/raid1/www/Hosts/bankrupt/CAR_Public/000905.MBX              C L A S S   A C T I O N   R E P O R T E R

             Tuesday, September 5, 2000, Vol. 2, No. 172


AMAGASAKI POLLUTION: Japanese Govt to Reject Settlement and Fight on
AMAZON.COM INC: Announces Revision of Privacy Policy
BRIDGESTONE/FIRESTONE: Tire Recall Called a 'Windfall' for Canadians
CHUBB CORPORATION: Milberg Weiss Files Securities Suit in New Jersey
COMPUTER ASSOCIATES: Kirby McInerney Announces Jury Verdict in New York

DT INDUSTRIES: Berman DeValerio Files Securities Lawsuit in Missouri
EMULEX CORPORATION: Schatz & Nobel Files Securities Suit in New York
EPA: Agency Administrator Wants Investigation on Black Employee's Claim
FORD MOTOR: Dealers' Suit Survives Dismissal in Ontario Court
GEORGIA POWER: Fed Judge Sets Ground Rules for Race Bias Suit

GREEN TREE: Second Ct Dismisses Identical Suit over Debt Collection
HMOs: Georgia Doctors Ask JPML to Consolidate Eight 'Slow-Pay' Suits
HOLOCAUST VICTIMS: Payments May Be Held up for Delay in Dismissing Suits
INDIAN TRUST: Lawsuit Still a Headache for Feds; Arguments Scheduled
INMATES LITIGATION: Judge OKs Settlement of 18-Year-Old City of PA Case

JEWEL AND DOMINICK'S: Supermarkers Accused of Milk Price-Fixing
LOCKHEED MARTIN: Judge Dismisses Claims over Toxic Contamination
MONROE COUNTY: Suit over Ban of Short-Term Rentals May Be Certified
PHONE COMPANIES: FTC to Seek Review on Sp Ct Rule on Pricing Changes
POINT MUGU: Navy Report Alleges Age Discrimination at Facility

PROVIDENT MUTUAL: Announces Settlement over Life Insurance Policies
RECORD MAKERS: Miami Judge Asks Consumers to Refile Suit over Pricing
RICHARDSON ET AL: Ark. High Court Decertifies Chemical Exposure Suit
TOBACCO LITIGATION: Industry Asks Fed Judge to Oversee FL Case
TX MEDICAID: Lawmakers Propose Changes to Program after Judge's Ruling

U.S. BANCORP: Resolves Two 1999 MN Suits over Account Holders’ Privacy
VENANGO COUNTY: Commissioners Fire Back on Property Tax Lawsuit


AMAGASAKI POLLUTION: Japanese Govt to Reject Settlement and Fight on
Japan's Justice Minister Okiharu Yasuoka said last Friday September 1 that
the government will reject a court-recommended settlement to an
anti-pollution lawsuit in Amagasaki, Hyogo Prefecture. The central
government and Hanshin Expressway Public Corp., being accused of causing
air pollution along a highway in Amagasaki, will thus fight the case
through the final verdict. Yasuoka said, however, he will make efforts to
conclude deliberations on the case as quickly as possible to settle the
suit at an early stage.

The suit was filed in December 1988 by Amagasaki residents who suffered
such diseases as bronchial asthma caused by air pollution stemming from
heavy road traffic.

The central government had appealed to a higher court after Kobe District
Court last January ordered the central government and the highway operator
to make efforts to curb pollutants and to pay a total of 212 million yen to
the plaintiffs. Osaka High Court recommended both the plaintiffs and
defendants to strike an out-of-court settlement. (Jiji Press Ticker
Service, September 01, 2000)

AMAZON.COM INC: Announces Revision of Privacy Policy
Amazon.com Inc. said it revised its privacy policy and will be informing
its 23-million customers of the changes via e-mail. The new privacy policy
details what personal information Amazon.com gathers, why it collects it
and how it is used. Amazon.com faces several class-action lawsuits that
allege its Alexa software unit secretly intercepted personal data and
transmitted the information to Amazon.com and other parties. A spokesman
said the lawsuits weren't a factor. (St. Petersburg Times, September 01,

BRIDGESTONE/FIRESTONE: Tire Recall Called a 'Windfall' for Canadians
Although the North American recall of millions of Firestone tires has
sparked industrywide shortages, congressional investigations and
class-action lawsuits in the United States, it appears Canadians are taking
the whole mess in stride.

In fact, Canadian consumers may be reaping a windfall because of the recall
of 6.5 million tires made by Bridgestone/Firestone Inc., despite reports
that some tire models can fall apart on the road and cause accidents under
certain conditions. "Actually, they love it," says Bill Minicuci, assistant
manager at a Firestone dealership in Toronto. "They're getting a new set of
tires and they're happy with the product as it was. I've had no one coming
into the store and yelling or screaming at all."

George Iny, president of the Automobile Protection Association, agrees few
complaints have surfaced in Canada since the recall was announced nearly
four weeks ago. "Our assessment of the situation in Canada is that this
recall is going to be a windfall for consumers here," Iny says. "People
with expensive tires are eligible for four new tires (and) the relative
risk appears to be quite low in Canada."

But the incident raises serious questions about how problems with the tires
were undetected for so long, particularly in the United States, where an
extensive monitoring system is in place, Iny says.

The U.S. federal agency responsible for highway safety has received more
than 1,400 complaints about the Firestone tires, including reports of 88
deaths and more than 250 injuries that were reportedly the result of
blowouts, tread separation and other tire defects.

The U.S. government warned consumers that 1.4 million Firestone tires the
manufacturer refused to recall could pose a safety risk and should be
replaced. The National Highway Traffic Safety Administration says it is
examining all 47 million Firestone ATX, ATX II and Wilderness AT tires, not
just the 6.5 million that Bridgestone/Firestone has voluntarily recalled.

In addition to being installed on new Ford and Mazda four-by-fours at the
factory, the three tire models were sold through Firestone stores as
replacement tires, and may have been installed on any truck using the
P235/75R15 size.

Transport Canada has had no reports of deaths, injuries or accidents linked
to the tires. The federal agency's telephone hotline has received only
about a dozen complaints and only three of them warrant further
investigation, spokesperson Russ Reiger said.

Nevertheless, Ford Motor Co. of Canada Ltd., which has 60,000 customers
affected, has authorized 30 other tire brands as replacements, including
Goodyear and Michelin, in addition to Firestone's supplies.

Firestone, for its part, will pay up to $150 per tire for owners to buy
other brands, the company said. Firestone was forced to make the drastic
move because of a worldwide shortage of the company's own tires that could
take months to resolve.

Bridgestone/Firestone Canada said customers must bring their proof of
purchase and the recall tires to a Firestone store or authorized dealer.
Customers can expect a cheque in four to six weeks after the claim is
verified and processed.

Canadian Tire Corp. announced it has made 40,000 tires of various makes
from its stocks available to its dealers across the country in the wake of
Firestone's offer to pay for replacements. (The Toronto Star, September 4,

CHUBB CORPORATION: Milberg Weiss Files Securities Suit in New Jersey
Milberg Weiss (http://www.milberg.com/chubb/)announced that a class action
lawsuit was filed on August 31, 2000 in the United States District Court
for the District of New Jersey on behalf of purchasers of The Chubb
Corporation (NYSE:CB) common stock during the period between April 27, 1999
and October 15, 1999 (the "Class Period") including the former shareholders
of Executive Risk Inc. who exchanged their Executive Risk shares for Chubb
stock in the July 1999 merger.

This action seeks damages for violations of Sections 10(b), 14 and 20(a) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder
and Sections 11 and 15 of the Securities Act of 1933. The defendants are
The Chubb Corporation, Executive Risk Inc., Dean R. O'Hare, Chairman and
Chief Executive Officer, Henry B. Schram, Chubb's Senior Vice President and
Chief Accounting Officer, David B. Kelso, Chubb's Executive Vice President
and Chief Financial Officer, Stephen J. Sills, President and CEO of
Executive Risk, Robert H. Kullas, Chairman of Executive Risk and Robert V.
Deutsch, Executive Vice President and Chief Financial Officer of Executive

Chubb sells personal, standard commercial and specialty commercial
insurance and is one of the largest U.S. underwriters of directors' and
officers' liability insurance.

This action arises out of a scheme to make it appear that serious problems
and increasingly large losses in Chubb's standard commercial insurance
business, which had badly hurt Chubb's results in 97-98, were being
overcome by a combination of rate increases and non-renewal of unprofitable
standard commercial insurance business (the "rate increase/policy
non-renewal initiative"), which enabled Chubb to report
better-than-expected 1stQ 99 earnings per share ("EPS"), indicating Chubb's
business was turning around faster than expected and that Chubb would
therefore achieve stronger EPS growth in 99 and 00 than earlier forecast,
thus artificially inflating Chubb's stock to $76-3/8 per share in mid-99.
This enabled Chubb to successfully complete its extremely important
acquisition of Executive Risk, a highly profitable underwriter of
directors' and officers' liability insurance, in exchange for 1.235 shares
of Chubb stock for each share of Executive Risk stock, a total of 14.8
million shares plus 1.8 million shares reserved for Executive Risk's
executives' options, via a 6/17/99 Registration Statement and a 6/17/99
Merger Proxy and other false and misleading public statements.

