/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/000616.MBX C L A S S A C T I O N R E P O R T E R Friday, June 16, 2000, Vol. 2, No. 117 Headlines 21ST CENTURY: Bailey & Peterson Files Lawsuit in NY over IPO ALPHARMA INC: Acquired Cox Investigated By UK OFT for Medicine Pricing ALPHARMA INC: Clears of Fen-Phen Suits; Bacitracin zinc Banned in EU AUTO INSURANCE: Dismissal of Single Policy Stacking Premium Case Upheld BAKERSFIELD POLICE: Gay Man Sues over Sting Operations in Public Parks BRUGNARA PROPERTIES: To Pay for Biohazardous Waste in City Atty.'s Case CITRIX SYSTEMS: Bernstein Liebhard Files Securities Lawsuit in Florida CITRIX SYSTEMS: Burt & Pucillo Announces Securities Suit in Florida CITRIX SYSTEMS: Wolf Haldenstein Commences Securities Suit in Florida COLUMBIA LABORATORIES: Abbey, Gardy Files Securities Lawsuit in Florida DEPT OF CHILDREN: Reform of Florida Foster Care System Sought FEDERAL-MOGUL CORP: Milberg Weiss Announces Securities Suit in Michigan FLOORING AMERICA: Berman, DeValerio Files Securities Suit in Georgia FLOORING AMERICA: Wolf Haldenstein Files Securities Fraud Suit in GA IMPERIAL CREDIT: Stanbury Fishelman Announcess Securities Suit to Go on LUFKIN INDUSTRIES: 5th Cir in LA OKs TX's Cert. Of Employee Racism Case MICROSOFT CORP: Oregon Consumer Antitrust Suit over Windows 98 Tossed NATIONAL COLEGIATE: Settlement Payout for Earnings Restriction Argued OPERN MARKET: Bernard M. Gross Files Securities Suit in Masachusetts OPEN MARKET: E-Business Solutions Provider Announces Securities Suit OPEN MARKET: Milberg Weiss Announces Securities Suit in Massachusetts OPEN MARKET: Securities Suit Filed in MA, Announces Cauley & Geller OPEN MARKET: Schiffrin & Barroway Files Securities Suit in Massachutts RAYTECH CORP: Asbestos Claims Included in Ch 11 Plan of Reorganization SAVANNAH RIVER: Black Workers Ask Judge to Reconsider Class Status TOBACCO LITIGATION: B&W CEO Acknowledges Smoking's Dangers UNICAPITAL CORPORATION: Cauley & Geller Files Securities Suit in FL * House OKs E-Signature by 426-4 Vote * Senate Panel to Consider Measure Changing Class Action Venue * Texans for Lawsuit Reform Working on "Offer of Settlement" ********* 21ST CENTURY: Bailey & Peterson Files Lawsuit in NY over IPO ------------------------------------------------------------ A class action has been commenced in the United States District Court for the Southern District of New York on behalf of all purchasers of 21st Century Holding Company (Nasdaq:TCHC) at the company's initial public offering on November 5, 1998, including those persons whose purchases can be traced to the initial public offering. The Complaint charges 21st Century Holding Company, and certain of its officers and directors, with violations of federal securities laws. Specifically, plaintiffs have brought claims under sections 11 and 15 of the Securities Exchange Act of 1933. Plaintiffs claim that, in the Registration Statement for the initial public offering, defendants issued materially false and misleading statements and omitted other material facts necessary not to make the remaining representations false and misleading regarding the financial condition and accounting policies and practices of 21st Century Holding Company, which artificially inflated the price of 21st Century Holding Company's securities. Contact: Bailey & Peterson, P.C., Denver James S. Bailey, Jr., 303/837-1660 bailey@b-p-law.com Randall M. Livingston, 303/837-1660 livingston@b-p-law.com ALPHARMA INC: Acquired Cox Investigated By UK OFT for Medicine Pricing ---------------------------------------------------------------------- The United Kingdom Office of Fair Trading ("OFT") is conducting an investigation into the pricing and supply of medicine by the generic industry in the United Kingdom. As part of this investigation, Arthur H. Cox & Co., a U.K. and English company acquired by Alpharma, received in February 2000 a request for information from the OFT. The request states that the OFT is particularly concerned about the sustained rise in the list price of a range of generic pharmaceuticals over the course of 1999 and is considering this matter under competition legislation. In December 1999 Cox received a request for information from the Oxford Economic Research Association ("OXERA"), an economic research company which has been commissioned by the United Kingdom Department of Health to carry out a study of the generic drug industry. The requests related to certain specified drugs and the Company has responded to both requests for information. The Company is unable to predict what impact the OFT investigation or OXERA study will have on the operations of Cox and the pricing of generic pharmaceuticals in the United Kingdom. ALPHARMA INC: Clears of Fen-Phen Suits; Bacitracin zinc Banned in EU -------------------------------------------------------------------- The Company was originally named as one of multiple defendants in 62 lawsuits alleging personal injuries and six class actions for medical monitoring resulting from the use of phentermine distributed by the Company and subsequently prescribed for use in combination with fenflurameine or dexfenfluramine manufactured and sold by other defendants (Fen- Phen Lawsuits). None of the plaintiffs have specified an amount of monetary damage. Because the Company has not manufactured, but only distributed phentermine, it has demanded defense and indemnification from the manufacturers and the insurance carriers of manufacturers from whom it has purchased the phentermine. The Company has received a partial reimbursement of litigation costs from one of the manufacturer's carriers. The Company has been dismissed in all the class actions and the plaintiffs in 52 of the lawsuits have agreed to dismiss the Company without prejudice. Based on an evaluation of the circumstances as now known, including but not solely limited to, 1) the fact that the Company did not manufacture phentermine, 2) it had a diminimus share of the phentermine market and 3) the presumption of some insurance coverage, the Company does not expect that the ultimate resolution of the current Fen-Phen lawsuits will have a material impact on the financial position or results of operations of the Company. Bacitracin zinc, one of the Company's feed additive products has been banned from sale in the European Union (the "EU") effective July 1, 1999. While initial efforts to reverse the ban in court were unsuccessful, the Company is continuing to pursue initiatives based on scientific evidence available for the product, to limit the effects of this ban. In addition, certain other countries, not presently material to the Company's sales of bacitracin zinc have either followed the EU's ban or are considering such action. The existing governmental actions negatively impact the Company's business but are not material to the Company's financial position or results of operations. However, an expansion of the ban to additional countries where the Company has material sales of bacitracin based products could be material to the financial condition and results of operations of the Company. AUTO INSURANCE: Dismissal of Single Policy Stacking Premium Case Upheld ----------------------------------------------------------------------- A three-judge panel of the Superior Court has upheld a Lancaster County trial court judge's decision to dismiss a class action lawsuit against several insurers accusing them of unlawfully charging single automobile policyholders with premiums for stacked coverage. The court said that the language of the law shows the Legislature did not intend to give certain policyholders the right to waive stacking benefits. "Had the Legislature intended all named insureds to waive stacking, it would have utilized different language ...," Judge Michael T. Joyce wrote for the unanimous panel in In Re: Insurance Stacking Litigation. "The fact that it did not do so thus suggests that the Legislature only intended to allow named insureds who have more than one vehicle insured under a policy to waive stacking."Commonly, "stacking" refers to a cumulation of available coverages from more than one source designed to create a greater pool of recoverable benefits. The Insurance Commissioner has broken stacking down into two types: intrapolicy and interpolicy stacking. The Motor Vehicle Financial Responsibility Law does not differentiate between the two. Under intrapolicy stacking, an insured could use the uninsured motorist and underinsured motorist coverage available on other vehicles insured under his or her policy if the coverage on the vehicle in which the insured was injured is drained. Under interpolicy stacking, a claimant could receive benefits from more than one policy. The case was against Donegal Mutual Insurance Co., United States Fidelity and Guaranty Co., Nationwide Insurance, Kemper National Insurance