/raid1/www/Hosts/bankrupt/CAR_Public/000914.MBX              C L A S S   A C T I O N   R E P O R T E R

             Thursday, September 14, 2000, Vol. 2, No. 179


AMERICAN FAMILY: Sweepstakes Suit Results in Settlement and Reforms
BOONE COUNTY: Judge Rules Lawsuit Covers All Female Students in District
BOSTON SCIENTIFIC: Investors Allege in MA of Misrepresentation of Recall
BOSTON SCIENTIFIC: DOJ Investigates on NIR ON(R) Ranger(TM) Recalled
BRIDGESTONE CORP: A- Long-Term S&P Credit Rating Still on CreditWatch

DELTA FINANCIAL: 1998 NY Suit Alleges of TILA and HOEPA Violations
DELTA FINANCIAL: Borrowers Say Processing Fees Are Improperly Charged
DELTA FINANCIAL: Changes in Lending Practices Part of Settlement
DELTA FINANCIAL: Defends Securities Suit Filed in NY over IPO in 1996
DELTA FINANCIAL: Faces NY Suit Filed in April on Fees for Mortgage Loans

DELTA FINANCIAL: Lawsuit Says Amounts in Escrow Accounts Exceed Limits
E.COLI: Judge in Canada Wants People Most Affected to Be Heard
FIRESTONE, FORD: Analysts Tell of Hurt on Earnings
FIRESTONE, FORS: KS Couple in Narrow Escape from Tire Peeling File Suit
FORD MOTOR: Board Discussed Dangerous Stalls; Denies Knowing Problem

HOLLYWOOD: Lawyers Consider Lawsuit Using FTC Finding on Violent Films
NEW YORK: Welfare Recipients Suit for Tax Refunds Time Barred
SAFEGUARD HEALTH: Announces Dismissal of Stockholder Litigation
TRAVELERS PROPERTY: Case over Annuities from Injury Settlement Dismissed
W.R. GRACE: Book Companies Resolve False Claims Charges

WAR VICTIMS: Bosnian Refugee to Testify in U.S. Court Karadzic
WAR VICTIMS: Disabled Veterans’ Lawsuit in Canada Will Proceed
WASATCH CONSTRUCTORS: Bankrupt Trucker Company Seeks to Recover Money

* Shakeout of U.S. e-Commerce Companies May Provide Examples for Canada


AMERICAN FAMILY: Sweepstakes Suit Results in Settlement and Reforms
A Tampa woman will receive more than $ 1,000 as part of a settlement with
American Family Publishers. A 79-year-old Tampa woman who poured hundreds
of dollars into American Family Publishers sweepstakes will share in a $
32-million class-action settlement approved in New Jersey last week, her
lawyers said Monday. Ina Brown received AFP mailings in 1997 telling her
that either she or one other person had won millions, said her attorney,
Guy Burns of Tampa.

The settlement, as well as reforms obtained by state and federal officials,
means that "the days of outlandish sweepstakes claims and promises are
over," Burns said.

Mrs. Brown will get back several hundred dollars she spent on magazines in
hopes of winning the sweepstakes, Burns said. She also will receive $ 1,000
for serving as one of a half-dozen lead plaintiffs in the nationwide
class-action lawsuit.

Burns and members of his firm, Johnson, Blakely, Pope, Bokor, Ruppel &
Burns, and more than 30 other lawyers throughout the country who worked
with them, will split an award of $ 8.7-million for fees and costs. The
total value of the settlement, with all costs included, is nearly $

Investigations of AFP began after the St. Petersburg Times reported in 1997
that a dozen people flew to Tampa to collect sweepstakes prizes they
mistakenly thought they had won. One was 88-year-old Richard Lusk of
California, who also is a plaintiff in the suit. He and the others who made
the trip to Tampa have already been reimbursed for their travel expenses.

The trips prompted a storm of criticism of AFP, Publishers Clearing House,
and other direct-mail marketers that use sweepstakes.

Dozens of law firms nationwide received complaints and filed lawsuits,
which were consolidated in federal court in New Jersey. AFP subsequently
declared bankruptcy there.

More than 140,000 people, who received AFP mailings between 1992 and 1999,
qualified for refunds that will average about $ 500. Claimants' attorneys
say that's about 90 cents on the dollar, an unusually high recovery rate.
Also as part of the settlement, $ 1-million has been set aside for a
sweepstakes. The court in New Jersey will supervise a drawing for 10 prizes
of $ 100,000. The refund qualifiers will be in the sweepstakes pool.

In agreeing to the terms, AFP denies liability, and says it is settling to
put the matter behind it. (St. Petersburg Times, September 12, 2000)

BOONE COUNTY: Judge Rules Lawsuit Covers All Female Students in District
A federal judge has given class-action certification to a lawsuit that
alleges the Boone County school district is not providing girls with the
same athletic opportunities as boys. U.S. District Judge William O.
Bertelsman ruled Monday that all female students in the district should be
included in the lawsuit involving three sets of Boone County parents. Boone
County is the first school district in the Cincinnati area to be charged
with Title IX violations.

"We're very pleased. This was a big step," said Kimberly Egan, one of the
parents, of the judge's ruling. The parents involved in the suit have four
daughters who play softball, basketball and volleyball for Boone County

In their lawsuit, the parents contend inequalities exist in funding, team
travel, equipment and supplies, quality of coaching, scheduling of games
and practice times, provision of locker rooms, medical and training
services and publicity.

Bertelsman expanded the lawsuit to include ""all present and future female
students enrolled at Boone County Schools who participate, seek to
participate, or are deterred from participating in interscholastic and
other school-sponsored athletics at Boone County Schools." He also promised
to visit Boone County facilities to determine whether inequities exist.

A ruling in favor of the class represented in the lawsuit could force Boone
County schools to reassess the way athletic funds and programs are handled.
A ruling could also stand as a precedent for other high school cases.

The parents are seeking a trial, attorneys' fees, and for Bertelsman to
declare that Boone County schools have engaged in discrimination on the
basis of gender. They want him to issue a permanent injunction restraining
the district from future discrimination. "We've always said this is not
just about our daughters," Egan said. "This was the judge validating that."

Title IX is the federal law prohibiting gender discrimination in education
programs and activities, including athletics, at any school receiving
federal money. The Office for Civil Rights in the U.S. Department of
Education enforces the 28-year-old legislation.

