CAR_Public/000522.MBX                  C L A S S   A C T I O N   R E P O R T E R

                  Monday, May 22, 2000, Vol. 2, No. 99

                                 Headlines

ASBESTOS LITIGATION: TX Jury Awards 7 MS, AL Papermill Workers $19.25M
BARNES & NOBLE: Continues to Defend Booksellers' Suit Filed '98 in CA
BARNES & NOBLE: Continues to Defend Booksellers' Suit Filed '98 in NY
BARNES & NOBLE: Shareholders Sue in DE over Babbage Acquisition
BOSTON CELTICS: Contests Unitholders' Lawsuit in DE over Reorganization

CIBA SPECIALTY: Chemical Company Sued over Drinking Water Contamination
DAIMLERCHRYSLER: TX Judge Fines Plaintiff's Attorneys Almost $1 Mil
GIO: To Appeal Court Decision Clearing Way for Securities Suit in Aust.
HOLOCAUST VICTIMS: Dresdner Bank Puts in 100 Million Marks for Fund
HOLOCAUST VICTIMS: Swiss Paid Survivors But Didn't Call It Compensation

KEYSTONE FINANCIAL: Bought by M&T Bank after Settling Investors' Suit
MCI WORLDCOM: Antitrust Enforcers Recommend Blocking Purchase of Sprint
NCR: NCR Retirees Win Action for Restoration of Health Benefits
NEW ENGLAND: Proposed MDL Settlement for Life Insurance Policies
PA STOCK: Agrees to Pay to Get out of Complaint over Prices

PACIFIC GATEWAY: Goodkind Labaton Files Securities Suit in California
PEGASYSTEMS INC: Boston Office of SEC Issues Order of Investigation
PEGASYSTEMS INC: Securities Suit Filed 97-98 in MA in Discovery Stage
PEGASYSTEMS INC: Sued Again over Restatement in December 1998
S1 CORPORATION: Spector, Roseman Files Securities Suit in Georgia

SOUTHWESTERN BELL: Legal Services May Benefit from Unique Settlement
SPECTRIAN CORP: Announces Settlement of Shareholder Lawsuits
U.S. FRANCHISE: Cauley & Geller Files Securities Suit in Georgia
U.S. FRANCHISE: Milberg Weiss Files Securities Lawsuit in Georgia
WAR VICTIMS: WWII Labor Suit against Japanese Firms to Be Filed

                                 *********

ASBESTOS LITIGATION: TX Jury Awards 7 MS, AL Papermill Workers $19.25M
----------------------------------------------------------------------
A jury in Texas has awarded between $1 million and $3 million in
compensatory damages to each of seven plaintiffs who sued various asbestos
products companies for personal injury and wrongful death, and added
$750,000 per plaintiff in punitive damages against Rapid American Co. Boney
et al. v. Pittsburgh Corning Co. et al., No. B-15374-Z (Tex. Dist. Ct.,
60th Dist., Jefferson County, Feb. 9, 2000).

Total compensatory damages equal $14 million and the punitives equal $5.25
million.

The plaintiffs charged Pittsburgh Corning Co. and Rapid American with
negligence, manufacturing defect and the marketing of unreasonably
dangerous products, and lodged claims of negligence and vicarious liability
against Pittsburgh Plate Glass Co. (PPG), as an overseer of Pittsburgh
Corning operations.

Six of the seven plaintiffs claimed they were exposed to asbestos from pipe
covering manufactured by Pittsburgh Corning at various times between 1962
and Six of the seven also claimed exposure to Carey Temp Pipe insulation
manufactured by a predecessor of Rapid American, Philip Carey Corp.

Four plaintiffs maintained claims of respiratory impairment from asbestos
from their exposure to the products; plaintiff Matthew Boney said he was
suffering from lung cancer. The surviving spouse of one decedent maintained
a wrongful death action against Pittsburgh Corning and PPG; the spouse of
another decedent sued Rapid American for wrongful death.

All seven workers performed various jobs in Mississippi and Alabama
papermills.

Expert witnesses for the plaintiffs were Geaton Lorino, M.D., of Gulfport,
Miss., on pulmonary diseases; Paul J. Biggs, M.D., of Birmingham, Ala., on
clinical pathology; William Gewin, M.D., of Mobile, Ala., on pulmonary
diseases and internal medicine; Arnold Brody, M.D., from Tulane University
School of Medicine in New Orleans, on general medicine; Edwin Holstein,
M.D., of Edison, N.J., on pathology; Richard Hatfield of Atlanta, on
threshold limit values and fiber analysis; Morton Corn, Ph.D., of
Baltimore, on industrial hygiene; and Henry Mancuso, Ph.D. (now deceased)
on industrial hygiene.

The defendants denied any product defects or failure to warn, and said none
of the seven workers had asbestos-related diseases. They claimed the lung
cancer cases were attributable to a prior history of smoking or unknown
causes. The defendants denied that plaintiffs had been exposed to their
products or that such exposure would have met the minimum threshold for
development of asbestos-related disease.

The defendants further maintained that one decedent had died of an
intervening heart attack and, therefore, had no wrongful death claim, and
also said the plaintiffs were contributorily negligent for smoking and
failing to heed for their own safety.

Expert witnesses for the defense were Gale D. Stockman, M.D., of Longview,
Texas, on pulmonary diseases; Jeff Alford Jr., M.D., of Beaumont, Texas, on
pulmonary diseases; Corwin Hinshaw, M.D., of Belvedere, Calif., on general
medicine; William Dyson, Ph.D., of Greensboro, N.C., on industrial hygiene;
and L.B. Grant , Ph.D., on industrial hygiene.

The jury found against Pittsburgh Corning and Rapid American on negligence,
finding Rapid American grossly negligent. No negligence was attributed to
PPG. The jury found zero to 30 percent contributory negligence on the part
of the plaintiffs.

