CAR_Public/000816.MBX              C L A S S   A C T I O N   R E P O R T E R

            Wednesday, August 16, 2000, Vol. 2, No. 159

                           Headlines

BIBB SHERIFF: Ap. Ct. Says Race-Based Promotions Violate Rights
BRIDGESTONE/FIRESTONE: Quicker and Expanded Recall Urged over Deaths
BURLINGTON RESOURCES: US Intervenes in Lawsuit over Crude Oil Royalties
CA GOVERNOR: University Employees File Civil Rights Suit on Union Dues
CENDANT CORP: Barrack, Rodos Says Period of Securities Suit Extended
CONSECO INC: Troubled Company Hires Prominent Indianapolis Attorney

FINANCIAL CREDIT: IL Ct Says Report to Credit Agency Is Needed for Cert.
FIRESTONE: Lawyers Want Recall to Include Larger Sizes in Middle East
FIRESOTNE, FORD: Finkelstein & Krinsk Files Vehicle Buyers’ Suit in TN
INDUSTRIAL-MATEMATIK: Stock Purchasers' Complaint Is Dismissed
LAMARQUE FORD: LA Ct Says Fed Ct Has Jurisdiction over Services Fee

NATIONAL COMPUTER: MN Test Scoring Company Expands Tuition Offer
NY EDUCATION: Commissioner Lacks Juriisdiction on Special Ed Disputes
PA POLICE: Diabetes Association Joins Suit for Diabetics in Custody
PHOENIX LEASING: Investors in 1997 CA Suit Seek Production
PINELLAS SCHOOL: Judge OKs Settlement Ending Court Ordered Busing

SYMONS INT’L: Faces IN Securities Suit; FDOI May Restrict on Fee Payment
TRUMP HOTELS: Press Release Fails to Specify One-Time Gain; May Be Fined

* EEOC Reveals Rise in Cases Involving Blue-Collar Women
* NCD Report Says ADA Enforcement Scheme Lacks Funds and Leadership
* SEC New Regulation Ends Selective Disclosure by Public Companies

                              *********

BIBB SHERIFF: Ap. Ct. Says Race-Based Promotions Violate Rights
---------------------------------------------------------------
As a public employer, do you believe that you can resolve a racial
discrimination suit by agreeing to implement race-based promotions or
other measures? Here, a Georgia county's attempt to resolve a racial
discrimination suit by agreeing to implement race-based promotions was
thwarted when the 11th U.S. Circuit Court of Appeals rejected a consent
decree as potentially unconstitutional. The court reasoned that the
decree could violate the equal protection rights of the non-promoted
workers. Thigpen v. Bibb County Sheriff's Department, No. 99-12417 (11th
Cir. 7/7/2000).

In 1978, a black male employed as a deputy sheriff by the Bibb County,
Ga., sheriff's department filed a class action racial discrimination suit
against the department and its former sheriff. The parties entered into a
consent decree settling that litigation.

The decree was intended to achieve a racially equal work force with
respect to job classification and rate of pay. Under the decree, at least
50 percent of promotions annually were to be granted to African-Americans
who had met the requirements for promotion to their next highest
position.

Two white males employed by the department brought a lawsuit challenging
the constitutionality of the consent decree's continued implementation.
They argued that the decree violated their right to equal protection.

A federal district court granted summary judgment in favor of the
sheriff's department, reasoning that the plaintiffs maintained no
property or liberty interest in promotions and thus, no equal protection
violation occurred.

The 11th Circuit affirmed. It rejected the lower court's reasoning,
explaining that property and liberty interests were irrelevant to equal
protection claims. Instead, the plaintiffs alleged cognizable equal
protection claims by averring that, although all officers holding equal
rank within the department were similarly situated, the consent decree
mandated the allocation of the department's annual promotions based
substantially on race.

Contrary to the decision reached by the district court, the court also
held that the plaintiffs' claim under 42 U.S.C. 1983 for equal protection
violations could be pleaded exclusive of a Title VII claim. Thus, their
failure to raise any Title VII claims did not necessarily preclude their
1983 action.

The court found that the plaintiffs' equal protection claim should not
have been analyzed under the familiar McDonnell Douglas burden-shifting
framework. Rather, the strict scrutiny test applied. That test required a
racial classification to serve a compelling governmental interest and to
be narrowly tailored to that interest.

This framework applied with equal force to affirmative action plans that
influenced the treatment of employees by government employers, the court
observed. It found that the decree's demand of a racial allocation on the
promotions conferred annually potentially created a constitutional
infraction. Accordingly, the case was remanded for further proceedings in
which the sheriff's department was to defend the constitutionality of the
decree under the strict scrutiny standard. (National Public Employment
Reporter, August 10, 2000)


BRIDGESTONE/FIRESTONE: Quicker and Expanded Recall Urged over Deaths
--------------------------------------------------------------------
U.S. consumer safety groups has stepped up pressure on
Bridgestone/Firestone Inc. to expand and accelerate the recall of
Firestone tires, which have been linked to more than 40 traffic deaths.

And Ford Motor Co. released documents showing that in 1997
Bridgestone/Firestone, a unit of Japan's Bridgestone Corp., began
receiving complaints of injuries and property damage involving certain
Firestone tires that were not recalled until last Wednesday.

Consumer groups Public Citizen and Safetyforum.com announced the
formation of a group to represent worried tire owners.

Public Citizen, the Washington DC-based consumer group founded by Ralph
Nader, and Safetyforum.com also called on the company to replace all
Wilderness tires, regardless of size.

Joan Claybrook, president of Public Citizen and a former administrator of
the National Highway Traffic Safety Administration, also urged the agency
to use its subpoena power to obtain all documentation about the tires and
linked incidents from Firestone and Ford.

At present, the voluntary recall covers 15-inch versions of Firestone's
ATX and ATX11 tires, as well as 15-inch Wilderness AT tyres made at the
Decatur, Illinois plant. An estimated 6.5 million tires are involved.
However, the recall is being staggered, with tires initially due to be
replaced in the four southern states where most of the reported incidents
have occurred: Florida, Arizona, California and Texas. Some northern
states are not officially due to get replacement tires for months,
although anecdotal reports suggest that some dealers are replacing tires
anyway.

Firestone, together with Ford, estimated last week that it was facing
over 100 individual lawsuits, a number of which are seeking class action
status.

On August 14 two Florida law firms representing at least four plaintiffs,
became the latest to file a class action in Miami County Circuit court.

Meanwhile, some of the recalled tires have rates of injury and personal
damage claims up to 100 times greater than for tires not recalled, Ford
disclosed Sunday. Many of those claims were sent to Bridgestone by
vehicle owners from 1997 to 1999, but the tire maker did not tell Ford,
the company said. Ford's new automobiles, particularly Ford Explorer
sport utility vehicles, are equipped with two-thirds of the recalled
tires.

The automaker said it only learned of the high rate of claims a week ago,
when it performed its own computer analysis of Bridgestone's data.
Bridgestone had resisted Ford's disclosure of the information, said a
person briefed on the automaker's work on the issue.

Ford said Bridgestone's factory in Decatur, Ill., had been the main
source of the problem tires, and that the factory had experienced its
biggest quality problems from 1994 through 1996. Those were the years
when the factory was operated mainly by replacement workers because of a
labour dispute between Bridgestone and its union.

Bridgestone officials did not dispute Ford's data, but said the problem
had not caught their attention until Ford began reviewing Bridgestone's
files two weeks ago. The overall rate of complaints on tires from all
Bridgestone factories has not been unusually high, and Bridgestone did
not conduct the detailed review of tire quality by factory that Ford
undertook, said Bob Wyant, Bridgestone's vice-president of quality
assurance.

Chris Karbowiak, a Bridgestone spokeswoman, said there was no evidence
the labour dispute had affected quality in Decatur. She was also quick to
point out during a conference call with reporters this afternoon that
Ford itself had given the Decatur factory a quality award.

The two companies' mutual sniping was the clearest sign yet that the
recall was causing a strain in one of corporate America's oldest
relationships. Firestone, which was purchased by Bridgestone in 1988, has
been supplying tires to Ford since 1906, when Henry Ford was still
designing the first Model T. (National Post (formerly The Financial
Post), August 15, 2000)

AP News says Bridgestone/Firestone Canada extended the recall last week
to roughly one million tires in Canada, the same size and brand as those
recalled in the United States. To date, there have been no reported
accidents or injuries related to Bridgestone/Firestone tires on Ford
vehicles in Canada, said John Arnone, a Ford of Canada spokesperson.


BURLINGTON RESOURCES: US Intervenes in Lawsuit over Crude Oil Royalties
-----------------------------------------------------------------------
In late February 1998, the Company and numerous other oil and gas
companies received a complaint filed in the United States District Court
for the Eastern District of Texas in Lufkin in a lawsuit styled as United
States of America ex rel. J. Benjamin Johnson, Jr., et al. v. Shell Oil
Company, et al. alleging violations of the civil False Claims Act.

