CAR_Public/000607.MBX                   C L A S S   A C T I O N   R E P O R T E R

                  Wednesday, June 7, 2000, Vol. 2, No. 110

                                 Headlines

ACCELR8 TECHNOLOGY: Rabin & Peckel Announces Securities Suit in CO
ACCELR8 TECHNOLOGY: Wolf Haldenstein Files Securities Lawsuit in CO
AUTO INSURANCE: Suit Says Allstate Collaborates with Claims Processors
COCA-COLA: Chairman Remarked on Excessive Money Demands for Racism Suit
FEN-PHEN: MDL Ct Hears Objections To AHP's Proposed $4.8 Bil Settlement

FIRSTPLUS FINANCIAL: Ch 11 Class Claim Denied Prevents Single Claim
G.A.D.R: NJ Ct Sends Dispute Over Hemophilia Settlement Back to IL
GLEN COVE: Watery Home Residents Form Tenant Council and Plan Lawsuit
INMATES LITIGATION: Ap Ct Hears Who Should Represent MS HIV Plaintiffs
JACK IN: Settlements Resolve CA Accessibility Suit against Restaurants

LIPARI LANDFILL: NJ Superfund Site Needs Fund for Cancer
MORGAN STANLEY: Cited for Discrimination against Women Employees
PEAK INTERNATIONAL: Reports Dismissal of Dorchester Investor Suit in NY
SEAGATE TECHNOLOGY: Faces 17 Securities Suits over Merger Agreement
TOBACCO LITIGATION: Financial Expert Said Industry Is Worth $157 Bil

TOBACCO LITIGATION: Philip Morris Will Drop Magazine Ads Read By Youths
TUBE TURNS: Insurance Carrier Defends Coker Plant Explosion Suit
WATER CONTAMINATION: Scramble under Way to Launch Actions
WATER CONTAMINATION: Seattle Atty. Warns of E. Coli Risk to Americans

* 35% of People Surveyed Think it's OK to Inflate Insurance Claims
* Most Americans Surveyed Favor Reform of the Class Action System

                                 *********

ACCELR8 TECHNOLOGY: Rabin & Peckel Announces Securities Suit in CO
------------------------------------------------------------------
A class action has been commenced in the United States District Court for
the District of Colorado, on behalf of all persons or entities who
purchased or otherwise acquired Accelr8 Technology Corporation common stock
during the period from September 15, 1997 through November 16, 1999,
inclusive (the "Class Period").

The Complaint alleges that Accelr8 and certain of its officers and
directors violated section 10(b) of the Securities Exchange Act of 1934. In
particular, it is alleged that defendants, among other things, materially
overstated the Company's revenue, improperly recognized revenue relating to
licensing and maintenance fees, failed to amortize capitalized software
development costs, and failed to disclose that Accelr8's Navig8 2000
software, created to fix the millennium bug, was not available as a general
Year 2000 remediation tool to the total universe of the programs that need
Year 2000 solutions as represented during the Class Period. The Complaint
alleges that, as a result of these material misstatements and omissions,
Accelr8's stock price was artificially inflated through out the Class
Period.

Contact: Joseph V. McBride of Rabin & Peckel LLP, 800-497-8076,
212-682-1818, email@rabinlaw.com


ACCELR8 TECHNOLOGY: Wolf Haldenstein Files Securities Lawsuit in CO
-------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP announces that it filed a
securities class action lawsuit in the United States District Court for the
District of Colorado on behalf of investors who bought Accelr8 Technology
Corp. (Nasdaq: ACLY) stock between September 15, 1997 and November 16, 1999
(the "Class Period").

The lawsuit alleges that Accelr8, Thomas V. Geimer and Harry J. Fleury
violated section 10(b) of the Securities Exchange Act of 1934.
Specifically, plaintiff alleges that defendants materially overstated
Accelr8's revenue, improperly recognized revenue relating to licensing and
maintenance fees, failed to amortize capitalized software development
costs, and failed to disclose that the Company's Navig8 2000 software,
created to fix the millennium big, was not available as a general Year 2000
remediation tool to the total universe of the programs that need Year 2000
solutions as represented during the Class Period. The Complaint alleges,
amongst other things, that, as a result of these material misstatements and
omissions, the Company's stock price was artificially inflated throughout
the Class Period.

Contact: Michael Miske, George Peters, Fred Taylor Isquith, Esq., Gregory
M. Nespole, Esq. or Brian S. Cohen, Esq., all of Wolf Haldenstein Adler
Freeman & Herz LLP, 800-575-0735, or classmember@whafh.com


AUTO INSURANCE: Suit Says Allstate Collaborates with Claims Processors
----------------------------------------------------------------------
A lawsuit filed in Edwardsville alleges that Allstate and two other
insurance companies collaborated with claims processors to fraudulently
undervalue customers' vehicle loss and medical claims. The lawsuit was
filed last Friday June 2 by the Lakin Law Firm of Wood River on behalf of
Howard Weaver of Madison County and four other plaintiffs who live outside
the area. It asks that a judge certify the complaint as a class action of
all who suffered similar losses. Defendants are Allstate Insurance Co.,
Unique Insurance, Grange Insurance, Automatic Data Processing Inc., ADP
Claims Solutions Group and ADP Integrated Medical Solutions.

The plaintiffs contend the insurance companies systematically underpaid
claims using biased reports from the ADP companies. The lawsuit seeks
damages amounting to the difference between the premiums actually paid and
the fair market value of the low-quality insurance coverage that allegedly
was provided. (St. Louis Post-Dispatch, June 6, 2000)


CATERPILLAR INC: Boat Engine Buyers Denied Class Status
-------------------------------------------------------
A federal judge has refused to certify a class action consumer's suit
brought by boat owners who claim that Caterpillar Inc. falsely inflated
fuel efficiency figures for its engines, finding it would be too difficult
for the court to apply the consumer protection laws of 41 different states.

"A class action is not the superior method of litigating this controversy
because of potential difficulties with case management. Management problems
are likely to result from the need to determine and apply the various
states' consumer fraud acts," U.S. District Judge Anita B. Brody wrote in
her 33-page opinion in Lyons v. Caterpillar Inc.Brody also found that the
would-be class members could easily sue individually since the lead
plaintiff had estimated that each class member's damages would be about $
100,000.

"Individual claims would certainly be large enough to make individual suits
feasible and therefore, a class action lawsuit is not the superior method
of adjudicating this dispute," Brody wrote.The individual boat owners who
claim that Caterpillar misrepresented the fuel consumption rate of its
engines, she said, "are not without effective strength to bring their
opponent into court."

The ruling means that plaintiff's attorneys Dante Mattioni and Stephen J.
Galati of Mattioni Mattioni & Mattioni have only the claims of Paul Lyons
to pursue. Lyons bought a 1995 Sea Ray 370 DB boat in August 1995. The boat
had twin 3116, 300-horsepower diesel engines manufactured by Caterpillar.
But Lyons claims the engines did not perform as warranted and specifically
that they used more fuel and failed prematurely. He claims his boat's range
was less than it would have been if the representations were accurate.

The suit alleges that Caterpillar knew before the engines were sold and
installed that the fuel efficiency figures were wrong but that it continued
to published and disseminated the false specifications. The Mattioni firm
asked that Lyons be allowed to sue on behalf of a class of up to 9,000
owners of boats in which Caterpillar 3116 marine engines have been
installed. The plaintiffs argued that Illinois's consumer protection law
should apply to every plaintiff under the Pennsylvania flexible interest
analysis.But Caterpillar's lawyers argued that the court must apply the law
of every state in which putative class members reside. They identified 41
states where the last known owners of the subject engines reside.

Brody sided with the defense, saying, "I find that Illinois law would not
apply to a certified class in this action."In diversity cases, she said,
federal courts must apply the choice-of-law rules of the forum.Applying
Pennsylvania's rules, Brody said the issue was whether any of the relevant
consumer fraud acts conflict and if they do conflict, whether it is a
"false conflict."

Caterpillar argued that there are numerous differences between the states'
statutes. Brody agreed, saying, "There is not a single jurisdiction that
has a greater interest in having its consumer fraud act apply to the entire
class."All of the states, she said, have an interest in using the statute
crafted by their state's legislature to protect their consumers and
residents." Even if applying one state's consumer fraud act would not
impair another state's governmental interests, it may impair the
governmental interests of any of the other 40 states involved," Brody
wrote.