The inflation of Chubb's stock price reduced the number of shares Chubb had
to issue to acquire Executive Risk, saving Chubb at least$300-$400 million,
while enabling the top three insiders of Executive Risk to receive millions
in special benefits and payments upon the sale of Executive Risk to Chubb.
However, just eight days after Chubb's acquisition of Executive Risk, Chubb
shocked the markets by revealing much worse-than-expected 2ndQ 99 EPS due
to increasing losses in its standard commercial insurance business, later
revealing that its "rate increase/policy non-renewal initiative," which
prior to the merger defendants had consistently represented was beneficial
and would continue to benefit Chubb's 99 EPS, would have no positive impact
on Chubb's results until mid-2000 at the earliest. Chubb's stock
immediately declined and continued to fall, to as low as $44 in mid-10/99,
as Chubb continued to report worsening results for its standard commercial
insurance business, which caused Chubb's 99 EPS to decline sharply from its
98 EPS.

Plaintiff alleges that defendants' materially false and misleading
statements, included, among others:

* That renewal rate increases were sticking.

* That Chubb was sending a strong message that its business was getting

* That its CEO was totally confident that the rate increase/non-renewal
   strategy was working.

* That Chubb's stock was undervalued and there was more good news ahead.

* That Chubb's standard commercial combined loss ratio (excluding
   catastrophes) would improve in 1999 and 2000.

The Private Securities Litigation Reform Act of 1995 (the "PSLRA") sets
forth the following requirements, among others, for any person seeking to
serve as a representative:

Each plaintiff seeking to serve as a representative party on behalf of a
class shall provide a sworn certification, which shall be personally signed
by such plaintiff and filed with the complaint, that:

(1) states that the plaintiff has reviewed the complaint and authorized
     its filing;

(2) states that the plaintiff did not purchase the security that is the
     subject of the complaint at the direction of the plaintiff's \
     counsel or in order to participate in any private action arising
     under this chapter;

(3) states that the plaintiff is willing to serve as a representative
     party on behalf of a class, including providing testimony at
     deposition and trial, if necessary;

(4) sets forth all of the transactions of the plaintiff in the security
     that is the subject of the complaint during the class period
     specified in the complaint;

(5) identifies any other action under this chapter, filed during the 3-
     year period preceding the date on which the certification is signed
     by the plaintiff, in which the plaintiff has sought to serve as a
     representative party on behalf of a class; and

(6) states that the plaintiff will not accept any payment for serving as
     a representative party on behalf of a class beyond the plaintiff's
     pro rata share of any recovery, except as ordered or approved by
     the court in accordance with paragraph (4). 15 U.S.C. Section 78u-

In addition, the PSLRA provides that the Court shall appoint as Lead
Plaintiff the member or members of the class that the Court determines to
be most capable of adequately representing the interests of class members.
In determining the "most adequate plaintiff," the PSLRA provides that the
Court shall adopt a rebuttable presumption that the most adequate plaintiff
is the person or group that has either filed a complaint or made a motion
for appointment as Lead Plaintiff, has the largest financial interest in
the relief sought by the class, and otherwise satisfies the requirements of
Rule 23 of the Federal Rules of Civil Procedure. 15 U.S.C. Section 78
u-4(a)(3)(iii). At the Lead Plaintiff selection stage, this latter
requirement involves a preliminary showing that the proposed Lead
Plaintiff's claims are typical of claims of the class members, and that the
Lead Plaintiff will be an adequate representative of the class. Any member
of the alleged class may seek to be appointed as Lead Plaintiff, even if
that person has not filed a complaint.

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

COMPUTER ASSOCIATES: Kirby McInerney Announces Jury Verdict in New York
The law firm of Kirby McInerney & Squire, LLP announced on August 1 that,
on August 31, 2000, a jury in the United States District Court for the
Eastern District of New York in Brooklyn rendered a verdict following trial
against Computer Associates International, Inc. (NYSE: CA).

The jury found Computer Associates liable for violation of the Williams Act
provisions of the Securities Exchange Act of 1934, 15 U.S.C. Section 78n,
and the SEC's implementing regulations, in connection with Computer
Associates' acquisition of On-Line Software, Inc. in 1991.

The jury found that Computer Associates violated the so-called "Best Price
Rule" by paying greater consideration per share for the holdings of one
On-Line shareholder than was paid to all others. The "Best Price Rule"
requires that all shareholders in a tender offer be offered the best price
offered to any of them.

Class counsel believes that the jury verdict translates into a judgment of
$6 million for the class, exclusive of interest.

The plaintiff class was represented by Roger W. Kirby and Joanne M. Cicala
of Kirby McInerney & Squire, LLP, a firm that specializes in complex
litigation, including securities class actions. The firm's efforts on
behalf of shareholders in securities litigation have resulted in recoveries
totaling hundreds of millions of dollars, and its achievements and quality
of service have been chronicled in published decisions.

Class counsel believes that this was the first jury verdict in favor of
plaintiffs in any class action brought under SEC rule 14d-10, and it is the
second time in approximately three years that Kirby McInerney & Squire has
obtained a favorable jury verdict in a trial of claims in a class action
under the Federal securities laws.

Contact: Kirby McInerney & Squire, LLP, New York Roger W. Kirby,
Esq./Andrea Bierstein, Esq., 212/371-6600 abierstein@kmslaw.com

DT INDUSTRIES: Berman DeValerio Files Securities Lawsuit in Missouri
DT Industries, Inc. (Nasdaq: DTII) has been named as a defendant in a
shareholder class action lawsuit filed in the United States District Court
for the Western District of Missouri. The action, brought by Berman,
DeValerio & Pease, LLP, www.bermanesq.com, seek damages for violations of
the federal securities laws on behalf of all investors who purchased DTI
common stock between September 29, 1997 and August 23, 2000 (the "Class

The complaint alleges DTI and certain of its current and former officers
with violations of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. On August 23, 2000, DTI disclosed that its
independent auditors had requested additional time in order to continue its
investigation into overstatements of certain asset accounts at DTI's
wholly-owned subsidiary Kalish, Inc. The Company further advised that "the
discrepancies are likely to be material and could impact previously
reported earnings for the 1997, 1998 and 1999 fiscal years, and for the
fiscal quarters during those years and during fiscal year 2000." In
addition, the Company stated that it had placed the senior financial
officer of Kalish on administrative leave and had accepted the resignation
of the Senior Vice President of Finance and Administration of DTI. As a
result of these revelations, NASDAQ halted trading in DTI stock.

Contact: Alicia M. Duff, Esq. at (800) 516-9926 or bdplaw@bermanesq.com

EMULEX CORPORATION: Schatz & Nobel Files Securities Suit in New York
A class action lawsuit has been filed in the United States District Court
for the Southern District of New York on behalf of all persons who sold
common stock or call options in Emulex Corporation (Nasdaq: EMLX) or
purchased put options in Emulex on August 25, 2000 between the opening of
the market at approximately 9:30 a.m. EST and 1:29 p.m. EST (before trading
of Emulex securities resumed following a halt of trading) (the "Class").
The Defendants in the class action lawsuit are Internet Wire, Inc. and
Bloomberg, L.P.

The class action complaint alleges that Internet Wire and Bloomberg
violated Section 10(b) of the Securities Exchange Act of 1934 by recklessly
disseminating materially false and misleading information concerning
Emulex. Specifically, the class action complaint alleges that at or about
9:30 a.m. EST on Friday, August 25, 2000, at the opening of the securities
markets, Internet Wire disseminated a bogus "press release" which purported
to originate from Emulex, and stated that Emulex's net income would be
revised downward, that the Securities and Exchange Commission was
conducting an investigation into Emulex's accounting practices, and that
Emulex's Chief Executive Officer had resigned. At approximately 10:13 a.m.
EST on Friday, August 25, 2000, Bloomberg News falsely reported the alleged
resignation of Emulex's CEO and the alleged SEC accounting investigation,
and at approximately 10:14 a.m. EST on Friday, August 25, 2000, Bloomberg
News falsely reported the alleged restatement of results. As a result of
Defendants' false statements, the price of Emulex stock dropped
precipitously, from an opening price of $110, to a low of $43 before
trading was halted. After it was determined that the "press release" and
the information disseminated by the Defendants were "bogus," trading in
Emulex securities resumed at 1:30 p.m. on August 25, 2000 with Emulex
trading at $120 per share, and the price of Emulex stock closed on August
25, 2000 at $105.75 per share.

Contact: Andrew M. Schatz, or Jeffrey S. Nobel, or Patrick Klingman, or
Robert W. Cassot, all of Schatz & Nobel, P.C., 800-797-5499,

EPA: Agency Administrator Wants Investigation on Black Employee's Claim
Environmental Protection Agency Administrator Carol M. Browner wants the
inspector general's office to investigate a black employee's claim that a
supervisor ordered her to clean a toilet for Browner during a 1993 agency

The Washington Post reports that Anita Nickens -- an environmental
specialist leveled the charge at a rally held by dozens of EPA employees to
protest what they called rampant bias at the federal agency.

