/raid1/www/Hosts/bankrupt/CAR_Public/000919.MBX             C L A S S   A C T I O N   R E P O R T E R

           Tuesday, September 19, 2000, Vol. 2, No. 182


AMERICAN SMELTING: Six-year Pollution Suit Settled In Corpus Christi
ARENAL FOOTBALL: Labor Relations Board Files Suit to Disband Union
BREAST IMPLANT: Makers Say Settlement Not Subject to Reimbursement Claim
CARNEGIE INTERNATIONAL: Reaches Settlement Agreement with Shareholders
CONSOLIDATED FREIGHTWAYS: LMRA Preempts State Law Claims Governed by CBA

ENTRUST TECHNOLOGIES: Addresses enCommerce Issue; Entends Reach in Japan
HANFORD RADIATION: Did Fed Judge Usurp the Role of a Jury in 1998?
HEALTH MANAGEMENT: Continues to Defend HHL Promissory Note Holders’ Suit
HEALTH MANAGEMENT: Settles Securities Lawsuit Commenced in 1997 in NY
HMOs: Medical Association Says Refusal to Pay Interferes with Practice

MASSACHUSETTS: Suit Claims State Pushing Elderly into Nursing Homes
PETCO ANIMAL: Announces Proposed Settlement of Merger Lawsuits
PINNACLE ENTERTAINMENT: Announces Settlement Pact over PH Casino Deal
REMEC INC: Underwriters Dismissed after Filing of Securities Suit in CA
TISSUE MANUFACTURERS: Lead Counsel Announce Settlement over Price-Fixing

TOBACCO LITIGATION: Judge Weinstein Considers Cert. Super-class Action
TOBACCO LITIGATION: Russia Seeks Compensation for Smokers in Miami Court
U.S. AGENCY: Pays $5 Mil to Settle Claims over Lay-offs for Age
WAR VICTIMS: Comfort Women File Suit in Washington against Japanese Govt


AMERICAN SMELTING: Six-year Pollution Suit Settled In Corpus Christi
Lawyers involved in a six-year lawsuit between a smelting company and 200
residents have settled the dispute for an undisclosed amount, sidestepping
a civil trial that was expected to take months.

Residents of Refinery Row - a cluster of 300 homes in a Corpus Christi
industrial zone - sued American Smelting and Refining Co. in 1994. Families
claimed their yards were contaminated and their property values bottomed
out because of heavy-metal air pollution from a nearby ASARCO smelter.

ASARCO officials have accepted some blame for the polluted neighborhood,
and since 1994 have been cleaning the area.

Details of the settlement will be kept confidential, Flood said in
September 15's San Antonio Express-News. "It's a done deal," said District
Judge Mike Westergren. Prepared to preside over the pending trial,
Westergren on September 14 called jurors to tell them not to come to court.

The settlement is the second property damage lawsuit to be resolved this
year between petrochemical companies and residents on the city's North
Side, home to some of Corpus Christi's poorest families. In March, a
class-action lawsuit that accused nine petrochemical companies of polluting
nearby neighborhoods was settled for $40 million, ending six years of

Still, only a few of the residents were able to move to safer
neighborhoods. Plaintiffs' attorney Steve Hastings said he hoped for a
stronger effort to relocate families.

Flood said he hoped the settlement would enable residents to move out if
they wish. But many of his clients who put up with pollution from Refinery
Row also enjoy their tightly knit neighborhood, he said. (The Associated
Press State & Local Wire, September 15, 2000)

ARENAL FOOTBALL: Labor Relations Board Files Suit to Disband Union
The National Labor Relations Board filed a complaint in Tampa, Fla. this
past Friday against the Arena Football League (AFL) and all of its member
clubs, seeking to disband the purported union for AFL players - the Arena
Football League Players Organizing Committee (AFLPOC) -- and to declare
invalid the collective bargaining agreement that the AFLPOC has reached
with the AFL.

After spending more than six months investigating the charges filed by two
AFL players -- Albany Firebirds quarterback Michael Pawlawski and former
Portland Forest-Dragon quarterback James Guidry -- the NLRB agreed with the
players that the AFLPOC has never been supported by a majority of AFL
players and was illegally recognized by the AFL owners, and that the AFL
owners threatened AFL players and illegally promised benefits to AFL
players to coerce them to form a union.

