
Windows is primarily sold to PC resellers not consumers, and very few
states have laws in place that would let third parties sue Microsoft.
However, the cost of fighting these civil lawsuits could tie up
Microsoft's resources and manpower, analysts said.

Slim-client providers such as Sun Microsystems Inc, alternative
operating systems suppliers like Red Hat Inc, and web-oriented software
providers including Oracle Corp were all highlighted by analysts as
being potential long-term benefactors from Microsoft's troubles. (AFX -
Asia, April 4, 2000)

A report on The Atlanta Journal and Constitution, April 4, 2000 says
Judge Thomas Penfield Jackson's ruling Monday against Microsoft will
strengthen lawsuits now pending against the company and spawn even more,
antitrust lawyers predicted.

"This ruling will have a significant impact in terms of creating a road
map of liability against Microsoft in other cases," said Kevin Grady, an
antitrust lawyer for the Atlanta firm Alston & Bird. "And certainly, a
strongly worded order will probably bring a lot of other cases out of
the woodwork."

Dozens of lawsuits have already been filed against the company. These
include class-action cases filed by Microsoft's wholesalers and
distributors, suits filed by competitors of the software company and a
number of consumer complaints.

"The ruling from Judge Jackson is going to make it a lot easier because
it will be admissible in cases like ours," said San Francisco lawyer
Terry Gross. He filed suit against Microsoft on behalf of consumers and
companies, contending they paid too much for the Windows operating

Plaintiffs' lawyers in the California case will try to introduce
Jackson's ruling into evidence under the legal doctrine of "collateral
estoppel." This doctrine allows a ruling in another case --- such as the
federal antitrust case in Washington before Jackson --- to be admitted
in a similar case in another jurisdiction, The Atlanta Journal further
reports. Because the issue before Jackson has already been litigated by
Microsoft, it should not be allowed to be contested again, plaintiffs'
lawyers said.

The force of Jackson's ruling in these other cases, however, will have
limited effect until Microsoft's appeals run the gamut. Only if
Jackson's ruling is upheld can it be used persuasively in court. "All
the plaintiffs' lawyers are expecting the judge's ruling will improve
their position on liability against Microsoft or on damages, or both,"
said Atlanta lawyer Martin Chitwood, who specializes in class-action

Microsoft Chairman Bill Gates has called these types of class-action
cases " piling on." He has predicted his company will prevail on appeal
and contended that Microsoft has charged the lowest costs possible for

But Gross countered that the class-action complaints are being filed
because of the violations exposed in the federal antitrust litigation.
"These lawsuits are not being filed because we're piling on," the San
Francisco attorney said. "It's because the federal antitrust action has
turned over the rock under which Microsoft was hiding evidence of its
illegal monopolistic actions."

California is one of only 17 states that allow state court antitrust
lawsuits by consumers and companies that have not bought their products
directly from the company. A U.S. Supreme Court decision in 1977 barred
federal lawsuits by so-called indirect purchasers. For example, a
consumer who bought Microsoft software from a retailer cannot sue
Microsoft on antitrust grounds in federal court. Georgia is one of the
states that does not allow antitrust lawsuits against companies in its
state courts.

In Silicon Valley, Microsoft's competitors are sure to be poring over
Jackson's findings.

When deciding valid antitrust claims, the courts first determine the
total amount of commerce generated by the company found to have violated
the law. The courts then calculate what percentage of business it cost
the company that suffered the harm. "If upheld, this ruling could be
very valuable to Microsoft's rivals," Atlanta lawyer W. Pitts Carr said.
"In a case like this, looking at it from a damages standpoint, you're
talking about enormous, enormous numbers, potentially billions and
billions of dollars." (The Atlanta Journal and Constitution, April 4,

MICROSOFT CORP: Vows to Fight Ruling on Antitrust
Microsoft Chairman Bill Gates is vowing to fight a federal court
decision that his company violated U.S. antitrust laws by mounting a
''deliberate assault'' on competition in the Internet browser market.
The ruling could lead to drastic punishment, including the breakup of
one of the world's major corporations.

''Microsoft placed an oppressive thumb on the scale of competitive
fortune, thereby effectively guaranteeing its continued dominance,''
U.S. District Judge Thomas Penfield Jackson wrote in a sweeping decision
that said Microsoft violated the Sherman Act, the same law used to break
up monopolies from Standard Oil to AT&T.

