CAR_Public/000809.MBX               C L A S S   A C T I O N   R E P O R T E R

              Wednesday, August 9, 2000, Vol. 2, No. 154

                              Headlines

BRIDGESTONE/FIRESTONE: Attys. Call Case One of the Deadliest Since 1970s
BRIDGESTONE/FIRESTONE: Cohen Milstein Files Customers' Suit in FL
BRIDGESTONE/FIRESTONE INC: Plans to Recall about 20 Million Tires
CASA LINDA: $16M Settlement with NV Homeowners over Construction Defects
DOLLAR GENERAL: Former Employees File Suit for Overtime Pay

FIRST USA: Judge OKs Suit Filed by Stanley, Mandel Re Credit Card
HOLOCAUST VICTIMS: Union Leader Calls On German Citizens To Donate
INMATES LITIGATION: Testimony By 160 on 1971 Attica Uprising Ends
I-STAT: Investor Acting on Market Price Fails to Show Reliance for fraud
L.L. BEAN: Lawsuit Says Retailer Charges Customers Too Much Sales Tax

MAX INTERNET: Milberg Weiss Files Securities Suit in Texas
PADUCAH GASEOUS: Workers Kept in Dark on Hazards Sue Govt and Companies
PAYDAY LENDERS: IL Ct OKs Claim for Improper Placement of Disclosure
PLC SYSTEMS: Investors Sued after FDA Rejected Heart Laser System in '97
RALLY'S HAMBURGER: Investors Wait for Response to DE Suits over Merger

RALLY'S HAMBURGERS: Discovery for 1994 Securities Suit Just Completed
TRANSWORLD SYSTEMS:  FDCPA Claim Survives Dismissal; Addresses Confusing
UNITED AUTO: Report Says U.S. Probes Allegations UAW Prolonged GM Strike

* Companies Are Dropping Employment Tests in Tight Labor Market
* Move to Ensure Australian Supreme Court Can Hear Class Actions

                              *********

BRIDGESTONE/FIRESTONE: Attys. Call Case One of the Deadliest Since 1970s
------------------------------------------------------------------------
The National Highway Traffic Safety Administration on 46 fatalities it
believes could be linked to failing Firestone tires, more than double the
number it had tallied last week, the CAR yesterday quoted AP Online. The
news said that NHTSA spokeswoman Liz Neblett said as of Monday the agency
had received more than 270 complaints about failing Firestone truck tires.

According to the Los Angeles Times, the National Highway Traffic Safety
Administration predicted that reports of accidents and injuries will
continue to rise as the investigation gains more attention and publicity.

The government is requesting that Firestone, a unit of Japanese tire maker
Bridgestone Corp., and Ford Motor Co. turn over more than 7,000 pages of
documents related to the design and manufacturing of the tires.

The government began its investigation in spring after hearing numerous
reports about accidents, blowouts and rollovers caused by tire treads
peeling off on Firestone ATX, ATX II and Wilderness models. Most of the
complaints involved Ford Explorer sport-utility vehicles. In some cases,
the tread separation was so severe that the tires completely disintegrated.

"The insidious problem with this is that these tires fail without warning,"
said Richard Baumgardner, head of Tire Consultants in Alpharetta, Ga., who
was a tire engineer at Firestone for 27 years. "There's no bulge, there's
no bubble, there's nothing that the person can see until they're driving
down the road at high speed and the tread starts peeling off."

Attorneys specializing in auto defects are already calling the Firestone
controversy one of the nation's deadliest tire-defect problems since the
1970s, when the Firestone 500 was recalled after being blamed for 50
deaths. "I can't think of any other problem with a specific tire where
there have been this many fatalities," said Don Fountain, an attorney in
West Palm Beach, Fla., who said he is preparing to file lawsuits against
Firestone and Ford.

Although the Ford Explorer has gained the most attention in the case, the
tires are also supplied on some new Ford F-Series pickups, Mercury
Mountaineer SUVs and select SUVs and light trucks built by General Motors
Corp., Mazda Motor Corp., Toyota Motor Corp. and Nissan Motor Co.

Los Angeles Times says that Firestone is offering customers a credit toward
the purchase of replacement tires, based on the age and condition of the
old tires. Discount Tire, the nation's No. 3 retail tire chain, said it is
joining Sears, Roebuck & Co. in halting sales of certain Firestone tires.
At the same time, Nashville-based Firestone Tire Sales was hit with a
class-action lawsuit on behalf of drivers nationwide.

Experts say that a U.S. recall of the Firestone tires could cost as much as
$ 500 million. Between 12 million and 47 million tires could be involved.

Growing numbers of consumer groups and safety organizations are demanding
that Ford replace the tires on its Explorer model, the nation's top-selling
sport-utility vehicle.

Strategic Safety, a Virginia-based research organization, questioned why
the auto maker would replace Firestone tires in some countries, but not in
the U.S., where costs would probably be far higher. "Can the American
public assume that because of the greater economic effect . . . Ford is
unwilling to offer replacement tires in the U.S.?" the group wrote in a
letter to Ford President Jac Nasser.

Joan Claybrook, president of Public Citizen, accused Ford and
Bridgestone/Firestone of covering up catastrophic problems with the tires
that they've known about for at least four years. "I'm more convinced than
ever that this tire should be recalled," Claybrook said. "It's been
recalled in a number of foreign countries. If they're doing it there, why
aren't they doing it in the United States?"

Meanwhile, Firestone and Ford face a torrent of lawsuits over the issue,
including one suit seeking class-action status, filed Monday in federal
court in Florida. The suit seeks to represent drivers nationwide who
purchased cars with Firestone ATX, ATX II or Wilderness tires.

Attorneys at Washington, D.C.-based Cohen, Milstein, Hausfeld & Toll accuse
Firestone of putting the lives of million of drivers at risk by failing to
fix the defects, which they say the tire company has known about since
1992. The suit also names Ford. A Ford spokeswoman said the auto maker has
been named as a co-defendant with Firestone in 39 separate lawsuits
involving tire separation. Only one case has been tried, and the court
ruled in favor of Ford and Firestone, she said.

Tire consultant Baumgardner said that the tires in question are "five times
more likely to cause an accident on the rear tires as on the front." "In
the back, when the tire starts to fail, the driver is unable to control the
pull of tire, whereas on the front, with power steering in most cases, they
can control and respond to the pulling and pushing of the tire," he said.
"My feeling is that it's a combination of the vehicle and the tire. It
appears that when the tire fails on a Ford Explorer, the vehicle's more
likely to go out of control," Baumgardner added.

Why on the Explorer? "The basic handling, center of gravity and all of the
components when the tire tread begins to peel off and pulls the vehicle off
its normal travel path," he said. (Los Angeles Times, August 8, 2000)


BRIDGESTONE/FIRESTONE: Cohen Milstein Files Customers' Suit in FL
-----------------------------------------------------------------
Representing consumers nationwide who purchased motor vehicles that have
Firestone ATX, ATX II or Wilderness tires, the Washington, D.C. plaintiffs'
firm of Cohen Milstein Hausfeld & Toll, P.L.L.C. and the Fort Myers,
Florida based Viles Law Firm, on August 7 filed a lawsuit in the Circuit
Court of the Twentieth Judicial Circuit in and for Lee County, Florida
against Bridgestone/Firestone, the maker of the tires and against Ford
Motor Company and other auto manufacturers who installed the defective
tires on the vehicles they manufactured and sold.

The suit alleges that the ATX, ATX II and Wilderness tires are defectively
designed and manufactured such that the treads separate from the casings
leading to crashes and thus imperiling the safety of drivers and passengers
of motor vehicles on which the tires are mounted. According to Cohen
Milstein partner Gary E. Mason, "Bridgestone has been actively
investigating this problem since 1992 and has yet to fix the defect in the
tires. This utter neglect has put the lives of millions of drivers in
jeopardy."

The suit seeks damages and injunctive relief that would force
Bridgestone/Firestone to inspect, repair and/or recall of the affected
tires.

Contact: Cohen Milstein Hausfeld & Toll, PLLC Gary E. Mason 202/408-4600,
or Alexander E. Barnett, 202/408-4600


BRIDGESTONE/FIRESTONE INC: Plans to Recall about 20 Million Tires
-----------------------------------------------------------------Bridgestone/Firestone
Inc. plans to announce Wednesday a recall of about 20 million tires for
light trucks and sport utility vehicles that have been implicated in
accidents resulting in more than 40 fatalities, a source familiar with the
decision said Tuesday. The recalled tires will be replaced by other
Firestone tires, the source said. The recall will begin immediately in
southern states and eventually spread nationwide, the source said.

Most of the Firestone ATX, ATX II and Wilderness AT tires are on Ford
Explorers, the industry's top-selling SUV, but the recall will include
tires on all brands of vehicles, the source said on condition of anonymity.

Bridgestone/Firestone is a subsidiary of Tokyo-based Bridgestone Corp.
Bridgestone/Firestone spokeswoman Marianna Deal said the company will hold
a news conference on Wednesday regarding the tires at the National Press
Club in Washington at 11 a.m. EDT. Ford Motor Company officials will also
attend.

Complaints alleged that Firestone tires peel off their casings, sometimes
while the light trucks or SUVs are traveling at high speeds.  The National
Highway Traffic Safety Administration has received 270 complaints,
including reports of 46 deaths and 80 injuries, about failing Firestone
truck tires. Most of the accidents reported to NHTSA came from Texas and
southern and southwestern states with warmer climates. Heat can effect tire
tread bonding and may be associated with an increased rate of tread
separation.