The players had complained to the NLRB that the AFL illegally recognized
and supported the AFLPOC in order to form a union that would be sympathetic
to management and try to shield the owners from player antitrust suits. The
complaint describes numerous instances in which the AFL and its teams,
among other things,

   * "rendered unlawful assistance" to the AFLPOC;
   * illegally "solicited employee players" to sign union cards;
   * illegally "promised benefits to employee players if they formed or
      joined a union and engaged in collective bargaining";
   * illegally "threatened employee players" with reprisals and
      "threatened to discharge and release employee players" who refused
      to engage in collective bargaining; and
   * illegally released players "to discourage employees" from refusing
      to form a union.

The complaint confirms that, even though the AFL owners have engaged in all
of this conduct, the "AFLPOC has never represented an uncoerced majority of
the employee players employed" in the AFL.

The NLRB has scheduled the hearing of the charge before an NLRB
Administrative Law Judge in Tampa, Fla., beginning on January 22, 2001, the
week before the Super Bowl.

There was also a major development in the class action antitrust lawsuit
that AFL players have filed against the AFL and all AFL teams in federal
court in Newark, N.J. The plantiffs in the antitrust case announced that
one of the AFL teams -- the San Jose SaberCats -- has broken ranks with the
other defendants and has agreed to settle the case and cooperate with the
players who have sued the AFL and its teams.

The SaberCats have informed the plaintiff players that the SaberCats agree
that the AFLPOC was not a valid union, and that the other AFL owners had
committed antitrust violations against the AFL players by unreasonably
restricting competition for players. The SaberCats also informed the
players that the SaberCats will file their own antitrust lawsuit against
the AFL if the league tries to enforce the salary cap and other
restrictions included in the illegal CBA that the AFL negotiated with the
AFLPOC, the union the NLRB is challenging.

In the settlement, the SaberCats agreed to file their lawsuit in the same
federal court in which the players' case is pending. And, the SaberCats
agreed to cooperate with the plaintiffs and the NLRB in the cases against
the AFL and other teams.

In all the history of player lawsuits against teams and leagues in
professional sports, this is the first time that a team owner has agreed to
cooperate with players who are suing team owners, in their lawsuit against
the teams and the league.

James Guidry -- who is the lead plaintiff in the New Jersey antitrust case
and also president of the Arena Football League Players Association
("AFLPA"), a non-union association that is supporting the players who are
asserting their antitrust rights -- said: "Both of these developments are
great news for AFL players. The federal government has agreed that what the
AFLPOC and the AFL owners did was wrong, and that the AFLPOC and its
supposed CBA are illegal shams. A team owner agreeing that the players have
been illegally held down in violation of the antitrust laws is
unprecedented, and a wonderful development. The AFL owners' lies will not
survive in the bright light of day, and the AFL players are grateful to
have the federal government and the SaberCats on our side."

According to David Feher of the law firm of Weil, Gotshal & Manges, LLP,
the firm serving as lead counsel for the plaintiffs in the antitrust case:
"It is unfortunate that the AFL owners chose to prevent competition for
players and illegally back a sham union that was never supported by a
majority of AFL players. These efforts have hurt not only the players, but
the fans and owners themselves. We look forward to the disbanding of the
AFLPOC, and moving as quickly as possible to restore the rule of law in the

David G. Feher of Weil, Gotshal and Manges, LLP, 212-310-8878; Mark
Levinstein of Williams and Connolly, LLP, 202-434-5012

BREAST IMPLANT: Makers Say Settlement Not Subject to Reimbursement Claim
The breast implant manufacturers involved in the MDL 926 litigation assert
the United States does not have the statutory authority to seek
reimbursement of its health care costs related to breast implants from the
class-action settlement fund. In support of their motion to dismiss, the
companies argue the claims filed pursuant to the Medical Care Recovery Act
and the Medicare Secondary Payer statute do not apply to them because they
are not insurance providers. United States v. Baxter International Inc. et
al., No. 00-N-0837-S, reply of RSP defendants in support of motion to
dismiss complaint filed (N.D. Ala., July 31, 2000); see Breast Implant LR,
July 10, 2000, P. 4.

"The Government claims the extraordinary right to prove that product
manufacturers and suppliers are liability insurers and lawsuit settlements
are insurance plans, in effect that it has the right to prove that apples
are oranges," say the Revised Settlement Program defendants.