Browner said Nickens' charge is "so abhorrent and blatantly discriminatory
that I have asked for a full-scale investigation into this matter." She
said it is "even more disturbing that this may have been done in my name by
some supervisor, since I had no knowledge of the incident and obviously
would never condone such behavior."

The EPA was recently ordered to pay $600,000 to the plaintiff in a race and
sex discrimination case.

The protesters said they are planning to file a class action discrimination
lawsuit against the agency. (United Press International, September 4, 2000)

FORD MOTOR: Dealers' Suit Survives Dismissal in Ontario Court
The Ontario Court of Appeal has dismissed a motion by Ford Motor Co. of
Canada Ltd. that would have allowed the company to appeal a lower court
ruling allowing dealers class-action status. Ford dealers claim the auto
giant should be liable for damages because they could be hurt financially
by a company decision last fall to turn all Lincoln Mercury outlets into
Ford stores. A panel of three judges did not give reasons for the decision,
but they ordered Ford to pay the legal costs of the dealers.

Sonja Falkenberg, director of the Canadian Ford Dealers Association, said
the decision represents one of the first times that a group of franchisees
has been successful in taking such a case to trial. "Whether or not we are
successful at trial, the fact is, car dealers are now a force to be
reckoned with," Falkenberg said. "This is important because dealers are
behind the eight ball from the beginning of their relationship with the
manufacturer due to skewed franchise contracts that are written by, and
heavily weighted in favour of, the manufacturer."

Ford spokesperson Lauren More said the company, which has 565 dealers,
expects to win at trial. "We are confident the outcome will be favourable
to Ford," More said.

Oakville-based Ford of Canada turned 124 Lincoln Mercury dealers into Ford
or Ford Lincoln stores in an effort to promote brand awareness last fall.
Many Ford dealers nearby said the move would eventually reduce their

Four Ford dealers had initiated legal action a few months earlier, arguing
the manufacturer would be breaching their franchise agreements since it
allowed new Ford outlets within 15 kilometres of existing stores without
market research justifying the move.

The dealers sought class-action status on behalf of all dealerships so they
could seek a declaration at trial that Ford breached its contract by "
rebranding" stores.

A favourable decision for dealers at trial would allow them to pursue
damages without needing to prove Ford's liability in each case.

A motions judge rejected the dealers' original request, but a divisional
court overturned the decision. That court said a test case involving a few
dealers would determine common issues if the parties would bind themselves
to a decision.

Ford countered that it shouldn't be bound by a decision that could apply to
other dealers later. Ford lawyers also argued there was no claim for
damages and no interest in litigation from dealers except the four
plaintiffs. Ford said a number of procedural steps need to be taken before
the case reaches trial.

Falkenberg said her group hopes to get a trial date for late next year or
early 2001. (The Toronto Star, September 1, 2000)

GEORGIA POWER: Fed Judge Sets Ground Rules for Race Bias Suit
The federal judge in the racial discrimination lawsuit against Georgia
Power Co. set ground rules for communications with employees who are
prospects to join a class action. Under an order issued by U.S. District
Judge Orinda D. Evans, lawyers for the seven employees who brought the suit
are free to discuss the case with other employees who initiate contact with

At the same time, Georgia Power management can discuss the case with any
employee who initiates contact to provide assistance with the company's
defense. The company can also discuss the case with management employees
who have not sued the company if their responsibilities make them necessary
for the company's case.

Though the company was proscribed from contacting any prospective class
member for purposes of discouraging participation in the case, the company
retains the right to keep employees informed about the status of the case.

No limitations will be placed on either side's rights to speak with the
news media, so long as it does not use the press to solicit participation
or discourage participation in the lawsuit.

The lawsuit filed July 27 by three Georgia Power employees alleges the
utility and its parent, Southern Co., foster a "pattern of discriminating
against African-Americans" who work there and show "reckless indifference"
to a racially hostile workplace. The plaintiffs are seeking class-action
status to represent 2,100 African- American employees. Since then, four
more employees of Georgia Power and other Southern Co. subsidiaries have
joined the lawsuit. In addition, more than 300 African- American employees
have contacted attorneys for the employees who sued about the lawsuit, the
attorneys say.

The guidelines parallel those issued in a similar lawsuit filed against
Coca-Cola Co. in April 1999.

Federal court rules in the Northern District of Georgia generally prohibit
both sides from communicating with prospective class-action lawsuit members
without court approval. (The Atlanta Journal and Constitution, September 1,

GREEN TREE: Second Ct Dismisses Identical Suit over Debt Collection
When similar suits seeking to certify an identical proposed class were
filed in separate courts on the issue of collecting discharged debt, the
second court dismissed the second action based on the "generally
recognized" doctrine of federal comity. (Peak v. Green Tree Fin. Servicing
Corp., et al., No. C 00-0953 SC (N.D. Cal. 7/7/00).)

In August 1999, Lavern Bigelow filed a class action complaint in the U.S.
District Court for the Eastern District of California containing 10 counts
for relief against Green Tree Financial Servicing Corp. and its parent,
Conseco Inc. Bigelow alleged violations of the U.S. Bankruptcy Code, the
Racketeer Influenced and Corrupt Organizations Act and the Fair Debt
Collection Practices Act.

In March 2000, James N. Peak filed a class action complaint in the U.S.
District Court for the Northern District of California containing eight
claims for relief against the same defendants. Similar to Bigelow, Peak
alleged violations of the U.S. Bankruptcy Code and the FDCPA. Bigelow's and
Peak's allegations defining their proposed classes were identical. Further,
both Bigelow and Peak declared themselves to be an adequate class

Based on Bigelow's earlier-filed action, Green Tree and Conseco moved the
court in Peak's suit for an order dismissing his claims or for the issuance
of a stay. The court dismissed the claims without prejudice.

                             Three factors

The court explained, "Under the generally recognized doctrine of federal
comity, a district court may decline jurisdiction over an issue that is
properly before another district court." Focusing on its own circuit, the
court stated, "In the Ninth Circuit, the 'first-to-file' rule embodies the
principles of federal comity." Under this rule, a District Court may
transfer, stay or dismiss an action when a similar complaint has been filed
in another district, the court said.

In determining whether to apply the "first-to-file" rule, the court stated
that it must look at three factors: "the chronology of the two actions, the
similarity of the parties, and the similarity of the issues." Concerning
the chronology of the two actions in question, the court noted that there
was no dispute that Bigelow's suit predated Peak's.

As for the similarity of the issues, the court asserted that there could be
no question that the issues presented in the two cases were similar. In
reference to this factor, the court specifically referenced the fact that
the cases need only involve similar issues, not identical issues. The court
then observed that the "alleged offending behavior" in both cases was the
defendants' alleged practice of "collecting and/or attempting to collect
discharged debt as a continuing personal liability." The court also
observed that the claims for relief in the two cases were nearly identical.

The court began its analysis of the final factor, similarity of the
parties, by noting that the named plaintiff in each action was different.
It also noted the defendants' argument that the "key party in interest" in
each case was the identical proposed class. Instead of asserting that the
actions were dissimilar, Peak requested that the court issue a ruling
stating that he was a proper member of Bigelow's proposed class. Peak
solicited the court for a transfer of the matter to the Eastern District.

However, because the issue of whether Peak was a member of Bigelow's
proposed class was not properly before it, the court declined to consider
such a ruling. The court dismissed Peak's action stating, "Though the named
plaintiffs are different, the issues presented in this case sufficiently
duplicate those presented to the Eastern District in Bigelow to justify
dismissing this case." The court stated in conclusion, "Allowing this case
to proceed would both impede judicial efficiency and run a significant risk
of conflicting judgments."

Judge Conti delivered the opinion of the court. (Consumer Financial
Services Law Report, August 21, 2000)

HMOs: Georgia Doctors Ask JPML to Consolidate Eight 'Slow-Pay' Suits
The physician plaintiffs in eight federal class-action lawsuits alleging
that several large HMOs engage in a deliberate pattern of delaying or
refusing to pay valid medical claims have asked the Judicial Panel on
Multidistrict Litigation to transfer and consolidate the suits in the
Northern District of Alabama. In re Healthcare Provider Litigation, MDL No.
1364, motion filed (J.P.M.L., July 7, 2000).

The proliferation of these so-called "slow-pay" lawsuits means that the
nation's largest HMOs are now getting it from both sides, their subscribers
and their health care providers. Most of the same HMOs named as defendants
in these eight suits have also been named as defendants in more than a
dozen lawsuits brought by subscribers who allege that the HMOs have secret
deals with their health care providers to reward the providers for holding
down costs and that those deals improperly influence the doctors' decisions
about medical treatment.

                        The Provider Suits

The plaintiffs in the eight provider suits are doctors, medical practices
or medical associations. Four of the suits are pending in Georgia, two in
California and one each in Alabama and Kentucky. The suits name several
defendants including Aetna U.S. Healthcare, Blue Cross of California, Cigna
Corp., Humana Inc., PacifiCare Health Systems Inc., Prudential Life
Insurance Co. and United Healthcare Corp.

The complaints allege breach of contract and violation of the federal
Employee Retirement Income Security Act. The doctors seek to recover all
outstanding benefits claims that have not been paid in a timely manner in
accordance with an ERISA provision as well as an injunction requiring the
HMOs to pay future claims promptly as required by federal and state law.

