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                C L A S S   A C T I O N   R E P O R T E R

                  Friday, April 7, 2000, Vol. 2, No. 69

                              Headlines

ALLSTATE INSURANCE: Agreement Would Mean Extra Payouts to Policyholders
ASIA ELECTRONICS: Securities Suit against Foreign Corporation Dismissed
AURORA FOODS: Cauley & Geller Announces Extended Securities Suit Period
AURORA FOODS: Milberg Weiss Extends Period in Securities Suit in CA
CENDANT CORP: Moving to Restructure Its Board to Comply with Settlement

COCA-COLA: Bus Ride against Employment Racial Bias Gains Support
CRACKER BARREL: Mediation Goes on for Employees' Suits Re Wages & Bias
ECONNECT, INC: Kirby McInerney Files Securities Suit in CA
HMO: Former FBI Agents Sue CIGNA over Misleading Insurance Practices
HOLOCAUST VICTIMS: Poland Names New Head to Distribute Compensation

JDN REALTY: To Report on 1999 Earnings and Accounting Practices
MICROSOFT CORP: Lawyers Trying to Coordinate Effort in Antitrust Suit
NETMANAGE INC: 1st Cir OKs Dismissal of Securities Suit in MA Re FTP
NETMANAGE INC: Dismissal of Firefox Securities Suit Re 95-96 Appealed
NETMANAGE INC: Dismissal of Securities Suit Re 95-96 Appealed

NETMANAGE INC: Hearing for Shareholder Complaint in CA in April 2000
NETMANAGE INC: Securities Suit in CA Re April to July 96 under Appeal
PASMINCO: Australians Sue Lead and Zinc Miner over Emissions
SKYMALL INC: Moves to Dismiss Securities Lawsuit in AZ Re Dec 98
SKYMALL INC: Settlement for Consumer Complaint Re Tax Involves Discount

TOBACCO LITIGATION: Jury in FL Mulls Health Compensatory Damages
TOBACCO LITIGATION: Minors' Case in CA to Proceed As Private Action
TOBACCO LITIGATION: Ways Devised to Keep Industry Alive after Lawsuit
U.S. CAPITAL: Klayman & Lazarus Files Securities Suit in Florida
U.S. SALES: Sweepstakes Company Agrees to Pay to Settle 2 Lawsuits

WA STATE: Activists for the Retarded Say State Thwart Lawsuit

* Consumers Use Power of Internet to Fight Firms
* Supreme Court to Review Liberal Legal Aid Ruling

                              *********

ALLSTATE INSURANCE: Agreement Would Mean Extra Payouts to Policyholders
-----------------------------------------------------------------------
A tentative class-action settlement agreement would mean extra insurance
checks for more than 2,000 Allstate Insurance Co. policyholders in
Oklahoma.

Policyholders had alleged in a federal court lawsuit that Allstate
improperly deleted Home Replacement Cost Guarantee and Roof Surfacing
coverage from numerous policies during the past decade. Consequently,
Allstate failed to fully compensate many of its policyholders for
insurance losses incurred between May 27, 1991 and April 4, 2000, the
policyholders claimed. Policyholders affected by the agreement could
include many of those whose homes were destroyed or damaged in the May 3
tornadoes.

Under terms of the tentative settlement revealed Wednesday, qualifying
policyholders will be entitled to receive 5.4 times the difference
between the amount already paid out by Allstate for covered losses and
the amount Allstate would have paid if it had compensated policyholders
for having Home Replacement Cost Guarantee or Roof Surfacing coverage.
"It appears that all these folks who were entitled to replacement
coverage will be adequately compensated not only for their losses, but
also for any costs caused by the delays in payment," said Michael
Hinkle, attorney for the policyholders.

The settlement does not say how much Allstate may have to pay in total
additional claims, but earlier court filings indicate it could go as
high as $20 million.

Allstate, which denies any wrongdoing, has agreed to pay opposing
attorneys $ 4.86 million in attorneys' fees, plus $90,000 in costs. The
insurance company has reserved the right to terminate the settlement if
a certain undisclosed number of policyholders entitled to recovery
choose to opt out of the settlement. (The Associated Press, April 6,
2000)


ASIA ELECTRONICS: Securities Suit against Foreign Corporation Dismissed
-----------------------------------------------------------------------
Federal judge in New York City has dismissed an uncertified securities
class action complaint accusing an overseas corporation and its officers
and directors of making materially false and misleading statements about
their compliance with Chinese law. Rapaport et al. v. Asia Electronics
Holding Co. Inc. et al., No. 98 Civ. 5785 (DNE) (S.D.N.Y., Mar. 7,
2000).

Neither the prospectus for an initial public offering (IPO) nor a
newspaper article about Asia Electronics Holding Co. adequately
supported the investors' allegations under the Securities Act, the judge
ruled.

The company is incorporated in the British Virgin Islands, and its
subsidiaries based in China develop and sell electronic devices used
with computer monitors and television sets.

The investors bought stock in Asia Electronics through a September 1997
IPO. The IPO price was $8 a share, which rose the next month to $14.13,
but plunged by July 1998 to $1.63 and then to 50 cents by the time the
amended complaint was filed.

The investors alleged in part that Asia Electronics shocked the market
in July 1998, when it announced that its chairman was being questioned
by the Disciplinary Committee of the Municipal Communist Party in
Xianyang, China, and that the committee had detained its CEO for
questioning.

The amended complaint, which consolidated other litigation, alleged that
Asia Electronics failed to disclose that its actions did not comply with
Chinese law and that individual officers and directors were liable as
controlling persons. The underwriters were also sued.

Judge David N. Edelstein of the Southern District of New York granted
the defense mission to dismiss, saying the complaint failed to allege
adequate facts to support contentions that the IPO violated Chinese law
and that the prospectus failed to disclose that violation.

He criticized the investors for failing to attach either the full
prospectus or a full Washington Post article about the company to the
complaint, although they used excerpts of those two documents to support
their Exchange Act claims. Examining those two documents on his own, he
found that they contradict the allegations.

For example, the Washington Post reported only a vague statement from a
local Communist Party propaganda bureau official without specifying what
Chinese law the defendants had purportedly violated, the judge said.
Read as a whole, the article contradicted the investors' assertion of
such a violation.

Similarly, Judge Edelstein said the prospectus contained no materially
false statement or omission. Instead, it contained detailed and specific
warnings concerning the legal and political risks of investing in the
company, including adequately labeled risk factors and other cautionary
statements. (Securities Litigation & Regulation Reporter, March 22,
2000)


CRIIMI MAE: Judge Dismisses Consolidated Securities Complaint in
MD-------------------------------------------------------------------
The United States District Court for the District of Maryland, Southern
Division dismissed the consolidated class action complaint filed against
certain officers and directors of CRIIMI MAE Inc. ("CRIIMI MAE" or the
"Company").

The decision, rendered March 30, 2000, grants the defendants' motion to
dismiss the complaint against certain of CRIIMI MAE's officers and
directors. The District Court found that the plaintiffs in the class
action, who purchased securities of CRIIMI MAE between February 20, 1998
and October 5, 1998, did not substantiate their claims that specific
CRIIMI MAE officers and directors violated certain federal securities
laws.

The District Court's March 30, 2000 ruling does not dispose of other
pending lawsuits and/or claims in bankruptcy which may affect the
Company, as more fully described in the Company's Form 10-Q for the
quarter ended September 30, 1999, and the Company's proposed Amended
Joint Disclosure Statement (the "Disclosure Statement") filed on March
31, 2000.

On October 5, 1998, CRIIMI MAE Inc. and two affiliates filed for
protection under Chapter 11 of the U.S. Bankruptcy Code. Before filing
for reorganization, the Company had been actively involved in acquiring,
originating, securitizing and servicing multi-family and commercial
mortgages and mortgage related assets throughout the United States.
Since filing for Chapter 11 protection, CRIIMI MAE has suspended its
loan origination, loan securitization and CMBS acquisition businesses.
The Company continues to hold a substantial portfolio of subordinated
CMBS and, through its servicing affiliate, acts as a servicer for its
own as well as third party securitizations. As previously announced, on
March 31, 2000, CRIIMI MAE and two of its affiliates filed their Second
Amended Joint Plan of Reorganization (the "Plan") and Disclosure
Statement with the United States Bankruptcy Court for the District of
Maryland in Greenbelt, Maryland (the "Bankruptcy Court"). The Bankruptcy
Court has scheduled a hearing for April 25 and 26, 2000 on approval of
the Disclosure Statement.