The United States has intervened in this lawsuit as to some of the
defendants, including the Company, and has filed a separate complaint.
This suit alleges that the Company underpaid royalties for crude oil
produced on federal and Indian lands through the use of below-market
posted prices in the sale of oil from BROG to BRTI. The suit alleges that
royalties paid by BROG based on these posted prices were lower than the
royalties allegedly required to be paid under federal regulations, and
that the forms filed by BROG with the MMS reporting the royalties paid
were false, thereby violating the civil False Claims Act.

The Company and others have also received document subpoenas and other
inquiries from the Department of Justice relating to the payment of
royalties to the federal government for natural gas production. These
requests and inquiries have been made in the context of one or more other
False Claims Act cases brought by individuals which remain under seal and
are now being investigated by the Civil Division of the Department of
Justice. The Company has responded and continues to respond to these
requests and inquiries, but the Company does not know what action, if
any, the Department of Justice will take with regard to these other
cases. If the government chooses not to intervene and pursue these cases,
the individuals who initially brought these cases are free to pursue them
in return for a share, if any, of any final settlement or judgment. In
addition, the Company has been advised that it is a target of a criminal
investigation by the United States Attorney for the District of Wyoming
into the alleged underpayment of oil and gas royalties. The United States
Attorney for the District of Wyoming has also inquired into certain
historical oil and gas accounting and financial reporting practices of
the Company. The Company has responded to numerous grand jury document
subpoenas in connection with the investigation and is otherwise
cooperating with the investigation. Management cannot predict when the
investigation will be completed or its ultimate outcome.

In April 1999, the court unsealed and the Company was served with the
petition in the False Claims Act lawsuits styled United States of America
ex rel. Jack J. Grynberg v. Burlington Resources Oil & Gas Company, et
al. and United States of America ex rel. Jack J. Grynberg v. The
Louisiana Land and Exploration Company, et al., filed in the United
States District Court of the District of Wyoming (the "Grynberg
lawsuits"). In both cases the United States Department of Justice
declined to intervene following its investigation, resulting in these
claims being pursued by Grynberg individually. Grynberg has filed seventy
similar suits against more than three hundred defendants. On October 20,
1999, the Judicial Panel on Multidistrict Litigation consolidated
sixty-six of the Grynberg False Claims Act lawsuits, including the
referenced suits against the Company, and transferred all cases to the
United States District Court for the District of Wyoming. The Grynberg
lawsuits generally allege that the Company and other defendants
improperly measured and otherwise undervalued natural gas in connection
with the payment of royalties on production from federal and Indian
lands. Motions to Dismiss have been filed by the Company and numerous
other defendants and are pending before the Court.

Based on the Company's present understanding of the various governmental
and False Claims Act proceedings described above, the Company believes
that it has substantial defenses to these claims and intends to
vigorously assert such defenses. However, in the event that the Company
is found to have violated the civil False Claims Act or is indicted or
convicted on criminal charges, the Company could be subject to a variety
of sanctions, including treble damages, substantial monetary fines, civil
and/or criminal penalties and a temporary suspension from entering into
future federal mineral leases and other federal contracts for a defined
period of time. While the ultimate outcome and impact on the Company
cannot be predicted with certainty, management believes that the
resolution of these proceedings will not have a material adverse effect
on the consolidated financial position of the Company, although results
of operations and cash flow could be significantly impacted in the
reporting periods in which such matters are resolved.

The Company is also involved in several governmental proceedings relating
to the payment of royalties. Various administrative proceedings are
pending before the Minerals Management Service ("MMS") of the United
States Department of the Interior with respect to the proper valuation of
oil and gas produced on federal and Indian lands for purposes of paying
royalties on production sold by BROG to its affiliate, Burlington
Resources Trading Inc. ("BRTI"), or gathered by its affiliate, Burlington
Resources Gathering, Inc. In general, these proceedings stem from regular
MMS audits of the Company's royalty payments over various periods of time
and involve the interpretation of the relevant federal regulations.


CA GOVERNOR: University Employees File Civil Rights Suit on Union Dues
----------------------------------------------------------------------
As the Democrat convention reached full throttle, University of
California (UC) employees on August 15 filed a federal class-action
lawsuit against Governor Gray Davis, the Board of Regents, and two
secretive unions for forcing more than 14,000 employees to pay union dues
for politics.

Much of that union dues money seized as a condition of employment is
being spent on partisan electioneering activity, even though polls show
that 62 percent of union members do not want their forced dues money
spent on politics of any kind.

The civil rights lawsuit, filed with the assistance of the National Right
to Work Legal Defense Foundation, seeks an injunction against the
enforcement of a law recently signed by Governor Davis that requires more
than 14,000 UC employees to pay a total of $5.6 million in union dues
annually even though they are not union members as a condition of
employment. "Gray Davis is ripping off millions of dollars from
California employees and pouring it into Big Labor's political slush
fund," said Stefan Gleason, Vice President of the National Right to Work
Foundation, a non-profit, charitable organization that is providing free
legal aid to the employees. "This campaign funding scheme is an outrage,
and today, these employees are making their stand against it."

Foundation attorneys filed the class-action lawsuit on behalf of
Katherine DeMille along with 31 other UC employees against Davis (as the
President of the Board of Regents), members of the Board of Regents of
the University of California, the Coalition of University Employees (CUE)
union, and the University Professional and Technical Employees
Communications Workers of America (UPTE-CWA) Local 9119.

The suit was filed in the U.S. District Court for the Northern District
of California in San Francisco.

In the complaint, the UC employees argue that the Constitution of the
State of California prohibits the blanket application of legislative
mandates upon the University of California system that enjoys significant
autonomy, academic freedom, and freedom from political and sectarian
influences. The Board of Regents also violated its own bylaws by
implementing the forced union dues without a majority vote. UC employees
also argue that Davis and the Board of Regents illegally handed over the
forced-dues money to the secretive unions even though the union officials
refused to provide a proper, independent audit of union expenditures.

Under the Foundation-won U. S. Supreme Court Chicago Teachers Union v.
Hudson decision, before seizing any dues whatsoever, union officials must
provide employees with an independent audit to prove exactly how the
forced union dues are spent. Along with a declaratory judgment that the
law does not apply to the UC system, Foundation attorneys are seeking
both a preliminary and permanent injunction to stop the seizure of forced
union dues. (U.S. Newswire, August 15, 2000)


CENDANT CORP: Barrack, Rodos Says Period of Securities Suit Extended
--------------------------------------------------------------------
The following was released today by Barrack, Rodos & Bacine and Bernstein
Litowitz Berger & Grossmann LLP:

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

In re: CENDANT CORPORATION (NYSE: CD) LITIGATION

Master File No. 98-1664 (WHW)

This document relates to: All Actions Except the Prides Action (No.
98-2819)

NOTICE OF ENLARGEMENT OF TIME TO FILE PROOFS OF CLAIM

TO: ALL PERSONS AND ENTITIES WHO PURCHASED OR OTHERWISE ACQUIRED PUBLICLY
TRADED SECURITIES (OTHER THAN PRIDES) OF (i) CENDANT CORPORATION OR (ii)
CUC INTERNATIONAL, INC., DURING THE PERIOD BEGINNING MAY 31, 1995 THROUGH
AND INCLUDING AUGUST 28, 1998, AND WHO WERE INJURED THEREBY

This is to notify you that:

The Notice of Settlement of Class Action and the Claim Form you received
had advised you that the deadline for submitting proofs of claim to
participate in the Settlements is August 18, 2000. Please Note that the
Court has extended this deadline so that proofs of claim may be submitted
up through and including October 31, 2000. Thus, proofs of claim must be
postmarked by October 31, 2000 to be valid and accepted.

Inquiries regarding this Action and submitting proofs of claim may be
addressed as follows: In re Cendant Corporation Litigation, Claims
Administration, P.O. Box 510, Philadelphia, Pennsylvania 19105-0510,
800-379-6239, www.heffler.com.

PLEASE DO NOT CONTACT THE COURT REGARDING THIS NOTICE.

DATED: August 11, 2000   BY ORDER OF THE COURT

WILLIAM H. WALLS

UNITED STATES DISTRICT JUDGE

CONTACT: Cendant Corporation Securities Class Action, Litigation, c/o
Heffler, Radetich & Saitta L.L.P., P.O. Box 510, Philadelphia, PA
19105-0510, telephone 800-379-6239.