The judge issued his ruling Monday April 3 after the stock market
closed, but word that it was coming caused Microsoft stock to drop by
more than $15 a share to $90.871/2, costing Gates about $12.1 billion in
paper losses.

Gates, the super-competitive Harvard University dropout who in 25 years
built Microsoft into a multibillion-dollar empire that dominates the
personal computer software market, immediately promised to appeal. ''We
believe we have a strong case,'' he said. ''This ruling turns on its
head the reality that consumers know: That our software has helped make
PCs accessible and more affordable to millions of Americans.''

Sen. John McCain, R-Ariz., chairman of the Senate Commerce Committee,
said on NBC's ''Today'' that he will hold hearings on the case. ''I
think it is the role of Congress to assess two things: one, the impact
on the consumer of such action that might have to be taken on the part
of Microsoft; and, two, what is the impact on this incredible engine
that's driving America's economy?''

Jackson's ruling came days after settlement talks broke down between the
Redmond, Wash.-based company and government lawyers, but both sides
Monday still left the door open to an agreement. Justice Department
antitrust chief Joel Klein said he was willing to consider a settlement
as long as it resolved the violations Jackson cited. Microsoft Chief
Executive Steve Ballmer said the company would be open to more
negotiations but it ''would need to see an appropriate openness'' from
the government.

If no agreement is reached, Jackson will begin considering what penalty
to impose, possibly by summer. The options range from breaking up the
company whose Windows operating system runs most of the world's personal
computers to forcing it to share its software code with competitors.

Microsoft's appeal of the judge's decision could take years, postponing
the effect of any penalty. The 19 states that joined the federal
government in suing Microsoft also can seek penalties under their own
anti-competition laws.

Monday's decision affirms Jackson's previous ruling in November that the
software giant is a monopoly that illegally bullied competitors and
stifled innovation, hurting consumers in the process. The judge said
Microsoft was guilty of ''unlawfully tying its Web browser'' to Windows.
''Microsoft mounted a deliberate assault upon entrepreneurial efforts
that, left to rise or fall on their own merits, could well have enabled
the introduction of competition into the market,'' Jackson wrote.
''Microsoft's anticompetitive actions trammeled the competitive process
through which the computer software industry generally stimulates

Microsoft didn't lose all of the case: Jackson ruled that the government
failed to prove that Microsoft's exclusive marketing arrangements with
other companies violated federal antitrust law. The Justice Department
vowed to press the case until consumers are rewarded. ''Thanks to this
ruling, consumers who have been harmed can now look forward to
benefits,'' Attorney General Janet Reno said.

Attorneys general for the states that joined the case called for strict
sanctions. Connecticut Attorney General Richard Blumenthal urged Jackson
to ''adopt remedies that are as far-reaching and fundamental as
Microsoft's abuses of its monopoly.''

Consumer advocate Ralph Nader said, ''The judge has laid the foundation
for the breakup of Microsoft. Anything less than that will be like a
thundering elephant emitting the squeak of a mouse.''

However, Gates said, ''As we look ahead to the appeals process,
innovation will continue to be the number one priority at Microsoft. ...
It's important to note how much the high technology industry has changed
just in the two years since this case has been filed.'' In an interview
published in The Wall Street Journal before Jackson released his ruling,
Gates said that regardless of what the judge decided, his company would
continue to integrate the Internet into its Windows software, even
though that linkage was at the core of the Justice Department lawsuit.

Klein told reporters Microsoft's violations occurred after the company
reached an agreement with the Justice Department in a previous case
about five years ago. The government will seek a remedy that ''ensures
that we not have this continued pattern of antitrust violation,'' he

Both sides in the case had reasons to seek a settlement. For Microsoft,
the verdict is expected to spur more consumer lawsuits. Microsoft
already faces dozens of class-action lawsuits seeking potentially
billions of dollars in damages. For the government, an out-of-court
settlement could have meant immediate sanctions against Microsoft. Such
relief would be delayed with a lengthy legal battle in federal appeals
court, and the U.S. attorney general's office will be under a new
administration by then. (AP Online, April 4, 2000)

MICROTEST INC: Arguments for Dismissal of Securities Suits in AZ Heard
Richard G. Meise, former Chief Executive Officer, Charles Mihaylo,
former Chief Operating Officer and John O'Block, former Chief Financial
Officer have been named as defendants in two purported class action