Dearborn, Mich.-based Ford Motor Co. and Nashville-based
Bridgestone/Firestone had insisted the tires are safe, but the source told
The Associated Press that the two companies decided on a recall after a
private meeting with NHTSA investigators Tuesday.

Martin Inglis, vice president for Ford North America, said tires are one of
the few features of a new vehicle that are warranted by a supplier instead
of the automaker. "Any time a Ford customer is at risk in any shape or
manner, we want to avoid any problems," he said.

Liz Neblett, a NHTSA spokeswoman in Washington confirmed that a meeting
occurred with the two companies on Tuesday, but she declined to elaborate.
"I have really nothing to say about that meeting," Neblett said. "Since
Ford and Firestone have been very good about cooperating with us, I'm sure
the meeting went well."

Firestone spokeswoman Susan Sizemore declined to comment on whether
Firestone had decided to issue a recall. "At this point, we have no news,"
said Sizemore.

Discount Tire, Montgomery Ward and Sears Roebuck and Co. have stopped
selling the tires because of safety concerns.

Ford has replaced Firestone tires for free on vehicles sold in Venezuela,
Ecuador, Thailand, Malaysia, Colombia and Saudi Arabia after tires failed
in those countries, but has resisted pressure to do so in the United
States, saying the matter was under investigation.

General Motors Corp., Nissan Motor Co., Toyota Motor Corp. and Subaru also
sell the Firestone ATX, ATX II and Wilderness AT tires as original
equipment on SUVs and pickups.

All have said they have received no complaints about the tire.

The NHTSA investigation was opened in May and in the preliminary inquiry
stage. An investigation eventually can lead to a recall, but many are
dropped. (AP Online, Detroit, August 8, 2000)


CASA LINDA: $16M Settlement with NV Homeowners over Construction Defects
------------------------------------------------------------------------
Homeowners contend that they suffered injuries due to physical property
damage caused by construction defects, construction defect-related stigma
damages and diminution of property value.

Homeowners noticed tilting and/or heaving of the concrete slab; cracking
and disintegration of interior wall surfaces; cracking and disintegration
of exterior wall surfaces and deterioration of concrete flatwork. Expert
investigations determined the primary failure mechanism associated with the
distress features was highly expansive and corrosive soils beneath the
homes' foundations.

Defendants contend that the subject homes were either defect free or
required less extensive repairs than the homeowners' experts recommended.

The case was a consolidated class action that involved claims of soils and
foundation system distress throughout the Casa Linda Subdivision. Homes in
the subdivision were developed, constructed or sold by one of the three
principle entities: Esser Development/HBR, Rhodes Design & Development Inc.
or HALCO Inc. Homeowners in the Alves case were 52 homeowners in the
subdivision. Through the investigation, it became apparent that the entire
community was plagued by the same soils and foundations problems.
Accordingly, a second lawsuit was filed with seven homeowners named as
class representatives for the entire class. A third lawsuit has been filed
by individual homeowners. By the time the settlement was reached, the
question remaining was the nature and extent of repairs required on the 186
homes represented in the action.

Plaintiff Attorneys: Scott K. Canepa of Vannah Costello Canepa Riedy &
Rubino in Las Vegas.

Defense Attorneys: Elizabeth Goff Gonzalez of Gonzalez & Salzano in Las
Vegas; Theodore Parker 3d of Parker Nelson & Arin in Las Vegas; Kathleen A.
Lynch of the Law Office of Geoffrey O. Evers in Sacramento, Calif.; Jeffrey
H. Ballin of the Law Office of V. Andrew Cass in Las Vegas; Randal A. De
Shazer of Parnell & Associates in Las Vegas; Marsha L. Stephenson of
Stephenson & Dickinson in Las Vegas; Jeffrey A. Bendavid of Moran &
Associates in Las Vegas; Philip J. Dabney of Haney, Woloson & Mullins in
Las Vegas; Thornsten J. Pray of the Law Offices of Gregory G. Dahl in
Henderson, Nev.; John J. Carniato and Craig D. Guenther of the Law Offices
of John J. Carniato in Lafayette, Calif.; Bruno Wolfenzon and Gregory M.
Schulman of Wolfenzon & Volk in Las Vegas; Stephen C. Grebing of Ryan,
Marks, Johnson, Todd & Broder in Las Vegas; Thomas R. Slezak Jr. of Leach &
English in Las Vegas; Carl E. Flick of Maeika & Flick in Las Vegas;
Christopher J. Curtis of Throndal, Armstrong, Delk, Balkenbush & Eisinger
in Las Vegas; Michael R. Merritt and S. Don Bennion of Bennion & Cardone in
Las Vegas; Victor A. Perry and Srilata Shah of Perry & Spann in Las Vegas;
Christopher H. Byrd and John H. Mowbray of Morse & Mowbray in Las Vegas;
Dennis M. Prince of Eglet & Prince in Las Vegas; Mark E. Trafton of Las
Vegas; Kenneth E. Pollock of Ryder & Caspino in Las Vegas; Michael L. Green
of Green & Baker in Scottsdale, Ariz.; James P. Chrisman of Barker, Brown,
Busby, Chrisman & Thomas in Las Vegas; Christine E. Drage and Kien C. Tiet
of Drage Olson & Tiet in Las Vegas; Peter C. Brown and Stephen M. Bowling
of the Law Offices of Peter C. Brown; and David S. Lee of Weil & Lee in Las
Vegas.

Plaintiff Experts: Salar Dehbozorgi, civil and soils engineer, Las Vegas;
Martin R. Owen, civil, soils and professional engineer, San Diego; Val Hoy,
licensed general contractor, Henderson, Nev.; Pamela Kinkade, certified
general appraiser, Las Vegas; Brian Grill, licensed architect and ICBO
official, Las Vegas; James J. Bynum, licensed general contractor, Tustin,
Calif.; H. Fred Uttke 2d, licensed general contractor, Tustin, Calif., Ed
Bove, licensed civil and concrete engineer, San Diego; Florian G. Barth,
licensed structural engineer, San Carlos, Calif.; and Robert C. O'Neill,
licensed petrographer, Murphys, Calif.

Defense Experts: Lane Swainston, certified building official, Henderson,
Nev.; Avram Ninyo, geotechnical engineer, San Diego; Robert C. Hendershot,
professional engineer, Las Vegas; David Robertson, general contractor, Las
Vegas; Robert Perry, licensed architect, Alpine, Calif.; Shelly Lowe, real
estate appraiser, Las Vegas; Bernard Erlin, licensed petrographer, Latrobe,
Pa.; Harvey Haines, concrete engineer, Oakland, Calif.; Marshall Hopper,
investigation/analysis of construction, Hillsborough, Calif.; Larry
Johnson, geotechnical, Sparks, Nev.; Kevin Jordan, civil engineer, Las
Vegas; Tom W. Thomas, professional engineer, Tempe, Ariz.; Carl Josephson,
professional/structural engineer, San Diego; Larry R. Nelson, professional
engineer, Las Vegas; Roger T. Alworth, civil and structural engineer, Las
Vegas; Clifford L. Freyermuth, post tension foundation slab, Phoenix; Wes
Harrington, general contractor, Henderson, Nev.; Shayne Skipworth, general
contractor, Henderson, Nev.; Alan Kropp, civil and geotechnical engineer,
Berkeley, Calif.; Ronald R. Bennett, structural aspects of PT slabs, Las
Vegas; Wes Daniels, licensed general contractor, Santa Rosa, Calif.; and
Ted Splitter, geotechnical engineer, Emeryville, Calif.

Case name and numbers: In Re: Casa Linda Development, Nos. A382341, A356772
and A378750, Nev. Dist., Clark Co.; class action consolidation.

Plaintiffs: Dennis Scarberry, et al.; Don Alves, et al.; Yoon Suk Lee;
Rhonda Goldberg

Settlement / Verdict: $ 16,197,500

Date: April 14

Defendants: Rhodes Design, et al.; HBR Inc., et al. (Mealey's Litigation
Report: Construction Defects, June, 2000)


DOLLAR GENERAL: Former Employees File Suit for Overtime Pay
-----------------------------------------------------------
Two former assistant managers in Alabama stores have sued Dollar General
Corp., claiming they were forced to work unpaid overtime.

In the lawsuit filed last week in U.S. District Court in Nashville, Mary
Clark, a former assistant manager at a Dollar General Store in Moulton,
Ala., and Michelle Shannon, a former assistant manager at a store in
Cullman, Ala., said they were required or permitted to work off the clock
before and after regular shifts.

Dollar General, a Goodlettsville, Tenn.-based chain of neighborhood
discount stores, has more than 50,000 employees in more than 4,500 stores
in 25 states. ''We have no intention of ever having a policy to ask anybody
to work off the clock,'' said Dollar General president Bob Carpenter.
''That's ridiculous.''

The lawsuit, which seeks class-action status, asks for an unspecified
amount for unpaid overtime and an equal amount for damages and legal
expenses. The two employees claim they worked during break times, that
overtime hours were rolled over from one week to the next and that time
records were changed or destroyed to delete overtime hours. Shannon, who
worked for Dollar General for about two years ending in October 1997, said
Monday she was asked to come in before and after her shift to unload
trucks, as well as to put out stock in the store.

The lawsuit contends company policies and practices include understaffing
stores to keep payroll costs low, putting limitations on payroll costs for
each store, compensating managers with bonuses based on lower payrolls and
discouraging the recording of overtime payments to assistant managers. (AP
Online, August 8, 2000)


FIRST USA: Judge OKs Suit Filed by Stanley, Mandel Re Credit Card
-----------------------------------------------------------------
A U.S. federal judge has certified a nationwide class of over 10 million
First USA Bank credit card holders in a case alleging fraud and violations
of federal law.