Co. and Liberty Mutual Insurance Co. The complaint asserted causes of action for negligence, breach of fiduciary duty, bad faith, fraud, punitive damages, unjust enrichment and violations of MVFRL. In the class action, each of the plaintiffs had purchased an auto insurance policy that provided UM/UIM coverage for only one vehicle. Each motorist did not return a form waiving the stacking option, which, under MVFRL, meant that they had chosen the stacking option.Those who sent their waiver forms back had "non-stacking" policies which included an "other insurance" clause such as: "In any event, if more than one policy applies, total limits applicable will be considered not to exceed the highest limits amounts of any one of them." The plaintiffs said that interpolicy stacking did not in fact exist and therefore charging a premium for stacking in a single-vehicle policy, under which intrapolicy stacking was necessarily not available, was unlawful. The plaintiffs also said that avoiding the non-stacking clause creates "gap" insurance, which the Superior Court had previously determined to be unlawful. The insurance companies all filed preliminary objections in the case, asserting that the matter should be heard by the insurance commissioner because the plaintiffs "were essentially challenging the rates charged by the insurers." The trial court denied some preliminary objections but agreed with the insurers that the insurance commissioner had primary jurisdiction. The trial court stayed the litigation and transferred the case to the commissioner to determine whether the premiums wrongfully included the charge for stacking. The commissioner concluded the premium charge for stacking was lawful under Section 1738 of MVFRL. The trial court subsequently granted the insurers' preliminary objections and dismissed the case. The plaintiffs appealed. The middle appeals court first noted that the trial court did not err by "giving deference" to the commissioner's interpretation of Section 1738. "The Legislature has specifically reserved questions of unfair insurance practices and automobile insurance rates to the insurance commissioner," Joyce wrote. "Moreover, it is clear from the trial judge's opinion that he viewed the instant case as a challenge to the insurers' practices and premiums, in light of Section 1738, rather than a pure question of statutory interpretation." The court said the issue fell within the commissioner's area of "peculiar expertise." The court next turned its attention to the proper analysis of Section 1738. Subsection (a) of the act provides for the apparently mandatory stacking of uninsured or underinsured benefits whenever more than one vehicle is insured under one or more policies. Under subsection (b), however, any named insured may waive the stacking benefit. "While the statute is clear up to this point, ambiguity arises in attempting to construe subsections (a) and (b) with the remaining provisions," the court said. "Under subsection (c), the legislature has specifically required that named insureds who purchase uninsured or underinsured benefits for more than one vehicle under a policy must be provided with the opportunity to waive stacking." The court said the language in subsection (c) makes it clear that the Legislature intended that only those with more than one vehicle under a single policy be entitled to waive stacking coverage. "If we were to construe Section 1738 to require that notice be given to all named insureds, we would necessarily have to disregard the limiting language contained in subsection (c), a result that violates our rules of statutory construction," Joyce wrote. Having found that Section 1738 does not require insurers to give single auto policyholders the opportunity to waive stacking, the court concluded the trial court was correct to sustain the insurers' preliminary objections. "All of appellants' causes of action are premised upon their belief that [the insurers'] conduct violates Section 1738 by charging appellants a premium for an illusory benefit and in failing to inform them of their opportunity to waive stacking." But Joyce said he agreed with the insurance commissioner that Section 1738 does not preclude an insurer from charging a single policy insured the stacked rate. "By confining the class of those who can waive stacking to named insureds who purchase coverage for more than one vehicle under a single policy," the Legislature has expressed a clear preference in favor of stacking, the court said. Citing the legislative history of the act, Joyce concluded, "the Legislature contemplated that those individuals who purchase coverage for only one car will pay increased premiums to help subsidize the higher costs associated with Pennsylvania's virtually mandatory stacking policy." The court also noted that the benefit of interpolicy stacking is not "illusory," as the plaintiffs alleged. "There are instances, such as when a person is injured while occupying a vehicle that is not his own, in which he may be entitled to recover uninsured or underinsured benefits under the host vehicle's policy as well as his own policy," Joyce wrote. The Superior Court dismissed the plaintiffs' remaining claims, upholding the trial court's dismissal of the case.Lancaster attorney Joseph F. Roda, who filed the class action, said he was "disappointed" with the decision and will petition the Superior Court for a rehearing en banc. If denied, he said he would petition the state Supreme Court to review the case. (Copies of the 18-page opinion in In Re: Insurance Stacking Litigation, PICS NO. 00-1083, are available from The Legal Intelligencer.) (The Legal Intelligencer, June 14, 2000) BAKERSFIELD POLICE: Gay Man Sues over Sting Operations in Public Parks ---------------------------------------------------------------------- Attorneys Geoffrey Kors and Bryan Miller, of San Francisco's Wotman Kors & Cloutier, LLP, announced on June 15 the filing of a class action federal lawsuit against the Bakersfield Police Department and others alleging that the Constitutional Rights of gay and bisexual men were violated during sting operations in public parks. The suit was filed on behalf of Roger Hartley, a Bakersfield resident, and all men who have been or will be targeted for arrest and/or arrested because they are perceived to be interested in intimate association with other men. According to the allegations in the complaint, Hartley was approached by an undercover police officer who initiated a conversation with Hartley. The police officer then told Hartley that he liked to have sex in public parks and public restrooms. According to the officer's own report, the officer began the conversation and brought up the subject of sex. When Hartley walked away from the Police Officer and went to the restroom to use the facilities, the officer followed him into the restroom and arrested him, charging him for soliciting a lewd act in public even though no such crime occurred. "This entire sting operation is unconstitutional and illegal," stated Kors. A government entity cannot select one group of individuals -- in this case gay and bisexual men -- and target them for arrest," Kors explained. "By engaging in this type of conduct, Bakersfield is illegally and unconstitutionally discouraging gay and bisexual men from meeting one another in public parks in the City," Kors said. "It is no more illegal for a gay man, while in a park, to indicate to another man that he wants to have sex than it is for a heterosexual man, while in a bar or at the beach, to ask a woman to have sex," Kors noted. "To target one group of individuals based on their sexual orientation or gender of their preferred sexual partner is discriminatory and blatantly unconstitutional," Kors said. "A review of the police reports for arrests of this nature occurring on or near the same day as Hartley was arrested demonstrates that it was the police, not the individuals, who were doing the soliciting," noted Miller. "To be a crime, the individual must solicit the sexual act to occur in a public place in the presence of someone the individual believes would be offended," Miller explained. "When the police officer, as is the case here, initiates the encounter and states that he wants to have sex in public, there is no reason for the individual to believe anyone who is present would be offended," Miller stated. "Accordingly, even if the individual agrees to have sex -- something Hartley never even agreed to -- no crime is committed since the officer indicated he was interested in having sex," he concluded. "It is truly outrageous that as we enter the 21st Century, Police are still targeting gay men for arrest and falsely arresting them in an apparent attempt to drive gay men in Bakersfield back into the closet," Kors said. "We are asking the Court not only to compensate the individuals