The plaintiffs were represented by Brent L. Coon of Provost Umphrey in
Beaumont, Texas; Ken Wilson and Karl Novak of Ness, Motley, Loadholt,
Richardson & Poole in Charleston, S.C.; and Tom Scott of Scott & Scott in
Jackson, Miss. (Asbestos Litigation Reporter, May 4, 2000)


BARNES & NOBLE: Continues to Defend Booksellers' Suit Filed '98 in CA
---------------------------------------------------------------------
In March 1998, the American Booksellers Association (ABA) and 26
independent bookstores filed a lawsuit in the United States District Court
for the Northern District of California against the Company and Borders
Group, Inc. alleging violations of the Robinson-Patman Act, the California
Unfair Trade Practice Act and the California Unfair Competition Law. The
Complaint seeks injunctive and declaratory relief; treble damages on behalf
of each of the bookstore plaintiffs, and, with respect to the California
bookstore plaintiffs, any other damages permitted by California law;
disgorgement of money, property and gains wrongfully obtained in connection
with the purchase of books for resale, or offered for resale, in California
from March 18, 1994 until the action is completed and pre-judgment interest
on any amounts awarded in the action, as well as attorney fees and costs.
In October 1999, Barnes & Noble.com was added as a defendant in the action.
The Company intends to vigorously defend this action.


BARNES & NOBLE: Continues to Defend Booksellers' Suit Filed '98 in NY
---------------------------------------------------------------------
In August 1998, The Intimate Bookshop, Inc. and its owner, Wallace Kuralt,
filed a lawsuit in the United States District Court for the Southern
District of New York against the Company, Borders, Amazon.com, Inc.,
certain publishers and others alleging violation of the Robinson-Patman Act
and other federal law, New York statutes governing trade practices and
common law. The Complaint sought certification of a class consisting of all
retail booksellers in the United States, whether or not currently in
business, which were in business and were members of the ABA at any time
during the four year period preceding the filing of the Complaint.

The Complaint alleged that the named plaintiffs have suffered damages of
$11,250,000 or more and requested treble damages on behalf of the named
plaintiffs and each of the purported class members, as well as of
injunctive and declaratory relief (including an injunction requiring the
closure of all of defendants' stores within 10 miles of any location where
plaintiff either has or had a retail bookstore during the four years
preceding the filing of the Complaint, and prohibiting the opening by
defendants of any bookstore in such areas for the next 10 years),
disgorgement of alleged discriminatory discounts, rebates, deductions and
payments, punitive damages, interest, costs, attorneys fees and other
relief.

The plaintiffs subsequently amended their complaint to allege eight causes
of action on behalf of the Intimate Bookshop and Wallace Kuralt, accusing
the Company and the other defendants of: (i) violating Section 2(f) of the
Robinson-Patman Act; (ii) violating Section 2(c) of the Robinson-Patman
Act; (iii) violating Section 13(a) of the Clayton Act; (iv) inducing every
publisher in the United States to breach contracts with the plaintiffs; (v)
interfering with the plaintiff's advantageous business relationships; (vi)
engaging in unfair competition; (vii) violating Sections 349 and 350 of the
New York General Business Law; and (viii) being unjustly enriched. The
class action allegations have been removed and the plaintiffs voluntarily
dismissed defendants Harper Collins Publishers, Inc. and Amazon.com, Inc.
from the case.

On April 13, 1999, the Company and the other defendants filed a motion to
dismiss the second through eighth causes of action in their entireties and
for a more definite statement of the remaining allegations of the first
cause of action. As a result, the plaintiffs' third through eighth causes
of action were dismissed with prejudice, as were all claims asserted by
Wallace Kuralt in his individual capacity. The Company served an Answer on
April 5, 2000 denying the material allegations of the Complaint and
asserting various affirmative defenses. The Company intends to continue to
vigorously defend this action.


BARNES & NOBLE: Shareholders Sue in DE over Babbage Acquisition
---------------------------------------------------------------
In fiscal 1999, following the October 28, 1999 acquisition of Babbage's
Etc., five shareholder derivative lawsuits were filed in the Chancery Court
of the State of Delaware by Harbor Finance Partners, Louis F. Mahler, Ralph
Stone, Lawrence G. Metzger and Robert Waring against Barnes & Noble, Inc.
and its directors. The lawsuits allege, among other things, a breach of
fiduciary duties to Barnes & Noble for the benefit of Leonard Riggio and
seek damages and to enjoin or rescind the transaction. The Company tells
investors that it believes that the acquisition of Babbage's Etc. is in the
best interests of shareholders and that the allegations are without merit.
The Company intends to vigorously defend its position.


BOSTON CELTICS: Contests Unitholders' Lawsuit in DE over Reorganization
-----------------------------------------------------------------------
Boston Celtics Limited Partnership reveal in its report to the SEC that in
July and August 1998, four separate class action complaints were filed by
Unitholders in the Court of Chancery of the State of Delaware in and for
New Castle County against BCLP II, Celtics, Inc., Paul E. Gaston, Don F.
Gaston, Paula B. Gaston, John H.M. Leithead and John B. Marsh III, each a
director or former director of Celtics, Inc.

The named plaintiffs, who each purported to bring their individual actions
on behalf of themselves and others similarly situated, are Kenneth L.
Rilander, Harbor Finance Partners, Maryann Kelly and Kathleen Kruse Perry.

Each of the Complaints alleges, among other things, that the Reorganization
was unfair to former BCLP II Unitholders, and seeks to recover an
unspecified amount of damages, including attorneys' and experts' fees and
expenses. The Partnership filed a Motion to Dismiss the complaint filed by
Mr. Rilander on July 29, 1998, and discovery in that case has been stayed
by agreement of the parties. The Complaints have been consolidated. On
August 6, 1999, the Court of Chancery issued an opinion granting in part,
and denying in part, the Partnership's Motion to Dismiss, and on September
3, 1999, the plaintiffs filed an amended Complaint. On October 1, 1999, the
Partnership filed an answer to the Complaint.