First USA Bank is a subsidiary of Bank One Corporation and has been the
subject of tremendous public scrutiny over its credit card practices.
Attorneys for the plaintiffs estimate potential damages in this case could
exceed $1 billion.

In the case of Rosted v. First USA Bank, no. C97-1482L, pending in United
States District Court for the Western District of Washington, the
plaintiffs allege First USA Bank defrauded them by offering them a credit
card with a "fixed APR", but raised their APR considerably higher shortly
after it was to be "fixed." Judge Robert S. Lasnik certified the class of
"All persons who received an offer (whether by mail, television, or other
medium) from First USA Bank promising a fixed APR and who were charged an
APR in excess of the fixed rate."

Lead counsel for the class are: John Bright (Keller, Rohrback, LLP-Seattle)
Marc R. Stanley (Stanley, Mandel & Iola, LLP-Dallas) Andrew S. Kierstead
(Huron Zieve & Kierstead, LLP-Portland) Timothy E. Eble (Ness, Motley,
Loadholt, Richard & Poole, P.A.-Charleston) Richard A. Freese (Langston
Sweet & Freese, P.A.-Birmingham) NOTE: Copies of the Certification Order
can be obtained by contacting Stanley, Mandel & Iola, LLP.

Contact: Stanley, Mandel & Iola, LLP, Dallas Marc R. Stanley, 214/443-4300
mstanley@airmail.net


HOLOCAUST VICTIMS: Union Leader Calls On German Citizens To Donate
------------------------------------------------------------------
The head of Germany's largest union Tuesday called on German citizens to
each donate 20 marks (dlrs 9.25) to a joint government-industry fund to
compensate victims of Nazi-era forced labor.

Klaus Zwickel, head of IG Metall, said that such a step by all Germans
could bring another 1 billion marks (dlrs 460 million) in for the 10
billion mark (dlrs 4.6 billion) fund.

The Finance Ministry has already set up a bank account to receive
donations, after a similar call for donations by public figures including
Nobel literature laureate Guenter Grass.

Government and German firms have pledged to split the fund 50-50, but
companies have been slow to sign on. As of Tuesday, the industry foundation
said 3,571 firms had pledged a total of about 3.2 billion marks (dlrs 1.5
billion), a number that has stagnated for weeks.

Zwickel also called on more companies to step forward, saying the inability
of companies to raise their half was a ''sorry affair.'' ''What was
envisioned as a worthy and generous gesture of reconciliation is threatened
to go to waste by penny-pinching,'' he said in a statement.

The fund is to compensate as many as 2 million slave and forced laborers,
mostly non-Jews from eastern Europe, who were used by the Nazis to keep
industry and arms plants running and replace Germans sent to the front
lines. Organizers have said they hope payments will begin before the end of
the year.

Industry formed the foundation last year under pressure of class-action
lawsuits in the United States, and will receive legal protection backed by
the U.S. government in exchange for setting up the fund. (AP Worldstream,
August 8, 2000)


INMATES LITIGATION: Testimony By 160 on 1971 Attica Uprising Ends
-----------------------------------------------------------------
The testimony of 160 inmates concerning the bloody uprising and fatal
shootings at the Attica Correctional Facility in 1971 have finished. The
last of the witnesses was heard Monday by U.S. District Judge Michael
Telesca. Before the end of summer, Telesca is expected to decide how more
than 570 people who have filed claims should share an $8 million
settlement.

In agreeing to settle, the state admitted no wrongdoing and agreed to pay
the inmates $8 million and their lawyers $4 million in legal fees and
costs. The original class-action lawsuit in 1974 sought $100 million in
damages.

Telesca said he planned to put each case into four categories based on the
level of injuries suffered, as well as a fifth category for the 32 inmates
who died.

The amount of the award - which will average $14,000 - will depend on the
level of seriousness and the number of other cases in the category.

Of the 1,281 inmates who were in prison yard "D" when police stormed the
prison, hundreds have since died. By year's end, Telesca will divide up the
money between the claimants - most of them former inmates in their 50s or
older.

Dozens of former inmates testified in the federal court about their
harrowing experiences in the hours after the prison was recaptured.

Josh Melville, 38, of Miami Beach, Fla., told Telesca what it was like to
grow up without his father, Sam Melville, an inmate slain by a trooper.
"There's no doubt in my mind he was intentionally shot," Melville said. "I
grew up mistrustful because of that whole situation. I didn't want to
believe the state deliberately shot my father." He handed the judge several
photos taken of the infamous D yard, photos of his father's wounds and
three photos of him and his dad, the Rochester Democrat and Chonicle
reported.

Sam Melville was serving time for bombing draft centers and companies that
supported the Vietnam War. No one was injured or killed in the bombings,
his son said.

Cleveland Hope, 58, described how he was severely beaten and suffered a
broken knee that has required two surgeries. Since leaving Attica, he has
held his job for nearly 25 years, took in seven foster children and adopted
four.

Larry Davis was only 17 and had been in Attica for one week, serving a
four-year burglary sentence, when the riot broke out and he was beaten.
"Extensively?" Telesca asked him. "Very," he replied. He recalled racial
slurs, especially when he had to run naked past police and correction
officers who struck him. He was paroled in 1973, but has been repeatedly
jailed, he said. "I admit I did something wrong, but I shouldn't have been
put in that position," Davis said. "I still have nightmares about it."

In all, 32 inmates and 11 prison employees died in the uprising. All but
four were killed by gunfire as police retook control of the prison. (The
Associated Press State & Local Wire, August 8, 2000)


I-STAT: Investor Acting on Market Price Fails to Show Reliance for fraud
------------------------------------------------------------------------
Plaintiffs in a class action for common-law fraud cannot prove the element
of reliance through the fraud-on-the-market theory, which establishes
reliance by showing that securities were purchased in the secondary markets
at attractive prices that had been artificially affected by an issuer's
misrepresentations and omissions, rather than through individual reliance;
the theory is a stranger to New Jersey's securities laws and is
inconsistent with the current requirements for a common-law action for
fraud in New Jersey -- use of the theory is not the equivalent of proof of
indirect reliance, in which a party makes a misrepresentation to a third
party knowing that the other party to the transaction will rely on it,
which is required minimally in a common-law fraud action; the judgment of
the Appellate Division is reversed and the decision of the Law Division
dismissing plaintiff's fraud claim is reinstated.

The theory of fraud on the market, as described by the United States
Supreme Court in Basic Inc. v. Levinson, 485 U.S. 224 (1988), allows
plaintiffs to bring class actions under federal securities-fraud law by
excusing those plaintiffs from the burden of proving individual reliance.
Instead, plaintiffs may establish the reliance element of their claims by
showing that they purchased securities in the secondary markets at
attractive prices that had been artificially affected by an issuer's
misrepresentations and omissions.

I. Plaintiff Susan Kaufman held shares of defendant i-Stat Corporation, a
New Jersey corporation, over a period during which i-Stat allegedly
misrepresented certain financial matters and the misrepresentations were
discovered and publicized. The misrepresentations were never made to
Kaufman by i-Stat or any intermediary. Kaufman relied on the price of the
stock in her decisions, and now contends that, because i-Stat's
misrepresentations were reflected in the share price, she can make out
claims for common-law fraud and negligent misrepresentation on the basis of
the share price alone.

On June 19, 1996, Kaufman filed suit as putative class representative on
behalf of all purchasers of i-Stat common stock between May 9, 1995, and
March 19, 1996, excluding the officers and directors of the company. She
alleged common-law fraud and negligent misrepresentation, contending that
i-Stat's deliberately false and misleading statements regarding its
financial status and deceptive sales practices inflated the stock price
during the class period. Kaufman also alleged that i-Stat's officers and
directors illegally received over $2.9 million from insider trading during
the class period.

Stat moved for summary judgment on the ground that Kaufman failed to state
a cause of action in fraud or in negligent misrepresentation because she
could not satisfy the actual reliance requirement in each. The trial court
granted the motion, dismissing Kaufman's claims with prejudice. Although
the court agreed with the fraud-on-the-market theory Justice Blackmun
espoused in Basic, it rejected the theory as a substitute for reliance,
believing it would be inappropriate for a trial court to expand the common
law of New Jersey. The court concluded that the issue was better addressed
by an appellate court or the Legislature.

On appeal, the Appellate Division reversed on the common-law-fraud claim,
but affirmed the dismissal of the negligent-misrepresentation claim.
Kaufman v. i- Stat Corp., 324 N.J. Super. 344, 348 (App. Div. 1999). The
court concluded that plaintiff's reliance on the integrity of the market
price of the security was sufficient to satisfy the reliance requirement of
a common-law-fraud claim when the security was inflated artificially by the
corporation's deliberate false statements, but declined to extend this form
of proof of reliance to a negligent-misrepresentation claim, citing public
policy considerations in favor of a more limited scope of liability for
negligent communication of fraudulent misrepresentations.

II. The misdeeds that plaintiff alleges i-Stat to have committed, if
proved, clearly fall within the ambit of Rule 10b-5, 17 C.F.R. * 240.10b-5.
Many actions based on similar claims, some using the fraud-on-the-market
theory, have been brought before the federal courts over the past 60 years.
But since 1995, plaintiffs in these actions have increasingly turned to
state courts.

The change has come about neither because state courts have greater
expertise in these matters nor because they are more convenient. The
impetus for these state court filings was provided by Congress' passage of
the Private Securities Litigation Reform Act of 1995, 109 Stat. 737
(PSLRA). Congress enacted the PSLRA to reduce or eliminate class- action
strike suits filed by investors when the price of a stock declined. PSLRA's
provisions have made litigating such cases much more difficult for
plaintiffs.