SUNBEAM INC: Says Debt Negotiations Will Delay Annual Report
------------------------------------------------------------
Consumer-products maker Sunbeam Inc., which has been weighed down by
heavy debt and accounting troubles, said it will file its annual report
late because of continuing talks with lenders, according to a filing
with the Securities and Exchange Commission.

Sunbeam currently isnt in compliance with its $ 1.7 billion credit
facility and hasnt been in compliance since 1998. The company has
entered into several amendments to either waive or amend the terms of
the covenants.

The current amendment is scheduled to expire on April 10, and the Boca
Raton-based company said it is in talks with the lenders regarding an
extension or further amendment.

Last month, Sunbeam agreed to sell its backpack unit Eastpak to VF Corp.
in an effort to reduce debt. The company has said the sale of Eastpak
and other nonessential operations would raise about $ 200 million.

The company, which makes consumer products such as kitchen appliances
and camping equipment, last month said its fourth-quarter loss narrowed
to $ 144.5 million, or $ 1.43 a share, from $ 310.9 million, or $ 3.09 a
share, a year earlier. Sales jumped 19 percent to $ 612 million from $
515 million a year earlier. The company also said its expenses in the
quarter fell 14 percent to $ 241.3 million and its level of inventory
shrank.

Sunbeam (NYSE: SOC) has been hit with a class-action shareholder lawsuit
related to the collapse of its stock price and the inaccuracy of its
financial statements for previous years, which have since been restated.

The SEC has been investigating Sunbeam since June 1998, when the company
fired Albert J. Dunlap as its chairman and chief executive. Dunlap has
denied responsibility for lapses in the companys financial reporting.

According to the Wall Street Journal, a formal order of investigation
says the agency is focusing on whether the company and certain officers
or directors violated federal securities laws by filing inaccurate
reports with the SEC, failing to maintain adequate internal accounting
controls or making false or misleading financial statements.

Sunbeam said in November 1999 that it couldnt predict how long the SEC
investigation would continue or its outcome. (Miami Daily Business
Review, April 4, 2000)


AURORA FOODS: Cauley & Geller Announces Extended Securities Suit Period
-----------------------------------------------------------------------
Aurora Foods, Inc. (NYSE: AOR) announced on April 6 that it has restated
its 1998 and 1999 earnings after the Company underwent an "extensive
review" of its accounting practices. The restatement will have the
effect of lowering Aurora's pretax profit by $43.3 million for the first
three quarters of 1999, and by $38.3 million for the third and fourth
quarters of Whereas Aurora had previously reported earnings for the
first three quarters of 1999 of $0.50 per share, the restated earnings
are only $0.08 per share, on an "adjusted" basis. Similarly, whereas
Aurora previously reported earnings for the third and fourth quarter of
1998 of $0.50 per share, the restated earnings for that period have been
reduced to $0.05 per share, "adjusted" basis. The Company further
acknowledged that the restatement was necessitated by improper
accounting for promotional related costs.

As a result of these revelations, the period covered by the class action
previously filed by the Cauley & Geller firm will be extended to cover
purchasers from October 28, 1998 through February 18, 2000.

Contact: Cauley & Geller, LLP, 11311 Arcade Drive, Suite 201, Little
Rock, AR 72212, 1-888-551-9944 - toll free, E-mail: CauleyPA@aol.com


AURORA FOODS: Milberg Weiss Extends Period in Securities Suit in CA
-------------------------------------------------------------------
Milberg Weiss (http://www.milberg.com/aurora/)announced that a class
action has been commenced in the United States District Court for the
Northern District of California on behalf of purchasers of Aurora Foods,
Inc. (NYSE:AOR) securities between October 28, 1998 and February 17,
2000 (the "Class Period").

The complaint alleges that Aurora and certain of its senior executives
committed accounting fraud during late 1999 and concealed the same
through February 17, 2000. The complaint further alleges that defendants
continued to engage in and conceal their improper accounting practices
from as early as October 28, 1998.

The initial complaints were filed by purchasers of Aurora securities
between February 23, 1999 and February 17, 2000. The complaint charges
Aurora and certain of its officers and directors with violations of the
Securities Exchange Act of 1934. Aurora produces and markets brand name
food products. The Company's products include Mrs. Butterworth's and Log
Cabin syrup, Duncan Hines baking mixes, Van de Kamp's and Mrs. Paul's
frozen seafood, Aunt Jemima frozen breakfast products, and Celeste
frozen pizza. During the Class Period, Aurora issued false financial
results and made false statements about its results causing its stock to
trade at artificially inflated levels. Then on February 17, 2000, Aurora
admitted that its 1999 results had been false, that its previously
reported profit converted into a loss and that its top four officers had
"resigned." On these shocking disclosures, Aurora's stock trading was
halted, after last trading at $7-5/16. Then, when trading resumed on
February 22, 2000, Aurora's stock collapsed to $3-1/2. Then on April 3,
2000 Aurora revealed that it had issued false financial statements as
far back as October 28, 1998.

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


CENDANT CORP: Moving to Restructure Its Board to Comply with Settlement
-----------------------------------------------------------------------
The Cendant Corporation said on April 5 that it was restructuring its
board to comply with terms of a class action settlement that arose out
of accounting irregularities. It is reducing the number of directors to
13 from 15 and lowering the number of employee directors to three from
four.

Cendant said the changes, which will be put into effect at the company's
annual meeting next month, are two years ahead of the schedule specified
in the settlement, which was reached in early December. A United States
district court in Newark will hold a hearing on June 28 on the
settlement of the class action suit. After the hearing, the court will
decide whether to approve the agreement.

Cendant, the franchiser of Century 21 real estate offices and Howard
Johnson hotels and Avis car rentals, said Robert Kunisch and John
Snodgrass, former employee directors, had resigned, effective March 31.

Myra Biblowit, vice dean for cultural affairs at New York University,
and Sheli Rosenberg, vice chairman of Equity Group Investments Inc.,
were elected to replace Mr. Kunisch and Mr. Snodgrass, effective on
Monday. Additionally, Michael Monaco, a former employee director, and
Carole Hankin have resigned effective with the annual meeting on May 25.
(The New York Times, April 6, 2000)


COCA-COLA: Bus Ride against Employment Racial Bias Gains Support
----------------------------------------------------------------
A coalition of advocacy groups has offered its support to organizers of
a bus "ride for justice" against Coca-Cola to get the company to settle
an employee racial discrimination case quickly.

The Coalition for the People's Agenda --- which includes the NAACP in
Georgia, Concerned Black Clergy, the Georgia Association of Black
Elected Officials, the Southern Christian Leadership Conference and the
Coalition of Black Women --- says it will also help raise funds to
underwrite the costs of the April 15 trip from Atlanta to the company's
annual shareholders meeting in Wilmington, Del., on April 19.

The chief organizer of the trip, former Coke human resources manager
Larry Jones, said a boycott of the company's products will be called if
substantial progress to settle the suit is not made before the buses
roll. "There must be a definite movement toward settlement on the part
of the company by April 15, or we will call a boycott of company
products on the 15th," Jones said.

He and a group of former and current employees are organizing the
three-bus convoy that will stop for rallies in three cities before
reaching the shareholders meeting. About 55 out of 150 people have
signed up to ride the buses so far, and about $ 15,000 out of the $
60,000 needed for the trip has been raised, Jones said.

The Coalitoin for the People's Agenda said it will press for a meeting
with Coca-Cola executives "to urge them to do the right thing and avoid
a national boycott." Last week, the Rev. Jesse Jackson was in Atlanta to
try to persuade the company to settle the suit.

The company has said it is seeking a speedy and equitable resolution,
and a court-ordered mediator is attempting to facilitate one.

The federal suit, filed by eight current and former employees, alleges
that Coke has discriminated against African-Americans in pay, promotions
and performance evaluations. The plaintiffs are seeking class-action
status so they can represent about 2,000 other current and former black
employees in the United States. The company has denied the suit's
allegations and opposed plaintiffs' efforts to make it a class-action
case. (The Atlanta Journal and Constitution, April 6, 2000)


CRACKER BARREL: Mediation Goes on for Employees' Suits Re Wages & Bias
----------------------------------------------------------------------
The CBRL Group, Inc. reports in its Annual Report on Form 10- K for the
fiscal year ended July 30, 1999 filed with the Commission on October 26,
1999, that the Company's Cracker Barrel Old Country Store, Inc.
subsidiary is involved in two lawsuits filed in the United States
District Court for the Northern District of Georgia which are not
ordinary, routine litigation incidental to its business.

