/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/000406.MBX C L A S S A C T I O N R E P O R T E R Thursday, April 6, 2000, Vol. 2, No. 68 Headlines BASF CORP: Judge Dismisses Farmers' Herbicide Deceptive Selling Lawsuit CINAR CORP: Founders in Talks to Sell Stake; CanWest at Table CONNECTIX CORP: Device that Emulates Sony Playstation (R) Ruled As Fair ECONNECT, INC: The Pomerantz Firm Announces Securities Lawsuit FOOD LION: Shareholders Ask Supreme Court to Review Dismissal KPMG: Summary Notice of Fairness Hearing Re Piper Jaffray (PJIGX) MICROSOFT CORP: Judge Proposes Expedited Appeal, Makes Tight Schedule MICROSOFT CORP: Legal & Tech Experts Voice Concern; Battle Just Begun NETWORK ASSOCIATES: 9th Cir Decides Not to Intervene in Securities Suit NEW ENGLAND: Goodman & Nekvasil Files Securities Suit in Florida NINA BRINK: World Online Shares Fall As Chairwoman Under Legal Threats PEAPOD INC: Milberg Weiss Files Securities Suit in Illinois SAFETY-KLEEN CORP: Berman DeValerio Files Securities Suit in SC SANTA CLARA: County in CA Forced to Pay $ 4.5 Mil in Back Wages for OT SECURITY AGENCIES: Unsuccessful Job Applicants Sue over Polygraph Exams TOBACCO LITIGATION: B&W Issues Statement Re Denial of Class in CA Ct TOBACCO LITIGATION: Bill to Cap Tobacco Damage Bond Passed in NC TOBACCO LITIGATION: Jury Asked Not to Let Makers 'off the Hook' TOBACCO LITIGATION: Trial To Enter Deliberations Phase TRW VEHICLE: Redidents in Mesa, Arizona Sue over Toxic Emissions ********* BASF CORP: Judge Dismisses Farmers' Herbicide Deceptive Selling Lawsuit --- -------------------------------------------------------------------- Farmers plan to appeal the dismissal of a lawsuit accusing the chemical giant BASF Corp. of deceiving the farmers by selling one herbicide as two separate products, charging a premium for the one marketed as stronger. The farmers from around the country contend Mount Olive, N.J.-based BASF used bogus marketing practices for its Poast and Poast Plus products, which kill weed grasses. Norman County District Judge Michael Crocker dismissed the class-action lawsuit March 2, ruling that the company had complied with state and federal rules, according to Douglas Nill, a Minneapolis attorney representing the farmers. Nill said on April 5 that the farmers will appeal. "The fact that the company complied with federal and state labeling and registration processes is in no way a defense to their deceptive and fraudulent formulating, pricing and marketing schemes," Nill said. Although the products were marketed for different uses, they were registered with the Environmental Protection Agency in 1992 for use on the same crops, Nill has said. He contends the labeling and pricing violate New Jersey's consumer protection act, which can be applied in any state. He said some farmers figured out from the labels that the products were the same and used the cheaper herbicide instead. But others thought Poast Plus was stronger and paid $4 an acre more. "They knew farmers relied upon the label," Nill said. The farmers were seeking an undisclosed amount of damages. (The Associated Press, April 5, 2000) CINAR CORP: Founders in Talks to Sell Stake; CanWest at Table --- ---------------------------------------------------------- Micheline Charest and Ronald Weinberg, the ousted chief executives of Cinar Corp., have begun talks with some of Canada's top entertainment firms to sell their majority stake of the Montreal animator, sources say. Firms said to be looking at buying the assets of the embattled company include CanWest Global Communications Inc. and Alliance Atlantis Communications Inc. Some U.S. firms are also said to be interested, including Nickelodeon, the number one children's cable network in the U.S. and Saban Entertainment, both of which Cinar currently has distribution deals. The couple, who co-founded Cinar, were in Toronto to meet with CanWest executives and are expected to set up meetings with other companies such as Alliance Atlantis and possibly Nelvana Inc., another Canadian animator. However, it is understood Nelvana is not interested in purchasing Cinar's assets. While the talks are said to be preliminary, they are the first step in the company's attempt to salvage its assets, with the goal of getting shareholders the best return for the stock, which has fallen nearly 75% since Cinar's troubles began last fall. The company is facing allegations of tax fraud, for prompting Canadians to say they were authors of scripts actually written by Americans, as well as a scandal involving the unauthorized investment of $122-million. (All figures in U.S. dollars.) Mr. Weinberg and Ms. Charest, as well as the company's former senior executive vice-president, Hasanain Panju, have been fired as a result of the improper investments made to Norshield Investments Inc., a Bahamian money management firm. The company's stock has been halted for weeks on the Toronto Stock Exchange, as well as the Nasdaq, where its volume is much higher, with regulators requesting more information on the whereabouts of the improper investments. As sale talks progress, Cinar would sign what is known as lockup agreements, to provide exclusivity when dealing with potential suitors. This could also create a bidding war which would drive up the price of the assets. One analyst estimated in early March that Cinar's library might be worth about $150-million, based on about $100,000 an episode. Mr. Weinberg and Micheline Charest, who are married, own a 62% voting stake in the company. Other major shareholders, who are also said to be interested in selling the company's assets, include Fidelity Management & Research Co., with 15%; John McStay Investments, with 8%; Edgemont Asset Management, with 4.5%; and Alliance Capital Management with 4%. One major shareholder said the desire is to sell the company as a whole, not in parts. 'I don't want to see this thing unravel,' said the shareholder who did not want to be named. CanWest, through its division called CanWest Entertainment -- one of Canada's largest production, distribution and financing companies of movies and television programs -- is believed to be interested in Cinar's extensive library of shows. CanWest's long-term strategy is to acquire more libraries to build content. Meantime, Alliance Atlantis would be interested in expanding its children's programming division following the launch this fall of its new label called AAC Kids. Alliance Atlantis already handles such children's programming as the Academy Award-winning Boys and Girls, based on the short story by Canadian author Alice Munro and the Daytime Emmy Award nominated shows Curse of the Viking Grace and Lost in the Barrens, based on novels by Farley Mowat. Both CanWest and Alliance Atlantis are said to be leery still of acquiring Cinar given its current troubles, which includes a number of class action lawsuits in North America, but are consulting lawyers to make arrangements for any possible liabilities to be excluded from the deal. (National Post (formerly The Financial Post), April 05, 2000) CONNECTIX CORP: Device that Emulates Sony Playstation (R) Ruled As Fair --- -------------------------------------------------------------------- A panel of the Ninth Circuit has allowed Connectix Corp. to resume selling its Virtual Game System, finding that Connectix's copying of certain elements of plaintiff Sony Computer Entertainment's software was permissible reverse engineering and, therefore, a fair use under the Copyright Act. Sony Computer Entertainment v. Connectix. P. 67. Minn. Class Action Hits Microsoft with Price-Fixing, Restraint of Trade ClaimsA consumer class action, filed in state court under the Minnesota Antitrust Act, has charged software giant Microsoft Corp. with monopolization in order to fix prices