Most of those cases newly brought in state court have been, as this one is,
substitutes for Rule 10b-5 actions. To maintain those actions' viability,
the plaintiffs bringing them have sought to have the courts hearing them
incorporate the doctrine of fraud on the market into the common law of
their respective states. Plaintiff, however, has cited no case in which a
state court ruling on its common law has accepted the invitation.
Defendants, by contrast, have found several cases declining to allow the
fraud-on-the-market theory to establish reliance at common law. See Mirkin
v. Wasserman, 858 P.2d 568, 580 (Cal. 1993).

The federal courts with jurisdiction in New Jersey have rejected the idea
that fraud on the market can create a common-law action for fraud. But see
In re Zenith Labs. Sec. Litig., 1993 WL 260683 (D.N.J.) (predicting that
New Jersey Supreme Court would allow fraud-on-the-market proof of negligent
misrepresentation and allowing negligent- misrepresentation claims to
survive summary judgment).

The many state-law class actions for securities fraud triggered further
federal reform legislation, the Securities Litigation Uniform Standards Act
( SLUSA) of 1998. SLUSA provides that any securities action brought on
behalf of a class of more than 50 individual investors, whether arising
under federal, common, or blue-sky law, must be brought in federal court.
15 U.S.C.A. * 77b. Since the common law of fraud covers areas other than
securities, then, the plaintiffs in this case are asking the Court to
expand the common law, potentially beyond the arena of securities, in an
action of a sort that Congress substantially has barred the courts from
hearing in the future.

To some degree, SLUSA allows the Court to consider this claim free from the
threat that securities-fraud plaintiffs will bring actions in New Jersey
with only the most tenuous of connections here because this is the only
state that allows them to do so. Nevertheless, the excepted plaintiffs
remaining under SLUSA, namely state or municipal entities, state pension
funds, or combinations of the same, could still bring a significant amount
of litigation here. Further, SLUSA excepts classes of fewer than 50
plaintiffs.

Federalism permits the state and national governments to resolve similar
matters in different ways. A court's decision to follow its own lead,
however, ought to be firmly grounded in public policy. The question in this
matter is whether the public interest in the development of our common law
of fraud is served by plaintiff's contention that the fraud-on-the- market
theory should be permitted to be used in New Jersey despite a contrary
conclusion in the many other jurisdictions that have considered the same
question.

III. A. Plaintiff characterizes the fraud-on-the-market theory as no more
than a reasonable application of indirect reliance principles. Indirect
reliance allows a plaintiff to prove a fraud action when he or she heard a
statement not from the party that defrauded him or her but from that
party's agent or from someone to whom the party communicated the false
statement with the intention that the victim hear it, rely on it and act to
his or her detriment. See Judson v. Peoples Bank & Trust Co., 25 N.J. 17,
27 (1957). The Appellate Division accepted plaintiff's argument, noting
that the fraud-on-the- market theory of federal securities fraud law was
"(b)ased on a similar analysis," and holding "that indirect reliance in the
form of reliance on the integrity of the market price for a corporate
security which has been artificially inflated by the corporation's
deliberate false statements concerning its financial condition may satisfy
the reliance element of a common law fraud action." Kaufman, 324 N.J.
Super. at 350, 354.

The actual receipt and consideration of any misstatement remains central to
the case of any plaintiff seeking to prove that he or she was deceived by
the misstatement or omission. The element of reliance is the same for fraud
and negligent misrepresentation.

Because negligent misrepresentation does not require scienter as an
element, it is easier to prove than fraud. The Appellate Division correctly
reasoned that, because the Rule 10b-5 action requires a plaintiff to prove
scienter, expanding fraud on the market to cover a tort without scienter
would be inconsistent with the theory of recovery. Nevertheless, the law of
indirect reliance, even though most recently clarified in
negligent-misrepresentation cases, is the same in fraud cases, the element
of reliance being the same in both.

Other states similarly have held that the doctrine of indirect reliance
requires that the plaintiff have relied on the substance of the allegedly
fraudulent claim.

Indirect reliance remains today what it was held to be in Judson. If
proved, it is an element of a claim of fraud. If a party to a transaction
makes a false statement to another party, intending or knowing that the
other party in the transaction will hear it and rely on it, and the second
party to the transaction actually hears the substance of the
misrepresentation, by means however attenuated, and considers the actual
content of that misrepresentation when making the decision to complete the
transaction, then that person has established indirect reliance to support
a fraud claim.

Held: In this case, plaintiff has explicitly stated that she did not
consider Stat's financial statements, either by herself or in consultation
with an investment professional, but acted only on the market price. By
that statement she denies that she ever considered i-Stat's sales volume in
her buying decision. Thus, she has failed to establish that she relied,
however indirectly, on the misstatements of i-Stat and its management.
Therefore, under the traditional standard for proof of reliance, even
indirect reliance, plaintiff fails to show reliance and, therefore, fails
to make out a claim for fraud.

IV. Plaintiff correctly avers that, because she brought her claim before
the enactment of SLUSA, she was "clearly entitled ... to seek redress under
state law in state court." New Jersey provides, as do the other states and
jurisdictions, a comprehensive statutory scheme of securities regulation
and investor protection, the Uniform Securities Law (USL) (1997), N.J.S.A.
49:3-47 to -76. Plaintiff here, however, has chosen not to proceed under
the USL because the USL requires privity in securities-fraud actions and
thus will not allow her to reach the issuer of her shares or its officers.
See N.J.S.A. 49:3-71.

Although requiring privity can seem harsh when, as here, the victim of the
alleged misstatement or omission is remote from the offending party, the
Legislature imposed the requirement of privity to counterbalance an
advantage for plaintiffs. The USL's drafters rejected any requirement that
the buyer prove reliance on the untrue statement or the omission. He must
show only that he did not know of it. As a result, securities-fraud
plaintiffs need only prove the misrepresentations and their ignorance of
them, a significantly lower burden than that imposed by a common- law fraud
action.

Plaintiff in this action asks to be relieved of that burden in another
fashion, preferable to her, through the use of the theory of fraud on the
market. The Legislature, however, has already clearly stated its choice in
approaching securities-fraud complaints: it did not lessen the proof
required to demonstrate reliance on a misrepresentation, but instead
eliminated reliance as an element of securities fraud entirely in favor of
a system in which privity establishes causation. The Legislature balanced
the plaintiff's advantage of not having to show reliance with the
defendant's advantage of being immune from liability to anyone out of
privity. The USL reflects other balances as well, such as a shorter
limitations period -- two years instead of six years for common-law fraud
-- and a provision that actions and damages are limited to those provided
in the statute. N.J.S.A. 49:3-71(g), (c).

Although the USL does not control the development of the common law in this
area, the Court is informed by the choices made by the Legislature when it
enacted the state statutory scheme for securities fraud. Accordingly,
plaintiff's arguments concerning the policy benefits of adopting fraud on
the market as a method of proving reliance in common-law fraud may be
evaluated from the vantage point of understanding the policy choices made
by the Legislature in the USL, which are unhelpful to plaintiffs here; the
deliberations of other jurisdictions that have considered the theory; and
analysis of the theory by academics.

V. Since the Supreme Court accepted fraud on the market in Basic, 12 years
ago, no state court with the authority to consider whether Basic is
persuasive has chosen to apply it to claims arising under its own state's
laws. In considering whether to accept the theory, then, the persuasiveness
of its intellectual underpinning, the Efficient Capital Markets Hypothesis,
or ECMH, requires close examination. The ECMH proposes that the price of a
stock reflects information known about a corporation whose securities trade
publicly. The extent to which the price reflects that information is
expressed by the three different forms of market efficiency -- strong,
semistrong and weak.

In a strong-form efficient market, all information that exists about a
company and would be of interest to a purchaser of the company's securities
is reflected, nearly instantaneously, in the price of the stock, such that
no individual can expect to gain a greater return from that security than
from any other security, and no individual can hope to perform better than
any other individual over the long term. The weak form of the ECMH, by
contrast, proposes that the price of the stock eventually reflects publicly
available information. There is widespread agreement among economists and
investment professionals that the national stock markets of the United
States display weak-form efficiency.

Semistrong efficiency, which is somewhere between the other two forms in
holding that most information about a company is reflected in its price
fairly quickly, appears to be the form assumed to exist by the United
States Supreme Court in Basic.

The ECMH, perhaps because it posits that no investor can consistently
outperform the market regardless of the amount of research or work
undertaken beforehand, is a favorite subject for academics but is often
discounted by investment professionals. For example, Warren Buffett, the
well-known, successful investor, contends that proper study of a company's
financial condition reveals its value far better than does the market price
of its shares.

Even at the time of the Basic decision, skeptical voices were heard.
Dissenting from the majority opinion, Justice White wrote that "with no
staff economists, no experts schooled in the 'efficient-capital-market
hypothesis,' no ability to test the validity of empirical market studies,
we are not well equipped to embrace novel constructions of a statute based
on contemporary microeconomic theory." 485 U.S. at 253. There is no greater
proof now than there was then that the theoretical foundation for the
fraud-on-the-market theory is as strong as its proponents maintain.

Yet now, despite there being no basis for increased acceptance of the idea
of fraud on efficient markets, plaintiff asks the Court to expand its use
beyond the carefully balanced world of the federal securities laws to the
vastly more diverse universe of common-law fraud claims. In addition to the
skepticism concerning its validity when used in the context of securities
markets, plaintiffs in other jurisdictions have attempted to establish that
markets in assets other than securities are efficient enough to allow use
of the fraud-on- the-market theory. Various opinions have rejected use of
the theory in those other settings.