The doctors allege that the HMOs delay payment of claims so that they can
collect interest on the premium money, which they are holding in
interest-bearing accounts, thus unjustly enriching themselves at the
expense of patients and providers.

Several states, including Georgia, have enacted prompt pay laws requiring
HMOs to either pay claims assigned by patients to their doctors within a
certain number of days or to notify the providers of its reasons for not
paying the claims. In the case of Georgia, the law requires the payment of
claims within 15 days.

Although half the suits were filed in Georgia, the plaintiffs asked that
the eight cases be consolidated in the Northern District of Alabama in
Birmingham, because it is a more central location for all of the cases than
a Georgia venue would be.

The motion to consolidate and transfer asserts that all of the cases are in
the early stages of litigation and that no discovery has been started in
any of them. Consolidation would avoid duplicative discovery as many of the
discovery issues are common to all of the cases. Those include:

  -- whether the defendants have engaged in a pattern and practice of
      delaying payments;

  -- whether the conduct of the HMOs has violated their contracts with

  -- whether the defendants have violated state "prompt pay" laws; and

  -- whether the plaintiffs have been harmed by the defendants'

Apparently fearing their suits might be lumped in with the suits brought by
HMO patients, the plaintiffs were careful to distinguish between their
suits and the class action suits brought by the HMO subscribers that have
been consolidated in the Southern District of Florida before U.S. District
Judge Frederico A. Moreno ( In re Humana Inc. Managed Care Litigation, MDL
No. 1334 S.D. Fla. ).

The subscriber suits allege that patients have been physically injured
because they have been denied adequate medical care as a result of the
secret physician incentive plans and other HMO practices, while the
provider suits involve claims that health care providers are suffering
financial damages because of the HMOs' refusal to pay claims at all, or in
a timely manner, the plaintiffs explained. Since the two kinds of suits are
distinctly different, judicial economy and the convenience of the parties
would not be served by consolidating them, the plaintiffs said.

The motion was filed by Dianne Nast and Brian D. Long of Roda & Nast in
Lancaster, Pa., and Kenneth S. Canfield and Ralph I. Knowles of Doffmeyre,
Shields, Canfield & Devine in Atlanta. (Managed Care Litigation Reporter,
August 14, 2000)

HOLOCAUST VICTIMS: Payments May Be Held up for Delay in Dismissing Suits
Payments to the long-neglected victims of Nazi-era labor policies could be
postponed until next year because of delays in dismissing class-action
lawsuits in the United States, an official said. ''The plan to start
payments by the end of this year is very, very threatened,'' said Wolfgang
Gibowski, the spokesman for a fund set up by German government and industry
to pay people forced into slave labor under the Nazi regime.

German companies launched the fund last year under pressure from the
class-action suits and have insisted the suits be dismissed as part of the
deal setting up the fund. Lawmakers also want the remaining cases dismissed
before they will vote to transfer the government's share to the fund, said
Dieter Kastrup, Germany's ambassador to the United Nations and chairman of
a 27-member foundation board set up to administer the fund.

The $4.6 billion fund is being split 50-50 by the German government and
industry. It is to be paid to more than 1 million victims mostly non-Jews
from Eastern Europe of the Nazis' campaign to keep their factories running
as they waged war on Europe.

There are 55 remaining court cases in the United States concerning Nazi
labor. They have been consolidated in the hands of three judges. Gibowski
said that for payments to begin by the end of the year, the cases would
have to be dismissed by mid-October. But members of the foundation board
were told that the dismissals will likely take until the end of November.
Another hurdle has been the companies' inability to collect their half of
the fund: Contributions have been stuck at about $1.5 billion for weeks.
Still, Kastrup emphasized that payments to survivors would begin even
before industry comes up with its complete share.  (AP Online, September 1,

INDIAN TRUST: Lawsuit Still a Headache for Feds; Arguments Scheduled
A multibillion-dollar lawsuit over mismanagement of American Indian trust
accounts continues to be a headache for the federal government more than a
year and a half after a judge held two Cabinet secretaries in contempt of

Since the February 1999 contempt ruling, Interior and Treasury department
officials have admitted they improperly destroyed thousands of records of
the $ 500 million account system. U.S. District Judge Royce Lamberth
temporarily halted the cross-country move of a Bureau of Indian Affairs
computer center, scolding the Interior Department for poor security
safeguards. And a court-appointed investigator - whose bills the government
is paying to the tune of about $14,000 a month - said government lawyers
should be sanctioned for making frivolous legal arguments.

With arguments in a crucial government appeal scheduled for Tuesday
September 5, lawyers for the Indians asked Lamberth for another contempt
citation against officials including Interior Secretary Bruce Babbitt and
Assistant Interior Secretary Kevin Gover. Lamberth's earlier contempt
ruling cited Babbitt, Gover and then-Treasury Secretary Robert Rubin for
improperly withholding and destroying records.

The Indians' lawyers claim Interior officials retaliated against Mona
Infield, a BIA computer center supervisor who signed an affidavit objecting
to the center's move to suburban Washington. Beginning just after Lamberth
halted the move, Infield said, her supervisors rescinded a job offer that
would have kept her in Albuquerque, N.M., posted armed guards at her
workplace and eventually told her to stay at home in an assignment with a
paycheck but no duties.

"It's repugnant for a secretary and assistant secretary to engage in this
kind of conduct, where they punish an Indian employee for doing her job,"
said Dennis Gingold, a lawyer for the Indians. "The department did not
retaliate against Mona Infield," Interior Department spokeswoman Stephanie
Hanna said. Hanna said Infield rejected a chance to move with the computer
center or take another job in Albuquerque.

The retaliation charge is the latest in a legal exchange that has become
increasingly bitter and personal since the contempt ruling. Gingold has
referred to government lawyers as "dumb and dumber" and Gover called the
plaintiffs "potentially a very dangerous and destructive force."

Elouise Cobell, the Blackfeet Indian who is the lead plaintiff in the case,
said on a radio talk show she would like to see tougher personal sanctions
against Gover and other Interior officials. The government paid more than
$600,000 in contempt penalties. "In the outside world, if you screw up with
people's money, you end up in jail," said Cobell, chairwoman of the
Blackfeet National Bank in Browning, Mont. "That's the problem here, that
the Department of the Interior has never had to pay for what they've done
to screw up people's lives on Indian reservations."

"If federal officials could end up in jail, not for criminal conduct, but
for the failures of their agencies, then you're never going to get people
to work for the government," responded Gover, the head of the BIA and also
a guest on National Public Radio's Diane Rehm Show. "When you make it
personal, Elouise, you make it all the more difficult for us to recruit the
kind of people that are going to make it possible to fix the system. I
think that's why you do it. I think that you turn it personal in order to
make the job more difficult, because you and your lawyers have staked your
reputations on the proposition that Interior cannot fix it."

The trust accounts stem from an 1887 federal law aimed at dividing
reservations into smaller plots for individual Indians. The federal
government holds that land in trust for the Indians and their heirs -
meaning it cannot be taxed or sold and the government must approve any

Many of the tracts are leased for uses such as grazing, logging, mining or
oil drilling. Proceeds from those leases are supposed to be deposited in
government accounts and then paid to the Indian land holders. There are
currently more than 300,000 accounts.

Since the beginning, however, those accounts have been mismanaged in almost
every way imaginable. Records for many accounts were never kept, while
documentation for others was lost, destroyed or filed so haphazardly it is
nearly impossible to find. Some of the money was stolen or used for other
federal government purposes. Some lease proceeds never were collected.
Thousands of the accounts have money in them but no names attached.

Congress passed a law in 1994 ordering the Interior Department to fix the
problems with the accounts. Cobell and other account holders sued in 1996,
seeking court oversight of the reform process and a full accounting of all
the money that should be in the accounts - which Gingold says is likely to
be more than $10 billion.

In a December ruling, Lamberth called the mismanagement "government
irresponsibility in its purest form." He said he would keep oversight of
trust account reforms and ordered the government to report its progress
every three months.

A three-judge federal appeals panel will hear arguments in a government
appeal which claims Lamberth does not have the authority to oversee the
reforms. The Justice Department lawyers representing the government also
argue that Lamberth cannot require a full accounting of how much money
should be in each ledger.

Gingold said the government's arguments boil down to a claim that the
government is not fully accountable for the Indians' money. "It's
aggravating for every trust beneficiary for the secretary (Babbitt) to
claim he has no trust responsibility to them, that if he steals the money
or if he loses the money he's not responsible," Gingold said.

Gover said that because so many records are missing, any attempt at a full
accounting would be guesswork. "Any accounts that predated 1994, we cannot
provide an accounting that anyone would find persuasive," Gover said. But
Gover also indicated he disagreed with the Justice Department decision to
file an appeal. "I would be concerned if the judge lost oversight," Gover
said. "The pressure of a judge helps us get things done. It helps us get
money from Congress." (The Associated Press State & Local Wire, September
4, 2000)

INMATES LITIGATION: Judge OKs Settlement of 18-Year-Old City of PA Case
Seior U.S. District Judge Norma L. Shapiro has officially closed the books
on Harris v. City of Philadelphia, the long-running prison-overcrowding
lawsuit that has been on her docket since 1982, by approving a final class
action settlement of the case that will send future disputes to an
arbitrator, at least for the next two years.

