CAR_Public/000707.MBX                  C L A S S   A C T I O N   R E P O R T E R

                  Friday, July 7, 2000, Vol. 2, No. 131

                                 Headlines

AOL: Customers Allege of Deceptive Tactics to Keep Members from Leaving
BELL ATLANTIC: PA Superior Court Reinstates Suit over Directory Ad.
DYNAMEX INC: Anticipates Trading to Resume
GASOLINE COMPANIES: Fuel Added to Gas Price Furor; Cabbies Seek Hike
HMOs: Mental Health Professionals Say Plan Benefits Misrepresented

HOLOCAUST VICTIMS: German Parliament Passes Law on Nazi Slaves Fund
INTERSTATE-81: Judge Orders Unprecedented Hearing Re Public Nuisance
LEAD PAINT: Two Top Plaintiffs' Firms Lose A Crucial Lawsuit
MEDIA BOROUGH: Media Business Owners Join to Challenge Borough Taxes
NATHANS FAMOUS: Resolves Lawsuit in Florida over Miami Subs Merger

OSICOM TECHNOLOGIES: Announces Agreement to Settle CA Securities Suit
PCB EXPOSURE: Court OKs Paoli Rail Yard Case for Medical Monitoring
POTOMAC ELECTRIC: Oil Cleanup Turns to Creeks; Phase One Soon to End
SORBATES PRICES: Food Company Opt-outs Pursue Claim
TITAN BOARD: Shareholders Sue Titan Board, USWA Says

TOBACCO LITIGATION: AP Says Judge Kaye Muses about Reducing Punitive
TOBACCO LITIGATION: Judge Kaye to Decide on Mistrial in Florida
TOBACCO LITIGATION: Woman Who Won $21.7M Award Has Died
USA: Lawyer Visited by Uninvited Termites Sue; New Orleans Natives Join
VIKTOR KOZENY: NY Money Managers Likely to Prove Fraud and Racketeering

* Immigrant Women in Low-Wage Jobs Are Targeted, EEOC Says

                             *********

AOL: Customers Allege of Deceptive Tactics to Keep Members from Leaving
-----------------------------------------------------------------------
Customers calling to cancel memberships with America Online are
frequently met with telephone representatives who use deceptive tactics
or blatantly lie to keep them from leaving the Internet giant, a former
employee alleged.

Providing documentation including scripts containing suggested language
for AOL "Saves consultants," the former worker said consultants use
misleading statements to talk at least 10 percent of all callers out of
canceling. Consultants are paid hefty bonuses for each member they
retain, the former employee said.

"They're paying these consultants to basically manipulate members into
believing their accounts are closed when they're not. It's probably 10
to 15 percent of the members calling in," said the former call center
worker, who asked not to be named. One common tactic, the former
employee said, is for consultants to fail to properly inform members
that they need to call back to confirm their cancellation.

AOL spokesman Rich D'Amato denied the accusations, saying that he could
not confirm if the documents received by the Herald were bona-fide AOL
policy. He also defended the tough questioning of members who call to
cancel, some of whom report being grilled by AOL representatives for 10
minutes or more. "We look at it as an opportunity for an exit interview.
We do want to find out why they want to cancel," he said of Saves
Department queries to members. "The most important part of AOL's
business is its relationship with its customers, establishing those
relationships and maintaining those relationships," he said. "At the end
of the day if someone wishes to cancel their AOL membership they can
call our 800 number and cancel."

Yet that assessment differs with that of Oakland, Calif., lawyer Ken
Richardson, who filed a class action suit last month seeking restitution
for members who say AOL refused to honor their cancellation requests.
"AOL has done this knowingly," he said. The practice could also be afoul
of a 1997 agreement with 44 state attorneys general, including
Massachusetts, in which AOL promised not to block members from
canceling.

While a spokeswoman for Bay State Attorney General Thomas Reilly told
the Herald it would be "inappropriate" to review the scripts, Iowa AG
spokesman Bill Brauch did look at the material, including suggested
responses to dozens of reasons members might give for canceling.

One recommended line, to get callers to "open up and start talking after
they've said: 'Don't give me a sales pitch; I just want to cancel,"' is
"I'm not here to sell you anything. I'm just here to ensure your
satisfaction." "That's just an outright lie and they should not be doing
that," said Brauch, who also expressed concerns about AOL's Saves staff
incentive programs.

Richardson, viewing the incentive plan posted on a public Website,
called it "highly weighted toward turning around cancellations." "One
scenario projects what 'Sammy Saver' can earn under the plan,"
Richardson said. "He's paid close to minimum wage under his base salary.
However, AOL pays him a bonus close to $1,900. The incentive bonus is
greater than Sammy's hourly wage."

In real life, the former employee claimed to have doubled a $20,000 base
salary to $40,000. "Believe me, an AOL consultant can make a really good
living from this type of business practice. And AOL rewards them for
doing so," the employee said. (Boston Herald Copyright 2000, Monday,
July 3, 2000)


BELL ATLANTIC: PA Superior Court Reinstates Suit over Directory Ad.
-------------------------------------------------------------------
The Pennsylvania Superior Court has reversed the dismissal of a class
action brought in Lancaster County, Pennsylvania, against Bell Atlantic
on behalf of all persons and entities that advertised in Bell Atlantic's
1998-99 directory for Lancaster County.

The case was brought in 1998 by Certified Carpet, Inc., and arose from
Bell Atlantic's decision not to include in the white pages of its
1998-99 Lancaster County directory the listings of all Lancaster County
residents. For many years before 1998, Bell Atlantic had included the
listings of all Lancaster County residents, including those whose
telephone service was provided by so-called "local" telephone companies
in the county, rather than by Bell Atlantic. The "local" telephone
companies service particular communities, and there are approximately 13
such communities and companies in Lancaster County. The listings of
these local companies comprise approximately 30% of the white page
listings in Bell Atlantic's Lancaster directory.

Including the listings of the local telephone companies was important to
Bell Atlantic's yellow page advertisers, because the perception is that
people will tend to use the directory that includes their listings and
those of their neighbors. By including the listings of the local
telephone companies, Bell Atlantic insured that its directory would
receive countywide distribution and use.

Bell Atlantic knew that this countywide inclusion and distribution was
important to its yellow page advertisers, and advertised for years the
inclusion of all white page listings, including those of the local
telephone companies, on the cover of its Lancaster County directory. An
inscription on the directory read: "Includes listings of all local
telephone companies."

For its 1998-99 directory, however, Bell Atlantic decided not to include
the listings of the local telephone companies, even though the cover of
that directory still contained the inscription quoted above,
representing that the listings of the local companies were included. As
a result of this change, the white page listings of the 1998-99
directory were approximately 30% fewer than those of the previous year's
directory, with its listings covering 13 communities in the county.

When it solicited the subscriptions for the yellow pages in its 1998-99
directory, however, Bell Atlantic did not tell its advertisers of the
plan change. The complaint filed by Certified Carpet alleges that Bell
Atlantic even kept the proposed change from its salespersons, so that
they would not let that information slip, even inadvertently. The
advertisers subscribed to the 1998-99 directory thinking that it would
be the same as that of previous years, with the same countywide coverage
and inclusion of all white page listings, and did not learn of this
substantial change and deletions until the directory came out and it was
too late for them to take their advertising dollars elsewhere.

Certified Carpet filed suit on behalf of itself and all other
advertisers in the 1998-99 directory, alleging that Bell Atlantic had
committed breach of contract and fraud. The case sought damages, in the
nature of fair restitution for the difference between a directory that
the advertisers thought they would get and that which they in fact got.

A Lancaster County judge, however, dismissed the complaint on
preliminary objections, an early procedural stage in the case, holding
that Certified Carpet and the class it sought to represent had no claim.
The legal issue at that point was whether the document that memorialized
the contract between the advertisers and Bell Atlantic was ambiguous.
The document, called "a Billing Summary," used the words "directory" and
"coverage areas," but did not define them. Certified Carpet said the
document was ambiguous, and could fairly be interpreted, and the
expectations of Bell Atlantic's customers reasonably understood, only by
looking at Bell Atlantic's past custom and practice.

The judge in Lancaster County, however, said the document was not
ambiguous and dismissed the case, holding that Certified Carpet had a
right only to have its advertisement included in the directory's yellow
pages, which it was, but no right to expect that the white pages would
include any particular number or scope of listings.

The Superior Court disagreed, holding that the Billing Summary was
ambiguous, and that evidence of the parties' past course of dealings, as
well as Bell Atlantic's past custom and practice, would be admissible.

The ruling by the Superior Court means that the case returns to
Lancaster County for further proceedings.

After the case was filed, Bell Atlantic voluntarily returned to
including the listings of all local telephone companies in its 1999-2000
directory.

The case was filed for Certified Carpet and the class by the law firms
of Roda & Nast, P.C. and Mikus Law Associates. Joseph F. Roda of Roda &
Nast has acted as lead counsel in the case, and presented the appeal,
which was argued to the Superior Court on May 24, 2000.

Roda said that he was pleased by the Superior Court's decision. "This
case has been from the outset about the idea of simple fairness. Bell
Atlantic has the right to publish whatever directory it wants, but it
also has the obligation to deal fairly with its customers. If Bell
Atlantic intended to make a change that it knew its advertisers would
consider important, we believe it had the obligation to tell them about
that change before it took their money, and let them make an informed
choice."

Copies of the Superior Court and trial court opinions are available on
request from Roda & Nast, at 717-892-3000. Contact: Joseph F. Roda of
Roda & Nast, P.C., 717-892-3000, ext. 222, or rodanast@aol.com


DYNAMEX INC: Anticipates Trading to Resume
------------------------------------------
Dynamex Inc. (AMEX:DDN), which was sued in Texas for violations of the
Securities Act and Securities Exchange Act, as previously reported in
the CAR, anticipates that the trading of its common stock was to resume
on July 6 on the American Stock Exchange when the market opens at 9:30
a.m. Eastern time.