Serena Mcdermott And Jennifer Gentry V. Cracker Barrel Old Country
Store, Inc. is filed under the federal Fair Labor Standards Act and was
served on Cracker Barrel on May 3, 1999. The MCDERMOTT case is styled a
collective action, alleges certain violations of the Fair Labor
Standards Act and seeks recovery of unpaid and overtime wages.

Kelvis Rhodes, Maria Stokes Et Al. V. Cracker Barrel Old Country Store,
Inc. is filed under Title VII of the Civil Rights Act of 1964 and
Section 1 of the Civil Rights Act of 1866 and was served on Cracker
Barrel on September 15, The RHODES case seeks certification as a class
action, a declaratory judgment to redress an alleged systemic pattern
and practice of racial discrimination in employment opportunities, an
order to effect certain hiring and promotion goals, back pay and other
monetary damages.

On March 17, 2000, the Court granted the plaintiffs' motion in the
MCDERMOTT unpaid wage case to send notice to a provisional class of
plaintiffs. The Court defined the provisional class as all persons
employed as servers and all second-shift hourly employees at Cracker
Barrel Old Country Store restaurants since January 4, 1996. A court
approved notice will be sent to the defined class members, who will have
30 days following the date of the notice to decide whether to
participate or "opt in" to the lawsuit. The number of persons who will
be sent notice has not yet been determined. Because of the provisional
status of the plaintiff class, the Court could subsequently amend its
decision. If amended, the scope of the class could either be reduced or
increased or, if appropriate, the Court could dismiss the collective
aspects of the case entirely.

Cracker Barrel Old Country Store, Inc. believes it has substantial
defenses to the claims made, and it is defending each of these cases
vigorously. The parties are engaged in mediation in both cases, but the
mediation process is confidential and the parties cannot comment on the
process or the status of their discussions. The Company says it cannot
determine the likelihood of an unfavorable outcome nor the amount of
ultimate liability, if any, with respect to these cases at this time
because only limited discovery has occurred to date.


ECONNECT, INC: Kirby McInerney Files Securities Suit in CA
----------------------------------------------------------
Kirby McInerney & Squire LLP announced on April 6 that a class action
lawsuit has been commenced in the United States District Court for the
Central District of California, on behalf of all purchasers of
securities of eConnect (OTC Bulletin Board: ECNC) between November 18,
1999 and March 13, 2000 (the "Class Period").

The Complaint charges eConnect and certain of its officers and directors
with violation of Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934. The Complaint alleges that during the Class Period,
defendants made false and misleading statements and/or omissions
concerning the financial condition and business prospects of the
Company, as well as the financial benefits that would enure to eConnect
and its shareholders, while disregarding information which would have
been of material importance to any reasonable shareholder. As a result,
eConnect's stock price was artificially inflated throughout the Class
Period inflicting enormous damages on investors.

The lawsuit will seek to recover losses suffered by investors who
purchased eConnect securities during the class period, excluding the
defendants and their affiliates. Plaintiffs have retained as counsel the
firm of Kirby McInerney & Squire, LLP, which specializes in complex
litigation, including securities class actions. Kirby McInerney & Squire
has repeatedly demonstrated expertise in the field, and has been
recognized by various courts which have appointed the firm to major
positions in consolidated and multi-district litigation. The firm's
efforts on behalf of shareholders in securities litigation have resulted
in recoveries totaling hundreds of millions of dollars, and its
achievements and quality of service have been chronicled in published
decisions. More information about Kirby McInerney & Squire can be
obtained from the firm's website at http://www.kmslaw.com

Contact: KIRBY MCINERNEY & SQUIRE, LLP Ira M. Press, Esq. Mark A.
Strauss, Esq. Robert Feinstein, Paralegal Telephone: (212) 317-2300 or
Toll Free (888) 529-4787 Email: dfeman@kmslaw.com


HMO: Former FBI Agents Sue CIGNA over Misleading Insurance Practices
--------------------------------------------------------------------
Three retired special agents with the Federal Bureau of Investigation
have brought a class action suit against CIGNA (NYSE: CI), alleging
misleading insurance practices in the sale of group life insurance
policies to F.B.I. agents. The lawsuit was filed in Tampa, Florida on
April 5, 2000.

Former agents Donald Yingling, Robert Ulmer, and Michael Lunsford allege
that CIGNA dramatically increased its premiums on group life insurance
for retired F.B.I. agents, in spite of past promises that retired agents
would continue to be charged the same rate schedule as active agents for
the group life insurance. The agents also allege that CIGNA
significantly reduced the benefits available under the group policy to
retired agents, in spite of assurances that changes in the group policy
"enhanced" their benefits.

The three agents, all of whom were career F.B.I. agents, claim that as a
result of having been misled by CIGNA as to the premiums and benefits
available under the group policies, they were forced to pay higher
premiums or, in some cases, cancel their policies due to the increased
costs. The complaint alleges that in 1996, CIGNA reasserted its
longstanding commitment to all F.B.I. agents that if they continued to
carry the group life insurance, their premiums would always be based on
their "GS" rating (a federal pay scale), even after retirement from the
Bureau. These promises were broken, however, when retired agents were
informed in November, 1998, that due to increased claims the rates
charged to retired agents were to be doubled, and benefits reduced. The
class action plaintiffs are residents of Michigan and Florida, and they
seek to represent all retired F.B.I. agents who were victimized by the
sales practices of CIGNA.

Terry A. Smiljanich, an attorney with James, Hoyer, Newcomer &
Smiljanich, a Tampa firm that represents victims of corporate fraud,
stated: "F.B.I. agents relied on the promises made to them that their
life insurance premiums would remain constant after retirement, and are
now trapped into either paying double the premiums or canceling their
policies and looking for new insurance at higher rates for retirees."

The case is Robert Dean Ulmer, Michael B. Lunsford, and Donald L.
Yingling vs. Life Insurance Company of North America (LINA), Connecticut
General Corporation (CGC), and CIGNA Corporation (CIGNA) Case No.
8:00-CV-665-T-24E

Contact: Terry A. Smiljanich of James, Hoyer, Newcomer & Smiljanich,
P.A., 813-286-4100, or tsmiljanich@jameshoyer.com


HOLOCAUST VICTIMS: Poland Names New Head to Distribute Compensation
-------------------------------------------------------------------
An aide to Prime Minister Jerzy Buzek has been named the new head of a
foundation that will distribute Poland's share of compensation fund for
Nazi-era forced and slave laborers, the government said Thursday.

Bartosz Jalowiecki, 28, who represented Warsaw in compensation talks
with German, U.S. and Israeli officials, will replace Jacek Turczynski
as chief of the Polish-German Reconciliation Foundation, Robert
Szaniawski of the government press office said. Turczynski resigned in
January after becoming head of the state postal service.

The foundation keeps records on more than 400,000 Poles who were forced
to work for the Nazi war machine. It will be responsible for
distributing Poland's 1.9 million mark (dlrs 950 million) share of the
10 billion mark (dlrs 5 billion) fund.

German companies that used forced and slave laborers during the Nazi era
agreed to set up the fund last year in exchange for protection from U.S.
class-action lawsuits. Slave laborers those sent to concentration camps
under ''work to death'' conditions are expected to receive as much as
15,000 marks (dlrs 7,500) each. Forced laborers deported to Germany to
work will as much as 5,000 marks (dlrs 2,500) each. (AP Worldstream,
April 6, 2000)


JDN REALTY: To Report on 1999 Earnings and Accounting Practices
---------------------------------------------------------------
The Buckhead-based real estate investment trust is expected to issue its
already delayed 1999 earnings and annual report, as well as the findings
of an internal investigation into accounting practices that forced it to
delay its results. It also will report restated earnings from 1994-98.

On April 14, JDN's credit agreement with its key bank group expires.
About a month later, JDN likely will come face-to-face with angry
shareholders, some of whom have filed federal lawsuits against the
company after seeing the value of their stock tumble 40 percent in one
day. "They're nervous," said Richard Moore, a McDonald Investments
analyst in Cleveland. JDN is concerned about how the lawsuits will
affect its operations and whether any other irregularities will be
discovered during the internal investigation, he said.

Moore said he believes JDN can survive without cleaning house or selling
out, but several other analysts who follow the REIT said they believe
the company will have to reorganize management or consider a merger or
sale.

JDN has been on shaky ground since Feb. 14, when it announced that two
executives had received a total of $ 4.9 million in undisclosed
compensation from 1994-98, causing it to default on its main credit
line. The two executives, Jeb L. Hughes, senior vice president of
development, and C. Sheldon Whittelsey, vice president of development,
resigned. Company founder J. Donald Nichols resigned as chief executive
but remained as non- executive chairman. JDN's stock lost 40 percent of
its value that day and hit a 52-week low of $ 9.81 1/4.
ed.