SOURCE Barrack, Rodos & Bacine

CONTACT: Heffler, Radetich & Saitta L.L.P., 800-379-6239


CONSECO INC: Troubled Company Hires Prominent Indianapolis Attorney
-------------------------------------------------------------------
Attorney named to Conseco post Indianapolis --- Conseco Inc. has hired a
prominent Indianapolis attorney as executive vice president, general
counsel and secretary. David K. Herzog, 44, managing partner of the
Indianapolis office of Baker & Daniels, will begin at the troubled
finance company on Sept. 1. He replaces John Sabl, who is returning to
private practice at the Chicago law office of Sidley & Austin. Conseco
slipped into financial disarray this year, weighed down by growing
problems with its Conseco Finance unit. (The Atlanta Journal and
Constitution, August 15, 2000)


FINANCIAL CREDIT: IL Ct Says Report to Credit Agency Is Needed for Cert.
------------------------------------------------------------------------
The U.S. District Court for the Northern District of Illinois made one
modification in a proposed class of debtors who received collection
letters promising them a better credit rating if they settled their
debts. The court required that the original creditor of the class members
must have reported the debt to a credit reporting agency prior to the
mailing of the collection letter. (White v. Financial Credit Corp., et
al., Nos. 99 C 4023, 99 C 5001 (N.D. Ill. 6/21/00).)

Roy White and Harold Bishop sought to represent a class of Illinois
residents who received collection letters which essentially stated that
settlement of the debt would improve the debtor's credit rating. The
debtors claimed this promise was false because, if the creditor reported
the debt to a credit rating agency, any settlement in collection would
not negate the adverse effect of the original delinquency on the debtor's
credit rating. They alleged that this false promise violated the Fair
Debt Collection Practices Act and the Credit Repair Organizations Act.

The collectors argued that the proposed class did not meet the
typicality, commonality and predominance requirements for a class action.
The District Court disagreed and certified the class, making one
modification in the class definition.

The "basic thrust" of the collectors' arguments against class
certification was that the court would need to "look into each class
member's credit history to see if it was in fact improved because he paid
off the debt." According to the collectors, the court would need to
determine whether a particular debtor was able to obtain credit that he
might not otherwise have gotten without the loan repayment. This lack of
commonality and typicality, the collectors argued, prevented the class
from complying with Fed. R. Civ. P. 23(b)(3) because individual defenses
would predominate.

The debtors argued that, once a debt has been reported to a credit
reporting agency, payment to a debt collector will not "meaningfully"
improve the debtor's credit rating. According to the debtors, even if
they subsequently settle a debt with a collector, the fact that a debt
was turned over to a debt collector will remain on the credit report.

Stating that it was not able to evaluate the merits of the case on a
motion for class certification, the court asserted its belief that, with
one modification, the debtors had established typicality, commonality and
predominance for purposes of certification. The court reasoned that if
the original creditor did not report the debt to a credit reporting
agency, "it seem[ed] hard ... to see how payment would not improve the
debtor's credit rating." In other words, by settling with a collector a
debt that has not been reported, the debtor can avoid impairment of his
rating by avoiding the reporting of the debt.

Thus, in certifying the class, the court added to the definition of the
class the requirement that the debt be reported to a credit rating agency
prior to the mailing of the collection letter. Magistrate Judge
Leinenweber delivered the opinion of the court. (Consumer Financial
Services Law Report, August 7, 2000)


FIRESTONE: Lawyers Want Recall to Include Larger Sizes in Middle East
---------------------------------------------------------------------
Legal and public relations headaches tied to Firestone tires mounted
Monday as safety advocates demanded a broader recall, South Carolina
filed a lawsuit, and a key U.S. Senator expressed "serious doubts" about
the handling of the case.

Public Citizen, a consumer safety group, joined trial lawyers in
demanding that Bridgestone/Firestone Inc. expand its 6.5 million recall
of 15-inch tires to include larger sizes -- which were replaced in some
Middle Eastern countries. The groups charged the alleged defects are
related to the design, not the manufacture, of certain Firestone tires,
as Ford Motor Co. recently argued.

At least one plaintiff's attorney suggested that Ford is as much to blame
as Firestone for alleged tire failures suspected of killing at least 46
people. "Composite detail sheets were created by Ford Motor Co. to set
forth specifications" for the tires in question, said C. Tab Turner, a
plaintiffs attorney in Arkansas. "Ford was involved in defining what they
wanted in the tire."

The accusations are the latest go-round in a blame game under way between
Ford, Firestone, and the lawyers who are suing both companies for their
alleged role in crashes that involved tire treads separating from their
casings, typically at high speeds in warm weather climates.

Now policy makers are weighing in on the unfolding saga. South Carolina
Atty. Gen. Charlie Condon filed a lawsuit Monday against
Bridgestone/Firestone, arguing that the company's initial focus on 11
states with the most tire complaints violates the law.

U.S. Sen. John McCain, R-Ariz., expressed the same sentiments and
suggested that the heightened attention in those states, most of them in
the South, might be tied to the media scrutiny in those areas. "I am sure
you agree that all consumers should be equally protected," McCain said in
a letter to U.S. Transportation Secretary Rodney Slater. "I ask you to
work with Bridgestone/Firestone to expand the scope of this recall."

South Florida drivers also filed a class action lawsuit Monday.

Firestone and Ford defended the scope of the recall and its handling. But
both vowed to appease consumers by stepping up production of replacement
tires and going to competing brands to make sure that availability of the
tires improves by early September.

Ford engineer Tom Baughman said the automaker has authorized 10 tires as
replacements for its top-selling Ford Explorer, which carries most of the
alleged faulty tires at issue. Ford has instructed its dealers to replace
Firestone tires on new Explorers with other brands if customers demand
it.

But Baughman flatly denied that anything related to the Explorer itself
contributed to the problem, as some personal injury attorneys have
suggested. "We built Explorers over the last 10 years with brands of
tires other than Firestone and we've seen absolutely no problem with
those tires." Baughman said.

Lawyers and safety advocates paint a different picture. They say certain
16-inch Wilderness tires, common on the Ford Explorer, were replaced
voluntarily by Ford in the Middle East because of similar problems. Some
of these tires are on Ford vehicles in the U.S., posing grave dangers,
said Joan Claybrook, president of Public Citizen. "Consumers should not
be given replacement tires that are already known to be defective but
have not yet been recalled," Claybrook said.

Ford said the problems in Saudi Arabia were related to misuse --
including the tendency to deflate the tires for desert driving without
re-inflating them when the vehicles were returned to the roadways. (The
Detroit News, August 15, 2000)


FIRESOTNE, FORD: Finkelstein & Krinsk Files Vehicle Buyers’ Suit in TN
----------------------------------------------------------------------
Finkelstein & Krinsk, has filed a class action complaint against Ford
Motor Company and the Firestone subsidiary of Bridgestone/Firestone based
in Nashville, TN.

The lawsuit, filed on behalf of the class of Ford customers who trusted
the company and bought Ford vehicles unaware that improper
specifications, deficient manufacturing and inadequate testing resulted
in their riding a vehicle both inherently dangerous and defective for the
intended purposes of these vehicles. While aware of the recall being
undertaken by Ford and Bridgestone, the complaint's focus is on the
inadequacy of the remedy provided by the Defendants. Riding in a
potential "time bomb" makes it imperative for Defendants to immediately
take steps to replace the suspect tires with tires chosen by the
consumers. In some instances this may be with a Bridgestone brand,
however, many consumers prefer immediate access to a competitor brand.

"We believe it irresponsible for Ford and Bridgestone to not only delay
replacement to conform to a schedule of their convenience," said
plaintiff's counsel, Jeffrey Krinsk, "but, additionally, refuse to
acknowledge that a change of tire brand may be critical to a customer's
peace of mind and, equally importantly, the resale value of the vehicle.
For Firestone to react in a manner calculated to maximize its insurance
reimbursement instead of the welfare of its consumers would be
unpardonable."

The complaint is based on a provision of California Business &
Professions Code uniquely available to California consumers that allows
the court to impose broad remedial measures on Ford and Firestone.

Contact: Finkelstein & Krinsk The Koll Center 501 West Broadway, Suite
1250 San Diego, CA 92101 Mark L. Knutson, Esq., (toll free -
877/493-5366) or 619/238-1333


INDUSTRIAL-MATEMATIK: Stock Purchasers' Complaint Is Dismissed
--------------------------------------------------------------
Plaintiff purchasers of defendant corporation's stock, brought suit
alleging violations of the Securities Exchange Act. Plaintiffs contended
that defendants made a series of materially false and misleading
statements. They contended that defendants misrepresented the success of
the corporation's programs and product sales. Plaintiffs also maintained
that when defendants made these statements, they knew that the
corporation was experiencing problems. The court found that plaintiff's
complaint failed to demonstrate that defendants knew, or recklessly
disregarded, that these statements were false at the time they were made.
It also found that there was nothing to suggest that the alleged
undisclosed adverse conditions existed at the time the statements were
made. Thus the court granted defendants' motion, and dismissed the
complaint.