subjected to this unconstitutional treatment, but also to issue an injunction prohibiting the Police from engaging in this conduct in the future," Kors added. "We hope that lawsuits such as this will end this practice throughout the State," Kors concluded. Contact: Geoffrey Kors of Wotman Kors & Cloutier, LLP, 415-647-2200 BRUGNARA PROPERTIES: To Pay for Biohazardous Waste in City Atty.'s Case ----------------------------------------------------------------------- A real estate mogul has been ordered to pay more than $1 million in penalties for illegally disposing of biohazardous waste in a case brought by the San Francisco city attorney's office. In City and County of San Francisco v. Brugnara Properties III, 300-708, Superior Court Judge William Cahill ordered property owner Luke Brugnara to pay penalties stemming from more than 100 violations of state and city codes at the Medico-Dental Building, 490 Post St. According to Thomas Lakritz, the deputy city attorney who led the case, Brugnara's violations posed a serious risk to janitors and trash collectors who handled the waste which contained blood-soaked swabs and syringes. Brugnara was ordered to pay $1,124,200 in civil penalties and for a contempt- of-court citation for failing to adhere to a preliminary injunction issued in February 1999. The city sued Brugnara in January 1999, responding to tenants who complained the building's waste disposal methods failed to meet state and city regulations. In addition to Lakritz, City Attorney Louise Renne and Deputy City Attorney, Rose-Ellen Heinz assisted in the case. A. Nick Shamiyeh, a solo practitioner in Walnut Creek, represented Brugnara. San Francisco v. Brugnara (The Recorder, June 15, 2000) CITRIX SYSTEMS: Bernstein Liebhard Files Securities Lawsuit in Florida ---------------------------------------------------------------------- A securities class action lawsuit was commenced on behalf of purchasers of the publicly-traded securities of Citrix Systems, Inc. (Nasdaq: CTXS), between October 20, 1999 and June 9, 2000, inclusive (the "Class Period"). A copy of the complaint is available from the Court. The case is pending in the United States District Court for the Southern District of Florida, Fort Lauderdale Division, located at 299 E. Broward Boulevard, Ft. Lauderdale, Florida, 33301. The case number is CV 00-6818. Named as defendants in the complaint are Citrix, Mark B. Templeton (President and Chief Executive Officer), John P. Cunningham (Chief Financial Officer), and Edward E. Iacobbucci (Chairman of the Board). The case has been assigned to Judge Lock. The complaint charges defendants with violations of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that the defendants issued materially false and misleading information concerning, among other things, the Company's financial and operating condition and the Company's prospects. For example, as alleged in the complaint, on January 19, 2000 defendants reported record operating results for the Company's fourth quarter and fiscal year 1999 and stated that customer demand for the Company's products, along with its business strategy, favorably position the Company as a leading provider of information technology in the new millennium. This statement was materially false and misleading because it did not disclose what the Company knew or recklessly disregarded, primarily that the Company's true financial status was deteriorating, and that its seemingly stellar growth was not likely to continue into 2000. On April 19, 2000, defendants reported record operating results for its first fiscal quarter of 2000, and stated that its results were fueled by the release of three new products, key acquisitions of companies in Asia which expanded its market, and the launching of an advertising campaign to raise its market visibility. In fact, the Company knew, or was reckless in disregarding that its market had shifted to a different type of program delivery and installation system than the Company was then offering, that its gross margins were declining, and that its sales in the Asian market were decreasing. When the Company announced, on June 12, 2000, that its first quarter 2000 financial results would be dramatically lower than the market had been led to believe, due to, among other things, poor overall sales attributable to a market shift towards an electronic delivery of programs and upgrades, and particularly poor sales in its Asian market, the price of Citrix common stock dropped by 48%. Plaintiff seeks to recover damages on behalf of all those who purchased or otherwise acquired Citrix securities during the Class Period. Contact: Mark Punzalan, Director of Shareholder Relations, Bernstein Liebhard & Lifshitz, LLP, 800-217-1522, 212-779-1414, or CTXS@bernlieb.com CITRIX SYSTEMS: Burt & Pucillo Announces Securities Suit in Florida ------------------------------------------------------------------- Pursuant to Section 21D(a)(3)(A)(i) of the Securities Exchange Act of 1934, on June 14, 2000, a class action lawsuit alleging violations of the federal securities laws was filed in the United States District Court for the Southern District of Florida against Citrix Systems Inc. (Nasdaq:CTXS), Mark Templeton, John P. Cunningham and Edward Iacobucci. The action is brought on behalf of a class of persons who purchased the common stock of Citrix Systems, Inc. during the period from October 20, 1999 through June 9, 2000 (the "Class Period"). The Complaint charges Citrix and the above-named officers and directors with violations of Sections 10(b) and 20(a) of the Security Exchange Act of 1934. The Complaint alleges that during the Class Period the Defendants failed to timely disclose deteriorating gross margins and slowing expansion of revenues. The Complaint further alleges that while revenues and gross margins were starting to deteriorate, the Defendants sold over $40 million of Citrix stock at or near the highest price at which said shares traded during the Class Period. The action was filed by the firm of Burt & Pucillo, LLP of West Palm Beach, Florida. Contact: Burt & Pucillo, LLP, West Palm Beach Michael J. Pucillo or Wendy H. Zoberman 561/835-9400 or 800/349-4612 or e-mail address: law@burt-pucillo.com or burtpucill@aol.com www.burtpucillo.com CITRIX SYSTEMS: Wolf Haldenstein Commences Securities Suit in Florida --------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP announces that a class action lawsuit has been commenced in the United States District Court for the Southern District of Florida on behalf of purchasers of the securities of Citrix Systems, Inc. ("Citrix" or the "Company") (NASDAQ: CTXS) between October 20, 1999 and June 9, 2000, inclusive (the "Class Period"). A copy of the complaint filed in this action is available from the Court, or can be viewed on the Wolf Haldenstein website at www.whafh.com. The complaint alleges that the Company and certain of its officers and directors violated the federal securities laws, namely, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements about the Company's financial condition and future growth potential. Specifically, the complaint alleges that on January 19, 2000, the Company reported record operating results and stated that customer demand for the Company's product was favorable, when in fact, the Company knew or recklessly disregarded the fact that the Company's true financial condition was deteriorating and that its seemingly stellar growth was not likely to continue into the year 2000. As a result of these false and misleading statements, the Company's stock traded at artificially inflated prices during the Class Period. On June 12, 2000, when the Company shocked the investment community and revealed that its first quarter financial results would be lower than the market had been led to believe, the price of the stock plummeted by nearly 50%. Contact: Wolf Haldenstein Adler Freeman & Herz LLP 800/575-0735 or our website at www.whafh.com. COLUMBIA LABORATORIES: Abbey, Gardy Files Securities Lawsuit in Florida ----------------------------------------------------------------------- A class action against Columbia Laboratories, Inc. (Amex: COB) and certain of its officers and directors has been commenced in the United States District Court for the Southern District of Florida on behalf of all persons who purchased shares of Columbia common stock between November 8, 1999 and June 9, 2000 inclusive (the "Class Period"). In brief, the Complaint charges that Columbia and certain of its officers and directors, violated the federal securities laws. The Complaint alleges that during the Class Period defendants made materially false and misleading statements regarding, among other things, the financial condition of Columbia. On June 12, 2000, defendants shocked the market by revealing that, contrary to the Company's misleading representations during