JDN said in Securities and Exchange Commission filings that 21 of its
150 developments over the past five years "violated the policies of the
company." Charles Talbert, director of investor relations, said a
special committee of non-management board members is scrutinizing all
150 development deals to determine if any other "irregularities"
occurred. "That is very important to us," he said. "We're being very
cautious."

Nichols was replaced as CEO by his wife, Elizabeth Nichols, and William
Kerley, JDN's chief financial officer. Elizabeth Nichols and Kerley are
serving as interim co-CEOs while the REIT searches for a permanent chief
executive.

Talbert said the company expected to lose some credibility on Wall
Street. " I would say we have," he said. "You're going to lose some
confidence" when a company has accounting problems.

Talbert said he has heard rumors of a possible sale of JDN, but he was
not aware of any merger talks. Robinson-Humphrey Co. analyst Pat Hickey
said a merger or acquisition is " clearly a possibility," although more
needs to be known about the company's accounting problems. "The company
has not made it very easy for people to develop a sense of the magnitude
(of the problem) or the steps it will take (to correct it)," he said.
"What the investment community is waiting on now is for the company to
come clean and provide details on what happened."

Some are not waiting on the company. In the weeks following the
Valentine's Day announcement, several shareholders filed lawsuits
seeking class-action status against the REIT in U.S. District Court in
Atlanta. A court spokeswoman said 14 suits have been filed against JDN
Realty Corp. One was filed against JDN Realty Inc.

In a suit filed Feb. 15, shareholder Jim Farrell says JDN issued
financial reports and news releases that "were false products of
financial manipulations."

JDN must take several steps to regain Wall Street's confidence, said Jim
Kammert, a Goldman Sachs analyst in New York. "I would advise that they
have a full-hands-on-deck forum and explain exactly what they're going
to do." The company can start the process by issuing its annual report
and explaining to shareholders and institutional investors what happened
concerning the improper payments. JDN also needs to share its "explicit
plans to regain momentum," he said. (The Atlanta Journal and
Constitution, April 6, 2000)


MICROSOFT CORP: Lawyers Trying to Coordinate Effort in Antitrust Suit
---------------------------------------------------------------------
Claiming to represent thousands of individual and corporate customers of
Microsoft Corp., some of the biggest names in the class-action bar have
already filed more than 100 lawsuits that mirror allegations in the case
pressed by the Clinton administration and 19 state attorneys general.

Participants in the Microsoft pile-on include Stanley Chesley of
Cincinnati, Robert Lieff of San Francisco and Michael Hausfeld of
Washington, D.C. They hope that U.S. District Judge Thomas Penfield
Jackson's findings about Microsoft's misconduct as a monopolist will
simply be adopted in their own cases, leaving little to debate but the
amount of damages to their clients. The stakes are high, since any
damages awarded can be tripled under antitrust laws.

And the judge's highly publicized ruling Monday could spark even more
private suits making the copy-cat arguments that Microsoft illegally
protected its dominant Windows computer operating system against
competitors and tried to monopolize the market for browsers used to
navigate the World Wide Web.

"The judge's findings of fact and law in the government case can be
accepted as findings of fact and law in the private cases," says Daniel
Small, a partner of Hausfeld's who is helping with a plaintiff suit
pending in federal court in Washington.

But it probably won't be quite that straightforward. Judge Jackson's
ruling won't be final until he decides on remedies -- court-ordered
changes in Microsoft's practices or structure -- a process likely to
take at least several months. At that point, Microsoft will almost
certainly appeal. And as long as the trial judge's decision remains in
dispute, it will be of limited value to plaintiffs in other proceedings.

Also, Microsoft will be sure to vigorously fight the private antitrust
claims. The plaintiffs' core claim that consumers paid too much for
Windows, for example, won no support from Judge Jackson's
pronouncements, Microsoft's lawyers say. In his findings, "you won't
find anything that says consumers were overcharged," says David Tulchin
of Microsoft's lead firm, Sullivan & Cromwell in New York. "In fact,
you'll find just the opposite, that Microsoft kept the pricing of
Windows . . . very low."

Lawyers for Microsoft are likely to contend that "indirect" consumers of
a product aren't entitled to damages under federal antitrust law or many
state laws. Nearly 100 percent of computer users fall in this category,
they add, since they bought Windows through a computer manufacturer or
retailer, rather than from Microsoft itself.

Plaintiffs' lawyers commonly file private claims that mirror allegations
in pending government suits. And the pace of suits filed in state and
federal courts accelerated after Judge Jackson handed down his initial
findings of fact in November, which were widely seen as unfavorable to
Microsoft. The software giant says it now faces 121 suits in 32 states,
all in preliminary stages, in federal and state courts.

But groups of plaintiffs' firms are trying to coordinate their efforts
-- both to mount their attack on Microsoft and to gain an edge in any
subsequent award of fees. "We've learned from experience that the best
and first thing we should do is to organize," says Chesley, whose firm,
Waite, Schneider, Bayless & Chesley, seeks a leading role in litigation
nationally. Chesley says his Cincinnati firm has linked up with Cohen,
Millstein, Hausfeld & Toll in Washington, and others, to coordinate
about 90 pending cases.

Separately, plaintiffs' firms and Microsoft have both asked a federal
judicial panel to coordinate pretrial proceedings in all of the federal
cases. The plaintiffs' firms suggested at a hearing that district courts
in a variety of locations, including Washington or Chicago, would be
appropriate for this task. Microsoft's first choice: Seattle, near its
headquarters in Redmond, Wash. About 25 state court cases have already
been consolidated for pretrial proceedings in California.

One of the major pretrial tasks in the private suits will be trying to
obtain most, if not all, of the documents Microsoft has turned over in
the government case. Tulchin, the Microsoft attorney, says his client
will surrender "a reasonable amount" of the material but that "the scope
and timing remain to be determined." The plaintiffs also will seek
documents from an antitrust case filed against Microsoft by Caldera
Inc., a Salt Lake City software maker. In January, Microsoft paid an
estimated $275 million to settle that suit.

How much plaintiffs will be able to piggyback on Judge Jackson's legal
findings isn't clear. Under some circumstances, conclusions reached by
one court that Microsoft illegally used its monopoly power, for example
-- can be adopted by another court without further litigation.

But while some courts could choose to adopt Judge Jackson's findings
now, legal experts say that the likelihood of a vigorous appeal and a
possible reversal may make most courts reluctant to do so. And, they
add, it's a risky approach for plaintiffs' lawyers themselves. If their
cases hinge on the validity of Judge Jackson's rulings, and those
rulings were to be overturned on appeal, the plaintiffs' own cases would
be eviscerated.

Tulchin says that private antitrust suits against Microsoft have been
trickling in at the rate of a few a week, and he expects that to
continue for a time. But, "once you get past a certain number of these
cases," he says, the additional ones only amount to more plaintiffs
squabbling over the same corporate pot. (The Deseret News (Salt Lake
City, UT), April 5, 2000)


NETMANAGE INC: 1st Cir OKs Dismissal of Securities Suit in MA Re FTP
-------------------------------------------------------------------
On March 14, 1996, a securities class action complaint, Greebel v. FTP
Software, Inc., et al., No. 96-10544, was filed in the United States
District Court for the District of Massachusetts against FTP and certain
of its former officers and directors. The complaint alleged that between
July 14, 1995 and January 3, 1996, defendants violated the federal
securities laws by making false and misleading statements of material
fact about FTP's prospects and financial statements. NetManage acquired
FTP in August 1998. On September 24, 1998, the district court granted
defendants' motion for partial summary judgment and granted without
leave to amend defendants' renewed motion to dismiss the complaint.
Plaintiffs filed a notice of appeal. Oral argument on the appeal was
held on June 9, 1999. By order dated October 8, 1999, the United States
Court of Appeals for the First Circuit affirmed the district court's
dismissal. Time to petition for review by the United States Supreme
Court has expired.


NETMANAGE INC: Dismissal of Firefox Securities Suit Re 95-96 Appealed
---------------------------------------------------------------------
In February 1996, a securities class action complaint, Zeid, et al. v.
Kimberley, et al., Case No. C-96-20136SW, was filed in the United States
District Court for the Northern District of California against Firefox
Communications Inc. ("Firefox") and certain of its former officers and
directors. FTP acquired Firefox in July 1996. The complaint alleged
that, between July 20, 1995 and January 2, 1996, the defendants violated
the federal securities laws by making false or misleading statements
about Firefox's operations and financial results. On May 8, 1997, the
district court granted defendants' motion to  dismiss without leave to
amend. Plaintiffs filed a notice of appeal. Oral argument on the appeal
was held on September 14, 1998.