Judge Baer

FEASBY, v. INDUSTRIAL-MATEMATIK INTERNATIONAL CORP. QDS: 02762700 -
Plaintiffs bring this action against defendants for alleged violations of
Sections 10(b), 16(b) and 20(a) of the Securities Exchange Act of 1934,
and Rule 10b-5 promulgated thereunder. Defendants move to dismiss for
failure to state a claim pursuant to Federal Rule of Civil Procedure
12(b)(6), and for failure to plead fraud with particularity pursuant to
Rule 9(b) and the Private Securities Litigation Reform Act of 1995. For
the reasons discussed below, the defendants' motions are GRANTED, with
leave to file an amended complaint.

Plaintiffs bring this action on behalf of themselves and other purchasers
of Industri-Matematik International Corp. ("IMI") stock, who bought IMI
stock between August 27, 1997 and May 5, 1998 (the alleged "Class
Period"). Plaintiff Howard Feasby purchased 100 shares of IMI stock on
September 22, 1997 at $ 22-1/2 per share. Plaintiff Ernst-Armin Lotz
purchased 300 shares of IMI stock on February 9, 1998, at $ 29-1/2 per
share.

Defendant IMI develops and markets software that improves the efficiency
of "supply chain" management. As described in the parties' pleadings,
supply chain management encompasses the execution of multiple processes,
including order management, pricing and sourcing, warehouse management,
transportation management, and demand chain planning. IMI's principal
product, its System ESS (the "Product"), was designed to meet the complex
supply chain management requirements of medium and large manufacturers.

Defendant Stig Durlow ("Durlow") was president and CEO of IMI since May
1995, and Chairman of IMI since May 1, 1996. During the class period,
Durlow allegedly sold 115,000 shares of his IMI stock. Defendant
Lars-Goran Peterson ("Peterson") was Sr. Vice President of Finance for
IMI and its Chief Financial Officer since 1994. During the class period,
Peterson allegedly sold 50,000 shares of his stock. It is worth noting
that during the class period, Mssrs. Durlow's and Peterson's sales came
to 17 percent of their holdings and very little more has been sold to
date. Defendant David Simbari ("Simbari") was Sr. Vice President of
Worldwide Sales and Marketing for IMI until February 1998, when he
resigned. During the class period, Simbari sold 266,000 shares of IMI
stock.

Defendant Jeffrey Harris ("Harris") serves as an outside director of IMI
and a member of its Audit Committee, which oversaw the accounting and
financial functions of IMI. Harris is a managing director of defendant EM
Warburg Pincus and Co. LLC. Defendant William H. Janeway ("Janeway")
serves as an outside director of IMI. Janeway is a managing director of
defendant EM Warburg Pincus and Co. LLC, and serves as the head of its
High Technology group.

Defendant Warburg Pincus Investors LP, whose sole general partner is
defendant Warburg Pincus and Co., is in turn managed by defendant EM
Warburg Pincus & Co. LLC. (For purposes of this motion, these three
defendants will collectively be referred to as "Warburg Pincus.") During
the class period, Warburg Pincus sold or distributed 6,027,499 shares of
IMI common stock

Plaintiffs also assert claims against various underwriters involved with
IMI's initial public offering in September 1996 and IMI's secondary
offering in October 1997. Defendants BT Alex. Brown Inc., Deutsche Morgan
Grenfell Inc., Soundview Financial Group Inc., and UBS Securities LLC
(collectively the "Underwriter Defendants") are investment banking firms,
and collectively served as the sole underwriters of IMI's secondary
offering in October 1997. Plaintiffs claim that the Underwriter
Defendants "pocketed over $ 7.5 million in proceeds" from the secondary
offering.

Plaintiffs' Allegations

The gist of plaintiffs' complaint is that the defendants made a series of
materially false and misleading statements to investors during the Class
Period regarding, among other things: IMI's system ESS software product
(the "Product"), IMI's joint marketing program with Oracle Corporation,
IMI's sales cycles, and the expansion of IMI's business into European
markets. Plaintiffs allege that IMI misrepresented that its success with
these programs and its product sales would result in increased earnings
per share for fiscal years 1998 and 1999. Plaintiffs allege that these
representations artificially inflated IMI's stock (to a class period high
of $ 33-5/8 per share) and allowed IMI and the insider defendants to sell
8.1 million shares of IMI stock to the public at the inflated price via a
secondary public offering held in October 1997, which yielded proceeds in
excess of $ 160 million. In addition, plaintiffs claim that the
defendants sold another 2.35 million shares (the "insider sales"), with
proceeds in excess of $ 64 million.

Plaintiffs maintain that when defendants made the alleged false and
misleading representations about IMI during the Class Period, defendants
knew that IMI was experiencing serious problems that impaired its
business and was likely to do the same for its earnings per share. In
particular, plaintiffs contend that defendants knew the following: that
IMI had "poor sales" of its ESS product; that there was a slowing growth
of the supply chain software market; that there were serious problems
with IMI's sales force; that IMI had deteriorating revenue and earnings
per share prospects; and that to cover this up IMI falsified its interim
fiscal year 1998 financial statements. As a result, plaintiffs claim that
defendants knew that IMI "would not be able to achieve the [earnings per
share] growth being forecast." Further, plaintiffs contend that
defendants refrained from disclosing the adverse information to the
public until May 1998, in order to keep the stock price inflated.

The Rise and Fall of IMI's Stock

According to plaintiffs, in the summer of 1997, the defendants conducted
a "roadshow" in various cities to generate interest in the secondary
offering and to support IMI's stock price. During the roadshow, the
underwriter defendants, as well as defendants Durlow and Peterson, met
with potential investors in various cities and presented favorable
information about IMI, including forecasts of strong revenue and profit
growth through fiscal years 1998-1999. Plaintiffs claim that the roadshow
allowed the defendants to effect the October 1997 stock offering at an
inflated price.

IMI reported positive financial results, both in terms of revenue and
earnings, for the first three quarters of fiscal year 1998 (thus
encompassing the period of time between May 1, 1997 through January 31,
1998). These positive financial results exceeded market expectations and
IMI's earlier projections.

On February 26, 1998, IMI announced that Dave Simbari (its Senior Vice
President for Worldwide Sales) had resigned. In the wake of that
announcement, IMI's stock price fell from $ 31 per share to $ 26-1/4 per
share overnight. The stock price recovered to $ 33 per share by February
31, 1998, allegedly due to defendants' false assurances as to the quality
of its sales force. According to plaintiffs, "rumors surfaced" in late
April 1998 that IMI's fourth quarter results (for fiscal year 1998) would
be worse than expected. Plaintiffs allege that as a result of these
rumors, IMI's stock fell from $ 28-1/4 per share (on April 24, 1998) to $
21 per share (on April 27, 1998). Subsequently, on May 5, 1998, IMI
announced that its fourth quarter earnings would be lower than expected,
thus confirming the rumors. That same day, IMI's stock price fell to $
14-5/8 per share, a 33 percent decrease from the previous day's closing.
IMI continued to report losses during the first three quarters of fiscal
year 1999, which caused its stock price to stumble to a low of $ 3 per
share.

Discussion

A Standards

Dismissal of a complaint pursuant to Rule 12(b)(6) is permitted "only
where it appears beyond doubt that the plaintiff can prove no set of
facts in support of the claim which would entitle him to relief." Scotto
v. Almenas, 143 F.3d 105, 109-10 (2d Cir. 1998). The court's function is
"'merely to assess the legal feasibility of the complaint, not to assay
the weight of the evidence which might be offered in support thereof."
Cooper v. Parsky, 140 F.3d 433, 440 (2d Cir. 1998) (quoting Ryder Energy
Distribution Corp. v. Merrill Lynch Commodities, Inc., 748 F.2d 774, 779
(2d Cir. 1984)). Factual allegations made in the complaint are assumed to
be true, and all inferences are drawn in favor of the plaintiff. Grandon
v. Merrill Lynch & Co., 147 F.3d 184, 188 (2d Cir. 1998). Further, the
court can consider documents which are incorporated into the complaint by
reference. See Newman & Schwarz v. Asplundh Tree Expert Co., 102 F.3d
660, 661 (2d Cir. 1996); Brass v. American Film Technologies, Inc., 987
F.2d 142, 150 (2d Cir. 1993).

Securities fraud actions are subject to Rule 9(b) of the Federal Rules of
Civil Procedure, which provides that "in all averments of fraud or
mistake, the circumstances constituting fraud or mistake shall be stated
with particularity." An essential purpose of Rule 9(b) is to prevent
plaintiffs from using "conclusory generalizations... to set off on a long
and expensive discovery process in the hope of uncovering some sort of
wrongdoing or of obtaining a substantial settlement." Decker v.
Massey-Ferguson, Ltd., 681 F.2d 111, 116 (2d Cir.1982); see also
DiVittorio v. Equidyne Extractive Indus., Inc., 822 F.2d 1242, 1247 (2d
Cir.1987). However, Rule 9(b) does not abrogate the general rule that
"pleadings are to be construed in a light most favorable to the pleader
and accepted as true." Ross v. Bolton, 904 F.2d 819, 823 (2d Cir.1990).