and restrain trade in the operating systems market. It also alleges Microsoft engaged in contracts in unreasonable restraint of trade to suppress and restrain trade and innovation in the market for Internet browsers or other application programming interfaces. Rubbright Group v. Microsoft. P. 68. Firm Asks Supreme Court to Review Antitrust Ruling in Favor of DECSMS Systems Maintenance Services has filed a petition for writ of certiorari asking the U.S. Supreme Court to review a decision affirming summary judgment in favor of Digital Equipment Corp. in an antitrust dispute involving the servicing of Digital computer equipment. SMS Sys. Maintenance Serv. v. Digital Equipment Corp. P. 69. Court Refuses to Dismiss Infringement Suit for Lack of Jurisdiction, VenueThe Eastern District of Wisconsin has refused to dismiss for lack of personal jurisdiction and lack of venue a copyright and patent infringement suit filed by a Milwaukee software company. PKWare Inc. v. Meade. P. 71. Mass. Ct. Refuses to Grant Judgment in Patent Dispute over CAD SoftwareThe District of Massachusetts has refused to grant summary judgment to either party in a patent dispute concerning the design of a template and digitizing tablet to simplify the operation of computer aided design software. Baystate Tech. v. Bowers. P. 73. E-mail Service Enjoined from Using 'CoolMail' TrademarkA company that purchased rights to the mark "Coolmail" from an individual who used the mark on free software distributed over the Internet has senior rights in the mark, a federal judge in Florida has ruled. Even though the software on which the mark "Coolmail" was first used was free, it was still "transported in commerce" under the Lanham Act, the judge said. Planetary Motion v. Techsplosion. P. 74. Lack of Timely Assurances Fails to Justify Breach of Contract ClaimEven though By-Lo Oil Co. felt compelled to spend $175,000 on a new computer system when the vendor of its computer software, ParTech, failed to respond to By-Lo's request for assurances that the software was Y2K compliant, the Eastern District of Michigan dismissed By-Lo's breach of contract suit against Par-Tech. By-Lo Oil Co. v. ParTech. P. 75. GAO Finds Lapses in FAA Security In Y2K Remediation EffortsMincing no words, the U.S. General Accounting Office has issued a report concluding that the failure of the Federal Aviation Administration to conduct background searches on foreign nationals who participated in the FAA's Y2K remediation efforts could mean that the air traffic control system may be more susceptible to intrusion and malicious attacks. P. 76. Advisory Board Finds Unforeseen Benefits of Y2K EffortsNow that Y2K has passed virtually glitch-free, some assert with the wisdom of hindsight that governments spent millions of dollars and hours of manpower for naught. Not so, concludes a report issued by an Intergovernmental Advisory Board. P. 77. ShinMaywa Industries Rebuts Insurers' Amicus ArgumentsShinMaywa Industries, the defendant fighting an insurance coverage lawsuit by Transportation Insurance Ltd., fired back at arguments made by the Insurers Year 2000 Roundtable in the answer brief it filed in response to the insurers' amicus curiae brief. Transp. Ins. v. ShinMawya Indus. Ltd. (Software Law Bulletin, April 2000) ECONNECT, INC: The Pomerantz Firm Announces Securities Lawsuit --- ----------------------------------------------------------- Pomerantz Haudek Block Grossman & Gross LLP (http://www.pomerantzlaw.com)announces the Class Period for purchasers of the common stock of the below listed security: ECONNECT, INC. (OTC Bulletin Board:ECNC) Class Period: February 22, 2000 and March 13, 2000, inclusive Contact: Pomerantz Haudek Block Grossman & Gross LLP Andrew G. Tolan, Esq., 888/476-6529 (888/4-POMLAW) agtolan@pomlaw.com FOOD LION: Shareholders Ask Supreme Court to Review Dismissal --- ---------------------------------------------------------- The shareholders of Food Lion Inc. claim the Fourth Circuit erred when it dismissed their securities fraud class action against the supermarket chain and have asked the U.S. Supreme Court to review the panel's treatment of the "fraud on the market" presumption. Longman et al. v. Food Lion Inc., No. 991313, petition for certiorari filed (U.S., Feb. 3. 2000). "The Fourth Circuit's ruling, if it is allowed to stand, promises effectively to eliminate the fraud on the market presumption in that jurisdiction," according to the shareholders. The presumption relieves a plaintiff from proving actual reliance on a corporation's public misrepresentations by assuming the information is absorbed by the market and reflected in the stock price. In 1992, David Longman filed suit against Food Lion, alleging the chain and its president, Tom E. Smith, expressly denied widespread illegal labor practices that resulted in artificially inflated profits and stock prices. The class period ran from May 7, 1990, to Nov. 5, 1992. In 1998, the Middle District of North Carolina ruled the illegal labor practices were fully disclosed to the public by Sept. 11, 1991, when the United Food and Commercial Workers Union (UFCW) announced it had filed a complaint against the company with the U.S. Department of Labor (DOL). The court then dismissed the complaint, ruling that the investors who purchased Food Lion stock after that date did not justifiably rely on the alleged material omissions. Those investors who purchased before Sept. 11, 1991, were barred by the statute of limitations from pursuing their claims. A divided panel of the U.S. Court of Appeals for the Fourth Circuit affirmed, concluding the claims were well known to the market before the end of the proposed class period and, therefore, Food Lion's omissions were not material. Longman's Argument Longman originally sued Food Lion shortly after a Nov. 5, 1992, "Prime Time Live" broadcast exposed the illegal labor practices. The day after the program aired, Food Lion's Class A stock fell approximately 11 percent and its Class B stock fell about 14 percent. The DOL also initiated its own suit against the company within a few days. At the time, Food Lion had in place a time-management system called "Effective Scheduling" that required employees to perform specific duties within certain times. If employees failed to complete the tasks during the allotted time, they either finished the work "off the clock" or took the chance of being fired. Food Lion "continually and vociferously" denied reports of the labor law violations, the plaintiff says. When the union first called for a boycott of Food Lion stores in 1990, Longman asserts the company issued a press release portraying its employees as well-compensated and working in positions that were highly sought after by the work force. By the time the UFCW filed its complaint in 1991, the union said Food Lion derived 37 percent of its after-tax profit from illegal work. However, Food Lion attempted to discredit the union's motives, stating, " O ur employees' hard work and company efficiencies in operations result in lower prices which threaten unionized competitors." Longman says leading market analysts discounted the union's 1991 suit as mere harassment, and some even said it was a good time to buy the stock. Paine Webber reported the UFCW had targeted Food Lion for unionization but had not been successful with its employees. Due to the controversy regarding the allegations, Longman argues Food Lion's offenses were not disclosed to the public in a credible fashion until the "Prime Time Live" report. In 1993, Food Lion agreed to pay the DOL $16.2 million for its violations of federal labor laws. "The Fourth Circuit's ruling that the presumption of reliance on a corporation's misrepresentations may be rebutted by establishing the existence of any contrary