Brody also refused to apply Pennsylvania's law to all of the plaintiffs.
"Applying the Pennsylvania consumer fraud act to all the putative class
members' claims would be a violation of the due process rights of those
plaintiffs who do not live in Pennsylvania and/or who did not purchase
their boats in Pennsylvania," she wrote. Under the Restatement (Second) of
Conflict of Laws, Brody found that "each putative class member's claim
arises under the consumer fraud act of his or her state of residence or the
state in which his or her boat was purchased."

U.S. District Judge Jerome Simandle of the District of New Jersey wrote in
In re Ford Motor Co. Ignition Switch Products Liability Litigation, a suit
involving the alleged defective ignition switch found in approximately 23
million vehicles, Simandle wrote: "Each plaintiff's home state has an
interest in protecting its consumers from in-state injuries caused by
foreign corporations and in delineating the scope of recovery for its
citizens under its own laws. These interests arise by virtue of each state
being the place in which plaintiffs reside, or the place in which
plaintiffs bought and used their allegedly defective vehicles or the place
where plaintiffs' alleged damages occurred." By the same logic, Brody found
that all 41 consumer protection laws would apply in her case and that her
next task was to determine if they could be "applied in such a way that
common questions of law predominate."

The Mattioni firm argued that they could because the consumer laws fall
into four general categories:

     -- Statutes generally prohibiting unfair and deceptive practices or
         listing prohibited practices, which practices include the practice

         in question, without the need to show intent that there be
         reliance.

     -- Statutes with a general prohibition of unfair and deceptive
         practices or a list of specific practices which includes the
         practice in question where the defendant intends to induce
         reliance but do not require a specific intent to deceive or proof
         of actual reliance.

     -- Statutes which impose a scienter requirement (proof that the
         defendant intended that there be deception).

     -- Statutes that require proof of individual reliance by the
plaintiff.

But Brody disagreed, finding that the differences could not be addressed so
simply."State consumer protection acts vary on a range of fundamental
issues," Brody wrote. "For example, the New Jersey consumer protection act
broadly proscribes 'any unconscionable commercial practice, deception,
fraud, false pretense, false promise, misrepresentation, or the knowing
concealment, suppression, or omission of any material fact...' while the
California statute specifically proscribes 23 itemized activities."

The level of scienter also differs, she noted, so that plaintiffs in
Massachusetts, Maine and Texas do not require proof of intent to deceive,
while Georgia, New Jersey and Utah plaintiffs must prove intent.

The statutes also vary on whether class action is available. Brody found
that the Mattioni firm failed to provide the court with a detailed analysis
of the 41 states' consumer fraud acts that was sufficient to analyze the
entire question. "My failed attempt to make sense of plaintiff's sample
jury instructions illustrates why plaintiff has not met his burden. If I
find plaintiff's jury instructions confusing, how can I expect a lay jury
to wade through these question?" she wrote.But Brody also found that "the
mere existence of state law variations is not alone sufficient to preclude
class certification."

Turning to the standard question that arise under Rule 23, Brody also
looked to whether "common issues of fact overcome divergent legal
issues."Brody found there were "substantial factual differences" among the
proposed class members, due to the model of engine they purchased, the
promises they relied on in doing so, and the possible outside causes of
problems with the engines that were beyond Caterpillar's control. Such
factual differences among the plaintiffs, when combined with the legal
differences among the states, she said, was enough to preclude certifying
the class.

Finally, Brody said, the plaintiff's lawyers failed to show that a class
action would be "superior" to individual litigation."Plaintiff has not
demonstrated that common issues of law and fact predominate over individual
issues. In addition, plaintiff fails to offer a workable plan as to how
this litigation would be tried with respect to the numerous individual
issues," Brody wrote. (The Legal Intelligencer, June 6, 2000)


COCA-COLA: Chairman Remarked on Excessive Money Demands for Racism Suit
-----------------------------------------------------------------------
Coca-Cola Chairman Doug Daft may have violated a court order by telling a
reporter in Ireland that "totally excessive money demands" are making it
more difficult for the company to settle a racial discrimination lawsuit.

Daft's comments to Paul O'Kane, deputy business editor of The Sunday
Tribune in Dublin, could violate an order prohibiting both sides from
publicly talking about the settlement negotiations, which began in
mid-April.

"We're seeking an equitable and expeditious settlement," Daft told O'Kane
in a taped, on-the-record interview. "I think you've seen enough in some of
the other press to indicate that the settlement is difficult when it just
becomes totally excessive money demands, financial demands. I won't comment
on it, but there has been enough commentary about it."

Daft's characterization of plaintiffs' monetary demands as excessive may
have violated an order signed Feb. 8 by U.S. District Judge Richard Story
requiring both sides to participate in confidential negotiations
facilitated by a mediator. "What occurs during the course of the mediation
shall be kept confidential among the named parties and their counsel and
consulting experts," Story wrote in his order.

But Coca-Cola spokesman Robert Baskin said the company doesn't believe Daft
violated the order. "In his interview with an Irish newspaper reporter in
Dublin, Mr. Daft did not comment on the mediation process, nor was he
seeking to communicate with prospective class members," Baskin said,
referring to plaintiffs' efforts to expand the case into a class-action
suit against the company. "There is absolutely no violation of any court
order."

Plaintiffs' attorney Cyrus Mehri said he was "astonished" after learning of
Daft's comments Monday. "Regardless of whether Mr. Daft violated the
court's order or inaccurately characterized the proceedings, we will not
comment on the substance of his statements," Mehri said. "From the get-go
in this case, we have sought to achieve the twin goals of creating systemic
changes in the company's practices and making fair amends for the past."
Mehri would not comment on whether the plaintiffs would seek any legal
remedy in the wake of Daft's remark. Legal experts said it is possible for
the plaintiffs to seek sanctions against the company.

On several previous occasions recently, including at the company's annual
shareholders meeting in April, Daft said he could not comment on the
ongoing negotiations because of the court order.

In his interview with O'Kane, Daft did not specifically mention the
monetary demand he thought was excessive. But he referred to former Coke
manager Larry Jones, who has said $ 200 million would be an appropriate
settlement for four plaintiffs and a prospective class of 2,000 current and
former black employees in the United States. Jones, who is not a plaintiff
in the case, has been organizing a boycott against the company to try to
pressure it to settle the suit. "In fact, Larry Jones sort of put a number
on the table the other day, which I thought was wrong to do," Daft told
O'Kane. "But he's not involved in the settlement of the case. He's outside
it."

While Daft is not supposed to talk about negotiations, he is allowed to
talk about the allegations in the lawsuit.

In the interview, Daft described the suit as "a very unfortunate issue. I
wish it was behind us. Nothing like this is good. It takes away energy from
myself in terms of focus from other parts of the business. But it has to be
settled, and we're trying to settle and have been for several weeks." Daft
said the diversity concerns raised by the lawsuit probably stem from
employees with individual issues unrelated to race. "It's probably just
related to bad supervisors," Daft said. Later in the interview he added: "I
would say that 99.9 percent of people know in their heart and in their mind
that there is no (systemic) discrimination in the Coca-Cola Co. We're
enormously diverse anyway. We have 215 nationalities that work in our
organization."

The company has denied the allegations in the suit, which contends that it
has systematically discriminated against African-Americans in pay,
promotions and performance evaluations.

Aside from the monetary issues that may be affecting the settlement talks,
another key issue concerns whether the plaintiffs' attorneys and the
company can agree on the types of diversity policies and practices to
establish for the future. (The Atlanta Journal and Constitution, June 6,
2000)


FEN-PHEN: AHP Reveals Grand Juryís Probe on FDA Reports of Adverse Drug
-----------------------------------------------------------------------
American Home Products Corp. disclosed in a recent Securities and Exchange
Commission filing that a federal grand jury is investigating whether the
company adequately reported adverse drug events involving its brand-name
diet drugs Pondimin and Redux to the FDA.


FEN-PHEN: MDL Ct Hears Objections To AHP's Proposed $4.8 Bil Settlement
-----------------------------------------------------------------------
U.S. District Judge Louis C. Bechtle held eight days of hearings from May 2
to May 11 before taking the decision under advisement over whether to grant
final judicial approval to American Home Products Corp.'s proposed global
settlement of thousands of diet drug lawsuits. His decision is expected
sometime this summer. In re Diet Drugs (Phentermine, Fenfluramine,
Dexfenfluramine) Products Liability Litigation, MDL No. 1203; Brown et al.
v. American Home Products Corp. et al. , Ind. No. 99-20593, hearing ended
(E.D. Pa., May 11, 2000); see Diet Drugs LR , May 2000, P. 3.

The hearing featured more than three dozen legal, medical, and financial
experts, plaintiffs, AHP representatives, and other witnesses testifying
for and against the proposed $3.75 billion settlement. That amount is
expected to grow to $4.8 billion over the 15-year life of the settlement
process if Judge Bechtle approves it and it withstands any appeal.

