/raid1/www/Hosts/bankrupt/CAR_Public/000807.MBX               C L A S S   A C T I O N   R E P O R T E R

               Monday, August 7, 2000, Vol. 2, No. 152


AMERICAN GENERAL: FBI Investigates Possible Destruction of Documents
ASBESTOS LITIGATION: Lawsuit Claims CT Company Sold Tainted Insulation
ASBESTOS LITIGATION: Malpractice Claim against Weitz Fails
BRILL'S CONTENTVILLE: Agrees with Writers Union on Website Royalties
CELL PATHWAYS: Stockholders Sue in PA over Lead Drug Candidate

CITIBANK: Pays $45M for Consumer Claims on Extra Interest and Late Fees
CITIBANK: To Set up $18 Mil Fund over Credit Card Finance Charges
E. COLI: Sizzler Shuts Down Second Restaurant After More Infections
GREAT EXPECTATIONS: Judgment Creditor Has No Direct Action with Insurer
LABOR READY: Shareholders Demand for Meeting to Explain Stock Value Drop

NABI: Named Co-Defendant in Lawsuit over HIV-Contaminated Products
NATIONAL WESTMINSTER: NY Ct Dismisses ERISA Suit for Meaning in Statute
NETWORK SOLUTIONS: Announces Dismissal of Securities Lawsuit in D.C.
NHL, NBA: Alleged of Collusion for High Prices for Blacked-out Games
PAGESTAR: Saiph Corp Discloses Lawsuit by Shareholders Briefly

ROCK SPRINGS: Accord Reached in Nevada Construction Defect Litigation
SONY CORP: Hit By 80 Suits over Record Pricing after FTC-Top Five Pact
SOTHEBY'S: May Set up Separate Probe Committee
TRAFFIC COURT: Ga. High Court Prepares to Hear on Constitutionality
VANDERBILT UNIVERSITY: Injuries from Radioactive Iron Study Are Covered


AMERICAN GENERAL: FBI Investigates Possible Destruction of Documents
The FBI is investigating American General Finance for the alleged
destruction of documents pertaining to the bankruptcy of a subsidiary
company, according to a newspaper report.

The FBI probe was launched after an employee of the Evansville-based
company claimed a former supervisor instructed her to destroy documents
related to the bankruptcy of AG Financial Service Center Inc., the
Evansville Courier & Press reported.

If the allegations made July 24 by Julie Greathouse are proven true,
American General Finance could be held liable in a $167 million court
judgment against AG Financial Service Center Inc.

A Mississippi judge ordered AG Financial in May 1999 to pay $167.7 million
in damages to 29 people who sued the company. That judgment accounts for
all but about $3 million of the $170 million in debts listed in AG
Financial's bankruptcy petition. It reported about $7.2 million in assets.

American General Finance provides home equity and consumer loans and has
assets totaling more than $117 billion. It is a subsidiary of Houston-based
American General Corp.

Greathouse has worked as a paralegal for the Evansville company since March
She was placed on paid administrative leave two weeks ago. She said the
former lead attorney for American General Finance, Ron DiGiacomo,
instructed her to destroy documents, including security documents and
credit agreements. She said she took about 30 boxes of documents and burned
them at her Posey County farm. "American General (Finance) wants to make
sure the subsidiary company is the only party responsible," said
Greathouse's attorney, Scott Danks.

Larry Mackey, an Indianapolis attorney who Danks said represents DiGiacomo,
did not return a request for comment. The documents allegedly destroyed
could hold significant information not produced during the Mississippi
trial that resulted in the $167 million judgment, Danks said.

Greathouse, 38, said she was unexpectedly moved from her original
department in September to the American General Finance warehouse. She was
instructed to collect documents needed in the bankruptcy proceedings.
Greathouse said a supervisor told her the company "had lost trust" in her.
She said she then mentioned "all I had done for the company including
things I'm not very proud of," she said. She mentioned shredding documents,
and was placed on leave the next day. Since being placed on leave,
Greathouse has given depositions to the FBI and federal bankruptcy

Greathouse said she worked about 70 hours a week for several weeks to
prepare the documents, and her supervisors praised her for her hard work.
During that time, Greathouse said DiGiacomo instructed her to shred about
30 boxes of legal documents.

Greathouse said she shredded about five boxes of documents before she
loaded the shredded material and the remaining boxes onto her father's
truck and took it to her farm. Her father doused the documents with diesel
fuel and set them ablaze.

Since the FBI learned of her actions, a forensic excavating team has
visited the farm and collected the charred remains of the documents, which
were buried under additional refuse.

Danks said the team collected a partial document which appeared to be a
credit card agreement, but everything else had been destroyed. Danks has
told Greathouse that she may face federal charges, although she was given
immunity for her statements to the FBI. Officials in the legal department
of American General in Evansville referred a request for comment to John
Pluhowski, vice president of corporate communications for American General
Corp. in Houston. "The company takes the allegation seriously, and in
response, immediately retained independent, expert counsel to examine the
matter," Pluhowski wrote in a statement.

John Ames, a Louisville, Ky., attorney representing AG Financial Services,
issued a written statement saying the company is investigating the

AG Financial filed for bankruptcy in U.S. District Court in New Albany in
August 1999. The parties in the bankruptcy were nearing a settlement, but
all progress has been put on hold while Greathouse's allegations are
investigated, said David Kleiman, an Indianapolis attorney representing a
committee selected to protect the interest of the creditors.

The bankruptcy followed a class-action lawsuit filed by about 5,500 people
who bought satellite dishes at a cost of $2,500 each. AG Financial, the
subsidiary, agreed to provide loans for the customers, who later filed the
lawsuit claiming they were not provided complete and accurate information
about the purchases.

Since then, American General Finance has agreed to pay $1 million each to
27 creditors among the group. Those payments should be made by Sept. 1. The
company has settled with some other creditors for about $8 million, Kleiman
said. "We're very interested in what documents may have been destroyed,"
Kleiman said. "Possession of these documents could reveal information
pointing at the parent company as having significant liability." (The
Associated Press State & Local Wire, August 4, 2000)

ASBESTOS LITIGATION: Lawsuit Claims CT Company Sold Tainted Insulation
Five residents of Illinois and Missouri have filed a lawsuit against a
Connecticut company they claim sold asbestos-tainted attic insulation until
1984, despite knowing of the danger of asbestos since the 1950s.

The lawsuit, filed last Thursday August 3 against W.R. Grace & Co.,
involves the sale of Zonolite, the company's brand of loose-fill attic

The named plaintiffs are Arvil Daily and James Gilreath of Madison County,
Jerry L. Parnell Sr. and Dennis Muelchi of St. Clair County, and Jessie
Brown, who is listed only as a Missouri resident.

The plaintiffs claim the insulation contains a form of asbestos known as
tremolite, which can cause asbestosis, lung cancer and meothelioma when
inhaled or ingested. The lawsuit alleges the company misled consumers and
government regulators by claiming the insulation was asbestos-free.

The suit asks that W.R. Grace be ordered to compensate home owners for
having the insulation removed and new insulation installed.

