CAR_Public/000629.MBX              C L A S S   A C T I O N   R E P O R T E R

             Thursday, June 29, 2000, Vol. 2, No. 126

                             Headlines

AMERICAN ELECTRIC: Milberg Weiss Files Securities Suit in New York
AOL: Hourly Subscribers Allowed to Sue Over Time Lost to pop-Up Ads
AOL: Will Appeal against Certification of Class Accusing Pop-up Ads
CONNECTICUT SCHOOL: Conservative Group To Sue Over Student Survey
EEX CORP: Announces Settlement of Securities Lawsuit in Texas

FEN-PHEN: Oregon Jury Awards Users $29.1 Million
GIULINANI: Eligibility Verification Review in Line with Food Stamp Act
INTERNET COMPANIES: Suits over Privacy Could Give Courts First Crack
LOS ALAMOS: Workers Aided in Wake of Security Incidents at Nuclear Lab
MICHIGAN: ACLU Says Use of Test Scores Discriminates against Minorities

MYLAN LABORATORIES: Faces Appeal against Dismisssal of Securities Suit
MYLAN LABORATORIES: Reports on Suits over Trade Practices Re Drug
PACIFIC GAS: PG&E Agrees to Increase Power Line Fee for 48 CA Counties
PINOCHET: 125 Chile Human Rights Suits Filed
TEN COMMANDMENTS: Orange County Plans Posting Despite ICLU Suit

TOBACCO LITIGATION: Jury Says Smoking Not To Blame For Lung Cancer
TOBACCO LITIGATION: Lorillard Will Admit Smoking Causes Disease
TRANSCONTINENTAL GAS: Defending Producers' Lawsuits over Royalties
TRANSCONTINENTAL GAS: Talks with DOJ over Waste Management Practice
VARI-L COMPANY: Savett Frutkin Files Securities Suit in Colorado

WILLIAMS COMPANIES: Landowners Sue over Fiber-Optic Cable Installation
WILLIAMS COMPANIES: Reports on CO Suit over Allegedly False Claims

* Advocate Says More Caseworkers Needed to Help the Mentally Ill

                                 *********

AMERICAN ELECTRIC: Milberg Weiss Files Securities Suit in New York
------------------------------------------------------------------
The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a
class action lawsuit was filed on June 23, 2000, on behalf of all persons
and entities who purchased or otherwise aquired the common stock of
American Electric Power Company ("AEP" or the "Company") (NYSE:AEP),
between July 25, 1997 and June 25, 1999, 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/aep/

The action, numbered CV 00 3744, is pending in the United States District
Court for the Eastern District of New York, located at 225 Cadman Plaza
East, Brooklyn, New York 11201, against defendants AEP, E. Linn Draper, Jr.
(President, Chief Executive Officer, and Chairman of the Board of
Directors), G.P. Maloney (Principal Financial Officer), Gene Fitzpatrick
(Executive Vice President - Nuclear Generation) and Robert Powers
(Executive Vice President - Nuclear Generation). The Honorable I. Leo
Glasser is the Judge presiding over the case.

The complaint charges AEP and several of its senior officers with
violations of Sections 10(b) and 20(a) of the Securities Exchange Act of
1934 and Rule 10b-5 promulgated thereunder. Specifically, the complaint
alleges that AEP issued materially false and misleading statements
regarding the undisclosed materially impaired condition of the D.C. Cook
nuclear power plant and the adverse effect these problems were having, and
would continue to have, on the Company. As a result of these materially
false and misleading statements, among others, plaintiff alleges that the
price of AEP common stock was artificially inflated throughout the Class
Period.

Contact: Steven G. Schulman or Samuel H. Rudman Milberg Weiss Bershad Hynes
& Lerach LLP One Pennsylvania Plaza, 49th Floor, New York, NY, 10119-0165
Phone Number: 800/320-5081 Website: http://www.milberg.comEmail:
AEPcase@milbergNY.com


AOL: Hourly Subscribers Allowed to Sue Over Time Lost to pop-Up Ads
-------------------------------------------------------------------
A judge has allowed America Online's hourly plan subscribers to sue AOL
over time lost to pop-up advertisements. At least 2.5 million subscribers
have overpaid by $ 15 million to $ 20 million when pop-ups appear after
they begin paying hourly rates for additional time beyond their monthly
limits, the subscribers charge.

Pop-ups appear on the screen while computer users are online, forcing them
to click to erase the ads and get back to what they were doing. The lawsuit
claims AOL doesn't tell people that the advertising time is counted toward
billing. "They're collecting incredible sums of money from
advertisers,"said subscribers attorney Andrew Tramont."At the same time,
they're charging you for something they're getting paid to put on the
screen."

Circuit Judge Fredricka Smith refused to dismiss the lawsuit June 20 and
said it could go forward as a class-action. AOL spokesman Rich D'Amato said
Tuesday that the case is without merit and that the Internet service will
appeal the ruling. (The Record (Bergen County, NJ), June 28, 2000)


AOL: Will Appeal against Certification of Class Accusing Pop-up Ads
-------------------------------------------------------------------
America Online Inc. said Tuesday that it will appeal a Florida judge's
order allowing hourly plan subscribers to pursue a class-action suit over
allegedly excessive billing charges caused by pop-up advertisements.

At least 2.5 million subscribers have overpaid a total of $ 15 million to $
20 million because pop-up ads appeared after they began to pay for
additional time beyond their monthly limits, the subscribers charge.
"They're collecting incredible sums of money from advertisers," plaintiffs'
attorney Andrew Tramont said. "At the same time, they're charging you for
something they're getting paid to put on the screen."

AOL spokesman Rich D'Amato said the company would appeal state court Judge
Fredricka Smith's June 20 decision to certify the lawsuit as a class
action, believing the case without merit.

The lawsuit covers customers paying $ 5.95 a month for three hours of
service and $ 9.95 a month for five hours of service. Exempt are those
paying $ 21.95 a month for unlimited access. The suit claims AOL doesn't
tell people that it counts the time used up by pop-up advertising toward
billing. The ads, which fill a subscriber's screen at intervals, are
removed with mouse-clicks. "They don't come out and tell you you're being
charged for the time you look at these advertisements," Tramont said. "They
don't tell you that you can't access the other services when the
advertisements are on the screen."

AOL now allows customers to avoid the pop-ups, but Tramont said that option
was added after the lawsuit was filed last year. Countered D'Amato: "It's
simply one click to state that you are not interested in this particular
pop-up. It's a matter of a few clicks if you are not interested in pop-ups
at all."

The lawsuit covers 10 percent to 20 percent of AOL customers from 1994 to
1999. Vienna, Va.-based AOL, which has 23 million subscribers, fought to
have the case heard in its home state, where class-action suits are barred.
But Smith ruled it would be "unjust and unreasonable" to force subscribers
to pursue individual small-claims cases in Virginia. (Sun-Sentinel (Fort
Lauderdale, FL), June 28, 2000)


CONNECTICUT SCHOOL: Conservative Group To Sue Over Student Survey
-----------------------------------------------------------------
A Virginia-based civil liberties organization plans to sue New Milford
school officials over an explicit survey that asked students if they have
oral sex, use drugs or contemplate suicide.

The Rutherford Institute - an international conservative group - said
Tuesday it will file a federal class action suit against the school board
on behalf on incensed parents. The group claims the anonymous survey given
last month to sixth- and eighth-graders and high school students violated
students' privacy and circumvented parents' rights.

The lawsuit will seek an undisclosed amount of money, said Ron Rissler,
legal coordinator for the institute - which assisted Paula Jones in her
sexual harassment case against President Clinton. About 10 parents are
parties to the lawsuit.

"Parents have the right still in the country, I hope, to determine the
educational upbringing of their children, and we believe this survey flies
in the face of that," said Rissler, adding the suit will be filed in the
next few weeks.

In the 95-question survey, students were asked if they have been sexually
assaulted, bring weapons to school, smoke cigarettes, freebase cocaine,
have sex with several partners and have AIDS. They were asked if they have
had oral sex and were given a definition of what it is.

A group of health teachers devised the survey to understand student
behavior so they could better tailor a health curriculum.

Students were told they could opt out of the survey or skip questions they
were uneasy about.

Superintendent Raymond Avery said Tuesday he sees no basis for a lawsuit
because no constitutional violations exist. He explained the district has
apologized for administering the survey and policies will be changed.

More than 100 parents attended a school board meeting earlier this month to
protest the survey, and a small group have met with Hugh Hughes, a New
Haven lawyer representing the Rutherford Institute.

A spokesman for the Connecticut Department of Education said the state has
no authority to investigate the survey's origin.

Complaints to the state department have to be based on allegations that a
school district violated state educational laws, said Tom Murphy. (The
Associated Press State & Local Wire, June 28, 2000)


EEX CORP: Announces Settlement of Securities Lawsuit in Texas
-------------------------------------------------------------
EEX Corporation (NYSE:EEX) announced on June 27 that it has executed a
memorandum of understanding ("MOU") to settle and resolve all claims
asserted against the Company and certain of its current or former officers
and directors in a consolidated securities class action pending in the
United States District Court for the Northern District of Texas (Gracy Fund
L.P. v. EEX Corporation, et al). The MOU and settlement are subject to
various terms and conditions, including reaching agreement on definitive
terms of settlement, notifying class members and obtaining the Court's
approval. Under the settlement described in the MOU, the Company would pay
approximately $1.25 million on behalf of itself and its current and former
officers and directors. This entire amount has been taken into accounting
reserves at the end of the last fiscal quarter.