District superintendent Bryan Blavatt disputes the claims. He said Boone
County's strong athletics program and record of nurturing female athletes
who eventually play college sports speak for themselves. "Most of this is
in the hands of the attorney," he said. "The quality of the girls' programs
and female athletics is a source of great pride for us. I just regret that
this will take up so much time and energy and resources from all the
citizens of Boone County when, in fact, I honestly believe we have made
every effort to work with these folks." (The Associated Press State & Local
Wire, September 13, 2000)

BOSTON SCIENTIFIC: Investors Allege in MA of Misrepresentation of Recall
Beginning November 4, 1998, a number of shareholders of the Company, on
behalf of themselves and all others similarly situated, filed purported
stockholders' class action suits in the U.S. District Court for the
District of Massachusetts alleging that the Company and certain of its
officers violated certain sections of the Securities Exchange Act of 1934.
The complaints principally alleged that as a result of certain accounting
irregularities involving the improper recognition of revenue by the
Company's subsidiary in Japan, the Company's previously issued financial
statements were materially false and misleading. In August 1999, lead
plaintiffs and lead counsel filed a purported consolidated class action
complaint adding allegations that the Company issued false and misleading
statements with respect to the launch of its NIR ON(R) Ranger(TM) with
Sox(TM) coronary stent delivery system and the system's subsequent recall.
The Company and its officers have filed a motion to dismiss the
consolidated complaint. The Plaintiffs have opposed the Company's motion to
dismiss the consolidated complaint.

BOSTON SCIENTIFIC: DOJ Investigates on NIR ON(R) Ranger(TM) Recalled
The Company is aware that the U.S. Department of Justice is conducting an
investigation of matters that include the Company's NIR ON(R) Ranger(TM)
with Sox(TM) coronary stent delivery system which was voluntarily recalled
by the Company in October 1998 following reports of balloon leaks. The
Company is cooperating fully in the investigation.

BRIDGESTONE CORP: A- Long-Term S&P Credit Rating Still on CreditWatch
Standard & Poor's Corp said its A- long-term corporate rating on
Bridgestone Corp remains on CreditWatch with negative implications. S&P
said it affirmed its A-2 short-term corporate credit rating on Bridgestone
and its commercial paper rating on Bridgestone/Firestone Inc. The
short-term ratings are not on CreditWatch.

The rating agency said it will assess risks that the product recall could
extend to tyres of other sizes, the degree to which the negative publicity
surrounding Firestone tyres might degrade the Bridgestone/Firestone brand
in general, the situation for North American replacement tyre sales over
the medium term, the effect on Bridgestone/Firestone's relationship with
Ford Motor Co in the OEM (original equipment manufacturing) tyre business
and its implications for other OEM business in North America, and the risk
of large contingent liabilities emerging from possible class-action

S&P said these risks are somewhat offset by the Bridgestone group's
conservative financial profile, and strong earnings and cash flow
generation, particularly in Japan.

It added the product recall incident has not substantially affected
Bridgestone in Japan, adding that the company's strong financial profile
should help the group weather the negative financial impact from the
product recall and the loss of replacement tyre sales, at least in the
immediate future. (AFX - Asia, September 13, 2000)

DELTA FINANCIAL: 1998 NY Suit Alleges of TILA and HOEPA Violations
The Company's lending practices have been the subject of several  lawsuits
styled as class actions and of investigations by various regulatory
agencies including the New York State Banking Department (the "NYSBD"), the
Office of the Attorney General of the State of New York (the "NYOAG") and
the United States Department of Justice (the "DOJ").

In or about November 1998, the Company received notice that it had been
named in a lawsuit filed in the United States District Court for the
Eastern District of New York. In December 1998, plaintiffs filed an amended
complaint alleging that the Company had violated the Home Equity and
Ownership Protection Act ("HOEPA"), the Truth in Lending Act ("TILA") and
New York State General Business Laws s.349.

The complaint seeks (a) certification of a class of plaintiffs, (b)
declaratory judgment permitting rescission, (c) unspecified actual,
statutory, treble and punitive damages (including attorneys' fees), (d)
certain injunctive relief, and (e) declaratory judgment declaring the loan
transactions  as void and  unconscionable.

On December 7, 1998, plaintiff filed a motion seeking a temporary
restraining order and preliminary injunction, enjoining Delta from
conducting foreclosure sales on 11 properties. The District Court Judge
ruled that in order to consider such a motion, plaintiff must move to
intervene on behalf of these 11 borrowers. Thereafter, plaintiff moved to
intervene on behalf of 3 of these 11 borrowers and sought the injunctive
relief on their behalf. The Company opposed the motions. On December 14,
1998, the District Court Judge granted the motion to intervene and on
December 23, 1998, the District Court Judge issued a preliminary injunction
enjoining the Company from proceeding with the foreclosure sales of the
three intervenors' properties. The Company has filed a motion for
reconsideration of the December 23, 1998 order. In January 1999, the
Company filed an answer to plaintiffs'  first amended complaint. In July
1999, plaintiffs were granted leave, on consent, to file a second amended
complaint. In August 1999, plaintiffs filed a second amended complaint
that, among other things, added additional parties but contained the same
causes of action alleged in the first amended complaint. In September 1999,
the Company filed a motion to dismiss the complaint, which was opposed by
plaintiffs and, in June 2000, was denied in part and granted in part by the

Also in September 1999, plaintiffs filed a motion for class certification,
which was opposed by Delta in February 2000, and is now fully briefed and
filed pending hearing. In or about October 1999, plaintiffs filed a motion
seeking an order preventing the Company, its attorneys and/or the NYSBD
from issuing notices to certain of Delta's borrowers, in accordance with a
settlement agreement entered into by and between the Company and the NYSBD.
In or about October 1999 and November 1999, respectively, Delta and the
NYSBD submitted opposition to plaintiffs' motion.

In March 2000, the Court issued an order that permits Delta to issue an
approved form of the notice. The Company believes that it has  meritorious
defenses  and  intends  to  defend  this   suit, but  cannot estimate with
a ny certainty its ultimate legal or financial liability, if any, with
respect to the alleged claims.

DELTA FINANCIAL: Borrowers Say Processing Fees Are Improperly Charged
In or about March 1999, the Company received notice that it had been named
in a lawsuit filed in the Supreme Court of the State of New York, New York
County, alleging that Delta had improperly charged certain borrowers
processing fees. The complaint seeks (a) certification of a class of
plaintiffs,  (b) an  accounting,  and (c)  unspecified compensatory and
punitive damages (including attorneys' fees), based upon alleged (i) unjust
enrichment, (ii) fraud, and (iii) deceptive trade practices. In April 1999,
the Company filed an answer to the complaint.  In August 1999, plaintiffs
filed a motion for class certification, which the Company opposed in July
2000 and the motion is now submitted. In September 1999, the Company filed
a motion to dismiss the complaint, which was opposed by plaintiffs, and in
February 2000, the Court denied the motion to dismiss. In April 1999, the
Company filed a motion to change venue and Plaintiff's opposed the motion.
In July 1999, the Court denied the motion to change venue. The Company
appealed and in March 2000, the Appellate Court granted Delta's appeal to
change venue from New York County to Nassau County. The Company believes
that it has meritorious defenses and intends to defend this suit, but
cannot estimate with any certainty its ultimate legal or financial
liability, if any, with respect to the alleged claims.