  * Great Neck Capital Appreciation Investment Partnership, L.P., et.
    al. v. Microtest, Inc., et. al., CIV 99-0438 PHX EHC filed on March
    8, 1999, in United States District Court for the District of
  * Banks v. Microtest, Inc., et. al., CIV 99-672 PHX EHC filed on
    April 7, 1999 in United States District Court for the District of

The two lawsuits contain substantially the same allegations and were
brought on behalf of a class of persons who purchased the Company's
common stock between April 14, 1998 and March 2, 1999. The complaints
allege claims under Section 10(b) and SEC Rule 10b-5 of the Securities
and Exchange Act of 1934. The claims further allege that the Company
made misrepresentations or omissions concerning our financial statements
and public disclosures that artificially inflated the price of our
common stock. The plaintiffs seek an unspecified amount of actual
damages, attorney's fees and costs.

On November 29, 1999, a motion to dismiss the lawsuit was filed. On
January 10, 2000, the Court heard arguments on the motion to dismiss.
This motion is currently pending. Microtest intends to defend the
actions vigorously. The Company says it is unable to predict the
ultimate outcome of this litigation and if the lawsuits were ultimately
determined adversely to Microtest, it could have a material effect on
the Company's results of operations and financial condition.

The Securities and Exchange Commission ("SEC") is engaged in an
investigation relating primarily to the Company's accounting matters.
They have requested and received documents from Microtest and taken
testimony from certain former employees. The SEC has not indicated
whether they intend to formally expand the scope of the investigation,
or take any other measures. They have not, to date, asserted any
specific claims, or remedy. The Company is unable to predict the effect,
if any, of this inquiry.

SEATTLE CITY: Parking Meter Lawsuit Dismissed; Faulty Equipment Fixed
A judge has dismissed a class-action lawsuit filed over parking meters
in Seattle that shorted motorists on time, and the lawyer handling the
case is considering whether to appeal. "Part of what we wanted has
already been accomplished - the meters have been fixed," said attorney
Steve Berman in a telephone interview Monday. "One of our objectives was
to force them to fix the meters." In addition to city assurances about
improved accuracy, he said, "We've done a test and they seem to be"

The lawsuit filed last fall sought unspecified damages, with Berman
citing an estimated $30 million in excess parking citations. The case
was dismissed by King County Superior Court Judge Larry Jordan. "Now
we're evaluating whether to appeal the decision, which I think is
wrong," Berman said.

He had contended that motorists putting money in parking meters had an
implied contract, paying a certain sum for a certain time period.
According to Berman, the judge found that when a motorist rents a meter
from city, "the city is acting in a police-power capacity, and you can't
have a contract when the city is engaged in law enforcement activity."
He contends that in operating meters, the city is simply collecting
money. "A city can act in commercial capacity - they do it all time,"
Berman said. When it comes to operating meters, "they're not engaged in
law enforcement, they're engaged in money collection. I think the law is
pretty clear that we're right on that."

The case caused a local flap when Mayor Paul Schell suggested people who
believe they've been shortchanged by meters should contest their parking
tickets. After he was lambasted in the media, Schell apologized and
promised to have the meters repaired.

Berman figured the public had paid out $5 million in overtime-parking
fees in each of the past six years, based on the city's estimate that 40
percent of the meters had faulty timing devices and the $13 million in
parking fines levied annually. Berman says the meters should have been
replaced in 1993, if not before. (The News Tribune Tacoma, March 28,

TOBACCO LITIGATION: Forces Arrayed Threaten Bankruptcy
Litigation against tobacco companies has reached the point where it
could eventually force fundamental restructuring of one of the oldest
and most profitable industries in America, according to The Christian
Science Monitor, April 4, 2000.

Taken together, recent judgments against tobacco firms indicate that
their potential legal opponents are more numerous than previously
thought - and that those opponents have a better shot at victory than
they did only a few years ago.

For tobacco companies, this raises the specter of bankruptcy via
liability costs. It may put them under increasing pressure to seek
congressional regulation to ensure future financial viability.

If nothing else, some antitobacco activists say they finally see
progress toward their own vision of 22nd-century tobacco: A
stripped-down industry that focuses on serving existing customers, while
making no overt effort to win new ones.

"My guess is that in the future tobacco firms will be run by different
executives largely for the financial benefit of their generations of
victims," says Richard Daynard, a law professor at Northeastern
University in Boston and head of the Tobacco Products Liability Project.