the Class Period, Advantage-S was not a viable product for stopping the transmission of AIDS. In response, the price of Columbia stock lost over 50% of its value, dropping from nearly $13 per share on June 9, 2000, to $6 1/8 on June 12, 2000. Contact: Mark C. Gardy or Maria Criscitiello, mcriscitie@a-g-s.com, both of Abbey, Gardy & Squitieri, LLP, 800-889-3701 or 212-889-3700 DEPT OF CHILDREN: Reform of Florida Foster Care System Sought ------------------------------------------------------------- Florida children who have been languishing in the state's foster care system for extended periods of time may finally be placed in permanent homes, depending on the outcome of a class action lawsuit filed in West Palm Beach, naming Governor Jeb Bush, Department of Children and Families (DCF) Secretary Kathleen Kearney and 15 district administrators as co-defendants. A team of attorneys representing foster children from around the state has instigated the action to force the foster care system into compliance with state and federal law once and for all. Robert M. Montgomery and Theodore Babbitt are two of the West Palm Beach- based attorneys comprising the team of 22 attorneys that is taking the case on behalf of Florida's foster children. Other attorneys from around the state of Florida include Michael Barnes (Key West), Barbara Burch (West Palm Beach), Bill Chanfrau (Daytona Beach), Jerold Feuer (Miami), Karen A. Gievers (Tallahassee), Donald Hadsock (Bradenton), Michelle Hankey (West Palm Beach), Wayne Hogan (Jacksonville), Kristi Kassebaum (Miami), Robert G. Kerrigan (Pensacola), John B. Ostrow (Miami), Bernard P. Perlmutter (Miami), Carolyn Salisbury (Miami), Gregory A. Samms (Miami), Brenda B. Shapiro (Miami), Neil Spector (Tampa), Susan L. Stockham (Sarasota), Jim Walsh (West Palm Beach), John Walsh (West Palm Beach) and Dianne Weaver (Fort Lauderdale). "The Florida foster care system is a disaster," said children's advocate Karen Gievers. "The only people benefiting from the system right now are the bureaucrats and their contract providers. The abuse, neglect and financial exploitation of these children that is occurring is shocking and simply must not continue." More than 14,000 children, many of whom have been removed from their families by the state because of alleged parental abuse or neglect, are currently in Florida's foster care system. Federal law limits the length of time children can be held in "temporary" state custody to 12 months. According to Gievers, children in Florida are held in foster care much longer, with the average length of stay nearly three times longer than the legal limit. The result is a grossly overcrowded system and greatly increased risks of harm to the children being held. The text of the lawsuit contains a number of specific instances in which children have been abused and neglected by the very system that was intended to protect and nurture them. "I just don't understand how the people with the authority to end this madness can sleep at night," said Robert Montgomery. "It's this simple: if the system was being operated in the fashion that it was intended, innocent, helpless children would be in loving homes, and not left indefinitely in bureaucratic limbo." "The State is not doing its job, and thousands of children are suffering as a result of that inaction," said Theodore Babbitt. "This has been going on for years. We simply will not stand for it any longer." Gregory Samms added, "I have worked with Karen Gievers in the past on children's issues, and I believe this case will force changes in a system sadly unresponsive to children, particularly minorities, in foster care." The lawsuit asks the federal court to mandate immediate compliance with existing laws relating to care for foster children and also asks for the appointment of a child advocate or ombudsman to monitor compliance. No monetary damages are sought, just prompt reform of the system. "Florida's foster care system has been described as the worst in America," said Gievers. "Children cannot be properly and safely raised by bureaucratic committees. They need real families and good permanent homes to help them reach their full potential." FEDERAL-MOGUL CORP: Milberg Weiss Announces Securities Suit in Michigan ----------------------------------------------------------------------- The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a class action lawsuit was filed on June 14, 2000, on behalf of purchasers of the securities of Federal-Mogul Corp. (NYSE: FMO news) between October 22, 1998 and May 25, 2000, inclusive. A copy of the complaint filed in this action is available from the Court, or can be viewed on Milberg Weiss' website at: http://www.milberg.com/federalmogul/ The action, numbered 00-72682, is pending in the United States District Court for the Eastern District of Michigan, located at 231 W. Lafayette Blvd., Detroit, Michigan 48226, against defendants Federal-Mogul and Richard A. Snell (Chairman of the Board of Directors, Chief Executive Officer, President and Director). The Honorable Bernard A. Friedman is the Judge presiding over the case. The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between October 22, 1998, and May 25, 2000. For example, as alleged in the complaint, on October 22 ,1998, Federal-Mogul issued a press release announcing solid third quarter results and praised the Company's continued progress in its acquisitions. This statement was materially false and misleading because it did not disclose that the Company's rapid expansion was causing serious operational difficulties in that the numerous smaller companies acquired by Federal-Mogul were proving much more difficult to integrate into Federal-Mogul's ongoing concern. These acquisition integration problems were negatively impacting earnings margins and caused the Company to miss revenue expectations. After the close of the market on May 25, 2000, the Company announced that its second quarter 2000 and full-year 2000 financial results would be dramatically lower than the market had been led to believe. The next trading day, May 26, 2000, the price of Federal-Mogul common stock dropped by more than 20%. Contact: Milberg Weiss Bershad Hynes & Lerach LLP, New York Steven G. Schulman or Samuel H. Rudman (800) 320-5081 Email: Openmarketcase@milbergNY.com Website: http://www.milberg.com FLOORING AMERICA: Berman, DeValerio Files Securities Suit in Georgia --------------------------------------------------------------------Flooring America, Inc. (NYSE: FRA) was named as a defendant in a shareholder class action filed in the United States District Court for the Northern District of Georgia. The action, brought by Berman, DeValerio & Pease, LLP, www.bermanesq.com, seeks damages for violations of the federal securities laws on behalf of all investors who purchased FRA common stock between November 11, 1999 through and including May 22, 2000 (the "Class Period"). The lawsuit charges FRA and certain of its officers, with violations of the federal securities laws by issuing materially false and misleading financial statements. The Company, on May 22, 2000, revealed that it would be restating its previously reported financial results for the first two quarters of the fiscal year 2000. In total, losses for these two periods were understated by more than $7 million. After the Company's announcement, FRA shares fell to $2 9/16 per share from a high of $6 15/16 during the class period, as the market fully absorbed the impact of these disclosures. Contact: Julayne M. Lazar or Jeffrey C. Block, Esq. of Berman, DeValerio & Pease LLP, 800-516-9926, bdplaw@bermanesq.com FLOORING AMERICA: Wolf Haldenstein Files Securities Fraud Suit in GA --------------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP announces that a class action lawsuit has been commenced in the United States District Court for the Northern District of Georgia on behalf of all persons who purchased or otherwise acquired common stock issued by Flooring America, Inc. from November 11, 1999, through and including May 22, 2000 (the "Class Period"). A copy of the complaint may be read and/or printed from the Wolf Haldenstein web site at www.whafh.com. The complaint alleges that Flooring America and certain of its top officers violated the federal securities laws by issuing false and misleading statements (which were prepared in violation of Generally Accepted Accounting Principles) that caused Flooring America stock to trade at artificially high prices during the Class Period. On May 22, 2000, Flooring America announced a delay in the filing of its Annual Report on Form 10-K with the Securities and Exchange Commission for the year ended February 5, 2000, and further announced that the Company would restate its financial results for the first two quarters of the fiscal year 2000, as a result of the year-end audit process. When