The manufacturers noted the recent ruling by U.S. Bankruptcy Judge Arthur
J. Spector in the Dow Corning bankruptcy in which he said the government's
asserted formulation of the MSP "borders on the absurd." In re Dow Corning,
No. 95-20512 (Bankr. E.D. Mich., June 22, 2000). In addition, Judge Spector
determined that the administration's interpretation of the MSP act was
"entirely unsupported by the statute" and tried to convert it from "an
important and sensibly fashioned fiscal cost-cutting measure into a mere,
heavy-handed collection tool."

The June 22 opinion also criticized the government's attempt to seek
reimbursement from Dow Corning when it has not provided specifics regarding
the women that received treatment and any costs incurred.

In this parallel action, the United States contends that the RSP
manufacturers withheld information on the health care costs of its
claimants. The companies acknowledge that the settlement was structured
with the women's privacy in mind. However, the RSP defendants contend that
the government does not have the information because it did not ask for it,
and that the settlement was deliberately structured to allow the government
to pursue its claims.

In 1995, Judge Samuel C. Pointer Jr. of the Northern District of Alabama
approved the settlement that included contributions from seven defendant
manufacturers. To date, numerous women have already received payment for
their injuries.

Contrary to the government's position, the RSP defendants say they were not
required to investigate whether Medicare conditionally paid for any breast
implant related costs. The government's position that the defendants "were
aware of the Health Care Financing Administration's <> interest"
does not trigger a duty, they add. The government itself has not tried to
obtain reimbursement from the federal beneficiaries, continue the RSP
defendants, and its "failure to allege this precondition to recovery
requires dismissal."

Citing Brooks v. Blue Cross & Blue Shield of Florida Inc., 116 F.3d 1364
(11th Cir., 1997), the manufacturers contend the U.S. Court of Appeals for
the 11th Circuit has already rejected the government's position that every
"arrangement" to "provide health benefits" constitutes a "primary plan"
within the meaning of the MSP statute.

Baxter International and Baxter Healthcare Corp. are represented by Peter
W. Morgan and Justine D. Simon of Dickstein Shapiro Morin & Oshinksy in
Washington, D.C., and Debra E. Pole of Brobeck Phleger & Harrison in Los

Bristol-Myers Squibb Co. is represented by Richard M. Ettreim and Jerry P.
Sattin of McCarter & English in Newark, N.J.

3M is represented by Miles N. Ruthberg, Maureen E. Mahoney and Paul A.
Allulis of Latham & Watkins in Los Angeles.

Union Carbide Chemical & Plastics Co. and Union Carbide Corp. are
represented by William A. Krohley of Kelly, Drye & Warren in New York.
(Breast Implant Litigation Reporter, August 21, 2000)

CARNEGIE INTERNATIONAL: Reaches Settlement Agreement with Shareholders
Carnegie International Corporation (OTCBB:CGYC) announced on September 18
that it has reached an agreement with certain shareholders to settle
federal securities litigation.

The settlement allows for a small cash component provided by Carnegie
insurer AIG, a warrant package at a strike price of $3.00, and a 3 percent
participation by class action shareholders in any recovery that Carnegie
may obtain in its suit against its former auditor Grant Thornton.

Carnegie Chairman E. David Gable praised the efforts by all concerned to
align the interest of the shareholders with the company. "AIG was
wonderfully instrumental in helping us to achieve this resolution, along
with our lawyer, Chris Ohly of Blank Rome Comisky & McCauley. All parties
moved to do what was in the best interest of the company and its
shareholders. We are delighted to have this chapter closed in this manner."

CONSOLIDATED FREIGHTWAYS: LMRA Preempts State Law Claims Governed by CBA
Over the years, the courts have said that most disputes arising between an
employer and organized employees must be decided under federal labor law
rather than various state laws. Thus, union employees who inadvertently
starred in employer-produced videos had to look to the Labor Management
Relations Act (LMRA) for their remedy.

The Teamsters union had a contract with Consolidated Freightways, a large
trucking company. Under the terms of the collective bargaining agreement
(CBA), Consolidated was prohibited from using video cameras to "discipline
or discharge an employee for reasons other than theft of property or
dishonesty." The contract then went on to set out a procedure that had to
be followed if videotapes were used to support the discipline or discharge
of an employee. There was a grievance procedure for addressing disputes
arising out of the CBA.

Consolidated installed video cameras and audio listening devices behind
two-way mirrors in the restrooms at its California terminal. Apparently, it
was trying to control the use of drugs by its drivers.