Tobacco's new legal peril has developed quickly. From the beginning of
the modern era of tobacco litigation in 1954 until 1996, the industry
was never forced to pay anything to an individual litigant. As recently
as two years ago, the industry's mammoth settlement with state attorneys
general held out the promise of protection against many prospective

What caused the change? In a word, paper. Millions of pages of internal
industry documents unearthed by state lawsuits have provided juries an
unprecedented glimpse into the mind of Big Tobacco.

In the past, juries have tended to hold smokers responsible for their
own smoking. That is especially true for litigants who began smoking
after the 1960s, when the federal government forced the industry to slap
labels on cigarettes, warning of tobacco's dangers.

But the internal documents have reversed this tendency and caused jurors
to increasingly consider the industry's role in luring smokers into

"When [jurors] see the way tobacco companies behave, it all changes,"
says Professor Daynard.

Attitude as well as actions have hurt the firms in this regard. Consider
an R.J. Reynolds Tobacco Co. memo boasting about making legal cases
prohibitively expensive for plaintiffs: "The way we won these cases, to
paraphrase Gen. Patton, is not by spending all of Reynolds' money, but
by making the other [person] spend all of his," says the memo.

Lately it is the other person that has been winning. Last week, a San
Francisco Superior Court jury awarded a Californian $ 20 million in
punitive damages from tobacco firms. It was the third straight West
Coast defeat for tobacco. The plaintiff, Leslie Whiteley, took up
smoking long after warning labels became standard practice.

This week, a jury in Miami begins deliberations in the first antitobacco
class-action lawsuit to ever reach trial. The jury has already held that
the tobacco industry engaged in deceptive practices. Since a
class-action involves tens of thousands of litigants, punitive damages
in the Florida case could total tens of billions of dollars - possibly
pushing some tobacco companies into bankruptcy.

The tobacco industry still has some hope in these cases, of course. They
could be overturned on appeal, restoring the legal status quo in respect
to the industry. State legislators in Florida are considering
legislation that would have the effect of greatly delaying tobacco's
punitive-damage payout.

But the outcome of these particular lawsuits is no longer the point, say
legal experts. Plaintiff lawyers now sense that the once-invulnerable
tobacco industry can be beaten. Once that happens, they circle like
sharks. More such cases inevitably follow.

"It could be the death of a million cuts," says Stephen Gillers, a
tobacco-litigation expert at New York University.

The future shape of the industry is thus an open question, says
Professor Gillers. He hazards three possible scenarios. In one, tobacco
firms could go to Congress and ask for legislative protection, in return
for agreeing to some regulation of their product. Second, they could
simply hike prices and accept legal losses as a cost of doing business.
Or third, they could launch an aggressive antismoking campaign on their
own, in an effort to change their legal situation and persuade juries
they are not acting in a predatory manner.

One way or another, cigarettes will continue to be made and sold in the
United States. The industry is too large to fade away, and there are too
many existing customers to service. Not even the toughest antismoking
group wants 43 million US smokers to have to quit, cold turkey.

The focus for many antismoking groups is future generations. And even if
they are successful in forcing the industry to in essence de-market
itself, young people could still pick up pro-smoking messages through
the Internet or foreign cultures. "There are a lot of ways to be exposed
to smoking. That may be where the battle is finally fought," says
Gillers. (The Christian Science Monitor, April 4, 2000)

TOBACCO LITIGATION: Legislation Proposed to Shield Assets in NC
A day before a special session of the General Assembly, legislators were
to gather on April 4 for an informal briefing on proposed legislation
that would shield the assets of tobacco companies in North Carolina from
seizure while they appeal a potentially crippling verdict in a Florida
class-action lawsuit.

Lawmakers will consider a measure that imposes a $ 25 million cap on the
bonds that North Carolina companies must post during appeals. Three
other states with large tobacco manufacturing operations already have
passed similar measures.

State Sen. Linda Garrou, a Winston-Salem Democrat who will sponsor the
bill, said in an interview Monday that the cap is necessary to protect
an important part of the state's economy. She said the debate over the
bill should be about economic issues, not health concerns about smoking.
"I see it more from a people standpoint than a product standpoint,"
Garrou said. "It's an economic issue and one that hits home."