Dynamex filed its Form 10-K for the year ended July 31, 2000 and Forms
10-Q for the quarters ended October 31, 1999, January 31, 2000, and
April 30, 2000 on Friday, June 30, 2000. The Company is in compliance
with the continued listing guidelines of the Exchange and the trading
halt will be lifted this morning.

The Company held an investor conference call yesterday afternoon. A
replay of the conference call is available at 800-642-1687, conference
ID 266867.

Dynamex is a leading provider of same-day delivery and logistics
services in the United States and Canada.


GASOLINE COMPANIES: Fuel Added to Gas Price Furor; Cabbies Seek Hike
--------------------------------------------------------------------
A Cook County judge on Wednesday ordered six gasoline companies to keep
price records back to April for a lawsuit that accuses them of price
gouging, a signal that the oil industry is facing hurdles other than
political rhetoric as Chicago motorists pay, on average, 25 cents more
for each gallon of gas than the rest of the nation.

Also on Wednesday, Chicago cabdrivers, who have complained that the high
gasoline prices have decimated their profits, officially asked the City
Council to consider a fare increase.

Both moves came on a day that the price of crude oil dipped nearly 6
percent and worldwide production was poised to increase, causing oil
producers to predict that the price of gas will drop further. Chicago
gas prices on Wednesday averaged $1.87 a gallon for regular unleaded,
down from $1.97 a month ago.

But the Cook County lawsuit contends that six oil companies--Shell,
Amoco, Mobil, Citgo, Clark Oil and Phillips Petroleum--have
unjustifiably raised their prices in violation of the Illinois Consumer
Fraud Act. "Our client believes ... there are unfair practices going on
out there," said Chicago attorney Larry Drury, a candidate for the
Illinois Supreme Court who is representing a Lake County limousine
driver in the case, which could be certified as a class-action suit.
"This [order] puts teeth into the process."

The companies already have been subpoenaed by the Federal Trade
Commission to hold on to the price information for the federal
government's investigation into whether they have illegally set high
prices. An Amoco representative said the lawsuit was groundless.

At City Hall, a hearing on a taxi fare increase is expected to take
place next week as the City Council begins to consider whether
cabdrivers should get more money and, if so, how much. Ald. Thomas Allen
(38th), chairman of the council's Transportation Committee, said he will
seek testimony from drivers, cab company representatives and consumers
to determine whether rising gasoline prices and other cost increases
should translate into higher fares. The hearing is required under city
ordinance because 10 percent of Chicago's licensed cabbies--1,700
drivers--signed petitions requesting it.

Some sort of increase--whether in the initial charge, called the flag
pull, the per-mile rate or the time-based charge--is considered a
foregone conclusion because Mayor Richard Daley supports relief for
drivers.

An ordinance will be drafted based, in part, on testimony from next
week's hearing, and the measure will be considered at a subsequent
Transportation Committee meeting, Allen said. If it is approved, it will
go to the full council for consideration.

Gas prices dominated hearings in the city and the suburbs on Wednesday.
U.S. Sen. Dick Durbin (D-Ill.) and state Reps. Maggie Crotty (D-Oak
Forest) and Jim Brosnahan (D-Evergreen Park) heard testimony by suburban
business owners and government agency officials who fear that the high
prices will play havoc with their budgets.

Robert Stranczek, president of Cresco Lines, a trucking firm based in
south suburban Harvey, said the price increases for diesel fuel and
gasoline will mean a 20 percent increase in fuel costs this year, or
nearly $1 million, and his truckers now buy all their fuel outside
Illinois. "I would love to give my money to the State of Illinois, but
I'm afraid I'd be put out of business if I do," he said.

At a General Assembly hearing on gasoline prices in Schaumburg, state
Reps. Terry Parke (R-Hoffman Estates) and Sidney Mathias (R-Buffalo
Grove) called for a more aggressive program nationally and in Illinois
to promote the use of alternative fuels, such as natural gas, propane,
hydrogen and electricity, as well as an 85 percent-grade ethanol fuel.
"Right now, we really don't have a program to address it," Mathias said.
"There's no question in my mind we need to be less dependent on foreign
fuel."

Wednesday's complaints were perplexing to oil producers, who pointed out
that prices were dropping. "We understand that gasoline is important to
people's lives and these price increases are not welcome," said Bob
Slaughter, general counsel for the National Petrochemical and Refiners
Association, in Washington. "But we do believe they are basically beyond
anyone's control."

The price increases were caused by a shift to more expensive
reformulated gasoline, pipeline problems and a general decrease in
supply and increase in demand worldwide, oil producers say. At $1.87 per
gallon of regular unleaded, Chicago area gasoline prices remain 11 cents
above the statewide average of $1.76 and 25 cents above the national
average of $1.62 per gallon. (Chicago Tribune, July 6, 2000)


HMOs: Mental Health Professionals Say Plan Benefits Misrepresented
------------------------------------------------------------------
The American Psychological Association, independent mental health
professionals and local organizations have filed several class actions
against HMOs and other mental health insurers seeking damages for
fraudulent misrepresentation, breach of contract and unjust enrichment.

The suits were filed in state courts in California, New Jersey and
Florida and in Washington, D.C., Superior Court and seek to enjoin the
mental health plans from misrepresenting benefits of their HMO plans and
to require the plans to fully disclose all internal guidelines and
limits to mental health care.

                              Cases Filed

The cases were filed between 1996 and 1999. They are New Jersey
Psychological Association, et al. v. MCC Behavioral Care Inc., No. MRS
L-1825-96, N.J. Super., Morris Co.; California Psychological
Association, et al v. Aetna U.S. Healthcare, et al., No. BC204113,
Calif. Super., Los Angeles Co.; Richard F. Brown v. Magellan CBHS
Holdings Inc., No. 99-2653, Fla. Cir., Hillsborough Co.; and Virginia
Academy of Clinical Psychologists, et al. v. Group Hospitalization and
Medical Services Inc. d/b/a Blue Cross/Blue Shield of the National
Capital Area, et al., No. 9400-98, D.C. Super.

(Complaints available. New Jersey: Document # 31-000526-005. 26 pages.
California: Document # 31-000529-006. 19 pages. Florida: Document #
31-000526-007. 9 pages. Washington, D.C.: Document # 31-000526-008. 30
pages.)

The New Jersey action was filed on behalf of the NJPA members who were
terminated by MCC Behavioral Care Inc. from its list of providers
because they were not "managed care compatible" and because the
psychologists allegedly overused the treatment sessions available to
their patients under MCC health care plan. The association alleged
breach of contract, implied covenant of good faith and fair dealing,
fraud, contract adhesion and the doctrine of fundamental fairness, as
well as tortious interference with economic advantage.

The California action was filed as a false advertising and unlawful,
unfair and fraudulent business practices action and sought to enjoin
Aetna U.S. Healthcare from leading California residents into selecting
its HMO by advertising prompt, accessible mental health treatment
services that it in fact denies. The association said that Aetna's
actions violate California's Unfair Competition Act, the California
Business and Professions Code, the state's False Advertising statute and
the state's Consumer Legal Remedies Act. Specifically, the California
plaintiffs alleged that Aetna's contracts with its subcontractors are
capitated and create a financial incentive to restrict or limit mental
health care. The nature of these contracts are not disclosed to
subscribers or enrollees.

                             Florida Action

The Florida action was filed based on Magellan CBHS Holdings Inc.'s
interference with the doctor-patient relationship and Magellan's alleged
failure to reimburse Dr. Richard F. Brown for care provided. The counts
in this action include tortious interference, fraudulent
misrepresentation, breach of contract and quasi contract or unjust
enrichment.

Finally, the suit filed in Washington, D.C., seeks to remedy fraudulent
and unlawful conduct occurring in connection with the marketing, sale
and administration of an HMO plan used by mental health patients
throughout the nation's capital. According to the complaint, the
psychologists allege that compensation rates for psychologists have been
drastically cut by more than 30 percent, which is in violation of
provider contracts and has resulted in a decrease in the number of
psychologists on the provider list.

"Yet neither patients, subscribers nor employer-purchasers have been
informed of the details of the reduction in Provider compensation or the
reduction in the number of psychologists on the HMO Provider panel," the
complaint said.

The association also alleged that the HMO plans have falsely led
subscribers and employers to believe that the plans will pay for 20
sessions and, in some cases, up to 52 sessions a year.

The psychologists seek damages for breach of contract, fraudulent
misrepresentation, breach of implied contract and tortious interference.

The New Jersey complaint was filed by William F. Maderer of Saiber
Schlesinger Satz & Goldstein in Newark, N.J. The California complaint
was filed by John E. McDermott of Howrey & Simon in Los Angeles. The
Florida complaint was filed by Kerry H. Brown and Michael C. Addison in
Tampa, Fla. The Washington complaint was filed by Dwight P. Bostwick of
Comey Boyd & Luskin in Washington, D.C. (Mealey's Managed Care Liability
Report, May 26, 2000)


HOLOCAUST VICTIMS: German Parliament Passes Law on Nazi Slaves Fund
-------------------------------------------------------------------
The lower house of the German parliament on Thursday overwhelmingly
passed a long-awaited law on setting up a five-billion-dollar foundation
to compensate former Nazi slaves and forced laborers. The 556-42 vote in
the Bundestag chamber cleared the way for a final passage by the
Bundesrat upper house on July 14.