The settlement agreement, worked out in secret negotiations last fall, has
been accepted by 200,000 plaintiffs. Another 45,000 have chosen to opt out
and pursue individual suits against the pharmaceutical giant. No one knows
how many diet drug users may ultimately qualify for inclusion in the
settlement class and subclasses, but as many as four to six million people
may have used the diet drugs fenfluramine and dexfenfluramine before they
were voluntarily recalled from the market on Sept. 15, 1997.

Objectors argued in court documents and at the hearing that the proposed
settlement provides too little compensation to those injured by the drugs,
that it does not cover certain categories of injuries and that it fails to
satisfy the U.S. Supreme Court's requirements for establishing settlement
classes in mass tort litigation. They also claimed that the settlement was
fashioned in the best interests of AHP and the class counsel, not the
plaintiff class members.

                                  Amchem and Ortiz

In particular, the objectors contended that the proposed settlement does
not comport with the Supreme Court's recent rulings in Amchem Products v.
Windsor, 521 U.S. 591 (1997), and Ortiz v. Fibreboard , 527 U.S. 815, 119
S. Ct. 2295 (1999), both attempts to certify large settlement classes in
asbestos litigation.

In Amchem, the defendants offered a lump-sum payment that would have had to
been allocated among different groups of plaintiffs, thus creating
conflicts between the classes, including those already manifesting injuries
and future claimants -- those who might not even have been aware that they
had been exposed to asbestos and who might not develop symptoms for decades
to come. In Ortiz, the parties attempted to bind all of the plaintiffs into
a mandatory limited fund settlement class. In both cases, the Supreme Court
found that the proposed settlements were inherently unfair, creating
various internal conflicts among the class members.

In this case, the plaintiffs' class counsel, led by Michael D. Fishbein of
Philadelphia's Levin, Fishbein, Sedran & Berman , argued that they had met
every objection raised by Amchem and Ortiz .

In fact, Fishbein told the court on the first day of the hearings that the
plaintiffs' attorneys were very mindful of Amchem from the beginning and
had worked hard to structure the diet drug settlement so it would not run
into the roadblocks posed by the Amchem ruling.

In a letter to AHP during the months-long negotiations, he said they told
the company, "If you want to do this, get serious, read Amchem and let's
get back to the bargaining table and figure out what we're going to do. If
not, that's okay. We're prepared to litigate."

Here, class members will receive payments for medical monitoring or
payments set forth in a matrix depending upon their age, exposure to the
drugs and severity of their heart valve injuries. If plaintiffs who are
currently asymptomatic later develop heart valve disease, they can then
either accept the matrix payments or opt out and file their own personal
injury suits against AHP. The company has also agreed not to mount any
statute of limitations defenses in those cases.

There is no lump sum to be divided among the class members, and no future
claimants will be shut out of the settlement because they did not know they
were injured. In addition, the settlement is not mandatory; potential class
members can opt out at three different points.

Exposure to diet drugs differs from exposure to asbestos, the settlement
proponents point out, because the drugs had to be prescribed by a doctor;
therefore, everyone knows whether they took the drugs and thus whether they
were exposed. In addition, there can be no future claimants who can allege
exposure to the drugs years from now because the drugs were withdrawn from
the market in 1997.

One of the class counsels' chief witnesses at the hearing was Columbia
University law professor John C. Coffee Jr., a steadfast opponent of the
proposed classes in Amchem and Ortiz, who nevertheless testified that he
favors the proposed settlement class here.

"This is a much tighter, less sprawling, less amorphous class," Coffee
said, contrasting it with the Amchem class.

Other witnesses appearing for the settlement class were financial experts
who testified to AHP's financial condition and the appropriateness of the
proposed settlement amounts; medical and scientific experts who testified
to the link between diet drugs and the alleged injuries; and an attorney
who testified that the negotiations were carried out in an adversarial
manner and "at arms length," as federal rules require.

                              A Fair Settlement

In addition to meeting the requirements of Amchem and Ortiz, the class
counsel argued, the proposed settlement also meets the fairness factors
articulated by the U.S. Court of Appeals for the Third Circuit in Girsh v.
Jepson, 521 F.2d 153, 156 (3d Cir., 1975), and its progeny. Those factors
test whether the settlement class meets the requirements of Rule 23 of the
Federal Rules of Civil Procedure regarding numerosity, commonality,
typicality, adequacy of representation and the superiority of a class
action over individual litigation.

The settlement's proponents maintain that the litigation meets the test in
Girsh in that it is complex, it is mature enough for the parties to
determine that a settlement would be preferable to continuing with the
suits and that there is a risk that plaintiffs may not be able to establish
liability. In addition, the proposed settlement meets the Girsh requirement
that it be fair and reasonable when compared to the amounts the plaintiffs
may expect to recover at trial, they said.

Some of the objectors had argued that the amounts of damages offered by AHP
in the settlement were inadequate, given the verdicts that juries have
returned or the settlement amounts that the company has paid in a handful
of cases that have already come to trial.

Class counsel responded that anyone who feels the settlement amounts are
inadequate can join the 45,000 plaintiffs who have already chosen to opt
out and take their chances at trial in hopes of obtaining similar verdicts
or individual settlements.

                              'Meritless Objections'

The objectors were represented by plaintiffs' attorney Edward Blizzard of
Blizzard & McCarthy in Houston. Some 36 groups of plaintiffs filed
objections initially, but by the time of the hearings, all but 10 objectors
had withdrawn, leaving only a very small number of objectors out of 200,000
plaintiffs who chose to accept the settlement.

Of those, the class counsel said, "Most of the objectors are present simply
for the sake of their counsel's interest s. They stand as shills for their
counsel who are attempting to use their clients' standing for their own
self-interest to enhance their settlement posture with American Home
Products."

The class counsel contended that many of the objectors did not even know
their attorneys were filing objections in their names and that if they had
known about the terms of the settlement, they would not have objected to
it.

The objectors' arguments that the proposed settlement conflicts with laws
in those states recognizing medical monitoring, that it conflicts with
state laws regarding punitive damages or that it was negotiated solely so
class counsel could collect as much s $429 million in attorneys' fees are
all without merit, the proponents asserted.

With respect to the attorneys' fees, class counsel and AHP set a maximum
fee of $200 million out of the medical monitoring fund and $229 million out
of the heart valve fund to compensate class counsel and other plaintiffs'
attorneys. Those figures are simply a cap on the amount of fees attorneys
may collect, the settlement proponents said. It will be up to the court to
determine the actual amount each attorney will receive in accordance with
how much time and effort each put into the litigation.

In a post-trial order, Judge Bechtle ordered the parties to file findings
of fact and law by May 19 and to file replies by May 23. He said he would
schedule a final oral argument at a later date. (Diet Drugs Litigation
Reporter, June 2000)


FIRSTPLUS FINANCIAL: Ch 11 Class Claim Denied Prevents Single Claim
-------------------------------------------------------------------
Consumers who believe they were overcharged for home mortgages may not seek
compensation through a class proof of claim in the lender's Chapter 11
case, Judge Harold C. Abramson (Bankr. N.D. Tex.) ruled in Charles Kahler,
et al. v. FirstPlus Financial, Inc. (In re FirstPlus Financial, Inc.), No.
99-31869-HCA-11, Adv. No. 99-3388 (April 26, 2000). Instead, the court
treated the class proof of claim as a group proof of claim filed on behalf
of the named plaintiffs.

Charles Kahler and other consumers filed a federal class action complaint
in California in 1998 alleging the mortgage originators, FirstPlus
Financial Corp. and Capital Direct Funding Group Inc., improperly marked up
charges for third-party vendor services. Specifically, they contended the
mortgage originators: charged "excessive loan fees and interest;
misrepresented that consumers were to receive competitive interest rates;
improperly charged borrowers for third party related loan expenses (i.e.,
credit reports, appraisals, mortgage insurance, and flood certification);
received kickbacks from some third party service providers; and manipulated
and withheld loan disclosure documents to hide effective interest rates,
loan costs, and fees."

The class action was not certified when FirstPlus filed for bankruptcy
protection. After the bankruptcy court denied the plaintiffs' request for
stay relief in order to pursue their California action, the named
plaintiffs in the action filed a proof of claim on behalf of themselves and
the proposed class. The claim was based on the same course of conduct that
led to the filing of the California complaint.

All potential class members received notice by mail of the lender's
bankruptcy and the bar date for filing claims. They were also provided with
a blank claim form. In addition, notice of the filing and bar date were
advertised in the Wall Street Journal and U.S.A. Today.

