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            Wednesday, September 13, 2000, Vol. 2, No. 178


AUTO INSURANCE: Study Says Original Parts Cost More Than 3 Times a Honda
CHURCHES: Indian Cultural Abuse Suits Shake Church-Run Schools in Canada
CIGNA CORP: Inflated Insurance Premiums Claims Canít Form Class Action
COLORADO OFFICIALS: Sued over Failure to Provide Residential Services
COMMUNITY UNIT: EEOC Backs Teachersí Claims for Infertility Treatment

E.COLI: Damaged Multiple Sclerosis Patient's Life
EMPIRE FUNDING: Consumer Wins TILA Claim and Can Rescind Agreements
FORD MOTOR: Documents Indicate Ford Knew of Engine Defect but Was Silent
FORD MOTOR: Gives an Account on Tire Recall in Report Filed with SEC
GENAMERICAN LIFE: Announces $55M Settlement for Suits over Life Policies

GENERAL MOTORS: Warns Buick and Oldsmobile Owners about Air Bags
GEORGIA POWER: Accused of Retaliation in Employment Racism Case
GORDON-DALY: London Law Firm Files Suit against Former Can. Stock Dealer
INMATES LITIGATION: Diabetes Group Sues Philadelphia Police
MARCOS: Merrill Lynch Releases $35 Mil in Filipinos' Human Rights Case

NETSOLVE, INC: Milberg Weiss Files Securities Suit in Texas
POLICY MANAGEMENT: Case on 401(k) Plan Coordinated with Securities Suit
POLICY MANAGEMENT: Merger Termination Fee Criticized in SC Amended Suit
POLICY MANAGEMENT: Securities Suit for Period 1998 to 2000 Consolidated
RECORD COMPANIES: Court Declines Certification in Singers' Action

SALT LAKE: Romney Defends the Releasing of the Geld Document
SECRET SERVICE: Director Promises No Retaliation on Agentsí Racism Suit
SIZZLER INTERNATIONAL: Subsidiaries Sued on E.Coli Outbreak in Wisconsin
SOUTHWESTERN ENERGY: Responds to AR Suit over Royalty and Mineral Rights

* 3rd Cir. Approves NJ Guidelines On Releasing Megan's Law Information


AUTO INSURANCE: Study Says Original Parts Cost More Than 3 Times a Honda
The latest annual study by the Alliance of American Insurers of how much it
would cost to buy all the original-equipment parts needed to rebuild a car
concludes that the project would cost $ 68,065.93 for a 2000 Honda Accord
3.0 LX.

That total - exclusive of labor and paint - is more than three times the
original retail price of $ 22,365, the Alliance says.

Last year, a similar study calculated that original equipment parts to
rebuild a Toyota Camry would cost four times the retail price of the car.

The Alliance has been conducting such theoretical exercises for nearly two
decades in order to make the point that prices of parts from original
equipment manufacturers should be held down through use of competitive
parts from other makers.

The Alliance and many auto insurance companies support the Certified
Automotive Parts Association (CAPA), which tests aftermarket parts and
certifies those it finds equally as good as the original.

"The cost of repairing damaged automobiles accounts for between 40 and 50
percent of the insurance premium for most auto insurance consumers," says
Kirk Hansen, Alliance director of claims.

"Therefore, the cost of replacement parts has a significant, direct impact
on the price consumers pay for auto insurance."

The Alliance published some comparative costs of representative parts for
this year's Honda Accord: fender $ 166.65 from Honda and $ 100 from a
competitive supplier; hood panel $ 331.53 from Honda and $ 241 from a
competitive maker, and headlamp $ 160.58 from Honda and $ 130 from a
competitive manufacturer.

Auto manufacturers insist that their parts are better and say the seemingly
high prices for them reflect the cost of carrying inventory.

The question of whether aftermarket parts are comparable is now at issue in
several class actions against auto insurers. An Illinois court awarded one
group of plaintiffs more than $ 1 billion against State Farm last year, and
the company has suspended use of competitive parts pending appeal. (Federal
& State Insurance Week, August 28, 2000)

CHURCHES: Indian Cultural Abuse Suits Shake Church-Run Schools in Canada
Although not a single case has yet made it to court, a wave of litigation
is threatening to bankrupt Canada's four largest Christian denominations
under the weight of thousands of lawsuits brought by Indians demanding
redress for "cultural abuse" in church-run boarding schools.

The lawsuits argue that attempts by the government-supported schools to
assimilate natives by requiring them to learn English and adopt the ways of
white Canada constituted a sort of cultural violence.

The effects, the lawsuits contend, were even more devastating than the
acknowledged sexual assaults and beatings that occurred in at least some of
the 125 Indian Residential Schools from the mid-19th century until the
1970s. The schools were run by the Roman Catholic, United, Anglican, and
Presbyterian churches until the system was finally abandoned in favor of
community schools on every Canadian reservation.

At the worst institutions, the federal government and churches acknowledge,
Indian youngsters were victims of sexual attack and sadism by staff. And
both the churches and Ottawa's Department of Indian Affairs are committed
to making amends for clear cases of physical abuse, with hefty financial

But in the stunning new wave of litigation, Indians and their white
lawyers, working on contingency, are demanding hundreds of millions of
dollars for loss of cultural identity. "In Canada, we didn't slaughter
Indians like in the United States," said Tony Merchant, a Saskatchewan
lawyer whose firm represents some 4,000 Indians who say their lives were
ruined by the boarding schools. "Our frontier was peaceful. Our policy was
to destroy Indian society, spirituality, and sense of self-worth through
forced assimilation."

Canada's Indians, all but invisible for most of the country's history, are
today riding perhaps the most aggressive aboriginal rights movement in the
world. From Nova Scotia to British Columbia, natives are pursuing - and, in
a surprising number of cases, winning - colossal land claims, rights to
harvest commercial quantities of resources, from lobster to redwood logs,
and cash payoffs for injustices dating back decades and even centuries.

The latest school suits allege that the poverty, alcoholism, crime,
domestic violence, and other ills that wrack aboriginal communities are at
least partly the result of attempts by the schools to force natives to
learn English, acquire job skills, and adopt Christianity.

"The schools took us from our parents and taught us that the ways of our
people were shameful and wrong," said Deborah St. John, 49, an Ontario Cree
packed off to an Anglican school in 1957.

St. John conceded that she was never physically harmed, aside from the
occasional rap across the knuckles for daydreaming in class. But she
insisted that her life of heavy drinking and domestic disharmony is the
result of losing her native tongue and traditions. "For me, I have no
forgiveness for what they did," she said.

In the past few years, more than 6,400 lawsuits by Indian plaintiffs, plus
four massive class-action suits, have been brought against the churches and
government agencies responsible for the boarding school system. New ones
are being filed at the rate of 40 a month, threatening to swamp the legal

"It's a level of litigation unprecedented in Canadian history," said the
Rev. Brian Thorpe, senior adviser on school issues for the United Church of
Canada, which operated 14 schools and last year paid out $2.3 million in
legal fees to cope with the suits. Various Catholic orders ran 70 Indian
schools; the Anglicans operated 37; the Presbyterians four.

The churches are hemorrhaging millions of dollars simply to pay lawyers to
meet the legal onslaught. The Anglican Church, Canada's third-largest
Christian denomination, is on the edge of bankruptcy and may go under as
early as next year unless the government engineers a bailout.

Church leaders agree that redress should be made to Indians who suffered
physical abuse. But the idea that the very act of teaching English or
imparting Western values - such as hard work, punctuality, and personal
cleanliness - constituted "cultural genocide," as Indians and their lawyers
allege, is too much for some clergy to swallow.

"There's a whole pile of upper- middle- class guilt here that's running the
show and not much common sense," Bishop John Clarke of the Anglican Diocese
of Athabasca, in northern Alberta, told the church newspaper Anglican

But Clarke's is a distinctly minority view, as Canadian church leaders trip
over one another in a stampede to issue mea culpas. For example, native
drums pounded in a somber if bizarre ceremony as clergy of several leading
Christian denominations in Newfoundland and Labrador offered formal
apologies for the coming of their forebears to the New World and subsequent
failure to treat natives with respect and kindness.

"We are embarrassed and sorry for the suffering that aboriginal people have
endured since our ancestors arrived 500 years ago," declared Sister Emma
Rooney, a Catholic nun.

Indians seemed mostly annoyed by the apology. "What is it, specifically,
they are apologizing for?" asked Peter Penashue, a Labrador Innu. "I have a
problem when people say, 'Oops, sorry for the past five centuries.' "

The lines separating church and state in Canada are fuzzier than in the
United States, and they were even more blurred back in 1879, when the
government contracted with churches, already running mission schools, to
establish residential schools whose unequivocal aim would be to assimilate
Indians by teaching them English and providing training in such skills as
black smithing, sewing, and carpentry.

Even today, these goals might seem laudable, given the staggering rates of
native illiteracy and unemployment, which top 80 percent on some reserves.
But the boarding schools also made it a policy to sternly discourage
students from speaking their own languages or following traditional
customs. The unabashed goal: to produce "red-skinned white people."