Germany, the United States and representatives of the former victims
have been holding often difficult talks on the creation of the
Remembrance, Responsibility and the Future foundation, that will make
the payments, for more than a year.

The 10 billion mark (4.8 billion dollars/5.1 billion euro) fund will
come from equal contributions from German business and the government.
Actual payments will amount to 8.1 billion marks to the former workers
and about one billion marks for property claims.

Germany could begin payments by the end of the year if legal issues are
resolved in US courts, German negotiator Otto Lambsdorff said last
Saturday. He told the Bundestag on Thursday there would be a meeting in
Berlin on July 17 at which the German and US governments would sign a
final payments agreement. Finance Minister Hans Eichel said that while
Germany was moving to compensate the one remaining class of Nazi victims
left out of previous reparation packages, "this does mean we are drawing
a line (to cross out) the period from 1933-45. That would not be
possible."

German industry has still not raised its promised five billion marks. A
total of 2,945 firms have signed on for 3.1 billion marks, Lambsdorff
said. He said it was a "public scandal" that the majority of German
firms have not pledged money for compensation. The foundation has
canvassed 200,000 German firms. Lambsdorff said last Saturday that
German firms were waiting for the United States to make good on "a
withdrawal as rapidly as possible of lawsuits (against German firms) in
US courts."

US and German negotiators reached agreement last month on a deal that
would protect German companies against legal claims in the United
States.

This "legal closure" is the key German demand in return for the
payments. "I do not see any reason for German business to stand apart"
from the compensation drive, Lambsdorff said.

The head of the German Jewish community Paul Spiegel told the Mannheimer
Morgen newspaper Thursday that its was a scandal that German firms that
profited from slave laborers "are today not ready to provide a moral
compensation" to the people they abused.

German industry spokesman Wolfgang Gibowski said the passing of the law
would be crucial in bringing in more contributions from companies.

The US government has agreed to oppose the 55 class action suits now
pending in the United States as well as other possible future claims
against German companies and their subsidiaries filed in the United
States by Holocaust-era victims. US negotiator Deputy Treasury Secretary
Stuart Eizenstat has said the matter is urgent since the former slave
and forced laborers are mostly in their 80s and dying off at the rate of
one percent a month.

The forced laborers, mainly from five East European countries --
Belarus, the Czech Republic, Poland, Russia and Ukraine -- numbered from
750,000 to one million, depending if agricultural workers were counted,
and would get an average of 5,000 marks each. The number of former slave
laborers is up to about 200,000 and would get about 15,000 marks each,
Eizenstat has said.

The Conference on Jewish Material Claims would be given money to "reach
surviving slave laborers" living outside of the five countries,
Eizenstat said.

The East European nations as well as Israel, Jewish organizations and
lawyers for the victims have been involved in the talks. (Agence France
Presse, July 6, 2000)


INTERSTATE-81: Judge Orders Unprecedented Hearing Re Public Nuisance
--------------------------------------------------------------------
In a move that legal experts called unprecedented, a Roanoke judge last
Friday ordered a hearing to determine whether a strip of Interstate 81
is a public nuisance.

The decision was a victory for attorney Richard Lawrence, who in the
course of puttering around the valley in his 1971 Volkswagen Beetle
became fed up with the congestion, speeding and accidents on I-81. Last
year, Lawrence called the Rockbridge-to-Wythe county stretch of the road
a "public safety emergency." His civil action seeks to accomplish
through litigation what legislation has not - forcing safety
improvements that he says have become bogged down in bureaucracy.

Much to the surprise of some, Circuit Judge Richard Pattisall allowed
the case to go forward. He scheduled a two-day hearing in October for
Lawrence to present evidence about a stretch of highway where 19 people
were killed last year. "The court is quite concerned about the health,
safety and welfare of citizens who must use, and do use, this section of
Interstate 81," Pattisall said. "Are they helpless?" the judge asked
rhetorically about citizens who seek help from the courts when none
seems available elsewhere. "Is government so big, so all-powerful, that
the citizen has no remedy?"

But if lawsuits were roads, Lawrence would be on an unpaved one. Law
professors and transportation experts said that they could recall no
other case in which an interstate was the target of a public-nuisance
lawsuit - a legal action usually leveled at toxic waste dumps or
polluting industries. Some viewed the lawsuit as a way of using the
courts to address broad public concerns that transcend the specifics of
a single case, like class-action lawsuits against tobacco companies and
gun manufacturers. "I think when you have a governmental system that
seems to have come to a road jam, the judicial system does offer more
sure relief," said Clarence Ditlow, executive director of the Center for
Auto Safety in Washington D.C.

Ditlow, a lawyer, said he knew of no case like Lawrence's. "I hope it's
successful," he said. Others said the lawsuit improperly interjects the
court system into issues of highway funding and maintenance that are
better left to elected officials and state agencies. "Everyone is
committed to improved highway safety, from the governor to the attorney
general on down," said David Botkins, spokesman for Attorney General
Mark Earley. "The answer lies in continued public-policy decisions, not
protracted litigation."

What makes Lawrence's lawsuit unique is that instead of suing a private
individual or corporation, he names the Virginia Department of
Transportation, the Commonwealth Transportation Board and the Department
of State Police as defendants.

Assistant Attorney General Peter Messitt argued that the lawsuit should
be barred by the doctrine of sovereign immunity, a legal principle that
prevents lawsuits against the state. "It's something of a harsh rule,
but a rule born of practical necessity," Messitt said. "The state
treasury is not unlimited."

Sam Garrison, a Roanoke lawyer who is representing Lawrence and two
other people who were added as plaintiffs after the lawsuit was filed,
argued there are exceptions to the rule of sovereign immunity. He cited
a Virginia Supreme Court ruling allowing a lawsuit against the city of
Charlottesville brought by an accident victim whose car ran off of an
improperly marked dead-end road. Messitt countered that that case
applied to municipal but not state governments.

Garrison agreed the state should not be subjected to a flood of lawsuits
over interstate safety, but said his case would prevent just such a
problem by consolidating the interests of thousands of motorists into a
single proceeding. "We're looking at the forest rather than the trees,"
he said.

While Pattisall did not grant the state's motion to have the case
dismissed, he did not completely cast aside the sovereign immunity
argument either. Instead, he delayed his decision while allowing an
evidentiary hearing to go forward Oct. 24 and 25.

The judge's decision allows Garrison to prepare for the hearing by
subpoenaing information from the state and taking depositions from
transportation and police officials. To prove a public nuisance,
Garrison must convince the judge there is a "public safety emergency" on
the interstate that cannot be resolved through other legal means.

It remained unclear just what power Pattisall would have if he
determined a public nuisance existed. "Nobody really thinks the judge
can direct VDOT to add lanes to the highway," Garrison said. "We're
really talking about lesser things." Those things might include reducing
the speed limits for trucks and possibly cars, beefing up police
patrols, restricting some vehicles to certain lanes, and adding more
rumble strips and other warning devices.

From the outset, Garrison has described the lawsuit as more of an effort
to create a forum for discussion and information gathering than an
adversarial legal fight. The lawsuit seeks no monetary damages. In fact,
the main goal was to get the hearing that Lawrence now has.

Some legal experts were surprised that the state's claim of sovereign
immunity did not lead to a quick dismissal of the case. "The danger of
an expansive interpretation of claims of public nuisance against the
state is that it would open up a wide range of lawsuits" said George
Rutherglen, a professor at the University of Virginia's School of Law.
"That would be intolerable," Rutherglen said. "Every significant
proposal has significant opposition to it, and we can't have government
by judiciary." Laurence Hammack can be reached at 981-3239 or
laurenceh@roanoke.com (Roanoke Times & World News, Saturday, July 1,
2000)


LEAD PAINT: Two Top Plaintiffs' Firms Lose A Crucial Lawsuit
------------------------------------------------------------
In a significant setback to the plaintiffs' litigation campaign against
former makers of lead paint, a Baltimore jury has returned a defense
verdict for NL Industries and PPG Industries in the first products
liability action against members of the industry to go to trial.

Tobacco plaintiffs' lawyers Peter G. Angelos, of Baltimore's Law Offices
of Peter G. Angelos P.C., and Ronald L. Motley, of Ness, Motley,
Loadholt, Richardson & Poole, announced in 1999 that they would be
conducting an all-out assault on all of the companies that made or used
lead pigments for paint.

                                No Slam Dunk

But the Baltimore ruling indicated that these cases won't be slam dunks
for the plaintiffs, said NL Industries' defense lawyer Donald E. Scott,
of the Denver office of Chicago's Bartlit Beck Herman Palenchar & Scott.
"The plaintiffs' lawyers were looking for a precedent here."

But lead plaintiffs' counsel in the Baltimore case, Ted Flerlage, of the
Angelos firm, warned that the industry should take little comfort from
this initial victory: "We're in the beginning of what we believe will be
a long future of lead litigation."

The plaintiff in Baltimore, Tyrone Parker, had charged that ingestion of
paint chips from NL and PPG lead-based paint during the early 1950s had
caused cognitive deficits and permanent damage to his central nervous
system.

In 1953, Mr. Parker, then 2, was brought to the University of Maryland
Hospital, after suffering a seizure. He was diagnosed with lead
encephalopathy, in which large doses of lead cause seizures, said NL
co-counsel Michael D. Jones, of the Washington, D.C., office of
Chicago's Kirkland & Ellis. The level of lead in Mr. Parker's blood was
tested at 52 micrograms per deciliter of blood. The current standard for
the level of concern is 10 micrograms, Mr. Flerlage said. Treatment
reduced that level, but this "lead poisoning" caused significant
problems, including a learning disability. In 1992, Mr. Parker had a
seizure while driving and ran his car into a tree, leaving him with
severe epilepsy. He sued PPG and NL. Parker v. NL Industries Inc., No.
97085060-CC915 (Cir. Ct., Baltimore City, Md.).