Further, the Private Securities Litigation Reform Act of 1995 ("PSLRA")
heightened Rule 9(b)'s requirement for pleading scienter, see 15 U.S.C. @
78u-4(b)(3)(A); see also Press v. Chemical Inv. Servs. Corp., 166 F.3d
529, 537-38 (2d Cir. 1998). To plead scienter, plaintiffs must allege
with particularity facts giving rise to a strong inference of fraudulent
intent. Novak v. Kasaks, 2000 WL 796300, *10, _ F.3d _ (2d Cir. 2000).
The "strong inference" may arise where the complaint sufficiently alleges
that the defendants: (1) benefitted in a concrete and personal way from
the alleged fraud; (2) engaged in deliberately illegal behavior, (3) knew
facts or had access to information suggesting that their public
statements were not accurate; or (4) failed to check information they had
a duty to monitor. Id.

Here, plaintiffs' complaint fails to adequately plead facts with
particularity giving rise to a strong inference of scienter. Simply
stated, the complaint fails to allege particularized facts required to
demonstrate that the defendants knew, or recklessly disregarded, that the
statements made about IMI's product sales, its marketing programs, and
its earnings forecast were false at the time they were made. Rather, it
appears from plaintiffs' papers they believe it is defendants' burden.
Not so. There must be proof of awareness on the defendants' part, and the
allegations in this complaint fail to do that. This is not to say one way
or the other whether the facts might be supportive, but simply that the
present pleading fails to meet the requisite standard. Plaintiffs cannot
prevail by using crystal balls or 20/20 hindsight any more than on
conclusory generalizations or speculation, but must "allege facts that
give rise to a strong inference of fraudulent intent." Chill v. General
Electric Co., 101 F.3d 263, 267 (2d Cir. 1996).

Here, plaintiffs allege that defendants made misleading statements
concerning the success of IMI's business during the class period, despite
knowing "the true but concealed facts." According to plaintiffs, the
complaint adequately explains why these statements were false when made,
citing paragraphs 5, 53, 60, and 71 of the complaint. (See Pl. Mem. in
Opposition, at 17-18.) Plaintiffs contend that the "true but concealed
facts" - which rendered all of defendants' statements misleading - were:
(i) that IMI's product line "was not achieving anywhere near the markets
success claimed, as many potential customers were refusing to purchase
the product or demanding very long trial-use periods" prior to purchase;
(ii) that contrary to IMI's assertions, it "was encountering difficulty
in closing large orders and was experiencing a lengthening sales cycle",
which impaired IMI's revenues; (iii) that IMI's expansion into Europe was
"going very poorly" and it had "received virtually no orders of any
significance" there, while incurring significant start-up costs; (iv)
that IMI's marketing partnership" was not nearly as successful or
effective" as IMI represented; that IMI's "direct sales force was
extremely troubled, suffering from an inadequate number of sales persons
and inadequately trained personnel"; (v) that in order to conceal these
facts, IMI "resorted to falsifying its reported financial results during
the Class Period, utilizing various accounting tricks and artifices";
that IMI's "top executives were suffering from extreme dissension and
disagreement... which had paralyzed them" from effectively managing IMI's
business; (vi) that IMI's "competitive position was being severely
eroded" due to competitors that offered superior products. (Compl. P 53.)
As a result, plaintiffs claim that the defendants actually knew that
IMI's forecasts for revenue and earnings growth "could not and would not
be achieved" given these alleged adverse conditions.

Although lengthy, plaintiffs' allegations are devoid of the particularity
required by Rule 9(b), and fail to give rise to a strong inference of
fraudulent intent. There is nothing to suggest that defendants knew or
recklessly disregarded these "concealed facts" during the class period,
let alone to suggest that the alleged undisclosed adverse conditions even
existed at the time the various statements were made, or the effect they
might have if true on earnings. See Shields v. Citytrust Bancorp, Inc.,
25 F.3d 1124, 1129 (2d Cir. 1994) (allegations that defendant
"intentionally concealed" certain risks and "knew but concealed" the poor
condition of its loan portfolio did not satisfy Rule 9(b)'s
requirements).

In Novak v. Kasaks, 2000 WL 796300 (2d Cir. 2000), the complaint alleged
that the defendants had made a series of false and misleading statements
as to its financial condition by overstating the value of its inventory
and by failing to adhere to the company's stated inventory markdown
policy, in order to artificially inflate the company's stock price during
the class period. Id. at 1-2. Specifically, the plaintiffs alleged that
defendants engaged in a "box and hold" scheme, in which a substantial
quantity of outdated inventory was stored in warehouses without being
marked down. Id. at *2. The company subsequently acknowledged that it did
in fact have serious inventory problems, at which point the stock price
tumbled. Plaintiffs' allegations of fraud included: (i) that during the
class period, the company distributed weekly merchandise reports (at
weekly meetings attended by the defendants) which specifically
distinguished regular inventory from "box and hold" inventory; (ii) that
these reports demonstrated that much of the "box and hold" inventory was
unlikely to ever be sold at full price, if at all, and that the levels of
"box and hold" inventory increased significantly during the class period;
(iii) that the company's public financial statements did not distinguish
between regular inventory and "box and hold" inventory" nor did the
company ever mark down such inventory during the class period; and (iv)
that specific conversations occurred between the named defendants and
other senior executives during the class period, in which they discussed
the need to mark down inventory but refused to do so because it would
damage the company's financial prospects. Id. at *2, 11. The "box and
hold" practice also violated the company's markdown policy, as stated in
public filings. Id. at 11. Based on these specific facts, the Novak court
held that the complaint sufficiently pled scienter. Moreover, the
plaintiffs' complaint in Novak also provided specific facts regarding the
company's significant write-off of inventory directly following the class
period, as contained in public filings, all of which "support[ed]
plaintiffs' contentions that the inventory was seriously overvalued at
the time the purportedly misleading statements were made." Id. at12.
Thus, the complaint there "identified with particularity several
documentary sources that supported plaintiffs' beliefs that serious
inventory problems existed" during the class period. Id.

Here, unlike in Novak, there are no specific facts alleged nor are any
documentary sources identified which suggest or support plaintiffs'
contention that IMI was experiencing serious business problems at the
time the purportedly misleading statements were made. Indeed, there is
nothing in the complaint to support plaintiffs' belief as to the "true
but concealed facts" they claim existed during the class period.
Plaintiffs contend that defendants knew these alleged facts because they
had access to unidentified corporate documents (which supposedly
contained information contrary to their public statements.) Yet,
plaintiffs have failed to provide any documentary support for their
beliefs or to specifically identify the reports or statements containing
the alleged information. See Novak, 2000 WL 796300 at *13 (complaint can
satisfy particularity requirement "by providing documentary evidence
and/or a sufficient general description of the personal sources of the
plaintiffs' beliefs"); San Leandro Emergency Med. Group Profit Sharing
Plan v. Phillip Morris Companies, Inc., 75 F.3d 801, 813 (2d Cir. 1996)
("Plaintiffs' unsupported general claim of the existence of confidential
company sales reports that revealed the larger decline in sales is
insufficient to survive a motion to dismiss."

The only allegation which arguably even attempts to support plaintiffs'
beliefs as to the "true but concealed facts" is plaintiffs' allegation
that on May 5, 1998, IMI acknowledged that its fourth quarter (fiscal
year 1998) results were "due to a shortfall in license fees and an
inadequate sales force." (Compl. P 73) (emphasis added). However, this
appears to be nothing more than speculation; there is nothing in the
complaint to support or even suggest that IMI made any such
acknowledgment of the adequacy or inadequacy of its sales force. Rather,
IMI's press release dated May 5, 1998 states that "earnings are lower
than expected due to a short fall in license revenues, resulting
primarily from the timing of significant orders." There is no mention or
acknowledgment by IMI of any problem with IMI's sales force.

Further, both Rule 9(b) and the PSLRA require that a complaint state
"with particularity all facts" upon which allegations made upon
information and belief are based. 15 U.S.C. @ 78u-4(b)(1). Here,
plaintiffs' allegations are "based upon the investigation of their
counsel, including a review of IMI's SEC filings, securities analysts'
reports, IMI's press releases, media reports, and information obtained
from consultants. " (Compl. P 86, "Basis for Allegations"). Taken
together, they provide scant, if any, specificity about the facts on
which plaintiffs' base their beliefs; indeed, they provide none of the
required facts underlying the complaint's allegations as to the
information that was supposedly available to the individual defendants,
nor does it direct the Court to where support for those allegations might
be found. While Rule 9(b) does not require that plaintiffs plead with
particularity every single fact upon which they base their beliefs, at a
minimum plaintiffs must plead with particularity some facts sufficient to
support those beliefs. See Novak, 2000 WL 796300 at *13. Here,
plaintiffs' complaint fails to state any facts to support their
allegations of fraud; rather, the complaint is a series of conclusory
generalizations - a generic reference to "press releases" or "analysts'
reports" does not cure that defect.