The decision means that Shapiro now will never rule on a pending contempt
motion against the city that could have resulted in millions of dollars in

But Shapiro made it clear in her 34-page opinion that she was ending the
case only because the city now has the power to end it unilaterally by
invoking the provision in the Prison Litigation Reform Act that allows
defendants to simply call for an immediate termination of any pending
consent decree. Shapiro also used the opinion as a chance to dole out
compliments to several key players in the case for their hard work over the
years, including plaintiffs' lead attorney David Richman of Pepper
Hamilton; the city's current lead lawyer, David J. Wolfsohn of Hangley
Aronchick Segal & Pudlin; and the former court-appointed full-time special
master in the case, William G. Babcock. Babcock has recently been appointed
to the prison system's Board of Trustees. In a footnote, Shapiro commented
that Babcock "is an exceptionally gifted attorney whose judgment and skills
will serve the PPS well." Also praised was Philadelphia Deputy Managing
Director Dianne Granlund, who has been responsible for controlling the
prison population by deciding which prisoners to release since Shapiro
returned control of those decisions to the city in 1995." The efforts of
Ms. Granlund to control the prison population by encouraging the
enforcement of bail guidelines and managing bedspace at PPS have been
outstanding," Shapiro wrote.

But Shapiro also used the opinion to take a few parting shots at District
Attorney Lynne Abraham, a long-time critic of Shapiro's handling of the
case, by flatly rejecting some of Abraham's concerns about the settlement.
In a letter to the City Solicitor that was also sent to the court, Abraham
said she does not object to the settlement agreement but encourages the
city to build additional prisons if it does not have sufficient bedspace to
accommodate its current and anticipated prison population. But Shapiro said
"It is ironic that the District Attorney led the efforts to enact the PLRA,
legislation denying a federal court the power to order an increase in
prison capacity. Had the District Attorney worked with the city and indeed,
the court, to encourage the building of additional prison facilities such
as a replacement for the House of Correction, it might have become a
reality under court supervision."

Abraham also said in the letter that she believes it "unwise for the city
to agree that any penalty monies paid to the plaintiffs shall be
distributed at the discretion of plaintiffs' counsel, to an organization or
institution engaged in work that is beneficial to the inmates of the PPS or
to ex-inmates of the PPS." But Shapiro said it was clear that city's
lawyers "had confidence in the ability of plaintiffs' counsel to
disseminate any funds to appropriate institutions." She then rebuked
Abraham for suggesting otherwise. "It is an affront to his integrity to
insinuate that he may not be trusted to choose the beneficiaries of funds
available for his clients. The court has observed, both in and out of
court, the demeanor and behavior of plaintiffs' counsel, David Richman,
Esquire, a partner in Pepper Hamilton LLP, in this action for almost two
decades. The court is confident that Mr. Richman will choose appropriate
beneficiaries, should penalty funds become available by the terms of the
agreement," Shapiro wrote.

Turning to the main task before her whether to approve the settlement and
end the case Shapiro was somewhat wistful in concluding that the settlement
was a fair one. "It is with some concern that the court will approve this
settlement. After 18 years, the population of the Philadelphia Prison
System has nearly doubled. Although new facilities have been, and are being
built, they are immediately filled beyond capacity," Shapiro wrote.

The Curran Fromhold Correctional Facility, or CFCF, was completed in 1995,
but inmates there are now being housed in rooms without plumbing that were
originally intended to be offices or multi-purpose rooms, she noted.And the
city's 10-year plan, proposed in 1994, contemplated closing the House of
Correction, which is almost 100 years old and was deemed unworthy of
repair. But now, six years later, Shapiro said, the city has agreed to make
extensive repairs "simply to keep the facility operable for another few
years." "Why then is this a fair settlement?" Shapiro asked." The answer
lies in the PLRA," she wrote, a law that has dramatically changed the
ground rules in litigation over prison conditions. In the PLRA, which was
passed in 1996, Shapiro said, Congress "decreed that a federal court should
not enforce legitimate consent decrees entered voluntarily by states and
municipalities unless it found unconstitutional conditions." That
limitation, she said, makes the two consent decrees in Harris "possibly
unenforceable if challenged."

In the 18 years that she has had the case, Shapiro said, the conditions in
the Philadelphia prison system "have improved in some respects under court
supervision." As a result, she said, if the city invoked the PLRA provision
to terminate the consent decrees, the court would have just 90 days to
decide whether the current conditions are unconstitutional, and "it is not
at all certain that the plaintiffs would prevail in such a presentation."
At the time the lawsuit was filed, Shapiro said, "there is no doubt" that
the conditions in the Philadelphia prison system were unconstitutional."
But the improvements over the ensuing years make the result of a present
challenge unclear. The only thing clear is the time, expense and
uncertainty of the litigation," Shapiro wrote. Without directly criticizing
the PLRA, Shapiro strongly suggested that the law gave the city the power
to defy court orders by offering a simple way out if it were ever held in
contempt. "It is possible that the city could violate some provisions of
the decrees with impunity. Should the court find the city in contempt for
violating one or more provisions of the consent decrees, the city would
probably move to vacate the decree under the PLRA," she wrote. If the city
were to file such a motion, she said, "neither monitoring nor funding for
the House of Correction improvements might be made available.

"This proposed settlement, she said, "while less than what the city had
originally promised in its 1986 and 1991 consent decrees, does benefit the
plaintiff class." The settlement agreement provides for continued
monitoring of conditions by consultants to be hired by the city and
requires that the city fund some House of Correction maintenance. The
consultants will report to the City Solicitor and to the prison board of
trustees.Shapiro said the city benefits from the settlement as well because
"it is released from federal court jurisdiction without the burden of
further litigation and financial penalties for contempt." She therefore
concluded that the proposed settlement "is fair, reasonable and in the best
interests of the inmate class." In a wistful coda to the opinion, Shapiro
wrote: "Eighteen years is generally the age at which a child is declared
emancipated. Therefore ... the court approves the settlement of the parties
dated June 28, 2000 and declares the city emancipated from federal court
supervision of the PPS." (The Legal Intelligencer, September 5, 2000)

JEWEL AND DOMINICK'S: Supermarkers Accused of Milk Price-Fixing
Jewel and Dominick's supermarkets were accused of conspiring to hike the
price of milk $1 a gallon higher than the rest of the country.

It was bad enough that milk prices mysteriously soared to $3.69 a gallon
even while wholesale prices nationwide were dropping. But worse,
economics-impaired City Hall decided to get involved. Instead of trusting
the invisible hand to correct this minor market muddle (not to mention the
courts, where a class-action suit alleging milk price gouging was filed),
Mayor Richard Daley saw fit to thrust his own clumsy paw into the matter.

He commissioned the Food Police. Under code name "Operation Food Basket,"
the city Department of Consumer Services will send in teams of inspectors
to conduct weekly grocery checks, prowling for suspicious price
fluctuations in such staples of good nutrition as milk, Kraft macaroni &
cheese and Frosted Flakes. Armed with electronic price-scanning devices,
the inspector team will make unannounced weekly visits to supermarkets and
convenience stores. "We've got a rogue bag of pricey Doritos on Aisle 12.
Call for backup!"

The Daley team has workers available to take on this silly venture? No
wonder they're staring at a $115 million deficit for next year.

The thinking behind this peculiar free-market theory seems to go like this:
If consumers are supplied with weekly price-checks of about two dozen food
items, shoppers will be able to demand lower prices. And if they don't get
them, the inspectors will haul everybody downtown to find out why.

The irony is that this action comes only weeks after the state's
ill-considered move in June to suspend the sales tax on motor fuels. That
is when gas prices suddenly--and very temporarily--spiked, prompting
legislators to suspend the 5 percent tax for six months, costing the state
tens of millions.

So for the benefit of City Hall, here is a short refresher on how supply
and demand actually works.

    Shopper A has an epiphany. Hey, milk prices are more expensive here
than at my hyper-expensive gas station convenience store. That stinks.

   Shopper A then mentions his beef to Shopper B who has had the exact same

   Pretty soon, everybody's talking milk. Milk news hits the 6 p.m.
newscasts, suggesting conspiracy.

   Outrage spreads across the land.

   Within days, everybody's heading to the hyper-expensive gas station
convenience store for their milk because it's cheaper. Or worse--they're
buying juice.

   The milk bandits, faced with entire supermarket dairy cases of unsold
product rapidly approaching expiration, lower their prices. Crisis over.
(Chicago Tribune, September 1, 2000)

LOCKHEED MARTIN: Judge Dismisses Claims over Toxic Contamination
A judge dismissed the claims of more than 200 residents who had alleged
that toxic contamination from Lockheed Martin's Burbank operations made
them ill and caused their property values to decrease. Los Angeles County
Superior Court Judge Carl J. West further reduced the number of plaintiffs
in a once-massive lawsuit which claims the aerospace giant caused cancer
and other illnesses among Burbank residents by releasing toxic chemicals
into the soil and ground water over decades of defense manufacturing.