EEX is entering into the MOU and settlement in order to avoid the costs,
distraction and risks inherent in defending securities class actions in the
courts. The Company and the individual defendants continue to deny all
allegations of wrongdoing.

EEX Corporation is an oil and natural gas exploration and production
company with activities currently focused in Texas, the Gulf of Mexico and
Indonesia.


FEN-PHEN: Oregon Jury Awards Users $29.1 Million
------------------------------------------------
George Fleming, Fleming & Associates, L.L.P. of Houston, announced on June
27 that a Coquille, Oregon jury has awarded $3.8 million in actual damages
and $25.3 million in punitive damages to two former users of the diet drug
combination fen-phen.

"American Home Products (AHP), as the manufacturer of Pondimin and Redux,
was unmistakably found liable for the severe damages they allowed to occur
through reckless promotion of these diet drugs to consumers such as Ms.
Juanita Batson and her son, Richard Wirt," said lead attorney George
Fleming. "The jury clearly understood that fen-phen caused significant and
irreparable heart valve damage to these patients. The amount of today's
awards underscores why we have so vehemently objected to the proposed
nationwide class action fen-phen settlement. Under the proposed settlement
these plaintiffs would have received only a total of $12,000. The
difference between today's awards by a conservative jury and what is
proposed under the nationwide settlement as suitable compensation to
victims such as the plaintiffs is unconscionable. This jury heard the hard,
stark evidence from both sides and properly evaluated the value of these
cases."

Contact: Russell T. Abney of Fleming & Associates, L.L.P., 713-621-7944, or
800-654-7139, or cell, 713-305-4875


GIULINANI: Eligibility Verification Review in Line with Food Stamp Act
----------------------------------------------------------------------
Plaintiffs contended that several municipal defendants denied their federal
rights by denying and discontinuing food stamp benefits, for failure to
comply with an Eligibility Verification Review process that violated the
Food Stamp Act. Defendants asserted that the EVR was consistent with the
Act, which permitted the use of local verification rules, as a means to
confirm combined public assistance and food stamp applications. Looking to
the definition of verification in 7 CFR @ 273.2, plaintiffs argued that the
EVR procedures did not fall under that definition. The court disagreed,
finding that @ 273.2, provided a more expansive understanding of the
procedures encompassed by the term verification, than plaintiffs would
concede. Thus it concluded that the EVR was a legally adequate verification
procedure.

Judge Cote

ROBERSON v. GIULIANI QDS:02762553 - The partial summary judgment motions
presented here require the Court to consider whether the New York City
system for investigating joint applications for food stamps and public
assistance violates provisions of the Food Stamp Act and its implementing
regulations. Specifically, the plaintiffs note that the federal regulations
governing food stamp applications require only one interview and provide
for home visits to verify information only when documentary evidence is
insufficient to make a determination of eligibility. Therefore, the
plaintiffs argue that joint applicants for food stamps and public
assistance cannot be denied food stamps on the basis of their failure to
comply with heightened public assistance verification rules that require
multiple interviews as well as a mandatory home visit in most cases.

On October 29, 1999, plaintiffs filed this action pursuant to 42 U.S.C. @
1983 against Rudolph Giuliani, as Mayor of the City of New York; Jason
Turner, as Commissioner of the New York City Department of Social Services
(collectively the "City defendants"); Brian J. Wing, as Commissioner of the
New York State Office of Temporary and Disability Assistance; and Antonia
Novello, as Commissioner of New York State Department of Health
(collectively the "State defendants"). Although the class action complaint
alleges seven causes of action against the defendants, only the first claim
is the subject of these cross motions for summary judgment. In that claim
the plaintiffs contend that defendants denied plaintiffs and plaintiff
class members their federal and state rights by denying and discontinuing
food stamp benefits for failure to comply with the New York City Human
Resources Administration's Eligibility Verification Review ("EVR") process.
The parties have commenced documentary discovery, but have adjourned the
taking of any depositions.

For the reasons discussed below, the City defendants' motion for partial
summary judgment is granted and the plaintiffs' motion is denied. The State
defendants' motion to dismiss the claims against them is granted in part.

Discussion

Cross Motions for Summary Judgment

Summary judgment may not be granted unless the submissions of the parties
taken together "show that there is no genuine issue as to any material fact
and that the moving party is entitled to a judgment as a matter of law."
Rule 56(c), Fed. R. Civ. P. The moving party bears the burden of
demonstrating the absence of a material factual question, and in making
this determination the Court must view all facts in the light most
favorable to the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 247 (1986); Celotex Corp v. Catrett, 477 U.S. 317, 323 (1986);
Azrielli v. Cohen Law Offices, 21 F.3d 512, 517 (2d Cir. 1994) ("The court
must resolve all ambiguities and draw all reasonable inferences in favor of
the nonmoving party."). When the moving party has asserted facts showing
that the nonmovant's claims cannot be sustained, the opposing party must
"set forth specific facts showing that there is a genuine issue for trial,"
and cannot rest on the "mere allegations or denials" of his pleadings. Rule
56(e), Fed. R. Civ. P. See also Goenaga v. March of Dimes Birth Defects
Found., 51 F.3d 14, 18 (2d Cir. 1995). In deciding whether to grant summary
judgment, therefore, this Court must determine (1) whether a genuine
factual dispute exists based on the evidence in the record, and (2) whether
the fact in dispute is material based on the substantive law at issue.

Relying principally on their construction of federal food stamp
regulations, plaintiffs maintain that the City defendants' current policy
of denying applications and discontinuing ongoing food stamp benefits to
persons who make joint applications for food stamps and public assistance
for their failure to comply with EVR violates federal law in two respects.
First, plaintiffs contend that because food stamp applicants need only
attend a single "interview" to establish eligibility under the federal food
stamp regulations, eligibility for food stamps cannot be denied based on a
failure to comply with the additional interviews imposed by EVR following
the "I" interview conducted at the Center at which an individual applies
for benefits. Second, plaintiffs argue that the policy of scheduling an EVR
home visit - regardless of the quality of information provided by the
applicant for food stamps - constitutes a violation of the federal food
stamp regulations which authorize a home visit only if required to verify
questionable documentary evidence.

The City defendants assert that EVR is consistent with the Food Stamp Act
and its implementing regulations which expressly permit the use of local
public assistance verification rules as a means of confirming the
information provided in combined applications for public assistance and
food stamps. Plaintiffs dispute the City defendants' characterization of
EVR as verification rules, contending that the food stamp regulations
distinguish between the interview and verification portions of the
application process. The EVR process, the plaintiffs argue, constitutes
additional interviews that cannot be imposed upon the food stamp
application process under the guise of verification.

Verification is defined in the implementing regulations for the Food Stamp
Act as "the use of third-party information or documentation to establish
the accuracy of statements on the application." 7 C.F.R. @ 273.2(f). That
skeletal definition is given substance through the food stamp verification
procedures set forth thereafter at considerable length and with significant
detail in subsections (1) through (8) of Section 273.2(f). These
regulations require, prior to certification of the household for food
stamps, verification of specified sections of the food stamp application,
including, for example, gross nonexempt income, alien status, utility and
medical expenses, social security number, residency, and identity, see 7
C.F.R. @ 273.2(f)(1); require verification of all other factors of
eligibility "which the State agency determines are questionable and affect
the household's eligibility and benefit level," see 7 C.F.R. @ 273.2(f)(2);
and provide that the "State agency may elect to mandate verification of any
other factor which affects household eligibility or allotment level,
including household size where not questionable," see 7 C.F.R. @
273.2(f)(3). The regulations further describe the sources of verification,
see 7 C.F.R. @ 273.2(f)(4), including documentary evidence, collateral
contacts ("an oral confirmation of a household's circumstances by a person
outside of the household") and, in limited circumstances, home visits. See
7 C.F.R. @ 273.2(f)(4)(iii) ("Home visits may be used as verification only
when documentary evidence is insufficient to make a firm determination of
eligibility or benefit level, or cannot be obtained, and the home visit is
scheduled in advance with the household."). The regulations also delineate
which parties have the primary responsibility for obtaining sources of
verification, documentation requirements for food stamp case files, the
permissible uses of various data exchange systems for purposes of
verification, and verification procedures at stages subsequent to the
initial certification for food stamp eligibility. See 7 C.F.R. @
273.2(f)(5)-(8).

When an individual files a joint application for food stamps and public
assistance, however, the State agency is not bound by the verification
procedures described in Sections 273.2(f)(i)(8), at least as to those
eligibility factors that are common to both food stamps and public
assistance. Section 273.2(j)(1)(iii) of the implementing regulations states
that for households applying for both public assistance and food stamps,
the verification procedures described in paragraphs (f)(1) through (f)(8)
of this section shall be followed for those factors of eligibility which
are needed solely for purposes of determining the household's eligibility
for food stamps. For those factors of eligibility which are needed to
determine both PA [public assistance] eligibility and food stamp
eligibility, the State agency may use the PA verification rules.