The plaintiffs claim their homes were insulated with Zonolite and are
asking the court to certify the case as a class-action complaint that would
include all Illinois and Missouri residents whose homes are insulated with
the product. (The Associated Press State & Local Wire, August 4, 2000)

ASBESTOS LITIGATION: Malpractice Claim against Weitz Fails
Workers who claimed that they were injured by exposure to asbestos brought
a class action in the U.S. District Court against manufacturers of asbestos
products. The jury returned a verdict in favor of the manufacturers. In the
instant legal malpractice action, plaintiff was the son of one of the
class-action plaintiffs, who had since died. He sued the law firm that
represented the workers. He argued that there was a legally incorrect jury
charge concerning the manufacturers' duty to test products, and that
defendants committed malpractice by failing to object to the charge at
trial and by failing to appeal the court's denial of a motion for a new
trial. The court granted defendants' motion for summary judgment, finding
that the class would not have prevailed even if the firm had not committed
the allegedly negligent acts.


Justice Weissberg

VODOPIA v. WEITZ QDS:22702875 - Upon the foregoing papers, it is ordered
that: This is a legal malpractice action brought by John L. Vodopia on
behalf of the Estate of his father, Nicholas L. Vodopia. It arises from a
class action lawsuit brought in the United States District Court for the
Eastern and Southern Districts of New York against asbestos products
manufacturers by workers who claimed that they were injured by their
exposure to asbestos. The plaintiffs alleged, inter alia, that the
manufacturers knew or should have known at the time of the plaintiffs'
exposure of the dangers of their respective asbestos-containing product
sufficient to give rise to a duty to warn the plaintiffs and that no such
warning was ever given. The jury returned a verdict in favor of the
defendants. The plaintiffs' subsequent motion for a new trial, pursuant to
Rule 59 of the Federal Rules of Civil Procedure, was denied. See In re
Joint Eastern and Southern Districts Asbestos Litigation, 762 F Supp 519
(SDNY 1991). Nicholas L. Vodopia was a member of the unsuccessful plaintiff
class. The present action is brought against the firm, Perry Weitz, P.C.,
and its members who represented the workers in that action. The action is
based on what the plaintiff herein argues was a legally incorrect jury
charge. According to the plaintiff, the district court (Robert P.
Patterson, Jr., J.) should have specifically charged that a manufacturer
has a duty at all times to fully test and inspect its products so as to
uncover all dangers that are scientifically discoverable but, instead,
charged that such a duty only arises before the manufacturer places a novel
or inherently dangerous product on the market. The plaintiff contends that
the distinction is critical because the actual charge permitted the jury to
believe that since the asbestos-containing products were not newly placed
on the market, the manufacturers were not under a continuing duty to test
and otherwise ascertain the danger of their products. The plaintiff charges
that the defendants committed malpractice by failing to object to the
charge at the trial and by failing to appeal the district court's denial of
the motion for a new trial which had been based, in part, on the allegedly
erroneous charge. The defendants have now moved for summary judgment
dismissing the complaint.

An attorney may be liable for malpractice if it is established that his or
her conduct fell below the ordinary and reasonable skill and knowledge
commonly possessed by a member of his or her profession. See DaSilva v.
Suozzi English Cianciulli & Peirez, 233 AD2d 172, 174 (1st Dept. 1996).
Errors of judgment or strategy generally do not rise to the level of
malpractice. See Rosner v. Paley, 65 NY2d 736, 738 (1985). In order to
establish a cause of action sounding in legal malpractice, a plaintiff must
establish not only that counsel failed to exercise due care, but that he or
she would have prevailed in the matter at issue "but for" the attorney's
negligence. See Levine v. Lacher & Lovell-Taylor, 256 AD2d 147 (1st Dept.
1998); Zasso v. Maher, 226 AD2d 366, 367 (2nd Dept. 1996).

Here, even assuming that the defendants committed malpractice by failing to
object at trial to the district court's charge, it is indisputable that any
such objection would not have made any difference. In its decision denying
the motion for a new trial, the district court made it clear that he
believed that his charge on the issue of the duty to test was consistent
with the prevailing law in New York, and that, in any event, the charge
reflected the substance of the workers' request to charge and merely failed
to adopt the exact wording of their request. See 762 F Supp at 526-528.
Thus, any objection which counsel would have made to the court's charge at
trial would have been found to be insubstantial and without merit.

As to the defendants' failure to appeal, the determination of whether the
defendants committed actionable malpractice ultimately turns on the purely
legal issue of whether the Court of Appeals for the Second Circuit would
have found that Judge Patterson's charge constituted reversible error. See
Katsaris v. Scelsi, 115 Misc2d 115, 118 (Sup Ct Broome Co 1982). This court
is not persuaded that any such reversible error would have been found. The
plaintiff's argument for reversal rests entirely on a Second Circuit
decision in an earlier asbestos case in which that court stated that a
manufacturer "has a duty to test fully and inspect its products to uncover
all dangers that are scientifically discoverable." George v. Celotex Corp.,
914 F2d 26, 28 (2d Cir 1990). The quoted language was not, however, germane
to that opinion. In George, the issue before the court was not, as here, a
jury charge but, rather, a ruling which permitted the introduction into
evidence of a report which expressed doubt that the level of exposure to
asbestos dust which the industry had otherwise believed to be safe was, in
fact, safe. In ruling that the report was properly received in evidence,
the Second Circuit found that a manufacturer may not rest content with
industry practice but should be held to the knowledge of an expert in its
field. Judge Patterson's charge to the jury which is the subject of this
malpractice action was entirely consistent with this ruling. The court
charged that "a manufacturer or distributor is held to that level of
knowledge which experts had, and the level of knowledge which was available
to or could have been obtained by an expert... during the period of
plaintiffs' exposure to a particular defendant's product." As to the duty
to test a product that has already been on the market, Judge Patterson
charged that if a reasonable expert had concluded that the product was
potentially harmful or that a large number of people might be endangered,
the manufacturer has a duty to investigate and test the effects of its
product. Notwithstanding the suggestion of the plaintiff herein to the
contrary, the Second Circuit did not rule in George, and never has ruled,
that such a charge is legally erroneous, that an unqualified charge using
the language "duty to test fully" is the only proper charge or that
manufacturers have an absolute obligation to test their products throughout
the time that they are on the market. Indeed, no court has ever made such a
strict ruling. On the contrary, it would appear that the reasonableness
standard applied by Judge Patterson is consistent with jury charges in
other cases. See, e.g., Lohnnann v. Pittsburgh Corning Corp., 782 F2d 1156,
1165 (4th Cir 1986).

It is true, as the plaintiff points out, that Perry Weitz argued in its
memorandum of law in support of the motion for a new trial that Judge
Patterson's charge on the duty to test constituted reversible error. The
firm, however, is hardly bound by the fact that it made this argument. In
seeking a new trial, it was incumbent upon the firm to assert that the
charge was critically erroneous. The firm thus was merely doing its job.
Its argument was without merit, as is the plaintiff's argument herein.