Plaintiffs also provide no basis for their allegation that "in order to
cover up and conceal" the bad news, "IMI had resorted to falsifying its
reported financial results during the Class Period, utilizing various
accounting tricks and artifices." (Compl. P 53(f).) While plaintiffs
assert that such information is "particularly within the adverse party's
knowledge, " plaintiffs are still required to include "a statement of
facts upon which [their] pleaded information and beliefs are founded."
Leslie v. Minson, 679 F. Supp. 280, 282 (S.D.N.Y. 1988).

In the main, plaintiffs' allegations of fraud and scienter are
unsupported by any sort of factual background, and this Court must
disregard them as speculation. See San Leandro, 75 F.3d at 813 (no
"license to base" @ 10(b) claims "on speculation and conclusory
allegations")(internal citations omitted); Shields v. Citytrust Bancorp.,
Inc., 25 F.3d 1124, 1129 (2d Cir.1994) (complaint deficient where
plaintiff simply "couple[d] a factual statement with a conclusory
allegation of fraudulent intent"). Oral argument supported my concerns;
there, plaintiffs asserted that "it's simply hard for us to believe that
those problems were not apparent to defendants at some point well before"
disclosure. (Tr. at 21.) Indeed, in their opposition papers too,
plaintiffs' contentions are little more than gossamer, alleging that the
underlying adverse conditions "must have been obvious to the defendants."
(Pl. Mem. In Opposition, at 22.). Such "intuition" on the part of
plaintiffs - without particularized facts - is insufficient under the
pleading requirements of Rule 9(b) and the PSLRA.

C. Section 16(b) and 20(a) Claims

Because plaintiffs have failed to adequately plead a primary violation
under Section 10(b), their Section 20(a) claim for "controlling person"
liability must likewise be dismissed. Further, plaintiffs' claim under
Section 16(b) is dismissed, as the complaint fails to allege that
plaintiffs made any demand on IMI prior to filing this action. See Fed.
R. Civ. P. 23.1.

Conclusion

For the reasons set forth above, defendants' motions to dismiss the
complaint are granted and the complaint is hereby dismissed without
prejudice. Plaintiffs are granted leave to amend and re-file this
complaint on or before July 28, 2000. (New York Law Journal, July 24,
2000)


LAMARQUE FORD: LA Ct Says Fed Ct Has Jurisdiction over Services Fee
-------------------------------------------------------------------
In declining to remand an automobile financing case to state court, the
U.S. District Court for the Eastern District of Louisiana found that the
alleged state violations with respect to the consumer services fee were
not separate and independent from the federal violations and, therefore,
the federal court properly had jurisdiction. (Mayer v. Lamarque Ford
Inc., No. CIV. A. 00-1325 (E.D. La. 6/27/00).)

Darla Mayer purchase a 1999 Ford Mustang from Lamarque Ford. Mayer
discovered that her purchase order included a charge of 395 for consumer
services. Mayer claimed that she was not told about this fee and that she
received nothing of value in return for it. According to Mayer, the fee
should not have been included in the amount financed. She also alleged
that she did not receive a copy of the document entitled "retail
installment sales contract ... promissory note, truth in lending
disclosure statement, and security agreement." Lastly, Mayer claimed that
the security agreement submitted to Hibernia Bank contained handwritten
changes to the purchase price which she did not approve.

                               Damages

Mayer filed suit against the dealership in Louisiana state court for
damages pursuant to the Louisiana Motor Vehicle Sales Finance Act, the
Truth in Lending Act and Regulation Z. She also asserted claims of
misrepresentation and unjust enrichment and requested class action
certification.

The dealership filed a notice of removal to the District Court alleging
that the District Court had jurisdiction based on the federal claims.
Mayer filed a motion to remand all or part of the case back to state
court.

                        Security agreement

Mayer argued that her claim regarding the consumer services fee was based
on state law and was a separate and independent claim from the security
agreement claim. The court noted that Mayer's current argument differed
from the allegations she made in her state court petition where she
alleged that the consumer service fee violated both state and federal
law. Furthermore, the court stated that "Ms. Mayer's claims of unjust
enrichment and misrepresentation, which arguably can be characterized as
purely state law claims, are clearly not 'separate and independent' from
her federal claims, as they arise from a single wrong, the assessment of
the consumer services fee, and are nothing more than different theories
of recovery."

Mayer conceded that the security agreement claims alleged violations of
both state and federal law but argued that the court should remand the
Louisiana Motor Vehicle Sales Finance Act claim. Mayer claimed that the
act presented "novel issues of state law" because the Motor Vehicle
Finance Act was made effective on July 2, 1999. The court noted that a
federal court can decline to exercise jurisdiction over a claim which
raises a novel or complex issue of state law. However, the court found
that the Louisiana act existed long before 1999; it was merely rewritten
in 1999. In addition, the court said that the act itself states that
persons can look to the TILA and Regulation Z in defining and
interpreting terms and concepts in the act.

                         Forum manipulation

Mayer offered to drop the federal claims in order to have her case
remanded back to state court. The District Court found that because Mayer
pleaded federal claims for all of the alleged wrongs, the District Court
had subject matter jurisdiction over the entire matter. Judge Clement
noted "the Supreme Court and the Fifth Circuit have both counseled
against allowing a plaintiff to manipulate the forum when removal has
been proper."

The District Court found that Mayer alleged both federal and state claims
as to the consumer services fee that were not separate and independent
and that the Motor Vehicle Sale Finance Act did not raise novel issues of
law. Therefore, the court denied Mayer's motion to remand the case, in
whole or in part, to state court. (Consumer Financial Services Law
Report, August 7, 2000)


NATIONAL COMPUTER: MN Test Scoring Company Expands Tuition Offer
----------------------------------------------------------------
A testing error on thousands of Minnesota basic-skills math tests kept
six or seven high school seniors from participating in graduating
ceremonies, state education officials testified Tuesday.

The number is considerably smaller than the 336 seniors originally
thought to be seriously affected by the error. However, at least 50
seniors who were wrongly failed were required to go to summer school to
get their diploma, even though they were allowed to participate in
graduation ceremonies. "Most districts that grappled with this question
allowed their students to graduate anyway," said Tammy Pust, assistant
commissioner of the Department of Children, Families and Learning.

Commissioner Christine Jax told the House Education Policy Committee that
regrading the tests lowered the scores of 912 students. But none of those
students had passed the test anyway, Jax said. The department was trying
to locate four wrongly failed seniors who may have been required to go to
summer school to get their diploma. It could not account for 10 to 15
people who may have dropped out because they were told they failed the
test.

About 47,000 students who took the test in February and April this year
received the wrong scores because of errors made by National Computer
Systems Inc., a private, Eden Prairie-based company hired by the state to
score the tests.

NCS announced Tuesday that it would reimburse the families of students
who paid for math tutoring because they were incorrectly told they failed
the test. NCS already had offered $1,000 tuition vouchers to high school
seniors who did not receive a diploma because of the error. But that was
just a fraction of the 8,000 students who were told they failed when they
actually passed. The test is given starting in eighth grade.

Minnesota school districts are prohibited from providing confidential
student information to any outside organization. That means NCS can only
identify the families who are eligible for the tuition reimbursement if
they contact the company.

NCS is running advertisements in newspapers throughout Minnesota to alert
affected families. The offer covers families of students who paid for
math tutoring or other math training between March and July 2000 as a
result of being incorrectly told they failed the exam. Seniors who are
eligible for the $1,000 tuition voucher also qualify for the expanded
offer.

So far, at least two lawsuits have been filed seeking class-action
status. One lists nine counts, ranging from breach of contract and
negligence to defamation and unjust enrichment. Attorney Richard Fuller,
who filed the lawsuit in Hennepin County District Court on behalf of two
families, said NCS didn't earn the money it was paid by the state and
should compensate the children and families inconvenienced by its
mistakes. Greg and Frankie Kurvers, the parents of Danielle Kurvers of
Burnsville, were the first to file against NCS. The Kurvers spent about
$3,000 for private tutoring at Sylvan Learning Centers. Danielle will be
a junior in high school this year. (The Associated Press State & Local
Wire, August 15, 2000)


NY EDUCATION: Commissioner Lacks Juriisdiction on Special Ed Disputes
---------------------------------------------------------------------
The commissioner of the New York State Department of Education dismissed
a class action because it didn't define class members and failed to
exhaust administrative remedies. Board of Educ. of the Half Hollow Hills
Cent. Sch. Dist., 32 IDELR 245 (SEA NY 1999).