                     Allowing class proofs of claim

Rule 3001(b) requires creditors, or their authorized agent, to file a proof
of claim. However, courts are divided as to whether a class representative
is an authorized agent permitted to file class proofs of claims.

The 7th Circuit Court of Appeals ruled that bankruptcy courts may allow the
filing of class proofs of claim if the class representative obtains
authorized agent status through Rules 9014 and 7023. Rule 9014 says in a
contested case a court "may at any stage in a particular matter direct that
one or more of the other rules ... shall apply." Rule 7023 makes Fed. R.
Civ. Pro. 23, governing class actions, applicable to bankruptcy
proceedings. The 7th Circuit allows a class representative to become an
"authorized agent" by applying Rule 7023 to the Code's proof of claim
provision.

Other courts, however, follow Rule 3001(b) and the principles of agency to
the letter, holding that an authorized agent is one who performs a
delegable act, which the creditor could do himself. An agent is not
"authorized" if he first files a proof of claim and then notifies the
creditor.

                         Following the minority rule

The Texas bankruptcy court considered the appropriateness of a class action
in a bankruptcy proceeding when the Kahler plaintiffs moved for class
certification. Judge Abramson opined, "The chief purpose of a class action
outside the bankruptcy context - to avoid litigation in a multiplicity of
fora - is of little concern in the bankruptcy context since the bankruptcy
court has jurisdiction over all claims against the debtor. Also, while
there is a deterrent effect to class actions outside of bankruptcy,
deterrence is less likely in bankruptcy because the incentive to monitor is
destroyed by the lack of available funds, by the fact that the equity
interests have been wiped out, and by the fact that the reputations of the
managers have been tarnished no matter what happens in the class action."

Admitting he was adopting the minority view, Judge Abramson held that Rule
3001(b) requires an authorized agency relationship to file a proof of claim
and a class representative does not qualify as "authorized agent." Without
the required agency relationship, the court ruled the class proof of claim
was defective and could not be extended to anyone other than the named
plaintiffs. The court barred the claims of any party who did not file an
individual proof of claim and who received actual notice of the claims bar
date.

As previously stated, class actions apply to bankruptcy proceedings under
Rule 7023. Thus, the Texas bankruptcy court addressed numerosity,
commonality, typicality and adequacy of representation. It concluded that
the Kahler class only demonstrated adequacy of representation.

Although the plaintiffs claimed they satisfied the numerosity prong of Rule
23 because the proposed class had 30,000 potential members, the court held
otherwise. It reduced the number of plaintiffs to 50 after determining
class proofs of claims were inapplicable, only 2,000 individuals filed
proofs of claim and only 50 of those claims remained after the claims
adjudication process. Joinder of 50 claims, said the court, was not
impractical.

The court also held that the class failed to fulfill Rule 23's commonality
and typicality elements. It ruled individual issues predominated because
"each ... class member will have to prove the particular way in which they
were defrauded and ... their reliance upon that fraud." Despite holding
that the class failed Rule 23(a), the court nonetheless analyzed the motion
for certification under Fed. R. Civ. Pro. 23(b). It considered whether a
class action would be superior to resolving the plaintiffs' RESPA, TILA,
RICO and state fraud claims on an individual basis.

With regard to the plaintiffs' contentions that the mortgage originators
violated the RESPA by paying yield spread premiums to third parties for
services not actually performed, the court held it would be required to
examine the defendant's conduct in each loan transaction. A case-by-case
analysis of the loans would also be necessary to determine if a class
member's claim complied with the act's one-year statute of limitations,
said the court. Accordingly, Judge Abramson denied the motion for class
certification of the RESPA claims.

The court also ruled a TILA action is not suited for class treatment
because individualized proof in necessary to obtain recession of the
contract and to challenge the adequacy of the disclosures given in each
transaction. (Consumer Bankruptcy News, May 30, 2000)


G.A.D.R: NJ Ct Sends Dispute Over Hemophilia Settlement Back to IL
------------------------------------------------------------------
A New Jersey appellate panel has reversed a trial court order awarding
$100,000 in proceeds from the national hemophilia class action settlement
to the estate of a claimant who died before the money was allocated. F.F.
v. G.A.D.R. et al., No. A-3717-98T1 (N.J. Super. Ct. App. Div., May 15,
2000).

Although rejecting claims by the decedent's siblings that New Jersey courts
lack the authority to decide who is entitled to the money, the panel said a
family dispute over the proceeds should be resolved in the U.S. District
Court for the Northern District of Illinois. There, it said, a process for
settling disputes over allocation of "claimant group" shares was
established as part of the huge 1996 blood products settlement and can be
administered by special masters familiar with the fine points of the
action.

The instant dispute arose surrounding T.D., a hemophiliac who died of AIDS
in August 1994, shortly after initiating a New Jersey Superior Court suit
alleging he was infected with HIV by the tainted blood clotting factorate
he used to control his bleeding.

Sheparded by his sister, F.F., as executrix of T.D.'s estate, the suit
continued as a wrongful death action on behalf of his siblings, and a
survivorship claim for damages he incurred before his death. The case was
removed to U.S. District Court in New Jersey and later transferred to the
Northern District of Illinois for inclusion with the multidistrict blood
products litigation overseen by U.S. District Court Judge John F. Grady.

Following the October 1996 settlement of the class proceedings, F.F., as
executrix, denied competing claims on the money by her other siblings and
filed the instant New Jersey Superior Court for Middlesex County action
claiming entitlement to the full $100,000 award under her status as sole
beneficiary of T.D.'s estate.

The decedents' other siblings (defendants) challenged her suit, claiming
that any disputes over entitlement to the $100,000 must be resolved in
Illinois, where the action was prosecuted and settled, and where Judge
Grady established procedures designed to resolve such infighting by a
decedent's "claimant group."

The superior court, however, entered an order proclaiming that the
settlement funds were "hereby awarded to the estate." On appeal, the
defendants argued before the New Jersey Superior Court Appellate Division
that the order improperly declared that the estate, not the defendants, are
entitled to all of the funds; that it preempts them from arguing their
right to at least a portion of the amount; and that final determination of
the issue should rest in the Northern District of Illinois.

The appeals court agreed with the defendants' final two contentions and
reversed the lower court's declaration.

It noted that the claim prosecuted in Illinois in the name of T.D.
contained two "distinctly different" causes of action: one for damages
suffered by the decedent prior to his death, a claim that is an asset of
the estate under the New Jersey Survival Act (N.J. Stat. Ann. @ 2A15-3);
and, under the New Jersey Wrongful Death Act (N.J. Stat. Ann. @ 2 A:31-1),
a claim for the "benefit of the persons entitled to take any intestate
personal property of the decedent."

On the issue of jurisdiction, the appellate division said: D efendants
maintain that the Superior Court in Middlesex County had no jurisdiction to
hear this case. We doubt that is so. Our long arm jurisdictional rule is
coextensive with constitutional due process jurisdictional limits. Were
there a need to do so, we think it likely that New Jersey could be found to
have sufficient contacts with this litigation to justify its exercising
jurisdiction to hear and resolve the matter.

"Comity does not rest on a lack of jurisdiction," the court added. "Rather,
it rests on a voluntary recognition of pending judicial proceedings in
another forum."

The fact that the entire proceeding has, to date, unwound in Illinois, said
the New Jersey panel, means that it would be most sensible for it to
continue there, where the court "has procedures in place to deal with the
present dispute."

Shirley B. Whitenack and Peter A. Marra of Schenck, Price, Smith & King in
Morristown, N.J., represent the cause for the defendants. F.F. is
represented by Laura M. Le Winn of Princeton Junction, N.J. (AIDS
Litigation Reporter, June 5, 2000)


GLEN COVE: Watery Home Residents Form Tenant Council and Plan Lawsuit
---------------------------------------------------------------------
Angry and frustrated for nearly a week since their watery homes were
condemned, Glen Cove residents Monday united to form their first tenants'
association. With politicians, preachers and attorneys at their side, about
100 displaced residents chose two women to lead the group. Now, they say,
Glen Cove Condominium and Apartment's management, the complex's association
and numerous landlords may listen to them and at least apologize for their
homeless status. A planned class-action lawsuit, they say, will surely send
a message. "Something has to happen. We just couldn't sit still with all
this abuse," said Esther Johnson, a resident. Johnson and Linda Dorsey were
elected chairwomen.

After city officials declared two Glen Cove buildings unsafe, residents
said they haven't seen or heard from property manager Michael Sims, who
couldn't be reached by phone Monday.