When employees discovered the equipment, they filed a grievance and a class
action lawsuit, both claiming invasion of privacy on behalf of anyone who
had "a reasonable expectation of privacy" while using the restrooms in the
terminal. Another group of employees filed a second lawsuit asking for
damages for invasion of privacy and for infliction of emotional distress.

Consolidated asked the court to dismiss both lawsuits without further
proceedings. The court granted the request, but the employees were not
through yet.

Two other employees, Theresa Hoffman and Masao Shobe, filed a third
lawsuit. Hoffman said she was fired because she had seen surveillance
equipment being installed and the company was trying to cover it up. Shobe
was a casual laborer at the terminal. He claimed he had not been rehired
because he had participated in one of the other lawsuits. Both relied on
the fact that installation of secret surveillance equipment violated
California state criminal law.

Consolidated asked the court to dismiss the third lawsuit as well. The
court agreed, finding that both of the claims had to be filed under the
LMRA, and dismissed the suit. All parties appealed.

What is preemption?

Some federal laws are so broad that they trump, or "preempt," state law
claims that arise out of the same set of facts or circumstances. The LMRA
is such a law. If the court must look to the CBA to resolve the dispute,
the LMRA preempts state lawsuits that are "substantially dependent" on the
CBA. Otherwise, employees covered by the CBA are free to file independent
state law claims against employers or former employers.

In this case, the employees tried to file state law claims for invasion of
privacy, infliction of emotional distress, and wrongful discharge. The
federal district court said that all of the claims were preempted by the
LMRA because to determine whether the employees’ rights had been violated,
the court would have to interpret and apply the CBA to determine whether
they "bargained away" their privacy rights.

The employees appealed, arguing that Consolidated could not bargain for the
right to violate criminal statutes. The Ninth Circuit agreed with the lower
court on the privacy and emotional distress claims but sided with the
employees on the wrongful discharge claim.

                          Expectation of Privacy

Although the California Constitution, like the Montana Constitution, grants
citizens a constitutional right to privacy, that right is not implicated
unless the employer is a public entity. The law is not really clear on the
extent to which private employers may intrude on employees privacy rights.
Regardless, the test for a violation, which the Ninth Circuit used, hinges
on whether the employee had a "reasonable expectation" that his or her
privacy would be respected. The court said that a privacy right isn’t
violated if an employee has given consent to the intrusion. To determine
whether the employees’ expectation of privacy was reasonable, the court had
to look at the CBA to find out how much management intrusion was allowed
and whether the restroom surveillance exceeded what the employees could
have reasonably expected. Since the CBA did address surveillance, the
privacy claims were not independent of the CBA.

The court was not persuaded by the employees argument that Consolidated was
breaking the law. The court said the law could be considered in deciding
the issue under the LMRA. Similarly, the court found the employees claims
of emotional distress to be related to the employers duties as set out in
the CBA.

                         Wrongful Discharge

Hoffman argued that Consolidated fired her to keep her from reporting
illegal surveillance. She relied on Californias whistleblower law, which is
quite similar to a provision of the Montana Wrongful Discharge Act. You may
not retaliate against employees for reporting violations to lawful
authorities. The Ninth Circuit said the claim could go forward because its
resolution depended on the employers motivation in firing Hoffman, not her
reasonable expectation under the CBA. Cramer, et al. v. Consolidated
Freightways, Inc., ___ F.3d ___ (9th Cir. April 26, 2000).

                            Bottom Line

If an employer is bargaining with your employees, the employer might want
to consider making specific references to any items that might be viewed as
invading privacy rights. That not only includes videotaping but also drug
testing and any other kind of surveillance or search you wish to undertake.

One should not come away from this case with the idea that it is OK to put
video cameras in the restrooms. When this case is decided under the LMRA,
it is quite possible that restroom surveillance will be determined to go
way beyond the amount of intrusion the employees bargained away. (Montana
Employment Law Letter, August, 2000)

ENTRUST TECHNOLOGIES: Addresses enCommerce Issue; Entends Reach in Japan
Things are looking up for Entrust Technologies Inc. after a harrowing July
in which its stock fell by more than half.

The Plano, Tex., company announced last week that it will provide its
digital certificate technology to Sanwa Bank, one of Japan's five largest
financial institutions. Winning the contract is a victory of sorts for the
company, whose stock slid in the second quarter from $77, to about $36,
after the July 3 announcement that it would miss its projected earnings by
as much as 6 cents a share.