DELTA FINANCIAL: Changes in Lending Practices Part of Settlement
In or about August 1999, the NYOAG filed a lawsuit against the Company
alleging violations of (a) RESPA (by paying yield spread premiums), (b)
HOEPA and TILA, (c) ECOA, (d) New York Executive Lawss.296-a, and (e) New
York Executive Lawss. 63(12). In September 1999, Delta and the NYOAG
settled the lawsuit, as part of a global settlement by and among Delta, the
NYOAG and the NYSBD,  evidenced by that certain (a) Remediation Agreement
by and between Delta and the NYSBD, dated as of September 17, 1999 and (b)
Stipulated Order on Consent by and among Delta, Delta Financial  and  the
NYOAG, dated  as  of  September 17,  1999. As part of the Settlement, Delta
will, among other things, implement agreed upon changes to its lending
practices; provide reduced loan payments aggregating $7.25 million to
certain borrowers identified by the NYSBD; and create a fund of
approximately $4.75 million to be financed by the grant of 525,000 shares
of Delta Financial's common stock valued at a constant assumed priced of
$9.10 per share, which approximates book value. The proceeds of the fund
will be used, for among other things, to pay borrowers and for a variety of
consumer educational and counseling programs. As a result, the NYOAG
lawsuit has been dismissed as against the Company.

The Remediation Agreement and Stipulated Order on Consent supersede the
Company's previously announced settlements with the NYSBD and NYOAG. In
March 2000, the Company finalized a settlement agreement with the United
States Department of Justice, the Federal Trade Commission and the
Department  of  Housing and Urban Renewal, to complete the global
settlementit had reached with the NYSBD and NYOAG. The Federal agreement
mandates some additional compliance efforts for Delta, but it does not
require any additional financial commitment.

DELTA FINANCIAL: Defends Securities Suit Filed in NY over IPO in 1996
In November 1999, the Company received notice that it had been named in a
lawsuit filed in the United States District Court for the Eastern District
of New York, seeking certification as a class action and alleging
violations of the federal securities laws in connection with the Company's
initial public  offering in 1996 and its reports subsequently filed with
the Securities and Exchange Commission. The complaint alleges that the
scope of the violations alleged recently in the consumer lawsuits and
regulatory actions indicate a pervasive pattern of action and risk that
should have been more thoroughly disclosed to investors in the Company's
common stock. In May 2000, the Court  consolidated  this case and several
other  lawsuits that purportedly contain the same or similar allegations.
The Company believes that it has meritorious defenses and intends to defend
these suits, but has not answered yet and cannot estimate with any
certainty its ultimate legal or financial liability, if any, with respect
to the alleged claims.

DELTA FINANCIAL: Faces NY Suit Filed in April on Fees for Mortgage Loans
In or about April 2000, the Company received notice that it had been named
in a lawsuit filed in the Supreme Court of the State of New York, Nassau
County, alleging that the Company has improperly charged and collected from
borrowers certain fees when they paid off their mortgage loans with Delta.
The complaint seeks (a) certification of a class of plaintiffs, (b)
declaratory relief finding that the payoff statements used include
unauthorized charges and are deceptive and unfair, (c) injunctive relief,
and (d) unspecified compensatory, statutory and punitive damages (including
legal fees), based upon alleged violations of Real Property Law 274-a,
unfair and deceptive practices, money had and received and unjust
enrichment,  and conversion. The Company answered the complaint in June
2000. The Company believes that it has meritorious defenses and intends to
defend this suit, but cannot estimate with any certainty its ultimate legal
or financial liability, if any, with respect to the alleged claims.

DELTA FINANCIAL: Lawsuit Says Amounts in Escrow Accounts Exceed Limits
In or about July 1999, the Company received notice that it had been named
in a lawsuit filed in the United States District Court for the Western
District of New York, alleging that amounts collected and maintained by it
in certain borrowers' tax and insurance escrow accounts exceeded certain
statutory (RESPA) and/or contractual (the respective borrowers' mortgage
agreements) ceilings. The complaint seeks (a) certification of a class of
plaintiffs, (b) declaratory relief finding that the Company's practices
violate applicable statutes and/or the mortgage  agreements,  (c)
injunctive relief, and (d) unspecified compensatory and punitive damages
(including attorneys' fees). In October 1999, the Company filed a motion to
dismiss the complaint. In or about November 1999, the case was transferred
to the United States District Court for the Northern District of Illinois.
In February 2000, the plaintiff opposed the Company's motion to dismiss. In
March 2000, the Court granted the Company's motion to dismiss in part, and
denied it in part. The Company believes that it has meritorious defenses
and intends to defend this suit, but cannot estimate with any certainty its
ultimate legal or financial liability, if any, with respect to the alleged

E.COLI: Judge in Canada Wants People Most Affected to Be Heard
The judge looking into the contamination of Walkerton's water supply made
it clear in a ruling on September12 he wants to be sure the people most
affected are heard. "Given the tragedy the residents have suffered, their
interests must be represented," Mr. Justice Dennis O'Connor wrote in
granting legal status to three disparate residents' groups. "Their voices
must be heard, even if those voices deliver somewhat different messages."

The three local groups - Concerned Walkerton Citizens, the Walkerton
Community Foundation and the "injured victims" (mostly the proposed
class-action plaintiffs) - were all formed in response to last May's E.
coli outbreak that caused six deaths and made 2,000 people ill.

They will put forward the perspective of those who have suffered, O'Connor

By contrast, five individuals - including an inmate at Millbrook Detention
Centre - who claimed standing on the basis of personal suffering were
turned down.

Those granted individual standing were people with key roles in events
leading to the tragedy - "in the eye of the storm," as O'Connor put it.

Chief among them are Public Utilities Commission manager Stan Koebel and
Dr. Murray McQuigge, the medical officer of health who on a hunch imposed a
boil- water advisory, then went public with his view that officials had
covered up the E. coli contamination.

O'Connor refused an application filed by the Ontario New Democratic Party,
which claimed involvement because of allegations by Premier Mike Harris
that their policies were implicated in the tainted water. "It is, in my
view, generally undesirable to use public inquiries to have political
parties advance their positions," O'Connor wrote.

In a telephone interview, NDP leader Howard Hampton said he thought the
party could have contributed useful information. However, he welcomed
O'Connor's statement that the party had no allegations of wrongdoing to

Among others refused status were the town's chief administrative officer,
Richard Radford, six utility employees, two health unit employees, and a
dozen present and past members of Brockton council.

Six parties got full standing on all issues. Standing limited to issues
affecting them was granted to 14 groups and individuals in Part 1 of the
inquiry, which will consist of formal hearings in Walkerton set to start
Oct. 16. Full standing at Part 1 involves advance notice of documents and
anticipated evidence, a seat at the lawyers' table, and the opportunity to
suggest and cross-examine witnesses and make closing submissions.

O'Connor had various recommendations on funding issues, which must be
approved by the Attorney General's ministry. O'Connor refused to grant
separate standing in Part 1 to several organizations. Instead, he ordered
ad hoc coalitions - one made up of three unions, one involving two health
agencies, and another composed of three environmental groupings, which in
turn represent many more groups.

Thirty parties have been granted limited standing in Part 2, in which an
expert panel will commission study papers on policy issues, which will then
be the subject of public submissions and meetings.