Scores of similar lawsuits were dismissed on statute-of-limitations
grounds or for failure to identify the specific paint maker, Mr. Scott
said. "The reason this case got to trial was that his older siblings
said they remembered the brands of paint their grandfather used."

The Bartlit Beck and Kirkland & Ellis teams tackled the medical case.
The attorneys for PPG, James Miller and Michael Sweeney, of Pittsburgh's
Dickie, McCamey & Chilcote, contested the siblings' identification of
Pittsburgh Paint, made by PPG.

At trial the defense "disputed the original diagnosis," Mr. Scott said.
Although the 52-microgram reading was high, he said, "it was below the
threshold of the level for causing seizures."

The plaintiff contended that the lead had set off a febrile, or
fever-related, seizure. The plaintiff's lawyers used Dr. Peter Kaplan,
of Johns Hopkins Bay-view, as their expert witness on this theory of the
case. In his cross-examination of Dr. Kaplan, Mr. Jones said, he used
the witness's own publication, Epilepsy From A to Z, against him. "In
the book, he described the causes of febrile seizures," but "nowhere in
the book did he mention lead."

As to the cognitive deficits, said Mr. Scott, the defense contested the
relevance of studies showing a decline in intelligence in children who
ate lead paint. "This doesn't necessarily mean that this person was
harmed," he said. To prove this point, NL produced the school records of
Mr. Parker's siblings. Mr. Parker's "grades were very bad, but not
significantly worse than his two brothers who did not have lead
poisoning," he said.

Mr. Parker and his wife were seeking up to $ 35 million in damages. But
on June 12, a Baltimore jury rejected the 1953 diagnosis and found that
eating lead did not cause Mr. Parker to have cognitive deficits as a
child. The plaintiffs have not decided whether to appeal. (The National
Law Journal, July 3, 2000)


MEDIA BOROUGH: Media Business Owners Join to Challenge Borough Taxes
--------------------------------------------------------------------
Media business owners have filed a lawsuit against Media Borough
claiming that it is interfering with free trade by improperly increasing
taxes on local businesses.

A lawsuit proposed as a class action in the Court of Common Pleas of
Delaware County names as original plaintiffs Le James Corp., trading as
County Beverage, John's Grille and Athena Volikas, owner of Pinocchio's
Restaurant. All are business owners in an area of Media targeted for
revitalization, called "the strip" by locals. Springfield attorney Lee
A. Stivale of Jackson Cavanagh & Stivale said other local business
owners have joined as plaintiffs in the lawsuit.

Stivale said that Media Borough is doing "everything to kill business"
in the quiet, mom-and-pop borough business district. He claims that due
to the wrongful taxation of local merchants, the vacancy rate on State
Street is the highest it has been since World War II. The lawsuit says
Media Borough is violating state law by illegally expanding business
taxes there. The complaint states the action seeks an end to the
"extrajurisdictional and expanded taxes," which Stivale claims "are
unconstitutional and contrary to uniform taxation principles."

The declaratory relief action says the original Media Business Privilege
tax, passed by ordinance in 1985, required that "every person engaging
in a business, trade, occupation or profession in the borough ... pay an
annual business privilege tax on each person's gross receipts." The
complaint says that the definition of 'gross receipts' never included
receipts from the rendering of services outside of Media Borough. But
the complaint says that in 1999, the borough illegally amended the term,
"gross receipts" to include earnings from outside services and sales.
The complaint states, "Accordingly, the taxpayers of Media Borough,
subject to the Business Privilege Tax, must now include receipts from
business rendered outside of Media Borough, in their computation of
their business privilege tax liability." Stivale said that the borough
council "stiffed" business owners by needlessly raising taxes again last
year.

The class also claims that the Pennsylvania Tax Reform Act of 1988
abolished all business privilege taxes, with the exception of those in
existence before November 1988. Stivale said that when the Commonwealth
of Pennsylvania eliminated the taxes in 1988, Media "broadened its
business tax base without input from the business community."

According to the complaint, Stivale's clients also object to the
expansion of the borough's Mercantile Tax, first enacted in December
1985. The complaint says that that tax should have expired on Jan. 31,
1990, four years after its effective date of Jan. 31, 1986, but that the
borough amended its ordinance on Dec. 21, 1989, expanding the duration
of the tax beyond four years. The tax was once capped at $ 600, but the
complaint claims the borough deleted the $ 600 tax cap altogether last
year, further handicapping local businesses. The complaint says that
there is no present limitation as to the amount of mercantile taxes
assessed on Media merchants. Media Business Authority Executive Director
Zubair Khan said revenues from the Media business privilege taxes pay
his salary and help fund promotional events in the business district,
which directly benefit retail merchants on the strip. He said that the
MBA hosts 14 yearly events along the strip, like Media's Super Sunday, a
sidewalk sale, and Media's signature event, the Food and Crafts
Festival.Khan said the last event alone is worth its weight in gold for
Media businesses because it attracts more than 30,000 people to the
strip. "The events need to be paid for somehow, and it doesn't seem fair
to tax local residents for events that benefit Media businesses,
primarily," he said.

He also said that money collected from the taxes subsidize the borough
infrastructure, such as parking lots. "That's a misdirection of the real
facts," Stivale responded. "This tax is not going to finance the things
that matter. There is a shortage of parking lots in Media, and the MBA
has not helped finance the business community's parking needs." Stivale
said business promotional events should not be subsidized by an illegal
tax and that Media business owners were "taking it in the neck" because
of the increased taxes. He said business owners also object to a move by
borough council members to raise the annual Media Business Authority
registration fee from $ 10 to $ 50.

Richard Glassman is the press spokesman for the Media Business and
Professional Association, a breakaway organization from the MBA. He is
also the local owner and operator of a Media television production
company that showcases the Philadelphia Visitors Channel. He said his
family has owned and operated businesses in Media since 1951 when his
father opened Richard's General Merchandise company. Glassman said in
1984, borough representatives approached business owners in the area,
seeking to resolve the problem of increased waste disposal and higher
liability insurance fees in the business district.

An MBPA press release, drafted by the MBPA Board of Directors, says that
back then, Media business owners rose to the occasion and "agreed that
these costs should rightfully be paid by the business community." But
Glassman said that "in return for our acquiescence to the new law, the
borough agreed to the mercantile tax cap of $ 600 per year. [The
Borough] also agreed to allocate those revenues generated by the
mercantile tax as a budget for the newly formed Media Business
Authority." Glassman said that the MBA, which is the beneficiary of the
taxes, no longer adequately represents the local businessperson's
interest, and so the MBPA was formed to protest anti-business measures
such as the illegal taxes.

The MBPA press release says that when Media Borough "quietly revised the
ordinance and lifted the mercantile tax cap recently," it resulted in
increased tax liabilities by over 400 percent. Many businesses saw their
tax liabilities raised thousands of dollars, and in one case a tax bill
jumped from $ 600 to over $ 10,000. The press release also says that the
taxes are inherently unfair because they tax the total dollars generated
by a business, or gross revenues, as opposed to the net profit. It says
that the newer, less profitable businesses end up paying the same amount
of taxes as more established, profitable businesses in town. Glassman
said he was outraged that Borough Council "presented no case to the
taxpayers. There was no public debate or discussion even though many of
the business owners were attending council sessions to protest
anti-business measures." The MBPA press release says that "when
confronted with protest, the council tried to 'spin' their way out by
claiming that there was no new tax increase because they only removed
exemptions and had not raised the tax rate." The plaintiffs seek to
abolish the taxes it claims are illegal and also seek refunds for taxes
paid. (The Legal Intelligencer Sububran Edition, July 5, 2000)


NATHANS FAMOUS: Resolves Lawsuit in Florida over Miami Subs Merger
------------------------------------------------------------------
As previously reported in the CAR, on January 5, 1999, Miami Subs was
served with a class action lawsuit entitled Robert J. Feeney, on behalf
of himself and all others similarly situated vs. Miami Subs Corporation,
et al., in Broward County Circuit Court, which was filed against Miami
Subs, its directors and Nathan's in a Florida state court by a
shareholder of Miami Subs. Subsequently, Nathan's and its designees to
the Miami Subs Board were also served. The suit alleged that the
proposed merger between Miami Subs and Nathan's, as contemplated by the
companies' non-binding letter of intent, was unfair to Miami Subs'
shareholders and constituted a breach by the defendants of their
fiduciary duties to the shareholders of Miami Subs. The plaintiff sought
among other things: 1. class action status; 2. preliminary and permanent
injunctive relief against consummation of the proposed merger; and 3.
unspecified damages to be awarded to the shareholders of Miami Subs.

On April 7, 2000 the plaintiff filed his dismissal without prejudice of
the action, effectively ending the case against all of the defendants


OSICOM TECHNOLOGIES: Announces Agreement to Settle CA Securities Suit
---------------------------------------------------------------------
Osicom Technologies Inc. (Nasdaq/NM: FIBR) Thursday announced that an
agreement in principle has been reached to settle the consolidated
shareholder class actions currently pending in Federal district court in
Los Angeles against the company and certain of its present and former
officers.

These actions, brought on behalf of Osicom shareholders who purchased
Osicom shares during the period July 1, 1998 to April 20, 1999, were
originally filed in April 1999 and were consolidated by order of the
court in August 1999. As more fully described in the company's report on
Form 10-K for the fiscal year ended Jan. 31, 2000, the litigation
relates to the company's disclosures about a contract entered into by
its now-discontinued Far East Division and the potential revenues
associated with that contract, which was first announced on July 1,
1998. The tentative settlement, which is being entered into without any
admission of liability by any of the defendants, provides that, among
other things, all claims against all defendants shall be dismissed.