It is left to another day to decide whether in a proper case the Court
would accept use of a theory akin to fraud on the market if it were
possible to determine reliably through such a theory that an unheard
misrepresentation, in fact, was the factor inducing a fraudulent
transaction. However, the danger exists of importing a specialized doctrine
into an area of law that has general effect, like the common law of fraud.
The doctrine of indirect reliance has developed with careful consideration
given to its impact. Indirect reliance occurs when a single communication,
an inducement to engage in a fraudulent transaction, is clearly
communicated to the defrauded party. The price of a publicly traded stock,
however, synthesizes a great variety of information and conveys as much of
that information as possible. But the information is jumbled. No one piece
of information survives clearly enough that the share price can be said to
have passed it on clearly. Until study or experience can prove that an
impersonal mechanism can communicate a single idea clearly, indirect
reliance should not be expanded to include this theoretical model of market
performance and excuse this plaintiff from her obligation to show
individual reliance on the alleged misrepresentation.

Accepting fraud on the market as proof of reliance in a New Jersey
common-law fraud action would undercut the public interest in preventing
forum-shopping, weaken the law of indirect reliance, and run contrary to
the policy direction of the Legislature and Congress. The Court declines to
expand the law regarding satisfaction of the reliance element of a fraud
action on the basis of a complex economic theory that has not been
satisfactorily proved. In so holding, it is noted that plaintiff had
available to her an adequate federal remedy perfectly suited to her
complaint. She chose not to pursue it.

The decision of the Appellate Division allowing the reliance element of a
fraud claim to be proved by the fraud- on-the-market theory is reversed,
and the judgment of the Law Division is reinstated, dismissing plaintiff's
action.

Chief Justice Poritz and Justices Coleman and Verniero join in Justice
LaVecchia's opinion.

* * *

Stein, J., dissents.

Since 1957 New Jersey has recognized that indirect reliance may satisfy the
reliance element of a common-law fraud action. See Judson. See also
Restatement (Second) of Torts * 533 (1977).

Thus, proof that a party deliberately made false representations with the
intent that they be communicated to others for the purpose of inducing
others to rely on them may satisfy the reliance element of common-law
fraud.

In this appeal, i-Stat issued materially misleading public statements about
its financial condition and prospects, subsequent to which the price of its
stock rose. The stock market "act(ed) as the unpaid agent of the investor
(and) inform(ed plaintiff) that given all the information available to it,
the value of the stock is worth the market price." Basic, 485 U.S. at 244.
Under the principle of indirect reliance applied in Judson, and consistent
with the Restatement (Second) of Torts' position, i-Stat's intentional
misrepresentation may be actionable as a common-law fraud even though the
authors of the false information did not communicate directly to plaintiff.

The question thus is whether the principle of indirect reliance applies in
the context of purchasers of publicly traded securities where the fraud was
perpetrated generally on the public with the intention that all purchasers
of the securities would be defrauded. The answer to that question is found
in the United States Supreme Court's analysis of the fraud-of- the-market
theory in Section 10b-5 cases. 15 U.S.C.A. * 78j(b).

The fraud-on-the-market theory of reliance is but a rebuttable presumption
of reliance. The Supreme Court found that it was fair to allow reliance to
be presumed in Rule 10b-5 cases because requiring "a plaintiff to show a
speculative state of facts, i.e., how he would have acted if omitted
material information had been disclosed or if the misrepresentation had not
been made would place an unnecessarily unrealistic evidentiary burden on
the Rule 10b- 5 plaintiff who has traded on an impersonal market." Basic,
484 U.S. at 241-42.

Defendants may "rebut proof of the elements giving rise to the presumption,
or show that the misrepresentation in fact did not lead to a distortion of
price or that an individual plaintiff traded or would have traded despite
his knowing the statement was false." Id. at 248. Similarly, the
presumption may be rebutted by "(a)ny showing that severs the link between
the alleged misrepresentation and either the price received (or paid) by
the plaintiff, or his decision to trade at a fair market price" or if
credible information "entered the market and dissipated the effects of the
misstatements." Id. at 249.

The rationale behind the Supreme Court's reasoning is that "(t)he market is
acting as the unpaid agent of the investor, informing him that given all
the information available to it, the value of the stock is worth the market
price." Id. at 244. Accordingly, "(a)n investor who buys or sells stock at
the price set by the market does so in reliance on the integrity of that
price. Because most publicly available information is reflected in market
price, an investor's reliance on any public material misrepresentations,
therefore, may be presumed for purposes of a Rule 10b-5 action." Id. at
247. Thus, the fraud-on-the-market theory of reliance is sufficient to
satisfy the reliance element of a Rule 10b-5 claim.

The Basic Court's holding that the use of the fraud-on- the-market theory
may satisfy the reliance element of a Rule 10b-5 claim is not based on the
specific language of the Securities Exchange Act of 1934. Instead, the
holding relies on the fact that the reliance elements of securities law
claims and common-law fraud actions are virtually identical. Accordingly,
"the reasoning of Basic and other cases brought under federal securities
law is equally applicable to a common law action for securities fraud."
Kaufman, 324 N.J. Super. at 352.

For an action to be maintained as a class action, "questions of law or fact
common to the members of the class (must) predominate over any questions
affecting only individual members." Rule 4:32-1(b)(3). Without the fraud-
on-the-market theory of reliance in securities fraud cases, each individual
plaintiff would be required to prove his or her own actual reliance on the
fraudulent misrepresentation or omission of the defendant. In that context,
individual issues of reliance would predominate over common issues and
class- action certification generally would be denied.

The majority refers to limitations on the fraud-on-the- market theory of
reliance and notes that commentators and investors may disagree about
whether the market price of a security fully reflects the present value of
a company. However, adoption of the fraud-on-the-market principle does not
require the Court to "adopt any particular theory of how quickly and
completely publicly available information is reflected in market price."
Basic, 485 U.S. at 248, n.28. It requires merely that the Court accept that
"(t)he idea of a free and open public market is built upon the theory that
competing judgments of buyers and sellers as to the fair price of a
security brings (sic) about a situation where the market price reflects as
nearly as possible a just price." Id. at 246. The significance of the
fraud-on-the-market principle derives not from the infallibility of the
market price of securities but rather from the theory's implicit
acknowledgment that the investing public is entitled to assume that
SEC-mandated disclosures have been made and that fraudulent
misrepresentations have not unlawfully affected the market price.

The majority asserts that to accept the fraud-on- the-market theory of
reliance as proof of reliance in a common-law fraud suit would "undercut
the public interest in preventing forum-shopping, weaken our law of
indirect reliance, and run contrary to the policy direction of the
Legislature and Congress." Those arguments are unpersuasive.

The Appellate Division cogently reasoned that "a defendant's
misrepresentation may be an immediate cause of a plaintiff's
injury-producing conduct even though the defendant did not make the
misrepresentation directly to the plaintiff, and even though the plaintiff
never heard or read the precise words of the misrepresentation." Kaufman,
324 N.J. Super. at 352 (citation and quotation omitted). The Appellate
Division also rejected the claim that the fraud-on-the-market theory of
reliance should not be adopted merely because plaintiffs have an adequate
remedy available under federal law.

Moreover, class-action lawsuits for securities fraud are so few in number
that the adoption of the fraud-on-the-market theory as a rebuttable
presumption of reliance will have little or no impact on the operation of
state courts.

Moreover, the enactment by Congress of legislation restricting the fora in
which victims of securities fraud may sue limits further those plaintiffs
who are permitted to maintain a securities fraud cause of action in state
courts. Nevertheless, the PSLRA and SLUSA permit specific but restricted
classes of plaintiffs to maintain their causes of action in state court. In
the absence of congressional intent to the contrary, those plaintiffs
should be permitted to have the benefit of the fraud-on-the-market theory
of reliance under the common-law fraud doctrine.

The statute of limitations for a lawsuit for securities fraud brought in
federal court under Rule 10b-5 is shorter than a suit for common-law fraud
brought in state court. Compare 15 U.S.C.A. * 78i(e) (claims under * 10(b)
of 1934 act must be brought within one year of discovery of violation) with
N.J.S.A. 2A:14-1 (statute of limitations governing common-law fraud is six
years). Federal suits brought under Rule 10b-5 also differ from common-law
fraud claims in that they do not permit punitive damages to be awarded.
Those differing treatments of the two types of lawsuits should not induce
the Court artificially to restrict the parameters of a cause of action
sounding in common-law fraud. If those disparities disturb the Legislature,
it can readily adopt a statute-of-limitations provision and limits on
punitive damages analogous to those congressionally imposed limitations in
Rule 10b-5 cases.

Justice Stein would affirm. Justice O'Hern and Justice Long join in the
opinion.

Digested by Steven P. Bann (The slip opinion, including the dissent, is 54
pages long.)

For appellants -- Lawrence M. Rolnick (Lowenstein Sandler; Rolnick and
Edward T. Dartley on the brief). For respondent -- William C. Fredericks,
of the N.Y. Bar (Miles M. Tepper). (New Jersey Law Journal, August 7, 2000)



L.L. BEAN: Lawsuit Says Retailer Charges Customers Too Much Sales Tax
---------------------------------------------------------------------
A lawsuit filed against L.L. Bean claims that the retailer overcharged
sales tax to customers who used coupons issued through a credit card
program.

R.F. Flippo of Cambridge, Mass., initiated the class action suit filed in
Cumberland County Superior Court. In the suit, Flippo described how she
used a $ 10 coupon to buy an item priced at $39.95. Flippo said she was
charged tax on the full price instead of the reduced price. In other words,
Flippo believes she was overcharged 55 cents. "The point is if people are
being overcharged, they have a right to get that back," said Daniel
Mitchell, one of Flippo's lawyers. "On the larger scale, it's a very
important consumer issue."