public statement, regardless of the market's view of the credibility of its source, cannot be harmonized with relevant decisions of this Court," Longman argues. He also says the holding directly conflicts with other circuit court decisions, including Schneider v. Vennard (In re Apple Computer Sec. Litig), 886 F.2d 1109 (9th Cir., 1989), cert. denied, 496 U.S. 943 (1990). In that case, Longman says, the Ninth Circuit emphasized that any statement refuting a corporation's claims which are published by sources not deemed credible by the investing public should not operate to rebut the fraud on the market presumption. Food Lion's denial of its labor practices (along with the analysts' reports) affected the total mix of information available to investors, says Longman. Given the contradictory information being provided to investors, the petitioner argues the court erred in allowing the food store chain to rebut the fraud on the market presumption. Longman is represented by David M. Clark and John F. Bloss of Clark Bloss & McIver in Greensboro, N.C. (Securities Litigation & Regulation Reporter, March 22, 2000) KPMG: Summary Notice of Fairness Hearing Re Piper Jaffray (PJIGX) --- -------------------------------------------------------------- The following was released April 4 by Lockridge Grindal Nauen P.L.L.P. and Head Seifert & Vander Weide: SUMMARY NOTICE OF CLASS ACTION, CONDITIONAL CLASS CERTIFICATION, SETTLEMENT AND FAIRNESS HEARING TO: ALL PURCHASERS OF SHARES IN THE PIPER JAFFRAY INSTITUTIONAL GOVERNMENT PORTFOLIO ("PJIGX") DURING THE PERIOD JULY 1, 1991 THROUGH MAY 9, 1994: This Notice is given pursuant to Rule 23 of the Federal Rules of Civil Procedure and the March 15, 2000 Order of the United States District Court for the District of Minnesota, Fourth Division. The purpose of this Notice is to inform you that the action brought in the Court as a class action on behalf of the purchasers of PJIGX during the period July 1, 1991 through May 9, 1994, inclusive, has concluded in a proposed settlement of $13,900,000, before any award of attorneys fees and costs. The action alleged violations of the federal securities laws. You may have already participated in a settlement with the Piper Jaffray Defendants. This is a separate settlement of claims against KPMG Peat Marwick. If you purchased PJIGX during the period July 1, 1991 through May 9, 1994, inclusive, you may be eligible to share in the settlement, and your rights will be affected by the proposed settlement. On March 29, 2000, a Notice, including a Proof of Claim and Release, was mailed to potential class members. That Notice contains important information regarding the rights of class members and a form that must be completed to share in the settlement. If you believe you are a member of the class as defined above, and if you have not received a copy of the Notice by mail, you may request a copy free of charge by mailing your request to: Claims Administrator, KPMG Litigation, P.O. Box 2370, Minneapolis, MN 55402-0370. PROOF OF CLAIM AND RELEASE FORMS MUST BE FILED BY CLASS MEMBERS BY JUNE 2, 2000. Lead counsel for the Plaintiff Class in this matter are Lockridge Grindal Nauen P.L.L.P., 100 Washington Avenue South, Suite 2200, Minneapolis, MN 55401 and Head Seifert & Vander Weide, One Financial Plaza, Suite 2400, 120 South Sixth Street, Minneapolis, MN 55402. A HEARING ON THE FAIRNESS OF THE SETTLEMENT AND CLASS COUNSELS' REQUEST FOR THE ATTORNEYS FEE AND EXPENSES WILL BE HELD ON JUNE 16, 2000 AT THE UNITED STATES COURTHOUSE IN ST. PAUL, MN. For more information, please contact the Claims Administrator, in writing, at the address listed above. DO NOT TELEPHONE THE CLERK OF COURT REGARDING THIS NOTICE Dated: April 4, 2000 BY THE ORDER OF THE COURT UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA Contact: Lockridge Grindal Nauen P.L.L.P., Minneapolis Gregg M. Fishbein, Esq. (612) 339-6900 MICROSOFT CORP: Judge Proposes Expedited Appeal, Makes Tight Schedule --- ------------------------------------------------------------------ The presiding judge in the Microsoft antitrust case, meeting with lawyers for both sides in Washington on April 4, said he wanted to put the remedy phase of the case on a "fast track" and consider encouraging the litigants to appeal the outcome directly to the Supreme Court, according to a transcript of the meeting. One day after he issued his judgment that found Microsoft in broad violation of the nation's antitrust laws, Judge Thomas Penfield Jackson laid out a tight schedule for filings from both parties every 10 or 15 days "under a genuine fast track which would enable us to conclude the remedy phase within 60 days" of Monday, he said. No decisions were made, and at one point Judge Jackson discussed possibly bypassing the appeals court and encouraging the Justice Department to take the case directly to the Supreme Court, under a law that allows that procedure in antitrust cases of national importance. "I would be remiss if I didn't tell you that I will be inviting from the government a motion to provide for direct review in the Supreme Court," he said. Lawyers for both sides raised questions about the various ideas, suggesting that they were not sure what the law permitted. At the same time, Microsoft faces the threat of a rising wave of consumer class-action cases and other private lawsuits. During the meeting, Judge Jackson said: "My transcendent objective is to get this thing before an appellate tribunal -- one or another -- as quickly as possible because I don't want to disrupt the economy or waste any more of yours or my time on a remedy if it's going to come back here." In the remedy phase, the court will decide what penalty, or remedy, is assigned to Microsoft. Ideas range from moderating the company's conduct to breaking the company up. The judge issued his verdict on Monday, just 48 hours after settlement talks broke down. In his conversations with the lawyers on Wednesday, he asked them to give him the last offers each side had made in the talks, an idea that both sides resisted. David Boies, the lead government lawyer, noted that offers discussed in mediation talks are often of a different character than those offered to a trial judge. Both sides were also concerned about making their last offers from the settlement talks part of the public record of the trial, to which Judge Jackson said he would be willing to take them under seal. No decisions were made, and the lawyers left to discuss the questions with others at the Justice Department and Microsoft. If the case were sent directly to the Supreme Court, the court could presumably refuse to accept it, thereby sending it to the Court of Appeals for the District of Columbia. Apart from the appeals process, Microsoft could face a raft of suits from the private sector. With Judge Jackson having ruled on Monday that Microsoft was a "predatory" monopolist that repeatedly violated antitrust laws, private plaintiffs have a far less daunting challenge in suits already filed -- and in actions being considered by companies that believe they have suffered from abuse of Microsoft's market power. "This is now an awfully big invitation to plaintiffs' lawyers," said John C. Coffee Jr., a professor at the Columbia University law school. "We may have reached a point for Microsoft, as there was in the tobacco cases, that basic attitudes have shifted, and a powerful defendant is no longer seen as invulnerable." Some of Microsoft's leading rivals, and even its biggest customers, could bring private suits, according to legal experts. But they will almost surely hold off, at least until they see what sanctions the courts approve against Microsoft -- sanctions that could, among other things, limit its ability to retaliate. Judge Jackson's judgment was not