The settlement also provides for an aggregate cash payment to class
members of $3.75 million, plus accrued interest from Sept. 1, 2000, if
any, less approved attorneys' fees and related expenses. The settlement
will be funded primarily by the company's insurance carrier, and will
not have a material adverse effect on the company's financial position
or results from operations. The settlement is subject to the execution
of a definitive settlement agreement and to other usual and customary
conditions, including preliminary and final approval by the United
States District Court for the Central District of California and notice
to the class. There can be no assurance, however, that a definitive
settlement agreement will be executed, or that, if executed, it will be
approved by the Court.


PCB EXPOSURE: Court OKs Paoli Rail Yard Case for Medical Monitoring
-------------------------------------------------------------------
The Commonwealth Court has upheld a Chester County judge's decision to
grant class certification on a medical monitoring claim to residents and
workers who allege they were exposed to above-normal levels of
polychlorinated biphenyls, or PCBs, as a result of living near or
working at the Paoli Railroad Yard. "Defendants' assertions to the
contrary, it is apparent that plaintiffs' claims arise from the same
course of conduct and that these claims can be efficiently and
economically proven in one cause of action," Senior Judge Joseph F.
McCloskey wrote for the unanimous three-judge panel in Foust v.
Southeastern Pennsylvania Transportation Authority. "While individual
issues may arise, including length and extent of exposure, age, gender,
medical history, family history, lifestyle, preexisting conditions,
intervening factors and the like, these items will be addressed when and
if a medical monitoring program is created."

The case began as three class action lawsuits filed in federal court,
but the U.S. District Court for the Eastern District ultimately denied
class certification. Then 290 people filed individual claims in
Philadelphia Common Pleas Court. The cases were eventually transferred
to Chester County Common Pleas Court. The class includes anyone who
since April 1, 1976, either worked at the Paoli Railroad Yard or lived
in an area immediately to the north of the rail yard.

Defendants requested an interlocutory appeal, which the trial court
denied. Defendants Monsanto Co., General Electric Co. and CBS Corp.
petitioned the Commonwealth Court for review, which was granted. On
appeal, the defendants argued that the trial court's decision certifying
the class added new parties to the litigation after the limitation
period had expired. They said there were no class claims in the initial
lawsuits filed in 1987 and 1988. The court determined that the
defendants did not show they were prejudiced by the judge's amendment.

The defendants argued that the plaintiffs failed to meet the numerosity
requirement, show that the class is dominated by common issues and
demonstrate that the class action suit is the most efficient method of
litigation. With regard to numerosity, the court said if the class was
not certified, the individual suits "would drain the trial court's
resources." In arguing the commonality requirement, the defendants first
asserted that each individual's exposure to the PCBs would need to be
addressed separately. But the plaintiffs, citing case law, countered
that they had to show only that more than normal exposure occurred.
"Plaintiffs' expert, Dr. Michael. H. Lewitt, testified that such a
determination can be made on a class-wide basis, independent of
individual characteristics," McCloskey wrote. "As Dr. Lewitt emphasized,
differences in the amount of exposure will affect the amount of
monitoring and testing necessary and not whether monitoring is necessary
in the first place."

The court similarly dismissed the defendants' argument that proof of a
significantly increased risk of developing a disease would require
individual inquiry. The appeals panel also dismissed defendants'
arguments that issues of causation, medical monitoring and proof of
negligence needed individual inquiry. The defendants further argued that
because of these necessary individual inquiries, the class action
mechanism would not be the most efficient way to litigate the case. They
suggested a number of different methods to litigate, including a
two-phase trial of all the claims of the 10 to 20 people with the
highest PCB blood levels, or a "bellwether group," consisting of six
workers and six residents. The appeals court simply said the trial court
"succinctly and correctly expressed reasons" why the class action was
the best way to litigate. "If each case were tried separately, it is
easy to see that the results could be unfairly diverse not because of
the differences in the individual cases or claims but, rather, because
different juries viewing the same evidence might come to different
conclusions on the scientific issues," the trial court wrote. (The Legal
Intelligencer Sububran Edition, July 5, 2000)


POTOMAC ELECTRIC: Oil Cleanup Turns to Creeks; Phase One Soon to End
--------------------------------------------------------------------
Nearly three months after a massive oil spill from the Potomac Electric
Power Co. power plant at Chalk Point, authorities are nearly ready to
declare the end of the first phase of the cleanup, a company spokesman
reported. State, federal and company officials have completed phase one
efforts in most of the areas affected by the April 7 spill, but they are
"still not signed off for phase one" in some of the surrounding creeks,
said Pepco spokeswoman Nancy Moses. Authorities will brief area
residents on the cleanup at 7 p.m. Tuesday at the Mechanicsville
Volunteer Fire Department.

"Pepco itself has been working with some of the community groups on the
common property beaches in terms of the claims process," Moses said.
"Things have moved along very well." Pepco officials said they are
developing guidelines with government authorities to determine when the
cleanup can be declared complete.

More than 100,000 gallons of oil leaked from a pipeline at Pepco's plant
on Swanson Creek at Aquasco in the southeastern corner of Prince
George's County. A storm the day after the spill blew oil past barriers
and into the Patuxent River.

No visible oil sheens have been reported in recent weeks. Workers
continue to restore private property, beaches and shoreline along and
near the Patuxent River.The Maryland Senate Economic and Environmental
Affairs Committee is expected to hold hearings on the spill in "late
summer or early fall," said state Sen. Roy P. Dyson (D-St. Mary's), a
committee member.Pepco officials said last month that the company has
spent "more than $ 50 million" on the cleanup.

State and federal officials have called the spill one of the worst
environmental disasters in Maryland history. Oil spread across at least
17 miles of Patuxent River shoreline, much of it in Calvert County, and
also moved into sensitive marshes and creeks in St. Mary's, Prince
George's and Charles counties. At least 100 birds, mammals and reptiles
died as a result, and many were injured.

The National Transportation Safety Board, which discovered a crack in
the pipeline, is still investigating the incident. After the spill, the
U.S. Transportation Department's Office of Pipeline Safety shut down the
51.5-mile pipeline, which carries fuel oil between the Chalk Point plant
and Piney Point in St. Mary's County on the Potomac River.

In June, the Office of Pipeline Safety held an informal hearing with
Pepco to discuss how the company will comply with a corrective action
order issued by the federal agency, an official said.

Numerous class-action lawsuits have been filed against Pepco on behalf
of those whose land has been damaged. Full restoration of the
environment could take five years, officials have said, and the
long-term effects of the spill won't be known for some time. (The
Washington Post, July 6, 2000)


SORBATES PRICES: Food Company Opt-outs Pursue Claim
---------------------------------------------------
Dean Foods Co., Kraft Foods Inc. and Ralston Purina Co. are pursuing a
price-fixing claim against several producers and distributors of
sorbates, a widely used food preservative, after opting out of a
class-action suit.

The three consumer-product companies have accused Eastman Chemical Co.,
Hoechst AGand some Japanese manufacturers and distributors of
participating in an international conspiracy to artificially inflate
prices and control the market for sorbates, which are found in dairy
products, cheese, baked goods and processed foods. They charge in a suit
filed last month in U.S. District Court in Chicago that the companies
engaged in price fixing since at least 1979 until 1998.

A similar claim was filed in Northern California in early 1999 as part
of a class action on behalf of nearly 1,000 sorbate buyers. Three of the
defendants, including Hoechst, have settled the class-action case and
agreed to pay the plaintiffs $60 million.

But Dean Foods, Kraft and Ralston Purina--some of the largest sorbate
buyers--think they can cut a better deal. "We believe we can do better
with an action independent of the class, and we owe that to our
shareholders," said Dale Kleber, vice president and general counsel of
Franklin Park-based Dean Foods.

The civil action stems from a federal probe of price-fixing allegations
and other antitrust violations in the preservatives industry. Roughly
$200 million worth of sorbates--which include potassium sorbate and
sorbic acid--are sold annually worldwide.

In October 1998, Eastman Chemical, based in Kingsport, Tenn., pleaded
guilty to criminal charges and agreed to pay an $11 million fine.
(Earlier this year, Eastman Chemical announced that it was ending
sorbate production.) Officials at Eastman Chemical could not be reached
for comment Wednesday.

The following year, Hoescht of Germany, one of the world's leading
sorbate producers at the time, and Nippon Gohsei also pleaded guilty to
participating in the conspiracy and were fined $36 million and $21
million, respectively.

In addition to the fine paid by Hoechst, Bernd Romahn, former marketing
manager of the company's food ingredients business unit, agreed to pay a
$ 250,000 fine for his role in the price-fixing scheme. A former
executive of Nippon Gohsei also was fined $350,000.

Since then, Hoescht, Nippon Gohsei and Daicel Chemical Industries have
settled class-action claims, said Susan Kupfer, an attorney with Berman,
DeValerio, Pease & Tabacco, in San Francisco, which chairs the
plaintiffs' committee in the California suit. "We are very pleased with
the settlement," Kupfer said. "We think it fairly compensates the
class."

The class includes sorbate buyers such as General Mills Inc., Coca-Cola
Co. and Ashland Chemical Co. But it is not unusual for some members of a
class to opt out of settlements and file their own claims. Dean Foods
uses sorbates in pickles and some dairy products. Kraft Foods, based in
Northfield, uses the chemical in cheeses and salad dressing among other
products. Ralston Purina, based in St. Louis, uses sorbates in pet food.
(Chicago Tribune, July 6, 2000)


TITAN BOARD: Shareholders Sue Titan Board, USWA Says
----------------------------------------------------
Three Titan International Inc. (NYSE: TWI) shareholders filed a
derivative complaint against Titan CEO Morry Taylor, Board Chair Erwin
H. Billig and all other sitting Titan directors on June 20, 2000 in the
Eighth Judicial Circuit of (Adams County) Illinois, according to papers
filed with the court.