7 C.F.R. @ 273.2(j)(1)(iii) (emphasis supplied). The plain language of the
regulation makes it clear that in the case of joint applications for public
assistance and food stamps, the food stamp regulations only govern the
verification procedures for eligibility criteria unique to the food stamp
program. Such limitations on verification procedures do not, however, apply
when the eligibility criteria at issue is not unique to the food stamp
program but rather overlaps with the eligibility criteria for public
assistance. See S.L. v. Whitburn, 67 F.3d 1299, 1306 (7th Cir. 1995).

While the plaintiffs concede this basic structure, they argue that even if
the use of public assistance verification procedures as to common factors
of eligibility is permissible, this allowance cannot be used to contravene
other federal regulations. Relying primarily on the structure of the food
stamp regulations, the plaintiffs maintain that EVR is more accurately
described as a series of additional interviews rather than as a
verification process. Plaintiffs note the extent to which federal food
stamp law relies on a tripartite structure - application, interview,
verification - that distinguishes between the interview portion and the
verification portion of the food stamp application process. See, e.g., 7
C.F.R. @ 273.2(d)(1) ("To determine eligibility, the application form must
be completed and signed, the household or its authorized representative
must be interviewed, and certain information on the application must be
verified."). Interviews and verification, the plaintiffs contend, are
different in kind: the interview portion involves gathering information
directly from an applicant, whereas verification necessarily entails the
involvement of third parties or other outside sources of information and is
primarily the responsibility of the City. Thus, although the plaintiffs do
not dispute that the City defendants can use more intensive verification
procedures as to common factors of eligibility, they argue that this
authority does not encompass subjecting joint applicants and recipients to
additional eligibility interviews. Indeed, the regulations structurally
distinguish - at least to some extent - the interview stage from the
verification of the information thus obtained. Compare 7 C.F.R. @ 273.2(e)
(interviews) with 7 C.F.R. @ 273.2(f) (verification). Simply put, the issue
this Court must resolve, therefore, is whether the EVR office interview and
home visit are "verification" procedures. If the EVR process is a legally
adequate verification system for factors common to eligibility for both
food stamps and public assistance, it follows that the failure to comply
with EVR is a legitimate ground on which to deny an application for food
stamps in the case of joint applications.

As discussed above, the package of application materials the applicant
receives at the "I" interview includes an EVR questionnaire. A financial
planner at the Center conducts the "I" interview, at which point the EVR
questionnaire is to be completed and forwarded to EVR by the Income Support
or Job Center.

At the EVR office interview, an EVR investigator trained in the detection
of false documents reviews the factual information recorded in the
questionnaire and any supporting documentation presented by the applicant.
In addition, by the time of the EVR office appointment, HRA's Management
Information Systems unit has also run two basic clearance reports - the
Resource File Integration System Report and the Credit Report - which are
included in the applicant's case file and provide data including basic
identifying information registered with the Social Security Administration,
any past receipt of unemployment insurance benefits, any active bank
accounts in one of the state-chartered banks, and the applicant's last
reported address and employer. The EVR investigator explores any
discrepancies uncovered by the computerized checks. To facilitate this
process, EVR investigators follow a detailed EVR Interview and
Recommendation Worksheet that itemizes the eligibility information sought -
including the applicant's identity, residence, household composition, past
maintenance, and assets and income - indicates at which points documentary
evidence should be requested from an applicant, and asks the EVR
investigator to record the disposition of the computer clearance reports.
Finally, an EVR home visit is scheduled during the EVR office visit; the
applicant is handed and signs a notice of the appointment date. The EVR
home visit confirms whether the applicant resides at the address reported
on the EVR questionnaire and whether the household composition and rent
reflect what the applicant reported.

In light of the detailed process described by the EVR Operating Procedures
manual, this Court is unable to conclude as a matter of law that the EVR
procedures do not constitute verification. The plaintiffs' reliance on the
definition of verification contained in Section 273.2(f) is not
inconsistent with this conclusion. In the first place, as discussed above,
the limited definition must be construed in the context of the eight
subsections that follow; read together they provide a more expansive
understanding of the procedures and processes encompassed by the term
verification than plaintiffs would concede. Indeed, the definition
includes, although in limited circumstances, the use of face-to-face
contacts such as home visits and allows the State agency to "establish its
own standards for the use of verification," including mandated verification
of any factor affecting eligibility or allotment level. See 7 C.F.R. @
273.2(f)(3)(i). Moreover, these regulations circumscribe verification in
the context of applications solely for food stamps, and do not dictate the
limits for verification procedures that may be implemented by State
agencies. If the State, in setting its verification procedures, were bound
by the requirements of Sections 273.2(f)(l)(8), Section 273.2(j)(1)(iii) -
which explicitly allows a State agency to use its public assistance
verification rules for those factors of eligibility common to both public
assistance and food stamps - would be meaningless. Conversely, the
flexibility and efficiency supposedly provided by allowing the State to
establish its own verification regime would be illusory if the State's
options were bounded by the food stamp verification procedures.

The plaintiffs are undoubtedly correct in their assessment that the EVR
process contains some degree of repetitive information seeking.
Nevertheless, the City's interest in protecting the integrity of its public
assistance programs extends not only to making effective use of its limited
resources, but also to avoiding federal sanctions for failure to interdict
fraudulent applications. The issue before this Court is not whether the
City's procedures are a necessary or indispensable facet of any
verification program, but rather whether EVR furthers the process of
determining the accuracy and truthfulness of the information provided by
applicants. Because the procedures as described, though admittedly
significantly more rigorous than those outlined in the food stamp
regulations, undoubtedly further the process of determining the reliability
of information provided by the applicant, the Court concludes that the
federal regulations do not preclude the use of the EVR policy presented by
the City defendants as verification procedures for factors common to food
stamp and public assistance applications on joint applications. It follows,
therefore, that a failure to participate in the EVR procedures would
necessitate denying an application for food stamps when it is joined with
an application for public assistance because the information essential to
an applicant's eligibility would not have been verified.

B. Dismissal of the State Defendants

The plaintiffs bring only their first, second, and seventh claims against
the State defendants. As already noted, the first claim alleges that the
defendants denied plaintiffs and plaintiff class members their federal and
state rights by denying and discontinuing food stamp benefits for failure
to comply with the EVR process. The second and seventh claims allege,
respectively, that defendants violated plaintiffs' rights by denying
expedited food stamps based on a prior EVR ineligibility recommendation and
denying and discontinuing food stamps, medical assistance, and public
assistance benefits based on an EVR recommendation without providing
sufficient explanations for such denials. In support of the contention that
each of these claims should be dismissed, the State defendants raise four
arguments: (1) ripeness; (2) an Eleventh Amendment bar; (3) that there is
no private right of action against the State under Section 1983; and (4)
failure to exhaust administrative avenues of review.

Ripeness

The State defendants assert that plaintiffs' claims against them are not
ripe for adjudication because the legality of any action by the State
defendants on plaintiffs' individual EVR cases cannot be evaluated "until
the State defendants actually act upon their EVR cases." Ripeness is a
"constitutional prerequisite to exercise of jurisdiction by federal
courts." Marchi v. Board of Cooperative Educational Services of Albany, 173
F.3d 469, 478 (2d Cir. 1999) (internal quotation omitted). This doctrine
"protects the government from 'judicial interference until a[ ]... decision
has been formalized and its effects felt in a concrete way by the
challenging parties.'" Thomas v. City of New York, 143 F.3d 31, 34 (2d Cir.
1998) (quoting Abbott Labs. v. Gardner, 387 U.S. 136, 148-49 (1967),
overruled on other grounds, Califano v. Sanders, 430 U.S. 99 (1977)). The
ripeness doctrine ensures that courts decide real, substantial
controversies, not mere hypothetical questions. An inquiry into the
ripeness of a dispute requires the Court to consider "both the fitness of
the issues for judicial decision and the hardship resulting from
withholding judicial consideration." Marchi, 173 F.3d at 478.

The issues presented by the plaintiffs are ripe for judicial review. In
each instance the plaintiff has been denied food stamps for failure to
comply with the EVR process. The issue of the applicability of the EVR
process to food stamp applications made in conjunction with applications
for other benefits is therefore fit for analysis at this time, and a
failure to address these issues presents a hardship not only to the named
plaintiffs but also to any other similarly situated individuals who are
members of the proposed class.

The fact that the State defendants have not yet had an opportunity to act
upon the plaintiffs' EVR claims, on the other hand, presents an issue of
exhaustion. Although ripeness and exhaustion may, in certain instances,
present overlapping grounds for dismissal, see, e.g., Seafarers Intern.
Union of North America, AFL-CIO v. U.S. Coast Guard, 736 F.2d 19, 26 n.11
(2d Cir. 1984), ripeness focuses on the types of functions that courts
should perform, while exhaustion addresses how far a party must pursue
administrative remedies before going to court. Id.