CIBA SPECIALTY: Chemical Company Sued over Drinking Water Contamination
-----------------------------------------------------------------------
A class-action lawsuit has been filed against a chemical company blamed by
many residents for contaminating drinking water supplies. The suit, which
accuses the former Ciba-Geigy Corp. of polluting local water supplies in
the 1960s and 1970s, asks that the company's corporate successors pay
punitive damages, compensatory damages and medical-monitoring expenses for
people who drank the water. Filed last Thursday May 18 in Superior Court,
the suit cites a Feb. 29 public health report that concluded that residents
may have been exposed to traces of dye and nitrobenzene from Ciba-Geigy
that seeped into three wells used by the Toms River Water Co., which is now
known as United Water Toms River.

It names Linda S. Breen of Toms River, George D. Trustin of Forked River,
who used to live in Toms River, and Laura Piccirillo of Toms River as
plaintiffs and seeks unspecified amounts of compensatory and punitive
damages. All three were "exposed, via ingestion, inhalation and dermal
contact, to said contaminants," the suit said.

"The Feb. 29 report ... confirmed many of the suspicions and beliefs of
many residents of Toms River regarding the role of Ciba-Geigy in the
contamination of ground water, and it is time they are held accountable to
the citizens of Toms River for their conduct," said lawyer Michael Gordon,
one of four attorneys to file the suit on behalf of three individuals who
they say represent a class of people harmed by the chemicals.

Organic dyes, epoxy resins and specialty chemicals were manufactured for
nearly 40 years on the site, which was formerly known as Toms River
Chemical Co. Solid and liquid waste from the manufacturing was dumped in 20
different places at the site, contaminating soil and ground water.

Declared a federal Superfund site in 1982, the land has come under
increased scrutiny since 1996, when the state revealed an unusually high
rate of some childhood cancers in the town. Between 1979 and 1995, 90 Dover
Township children were diagnosed with cancer, or about 23 more than
researchers would have expected.

The state is conducting an epidemiological study in hopes of learning
whether something in the environment caused the high cancer rates. That
study, which began in March 1996, is being conducted by the federal Agency
for Toxic Substances and Disease Registry and state health officials. It is
examining nearly 200 families - 40 that have children with cancer.

According to the state's Feb. 29 health assessment, which was conducted as
part of the overall study by the state and the federal Agency for Toxic
Substances and Disease Registry, cancer-causing chemicals contaminated
drinking water wells in the mid-1960s. "Although the nature and length of
exposures is not known, there is evidence that these wells were
contaminated with dyes and nitrobenzene. Dye production involved the use of
a number of chemicals, including known and probable human carcinogens," the
report said.

Linda Gillick, the mother of one childhood cancer sufferer, told the Asbury
Park Press of Neptune that she worries that the lawsuit will chill what has
been a productive exchange of information between the parties to date. "I
only hope that everything that has been needed in the childhood cancer
cluster investigation from Ciba" has been obtained already, said Gillick,
who heads the Citizens Action Committee on Childhood Cancer Cluster.

A group of 60 Dover Township families, has hired lawyer Jan Schlictmann,
who won fame representing families in Woburn, Mass., who sued W.R. Grace
and Beatrice Foods over water contamination. The case was the subject of a
best-selling book called "A Civil Action," that was made into a movie
starring John Travolta. But the group, which uses the name TEACH - Toxic
Environments Affect Children's Health - organization has agreed not to sue
Ciba, Union Carbide or United Water Toms River while the companies and
citizens exchange information about the contamination. (The Associated
Press State & Local Wire, May 19, 2000)


DAIMLERCHRYSLER: TX Judge Fines Plaintiff's Attorneys Almost $1 Mil
-------------------------------------------------------------------
The following is being released by DaimlerChrysler Corporation:

A Texas judge dismissed a $2 billion product liability lawsuit against
DaimlerChrysler Corporation today [May 18] and slapped three San Antonio
lawyers with a record $920,000 fine after ruling that they had tampered
with evidence and attempted to bribe witnesses in an effort to manufacture
a lawsuit against the automaker.

In an extraordinary rebuke, Texas District Court Judge David Peeples
assessed sanctions against Robert Kugle, Trey Wilson and Andrew Toscano of
the Kugle Law Firm and indicated that he would report the attorneys to the
Bexar County District Attorney and the State Bar of Texas.

"This is the most flagrant example of misconduct I've seen in more than 20
years as a lawyer," said DaimlerChrysler Associate General Counsel Ken
Gluckman. "While these sanctions are appropriate compensation for
DaimlerChrysler, we hope the District Attorney and State Bar of Texas
seriously review the judge's ruling and consider whether criminal charges
are warranted and whether these three individuals should be allowed to
continue to practice law."

The initial lawsuit arose out of a tragic accident near Sabinas, Coahuaila,
Mexico in June 1996. Of the seven people riding in the five passenger 1995
Dodge Neon, four were killed in a high speed rollover accident. None of the
deceased were belted, and all of them were riding in the back seat.

Following the accident, Bridgett Fabila told two Mexican police officers
and a Red Cross official who transported her to a hospital that her husband
had fallen asleep at the wheel while driving and then drifted into the
oncoming lane of traffic. She and her husband subsequently both jerked the
steering wheel, causing the Neon to lose control and then roll over several
times.

After filing suit against DaimlerChrysler, Mrs. Fabila attempted to recant
her admissions and to blame the automaker for the accident. This set off a
bizarre chain of events which ultimately led to the discovery that the
Kugle Law Firm had engaged in extensive fraud, evidence tampering, and
witness tampering including bribery and intimidation in order to build a
phony case against DaimlerChrysler.

Evidence Tampering. On July 6, 1998, Tom Persing, an expert hired by the
Kugle Law Firm, inspected the Dodge Neon and found no defect with the
vehicle. Photographs taken by Persing show the steering decoupler
completely intact. All the attorneys were present at the inspection and Mr.
Kugle and Mr. Wilson were specifically informed by Mr. Persing that there
was no defect. On September 3, 1998, another expert for plaintiffs
inspected the vehicle and found the steering decoupler was separated.
Plaintiffs produced photographs from that inspection but never produced Mr.
Persing's photographs. The Kugle Law Firm repeatedly tried to hide
Persing's exonerative photographs from DaimlerChrysler -- which presented
irrefutable proof that the Neon had been tampered with -- and defied two
separate court orders to produce the Persing evidence.