Tobacco companies face the prospect of a huge legal judgment of more
than $ 100 billion in the class-action lawsuit seeking damages from
smoking related illnesses. Under Florida law, the companies would be
required to post an appeal bond equal to the amount awarded in damages
plus interest. If tobacco companies can't post that amount, they've
suggested they could be forced to declare bankruptcy.

Supporters of the measure contend that it is a matter of fairness that
North Carolina companies have the same right of appeal of legal
judgments awarded in other states as they would in North Carolina
without being forced into bankruptcy. "Obviously people are going to
work very aggressively to get a crack at Reynolds," Senate President Pro
Tem Marc Basnight, a Manteo Democrat, said. "They'll do it to Hershey's
chocolate one day. You should have the opportunity to exhaust that
appeal. To let some attorney in Florida get billions of dollars, I'm not
for that - without an appeal."

Tobacco companies first approached legislative leaders last year and
wanted the General Assembly to take up the issue during the special
session on Hurricane Floyd. They tried again when it appeared the
legislature would have a session on redistricting. Rep. Phil Baddour, a
Goldsboro Democrat who will chair the House committee on the
legislation, said there appears to be broad support for the legislation.

Some legal scholars have said the legislation violated the Full Faith
and Credit Clause of the U.S. Constitution, which requires states to
honor each other's court decisions.

But Baddour said the proposed cap would not interfere with a final
judgment. Instead, he said, it would establishes a procedure for
enforcing judgments in this state. "I'm not interested in seeing RJR go
under so all the tobacco jobs can go to Virginia or some other state,"
Baddour said. (The News and Observer (Raleigh, NC), April 4, 2000)

WA STATE: Judge OKs Class over Foster Child Treatment
A lawsuit alleging that the state failed to give foster children stable
homes has moved toward class-action status and could ultimately cover
thousands of children in Washington.

The suit, filed in Whatcom County Superior Court, originally covered 13
children from nine families. It sought unspecified damages as well as
large-scale changes in the foster-care system administered by the state
Department of Social and Health Services.

A judge accepted a motion to expand the suit to a class-action earlier
this month, after a national child-advocacy group agreed to join
Bellingham attorney Tim Farris as co-counsel. Farris filed the original
suit in November 1998. "There's no excuse for the number of times
children are being moved," Farris said.

One of the original foster children in the suit was moved 29 times over
14 years in foster care, attending 20 different schools and seeing 19
different therapists and seven caseworkers. According to Department of
Social and Health Services documents, the girl, now 18, suffers from
depression and has had been admitted to a hospital twice for psychiatric

"If a biological parent abandoned a child in 29 different homes, we'd
call that neglect. That's exactly what the state does when it brings
these children into care and then abandons them with strangers again and
again," Farris said. "This has got to stop," said Bill Grimm, an
attorney with the National Center for Youth Law, which has agreed to
join Farris in the suit. "One of the worst ways the system treats
children is moving them around. ... We want DSHS to learn a lesson -
that it is not free or cheap to move these children around," Grimm said.

Farris and Grimm will ask the court within a month to certify the suit
as a class action, as well as scheduling a 2000 trial date.

The state will oppose certification, Assistant Attorney General Jeff
Freimund said. He said the suit blames the state for psychological
problems that existed before children were placed into foster care. As a
class action, it also unfairly assumes all foster children are treated
in the same way, he said. "By definition, these children are victims of
severely dysfunctional upbringings," Freimund said. "That seems to be a
more likely explanation (for their problems)." If certified as a class
action, the suit would not seek damages for any but the first 13
plaintiffs but would seek changes in the state system.

A 1996 state study found that 44 percent of children who stay in care
for one year or longer are moved three or more times, while 15 percent
of children in care more than a year live in five or more homes. About
28 percent of the state's 11,000 foster children are in care longer than
one year. Fifty percent of foster children go back to their biological
parents' home within two months, while the rest go home after two to 12
months in care. Besides frequent moves, the suit seeks changes in
psychological care for foster children, claiming the state often fails
to provide appropriate treatment.

A similar lawsuit in Arkansas led to a settlement five years ago that
increased the number of caseworkers and resulted in all foster children
receiving mental-health and physical evaluations within 60 days of
removal from their families, Grimm said.

In a California case, a judge ruled in favor of the state, finding that
while children ideally would be raised by a single set of parents, it
does not follow that they will be emotionally damaged when that doesn't
happen. (The Associated Press, March 29, 2000)


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