On November 1, 1999, the Court of Appeals for the Ninth Circuit issued
an order vacating the judgment of the district court and remanded the
case back to the district court for reconsideration in light of its
recently issued landmark decision in the securities litigation case of
Janas v. McCraken (In re Silicon Graphics Inc.). After remand, the
Company renewed its motion to dismiss. On March 22, 2000, a hearing on
motion to dismiss was held by the district court.


NETMANAGE INC: Dismissal of Securities Suit Re 95-96 Appealed
-------------------------------------------------------------
On January 9, 1997, a securities class action complaint, Head, et al. v.
NetManage, Inc., et al., No. 07763295, was filed in the Superior Court
of California, Santa Clara County, against the Company and certain of
its directors and current and former officers.

On January 10, 1997, the same plaintiffs filed a securities class action
complaint, Head, et al. v. NetManage, Inc., et al., No. C-97-4385-CRB,
in the United States District Court for the Northern District of
California, against the same defendants.

Both complaints allege that, between July 25, 1995 and January 11, 1996,
the defendants made false or misleading statements of material fact
about the Company's prospects and failed to follow generally accepted
accounting principles. The state court complaint asserts claims under
California state law; the federal court complaint asserts claims under
the federal securities laws.

On September 10, 1997, a class action substantially similar to the
Headaction was filed, Beasley v. NetManage, Inc., et al., C-98-1794 CRB
(N.D. Cal.), seeking an unspecified amount of damages.

The federal court certified the purported class. On December 30, 1998,
the federal court granted without leave to amend the defendants' motion
to dismiss the second amended complaint in the Head federal action;
plaintiffs have filed a notice of appeal to the U.S. Court of Appeals
for the Ninth Circuit.

On February 2, 1999, the federal court dismissed with prejudice the
Beasley action pursuant to its order in the Head action. The Company
believes there is no merit to these cases and intends to defend them
vigorously.


NETMANAGE INC: Hearing for Shareholder Complaint in CA in April 2000
--------------------------------------------------------------------
On October 10, 1997, a shareholder derivative action was filed in the
United States District Court for the Northern District of California
against nine present and former officers and directors of the Company.
Sucher v. Alon et al., No. C-98-203-CRB. The complaint alleged that the
defendants violated various fiduciary duties to the Company; the Company
is named as a nominal defendant. The complaint was predicated on the
factual allegations contained in the Head and Molinari class action
complaints, and sought an unspecified amount of damages.

On November 6, 1998, the court dismissed the complaint without leave to
amend on the grounds that plaintiffs had failed to make a pre-litigation
demand on the Company's board of directors. Plaintiff have filed a
notice of appeal to the U.S. Court of Appeals for the Ninth Circuit.
Appellate briefing is complete. A hearing on that appeal has been set
for April 2000.


NETMANAGE INC: Securities Suit in CA Re April to July 96 under Appeal
---------------------------------------------------------------------
On March 21, 1997, a securities class action complaint, Interactive Data
Systems, Inc., et al. v. NetManage, Inc., et al., No. CV764945, was
filed in the Superior Court of California, Santa Clara County, against
the Company and certain of its directors and officers. On June 19, 1997,
one of the plaintiffs in that action filed a securities class action
complaint, Molinari v. NetManage, Inc., et al., No. C-98-202-CRB, in the
United States District Court for the Northern District of California
against the same defendants. Both complaints allege that, between April
18, 1996 and July 18, 1996, the defendants made false or misleading
statements of material fact about the Company's prospects. The state
court complaint asserts claims under California state law; the federal
complaint asserts claims under the federal securities laws. Both
complaints seek an unspecified amount of damages.

The federal court certified the purported class. On February 26, 1998,
the state court entered judgement in favor of the Company in the state
case. Plaintiffs have filed a notice of appeal as to the Company and
have indicated that they will file an amended complaint as to the
individual defendants. On December 30, 1998, the federal court granted
without leave to amend the defendants' motion to dismiss the complaint
in the Molinari case. Plaintiffs have filed a notice of appeal to the
U.S. Court of Appeals for the Ninth Circuit. The Company believes there
is no merit to these cases and intends to defend these cases vigorously.



PASMINCO: Australians Sue Lead and Zinc Miner over Emissions
------------------------------------------------------------
More than 1,000 people had been identified as eligible to join a class
action against lead and zinc miner Pasminco over emissions from smelters
in two states, lawyers said on April 6.

Sydney firm Coleman and Greig launched the action last month and with it
a public appeal to identify people allegedly affected by the emissions
from smelters at Cockle Creek in New South Wales and Port Pirie in South
Australia. Solicitor Paul Gambin said the firm had since taken 312 calls
on behalf of 1,018 possible victims. Mr Gambin described the response as
overwhelming and said those people who had contacted the firm had been
sent lengthy questionnaires to complete. "This stands to be one of the
larger class actions undertaken in Australia," he said.

The action against Pasminco alleged the company wrongfully permitted
emissions of noxious fumes, vapour and gases containing lead, sulphur
dioxide and other toxic pollutants into the air around the two smelters.
It argued these toxic pollutants caused a range of symptoms from
headaches and nausea to behavioural problems, intellectual disabilities
and asthma to tumours and cancers. It further alleged the emissions
impacted on the value of property around the smelters. The case was
instigated on behalf of Roslyn Cook and her daughter Samantha, 8, who
lived at Boolaroo from 1989 to 1998. It came before the Federal Court in
Sydney on April 6 with May 9 set as a hearing date. Mr Gambin said in
the meantime his firm would continue to search for anyone born in Cockle
Creek or Port Pirie over the past 21 years or any adults living within a
five kilometre radius of the smelters over the past six years. Pasminco
said previously it would defend the action. (AAP NEWSFEED, April 6,
2000)


SKYMALL INC: Moves to Dismiss Securities Lawsuit in AZ Re Dec 98
----------------------------------------------------------------
On January 29, 1999, a securities class action complaint was filed
against SkyMall and Robert Worsley, the Company's Chief Executive
Officer, Chairman and principal shareholder, in connection with certain
disclosures made by the Company in December 1998 relating to its
Internet sales. The complaint was filed in the United States District
Court, District of Arizona, Case No. CIV-99-0166-PHX-ROS.

The complaint alleges unlawful manipulation of the price of the
Company's stock and insider selling during the period from December 28,
1998 through December 30, 1998. The complaint seeks unspecified damages
for alleged violations of federal securities laws. SkyMall has filed a
Motion to Dismiss. SkyMall believes that the allegations against it and
Mr. Worsley are substantially without merit and intends to vigorously
defend the lawsuit.


SKYMALL INC: Settlement for Consumer Complaint Re Tax Involves Discount
-----------------------------------------------------------------------
On May 13, 1998, Kathy Jordan, a purchaser of products through a SkyMall
catalog in March 1998, filed an action in the District Court of Cherokee
County, Oklahoma, styled as Kathy Jordan, Plaintiff v. SkyMall, Inc. a
corporation, and John Doe(s), et al., Defendants, which is designated as
Case No. CJ-98-208. Plaintiff alleged that SkyMall improperly collected
from her certain state and local taxes relating to her purchase.
Plaintiff brought the action on behalf of herself and a class of persons
in the United States similarly situated. She alleged causes of action
for unjust enrichment, fraud, breach of contract, and declaratory
judgment, and seeks return of allegedly unlawful revenue collected with
interest, an injunction against collecting taxes improperly,
compensatory and punitive damages, and attorneys' fees and costs.

The Company believed Ms. Jordan's claims were substantially without
merit, but, it says, in order to minimize overall litigation risks and
ongoing litigation costs, and to reduce the management time and
attention required to be devoted to this matter, it entered into a
Settlement Agreement with Plaintiff and the alleged class. The agreement
received final court approval on October 14, 1999. As a part of the
agreement, the Company has agreed, among other things, to offer
discounts during 2000 to SkyMall customers who purchased merchandise
from the Company prior to December 31, 1998. The agreement also calls
for SkyMall to issue to Plaintiff's attorneys approximately 65,000
shares of common stock valued at $600,000 and $100,000 cash. The Company
recorded a reserve for this settlement amount and the related expenses
in the second quarter of 1999 in the amount of $1.436 million,
representing approximately $700,000 payable to Plaintiff's attorneys in
stock and cash, $356,000 in anticipated customer discounts associated
with the offer to customers and $380,000 in professional fees incurred.