surprising, after his findings of fact in November sided with the version of the case presented in court by the Justice Department and 19 states. But this week's ruling was a crucial step because it means that many of his findings -- that Microsoft is a monopoly, for example -- may be accepted as proof by other courts in private suits. Several companies that could now step forward as plaintiffs sent witnesses to Judge Jackson's courthouse to testify on behalf of the government, including Netscape Communications, America Online, Sun Microsystems, Apple Computer and I.B.M. In his ruling, the judge cited those companies as suffering from Microsoft's "oppressive thumb on the scale of competitive fortune." The judge ruled, for example, that the company not only used its market power to defend its monopoly in operating systems but also illegally tried to monopolize the market for Internet browsing software. The principal victim of that tactic was Netscape, the pioneer in the browser market, which was acquired by America Online in late 1998. That judgment makes it far easier for America Online to sue for damages. Because the judge ruled that Microsoft's monopoly power allowed it to overcharge for Windows, the big personal computer makers including Dell, Compaq, Gateway and I.B.M. could have cause to file suit. If they won, such judgments could yield hundreds of millions of dollars each for big PC makers that use Windows. The treble damages in private antitrust cases would cover every PC a company sold over four years, the statute of limitations in such cases. "Microsoft could find itself in a very tight pincer here, since these companies could regard it as being in their fiduciary interest to file private suits," said Herbert Hovenkamp, a professor at the University of Iowa law school. Sun Microsystems, lawyers say, is probably the most likely to file a private suit against Microsoft. It is a bitter direct competitor and has little to lose. For all the others, the calculation would be more complicated because they rely in one way or another on Microsoft's cooperation. Most of the companies named in Judge Jackson's ruling declined to comment on the possibility of private antitrust suits against Microsoft. Still, an executive at one of the companies said, "It is clearly something we will consider, but there has been no substantive internal discussion of that yet." And the companies may decide against suing Microsoft for other reasons. First, parts of Judge Jackson's legal conclusions -- though not his findings of fact -- could be reversed on appeal. And second, the companies may not see it as in their long-term interest to bring suit against Microsoft, even if they do not fear retaliation from Microsoft. RealNetworks, which makes software for playing multimedia programming on personal computers, was mentioned by Judge Jackson as among the targets of Microsoft's tactics. Yet Rob Glaser, chairman of RealNetworks, said that he had no plans to sue. "While I think Microsoft has behaved unethically at times and this judge found that it broke the law, my focus is going to be on doing everything I can to make sure RealNetworks remains ahead of Microsoft in our business," Mr. Glaser said. "The government was absolutely right to prosecute Microsoft. But it doesn't make sense for us." But companies are not the only potential litigants. More than 100 class-action suits have already been filed against Microsoft in two dozen states, nearly all in the aftermath of Judge Jackson's powerfully worded findings of fact last November. Those suits, legal experts say, were the early starters as plaintiffs' lawyers maneuvered for leadership positions in what are likely to become a broader class-action assault. More consumer class-action suits are expected, and lawyers involved in the early cases said Judge Jackson's rule was a significant victory. "We're very pleased with the way the government case came out," said Leonard B. Simon, a partner at Milberg Weiss Bershad Hynes & Lerach in San Diego, whose firm has brought many prominent class-action cases. "This is very good news for the consumer class-action cases." But while the ruling in the government case makes things easier for private antitrust plaintiffs, it by no means ensures that they will win in court. The consumer class-action suits mainly contend that Microsoft, as a monopoly, was able to overcharge for its industry-standard Windows operating system, which runs the basic operations of nearly 90 percent of all PC's sold today. Judge Jackson ruled that Microsoft had the ability to "price substantially above the competitive level." And in his November findings, he noted an internal Microsoft pricing study that said the company could have charged $49 for a retail upgrade from Windows 95 to Windows 98 but that the company chose to charge $89 instead because it was the "revenue-maximizing price." Microsoft replies that the numbers cited in the study were arbitrary numbers, and that it could have also charged far more for the Windows upgrade. In the class-action confrontation, Microsoft says it has the money and the patience to withstand what it regards as an opportunistic assault on a deep-pocketed corporate target. In addition, the company's executives express confidence in their legal position. "These class-action cases are just piling on," William H. Gates, Microsoft's chairman, said in an interview over the weekend. "There is no economic theory to show that ours was not the aggressive price for Windows." Indeed, while Judge Jackson's ruling places Microsoft's liability firmly into the legal record, the class-action suits must still prove damages -- that is, what impact Microsoft's abuse of its market power had on consumers. And even the class-action advocates recognize that. "The ruling in the government case simplifies our job, but it does not make it easy," said Terry Gross, a lawyer in San Francisco. "We're up against one of the most powerful defendants in the world." The private litigation promises to be a marathon effort. A group of seven federal judges, called the Multi-District Litigation Panel, held a hearing last week in Palm Springs, Calif., on where to combine all the federal class-action suits. That initial decision is expected soon. But it is only a starting point. California is the leader among the states in class-action cases. The more than two dozen cases filed to date have been consolidated in the San Francisco Superior Court. (The New York Times, April 5, 2000) MICROSOFT CORP: Legal & Tech Experts Voice Concern; Battle Just Begun --- ------------------------------------------------------------------ In the wake of U.S. District Judge Thomas Penfield Jackson's verdict Monday that Microsoft illegally used anticompetitive practices to maintain its monopoly, several local business and technology leaders opined on the day's developments, including the speculation that Jackson will order Microsoft to be broken up. Russ Gullotti, chairman and CEO of National Computer Systems in Eden Prairie, said he was troubled by the ruling. "I generally do not like to see the courts involved in the running of a business. Business and government work on two different planes, and they work at totally different speeds," Gullotti said. "This is far from over, and by the time the appeals are done, the marketplace is going to look far different than it does today. But finding Microsoft guilty of antitrust violations is not the big news. The big news will be the penalty." Minneapolis attorney Vance Opperman said the possible Microsoft breakup order would be an inappropriate action. "I don't think these kinds of remedies fit very well in the fast-paced economy we have today. What does fit is private enforcement of antitrust laws," Opperman said. He said Microsoft's