Entrust's stock closed last Friday at $28.69.

Sanwa extends Entrust's reach into Japan, where it has about 40 clients.
Its customer base overall numbers 1,500. "When you combine it with our
European customers, we have without question the world's largest clientele
in the industry," said John Ryan, chief executive officer of Entrust. "It
shows their confidence in our technology and capability."

Confidence was not in evidence this summer when Entrust failed to close
four major contracts and ended up with earnings of 3 cents a share;
analysts had predicted 8 cents a share. It posted a second-quarter net loss
of $28.9 million, or 54 cents a share. Mr. Ryan said some of those
contracts have now closed, though he said he could not offer specifics
until the company posts its third-quarter earnings.

Kevin Wagner, an analyst at Adams Harkness, said the lost deals were worth
about $3 million. "Clearly it was a bleeder for the company."

Sanwa is expected to become one of the first Entrust customers to use a
software package that combines Entrust's user-authentication technology
with enCommerce Inc.'s authorization technology for letting people gain
access to specific information. Entrust purchased Santa Clara, Calif.-based
enCommerce on July 27.

"We are aggressiv ely introducing clients to enCommerce's
authorization-product family, integrated into Entrust's products," Mr. Ryan

                          Class Action Lawsuits

Entrust still is addressing about 10 class-action lawsuits stemming from
its acquisition of enCommerce. Shareholders allege that Entrust
misrepresented revenues by issuing the 8-cent forecast to inflate its stock
price so it could complete the stock-for-stock acquisition. Two business
days after the deal, Entrust announced an amended forecast: 2 cents per
share. Entrust issued 8.2 million shares of common stock in exchange for
all of the outstanding capital stock of enCommerce.

Mr. Ryan would not comment on the lawsuits other than to say the company is
confident it will prevail.

Entrust now is "looking for more diversity in our revenue stream," the CEO
said. "We're looking for less reliance on larger customers to spread
revenue around to more customers." And it is looking overseas, Mr. Ryan
said. In the second quarter 41% of Entrust's business came from outside of
North America.

Despite the miserable second quarter, Entrust has had strong revenue growth
an average of 67% in the last four quarters. In the second quarter revenues
were $29.3 million, up 48% against the year-earlier period.

Robbie Owens, a senior analyst and vice president of research at Pacific
Crest Securities, said Entrust is the leader in a field that includes the
Irish Internet security firm Baltimore Technologies and Mountain View,
Calif.-based Verisign. "Their business is back on track," Mr. Owens said.
The second quarter "was a speed bump, but I don't see the wheels coming
off." (The American Banker, September 18, 2000)

HANFORD RADIATION: Did Fed Judge Usurp the Role of a Jury in 1998?
A federal judge improperly dismissed nearly 4,500 plaintiffs from a major
Hanford radiation lawsuit, their lawyers argued last Thursday September 14
before a three-judge panel of the 9th U.S. Circuit Court of Appeals.

At issue before the panel: Whether U.S. District Judge Alan McDonald of
Yakima properly used his ''gatekeeper'' role to review scientific evidence
in the massive toxic tort case, or whether he improperly usurped the role
of a jury and disregarded applicable Washington state evidence standards.

McDonald should have allowed a jury to weigh individual claims of radiation
damage, said attorney Merrill Davidoff. His Philadelphia law firm has been
involved in several high-profile radiation cases, including litigation that
followed the 1979 Three Mile Island nuclear accident. ''The judge contorted
the rules,'' Davidoff told 9th Circuit judges Alfred Goodwin of Pasadena,
Calif., and Mary Schroeder and Michael Hawkins, both of Phoenix.

Kevin Van Wart, a Chicago lawyer for the private contractors who ran
Hanford during the Cold War, disagreed. He said McDonald had done a proper
job of narrowing the case to people who can prove Hanford radiation doubled
their risk of contracting a disease. ''This process requires the judicial
system to draw lines. It can't just be anybody claiming compensation,'' Van
Wart said.