"In historic hindsight, we see that churches and government took a
wrong-minded approach to education, with negative impact on native
culture," said Shawn Tupper, head of the residential schools unit of the
Ministry of Indian Affairs. "But it's unclear whether redress for 'cultural
abuse' is something that can be won in a court of law." (The Boston Globe,
September 12, 2000)

CIGNA CORP: Inflated Insurance Premiums Claims Canít Form Class Action
Although a RICO Act class action alleging the collection of excessive
insurance premiums met the requirements of Fed. R. Civ. P. 23(a), it could
not satisfy the requirement of common question predominance and thus proved
to be unmanageable as a class action. (Gibbs Properties Corp., et al. v.
Cigna Corp., et al., No. 3:98-cv-687-J-21C (M.D. Fla. 6/16/00).)

Three Florida corporations that had purchased various commercial insurance
packages from several insurance companies owned by Cigna Corp. sued the
insurance companies in the U.S. District Court for the Middle District of
Florida alleging RICO Act violations and breach of contract. The insureds
claimed that while the insurance companies purported to sell insurance in
accordance with rates and schedules filed with the Florida Department of
Insurance, they in fact instituted various policies and procedures that
illegally and improperly inflated premiums.

These policies and procedures, which allegedly violate Florida's Insurance
Code and related regulations, included the offsetting of mandatory
experience-based credits with "arbitrary and unjustified" schedule debits
and annually increasing premiums without regard to whether such increases
were permissible under Florida law.

The District Court denied a motion by the insureds to certify a class
consisting of thousands of other insureds residing or doing business in
Florida who purchased commercial coverages from the insurers during a
two-year period. (Civil RICO Report, September 7, 2000)

COLORADO OFFICIALS: Sued over Failure to Provide Residential Services
A federal lawsuit filed in Colorado last month accuses state officials and
agencies of violating the ADA and other federal requirements by failing to
provide adequate, timely services to adults with developmental
disabilities. According to the suit, some eligible individuals have been
forced to wait for intermediate care facility services for up to 10 years.
"The state has violated federal Medicaid requirements for timely processing
of applications, prompt provision of services, freedom of choice,
constitutional due process and other laws," said Debra Knapp of Denver's
Knapp & Sachs, P.C., who filed the suit with Benjamin Sachs.

Knapp and Sachs are asserting claims under the federal Medicaid Act, the
Due Process Clause, the ADA and Section 504. The plaintiffs in the case are
identified as Mandy R., a 24-year-old woman with autism; Stephanie F., who
is also 24 years old and has a developmental disorder, a seizure disorder,
and an anxiety disorder; and Lisa W., a 30-year-old woman Down Syndrome.

All three plaintiffs currently live with their parents or other family
members while awaiting residential placements pursuant to state programs
for individuals with developmental disabilities. Responsible for the
administration of those programs are the defendants: Colorado Gov. Bill
Owens; Marva Hammons, executive director of the state's department of human
services; James T. Rizzuto, executive director of the state's department of
health care policy and financing; the Colorado Department of Human
Services, which administers and operates the state's programs for people
with developmental disabilities; and the Colorado Department of Health Care
Policy and Financing, which administers the state's Medicaid program.

All of the plaintiffs require treatment in what is known as an intermediate
care facility for the mentally retarded. But the state halted development
of additional ICF/MR facilities several years ago, the plaintiffs claim,
and has also downsized or eliminated others. That has resulted in waiting
lists that vary but can reach up to 10 years, the suit claims. According to
the ARC of Colorado, a Denver advocacy organization, there are
approximately 3,000 other state residents who are in the same predicament
as the named plaintiffs in the suit, waiting for needed residential

The state's action "has severely limited both intermediate care/mental
retardation services and alternative, less expensive home and community
based residential services so that currently only persons with emergency
needs have any real chance of getting into services," said Joan Hartwick,
president of the Arc of Colorado's board of directors. Hartwick added that
currently available services are not even adequate to address all emergency

The class action suit raises various claims that vary depending on whether
the defendant is an individual or a state entity. The suit accuses the
three individual defendants of violating the Medicaid Act and 42 USC 1983
by failing to provide ICF/MR services with reasonable promptness, failing
to comply with comparability requirements of the Medicaid Act, and failing
to give eligible individuals a choice between receiving ICF/MR or home and
community based services.

The agency defendants, on the other hand, are accused of violating Title II
of the ADA and Section 504 by failing to provide services in the most
integrated appropriate setting and failing to provide an equal opportunity
to obtain available benefits.

The plaintiffs are seeking declaratory and injunctive relief. They ask the
court to "immediately" provide them with appropriate community residential
placements, and further seek an award of attorney's fees and costs.

"After years of suffering without necessary services and trying to resolve
this problem by going to state officials and the state legislature, the
plaintiffs have had to resort to asking the federal court to order the
state to meet its obligation," said plaintiffs' attorney Knapp. (Disability
Compliance Bulletin, September 8, 2000)

COMMUNITY UNIT: EEOC Backs Teachersí Claims for Infertility Treatment
Aided by a favorable determination from the Equal Employment Opportunity
Commission, two Illinois schoolteachers are claiming in federal court that
the costs of their infertility treatments should be covered under their
school district's self-insured benefit plan. Although the case presents
obstacles for the plaintiffs, it is noteworthy because it shows the EEOC's
willingness to back such claims and because it carries the potential to
make a profound impact on health insurance practices.

Patricia A. Collins, Marvin Gittler and Margaret Angelucci of Chicago's
Asher, Gittler, Greenfield & D'Alba, Ltd., filed the suit in an Illinois
federal court on behalf of teachers Lisa Mack and Angela Moreau. Both
plaintiffs, the suit against Community Unit School District #303 says, have
received diagnoses and treatments for infertility treatments, including
tests, prescription drugs and artificial insemination. But the school
district's benefit plan, administered by Professional Benefit
Administrators Inc., has denied coverage for those treatments. The
plaintiffs say that the denial violates the ADA and Title VII of the Civil
Rights Act, which bars discrimination based on sex and pregnancy. The plan
administrator is not named as a defendant in the suit.

The theory of the claim under the ADA is that the district is
discriminating on the basis of disability by providing a higher level of
health benefits for medical conditions that do not relate to fertility. A
separate count of the complaint alleges sex discrimination, including
pregnancy discrimination, on the theory that the district's plan wrongfully
provides a higher level of coverage to non-infertility and non-pregnancy
related medical conditions. The potential impact of the case is underscored
by the fact that it has been brought as a class action, on behalf of "all
employees or beneficiaries who have been denied benefits for infertility
diagnosis and treatment." The complaint seeks injunctive relief,
compensatory damages, and attorney's fees and costs. (Disability Compliance
Bulletin, September 8, 2000)

E.COLI: Damaged Multiple Sclerosis Patient's Life
While every Walkerton citizen finds the contaminated water crisis fearsome,
Vern Reddon feels it has ruined his life.

Reddon has been living with multiple sclerosis for years. His case is a red
flag for others with chronic disease who drank the tainted water. At 57,
Reddon was no longer working as an auto parts salesman or driving a car but
he kept up an active, independent life. He used a motorized scooter to get
about, cooked for himself and was able to shower and dress on his own.

All that has changed since his devastating bout of E.coli O157:H7. It
struck him last May 17 - the same day the Walkerton Public Utilities
Commission was notified that water samples contained the deadly bacteria.
The public didn't find out for another week. Reddon had been visiting
friends and, as usual, drinking "gallons of tap water - I thought it was
good for me." Suddenly, he was feeling sicker by the minute and unable to

He was rushed to hospital that night where he drank local water until the
boil water advisory four days later. He had bloody diarrhea so often he
couldn't get help to make it to the toilet in time and soiled himself
repeatedly. "I would lay in bed at nights and cry. I never went through
anything like that." It lasted the two weeks he was in hospital. And he was
"scared as hell" because the woman who brought his hospital meals to him -
Betty Trushinsky - died as a result of the E. coli within days of the

Months later, Reddon has improved little but for the diarrhea. And his
deteriorated condition raises questions as to the impact of the virulent
bacteria on people living with other diseases such as diabetes and
arthritis. After years of only needing homemaking help once weekly, Reddon
currently requires daily visits. A homemaker must get him out of bed,
shower and dress him, cook for him and get him into the wheelchair he's now
forced to use as he can't stand. His sister comes each night to assist him
into bed. His mobility and function have been cut in half. His joints are
so sore he's sometimes screaming in pain. He fatigues easily. His
twice-weekly visits to a day hospital - his main social outing where he
also gets medical checks and a hot lunch - have become problematic
requiring Wheel-Trans and personal assistance. "I'm mad as hell. With
winter coming, I don't even want to think about it," he says, fearing that
harsh weather will cut him off completely from his former life.

Even his medication no longer helps. Ever since the E. coli illness, the
drugs that worked before now seem to operate in reverse and cause his arms
and legs to go rigid.