antitrust lawyers must be telling Chairman Bill Gates that if a breakup is ordered, Gates "should go to the court of appeals on an expedited basis because there is no chance that those remedies will be upheld. You can impose meaningful, but short of breakup, remedies." Moreover, Microsoft's near-monopoly of its Windows desktop operating systems isn't so significant anymore, Opperman said. "It's no longer as important as it was five years ago to control the first screen on a desktop. It's the Internet and no longer Windows." Michael Lindsay, co-leader of Dorsey & Whitney's antitrust practice group, said that the ruling is likely to provide precedent for future antitrust litigation and that it has significant ramifications for the industry. "There are two areas of importance here: First, what does this case say for all of antitrust law _ how transportable are the principles of this decision to other cases?" Lindsay said. "This case is going to be appealed, so it's not all that transportable until all is said and done by the appellate court, and perhaps the Supreme Court. "The second area is not just the law, but what's going to happen in the computer world, and obviously the market has reacted to the uncertainties," he said. "There's a wide range of possible remedies, ranging from some form of compulsory licensing to predisclosure of product changes to the breakup of the company into 'Baby Bills.' " Minneapolis attorney and antitrust expert Brad Clary said the battle has only just begun. "This is just round six in a 15-round heavyweight fight that's nowhere near over. There are lots of heavy blows being exchanged, and at the moment the plaintiffs just scored some big points, but who knows what the final decision will be," Clary said. "One problem [Judge Jackson] has got, and he concedes this, is that the Federal Court of Appeals in the D.C. Circuit previously ruled in a different Microsoft matter that there was a functional integration between Microsoft's operating system and some of its other technology. So it will be very interesting to see what the D.C. Circuit does with the bundling of the operating system and the browser." Ashok Kumar, a technology analyst at U.S. Bancorp Piper Jaffray, predicted that Microsoft's likely appeals in the antitrust case could take so long that the outcome won't matter anymore. "By then the world as we know it could be completely different," Kumar said. For Microsoft, the adverse court ruling was only part of the problem, Kumar said. Microsoft management has spent so much time on the court case that "management has been off the ball in terms of opportunities." In addition, Microsoft has lost considerable talent because of the antitrust suit and because of the lure of dot-com start-up companies, he said. (Star Tribune (Minneapolis, MN), April 4, 2000) NETWORK ASSOCIATES: 9th Cir Decides Not to Intervene in Securities Suit --- ------------------------------------------------------------------- The Ninth Circuit U.S. Court of Appeals decided last week not to intervene in a highly publicized securities fraud class action against Network Associates Inc. With an order denying mandamus, the case now goes back to Northern District Judge William Alsup, while the law behind his controversial ruling granting lead plaintiff status to a small, local investor remains untested by higher courts. Alsup's order was hailed as groundbreaking by some and assailed by others. The judge granted lead plaintiff status to a retired attorney claiming $30, 000 in stock losses over the protests of larger, institutional investors who claimed they lost millions. Before Alsup's ruling, judges routinely conferred lead plaintiff status to the investors who suffered the greatest losses. The case has been on hold since Feb. 14, when a Ninth Circuit motions panel asked appellants to file further briefs in support of their writ, but the arguments didn't persuade the court to take action. The appellate court rarely suspends a district court case midway through to hold a hearing on a judge's order. "Petitioners have not demonstrated that these consolidated cases warrant the intervention of this court by the extraordinary remedy of mandamus," the three-judge panel wrote. Senior Judges Joseph Farris and William Canby Jr., along with Judge William Fletcher, comprised the panel. Alsup and the Securities and Exchange Commission also filed briefs in the case, Vatuone v. Network Associates, 99-1729. If the Ninth Circuit had weighed in on the case, it would have been the first appellate court to test the strength of Alsup's order, which has since been mirrored by other judges. (The Recorder, April 4, 2000) NEW ENGLAND: Goodman & Nekvasil Files Securities Suit in Florida --- ------------------------------------------------------------- Goodman & Nekvasil, P.A., and James, Hoyer, Newcomer, & Smiljanich, P.A., have filed a securities class action complaint against New England International Surety, Inc. ("New England"), in the United States District Court for the Southern District of Florida, on behalf of persons between January 1, 1997, and the present who purchased promissory notes guaranteed by New England. These notes include, but are not limited to, notes issued by Pacific Air, Canko Environmental Technologies, Inc., RMW/Corlogic, Inc., Caffe Diva Group Ltd., Technical Support Services, Tri-National Development Corp., South Mountain Resort & Spa, Inc., Sun Broadcasting Systems, Inc., Alumalex, Sebastian International Enterprises, Inc., World Vision, Ameritech Petroleum, Inc., and Lomas DeLaBarra Development, Inc./Uraguay. The complaint alleges that New England violated the federal securities registration laws by offering and selling unregistered guarantees to investors which induced them to purchase unregistered promissory notes. The complaint also alleges that New England fraudulently induced the investors to purchase these unregistered securities by failing to disclose that these securities were not registered, that New England had not adequately investigated the issuing companies, and that New England did not have sufficient financial backing in the event the issuing companies failed. Many of the issuing companies have now failed, New England is not honoring its guarantees, and, as a result, the investors have suffered substantial losses. Contact: Goodman & Nekvasil, P.A., Clearwater Joel A. Goodman, Esq., 727/524-8486 NINA BRINK: World Online Shares Fall As Chairwoman Under Legal Threats --- ------------------------------------------------------------------- Shares in Dutch Internet company World Online dropped nine percent on Wednesday, as lawyers said European and US investors were considering bringing lawsuits against chairwoman Nina Brink. Both Brink and the Internet access company have attracted fierce criticism following revelations that Brink had sold around 10 million shares of her shares at the end of last year, before the March flotation. The shares closed down 9.37 percent at 16 euros from Tuesday's close, having fallen around 14 percent during the session -- and well down on the flotation price of 43 euros. The wider market closed down 2.33 percent. World Online stock has lost around a third of its value since the company listed the shares at 43 euros on March 17 in a much-hyped exercise. Lawyer Oscar Hammerstein said disgruntled investors had asked if there were grounds for legal action against Brink, and banks ABN Amro and Goldman Sachs, which handled World Online International's flotation last month. There was concern that two prospectuses issued before and during the flotation contained different sets of figures. "For the time being, we are making inquiries," said Hammerstein. "We have to see if the facts presented in the prospectus are consistent with the truth, if