McDonald's August 1998 order left only a handful of plaintiffs in the case,
estimated by the U.S. Department of Energy to be from 20 to 200. The next
phase of those cases is on hold while the appeal of McDonald's order is
heard. In his 760-page legal order, McDonald said he was following U.S.
Supreme Court directives for judges to act as ''gatekeepers'' of scientific
evidence. McDonald also said scientific evidence on radiation injury is too
complex for a jury and could lead to ''an erroneous conclusion that
exposure to Hanford emissions was a cause in fact of an individual's

Most of the remaining plaintiffs are making thyroid cancer claims and must
prove they got a radioactive Iodine-131 dose between five and 100 rads from
Hanford emissions. The downwinders' lawyers want the 9th Circuit judges to
apply a lesser standard of proof used in Washington state toxic tort cases,
in which an individual only needs to prove that radiation was a
''substantial factor'' in causing an illness.

At the hearing, the judges closely questioned the lawyers, but didn't
indicate how they are leaning on the complex case. They will eventually
produce a written decision.

Van Wart defended McDonald's use of scientific experts and evidence. ''This
case is almost 10 years old, and the court gave these plaintiffs nearly
eight years to prove their case,'' Van Wart said.

Attorneys for the corporations that ran Hanford during the Cold War have
racked up more than $ 60 million in legal fees to defend the nuclear
contractors against the downwinders, according to information obtained by
The Spokesman-Review through the Freedom of Information Act.

Judge Hawkins asked one plaintiffs' lawyer, Roy Haber of Eugene, Ore., what
was wrong with McDonald's approach.

McDonald ''got to the 9th inning without any evidence,'' Haber said. ''He
set a threshold dose when the science is unanimous there is no threshold
below which radiation can't cause cancer.''

Davidoff reminded the judges that the 9th Circuit had already reversed
McDonald after he denied a separate claim for medical monitoring for
Hanford downwinders. He asked the panel to reverse McDonald in the Hanford
case and ''give a more direct mandate to this judge.''

The Hanford lawsuit was filed in 1990 on behalf of nearly 5,000 people who
said their health was harmed by exposure to Hanford radiation emissions in
the early years of the Cold War. At least 100 plaintiffs have died since
the case began, said attorney Tom Foulds.

The litigation was triggered by the U.S. government's admission in 1989
that Hanford's releases of radioactive Iodine-131 and other toxic
substances were large enough to have harmed people living in the path of
the pollution.

The contamination was a consequence of plutonium production at Hanford. The
government considered it a military secret for decades, and it was only
revealed in the mid-1980s after a series of Freedom of Information Act
requests from newspapers and citizen action groups in the Northwest. (The
Spokesman-Review (Spokane, WA), September 15, 2000)

HEALTH MANAGEMENT: Continues to Defend HHL Promissory Note Holders’ Suit
On June 28, 1998, eight holders of promissory notes of HHL Financial
Services, Inc. commenced a lawsuit against Health Management Systems Inc.
and others in the Supreme Court of the State of New York, County of Nassau,
alleging various breaches of fiduciary duty on the part of the defendants
against HHL.

The complaint alleges that, as a result of these breaches of duty, HHL was
caused to make substantial unjustified payments to the Company which,
ultimately, led to defaults on the Notes and to HHL's filing for Chapter 11
bankruptcy protection.

On June 30, 1998, the same Note holders commenced a virtually identical
action (the "Adversary Proceeding") in the United States Bankruptcy Court
for the District of Delaware, where HHL's Chapter 11 proceeding is pending.
The Adversary Proceeding alleges the same wrongdoing as the New York State
Court proceeding and seeks the same damages, i.e., $2,300,000 (the unpaid
amount of the Notes) plus interest. Plaintiffs have moved in the Bankruptcy
Court to have the Court abstain from hearing the Adversary Proceeding in
deference to the New York State Court action. The Company has opposed
plaintiffs' motion for abstention and on September 15, 1998 filed a motion
in the Bankruptcy Court to dismiss the Adversary Proceeding. This motion
was briefed in December 1998. Oral argument on the motions was heard by the
Court on April 22, 1999 and the motions are now sub judice.

The Company intends to continue its vigorous defense of this lawsuit.
Management believes that a loss is not probable and accordingly has not
recognized any accrued liability for this matter. Although the outcome of
this matter cannot be predicted with certainty, the Company believes that
any liability that may result will not, in the aggregate, have a material
adverse effect on the Company's financial position or cash flows, although
it could be material to the Company's operating results in any one
accounting period.

HEALTH MANAGEMENT: Settles Securities Lawsuit Commenced in 1997 in NY
On August 14, 2000, an Order and Final Judgment was entered in the United
States District Court for the Southern District of New York approving the
proposed settlement of the litigation commenced in 1997.