TOBACCO LITIGATION: Jury in FL mulls Health Compensatory Damages
----------------------------------------------------------------
A jury in Florida has begun deliberations on how much money should be
awarded to sick smokers in a class-action lawsuit against the tobacco
industry, a court spokesperson said. The jury's verdict could be issued
as early as Thursday but could also take days or weeks to reach. The
amount awarded in this phase of the proceedings, which began Wednesday,
will only cover compensatory damages, including medical expenses, for
smokers in the state of Florida.

Much larger "punitive" damages could be determined in a later phase. A
big punitive award could run into the hundreds of billions of dollars,
according to analysts. But the verdict on victims' compensation might
signal what may be expected in the punitive phase, according to Clark
Freshman, a legal expert at the University of Miami Law School. "If it
is very high or very low, then it may signal what will happen at the
punitive damages phase. But it's most likely that it will be somewhere
in the middle where it will not be obvious at all what that means for
punitive damages," he said.

Defendants in the trial include cigarette firms Philip Morris, R.J.
Reynolds Tobacco, Brown and Williamson, Lorillard, and Liggett and
Brooke Group, as well as two research arms of the industry: the Council
for Tobacco Research and the Tobacco Institute.

The jurors initially will be considering three specific cases: two
patients suffering from smoking-related illnesses, Frank Amodeo and Mary
Farnan, and one who recently died, Angie Della Vecchia. The attorney for
the two is seeking 13 million dollars. (Agence France Presse, April 6,
2000)


TOBACCO LITIGATION: Minors' Case in CA to Proceed As Private Action
-------------------------------------------------------------------
A state judge has declined to grant class-action status to a lawsuit
against the tobacco industry that seeks more than $ 1 billion in
restitution for 1.5 million California residents who began smoking as
minors. San Diego County Superior Court Judge Ronald Prager decided
instead that the case can proceed as a private attorney general action
against Philip Morris Cos., R.J. Reynolds Tobacco Holdings Inc., British
American Tobacco's Brown & Williamson subsidiary and Loews Corp.'s
Lorillard Tobacco, among others.

"He's essentially told us we could go forward and get all of the
financial and injunctive relief we're seeking, without obtaining class
certification," plaintiffs' attorney Mark Chavez said.

The plaintiffs had sought class-action status, in part, because that
would have given them the ability to reach other class members who could
help them develop evidence against the companies, Chavez said.

Prager ruled, though, that the plaintiffs failed to establish that a
class action would be "superior" to bringing the case as a private
attorney general action, which is a suit brought by individuals on
behalf of the general public. "The relief sought by plaintiffs . . . is
readily and fully potentially available" in a private attorney general
suit, the judge ruled Tuesday.

While Chavez said Prager's decision allows the suit to proceed to trial
more quickly than a class action, a Brown & Williamson spokesman said
the ruling is another indication that these types of lawsuits against
the tobacco companies will not survive as class actions. "The fact is
court after court in most cases have come back and said smoking-related
suits against tobacco companies are not appropriate for class actions,"
Brown & Williamson spokesman Joe Helewicz said.

The 1998 lawsuit, filed by five California residents, accuses the
tobacco industry of enticing them to experiment with smoking as minors
through deceptive advertising, among other things. The suit asks for
restitution of more than $ 1 billion, including $ 700 million for
alleged ill-gotten gains by the companies, on behalf of California
residents, Chavez said. No trial date has been set, Chavez said. (Los
Angeles Times, April 6, 2000)


TOBACCO LITIGATION: Ways Devised to Keep Industry Alive after Lawsuit
---------------------------------------------------------------------
Financial Times (London) compares legal action against the tobacco
industry to flogging a mule: one step too far, and the result is a
non-performing farm asset. The article says litigation against the
industry is satisfying, lucrative, but risky if taken too far. The trick
is to keep the industry alive while suing it for every dollar that can
be earned for sick smokers.

That strategy is now in jeopardy as jurors in a multi-billion dollar
trial in Miami prepare to deliver a verdict which could bankrupt the
industry, and prevent it from continuing to make payments on the Dollars
246bn it already owes to 46 states after a settlement in 1998. That
prospect has inspired a burst of legislative ingenuity from southern
tobacco states, and Florida, to protect their share of the money - and
the golden mule in the process.

Florida is considering a law which would substantially delay the award
of potentially crippling punitive damages in the Miami trial. Other
states have passed or are debating legislation which could put off for
years the day when the companies actually come up with the cash.

But there are serious constitutional issues which go well beyond the
current trial, and highlight an increasing threat to the rights of
defendants - even large, corporate, cancer-inducing defendants - in a
world of big and bigger lawsuits.

Two aspects of the trial could seriously threaten the constitutional
rights of Big Tobacco. First, Florida law says defendants in a civil
lawsuit must post cash or a bond for 115 per cent of any jury award,
before they can pursue an appeal. Under Florida law, the jury cannot
award damages which exceed the defendants' net worth. Even so, the
figure may still be too high to be bonded.
And if there is no bond, there is no appeal. That means Big Tobacco
would be deprived of its constitutional right to due process, says
Lester Brickman of Cardozo Law School. In practical terms, it means a
choice between settlement and bankruptcy.

Tobacco would not be the first: most famously, back in the 1980s, Texaco
was unable to bond the Dollars 10bn awarded against it by a Texas jury,
forcing the company to settle. Since then, the bonding requirement,
which exists in all 50 states, has created a powerful incentive to
settle big suits.

But new state laws which cap bonding requirements (Virginia has just set
a Dollars 25m limit) are probably unconstitutional, says John Coffee, a
leading class action expert at Columbia University. They violate a
requirement central to the Constitution: that one state must enforce the
court judgments of another. So Virginia, a big tobacco producing state,
cannot simply refuse to enforce a bond required by Florida. Florida, on
the other hand, has every right to change its own laws.

But here too there are problems: Florida may try to change the
controversial process of awarding damages in the Miami trial, where the
jury will come up with a lump sum punitive damage award - to punish
tobacco for its evils - without first assessing the actual harm done to
the hundreds of thousands of smokers involved in the suit. That
procedure arguably violates both Florida and US Supreme Court precedent,
because it breaks the necessary link between the actual harm done and
the punishment.

But passing a law now to compel a different procedure might be
considered an unconstitutional legislative intrusion into an ongoing
trial. Morality is malleable whenever, as in this case, politics is so
powerfully present in the courtroom, the Financial Times says.

Judge Thomas Penfield Jackson made it pretty clear that bundling is bad,
in a Microsoft context.

Lawyers for the National Association of Recording Merchandisers, a music
retailers' group, are hoping to use his ruling to help them with their
intriguing anti-trust suit against Sony.

The retailers claim Sony is illegally steering customers away from
brick-and-mortar stores, and toward its own online operation, by forcing
retailers to stock CDs which contain a "hyperlink" to Sony online.

By "tying" the CDs to the website, Sony violates the anti-trust laws,
they say. The suit could mark an important skirmish over when suppliers
can bypass middlemen to sell directly over the internet. (Financial
Times (London), April 6, 2000)


U.S. CAPITAL: Klayman & Lazarus Files Securities Suit in Florida
----------------------------------------------------------------
The Law Firm of Klayman and Lazarus, LLP announced on April 5 that it
has filed a class action in the United States District Court for the
Southern District of Florida on behalf of all individuals who purchased
corporate funding notes from U.S. Capital Funding, Inc., First Capital
Services, Inc., Merchants Capital, Inc., Asset Base Management, Inc., or
American Benefits Services, Inc. between March 2, 1997 and March 1,
2000, inclusive (the "Class Period").

The complaint charges that the Companies and certain of their officers,
directors and agents violated the federal securities laws by providing
materially false and misleading information about the true nature of
Corporate Funding Notes being sold by the Companies. Specifically, the
companies took advantage of the purchasers of the notes by, among other
things, misrepresenting that the proceeds of the notes would be invested
in government-backed securities, and fraudulently inducing the
purchasers of the said "promissory notes" to surrender their rights in
the notes, without disclosing the fact that the proceeds of these
securities either had been, or would be, diverted to the private uses of
the Defendants themselves, in direct violation of the written terms and
conditions of the notes.