nothing more should have been brought to the attention of the public before the flotation." He said the number of investors who had contacted his office had risen to nearly 200 by Wednesday. "There were only small investors at the beginning, but now we also have two large European institutional investors," he said, without naming them. World Online spokeswoman Margaret van Kempen said: "We want to study the situation very closely." The company has asked Brink not to speak to the media since the row erupted. Meanwhile, Dutch shareholders association VEB said it did not rule out a lawsuit against Brink. VEB chairman Peter Paul de Vries said their own lawyers were looking at the possibility of launching a lawsuit against Brink. "Besides, we have contacted Messrs Gerard Spong and Oscar Hammerstein, who are looking into the possibilities of a class action on behalf of a number of Dutch investors," De Vries added. Earlier, the newspaper De Volkskrant reported that Dutch investors had hired lawyers Gerard Spong and Oscar Hammerstein to investigate a civil claim for damages. Newspapers have reported that Brink some of her stock at 50 euros per share to US fund manager Baystar Capital late last year, and the fund then sold 1.2 million shares a few seconds after the stock started trading. (Agence France Presse, April 5, 2000) PEAPOD INC: Milberg Weiss Files Securities Suit in Illinois --- -------------------------------------------------------- A class action lawsuit was filed on March 21, 2000, in the United States District Court for the Northern District of Illinois, on behalf of all persons who purchased the stock of Peapod Inc. (Nasdaq: PPOD) between November 8, 1999, and March 16, 2000, inclusive (the "Class Period"). The complaint charges Peapod and certain of its officers and directors with violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that defendants issued materially false and misleading statements concerning the Company's ability to continue funding its ongoing operations. Contact: Steven G. Schulman or Samuel H. Rudman, both of Milberg Weiss Bershad Hynes & Lerach LLP, 800-320-5081, or endfraud@mwbhlny.com Shareholder Relations Dept. 800-320-5081, E-Mail: endfraud@mwbhlny.com SAFETY-KLEEN CORP: Berman DeValerio Files Securities Suit in SC --- ------------------------------------------------------------ Berman, DeValerio & Pease LLP announces that Safety-Kleen Corporation (NYSE:SK) has been charged with violating the federal securities laws in a class action filed against the company in the United States District Court for the District of South Carolina. The action seeks damages for violations of the federal securities laws on behalf of all investors who purchased Safety-Kleen common stock between November 13, 1997 and March 3, 2000, including those shareholders who acquired the securities of Laidlaw Environmental Services, Inc. in the 1998 merger between Safety-Kleen and Laidlaw. The action alleges that Safety-Kleen and certain of its officers materially overstated the company's revenues and earnings. It further alleges that the company and its officers failed to reveal the true state of the company's deteriorating financial condition until March 6, 2000, when Safety-Kleen announced that it "has 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." Two days later, on March 8, 2000, Safety-Kleen's auditor stated that it had withdrawn its prior opinions on the company's financial statements for the fiscal years ended August 31, 1999, 1998, and 1997. Contact: Berman, DeValerio & Pease LLP Chauncey D. Steele IV, (800) 516-9926 bdplaw@bermanesq.com SANTA CLARA: County in CA Forced to Pay $ 4.5 Mil in Back Wages for OT --- ------------------------------------------------------------------- A federal appellate court has ruled that Santa Clara County must pay up to $ 4.5 million in back wages to mid-level managers and nurses who were wrongly denied overtime pay by the county. The ruling by the Ninth Circuit Court of Appeals applies to about 400 nurses and managers, who would be paid overtime for work performed beginning in 1991 and ending in 1997 if, as expected, the decision stands. If the judgment stands, the nurses would get up to $ 1.5 million, and the managers about $ 3 million, according to the plaintiffs' attorneys. The county plans to ask the court to review its decision or allow a new panel of federal judges to reconsider the case. But sources familiar with the case said the court is unlikely to side with the county, which also lost in a lower court. Attorneys for the workers criticized county officials for ignoring warnings in 1991 that they were violating labor laws. "We are, of course, thrilled by the court's ruling," said attorney Carol Koenig, who represented 333 nurses. "It's been a long, hard battle -- a battle that could have been avoided if only the county had changed its policy almost nine years ago when we warned it that its classification of the nurses as exempt employees was illegal. "Unfortunately, the county did not listen, not even after the Department of Labor stepped in and told the county that it was not compliance with the law...." County Counsel Ann M. Ravel denied the accusation, saying the county still believes the workers were not entitled to overtime pay. "We view the court's ruling as a very narrow interpretation of the law, so we are going to seek review," Ravel said. The case comes down to a dispute over a technicality in federal labor law. Salaried workers are supposed to receive their full wages even if they only work a few hours in a particular week. But when the county punished 53 of the 400 workers by suspending them for part of a week, it docked their wages by the number of hours they were off duty, rather than giving them full pay. Under county ordinance, workers can be suspended for a range of reasons including insubordination, excessive absences and failure to perform job duties. In effect, the county classified them as salaried workers not entitled to overtime pay, but treated them as hourly workers when it came to discipline. The county offered to make good on its mistake by paying the 53 workers their full weekly wages for the time they were suspended, Ravel said. Under a U.S. Supreme Court decision, some employers have the right to use "a window of corrections" to fix their mistakes. Paying the workers those weekly wages would have been less costly for the county than paying overtime for the entire group covered in the lawsuit during the 5[ years they were denied it under the discredited discipline policy. But the federal appeals court sided with an earlier ruling by a district court, which found the county was not entitled to use the window because it had a practice and pattern of making the impermissible deductions. (San Jose Mercury News, April 5, 2000) SECURITY AGENCIES: Unsuccessful Job Applicants Sue over Polygraph Exams --- -------------------------------------------------------------------- Seven unsuccessful applicants for federal jobs filed a lawsuit against the security agencies that rejected them for failing mandatory polygraph exams. Croddy et al v. FBI et al. The plaintiffs' attorney may seek to expand the case into a class action lawsuit. Filed in U.S. District Court in Washington, the applicants sued the Secret Service, the FBI and the Drug Enforcement Administration to have their records and names cleared and their applications reconsidered. Attorney Mark Zaid, of the Washington law firm of Lobel, Novins & Lamont, said the polygraph tests unjustly ruined the applicants' chances at federal employment. They have consequently been ostracized by other agencies to which they applied. Each applicant failed the polygraph exam when asked if he had ever used illegal drugs. Although the applicants never failed a drug