The suit alleges that Taylor and Billig -- and the other members of
Titan's Board of Directors -- committed "gross mismanagement, abuse of
control, waste of assets, excessive remuneration, breach of fiduciary
responsibility and other illegal conduct which has inflicted hundreds of
millions of damage on Titan and its shareholder community."

According to the suit, the plaintiffs have demanded, among other things,
that the defendants be ordered to personally repay Titan unspecified
compensatory and/or punitive damages for destroying more than $400
million in shareholder value and causing other acts that "have severely
damaged a valuable corporate franchise." Also, the suit asks for legal
fees and plaintiffs' court costs, as well as "such other relief as the
Court my deem just and proper."

The plaintiffs in the suit are shareholders Merrill Beck, Lawrence
Breuklander and Marvin Glass -- all residents of Iowa who are members of
USWA Local 164 of Des Moines, Iowa. Titan forced the 670 members of
Local 164 into an unfair labor practice (ULP) strike on May 1, 1998.
That labor dispute was followed by a ULP strike forced by Titan in
Natchez, Miss., that put 330 members of USWA Local 303 out of work on
Sept. 14, 1998. Both labor disputes continue and the complaint
identifies both disputes as material issues.

The San Diego law firm of Millberg Weiss Bershad Hynes & Lerach is
representing the plaintiffs. (Source: United Steelworkers of America)


TOBACCO LITIGATION: AP Reports on Punitive Issue, Captures Major Events
-----------------------------------------------------------------------
"In the long haul, I'm the one that has to make the decision, not the
jury," Circuit Judge Robert Kaye said Wednesday while reviewing
financial documents from the nation's five biggest cigarette makers,
according to a report on the Associated Press.

Defendants routinely contest a jury's punitive damage verdict as
excessive and ask the judge to reduce the award. "What have I got to
work with?" he asked as he examined an R.J. Reynolds Tobacco Co.
financial statement. "I've got to decide whether whatever it is they
decide is sufficient to put you all out of business."

The jury is to begin hearing closing arguments Monday on punitive
damages for 300,000 to 700,000 sick Florida smokers. State law does not
allow a punitive verdict to bankrupt a company.

The tobacco industry made a strategic decision against calling any
expert witnesses on the ability to pay punitive damages, limiting their
financial case to cross-examination of smokers' witnesses and CEO
testimony. Smokers' attorney Susan Rosenblatt charged it was the
industry's burden to prove what it could afford.

The Associated Press also reports, in another wire, Judge Kaye said,
"We're talking financial resources. Financial resources mean the whole
ball of wax," as he reviewed instructions to be read to the jury, which
is expected to begin deliberations late next week.

The tobacco industry insisted the jury cannot go beyond the net worth
figure of $15.3 billion listed in 1999 corporate annual reports for the
nation's five biggest cigarette makers. Kaye disagreed. "There's much
more to this case than net worth or stockholder equity," he said. "I
tried to explain that to you throughout the entire course of the trial.
You guys fought me all the way down the line. I think you're wrong," the
report goes on. Trademarks, which represent untold value to cigarette
makers but are not part of net worth, can be a factor for the jury, Kaye
said, according to the AP. "What is a company worth? That's what we're
talking about," the judge said. "Not net worth, but worth."

The attorney for 300,000 to 700,000 sick Florida smokers was expected to
give a dollar request to the jury early next week in closing arguments.

Smokers' witnesses testified the companies could afford to pay $150
billion to $157 billion. The 1994 lawsuit listed $200 billion, and lead
tobacco attorney Dan Webb has mentioned a possible $300 billion award.
All of the numbers dwarf the U.S. record for punitive damages set by
juries - $4.8 billion against General Motors last year in a California
car fire.

Florida law says a punitive verdict cannot put a company out of
business, and judges are required to reduce excessive amounts that
would.

Jury selection in the nation's first class-action trial for smokers
began two years ago on July 6, 1998. The same jury already has ruled the
tobacco industry makes deadly, defective products and awarded $12.7
million in compensatory damages to three representative smokers.

The defendants are Philip Morris Inc., R.J. Reynolds Tobacco Co., Brown
& Williamson Tobacco Corp., Lorillard Tobacco Co., Liggett Group Inc.
and the industry's defunct Council for Tobacco Research and Tobacco
Institute.

                             Mistrial Motions

On another subject, Kaye did not rule after arguments on nine mistrial
motions made by tobacco attorneys during the six-week punitive phase. In
two previous trial segments, Kaye tabled an assortment of mistrial
motions for reconsideration once the final verdict is in.

As the trial enters its third year, attorneys argued housekeeping issues
to get the punitive case to the six-member panel. The same jury already
has ruled the tobacco industry makes deadly, defective products and
awarded $12.7 million in compensatory damages to the three
representative smokers.

          Major events in the first smokers' class-action lawsuit

    May 1994 - Class-action suit filed on behalf of sick U.S. smokers
against the nation's five biggest cigarette makers and two industry
groups.

    October 1994 - State judge approves class certification.

    January 1996 - State appeals court limits class to sick smokers in
Florida.

    March 1998 - Judge Robert Kaye assigned to case.

    July 6, 1998 - Jury selection begins.

    October 1998 - Opening statements. Judge imposes gag order on trial
participants.

    July 1999 - Jury decides tobacco industry fraudulently conspired to
make a dangerous, addictive product that causes cancer, heart disease
and other illnesses.

    September 1999 - State appeals court orders damages to be decided
one smoker at a time.

    October 1999 - Appeals court reverses itself, says jury can award
punitive damages for class.

    November 1999 - Compensatory damage phase begins for three smokers
serving as class representatives.

    December 1999 - State Supreme Court refuses to consider tobacco
challenge to class punitive award.

    February 2000 - State appeals court rejects tobacco industry
challenge to gag order.

    March 2000 - News media challenge gag order in federal court.

    April 2000 - Federal judge lifts gag order. State jury awards $6.9
million in compensatory damages to two smokers. Jury also awards third
smoker $5.8 million but said he should be barred from collecting the
money because a four-year statute of limitations had expired. Judge says
he would decide later how to handle that ruling.

    July 2, 2000 - Testimony ends, both sides rest.

    July 6, 2000 - Trial has its second anniversary as attorneys and the
judge work out how jurors will be instructed when the case is turned
over to them. (The Associated Press, July 6, 2000)


TOBACCO LITIGATION: Defense Attys Refute Ability to Pay in Instalments
----------------------------------------------------------------------
Tobacco attorneys said lawyers for the plaintiffs told the jury
deliberate lies in the penalty phase of the trial. The defense attorneys
said lawyers Stanley and Susan Rosenblatt told the jury that the tobacco
industry can pay damages in installments over a long period of time when
that is not true. "Some day, when it does have to be paid, we will have
to pay it all at once," said Phillip Morris attorney Brad Lerman.

The attorneys also said the Rosenblatts told the jury they can set
damages as high as they want -- estimates have run up as high as $300
billion. They said in fact, Florida law prohibits awards in excess of a
defendants' ability to pay without going bankrupt.

The Rosenblatts said the tobacco attorneys were trying to sabotage the
case. "This has been totally twisted and distorted," Susan Rosenblatt
said.

Closing arguments in the case are expected next week and a verdict could
come by the end of the month. The penalty phase of the trial began May
22 and except for appeals is the last phase of the proceeding.

Last July, the same jurors found the industry guilty of misleading the
public about the dangers of smoking. In April, they awarded the three
primary defendants in the case $12.7 million in damages. (United Press
International, July 6, 2000)


TOBACCO LITIGATION: Woman Who Won $21.7M Award Has Died
-------------------------------------------------------
A 40-year-old Ojai woman who won $21.7 million in San Francisco Superior
Court from tobacco giants Phillip Morris Inc. and R.J. Reynolds has died
of lung cancer, her lawyers said on July 5.

Leslie Whitely, a former smoker and mother of four children who
developed lung cancer after smoking for 26 years, died in a Ventura
hospital on Monday, said attorney Madelyn Chaber of San Francisco.

In March, a San Francisco jury awarded Whitely $21.7 million in damages
from the nation's two biggest cigarette companies. The award included
$20 million in punitive damages for Whiteley and $1.7 million in
compensatory damages to her for medical care and lost wages as well as
to her husband for loss of companionship.

The jury found that Phillip Morris and R.J. Reynolds knew about the
health hazards of smoking and deliberately misled the public about those
dangers. Whitely's lawyers claimed that the tobacco industry targeted
children and teenagers, including their client, for its addictive
product.

The verdict was the first in the country won by a former smoker who took
up the habit after 1965, when the federal government required health
warning labels on packs of cigarettes.

Both companies are appealing the case to the state Court of Appeal in
San Francisco. It is unclear whether Whitely's death will affect the
appeal process.

The company lawyers contend that the award was not justified because the
trial jury erred in focusing on the conduct of the industry rather than
Whitely's smoking behavior.

Her victory marked the first loss for North Carolina-based Reynolds in a
case brought by an individual smoker, but New York-based Philip Morris
has lost several cases in recent years brought by long-term smokers. The
two companies have more than 500 lawsuits each pending against them.

In addition, the outcome of a huge class action lawsuit brought against
the tobacco industry by three smokers on behalf of an estimated 500,000
smokers is pending in Miami.