Mitchell said Flippo knows she was overcharged in that instance and may
have paid too much sales tax on other occasions as well. He said for the
purposes of the case, she needed to show one instance. Flippo's lawyers
will try to find others who believe they were charged too much sales tax by
the Freeport-based company.

Mitchell said that longtime participants of the coupon program may have
been overcharged large amounts.

L. L. Bean plans to file a motion to dismiss the case. David Bertoni, a
lawyer that represents the company, said L.L. Bean is charging taxes
correctly.

Customers who apply for a special credit card with MBNA receive coupons of
$5 and $10 for L.L. Bean purchases when they spend a certain amount on
their credit cards.

Bertoni said that the "Outdoor Advantage" coupons are like a manufacturer's
coupon. MBNA reimburses L.L. Bean for the value of the coupon, so L.L. Bean
receives the full price and must charge sales tax on that amount even
though the customer is paying less, he said. Bertoni said L.L. Bean has a
letter from tax officials saying it is charging taxes properly.

Peter Beaulieu, director of the sales and excise tax division of Maine
Revenue Services, would not comment specifically on the L.L. Bean case.

Bertoni also said L.L. Bean is simply collecting taxes for Maine and that
those who feel wronged should file a claim with the state.

Maine's sales tax was dropped to 5 percent from 5.5 percent in July.


MAX INTERNET: Milberg Weiss Files Securities Suit in Texas
----------------------------------------------------------
Milberg Weiss (http://www.milberg.com/max/)announced in August 7 that a
class action has been commenced in the United States District Court for the
Northern District of Texas on behalf of purchasers of MAX Internet
Communications Inc. ("MAX") (Nasdaq:MXIP) publicly traded securities during
the period between Nov. 15, 1999 and May 12, 2000 (the "Class Period").

The complaint charges MAX and certain of its officers and directors with
violations of the Securities Exchange Act of 1934. MAX manufactures and
markets a personal computer Internet media processor card and an
information appliance. The Company's core technology delivers the power to
conduct true-motion, synchronized video and audio communications, as well
as video and audio streaming and browsing over a broadband Internet
connection. The complaint alleges that to portray the Company as a
financially viable Internet play, during the Class Period the individual
defendants caused MAX to issue false financial results and make false
statements about its results, causing its stock to trade at artificially
inflated levels. The complaint further alleges that by late 1999, the
Individual Defendants were anxious to see MAX participate in the Internet
stock boom so they could sell more than $9 million in private equity
transactions, the consummation of which assisted the defendants in
obtaining approval for NASDAQ small cap market listing. To do this,
defendants determined it was essential they report favorable financial
results to be seen as a financially viable Internet play. As a result of
the defendants' false statements, MAX's stock price traded at inflated
levels during the Class Period, increasing to as high as $28 in February
2000.

Then on May 12, 2000, MAX admitted that its results for its first and
second quarters, ended Sept. 30, 1999 and Dec. 31, 1999, respectively, had
been false, and that its previously reported revenues had been improperly
recognized and were the result of fraudulent accounting entries.

Contact: Milberg Weiss William Lerach, 800/449-4900 wsl@mwbhl.com


PADUCAH GASEOUS: Workers Kept in Dark on Hazards Sue Govt and Companies
-----------------------------------------------------------------------
Two more lawsuits have been filed against the federal government and the
companies it hired to run the Paducah Gaseous Diffusion plant, accusing
them with failing to inform workers of hazards at the facility.

One of the suits, filed Monday in U.S. District Court in Paducah, alleges
three employees contracted rare brain cancers as a result of working at the
plant. The suit seeks $4 billion in compensatory and punitive damages and
seeks class-action status for all workers suffering tumors as a result of
radiation exposure.

A similar suit was filed in federal court in Louisville seeking $5 billion
in damages.

The suits name Union Carbide Corp., Martin Marietta Corp., Martin Marietta
Energy Systems Inc., Martin Marietta Utility Services Inc., Lockheed Martin
Energy Systems Inc., Lockheed Martin Utility Services Inc., General
Electric Co., E.I. du Pont de Nemours and Co., NL Industries Inc. and NLO
Inc.

Carbide and Lockheed Martin are former plant contractors while GE, DuPont
and National Lead ran nuclear facilities.

U.S. Energy Secretary Bill Richardson also is named as a defendant along
with 16 other people who worked for the Atomic Energy Commission or the
Nuclear Regulatory Commission. The suits accuse government officials and
their contractors of conspiring to poison plant workers.

The Paducah suit was filed by attorney David R. Smith of Nashville, Tenn.,
on behalf of workers who developed rare pituitary tumors because of
"excessive, unlawful and nonconsensual exposures to radioactive substances
including plutonium and neptunium." The named plaintiffs are James E. Dew
and Jerome Vandeven and their wives, and Betty Jane Lynch, the
administrator of the estate of Robert E. Lynch.

The 34-page suit seeks to hold government officials and their contractors
individually responsible and seeks to force Richardson to identify "unknown
government workers" who perpetuated what Smith calls a "fraud" by the
Atomic Energy Commission.

The suit also alleges workers' rights were violated because they were
denied exposure information. The suit says they were unaware they had been
exposed to radiation until news accounts published in the last year
detailed what the Department of Energy has labeled a "climate of secrecy"
about conditions at the plant.

As many as 10,000 people worked at the plant between 1952 and 1998 but it
is unclear how many developed radiation-induced tumors, Smith said.

Two suits previously were filed by Washington attorney Joe Egan and William
F. McMurry of Louisville, who also filed the $5 billion suit. Egan told
Tuesday's Paducah Sun he expects the suits to be consolidated.

McMurry's latest suit mirrors the earlier one, accusing the companies of
knowing radiation at the plant posed a danger to workers but failed to warn
or protect them. The newest suit names the managers and supervisors who
actually ran the plant. (United Press International, August 8, 2000)


PAYDAY LENDERS: IL Ct OKs Claim on Improper Placement of Disclosure
-------------------------------------------------------------------
In declining to dismiss a claim for statutory damages under the Truth in
Lending Act, the U.S. District Court for the Northern District of Illinois
equated the improper placement of a required disclosure with the failure to
make the required disclosure. (Van Jackson, et al. v. Check 'N Go of
Illinois Inc., et al., No. 99 C 7319 (N.D. Ill. 6/15/00).)

A group of Illinois debtors who took out "payday loans" from Check 'N Go of
Illinois Inc. sued the lender under the TILA and moved the District Court
to certify "the class of all Illinois debtors" who signed certain high-cost
loan agreements. The debtors sued for statutory damages under the act and
Regulation Z. They also brought several individual TILA claims, claims
under Illinois' Consumer Fraud Act and a common law unconscionability
claim.

Check 'N Go moved to dismiss the TILA claims and challenged the class
certification. The court granted the motion for certification and denied
the motion to dismiss.

Check 'N Go argued that the proposed class lacked the elements of
commonality and typicality. Specifically, it argued that the complaint
failed to establish any basis for the recovery of statutory damages under
the TILA. Thus, according to Check 'N Go, the plaintiffs must make a
showing of individual damages supported by proximate cause. The court
noted, however, that this argument went to the merits of the claim for
statutory damages and was, therefore, inappropriate for consideration on a
motion for class certification.

As for Check 'N Go's assertion that a class action would be difficult to
manage because of the alleged predominance of individual issues, Judge
Elaine E. Bucklo stated, "I appreciate the defendants' concern about my
caseload, but I would much rather handle this case as a class action than
try hundreds of individual claims."

Security disclosure

Turning to the motion to dismiss, the court explained that the TILA
requires certain disclosures to be made in a certain form. The court
further explained that all disclosures required by federal law must be
grouped together and "conspicuously segregated" from other information. The
debtors claimed Check 'N Go violated the TILA and Regulation Z because the
security disclosure in their loan documents was not properly made or
properly segregated.

The court noted that, although the loan agreements contained a "federal
box" headed "Our Disclosures to You," the "federal box" did not identify
the security for the loans. Instead, the statement identifying the debtors'
check as the security for the loan was made outside and above the "box," in
small print and at the end of a paragraph "written in repetitive and hard
to read legalese."

Recognizing that its forms were technically in violation of the TILA, Check
'N Go argued that the problem was a "picky and inconsequential formal
error" that did not warrant an award of statutory damages under Section
1640(a). In support of its argument, Check 'N Go claimed that its error was
one relating to conspicuous segregation as opposed to failure to make a
required disclosure. While failure to make a required disclosure is covered
in Section 1640(a), failure to conspicuously segregate is not.

The court held, however, that because the security disclosure was outside
the "federal box" and because "the statement could not have been less
accessible to the average person if it had been written in Sanskrit," Check
'N Go simply failed to make the required disclosure. As stated by the
court, "[I]t would frustrate the purpose of the disclosure law to read the
statute to bar statutory damages when a required disclosure is hidden in
the fine print at the end of an indigestible chunk of legalistic
boilerplate."

Check 'N Go also attempted to dismiss the individual TILA claims of certain
named debtors on the basis of an arbitration agreement. The court, however,
noted that these arbitration clauses did not provide for mandatory
arbitration. Rather, they were elective arbitration clauses. According to
the unambiguous language of the contracts, "the choice of arbitration after
a lawsuit has been filed is plainly up to the plaintiff in the lawsuit,"
the court said.