Those granted standing at Part 2 may make submissions, including responses
to the commissioned papers, and participate in the public meetings. (The
Toronto Star, September 13, 2000)

FIRESTONE, FORD: Analysts Tell of Hurt on Earnings
The Firestone tire recall and Ford Motor Co.'s reaction to the furor are
inflicting pain on the automaker's earnings, its stock price and those of
its key parts suppliers, analysts say.

That pain could increase, say industry insiders, if Ford's 3-week shutdown
at three plants that make Ranger pickups and Explorers sport-utilities
stretches into more weeks. Those plants, in Minnesota, Missouri and New
Jersey, have been idled by Ford so that tires that would have been used on
new vehicles built there can instead replace the 6.5 million recalled
Firestone tires.

So far, 2 million of the recalled 15-inch ATX, ATXII and Wilderness AT
tires have been replaced.

The 3-week shutdown has cost Ford about $ 200 million in earnings, auto
analysts estimated. Most analysts have reduced their third-quarter earnings
forecasts by about 10 cents per share for Ford, down to 53 cents per share.
Each additional week that those three plants are idled could cost the
world's second-largest automaker about $ 50 million in profits or 3 cents
per share, say analysts. "On top of that $ 200 million, there will be other
recall costs, I'm sure," said David Healy, auto analyst at Burnham
Securities in New York. "We haven't got much guidance yet from Ford on how
their earnings will look."

A Ford spokesperson said the company still hasn't calculated the impact of
the recall and idled plants on third-quarter earnings. If the company is to
miss its quarterly expectations significantly, it must inform Wall Street
in advance. "We will worry about costs later. Right now we are just acting
to get tires out for customers," said Della DiPietro, Ford director of
manufacturing and purchasing communications. "That's our priority."
DePietro said no decision has been made about idling the plants longer, but
added, "We are looking at it on a week-by-week basis." The 3-week shutdown
trimmed production of about 23,500 Rangers and 15,400 Explorers. DiPietro
said Ford will make up most of that Ranger production in the fourth
quarter, but Explorer production will not be made up.

Nick Harrod, chairman for the skilled trades segment of United Auto Workers
Local 879 at Ford's St. Paul, Minn., truck plant, told the St. Paul Pioneer
Press his workers have been told there's a "real possibility" the shutdown
will last until Sept. 25.

The idling of the plants has a significant trickle-down effect by cutting
expected earnings at key Ford suppliers such as Lear Corp., Visteon Corp.
and ArvinMeritor Inc. For those suppliers, which in turn have to idle their
plants and lay off workers, this shutdown is much like a strike.

"It's similar to a strike because the suppliers don't know day-to-day when
they'll be back up and running," said Michael Robinet, director of
forecasting at CSM Worldwide Inc., a Northville automotive consulting firm.
"This kind of interruption to the suppliers is expensive because they have
all that parts inventory on their balance sheet, plus they have to lay off
people and in this tight job market those people may just go find a job
somewhere else," he said.

Southfield-based Lear makes door panels and seats for the Ranger and
Explorer, while Visteon makes various interior parts and ArvinMeritor makes
exhaust systems. Dearborn-based Visteon is likely to be the hardest hit, as
it supplies nearly $ 3,000 in parts on each Explorer and $ 2,500 on each
Ranger, say analysts.

Lear, which supplies seats on the Explorer, has about $ 1,350 in content on
that sport-utility. Lear has idled its production plant in St. Louis in
response to Ford's shutdown, laying off about 300 workers.

Other suppliers that have cut earnings projections or have seen analysts
cut them include Toledo-based Dana Corp., Rochester Hills-based Dura
Automotive Systems Corp. and Cleveland-based TRW Inc. These suppliers are
also under pressure due to an a weak euro, which hurts European operations,
and slower sales of heavy-duty trucks and replacement parts. (Detroit Free
Press, September 13, 2000)

FIRESTONE, FORS: KS Couple in Narrow Escape from Tire Peeling File Suit
An Olathe couple who barely escaped a wreck when the tread on their 16-inch
Firestone tire peeled off in July has filed a lawsuit in Johnson County
District Court that seeks to have the case declared a class action on
behalf of other Kansans.

The lawsuit is the second in recent days filed against
Bridgestone/Firestone Inc. and Ford Motor Co. in the Kansas City area. The
first lawsuit was filed Friday in Jackson County Circuit Court.

What makes this case different, however, is that it involves a Firestone
tire - a 16-inch Wilderness Tire that was placed on the couple's Ford
Explorer - that is not part of a massive Aug. 9 recall.

Kelly T. And Kathleen R. McMasters of Olathe filed the lawsuit as Congress
continues to hear testimony about whether to expand the recall to include
more tires consumer advocates say are faulty. The lawsuit also names Olathe
Ford Inc., where the couple bought the Explorer used, and Tires Plus Co. in
Olathe, where the lawsuit states they bought the tires new.

The McMasters were driving with their daughter on July 29 when their Ford
Explorer careened out of control after a rear tire blew out near Clinton,
Mo., according to the lawsuit. The Explorer veered across other lanes of
traffic and ended up on the shoulder.

Attorneys for the McMasters claim that Firestone and Ford have known about
the additional defects for years. They are seeking to have a judge force a
much bigger recall. Firestone is recalling mainly 15-inch tire models. The
Missouri and Kansas lawsuits seek to have the recall expanded to include
all 14-inch, 16-inch and 16.5 inch tires. "While Ford and Firestone talk
about safety, 16-inch tires continue to fail and cause wrecks," said Steve
Bough, a lawyer with the Overland Park law firm of Shamberg, Johnson &
Bergman. Bough said the law firm wants to talk with more people who have
experienced problems with all models of Firestone tires.

Bough said the McMasters took their damaged tire to Olathe Ford, where they
were charged to have the tire replaced. The lawsuit claims the tire
companies and the local dealerships violated state law by suppressing
information about allegedly defective tires.

Bough expects more cases to be filed involving nonrecall tires. "We believe
these cases will proceed on a state-by-state basis," he said. "Until Ford
and Firestone think of these cases as a safety issue rather than a profit
issue, people will continue to have wrecks." (The Kansas City Star,
September 13, 2000)

FORD MOTOR: Board Discussed Dangerous Stalls; Denies Knowing Problem
When thousands of car owners complained in the 1980s and 1990s 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 Motor Co. 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 TFI 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% 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%
greater chance of being in a fatal crash. Ford contests that finding, but
stopped putting ignitions on distributors after the 1995 model year.

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 Kam, a recently retired official at the National Highway Traffic
Safety Administration, said 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 Co. had obfuscated the existence of the TFI 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 U.S. history to order an auto recall. Such a
ruling combined with other damages could cost Ford as much as
US$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 outside the United States, where tens of
millions of autos are on the roads with the ignition part affixed to the

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 TFI failure were not nearly as
large as a number of other factors,' he said. 'NHTSA 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 forthcoming.' (National Post (formerly
The Financial Post), September 13, 2000)

HOLLYWOOD: Lawyers Consider Lawsuit Using FTC Finding on Violent Films
Lawyers for the parents of three girls murdered in Paducah, Ky., are
considering a national class-action lawsuit using a Federal Trade
Commission finding that Hollywood targets children in marketing violent
movies and videos.