Attorneys at the meeting encouraged the residents, displaced after heavy
rains sent their ceilings crashing and doused furniture and the buildings'
electrical boxes, to keep documentation of all damages. Nearly 500
residents were forced to leave. Monday's meeting was called by Arthur
Kennedy, chief of staff for U.S. Rep. Alcee Hastings, D-Miramar, after
dozens of residents complained they were being rebuffed by Glen Cove's
management. The 364-unit complex has a history of building code violations.

Earlier Monday, and over the weekend, moving trucks jostled for space as
families from the 120 condemned units were leaving. "It is very difficult.
It was awful," said Sharon Williams, one of the few unit owners who still
lives in her Glen Cove condominium.

Work on the two vacant buildings, city officials say, could take anywhere
from six weeks to four months, depending on how fast the complex's
association seeks to remedy the situation. "We don't want to give false
hope based upon the fact that it appears that some owners care more about
their investment. This is a classic slumlord situation," said Lauderdale
Lakes Community Development Director Michael Matthias. A Lauderdale Lakes
building department representative said permits for repairs on Glen Cove's
roof were applied for on Monday. (Sun-Sentinel (Fort Lauderdale, FL), June
6, 2000)


INMATES LITIGATION: Ap Ct Hears Who Should Represent MS HIV Plaintiffs
----------------------------------------------------------------------
Mississippi prisoners' rights attorney Ron Welch has told a federal appeals
court the American Civil Liberties Union had aggressively sought to replace
him as lawyer for inmates with HIV.

Welch and the ACLU appeared Monday before a three-judge panel of the 5th
U.S. Circuit Court of Appeals in New Orleans.

Welch, of Jackson, Miss., said the ACLU sought to take control of a
class-action lawsuit involving the HIV inmates in late 1998, during a
period when Welch had not heard from the prisoners.

A medical expert has testified that during the period in question, covering
more than a year, prison doctors provided poor and outdated HIV treatment
to inmates.

Welch said he had interpreted the absence of contact with the inmates as a
meaning there were no problems. In reality, he said, "they bypassed me and
went to the other counsel."

The ACLU is appealing several issues involving the lawsuit, including a
lower court's ruling that Welch should remain as the court-appointed
attorney.

Jane Hicks, a Jackson lawyer with the ACLU, said the HIV inmates wanted to
be represented by other attorneys. "It's about the rights of inmates to
choose their counsel," Hicks said.

The appeals court will rule later on the case.

Inmates with HIV at the Mississippi State Penitentiary at Parchman signed a
petition in December seeking Welch's removal. Attorneys for the ACLU's
National Prison Project claim Welch was aware of inmates' complaints about
medical treatment but ignored them. Welch said he received a letter from an
inmate in March 1997 complaining about medical treatment. He said he was
pursuing an administrative remedy that eventually made medical treatment
for all state inmates the responsibility of the University of Mississippi
Medical Center in Jackson. "My strategy worked. We got UMC," said Welch.

The medical center in July 1998 began to provide treatment to state
prisoners, including those with HIV. In March 1999, however, an expert for
the ACLU testified at a lower court hearing that prisoners continued to
receive substandard treatment that he described as dangerous.

Combination therapy, a treatment that substantially prolongs the lives of
many people with HIV, was widely accepted by the medical community by late
1996. In June 1997, the National Institutes of Health issued guidelines for
combination therapy in treating HIV.

In July, a federal magistrate ordered the state Corrections Department to
implement the new therapy and report its progress to the court.

Corrections Department attorney Leonard Vincent told the appeals court
panel the state was in the process of implementing the new treatment. "We
were doing exactly what the court ordered all along," Vincent said.

Welch told the court that it was his responsibility to assess the veracity
of prisoners' complaints and to protect the court from frivolous
complaints. "This one wasn't frivolous," said U.S. District Judge Donald
Walter.

Vincent said the ACLU shouldn't receive payment because it had not been
successful in its attempt to have the court appoint an independent medical
expert.

U.S. District Judge Fortunato Benavides said the fact Mississippi had
speeded up implementation of treatment could be viewed as a success. "They
got there a little faster, didn't they?" Benavides asked. (The Associated
Press State & Local Wire, June 6, 2000)


JACK IN: Settlements Resolve CA Accessibility Suit against Restaurants
----------------------------------------------------------------------
A federal lawsuit alleging that Jack in the Box restaurant locations were
illegally inaccessible to individuals with disabilities has been resolved
via the execution of three settlement agreements last month. The class
action suit, filed by the Oakland-based Disability Rights Advocates, is
similar to cases involving Wendy's International Inc. and Taco Bell Corp.

Under the Jack in the Box settlements, which affect more that 50 franchise
owners and 174 locations, improvements will be made relating to features
such as restrooms, parking lots, and paths of travel. One of the settlement
agreements addresses improvements at corporate-controlled locations, while
the other two have been joined by franchise operators. Jack in the Box,
headquartered in San Diego, operates and franchises more than 1,500
restaurants in 14 states.

"We are pleased to see so many independent operators back up the commitment
by Jack in the Box's corporate headquarters and make necessary
improvements," said DRA attorney Melissa Kasnitz. "We expect people with
disabilities who know they can count on accessible features at Jack in the
Box Restaurants will be pleased to patronize the chain. Access is not just
a civil rights obligation; it's also good for business."

Fast food restaurants are clearly subject to the requirements of Title III
of the ADA, and others have similarly settled charges that they failed to
meet applicable accessibility requirements. In March, Taco Bell Corp.
entered into an agreement designed to improve the accessibility of its
Colorado restaurant locations. That suit, which also was a class action,
focused heavily on the accessibility of the restaurant's queue lines. In
August 1998, Wendy's International Inc. also entered into a settlement
agreement that resolved a dispute concerning the alleged inaccessibility of
its queue lines. To settle the case, Wendy's agreed to widen or eliminate
the queue line system in its restaurants nationwide. (Disability Compliance
Bulletin, June 2, 2000)


LIPARI LANDFILL: NJ Superfund Site Needs Fund for Cancer
--------------------------------------------------------
Responsible parties cleaning the Lipari Landfill Superfund site in Mantua
Township, N.J., will have to create a fund to pay for medical attention of
former residents near the site who have developed cancer if a court rules
in favor of plaintiffs.

On behalf of 3,000 former residents, including three ex-Girl Scouts, Harris
Pogust of the Pennsauken, N.J., law firm, Sherman, Silverstein, Kohl, Rose
& Podolsky, filed suit against the responsible parties of the Superfund
site, claiming the contamination has caused undue harm against the
plaintiffs.

In January, N.J. Superior Court Judge John Holston certified the class for
the class-action suit. Since then, the defendants' lawyers tried to appeal
that decision, arguing the lawsuits should be individual cases, but the
appellate court refused to hear the appeal. Briefs in the lower court case
are not expected until mid-June, said Pogust.

The suit began when several residents came to Pogust. One Girl Scout
developed ovarian cancer while she was in her 20s and her brother had died
from exposure to the site, he said. If the plaintiffs are successful in the
suit, the companies would have to contribute money to pay for medical
attention periodically over the next 10 years.

"Other companies have voluntarily set up funds for this kind of thing, but
so far we haven't seen it here," he said.

Defendants have admitted to the contamination but argue that the injuries
are not the result of the pollution. Their lawyers say the case has no
merit and should be dismissed.

The landfill is a 15-acre site that includes 6 acres of an inactive
facility. From 1958 to 1971, the Lipari Landfill accepted municipal waste,
liquid and semisolid chemical wastes, and industrial materials, according
to EPA Region 2. The contamination includes solvents, paints, formaldehyde,
dust residues, resins and solid press cakes. Responsible parties are
addressing the site in four stages, officials said.

Contacts: Harris Pogust, Sherman, Silverstein, Kohl, Rose & Podolsky for
plaintiffs, (856) 662-0700; Rich Cahill, EPA, (212) 637-3666. IAC-ACC-NO:
62405648 (Hazardous Waste News, May 22, 2000)


MORGAN STANLEY: Cited for Discrimination against Women Employees
----------------------------------------------------------------
A federal agency determined on June 5 that Morgan Stanley Dean Witter had
discriminated against women working in one of its divisions, opening the
door for lawsuits -- and possibly a class action -- against the firm.

In one of the first investigations into pay and promotion practices at a
big Wall Street investment bank, the Equal Employment Opportunity
Commission said it had seen evidence of "a pattern and practice" of
discrimination against women employed in Morgan Stanley's institutional
stocks division. The case stems from a complaint filed with the commission
in 1998 by Allison K. Schieffelin, a trader of convertible bonds, who said
she had repeatedly been denied a promotion because of her sex.