The parents requested that the commissioner find that the district failed
to provide free and appropriate public education, particularly to
students about to turn age 21 who required transition services.

The district contended that the commissioner lacked jurisdiction to hear
special education disputes, and that the parents failed to exhaust
administrative remedies. The commissioner dismissed the parents' appeal.
They tried to bring a class action, but did not specify class members and
had no evidence that others experienced similar situations. Finally, the
commissioner lacked jurisdiction over the matter.

The parents' claims were related to violations of the Individuals with
Disabilities Education Act and were subject to review by a hearing
officer. By bringing the action before the commissioner, they attempted
to circumvent the due process hearing, and failed to exhaust their
remedies. (Educating for Employment, August 10, 2000)


PA POLICE: Diabetes Association Joins Suit for Diabetics in Custody
-------------------------------------------------------------------
Illustrating its advocacy role, the American Diabetes Association has
joined a pending class action lawsuit against the city of Philadelphia
regarding the treatment of diabetics in police custody.

According to the association, the suit involves seven diabetics who say
they became seriously ill when the city's police department denied their
requests for basic medical care. "Just because someone is in police
custody, does not give the authorities a license for abuse," said Michael
Greene, chairman of the association's legal advocacy subcommittee. "When
individuals with diabetes are mistreated by government, it affects
everyone with diabetes. People with diabetes should be allowed the proper
care needed to stay in good control of their blood sugar levels, whether
in police custody or not."

While there has been some difference of opinion among the courts over the
extent to which the Americans with Disabilities Act applies to the
activities of law enforcement officials, it is fairly well established
that Title II requirements are applicable once an individual is taken
into custody and held in a detention facility.

Tom D'Agostino, editor of LRP's Disability Compliance Bulletin,
contributed this report. (Corrections Professional, August 11, 2000)


PHOENIX LEASING: Investors in 1997 CA Suit Seek Production
----------------------------------------------------------
On October 28, 1997, a Class Action Complaint was filed against Phoenix
Leasing Inc., Phoenix Leasing Associates, II and III L.P., Phoenix
Securities Inc. and Phoenix American Inc. in California Superior Court
for the County of Sacramento by eleven individuals on behalf of investors
in Phoenix Leasing Cash Distribution Funds I through V (the
"Partnerships"). The Companies were served with the Complaint on December
9, 1997. The Complaint sought declaratory and other relief including
accounting, receivership, imposition of constructive trust and judicial
dissolution and winding up of the Partnerships, and damages based on
fraud, breach of fiduciary duty and breach of contract by the Companies
as general partners of the Partnerships.

Plaintiffs severed one cause of action from the Complaint, a claim
related to the marketing and sale of CDF V, and transferred it to Marin
County Superior Court (the "Berger Action"). Plaintiffs then dismissed
the remaining claims in Sacramento Superior Court and re-filed them in a
separate lawsuit making similar allegations (the "Ash Action").

In the Ash action, Plaintiffs have filed a fourth amended complaint which
includes six causes of action: breach of fiduciary duty, constructive
fraud, judicial dissolution of Cash Distribution Fund IV, judicial
dissolution of Cash Distribution Fund V, accounting and alter ego.
Defendants recently answered the complaint. Plaintiffs have served four
requests for production on July 25, 2000. The plaintiffs depositions have
been taken and plaintiffs recently took depositions of defendants.

The Berger complaint relates to alleged misrepresentations made in
connection with the offering of Cash Distribution Fund V. Defendants have
answered the complaint and discovery has commenced. A class has been
certified. Plaintiffs have served three requests for production;
defendants responded to the third request for production on July 25,
2000. The plaintiffs deposition has been taken and plaintiffs recently
took depositions of defendants. The Companies intend to vigorously defend
both actions.


PINELLAS SCHOOL: Judge OKs Settlement Ending Court Ordered Busing
-----------------------------------------------------------------
Significant events in the history of Pinellas County's school
desegregation case which was filed in 1964 and certified in 1997.

    MAY 17, 1954: U.S. Supreme Court outlaws segregation in public
schools.

    1961: The first small desegregation of Pinellas County schools occurs
when black students are admitted to St. Petersburg Junior College, then
operated by the Pinellas School Board.

    MAY 7, 1964: A group of black parents of Pinellas County students is
joined by the NAACP Legal Defense Fund in filing suit against the
Pinellas School Board. They note that only 200 of the county's 10,000
black students are attending schools with white students and they seek to
end segregated education.

    JAN. 15, 1965: U.S. District Judge Joseph P. Lieb orderes the
desegregation of Pinellas County schools.

    JUNE 2, 1971: The Pinellas School Board votes 5-2 to desegregate
schools countywide.

    JULY 23, 1971: Judge Lieb accepts the School Board plan and orders
that no school be allowed to have a student population more than 30
percent black. By then, a Bi-Racial Advisory Committee had been created
to help monitor progress toward desegregation.

    OCTOBER 1976: Court rules that the School Board must make good-faith
projections of the number of black and white students at each school.
Agrees that students should not be forced to transfer during the school
year, except to force compliance with caps on the number of black
students.

    MAY 18, 1977: Lawsuit is certified as class action on behalf of all
black students eligible to attend Pinellas schools now or in the future.

    APRIL 24, 1989: The court authorizes the creation of the first magnet
school programs to encourage voluntary integration.

    JUNE 17, 1998: After several years of making modifications to racial
ratios and overseeing nearly every aspect of pupil assignment, the court
directs the School Board to identify areas in which the district has
achieved the goal of providing equal opportunities to minority students.

    OCT. 9, 1998: NAACP Legal Defense Fund agrees that Pinellas has
complied with the court order in the areas of transportation and
opportunities for administrative staff, but disagrees that the district
treats blacks the same as whites in any other areas.

    DEC. 15, 1998: School Board and Legal Defense Fund attorneys agree to
a nine-year plan to end court-ordered busing.

    JAN. 8, 1999: U.S. District Judge Steven D. Merryday refuses to
approve the agreement between the parties. He criticizes the plan for
being too vague and appoints a mediator to move the parties toward a more
concrete agreement.

    JULY 14, 1999: Merryday agrees that Pinellas has achieved "unitary
status" by treating blacks and whites alike in the areas of facilities
and resources, transportation and administrative staff assignment.

    DEC. 17, 1999: The School Board approves an agreement with the Legal
Defense Fund on all other outstanding issues, including student
assignment.

    JAN. 31, 2000: The parties seek dismissal of the lawsuit.

    AUG. 10, 2000: Merryday accepts the settlement agreement providing
for an end to court-ordered busing and dismisses the lawsuit. (St.
Petersburg Times, August 11, 2000)


SYMONS INT’L: Faces IN Securities Suit; FDOI May Restrict on Fee Payment
------------------------------------------------------------------------
The report of Symons International Group Inc. filed with the SEC says
that a complaint for a class action alleging violations of Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 was filed against the
Company and certain of its officers and directors in the United States
District Court for the Southern District of Indiana. The Company is
vigorously defending the claims brought against it. No material
developments have occurred recently.

The report also says that On July 7, 2000, the FDOI issued a notice of
its intent to issue an order which principally addresses certain policy
and finance fee payments by Superior to Superior Insurance Group, Inc.,
another subsidiary of the Company, and financial reporting issues,
including disclosure of intercompany transactions. Superior has filed a
petition with the FDOI which requests a formal hearing to review the
Notice and a determination that the order contemplated by the Notice not
be issued.

The order, if issued, may restrict Superior from paying certain billing
and policy fees to Superior Group and include a requirement that Superior
Group repay to its subsidiary, Superior, billing and policy fees from
prior years in an amount of approximately $35.2 million. In such event,
there would be no financial impact on the Company's consolidated
financial statements. A restriction on the ability of Superior to pay
future billing and policy fees to Superior Group may necessitate that the
Company take certain actions,  which may be subject to regulatory
approvals, to reallocate operating revenues and expenses between its
subsidiaries. The Company intends to vigorously contest the issuance of
any such order; however, there can be no assurance that an order, if
issued, will not have a material adverse effect on the Company's results
of operations or financial position.


TRUMP HOTELS: Press Release Fails to Specify One-Time Gain; May Be Fined
------------------------------------------------------------------------
Trump Hotels & Casino Resorts Inc. said the Securities and Exchange
Commission might pursue legal action against the company over an earnings
release that the SEC says was misleading. The SEC has said it might seek
fines against the company, a former chief executive and a former chief
financial officer, Trump Hotels said in an SEC filing. Trump Hotels is
the casino company controlled by real estate developer Donald Trump. The
company's press release, issued last October, failed to disclose that $
17 million of Trump Hotels' third-quarter 1999 operating income came from
a one-time gain. The gain was related to the purchase of an All-Star Cafe
from Planet Hollywood International Inc. (The Atlanta Journal and
Constitution, August 15, 2000)


* EEOC Reveals Rise in Cases Involving Blue-Collar Women
--------------------------------------------------------
Two years after the U.S. Supreme Court clarified employer liability in
sexual harassment cases, experts say the problem remains persistent even
while the nature of complaints shifts.