"I think that we have some very big bullets for our guns. The FTC report is
just tailor-made for what we've been saying," said Michael Breen of Bowling
Green, Ky.

"This is kind of like the embryonic days of tobacco litigation. They
started out as individual lawsuits, too," added co-counsel John B. Thompson
of Coral Gables, Fla., who has been active on issues involving rap music
and two children's suicides linked to a "South Park" TV episode.

"You can't buy off a parent whose child is dead," Mr. Thompson said.

But a lawyer who worked on class-action lawsuits against "Big Tobacco"
disputed that strategy - despite marketing parallels to the now-banned Joe
Camel advertisements.

"There is a possibility you could get a court that would be receptive to
that argument in a single case. I can't imagine you could get a court that
would be receptive to that as a class action," said Daniel G. Abel, who
helps manage class-action lawsuits on guns and tobacco for New Orleans
superlawyer Wendell H. Gauthier.

"The tobacco industry was forced to discontinue its use of Joe Camel
because it obviously targeted kids. Well, Hollywood has a Joe Camel problem
of its own aggressive marketing of adult material to underage children,"
said Robert Knight of the Family Research Council.

On May 28, 1997, the FTC charged R.J. Reynolds Co. with "unfair trade
practice" for the Joe Camel ads targeted at children, but later dismissed
the charge after RJR agreed with state attorneys general to no longer use
the ads.

Mr. Breen said a legal concept called "comparative fault" allows juries to
set damages and then apportion blame among various parties, including the
killer. A jury could leave the entertainment industry partially liable for
a share of large judgments.

"There's nothing theoretical about victims," Mr. Breen said. "There are a
half million incidents of school violence a month, in primary and secondary
schools and 10 percent involve serious crimes such as rape, robbery,
assault or weapons. If even a percentage of those is entertainment-induced,
then by all means you have the makings of an action that could seek class

He said FTC data released Monday "shows correlation between seeing violent
images on computer, TV or movie screen and violent conduct on the part of
the viewer."

Mr. Abel didn't see it as clearly.

"There's a substantial difference between somebody who's been shot and
someone who is emotionally injured after seeing an ad. A court would have
to find a connection between the cause and effect. That is complex, and it
sparks First Amendment issues," Mr. Abel said.

Mr. Breen and Mr. Thompson are part of the legal team seeking $130 million
from some of the biggest entertainment companies - among them Time Warner,
Nintendo and Sega - for the families of Jessica James, Kayce Steger and
Nicole Hadley, who were killed at school when Michael Carneal, 14, opened
fire on their prayer group Dec. 1, 1997.

The Paducah case is one of two notable lawsuits taking on the entertainment

In Louisiana, Lonnie Byers is moving ahead with his lawsuit against Time
Warner, killer Sarah Edmondson and her prominent parents. He is the widower
of shop clerk Patsy Ann Byers, who was paralyzed after being shot during a
1995 crime spree by Ben Darras and Sarah Edmondson. Mrs. Byers later died
of cancer.

Edmondson said she and Darras, both 18, started killing after watching a
video of "Natural Born Killers" and then watched the movie six times a day
during their multistate rampage.

Producer/director Oliver Stone testified at a two-day deposition session in
July after industry lawyers failed to have the U.S. Supreme Court throw out
the case.

A three-judge Louisiana Court of Appeal panel said the accusation that the
movie incited the shooting that paralyzed Mrs. Byers nullified the First
Amendment defense Time Warner raised, and said Mr. Byers was within his
rights to charge that the producers intended to incite viewers.

Other appeals courts have upheld more than a dozen murder prosecutions in
which "Natural Born Killers" was cited as a motivating factor. Mr. Byers'
lawyer, Randolph A. Piedrahita of Baton Rouge, La., who helped take Mr.
Stone's deposition, said he was seeking information on the FTC report but
that he couldn't predict its effect on any class-action strategy.

"You're asking a tough question, but I have no comment right now," he said,
expressing caution about discussing the case out of court.

Another lawyer in that case, Joseph H. Simpson of Amite, La., denied trying
to censor Hollywood's creativity.

"But we feel something should be done about the violence on television and
movies. Hopefully the industry will come to its senses," he said.

Mr. Breen said the Kentucky lawsuit accusations parallel the Federal Trade
Commission findings. "The FTC found that these people are targeting a
juvenile audience with these products and that violence begets violence,"
he said. "I think in light of the FTC report we may have undervalued the
case by asking $130 million, of which $ 100 million would be punitive

Best-selling author John Grisham said he encouraged the lawsuit that
brought Mr. Stone and Time Warner into court because an old friend was
killed by the same people the day before they shot Mrs. Byers.

"Oliver Stone is saying murder is cool and fun, murder is a high, murder is
a drug to be used at will. The more you kill, the cooler you are," Mr.
Grisham said in a newspaper interview.

"Natural Born Killers" also was implicated in the Paducah shooting along
with violent video games of the genre indicted by the FTC Monday, games
with names like Doom and Quake.

In a separate state case in August, the Paducah parents won a $42 million
settlement from the killer, which they consider "symbolic" if

Their federal lawsuit against the industry was dismissed April 6 by senior
U.S. District Judge Edward H. Johnstone, who summarily dismissed the case
in April, in part on grounds that entertainment defendants couldn't have
foreseen the effects their movies and videos would have on children.

"This was a tragic situation but . . . tragedies such as this simply defy
rational explanation and courts should not pretend otherwise," the judge

"We're going to get that judge reversed and when we're back up running,
we're going to have the subpoena power the FTC did not have," Mr. Thompson
said. "Others who want to file lawsuits are going to be watching us and
you're going to see a lot of them following us."

An advocate in disputes involving rapper Ice T and the 2 Live Crew
obscenity case, Mr. Thompson represents parents of two children who he
claims hanged themselves after watching the same episode of "South Park."
(The Washington Times, September 13, 2000)

NEW YORK: Welfare Recipients Suit for Tax Refunds Time Barred
In a defeat for public assistance recipients, the Appellate Division, First
Department, dismissed a class-action suit alleging that the State
improperly confiscated tax refunds.

Reversing a ruling by New York Supreme Court Justice Sheila Abdus-Salaam,
the appeals court dismissed the taxpayers' suit as time-barred because it
was filed more than four months after the recipients received collection

The ruling in Butler v. Wing, 2472, involves former welfare recipients
whose income tax refunds were confiscated to offset alleged overpayments
made by the State. Plaintiffs charged they were not given adequate notice
of the overpayments or the opportunity to contest them.

The plaintiffs asked the court to issue a declaratory judgment stating that
procedures used by the State did not comport with the statute authorizing
confiscation, State Tax Law @ 171-f(3). The statute of limitations on this
type of declaratory judgment action is three years.

The State, however, argued that the statute of limitations was actually
only four months since the case could have been brought under Article 78 of
the Civil Practice Law and Rules. That statute requires that cases be
brought within four months of the triggering event.