Dr. John Paulseth, a neurologist at McMaster University's multiple
sclerosis clinic, says that MS patients are "very vulnerable" when they
contract another illness that weakens them. "The most consistent trigger to
a sudden worsening is an infection of some sort," he says. Dr. Andrew
Simor, infectious disease consultant at Sunnybrook and Women's College
Health Sciences Centre, says there have been no scientific studies on the
impact of E. coli on people with underlying diseases.

However, it is known that this strain causes severe haemorrhagic colitis
which can be life-threatening or fatal, particularly in the elderly who
often have other chronic diseases. And it can cause hemalytic uremic
syndrome, Simor says, which is a severe form of kidney disease that can
occasionally be long-term or fatal. "We take for granted a public utility
like water supply in a country like Canada has to be safe. Obviously,
tragedy strikes when it isn't."

Though Simor does not know Reddon personally, he says there are two
possibilities in his case: "Either E.coli O157:H7 made his MS worse and
he'll never recover to the degree of function he had before or there's been
a very rapid change in his MS."

For Reddon, the change is too coincidental with the illness and too
dramatic not to be related. "I never expected to shut down this early. The
changes before were always gradual. This is driving me crazy. I don't want
to stay like this. I'm not that old. I hope to hell there are better days

Whether through the provincial inquiry or the class-action lawsuit, Vern
Reddon deserves, at the very least, an explanation of why this happened to
him. (The Toronto Star, September 12, 2000)

EMPIRE FUNDING: Consumer Wins TILA Claim and Can Rescind Agreements
Because creditors now have the ability to request an advance ruling from
the Federal Reserve Board on whether a state rescission notice is preempted
by the Truth in Lending Act, creditors should not include inconsistent
state disclosures regarding rescission periods in their lending agreements.
(Williams v. Empire Funding Corp., et al., No. 97-4518 (E.D. Pa. 8/7/00).)

When approached by the home improvement company of Fredmont Builders Inc.,
Kim Williams and other low-income homeowners signed installment contracts,
agreeing to finance their repairs through Empire Funding Corp., First Bank,
N.A., TMI Financial Inc. or EFC Servicing LLC. The financing agreements
contained a notice of the borrowers' TILA right to rescind the contract
within three business days of the transaction; however, directly below the
three-day notice appeared Pennsylvania's mandatory one-day rescission
language. The state language read, "You may rescind this contract, subject
to liability for any liquidated damage provision ... [if the right to
rescission is exercised] not later than five (5) p.m. on the business day
following the date [of the contract]."


Williams attempted to rescind her contract long after the three-day
rescission period. Consequently, the defendants denied her request.
Claiming that she and other homeowners were the victims of a fraudulent
home improvement financing scheme, Williams sued the Empire defendants,
Fredmont and Stanley Rabner, alleging TILA, Fair Debt Collection Practices
Act and Pennsylvania Unfair Trade Practices and Consumer Protection Law

Williams moved for class certification under Fed. R. Civ. P. 23(b)(2) to
determine if the consumers were entitled to rescission under the TILA. The
parties filed cross motions for summary judgment.


Williams argued that the financing agreements did not contain a "clear"
notice of the borrowers' TILA right to rescind their home improvement
contracts within three days of consummation. Furthermore, Williams
contended the right to rescission was unclear given that the agreements
included both the TILA and Pennsylvania notices. The lack of proper notice,
said Williams, extended her rescission period under the TILA to three years
from the date of the transaction.

The defendants disagreed with Williams' contention that the notices were
unclear and confusing. They countered that the financing agreements "merely
afforded two separate and overlapping rights of rescission" and that the
one-day notice did "not detract from the three day period of rescission
afforded to plaintiffs under TILA." The Empire defendants claimed the
borrowers had only up to three days to rescind their contracts.

                     Different Interpretations

Following the 3rd U.S. Circuit Court of Appeals' instruction that "whether
a notice of the right to rescission created by TILA is clear turns on
whether the notice is subject to more than one plausible or sensible
interpretation, " the District Court examined the agreements. Thereafter,
Judge Eduardo C. Robreno explained a reasonable consumer could interpret
the agreements' language in two ways: (1) a consumer must cancel the
contract within three business days after signing the contract; or (2) a
consumer must follow the second disclosure and cancel the contract within
one day.

Because the financing agreement did not clarify which provision prevailed
or the starting point for each period of rescission, the court held the
lenders failed to include in the financing agreement a clear notice of the
borrowers' right to rescission guaranteed by the TILA. The court held the
defendants' argument that the inconsistent notices did not prejudice the
consumers was irrelevant. Also, the defendants' failure to include a clear
rescission notice in the financing agreements extended the rescission
period from three days to three years from the date of the transaction,
ruled the District Court.

                   Pennsylvania notice provision

The lenders argued on appeal that they should not be liable where they were
required, under the TILA and Pennsylvania law, to provide both the
three-day and one-day rescission notices in the financing contracts. The
lenders asserted that because the FRB, charged with implementing the TILA,
had not decided that the state's one-day rescission period was preempted by
the TILA, they followed proper disclosure procedures.

The court examined the TILA's text dealing with conflicts with state law
provisions. It found that "state law is inconsistent with TILA 'if it
requires a creditor to make disclosures or take actions that contradicts
the requirements of the federal law.'" Relying on Section 1610(a)(1) of the
TILA, the District Court held the Pennsylvania Home Improvement Finance
Act's one-day notice provision contradicted the TILA, and therefore, the
creditors had no obligation to include the state disclosure in the

The fact that the FRB had not determined that the state law was preempted
by the TILA was an unsuccessful defense, explained the court, given that
Congress and the FRB amended the TILA to allow creditors to request an
advance ruling from the board on whether the federal act preempts state
disclosure requirements. After these revisions, said the court, lenders
were no longer free to include inconsistent state rescission notices in
retail installment contracts. Again, the District Court ruled that the
Empire defendants' inclusion of Pennsylvania's one-day rescission notice
provision in the financing agreements was improper.

The District Court entered judgment in favor of Williams on her TILA claims
and held the consumers were entitled to rescind their financing agreements.

David A. Searles of Donovan Miller LLC in Philadelphia and Henry J. Sommer
of Miller, Frank & Miller in Philadelphia represented the plaintiff class.
Joy Harmon Sperling of Pitney, Hardin, Kipp & Szuch LLP of Morristown,
N.J., represented the Empire defendants. (Consumer Financial Services Law
Report, September 5, 2000)

FORD MOTOR: Documents Indicate Ford Knew of Engine Defect but Was Silent
When thousands of car owners complained in the 1980's and 1990's that their
Fords unexpectedly stalled, often on highways and while making left turns
across oncoming traffic, top company executives repeatedly assured
regulators that there was no way to know what might be causing the problem.

But throughout the period, Ford documents show, the company's engineers,
safety officials and even its board were aware of growing problems with one
particular part -- a computerized ignition system attached to the engine's
distributor -- that would shut the engine down if it got too hot.

Even as federal investigators opened and closed five investigations based
on Ford's assurances that it knew of no particular defect, the company
never provided regulators with more than a dozen documents that would have
shed light on the problem.

On the same day in 1986 when the regulators closed their second
investigation based on Ford's assurances that there was nothing defective
to warrant a recall, members of the company's board meeting in a private
session discussed the rising number of service complaints about the part,
according to Ford documents.

Also that day, Ford officials prepared a memo raising questions about the
company's plan to continue attaching the system, known as a thick film
ignition, or T.F.I. module, to the engine in a future model in light of the
problems and complaints.

Neither the notes from the board meeting nor the Ford memo was ever
provided to federal investigators. Ford continued to deny there were
problems for the next nine years, in spite of repeated internal company
studies, consumer complaints, numerous reports of deadly and other serious
accidents, wrongful death and personal injury lawsuits and warranty claims
that topped 40 percent in some years.

The company, which denies the defect has caused any fatal accidents, has
settled at least four lawsuits involving serious injuries and at least four
deaths. A study prepared for the plaintiffs in one case asserts that the
drivers of the 22 million cars equipped with the ignition system faced a 9
percent greater chance of being in a fatal crash. Ford contests that
finding but stopped putting ignitions on distributors after the 1995 model

The company's handling of complaints about the ignition system -- detailed
in court papers, as well as interviews with witnesses, safety experts,
government officials and lawyers -- has taken on new significance in light
of the recall of 6.5 million Firestone tires after dozens of deadly crashes
involving Ford Explorers. In recent days, documents have emerged showing
that the companies were aware of problems with Explorers equipped with the
tires several years before the recall.

Congressional investigators are now examining whether the ignition case is
part of a broader pattern in which Ford misled regulators by failing to
disclose what its engineers and safety experts know of possible defects.