the results of these restatements were announced, Flooring America's common stock price, which closed as high as $6 15/16 during the Class Period, fell to $2 9/16. Plaintiffs seek to recover damages on behalf of all those who purchased Flooring America common stock during the Class Period. Contact: Wolf Haldenstein Adler Freeman & Herz LLP, New York Gregory M. Nespole, Esq, 800/575-0735 nespole@whafh.com Gnespole@aol.com classmember@whafh.com whafh@aol.com Michael Miske, 800/575-0735 classmember@whafh.com whafh@aol.com www.whafh.com IMPERIAL CREDIT: Stanbury Fishelman Announcess Securities Suit to Go on -----------------------------------------------------------------------Stanbury Fishelman Wisner & Adsit announced that plaintiff will continue efforts to recover damages on behalf of all purchasers of Imperial Credit Commercial Mortgage Investment Corporation's ("ICCMIC") (formerly, Nasdaq:ICMI) common stock during the period between Oct. 22, 1997 and Oct. 21, 1999 (the "Class Period"). On June 7, 2000, the United States District Court for the Central District of California denied Defendants' Rule 12(b)(6) Motion to Dismiss Plaintiff's Class Action Complaint alleging violations of the Securities Act of 1933. In denying Defendants' Motion to Dismiss and permitting Plaintiff to proceed against ICCMIC and certain of its directors, the Court said, "The Prospectus is a part of the Registration Statement and the Prospectus fails to describe that ICCMIC must pay for the Manager's operating expenses." ICCMIC filed a Registration Statement and Prospectus with the Securities and Exchange Commission on or about August 1, 1997. The complaint alleges that Prospectus contained false statements, including a variety of false statements related to the compensation paid to a management entity hired to operate the investment fund and undisclosed conflicts of interest. For example, the complaint alleges that misrepresentations about the costs associated with terminating the management entity have cost ICCMIC investors nearly 10% of the current fund value, which was the single greatest operating loss sustained by ICCMIC after its inception. Contact: Stanbury Fishelman Wisner & Adsit 310/278-1800 Bruce C. Fishelman, bcfishelman@stanfish.com Alec B. Wisner, abwisner@stanfish.com LUFKIN INDUSTRIES: 5th Cir in LA OKs TX's Cert. Of Employee Racism Case ----------------------------------------------------------------------- A class action complaint was filed in the United States District Court for the Eastern District of Texas on March 7, 1997 by an employee and a former employee which alleged race discrimination in employment. Certification hearings were conducted in Beaumont, Texas in February of 1998 and in Lufkin, Texas in August of 1998. The District Court in April of 1999 issued a decision that certified a class for this case which includes all persons of a certain minority employed by the Company from March 6, 1994 to the present. The Company appealed this class certification decision by the District Court to the 5th Circuit United States Courts of Appeals in New Orleans, Louisiana. This appeal was denied on June 23, 1999. The Company is defending this action vigorously. Furthermore, the Company believes that the facts and the law in this action support its position and is confident that it will prevail if this case is tried on the merits. MICROSOFT CORP: Oregon Consumer Antitrust Suit over Windows 98 Tossed --------------------------------------------------------------------- Microsoft Corp. persuaded a state judge to dismiss a consumer antitrust lawsuit over the Windows 98 operating system, a company spokesman said. Multnomah County Circuit Judge John Wittmayer's decision is the first to dismiss an antitrust suit against Microsoft in the United States since November, when a federal judge decided the world's largest software company monopolizes personal computer operating systems, the company said. Microsoft spokesman Jim Cullinan said the Oregon case is among 137 filed against the company in 34 states and the District of Columbia. Wittmayer's decision Tuesday was based on a U.S. Supreme Court ruling that denies consumers the right to bring an antitrust lawsuit unless they purchased a product directly from a company. The Windows operating system is generally bought by manufacturers and loaded on computers before they're sold to consumers. Consumers, however, have to agree to Microsoft's licensing terms before using the software. While Oregon and most states' laws mirror federal antitrust law, California and 15 others have modified their laws to allow indirect purchasers to bring antitrust claims, one legal expert said. "All the Oregon judge's decision should really mean is that there may not be a claim under Oregon law, but there may be a claim under the other 16 state laws," said San Francisco-based antitrust lawyer Mark LeHocky. Plaintiffs' attorney David Dean couldn't immediately be reached for comment. The lawsuit, filed by consumers Hafez Daraee and Brooks Cooper, sought class-action status on behalf of Oregon consumers who are end-user licensees of Windows 98. The suit alleged that Microsoft charged consumers too much for the operating system and "unlawfully wielded its monopoly power." It sought unspecified damages. Shares of Redmond, Wash.-based Microsoft rose $ 2.63 to $ 70.50 on the Nasdaq Stock Market. (Sun-Sentinel (Fort Lauderdale, FL), June 15, 2000) NATIONAL COLEGIATE: Settlement Payout for Earnings Restriction Argued --------------------------------------------------------------------- Only one person appeared in a Kansas City, Kan., federal court Tuesday to contest the proposed distribution of $36 million among about 1,700 college assistant coaches. The ruling will affect coaches whose earnings were restricted by a rule of the National Collegiate Athletic Association. The coaches won the money last year in the settlement of a class action anti-trust case that the NCAA had lost in a jury trial and had appealed to the 10th U.S. Circuit Court of Appeals in Denver. The settlement was for $54.5 million, but attorney fees and costs have taken about $18 million. The rule, limiting some assistant coaches' earnings to $12,000 during the school year and $4,000 in the summer, was in effect from 1991 to 1995 when U.S. District Judge Kathryn H. Vratil ruled it violated anti-trust laws. A lawyer representing Woodrow Wilson, an assistant men's basketball coach at the University of Wisconsin at Green Bay, objected to the formula that awarded coaches who made less that $7,900 a year under the rule an award equal to 100 percent of their actual salaries. Men's basketball coaches that made more than $7,900 while under the rule are a good example. The coaches are to receive 83 percent of the amount made by the lowest-paid coach the rule didn't affect at their particular school. The lawyer, Gary Weidner, asserted that the $7,900 break point - the amount varies from sport to sport - in effect unfairly created two unequal classes. He argued that coaches who made less than $7,900 in salary should be permitted to count non-cash compensation, like the use of a car, room and board or training table meals to push them over the $7,900 line. Weidner said Wilson's award would be reduced from $120,000 to $44,000 by the formula designed by the class action attorneys and their economist. About 25 other coaches sent in affidavits opposing or questioning the distribution plan. Dennis Cross, one of the class attorneys, said the differential was necessary because the figures showed that after the rule was lifted, the salaries of those making less than $7,900 went up very little while the salaries of those making more than $7,900 increased a lot more. For example, Cross said that after the rule was lifted, Wilson's salary went up to only $9,000 a year. Cross also told the judge that it was virtually impossible to get accurate information on non-salary compensation received by the coaches. Vratil took the distribution issue under advisement. (The Kansas City Star, June 14, 2000) OPEN MARKET: E-Business Solutions Provider Announces Securities Suit -------------------------------------------------------------------- Open Market, Inc. (Nasdaq: OMKT), a provider of integrated enterprise e-business solutions, announced on June 15 that a purported class action lawsuit has been filed naming the Company and certain of its current and former officers and directors as defendants alleging violations of certain securities laws. The complaints allege, among other matters, that the Company made false statements commencing in November 1999 regarding its current and future products and competitive position. The Company believes it has meritorious defenses to the lawsuits and intends to defend them vigorously. OPERN MARKET: Bernard M. Gross Files Securities Suit in Masachusetts -------------------------------------------------------------------- A class action lawsuit was filed on June 14, 2000, in the United States District Court for the District of Massachusetts, on behalf of all persons and entities who purchased or otherwise acquired the common stock of Open Market, Inc. (NASDAQ: OMKT), between November 8, 1999 and April 18, 2000, inclusive (the "Class Period") on an American Exchange. The Complaint charges Open Market and its senior officers with violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934. The Complaint alleges that defendants issued false and misleading statements about the Company's ability to deliver a new suite of products before the end of the year that would include less expensive of its software, with simpler tools for setting up electronic store fronts, and that this product line would reinforce the Company as a market leader. The false and misleading statements resulted in artificially inflated stock prices during the class period. Contact: Law Offices Bernard M. Gross, P.C. Susan Gross, Esq., 800/849-3120 or 215/561-3600 susang@bernardmgross.com tina@bernardmgross.com http://www.bernardmgross.com OPEN MARKET: Milberg Weiss Announces Securities Suit in Massachusetts --------------------------------------------------------------------- The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a class action lawsuit was filed on June 14, 2000, on behalf of purchasers of the securities of Open Market, Inc. (NASDAQ: OMKT) between November 8, 1999, and April 18, 2000, inclusive. A copy of the complaint filed in this action is available from the Court, or can be viewed on Milberg Weiss' website at: http://www.milberg.com/openmarket/ The action, numbered 00 CV 1162NG, is pending in the United States District Court for the District of Massachusetts, located at One Courthouse Way, Ste. 2300, Boston, MA, 02210, against defendants Open Market, Jeff Bussgang (Vice President of Marketing until January 6, 2000), Gary Eichorn (Chief Executive Officer and director until February 5, 2000), Shikhar Ghosh (Chairman of the Board), and Ron Matros (President, and Chief Executive Officer since February 5, 2000). The Honorable Nancy Gertner is the Judge presiding over the case. The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between November 8, 1999, and April 18, 2000. For example, as alleged in the complaint, on November 8, 1999, defendants reported that the Company was executing its business strategy better than ever, and that it was poised to take advantage of its position as a very competitive Internet growth company. Defendants knew, or recklessly disregarded, that the statement was false and misleading because the Company continued to post operating losses, and that it was not poised for greater growth because its market share was declining in the face of overwhelming competition. On December 7, 1999, defendants reported that the availability of its new product, Golden Gate, would allow it to compete effectively with larger industry rivals, and that Open Market is leading, and would continue to lead, the e-commerce marketplace. In fact, defendants knew, or recklessly disregarded, that Golden Gate was still in its early stages of development, and that competitors were offering more flexible products which buyers could more easily adapt and customize. When the Company announced, on April 18, 2000, that its first fiscal 2000 quarter would see greater than expected losses, its stock price dropped by 23% from the prior day's close, and 83% from its class period high. Contact: Milberg Weiss Bershad Hynes & Lerach LLP, New York Steven G. Schulman or Samuel H. Rudman (800) 320-5081 Email: Openmarketcase@milbergNY.com Website: http://www.milberg.com OPEN MARKET: Securities Suit Filed in MA, Announces Cauley & Geller ------------------------------------------------------------------- The Law Firm of Cauley & Geller, LLP announced that it has filed a class action in the United States District Court for the District of Massachusetts on behalf of all individuals and institutional investors that purchased the securities of Open Market, Inc. (Nasdaq: OMKT) between November 8, 1999 and April 18, 2000, 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 statements regarding the Company. Specifically, as alleged in the complaint, on November 8, 1999, defendants reported that the Company was executing its business strategy better than ever, and that it was poised to take advantage of its position as a very competitive Internet growth company. Defendants knew, or recklessly disregarded, that the statement was false and misleading because the Company continued to post operating losses, and that it was not poised for greater growth because its market share was declining in the face of overwhelming competition. On December 7, 1999, defendants reported that the availability of its new product, Golden Gate, would allow it to compete effectively with larger industry rivals, and that Open Market is leading, and would continue to lead, the e-commerce marketplace. In fact, defendants knew, or recklessly disregarded, that Golden Gate was still in its early stages of development, and that competitors were offering more flexible products which buyers could more easily adapt and customize. When the Company announced, on April 18, 2000, that its first fiscal 2000 quarter would see greater than expected losses, its stock price dropped by 23% from the prior day's close, and 83% from its class period high. Contact: Cauley & Geller, LLP, Boca Raton, FL Sue Null or Jackie Addison Toll Free: 1-888-551-9944 E-mail: Cauleypa@aol.com OPEN MARKET: Schiffrin & Barroway Files Securities Suit in Massachutts ---------------------------------------------------------------------- A class action lawsuit was filed in the United States District Court for the District of Massachusetts on behalf of all purchasers of the common stock of Open Market, Inc. (Nasdaq: OMKT) from November 8, 1999 through April 18, 2000 inclusive (the "Class Period"). The complaint charges Open Market and certain of its officers and directors with issuing false and misleading statements concerning the Company's business and financial condition. Among other things, the Complaint alleges that on December 7, 1999, defendants reported that the availability of its new product, Golden Gate, would allow the Company to continue to lead the e-commerce marketplace. In fact, defendants knew that Golden Gate was still in its early stages of development, and that competitors were offering more technologically advanced products. On April 18, 2000, the Company announced a wider than expected first quarter 2000 loss, and its stock price dropped by 23% from the prior day's close, and 83% from its Class Period high. Contact: Schiffrin & Barroway, LLP Marc A. Topaz, Esq. Robert B. Weiser, Esq. 888/299-7706 (toll free) or 610/667-7706 info@sbclasslaw.com RAYTECH CORP: Asbestos Claims Included in Ch 11 Plan of Reorganization ---------------------------------------------------------------------- Raytech Corporation was incorporated in June, 1986 in Delaware and held as a subsidiary of Raymark Corporation. In October 1986, Raytech became the publicly traded (NYSE) holding company of Raymark stock through a triangular merger restructuring plan approved by Raymark's shareholders whereby each share of common stock of Raymark was automatically converted into both a share of Raytech common stock and a right to purchase a warrant for Raytech common stock. Prior to the formation of Raytech, Raymark had been named as a defendant in more than 88,000 lawsuits claiming substantial damages for injury or death from exposure to airborne asbestos fibers. Subsequent to the divestiture sale of Raymark in 1988, lawsuits continued to be filed against Raymark at the rate of approximately 1,000 per month until an involuntary petition in bankruptcy was filed against Raymark in February 1989, which stayed all its litigation. In August 1996, the involuntary petition filed against Raymark was dismissed following a trial and the stay was lifted. However, in March 1998, Raymark filed a voluntary bankruptcy petition again staying the litigation. In May 1988, following shareholder approval, Raytech sold all of the Raymark stock to Asbestos Litigation Management, Inc., thereby divesting itself of Raymark. The purchase price of the stock was affected by Raymark's substantial asbestos-related liabilities. Despite the restructuring plan implementation and subsequent divestiture of Raymark, Raytech was named a co-defendant with Raymark and other named defendants in approximately 3,300 asbestos-related lawsuits as a successor in liability to Raymark. Until February 1989, the defense of all such lawsuits was provided to Raytech by Raymark in accordance with the indemnification agreement included as a condition of the purchase of the Wet Clutch and