test nor had anyone confirm prior drug use, the agencies denied their applications based on the polygraph results, Zaid told FEDHR. Polygraphs, he said, "are the only part of the process that has no supportive basis. Even drug tests have a science to them." Three of the seven applicants still work as law enforcement officers. Another is a teacher, he said. Jim Davis, unit chief for the FBI's national press office, said bureau applicants are judged on a number of criteria. However, how they answer a question during the polygraph exam could cost them a job. Despite agency claims that prospective employees are considered on the basis of the entire application process, Zaid said his clients' chances at federal jobs were gone when they failed the lie detector test. Davis said the FBI receives 20,000 to 25,000 applications a year and hires no more than 1,000 people. Although he couldn't confirm that the applicants in the lawsuit were turned away because of a failed polygraph test, he said many prospective agents are passed over every year. The DEA has been using the polygraph exam in its hiring process since 1994 and has no plans to eliminate it. Terry Parham, chief spokesman for the agency, said DEA has the authority through a presidential directive to use the device because of the nature of the work. However, a failed polygraph exam would not necessarily result in an applicant being denied a position in the agency, Parham said. The applicant in the lawsuit failed a number of the DEA's criteria if he was denied a job, Parham said. "The polygraph exam is one of several screening tools that are utilized by the DEA," he said. Zaid said that if he receives enough interest in the case he would request that the judge expand it into a class action lawsuit. So far 40 to 50 more former applicants have approached him, he said. Should the case become a class action lawsuit, it would encompass every applicant who was denied a federal job for failing a polygraph exam in the last six years, Zaid said. (Federal Human Resources Week, March 30, 2000) TOBACCO LITIGATION: B&W Issues Statement Re Denial of Class in CA Ct --- ----------------------------------------------------------------- Brown & Williamson Tobacco Corporation issued the following statement regarding a state court ruling in San Diego, California, denying class certification for Daniels, et al. v. Brown & Williamson Tobacco, et al. The suit was filed on behalf of California residents who began smoking as minors: "Yesterday's decision by the state court of California is yet another demonstration that smoking and health lawsuits cannot be maintained as class actions. The court's decision continues the trend of no federal and most state courts refusing to certify a class action in a smoking and health case. "In the complaint, plaintiffs sought relief for alleged unfair business practices under California statutes. In his opinion, State Judge Ronald S. Prager rejected the plaintiffs' application for class certification holding that the plaintiffs failed to demonstrate a reason that would 'warrant the imposition of the financial and administrative burden naturally associated with a class action.' "This state court opinion mirrors Brown & Williamson's position that the facts involving each individual's smoking and health experiences are unique and should be handled as such, and illustrates that smoking and health lawsuits should not be treated as class actions. "This marks the twenty-second case in which a U.S. court has denied class certification." Brown & Williamson Tobacco Corporation is headquartered in Louisville, Ky. The company's major brands include KOOL, LUCKY STRIKE, CARLTON, CAPRI, GPC, MISTY, and VICEROY. For additional information on related subjects and issues, visit: http://www.brownandwilliamson.com SOURCE Brown & Williamson Tobacco Corporation TOBACCO LITIGATION: Bill to Cap Tobacco Damage Bond Passed in NC --- ------------------------------------------------------------- A bill shielding cigarette-makers from a potentially devastating judgment in a Florida lawsuit cleared the Legislature on April 5 less than four hours after a special session began. The bill would cap at $25 million the bond tobacco companies would need to post for any punitive damages a Florida jury might award sick smokers. The Senate approved the bill 48-2 and the House passed it 114-1. The measure must next go to Gov. Jim Hunt for his signature. Under Florida law, a defendant must post a bond equal to the damages levied while appealing a case. Tobacco companies are facing possible punitive damages of $300 billion in Florida, where a jury began considering compensatory damages. ''North Carolina has been well-served by tobacco,'' said Sen. Ham Horton, a Republican. ''A six-person jury in Florida ... is on the verge of bringing a gigantic industry to its knees.'' The House committee also unanimously adopted a resolution urging tobacco companies to buy more domestic leaf to help farmers. The Florida jury found in July that cigarette companies _ including R.J. Reynolds Tobacco Co. of Winston-Salem, Liggett Group of Durham and Lorillard Tobacco Co. in Greensboro made a deadly product. Other defendants are Philip Morris Inc., Brown & Williamson and the industry's Council for Tobacco Research and Tobacco Institute. The jury is now considering how much in compensatory damages to award three representative plaintiffs in the class action. If it awards compensatory damages, it then will weigh punitive damages for about 500,000 smokers. Three states already have approved laws limiting the bond cigarette companies would have to post. Virginia and Georgia approved a $25 million limit; Kentucky set it at $100 million. Tobacco industry lawyers say the shield laws are legal and necessary to preserve North Carolina companies' right to appeal without going broke. But several constitutional law experts say such a law would violate the Constitution's ''Full Faith and Credit Clause,'' which requires states to honor one another's court decisions. Some also say the law may violate constitutional rules affecting interstate commerce. (AP Online, April 5, 2000) TOBACCO LITIGATION: Jury Asked Not to Let Makers 'off the Hook' --- ------------------------------------------------------------ A jury that has ruled against the tobacco industry once should not let cigarette makers off the hook when considering a $13.2 million damage claim in the case of three smokers with cancer, their attorney said. After jury instructions Wednesday, the compensatory damage question will be before the same panel that decided last July that the industry fraudulently conspired to produce a deadly product. "Your Phase One verdict would be rendered meaningless were you to let these companies off the hook," smokers' attorney Stanley Rosenblatt told the jurors before resting the five-month damage case. "We want you to find that when an industry is fraudulent and they misrepresent and they conceal and they engage in a conspiracy and they do it intentionally, there will be consequences," he said. The jury faces a complicated 18-page verdict form on the claims of Mary Farnan, 44, Frank Amodeo, 60, and the late Angie Della Vecchia, who died last year at 53. Doctors testifying for the smokers blamed decades of smoking for their diseases. Despite the jury's earlier findings against the nation's five biggest cigarette makers, Rosenblatt charged near the end of seven days of closing arguments that the industry will never admit a disease link in the three smokers or anyone else. The industry offered alternative explanations, such as scar cancer in Della Vecchia; bronchioalveolar cancer, a form of lung cancer the jury did not attribute to smoking, in both women; and occupational exposure to wood dust in Amodeo, a clock