Alan J. Kam, a recently retired official at the National Highway Traffic
Safety Administration, said in an interview that in his 21 years as the
agency's top lawyer for defects and enforcement issues, he had never seen a
greater deception perpetuated on the government by an auto company. "When I
looked at this material I was astonished," said Mr. Kam, who has been
retained as an expert witness for the victims and is preparing an affidavit
outlining his views that will be filed in a case in Tennessee. "Ford Motor
Company had obfuscated the existence of the T.F.I. module problems even
though it had problems on a massive basis," he said. "They had concealed
signs of failures that were occurring at an astronomical level, at a figure
far beyond any measure I have seen before. They were telling the agency
they didn't know what was causing stalling while they were doing extensive
studies showing they knew what was causing the stalling."

The ignition cases have been described in news reports. But Mr. Kam's
involvement in the case and many of the Ford internal documents
Congressional investigators are now studying have not been previously

Two weeks ago, a state court judge in California concluded in a tentative
decision in a class-action lawsuit involving the ignition system that Ford
had engaged in a huge corporate cover-up, concealing from both regulators
and consumers a design flaw affecting 22 million cars produced between 1983
and 1995, almost 15 million of which remain on the road. If, as expected,
he makes the decision final in the next few weeks, the judge will become
the first in American history to order an auto recall. Such a ruling
combined with other damages could cost Ford as much as $3.5 billion in
California alone.

Cases are also pending in five other states, and like the tire recall, Ford
faces the prospect of action abroad, where tens of millions of autos are on
the roads with the ignition part affixed to the distributor.

Ford executives and lawyers say they intend to appeal the ignition case if
the judge's decision becomes final. They said the judge had no basis for
reaching his conclusions of cover-up and liability and exceeded his
authority by ordering a recall. Ford executives said the only similarity
between the ignition and tire cases is that company officials did nothing
improper and took necessary steps to correct any problems.

Warren Platt, a Ford lawyer, said that in the tire case, Ford was under no
legal obligation to report on problems being encountered abroad. And in the
ignition case, he said, the company's position is that there were many
possible causes of cars stalling on the road beyond problems with the
ignition module. "The frequency of the stalls caused by a T.F.I. failure
were not nearly as large as a number of other factors," he said.
"N.H.T.S.A. looked at the adequacy of our filings and with the exception of
seven documents that Ford didn't produce, it found that we produced all
that was required. It's hard to argue that Ford has been less than

In court papers outlining its legal defense, Ford maintained that the
module was far more reliable than earlier ignition systems and there had
not been an inordinate number of accidents caused by cars that stalled. The
company said there were sound engineering reasons for putting the module on
the distributor, and that the company corrected any problems by replacing
more than one million parts under warranty.

Moreover, while there was a high rate of warranty claims filed over the
ignition module, Ford executives testified that nearly 90 percent of the
parts replaced were found not to be defective.

Ford's handling of the ignition complaints points up the shortcomings of a
regulatory system that, short of manpower, relies heavily on the candor of
the auto companies.

The penalties for failing to disclose defects to federal auto regulators
are not onerous. In the ignition case, the highway safety agency concluded
two years ago that Ford had improperly withheld important documents but
declined to impose any penalties at all, in part because the cars were no
longer covered by federal laws on recalls sponsored by a manufacturer.

Documents that have been made public in recent months show that in both the
tire and ignition cases, Ford executives knew about increasing consumer
complaints and accidents surrounding the parts. In both cases, regulators
were not immediately told of the complaints. Although the leadership of the
company has since changed hands, some of the same Ford executives,
including the company's top executive for safety issues, Helen O.
Petrauskas, have been involved in both cases.

And in both cases, the company followed its practice of settling
personal-injury and wrongful-death lawsuits raising safety concerns by
requiring that the cases be sealed and that the plaintiffs return all
incriminating company documents to Ford. In some cases, the settling
parties had to also agree that they would take no steps to assist
plaintiffs in other cases who assert similar claims.

"The objective in both the tire and the ignition cases was to avoid a
costly recall in the United States, to handle costly defects through
settlements in individual cases and then have those cases sealed," said
Clarence Ditlow, executive director of the Center for Auto Safety and an
unpaid expert witness for the plaintiffs in the ignition lawsuits. "In both
instances, Ford was under an obligation to self-report to N.H.T.S.A., and
in both instances, Ford failed."

Michael E. Ballachey, the California Superior Court judge who ruled against
Ford, blamed Ford for a corporate culture in which the careers of
executives can be ruined by reporting design defects to higher-ups. The
judge said, for instance, that the testimony in his case of a top Ford
engineer's reluctance to convey bad news about the ignition module had
reminded him of "The Emperor's New Clothes."

"No one wanted to be the one to deliver the bad news to the president of
Ford," Judge Ballachey wrote. "That reluctance, and Ford's commitment to
failed technology, cannot be accepted as a realistic attempt to solve the
obvious safety problem confronting Ford: the massive failure of
distributor-mounted T.F.I. modules due to excessive heat and thermal

The ignition cases brought in California do not involve auto passengers who
were injured or killed, but were filed as fraud lawsuits that accuse the
company of deceiving car owners about the safety of their products.

Lawyers for the plaintiffs said they decided, as a matter of strategy, not
to pursue claims for death or injury. Engines that stall can often be
restarted after cooling down, making it difficult to establish to a legal
certainty that a particular accident was caused by an ignition defect.

In the California case, Judge Ballachey ordered Ford to disclose details of
several sealed lawsuits. One of these cases involved an April 14, 1990
accident. Andy Pham, a 19-year-old who rented a 1990 Mercury Sable in San
Jose was driving to Reno with seven passengers when his car stalled, hit
the center divider and rolled over and crashed off the road. Mr. Pham and
two others died in the crash. Another passenger, Asali Johnson, was left a
quadriplegic while the other passengers suffered less severe injuries.

At the center of the case is the T.F.I. module, which Judge Ballachey
described as "delicate electronic, computer-driven technology," prone to
shutting down at high temperatures. It was placed near the engine on a
number of Ford models, from 1983 to 1995 and including some makes of the
Bronco, Escort, Grand Marquis, Mustang, Sable, Taurus, Tempo, Thunderbird,
Topaz and Town Car.

Although some Ford engineers and officials argued that early electronic
ignitions be placed inside the passenger compartment of vehicles in part to
eliminate exposure to high temperatures, Ford rejected that approach.

Jeffrey Fazio, the San Francisco lawyer who has been the driving force
behind the cases, said the Ford documents uncovered in the litigation
detail years of concern about the part. Most of the documents were never
provided to federal traffic safety officials during their investigations.

In 1981, the documents show, the company decided against mounting the
ignition system away from the engine in future models "for cost/ function
reasons." As early as April 1982, Ford engineers began to raise concerns
about overheating of the ignition module. A warranty analysis in January
1984 projected that the ignition module -- which was supposed to last for
the lifetime of the vehicle -- would fail at a rate of 56 percent at five
years or 50,000 miles. In May of that year, Ford engineers compiled a list
of components that could cause a "quits on road" condition -- a failure
that causes the vehicle to shut down while being driven. The document
questioned whether a recall was necessary.

The company continued to tell the safety agency there was no "common
pattern or cause" behind the complaints about stalling.

In July 1985, Ford executives were told that a special company task force
was studying why the ignition module and another part failed in "hot
climates" within warranty and more temperate climates after the warranty
expired. In October 1986, federal safety officials, relying on such Ford
assurances, shut down their second investigation. That same day, the
company's directors began to raise questions about the high costs of fixing
the module. Although the module was one of 14,000 parts of the car, costs
of replacing it threatened to eat up more than $200 million of the $350
million that Ford had reserved for all warranty claims. In November 1986, a
month after that meeting, Ford executives prepared a report on the issue
for the company's top management, including Harold A. Poling, then the
chairman. But according to testimony in the case, Mr. Poling never received
the report, although he and other executives learned of many of its

The study noted the nodule's high rate of failure at hot temperatures. It
said that 4.3 million vehicles in model years 1984 and 1985 were at risk of
ignition problems and that about 500,000 already had their modules replaced
at the owners' expense.

A survey of Ford customers who reported stalling found that 66 percent had
their cars towed because of the module's failure and 29 percent
"experienced a T.F.I.-related failure that caused the engine to quit while
the vehicle was in motion."

At that point, company officials recognized that the potential cost to an
across-the-board fix would be staggering, more than $429 million. The
company also concluded that such a fix was "not feasible" because they did
not have enough replacement parts and opted for a "selective notification,"
even though executives recognized it would leave many cars on the roads
that would continue to "quit on road."