In April and May 1997, five purported class action lawsuits were commenced
in the United States District Court for the Southern District of New York
against Health Management Systems Inc. and certain of its present and
former officers and directors alleging violations of the Securities
Exchange Act of 1934 in connection with certain allegedly false and
misleading statements. These lawsuits, which sought damages in an
unspecified amount, were consolidated into a single proceeding captioned In
re Health Management Systems, Inc. Securities Litigation (97 CIV-1965 (HB))
and a Consolidated Amended Complaint was filed.

Defendants made a motion to dismiss the Consolidated Amended Complaint,
which was submitted to the Court on December 18, 1997 following oral

On May 27, 1998, the Consolidated Amended Complaint was dismissed by the
Court for failure to state a claim under the federal securities laws, with
leave for the plaintiffs to replead.

On July 17, 1998, a Second Consolidated Amended Complaint was filed in the
United States District Court for the Southern District of New York, which
reiterated plaintiffs' allegations in their prior Complaint. On September
11, 1998, the Company and the other defendants filed a motion to dismiss
the Second Consolidated Amended Complaint. The motion was fully briefed in
late November 1998, at which time the motion was submitted to the Court.
The consolidated proceeding was reassigned to another Judge. The Court
heard oral argument on the motion to dismiss on June 11, 1999.

Prior to rendering its decision on the motion to dismiss, the Court ordered
the parties to attempt to settle the case, and meetings toward that end
were conducted.

On December 20, 1999, the parties reached a tentative agreement on the
principal terms of settlement of the litigation against all defendants.
Pursuant to this understanding, without admitting any wrongdoing, certain
of the defendants have agreed to pay, in complete settlement of this
lawsuit, the sum of $4,500,000, not less than 75 percent of which will be
paid by the Company's insurance carriers. The Company recorded a charge of
$845,000 in the quarter ended October 31, 1999 related to this proposed

On March 23, 2000, the Company and plaintiffs entered into a Stipulation
and Agreement of Settlement, which was subject to review and approval by
the Court. A fairness hearing on the proposed settlement was held before
the Court on June 28, 2000. On August 14, 2000, the Court signed an Order
and Final Judgment approving the proposed settlement.

HMOs: Medical Association Says Refusal to Pay Interferes with Practice
A New London County doctors' group says it wants to improve the health care
system by documenting what it calls abuses by HMOs. The New London County
Medical Association claims HMOs are interfering with the practice of
medicine by refusing to pay for legitimate medical expenses, for valid
hospital admissions and for other important services.

Arthur Schuman, executive director of the association, says the group will
share complaints it receives with state Attorney General Richard
Blumenthal, who filed a class action lawsuit earlier this month against
four managed-care insurers.

In his lawsuit, Blumenthal accuses HMOs of trying to boost profits by
sacrificing patient care. He is the first attorney general in the county to
take that step. "We all know these abuses occur," said Phyllis Darby,
assistant executive director of the New London County Medical Association.
"Doctors see it every day in their practices. The problem is that it is not
organized at the moment. We want to put it in an organized fashion."

Dr. Mithlesh Govil, president of the association and a New London
oncologist, said the campaign to create a record of alleged HMO abuses will
begin over the next week or two. "Reform is overdue," Govil said. "They
(HMOs) grind down the physicians and they grind down the patients."

The four HMOs named in Blumenthal's lawsuit are Physician Health Services
Inc., Anthem Blue Cross & Blue Shield of Connecticut, CIGNA Health Care of
Connecticut, and Oxford Health Plan.

The HMOs say Blumenthal did not review their standards, practices and
quality-care initiatives before filing the lawsuit. They insist that a
courtroom is not the best place to address problems in the health care

Maria Shydlo, a spokeswoman for Oxford, says HMOs must control costs to
hold down premiums, which sometimes means challenging medical procedures
that are not appropriate. "We give our doctors a lot of latitude and work
with them to make sure the patient gets appropriate care in a timely
fashion," Shydlo said. "We track customer service issues and how quickly we
respond, and we feel it is quite timely."

Dr. John P. Bigos, a New London doctor who treats lung disease, suspected
in July that one of his patients, Arthur "Hap" Murano of Old Saybrook, had
internal bleeding. Bigos wanted Murano admitted to the hospital.