The commission said the evidence it had gathered supported Ms.
Schieffelin's contention that less-deserving men had been promoted to the
top rank of managing director while she had remained a principal. The
commission also said it had found that the firm had retaliated against Ms.
Schieffelin for making her complaints.

A spokesman for Morgan Stanley, Ray O'Rourke, said: "We emphatically
disagree with the findings of the commission. We do not practice or condone
employment discrimination of any kind. We think the commission can only
have misinterpreted the data that we gave them because the information
shows no pattern of discrimination whatsoever."

The determination signals that the commission may sue Morgan Stanley if the
firm does not agree to a settlement. Litigation is a last resort for the
commission; last year, it received 77,444 complaints and filed just 465
suits against employers.

The commission has filed suit against some brokerage firms and some major
corporations, including Mitsubishi Motors and the drugmaker Astra U.S.A.,
in recent years. But it has not disclosed any actions against major Wall
Street firms in about a decade.

In 1998, Mitsubishi agreed to pay $34 million to hundreds of women who
worked in its auto factory in central Illinois and agreed to outside
monitoring of complaints of harassment and discrimination. That settlement
was easily the biggest of its kind, supplanting one the commission reached
earlier that year with Astra, in which Astra agreed to pay $10 million, to
admit that it had fostered a hostile work environment for women and to
apologize.

It is not clear what sort of settlement the commission will try to elicit
from Morgan Stanley, but a monetary settlement could be substantial because
employees in the division are highly paid. Managing directors at the firm
can earn several million dollars a year, and they can hold those jobs for
10 years or more.

In the 1970's, Merrill Lynch consented to the commission's monitoring of
its hiring of women and minorities in its brokerage business. Recent
high-profile sexual harassment and discrimination suits against Merrill
Lynch and the Salomon Smith Barney unit of Citigroup were filed in federal
court without intervention by the commission.

In September, the commission demanded that Morgan Stanley turn over
comprehensive records on hiring, pay and promotions in its institutional
stocks division, in which Ms. Schieffelin has worked in her 14-year career.
Neither the commission nor Mr. O'Rourke would describe the information the
firm turned over.

Wayne Outten, a lawyer in Manhattan who represents Ms. Schieffelin, said he
had not seen the data but he believed the commission had received profiles
of the division's employees going back about 15 years. He said there were
other facts that supported Ms. Schieffelin's complaint, including that only
3 of 50 managing directors in the division were women and that senior
executives of the firm had condoned and participated in firm-sponsored
events from which women were excluded.

Ms. Schieffelin is a golfer but was not invited to golf outings with
clients, Mr. Outten said. She also contended in her complaint that the firm
had paid for the entertainment of clients at strip clubs. But in its
response to the commission, Morgan Stanley said that "entertainment at
topless bars was at most infrequent."

The commission also based its decision on information supplied by several
other women who had worked at Morgan Stanley. Two women who worked in the
same division as Ms. Schieffelin and now work at other investment banks
corroborated her contentions in sworn statements, Mr. Outten said. He would
not identify those women.

Ms. Schieffelin filed her complaint with the commission after she was
passed over for promotion as managing director in 1997. Since then, she has
been passed over twice, Mr. Outten said. He said her year-end bonus for
1999 was substantial but "we believe that her bonus could have and should
have been higher" and was adversely affected by the fact that she is a
woman and she filed this charge.

Mr. Outten said that going public with her complaint had had a harsh effect
on Ms. Schieffelin's relationship with the firm and her co-workers. She has
felt shunned and has been excluded from some extracurricular roles,
including the recruiting of prospective employees and helping develop an
online system for marketing new securities, known as an electronic
roadshow.

Ms. Schieffelin, 39, has declined to comment publicly on her case because
Morgan Stanley's lawyers have warned that she could be disciplined or fired
for talking to the news media without permission, Mr. Outten said. Mr.
O'Rourke confirmed that Ms. Schieffelin would be violating the firm's
policy if she talked about her case. (The New York Times, June 6, 2000)


PEAK INTERNATIONAL: Reports Dismissal of Dorchester Investor Suit in NY
-----------------------------------------------------------------------
Peak International Limited (Nasdaq: PEAKF; Amex: PTT) announced the
voluntary dismissal of all claims against the company and its Vice
President, CFO, Jerry Mo, in the Dorchester Investors purported class
action lawsuit pending in the US District Court for the Southern District
of New York.


SEAGATE TECHNOLOGY: Faces 17 Securities Suits over Merger Agreement
-------------------------------------------------------------------
On March 29, 2000, Seagate Technology, Seagate Software Holdings, Inc. and
Suez Acquisition Company Limited, an entity affiliated with, among others,
Silver Lake Partners and Texas Pacific Group entered into a Stock Purchase
Agreement, and Seagate Technology, VERITAS and a wholly owned subsidiary of
VERITAS entered into an Agreement and Plan of Merger and Reorganization.

Following Seagate Technology Inc.ís announcement of the Veritas/Silver Lake
transaction, a number of stockholders filed lawsuits against the Company,
the individual members of the Board of Directors and certain executive
officers in both Delaware and California. As of April 11, 2000, 17
complaints had been filed in the Chancery Court of Delaware. In California,
three complaints were filed in Santa Clara County Superior Court and two
complaints were filed in Santa Cruz County Superior Court. The complaints
in these jurisdictions each allege that the members of the Company's Board
of Directors breached their fiduciary duties to the Company's shareholders
by entering into the Veritas/Silver Lake transaction. The complaints also
allege that the Company's directors and executive officers have conflicting
financial interests and did not secure the highest possible price for the
Company's shares. All the complaints are styled as class actions, and seek
to enjoin the Veritas/Silver Lake transaction and secure damages from all
defendants. The Company believes that none of the lawsuits has any merit
and intends to defend all these claims vigorously.

                            Reorganization

On October 20, 1999, the stockholders of Seagate Software, a majority-owned
subsidiary of the Company, approved the merger of Seagate Daylight Merger
Corp., a wholly-owned subsidiary of the Company, with and into Seagate
Software. Seagate Software's assets consisted of the assets of the
Information Management Group and its investment in the common stock of
VERITAS Software Corporation. The merger was effected on October 20, 1999.
As a result of the merger, Seagate Software became a wholly-owned
subsidiary of the Company. In connection with the merger, Seagate
Software's stockholders and optionees received payment in the form of 3.23
shares of the Company's common stock per share of Seagate Software common
stock less any amounts due for the payment of the exercise price for such
options. All outstanding Seagate Software stock options were accelerated
immediately prior to the merger. Seagate Technology issued 9,124,046 shares
to optionees and minority stockholders of Seagate Software.

In connection with the reorganization, Seagate Software also formed a
wholly-owned subsidiary that assumed the name "Seagate Software, Inc."
("Software Operating Company"). Seagate Software transferred the IMG assets
into Software Operating Company. This new company, Software Operating
Company, is now the operating entity for the IMG business. In October 1999,
a new stock option plan was established for Software Operating Company, and
employees of the IMG business are eligible to participate in the plan.

During the quarters ended October 1, 1999 and December 31, 1999, Seagate
Software sold 18,523,502 and 9,000,000 shares, respectively, of VERITAS
common stock, adjusted for 3 for 2 stock splits on November 22, 1999 and
March 6, 2000, for proceeds of $397 million and $437 million, respectively,
net of underwriting discounts and commissions. Seagate Software acquired
such shares in connection with the contribution of its Network & Storage
Management Group business to VERITAS in May 1999. The sale of shares of
VERITAS common stock by Seagate Software in the quarters ended October 1,
1999 and December 31, 1999 resulted in pre-tax gains of $193 million and
$344 million, respectively. As of March 31, 2000, Seagate Software held
approximately 33% of the outstanding common stock of VERITAS. The Company
accounts for its investment in VERITAS under the equity method and records
its equity interest in VERITAS' net income (loss) on a one-quarter lag.


TOBACCO LITIGATION: Financial Expert Said Industry Is Worth $157 Bil
--------------------------------------------------------------------
The nation's five biggest cigarette makers are worth $157 billion
domestically and have a ''strikingly rosy'' future, a financial expert
testified Tuesday for smokers seeking punitive damages from the tobacco
industry.

George Mundstock, a professor of finance at the University of Miami law
school, said the tobacco companies could raise that amount in six months by
Wall Street borrowing or selling themselves.

The dollar figure is key testimony for a jury considering how much to award
300,000 to 500,000 sick Florida smokers to punish the industry for decades
of misconduct.

The jury in the case the nation's first class-action lawsuit by smokers to
go to trial previously ruled that the industry makes a dangerous product.