Whitely, who claimed that the companies misled her about the dangers of
cigarettes, began smoking Camels and Marlboros at age 13 in 1972. She
quit smoking in 1998, shortly before lung cancer was diagnosed.

"This is obviously a personal tragedy, but at trial her whole smoking
career was after the time that there were federally-mandated warnings on
the pack," said Michael York, a lawyer for Phillip Morris. "The puzzling
thing is how someone could smoke cigarettes with these warnings on them
and still maintain that they were somehow not aware of the hazards of
smoking."

During the trial, lawyers for the tobacco companies challenged Whitely's
credibility, particularly her statements that she had never fully read
or understood the specific warnings.

Tobacco lawyers insisted that they should not be held responsible for
her injuries because she had been exposed to warning labels since she
began smoking. They argued that Whitely should be held partly
responsible because she smoked marijuana in previous years and also
smoked, against her doctor's advice, during her pregnancies.

Whitely, who appeared only briefly during the trial, had brain surgery
earlier this year. Whitely's lawyers relied on her videotaped
deposition. They also showed the jury 1,000 internal industry documents
to help prove their case that the tobacco companies had committed fraud
by knowing about the dangers of their products and hiding them from the
public.

The documents included a statement that tobacco executives placed in
major newspapers in 1954, saying there was no proof that cigarettes are
addictive but vowing to support scientific research on the subject.

The Whitely case was the first brought by a California individual to go
to trial since a San Francisco jury last year awarded $50 million to
Patricia Henley, a longtime smoker who sued Phillip Morris after
developing lung cancer. That award was reduced to $26 million by Judge
John Munter, who also presided over the Whitely case. Henley's award is
also on appeal. (The San Francisco Chronicle, July 6, 2000)


USA: Lawyer Visited by Uninvited Termites Sue; New Orleans Natives Join
-----------------------------------------------------------------------
The first time termites infested Harry Hoskins's carport, he did what
most people do. He called the exterminator, tore out all the old
chewed-up wood, and rebuilt his carport. The second time they arrived,
in the hundreds of thousands, Mr. Hoskins, a lawyer, decided to sue the
federal government.

You see, Hoskins has Formosan Termites, one of the most voracious eaters
the world has ever known. These little insects, Hoskins believes, made
their way to New Orleans aboard wooden planks from Asia, carried on a US
Navy ship during World War II. And Hoskins believes the federal
government should be responsible not just for his own carport, but for
Formosan termite-damaged structures all across the South, and in
California and Hawaii, too. "In the '50s, the government knew there was
a problem, and they were told they needed to do something to eradicate
Formosan termites, or there would be far-reaching consequences," says
Hoskins, tearing open a wooden support beam in his carport with his
hand. "Well, you know the rest of the story."

Across the American South, homeowners know the story of the Formosan
termite all too well, although few have taken their pest problems to
court. The scope of the problem, by all accounts, is massive. Formosan
termites can be found infesting homes in some 11 states. In New Orleans
alone, the cost of repairing Formosan-chewed structures runs about $ 300
million a year. Nationwide, the damages exceed those caused by fire,
flood, and tornado. "We joke that this is the second Battle of New
Orleans," says Ed Bordes, director of the New Orleans Mosquito and
Termite Control Board. "The first battle was a lot easier, because the
redcoats marched in a straight line."

While most entomologists trace the original infestation of Formosan
termites to World War II, and mostly around naval bases that carried
cargo from Asia, legal experts say that proving the federal government
to be liable for damages will be difficult at best.

One law professor, Blaine LeCesne of Loyola University, has one word for
Hoskins's attempt to trace the infestation to a single wooden stage at
Camp Leroy Johnson in New Orleans. The word is "bizarre."

But while Hoskins's class-action suit lumbers through the courts,
entomologists are making strides in understanding, and fighting, the
world's hungriest termite. Formosan termites are hardly a new
phenomenon. Thought to have originated in southern China, Formosan
termites made their way from port city to port city by way of trading
ships. One Japanese monk in the 1600s, commenting on the new alien bugs
in the shipping port of Nagasaki, described them as being the size of a
grain of rice, but with the potential for destroying a wooden temple. He
nicknamed them do-to-su, or temple destroyer.

What makes the Formosan termite so devastating is not the appetite of
the individual termite, but the size of its colony. Unlike native
termite colonies, which tend to number a few hundred thousand, Formosan
termite colonies can grow to anywhere from 5 million and upward, and
their underground nests can be as large as 300 feet across. Pouring
poison around the perimeter of a house may kill a few thousand, but
Formosan termites tend to march through poison barriers like the Allies
taking the beaches of Normandy. The largest Formosan termite infestation
in recorded history was found in the Algiers Regional Library, across
the river from New Orleans. The termites were feeding not on books, but
on tree trunks buried by a hasty developer in the neighborhood. "There
were some 60 or 70 million individuals," says Mr. Bordes. "This was the
equivalent of a 180-pound animal feeding on that structure."

What killed this colony, finally, was a new pest-management system that
inhibits a termite's ability to molt its hard exoskeleton as it grows.
As the poisoned termites make their way home, after a long day of
chewing hardwood floors and copies of Encyclopedia Brittanica, they
poison their fellows. In time, the colony's population goes into a steep
decline. Like many entomologists, Nan-Yao Su speaks of the Formosan
termite with grudging respect. "We haven't eradicated a single insect in
the history of humankind," says Dr. Su, one of the chief developers for
the poison bait system used in the Algiers library. "The best we can do,
I think, is to manage the populations."

This, of course, is small comfort to Harry Hoskins, who recently found
Formosan termites in a metal electrical conduit leading into his house.

At present, Hoskins's lawsuit is in the discovery phase, as he requests
paperwork from the Pentagon on who knew about the Formosan termite
infestation at Camp Leroy Johnson and when they knew it. But he has been
getting calls from neighbors and fellow New Orleans natives eager to
join his suit. "The real drudgery of the lawsuit is just beginning," he
says, adding, "These things didn't just fly over from Formosa, and we
didn't invite them in either." (The Christian Science Monitor, July 6,
2000)


VIKTOR KOZENY: NY Money Managers Likely to Prove Fraud and Racketeering
-----------------------------------------------------------------------
A group of New York money managers has a "substantial likelihood" of
proving fraud and racketeering charges against international financier
Viktor Kozeny, a federal judge in Denver has ruled.

In the most detailed legal setback for Kozeny, U.S. District Court Chief
Judge Lewis Babcock has extended a preliminary injunction freezing
Kozeny's ownership of a lavishly furnished Aspen estate that he used to
lure wealthy investors and their Wall Street contacts.

In two separate rulings, Babcock surmised that Kozeny used proceeds from
an overseas "fraud scheme" in which plaintiffs lost more than $140
million to remodel and furnish the Red Mountain villa, now on the market
for $27 million.

The Czech-born financier, who now lives in the Bahamas, has denied any
wrongdoing.

But after reviewing hundreds of documents and affidavits, the judge said
the eight plaintiffs - led by New York-based Omega Advisors hedge fund
manager Leon G. Cooperman and insurance giant American International
Group - had demonstrated evidence that Kozeny "engaged in racketeering
activity by perpetuating frauds and laundering monetary instruments or
funds."

The pretrial ruling, which prevents the Aspen property from being sold
without the court's approval, ensures Kozeny's Colorado assets will be
available to satisfy an award for damages should Omega and AIG win their
case.

Babcock said the preliminary injunction is appropriate because the
evidence shows Kozeny diverted "tens of millions of dollars" of
plaintiffs' funds to Swiss bank accounts and holding companies
controlling his personal investments. Records show Kozeny used some of
those funds to remodel both his Eaton Square mansion in London and the
Aspen residence. Nearly $10 million was poured into refurbishing the
Aspen home, which a Kozeny- controlled company paid a record $ 19.7
million three years ago.

A collection of Omega and AIG subsidiaries are suing Kozeny, 36, for
fraud arising out of a failed attempt to acquire a majority stake in the
only petroleum producer in Azerbaijan, a former Soviet republic.
Kozeny's plan involved buying millions of privatization vouchers for the
government-owned company. The investment soured when the Azeri
government decided against privatizing. A subsequent investigation by
AIG and Omega concluded that Kozeny - their "equal" partner - had spent
less than 40 cents each on millions of vouchers that he resold to them
for $25 per option.

Three foreign courts have issued similar asset freezes on Kozeny's homes
and property in the Bahamas, the British Virgin Islands and England. But
AIG's lead attorney, Stephen Younger, said Babcock's written opinions on
June 12 and 21 are the most comprehensive - and damning - court analyses
of the case against Kozeny. The U.S. court has tentatively agreed to
follow the lead of the High Court of London, where the main case against
Kozeny is expected to be heard in the fall of 2001.

Kozeny's Denver attorney, James Nesland, said an appeal of Babcock's
preliminary injunction, which essentially freezes all of Kozeny's U.S.
assets until the case can be brought to trial, will be lodged with the
10th Circuit Court of Appeals in Denver. That appeal will argue Babcock
acted on insufficient evidence, Nesland said.

Kozeny has disclaimed "beneficial ownership" in the 3-acre estate, known
as Peak House, where he took up residence in July 1997 and initially
began promotzeri privatization program to his Aspen neighbors.

But in his 40-page opinion on June 12 titled "Findings of Fact,
Conclusions of Law and Order," Babcock said "undisputed evidence"
establishes Kozeny as the owner of Peak House.

The judge cited more than $9.7 million in wire transfers of plaintiffs'
funds sent to Kozeny-controlled companies that paid for the extravagant
renovation and decoration of Peak House. Records show Kozeny bought the
23,000-square-foot home through Landlocked Shipping Co., a Turks and
Caricos Islands company, in June 1997. The cash purchase remains the
most expensive home sale in Colorado.

Over the 2 1/2 years, Kozeny personally ordered and supervised the
home's remodeling, the judge wrote. Expenses included an exercise room
for his wife as a Christmas present, a cigar room tunneled out of the
mountainside, a suite of rooms for an unidentified "female companion," a
two-bedroom guest wing and new quarters for the family chauffeur and
nanny.

Accounting records, the judge wrote, show a Kozeny-controlled shell
company, Turnstar Limited, used plaintiffs' funds to purchase and
reupholster "millions of dollars" of antique furnishings for the
mansion. Plaintiff lawyers provided a partial inventory of the home's
contents, including 500 bottles of rare wine, an ivory collection valued
at $2 million, a couch hand-sewn with 33 alligator skins, and a fleet of
late-model trucks and SUVs. The home's furnishings, including artwork,
have been appraised at roughly $7 million.

Babcock determined Kozeny violated the Colorado Organized Crime Control
Act by using Landlocked, Turnstar and another company, Peak House Corp.,
to launder funds from defrauded investors from September 1997 to
September 1999.

The home also became an "essential and integral part of Kozeny's method
to recruit investors in the Azeri fraud by impressing them with his
material wealth," Babcock wrote.

Babcock referred to a December 1997 party Kozeny hosted at Peak House
for wealthy potential investors that reportedly cost more than $1
million and several follow-up meetings in which neighbors were offered
the opportunity to invest in the Azeri venture. One of those neighbors,
Aspen money manager Aaron Fleck, later introduced Kozeny to Leon
Cooperman at Omega.

The judge stopped short of freezing $350,000 in payments Landlocked is
receiving from a Florida couple to rent Peak House for the summer.
Babcock said the lease was signed in October, before the Colorado
complaint was filed in Denver federal court.

Although Kozeny's fleet of GMC trucks and Suburban vehicles are included
in the preliminary injunction, Babcock said he had no jurisdiction over
a Mercedes armored car that plaintiffs' investigators found in the Peak
House garage. Title to the $250,000 black Mercedes S600 sedan, which was
custom built to Kozeny's specifications, is still held by O'Gara Hes
Eisenhart Armoring Co. (Denver Rocky Mountain News, July 5, 2000)


* Immigrant Women in Low-Wage Jobs Are Targeted, EEOC Says
----------------------------------------------------------
Two years after the U.S. Supreme Court's landmark rulings clarifying
employer liability in sexual harassment cases -- and with millions in
corporate dollars spent training workers about the hazards of
perpetrating or condoning such conduct -- experts say that the problem
has remained stubbornly persistent.

More ominous, says the U.S. Equal Employment Opportunity Commission, is
an apparent rise in cases involving the most vulnerable women in the
workplace: those filling blue-collar and factory jobs, especially
immigrants.

"The commission is deeply concerned by an alarming trend in the rise of
employment discrimination and retaliation against immigrant workers in
low-wage jobs," says EEOC Chairwoman Ida L. Castro, who is also the
commission's first Latina chair.

Ms. Castro called such workers "prime targets for abuse and exploitation
because they are relatively powerless and work under dire conditions.
Moreover, they often speak little or no English and have limited
mobility."

EEOC spokesman David B. Grinberg says that such cases of sex harassment
are also significant because low-wage jobs are showing the largest
increase as a percentage of the national work force.

Consider:

On June 1, the EEOC announced a $ 1 million settlement of a class action
against Grace Culinary Systems Inc. and Townsends Culinary Inc.
involving allegations of sexual harassment against 22 Hispanic women who
worked at a food processing plant in Laurel, Md.

The workers, all recent immigrants from Central America who speak little
English, claimed that they were subjected to sexual groping and requests
for sex from male managers and co-workers over a period of several
years. Those women who rejected sexual advances were given menial or
more difficult assignments; two pregnant women who refused were demoted
and then fired; another woman was locked in a walk-in freezer by her
supervisor after she rejected his advances.

Grace Culinary, a subsidiary of W. R. Grace & Co., agreed to pay $
850,000 to the victims. Townsends Culinary, which bought the Laurel
plant from Grace in 1996 and closed it in April, will pay $ 150,000.

A May 26 ruling by the U.S. Court of Appeals for the 6th Circuit
unanimously affirming an award of damages totaling $ 407,364 to Sharon
Pollard, the control room operator of a DuPont hydrogen peroxide plant
in Tennessee, and $ 252,997 to her attorneys. Pollard v. E. I. DuPont de
Nemours Co., No. 98-6317.

U.S. District Judge Jon Phipps McCalla, of the Western District of
Tennessee, found that Ms. Pollard was subjected to continuing sexual
harassment by male co-workers since 1987. DuPont supervisors know of the
harassment, the judge determined, but did not take adequate steps to
stop it, even after Ms. Pollard was forced to take medical leave to seek
psychological assistance.

Judge McCalla called it a "case of wretched indifference to an employee
who was slowly drowning in an environment that was completely
unacceptable, while her employer sat by and watched."

Last year's $ 1.9 million settlement between the EEOC and Tanimura &
Antle, of Salinas, Calif., one of the largest U.S. lettuce growers and
distributors, on behalf of a class of Latino agricultural workers who
were required to give sexual favors for continued employment and job
benefits at Tanimura & Antle plants in Salinas and in Yuma, Ariz.

                              An Outreach Effort

Mr. Grinberg says that agency officials are concerned enough about the
trend that since last year, they have been conducting outreach programs
in Chicago, Houston and Philadelphia and other areas that have large
immigrant populations. "Many of these people don't know they have these
rights until we make them aware of them," Mr. Grinberg says.

The legal landscape for surveying sexual harassment cases was reformed
in June 1998, when the Supreme Court ruled simultaneously in two cases:
Burlington Industries Inc. v. Ellerth, 118 S. Ct. 2257, and Faragher v.
City of Boca Raton, 118 S. Ct. 2275.

The two rulings cleared up more than 10 years of contradictory rulings
from the federal circuit courts about when a company can be found liable
for sexual harassment committed against an employee by a supervisor. The
high court ruled that a company can be held liable for an employee's
sexual harassment by a supervisor -- even when a corporate sexual
harassment policy is in place -- if the victimized worker suffered a
"tangible employment action" such as firing or demotion.

If the employee does not experience any tangible adverse action from
being sexually harassed, the Supreme Court says, the company can escape
liability with a two-pronged affirmative defense: the existence of an
effective sexual harassment policy and both a prompt action by the
company to correct the problem and a failure by the complaining employee
to use the remedial process provided by the company.

The two Supreme Court rulings prompted a rush to attorneys and
consultants who specialized in providing model sexual harassment
policies and training for companies.

Statistically, it may be too soon to tell whether the two rulings and
the burst of corporate training have made a difference. According to
EEOC data, for example, the number of claims involving sexual harassment
rose from 5.7% of complaints received in the 1997 fiscal year, to just
6.2% in fiscal year 1999.

Nevertheless, EEOC data show the cost to employers of sexual harassment
cases has become steadily greater: from $ 12.7 million in EEOC
settlements in fiscal year 1992, to $ 50.3 million in the 1999 fiscal
year.

Those specializing in sexual discrimination and harassment litigation
say that they are not surprised by the persistence of the problem,
despite all the money spent by companies trying to armor themselves
against such claims.

"I have to believe it has made a dent in the situation," says Nancy
O'Mara Ezold, a Philadelphia-area litigator who is also chair of the
Women's Law Project in Philadelphia. "Has it made the kind of difference
the public thinks it has made? My response would be no."

Ms. Ezold, whose own sex discrimination lawsuit against the venerable
Philadelphia firm of Wolf, Block, Schorr and Solis-Cohen L.L.P. rocked
the city's legal community in 1990, now has three lawyers working for
her in her 9-year-old firm, which, she says, earns the bulk of its money
from employment discrimination cases.

"I think employers today are much more savvy than ever before," Ms.
Ezold says. "I know they are postering the walls and filing e-mails. My
concern is that they are concentrating on the policy and not following
up with action.

"I think that the money being spent on establishing policies far
outweighs the kind of money being spent to see that anyone complies with
them," she adds.

Garry Mathiason, a senior partner at Littler Mendelson P.C., in San
Francisco, the country's largest employment and labor law firm, says he
believes it is logical that sex harassment litigation appears to be
moving into the ranks of blue-collar and minimum-wage employees.

The reason, Mr. Mathiason says, is that the Supreme Court's 1998
decisions, in putting a new emphasis on the effectiveness of company
policies and corrective actions, have made such blue-collar cases more
likely to be financially viable for plaintiffs' attorneys. Lawyer-driven
increase?

"When you take one of these cases alone, you're looking at very small
damages because you have a low-paying job," Mr. Mathiason explains.
"Now, when you focus instead on what the company did in response, you
have something an attorney can use to enrage the jury and argue for
punitive damages."

As a result, Mr. Mathiason adds, there has been an increase not only in
low- wage sex harassment cases, but also in cases of harassment based on
race, gender, ethnic origin and other reasons.

Like Ms. Ezold, Mr. Mathiason believes that companies are still in the
middle of the learning curve in dealing with workplace harassment and
discrimination cases. The first phase, the rush to adopt corporate
harassment policies and procedures, occurred in the first two years
after the Supreme Court rulings, he says.

Mr. Mathiason says that most companies are now in the second phase:
training managers to investigate and document harassment complaints
properly. He notes that three years ago, his firm's
investigation-training seminar for human resources professionals
attracted five people. Last year, he says, there were 25, and this year,
there were 35 and a waiting list of 25 more. (The National Law Journal,
July 3, 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
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Washington, DC. Theresa Cheuk, Managing Editor.

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