Bribery and Intimidation. Despite repeated requests by the Kugle Law Firm
to block their testimony, Officers Hector Morales and Marco Villanueva of
the Mexican Highway Patrol testified that Enrique "Henry" Saldivar, an
investigator hired by the Kugle Law Firm, attempted to bribe them in
exchange for "forgetting" crucial testimony about the circumstances of the
accident.

Red Cross Official Javier Ramirez testified that Saldivar attempted to
intimidate him with threats that family members were being investigated.
Throughout the case, Kugle lawyers fought vigorously to prevent these
witnesses from testifying.

When their fraud was exposed, Kugle attorney Trey Wilson told his expert,
Tom Persing, "we were running a bluff, and they called our hand."
DaimlerChrysler's Ken Gluckman said "Wilson's comments reflect the cavalier
attitude this firm has toward the law. Millions of dollars are at stake,
the reputation of a corporation is at stake, and these guys think they are
playing a game."

"Frankly, I view this outrageous conduct as an unfortunate byproduct of our
legal system gone awry," said Gluckman. "When plaintiffs' lawyers routinely
reap legal fees in the millions or even tens of millions at the end of
these cases, it creates an 'anything goes' attitude that makes our system
ripe for abuse."

In recent years, DaimlerChrysler Corporation has taken an increasingly hard
line against abusive plaintiffs' lawyers.

In September 1998, DaimlerChrysler won an $800,000 judgment against two St.
Louis lawyers who had illegally removed confidential documents while
employed at one of the company's outside defense counsels. The attorneys
then attempted to use the documents to file class action lawsuits against
the company.

In November 1999, DaimlerChrysler filed suit against a Philadelphia law
firm which had sued the company even though their plaintiff had never been
injured in a DaimlerChrysler vehicle and had never even owned the vehicle
they claimed was defective.


GIO: To Appeal Court Decision Clearing Way for Securities Suit in Aust.
-----------------------------------------------------------------------
GIO, the AMP subsidiary embroiled in legal action with former shareholders,
is expected to appeal a decision made by a federal judge that cleared the
way for Australia's largest class action.

AMP - which was attacked by shareholders over the GIO debacle at its annual
meeting on May 18 - declined to comment, except to say that the subsidiary
was considering its options.

Former GIO shareholders are suing for damages on grounds they were wrongly
advised not to accept AMP's first offer for the reinsurer in mid-1998.
GIO's share price collapsed shortly afterwards when its financial
difficulties came to light. This forced AMP, which had acquired 57.5 per
cent, to rescue it. More than ADollars 1.1bn (USDollars 627m) losses at GIO
in turn pushed AMP ADollars 424m into the red last year.

At the annual meeting, the financial services group said that despite the
difficulties caused by the GIO acquisition, its core businesses were
performing well.

This year assets under management have grown by 8 per cent to A Dollars 280
bn. Retail sales in the UK, where the group owns Pearl, Henderson and
National Provident, were up more than 30 per cent over the same period last
year while those in Australia and New Zealand had risen more than 20 per
cent. Cost cutting at GIO and at the UK operations were also ahead of
schedule.

It sought to draw a line under the affair by formally apologising to
shareholders and admitting it had failed to conduct due diligence. "Our
judgment was wrong in pursuing an aggressive bid and as such being forced
to rely on arm's length information on GIO," said Stan Wallis, chairman. Mr
Wallis was brought in last month after institutional shareholders demanded
wide-ranging changes to the board after the charges resulting from the GIO
acquisition pushed AMP, a blue chip company, into loss. (Financial Times
(London), May 19, 2000)


HOLOCAUST VICTIMS: Dresdner Bank Puts in 100 Million Marks for Fund
-------------------------------------------------------------------
Dresdner Bank, Germany's third-largest bank, said it would contribute 100
million marks (51.13 million euros, 44.99 million dollars) into a fund to
compensate survivors who were used as forced labour under the Nazi regime.
Dresdner Bank management board Chairman Bernd Fahrholz reminded the annual
shareholders meeting that the bank was one of the compensation fund's 13
founding institutions and called on German companies to contribute in order
to attain the targeted five billion marks (2.56 billion euros) due from
industry.

The German corporate sector has so far only managed to raise a little less
than three billion marks from 1,500 companies.

The Bundesrat, or upper house of parliament, meanwhile expressed its
support for the government bill setting up the compensation fund. The
chamber will hold a formal vote on the bill on or after July 14.

The US negotiator in restitution talks for Nazi forced and slave labor said
that Germany and the United States were nearing a "truly historic
agreement." "We are nearing completion of a truly historic agreement" for
survivors of slave and forced labor, US Deputy Treasury Secretary Stuart
Eizenstat said at a graduation ceremony for the Jewish Theological Seminary
in New York. "While no amount of money can compensate for what they went
through, over 1.2 million surviving laborers, including tens of thousands
in the United States, will receive dignified payments in the declining
years of their lives," said Eizenstat.

In a copy of the draft agreement called "Final Act," all class action
lawsuits filed against the German government and industry will be dropped
once the document is signed. In exchange, Germany will pay 10 billion marks
-- shared equally by government and industry -- to victims of war crimes
and despoilment, including forced workers, through a special fund set up
for that purpose. (Agence France Presse, May 19, 2000)


HOLOCAUST VICTIMS: Swiss Paid Survivors But Didn't Call It Compensation
-----------------------------------------------------------------------
The Swiss government tried to turn the page on one of the most disgraceful
single episodes of its tarnished World War II past by making amends with a
Jewish brother and sister whose parents were gassed by the Nazis after
expulsion from Switzerland.

The Finance Ministry said it would pay Charles and Sabine Sonabend 200,000
Swiss francs (dlrs 118,000) in an out-of-court settlement to cover costs
incurred during their legal battle, but stopped short of calling this
compensation fearing this might encourage claims from other Holocaust
survivors.