Contact: Klayman & Lazarus, LLP, Boca Raton Lawrence Klayman,
888/997-9956 Email: llksec@aol.com


U.S. SALES: Sweepstakes Company Agrees to Pay to Settle 2 Lawsuits
-----------------------------------------------------------------------
One of the nation's largest sweepstakes companies has agreed to pay $50
million to settle two lawsuits accusing it of running deceptive
promotions, officials announced on April 6. The United States Sales
Corporation, which does business as United States Purchasing Exchange
and U.S.P.E., reached agreements with 48 states and the District of
Columbia and plaintiffs in a separate class-action lawsuit. The company,
which mails tens of millions of sweepstakes offers each year, had been
accused of misleading consumers into believing that they had a better
chance of winning if they bought a product offered along with the
contest.

The settlements announced include more than $30 million for the states
and another $20 million for court-approved distribution to customers in
the class-action lawsuit, the company said. (The New York Times, April
6, 2000)

According to the Associated Press, April 6, 2000, the settlement was
negotiated by a task force representing attorneys general from every
state except Iowa and Connecticut. Their colleagues across the nation
hailed it as a blueprint for the industry, which is under fire for
alleged deceptive marketing practices. Under the deal with the states,
USPE agreed to provide "Sweepstakes Facts" in big print on its contest
entry forms explaining that entrants have not yet won prizes and are not
required to buy anything to enter or improve their chances of winning.
It also will disclose the odds of winning a prize.

USPE, which has been in business since 1967 and has undergone a recent
downsizing, admitted no wrongdoing under the agreement. Instead, the
company recognized that growing attention to the issue of marketing and
"inappropriate purchasing by some customers" made it clear that changes
were needed, spokesman Harvey Englander said. "We're a model for the
entire industry in this settlement. We stepped up to the plate," he
said.

The firm sells low-cost household items and has given away millions in
prizes, including a $3.3 million jackpot a few weeks ago to a winner in
Florida, Englander said.

Under the settlement, a private firm to be hired by the states will get
a list of USPE customers who spent at least $1,870 in any one year
between 1997 and 1999 and send a notice of eligibility to file a claim.

USPE also agreed to discontinue mailings to "high activity" customers,
defined as those who make more than 25 purchases or spend more than $935
on sweepstakes offers in a year.

The number of people who receive refunds and the amount of the refunds
will depend upon the number of claims filed.

Doug Walsh, an assistant attorney general in Washington state who was
involved in the negotiations, said the number of consumers nationwide
could exceed 150,000.

The restitution will come too late for Blake, who now lives in the
Alzheimer's wing of a nursing home.

Mary Blake wanted to win a national sweepstakes so badly that she often
went without groceries and medicine so she could buy merchandise in
hopes of boosting her chances. When the mail came, family members say,
the elderly Olympia woman would immediately fill out the entry and order
forms and rush to the post office with the idea of beating quick
deadlines to win free gifts. And she thought her bank made a mistake
when it overdrew her account, even though she included handwritten notes
on her checks asking the sweepstakes firms not to cash them until her
Social Security check was deposited. Blake, who turns 83 next month, is
the kind of consumer that the nation's attorneys general are hoping will
benefit from a settlement announced Wednesday that involves one of the
country's biggest sweepstakes firms.

Her family cleaned out "truckloads" of useless merchandise that Blake
bought over the years from companies offering big prizes,
daughter-in-law Sherry Blake said. Mary bought magazines, sports
memorabilia and even videocassette tapes, although she does not own a
VCR.

"Mom was a firm believer that, to win, you have to buy," Sherry Blake
said, adding that the family sometimes paid as much as $800 to $1,000 to
cover Mary's monthly bills. "It's really sad. She always wanted to win a
car because hers was so bad. She could have bought 10 or 12 of them for
the money she spent. "She was so depressed because she never won and she
couldn't understand why."

"A favorite target of these companies are the elderly, who are duped
into believing a small investment will net them millions," Washington
state Attorney General Christine Gregoire said. "This should send a very
clear message that it's time to stop the deception." (The Associated
Press, April 6, 2000)


WA STATE: Activists for the Retarded Say State Thwart Lawsuit
-------------------------------------------------------------
Advocates for thousands of retarded citizens who have waited years to
get public services have accused the state of thwarting their
class-action lawsuit. The plaintiffs filed the suit in federal court in
March 1999, demanding the state help nearly 3,000 disabled adults, many
of whom have waited more than 10 years for spots in Medicaid-funded
programs and homes. The suit charged the state with violating the
federal Medicaid Act, which guarantees the disabled certain services in
a timely fashion.

The plaintiffs' lawyer, Neil McKittrick, said representatives of
Attorney General Tom Reilly's office had covertly changed an agreement
with the federal government to allow the state to avoid paying for some
services if funds were not readily available.

McKittrick said the new terms between the state and the Health Care
Financing Administration would keep the retarded adults in limbo for
months or years. "They changed the rules when nobody was looking," he
said.

The new clause in the agreement between Massachusetts and HCFA may also
be a violation of the Medicaid Act, McKittrick said.

Because half of the state's retarded have caregivers older than age 60 -
and some are ill themselves - the delay caused by the state's action is
unacceptable and dangerous, advocates for the plaintiffs argue. (The
Associated Press, April 6, 2000)


* Consumers Use Power of Internet to Fight Firms
------------------------------------------------
When his 1995 Ford Windstar blew a head gasket last April, Chuck
Cantanese became the proverbial squeaky wheel. He did his homework on
the checkered history of his minivan's 3.8-liter, V-6 engine and hounded
Ford Motor Co. to pay his $1,000 repair bill, to no avail.

Then Cantanese, 38, of Independence, Ky., got an unexpected call from
Ford. He had been selected for a customer satisfaction program, Ford
told Cantanese. And he was eligible to receive money for recent repairs.

Afterward, Cantanese felt Ford wanted to quietly appease him without
admitting the engine problem. He wondered if there were other Ford
owners stuck with defective engines. So he took to the Internet,
launching a Web site in November filled with information about the bad
engines. Soon his site was swarming with thousands of Ford owners whose
vehicles also had blown head gaskets. Soon afterward, two class-action
lawsuits were filed against Ford.

Facing a customer backlash, Ford announced a warranty extension program
that could cost more than $200 million and covers 718,000 vehicles with
potentially defective head gaskets.

The episode illustrates how the Internet is empowering consumers as
never before. In cyberspace, the Davids have a new slingshot to aim at
corporate Goliaths, ranging from automakers to airlines. "It's really a
great leveler," said Clarence Ditlow, executive director of the Center
for Auto Safety in Washington "It's absolutely clear the Internet is
causing an upsurge in complaints. Now you can surf the Net and find out
how to be a more effective consumer advocate."

Before the Internet, consumers who felt jilted may have paraded in front
of corporate headquarters or dealerships with placards, called a
consumer group or headed to small claims court. These days, they can log
on and find the nearest chat room or Web site and speak to the world
without leaving their den. And more and more, the information
superhighway is becoming their road to restitution.

The head gasket episode is a case in point. Ford owners are receiving
letters extending the warranty to seven years and 100,000 miles for the
1995 Ford Windstar, 1994 and 1995 Ford Taurus and Mercury Sable and 1994
Lincoln Continental. The program -- one of the largest and costliest
voluntary service actions ever -- includes reimbursement of past repair
bills, coupons toward future vehicle purchases and even some vehicle
buybacks.

For its part, Ford said it extended the warranty to 60,000 on the
Tauruses, Sables and Windstars and 75,000 miles on the Continental in
June 1998 and increased the warranty in February as the company learned
owners had problems beyond these points. "Yes there was a lot of
disgruntled traffic on the Web and we listened," Ford spokesman Mike
Vaughn said. "We listened to everyone, we looked at the data and this
decision to extend the warrantly was based on what is right for the
customer."

It wasn't the first time the Internet affected a controversy within the
auto industry.

                           Flaming Fords

A couple in Marietta, Ga., turned to the Internet when their 1985 Ford
Ranger burst into flames in their driveway in November 1995 because of a
problem with the ignition switch.

Edward and Debra Goldgehn shared their experience with Net surfers on
their now-defunct Association of Flaming Ford Owners Web site
(www.flamingfords.com) that featured photos of charred vehicles and a
list of affected models. The site became a repository of information for
consumers and reporters and generated publicity that helped prod Ford to
recall 8.7 million cars and trucks, the largest ever at the time for a
single automaker.

Truman Trekell of Texas undertook a similar endeavor last year when he
learned on an Internet Web site that the 1999 Dodge Dakota R/T pickup he
bought hauled 2,000 pounds -- not 6,400 pounds as advertised in the
company's brochures and owners' manuals. When DaimlerChrysler AG
officials would not meet with him, Trekell posted his concerns with a
newsgroup for Dakota RT owners. Some owners filed a class-action lawsuit
in California last summer. Within a month of the filing, the automaker
offered disgruntled Dakota owners the option of a full refund, a
trade-in for another vehicle at window sticker prices, an extended
warranty or $500 in parts, Trekell said.