The Appellate Division unanimously ruled against the plaintiffs, holding
that their claims were "cognizable" under Article 78, and therefore
governed by the four-month time limit. "Since plaintiffs failed to commence
an Article 78 proceeding within four months of receipt of the... notices,
plaintiffs' claims are untimely and the complaint should have been
dismissed," wrote the court.

Plaintiffs here had filed suit on Sept. 2, 1997, seeking class
certification for everyone whose income tax refunds were seized by the
State to offset alleged government overpayments. In addition to declaratory
judgment, the plaintiffs asked for refunds of the amounts seized, as well
as injunctive relief.

Justice Abdus-Salaam ruled for the plaintiffs, finding that the tax
department's notices were defective in several respects: the notices sent
did not inform recipients that they might forfeit their tax refunds;
recipients were not given an opportunity to challenge the alleged
overpayments in person at a hearing; and recipients were limited in their
reasons for challenging the government's records.

Although Justice Abdus-Salaam's factual findings were limited to the named
plaintiffs, who were former welfare recipients, she certified a much
broader class that included thousands of people whose refunds were seized
by any state agency for reasons such as unpaid school loans or hospital

The appellate panel consisted of Justices Joseph Sullivan, Eugene Nardelli,
Angela Mazzarelli, Richard Wallach and David Friedman.

Plaintiffs were represented by Jane Greengold Stevens, a professor at
Brooklyn Law School, and Constance Carden, of the New York Legal Assistance
Group. The State was represented by Assistant Attorney General August
Fietkau. (New York Law Journal, September 1, 2000)

SAFEGUARD HEALTH: Announces Dismissal of Stockholder Litigation
SafeGuard Health Enterprises, Inc. (OTC BB: SFGD) on September 13 announced
that the stockholder class action lawsuit filed against the Company in
December 1999 which alleged violations of certain securities laws was
dismissed with prejudice as to all defendants on September 12, 2000, by the
Federal District Court for the failure by the Plaintiffs to state a claim.
The Motion to Dismiss was granted after Plaintiffs had filed a first
amended complaint. The Plaintiffs have thirty days to file a Notice of

SafeGuard provides managed care dental plans, PPO/indemnity dental plans,
vision benefit plans, administrative services, and preferred provider
organization services. The Company serves a total of approximately 900,000
members in 20 states and the District of Columbia.

TRAVELERS PROPERTY: Case over Annuities from Injury Settlement Dismissed
Because annuity recipients did not allege an injury to their business or
property, the Connecticut Superior Court dismissed a class action RICO suit
against an insurance company which issued annuities in connection with the
settlement of personal injury actions. (Macomber, et al. v. Travelers
Property Casualty Corp., et al., No. X03CV 990496761S (Conn. Super. Ct.

Lisa Macomber entered into a structured settlement with Travelers Property
Casualty Corp. upon settling a personal injury action. Travelers Property
provided an annuity owned by the Travelers Indemnity Co. and issued by
Travelers Life and Annuity Co., with a present value of 15,000. Kathryn
Huaman, as custodian for Joshua Adickes, also entered into a structured
settlement with Travelers Property, and received an annuity with a present
value of 6,667.

Structured settlements have been used in the insurance industry since the
1970s to settle personal injury, workers' compensation and other claims
against insureds. These settlements, involving periodic payments over time,
are usually funded with an annuity purchased by the settling insurance
company from a life insurance company. The life insurance company usually
pays a 4 percent commission to the broker who arranged for the annuity.

Macomber and Huaman, on behalf of other annuity recipients, sued Travelers
Property and others, alleging damages because Travelers Property failed to
disclose it received a portion of a 4 percent commission on the annuities.
The annuity recipients alleged that Travelers Property would direct a
broker to purchase an annuity to fund a settlement and the broker would
"rebate" some of the commission paid by the life insurance company to
Travelers Property.

Macomber and Huaman first filed the same suit in U.S. District Court for
the District of Connecticut. The District Court dismissed these companion
suits because the claimants "could not allege any legally cognizable injury
arising from the structured settlements of their personal injury claims."
Instead of amending their federal complaints, Macomber and Huaman filed the
same claims in the Connecticut Superior Court.

Another purported class action member in the state court litigation
previously filed an identical case in the District Court. Judge Warren
William Eginton similarly dismissed that suit because the claimant could
not allege any "legally cognizable injury."

Counsel for Macomber also previously filed suit in New Jersey state court,
alleging identical claims to those asserted in this case. The New Jersey
Superior Court dismissed that litigation because the claimants received
exactly what they had bargained for and had not been damaged in any way.
(Civil RICO Report, September 7, 2000)

W.R. GRACE: Book Companies Resolve False Claims Charges
False claims allegations arising from the supply of books to schools,
libraries and government agencies have been resolved by W.R. Grace & Co.
and its former subsidiary, Baker & Taylor Inc., the Department of Justice
has announced.

Relators Robert Costa and Ronald Thornburg filed a qui tam suit against the
companies asserting that they defrauded the federal government in direct
book sales. The states of Arkansas, California, Connecticut, Florida,
Hawaii, Idaho, Kentucky, Massachusetts, Minnesota, Missouri, Nevada, New
Mexico, North Carolina, Oklahoma, Tennessee, Texas, Vermont and Wisconsin
joined the suit as co-plaintiffs, seeking damages for schools and libraries
as a result of alleged overcharges paid with federal funds.

Baker & Taylor was alleged to have violated the False Claims Act, 31 U.S.C.
@ 3729 et seq., when it failed to provide agreed-upon trade discounts of 40
percent to its institutional customers. The company allegedly misclassified
trade titles as non-trade in order to avoid the full discounts, and then
provided full trade discounts to retailers on the same books.

Under the terms of the recent settlement, W.R. Grace and Baker & Taylor
will jointly pay $12.5 million to the co-plaintiff states, and W.R. Grace
will pay $3 million to the federal government. Baker & Taylor previously
paid the United States $3 million to resolve the government's claims.
(Government Contract Litigation Reporter, August 17, 2000)

WAR VICTIMS: Bosnian Refugee to Testify in U.S. Court Karadzic
A Bosnian refugee living in Salt Lake City is scheduled to testify this
week against the architect of Bosnia's war. Kemal Mehinovic, an ethnic
Muslim who was held prisoner by the Serbs for 2 1/2 years, is one of
two-dozen plaintiffs seeking a civil judgment against former Bosnian Serb
leader Radovan Karadzic.

Karadzic is considered largely responsible for the brutal campaign of
"ethnic cleansing" against non-Serbs during the 1992-95 war in
Bosnia-Herzegovina. He has been indicted in The Hague with war crimes and
crimes against humanity.

Still at large, Karadzic is also the defendant in a lawsuit in U.S.
District Court in New York City that accuses him of violating the Alien
Tort Claims Act, a 1789 federal statute that gives non-U.S. citizens the
right to sue in U.S. courts for damages suffered in violations of
international laws.