An examination of the caseload at the U.S. Equal Employment Opportunity
Commission reveals that companies are facing a changing and growing
roster of complaints. The EEOC, under its first Latina chair, Ida Castro,
cites an " alarming" rise in cases involving the most vulnerable women in
the workplace: those filling blue-collar and factory jobs, especially
immigrants. EEOC spokesman David Grinberg says that such cases of sexual
harassment are also significant because low-wage jobs are showing one of
the largest increases as a percentage of the national work force.

Consider: On June 1, the EEOC announced a $ 1 million settlement of a
class action against Grace Culinary Systems Inc. and Townsends Culinary
Inc. involving allegations of sexual harassment against 22 Hispanic women
who worked at a food processing plant in Laurel, Md. The workers, all
recent immigrants from Central America who speak little English, claimed
they were subjected to sexual groping and requests for sex from male
managers and co-workers over a period of several years.

Women who rejected the sexual advances were given menial or more
difficult assignments; two pregnant women who refused were demoted and
then fired; another woman was locked in a walk-in freezer by her
supervisor after she rejected his advances.

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

A May 26 ruling by the U.S. Court of Appeals for the 6th Circuit
unanimously affirmed an award of damages totaling $ 407,364 to Sharon
Pollard, the control room operator of a DuPont hydrogen peroxide plant in
Tennessee, and $ 252,997 to her attorneys.

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

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

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

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

                              New Landscape

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

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

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

Statistically, it may be too soon to tell whether the two rulings and the
burst of corporate training they prompted have made a difference.
According to EEOC data, sexual harassment claims made up 5.7 percent of
complaints received in 1997 and 6.2 percent received in 1999. At the same
time, EEOC data show that the cost of sexual harassment cases is rising:
Employers paid out $ 12.7 million in EEOC settlements in 1992 and $ 50.3
million in 1999.

Specialists in sexual discrimination and harassment litigation say they
are not surprised by the persistence of the problem, despite all the
money spent by companies trying to shield themselves against such claims.
"I have to believe it has made a dent in the situation," says Nancy
O'Mara Ezold, a Philadelphia-area litigator and outgoing chair of the
Women's Law Project in Philadelphia. "Has it made the kind of difference
the public thinks it has made? My response would be no."

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

The reason, Mathiason says, is that the Supreme Court's 1998 decisions,
in putting a new emphasis on the effectiveness of company policies and
corrective actions, have made such blue-collar cases more likely to be
financially viable for plaintiffs attorneys. "When you take one of these
cases alone, you're looking at very small damages because there is a
low-paying job" involved, Mathiason explains. "Now, when you focus
instead on what the company did in response, you have something an
attorney can use to enrage the jury and argue for punitive damages." As a
result, Mathiason adds, there has been an increase not only in low-wage
sex harassment cases, but also in cases of harassment based on race,
gender, ethnic origin, and other reasons.

Companies are still learning how to deal with workplace harassment and
discrimination cases, Mathiason says. The first phase, the rush to adopt
corporate harassment policies and procedures, occurred in the first two
years after the Supreme Court rulings, he says. Mathiason says that most
companies are now in the second phase: training managers to investigate
and document harassment complaints properly. Three years ago, Mathiason
notes, Littler's investigation-training seminar for human resources
professionals attracted five people. Last year, he says, there were 25,
and this year, there were 35 and a waiting list of about 25 more.

Joseph A. Slobodzian reports on the federal courts for The Philadelphia
Inquirer and writes regularly about legal issues. This article was
distributed by the American Lawyer Media News Service. (By Joseph A.
Slobodzian, Legal Times, August 14, 2000)


* NCD Report Says ADA Enforcement Scheme Lacks Funds and Leadership
-------------------------------------------------------------------
Saying that the ADA's impact has been "seriously diminished" by an
enforcement scheme that is plagued by underfunding and lack of
leadership, a report issued by an independent federal agency highlights
perceived shortcomings and makes more than 100 specific recommendations
for change. The federal agencies that enforce the ADA, the National
Council on Disability report says, "have been overly cautious, reactive,
and lacking any coherent and unifying national strategy."

Despite its criticisms, the report says that the federal agencies
responsible for implementing the ADA, which primarily include the Equal
Employment Opportunity Commission and the Department of Justice, have
shown a "great willingness" to improve enforcement, and its ultimate tone
is optimistic.

Notable among the report's specific findings and recommendations are the
following.

As to the DOJ, which enforces Titles II and III of the ADA, the report
noted the delays that result from the multiple review levels within the
current administrative structure. It also said that collaboration is
hampered because different sections within the department are housed in
different locations. It suggests that the DOJ work to improve its
data-entry and data-analysis processes, and it also urges the agency to
issue additional regulations and subregulatory guidance.

The EEOC, the report says, has failed to take a sufficiently active role
in responding to negative and inaccurate media comments about the ADA.
The agency should also litigate more class action suits, it says, and
should issue more clear guidance regarding the legality of
disability-based distinctions in employer-provided health insurance.

The Department of Transportation, recommends the report, should begin
training to improve its investigation procedures and should provide a
formalized technical assistance program regarding its enforcement of ADA
requirements.

The report recommends that the Federal Communications Commission
establish a committee on disability issues, including issues relating to
the provision of telecommunications relay services. (Disability
Compliance Bulletin, August 11, 2000)


* SEC New Regulation Ends Selective Disclosure by Public Companies
------------------------------------------------------------------
Last week, the Securities and Exchange Commission adopted Regulation FD,
to end the practice of selective disclosure to securities analysts by
public companies in closed conference calls and one-on-one meetings.

Without offering any guidance on what constitutes material information,
the new rule allows the SEC to bring enforcement actions against public
companies that selectively disclose such material information to analysts
and investors before disclosing it publicly.

This well-intentioned rule is unlikely to improve disclosure and may
decrease the amount of independent analyst research available to
investors. It may also compromise the ability of small, emerging
companies to succeed.

Already, most public companies disclose material information promptly and
fully, based upon existing Nasdaq and New York Stock Exchange
requirements, the potential for legal liability, and plain old-fashioned
concern about their reputations.

The marketplace exacts its own swift and meaningful discipline for faulty
disclosure policies. When a senior Compaq official inadvertently
disclosed declining PC demand last year, management was promptly taken to
task by both the financial press and securities analysts for lack of
control.

With respect to the longstanding practice of limiting quarterly earnings
calls to analysts and large institutional investors, the Internet and
marketplace forces may have already made Regulation FD irrelevant.
CCBN.com and Bestcalls.com are facilitating Webcasts and open conference
calls that allow thousands of small investors to receive real-time
information from companies. Bestcalls recently indicated that within the
previous year alone, the percentage of public companies whose conference
calls were open to small investors had increased to 70 percent from 25
percent.

The other practice targeted by Regulation FD is the one-on-one analyst
meeting. The early indications are that the rule will lead to a decrease
in the number of such meetings. Nobody would condone a public company
telling an analyst in a private meeting that it was going to
significantly miss its quarterly earnings estimates a week before that
information was publicly announced. The information discussed in these
meetings is, however, usually of a much grayer variety. Often, it is
background information on markets, competition, and customers or on new
product developments that may not generate significant revenue for
several quarters.

Typically, well-counseled companies are careful not to discuss material
information, including next quarter's earnings, at such meetings.

One of the SEC's concerns was a sense that the inside game between
analysts and public companies was fixed. The agency cited evidence that
analysts write favorable reports in order to be assured of continued
access to information. Other studies have indicated analysts are less
likely to write critical reports about companies their investment banks
have taken public. Unbiased analysts who did not work on a company's IPO,
however, are the ones most in need of one-on-one meetings. One of the
unintended consequences of Regulation FD will be making it harder for
such analysts to begin covering companies.

Small emerging companies may also be hurt. Large-cap companies, such as
General Electric and Microsoft, are often covered by a dozen or more
analysts. And there is ample publicly available information on them. Of
the roughly 12,000 public companies in the United States, however, the
vast majority are small-caps with limited analyst coverage and little
publicly available information. For them, meetings with analysts are
essential.

Its advocates say Regulation FD largely codifies existing practices, and
the SEC has reiterated that violations will not in and of themselves give
rise to liability in class-action suits for securities fraud. This
argument misses the real concern: The SEC calculated that Regulation FD
will cost companies tens of millions each year in additional legal fees.
(The Boston Globe, August 15, 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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