Even after the limited notification program, which affected slightly over
one million cars, executives continued to raise concerns about the
placement of the module on the distributor. In a July 1988 memo, officials
in the electrical and electronic division said they were "concerned about
long-term customer satisfaction due to the anticipated high T.F.I. module
operating temperatures." "As you are aware," the memo said, "the failure
mode for the T.F.I. module under these conditions is a quits-on-road." "We
have reviewed this subject with you in the past, and we understand the cost
pressures," it concluded. "However, this posture is not consistent with
company quality goals."  (The New York Times, September 12, 2000)

FORD MOTOR: Gives an Account on Tire Recall in Report Filed with SEC
-------------------------------------------------------------------- The
following is an account given by Ford in the Company's report on Form 8-K
filed with the SEC on September 8, 2000:

"On August 9, 2000, Bridgestone/Firestone, Inc. ("Firestone") announced a
recall of all Firestone Radial ATX and Radial ATX II tires in size
P235/75R15 produced in North America since 1991 and all Wilderness AT tires
of that same size manufactured at Firestone's Decatur, IL plant. At the
time the recall was announced, Firestone estimated that about 6.5 million
of the affected tires were still in service. The recall was announced
following an analysis by Ford and Firestone that determined there was a
statistically significant incidence of tread separation occurring in the
affected tires. Most of the affected tires were installed as original
equipment on our Explorer, Mountaineer and Ranger models and on Mazda's
Navajo and B Series models (which are manufactured by Ford and sold to
Mazda). Under the recall, owners and lessees of those and any other Ford or
Mazda vehicles with the affected tires are being asked to bring their
vehicles to a Ford, Mazda or Firestone dealer for free replacement tires.
Alternatively, customers can have the tires replaced at other tire dealers
with tires of another manufacturer and be reimbursed up to $100 per
affected tire. Because of the magnitude of the recall and the limited
supply of appropriately sized replacement tires from all tire
manufacturers, we expect the recall to take several months to complete. As
of September 6, 2000, we estimate that about 30% of the estimated 6.5
million affected tires have been replaced.

We have preliminarily agreed to bear a portion of the costs of Firestone's
recall. In addition, we have suspended production of Explorer, Mountaineer,
Ranger and B Series models for the two-week period beginning August 28,
2000, which will allow us to divert about 70,000 replacement tires for use
in the recall. Although we expect these actions to reduce revenues and
increase costs, it is too early to assess their overall financial impact in
the second half of 2000.

At this point, neither Ford nor Firestone has determined the root cause of
any defect in the affected tires. The National Highway Traffic Safety
Administration ("NHTSA") is investigating this matter and could conclude
that the recall should be expanded to include other Firestone tires. On
September 1, 2000, NHTSA released a Consumer Advisory, suggesting the scope
of the recall could be expanded and recommending that owners of vehicles
with certain models and sizes of Firestone tires not already being recalled
take a number of actions to enhance their safety. Additionally,
Congressional hearings on this matter began on September 6, 2000, at which
Ford's Chief Executive Officer, Jac Nasser, has testified.

In addition, governmental authorities in Venezuela are conducting an
investigation relating to accidents involving Explorers equipped with
Firestone tires. Ford of Venezuela launched an Owner Notification Program
("ONP") in May 2000 to customers with Explorers equipped with Firestone
tires. The ONP included tires produced both in Venezuela and in North
America. We have found that many of these recalled tires were not built to
our specifications. An agency of the Venezuelan government, INDECU, has
recommended an investigation to determine whether possible criminal charges
should be brought against both Ford and Firestone. INDECU has also
indicated its intention to pursue a civil case against Ford of Venezuela to
seek monetary compensation for victims of tread separation accidents, civil
penalties, and a recall of all 1996 - 1999 Explorers to retrofit them with
stiffer shock absorbers.

On September 5, 2000, Firestone announced its own recall of the same tires
already covered by Ford of Venezuela's ONP.

As a result of the Firestone tire recall, there have been several new
individual personal injury lawsuits and class action lawsuits filed against
Ford and Firestone in state and federal courts across the country. Although
the number of new filings increases almost daily, there are approximately
63 personal injury lawsuits and 35 class action lawsuits pending against
Ford. Among other things, the class actions seek to expand the scope of the
recall to include other tires and to award to consumers the cost of
replacing those tires. Several of the individual personal injury lawsuits
and class actions also seek punitive damages.

Mr. Nasser's statement made at an August 31, 2000 press conference and his
statement made at the September 6, 2000 hearing before a joint session of
the House Subcommittees on Consumer Protection and Government Oversight,
filed as Exhibits 99.1 and 99.2, respectively, to this report, are
incorporated by reference herein.

GENAMERICAN LIFE: Announces $55M Settlement for Suits over Life Policies
GenAmerican Financial Corp. announced Aug. 24 that it has agreed to a
settlement worth some $ 55 million to end all federal class action lawsuits
against it over sales of whole life policies by its subsidiary, General
American Life Insurance Co.

Plaintiffs had filed three class actions alleging that policyholders had
been damaged by improper sales practices and policy performance.

The settlement calls for benefits to go to 251,000 current and former
policyholders who bought whole life policies from

The St. Louis-based company continued to deny the charges. "The decision to
settle was a business decision," said Kevin C. Eichner, president of
General American Life. "By settling this litigation, we will put the issues
behind us and move forward with our business plans."

Other life insurance companies have settled similar lawsuits, generally
based on claims that policyholders were deceived into believing interest on
the cash value of their policies would reduce or eliminate the amounts they
paid in premiums. (Liability Week, August 28, 2000)

GENERAL MOTORS: Warns Buick and Oldsmobile Owners about Air Bags
General Motors has warned owners of 290,000 Buick and Oldsmobile sedans
that driver-side air bags could deploy unexpectedly, but a recall will not
begin until later this year because GM does not have parts to fix the
problem. GM spokesman Terry Rhadigan said 60 injuries, all minor, have been
reported from 115 incidents of air-bag deployment in the vehicles. The
problem affects 103,000 1995 Buick Regals and 187,000 Oldsmobile Cutlass
Supremes from 1995 and 1996 sold in the United States and Canada. (The
Washington Post, September 12, 2000)

GEORGIA POWER: Accused of Retaliation in Employment Racism Case
Georgia Power is facing new allegations in a high-profile lawsuit that
accuses the Atlanta utility of racial discrimination against its
African-American workforce. In a court filing in U.S. District Court in
Atlanta, plaintiffs lawyers accused the utility of firing one of the black
plaintiffs in retaliation for her decision to file suit.

The lawyers contend that Sarah Jean Harris, who has worked for the utility
for 21 years, was illegally fired 36 days after she and two other black
employees became named plaintiffs in the case. The suit, since expanded
against Southern Co. and Georgia Power s sister companies, seeks class
action status to represent 2,100 salaried African-American employees.

The court motion said that Harris was told by two white supervisors on
Sept. 1 that she was being fired "because of her performance" and because
she was seen making copies at the utility s operating headquarters on a
Saturday. But Harris s job evaluations had been exemplary and any claim she
was making copies "is absolutely false," the court motion added.

Georgia Power spokeman Tim Terrell, in statements made to the Atlanta
Journal-Constitution, denied the utility fired Harris for any retaliatory
reason. In October 1999, he said, Harris had been placed "on the final
level of discipline under Georgia Power s progressive discipline process."
At that time, he added, she was told that any further performance problems
during the following 12 months could result in her termination from the
company. (The Electricity Daily, September 12, 2000)

GORDON-DALY: London Law Firm Files Suit against Former Can. Stock Dealer
A London law firm has filed a class-action lawsuit against former penny
stock dealer Gordon-Daly Grenadier Securities.

The Toronto dealer was ordered last month to close and its executive
partners were drummed out of the securities business after admitting they
charged clients excessive markups on 13 stocks traded on the Canadian
Dealing Network.

The dealer made $31 million in markups over four years. But the Ontario
Securities Commission negotiated payment of only $25,000 to cover its
investigation costs.

Rose Hill of London, Ont., wants more. Her lawyers will attempt to recover
losses and punitive damages for the company's clients. She is represented
by lawyers at Siskind, Cromarty, Ivey and Dowler in London, one of the
leaders in class-action lawsuits in the province.

Hill alleges in her claim that "misrepresentations and manipulations" of
stocks cost her about 86 per cent of the $70,000 she invested through
Gordon- Daly in 1999. She names in her claim David Bregman of Cortleigh
Blvd., Alan Greenberg of Bayview Ridge and Oron Sternhill of Hillmount
Ave., all of Toronto and all registered as managing partners of
Gordon-Daly. Also named are the companies through which these men owned
shares in Gordon- Daly, and the former controller and compliance officer,
Wangyal Tulotsang of Sawood Blvd.

Much of Hill's statement of claim, filed with Ontario's Superior Court of
Justice, repeats facts agreed upon before the OSC.

The company's partners admitted to the OSC that 90 per cent of their
revenues between 1996 and 1999 came from buying shares cheaply and
reselling them to clients at escalating prices, charging markups as high as
324 per cent. Eight of the 13 companies were promoted by Harry Bregman, the
original founder of Gordon-Daly, father of David Bregman and father-in-law
of Oron Sternhill. This had not been disclosed to the OSC or to clients.

Hill alleges the markups and the statements made by salespeople to induce
clients to buy and hold on to shares that would soon fall in price amounted
to fraud. She alleges Gordon-Daly never disclosed its excessive markups. It
recommended stocks as excellent investments. It made false representations
about future profits. It gave misleading information about the price
history of stocks. "These statements were false representations as they
were untrue statements of fact made with a knowledge of their falsehood or
recklessly made without belief in the truth of the statements," she states
in her claim.