Mehinovic and 21 other Bosnians allege that Karadzic directed rebel Serb
forces in a campaign of terror against ethnic Muslims and Croats after the
multiethnic state of Bosnia declared independence from the Serb-led

The campaign consisted of driving non-Serbs from their homes, violating
women in "rape camps" and imprisoning men, who were tortured and forced to
work as slaves for the Serb cause, according to the charges against

Mehinovic was arrested by Serb police in May 1992 at his home in Bosanski
Samac, a small city in extreme northern Bosnia. He was first held in the
local police station for several months before being transferred to a
prison camp in Batkovic in northeastern Bosnia near the Serbian border. For
the next 29 months, Kemal, now 44 years old, was subjected to mental and
physical abuse at the hands of his Serb captors.

His testimony against Karadzic is considered key in the civil lawsuit,
which wass expected to begin on September 12 in New York. "He's a really
important witness because of what he went through, the intensity of it and
the range of what happened: the concentration camps, the torture and the
forced labor," said Jennifer Green, an attorney for the New York-based
Center for Constitutional Rights, which is prosecuting the civil case
against Karadzic.

Mehinovic will also testify that he saw Karadzic rallying his troops in the
Serb stronghold of Bijeljina near Batkovic.

This week's trial against Karadzic won't be the first. In August, a federal
court jury in Manhattan found Karadzic guilty of torture and awarded $ 745
million to 11 women who were victims of Serb rape camps. The plaintiffs
will likely never recover any of the judgment, but that's not the point,
said Shawn Roberts, legal director of the San Francisco-based Center for
Justice and Accountability.

Given the lack of justice to date in Bosnia and The Hague, a verdict in a
U.S. court gives some degree of relief to the victims. In addition, the
verdicts send a message that torturers are not welcome in the United
States, Roberts said.

He is representing Mehinovic in a similar civil action against a Serb
refugee living in Atlanta. That case, in which Mehinovic accuses the Serb
of being one of his torturers during the war, has yet to go to trial. (The
Salt Lake Tribune, September 12, 2000)

WAR VICTIMS: Disabled Veterans’ Lawsuit in Canada Will Proceed
The Honorable Mr. Justice John H. Brockenshire, of the Superior Court of
Justice has ruled that a Motion for Summary Judgment -- brought forward by
the plaintiffs as part of a Class Action Lawsuit against the federal
government, on behalf of disabled veterans - can proceed. In doing so,
Justice Brockenshire ruled against a Motion brought by the federal
government requesting a 6-month adjournment in proceedings. The Motion for
Summary Judgment is a request that the Court grant judgment rather than
proceed to trial.

The Class Action lawsuit, certified by Justice Brockenshire in the Superior
Court of Justice in October 1999, asserts that the government failed in its
duty as a trustee on behalf of veterans who were disabled in the service of
their country. As a result of their injuries, these veterans were
subsequently declared incompetent and were unable to manage their financial
affairs. Under legislation provided expressly for that purpose, the federal
government administered these veterans' financial affairs, amassing their
monies in the government's own treasury -- the Consolidated Revenue Fund.

During the course of its investigation the legal team also discovered that
the federal government not only failed to pay interest to disabled
veterans, but upon the death of those veterans the government would, in
many cases, confiscate their accumulated pensions and other monies -
regardless of whether or not the veterans had estates or heirs that were
entitled to that money under law.

In his ruling, Justice Brockenshire noted that further delay would be
harmful to members of the Class, many of whom are elderly. He also autioned
the government against arguing that 'there might be further evidence that
might turn up', noting that further information - which the government had
argued was necessary but would take more time - would not be material to
the core case issues which are constitutional and legal in nature. The
Judge also ordered the federal government to pay costs to the plaintiff in
the sum of $7,500.

'We are very pleased with the Judge's ruling. In denying the  Government's
Motion for adjournment, he has given us the green light to proceed with the
key issues of the government's failure to pay interest. He has also sent a
strong signal to the government that further delay is not in the interest
of these veterans, most of whom are elderly," said legal team member
Raymond Colautti, Partner, Raphael Partners, Barristers and Solicitors,
Windsor, Ontario.

The other members of the legal team are Mr. David Greenaway (Partner,
Raphael Partners) and Mr. Peter Sengbusch, London, Ontario. "We intend to
prove that the government, by its own admission, acted as a trustee to
these veterans -- in some cases, to the point of micro-managing their daily
affairs. We also intend to prove that they failed in their most basic duty
in the capacity as a trustee when they neglected to properly manage the
funds of these incapacitated veterans, many of whom were institutionalized
for the majority of their lives. Finally, we intend to prove that in 1990
when the federal government realized that it had created a huge liability,
it passed legislation preventing veterans and their families from
recovering the unpaid interest they were due," said Greenaway. "It is
particularly odious in a country that believes in the right of due process,
that a government would prevent its own citizens from making a claim to
recover their own property,' he added.

The legal team representing the veterans has elected to bring forward the
Summary Judgment Motion as result of the fact that the evidence in the
lawsuit is entirely documentary and all of it emanates from the Federal

"The Motion for Summary Judgment asserts that there are no genuine issues
requiring a full-blown trial. The facts we have amassed in preparation for
these legal proceedings provide a historical record and bona fide proof
that over the last 25 years, various federal governments have undertaken
exhaustive studies as to whether or not to pay interest on these accounts
under their administration. Senior officials were aware, and the Auditor
General in his 1985 and 1986 reports was highly critical of the government
for not having paid interest on the growing principle which at that time
was $53 million," said Mr. Sengbusch. "Their failure to act is not only
shocking, it is an outrageous act of negligence against a group of
Canadians who sacrificed their lives for our country," he added.

In terms of the legal proceedings, prior to hearing the arguments on the
Summary Judgment Motion, the Court will address a jurisdictional Motion
brought by the Federal Government on September 12. The federal government
will argue that the lawsuit should be argued in Federal Court of Canada as
opposed to the Ontario Superior Court of Justice.

"The federal government has taken the position that this lawsuit should
proceed in the Federal Court of Canada. Raising the issue of jurisdiction
is simply a further delaying tactic which the Crown is deploying to avoid
addressing the issue of non-payment of interest. We look forward to
responding to their arguments and to getting on with the core aspects of
the lawsuit,' the legal team said.

'As administrators, the Department of Veterans Affairs had a trust
responsibility to act in the best interest of these veterans. That duty
included the obligation to prudently invest these monies such that they
would realize a reasonable rate of return. By virtue of their disabilities
and infirmities, these veterans should not have been denied what is the
basic right of all Canadians who faithfully entrust their financial
dealings to a third party,' the team noted. (Canada NewsWire, September 13,

WASATCH CONSTRUCTORS: Bankrupt Trucker Company Seeks to Recover Money
A lawsuit alleges that the primary contractor and a chief subcontractor on
the I-15 reconstruction project shortchanged truckers and a dispatcher
extorted gifts from them.

Jakeco Enterprises filed the suit, which seeks unspecified damages, in U.S.
Bankruptcy Court. The Heber City trucking company filed for bankruptcy
during the I-15 overhaul. It hopes the suit becomes a class action and
recovers money for more than 100 truckers and trucking companies that have
worked on the project.