2. Eleventh Amendment

The State defendants contend that the Eleventh Amendment bars plaintiffs
from obtaining (1) relief against the State defendants for violations of
state law, and (2) damages from the State defendants for any violations of
federal law. While the Eleventh Amendment by its terms does not bar suits
against a State by its own citizens, the Supreme Court has consistently
held that an unconsenting State is immune from suits brought in federal
courts by her own citizens as well as by citizens of another State. See
Burnette v. Carothers, 192 F.3d 52, 57 (2d Cir. 1999) (citing Edelman v.
Jordan, 415 U.S. 651, 662-63 (1974)). The immunity extends to state
agencies and to state officers who act on behalf of the State. See Puerto
Rico Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 142-47
(1993). An important exception to this general rule is set forth in Ex
Parte Young, 209 U.S. 123 (1908), which holds that the Eleventh Amendment
does not bar suits seeking prospective relief against state officials
acting in violation of federal law because such action is not considered an
action of the State. See Burnette, 192 F.3d at 57 n.3.

To the extent that plaintiffs' federal claims seek declaratory and
injunctive relief against state officers acting in their official
capacities, such claims are not barred by the Eleventh Amendment. See Dube
v. State University of New York, 900 F.2d 587, 595 (2d Cir. 1990). This is
true whether the claims arise from the United States Constitution or
federal statutes. See Kostok v. Thomas, 105 F.3d 65, 68 (2d Cir. 1997).

Plaintiffs' claims based on state law, however, are barred by the Eleventh
Amendment. The doctrine of Ex Parte Young does not apply to a suit against
state officials based on state law because such a suit is not necessary to
"vindicate the supreme authority of federal law" and "conflicts directly
with the principles of federalism that underlie the Eleventh Amendment."
Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 106 (1984); see
also Kostok, 105 F.3d at 68; Young v. New York City Transit Authority, 903
F.2d 146, 164 (2d Cir. 1990). Such intrusion on state sovereignty is no
less when the state law claims are brought into federal court under pendent
jurisdiction. Allen v. Cuomo, 100 F.3d 253, 260 (2d Cir. 1996).

Therefore, to the extent that plaintiffs assert claims arising under state
law against the State defendants acting in their official capacity, those
claims are dismissed. Further, to the extent that the plaintiffs seek
monetary damages for an accrued liability from the State defendants acting
in their official capacity, as distinct from the expenditure of state funds
for future compliance with a grant of prospective relief, such a claim is
barred by the Eleventh Amendment. See, e.g., New York City Health &
Hospitals Corp. v. Perales, 50 F.3d 129, 135 (2d Cir. 1995).

3. Private Right of Action Under Section 1983

The State defendants, relying on Blessing v. Freestone, 520 U.S. 329
(1997), argue that there is no private right of action for the plaintiffs'
claims based on alleged violations of the Food Stamp Act. The plaintiffs
contend that their federal statutory claims may properly be brought under
Section 1983.

Section 1983 provides a cause of action against any person who, under color
of state law, deprives another of "any rights, privileges or immunities
secured by the Constitution and laws" of the United States. 42 U.S.C. @
1983. "In order to seek redress through @ 1983, however, a plaintiff must
assert the violation of a federal right, not merely a violatio" Blessing,
520 U.S. at 340 (emphasis in original). To establish the existence of a
private right of action, a plaintiff must show that the statute is: (1)
"intended to benefit" the plaintiff seeking to enforce it; (2) a "binding
obligation on the governmental unit," rather than "merely a congressional
preference for a certain kind of conduct"; and (3) not so "vague and
amorphous" as to be "beyond the competence of the judiciary to enforce."

Rodriguez v. DeBuono, 162 F.3d 56, 60 (2d Cir. 1998) (quoting Wilder v.
Virginia Hosp. Ass'n, 496 U.S. 498, 509 (1990)). Even in those cases where
a plaintiff demonstrates that a federal statute has created an individual
right, "there is only a rebuttable presumption that the right is
enforceable under @ 1983." Blessing, 520 U.S. at 341. If Congress has
foreclosed a Section 1983 remedy, either by express statements in the
underlying statute, or by creating a comprehensive enforcement scheme, then
the presumption is rebutted. Id. at 341.

Plaintiffs' first and second claims seek to enforce rights under the Food
Stamp Act, specifically, 7 U.S.C. @@ 2014(b), 2020(e)(2)(B), and
2020(e)(9), and the Act's implementing regulations. Section 2014(b)
provides, inter alia, that the Secretary [of Agriculture] shall establish
uniform national standards of eligibility... for participation by
households in the food stamp program.... No State agency shall impose any
other standards of eligibility and a condition for participating in the
program.

Section 2020(e)(2)(B), "Requisites of a state plan of operation," states
that a State agency shall, inter alia, "provide timely, accurate, and fair
service to applicants for, and participants in, the food stamp program";
"permit an applicant household to apply to participate in the program on
the same day that the household first contacts a food stamp office in
person during office hours" and "consider an application that contains the
name, address, and signature of the applicant to be filed on the date the
applicant submits the application." Section 2020(e)(2)(B) further requires
that the State agency establish operating procedures which, although they
may "vary for local food stamp offices to reflect regional and local
differences within the State" must include a method by which the food stamp
applicant certifies the truth of the application information and the
household's eligibility. Section 2020(e)(9) provides that in the context of
applications for expedited food stamps "the State agency shall - provide
coupons no later than 7 days after the date of application to any household
which [falls below certain income levels]."

That these provisions of the Food Stamp Act were enacted by Congress in
order to protect the intended recipients of food stamps is not open to
serious doubt. Further, these provisions impose unambiguous obligations on
participating State agencies. See, e.g., Reynolds v. Guiliani, 35 F.Supp.2d
331, 340-41 (S.D.N.Y. 1999) (7 U.S.C. @@ 2020(e)(2)(B) and 2020(e)(9));
Meachem v. Wing, 77 F.Supp.2d 431, 440 (S.D.N.Y. 1999) (7 U.S.C. @
2020(e)(2)(B)). Finally, these provisions of the Food Stamp Act and its
implementing regulations are not so vague or amorphous that their
enforcement would strain judicial competence. Based on this analysis, there
is a rebuttable presumption that a private right of action exists to
enforce the rights created by the Food Stamp Act through a Section 1983
action. Furthermore, Congress has taken no explicit or implicit action -
and the State defendants have not pointed to any - to foreclose a remedy
under Section 1983.

4. Failure to Seek Administrative Review

The State defendants assert that plaintiffs' claims against them must be
dismissed because the plaintiffs have failed to pursue state administrative
review and thus have not exhausted their administrative remedies before
seeking federal review. It is well established, however, that "exhaustion
of state administrative remedies should not be required as a prerequisite
to bringing an action pursuant to @ 1983." Patsy v. Board of Regents, 457
U.S. 496, 516 (1982). Indeed, exhaustion is only necessary prior to
bringing a Section 1983 action "where Congress has carved out a specific
exception to the general rule that exhaustion is not required." Doe v.
Pfrommer, 148 F.3d 73, 78 (2d Cir. 1998) (citing Patsy, 457 U.S. at 512).
In this case, although both the Food Stamp Act and Medicaid statute require
States to provide for administrative hearings when requested by recipients,
see 7 U.S.C. @ 2020(e)(10); 42 U.S.C. 1396a(a)(3), the State defendants
fail to point out any indication of congressional intent to require the
exhaustion of such remedies prior to bringing a Section 1983 action. See
Pfrommer, 148 F.3d at 78.

Instead, the State defendants rely on Zinermon v. Burch, 494 U.S. 113
(1990), to argue that plaintiffs' failure to exhaust their administrative
remedies against the State precludes this action because in the context of
an alleged procedural due process violation "the constitutional violation
actionable under @ 1983 is not complete when the deprivation occurs; it is
not complete unless and until the State fails to provide due process." Id.
at 126. In the first place, this argument fails to recognize the federal
statutory basis for several of the plaintiffs' claims against the State
defendants. In any event, even with respect to the plaintiffs' federal due
process claim, Zinermon recognized that a Section 1983 action was
appropriate where the State acted "pursuant to any established State
procedure" instead of acting in a "random, unauthorized" manner. Id. at
130. In the latter case, state post-deprivation remedies may provide
adequate process. Id. Here, plaintiffs challenge the constitutionality of
the state procedures, and not a random event, unauthorized by state
authority. The State defendants' argument thus fails to account for the
fact that when reviewing alleged due process violations, courts must
distinguish between claims based on established procedures and claims based
on random and unauthorized acts by state employees. See Hellenic Am.
Neighborhood Action Comm. v. City of New York, 101 F.3d 877, 880 (2d Cir.
1996). The existence of "an adequate post-deprivation remedy is a defense
to a Section 1983 due process claim only where the deprivation is random
and unauthorized." Alexandre v. Cortes, 140 F.3d 406, 411 (2d Cir. 1998)
(internal quotation omitted).

The State defendants have thus failed to articulate a reason that would
justify this Court's departure from the general rule that administrative
exhaustion is unnecessary for the maintenance of a Section 1983 claim. See
Reynolds, 35 F-Supp.2d at 341 n.9 (stating, in context of claims brought
under food stamp, medicaid, and public assistance law that "exhaustion of
state administrative remedies is unnecessary"). Cf. Meachem, 77 F.Supp.2d
at 436-37 (finding that plaintiffs need not exhaust state court remedies to
pursue claims under food stamp, medicaid, and public assistance programs).