Cathleen M. Combs, Daniel A. Edelman, James O. Latturner and Michelle R.
Teggelaar of Edelman, Combs & Latturner in Chicago, represented the
debtors. Daniel F. Konicek of Konicek & Dillon P.C. in St. Charles, Ill.,
represented Check 'N Go. (Consumer Financial Services Law Report, July 24,
2000)


PLC SYSTEMS: Investors Sued after FDA Rejected Heart Laser System in '97
------------------------------------------------------------------------
In July 1997, a U.S. Food and Drug Administration ("FDA") advisory panel
recommended against approval of the Company's application to market The
Heart Laser System in the United States. Following this recommendation, the
Company was named as defendant in 21 purported class action lawsuits filed
between August 1997 and November 1997 in the United States District Court
for the District of Massachusetts. The lawsuits seek an unspecified amount
of damages in connection with alleged violations of the federal securities
laws based on the Company's failure to obtain a favorable FDA panel
recommendation in 1997. Nineteen of these complaints have been consolidated
by the court into a single action for pretrial purposes (hereafter referred
to as the "federal suit"). Two of these suits were voluntarily dismissed.
The Company moved to dismiss all claims in the federal suit.

On March 26, 1999, the court issued an order dismissing some, but not all,
of the claims in the federal suit. The parties filed cross motions for
reconsideration and on October 12, 1999, the court dismissed additional,
but not all remaining claims in the federal suit. The Company cannot make a
meaningful estimate of the amount or range of loss that could result from
an unfavorable outcome of this lawsuit, but an unfavorable outcome could
have a material adverse effect on the Company's business, financial
position and results of operations. The Company believes that it has
meritorious defenses to this litigation matter and continues to vigorously
defend itself.

                          MA State Suit Settled

The Company also was named as a defendant in a lawsuit filed in
Massachusetts Superior Court in September 1998 seeking over $2.0 million in
damages for alleged negligent misrepresentations and fraud arising from the
Company's failure to obtain a favorable FDA recommendation in 1997. The
state suit settled on confidential terms, and a Stipulation of Dismissal
was filed on April 13, 2000. The settlement of the lawsuit did not have a
material impact on the Company's financial statements.


RALLY'S HAMBURGER: Investors Wait for Response to DE Suits over Merger
----------------------------------------------------------------------
First Albany Corp., as Custodian For The Benefit Of Nathan Suckman V.
Checkers Drive-In Restaurants, Inc. Et Al. Case No. 16667.

This putative class action was filed on September 29, 1998, in the Delaware
Chancery Court in and for New Castle County, Delaware by First Albany
Corp., as custodian for the benefit of Nathan Suckman, an alleged
stockholder of 500 shares of the Company's common stock.

The complaint names Checkers Drive in Restaurant Inc. and certain of its
current and former officers and directors as defendants including William
P. Foley, II, James J. Gillespie, Harvey Fattig, Joseph N. Stein, Richard
A. Peabody, James T. Holder, Terry N. Christensen, Frederick E. Fisher,
Clarence V. McKee, Burt Sugarman, C. Thomas Thompson and Peter C. O'Hara.
The Complaint also names Rally's and GIANT as defendants.

The complaint arises out of the proposed merger announced on September 28,
1998 between Checkers, Rally's and GIANT and alleges generally, that
certain of the defendants engaged in an unlawful scheme and plan to permit
Rally's to acquire the public shares of the Company's stock in a
"going-private" transaction for grossly inadequate consideration and in
breach of the defendants' fiduciary duties. The plaintiff allegedly
initiated the Complaint on behalf of all stockholders of the Company as of
September 28, 1998, and seeks INTER ALIA, certain declaratory and
injunctive relief against the consummation of the Proposed merger, or in
the event the Proposed Merger is consummated, recision of the Proposed
Merger and costs and disbursements incurred in connection with bringing the
action, including attorney's fees, and such other relief as the Court may
deem just and proper.

In view of a decision by the Company, GIANT and Rally's not to implement
the transaction that had been announced on September 28, 1998, plaintiffs
have agreed to provide the Company and all other defendants with an open
extension of time to respond to the complaint. Although, plaintiffs
indicated that they would likely file an amended complaint in the event of
the consummation of a merger between the Company and Rally's, no such
amendment has been filed to date.

                             Steinberg Action

David J. Steinberg and Chaile B. Steinberg, Individually and on Behalf Of
Those Similarly Situated V. Checkers Drive-In Restaurants, Inc., Et Al.
Case No. 16680. This putative class action was filed on October 2, 1998, in
the Delaware Chancery Court in and for New Castle County, Delaware by David
J. Steinberg and Chaile B. Steinberg, alleged stockholders of an
unspecified number of shares of the Company's common stock. The complaint
names the Company and certain of its current officers and directors as
defendants including William P. Foley, II, James J. Gillespie, Harvey
Fattig, Joseph N. Stein, Richard A. Peabody, James T. Holder, Terry N.
Christensen, Frederick E. Fisher, Clarence V. McKee Burt Sugarman, C.
Thomas Thompson and Peter C. O'Hara. The Complaint also names Rally's and
GIANT as defendants.

As with the FIRST ALBANY complaint, this complaint arises out of the
proposed merger announced on September 28, 1998 between the Company,
Rally's and GIANT (the "Proposed Merger") and alleges generally, that
certain of the defendants engaged in an unlawful scheme and plan to permit
Rally's to acquire the public shares of the Company's common stock in a
"going-private" transaction for grossly inadequate consideration and in
breach of the defendant's fiduciary duties. The plaintiffs allegedly
initiated the Complaint on behalf of all stockholders of the Company as of
September 28, 1998, and seeks INTER ALIA, certain declaratory and
injunctive relief against the consummation of the Proposed merger, or in
the event the Proposed Merger is consummated, recision of the Proposed
Merger and costs and disbursements incurred in connection with bringing the
action, including attorneys' fees, and such other relief as the Court may
deem just and proper. For the reasons as in the FIRST ALBANY action,
plaintiffs have agreed to provide the Company and all other defendants with
an open extension of time to respond to the complaint. Although, plaintiffs
indicated that they would likely file an amended complaint in the event of
the consummation of a merger between the Company and Rally's, no such
amendment has been filed to date.


RALLY'S HAMBURGERS: Discovery for 1994 Securities Suit Just Completed
---------------------------------------------------------------------
In its report filed with the SEC, Checkers Drive in Restaurants Inc.
updates on lawsuit Jonathan Mittman Et Al. V. Rally's Hamburgers, Inc., Et
Al. (Case NO. C-94-0039-L-CS).

In January and February 1994, two putative class action lawsuits were
filed, purportedly on behalf of the stockholders of Rally's, in the United
States District Court for the Western District of Kentucky, Louisville
division, against Rally's, Burt Sugarman and GIANT GROUP, LTD.  and certain
of Rally's former officers and directors and its auditors. The cases were
subsequently consolidated under the case name Jonathan Mittman et al vs.
Rally's Hamburgers, Inc., et al, case number C-94-0039-L (CS).

The complaints allege defendants violated the Securities Exchange Act of
1934, among other claims, by issuing inaccurate public statements about
Rally's in order to arbitrarily inflate the price of its common stock. The
plaintiffs seek unspecified damages. On April 15, 1994, Rally's filed a
motion to dismiss and a motion to strike. On April 5, 1995, the Court
struck certain provisions of the complaint but otherwise denied Rally's
motion to dismiss. In addition, the Court denied plaintiffs' motion for
class certification; the plaintiffs renewed this motion, and despite
opposition by the defendants, the Court granted such motion for class
certification on April 16, 1996, certifying a class from July 20, 1992 to
September 29, 1993. In October 1995, the plaintiffs filed a motion to
disqualify Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP
as counsel for defendants based on a purported conflict of interest
allegedly arising from the representation of multiple defendants as well as
Ms. Glaser's position as both a former director of Rally's and a partner in
Christensen, Miller. Defendants filed an opposition to the motion, and the
motion to disqualify Christensen, Miller was denied.

A settlement conference occurred on December 7, 1998, but was unsuccessful.
Fact discovery was completed in August 1999. Expert discovery was completed
in July 2000. Motions for Summary Judgment will be filed by the parties by
August 18, 2000.


TRANSWORLD SYSTEMS:  FDCPA Claim Survives Dismissal; Addresses Confusing
------------------------------------------------------------------------
A collection letter that commanded the debtor's "immediate attention" did
not overshadow the Fair Debt Collection Practices Act's 30-day validation
notice, ruled the U.S. District Court for the Southern District of
California. However, the court found the letter's inclusion of both the
collector's and creditor's addresses was confusing to the least
sophisticated consumer and denied the collector's motion for summary
judgment. (Doxtader v. Transworld Systems Inc., No. 99-CV-1563 W (LSP)
(S.D. Calif. 6/14/00).

                              Collection Letter

Transworld Systems Inc. mailed Brian J. Doxtader a debt collection letter.
The letterhead identified Transworld as a debt collector and listed
Transworld's address. The body of the letter informed Doxtader: "This is an
urgent matter requiring your immediate attention. Unless disputed ... we
strongly recommend you contact our client to make payment arrangement." The
letter did include the mandatory 30-day validation notice in smaller font
below the demand for "immediate attention" and listed the creditor's name,
address and telephone number.

Doxtader filed a class action alleging violations of the FDCPA and Section
17200 of the California Business and Professions Code. Under state law,
violations of the FDCPA constitute violations of the Cal. Bus. & Prof.
Code. Doxtader claimed the "immediate attention" language overshadowed the
30-day validation notice and confused "the least sophisticated debtor about
whom to contact to dispute the debt." Transworld moved for summary
judgment.