Now, there are fewer than 200 plaintiffs left in the state lawsuit that
once included 2,400 residents, said Thomas G. Foley, an attorney for the
residents. Most of the 236 plaintiffs were dismissed because they failed to
provide their lawyers information needed to support their legal claims,
West said.

In addition to those plaintiffs, hundreds more have voluntarily withdrawn
their claims against Lockheed, some under a provision of state law that
allows them to back out without any legal consequences. Lockheed had warned
plaintiffs that they could be held liable for the defense contractor's
legal costs, if Lockheed won at trial.

Earlier this year, West threw out a test case involving 140 plaintiffs,
saying they did not provide either scientific or medical evidence to show
their illnesses were caused by toxic emissions from Lockheed's Burbank
facilities. The plaintiffs in the test case are appealing that decision.

The lawsuit was filed in 1996, after published reports that Lockheed paid $
60 million to more than 1,200 Burbank residents in a confidential
settlement of similar claims. Although Lockheed paid those residents,
company officials have vowed to fight all further suits. "They have had
four years now to try to prove their claims and they have been unable to do
it," said Gail E. Rymer, a Lockheed spokeswoman. "So it's time to close the
books." (Los Angeles Times, September 2, 2000)

MONROE COUNTY: Suit over Ban of Short-Term Rentals May Be Certified
A $ 100 million lawsuit against Monroe County on behalf of 4,000 property
owners will likely receive class certification.

Chief U.S. Magistrate Judge Linnea Johnson recommended class certification
for the case, which was brought by three Keys homeowners against the county
in federal court in May. They alleged that a new county ban on renting
houses to tourists for less than a month is unconstitutional. Although its
up to James C. Paine, a U.S. district judge on senior status, to make a
final ruling on the matter, both sides predict the class certification
recommendation will stand.

Historically, judges tend to follow the recommendation of the magistrate
judge, said James Hicks of West Palm Beach, attorney for the plaintiffs.
That means this is on its way to being the largest class-action case in
Monroe County history.

Karen Cabanas, lawyer for Monroe County, characterized the magistrate
judges ruling as more of a procedural ruling that anything. It doesnt have
any impact on the merits of the case. Cabanas said she wasnt surprised by
the ruling. The case met all the criteria for a class action. Im sure it
will be certified.

The Monroe County Commission enacted the short-term vacation rental ban in
1997 following years of complaints from Keys residents who were fed up with
living next door to what had become mini-hotels. The law applies to most
houses in unincorporated residential neighborhoods in Monroe.

Other property owners had sued the county in state court and lost. But that
suit challenged the constitutionality of the law. The federal lawsuit takes
a different, unusual tack. The case doesnt seek to rescind the law, at
least not outright. Rather, it accuses the county of unjust taking of
property and seeks to force Monroe County to pay the property owners for
their lost rental income about $ 20 million a year. If victorious, the suit
would result in the county taking the law off the books, Hicks predicts.

The county would not be eager to pay every year, said Hicks. Its not that
were trying to bankrupt Monroe County. But on the other hand, this law is
causing dire financial straits for our clients. In fact, the main plaintiff
in the case, Elizabeth Neumont of Pittsburgh, has been forced to sell her
property in the Keys since the lawsuit because she could not afford to
maintain it, he said.

The lawsuit also alleges that the county started enforcing the ordinance
before it became final, therefore is seeking about $ 50 million in lost
income between December 1998 -- when the county began enforcement -- and
March 2000.

The plaintiffs hope for a speedy ruling on the matter of premature
enforcement. That can be decided purely on the facts, said Hicks. All the
judge has to do is look up the state statute. (Broward Daily Business
Review, August 31, 2000)

PHONE COMPANIES: FTC to Seek Review on Sp Ct Rule on Pricing Changes
WorldCom, AT&T, Sprint and federal regulators asked the 8th U.S. Circuit
Court of Appeals to delay a decision that overturned rules used to
calculate prices regional phone companies charge rivals to access their
networks. The Federal Communications Commission said it plans to ask the
Supreme Court to review last month's decision, which the agency said would
mean states and companies would have to revise complicated pricing
structures. (The Washington Post, September 1, 2000)

POINT MUGU: Navy Report Alleges Age Discrimination at Facility
Managers at Point Mugu have engaged in a pattern of discrimination against
older workers, and may have improperly laid off as many as 300 civilian
employees, according to an internal Navy report that questions the base's
policy for evaluating some employees.

Rear Adm. Bert Johnston, who heads the Naval Air Warfare Center Weapons
Division, said the base will name an independent investigator to look into
the charges in the report, which was written in April after more than a
year of study. "The bottom line is that there were some concerns
identified, and we're taking the appropriate action on them," he said.
"We're going to look over our shoulder."

The often scathing report by the Naval Air System Command's inspector
general's office in Washington argues that a 20-year system of awarding
bonuses and raises, called the Demo Project, puts older workers at a
disadvantage when the Navy dismisses employees.

The report's author, Harry Carter, an investigator in the inspector
general's office, further concluded that high-ranking officers at the Naval
Air Systems Command attempted to quash the report, questioned his authority
to handle the investigation and accused him of asking biased questions when
he conducted interviews with managers and workers at Point Mugu and China
Lake naval bases.

Carter wrote that before the Navy began its 1999 civilian staff cuts, he
warned civilian managers at Naval Air Systems Command that they should wait
until the issue had been studied further.

But his warning was ignored. According to an internal memo from the Naval
Air System Command's legal office, lawyers suggested that worker complaints
could be ignored, reasoning that the prospect of the workers filing a
class-action lawsuit was unlikely because the process would be onerous,
expensive, and time-consuming for the parties." Navy brass say they believe
the process is fair and respected among most workers and managers, but
Carter's report contends that there is a flaw in the system that leads
managers to feel they must under-rate some workers in their evaluations.

                Older Employees Get Lower Ratings

He questioned the Weapons Division's commitment to seeking out the details
in his findings. "I can support everything in my report. There's no
question about that," Carter said from his office in suburban Maryland. "My
position is I want to see how this new investigation is going to be

The Demo Project, approved by Congress in 1979 and practiced at only a
handful of bases and in another version at the FBI and CIA, was created to
give managers more flexibility and to reward employees who do outstanding
work, said Ed Rockdale, the acting personnel officer for the Weapons
Division. But managers and workers interviewed by the inspector general's
office say that because money is limited, many managers choose to give
lower ratings to older workers because they have typically reached a pay
ceiling, and could not receive the money.

Some employees believe managers acted to purposely push older workers out.
"They've been giving only average performance ratings to older workers,"
said John Jay, 56, an engineer who was laid off in November. "They did it
deliberately. They knew what they were doing. . . . All of the older
employees were up against these ceilings, and very few are given
outstanding ratings, and couldn't jump over the barriers."

When the Navy began a series of cuts last year as part of the Pentagon's
ongoing belt-tightening, those who received lower ratings were the first to
go--a process that, because of the Demo Project, critics contend adversely
affected older workers, minorities and women. "There's a design flaw in the
system," said Jack Futoran, a lawyer who has filed a lawsuit on Jay's
behalf. "Older employees are topped out. You can't reward them."

Navy officials argue that there are opportunities for employees to contest
their evaluations, and that managers can ask for additional funding if
"there is good cause to exceed it." They also say that workers who receive
more money--typically the most experienced ones--deserve tougher
evaluations. "The standard for someone who's highly paid will naturally be
higher than for someone who is paid less," Rockdale said.

The budget for salaries hasn't changed, Rockdale said, and was based on a
previous amount used before the Demo Project's creation. The program has
been overseen by the Navy's Office of Personnel Management for years, and
that office never chose to end the project, even after a series of critical
employee surveys and analyses.

                Attorney Questions Legality of System

Carter's report, culled from a series of focus-group interviews at Point
Mugu and China Lake, states that many managers feel their hands are tied
because of the limited funding and it scolds top brass for taking the
position "that everything is fine because we have instruction that properly
describes how supervisors are supposed to rate their employees." "I cannot
think of another investigation that I've ever been involved in where
employees stated they were being mistreated . . . and the supervisory
officials supported their allegations, but no corrective actions were
deemed appropriate," he wrote in the 16-page April report. "The people who
work for the Navy are not evil people," Futoran said. "They feel as if
hiding this information is in the national interest, like hiding the plans
for the Normandy invasion. They are flat out wrong."

Futoran also questioned the legality of the Demo Project at Point Mugu,
where it spread from China Lake. Congress approved the program at China
Lake in 1979, but never specifically mentioned the Ventura County base.
Futoran said that because there were no open meetings, and workers never
had the chance to voice an opinion on how they were rewarded, the project
may be invalid there.

Navy officials said they were not prepared to respond to that allegation.
Futoran said the effect on the Navy is potentially large. His client, Jay,
who has not yet found work, could be later joined in his lawsuit by others
who feel they were wronged. "We think that the big damages are going to be
all of the people who still work there," Futoran said. "If the Navy has to
go back and say 'Let's give people the ratings they would have had,' those
people stand to have millions of dollars."

Since the Navy's recent cutbacks, many employees who were either laid off
or transferred to undesirable jobs have been very vocal about the Navy's
actions, writing letters to Congress, contacting the news media and filing
grievances and lawsuits.