Finally, in opposing the defendants' motion, plaintiff asserts that the
defendants committed malpractice by failing to even inform his father of
his right to appeal. Even if this were true, the plaintiff could not
prevail in this action because any appeal that would have been brought
would have been unsuccessful. Morever, this claim of a failure to inform
was not raised in the complaint or in the bill of particulars and may not
therefore be raised on this motion for the first time. See Forester v.
Golub Corp., 267 AD2d 526 (3rd Dept 1999); Robinson v. Schiavoni, 249 AD2d
991, 992 (4th Dept 1998).

Accordingly, the defendants' motion for summary judgment is granted and the
complaint is hereby dismissed. The Clerk shall enter judgment herein. (New
York Law Journal, July 24, 2000)

BRILL'S CONTENTVILLE: Agrees with Writers Union on Website Royalties
The National Writers Union (NWU), Local 1981 of the United Auto Workers,
and Contentville.com , a new website founded by publisher Steven Brill,
formally announced an agreement to compensate writers for works purchased
by visitors to the website.

The new agreement, approved on August 3 by the NWU National Executive
Board, is the first contract of its kind between a major web-based content
provider and the National Writers Union. It will utilize the innovative
NWU's Publications Rights Clearinghouse (PRC) to assign and pay royalties
to writers whose work is sold on Contentville. NWU and Contentville are
drafting the final contract language, which is expected to be completed

"We're delighted to have reached this landmark agreement," said
Contentville founder and CEO Steven Brill. "It's not only what we should be
doing under the law, but it's also the right thing to do. As a former free
lancer I know that I'd be angry if others were selling my work and not
giving me the chance to participate in that sale or perhaps even decide
that it should not be sold. Thanks to Jonathan Tasini's leadership and the
NWU, we can now do both -- and, in the process, offer our customers an
amazing variety of content that has never before been offered. By setting
up the PRC, Jonathan and the NWU have established a framework and a system
that is both fair and practical, and we're pleased to be involved with them
in leading this effort. We have already made the archives of some 2,000
publications searchable and available for sale; this agreement should open
the way for us to make many more available."

"The Internet creates enormous possibilities for the exchange of
information, but those possibilities will not be realized if writers are
not fairly compensated for their work," said UAW Vice President Elizabeth
Bunn, who directs the Union's Technical, Office and Professional (TOP)
Department. "This agreement will set the standard for how writers and
creative workers can reach co-operative agreements with publishers to take
full advantage of new technologies."

"This is an important breakthrough," said Jonathan Tasini, president of the
NWU and a lead plaintiff in Tasini vs. New York Times et al., the
precedent- setting lawsuit, which established the principle that writers
must be paid for the electronic use of copyrighted works. "Steve Brill has
acted responsibly and ethically and we applaud him for laying down a
standard that all publishers can emulate. Through the direct dialogue and
negotiation that led to this agreement, Steve Brill is working with us to
kick open a door to a new set of ground rules to establish fair and stable
relationships between creators, consumers and distributors. We hope and
expect that the deal will be a model for other publishers to address the
significant liabilities they have incurred as the result of the
unauthorized sale of copyrighted material."

In the Tasini vs. New York Times lawsuit, a three-judge panel of the Second
Circuit U.S. Court of Appeals ruled in September of 1999 that the Times and
other publishers could not sell electronic versions of articles for which
they had purchased only first North American serial rights.

Contentville, an offshoot of Brill's Content, serves as content "dream
store," providing not only hundreds of thousands of books at discount
prices, but also magazine subscriptions usually shipped within 24 hours, as
well as instantly-downloadable magazine archives, legal documents, doctoral
dissertations, speeches, screenplays and other material. All of it is
easily searchable using Contentville's Cross Content Search, and all of it
is supplemented by reviews and commentary from, among others, the owners of
40 of the nation's leading independent book stores who serve as
Contentville's Affiliate Experts.

Under the terms of the agreement, writers who register the copyright for
their work through the Publications Rights Clearinghouse will receive 30
percent of the fees paid by Contentville.com customers. The agreement will
primarily benefit free-lance writers who own the copyright to articles they
have contributed to newspapers and magazines.

Any writer, however, who owns the copyright to his or her work can register
at the Publications Rights Clearinghouse and receive payment for sales
generated by Contentville.

CELL PATHWAYS: Stockholders Sue in PA over Lead Drug Candidate
In February and March of 1999, five stockholder class actions were filed
against Cell Pathways Holdings Inc. and certain of its officers and
directors in the United States District Court for the Eastern District of
Pennsylvania seeking unspecified damages on behalf of various classes of
persons, including all persons who purchased Company Common Stock during
certain periods in 1998 and 1999. The complaints alleged that the Company
made false and misleading statements about the efficacy and near-term
commercialization of the Company's lead drug candidate, which had the
effect of artificially inflating the price of the Company's Common Stock.
These actions were consolidated into one action in April 1999, and a
consolidated amended complaint was filed in late June 1999 asserting a
class period extending from October 7, 1998 to February 2, 1999. The
company says that the litigation is at a very preliminary stage.

CITIBANK: Pays $45M for Consumer Claims on Extra Interest and Late Fees
Citigroup Inc.'s Citibank unit will pay US$45-million to settle consumer
claims they were forced to pay extra interest and late fees. The settlement
includes more than US$16-million in reimbursements to credit-card holders
who were overcharged when payments weren't properly credited. (National
Post (formerly The Financial Post), August 04, 2000)

CITIBANK: To Set up $18 Mil Fund over Credit Card Finance Charges
Citibank has agreed to set up an $18-million fund for cardholders who can
show that they were improperly forced to pay late fees or finance charges,
according to a proposed settlement of a class-action lawsuit filed in Los
Angeles. Cardholders claimed Citibank assessed late fees on payments that
arrived after 10 a.m. on the due date. Under the settlement--which must be
approved by a federal judge next month--Citibank agreed not to charge late
fees as long as payments are received before midnight on the due date.
Average finance-charge refunds will be less than $ 1, according to the
settlement. Customers who can show that their interest rates were hiked
because of an inappropriately assessed late charge may recover more.
Citibank is among several credit card issuers who have been hit with
class-action lawsuits over their late-fee policies. Others include First
USA and Providian Corp. (Los Angeles Times, August 4, 2000)

E. COLI: Sizzler Shuts Down Second Restaurant After More Infections
The parents of a 3-year-old girl who died from food poisoning linked to a
local Sizzler filed a wrongful death lawsuit against the company last
Thursday August 3 as the number sickened by E. coli from Sizzlers grew to

That lawsuit and another filed last Thursday August 3 bring the number of
suits related to the outbreak to seven. Brianna Kriefall died July 28 from
complications of hemolyic uremic syndrome, also known as HUS, a disease
caused by the E. coli infection. "(Her parents) want to have answers, like
how it happened and secondly they want to make sure that it doesn't happen
again to any other family," said the Kriefalls' lawyer, Bill Cannon.

Health officials also reported the number of those sickened from E. coli
linked to Milwaukee-area Sizzlers rose to 56, including 54 from the Sizzler
on the city's south side and two from a Sizzler in Wauwatosa.