None of these more serious allegations has been proven in court, though,
and the claim will require certification to proceed as a class action.

David Bregman said, "I really have no comment at this time, but thank you
for calling." Greenberg did not return a call, while Sternhill and
Tulotsang have unlisted numbers. The lawyer who represented the men before
the OSC did not return a message either.

Other lawyers contacted by The Star before the Hill claim was filed did not
hold out much hope that a class-action suit would even be launched, let
alone collect much money.

Soon there will be no corporate entity to sue. And observers doubt small
operations like Gordon-Daly ever had much capital to go after. Most
revenues were likely spent in salaries or dividends to the owners. Going
after the owners - even if they held on to a lot of money - will be both
costly and difficult, say other lawyers. The corporate structure provides
owners considerable protection.

The Hill claim asks the court to order "an accounting, an equitable tracing
order and an order requiring disgorgement of all income earned by the
defendants through their receipt of investment deposits, . . . (sales)
commissions and any other proceeds."

Securities lawyer Paul Pape says it is "exceedingly difficult, bordering on
impossible" to certify a class action to sue a securities dealer who was
not involved in founding a company or promoting the original issue of
shares. He and lawyer Harvey Strosberg of Windsor were unsuccessful in
their attempt to include stock dealers in a class-action suit over Bre-X
Minerals Ltd., whose claims of a giant gold find in Indonesia proved to be

Justice Warren Winkler denied their application on the grounds that the
facts of each client's case would depend on what the client was told by his
or her broker.

So, while Hill and other Gordon-Daly clients have crossed one hurdle in
their quest for reimbursement by finding a willing law firm, there are
other hurdles left to cross. (The Toronto Star, September 12, 2000)

INMATES LITIGATION: Diabetes Group Sues Philadelphia Police
The American Diabetes Association has joined in a class-action lawsuit that
charges the city of Philadelphia with denying diabetics proper medical
treatment while in police custody.

In the lawsuit, the ADA is teamed with seven other plaintiffs who say they
were denied food, insulin, glucose-testing supplies and other medical
treatment by Philadelphia police after identifying themselves as diabetics.
"These individuals became seriously ill as a result of the police
department's failure to respond to their clear request for basic medical
care," the ADA said in a statement.

The case originally was filed in February by Stephen M. Rosen, a
Philadelphia cabaret owner and insulin-dependent diabetic, who uses an
insulin pump to control his blood-sugar levels.

In the lawsuit, Mr. Rosen says he came "close to death" last year when
police locked him in a holding cell for nearly 24 hours, gave him little to
eat and denied him access to insulin and blood-pres- sure medicine. As a
result, he experienced dangerous fluctuations in his blood-sugar levels,
plus sky-high blood pressure that put him at risk for a stroke. He was
arrested for a liquor code violation that ultimately was dismissed.

Mr. Rosen's civil rights lawsuit, which is pending in federal court, said
this was "at least" the fourth claim filed against Philadelphia since 1997
over police treatment of diabetics in custody.

An investigation into the Nov. 5, 1987, death of Betty Jean Davis, a
diabetic who spent 24 hours in police custody without receiving medical
attention, determined that personnel with the Police Detention Unit "had
not received training relating to persons with diabetes in police custody,"
according to the class-action lawsuit.

However, the city previously had pledged to train officers in identifying
and handling diabetic emergencies, as part of a settlement in a lawsuit
brought by the Juvenile Diabetes Foundation in 1982.

After Mr. Rosen filed suit, six other diabetics, all adult males, came
forward and complained that they had been denied medical treatment by
Philadelphia police and joined him as plaintiffs. One man, arrested in July
1999 on a marijuana possession charge, says he suffered near-fatal
consequences when his blood sugar rocketed as a result of an insulin pump
malfunction, but police barred him from giving himself insulin injections.
Another plaintiff, charged in a forgery warrant and arrested at his home,
was told he could not take his insulin and testing equipment with him to
the police station. His mother later brought those supplies to the station.
Asked if she believes the plaintiffs' charges, Shereen Arent, national
director of legal advocacy for the ADA, said, "We wouldn't be a plaintiff
in this suit if we didn't believe them."

Michael Greene, chairman of the ADA's legal-advocacy subcommittee, put it
this way: "The association does not enter into this litigation lightly.
However, when people with diabetes do not receive the medical attention or
treatments they need to manage this serious disease, they are at risks for
dangerous health consequences, including hospitalization, coma and possibly

Sgt. Roland Lee, spokesman for the Philadelphia Police Department, said he
was familiar with the lawsuit but could not comment on the accusations.
Sgt. Lee said his department has long had procedures on the books for
dealing with diabetics and people with other medical disorders who are in
police custody. (The Washington Times, September 12, 2000)

MARCOS: Merrill Lynch Releases $35 Mil in Filipinos' Human Rights Case
Merrill Lynch agreed Monday to turn over to a U.S. court more than $ 35.3
million being sought by Filipino citizens who won a human rights lawsuit
against their late President Ferdinand E. Marcos.

Plaintiffs' attorney Robert A. Swift said after a closed-door meeting in
the chambers of U.S. District Judge Manuel L. Real that the brokerage house
had agreed to let Real decide who is entitled to the money.

Merrill Lynch's corporate counsel, George Schieren, confirmed that the firm
agreed to surrender the funds, which are in an account set up in 1972 under
the name of Arelma Inc., a Panamanian corporation.

In 1995, a federal court jury awarded $ 1.9 billion to 9,539 Filipino
plaintiffs in a class-action suit for human rights abuses they suffered
under Marcos. The suit was brought in a U.S. court in 1986 because at the
time Marcos was living in exile in Hawaii. He died in 1989.

Despite the colossal verdict, Swift and his co-counsel, Sherry P. Broder of
Honolulu, were able to seize only about $ 1 million of Marcos' assets from
the sale of a home and a Mercedes-Benz in Hawaii.

With prospects of further recovery looking dim, the plaintiffs agreed in
1999 to accept a reduced settlement of $ 150 million.

The money was to come from a $ 475-million cache in two Swiss bank accounts
and subsequently turned over to the government-controlled Philippine
National Bank.

Although the Philippine government agreed to surrender the money as part of
the settlement, it has refused to make good on its promise, Swift said.

Swift has filed a motion to set aside the $ 150-million settlement on the
grounds that the Philippine government reneged on its agreement.

The meeting in Real's chambers included a discussion of the impasse with
Filipino authorities. It was attended by lawyers for the Philippine
government and Marcos' wife and son. Participants in those discussions
declined to comment afterward, saying they were barred by the judge from
doing so.

"This is a highly sensitive matter," said former U.S. Sen. Birch Bayh
(D-Indiana), a Washington, D.C., lawyer whose firm represents the
Philippine government.

Before the meeting got underway, however, Bayh said he was mystified about
why the Philippine government has not freed up the money.

Also attending the meeting were James P. Linn, an Oklahoma City lawyer who
represents Marcos' widow, Imelda, and John Bartko, a San Francisco lawyer
who appeared on behalf of Marcos' son, Ferdinand "Bong Bong" Marcos Jr. The
plaintiffs have also asked Real to find Marcos' widow and son in contempt
for failing to disclose information about their assets.

Real scheduled another meeting with the lawyers Nov. 1. (Los Angeles Times,
September 12, 2000)

NETSOLVE, INC: Milberg Weiss Files Securities Suit in Texas
The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a
class action lawsuit was filed on September 11, 2000, on behalf of
purchasers of the securities of NetSolve Inc. (NASDAQ:NTSL) between April
18, 2000 and August 18, 2000, inclusive (the "Class Period'). A copy of the
complaint filed in this action is available from the Court, or can be
viewed on Milberg Weiss' website at: http://www.milberg.com/netsolve/

The action, numbered A00CA591SS is pending in the United States District
Court for the Western District of Texas, Austin Division, located at 655 E.
Durango Blvd., San Antonio, TX 78206, against defendants NetSolve, Craig
Tysdal (President and Chief Executive Officer), Harry S. Budow (Vice
President), and Kenneth C. Kieley (Chief Financial Officer and Vice
President). The Honorable Sam Sparks is the Judge presiding over the case.

The complaint charges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder,
by issuing a series of material misrepresentations to the market between
April 18, 2000 and August 18, 2000. For example the complaint alleges that
on May 18, 2000, NetSolve Vice President Harry S. Budow provided an
interview to Bloomberg Forum concerning the Company and its operations.
During that interview, which was disseminated over the Bloomberg Newswire,
defendant Budow represented that the Company would beat the $0.41 earnings
estimate of two analysts that follow the Company and stated: "We've
exceeded the estimates since we went public by 2 cents or more a quarter .
. . There's no reason not to expect (it won't keep happening). . . " The
complaint alleges that these statements were materially false and
misleading because, among other things, they failed to disclose that the
Company was not performing according to its internal projections and was
experiencing declining demand for its products and services. Then, on
August 18, 2000, defendants revealed that the Company's growth rate was
slowing dramatically and that analysts should lower their earnings
estimates. In response to this information, the price of NetSolve common
stock plunged from $ 12.625 per share to $7.625 per share -- a decline of
38%. During the Class Period, certain NetSolve insiders sold their
personally-held NetSolve common stock to the unsuspecting public generating
aggregate proceeds of more than $3 million.