Futoran and Jay said they don't disagree with the process in its entirety,
and understand the reasons for merit pay. Jay believes, however, that
managers clearly used the process as an excuse to discriminate against
older workers and those who had filed complaints with the U.S. Equal
Employment Opportunity Commission. "Any kind of complaint and you're on the
hit list," Jay said.

                     Rear Admiral Defends System

Jay is appealing what he calls his forced retirement with the Merit System
Protection Board in Washington, and says he is skeptical about the
impending investigation, even if it is done by an independent body as
Johnston promised. "They've investigated themselves before and they never
can find anything wrong," Jay said. "I never once saw a fair investigation
until this one came along."

Rear Adm. Johnston said he stands by the system as the best way to reward
workers with the limited funds available. "We think the performance system
is fair," Johnston said. "We believe we've been on track the whole time."
(Los Angeles Times, September 4, 2000)

PROVIDENT MUTUAL: Announces Settlement over Life Insurance Policies
Mutual Life Insurance Company and lead attorneys for plaintiffs announced
that they have reached a settlement agreement in class action lawsuits
concerning nonvariable, cash-value life insurance policies issued by the
Company from January 1, 1984 to December 31, 1996. The Company said that
the agreement, which covers approximately 200,000 current and former
policyholders, serves the best interests of all parties involved by
providing substantial benefits to policyholders while avoiding the
disruption and expense of prolonged litigation.

In agreeing to the negotiated settlement, Provident Mutual denies any
wrongdoing alleged in the litigation. The Company said its decision to
settle reflected the desire to resolve some policyholder concerns and would
enable it to focus its full energy on continuing to meet its customers'
financial and insurance needs.

The proposed settlement agreement was filed September 1, 2000 with the
Philadelphia County Court of Common Pleas in the Commonwealth of

The settlement gives eligible policyholders the right to choose between a
general settlement relief option (a Term Coverage Benefit) or pursue an
individual claim if they believe they have suffered specific harm.

"Class members will not have to take any action to receive the Term
Coverage Benefit," said James Potter, Executive Vice President and General
Counsel for Provident Mutual. "Those who choose to file an individual claim
will receive a claim form to complete and send in that may enable them to
receive a direct cash payment."

Settlement Will Not Materially Affect Provident Mutual's Financial

Provident Mutual said the proposed settlement limits the Company's
financial exposure in this matter and will have no material adverse impact
on the financial condition of the Company.

Provident Mutual said it has established an extensive communications
program to inform eligible policyholders about the proposed settlement,
explain policyholder options, and enable class members to take full
advantage of the value it presents. Later this year, Provident Mutual will
begin to notify some 200,000 current and former policyholders of the Class
Action and proposed settlement, establish a Class Action Information
Center, and provide information on its web site, www.providentmutual.com.

Provident Mutual is headquartered in Berwyn, PA, and licensed in all states
and the District of Columbia.

Contact: Abby Gouverneur Bliss, Gouverneur & Associates 212/840-1661

RECORD MAKERS: Miami Judge Asks Consumers to Refile Suit over Pricing
Miami-Dade Circuit Judge Margarita Esquiroz dealt a temporary blow to a
lawsuit that alleges the nation's major record companies conspired to
overcharge Florida consumers for compact discs. Esquiroz dismissed the
antitrust suit against Sony Music Entertainment and four other record
manufacturers, but told the consumers' legal team to refile another
complaint in two weeks to correct certain problems with the original.

In particular, Esquiroz said the proposed class-action suit needs to spell
out which record companies allegedly conspired with one another or with
retail stores to fix CD prices. "You have to do something about those
co-conspirators that you don't identify," Esquiroz said during a hearing on
the motion to dismiss the suit. "You can't allege that conspiracy if they
aren't identified in some way."

Miami attorney Robert Fiore, representing the Florida class, said the team
will refile another suit naming "the players involved in the conspiracy."

The suit, filed in June by a group of South Florida CD consumers, is among
an estimated 87 civil actions filed nationwide against Sony Music, Time
Warner, EMI Music Distribution, Universal Music & Video Distribution Corp.
and BMG Entertainment. Florida and 29 other states filed one federal suit
in August, demanding damages from these companies for allegedly conspiring
to fix CD prices.

Those suits followed the record companies' settlement agreement with the
U.S. Trade Commission that required them to stop pressuring retail stores
from offering substantial discounts on CDs. The FTC said the manufacturers'
tactics added at least $ 480 million to CD prices since 1997.

But the settlement did not order them to return that money to CD
purchasers, some of whom have joined forces in class-action suits to
recover what they claim is an average overcharge of $ 5 per CD.

The controversy dates back to the early 1990s, the beginning of the price
wars between traditional and discount retailers. Prices dropped to as low
as $ 9.99 per CD.

The five music manufacturers responded by requiring retailers to advertise
CDs at or above a minimum price set by them, the FTC alleged. If they
didn't, the retailers would lose cooperative advertising dollars from the

Regulators labeled the so-called minimum advertising price policy, or MAP,
a violation of federal antitrust laws.

The settlement agreement between the FTC and the record companies formed
the basis for the class-action suit filed in Miami-Dade Circuit Court,
alleging antitrust and unfair trade practices under Florida law. "It
eliminated all price-cutting in Florida, and allowed prices to stabilize at
a higher level," Miami attorney Stephen Nagin, representing the class,
argued at the hearing.

But Irving Scher, EMI's attorney, scored points with the judge when he
countered that the CD consumers were "indirect purchasers" who bought the
records from retailers, not the manufacturers. He said, as a result, they
have no legal standing to sue the companies. (The Miami Herald, September
1, 2000)

RICHARDSON ET AL: Ark. High Court Decertifies Chemical Exposure Suit
The Arkansas Supreme Court has decertified a class of plaintiffs who claim
they were exposed to toxic chemicals as a result of an explosion and fire
at an agricultural chemical packing plant in 1997, because the trial court
failed to make the factual conclusions necessary to comply with the
Arkansas Rules of Civil Procedure outlining class certification. BPS Inc.
et al. v. Richardson et al., No. 99-912 (Ark., July 7, 2000).

The defendants appealed the class certification from the Arkansas Circuit
Court, Philips County.

In 1997, an explosion and fire occurred at BPS Inc.'s chemical packing
plant in West Helena, Ark. The blaze burned for several days and three
firemen were killed while attempting to control it. One of the chemicals
involved in the fire was azinphos methyl, which was supplied to BPS by
defendant Micro Flo Co.

Local residents and BPS employees filed an action against BPS and Micro
Flo. They sought certification as representatives of a class of people who
were or will be exposed to the chemicals that were released into the air.
The plaintiffs alleged the class had 16,000 to 20,000 members.

The complaint sought compensatory and punitive damages for medical
expenses, lost wages, pain and suffering, life-long medical monitoring and
prepaid medical insurance policies.

On May 5, 1999, the trial court certified the class of plaintiffs. The
defendants appealed, charging that the court did not properly analyze the
factors required for certification under Rule 23 of the Arkansas Rules of
Civil Procedure: numerosity, commonality, predominance, typicality,
superiority and adequacy.

The defendants also maintained that the case should be reversed and
remanded because the trial court failed to make specific findings of fact
and conclusions of law pursuant to Rule 52 of the Arkansas Rules of Civil
Procedure, when the defendants requested the findings four months before
the trial court's class certification order.

The Arkansas Supreme Court found that the trial court failed to meet the
requirements of Rule 52 to justify the certification of the class.

Specifically, the high court ruled that it could not be certain of the
trial court's findings on a number of issues, including:

-- the number of members in the class that the trial court used to
    determine whether the numerosity requirement was met;

-- what the trial court found to be the common questions of law or fact;

-- what claims the trial court found to be held by the representative
    parties which would be typical of the class claims;

-- why the trial court found that the representative parties would
    fairly and adequately represent the class; and

-- why the trial court found that a class action is a superior method of

In reversing and remanding the case back to the circuit court, the supreme
court said the lower court abused its discretion in certifying the case for
class-action status.

The plaintiffs were represented by Don Trimble and E. Dion Wilson of Wilson
& Valley. BPS was represented by Gordon Rather Jr., Michael Barnes and Jane
Faulkner of Wright, Lindsey & Jennings. Micro Flo was represented by
Frederick Ursery and Kevin Crass of Friday, Eldredge & Clark. All are
located in Little Rock, Ark. (Toxic Chemicals Litigation Reporter, August
11, 2000)

TOBACCO LITIGATION: Industry Asks Fed Judge to Oversee FL Case
The tobacco industry is asking a federal judge to oversee the case in which
thousands of sick Florida smokers won a $145 billion verdict against
cigarette makers. In legal filings, the industry asked U.S. District Judge
Ursula Ungaro-Benages to take the case, which was tried before a state
judge over two years, and also listed reasons why the record-setting jury
award should be erased.

The normal appeals route would be a state appeals court and the state
Supreme Court. The U.S. Supreme Court could take the case if constitutional
issues were at stake. That track would not take the case to a federal judge
or the federal appellate system. The industry based its request for federal
jurisdiction on ''patent errors'' and ''federal constitutional aberrations
that subsumed the trial.''