Swiss Finance Minister Kaspar Villiger said he would meet the Sonabends
Tuesday May 23 to express ''the sympathy and regret of the government'' a
move hailed by the Sonabends' lawyer as more important than the actual cash
offer. ''My clients see themselves as representatives of all the other
Holocaust refugees in Switzerland,'' lawyer Marc Richter told The
Associated Press. (AP Worldstream, May 19, 2000)


KEYSTONE FINANCIAL: Bought by M&T Bank after Settling Investors' Suit
---------------------------------------------------------------------
M&T Bank Corp. announced it will buy Keystone Financial for $ 1 billion,
creating the 29th-largest bank in the US. Keystone's stock price has
plunged more than 47 percent in the past year because it paid $ 30 million
to settle a class-action lawsuit over mishandled investments. That meant
Buffalo, N.Y.-based M&T could make the acquisition at a lower price.
Keystone is based in Harrisburg, Pa. (The Christian Science Monitor, May
19, 2000)


MCI WORLDCOM: Antitrust Enforcers Recommend Blocking Purchase of Sprint
-----------------------------------------------------------------------
Federal antitrust enforcers have recommended blocking MCI WorldCom Inc.'s
purchase of Sprint Corp., The Wall Street Journal reported. Justice
Department staff members are against the deal, the newspaper said, because
it would combine the second- and third-largest long-distance carriers and
because the companies would dominate Internet switching services. Justice's
antitrust chief, Joel Klein, is expected to meet with lawyers for both
companies, but he is not bound by the recommendation. The deal is also
under review by the Federal Communications Commission and the European
Commission, which last month warned of antitrust problems. The merger is
valued between $ 115 billion and $ 129 billion. (The Christian Science
Monitor, May 19, 2000)


NCR: NCR Retirees Win Action for Restoration of Health Benefits
---------------------------------------------------------------
Judge Jack Tunheim ruled in favor of the 3,400 retirees of NCR for the
restoration of their retiree health benefits last Thursday May 18. The cost
of this ruling should be in excess of $20 million dollars. Most
importantly, retirees who agreed to retiree early from NCR in 1993 will
have the company once again pay for their premiums and their co-payments
will be reduced to the early out level. This agreement will be retroactive
and mean that each retiree will be awarded a benefit that should be valued
in excess of $5,000.

This ruling comes less than a month after the retirees argued their case
before Judge Tunheim in Minneapolis Federal District Court. The retirees
brought three separate counts against their former employer, NCR. They
were: claim for ERISA plan enforcement, claim for breach of contract under
the "federal common law" and claim for breach of fiduciary duty. The Judge
in his decision dismissed the claims of ERISA plan enforcement and breach
of fiduciary duty but upheld the claim of breach of contract.

The case is a major victory for retirees of a substantial corporation
around elimination of retiree health care benefits and breaks the string of
losses retirees have suffered over the past numbered of years at the hands
of the courts. The plaintiff's lawyers argued correctly that by signing
away their rights to employment and suing under age discrimination laws in
exchange for enhanced benefits the retirees and company had a bilateral
contract which also became part of the amended company benefits plan. On
this basis, the company could not come back later and renege on its end of
the contract.

This case was started by Donald Stearns, a resident in Minnesota coming to
the Minnesota Senior Federation's Pension Rights Project seeking help and
understanding over the letter he received from NCR proposing to eliminate
Medicare supplemental health plan payments and substantially cut back the
contribution toward premiums and co-payments for other early retirees under
age The Pension Rights Project staff upon review of the case believed there
was a legitimate claim to be made and referred Stearns to Jordan Lewis of
the law firm Seigal, Brill, Greupner, Duffy & Foster in Minneapolis. Lewis,
upon further review, decided there was in fact a good case to be made and
filed a class action suit in late 1998.

The final step in the outcome of the case is for the plaintiffs to file
with the court a motion as to the total value of the order. Staff for the
Pension Rights Project who referred the case believe that it will amount to
somewhere in excess of $20 million dollars.

The Pension Rights Project sponsored by the Minnesota Senior Federation is
part of a national demonstration project under the auspices of the
Administration on Aging. With this significant win, the Projects have in
six and one-half years helped pension plan participants recover over $55
million dollars of benefits.

Contact: Jordan Lewis, 414-225-9646, jordanlewis@sbgdf.com , or Dick Dolan
of the Pension Rights Project, 651-645-0261 ext. 110, ddolan@mnseniors.org


NEW ENGLAND: Proposed MDL Settlement for Life Insurance Policies
----------------------------------------------------------------
New England Financial and lead attorneys for plaintiffs and the class in a
multi-district class-action lawsuit announced last Friday May 19 a proposed
settlement of nationwide litigation involving alleged improper sales
practices in connection with individual life insurance policies issued by
the company. The class-action settlement, if approved by the court, covers
some 600,000 current and former policyholders who purchased New England
Financial products between January 1, 1983 and August 31, 1996. In
resolving these cases, New England Financial does not acknowledge any legal
wrongdoing.

The multi-district litigation, which consolidates 11 separate suits into a
single settlement, has been pending for about four years in U.S. District
Court in Boston.

The total value to policyholders of the proposed settlement approximates $
172 million, based on analysis provided by actuarial experts retained by
the parties. The most common sort of relief policyholders will receive is
additional insurance coverage for a period of time from 18 months up to 59
months. Reserves for the estimated cost of the settlement already have been
established and are reflected in the company's present financial
statements.

"What's satisfying about this settlement is that it provides our
policyholders valuable benefits while easing the disappointment that the
investment climate didn't allow us to meet some of their expectations,"
said James Benson, Chairman and Chief Executive Officer of New England
Financial.

"I am gratified that after four years of hard fought litigation, we were
able to achieve such a satisfying result for New England's policyholders,"
said Melvyn I. Weiss, Lead Counsel for the Plaintiff's class. The proposed
settlement, similar to those entered into by other major life insurance
companies facing comparable allegations, is comprised of two forms of
relief.