Attorney Michael Hupy also filed a lawsuit on August 3 on behalf of Robert
Troupe, a Milwaukee man who ate at the Wauwatosa Sizzler July 16. That
lawsuit names Sizzler International, Sizzler USA Franchise, and Eschenbach
and Boysa Management, the local management company, as defendants. A child
also tested positive for the bacteria after eating at the Wauwatosa Sizzler
that day. The child and Troupe ate there the same day but were not

The lawsuit filed on behalf of Brianna, her parents, her brother and a
health insurance company also names Sizzler USA Franchise and Eschenbach
and Boysa Management Company. Eschenbach and Boysa Management voluntary
closed the Wauwatosa Sizzler last Wednesday evening. The company last week
closed its south side Sizzler.

Health officials said tests show a genetic link between the bacteria at the
Milwaukee Sizzler and the Wauwatosa Sizzler.

Paul Biedrzycki, manager of disease control and prevention for the
Milwaukee Health Department, said the two restaurants could be linked
through a batch of meat used at both. Investigators are also checking
whether the two restaurants have the same distributor, Biedrzycki said.

Officials believe contaminated watermelon at the Milwaukee Sizzler's salad
bar may be connected to the outbreak. Officials also originally thought a
pair of meat samples from that restaurant tested positive for E. coli, but
said only one sample contained the bacteria. They have not determined if
the bacteria was somehow transferred to the watermelon.

The two restaurants are the only Sizzlers in Wisconsin. Eschenbach and
Boysa issued a statement last Thursday August 3 calling the Wauwatosa
closure "precautionary." "There is still much to be determined in this
ongoing investigation," the Milwaukee Journal Sentinel newspaper reported
the statement said. "While progress is being made, many questions have yet
to be answered. We continue to work with authorities to hopefully gain
additional information that provides us with those answers."

Lawyers for Arlene K. Trantow of Milwaukee also filed a suit last Wednesday
August 2. Another was filed that day as a class action on behalf of two St.
Francis children and Marcia Helzer, a Milwaukee mother, and her 2-year-old

Three other lawsuits were filed earlier in the week.

Doctors at Schneider Children's Hospital in New York upgraded the condition
of 4-year-old Gabrielle Cetta to stable and improved. Cetta, from Long
Island, N.Y., became ill after eating at the Milwaukee Sizzler while
visiting relatives. Kelly Henrickson, a pediatric infectious disease expert
at Children's Hospital of Wisconsin, said that another child came in,
bringing the total number of children ill with E. coli at the hospital to

Three of them have HUS and three have gastroenteritis, a stomach ailment
often accompanied by diarrhea. Three of them have been linked to the
Milwaukee Sizzler.

Henrickson said doctors planned to use Synsorb Pk, an experimental drug
that may prevent some children with E. coli from developing HUS. The
federal Food and Drug Administration issued emergency approval to use the
drug in Milwaukee, the Journal Sentinel reported.

Only patients ages 6 months to 15 years who test positive for the bacteria
can use the drug. Others must be approved on a case-by-case basis. The
first patient was treated August 3, Henrickson said. (The Associated Press
State & Local Wire, August 4, 2000)

GREAT EXPECTATIONS: Judgment Creditor Has No Direct Action with Insurer
Question presented: Did a class action judgment creditor have a right of
direct action against a settling defendant's insurer where the defendant
independently entered into a settlement agreement notwithstanding the
insurer's active defense and involvement in the case?

Facts: VLP Enterprises operated a franchise of the dating service known as
Great Expectations Creative Management. VLP had a $1 million commercial
insurance policy with Maryland Casualty Company. The policy permitted a
judgment creditor to bring a direct action against Maryland when based on
an agreed settlement or final judgment, provided that an agreed settlement
meant a settlement and release of liability executed by Maryland, the
insured, and the claimant ("no action" clause).

William Hamilton and other individuals (Hamilton) filed a proposed class
action against Great Expectations and its franchisees. Hamilton alleged
that Great Expectations had invaded clients' privacy by recording and
broadcasting confidential communications. Maryland undertook VLP's defense.
The action was assigned to a special master and discovery was stayed after
approximately one year.

Hamilton offered to settle with VLP for policy limits or perhaps $500,000,
but the parties' settlement negotiations failed. On its own VLP entered
into a settlement agreement as part of a global settlement. VLP agreed to
stipulate to a $3 million adverse judgment, and to assign to Hamilton any
contractual right which VLP might have against Maryland.

Maryland neither approved nor disapproved VLP's settlement.

A special master and the trial court reviewed the settlement. The trial
court approved the class action for settlement purposes only and found that
the parties had reached a good faith settlement adequate to support entry
of judgment.

Hamilton sued Maryland for breach of VLP's insurance contract. Hamilton
maintained that VLP was entitled to damages for Maryland's failure to
accept reasonable settlement offers. Maryland countered that there was no
direct contractual claim against it because it was at all times actively
defending VLP against Hamilton's claim. The trial court granted summary
judgment in favor of Hamilton on the ground that Maryland had breached its
covenant of good faith and fair dealing by failing to accept Hamilton's
settlement offers. Maryland appealed.

The court of appeal reversed, holding that Hamilton had no direct action
against Maryland.

The Insurance Code mandates that insurance policies permit a judgment
creditor to bring an action against a judgment debtor's insurer to recover
on the judgment. While complying, many insurers, including Maryland, also
include "no action" clauses within their policies. No action clauses give
the insurer the right to control the defense of a claim; the insured has no
right to interfere, and a stipulated judgment between a claimant and
insured, without the insurer's consent, does not impose liability on the
insurer so long as the insurer did not deny coverage and did provide a
defense. Some authority holds that a final judgment is binding on an
insurer despite a "no action" clause when the judgment results from a
non-adversarial "trial," so long as the facts were adjudicated
independently in a process that did not create the potential for abuse,
fraud or collusion.

The appellate court concluded that Hamilton had no direct action against
Maryland. In a class action settlement proceeding, the trial court
determines the good faith of the settling tortfeasor as against the
interests of non-settling tortfeasors, but not as against the interests of
the tortfeasor's insurer. The trial court's primary concern is to protect
named an unnamed class members by considering whether a settling tortfeasor
is paying less than its pro rata share of the plaintiffs' loss. The
tortfeasor's insurer, however, is primarily concerned with ensuring that
the tortfeasor is not paying too much. The tortfeasor, in turn, wishes to
settle for any amount so long as it is not held personally liable.

The court determined that VLP's settlement, even though part of an approved
class action settlement, was not a "trial" for purposes of bringing a
direct action against Maryland. The case was certified as a class action
only for purposes of settlement, and Maryland's interests were not
adequately represented in the settlement proceeding. Moreover, the limited
discovery period did not adequately develop facts necessary to establish,
fully and finally, that the settlement was reasonable. The settlement and
judgment therefore were not binding on Maryland, and Hamilton had no right
of direct action against Maryland.

The court of appeal also determined that Hamilton could not prevail as an
assignee of VLP's contract claims against Maryland. The trial court erred
in granting summary judgment binding Maryland to a settlement agreement and
judgment to which it did not stipulate.