Conclusion

For the reasons stated, the City defendants' motion for partial summary
judgment is granted and the plaintiffs' motion is denied. The State
defendants' motion to dismiss is granted in part. Specifically, to the
extent that plaintiffs assert claims arising under state law against the
State defendants acting in their official capacity, those claims are
dismissed. Further, to the extent that the plaintiffs seek monetary damages
for an accrued liability from the State defendants acting in their official
capacity, as distinct from the expenditure of state funds for future
compliance with a grant of prospective relief, such a claim is similarly
dismissed. (New York Law Journal, June 16, 2000)


INTERNET COMPANIES: Suits over Privacy Could Give Courts First Crack
--------------------------------------------------------------------
Already bedeviled by legislators and consumer advocates about their privacy
policies, Internet companies now have a new foe to contend with: the class
action bar.

Milberg Weiss Bershad Hynes & Lerach is among several plaintiffs firms
pursuing litigation against four online companies -- DoubleClick Inc.,
Amazon. com Inc., RealNetworks Inc. and Buy.com Inc.

The suits claim that the businesses are secretly collecting personal data
on Internet users, such as their e-mail and home addresses, phone numbers
and the Web sites they frequent. However, the companies contend that
visitors to their sites remain anonymous. And they are adamant that
litigation is an inappropriate way to revise online privacy policies.

For plaintiffs attorneys, however, the lawsuits are an entre into the
dynamic, and potentially lucrative, debate over consumer privacy on the
Internet. Little case law exists on the subject, and the suits could give
the courts their first crack at the issue.

The class actions also coincide with efforts by the federal government,
Congress and privacy advocates to hold companies accountable for how they
collect and use personal data. Last month, the Federal Trade Commission
issued a report to Congress calling for legislation to require companies to
meet specific privacy standards. Several privacy bills are pending in
Congress and state legislatures that, if passed, would fill -- along with
the lawsuits -- a legal void in the privacy arena.

Not surprisingly, plaintiffs attorneys prefer litigation to legislation.
"The evolution of this is going so fast that companies are doing things
they had not done six months ago," said Alan Mansfield, a partner at
Milberg Weiss's San Diego office and one of the plaintiffs' attorneys in
class actions against the four companies. "The rules may be obsolete by the
time legislation is adopted."

The first privacy class actions were filed late last year in both federal
and state courts. In most instances, companies face more than one class
action. For example, 15 suits have been filed against online advertiser
DoubleClick. The federal cases have been consolidated into In re
DoubleClick Inc. Privacy Litigation, 00-641, which is pending in the
federal court for the Southern District of New York.

The complaints could turn into a pot of money for plaintiffs firms.
Mansfield said statutory damages "could be in the hundreds of million of
dollars for each of the cases."

In the DoubleClick litigation, Milberg Weiss shares lead counsel status
with New York's Bernstein Litowitz Berger & Grossmann and Chicago-based
Miller Faucher and Cafferty. Plaintiffs claim that DoubleClick uses
cookies, electronic files with unique identification numbers, to secretly
track users' activities on the Internet and collect their personal
information. When an individual visits a Web site that displays a
DoubleClick ad, a cookie is implanted on the user's computer system.

But DoubleClick contends that the visitors retain their anonymity. "There
is no personally identifiable information available from placement of a
cookie," said DoubleClick's attorney, Morrison & Foerster partner Lori
Schechter. Rather, she said, a cookie is used to enable DoubleClick to
determine how many unique anonymous visitors see a given ad.

DoubleClick had planned to combine names with anonymous user activity on
the Internet following its merger last year with Abacus Direct. Abacus has
a database of information about direct-mail shoppers that it shares with
catalog companies. But in response to an outcry from consumer advocates and
the initiation of an FTC investigation, DoubleClick announced in March that
it would not link offline and online data until the government and industry
agreed on privacy standards.

As to the company's current practices, Milberg's Mansfield said DoubleClick
is playing a game of semantics, that although DoubleClick doesn't obtain
personal information every time someone visits a Web site with its banner
ad, specific information is obtained over time that enables DoubleClick to
compose a Web surfer's profile.

For example, Richard Smith, an Internet consultant in Brookline, Mass.,
said he recently found that visitors to Red Herring's Web site typed in
their e- mail addresses in order to subscribe to a Red Herring newsletter.
The e-mail address was then automatically sent to DoubleClick. While Smith
said DoubleClick probably doesn't use such personally identifiable
information, he said the issue is that the company doesn't inform consumers
what it saves and what it throws away.

"Companies can change the rules at a drop of a hat," Smith said. "What they
throw away today, six months later they can keep." It's the potential for
companies to do harm in the future that has gotten many consumer advocates
riled up. "There is heightened concern not about what you are doing or
collecting now, but about what you might do in the future as a result of
industry mergers and consolidation," said James Brelsford, the managing
partner of Perkins Coie's Menlo Park and San Francisco offices.

Brelsford represents Amazon.com Inc. and its affiliate Alexa Internet in a
privacy class action. The suit alleges that Alexa's software interfaces
with a user's Internet browser to obtain information about the Web sites
the individual visits.

In the other class actions Milberg Weiss is pursuing, RealNetworks is
alleged to collect personal data via software that enables computers to
play audio and video files. The complaint against Buy.com claims the online
superstore collects personal information and transmits it to advertising
companies.

Concern over online privacy is at an all time high. Last month the Federal
Trade Commission issued a report to Congress calling for privacy
legislation. The agency, which has been monitoring commercial Web sites for
several years, said companies have not been successful in regulating
themselves and that most do not adequately disclose the information they
collect.

Several bills are pending in Congress. The most closely watched is the
Consumer Privacy Protection Act, S. 2606, introduced by Sen. Ernest
Hollings, D-S.C., the day after the FTC issued its report. As mandated by
the FTC, the bill would require commercial Web sites to notify consumers
what information is collected about them and how it is used; permit
consumers to choose whether this data can be used; give consumers access to
the data; and make sure the information is secure.

As an alternative to a legislative fix, the World Wide Web Consortium, or
W3C, is developing a protocol to enhance online privacy. The standard,
called Platform for Privacy Preferences, or P3P, would enable Internet
users to select the type of privacy policy they wish to use. A web server
would automatically communicate how it collects and shares data and a
user's browser would only go to sites that meet its privacy specifications.

While many companies believe that a technology fix is preferable to
legislation, some privacy advocates say the P3P falls short of protecting
consumers privacy. The Electronic Privacy Information Center, Junkbusters
Corp. and other privacy proponents released a report critical of the
protocol, which is still in draft form.

Jason Catlett, president of Junkbusters, an online privacy advocate,
believes legislation is the only way to assure consumer privacy. He said
privacy problems exist "because the United States doesn't have legislation
that requires information to be treated in a fair and transparent way."

Brelsford concurs. "Having some clarity as to the do's and don'ts is
preferable to the situation industry is facing now," Brelsford said. But
litigation, he says, isn't the way to bring about new policy. The
plaintiffs, he says, are attempting to exploit consumer worries about
online privacy.

Milberg Weiss' Mansfield believes it's the Internet companies who are
exploiting the situation. "Rather than trying to fix the problem, companies
are trying to make their activities more surreptitious." (The Recorder,
June 27, 2000)


LOS ALAMOS: Workers Aided in Wake of Security Incidents at Nuclear Lab
----------------------------------------------------------------------
With management at the Los Alamos National Laboratory back on the front
pages for still more security breaches, lab workers are fearful that they
will be the scapegoats for years of management indifference to security
issues. Since January, workers have been organizing and working to win a
union voice at the Lab. Employees who are charged in disciplinary actions
by Lab management, will have the support of the University Professional and
Technical Employees-CWA, if they request such help.

Lab Director John Browne announced to Congress that actions would "include
disciplinary actions up to and including termination of employment against
individuals who willfully or carelessly violate the rules."

In response, UPTE President Betty Gunther said, "UPTE is prepared to fight
hard for due process for employees, and to ensure that any discipline
levied is only for just cause. Only the individuals who violated rules
should be punished, not the entire workforce." In the past, Gunther said,
laboratory management was quick to point fingers away from themselves,
protecting favorites and punishing other employees.

Workers -- especially many considered by management to be "whistleblowers"
were let go in a round of layoffs in 1995; many employees have filed
individual and class action suits stemming from those layoffs and the Lab's
refusal to follow fair procedures in furloughing employees, Gunther noted.
Such arbitrary disciplinary actions are a big reason why workers are
organizing, she added.

As Congress discovered, regulations governing the storage of some materials
were so lax that it was not possible to determine who had taken the missing
drives or when they were last in the classified vault where they belonged.
These regulations were drafted by managers at LANL and approved by the U.S.
Department of Energy. In addition, LANL recently passed numerous DOE
security audits.

Recent news reports indicate that LANL may have negotiated with DOE
security auditors in Albuquerque to gain a higher security rating for LANL
than it actually deserved. But employees were told that LANL had passed its
many security audits with flying colors and are now shocked to discover
serious weaknesses in the system. The union charges that the blame should
be laid squarely at the feet of management where it belongs.