The first is Settlement Death Benefits, which are available automatically
at no cost to all class members who do not elect claim evaluation and which
would provide a cash payment if the insured dies during the period the
benefit is in effect. This relief is automatic and does not require class
members to prove their case.

The second form of relief is Claim Evaluation, in which class members must
submit documentation to a neutral claim evaluator showing that they have
been harmed by actual misrepresentations. Successful claimants will receive
compensation based on the strength of their claims.


PA STOCK: Agrees to Pay to Get out of Complaint over Prices
-----------------------------------------------------------
The Philadelphia Stock Exchange has agreed to pay $ 2.8 million to settle
its portion of a class-action complaint accusing the stock-options industry
of jacking up prices by squelching competition. Without admitting any
wrongdoing, the PhilEx agreed to the payment, "which is significantly less"
than the exchange would have expended by fighting the case, chairman Meyer
Frucher said.

Joseph Kohn of Philadelphia, one of several U.S. lawyers representing
aggrieved investors, confirmed details of the settlement. Frucher said that
the payment would not force the PhilEx to raise fees in order to balance
its $ 44 million yearly budget.

The suit combines complaints filed on behalf of options investors across
the country last fall amid a Justice Department investigation of
options-industry practices.

Option contracts allow investors to bet on the future prices of stocks.
Options investors pay only a fraction of the value of the underlying shares
but risk losses if the stocks' price is different from that in the options
contract.

The suit alleges that the trader-owned PhilEx and its larger rivals in
Chicago, New York and San Francisco conspired for two decades to boost
traders' profits by limiting trades in the most popular stock options to
particular exchanges.

Until last year, Philadelphia was the only place to trade options contracts
in Dell Computer Corp., its most popular product, while the Pacific Stock
Exchange in San Francisco was the only market to trade options in Microsoft
Corp., the nation's most valuable stock at the time. Such regional
divisions collapsed last fall under pressure from regulators and from new
electronic markets.

The most popular stock options are now traded by firms at two or more of
the traditional exchanges. While the PhilEx now hosts just one-quarter to
one-third of all Dell trades, it has won a similar proportion of trades in
America Online Inc., JDS Uniphase Corp. and other popular markets away from
its rivals.

Overall, the PhilEx has retained its 10 percent share of the national
options business, which has been growing at a record pace. Exchange
executives, including Frucher, have insisted that there was no "gentleman's
agreement" enforcing the division; some traders said the rationing of the
market actually helped investors by ensuring a concentration of buyers and
sellers at the exchanges where each option traded. Since the markets began
competing more directly, the gap between buy and sell offers on many
popular options has narrowed, reducing customers' costs and cutting
traders' profits.

But some traders say that investors in less-popular options are worse off
because low trading volume in those securities has been fragmented among
multiple markets, discouraging investors.

The PhilEx board unanimously approved an outline of the settlement on May
2. A letter of credit in the amount of the PhilEx payment will be placed in
escrow pending a final settlement of the case, which could take two to
three years if it goes to trial, according to Frucher.

The PhilEx was the second defendant to acknowledge settling the complaint.
Last week, the Pacific Stock Exchange in San Francisco said it would pay $
4.5 million -- including $ 1 million it has already paid -- to end its
involvement in the case.

That leaves as defendants the Chicago Board Options Exchange, the
Nasdaq-American Stock Exchange, and the New York Stock Exchange, which no
longer has a stock-options business. (The Philadelphia Inquirer, May 19,
2000)


PACIFIC GATEWAY: Goodkind Labaton Files Securities Suit in California
---------------------------------------------------------------------
Goodkind Labaton Rudoff & Sucharow LLP and Girard & Green LLP announce
that, pursuant to Section 21(D)(a)(3)(A)(i) of the Securities Exchange Act
of 1934, notice is given that a complaint has been filed by in the United
States District Court for the Northern District of California against
Pacific Gateway Exchange (NASDAQ: PGEX), and certain directors and senior
officers, charging the commission of securities fraud. That lawsuit was
filed on Thursday May 18, 2000, on behalf of all persons who purchased
Pacific common stock from May 13, 1999 through March 31, 2000.

The complaint charges the defendants with manipulating Pacific's stock
price by improperly accounting for certain expenses and misleading the
public about the Pacific's ability to continue operating as a going
concern, resulting in the material misstatements contained in Pacific's
financial and operating results from May 1999 through March 2000.

The complaint further alleges that the individual defendants sought to
profit from their accounting manipulations by selling Pacific's stock at
prices artificially inflated by their illegal actions.

Contact: Goodkind Labaton Rudoff & Sucharow LLP, New York Joel H.
Bernstein, Esq., 212/907-0700 bernstj@glrs.com or Girard & Green, LLP
Robert S. Green, Esq., 415/981-4800 rsg@classcounsel.com


PEGASYSTEMS INC: Boston Office of SEC Issues Order of Investigation
-------------------------------------------------------------------
In May 1999, the Boston office of the Securities and Exchange Commission
("SEC") issued a Formal Order of Private Investigation of the Company and
unidentified individuals, currently or formerly associated with the
Company, which concerns past accounting matters, financial reports, and
other public disclosures and trading activity in the Company's securities
during 1997 and 1998. The Company says it has been cooperating fully with
the Commission. The investigation is confidential and ongoing.


PEGASYSTEMS INC: Securities Suit Filed 97-98 in MA in Discovery Stage
---------------------------------------------------------------------
In November 1997 and January 1998, complaints purporting to be class
actions were filed with the United States District Court for the District
of Massachusetts alleging that the Company and several of its officers
violated Section 10(b) of the Securities Exchange Act of 1934, as amended,
Rule 10b-5 promulgated by the Commission thereunder, and Section 20(a) of
the Exchange Act. A third complaint was filed in April 1998 but has been
voluntarily dismissed without prejudice.

In December 1998, the plaintiffs filed their First Amended Consolidated
Complaint, that names the Company, the Company's Chief Executive Officer
(Alan Trefler) and a former officer and director (Ira Vishner) as
defendants. The Amended Complaint alleges that the defendants issued false
and misleading financial statements and press releases concerning the
Company's publicly reported earnings. The Amended Complaint seeks
certification of a class of persons who purchased the Company's Common
Stock between July 2, 1997 and October 29, 1997, and does not specify the
amount of damages sought. The Court has denied the defendants' motion to
dismiss the Amended Complaint. The case is currently in discovery.