DaimlerChrysler officials said these options were available to consumers
before the lawsuit. But some Dakota owners said they were unaware of the
offer and others said they could not get the automaker to honor it. "We
got all our evidence together on the Internet," Trekell said.

                           Web Watching

Corporate America, always sensitive to bad press, is now trying to keep
tabs on the Internet, where negative news can spread like a brush fire.
"I think you are crazy not to pay attention to it," said Jon Austin,
Northwest Airlines managing director for corporate communications.
Northwest monitors certain newsgroups and other forums "to get a sense
of what is being said about us and who is saying it," Austin said.

Ford tries "to keep our finger on the pulse out there and correct any
misinformation," Vaughn said.

Companies complain that for every Web page dedicated to sharing
information about legitimate concerns, there is a raft of shrill hate
sites fed by angry consumers and disgruntled employees. There are an
estimated 1,500 business-bashing addresses on the Web. While they may be
distasteful or even inaccurate, in lawsuits around the country judges
have ruled the sites are protected by the First Amendment.

One controversial site, http://www.blueovalnews.comwas nearly shut down
last year when Ford objected to the publication of internal documents
that showed exhaust problems with the 1999 SVT Mustang Cobra
significantly reduced the car's horsepower.

The courts ruled BlueOvalNews was protected by free speech. Ford
recalled the SVT Cobra. BlueOvalNews -- a collection of news and
opinions about Ford products continues to receive a staggering 100,000
hits a day. "I think it's a great thing for consumers," said Robert
Lane, who publishes BlueOvalNews from his home near Ford World
Headquarters in Dearborn. "If I don't do it, who else will?"

                      Net Is Legal Tool

The sites are a natural draw for lawyers to organize class-action
lawsuits against large corporations. Auto companies complain the
Internet has provided trial lawyers with a chance to rally plaintiffs
around bogus causes. "It's gotten to the point where just about anyone
can hang a shingle on the Internet," said Jay Cooney, spokesman for
DaimlerChrysler. "I'm sure the trial lawyers are thrilled to have this
tool at their disposal. It makes their work easy."

Lawyers and consumer advocates dismiss such complaints as public
relations rhetoric. "The Internet not only allows people to find each
other, but helps lawyers obtain information they couldn't obtain
before," said Sandusky, Ohio, lawyer Dennis Murray Jr.

Murray filed a lawsuit in February against Ford on behalf of owners of
vehicles susceptible to head gasket failure. "You can no longer be
snowed about the scope of the problem, " he said.

                      Empowering Consumers

Cantanese, a telephone company troubleshooter, said he didn't create his
Web site (home.att.net/ccantanese/ford) to encourage lawsuits. And he
doesn't consider it a Ford-bashing site. "That would serve no purpose,"
he said. "My goal was to present facts and give people the resources to
act. I believe if people are empowered, they can do anything."

The Web site includes detailed information about the head gaskets,
copies of documents and reams of owner testimonials.

Cantanese has personally exchanged e-mails with more than 500 Ford
owners who have experienced head gasket problems. "I read every article
he had on there and printed them off, so I knew what happened to
everybody else," said Barbara Wright, a Milan, Mich., resident whose
1995 Windstar blew a gasket in October and has since been sitting in her
driveway.

Wright's minivan has been driven 112,000 miles, so she doesn't qualify
for the warranty extension, but she hasn't given up. "I learned on the
Web site you can take them to small claims court," she said.

Another Windstar owner, Ken Wright of Howell, Mich., paid $1,100 to
replace the head gasket and is trying to persuade Ford to include 1996
models in the warranty extension. "I would have given up on Ford a long
time ago if it hadn't been for that Web site," Wright said. "The
Internet gives us access all over the country. It banded people together
and gave us the power to get Ford to listen. It was all because of
communication."

Ford redesigned the engine in 1996 and began supplying improved
aftermarket head gaskets for repairs in 1998, but has pledged to
continue evaluating data to determine whether further action is needed.

While scores of Ford owners are still lobbying to be included in the
warranty extension, Cantanese said he is gratified by the results. "I
had so many people e-mail me and say 'I can't believe I have this
vehicle and I can't afford to get it fixed,' " Cantanese said. "A
majority of those people now have their vehicles fixed." (The Detroit
News, April 6, 2000)


* Supreme Court to Review Liberal Legal Aid Ruling
--------------------------------------------------
The U.S. Supreme Court on Monday agreed to decide whether one of the
congressional efforts to rein in the Legal Services Corp. violates the
First Amendment.

Lawyers funded by the independent government corporation represent
nearly 2 million indigent people annually in non-criminal cases.
Conservatives in Congress have long criticized the program, saying it
sponsors lawyers who take on socially oriented or anti-government
causes. In 1996, Congress enacted sweeping restrictions on legal
services lawyers, barring them from joining in class actions and from
lobbying legislators, among other things.

The high court agreed to review a decision by the Second Circuit U.S.
Court of Appeals striking down one of those restrictions: a provision
that bars legal services lawyers from challenging welfare laws. The
appeals court last July upheld the restrictions on lobbying and other
activities by legal services-funded lawyers, but said the welfare
restriction ran afoul of the First Amendment. By barring litigation
against welfare rules, but allowing litigation under those rules, the
court reasoned that Congress had engaged in impermissible viewpoint
discrimination. The Second Circuit decision conflicted with a 1998
decision by the Ninth Circuit upholding the same provision of the law.

"The court has the opportunity to say that government cannot direct
lawyers not to make legitimate arguments on behalf of their clients,"
said David Udell of the Brennan Center for Justice, which has
represented LSC lawyers and clients in litigation over the issue.

The regulations were challenged by more than a dozen New York City legal
services lawyers and agencies, a group of clients, and by several New
York officeholders.

By agreeing to hear the cases of United States v. Velazquez and Legal
Services Corp. v. Velazquez, the high court will revisit one of the most
nettlesome areas of its First Amendment jurisprudence: what restrictions
government may place on expression when it is footing the bill for that
expression.

In Rust v. Sullivan in 1991, the court upheld rules that barred
federally funded medical clinics from offering abortion advice.
Government was entitled, the court said then, to choose one
speech-related activity over another to fund. But the justices have
struggled with variations on that principle ever since, in cases
involving federal funding for the arts and state university funding of
Christian student newspapers. In general, the court has said that
government can prefer one speech over another as long as its criteria
for choosing do not depend on the viewpoint expressed.

The Second Circuit, in a 2-1 decision, agreed that the restriction on
welfare law challenges amounted to the kind of viewpoint discrimination
that is prohibited. "Such a restriction is a close kin to those
calculated to drive certain ideas or viewpoints from the marketplace,"
wrote Judge Pierre Leval. " If the idea in question is the
unconstitutionality or illegality of a governmental rule, the courtroom
is the prime marketplace for the exposure of that idea."

But the Clinton administration challenged the Second Circuit finding,
arguing that the disputed law is not viewpoint discrimination. "As in
_Rust_, Congress has chosen to fund a certain program to the exclusion
of another," the government brief says. "The limitation is not
viewpoint-based; it merely ensures that the program operates within its
intended limits."

The litigation places the Clinton administration in an awkward position.
While vocally supportive of legal services, it did not strenuously
oppose the congressionally imposed restrictions, which were seen as the
price for allowing the Legal Services Corp. to remain in existence. Now
it is obliged to defend the law in its role as enforcer of congressional
enactments.

The Supreme Court has long viewed litigation as a form of protected
expression under the First Amendment. In the 1963 case _NAACP v.
Button_, the court acted to protect "First Amendment rights to enforce
constitutional rights through litigation."

But the Clinton administration, in a brief signed by Solicitor General
Seth Waxman, argues that, "While a courtroom might be referred to as a
public forum in the sense that courts conduct public (as opposed to
private) proceedings, we are aware of no case holding that a courtroom
is a public forum for the robust expression of ideas by attorneys or
clients or for applying strict scrutiny to rules regulating attorneys'
speech."

The Supreme Court's action on Monday left one aspect of the legal
services litigation unresolved. A separate suit by legal services
lawyers and clients challenging the other parts of the Second Circuit
opinion, in which it upheld other restrictions on advocacy, was not
acted on. The cases the court granted on Monday will be argued in the
fall, with decisions unlikely before 2001. (The Recorder, April 4, 2000)



                              *********


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