The nation's five biggest cigarette makers also attacked class
certification allowing 300,000 to 700,000 sick Florida smokers to pursue a
single case against the industry.

Attorneys for the smokers can file their response, and the judge set a
hearing for Nov. 7.

A six-member state jury delivered the punitive damages verdict July 14. The
jury had earlier awarded $12.7 million in compensatory damages to three
people who represented the class.

The defendants are Philip Morris Inc., R.J. Reynolds Tobacco Co., Brown &
Williamson Tobacco Corp., Lorillard Tobacco Co., Liggett Group Inc. and the
industry's defunct Council for Tobacco Research and Tobacco Institute. (AP
Online, September 1, 2000)

TX MEDICAID: Lawmakers Propose Changes to Program after Judge's Ruling
Texas legislators who have been studying the state's Medicaid program say
they will propose changes to address serious problems that were highlighted
after a federal judge's critical ruling was made public. The decision
immediately became fodder for the presidential candidates, with Democrat Al
Gore criticizing Texas Gov. George W. Bush, his Republican rival. Bush
defended his record and accused Democrats of trying to hide their own
weaknesses. The state Senate Committee on Human Services will submit its
final recommendations to Lt. Gov. Rick Perry and other legislative leaders
looking ahead to the next biennial session in January.

In a copy of the recommendations, obtained by The Associated Press, the
committee proposes measures to improve communication between Medicaid
recipients and the state, to make the Medicaid application process easier,
to eliminate rules that require the state to count assets such as cars when
reviewing applications and to expand support for recipients leaving welfare
for work. "Our ultimate goal is to ensure health care is available to all
Texas children and that those children are safe and healthy," said state
Sen. Judith Zaffirini, a Laredo Democrat and the committee's chairwoman.

Although many of the recommendations address problems outlined in the court
ruling, legislative committees have been working on Medicaid reform in the
years in between sessions.

U.S. District Judge William Wayne Justice, in an Aug. 14 ruling, said Texas
was not adequately providing dental care, regular checkups, transportation
to doctors or information about what services are available to children in
Medicaid, despite a 1996 agreement in which the state promised to make
major improvements in its program. "This will help with some of those
problems," said state Rep. Elliott Naishtat, a Democrat from Austin and
chairman of the House Committee that will recommend similar changes.

About 1.5 million of Texas' 6 million children are enrolled in Medicaid.
Another 1.4 million are uninsured, about 600,000 of whom are eligible for
Medicaid but not enrolled.

Gore's campaign said the ruling shows Bush's lack of leadership on child
health issues. Bush rejected the accusations, saying a court order
demanding action came from an "activist, liberal judge." "We are doing
everything in our power to take care of the disadvantaged children of the
state of Texas," the governor said. He criticized the federal government
for refusing to grant waivers that he said would have made helping children
easier. "The reason they're pounding me is because this is an
administration of which Al Gore is a part that has been unable to lead,"
Bush said. "They're trying to go on the offensive on an issue on which they
are extremely vulnerable."

Bush spokesman Mike Jones said it's too early to tell what, if any, changes
will be made. He said Bush is committed to the children of Texas and
pointed to state court filings that say Texas has dramatically improved
Medicaid since the original class-action lawsuit filed in 1993.

According to those filings, checkup participation rates have increased from
29 percent to 66 percent since 1993. The number of state employees assigned
to the program has increased from 10 to nearly 500 and the state made 5
million contacts to Medicaid clients in 1999.

Additionally, the Medical Transportation Program budget has increased 300
percent since 1993, the state claimed.

The court found that much of that data was inflated. And while more money
may be spent on transportation, the court found that only 2 percent of
those eligible had used it in the last year. Attorney General John Cornyn
plans to appeal Justice's ruling, which requires that a corrective plan be
submitted to the court in 60 days. (The Associated Press State & Local
Wire, September 1, 2000)

U.S. BANCORP: Resolves Two 1999 MN Suits over Account Holders’ Privacy
U.S. Bancorp (NYSE: USB) announced last Friday September 1 that it is
concluding two legal matters from 1999 relating to privacy, including the
settlement of a consolidated class action suit and an agreement with a
multi-state task force of attorneys general.

The bank announced several significant privacy initiatives launched over
the past year:

  * Developed one of the most comprehensive privacy policies of any bank,
     allowing customers to opt out of affiliate information sharing for
     direct marketing purposes, and going beyond the requirements of
     recent privacy law;

  * Contacted all consumer customers about the bank's privacy policy and
     informing them of their ability to control how their information is
     handled, well in advance of a 2001 deadline required by federal

  * Became the first and only bank member of the Privacy Leadership
     Initiative, a coalition of more than 20 national chief executive
     officers working to address consumer concerns about privacy;

  * One of a small group of financial institutions to have appointed a
     chief privacy officer reporting to the CEO and whose job it is to
     be an advocate for consumer privacy.

        1999 Privacy Settlements with State Attorneys General

On June 9, 1999, the Minnesota attorney general filed a lawsuit against
U.S. Bank alleging that the bank provided customer account information to a
marketing partner in connection with the marketing of non-financial
products and services. On June 30, 1999, without any finding of wrongdoing,
U.S. Bank voluntarily settled the lawsuit and agreed to contribute the
amount of revenue received from such information sharing to charities or
public bodies in Minnesota and other states where the bank conducts
business. The Minnesota portion of the settlement ($2 million) was paid in
the third quarter of 1999, with the balance of the funds, an additional $2
million, earmarked to be divided between the additional states, concluding
the 1999 settlement. Thirty attorneys general have participated in the
settlement discussions and will decide how the funds will be divided.
Additionally, as has already taken place in Minnesota, consumers in the
other states who purchased a non-financial product that they did not use
will receive an offer of a refund from U.S. Bank.

The following states participated in the attorneys general task force:
Arizona, California, Colorado, Connecticut, Florida, Hawaii, Idaho,
Illinois, Iowa, Kansas, Massachusetts, Michigan, Missouri, Montana,
Nebraska, Nevada, New Jersey, New Mexico, New York, North Dakota, Oklahoma,
Oregon, Pennsylvania, South Dakota, Tennessee, Utah, Vermont, Washington,
Wisconsin and Wyoming.

                Settlement of Class Action Lawsuit

Shortly after last year's lawsuit by the Minnesota Attorney General, a
number of class actions with comparable allegations of information sharing
were filed and subsequently consolidated as a single class action suit in
U.S. District Court in Minnesota. The settlement of these cases has been
preliminarily approved by the court, both parties recognizing that a
settlement was preferable to the costs and uncertainties of a trial. The
bank has fully reserved for the cost of the settlement.

           Mechanics/details of Class Action Settlement

The bank is providing a settlement fund of $3 million to pay potential
claims and will also pay the first $500,000 of plaintiffs' attorneys fees
approved by the Court. If the settlement fund is not used in its entirety,
the balance will go to the University of Minnesota Law School or to
non-profit human services agencies.

Claim forms will be mailed beginning September 2nd to claimants who had
U.S. Bank checking or credit card accounts with the bank prior to July
Claimants can contact the third-party claims administrator at 877-768-2625
or visit http://www.claimsadministrator.comfor more information.

As actual damages are nonexistent, a predetermined scale will be used for
scoring seven possible levels of claims based upon claimants' answers to
questions on the claim forms. Claim amounts will range from $25 to $ 400,
although the amounts could be lower or higher based upon the number of
claims granted. The company said it expects that few claimants would be
eligible for claims in excess of $50.

VENANGO COUNTY: Commissioners Fire Back on Property Tax Lawsuit
Commissioners in a northwestern Pennsylvania county brought armed guards to
a meeting on a hotly debate property tax issue. The guards stood by as
Venango County commissioners Bob Murray Deb Lutz and Larry Horn responded
to a lawsuit filed by owners of timber lands.

The county is re-evaluating property to determine new tax rates. Murray
called on the plaintiffs to drop the lawsuit in the name of "tax fairness."
"Their lawsuit is a Trojan horse that pretends to represent all taxpayers,
but which in reality is an ambush," he said. "This is not a class-action
lawsuit. It is a litigious assault on the taxpayer that will allow these
multimillionaires to cut their own deal and serve their own special

Steven Santoro, the attorney for the landowners, said the property is not
being reassessed fairly. In the lawsuit, he asked a judge to oversee the
process and said $2 million is being spent for reassessments that may not
be accurate.

Murray warned that the case could lead to even higher taxes because of
legal bills. "If the timber barons and their Pittsburgh lawyer have their
way, we may be court ordered to endure - and pay for - another
reassessment," Murray said. "Who wants to go through this again?" he asked.
"And where will the millions of dollars come from to pay for it? The answer
is: from Venango County citizens in the form of additional tax dollars.
This lawsuit must be stopped." (The Associated Press State & Local Wire,
September 1, 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
Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc.,
Washington, DC. Theresa Cheuk, Managing Editor.

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

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to be
reliable, but is not guaranteed.

The CAR subscription rate is $575 for six months delivered via e-mail.
Additional e-mail subscriptions for members of the same firm for the
term of the initial subscription or balance thereof are $25 each.  For
subscription information, contact Christopher Beard at 301/951-6400.

                    * * *  End of Transmission  * * *