PEGASYSTEMS INC: Sued Again over Restatement in December 1998
-------------------------------------------------------------
In December 1998, a complaint also purporting to be a class action was
filed with the Court after the Company's announcement on November 24, 1998
that it may be recording revenue adjustments to prior periods. In April
1999 the plaintiffs filed their First Amended Class Action Complaint
("Gelfer Complaint") in that action following the January 20, 1999
restatement. The Gelfer Complaint is filed against the Company, Alan
Trefler, Ira Vishner, the former Chief Financial Officer and alleges
violations of Section 10(b) and Section 20(a) of the Exchange Act and Rule
10b-5 promulgated by the Commission thereunder. The Complaint is filed on
behalf of a purported class of persons who purchased the Company's common
stock between April 2, 1998 through November 24, 1998 and does not specify
the amount of damages sought. The defendants filed their answer to the
Gelfer Complaint after its motion to dismiss was denied.


S1 CORPORATION: Spector, Roseman Files Securities Suit in Georgia
-----------------------------------------------------------------
Spector, Roseman, & Kodroff, P.C. has filed a complaint in the United
States District Court for the Northern District of Georgia, Atlanta
Division on behalf of all persons who purchased the common stock of S1
Corporation (Nasdaq: SONE - news) during the period of November 2, 1999
through May 2, 2000.

The complaint charges S1 and certain of its directors and executive
officers with violations of the Securities Exchange Act of 1934 and Rule
10b-5 promulgated thereunder. The complaint alleges that the defendants
issued false and misleading information concerning, among other things,
S1's ability to integrate two companies that S1 acquired in November, 1999.

As a result of S1's false and misleading statements, the price of the stock
was artificially inflated during the class period.

Contact: Spector & Roseman Robert Roseman, 888/844-5862
classaction@spectorandroseman.com


SOUTHWESTERN BELL: Legal Services May Benefit from Unique Settlement
--------------------------------------------------------------------
Nothing makes class action lawyers seethe more than a last-minute
intervenors wanting their share of a settlement. But when that happened in
a $ 10 million settlement earlier this month with Southwestern Bell
Telephone, all the parties walked away seemingly happy.

Maybe that's because they are legal services agencies that serve the poor
in Texas.

The legal services agencies jumped into the case by objecting to the
settlement in Jose Mireles et al. v. Southwestern Bell Telephone, a
complicated suit filed in Brownsville state district court. The estimated 7
million plaintiffs alleged the telecommunications giant overcharged Texas
customers. Southwestern Bell denied the allegations. But because the
recovery due each class member was hardly more than the cost to mail a
check, the plaintiffs aimed the settlement at improving the customers'
telecommunications infrastructure.

The money will go directly to the Telecommunications Infrastructure Fund
(TIF), an obscure state agency that is responsible for high-speed
telecommunications and Internet services for libraries of higher education
institutions and certain medical facilities. But because of the legal
services groups efforts, as part of the May 4 settlement, TIF will be
encouraged to spend 20 percent of the $ 10 million on improving
telecommunications for legal services. "It was pleasantly surprising
because of where the money is going," says Fernando Mancias, judge of
Edinburgh's 93rd District Court who heard the case by assignment and
approved the settlement. "I've never seen that before to be honest with
you."

That $ 1.6 million in funding could be crucial in bringing legal aid
lawyers technologically up to speed with the rest of the business world,
says Randy Chapman, executive director of Austin's Texas Legal Services
Center, a nonfederally funded legal services organization that intervened
in the class action. "We have been looking for over two years for a method
of improving technology in legal services," Chapman says. "Eighty percent
of our lawyers don't have access to desktop e-mail. It is critical to be
able to communicate with other lawyers."

                         Interesting Request

In the mid-1990s, Congress slashed funding for legal services. Lawmakers
effectively prohibited federally funded legal services agencies from filing
class action cases on behalf of clients. So naturally, the intervenors'
request in Mireles initially raised the eyebrows of Southwestern Bell
lawyers. "Nobody disputes that there is a need for legal services for the
poor and funding sources for that are difficult to come by," says David
Brown, in-house counsel for Southwestern Bell. "Our position on their
objection is that they didn't have any business being in the lawsuit. They
were skirting if not violating federal law by being there."

But because the legal services groups' intervention didn't upset the
settlement, Southwestern Bell lawyers agreed to it, Brown says. Chapman
says the federally funded Legal Services Corp. in Washington, D.C.,
approved of the intervention because Chapman's organization was
representing legal aid agencies instead of individual clients. LSC doles
out grants to 237 legal aid groups around the country. "The key there is
the settlement did not change," Brown says. "We didn't have to write any
bigger checks or reformat how we pay the money."

Jeffery Tillotson, a partner in Dallas' Lynn Stodghill Melsheimer &
Tillotson who represented the plaintiff class, could not be reached for
comment by press time.

Still, TIF has to approve the use of the settlement funds before legal
services gets a dime. TIF executive director Arnold Viramontes says he has
not seen the settlement, but expects the money will be distributed
according to the agreement, pending the approval of the TIF board. "The
reason they came to TIF is we already have a grant program that's very
successful and we can also administer those funds as outlined in the
settlement," Viramontes says.

The settlement agreement is an ingenious yet appropriate way to funnel
money to legal services, says James Paulsen, a South Texas College of Law
professor who testified on behalf of the legal services organizations. "It
seems eminently fair that some portion of a class action settlement should
go to legal services of the poor in the same vein as a court filing fee
add-on," Paulsen says. "There's a basic fundamental fairness." (Texas
Lawyer, May 15, 2000)


SPECTRIAN CORP: Announces Settlement of Shareholder Lawsuits
------------------------------------------------------------
Spectrian Corp. (Nasdaq:SPCT) announced last Friday May 19 that it reached
a settlement in principal of the shareholder class action lawsuits which
were filed on or after Dec. 23, 1997, and are pending in the United States
District Court for the Northern District of California and the Superior
Court of the State of California for Santa Clara County.