Employees are only now learning that scientists are being grilled and
forced to take polygraphs by the FBI, sometimes in all night sessions.
Gunther points out that polygraphs are inaccurate at best and can be made
more so by giving them in threatening situations. "Requiring polygraphs of
everyone who had access to the vault in question is a poor replacement for
having had proper rules and regulations in place. Gestapo methods should
not be used to extract confessions. If this kind of treatment continues,
few scientists will be available for future nuclear research at any
national laboratory, let alone LANL."

"Employees want better management and accountability at the Lab. Lack of
management accountability is the root cause of the current debacle,"
Gunther added.

Workers at the Lab have begun organizing with the help of UPTE, an
affiliate of the 630,000 member Communications Workers of America. UPTE-CWA
already represents some 10,000 workers at the University of California
campuses, medical centers, and the Lawrence Berkeley National Lab. On
January 1, 2000, the California higher education collective bargaining
statute was extended to cover workers at LANL; Lab workers began their
organizing efforts immediately thereafter. (Source: Communications Workers
of America)


MICHIGAN: ACLU Says Use of Test Scores Discriminates against Minorities
-----------------------------------------------------------------------
The state's use of standardized test scores as the sole criteria in
determining the winners of the Michigan Merit Award Scholarship
discriminates against minorities, the American Civil Liberties Union said
in a lawsuit. ''Standardized tests provide only a snapshot about the
test-taker and are not a good measurement of a student's talents or
abilities,'' said ACLU of Michigan Executive Director Kary Moss.

The lawsuit, filed Tuesday in U.S. District Court on behalf of six
students, calls the Merit program an ''unconscionable use of public
funds.'' It asks that a judge order the state to re-evaluate students who
were denied awards this year and to include other criteria for determining
the scholarships.

John Truscott, a spokesman for Gov. John Engler, said the state isn't
worried about the lawsuit.

The one-time scholarships, which offer as much as $2,500, are awarded to
students based on their scores on the Michigan Education Assessment Program
test, which students are not required to take. The ACLU says students in
poorer districts are at a disadvantage because those schools might not have
the same resources as wealthier districts to teach for the test. ''The
state is essentially punishing students for the schools they attend,'' Moss
said. ''If they want to reward student achievers, they need to look at
other factors.'' Moss said things such as a student's grade point average,
class rank, financial need and extracurricular activities should be
considered, not just the test scores.

Plaintiff Anita White said she took the test for the scholarship but didn't
get the money. Now she can't afford the school of her choice, Michigan
State University. ''I feel it's unjust,'' said White, who had a 3.4 GPA at
Belleville High School in western Wayne County. She plans to attend Central
Michigan University instead. ''A scholarship would have made a big
difference in my choice of a college,'' she said.

Truscott said using grade point averages to award scholarships isn't fair
either. ''That is not a uniform standard. An 'A' in one school is not an
'A' in another,'' Truscott said, adding that students who fair poorly on
the test can take it again.

About 40,000 students were awarded scholarships this year. Money for the
program comes from Michigan's share of the multistate tobacco settlement.
Students who qualify receive either $2,500 to attend a Michigan school or
$1,000 if they go to an out-of-state institution. (AP Online, June 28,
2000)


MYLAN LABORATORIES: Faces Appeal against Dismisssal of Securities Suit
----------------------------------------------------------------------
A class action suit was filed alleging violations of federal securities
laws by the Company and certain directors and officers of the Company.
Without specifying a dollar amount, the suit sought compensatory damages.
The Company's motion to dismiss the federal securities case was granted on
December 22, 1999. An appeal is pending.


MYLAN LABORATORIES: Reports on Suits over Trade Practices Re Drug
-----------------------------------------------------------------
Mylan Laboratories Inc., a Pennsylvania corporation incorporated in 1970,
and its subsidiaries are engaged in developing, licensing, manufacturing,
marketing and distributing generic and branded pharmaceutical products.
References herein to fiscal 2000, 1999 and 1998 shall mean the fiscal years
ended March 31, 2000, 1999 and 1998, respectively.

The company reveals in its report to the SEC that on December 22, 1998, the
Federal Trade Commission filed suit in U.S. District Court for the District
of Columbia against the Company. The FTC's complaint alleges the Company
engaged in restraint of trade, monopolization, attempted monopolization and
conspiracy to monopolize, arising out of certain agreements involving the
supply of raw materials used to manufacture two drugs. The FTC also sued in
the same case the foreign supplier of the raw materials, the supplier's
parent company and its United States distributor. Under the terms of the
agreements related to these raw materials, the Company has agreed to
indemnify these parties.

The Company is a party to other suits involving the Attorneys General from
33 states and more than 25 putative class actions that allege the same
conduct alleged in the FTC suit as well as alleged violations of state
consumer protection laws. A qui tam action was commenced by a private party
in the U.S. District Court for the District of South Carolina purportedly
on behalf of the United States alleging violations of the False Claims Act
and other statutes.

The relief sought by the FTC includes an injunction barring the Company
from engaging in the challenged conduct, recision of certain agreements and
disgorgement in excess of $120,000,000. The states and private parties seek
similar relief, treble damages and attorneys' fees. The Company's motions
to dismiss several of the private actions were granted.

The Company had filed motions to dismiss the FTC complaint and significant
portions of the State Attorneys General complaint. In July 1999, the Court
denied the Company's motion to dismiss the FTC complaint. The Company filed
a motion requesting the Court to certify its ruling with respect to the
jurisdictional issue for expedited appeal to the U.S. Court of Appeals for
the District of Columbia. This motion was denied. The Court granted in part
and denied in part the Company's motion to dismiss portions of the State
Attorneys General complaint. In so doing, the Court limited certain
theories of recovery asserted by the states. Some States filed a motion
with the Court requesting that it reconsider certain claims that were
dismissed, and, in December 1999, the Court reinstated certain claims.


PACIFIC GAS: PG&E Agrees to Increase Power Line Fee for 48 CA Counties
----------------------------------------------------------------------
Pacific Gas and Electric Co. has agreed to pay an additional $500,000 a
year to 48 California counties to settle a lawsuit over payments for
running its power lines throughout the state.

The class-action suit had been filed in 1994 by Alameda and Santa Clara
counties and was subsequently joined by dozens of other local governments,
mostly in Northern California.

Under a complex formula dating back to 1905, PG&E is required to pay cities
and counties an annual "franchise reimbursement fee" of 2 percent of the
utility's gross income resulting from running power lines in individual
jurisdictions. However, the plaintiffs in the suit said that the formula
short-changed counties by understating gross income.

By settling, PG&E essentially agreed to the counties' demands without
admitting any wrongdoing. "There was a disagreement with the counties on
how franchise fees were calculated," said Jon Tremayne, a spokesman for the
utility. "This settles it to our satisfaction and their satisfaction."
"This is a monumental victory," said Ann Ravel, Santa Clara County counsel.
"PG&E now will be paying their fair share of what they owe citizens."

Nancy Fineman, an attorney with the Burlingame law firm of Cotchett Pitre &
Simon, which represented the counties in the lawsuit, said the additional $
500,000 will be divided each year among the 48 plaintiffs. "It's a really
good settlement," she said. "It means more county services because the
counties will have more money."

The settlement does not affect San Francisco, which has a separate status
as both a city and a county.

Other counties that were party to the suit include Contra Costa, Humboldt,
Monterey, Napa, Sacramento, San Mateo, Solano and Sonoma. (The San
Francisco Chronicle, JUNE 28, 2000)


PINOCHET: 125 Chile Human Rights Suits Filed
--------------------------------------------
The Latin American Human Rights Association (ALDHU) has filed a class
action suit against Augusto Pinochet for human rights abuses during his
17-year rule, bringing to 125 the number of suits against the former
strongman. ALDHU Secretary General Juan de Dios Parra, and human rights
attorneys Nelson Caucoto and Francisco Bravo presented the suit in Santiago
on Tuesday.

The human rights group cites the disappearance and execution of 37 South
American nationals in Chile after the 1973 military coup that overthrew the
Salvador Allende government.

Caucoto said the suit was on behalf of six Ecuadorans, 14 Argentines, six
Bolivians, one Mexican, a Peruvian, eight Uruguayans and one Venezuelan,
who disappeared under the Pinochet regime.

"The complaint is directed against Mr. Pinochet and against other people
whose responsibility is indicated in the suit," Caucoto said. De Dios
Parra, of Ecuadoran nationality, told local television that the human
rights violations in Chile after the coup were part of a policy of state
terrorism that had spread beyond the nation's borders.

The Commission of Truth and Reconciliation, presided by Raul Rettig, in
1990-1991 investigated abuses in Chile, establishing that 3,000 people were
criminally killed during Pinochet's 1973-1990 regime. That figure included
1,198 who were never found.

The 84-year-old Pinochet was stripped of his parliamentary immunity from
prosecution in May, in a hotly contested move that paves the way for him to
face trial over the abuses.

Attorneys for the general have filed an appeal against the judges' ruling
in a bid to get the verdict overruled. (Agence France Presse, June 28,
2000)


TEN COMMANDMENTS: Orange County Plans Posting Despite ICLU Suit
---------------------------------------------------------------
Officials in southern Indiana's Orange County plan to take advantage of a
state law that takes effect Saturday and post the Ten Commandments in the
courthouse. The action comes despite a suit filed by the Indiana chapter of
the American Civil Liberties Union seeking a court injunction against the
law. The measure was sponsored by state Rep. Jerry Denbo of French Lick,
who said it is only appropriate to post the commandments since "our laws in
America are based on the principles of the Ten Commandments."