Contact: Milberg Weiss Bershad Hynes & Lerach LLP, New York Steven G.
Schulman or Samuel H. Rudman 800/320-5081 Email: NetSolvecase@milbergNY.com
Website: http://www.milberg.com

POLICY MANAGEMENT: Case on 401(k) Plan Coordinated with Securities Suit
Also on May 22, 2000, an amended complaint was filed in the previously
disclosed purported class action brought by one of the Company's employees,
suing allegedly on behalf of herself and all former or current participants
in the Company's 401(k) Retirement Savings Plan ("Plan") during the period
October 22, through February 10, 2000, against the Company, its Chairman
and three members of the Administrative Committee of the Plan. The amended
complaint alleges that the Plan's investment in the Company's stock
violated Sections 502 (2) and (3) of ERISA and constituted a breach of
fiduciary duty given defendants' alleged knowledge that the Company's stock
price was artificially inflated throughout the class period as a result of
the same series of alleged materially false and misleading statements that
form the basis of the securities class action described above. The court
has entered an order providing for the coordination of proceedings with the
securities class action. The defendants have filed a motion to dismiss the
complaint and intend to vigorously pursue a full defense of this action.

POLICY MANAGEMENT: Merger Termination Fee Criticized in SC Amended Suit
As previously disclosed, between March 31, 2000 and May 5, 2000 four
purported class actions were filed against the Company and its directors in
the Court of Common Pleas in Richland County, South Carolina. These actions
were consolidated into a single action and an amended consolidated
complaint was filed on July 24, 2000. The amended consolidated complaint
alleges that the defendants breached their fiduciary duties by failing to
conduct a market check and agreeing to an unreasonable termination fee in
the June 20, 2000 Agreement and Plan of Merger between the Company and
Computer Sciences Corporation (CSC transaction) and breached their duty of
candor in failing to disclose material information concerning the CSC
transaction. The plaintiffs seek preliminary and permanent injunctive
relief to enjoin payment of the termination fee under the Agreement and
Plan of Merger between Politic Acquisition Corp. and the Company (Welsh
Carson transaction) which was terminated by the Company. Plaintiffs also
seek to enjoin consummation of the CSC tender offer until additional
disclosures are made, to strike the termination fee in the CSC transaction,
and seek reasonable attorney fees and costs. The plaintiffs' request for a
temporary injunction was denied on August 7, 2000 following a hearing on
plaintiffs' request. Defendants have filed a motion to dismiss the amended
complaint and intend to vigorously pursue a full defense of this action.

POLICY MANAGEMENT: Securities Suit for Period 1998 to 2000 Consolidated
On May 22, 2000 an amended consolidated complaint was filed in the
previously disclosed purported class action filed on behalf of purchasers
of the stock of Policy Management Systems Corp. during the period October
22, 1998 and February 10, 2000. The defendants have filed a motion to
dismiss the complaint and intend to vigorously pursue a full defense of the

RECORD COMPANIES: Court Declines Certification in Singers' Action
In a suit by 18 recording artists against their union and record companies
for breach of fiduciary duty and civil RICO violations, the 11th U.S.
Circuit Court of Appeals denied class certification because the singers'
contracts all differed, depending on their popularity. (Moore, et al. v.
American Federation of Television and Radio Artists, et al., Nos. 98-8895,
98-9263 (11th Cir. 6/29/00).)

In 1993, 18 recording artists sued their union, American Federation of
Television and Radio Artists, their union's benefit plans, AFTRA Health and
Retirement Funds, the trustees of the Funds and eight record companies who
contribute to the Funds. The complaint alleged that the record companies
failed to contribute the proper amounts due, that the union trustees
breached their fiduciary duty by failing to collect the delinquencies and a
civil RICO claim.

The singers subsequently moved for class certification to litigate the RICO
and breach of fiduciary duty claims. The U.S. District Court for the
Northern District of Georgia denied class certification and dismissed the
derivative delinquent contribution claims under the Employee Retirement
Income Security Act of 1974 for lack of standing. The singers appealed.
(Civil RICO Report, September 7, 2000)

SALT LAKE: Romney Defends the Releasing of the Geld Document
Salt Lake Organizing Committee President Mitt Romney says the public
release of the "geld document," a secret dossier on IOC members that had
been prepared during the city's successful bid to win the 2002 Winter
Games, was the right thing to do.

"Under our laws and SLOC's policy of openness, all documents relating to
the bid scandal will be public," Romney said in a statement released
shortly after his arrival in Sydney for the 2000 Summer Games. "We will not
in any way try to hide the past. Shedding light on what happened will
ensure it does not happen again."

Romney's comments came a day after some IOC members vented their anger at
being portrayed as corrupt and threatened to sue Salt Lake organizers over
the document, which listed personal habits, loyalties and family needs of
IOC members.

The document was compiled by Salt Lake bid leaders. The word "geld," which
means money in German, was written next to the names of several IOC

The document, was retrieved under a subpoena in the U.S. Justice
Department's grand jury investigation of the scandal. The memo was found on
the hard drive of the computer of Dave Johnson, the No. 2 official in the
bid and former deputy of the organizing committee.

It was released publicly four months ago.

Keba Mbaye, chairman of the IOC ethics commission, said that the dossier
"lists the names of practically all IOC members and indicates how to obtain
their votes and favor."

Mbaye, a former World Court judge from Senegal, said there were legal
grounds to sue for libel - either by IOC members individually or in a
class-action suit.

The notation for Mbaye in the document said "Salt Lake visit at all costs."
Mbaye's reaction when the document was disclosed was, "I never went to Salt
Lake City, so it didn't work."

IOC leaders, including Vice Presidents Anita DeFrantz and Richard Pound,
and Director General Francois Carrard, have downplayed the notion of a

"To try and sue someone whose identify you don't know ... about a list that
talks about possible prospects of avenues of approach to certain IOC
members - good luck with that," said Pound, a Canadian lawyer who led an
internal inquiry into the Salt Lake scandal. "Who are you going to sue for

Bid committee operations were led by former SLOC President Tom Welch and
Johnson, who were charged in July with 15 felony counts of conspiracy,
racketeering and fraud for providing more than $1 million in cash and gifts
to IOC members.

Romney also denied claims that when he wrote IOC President Juan Antonio
Samaranch that he was releasing the document, he apologized for doing so.

"My letter to President Samaranch ... was in no way an apology for
releasing the geld document," Romney said. "It was for the lack of notice
given to the IOC regarding the document's release."

The document had been requested by Utah news organizations, but originally
was withheld on the advice of SLOC's outside legal counsel because of its
potential pertinence to the Justice Department investigation.

Romney released it after being informed that the federal attorneys had
cleared SLOC of any criminal wrongdoing.

Romney's letter to Samaranch said state law and SLOC's open-records policy
required immediate release. He also indicated SLOC officials knew reporters
would get the document from other sources anyway, and trying to keep it
secret longer would be seen as a cover-up.

Carrard told The Salt Lake Tribune that the issue resurfaced because some
members had just become aware of the document and what had happened
regarding its release. (The Associated Press State & Local Wire, September
12, 2000)

SECRET SERVICE: Director Promises No Retaliation on Agentsí Racism Suit
Responding to pressure from a federal judge, Secret Service Director Brian
Stafford has sent an e-mail to his work force in which he promises that no
one will face retaliation for joining in a pending racial discrimination
lawsuit against the agency.

Stafford's message was meant to clarify a February e-mail in which he wrote
that he was "disappointed and troubled" by the allegations of
discrimination. In that message, he wrote: "It is offensive for anyone to
question our commitment to equal employment opportunities for all of our

Lawyers representing a group of current and former black Secret Service
agents contended that Stafford's first message, sent Feb. 25, was meant to
intimidate others from joining in their complaint or speaking out.
Government lawyers said Stafford was only attempting to defend the agency's
record and was not trying to threaten anyone.

But at a hearing this month in U.S. District Court, Judge Richard W.
Roberts agreed that Stafford's e-mail could have a "chilling effect" on
agency employees who are considering joining the lawsuit.

Roberts repeatedly asked government lawyers how Stafford intended to
correct the situation. When they said officials believed no action was
necessary, Roberts strongly suggested that they reconsider.

Stafford issued the follow-up e-mail. "Each employee of the Secret Service
should feel free to exercise his or her rights under the equal employment
laws," he wrote. "My previous [e-mail] certainly was not meant to suggest

Saying the agency is committed to equal employment opportunity, Stafford
added: "We do not and will not tolerate discrimination nor retaliation in
any form."