Brake Division and German subsidiary from Raymark in 1987. However, subsequent to the involuntary bankruptcy proceedings against Raymark, a restrictive insurance funding order was issued by an Illinois Court, denying defense costs, and another Raymark insurance carrier had been declared insolvent. These circumstances caused Raymark to be unable to fund the costs of defense to Raytech in the asbestos-related lawsuits. It has also been informed that as a result of the dismissal of the involuntary petition, Raymark encountered newly filed asbestos-related lawsuits but had received $27 million from a state guarantee association to make up the insurance policies of the insolvent carrier and had $32 million in other policies to defend against such litigation. In March 1998, Raymark filed a voluntary bankruptcy petition as a result of several large asbestos-related judgments. In an asbestos-related personal injury case decided in October 1988 in a U.S. District Court in Oregon, Raytech was ruled under Oregon equity law to be a successor to Raymark's asbestos-related liability. The successor ruling was appealed by Raytech and in October 1992 the Ninth Circuit Court of Appeals affirmed the District Court's judgment on the grounds stated in the District Court's opinion. The effect of this decision extends beyond the Oregon District due to a Third Circuit Court of Appeals decision in a related case cited below wherein Raytech was collaterally estopped (precluded) from relitigating the issue of its successor liability for Raymark's asbestos-related liabilities. As the result of the inability of Raymark to fund Raytech's costs of defense recited above, and in order to obtain a ruling binding across all jurisdictions as to whether Raytech is liable as a successor for asbestos-related and other claims, including claims yet to be filed relating to the operations of Raymark or its predecessors, on March 10, 1989, Raytech filed a petition seeking relief under Chapter 11 of Title 11, United States Code in the United States Bankruptcy Court, District of Connecticut. Under Chapter 11, substantially all litigation against Raytech has been stayed while the debtor corporation and its non-filed operating subsidiaries continue to operate their businesses in the ordinary course under the same management and without disruption to employees, customers or suppliers. In the Bankruptcy Court a creditors' committee was appointed, comprised primarily of asbestos claimants' attorneys. In June 1989 Raytech filed a class action in the Bankruptcy Court against all present and future asbestos claimants seeking a declaratory judgment that it not be held liable for the asbestos- related liabilities of Raymark. After a series of actions as related in the company�s report to the SEC, the ruling leaves the Oregon case, as affirmed by the Ninth Circuit Court of Appeals, as the prevailing decision holding Raytech to be a successor to Raymark's asbestos-related liabilities. In March and April 1998, Raymark and its parent, Raymark Corporation, filed voluntary petitions in bankruptcy in a Utah Court. In connection with its attempt to assert control over Raymark and its assets, the creditors' committee, joined by Raytech, the Guardian ad litem for Future Claimants, the equity committee and the government agencies moved to have the venue of the Raymark bankruptcies transferred from Utah to the Connecticut Court. In July 1998, the Bankruptcy Court issued an order on the motions and transferred venue to the Connecticut Court. In October, 1998 Raytech reached a tentative settlement with its creditors and entered into a Memorandum of Understanding with respect to achieving a consensual plan of reorganization (the "Plan"). In August 1999, a bar date was set for filing claims against Raytech by the Bankruptcy Court. The total amounts claimed, not including unliquidated claims, exceeded $300 billion. Claims believed invalid by the debtor were objected to and the Bankruptcy Court expunged many claims following hearings in February 2000. Allowed claims under the Plan will fall into five classes, including priority, secured, general unsecured, affiliate and shareholder. Most allowed claims will fall into the general unsecured class and will be paid through the 90% equity contribution, including all asbestos-related claims, environmental claims, employee-related claims and contractual and general claims. It is possible that the confirmation of the plan will occur in 2000. SAVANNAH RIVER: Black Workers Ask Judge to Reconsider Class Status ------------------------------------------------------------------ A federal judge is being asked to reconsider her decision denying class-action status to a lawsuit filed by some black workers at the Savannah River Site against their employers. U.S. District Judge Cameron Currie on May 25 rejected class-action status to the racial discrimination lawsuit by 99 workers at the nuclear weapons complex. Currie ruled the policies' subjectivity alone was insufficient for class-action status. The suit alleges the contractors discriminated against black employees in awarding pay raises and promotions, and that black employees were assigned to jobs that could expose them to radiation more often than were white workers. Class-action status would allow the suit to represent the interests of about 4,000 past, present and future black employees. Currie's ruling means the court will have to hear the cases of the 99 plaintiffs individually. The workers' lawyers asked for class-action status based on allegations that evaluation policies were flawed and too subjective, allowing managers to discriminate against black employees. Westinghouse Savannah River Co., Bechtel Savannah River Inc., Babcock & Wilcox Savannah River Co. and British Nuclear Fuels Ltd. Savannah River Corp., are the defendants. (The Associated Press State & Local Wire, June 14, 2000) TOBACCO LITIGATION: B&W CEO Acknowledges Smoking's Dangers ---------------------------------------------------------- The head of the nation's No. 3 cigarette maker testified Thursday that smoking is addictive and causes lung cancer and other diseases, says a report on the Associated Press. Nicholas G. Brookes, chairman and CEO of Brown & Williamson Tobacco Corp., told the jury hearing the class-action suit filed by sick Florida smokers that the industry should have been more open about smoking's health hazards. "There is nothing that would have prevented us to communicate that earlier," he said. "I regret not having done that." Brookes went further in assessing blame on the companies than Michael Szymanczyk, the CEO of Philip Morris, the nation's top cigarette maker, according to the Press. Szymanczyk was on the stand earlier this week. He testified that smoking is unhealthful but would not be more specific and said that while it is addictive, smokers can break the habit if they choose. Responding to questions by company attorney Gordon Smith, Brookes testified that his company is the industry leader in providing information about smoking's dangers to the public. Brookes, who became CEO in 1995, pointed to the company's computer website, where information about smoking's dangers, stop-smoking programs and the ingredients of its cigarettes are available. "We want to have an open dialogue with the public," Brookes said, adding that the company wants consumers to know "what risks you run if you choose to smoke." Brookes will later be cross-examined by smokers' attorney Stanley Rosenblatt. The CEOs of the other three tobacco companies are expected to follow Brookes to the witness stand. Brown & Williamson is based in Louisville, Ky., and controls 11.6 percent of the U.S. cigarette market, down from 13 percent last year. It sells 20 domestic brands including Kool, Lucky Strike and Pall Mall. It is a subsidiary of London-based British American Tobacco Industries. Other CEOs expected to testify are Andrew Schindler of R.J. Reynolds Tobacco Co., Martin Orlowsky of Lorillard Tobacco Co. and Bennett LeBow of Liggett Group Inc. On the Net: Tobacco links: http://www.umich.edu/(tilde)umtrn/websites.html (The Associated Press State & Local Wire, June 15, 2000) UNICAPITAL CORPORATION: Cauley & Geller Files Securities Suit in FL ------------------------------------------------------------------- The Law Firm of Cauley & Geller, LLP announced that it has filed a class action in the United States District Court for the Southern District of Florida on behalf of all individuals and institutional investors that purchased the common stock of UniCapital Corporation Inc. (Nasdaq:UCP) between May 14, 1998 and May 15, 2000, 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 statements regarding the Company. Specifically, as alleged in the complaint, on May 14, 1998, the Company represented in the prospectus issued in connection with the Company's Initial Public