John Krull, the executive director of the ICLU, told UPI Wednesday the law
is meaningless because "the Indiana General Assembly doesn't have the power
to trump the First Amendment. What's going to be argued in any application
is how the First Amendment is going to be interpreted."

The ICLU suit was filed against plans to post the Ten Commandments on a
monument on the Statehouse lawn as part of an exhibit of historic
documents. The monument, however, is not ready and no court date has been
set for litigation. The ICLU is the lead plaintiff in the suit and is
joined by an interdenominational group of clergymen.

Most governmental bodies, schools and other public institutions have chosen
to see how the litigation comes out before taking any action, Krull said.
"Denbo sponsored the bill and the representative has chosen to get out in
front of the litigation and put his constituents tax dollars at risk,"
Krull said. "Since he's been an advocate for trying to bring a railroad
casino to that area, his devotion to gambling must have extended to games
of chance with his constituents dollars."

Orange County commissioners plan to erect a wooden plaque bearing the Ten
Commandments at 12:01 a.m. Saturday.

"A lot of people feel our government has gotten away from these
principles," Denbo told the Indianapolis Star, adding that the
commissioners are prepared for the political fallout. "They're willing to
take a stand on what they think is right."

State Sen. Anita Bowser of Michigan City said she doesn't think the law
stands a chance of surviving a court test. "Considering what the U.S.
Supreme Court just decided about saying a prayer at ball games, I would
assume that as soon as the (Civil Liberties Union) gets a case, the court
will throw it out," she said.

The Rev. Kevin Armstrong, pastor of the Roberts Park United Methodist
Church in Indianapolis, said he thinks a public display of the Ten
Commandments is a mistake. "What's more important to me is placing those
sacred writings in their religious contexts," he said. "Putting them in (a)
public square diminishes their religious nature." (United Press
International, June 28, 2000)


TOBACCO LITIGATION: Jury Says Smoking Not To Blame For Lung Cancer
------------------------------------------------------------------
Reeling from major West Coast defeats and the threat of a judgment day in
Florida, cigarette makers scored a legal victory Tuesday in Brooklyn, N.Y.,
where a state court jury ruled tobacco companies were not to blame for the
lung cancer of a longtime smoker.

The verdict in the case of Clyde Anderson, a former laborer who lives in
Brooklyn, turned on the unexpected finding that his cancer was not linked
to more than 30 years of smoking.

After a nearly two-month trial, jurors were to determine whether tobacco
companies were guilty of a host of wrongs, including failing to give
adequate health warnings and conspiring to deceive the public about the
risks and addictiveness of smoking. But the panel's 5-1 decision that
smoking was not "a substantial factor" in Anderson's cancer exonerated the
companies and made all of those issues moot.

In the first individual smoker case ever tried in New York state, Anderson
had sued R.J. Reynolds Tobacco Co., Philip Morris Cos. and Lorillard
Tobacco Co. for making the brands he smoked from the early 1960s until
1993. Brown & Williamson Tobacco Corp., Liggett & Myers Tobacco Co. and two
industry organizations were also on trial for allegedly taking part in a
long-running conspiracy to hide the dangers of smoking.

Tobacco company lawyers had presented evidence that Anderson, 57, could
have contracted cancer from exposure to toxic substances through his work
as a bathtub refinisher and in other jobs. Even so, the conclusion that
smoking was a non-factor in Anderson's illness was described by an industry
spokesman as an "improbable" basis for victory, and by Martin Feldman, a
tobacco analyst with Salomon Smith Barney, as a "remarkable decision."

It appeared "the jury accepted the defense contention that bathtub
refinishing is more likely a cause of lung cancer than 30 years of smoking
Salems," said Mark Gottlieb, a staff attorney with the Tobacco Products
Liability Project, a Boston-based support group for lawyers who sue the
industry.

Stuart Finz, one of Anderson's lawyers, called the verdict "shocking . . .
in view of the overwhelming proof that 33 years of cigarette smoking indeed
caused Mr. Anderson's lung cancer." He said the case will be appealed.

Despite the victory, cigarette makers face a far greater threat in the
Engle class-action case in Miami, where a group of Florida smokers
numbering in the hundreds of thousands may be eligible for damages. The
case is nearing the end of a crucial punitive damages phase that many
analysts believe could produce an award in the tens of billions of dollars
as early as mid-July.

Even so, industry officials savored the victory in Brooklyn, noting its
pro-plaintiff leanings in asbestos cases and other litigation.

Brooklyn is "a very dangerous place to try cases if you're a defendant, no
matter what kind of product you have," said William S. Ohlemeyer, vice
president and associate general counsel for Philip Morris.

Tobacco lawyers had been able to "prevent the kind of jury anger . . .
that's infected a couple of the cases we've tried recently," Ohlemeyer
said.

He was referring to the string of eye-popping defeats sustained by Philip
Morris and R.J. Reynolds this year and last in individual smoker trials in
San Francisco and Portland, Ore. Verdicts in the three cases totaled $ 78.2
million even after judges substantially lowered two of the jury awards. All
three cases are being appealed.

In a particularly alarming sign for the industry, a San Francisco jury in
March awarded $ 21.7 million to plaintiff Leslie J. Whiteley, although she
began smoking after warnings were placed on all cigarette packs. That
result appeared to confirm a growing willingness by juries to base verdicts
on the misconduct of tobacco companies, rather than on the weakness or bad
judgment of smokers.

The Brooklyn verdict "bucks the trend of the West Coast cases," Feldman
said. For the plaintiffs, it "is a reality check on just how difficult it
is to win a case against the tobacco industry," he said.

Hundreds more claims by individual smokers are pending in courts throughout
the country. Trial began Monday in Hernando, Miss., in one--a wrongful
death case against R.J. Reynolds by the widow of lung cancer victim Joseph
Nunnally.

Most carefully watched, however, is the Engle case in Miami, the only class
action on behalf of sick smokers ever to go to trial.

Jurors in the marathon case ruled last July that smoking causes a host of
deadly diseases and that cigarette makers were guilty of fraud for lying to
the public.

In a second phase of the case that concluded in April, cigarette makers
were found liable for the specific diseases of three class representatives,
who were awarded compensatory damages totaling $ 12.7 million.

That set the stage for the current punitive-damages phase, in which jurors
will decide whether to award punitives in a lump sum to be divided among
all members of the class.

With closing arguments likely during the week of July 10, plaintiffs'
lawyers Stanley and Susan Rosenblatt are expected to request an award of $
100 billion or more.

The difficulty of appealing such a huge award had prompted speculation
about bankruptcy filings by one or more cigarette makers, but Florida
lawmakers in May passed protective legislation to eliminate the threat.

To avoid paying a judgment during an appeal normally requires an appeal
bond to be posted in the full amount--and it was this that triggered
discussion of bankruptcy scenarios. However, the new Florida law caps
appeal bonds at $ 100 million--a huge sum, but one the industry could raise
to pursue an appeal.

Tobacco officials say they expect to reverse the Engle verdicts on appeal,
contending the case was improperly granted class-action status. (Los
Angeles Times, June 28, 2000)


TOBACCO LITIGATION: Lorillard Will Admit Smoking Causes Disease
---------------------------------------------------------------
Lorillard Tobacco Co. intends to acknowledge in future trials that
cigarette smoking causes disease, the company CEO testified Wednesday in an
attempt to avoid paying punitive damages to sick Florida smokers.

The nation's fourth-biggest cigarette maker also acknowledges smoking
caused illnesses in some of the suing Florida smokers, said Lorillard's
Martin Orlowsky, the last of five tobacco chiefs to testify.

The industry fought the issue of medical causation in three smokers
representing 300,000 to 700,000 people covered by the lawsuit, but none of
them was a regular Lorillard smokers.

For the first time in public, Orlowsky also said the company agrees that
smoking causes lung cancer and other diseases, and is addictive.

Lorillard has made no statements on its change in position to comply with a
1997 agreement saying public-health officials should be the only public
voice on smoking and health, Orlowsky said.

Industry-leading Philip Morris Inc. said it also has kept silent under the
1997 pact reached as part of federal legislation that died, but the company
position hasn't changed on smoking-related disease.

Orlowsky was to face cross-examination Wednesday afternoon, and the
industry expected to rest Thursday after nearly three weeks. The jury was
expected to get the case in about two weeks, closing the third and final
phase of a long trial.

Orlowsky called a $17 billion value offered for Lorillard by a smokers'
witness "outlandish." The amount was based on Liggett Group Inc.'s $300
million sale of three premium brands to Philip Morris last year.

Based on the price offered by Lorillard to buy some Brown & Willamson
Tobacco Corp. brands about five years ago, Orlowsky said his company would
be worth $360 million.

Greensboro, N.C.-based Lorillard, a subsidiary of Loews Corp., has a net
worth of $921 million based on its latest financial statement at the end of
1999. A higher punitive award would put the company out of business, he
testified.