The terms of the settlement for the lawsuits are still being resolved but
will not have a material adverse effect on the Company's financial position
or results from operations. The final settlement agreement is subject to
Court approval and class notice provisions.


U.S. FRANCHISE: Cauley & Geller Files Securities Suit in Georgia
----------------------------------------------------------------
The Law Firm of Cauley & Geller, LLP announced on May 18 that it has filed
a class action in the United States District Court for the Northern
District of Georgia, Atlanta Division, on behalf of all individuals and
institutional investors that purchased or otherwise acquired the common
stock of U.S Franchise Systems, Inc. (Ticker Symbol:USFS) between May 6,
1999 and October 29, 1999, inclusive (the "Class Period").

The complaint charges that the Company and certain of its officers and
directors violated the federal securities laws by providing materially
false and misleading information about the Company's financial condition
during the Class Period. Among other things, the Complaint alleges that the
Company misled the investing public into believing that USFS was undergoing
phenomenal growth by reporting "record franchise sales" and "record
revenue." In reality, the Complaint alleges that the Company was facing
debilitating problems in almost every area of its operations, including
weak earnings, reduced management fees, reductions in new hotel openings,
problems with loans, and increasing competition. When the truth about the
Company's financial disarray was revealed, analysts and the investing
public were shocked, and the price of the stock dropped significantly.

Contact: Cauley & Geller, LLP, Boca Raton Sue Null or Sharon Jackson Toll
Free: 1-888-551-9944 E-mail: Cauleypa@aol.com


U.S. FRANCHISE: Milberg Weiss Files Securities Lawsuit in Georgia
-----------------------------------------------------------------
A class action lawsuit was filed on May 18, 2000, in the United States
District Court for the Northern District of Georgia, Atlanta Division,
Civil Action No., 1:00-CV-1244, on behalf of all persons who purchased the
securities of U.S. Franchise Systems, Inc. (Nasdaq: USFS) between May 6,
1999 and October 29, 1999 (the "Class Period").

The complaint charges the Company, its Chief Executive Officer, Chief
Financial Officer and Director with violation of Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. During the Class Period, defendants made repeated false and
misleading statements regarding the Company's growth and profitability,
causing the stock to reach a Class Period high of over $23 per share. On
November 1, 1999, defendants disclosed that the Company's true financial
condition and future prospects were dramatically different than investors
had been led to believe, due to problems in virtually every area of the
Company's operations -- ranging from reduced management fees to higher
overhead and commissions. In response, the Company's stock fell to $7.5 on
November 1, 1999, and traded as low as $4 per share on May 18, 2000.

Contact: Milberg Weiss Bershad Hynes & Lerach LLP Shareholder Relations
Dept., 800-320-5081, or endfraud@mwbhlny.com


WAR VICTIMS: WWII Labor Suit against Japanese Firms to Be Filed
---------------------------------------------------------------
One of the U.S. lawyers in several class-action suits against Japanese
companies that allegedly used forced labor during World War II said in a
press conference, Robert Swift said 18 cases have already been filed at the
California Superior Court in Orange County by different groups from various
countries.

Among Japanese firms from which U.S. and foreign prisoners of war have been
seeking compensation are Mitsui & Co., Nippon Steel U.S.A. Inc. and
Mitsubishi Corp. "I'd say approximately eight to nine Japanese
conglomerates today are probably responsible for 60-75% of the use of slave
or forced labor in the Philippines," Swift said.

He refused, however, to name the firms until the Philippine case has been
filed before the California Superior Court.

Swift estimated more than 500,000 Filipinos served as slave laborers during
World War II for Japanese companies that operated businesses all over the
Philippines, including 43 mines and 41 cotton plantations.

Around 15-20% of the forced laborers are believed to be still alive and
their average age would be about 80 years old, he said. "Our challenge is
to try to get compensation to those survivors in their lifetime."

"I hope that the media gives attention to those companies because I think
that's one of the dark secrets of Japan, that the companies also bear
liability, responsibility and they have never accepted that
responsibility," Swift said.

Swift said, "We cannot sue the Japanese government (for using forced labor)
because of its sovereign immunity but we can sue private Japanese
companies."

Swift's Filipino colleague, lawyer Rod Domingo, said in the same press
conference that so far 100 to 150 claimants have stepped forward. He said
cases have yet to be assessed and those not qualified to be weeded out. But
Domingo said they have several strong cases already, and that even one or
two cases can already be used to start the suit. Swift said they based the
500,000-person estimate on various history books and research done by
Philippine universities.

In Korea, Japanese firms used about 5 million Koreans as slave laborers, of
whom about 250,000 were taken to Japan, he said.

Compensation is sure to be in "many billions of dollars" Swift said, with
compensation for each victim to be calculated based on unpaid daily wages
multiplied by the number of days worked plus interest.

The cases will be filed separately for nationals of each country but will
be handled by one judge.

One surviving Filipino victim of forced labor, retired Col. Vicente
Novales, told Kyodo News in an interview in late March he was arrested in
1943 by the Japanese Kempei-tai (military police) and tortured for 10 days
at Manila's Fort Santiago.

Novales said that in March 1944 he was transferred to a concentration camp
in Davao, 970 kilometers south of Manila, and suffered hard labor and
torture until his escape in September 1944. During his incarceration, he
said he and other prisoners were brought everyday to a hemp plantation
operated a Japanese company some 10 km from the concentration camp, where
the prisoners crushed stones for the road and wharf of the plantation. They
were not paid and were fed only a small piece of cassava for each meal,
leading to the deaths of many prisoners, Novales said. Based on Novales'
narration, there were some 1,200 prisoners inside the Davao concentration
camp. About 85% of them died of starvation and disease, 5% were executed in
the presence of other prisoners, while 10% escaped. (Asian Political News,
May 8, 2000)


                                *********


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