Mundstock estimated the worth of Philip Morris' domestic and foreign
cigarette business at $118 billion. But he agreed when company attorney
Brad Lerman said, ''They don't have their hands on that cash today.''

Lerman said that amount isn't something the company could pay in 30 days.
The industry fears a crippling award even though Florida law does not allow
a punitive damages verdict to put a company out of business.

During the punitive damages phase, the cigarette companies lost a fight to
keep the jury from considering their borrowing power, and the smokers'
attorney has stressed the industry's ability to raise prices.

Wholesale cigarette prices are up 58 percent and sales are down 9 percent
since the tobacco companies settled lawsuits with states in 1998 for $254
billion, Mundstock testified. The settlements are called the MSA, for
Master Settlement Agreement. ''In the post-MSA world, things are really
looking strikingly rosy,'' he said of tobacco finances.

Mundstock offered values for the domestic tobacco companies, based in part
on their share of the domestic market. He concluded that Philip Morris,
with 49 percent of the market, is worth $80 billion; R.J. Reynolds Tobacco
Co., with 24 percent, $36 billion; Brown & Williamson Tobacco Corp., with
14 percent, $22 billion; Lorillard Tobacco Co., with 11 percent, $17
billion; and Liggett Group Inc., with 1 percent, $1.8 billion. (AP Online,
June 6, 2000)


TOBACCO LITIGATION: Philip Morris Will Drop Magazine Ads Read By Youths
-----------------------------------------------------------------------
Bowing to legal pressure, tobacco giant Philip Morris Cos. said it will
pull advertising from about 40 magazines with large youth readership,
including such major showcases for its brands as Rolling Stone and Sports
Illustrated.

The move by the top U.S. cigarette maker is intended to blunt fallout from
a probe by state attorneys general who are investigating whether tobacco
firms have violated a 1998 settlement agreement by pitching their brands to
youths. The companies agreed in the $ 246-billion settlement to eliminate
tobacco billboards, but have since significantly stepped up their print
advertising.

Michael Szymanczyk, president of Philip Morris USA, said in a letter to
Washington Atty. Gen. Christine Gregoire, a leader of the states, that the
firm will no longer advertise in any publication with a readership that is
at least 15% younger than 18, the legal age to smoke, or that has more than
2 million readers younger than 18.

The move was applauded by Gregoire and by Matt Myers, head of the National
Center for Tobacco-Free Kids, who said it appeared to be a "positive step
forward that other companies should follow."

But Philip Morris dominates the industry with a 51% market share, and any
general reductions in advertising will tend to lock in its commanding
position. No. 2 tobacco company R.J. Reynolds Tobacco Co., which in recent
years has slipped ever further behind Philip Morris, quickly announced that
it will not follow the bigger firm's lead.

In a prepared statement, RJR said reductions in cigarette advertising will
not affect youth smoking, "but will absolutely have enormous impact on our
ability to communicate with and compete for adult smokers."

The firm, which has ceased advertising in certain youth-oriented
publications, said the settlement agreement permits advertising as long it
does not "directly or indirectly target youth."

Announcement of the probe by the attorneys general came at a particularly
bad time for the industry, which is battling to avert a potentially
crushing punitive-damages award in the landmark Engle class-action case in
Florida.

In the trial's punitive-damages phase, which began last month, the
companies are trying to convince jurors that they have reformed their
marketing practices, and that therefore punitive damages are not warranted.
Szymanczyk is expected to testify in the case within the next few days, and
may be questioned about the attorneys general probe. (Los Angeles Times,
June 6, 2000)


TUBE TURNS: Insurance Carrier Defends Coker Plant Explosion Suit
----------------------------------------------------------------
Sypris Solutions Inc. discloses in its SEC report that Tube Turns
Technologies Inc., a wholly owned subsidiary of the company, is a
co-defendant in two separate lawsuits filed in 1993 and 1994, one pending
in federal court and one pending in state district court in Louisiana,
arising out of an explosion in a coker plant owned by Exxon Corporation
located in Baton Rouge, Louisiana. The suits are being defended for Tube
Turns by its insurance carrier, and the Company intends to vigorously
defend its case. The Company believes that a settlement or related judgment
would not result in a material loss to Tube Turns or the Company.

According to the complaints, Tube Turns is the alleged manufacturer of a
carbon steel pipe elbow which failed, causing the explosion which destroyed
the coker plant and caused unspecified damages to surrounding property
owners. One of the actions was brought by Exxon and claims damages for
destruction of the plant, which Exxon estimates exceed one hundred million
dollars. In this action, Tube Turns is a co-defendant with the fabricator
who built the pipe line in which the elbow was incorporated and with the
general contractor for the plant. The second action is a class action suit
filed on behalf of the residents living around the plant and claims damages
in an amount as yet undetermined. Exxon is a co-defendant with Tube Turns,
the contractor and the fabricator in this action. In both actions, Tube
Turns maintains that the carbon steel pipe elbow at issue was appropriately
marked as carbon steel and was improperly installed, without the knowledge
of Tube Turns, by the fabricator and general contractor in a part of the
plant requiring a chromium steel elbow.


WATER CONTAMINATION: Scramble under Way to Launch Actions
---------------------------------------------------------
The tragic water contamination in Walkerton, Ontario last month will give
rise to a considerable amount of civil litigation -some of it individual
statements of claim, but very probably a class action or two as well.

The Lawyers Weekly asked Kirk Baert, of the Toronto law firm McGowan and
Associates, which specializes in class action cases, about the factors that
determine whether a case is pursued individually or as a class proceeding.

"When you want to bring a class action you just issue a statement of claim
in the normal way, pursuant to the Class Proceedings Act,"Baert said. "Then
you have to bring a motion within 90 days for certification, which requires
a five-part test. Until you're certified, it's only a tentative class
proceeding. You have to show common facts, or common issues of law, and
that a class proceeding would be the preferable way to resolve them."

Baert disagreed that "the race was on"to pick up some of the legal business
that Walkerton will generate. "It doesn't matter who's first and who's
last,"Baert said. "That has nothing to do with the test. If you have four
or five different cases that have all been started as class actions, it's
going to be up to the judge who hears those motions to decide how to deal
with a multiplicity of lawsuits. For example, they may have to be
consolidated into one case, or some of them may be stayed, or a combination
of the two."

Baert said he thought that the Walkerton cases would ultimately be
consolidated under the control of one judge. "You only need one [individual
plaintiff] to start a class action, but you have to go through this
screening process called certification. It's a five-part test that turns a
regular action or an intended class proceeding into a formal class
proceeding."

In the Walkerton situation, Baert said that a case in which the family
breadwinner has died is going to be worth pursuing individually, because
there will likely be a lot of money at stake.

Class action, on the other hand, "was intended for cases that are either
too small to pursue individually, or the amount that it would cost to
pursue it individually would be so great that it's necessary to spread it
around among class members." Thus, if a number of people have just fallen
ill and missed a few days of work, they would likely be better served by
consolidating their cases into a class action. "It's not worth it to sue
someone for $5,000 in Ontario. No reputable lawyer would do it."

Baert said he'd attended a recent conference at which a judge commented
that a lot of people start class actions without really knowing what
they're doing. "It's not an area for dabblers,"Baert said. "People think
'Oh, I'll just start this, I'll get my name in the paper,'and then a week
later they don't know what they're supposed to do next. They think...the
defendant is going to call them up and say 'Who do I make the cheque out
to?'That is not what happens. The defendant is going to fight to the
death."

London lawyer Scott Ritchie said his firm, Siskind Cromarty, was invited to
Walkerton by a local lawyer who knew the firm had some class action
experience. Regarding the need for speed, "if I'm going to take an action
on, I'm not going to push handcuffs on myself by starting my investigation
late,"said Ritchie. "Evidence deteriorates very rapidly, for a lot of
different reasons. Time is one of those reasons. People talk things over in
the presence of other people, and all of a sudden, that freshness, that
spontaneity disappears, and it becomes packaged. You also have limitation
periods in this case that are pretty darned short." (The Lawyers Weekly,
June 9, 2000)


WATER CONTAMINATION: Seattle Atty. Warns of E. Coli Risk to Americans
---------------------------------------------------------------------
Americans relying on rural and small municipal water systems are just as
likely to become victims of the deadly E. coli bacteria as are Canadians
like those in Walkerton, Ontario, says Seattle attorney William Marler of
Marler Clark, who represents victims of outbreaks of food and water-borne
illnesses.