Counsel for petitioner William Hamilton: Michael Rubin, Altshuler, Berzon,
Nussbaum, Rubin & Demain, 177 Post St., Ste. 300, San Francisco, CA 94108,

Counsel for respondent Maryland Casualty Company: Jonathan Margolis, Low,
Ball & Lynch, Two Lower Ragsdale Dr., Ste. 110, Monterey, CA 93940

Supreme Court Case No. S087346

Case below: A085219; Cal.Ct.App., 1st Dist., Div. 1; 78 Cal.App.4th 640, 92
Cal.Rptr.2d 907, 00 C.D.O.S. 1483

Petition filed: April 5, 2000

Review granted: June 2, 2000

Justices voting for review: Brown, Chin, George, Werdegar

Procedure: Petition for review after reversal of judgment.

(California Supreme Court Service, June 30, 2000)

LABOR READY: Shareholders Demand for Meeting to Explain Stock Value Drop
A prominent shareholder, the Building and Construction Trades Department,
AFL-CIO, wants to know why Seattle-based Labor Ready, Inc. (NYSE: LRW), one
of the nation's largest temporary employment firms, hasn't held its annual
shareholders meeting as required by law and is demanding an explanation for
the approximately 400 percent drop in the value of the company's stock
since the last shareholders meeting.

"With all of the changes and problems facing Labor Ready, it is imperative
that management explain how it views the current circumstances and describe
its plan for the future," said Richard G. McCracken, attorney for the
Building and Construction Trades Department (BCTD), AFL-CIO, in a
sharply-worded letter sent to Labor Ready President and CEO Richard L.

"It appears that management is delaying the holding of the annual meeting,
possibly due to the uncertainty and turmoil in the company. This is not a
time to hide from shareholders, however, but to face them and make
managements' views known," McCracken said in the letter.

The BCTD -- umbrella organization for more than 1 million members of 15
national construction unions -- holds 515 shares of Labor Ready common
stock. Washington State law requires that corporations hold their annual
shareholders' meetings within six months of the end of their fiscal year.
Labor Ready closed it books on FY 1999 on December 31 and, according to the
BCTD, should have held its annual meeting by June 30.

The BCTD and other stockholders want an explanation for why the company's
stock has dropped nearly 400 percent in value since the last shareholders
meeting. Stockholders are also concerned by the resignation of Labor
Ready's CEO and Chairman Glenn Welstad in July after he admitted taking a
$3.5 million loan that was not authorized by Labor Ready's board of

Labor Ready has come under increasing fire from the building trades unions
over its employment practices. In June, workers backed by the BCTD filed a
class action lawsuit in Georgia alleging the company is charging employees
illegal fees for drawing their pay from the company's cash dispensing
machines. The lawsuit is seeking awards for thousands of workers who used
the machines over the past two years.

The union group is also demanding to know what deal the company made for
the cash machines, which were invented by Welstad, his son Todd Welstad,
and Keith Gilbert.

Labor Ready is one of the largest and fastest-growing temporary employment
agencies in the world. It operates out of 839 offices in 49 states, Puerto
Rico, Canada and the United Kingdome.

In April, the unions launched a national campaign to bring temp workers "a
Permanent Voice@Work" and shed light on the abusive and often illegal
action of temp agencies in the construction industry.

NABI: Named Co-Defendant in Lawsuit over HIV-Contaminated Products
The company is a co-defendant with various other parties in one suit filed
in the U.S. by, or on behalf of, individuals who claim to have been
infected with HIV as a result of either using HIV-contaminated products
made by the defendants other than Nabi or having familial relations with
those so infected. The claims made against Nabi are based on negligence and
strict liability. Several similar suits previously pending against the
company, including a purported class action, have been dismissed.

NATIONAL WESTMINSTER: NY Ct Dismisses ERISA Suit for Meaning in Statute
Claims brought against a bank by a group of former employees pursuant to
ERISA have been dismissed by the Eastern District of New York on the
grounds that the plan in question is not an employee pension benefit plan
as defined in the statute. Hahn et al. v. National Westminster Bank N.A.
t/a Fleet Bank of New York N.A. , No. CV 00-452 (E.D.N.Y., June 12, 2000).

Plaintiffs Barbara Hahn, Armand Ehrlein, Roberta Hayes, Brett Smith and
Michael F. Kaczynski filed a putative class action in the New York Supreme
Court, Suffolk County, naming National Westminster Bank N.A. t/a Fleet Bank
of New York N.A. as defendant. The plaintiffs, who were employees of
National Westminster Bancorp Inc., sought to enforce their rights under a
plan known as the "Phantom Stock Appreciation Plan of National Westminster
Bancorp as Amended and Restated April 1994" (the PSP). The complaint raised
causes of action for breach of contract and a federal claim pursuant to the
Employee Retirement Income Security Act, 29 U.S.C. @ 1001 et seq.

According to the plaintiffs, they received payments under the PSP following
a merger that resulted in the sale of Bancorp's assets to Fleet Bank of New
York. However, the payments were not valued properly, the suit said, and
the plaintiffs were owed the difference between the $37 a share they
received and the actual value of $108 per share.

The suit was removed to U.S. District Court for the Eastern District of New
York and the bank moved to dismiss the ERISA cause of action on the grounds
that the PSP was not a plan under the statute. The motion also sought to
dismiss the plaintiffs' request for class certification.

U.S. District Judge Leonard D. Wexler granted the motion to dismiss,
explaining that under Sec. 1002(2)(A) of ERISA, an employee pension benefit
plan is defined as any plan set up or maintained by an employer that
provides retirement income or results in a deferral of income for periods
extending beyond the termination of covered employment. Regulations
promulgated by the Department of Labor at 29 C.F.R. @ 2510.3-2(c) exclude
from the definition of an ERISA plan those plans that involve payments made
to employees as bonuses for work performed, the judge continued. A
non-ERISA bonus plan exists when payments are made to serve a purpose such
as a reward or incentive, rather than to provide retirement income. The PSP
is a bonus plan that does not fall within ERISA, Judge Wexler held.

The PSP was created to give current employees additional compensation in
order to recognize their value to Bancorp, the judge said. The PSP
expressly states that its purpose is to provide key employees with
financial incentives to improve the long-term performance of the bank. This
statement is entitled to weight when the nature of the plan is being
determined, Judge Wexler reasoned. He also found that the PSP did not fall
within either of the exceptions contained in the Labor Department's
regulations. The exceptions state that a bonus plan may still fall within
ERISA's definition of an employee pension benefit plan when payments are
systematically deferred to the termination of employment or when payments
are designed to provide retirement income.

The PSP was never intended to provide retirement income, Judge Wexler
stated, rejecting one exception. Further, even though the PSP allowed
certain payments to be granted after retirement, any post-retirement
receipt of payments is merely incidental to the plan's administration and
does not mean it fits within the other exception, he stated. This was the
case because participants in the bank's PSP could cash in certain phantom
stock awards while still employed.

The judge also stated that since the plaintiffs' ERISA claim was the sole
basis for federal jurisdiction, he would not exercise supplemental
jurisdiction over the state-law beach claim, nor would he rule on class
certification. The matter was remanded to the state supreme court for
further proceedings. (Bank & Lender Liability Litigation Reporter,July 27,

NETWORK SOLUTIONS: Announces Dismissal of Securities Lawsuit in D.C.
Network Solutions, Inc., a VeriSign company (NASDAQ: VRSN) announced that
on August 1, 2000 counsel for the plaintiffs in the potential $1.7 billion
class action lawsuit entitled William D. Hoefer, et al. v. United States
Department of Commerce, et al., filed a Voluntary Dismissal of the entire

This dismissal comes immediately upon the court ordered transfer of the
case from the Federal District Court in San Francisco to the Federal
District Court in Washington, D.C..

This case was defended by Michael Burack of Wilmer, Cutler and Pickering,
Washington, D.C.. "Its always good to dismiss meritless cases early," said
Phil Sbarbaro, outside Chief Litigation Counsel for Network Solutions.
About Network Solutions Network Solutions Inc. is a wholly owned subsidiary
of VeriSign, Inc. (NASDAQ: VRSN), the leading provider of Internet trust
services for e-commerce. VeriSign supplies services throughout the
e-commerce life cycle including domain name registration and infrastructure
services, Web site security, payment processing and digital credentials.
These services provide businesses and individuals a domain name, a way to
be found, a way to be trusted, the means for getting paid and proof of
payment on the Internet. VeriSign and Network Solutions offer these
critical services to help businesses and individuals conduct trusted and
secure electronic commerce and communications over IP networks. With nearly
12 million paid registrations, VeriSign and Network Solutions have one of
the largest business subscriber bases on the Internet. For more
information, visit and http://www.networksolutions.com.

NHL, NBA: Alleged of Collusion for High Prices for Blacked-out Games
have been filed against the National Basketball Association, the National
Hockey League and DirecTV accusing them of conspiring to keep prices high
for television viewers who wanted to watch blacked-out games.

The suits, which seek class-action status, claim that DirecTV subscribers
were forced to purchase an entire pay-per-view package of games in order to
view games outside their viewing area. The suits accuses the three of
anticompetitive practices and seeks compensation for viewers and commercial
establishments who purchased NBA League Pass and NHL Center Ice.

The suits, which were filed on behalf of The Beer Hunter restaurants in
California and South Dakota, claim that beginning with the 1994-95 season,
the NHL and NBA agreed to prohibit the rebroadcast of their games shown on
regional sports networks except for games shown within designated
territories of the teams involved in a particular game. Such an exclusive
agreement restricts competition and artificially inflates the price of
DirecTV's pay-per-view packages NHL Center Ice and NBA League Pass, the
suit claims.

The suits claim that restricting the re-broadcast of games outside a team's
geographic territory is ''not reasonably necessary to achieve any
legitimate business objective.'' ''A lot of the people who buy these
packages believe they're going to get all the games but they're not,'' said
Pam Hooper, a lawyer for the plaintiffs. ''Whatever DirecTV sells to its
subscribers, it's an all or nothing package. I think that's where the
consumers feel very frustrated.''

NBA officials had not been served with the suit as of August 3, said league
spokeswoman Teri Washington. DirecTV spokesman Robert Marsocci also had not
seen the lawsuit and could not comment. The two lawsuits were filed last
Tuesday August 1 in federal court in San Diego. (AP Online, August 4, 2000)

PAGESTAR: Saiph Corp Discloses Lawsuit by Shareholders Briefly
Saiph Corporation discloses in its report to the SEC that, on November 24,
1998, a class action suit was filed in Los Angeles Superior Court (Case No.
BC190882) by Joseph A. Nigro, as a representative of a class of
shareholders of PageStar, against PageStar, Eric Chess Bronk, and others.
The complaint alleges that PageStar released public information from
approximately October 1996 until September 1997, containing material
misstatements about its business. Mr. Bronk has denied all of the
allegations against him.

Saiph Corporation, whose Board of Directors consists of a single
individual, Eric Chess Bronk, was incorporated under the laws of the State
of Nevada on March 1, 2000. On July 10, 2000, the Company amended its
articles of incorporation to increase the number of authorized shares of
common stock from 1,000,000 to 100,000,000. Upon completion of this
registration statement, the Company intends to seek potential business
acquisitions or opportunities to enter into in an effort to commence
business operations.

Eric Chess Bronk has been the president of Mezzanine Capital Ltd., a
closed-end investment company, since August 1997. From April 1997 until
August 10, 1997, he was the president of Xtranet Systems, Inc., a credit
card processing and risk management company, and from October 21, 1997, to
June 1, 1999, he was the secretary of such entity. From June 1998 to the
present, Mr. Bronk has been the President of Mezzanine Associates, LLC, a
California limited liability company engaged in corporate investor
relations services. From September 1995 until August 23, 1996, he was the
president, and from August 23, 1996 to December 1, 1996, he was the chief
operating officer of Satellite Control Technologies, Inc., formerly known
as PageStar, Inc.

From 1972 to the present Mr Bronk has been a practicing attorney, licensed
to practice law in the State of California and in Washington, D.C. Mr.
Bronk received his bachelor of arts degrees in 1967 from Penn State
University, and he received his law degree in 1972 from America University,
Washington College of Law. Mr. Bronk was the President of Bruston Corp.
which filed for protection under the U.S. Bankruptcy Code in 1991. The
action was dismissed in 1996. Mr. Bronk is also a director of Mezzanine
Investments Corporation, a shell company having a class of securities
registered pursuant to Section 12 of the Securities Exchange Act of 1934.

Mr. Bronk has been involved as a director or executive officer of other
companies that may be deemed to be "blank check" companies, but has not
been involved in any blank check public offerings.

ROCK SPRINGS: Accord Reached in Nevada Construction Defect Litigation
Parties in a civil trial that was in its third week forged last Wednesday,
August 2 a settlement that one attorney said represents the largest award
in a Nevada construction-defect case.

Attorneys for Rock Springs Vista III Homeowners Association and the
companies that developed the 576-unit condominium complex about 10 years
ago had continued mediation efforts even after opening statements on July

The parties reached a $ 16.25 million settlement that will be paid within a
month. The figure includes a $ 3.1 million settlement the plaintiffs
reached with the project's subcontractors prior to trial.

'This is a fair and equitable settlement with regards to the homeowners and
the defendants in this case,' District Judge Michael Cherry told the

The association had sought $ 29.5 million in damages from J.A. Black
Construction and the project's developer, Rock Springs Development Co. of

Attorney Scott Canepa, who represents the plaintiffs, said massive plumbing
problems were the first sign of trouble at the complex. He said closer
inspection revealed other defects.

The defendants acknowledged that problems arose at the complex, located off
Washington Avenue west of Buffalo Drive. But they contended the total
repair bill should be about $ 5 million.

Jurors heard from six expert witnesses over 11 days before Cherry informed
them of the settlement early last Wednesday evening. 'We can all get our
contractors' licenses after this,' one juror joked to attorneys. While
stressing that they had yet to hear defense witnesses, several jurors
indicated they would have been inclined to return a damage award that was
closer to $ 30 million than $ 5 million.

However, Canepa noted that the settlement ensured his clients will be paid
within one month. A lengthy appeals process could have delayed payment of
damages ordered by the jury, he said.

Canepa said the settlement eclipses a $ 16.2 settlement reached in
February. Canepa, who also represented the plaintiffs in that case, said
that matter involved the Casa Linda development at Simmons Street and
Alexander Road in North Las Vegas.

Jurors in the case that ended last Wednesday August 2 toured Rock Springs
Vista III last month. While several jurors said they did not see massive
and obvious defects, they praised the testimony of expert witnesses who
testified for the plaintiffs.

One juror cited her background as an accountant in saying she put great
stock in testimony that some aspects of the construction did not comply
with state and city building codes. 'You either do it right or it's wrong,'
the juror said. (Las Vegas Review-Journal (Las Vegas, NV), August 3, 2000)

SONY CORP: Hit By 80 Suits over Record Pricing after FTC-Top Five Pact
Sony Corp. said about 80 class-action lawsuits have been filed against its
Sony Music Entertainment unit and other record companies since the Federal
Trade Commission's settlement concerning 'minimum advertised price'
policies used by the top five record companies. The company made the
disclosure in its annual report filed with the Securities and Exchange
Commission. Under the FTC settlement entered into May 10, the top five
record companies agreed to stop penalizing music retailers for selling
music too cheaply. Retailers who failed to observe the minimum advertised
price stood to lose promotional subsidies from the record companies.
(National Post (formerly The Financial Post), August 04, 2000)

SOTHEBY'S: May Set up Separate Probe Committee
Michael Sovern, chairman of Sotheby's, said he would ask the board of
directors to create a separate, independent committee to oversee legal
matters stemming from the US Justice Department's investigation of the
auctioneer and a subsequent class action lawsuit brought by past customers.

The announcement, made at Sotheby's annual meeting, was seen as a way to
placate its leading outside shareholder, Ronald Baron, who has blasted the
company's board of directors for its close ties to former chairman Alfred

Mr Taubman resigned in February amid allegations that the auctioneer had
colluded with rival Christie's to fix prices, although he has denied any
wrongdoing. His son, Robert, was nominated to replace him on the board.

Mr Baron, whose mutual fund group holds 55 per cent of Sotheby's common
shares, seemed receptive to the proposal for a new committee. "I think it's
a very good thing to do," he said, adding that he did not believe Robert
Taubman would be eligible to serve on the committee because he would not be

Robert Taubman declined to comment on that matter, or on reports that LVMH,
the luxury goods group, had made an offer in September to buy his father's
stake in the company, which represents more than 60 per cent of its voting
shares. He sat apart from the other nominees for the board, although he was
seen speaking cordially with Mr Baron.

Mr Sovern's proposal was one of the few substantive developments at a
shareholder meeting that was expected to contain high drama.

The meeting was the company's first since the price-fixing scandal erupted,
and had been delayed three months after a fight for control of the board
between Mr Baron and Mr Taubman.

Shareholders did not ask questions about the slate of new directors to be
voted, or the company's proposal to expand the board from 14 to 16 members.

William Ruprecht, Sotheby's chief executive, reaffirmed Sotheby's
commitment to the internet, where it has invested heavily to launch two
websites to sell lower-priced goods. Mr Ruprecht said that the sites had
registered Dollars 31m in sales for the first half of the year, and that he
believed the business would break even some time in 2002.

The only unscripted excitement of the day materialised when a Methodist
minister and shareholder questioned why the board did not have any African
American directors. Reverend Douglas Moore drew nervous laughter when he
said he bought African American prints at Sotheby's on the cheap "because
most other negroes don't know you exist". (Financial Times (London), August
4, 2000)

TRAFFIC COURT: Ga. High Court Prepares to Hear on Constitutionality
A law review article was Defense Exhibit No. 1 in a recent DUI case in
Atlanta Traffic Court. That article, which questions the constitutionality
of Atlanta's busy traffic court, will be the focus of arguments at the
Georgia Supreme Court this fall. If the justices rule the traffic court
unconstitutional, this could prompt litigation, such as a class action, to
undo the convictions of more than a million people sentenced in the court
since 1996.

The justices unanimously agreed last month to hear what has become a
growing debate over the constitutional underpinnings of Atlanta's unique
court, formally known as the City Court of Atlanta.

The debate began when Edward C. Brewer III, an assistant professor at the
Salmon P. Chase College of Law at Northern Kentucky University, published
an article in the Georgia State Law Review this spring entitled "The City
Court of Atlanta and the 1983 Georgia Constitution: Is the Judicial Engine
Souped Up or Blown Up?"

Brewer contends the very existence of the court is probably
unconstitutional. And he's sure that it's unconstitutional for the court to
exercise jurisdiction over nontraffic misdemeanors that arise from traffic
arrests, such as marijuana possession, open container violations or giving
a false name.

According to his analysis, that jeopardizes all nontraffic misdemeanor
convictions in City Court since 1988-an estimated 50,000. It also could
affect all traffic convictions since 1996-more than a million.

Jurisdiction Improperly Extended?

The problem, he argues, is that statutes and constitutional amendments
adopted after City Court was created in 1967 have improperly extended its
subject matter jurisdiction, causing it to violate uniformity provisions of
the state Constitution.

Defense lawyer William C. Head, representing a defendant charged with DUI,
offered Brewer's article and analysis to City Court Judge Lenwood A.
Jackson. Head argued that Jackson had no jurisdiction to hear the case
before him.

Jackson, Head recalls, was "a little p.o.'d with me." The judge denied
Head's motion in a May 25 order. But Jackson also decided that the issue
should be addressed by a higher court and granted Head's client, Robert
David Wickham, a certificate of immediate review. The matter is "of such
importance not only to this case but to the fundamental jurisdiction of
this court to act as a court of this state, that immediate review should be
had," Jackson wrote.

The City Court Solicitor, Joseph J. Drolet, concurred. According to a
transcript of the May 24 hearing, Drolet said he was familiar with Brewer's
arguments, having served on the legislative committee in the early 1980s
that revised the judicial article of the Georgia Constitution.

Drolet, a former Fulton assistant district attorney, served for years as
then-Fulton District Attorney Lewis R. Slaton's voice in the Legislature,
where he acquired a reputation as a savvy and persuasive lobbyist for

                     Drolet: Analysis Incorrect

Drolet called Brewer's analysis "an interesting academic exercise" but one
that is fundamentally incorrect. He didn't elaborate, but said he would be
"delighted" for the Supreme Court to hear the matter. It appears the
justices will tackle the issue directly. In their order granting Head's
application for interlocutory appeal, the justices requested briefs on: "Is
the City Court of Atlanta unconstitutional under the Georgia Constitution
or the Federal Constitution?"

Brewer, formerly a partner with Nelson Mullins Riley & Scarborough and the
co-author of a book on appellate practice in Georgia, says he's glad to see
lawyers utilizing his article. "Whatever else is said, at the end of the
day, it's an important issue," he says. He's working on the brief for the
Supreme Court, he says. Head hired him to help with the appeal.

                        Two-Part Argument

Brewer laid out a two-part argument in his law review article.

In 1988 the General Assembly gave City Court jurisdiction over nontraffic
misdemeanors. That jurisdictional expansion, Brewer contends, exceeds the
limits of the 1967 constitutional amendment that established City Court and
limited its jurisdiction to misdemeanors arising out of traffic laws and
ordinances. The 1967 amendment was continued by a 1986 amendment.

But a 1991 Supreme Court case, Lomax v. Lee, 261 Ga. 575, limits the
General Assembly's ability to amend statutes whose constitutionality
depends upon a continuation amendment, such as the 1967 amendment that
created City Court. Under Lomax, the City Court statutes can be amended
only on matters within the scope of the 1967 amendment, Brewer's article

Then in 1996, the General Assembly re-created City Court under "a system of
state courts." That act, Brewer contends, also is flawed because it
violates the 1983 Constitution's exclusive-power provisions and runs
counter to its description of City Court as a municipal court.

City Court, according to Brewer, can't be a state court as defined by the
state constitution because state courts have concurrent misdemeanor
jurisdiction with superior courts whereas the city court handles only
traffic and same-occurrence misdemeanors. He argues the 1996 legislation
created a non-uniform state court, violating the state constitution's
provision that courts of a given class shall be uniform in jurisdiction,
powers and procedures.

Brewer argues state courts can only have jurisdiction in one county.
Atlanta City Court's jurisdiction stretches into DeKalb and Fulton. But
those counties already have state courts, he points out. The only solution
to the constitutional dilemma, his article says, is to turn City Court into
a traffic division of Atlanta Municipal Court. Brewer says Head's case "is
an adequate and appropriate vehicle for bringing questions about the 1996
problem to the court's attention." But the case doesn't raise the issue of
the court's jurisdiction over same-occurrence misdemeanors, he adds.

The defendant is charged with DUI, disobeying a traffic device and not
obtaining his Georgia license within 30 days of establishing residency-all
traffic-related offenses. "A major piece of the problem will be before the
court, but not all," says Brewer. (Fulton County Daily Report, August 4,

VANDERBILT UNIVERSITY: Injuries from Radioactive Iron Study Are Covered
Case United States Fire Insurance Co. v. Vanderbilt University, et al.,
Nos. 00-5239 and 00-5301, 6th Cir.

Appellants' Proof Brief Filed May 25 by Vanderbilt University and
Vanderbilt University Medical Center.

In 1994, a class action suit was filed against Vanderbilt University and
others by plaintiffs alleging the defendants conducted the Tennessee
Vanderbilt Nutrition Project (TVNP), in which more than 800 pregnant women
were given a liquid containing radioactive iron from 1945 to 1947 without
their consent (Craft v. Vanderbilt University, 174 R.F.D. 396 [M.D. Tenn.
1996]). Based on results of its follow-up study in the 1960s, Vanderbilt
reported a possible relationship between fetal exposure to radioactive iron
and the incidence of childhood cancers. The Craft action settled for $ 10
million in 1998 with Vanderbilt being responsible for approximately $ 9.1

Excess carrier United States Fire Insurance Co. filed this action in
January 1999 against Vanderbilt and its primary carrier, St. Paul Fire &
Marine Insurance Co., for a declaration that is has no duty to indemnify
Vanderbilt for the settlement.

U.S. Fire and Vanderbilt cross-moved for summary judgment on whether
Vanderbilt's 1994 notice to the insurer was timely. U.S. Fire argued that
it should have been notified in 1969 when Vanderbilt published its findings
from the follow-up study because it identified the increased incidence of
cancer in the exposed children. Vanderbilt countered that U.S. Fire waived
its argument when it refused to defend or indemnify Vanderbilt in the Craft
action, U.S. Fire was not entitled to notice to 1969, and U.S. Fire has not
shown any prejudice from the 1994 notice.

Vanderbilt also moved for summary judgment arguing that U.S. Fire is
responsible for the remainder of the Craft settlement - approximately $ 6.6
million - because the insurer provided excess insurance during the
follow-up study period which was a concurrent cause of the damages to the
Craft plaintiffs. Vanderbilt also contends U.S. Fire is liable for the
remainder of the settlement under the policies' all sums doctrine pursuant
to J.H. France Refractories Co. v. Allstate Insurance Co. (626 A.2d 502
[Pa. 1993]; See 6/8/93, Page 3).

The U.S. District Court for the Middle District of Tennessee held Jan. 27
that Vanderbilt University did not provide timely notice and is not
entitled to seek indemnification from U.S. Fire for the underlying class
action settlement. The court found that after the underlying settlement was
entered, the entire settlement money was allocated to the battery claims of
the 1940s and wrongful death claims of the 1950s. No money was assigned to
liability for the 1960s follow-up study when U.S. Fire's policies were in

Arguments The District Court improperly assumed the role of a jury in
granting summary judgment to U.S. Fire and erred in denying Vanderbilt's
cross-motion for summary judgment regarding notice. Vanderbilt's notice of
claim in 1994 was timely. U.S. Fire incorrectly argues that Vanderbilt was
required to notify U.S. Fire of its awareness of certain deaths of children
of several participants of the 1940s study because the law does not require
notice of death. Moreover, Vanderbilt sought coverage for the claims in
connection with the 1960s follow-up study, not wrongful death claims. U.S.
Fire failed to show that Vanderbilt was aware of any claims stemming from
the follow-up study prior to 1994. As an excess insurer, U.S. Fire was
entitled to notice only if Vanderbilt became aware that a liability might
exceed the limits of St. Paul's policy and no such claim had been made.

The court's decision that U.S. Fire was prejudiced by Vanderbilt's alleged
untimely notice must be reversed because Vanderbilt provided sufficient
evidence to show that U.S. Fire was not prejudiced and U.S. Fire presented
no such evidence.

The court erred in denying Vanderbilt's motion for summary judgment
regarding coverage and indemnity because the court misconstrued the
definition of "occurrence" under the U.S. Fire policies; misapplied the
"concurrent causation" doctrine; violated Vanderbilt's due process rights
and misapplied applicable law in holding that Vanderbilt was bound by an
order of distribution entered after Vanderbilt was dismissed with prejudice
as a defendant in the class action; and misapplied controlling law in
permitting an insurer to avoid coverage for an entire loss despite the
absence of a policy provision permitting it to allocate the loss to policy
years outsides it own policy periods. The 1960s study constitutes an
"occurrence" under the policy, thus the court erroneously denied coverage
to Vanderbilt.

The court erred in finding that the Craft claims from the 1960s study were
separate from those related to the 1940s study and thus erred in concluding
that U.S. Fire was not obligated to pay the balance of the Craft

The court erred in determining that Vanderbilt did not suffer a covered
loss and that it was bound by the distribution order.

Attorneys Vanderbilt is represented by Greg Mackuse of Miller, Alfano &
Raspanti of Philadelphia. U.S. Fire is represented by Robert A. Shults,
Brian S. Martin and Janis H. Detloff of Sheinfeld, Maley & Kay of Houston.
(Mealey's Litigation Report: Insurance June 13, 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.

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

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