                Overshadowing Or Contradictory Language

The District Court considered Transworld's motion and Doxtader's reliance
on Swanson v. Southern Oregon Credit Service Inc., 869 F.2d 1222 (9th Cir.
1988).

First, the District Court found that Doxtader's reliance on Swanson was
misplaced. Unlike in Swanson, said the court, the "immediate attention"
language in Transworld's notice was not dominantly placed in the center of
the page, printed in a font size three times larger than other text,
underlined, bolded or capitalized. Furthermore, said the court,
Transworld's letter did not contradict the validation notice.

The District Court instead found Terran v. Kaplan, 109 F.3d 1428 (9th Cir.
1997), to be controlling. In Terran the collector requested the debtor to
make an immediate phone call but printed the validation notice in the
following paragraph and in the same font. The 9th U.S. Circuit Court of
Appeals found the request for an immediate telephone call was neither
threatening nor contradictory to the 30-day notice.

Following the reasoning in Terran, the District Court held the request for
"immediate attention" was "sufficiently analogous to an 'immediate
telephone call.'" Such requests, explained Judge Thomas J. Whelan, are
significantly different from the line of cases that demand "immediate
payment" and Transworld's "letter would not cause a least sophisticated
debtor to believe he must immediately render payment in order to avoid
adverse consequences."

Accordingly, the District Court held Transworld's "immediate attention"
language did not violate the FDCPA.

                          Confusing Language

The District Court next considered Doxtader's argument that the two
addresses printed in the notice would confuse the least sophisticated
consumer about who he should contact in order to dispute the debt. Doxtader
also contended the letter was confusing because it lacked a statement that
Transworld would obtain verification of the debt or provide the name of the
original creditor.

On this FDCPA claim, the court agreed with Doxtader and ruled the letter
was confusing as a matter of law. The FDCPA, said the court, requires the
notice to state that the collection agency will provide the requested
information. By printing both the debt collector's and the creditor's
addresses, held the court, the least sophisticated debtor "could logically
believe that he should contact [the original creditor] to dispute the
debt."

The District Court granted Transworld's motion for summary judgment in part
and denied it in part. It granted the motion as to Doxtader's claim that
Transworld's letter overshadowed and contradicted the validation notice but
denied it as to the debtor's claim that the letter would confuse a least
sophisticated debtor.

Randolph Bragg of Horwitz, Horwitz & Associates Ltd. in Chicago and Robert
Stempler of Palm Desert, Calif., represented Doxtader. Gordon R. Levinson
of the Law Offices of James R. Rogers in Solana Beach, Calif., and
Christopher M. Mazzia of Anderson, Zeigler, Disharoon, Gallagher & Gray in
Santa Rosa, Calif., represented Transworld. (Consumer Financial Services
Law Report, July 24, 2000)


UNITED AUTO: Report Says U.S. Probes Allegations UAW Prolonged GM Strike
------------------------------------------------------------------------
The U.S. government is investigating whether United Auto Workers officials
demanded jobs for relatives and improper overtime payments for ending a
costly 1997 strike at General Motors Corp.'s Pontiac truck plants, a
newspaper said Tuesday.

The 87-day strike canceled production of more than 70,000 GM pickups, the
company's best-selling vehicle. Along with a strike in Oklahoma City that
year, the strike cost GM an estimated $490 million after taxes.

The probe centers on officers of UAW Local 594 in Pontiac and some GM labor
officials who may have given in to the alleged demands, UAW members and
officials told the Detroit Free Press. They said they recently had been
interviewed by federal investigators.

None of those who spoke wanted to be identified, the newspaper said.

A related civil class-action lawsuit by GM workers was filed Monday in U.S.
District Court in Detroit. The suit seeks $50 million in compensatory
damages from GM and the UAW and $500 million in punitive damages from the
UAW, the Free Press said.

Investigators at the FBI and the Labor Department's Office of the Inspector
General declined to comment. A GM spokesman who was not identified told the
newspaper that the automaker was "working with the federal government" on
the criminal case.

No one answered the telephone late Monday at UAW Local 594. A message was
left late Monday at UAW headquarters in Detroit seeking comment.

Several individuals at the UAW and GM have been subpoenaed to testify
before a federal grand jury, the Free Press said.

So far, 21 members of Local 594 have sued GM and the local. Their suit says
the UAW and GM breached their contract and their duty. The suit says Local
594 did not fairly represent its members and prolonged the 1997 strike by
up to two months.

Assembly workers lost an average of $10,000 in salary and skilled-trades
workers closer to $20,000 during the strike, the newspaper said. The suit
alleges that the strike settlement was delayed to get the sons of certain
UAW officials hired.

It also says GM agreed to pay approximately $200,000 designated as overtime
payments to top officials at Local 594.

"Our accusation is that (some) members of the Local 594 bargaining
committee illegally split up about $200,000 between them," said Harold
Dunne, a Livonia attorney representing the workers in the lawsuit.

The plant employs about 6,000 workers.

The Taft-Hartley Act of 1947 makes it illegal for union officials to accept
anything beyond a normal salary from a company with which they are
negotiating. (The Associated Press State & Local Wire, August 8, 2000)


* Companies Are Dropping Employment Tests in Tight Labor Market
---------------------------------------------------------------
Companies are quietly dropping controversial employment tests such as drug
screenings, medical exams and psychological exams -- a sharp reversal from
the early 1990s when such testing was the rage.

More employers are dropping the exams amid growing fears job seekers in
today's tight labor market will snub firms that require such tests.

Others are questioning the effectiveness of employee screenings or facing
lawsuits from workers who say the exams go too far.

"Companies are adjusting to a tight labor market," says Eric Greenberg, an
American Management Association (AMA) spokesman. "If you've got an
absolutely critical position you need filled and the person shows up dirty
on a test for marijuana, you may regret you ever asked. You're dealing with
a situation where you don't have the luxury to pick and choose."

The number of firms using psychological measurements has dropped from 52%
in 1998 to 33%, based on a recent poll by the AMA of 2,133 firms. Companies
requiring drug testing of current employees have fallen from 62% in 1997 to
47% this year, the study found.

Behind the shift: Workers are speaking out against some tests. Last month,
Rent-A-Center settled a class-action lawsuit brought by workers who felt
questions in a psychological test went too far. Some of the 502 true-false
questions included "I believe there is a God," "I have no difficulty
starting or holding my bowel movement" and "I have never indulged in any
unusual sex practices," according to the lawsuit.

The Plano, Texas-based firm will pay $ 2 million in damages and discontinue
using the psychological test at its 2,500 stores, a lawyer for the workers
says. A Rent-A-Center spokesman declined to comment on the case. "It was
absurd," says Scott Hadley, 37, in San Francisco, a former manager who
filed suit. "I was offended someone would ask me these questions."

Employers don't want to reduce the pool of available hires. Companies
struggling to find workers don't want to weed out potential applicants or
deter applicants with tests, experts say.

And many job seekers do shy away from some screenings. If asked to submit
to a psychological test, nearly 15% of job seekers would either take it
reluctantly or politely refuse the tests, based on a new poll by
CareerBuilder. And 12% would end the interview immediately and leave. "If
you're driving people away, that's tricky in this job market," says Barry
Lawrence, a spokesman at the Reston, Va.-based online career site. "In a
job market where you're doing everything to bring people in, it's a
quagmire for employers."

Decreasing drug use among employees. The number of employees testing
positive for drug use has dropped to the lowest level in 11 years,
according to Quest Diagnostics, a Teterboro, N.J.-based provider of
diagnostic testing that compiles statistics semiannually for clients. The
company performs 10 million drug tests a year. (USA Today, August 8, 2000)


* Move to Ensure Australian Supreme Court Can Hear Class Actions
----------------------------------------------------------------
AAP Newsfeed news from Melbourne says that legislation is to be introduced
into the Victorian Parliament to ensure the Supreme Court can hear class
actions. The move comes after a challenge by Mobil Avgas to the class
action being waged over the aviation fuel contamination crisis earlier this
year.

The class action, bringing together thousands of plane owners and air
service operators hit by the crisis, alleges that Mobil was negligent over
the fuel contamination issue. Mobil sought to overturn the case,
challenging the Supreme Court rules on class actions - but the oil company
was overruled by the Court of Appeal. Earlier this year contaminated
aviation fuel grounded thousands of small aircraft which had used Mobil
aviation gasolene between November 21 and December 23.

State Attorney-General Rob Hulls said that although the Court of Appeal
found the Supreme Court rules were valid, there was continuing uncertainty
because Mobil sought leave to appeal to the High Court. Mr Hulls said it
was his task as attorney-general to ensure such court processes were
certain and protected.

"Class actions are a valuable tool in enabling the resolution of disputes
involving large numbers of plaintiffs," he said. His proposed amendments
would enshrine in legislation the procedures currently found in the Supreme
Court Rules, which were based on similar federal laws. Some of the changes
would take into account issues raised by the Court of Appeal, he said. "I
want to make sure that the class actions already commenced can continue and
be determined in the normal way," he said. "They should not be held up
while there is an appeal to the High Court, which may or may not succeed."

Eugene Arocca, partner in the law firm Maurice Blackburn Cashman,
representing some of the plaintiffs in the class action, said Mr Hulls was
"very sensibly" giving the force of law needed to deal with the situation.
"Hullsy's trying to cut them off at the pass by giving these rules the
force and impact of the legislature," Mr Arocca said. "Parliament, through
the government, will be asked to embody these rules as law, which would
therefore in our view avoid the necessity of a High Court decision." "It's
important for ordinary people who suffer injuries or damages and who are
united in similar-fact circumstances of their damage - ie as a result of
the same incident - should be able to avail themselves of these rules."
(AAP NEWSFEED, August 8, 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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