Lorillard's current domestic market share is just under 10 percent. Tobacco
companies want to avoid paying any punitive damages in the landmark
smokers' class-action case, offering its $254 billion to state lawsuit
settlements as sufficient.

Smokers are seeking a multibillion-dollar award as punishment for decades
of industry misconduct.

The jury already has ruled the industry makes deadly, defective products
and awarded $12.7 million in compensatory damages to the three
representative smokers.

The other defendants are: R.J. Reynolds Tobacco Co. and the industry's
defunct Council for Tobacco Research and the Tobacco Institute. (The
Associated Press State & Local Wire, June 28, 2000)


TRANSCONTINENTAL GAS: Defending Producers' Lawsuits over Royalties
------------------------------------------------------------------
In connection with agreements to resolve take-or-pay and other contract
claims and to amend gas purchase contracts, Transcontinental Gas Pipe Line
and Texas Gas each entered into certain settlements with producers which
may require the indemnification of certain claims for additional royalties
which the producers may be required to pay as a result of such settlements.

As a result of such settlements, Transcontinental Gas Pipe Line is
currently defending two lawsuits brought by producers. In one of the cases,
a jury verdict found that Transcontinental Gas Pipe Line was required to
pay a producer damages of $23.3 million including $3.8 million in
attorneys' fees. Transcontinental Gas Pipe Line is pursuing an appeal. In
the other case, a producer has asserted damages, including interest
calculated through December 31, 1997, of approximately $6 million.
Producers have received and may receive other demands, which could result
in additional claims. Indemnification for royalties will depend on, among
other things, the specific lease provisions between the producer and the
lessor and the terms of the settlement between the producer and either
Transcontinental Gas Pipe Line or Texas Gas. Texas Gas may file to recover
75 percent of any such additional amounts it may be required to pay
pursuant to indemnities for royalties under the provisions of Order 528.


TRANSCONTINENTAL GAS: Talks with DOJ over Waste Management Practice
-------------------------------------------------------------------
Transcontinental Gas Pipe Line, Texas Gas and Central have identified
polychlorinated biphenyl (PCB) contamination in air compressor systems,
soils and related properties at certain compressor station sites.
Transcontinental Gas Pipe Line, Texas Gas and Central have also been
involved in negotiations with the U.S. Environmental Protection Agency
(EPA) and state agencies to develop screening, sampling and cleanup
programs. In addition, negotiations with certain environmental authorities
and other programs concerning investigative and remedial actions relative
to potential mercury contamination at certain gas metering sites have been
commenced by Central, Texas Gas and Transcontinental Gas Pipe Line.

Transcontinental Gas Pipe Line received a letter stating that the U.S.
Department of Justice (DOJ), at the request of the EPA, intends to file a
civil action against Transcontinental Gas Pipe Line arising from its waste
management practices at Transcontinental Gas Pipe Line's compressor
stations and metering stations in 11 states from Texas to New Jersey. DOJ
stated in the letter that its complaint will seek civil penalties and
injunctive relief under federal environmental laws. DOJ and
Transcontinental Gas Pipe Line are discussing a settlement.


VARI-L COMPANY: Savett Frutkin Files Securities Suit in Colorado
----------------------------------------------------------------
Savett Frutkin Podell & Ryan, P.C. gives notice that a class action
complaint was filed on June 28 in the United States District Court for the
District of Colorado on behalf of a class of persons who purchased the
common stock of VARI-L Company Inc. (NASDAQ: VARL) at artificially inflated
prices during the period December 17, 1997 through May 17, 2000 ("Class
Period") and who were damaged thereby.

The complaint charges VARI-L and certain of its officers and directors with
violations of Sections 10(b) and 20(a) of the Securities Exchange Act of
1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that
during the Class Period, defendants issued false and misleading statements
about VARI-L's business, earnings growth and financial statements and its
ability to continue to achieve profitable growth. The alleged
misrepresentations resulted in artificially inflated stock prices.

Contact: Savett Frutkin Podell & Ryan, P.C. Robert P. Frutkin, Esquire
Barbara A. Podell, Esquire 215/923-5400 or 800/993-3233 E-mail:
sfprpc@op.net


WILLIAMS COMPANIES: Landowners Sue over Fiber-Optic Cable Installation
----------------------------------------------------------------------
Shrier v. Williams was filed on August 4, 1999, in the U.S. District Court
for the Northern District of Oklahoma. Oxford v. Williams was filed on
September 3, 1999, in state court in Jefferson County, Texas. The Oxford
complaint was amended to add an additional plaintiff on September 24, 1999.
On October 1, 1999, the case was removed to the U.S. District Court for the
Eastern District of Texas, Beaumont Division. Plaintiffs have filed a
motion seeking to remand the case back to state court. In each lawsuit, the
plaintiff seeks to bring a nationwide class action on behalf of all
landowners on whose property the plaintiffs have alleged Williams
Communications Group, Inc. (WCG) installed fiber-optic cable without the
permission of the landowner. The plaintiffs are seeking a declaratory
ruling that WCG is trespassing, damages resulting from the alleged
trespass, damages based on WCG's profits from use of the property and
damages from alleged fraud. Relief requested by the plaintiff includes
injunction against further trespass, actual and punitive damages, and
attorneys' fees.

Williams believes that installation of the cable containing the
single-fiber network that crosses over or near the named plaintiffs' land
does not infringe on the plaintiffs' property rights. Williams also does
not believe that the plaintiffs in these lawsuits have sufficient basis for
certification of a class action. The proposed composition of the class in
the Oxford lawsuit appears to include only landowners who would also be
included in the class proposed in the Shrier suit. Other communications
carriers have been successfully challenged with respect to their rights to
use railroad rights of way, which are also challenged by the plaintiffs in
Shrier and Oxford. Approximately 15 percent of the WCG network is installed
on railroad rights of way. In many areas, the railroad granting WCG the
license holds full ownership of the land, in which case its license should
be sufficient to give WCG valid rights to cross the property. In some
states where the railroad is not the property owner but has an easement
over the property, the law is unsettled as to whether a landowner's
approval is required. WCG generally did not obtain landowner approval where
the rights of way are located on railroad easements. In most states, WCG
has eminent domain rights which WCG believes would limit the liability for
any trespass damages. It is likely that WCG will be subject to other
purported class action suits challenging the use of railroad or pipeline
rights of way. WCG cannot quantify the impact of all such claims at this
time.


WILLIAMS COMPANIES: Reports on CO Suit over Allegedly False Claims
------------------------------------------------------------------
In 1998, the United States Department of Justice informed Williams that
Jack Grynberg, an individual, had filed claims in the United States
District Court for the District of Colorado under the False Claims Act
against Williams and certain of its wholly owned subsidiaries including
Williams Gas Pipelines Central, Kern River Gas Transmission, Northwest
Pipeline, Williams Gas Pipeline Company, Transcontinental Gas Pipe Line
Corporation, Texas Gas, Williams Field Services Company and Williams
Production Company. Mr. Grynberg has also filed claims against
approximately 300 other energy companies and alleges that the defendants
violated the False Claims Act in connection with the measurement and
purchase of hydrocarbons. The relief sought is an unspecified amount of
royalties allegedly not paid to the federal government, treble damages, a
civil penalty, attorneys' fees, and costs. On April 9, 1999, the United
States Department of Justice announced that it was declining to intervene
in any of the Grynberg qui tam cases, including the action filed against
the Williams entities in the United States District Court for the District
of Colorado. On October 21, 1999, the Panel on Multi-District Litigation
transferred all of the Grynberg qui tam cases, including the ones filed
against Williams, to the United States District Court for the District of
Wyoming for pre-trial purposes.


* Advocate Says More Caseworkers Needed to Help the Mentally Ill
----------------------------------------------------------------
AP News from Maine sayst that the state must increase the number of case
workers for the mentally retarded by half in order to comply with a
six-year-old consent decree, according to advocates for the retarded.

Richard Estabrook, chief advocate for the state mental health department,
told the Appropriations Committee Tuesday that 52 more caseworkers are
needed to meet the ratio of one worker per 35 patients. That calculation
assumes that the total number includes the 985 workers that only sometimes
need help.

The consent decree requires the state to provide community-based services
to former residents of the Pineland Center. It is an update of a 1978
settlement of a class-action lawsuit on behalf of former Pineland
residents.

The state withdrew its request last month that a federal judge find the
terms of the decree had been met, after a May 1 consultant's report
criticized the state mental retardation system.

Katie Fullam Harris, spokeswoman for the Department of Mental Health,
Mental Retardation and Substance Abuse Services, estimated the cost of the
extra workers at slightly more than $2 million. But she said department
officials disagree with Estabrook's claim that the workers are needed. "We
don't dispute there are problems that need to be addressed," she said. "But
we do not believe additional resources are required."

Estabrook said other positions in addition to the caseworkers are needed to
meet the terms of the consent decree, and told the committee members they
should have known more funds would be needed.

But department officials including Commissioner Lynn F. Duby told the
lawmakers they believe most of the changes can be paid through the
department's existing budget. (The Associated Press State & Local Wire,
June 28, 2000)


                              *********


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Class Action Reporter is a daily newsletter, co-published by Bankruptcy
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Copyright 1999.  All rights reserved.  ISSN 1525-2272.

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