Offering (the "Prospectus") that it recognized $588.7 million in goodwill as an asset in connection with twelve corporate acquisitions. UniCapital, however, did not disclose that it overvalued the acquisitions. In addition, the prospectus failed to disclose that the company would have to comply with federal noise abatement statutes thereby requiring the phasing-out of certain types of the Company's aircraft which would, and did, negatively impact the Company's operations. When the Company announced, on May 15, 2000, that its first quarter 2000 financial results would be dramatically lower than the market had been led to believe, due to, among other things, an $8.5 million operating loss, as well as a$239.3 million write off of the impaired goodwill, the stock price of UniCapital dropped by 28%. Contact: Cauley & Geller, LLP, Boca Raton Sue Null or Jackie Addison Toll Free: 888/551-9944 Email: Cauleypa@aol.com * House OKs E-Signature by 426-4 Vote ------------------------------------- In what lawmakers called a revolutionary step, the House voted Wednesday to authorize electronic signatures in most on-line transactions and eliminate the need for paper in the purchase of homes, cars, even entire companies. The measure, approved 426-4, would give a major boost to the growing e-commerce industry by making an electronic signature legally equivalent to a written signature for a wide range of transactions, removing a major obstacle to on-line dealings. The Senate is expected to approve the bill later in the week. President Clinton said he intended to sign it. "It will encourage the information technology revolution that has helped lower inflation, raise productivity, and spur new research and development," the president said in a statement. "This bill will transform the way we work and the way we're governed," said Rep. David Dreier (R-Calif.). Added Rep. Tom Bliley (R-Va.), chairman of the House Commerce Committee: "This bill will further move us from the paper age to the digital age." E-commerce is growing rapidly in America, the lawmakers noted. Last year, it amounted to a $500 billion industry but will grow to $1.6 trillion by 2003. William Archey, president and chief executive officer of the American Electronics Association, said enactment of the legislation would remove legal uncertainties and "help ramp up e-commerce to a whole new level of rapid development." Representatives saw little downside to the measure. Anticipating consumer fears that signatures could be fraudulently used, most said that an electronic "John Hancock" in today's sophisticated technological environment can be even more secure than a written one. An electronic signature can be based on a retina scan, a thumbprint, an actual signature or other hard-to-copy means, said Rep. Bill Tauzin (R-La.), one of the bill's prime supporters, and can be encrypted when shipped back and forth on-line. Americans had similar fears when the telegraph arrived, he said, but as they became more comfortable with the technology, they embraced it. The same will happen with e-commerce, he said. In many complex transactions between two parties, third-party firms that specialize in electronic signatures likely would be called in to validate them, said House Commerce Committee staff members. Software already has been developed that would keep the signatures secure, they added. The measure envisions that consumers and businesses will be able to conduct many transactions on-line by transmitting electronic contracts back and forth and by sealing deals with an electronic signature. But not every transaction would be covered. For example, paper notifications still would be required for recalls of a product; cancellation of utility services such as water, heat or power; defaults; evictions; or foreclosures. Also, court orders involving wills and trusts or adoption, divorce and family matters also could not be handled totally by electronic means. Consumers still could request that a written document of the transaction be mailed, but this no longer would be deemed a business necessity if both sides agreed that everything could be handled electronically. The legislation also would allow most records kept by businesses to be in electronic form, a provision members of Congress said could eliminate the need for millions of filing cabinets in America. Documents also can be notarized electronically through electronic signatures, the measure provides. The bill authorizes use of the electronic signature by Oct. 1, but because the records provision would not be effective until March 1, 2001, the explosion in e-commerce that could be triggered by the measure likely will not occur until next year at the earliest. That's because consumers who agree to use electronic signatures also must consent to receiving electronic records. Current consumer protection laws would still apply. In one provision added to protect people, the measure provides that companies must "reasonably demonstrate" that consumers can access the electronic records once they have consented to a deal. This provision means that companies must show that the consumer has the hardware and software to receive the documents. Tauzin said the phrase "reasonably demonstrate" could be open to legal interpretation when conflicts develop between companies and consumers over whether their consent is valid. This could expose companies to class-action lawsuits, he said, adding that he would try to change the provision next year. But any attempt to soften consumer protections in the future likely would be met with strong opposition. The Clinton administration had opposed earlier versions of the bill on grounds that they failed to adequately protect consumers who lacked computer skills or the technology to deal with electronic information. Without the protections in the bill, the administration argued, businesses could bind unsuspecting consumers to higher fees or price increases. The group Consumers Union said in a statement that the bill adequately protects consumers. Rep. Zoe Lofgren (D-Calif.), a member of the House Judiciary Committee, agreed. She said e-commerce is no riskier than ordinary commerce. Consumers also can decide whether to opt in or out of e-commerce, she said. Supporters say on-line signature may be safer than written one. (Chicago Tribune, June 15, 2000) * Senate Panel to Consider Measure Changing Class Action Venue -------------------------------------------------------------- CQ (6/14, Fagan) reported the Senate Judiciary Committee "is scheduled to mark up legislation (S 353) Thursday that would transfer many class action lawsuits from state to federal court, but some sources indicate that it will be held over another week." Committee Chairman Orrin G. Hatch "has been working on a manager's amendment designed to bring the bill closer in line with a House-passed bill (HR 1875)." Under the measure, "either party in a class action case could seek a transfer to federal court if the defendant and at least one plaintiff live in different states. Supporters of the bill say the current law allows plaintiffs to forum-shop among states in search of a 'home field advantage.'" They also "contend that plaintiffs often are misled into accepting objectionable settlements, in which they receive little compensation and their lawyers receive millions of dollars." The measure would "implement several provisions designed to prevent that. But opponents, including the White House, say the bill will not stop such abuses but simply transfer cases to federal courts where the same abuses exist; stifle plaintiffs' rights; further clog already overloaded federal court dockets; and make it less convenient and more expensive for many plaintiffs to seek legal redress." (The Bulletin's Frontrunner, June 15, 2000) * Texans for Lawsuit Reform Working on "Offer of Settlement" ------------------------------------------------------------ Richard Weekley, president of Texans for Lawsuit Reform, appeared on the rubber chicken circuit in Austin May 16, soliciting new members to continue the group's tort reform agenda. Weekley spoke to more than 150 people at a Rotary Club luncheon held in the decrepit City Coliseum. Decrying class actions, huge legal fees and excessive damages, Weekley said TLR is working on "offer of settlement" legislation. He said the legislation would provide incentives for plaintiffs to make reasonable demands and for defendants to make reasonable settlement offers. "Offer of settlement is better than loser pays," said Weekley, because it doesn't have "a draconian impact on those folks who have trouble getting to the courthouse." (Texas Lawyer May 22, 2000) ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc., Washington, DC. Theresa Cheuk, Managing Editor. Copyright 1999. All rights reserved. ISSN 1525-2272. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *