CAR_Public/000714.MBX                  C L A S S   A C T I O N   R E P O R T E R

                  Friday, July 14, 2000, Vol. 2, No. 136

                                 Headlines

BRANCH DAVIDIAN: Testify Continues; Closing Statements Forthcoming
CENDANT CORP: Securities Suit Re ABI Dismissed & Remanded on Appeal
CHASE MANHATTAN: Customers Object to Motion to Dismiss Investment Suit
DAIMLER CHRYSLER: Greitzer & Locks Defamation Suit Can Proceed
FLOORING AMERICA: The Atlanta Journal Reports on Continued Upheaval

GIULIANI: Ap. Ct Affirms Settlement for NY Child Welfare System Case
HAMMERHEAD'S SEA: Agrees to Pay Patrons; Food Poisoning Hit 500 in '98
HIGHLAND PARK: Racial Pact Nears; ACLU Plan Aims to Prevent Profiling
HOLOCAUST VICTIMS: Church to Contribute $5 Mil to Slave Labor Fund
INMATES LITIGATION: Rikers to Receive Mental Health Care Arrangement

IVAX CORP: Announces 11th Cir Dismisses Shareholder Suit with Prejudice
MONSANTO CO: Anniston Residents Seek Court-Ordered PCB Cleanup
MYLAN LABORATORIES: Agrees to Pay $135 Mil to Settle Generic Drugs Case
NATIONAL SEMICONDUCTOR: Santa Clara Jury Rejects Securities Fraud Claim
OFFICE DEPOT: Catalogue Prices Go to Miami-Dade Circuit Court

OMEGA HEALTHCARE: Wolf Haldenstein Announces Securities Suit in NY
ORBITAL SCIENCES: CFO at Center of Shareholder Suit to Quit
REDLANDS CONTAMINATION: CA Sp Ct Voted to Review Decert in Lockheed Case
TOBACCO LITIGATION: Companies Fail To Get Mistrial in FL Engle Case
TOBACCO LITIGATION: Smoking Among CA Teenagers Drops More Than A Third

WEYERHAEUSER CO: House Siding Suit Nears No Cap Settlement

                                *********

BRANCH DAVIDIAN: Testify Continues; Closing Statements Forthcoming
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Potentially incendiary military style tear gas rounds were fired at an
underground bunker, but only ferret style rounds were launched into the
Branch Davidian compound before it erupted in smoke and flames, an FBI
agent testified Wednesday. David Corderman, a member of the FBI's Hostage
Rescue Team, was in one of several tanks taking part in a tear-gassing
operation designed to flush sect members out of the building April 19,
1993.

Surviving Davidians and family members who filed a $675 million wrongful
death lawsuit against the government contend a military-style gas round
shot into the main building may have sparked the blaze.

The government says suicidal sect members started three fires in the
building and are responsible for their own deaths. Some 80 sect members,
including leader David Koresh, died from either gunshots or fire as the
compound erupted into flames. "I was concerned to make sure military rounds
did not in any way go near the above-ground structure," Corderman testified
Wednesday.

Experts say ferret rounds - plastic canisters containing tear gas - are not
considered incendiary devices. But military rounds are metallic canisters
that potentially could be flammable devices.

Corderman admitted there were 20 military rounds in his arsenal, but only
three were launched at an underground bunker at the complex. They all
bounced off a plywood roof and didn't penetrate the bunker.

A 51-day standoff with federal agents began Feb. 28, 1993, when the Bureau
of Alcohol, Tobacco and Firearms tried to search the complex and arrest
Koresh on illegal weapons charges. A gunfight ensued; six Davidians and
four ATF agents were killed.

Plaintiffs say government agents violated a tear-gassing plan approved by
Attorney General Janet Reno when tank drivers began a premature demolition
of the structure on the final day of the siege. Government attorneys say
the damage caused by the tanks was a function of the tear-gassing mission.
And when FBI tanks punched holes in walls of the compound, plaintiffs say
it helped fan the flames. They also argue the tanks could have knocked over
lanterns used to illuminate the compound after the government cut off
electricity.

In a motion filed late Tuesday, the government argued it can present
testimony showing that Davidians forcibly resisted arrest during an initial
raid and weren't hindered from leaving their compound during the standoff.

Lead plaintiffs' attorney Michael Caddell said the government intimidated
sect members with tanks and noise-making equipment, making them too scared
to leave. He compared a tear-gassing plan to force sect members from the
compound to a tube of toothpaste. "Squeeze it and you get people coming out
the end. But people don't act that way," Caddell said.

U.S. Attorney Michael Bradford said the government could finish presenting
its side of the case as early as Wednesday, clearing the way for closing
statements to possibly begin Thursday.

A five-member jury will act as an advisory panel to U.S. District Judge
Walter Smith Jr., who will deliver a final verdict in the case. (The
Associated Press State & Local Wire, July 12, 2000)


CENDANT CORP: Securities Suit Re ABI Dismissed & Remanded on Appeal
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In this ' 10b-5 action by investors alleging the public dissemination of
misleading information that resulted in fluctuations of the share price,
the complaint alleges sufficient facts to establish the elements of
reliance and loss causation; under the materiality of the misrepresentation
standard adopted here, it is irrelevant that the misrepresentations were
not made for the purpose of influencing the investment decisions of market
participants, and the "in connection with" element of a ' 10b-5 action can
be satisfied simply by showing that the misrepresentations were material,
and that they were disseminated to the public in a medium on which a
reasonable investor would rely -- the class is not required to establish
that the defendants actually envisioned that members of the class would
rely on the alleged misrepresentations when making their investment
decisions; the District Court applied the incorrect analysis for
determining whether the complaint alleges that the purported
misrepresentations were made "in connection with" the purchase or the sale
of a security, and the matter is reversed and remanded.

The P. Schoenfeld Asset Management LLC and the class of similarly situated
investors appeal from the order of the district court dismissing their
claims for securities fraud pursuant to Rule 12(b)(6) of the Federal Rules
of Civil Procedure. The Class's complaint was filed under 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5. The complaint also alleged
that the individual defendants were liable for the underlying violations of
10(b) and Rule 10b-5 as control persons under 20(a) of the Exchange Act.

The Class alleges that the defendants violated S 10(b) and Rule 10b-5 by
making certain misrepresentations about Cendant during a tender offer for
shares of American Bankers Insurance Group, Inc. ("ABI") common stock. The
Class consists of persons who purchased shares of ABI common stock during
the course of the tender offer. The class period runs from January 27, 1998
to October 13, 1998.

The complaint does not allege that any member of the Class purchased
securities issued by Cendant, or that any member of the Class tendered
shares of ABI common stock to Cendant. Instead, it alleges that the
defendants made certain misrepresentations about Cendant that artificially
inflated the price at which the Class purchased their shares of ABI common
stock, and that the Class suffered a corresponding loss when those
misrepresentations were disclosed to the public and the merger agreement
was terminated.

On December 22, 1997, the American International Group, Inc. ("AIG")
announced that it would acquire one hundred percent of the outstanding
shares of ABI common stock for $47 per share. On January 27, 1998, Cendant
made a competing tender offer to purchase the same shares at a price of $58
per share, or a total price of approximately $2.7 billion. In conjunction
with its tender offer, Cendant filed with the Securities and Exchange
Commission a Schedule 14D-1 that overstated its income during prior
financial reporting periods.

On March 3, 1998, AIG matched Cendant's bid and offered to pay ABI
shareholders $58 for each share of outstanding ABI common stock. Cendant
eventually raised its bid price to $67 per share. It then executed an
agreement to purchase ABI for approximately $3.1 billion, payable in part
cash and in part shares of Cendant common stock. Cendant filed an amendment
to its Schedule 14D-1 on March 23, 1998 reporting the terms of the merger
agreement. Eight days later, Cendant filed a Form 10-K reporting its
financial results for the 1997 fiscal year.

After the close of trading on April 15, 1998, Cendant announced that it had
discovered potential accounting irregularities, and that its Audit
Committee had engaged Willkie, Farr & Gallagher and Arthur Andersen LLP to
perform an independent investigation. Cendant also announced that it had
retained Deloitte & Touche LLP to reaudit its financial statements, and
that "(i)n accordance with (Statement of Accounting Standards) No. 1, the
Company's previously issued financial statements and auditors' reports
should not be relied upon." Nevertheless, the April 15, 1998 announcement
reported that the irregularities occurred in a single business unit that
"accounted for less than one third" of Cendant's net income, and it
indicated that Cendant would restate its annual and quarterly earnings for
the 1997 fiscal year by $0.11 to $0.13 per share. Immediately after Cendant
disclosed the accounting irregularities, the price of ABI common stock
dropped from $64-7/8 to $57-3/4, representing an eleven percent decrease
from the price at which the shares had been trading.

Following the April 15 announcement, Cendant made several pubic statements
in which it represented that it was committed to completing the merger with
ABI notwithstanding the discovery of the accounting irregularities.

On July 14, 1998, Cendant revealed that the April 15, 1998 announcement
anticipating the restatement of its financial results for the 1997 fiscal
year was inaccurate, and that the actual reduction in income would be twice
as much as previously announced. Cendant further acknowledged that its
investigation had uncovered several accounting irregularities that had not
previously been disclosed, and that those accounting irregularities
affected additional Cendant business units and other fiscal years. Cendant
estimated that earnings would be reduced by as much as $0.28 per share in
1997. After the July 14, 1998 disclosure, the price of ABI common stock
dropped until Cendant issued several public statements indicating that it
intended to continue the tender offer and that it was "contractually
committed" to completing the ABI merger. Thereafter, the market price of
ABI common stock was "buoyed" by Cendant's repeated statements that it was
committed to completing the merger.

On August 13, 1998, Cendant issued a press release announcing that its
investigation into the accounting irregularities was complete. The release
stated that Cendant would restate its earnings by $0.28 per share in 1997,
by $0.19 per share in 1996, and by $0.14 per share in 1995. On August 27,
1998, Cendant issued a statement that the board of directors had adopted
the audit report. The audit report was publicly filed with the SEC on
August 28, 1998, and a copy was forwarded to the United States Attorney for
the District of New Jersey. The report included findings that "fraudulent
financial reporting" and other "errors" inflated Cendant's pretax income by
approximately $500 million from 1995 to 1997, and that Forbes and Shelton
were "among those who must bear responsibility." After the audit report was
filed with the SEC, the price of ABI common stock closed at $53-1/2 per
share on August 28, 1998 and fell further to a closing price of $51-7/8 per
share on August 31, 1998, the first day of trading following the
disclosure.

On September 29, 1998, Cendant filed an amended Form 10-K for the 1997
fiscal year announcing that Cendant had actually lost $217.2 million in
1997 rather than earning $55.5 million, as previously reported. That
announcement caused the price of ABI common stock to drop further to $43
per share by the close of trading. On October 13, 1998, Cendant and ABI
announced that they were terminating the merger agreement, and that Cendant
would pay ABI a $400 million dollar break up fee, despite the fact that it
was not contractually bound to do so. The termination agreement, which was
executed the same day, provided that the termination of the merger would
not result in liability on the part of Cendant or ABI, or on the part of
any of their directors, officers, employees, agents, legal and financial
advisors, or shareholders. In response to the disclosure, the price of ABI
common stock dropped to $35- 1/2 per share by the end of the day.

The district court granted the motion and entered an order dismissing the
complaint under Rule 12(b)(6). In explaining its dismissal order, the
district court stated that the complaint failed to establish that the
alleged misrepresentations were made "in connection with" the Class's
purchases of ABI common stock, that the Class reasonably relied on the
purported misrepresentations, and that the Class suffered a loss as the
proximate result of the purported misrepresentations. *To state a valid
claim under Rule 10b-5, a plaintiff must show that the defendant (1) made a
misstatement or an omission of a material fact (2) with scienter (3) in
connection with the purchase or the sale of a security (4) upon which the
plaintiff reasonably relied and (5) that the plaintiff 's reliance was the
proximate cause of his or her injury.  This case does not present a claim
based on allegations of internal corporate misconduct arising from a
contest for the control of a closely held corporation. See Ketchum v.
Green, 557 F.2d 1022 (1977). Nor does it concern a fraudulent course of
dealing by a brokerage firm. See Angelastro v. Prudential- Bache-Sec.,
Inc., 764 F.2d 939 (3d Cir. 1985). Rather, it involves the public
dissemination of allegedly misleading information into an efficient
securities market.

The Second and the Ninth Circuits have generally adopted the standard
articulated in Securities & Exch. Comm'n v. Texas Gulf Sulphur Co., 401
F.2d 833, 862 (2d Cir. 1968) (in banc), and applied an objective analysis
that considers the alleged misrepresentation in the context in which it was
made. They have held that, where the fraud alleged involves the public
dissemination of information in a medium upon which an investor would
presumably rely, the "in connection with" element may be established by
proof of the materiality of the misrepresentation and the means of its
dissemination. See In re Ames Dep't Stores Inc. Stock Litig., 991 F.2d at
963, 965 (2d Cir. 1993); Securities & Exch. Comm'n v. Rana Research, Inc.,
8 F.3d 1358, 1362 (9th Cir. 1993). Under that standard, it is irrelevant
that the misrepresentations were not made for the purpose or the object of
influencing the investment decisions of market participants.

Held: The materiality and public dissemination approach should apply in
this case. The purpose underlying 10(b) and Rule 10b-5 is to ensure that
investors obtain fair and full disclosure of material facts in connection
with their decisions to purchase or sell securities. That purpose is best
satisfied by a rule that recognizes the realistic causal effect that
material misrepresentations, which raise the public's interest in
particular securities, tend to have on the investment decisions of market
participants who trade in those securities. Therefore, the Class may
establish the "in connection with" element simply by showing that the
misrepresentations in question were material, and that they were
disseminated to the public in a medium upon which a reasonable investor
would rely. Under the standard adopted here, the Class is not required to
establish that the defendants actually envisioned that members of the Class
would rely upon the alleged misrepresentations when making their investment
decisions.

It is no defense that the alleged misrepresentations were made in the
context of a tender offer and a proposed merger, or that they did not
specifically refer to the investment value of the security that was bought
or sold. It is well established that information concerning a tender offer
or a proposed merger may be material to persons who trade in the securities
of the target company, despite the highly contingent nature of both types
of transactions. It is also settled that 10(b) and Rule 10b-5 encompass
misrepresentations beyond those concerning the investment value of a
particular security. So long as the alleged misrepresentation were
material, the "in connection with" requirement may be satisfied simply by
showing that they were publicly disseminated in a medium upon which
investors tend to rely.

It is not resolved, however, whether the "in connection with" is satisfied
in the present case. Because the standard set forth here is different from
the one applied by the district court, and because the parties have not
been afforded a full opportunity to brief the issues of materiality and
public dissemination, the matter is remanded to allow the district court to
consider, in the first instance, the question whether the Class's complaint
pleads sufficient facts to satisfy the requirements of Rule 12(b)(6). It is
noted, however, that the issue of materiality typically presents a mixed
question of law and fact, and that the delicate assessment of inferences is
generally best left to the trier of fact. The district court should decide
the issue of materiality as a matter of law only if the alleged
misrepresentations are so clearly and obviously unimportant that reasonable
minds could not differ in their answers to the question.

Next is the question of whether the Class's complaint alleges sufficient
facts to establish the element of reliance. It is axiomatic that a private
action for securities fraud must be dismissed when a plaintiff fails to
plead that he or she reasonably and justifiably relied on an alleged
misrepresentation. *Traditionally, purchasers and sellers of securities
were required to establish that they were aware of, and directly misled by,
an alleged misrepresentation to state a claim for securities fraud under S
10(b) and Rule 10b-5. Recognizing that the requirement of showing direct
reliance presents an unreasonable evidentiary burden in a securities market
where face- to-face transactions are rare and where lawsuits are brought by
classes of investors, however, this court has adopted a rule that creates a
presumption of reliance in certain cases. Under the fraud on the market
theory, a plaintiff in a securities action is generally entitled to a
rebuttable presumption of reliance if he or she purchased or sold
securities in an efficient market.

The fraud on the market theory of reliance is, in essence, a theory of
indirect actual reliance under which a plaintiff is entitled to three
separate presumptions in attempting to establish the element of direct
reliance. Under the fraud on the market theory of reliance, the court
presumes (1) that the market price of the security actually incorporated
the alleged misrepresentations, (2) that the plaintiff actually relied on
the market price of the security as an indicator of its value, and (3) that
the plaintiff acted reasonably in relying on the market price of the
security. The presumption of reliance may be rebutted by showing that the
market did not respond to the alleged misrepresentations, or that the
plaintiff did not actually rely on the market price when making his or her
investment decision. The court has also held that a defendant may defeat
the presumption of reliance by showing that the plaintiff 's reliance on
the market price was actually unreasonable. See Zlotnik v. Tie
Communications, 836 F.2d 818, 822 (3rd. Cir. 1988).

In the present case, the Class has sufficiently pleaded the element of
reliance to withstand a challenge under Rule 12(b)(6) with respect to at
least some of the alleged misrepresentations. The complaint alleges that
ABI common stock traded in an open and developed market throughout the
class period, that the market price of ABI common stock incorporated the
alleged misrepresentations, and that the Class members purchased shares of
ABI common stock in reliance on that price. The complaint also states that
the Class was directly misled by the alleged misrepresentations. Those
allegations, if true, are sufficient to establish direct reliance and to
create a presumption of indirect actual reliance so long as the Class's
reliance on the purported misrepresentations or the market price of ABI
common stock was not unreasonable as a matter of law.

It was reasonable for the Class members who purchased shares prior to March
3, 1998 to rely on the alleged misrepresentations occurring prior to that
date. *It is not unreasonable as a matter of law to rely on information
concerning a tender offer or a merger before the transaction is finalized.
If it may be reasonable for an investor to find information concerning a
tentative tender offer or a merger important when making an investment
decision, we see no reason why the conditional nature of those transactions
should necessarily prevent the investor from reasonably relying on that
information as well.

Also, the Class members who purchased shares of ABI common stock between
March 3, 1998 and April 15, 1998 alleged sufficient facts to satisfy the
element of reliance. In this case, the Class's complaint alleges that the
market price of ABI common stock was inflated due to the alleged
misrepresentations, and it states that the Class purchased "ABI shares
believing they would receive $58 per share . . . in a combination of cash
and Cendant stock." Though we agree with the defendants that the market
price of ABI common stock incorporated information concerning AIG's $58
tender offer, it may not be assumed for the present purposes that it did
not also incorporate information concerning a potential acquisition by
Cendant, or that Cendant's tender offer did not have an actual effect on
the Class. Indeed, it is likely that the shares of ABI common stock traded
at a relative premium during the competing tender offer based on the fact
that two purportedly willing and able suitors sought to acquire the
company. It is also possible that members of the Class would not have
purchased shares of ABI common stock had they been unable to exchange them
for shares of Cendant.

The Class has failed to demonstrate that it was reasonable for its members
to rely on the defendants' prior financial statements and auditors' reports
following the April 15, 1998 disclosure of the accounting irregularities.
The complaint states that Cendant disclosed on April 15, 1998 that it had
uncovered accounting irregularities, and that it warned investors not to
rely on its prior financial statements and auditor's reports when making an
investment decision. The complaint further alleges that the common stock of
both Cendant and ABI traded in an efficient market, and that the market
price of each stock instantly dropped after Cendant issued the warning. In
light of the curative nature of the warning statement, and given the
instantaneous decline in the market price of both companies' common stock,
the announcement immediately rendered the prior misrepresentations
concerning Cendant's financial condition thereafter immaterial as a matter
of law.

Thus, neither the market nor the Class members could have reasonably relied
upon Cendant's prior financial statements or its audit reports after April
15, 1998. Because it made no misrepresentations after the curative
statement was issued, Ernst & Young may not be held liable to members of
the Class who purchased shares of ABI common stock after April 15, 1998.
*Nevertheless, the Class could have reasonably relied on the alleged
misrepresentations that were included in the April 15, 1998 announcement.

The Class claims that the April 15, 1998 announcement misrepresented
Cendant's financial condition by stating that the company expected to
restate its 1997 earnings by $0.11 to $0.13 per share and to reduce its net
income prior to restructuring and unusual charges by approximately $100 to
$115 million.

The defendants claim that the Class was not entitled to rely on those
statements or on any subsequent statements, because the announcement warned
that the representations were subject to "known and unknown risks and
uncertainties including, but not limited to, the outcome of the Audit
Committee's investigation." Their argument is based upon both the bespeaks
caution doctrine, which renders alleged misrepresentations immaterial, and
the common sense principle that investors do not act reasonably in relying
on statements that are accompanied by meaningful cautionary language.

The accompanying warnings were not sufficiently cautionary to warn against
the danger of relying on the specific numbers identified in the
announcement. The cautionary language set forth in the April 15, 1998
announcement generally pertains only to the risk that the results of
operations could vary in future fiscal years. In fact, the only risk factor
that is apparently applicable to the restatement of Cendant's results for
the 1997 fiscal year relates to the risk that the announcement's
calculations might differ from those made by the Audit Committee. Such a
general statement of risk is not sufficiently substantive and tailored to
satisfy the requirements of the bespeaks caution doctrine. Nor is it
adequate to give investors reasonable notice that the projected restatement
of Cendant's financial statements should not be trusted so as to make any
reliance unreasonable as a matter of law.

The Class was not entitled, however, to rely indefinitely upon the April
15, 1998 misrepresentations. Cendant announced on July 14, 1998 that it had
revised the restatement of its 1997 income, and it disseminated the formal
results of the Audit Committee's investigation one month later. It is
possible that either, if not both, of those announcements might have cured
the effect of the alleged misrepresentations in the April 15, 1998
announcement and rendered the disclosure thereafter unreliable. However, in
light of the decision to remand this case, and given that the parties have
not discussed the issue, it is for the district court to decide in the
first instance the point at which the particular misrepresentations could
no longer be trusted.

Finally, it must be decided whether the Class's complaint adequately pleads
the element of loss causation. The defendants contend that the complaint
failed to allege sufficient facts to support an inference that the alleged
misrepresentations were the proximate cause of the Class's loss. They
maintain that the complaint shows that several intervening events, and not
the alleged misrepresentations, led first to the artificial inflation and
then to the decline in the market price of ABI common stock. In particular,
they assert that the price of ABI common stock was inflated by AIG's $58
tender offer and by the approval of the merger agreement by the board of
directors of ABI. They also suggest that the Class's loss was actually
caused by the mutual termination of the merger agreement by the board of
directors of both ABI and Cendant.

Scattergood v. Perelman, 945 F.2d 618, 624 (3d Cir. 1991), and Hayes v.
Gross, 982 F.2d 104, 107 (3d Cir. 1992), hold that, where the claimed loss
involves the purchase of a security at a price that is inflated due to an
alleged misrepresentation, there is a sufficient causal nexus between the
loss and the alleged misrepresentation to satisfy the loss causation
requirement. However, those decisions assume that the artificial inflation
was actually "lost" due to the alleged fraud. Where the value of the
security does not actually decline as a result of a misrepresentation, it
cannot be said that there is in fact an economic loss attributable to that
alleged misrepresentation. In the absence of a correction in the market
price, the cost of the alleged misrepresentation is still incorporated into
the value of the security and may be recovered at any time simply by
reselling the security at the inflated price. Because a plaintiff in an
action under 10(b) and Rule 10b-5 must prove that he or she suffered an
actual economic loss, an investor must also establish that the alleged
misrepresentations proximately caused the decline in the security's value
to satisfy the element of loss causation.

The Class has alleged sufficient facts to show that the alleged
misrepresentations proximately caused the claimed loss. The Class contends
that it purchased shares of ABI common stock at a price that was inflated
due to the alleged misrepresentations, and that it suffered a loss when the
truth was made known and the price of ABI common stock returned to its true
value.

The complaint further indicates that the price of ABI common stock was "
buoyed" by the defendants alleged misrepresentations, and that it dropped
in response to disclosure of the alleged misrepresentations and the
termination of the merger agreement. Assuming the truth of those
allegations, and taking all reasonable inferences in the light most
favorable to the Class, the Class is entitled to offer evidence to support
its claim.

Rather, the judgment of the district court is vacated and the matter is
remanded so that the district court may determine, in the first instance,
whether the alleged misrepresentations were material and publicly
disseminated in a reliable medium and, if so, whether the complaint
nevertheless should be dismissed for a failure to plead scienter with
particularity.

For appellants - George Semerenko et al - Arthur N. Abbey, Jill S. Abrams,
Stephen J. Fearon, Jr.and Nancy Kaboolian (Abbey, Gardy & Squitieri, of the
Ny bar), Allyn Z. Lite, Joseph J. DePalma and Mary Jean Pizza (Lite DePalma
Greenberg & Rivas), Andrew Barroway and David Kessler (Schiffrin &
Barroway, of the Pa bar). For appellees: Cendant Corporation - Jonathan J.
Lerner and Samuel Kadet (Skadden, Arps, Slate, Meagher & Flom, of the NY
bar), Michael M. Rosenbaum and Carl Greenberg (Budd Larner Gross Rosenbaum
Greenberg & Sade); Walter Forbes and Christopher McLeod - James M.
Hirschhorn and Steven S. Radin (Sills Cummis Radin Tischman Epstein &
Gross), Dennis J. Block and Howard R. Hawkins, Jr. (Cadwalader, Wickersham
& Taft) and Greg A. Danilow and Timothy E. Hoeffner (Weil, Gotshal &
Manges); E. Kirk Shelton - Richard Schaeffer and Bruce Handler (Dornbush
Mensch Mandelstam & Schaeffer, of the NY bar); Cosmo Corigliano - Gary P.
Naftalis (Kramer, Levin, Naftalis & Frankel, of the NY bar); Ernst & Young
LLP - Alan N. Salpeter and Michele Odorizzi (Mayer, Brown & Platt, of the
Il. bar), William P. Hammer, Jr. and J. Andrew Heaton, of the D.C.(Ernst &
Young LLP), and Douglas S. Eakeley (Lowenstein Sandler). For
amicus-appellant Securities and Exchange Commission - Harvey J. Goldschmid,
General Counsel, Jacob H. Stillman, Solicitor, Eric Summergrad, Deputy
Solicitor, and Hope Hall Augustini, Special Counsel (Securities & Exchange
Commission). (Digested by Steven P. Bann, (New Jersey Law Journal, July 3,
2000)


CHASE MANHATTAN: Customers Object to Motion to Dismiss Investment Suit
----------------------------------------------------------------------
The plaintiffs in two related suits pending in the Southern District of New
York against Chase Manhattan Bank have filed a joint brief in opposition to
dismiss the bank's motions to dismiss on the grounds of forum non
conveniens. The bank, which has also filed its brief, seeks to dismiss
complaints alleging that it misled long-time customers about risky
investment opportunities with regard to emerging market securities,
including unstable Russian bonds. Springwell Navigation Corp. v. Chase
Manhattan Bank. (Bank & Lender Liability Litigation Reporter, June 29,
2000)


DAIMLER CHRYSLER: Greitzer & Locks Defamation Suit Can Proceed
--------------------------------------------------------------
Greitzer & Locks has won a significant battle in its war with
DaimlerChrysler Corp. now that a federal judge has ruled that the law firm
can proceed with its defamation counterclaims against the auto giant over
statements that accused the firm of engaging in "legalized blackmail" and
trying to transform the legal system into a "rigged lottery." The case was
previously reported in the CAR.

The statements were made by DaimlerChrsyler's general counsel at the time
that the auto maker was filing a Dragonetti Act suit against the law firm
for filing an allegedly frivolous class action suit in which the lead
plaintiff was later found not even to own the car at issue. DaimlerChrysler
sued three parties Greitzer & Locks; the lead plaintiff in the suit, Brian
Lipscomb; and Maryland attorney William Askinazi.

Askinazi and Lipscomb moved to have the suit dismissed. But Greitzer &
Locks's lawyers, John D. Lewis and David D. Langfitt of Montgomery
McCracken Walker & Rhoads, took a different approach by filing an answer
with counterclaims that accused DaimlerChrysler of defamation and tortious
interference with prospective contractual relations.

In recent weeks, U.S. District Judge William H. Yohn Jr. has issued three
opinions in the case, DaimlerChrysler v. Askinazi.  The first held that
DaimlerChrysler's general counsel, Lewis Goldfarb, must answer to the
defamation counterclaims. The second rejected the motions to dismiss filed
by Askinazi and Lipscomb. Now Yohn has issued a third opinion in which he
ruled that the defamation and tortious interference counterclaims survive
DaimlerChrysler's motion to dismiss. (The Legal Intelligencer, July 13,
2000)


FLOORING AMERICA: The Atlanta Journal Reports on Continued Upheaval
-------------------------------------------------------------------
Four top officers, including the new chairman, have joined the exodus from
the troubled Kennesaw-based retailer as the company tries to reorganize
under bankruptcy protection. Flooring America said Wednesday that Chairman
David Nichols had resigned after six months on the job. Nichols also had
taken the additional responsibilities of chief executive when A.J. Nassar
left the company in May. The new CEO and president is Michael Worrall, a
retail restructuring specialist. Worrall recently led a reorganization of
Tampa-based Sports & Recreation, which formerly operated as JumboSports.

The company said Wednesday that three other officers resigned, including
the new executive vice president of operations, Jim Frede. Also gone is Sue
Salg, who was just promoted to senior vice president of planning as part of
the company's reorganization. Flooring America also announced that F.G.
"Buck" Rodgers had resigned after five months on its board of directors.

The chief internal auditor, Leonard Thill, has also left. Thill, a former
accountant with the Securities and Exchange Commission, was brought in last
fall to tackle the company's accounting problems. The SEC has been
investigating Flooring America's bookkeeping practices following its
downward restatement of fiscal 1999 earnings. The company also said in May
that it would restate earnings for each of the first two quarters of this
fiscal year.

Last month Flooring America filed for Chapter 11 protection and planned to
cut two-thirds of its corporate staff of 300. The former chairman said the
company would close roughly 300 corporately owned stores to focus on its
franchises. Flooring America has about 725 franchise stores that operate
under names such as CarpetMax and GCO Carpet Outlet.

The earnings restatement and bankruptcy filing have spurred a series of
shareholder lawsuits seeking class action status. Meanwhile, the company's
common shares have been delisted by the New York Stock Exchange. (The
Atlanta Journal and Constitution, July 13, 2000)


GIULIANI: Ap. Ct Affirms Settlement for NY Child Welfare System Case
--------------------------------------------------------------------
An appeals court panel has affirmed a settlement of a 1995 federal
class-action lawsuit against New York City's child welfare system. Under
the settlement, known as Marisol v. Giuliani, child welfare experts are
taking two years to review the operations of the Administration of
Children's Services. But lawyers for gay and lesbian young people in foster
care argued that the settlement offered no relief for their clients. On
Monday, the three-member panel of the United States Court of Appeals for
the Second Circuit said the settlement "does not have to be perfect, just
reasonable and fair."  Somini Sengupta (NYT) (The New York Times, July 12,
2000)


HAMMERHEAD'S SEA: Agrees to Pay Patrons; Food Poisoning Hit 500 in '98
----------------------------------------------------------------------
A defunct Juno Beach restaurant could pay more than $ 730,000 as part of a
tentative settlement reached on Wednesday in a class-action lawsuit filed
by customers who got food poisoning.

Hammerhead's Sea Grille agreed to pay between $ 400 and $ 5,000 to
customers who got sick one July 1998 weekend. It was the second-largest
outbreak in Palm Beach County.

The amount the restaurant will pay each customer depends on how sick they
got.

As many as 500 patrons became ill from a type of bacteria that causes
diarrhea and vomiting. Palm Beach County Health Department officials
determined customers got sick from the spore-forming Bacillus cereus found
on the remnants of a $ 9 dolphin salad that was saved in a doggie bag.

The poisonous spores may have come from a dry mixture of seasoning or a
restaurant-produced sauce that was used in preparing many of the dishes at
the 170-seat eatery, health officials said.

Wednesday's agreement calls for anyone who got sick to file a claim for
money by Sept. 15.

In addition, the restaurant will pay $ 175,000 to the attorneys who filed
the class-action complaint and $ 3,000 to each of the 20 customers who
spearheaded the lawsuit.

Estimates indicate that customers will file claims for a total of about $
500,000, said Paul Geller, one of the customer's attorneys. A mediator
handling the case will determine how much each customer receives.

"This was not a case where either side caved in," Geller said. "They were
fighting very hard and we were fighting very hard, and ultimately the
resolution is one that the class members that we've spoken with are very
happy with."

Palm Beach County Circuit Judge Stephen Rapp will finalize the settlement
Sept. 11 after individual customers are given a chance to comment on the
case.

Geller said notices of the settlement will be sent to the customers and
placed in newspapers within the coming weeks. They could see their money as
early as the fall, he said.

Hammerhead's Sea Grille attorney, Anita Tamayo, declined to comment on
Wednesday and spoke only briefly during the court hearing. Jon Burstein can
be reached at jburstein@sun-sentinel.com or 561-832-2895. (Sun-Sentinel
(Fort Lauderdale, FL), July 13, 2000)


HIGHLAND PARK: Racial Pact Nears; ACLU Plan Aims to Prevent Profiling
---------------------------------------------------------------------
Highland Park and the American Civil Liberties Union of Illinois asked a
federal judge Wednesday to approve a plan that would ensure the wealthy
suburb keeps its promise to curb racial profiling.

The ACLU filed a lawsuit against the city Wednesday on behalf of Karen Lynn
Ledford, a longtime Highland Park resident, and her 21-year-old son,
Michael. The suit, which seeks class-action status, claims the Ledfords and
other African-Americans have been unfairly targeted for traffic stops.

At the same time, however, the city and the ACLU filed a joint motion for
the approval of a consent decree, which would legally require city
officials to implement initiatives proposed by the city in May. Those
initiatives, which came in response to an earlier suit, are designed to
prevent officers from stopping minorities without cause.

The proposed settlement agreement would also relieve the city, which denies
all wrongdoing alleged by the Ledfords, from paying any damages, fines,
penalties or legal fees. In addition, the ACLU would agree not to file any
other racial profiling complaints against the city based on events before
this month.

ACLU of Illinois legal director Harvey Grossman said U.S. District Senior
Judge William Hart will be asked to proceed on the motion July 19.

During a news conference at Highland Park's City Hall, Grossman called the
city a model for the state and nation.

Mayor Daniel Pierce added: "Highland Park and the ACLU may have somewhat
different perspectives on the specifics of the case that led to this
agreement. But we are of one mind in our pursuit of racial, ethnic and
religious tolerance in our society, and in our belief that law-enforcement
officers must not target minorities."

The Highland Park Police Department was thrust into controversy recently
after three current and two former police officers filed a lawsuit in
federal court.

The original lawsuit, which stemmed from a labor-management dispute, was
filed in 1998. But the plaintiffs refiled the suit last year, adding
allegations of racial profiling and sexism.

U.S. District Judge Joan B. Gottschall dismissed the most recent lawsuit
filed by officers last month, saying it was incomprehensible. Keevan
Morgan, the plaintiffs' attorney, has not refiled the complaint, but said
he intends to do so within the next few days.

In response to the suit, the city hired former U.S. Atty. Thomas P.
Sullivan to investigate the complaints.

Sullivan found that while the top brass did not order rank-and-file
officers to stop African-Americans and Hispanics, there have been isolated
cases of racial profiling in Highland Park. The department has also allowed
for an environment where racial jokes had been tolerated, the report said.

After Sullivan's report was released, Pierce outlined 11 initiatives to
discourage racial profiling, including the installation of cameras in
patrol cars and mandatory sensitivity courses for the 60-member department.

The proposed consent decree would make the initiatives legally binding,
said City Atty. Steven Elrod, who has been negotiating with the ACLU since
April, when the city was informed that the Ledfords were considering a
lawsuit.

"This is making it permanent ... and that really says that the city is
willing to stand behind the measures that it had adopted. It's willing to
put its money where its mouth is, basically," Elrod said.

The term for the proposed consent decree is five years, but if the city has
no violations for three years, it will expire.

The Ledfords' suit claims that police unfairly targeted Michael Ledford in
1997 and 1998 and that Karen Lynn Ledford was stopped by officers for no
apparent reason April 11.

But the mother and son had little criticism for the Police Department at
Wednesday's news conference.

Michael Ledford said he had a positive experience growing up in Highland
Park.

"Race made no difference with my friends. We all dressed alike. We listened
to the same music. We have similar interests," he said.

Karen Lynn Ledford said, "We are grateful for the opportunity to be part of
this process, and we are happy that this new policy of accountability is
being established here in Highland Park." (Chicago Tribune, July 13, 2000)


HOLOCAUST VICTIMS: Church to Contribute $5 Mil to Slave Labor Fund
------------------------------------------------------------------
Acknowledging that German churches used forced laborers during the Nazi era
too, the Evangelical Church in Germany pledged $ 5 million Wednesday to the
1 compensation fund recently established by government and industry. "This
was participation in a forced and unjust system. We recognize this guilt,"a
church statement said.

Churches and church-related social agencies used forced laborers during the
war for such things as cemetery upkeep. Protestant Bishop Wolfgang Huber
said the Berlin diocese ran a camp for about 100 people from 1943-45 to
ease labor shortages.

The Evangelical Church in Germany includes 24 Lutheran, Reformed, and
United regional churches.

Germany's Catholic church, meanwhile, said it had no plans to make a
general contribution to the fund. Rudolf Hammerschmidt, spokesman for the
German Bishops Conference, told a Berlin radio station that it was aware of
only two Catholic church communities, both in Berlin, where forced laborers
were employed at cemeteries, and that local church leaders would decide on
an appropriate action. Germany's Catholic church has contributed about $ 5
million over the past 20 years to support Polish concentration camp
victims, he added.

More than 3,000 German businesses have pledged $ 1.5 billion so far to the
$ 5 billion fund, which is to be financed 50-50 by industry and the
government.

The bill setting up the foundation is to get final approval Friday from
Germany's upper house of parliament before a formal signing ceremony Monday
with representatives from the German, U.S., and eastern European
governments. The agreement also includes guarantees from Washington
intended to protect German firms from class-action lawsuits in the United
States. More than 1 million former laborers are expected to be eligible for
payments, which Germany hopes to begin this year. (The Record (Bergen
County, NJ), July 13, 2000)


INMATES LITIGATION: Rikers to Receive Mental Health Care Arrangement
--------------------------------------------------------------------
The Giuliani administration must arrange for the continuing mental health
care of thousands of inmates before they are released from the Rikers
Island jail, a Manhattan judge has ruled.

On Wednesday, Justice Richard F. Braun, of State Supreme Court in
Manhattan, granted a preliminary injunction and gave class action status to
a suit filed against the city last August by seven mentally ill inmates of
the jail.

The suit contends that the 25,000 inmates who are treated for mental
illness at the prison each year were being released without proper
provision for treatment in the community or a way to continue their
psychotropic medication.

The city has not disputed those claims, but argued that Rikers inmates have
no legal right to the kind of prerelease planning required for mental
hospital patients under state law.

Braun found that the plaintiffs were highly likely to win the lawsuit on
its merits, and said they would suffer irreparable harm unless the city was
required to provide them with a discharge plan while the case is fought in
court.

Braun rejected the city's contention that because many of these inmates are
held for less than 45 days, there would be no time to arrange for such
services, instead agreeing with the plaintiffs that release planning could
begin at the start of treatment.

In the New York state prison system, most prisoners who have been treated
for mental illness during their incarceration are provided with a two-week
supply of psychotropic medication, a two-week prescription and a referral
to an outpatient mental health clinic. (The Associated Press State & Local
Wire, July 13, 2000)


IVAX CORP: Announces 11th Cir Dismisses Shareholder Suit with Prejudice
-----------------------------------------------------------------------
IVAX Corp. (AMEX: IVX) of Miami said that the 11th U.S. Circuit Court of
Appeals upheld the dismissal of a number of consolidated shareholder
class-action lawsuits against the company. The court dismissed the Malin et
al. v. Ivax suit, originally filed in 1996, with prejudice -- meaning it
cannot be filed again.

This is the last of a slew of shareholder lawsuits filed in 1996. Earlier
this year and last year, the generic drug manufacturer won other appeals in
similar cases filed in 1997 and 1996.

The lawsuit alleged price discounts offered by Ivax to buyers artificially
inflated financial results.

Ivax made money in 1995 but posted a loss in the second quarter of 1996.
The company issued a news release expressing optimism while acknowledging
problems, and its share price rose. Later, Ivax announced that it expected
a $ 43 million loss in the third quarter, and the stock plummeted.  (Miami
Daily Business Review, July 13, 2000)


MONSANTO CO: Anniston Residents Seek Court-Ordered PCB Cleanup
--------------------------------------------------------------
Residents who claim Monsanto Co. is to blame for PCB contamination in their
town asked a judge to make the chemical manufacturer clean up the mess.
Attorneys representing 3,600 clients in a class-action lawsuit against
Monsanto made the request in a motion filed Tuesday in the ongoing case.
There was no immediate ruling.

The company, now known as Solutia, has spent more than $30 million since
1995 to clean up PCBs, said Craig Branchfield, manager of remedial
projects. The efforts have included moving mountains of PCB-free soil atop
the plant's old landfill areas, sealing contaminated soil underground and
rerouting water flowing from Coldwater Mountain.

An attorney for the residents, Donald Stewart, said Solutia's plan "just
ain't working."

Polychlorinated biphenyls were manufactured at the Anniston plant for
nearly 50 years, until production ceased in 1971. PCBs, which have been
linked to cancer in laboratory animals, were banned in the United States in
1977. (The Associated Press State & Local Wire, July 12, 2000)


MYLAN LABORATORIES: Agrees to Pay $135 Mil to Settle Generic Drugs Case
-----------------------------------------------------------------------
The nation's second-largest maker of generic drugs agreed Wednesday to pay
$ 135 million to settle federal, state and private lawsuits charging it
with fixing the prices of two widely prescribed anti-anxiety medications.

The suits against Mylan Laboratories of Pittsburgh marked the first time
the federal government had sought such massive fines against a
pharmaceutical company for price fixing, and just the second time that it
had asked for fines in an antitrust action against a drug maker.

Mylan Laboratories said it was admitting no wrongdoing in agreeing to the
settlements, which took 19 months to negotiate after the Federal Trade
Commission filed the lead suit late in 1998.

The company, which makes lorazepam, the generic version of Ativan, and
clorazepate, the generic for Tranxene, raised prices by as much as 3,000%
on the two drugs, officials claimed in the suits. The drugs are commonly
used to treat anxiety and hypertension among the elderly.

The FTC and attorneys general for 32 states including California said that
Mylan--along with Cambrex Corp. of East Rutherford, N.J.; Cambrex's Italian
subsidiary, Profarmaco; and drug distributor Gyma Laboratories of America
Inc. of Westbury, N.Y., conspired in 1997 to control ingredients for the
two drugs.

Then, according to the suits, Mylan raised the price of lorazepam from $
7.30 for a bottle of 500 tablets to $ 190. The price for clorazepate rose
from $ 11.36 to $ 377 for a bottle of 500.

"This kind of behavior is unconscionable and caused nursing home and
hospice patients who frequently use the drugs to suffer from astronomical
price hikes," said California Atty. Gen. Bill Lockyer, who joined the other
states' suit after taking office in 1999.

Lockyer, who recently participated in a suit that resulted in a $
300-million settlement with credit card issuer Providian Inc., said the
Mylan settlement was among the larger ones negotiated by federal and state
officials.

Ohio Atty. Gen. Betty Montgomery said the Mylan price hikes cost U.S.
consumers as much as $ 180 million.

The exact amount of the settlements are still fluid, pending final
negotiations with the states and federal officials. Most likely, according
to several attorneys involved in the cases, $ 100 million will be paid to
the states and federal government, and will eventually be returned to
consumers. About $ 35 million more will settle private class-action
lawsuits filed on behalf of consumers and other purchasers of
pharmaceuticals. An additional $ 12 million has been earmarked for
attorneys' fees.

In settling the lawsuits, Mylan has indemnified its subcontractors, and
will bear the cost of the payouts, Mylan said in its news release.

Mylan Chairman and Chief Executive Milan Puskar continued to dispute the
accusations, which he characterized at the time the suits were filed as
"radical, rushed and wrong."

"This is the first time in Mylan's 39-year history that any government
agency has accused us of improper conduct," Puskar said. "We continue to
believe we acted properly. However, the board and I view these settlements
to be in the best interest of our company's shareholders, customers and
employees. By putting a significant portion of this case behind us, we can
now look forward to devoting our full resources to the business of this
company."

Shares of Mylan rose 50 cents to close at $ 19.50 in regular trading on the
New York Stock Exchange on news of the settlement. Last month, the company
warned that its first-quarter earnings would be only half of what Wall
Street expected because of lower prices for the two anxiety drugs.

The company has not, however, settled suits brought by pharmaceutical
wholesalers, and plans to fight them in court.

Final details are expected to be worked out in the next several weeks,
pending formal approval by government authorities. (Los Angeles Times, July
13, 2000 Reuters contributed to this report)


NATIONAL SEMICONDUCTOR: Santa Clara Jury Rejects Securities Fraud Claim
-----------------------------------------------------------------------
A Santa Clara County Superior Court jury Tuesday rejected a $240 million
class action securities fraud claim by shareholders who alleged National
Semiconductor Corp. lied to them about the stock's value.

The class was comprised of 25,000 shareholders who had originally held
stock in Cyrix, a producer of microprocessors. In November 1997, Santa
Clara-based National Semiconductor purchased Texas-based Cyrix to utilize
its embedded microprocessor technology. Cyrix shareholders exchanged their
stock for National stock as a result of their merger.

The stock price dropped and within a month, the shareholders filed suit.

In Jason Forge v. National Semiconductor, CV770082, plaintiffs argued
National Semiconductor violated sections 11 and 12 of the Federal
Securities Act of 1993 by including misleading information about National
in the stock prospectus.

They also alleged National lied about its available fabricating capacity to
make Cyrix processors. The plaintiffs also said the company's claim that
its wafer fabricating facility was state of the art was false.

But in a special jury form, jurors rejected the plaintiffs' allegations.
They spent 3 1/2 hours in deliberations before rendering their verdict.

The case was unusual in that most securities fraud class action suits are
settled out of court, said National attorney Benjamin Riley on Wednesday.

"National and its directors firmly believed that there was no basis for
plaintiffs' claims, and we weren't going to give in to their demands," said
Riley, a Cooley Godward partner in San Francisco.

Paul Vizcarrondo, a partner at New York's Wachtell, Lipton, Rosen & Katz,
served as Riley's co-counsel.

The plaintiffs were represented by Matthew Zevin, an associate at Los
Angeles' Weiss & Yourman, and Guy Mailly, an associate at Los Angeles'
Stull, Stull & Brody.

The technically difficult trial, presided over by Superior Court Judge
Frank Cliff, spanned over six weeks including motions and jury selection.
Between 30 to 40 witnesses were called to testify, Riley said.

Riley said he was grateful the case was heard before a Santa Clara County
jury_ with some technology experience. Several of the jurors were engineers
familiar with the technology and the other jurors had rudimentary knowledge
about the subject, he said.

"Santa Clara County is probably the best place to present an IP case,"
Riley said. (The Recorder, July 13, 2000)


OFFICE DEPOT: Catalogue Prices Go to Miami-Dade Circuit Court
-------------------------------------------------------------
As a certified public accountant, David Simons job is to keep close tabs on
his clients bottom line. So when he noticed that the prices of some of the
items he bought at Office Depot varied, depending on whether he purchased
them at a store or through the stores catalogue, it raised his suspicions.
Cheryl Cohen of Georgia also questioned Office Depots pricing policies
after she purchased a printer cartridge and file folder through the stores
catalogue and later found she could have saved $ 2.30 if she had purchased
them at a store. Delray Beach-based Office Depot promised on its catalogue,
Low prices guaranteed, every item every day.

Simon of Miami and Cohen are plaintiffs in a suit filed this week in
Miami-Dade Circuit Court against the Delray Beach-based office supply
company, alleging that the companys low-price guarantee advertising is
deceptive. The suit, which seeks class-action status on behalf of more than
1,000 Office Depot customers in Florida and Georgia, alleges they were led
to believe they would get a better deal by ordering through the catalogue
than by buying through the store.

The suit seeks unspecified compensatory and punitive damages and alleges,
among other things, unfair and deceptive trade practices. It seeks to
prevent the chain from continuing to make such pricing claims.

If the lawsuit sounds familiar, its because Simon filed a similar suit
about three years ago, but dropped it after Cohen filed the same suit in
federal court in Miami on behalf of some 39,000 Office Depot customers
nationwide. Then, in April 1998, U.S. District Judge Joan Lenard dismissed
Cohens suit. Lenard ruled the $ 2.30 Cohen alleged she was overcharged was
well below the $ 75,000 in damages required to get a case heard in federal
court.

Last August, a federal court in Atlanta reinstated the suit, ruling that a
Florida state law regarding punitive-damage pleading requirements do not
apply to class-action cases involving more than one state. But it didnt
stop there. In February, that same court vacated its previous order and
affirmed Lenards ruling.

Alvin Lodish, the attorney who represents Simon and Cohen, was granted a
stay of the ruling last week so he can pursue the case to the U.S. Supreme
Court.

So, why the suit in circuit court?

If the case is dismissed, the statute of limitations could run, said
Lodish. To protect their claims, we have filed the case in state court
asking for class certification for the state of Florida and Georgia. Simon,
in his suit, claims that items purchased through the catalogue were 4 cents
to $ 1.50 more than they would have been had he purchased them directly
from an Office Depot store. While it doesnt sound like much, Simon says
consumers need to look at the percentages. When you have a net income of 20
percent and you can get an extra 20 percent thats like doubling your bottom
line, said Simon. You cant look at it as dollars and cents, you have to
look at it as a percentage.

Eileen Dunn, vice president of investor and public relations for Office
Depot, said she had not seen the suit and declined to comment. However,
when Simon filed his original suit three years ago, an Office Depot
spokesman said catalogue and store prices sometimes differ because the
catalogue is published only twice a year. He also said customers may pay
more for the convenience of ordering by catalogue and that catalogue prices
are sometimes lower. (Broward Daily Business Review, July 13, 2000)


OMEGA HEALTHCARE: Wolf Haldenstein Announces Securities Suit in NY
------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP the firm was filing a class
action lawsuit in the United States District Court for the Southern
District of New York on behalf of all individuals and entities who acquired
the securities of Omega Healthcare Investors, Inc. between April 13, 1999
and May 11, 2000 and who were damaged thereby. If you wish to discuss this
action please contact Wolf Haldenstein Adler Freeman & Herz LLP (Michael
Miske or Robert Abrams, Esq.) at (800) 575-0735 or visit our website at
www.whafh.com

The Complaint charges Omega and certain officers and directors of the
Company during the relevant time period with violations of Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and
Rule 10b-5 promulgated thereunder, for, among other things, making false
and misleading public statements concerning its financial condition during
the Class Period.

During the Class Period, Omega issued a series of false and misleading
statements regarding the profitability of its investments in healthcare
facilities.

Contact: Wolf Haldenstein Adler Freeman & Herz LLP Michael Miske or Robert
Abrams, Esq. 800/575-0735 www.whafh.com classmember@whafh.com


ORBITAL SCIENCES: CFO at Center of Shareholder Suit to Quit
-----------------------------------------------------------
The chief financial officer of Orbital Sciences Corp., the Dulles-based
satellite maker whose accounting missteps forced its stock to record lows
and left analysts questioning management, plans to step down July 13,
according to Orbital representatives.

Pirone's conduct is at the center of a class-action shareholder lawsuit
filed against Orbital that accuses the company of using fraudulent
accounting to artificially inflate its stock price. The lawsuit also
accuses Pirone and Thompson of using inside information to profit from
trading in Orbital stock. The case was scheduled to go to trial next week,
but the judge removed it from the court's active docket last week to allow
the two sides to reach a settlement, according to Beneski. Orbital has
denied the charges.

In unrelated news, Orbital announced yesterday that its MacDonald Dettwiler
and Associates Ltd. subsidiary had completed a $ 57 million initial public
offering on the Toronto Stock Exchange; $ 38 million went to McDonald
Dettwiler and $ 14 million went to Orbital. Private investors raised the
rest through an offering of secondary shares.

The subsidiary, based in British Columbia, manufactures space robotics used
on NASA space shuttles and the International Space Station and offers
online geographic information for real estate transactions.

Jeffrey V. Pirone joined Orbital in 1992 and became chief financial officer
in 1996, launching a tenure marred by disappointing financial results and
accounting practices that former auditor KPMG LLP said were often in error.
Company officials have called the former practices aggressive. The missteps
eventually led the company to restate several years' worth of financial
information in April.

Orbital fired KPMG last spring after a long string of disagreements and
hired PricewaterhouseCoopers.

Garrett E. Pierce, now CFO for Sensormatic Electronics Corp. of Boca Raton,
Fla., will replace Pirone on Aug. 1, and Pirone will become a consultant to
Orbital. (The Washington Post, July 13, 2000)


REDLANDS CONTAMINATION: CA Sp Ct Voted to Review Decert in Lockheed Case
------------------------------------------------------------------------
The California Supreme Court on Wednesday voted to decide whether residents
of the city of Redlands can be certified as a class for the purpose of a
toxic tort suit.

The court will also decide if the California Highway Patrol is immune from
liability if an officer's actions put a driver in harm's way.

All but vacationing Justice Stanley Mosk voted to review the Fourth
District Court of Appeal's decision in Lockheed Martin v. San Bernardino
Superior Court, S088458 -- a case which could establish the legal remedies
available for communities that are the victims of toxic pollution.

"It's time for California courts to address the right to medical monitoring
from exposure to chemicals in people's drinking water," said Gary Praglin,
a partner at Los Angeles' Engstrom, Lipscomb & Lack, one of the firms
acting as class counsel.

As previously reported in the CAR, in April the court of appeal ruled that
city residents could not sue as a class for exposure to contaminated
groundwater. Decertifying the 50,000- person class, Justice Thomas
Hollenhorst ruled that proposed damages in the form of a court-certified
medical monitoring program relied too heavily upon factors unique to each
individual.

"Many courts, both California and federal, have found that mass tort
actions for personal injuries are not appropriate for class treatment due
to the plethora of individual factual issues regarding liability, causation
and damages," Hollenhorst wrote in his unanimous opinion.

Plaintiffs had sought the medical monitoring program as well as punitive
damages for claimed exposure to a laundry list of solvents, including
rocket fuel components and rocket fuel decomposition products.

Residents allege that as early as 1954, Lockheed and other defendants
conducted manufacturing operations in San Bernardino County that resulted
in the discharge of dangerous chemicals into the Redlands groundwater.

In another case from the Fourth District, four justices agreed to decide if
the Highway Patrol is liable for a 1996 accident that killed one man and
severely injured another.

In a case that could extend immunity for California law enforcement
agencies, the court must decide in Lugtu v. California Highway Patrol,
S088116, whether an officer owed a duty of care to the driver of a Toyota
Camry who was instructed to pull over in the highway median and was then
hit by a passing truck.

The California Attorney General's office won summary judgment after it
argued that the accident was not foreseeable and, in any event, the officer
was immune from liability.

But the court of appeal disagreed, holding that a triable issue of fact
existed and no immunity applied.

The appellate court ruling came one day after the California Supreme Court
held that police officers involved in vehicle pursuits are immune from
liability even if they are negligent.

That case was Cruz v. Briseno, 00 C.D.O.S. 2299.

Chief Justice Ronald George and Justices Ming Chin, Joyce Kennard and
Janice Rogers Brown voted to review Lugtu. (The Recorder, July 13, 2000)


TOBACCO LITIGATION: Companies Fail To Get Mistrial in FL Engle Case
-------------------------------------------------------------------
A judge Thursday brushed aside a request for a mistrial in a landmark case
against the tobacco companies, rejecting the suggestion jurors could have
been influenced by a headline saying the companies could afford to pay
billions in damages. The judge refused the request after no jurors told him
they had seen any news coverage, and the tobacco attorneys then resumed
their closing arguments.

The 300,000 to 700,000 smokers accuse the industry of making a deadly,
defective product and are asking for up to $196 billion in punitive
damages.

The front-page headline in Thursday's Miami Herald read, ''Experts say
tobacco firms can afford to pay billions.'' The tobacco companies have told
jurors they cannot afford a multibillion-dollar verdict.

Philip Morris attorney Dan Webb asked for the mistrial outside the jury's
presence. Circuit Judge Robert Kaye brought the jurors into the courtroom
and asked them collectively if they had been exposed to any publicity about
the case since they went home Wednesday.

The jurors are instructed not to read articles or watch reports of the
trial, and Kaye asks that question daily. When no jurors said they had seen
any stories, Kaye continued the trial without comment.

Attorney Anthony Upshaw, representing Brown & Williamson, the last company
to address the jury, told the jury it must decide whether it is ''necessary
to spank (the cigarette companies) or destroy them.'' The tobacco attorneys
have argued that even a multimillion-dollar punitive damage award would
snuff out the industry.

Brown & Williamson asked for the smallest punitive damage award in a
landmark smokers' case Thursday, saying it has the lowest profits among the
five tobacco companies on trial. After saying 7,000 employees are working
to make Brown & Williamson a responsible company, attorney Gordon Smith
pleaded: "I ask that you don't kill that dream. Don't stop a better
future."

Smith offered two different dollar ranges for consideration based on Brown
& Williamson's net worth, its share of underage smokers and Florida sales,
but he asked not to bring back a verdict larger than $25 million. About
300,000 to 700,000 smokers in their first class-action trial asked for up
to $196 billion to punish the tobacco industry for decades of deceit.
Considering the size of the smokers' request, Smith said: "Brown &
Williamson isn't in that league. You can't squeeze blood out of a turnip."

Other tobacco attorneys calculated their suggestions based on cash on hand,
potential verdicts in other cases and the difference between a
congressional lawsuit settlement that failed and state settlements.

All five defendants have said they could only afford awards in the millions
of dollars, somewhere around $150 million to $375 million. The difference
between their assets and liabilities on their balance sheets is a combined
$15.3 billion.

R.J. Reynolds attorney Jim Johnson said Wednesday his company cannot pay a
substantial award because its current debts outpace its ready cash. ''Like
many individuals, Reynolds is living paycheck to paycheck.''

Webb asked jurors not to make smokers rich with a big verdict. ''They can
become instant millionaires as a bonus above and beyond fully compensating
them for their injuries,'' he said. ''In many ways, the future of my client
Philip Morris and its employees and its stockholders rest in your hands.''
If the jury awarded $75 million, the average smoker would receive about
$150 if it were split among 500,000 people. If the jury awarded the $154
billion suggested by the smokers, the average payout would be more than
$300,000.

The attorney for Liggett, the smallest corporate defendant, called the
smokers' request irresponsible given the company's break with the industry
in 1997 to begin settling lawsuits. ''Liggett has shown that a tobacco
company can act responsibly,'' Aaron Marks said.

The six-member jury already has awarded $12.7 million in compensatory
damages to three representative smokers. The jury must now decide how much
to award in punitive damages, which are intended to punish and deter
misconduct.

The key tobacco defense is that the industry has changed its ways since
states began suing in 1994, and that $257 billion in settlements is enough.
The companies have argued that they should not be required to pay any more
than their combined net worth of $15.3 billion, the difference between
their assets and liabilities.

The case is the first smokers' class-action lawsuit to go to trial and the
most serious financial threat to the industry. Any verdict will be appealed
and could take at least two years to move through Florida's courts.

Other defendants are Lorillard Tobacco and the industry's defunct Council
for Tobacco Research and Tobacco Institute. (The Associated Press, July 13,
2000)


TOBACCO LITIGATION: Smoking Among CA Teenagers Drops More Than A Third
----------------------------------------------------------------------
Smoking among California teenagers fell by more than a third last year,
prompting Gov. Gray Davis to proclaim Wednesday that a decade of
anti-smoking efforts in California is paying off.

A survey by the state Department of Health Services shows that 6.9% of the
state's youths ages 12 to 17 smoked in 1999, a drop from 10.7% in 1998.

Smoking among adults fell slightly last year to 18% from 18.4% in 1998, and
was far less than the 25% of Californians who smoked in the late 1980s
before California voters approved an initiative that funded the state's
anti-tobacco campaign. Nationally, a fourth of adults smoke.

"This survey shows that our efforts are reducing youth smoking," Davis said
in a statement, adding that California's anti-smoking programs have led to
the decreases.

But even as they applauded the overall declines, several anti-smoking
advocates attributed the latest decline to a voter-approved initiative that
raised cigarette prices 50 cents a pack in 1999.

Also in 1999, cigarette makers raised prices by about 45 cents per pack, as
companies passed along costs from the $ 200-billion settlement of a
nationwide class action suit brought by states.

"The precipitous drop is because the prices were raised," said actor and
producer Rob Reiner, who sponsored Proposition 10 in 1998 to raise
cigarette taxes by 50 cents a pack. "Every study shows that the single best
way to reduce teen smoking is to raise prices."

Although the governor's statement cited the fall in smoking among teenagers
and the slight decline among all adults, the full health department survey
shows that smoking is rising among young adults, ages 18 to 24. About 22.7%
smoked last year, up from 22% in 1998, and from 16.3% in 1994.

"That's bad news; that's worse than bad," said Marc Burgat, spokesman for
the American Heart Assn. "The tobacco industry is targeting them and we're
not responding."

There are several theories about the increase. One is that young adults
were influenced by ads from their youth, particularly the Joe Camel cartoon
character. Additionally, young adults are a major focus of tobacco industry
marketing now, as cigarette makers sponsor events at bars and take out ads
in college and alternative publications.

"Their campaign is working with young adults, and the state is not
responding to their tactics," said Paul Knepprath of the American Lung
Assn. of California.

He and others said increased smoking among young adults could result in
more tobacco use by teenagers, because middle school and high school-age
children view young adults as role models.

California's anti-smoking effort is funded by a separate 25-cent-per-pack
tax imposed by voters when they approved Proposition 99 in 1998. California
will spend about $ 115 million on anti-tobacco efforts this year, including
$ 45 million for anti-tobacco advertising.

Davis, who touted his anti-tobacco credentials when he ran for governor,
increasingly is the target of criticism by tobacco opponents, who demand
that he sharply increase the state program, and that his administration
start airing tougher anti-tobacco television ads.

Former Davis spokesman Michael Bustamante had said earlier this year that a
new batch of anti-tobacco ads would be released by mid-May. A state health
department official said Wednesday that the Screen Actors Guild strike is
slowing production.

"The Davis administration has done nothing to reduce tobacco use," said
anti-smoking advocate Stanton Glantz, UC San Francisco medical professor.
"The word everyone uses is 'disappointment.' "

Contending that price hikes brought about by initiatives and litigation are
causing the drop in youth smoking, Glantz said, "For him to claim credit
for the reductions for what the voters did is outrageous." (Los Angeles
Times, July 13, 2000)


WEYERHAEUSER CO: House Siding Suit Nears No Cap Settlement
----------------------------------------------------------
A proposed settlement in a class-action lawsuit against the Weyerhaeuser
Co. over defective house siding has won preliminary approval in a state
court in California. Under the deal presented Wednesday, Weyerhaeuser
agreed to pay to replace swollen, warped, split and rotted siding made from
compressed wood chips, fiber, resin and wax at a plant in Klamath Falls,
Ore.

Production of the siding ended in 1996, the year after the first claims
were brought.

The settlement covers a class-action lawsuit filed in 1998 in Superior
Court in San Francisco and could extend to similar litigation pending in
Oregon, Iowa, South Carolina and Texas. The dismissal of a similar case in
Washington state is on appeal.

Unlike a settlement with Louisiana-Pacific Corp. of Portland, Ore., in a
similar case four years ago, there is no limit cap on what Weyerhaeuser may
be required to pay. ''Whatever comes in, comes in, and it gets paid no
matter how many other people get paid,'' said Christopher I. Brain of
Seattle, one of the principal lawyers for homeowners who brought the case.

Nearly 2 billion board-feet of the hardboard siding was made by
Weyerhaeuser, based in this Seattle suburb, or was sold under the company's
name between 1981 and 1999, Brain said. More than a third ended up on
homes, apartments and other buildings in California, he said. Colorado,
Arizona, Washington and Oregon also have affected buildings.

Weyerhaeuser is paying 11 law firms representing plaintiffs at least $18
million, representing 15 percent of the first $120 million in claims, and a
maximum of another $8.4 million, representing 12 percent of the next $70
million in claims. The deadline for filing claims is 2009.

Weyerhaeuser announced earlier that it was setting up a reserve for the
settlement with $82 million of its after-tax profits in the second quarter.
It earned $244 million in the first quarter, and it plans to report
second-quarter results next week. The Louisiana-Pacific settlement, in
which Brain also represented homeowners, required the company to pay $275
million into a compensation fund. When claims soared higher, the company
put another $100 million in the fund and established a second fund with
$125 million that could be used to pay homeowners more quickly if they
accepted a fraction of their original claim.

Payments have exceeded $470 million, thousands of claims remain unpaid and
new claims are still being filed. Terms of the Weyerhaeuser agreement
should result in faster payment on claims, Brain said. (AP Online, July 13,
2000)


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