"Canadian officials are embarrassed that 11 people have been killed and
hundreds injured in Walkerton, Ontario from drinking municipal water
carrying animal manure laced with E coli," Marler said. "American health,
environmental and water officials should be just as embarrassed given the
record. People in both countries have an absolute right to safe, clean
drinking water and not all are getting it. Why our public officials cannot
learn from history shocks me," continued Mr. Marler.

Selected History of E. coli Contamination in Public Drinking Water:

1999   Washington County Fair (New York) Outbreak - 781 people sickened, 2
        deaths and 71 hospitalized. Source was contaminated, untreated well

        water.

1998   Wyoming Outbreak - 157 people sickened. Source was contaminated,
        untreated groundwater.

1998   Illinois Outbreak - 3 people sickened. Source was contaminated,
        untreated groundwater.

1997   Washington State Outbreak - 4 people sickened. Source was
        contaminated water caused by treatment deficiency.

1995   Minnesota Outbreak - 33 people sickened at a summer camp. Source
        was attributed to flooding from heavy rains and to an improperly
        constructed spring.

1990   Cabool, Missouri Outbreak - 243 people sickened, 4 deaths and 2
        developed hemolytic uremic syndrome. Source was contaminated,
        unchlorinated municipal water supply.

                  What are the symptoms of E. coli O157: H7?

After someone ingests a sufficient quantity of E. coli O157: H7, the
bacteria travels through the stomach and small intestine, and then attaches
itself to the inside surface of the large intestine and causes inflammation
of the intestinal wall. This inflammatory reaction is caused by toxins
secreted by the bacteria, and is believed to be the cause of hemorrhagic
colitis.

Hemorrhagic colitis is characterized by the sudden onset of abdominal pain
and severe cramps, followed within 24 hours by diarrhea. As the disease
progresses the diarrhea becomes watery and then grossly bloody -- bloody to
naked eye. Vomiting can also occur, but there is usually no fever. The
incubation period for the disease (i.e., the period from ingestion of the
bacteria to the start of symptoms) is typically 3 to 9 days, although
shorter and longer periods are not that unusual. An incubation period of
less than 24 hours would be unusual, however.

Although most people recover from an E. coli O157: H7 infection, about
5-10% of infected individuals goes on to develop hemolytic uremic syndrome
("HUS"), a severe life-threatening complication. HUS was first described in
1955, and is now recognized as the most common cause of kidney failure in
childhood. E. coli O157: H7 is responsible for over 90% of the cases of HUS
that develop in North America. In fact, some researchers now believe that
E. coli O157: H7 is the only cause of HUS in children.

HUS is believed to develop when the E. coli O157: H7 enters into the
circulation through the inflamed bowel wall, releasing a specific chemical
known as shiga-like toxin (SLT). SLT, and probably other chemical
mediators, attach to receptors on the inside surface of blood vessel cells
(endothelial cells). Some organs appear more susceptible than other to the
damage caused by these toxins, possibly due to the presence of increased
numbers of toxin-receptors. These organs include the kidney, pancreas and
brain.

There is no known therapy to halt the progression of HUS. The active stage
of the disease usually lasts one to two weeks, during which a variety of
complications are possible. HUS is a frightening illness that even in the
best American medical facilities has a mortality rate of about 5%. By
comparison, the mortality rate in the developing world is much higher.
About 50% of patients require dialysis due to kidney failure, 25% develop
pancreatitis, 25% experience seizures, and 5% suffer from diabetes
mellitus. The majority of HUS patients requires transfusion of blood
products and develops complications common to the critically ill. The
illness is a living nightmare for the patients and families, and leaves a
painful memory that lingers long after the acute illness had passed.

Among survivors of HUS, about five percent will eventually develop end
stage kidney disease, with the resultant need for dialysis or
transplantation, and another five to ten percent experience neurological or
pancreatic problems which significantly impair quality of life. Since the
longest available follow-up studies of HUS are about twenty (20) years, an
accurate lifetime prognosis is not available, and as such, medical
follow-up is indicated for even the mildest affected cases.

Contact: Marler Clark Bill Marler, 206/346-1888 www.marlerclark.com


* 35% of People Surveyed Think it's OK to Inflate Insurance Claims
------------------------------------------------------------------
A significant number of Americans surveyed -- 35 percent-believe that it
all right to exaggerate insurance claims under certain circumstances,
according to a recent Insurance Research Council (IRC) survey. These
respondents agreed that it is acceptable to increase the amount of an
insurance claim by a small amount to make up for a deductible. Nearly one
in four respondents (24 percent) said that it is acceptable to increase the
amount of a claim to make up for insurance premiums paid when no claims
were made.

The IRC has been tracking public tolerance for claims padding for many
years. The 2000 results show fewer respondents accept this type of
insurance fraud than did in 1997, when the acceptance level surged.
However, the percentage of Americans surveyed believing that it is all
right to exaggerate a claim to make up for the deductible is higher in 2000
than in any year before 1997.

"Insurers have been making significant efforts to fight fraud," according
to Elizabeth A. Sprinkel, senior vice president who heads the IRC. "While
we have seen some improvement in recent years, it is still disappointing
that so many Americans still see this type of insurance fraud as
acceptable."

The results contained in IRC's recently released report, Public Attitude
Monitor 2000, Issue 1, were based on a survey conducted by Roper Starch
Worldwide. The survey consisted of telephone interviews with 1,000 men and
women 18 years old and older conducted in February 2000. Survey
participants were selected to be representative of the population of the
continental U.S. The survey also addressed attitudes towards class action
lawsuits and third party bad faith lawsuits.

For more detailed information on the study's methodology and findings,
contact Elizabeth Sprinkel by phone at (610) 644-2212, ext. 7568; by fax at
(610) 640-5388; or by e-mail at irc@cpcuiia.org. Or visit IRC's Web site at
www.ircweb.org . Copies of the study are available at $10 each in the U.S.
($20 elsewhere) postpaid from the Insurance Research Council, 718
Providence Rd., Malvern, Pa. 19355-0725. Phone: (610) 644-2212, ext. 7569.
Fax: (610) 640-5388.

The Insurance Research Council is a division of the American Institute for
CPCU and the Insurance Institute of America. The Institutes are
independent, nonprofit organizations dedicated to providing educational
programs, professional certification, and research for the property and
liability insurance business. The IRC provides timely and reliable research
to all parties involved in public policy issues affecting insurance
companies and their customers. The IRC does not lobby or advocate
legislative positions. It is supported by leading property and liability
organizations. (Source: Insurance Research Council)


* Most Americans Surveyed Favor Reform of the Class Action System
-----------------------------------------------------------------
The majority of respondents to a recent Insurance Research Council (IRC)
survey of U.S. households support changes in the way that class action
lawsuits are handled. Seventy percent of survey respondents agreed that
significant reform of the class action lawsuit system is needed. Class
action lawsuits are legal actions filed by a few individuals on behalf of a
large number of people who together attempt to obtain a legal remedy for
some alleged wrong. Two common examples of class actions are consumer class
actions (in which the plaintiffs contend that a business has engaged in
fraudulent business practices) and mass tort class actions (in which the
plaintiffs allege that the defendant has caused them personal injury or
property damage).

Forty-four percent of respondents in IRC's recent survey said that the
number of class action lawsuits today is too high. Only six percent said
that the number is too low. Similarly, 41 percent of respondents said that
the average size of awards in class action lawsuits is too large, while
only 10 percent said that awards are too low.

The survey revealed an interesting dichotomy in the public's views of class
action lawsuits. Most respondents (76 percent) agreed that class action
lawsuits give average people the ability to act against big corporations
with large legal resources. Interestingly, however, nearly as many
respondents (73 percent) believe that class action lawsuits generate a lot
of money in legal fees but produce little monetary benefit for the people
suing. "Americans have mixed views about class action lawsuits," according
to Elizabeth A. Sprinkel, senior vice president who heads the IRC. "While
they show concern about individuals' ability to seek compensation from
large organizations, they worry about the number and size of awards of
class action lawsuits as well as the share of settlements that attorneys
claim."

The results contained in IRC's recently released report, Public Attitude
Monitor 2000, Issue 1, were based on a survey conducted by Roper Starch
Worldwide. The survey consisted of telephone interviews with 1,000 men and
women 18 years old and older conducted in February 2000. Survey
participants were selected to be representative of the population of the
continental U.S. The survey also addressed attitudes towards third party
bad faith lawsuits and insurance fraud. (Source: Insurance Research
Council)


                              *********


S U B S C R I P T I O N  I N F O R M A T I O N

Class Action Reporter is a daily newsletter, co-published by Bankruptcy
Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc.,
Washington, DC. Theresa Cheuk, Managing Editor.

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

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