The legal battle began in February, when two agents, Reginald G. Moore and
John E. Turner, filed a complaint with the Equal Employment Opportunity
Commission alleging that the Secret Service promotions system is tilted in
favor of whites. In May, Moore, Turner and eight other current and former
agents filed a class action lawsuit.

Government lawyers denied the allegations. The agents' lawyers, meanwhile,
asked Roberts to issue an emergency order that would shelve the Secret
Service's promotions system until the case is decided. They also sought an
order directing the agency to send a corrective e-mail and refrain from
punitive transfers or other retaliation.

In a ruling, Roberts said he was not swayed by the evidence of
discrimination gathered so far, maintaining that statistics gathered by the
plaintiffs were inconclusive. The judge said he saw no reason to
immediately change the promotions process.

Unaware of the corrective e-mail from Stafford, Roberts said "some actions
taken by the Secret Service since this litigation began are likely to chill
other black agents from coming forward with their claims." (The Washington
Post, September 12, 2000)

SIZZLER INTERNATIONAL: Subsidiaries Sued on E.Coli Outbreak in Wisconsin
------------------------------------------------------------------------ In
its report filed with the SEC, Sizzler International Inc. discloses that
subsidiaries of the Company were named as defendants in seven of nine
lawsuits filed by individuals who were affected by the E.coli outbreak at
its two franchised locations in the Milwaukee area, Wisconsin on July 26,
2000. Out of nine lawsuits, two were filed as class action.

SOUTHWESTERN ENERGY: Responds to AR Suit over Royalty and Mineral Rights
Southwestern Energy (NYSE: SWN) on September 11 responded to a class action
lawsuit that has been filed against the Company in state court in Sebastian
County, Arkansas. The suit alleges royalty and mineral rights owners are
owed damages as a result of the Company's operation of an underground
natural gas storage facility in Franklin County, Arkansas.

Southwestern Energy believes that the Plaintiffs' allegations in this suit
are not supported by the facts or the law and that the Company's subsidiary
acted in accordance with the guidelines of the Arkansas Oil and Gas
Commission. Specifically, the Arkansas Oil and Gas Commission has
authorized the Company's subsidiaries to use the gas storage facility. That
authority was granted after proper notice and full public hearings in 1968,
and the facility has been in continuous use for more than 30 years. Written
agreements were obtained from the property owners, and those owners have
been continuously paid compensation for the right to gas storage at the
Stockton Gas Storage Unit.

In 1997, as a result of additional geologic and engineering data from
drilling in the area, the Arkansas Oil and Gas Commission, after proper
notice and a full hearing, expanded the area limits of the Stockton Gas
Storage Unit. In its 1997 Order, and certification, the Commission again
found that the facility was suitable for the storage of gas and that its
use for gas storage was in the public's interest.

"Contrary to the Plaintiffs' allegations, this suit is not related to, or
analogous to, the recent Hales suit. The Company denies the Plaintiffs'
allegation that they are entitled to ownership rights to the natural gas
that the Company has injected into the storage facility," said Harold
Korell, president and chief executive officer, Southwestern Energy.

As a result of negotiations with property owners, the Company's subsidiary
has obtained the storage rights from a majority of the property owners in
the expanded portion of the storage unit. Prior to the Plaintiffs' filing
of this lawsuit, the Company's subsidiary had been actively pursuing the
acquisition of agreements with all remaining property owners. However,
until the Court can determine whether to allow this lawsuit to proceed as a
class action, the Company has stopped further negotiations with the
remaining property owners. Consequently, the Company will begin
condemnation proceedings, as are specifically allowed under Arkansas law,
to allow the Court to determine the fair value of the remaining property
owners' gas storage rights.

"We have been working for a number of months with affected property owners
to provide fair compensation for the use of their property for gas storage.
Because of their significantly divergent interests, we believe that the
Court will deny class action certification of this lawsuit," said Mr.

The Company believes that its ultimate liability, if any, will not be
material to its consolidated financial position or results of operations.

* 3rd Cir. Approves NJ Guidelines On Releasing Megan's Law Information
New Jersey Attorney General John J. Farmer's new guidelines for the release
of Megan's Law information are sufficient to ensure that private
information about convicted sex offenders doesn't fall into the wrong
hands, the 3rd Circuit Court of Appeals ruled. The court's opinion, written
by Circuit Judge Marion Trump Barry, calls the ruling an end to years of
litigation concerning the constitutionality of New Jersey's Megan's Law,
which instructs law-enforcement officers to notify the public of the
whereabouts of released sex offenders.

The appeal addressed two narrow issues all that remained of a class action
filed in 1997.The suit, Paul P. v. Farmer, alleged that the law's community
notification provisions violated released prisoners' constitutional right
to privacy.

The first time the challenge reached the 3rd Circuit, the appeals court
held that registrants had a privacy interest in only one bit of information
police could release about them under the law their home addresses. The
court also ruled, however, that the public interest in "knowing where sex
offenders live so that susceptible individuals can be appropriately
cautioned" was compelling enough to overwhelm the plaintiffs' privacy
interest. But the appeals court noted that "the fact that protected
information must be disclosed to a party who has a particular need for it
... does not strip the information of its protection against disclosure to
those who have no similar need."

The case was remanded to the district court of New Jersey for a
determination of whether the state's procedures for releasing the
information adequately guarded against unauthorized release. On remand, the
plaintiffs found fault with several aspects of the community notification
system, including the lack of penalties to deter unauthorized release of
the information and inconsistency in the procedures followed.

The New Jersey attorney general responded that the guidelines for release
of Megan's Law information cautioned in several places against improper
disclosure. But U.S. District Judge Joseph E. Irenas pointed out that the
plaintiffs had "summarized forty-five incidents where confidential
information released under Megan's Law was distributed to unauthorized
persons." No system could be perfectly leak-proof, Irenas said, but there
should be a uniform system that was at least reasonably calculated to
prevent unauthorized disclosure. The guidelines as written failed to meet
that standard, he held, and he ordered that they be redrafted. The current
set of guidelines, issued on March 23, are Farmer's response to that order.

Under the new guidelines, two forms are used to notify the community of a
sex offender's presence an "unredacted notice" and a "redacted notice."The
first form contains all the information a registrant's name, photograph,
description, exact street address, exact business or school address,
vehicle number and license number, and a description of the offense.Such
unredacted notices are provided only to those who sign a "Megan's Law
Receipt Form" in which they agree to be bound by the "Megan's Law Rules of
Conduct," which bar any unauthorized sharing of the information with others
who were not notified by law enforcement authorities. The redacted notice
contains all the same information except that the exact home and work
addresses are replaced by street names and block numbers.

The plaintiffs raised only two challenges to the new guidelines. They
argued that they were deficient because they did not raise the threat of
contempt-of-court sanctions for unauthorized disclosures. Second, they
argued that the redacted notices were still too revealing because "a
person's block of residence is constitutionally protected information."

Irenas rejected both arguments, and the plaintiffs appealed. Their case was
argued by Edward L. Barocas of the New Jersey Office of the Public
Defender. Attorney General Farmer argued for the state. The appeals court
agreed with Irenas. Noting that it had already found the state's interest
in disclosing where prior sex offenders live "compelling," Barry pointed
out that "Megan's Law's fundamental purpose ... is public disclosure. ""For
example, with a Tier 3 offender [one who has been deemed likely to commit a
sex offense again], every parent of a child attending a school within the
court-authorized notification zone is entitled to receive an Unredacted
Notice," Barry wrote. "In light of all these authorized public
disclosures," Barry said, "all that remains is the potential that a minimal
burden ... will be placed on appellants' nontrivial privacy interest if
there are subsequent, unauthorized disclosures with respect to a single
piece of information, an offender's address." "Moreover," the court found,
"the notification order itself and the accompanying Rules of Conduct
rigorously stress the confidentiality of the information being provided,
comprehensively explain how the information can and cannot be used, and
firmly warn against unauthorized disclosures."

Although the threat of contempt sanctions might further reduce the number
of unauthorized disclosures, the court found, it isn't necessary to make
the process constitutional.Responding to the plaintiff's criticism of the
unredacted notices that specifying what block a registrant lives on is a
violation of a constitutionally protected privacy interest the court again
found the plaintiffs' privacy interest was trumped by the state's interest
in disclosing Megan's Law information to the "relevant public.

"Jeff Beach, a spokesperson for the New Jersey Office of the Public
Defender, said that the appellate ruling was "a disappointment for our
clients."The plaintiffs haven't yet determined what their next step will
be, he said, although he noted that a request for an en banc rehearing was
possible.He pointed to a footnote in the appeals court's opinion, which he
called an invitation to "start over again at square one" if the new
guidelines are ineffective that is, he said, if there are more unauthorized
disclosures, particularly ones that result in vigilante actions against his
clients."If the safeguards prove to be inadequate," the footnote says, "we
do not preclude an application to the District Court for relief." Shannon
P. Duffy contributed to this report. (The Legal Intelligencer, September
12, 2000)


S U B S C R I P T I O N  I N F O R M A T I O N

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

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