The suit alleges Wasatch Constructors and its primary dirt supplier, Ralph
Smith Co. of West Bountiful, shortchanging haulers and that a Smith
dispatcher demanded gifts and cash before doling out work to truckers.
"It's bull," said Richard Haskill, the dispatcher.

Haskill, who was quoted in a copyright story in The Salt Lake Tribune, said
he never asked for bribes when assigning subcontracted trucks to haul fill
for I-15 embankments.

The suit alleges that Wasatch skirted legal weight limits and full payment
to the truckers by overloading their trucks and paying only for the legal
limit - less than what they were hauling.

Wasatch and Ralph Smith Co. called the lawsuit frivolous. Doug Smith, owner
of Ralph Smith Co., said trucking companies that spent too much on new
equipment expecting a bonanza from the I-15 work now are trying to recoup
losses by attacking the firms that have prospered. Smith denied that trucks
were loaded with more dirt than the truckers were paid to haul. Smith said
Wasatch pays him based on the number of tons he supplies to the job site.
"When I get paid by the ton, what would be my motive to short the trucks?"
he said.

The lawsuit alleges Wasatch employees working at a quarry at Point of the
Mountain saw to it that the trucks were overloaded and the truckers
underpaid. They weighed only the first truckload of the day and kept it
under the legal limit of 29,000 pounds, according to Jakeco's lawsuit.
Subsequent loads were heavier and were not weighed, the plaintiff contends.
"As a result, (truckers) were damaged by not being paid for the weight of
materials actually being transported and exposure to liabilities associated
with being over the legal weight," according to the suit. The excess weight
also caused premature wear on equipment, Jakeco contends. (The Associated
Press State & Local Wire, September 13, 2000)

* Shakeout of U.S. e-Commerce Companies May Provide Examples for Canada
As the downturn in the market for technology stocks takes hold, the
shakeout of e-commerce companies in the U.S. has provided examples of
privacy problems that may soon arise in Canada as the federal Personal
Information Protection and Electronic Documents Act (the Personal
Information Act) comes into force on Jan. 1, 2001.

For many in the retail sector, a significant part of their goodwill is now
represented by information that they collect on their customers and their
shopping preferences.

The Personal Information Act will now generally require that personal
information can only be collected, used, and disclosed with the informed
consent of the person about whom the information is collected, and require
the development of enforceable privacy policies and procedures for both
online and offline collections of data.

Such policies should be drafted carefully to avoid liability for
misrepresentations and to ensure the transferability of the information on
the sale of the business.


Part I of the Personal Information Act applies to every organization that
collects, uses or discloses personal information in the course of
commercial activities, except where this occurs only within a province
(with certain exceptions).

It also applies to information collected about employees in connection with
a federal work, undertaking or business.

Quebec has had a similar law in place since 1994, and in July, Ontario
released a consultation paper for a proposed privacy act. Comments are due
by Sept. 15, 2000.

In the United States, there are no personal information protection laws of
general application. Instead, the e-commerce industry has relied on
self-regulation, assisted by privacy certification groups such as TRUSTe.

But in May the FTC reversed itself and stated that because self-regulation
was not providing adequate protection, it would recommend that Congress
enact privacy legislation.

Toysmart.com, a retailer of educational toys controlled by the Walt Disney
Company, developed a TRUSTe approved privacy policy and collected
information about its customers'families and shopping preferences. Its
privacy policy asserted that:

Personal information voluntarily submitted by visitors to our site, such as
name, address, billing information and shopping preferences is never shared
with a third party....When you register with Toysmart.com, you can rest
assured that your information will never be shared with a third party.

Difficulties started when Toysmart.com announced that it would be ceasing
operations and, on June 8, 2000, advertised its "databases and customer
lists,"thought to hold information on 190,000 customers, for sale.

The creditors then petitioned it into bankruptcy, and later the FTC sought
an injunction to stop the sale of the information, based on Toysmart.com's
privacy policy and s. 5 of the Federal Trade Commission Act prohibiting
unfair or deceptive acts or practices in or affecting commerce.

Toysmart.com managed to negotiate a settlement with the FTC whereby the
information could be transferred to a "Qualified Buyer," being an entity in
a related market that expressly agreed to be Toysmart's
successor-in-interest to the information.

The settlement was opposed by 43 states on the grounds that each person on
the list should consent to the transfer of their information. The
bankruptcy judge rejected the settlement as premature, as a buyer had not
yet been determined.

Before the FTC intervention there were several bids of not less than $
100,000. After the intervention there were only two bids, for $50,000 and $
15,491. Toysmart owes $20 million.

More recently, when APBnews.com went into bankruptcy, the one bidder backed
out after due diligence. The APBnews privacy statement was silent on the
transfer of information to third parties, but did specify uses.

Breaches of privacy policies in the United States, such as the failure to
identify processing by subcontractors, have also led to class action


While Canada's Personal Information Act contains provisions regarding
remedies, it does not appear that these are intended to be the only
remedies. Specifically s. 13 (2)(b) provides that the Privacy Commissioner
is not required to prepare a report if she is satisfied that "...the
complaint could more appropriately be dealt with, initially or completely,
by means of a procedure provided for under the laws of Canada, ... , or the
laws of a province; ..."

If the matter is taken to the Federal Court (which does not yet allow class
proceedings) the remedies may include damages for humiliation.

Complainants may therefore also have the option of using the misleading
advertising provisions of the Competition Act. If it can be shown that the
breach of the privacy statement was made "knowingly or recklessly," the
complainants will have a private right of action for damages and costs
under s. 36, in addition to a common law action for breach of contract.

These rights can be exercised as class proceedings, which are now permitted
in Ontario, Quebec and British Columbia.

What are the damages for humiliation in a privacy matter? Plaintiff counsel
may suggest Aubrey v. editions Vice-Versa Inc., [1998], 1 S.C.R. 591 as a
standard, as the single plaintiff was awarded $2,000 for moral damages for
simple breach of her privacy rights in Quebec.

Although the Supreme Court thought that this number was high, it did not
interfere. The application of numbers in this range to a customer list
should motivate class action counsel.

                        Privacy statements

Well-drafted privacy statements and policies should allow for the transfer
of information and avoid misrepresentations as to use.

However, a broad successors and assigns clause may not be effective. Under
the Personal Information Act, information must be used for specified
purposes that are stated in a manner that the individual can reasonably
understand. Broad or vague purposes may be invalid.

For an example of the use of such a provision, and some of the problems in
drafting a consent, see the report of Quebec's Commission d'access
d'information in X c. Banque Nationale du Canada, [1996], C.A.I. 410.

If a customer list is considered a significant asset, counsel will now have
to review a vendor's privacy statements to ensure that the list and
information can indeed be transferred.

Paul Jones practises franchising, marketing and trademark law at Miller
Thomson llp in Toronto. He recently presented a paper on privacy law at the
Annual Meeting of the Canadian Corporate Counsel Association in Halifax.
(The Lawyers Weekly, September 15, 2000)


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

Class Action Reporter is a daily newsletter, co-published by Bankruptcy
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Copyright 1999.  All rights reserved.  ISSN 1525-2272.

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