maker. Medical bills, lost income, lost services, pain and suffering can be factored into the verdict for damages from lung cancer that spread to the brain in Farnan and Della Vecchia and throat cancer in Amodeo. If any money were awarded, the jury would hear more testimony and be asked to set punitive damages for an estimated 500,000 sick Florida smokers covered by the landmark class-action suit. The industry, which already owes states about $250 billion on lawsuit settlements with states, fears a $300 billion punitive award. But by Florida law, a punitive verdict cannot bankrupt a company. The defendants are Philip Morris Inc., R.J. Reynolds Tobacco Co., Brown & Williamson, Lorillard Tobacco Co., Liggett Group Inc. and the industry's Council for Tobacco Research and Tobacco Institute. On the Net: Trial transcript service: http://www.engle.cc Philip Morris: http://www.philipmorris.com R.J. Reynolds: http://www.rjrt.com Brown & Williamson: http://www.bw.com Lorillard: http://www.lorillard.net/ Liggett: http://www.brookegroup.com American Lung Association: http://www.lungusa.org/tobacco Action on Smoking and Health: http://www.ash.org/ (The Associated Press, April 5, 2000) TOBACCO LITIGATION: Trial To Enter Deliberations Phase --- --------------------------------------------------- Feeling that lawyers for the five top tobacco companies portrayed his clients as money-grubbers in search of a big payout, Miami attorney Stanley Rosenblatt went on the defensive Tuesday. Of course the ailing Floridians suing the tobacco industry want money from the cigarette-makers as compensation for their pain and suffering; it is their only legal remedy, Rosenblatt said. It is not as if the sick smokers can burn down Philip Morris in retribution, he said. In concluding his closing arguments, Rosenblatt, who represents the smokers involved in a statewide class-action lawsuit against the tobacco industry, called cigarettes "the only legal product in America that, when used as directed, will kill its customers." Rosenblatt wants tobacco to pay his clients $ 10 million to $ 14 million in compensatory damages. Miami-Dade County Circuit Judge Robert Kaye is expected to give last instructions before the six-member panel begins deliberating a verdict for the second phase of this landmark trial. In the first phase, the same jury found that the tobacco companies produce a dangerous product that causes cancer and several other diseases. Now the jurors must decide whether three plaintiffs who are representing the entire class of smokers, as many as 500,000 people, contracted cancer because they smoked for decades. If the jury finds there is a link between their smoking and cancer, it must decide whether the three should be compensated for past and future lost wages, medical bills and the emotional suffering caused by their illnesses. The plaintiffs are Mary Farnan, a nurse who has had cancer in both lungs and her brain; Frank Amodeo, an Orlando clock maker, whose throat cancer rendered him unable to eat or drink anything for the past 12 years; and Angie DellaVecchia, a housewife who died last summer of the lung cancer that spread to her brain. If the jurors grant compensatory damages, they will be asked in the third phase to determine whether the tobacco companies should be ordered to pay punitive damages to the entire class. Dan Webb, an attorney for tobacco company Philip Morris, said he thought that award could be as much as $ 300 billion. The tobacco companies argued that the plaintiffs did not prove definitively that smoking caused their illness and that their decision to smoke was a personal one, not motivated by cigarette advertisements. "There isn't a human being on the planet who will ever pass their test," Rosenblatt said of the cigarette companies. "They will never, ever, ever pin (cancer) on cigarette smoking." Without discussion, Kaye rejected one of several mistrial motions by the industry after Rosenblatt called cigarette-makers "fundamentally dishonest" and accused them of using a "bag of tricks." The defendants are Philip Morris Inc., R.J. Reynolds Tobacco Co., Brown & Williamson, Lorillard Tobacco Co., Liggett Group Inc. and the industry's Council for Tobacco Research and Tobacco Institute. TRW VEHICLE: Redidents in Mesa, Arizona Sue over Toxic Emissions --- ------------------------------------------------------------- A class action suit was filed on April 4 in Maricopa County Superior Court against TRW Vehicle Safety Systems, Inc., a manufacturer of automobile airbags, alleging that toxic emissions from TRW's plant in Mesa, Ariz., have caused health problems for residents living near the plant, and that TRW concealed information about the potential health risks of its emissions. Claimants in the suit have reported suffering from various ailments, including upper respiratory distress, impairments such as fatigue, sleepiness, confusion, dizziness, memory loss, heart problems, brain lesions, chronic diarrhea, spontaneous miscarriage and various forms of cancer. The suit also alleges animals and plant life have been injured or destroyed through significant exposure to TRW's toxic emissions. According to the suit, TRW Vehicle Safety Systems violated a number of state laws, including negligence. The suit alleges TRW knowingly engaged in hazardous activity that placed the defendants in unreasonable risk of harm, and that TRW's conduct and activities were gross and wanton in character. "It's clear that TRW has endangered this community while reaping substantial profits," said plaintiffs attorney Steve Berman of Hagens Berman & Mitchell. "As a result of their blatant misrepresentations, TRW has irrevocably altered people's lives and their livelihoods." TRW is a complete manufacturer of air bag systems. The propellant used by TRW to rapidly inflate air bags includes the chemical sodium azide, a highly toxic poison that can be ingested, inhaled and even absorbed through the skin. The suit claims that between 1991-99, numerous fires, explosions and releases have occurred at the plant, emitting sodium azide and its derivations into the air, exposing the community to toxic substances. According to the suit, TRW has and continues to publicly proclaim that the toxic chemical substances emitted from its air bag facility pose no health concern. According to TRW, in fires involving sodium azide, the sodium azide is completely combusted and the only substance released is sodium hydroxide, which is converted to sodium carbonate, a less harmful substance, after contact with the carbon dioxide in the ambient air. The 1997 Arizona Toxic Release Inventory Report lists TRW as the seventh largest releaser of toxic chemicals in the state of Arizona. Despite TRW's claims, a report conducted for the City of Mesa by CH2M Hill, Inc., an environmental project development firm, concluded that TRW would have no way of knowing to a certainty that all of the "sodium hydroxide is converted to sodium carbonate" every time there is an explosion. Another report published by the National Institute of Occupational Safety and Health confirms that TRW released toxic substances without the ability or willingness to analyze what the exposed levels are. Plaintiff's requests include the institution of medical monitoring for the claimants, that TRW cease operations that release toxic substances into the air, and that a supervised fund be created to pay for medical screening and monitoring. Contact: Hagens Berman Steve Berman, 206/623-7292 or Hagens Berman & Mitchell Steve Mitchell, 602/840-5900 or Firmani & Associates (Media) Mark Firmani, 206/443-9357 mark@firmani.com ********* 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. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. 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