But the insurer, Physician Health Services of Connecticut, said Murano
could be treated in the doctor's office and wanted Murano to recover at
home. The HMO refused to approve hospital admission even after a second
doctor agreed that Murano needed to be hospitalized. Bigos eventually had
Murano admitted to the hospital, where doctors determined that Murano had a
bleeding ulcer and lungs damaged by asbestos. Murano was treated for two
days and released. PHS has refused to pay for the admission and for many
tests that were conducted. Murano's doctors are fighting the decision.

"These doctors did the right thing," Murano said. "But it is still
incredible to me that I was sick enough to be in a hospital, and I had two
specialists agree on that, and still they say they ain't going to pay.
Well, I'm not going to pay, I'll tell you that." (The Associated Press
State & Local Wire, September 18, 2000)

MASSACHUSETTS: Suit Claims State Pushing Elderly into Nursing Homes
Advocates for the elderly and disabled have filed a class action lawsuit
against the state, claiming it is pushing many elderly residents into
nursing homes. The suit filed last week in U.S. District Court in
Springfield claims state eligibility rules are tougher for people over the
age of 65, and are preventing the elderly from receiving home heath care
that would allow them to remain in their own homes. The suit was filed on
behalf of five elderly western Massachusetts residents by lawyers from
Western Massachusetts Legal Services and the Disability Law Center.

Richard Copp, a spokesman for the Executive Office of Health and Human
Services, declined to comment on the suit. (The Associated Press State &
Local Wire, September 18, 2000)

PETCO ANIMAL: Announces Proposed Settlement of Merger Lawsuits
PETCO Animal Supplies, Inc. (Nasdaq:PETC) on September 18 announced the
signing of a memorandum of understanding related to a proposed settlement
of the class action lawsuits filed during May 2000 resulting from the
proposed merger of BD Recapitalization Corp. into PETCO.

The memorandum of understanding provides for the settlement and dismissal
with prejudice of the litigation. The final settlement of the lawsuits,
including the amount of attorneys' fees to be paid, is subject to court
approval and there can be no assurance that such approval will be obtained.
The memorandum of understanding provides for the following:

  * The reduction of the termination fee set forth in the merger
     agreement from $11 million to $5 million; and
  * The mailing of a letter to PETCO's stockholders containing
     additional disclosures.

Upon final approval of the settlement, PETCO has agreed to pay a specified
amount of attorney's fees and costs to the plaintiffs' counsel, subject to
court approval.

The defendants to the lawsuits have denied that they have engaged in any
wrongdoing whatsoever, and have agreed to the memorandum of understanding
to eliminate the burden and expense of further litigation and to permit the
merger to proceed as scheduled.

The Company has entered into a definitive merger agreement with a company
organized by Leonard Green & Partners, L. P. and Texas Pacific Group.
Stockholders will vote on the proposed merger transaction at a special
meeting of stockholders scheduled to be held on September 27, 2000.
Completion of the Transaction is subject to customary closing conditions,
including stockholder approval, receipt of regulatory and other approvals
and the completion of debt financing. PETCO anticipates completing the
transaction in the fall of 2000.

PINNACLE ENTERTAINMENT: Announces Settlement Pact over PH Casino Deal
Pinnacle Entertainment, Inc. (NYSE: PNK)(formerly Hollywood Park, Inc.)
announced that it has reached an agreement in principle with respect to
settlement of the pending purported class action lawsuit against Pinnacle
Entertainment and its directors relating to the proposed merger in which
Pinnacle Entertainment would be acquired by PH Casino Resorts, Inc., a
subsidiary of Harveys Casino Resorts (an affiliate of Colony Capital LLC).

The settlement is subject to the execution of a definitive settlement
agreement and court approval of that agreement. The defendants' agreement
to the tentative settlement does not constitute, and should not be
construed as, an admission that the defendants have any liability to or
acted wrongfully in any way with respect to the plaintiff or any other

Pursuant to the proposed settlement, certain provisions of the merger
agreement between Pinnacle Entertainment and PH Casino Resorts have been
amended. PH Casino Resorts has consented to such amendments. The amendments
provide for:

  (1) extension of the deadline for the opening of the Belterra Casino
       Resort from September 15, 2000 to November 15, 2000; and
  (2) a $10 million increase in the permitted $207 million budget for
       completing the Belterra Casino Resort.

These amendments are intended primarily to accommodate the additional time
and expenses necessary to complete the Belterra Casino Resort in light of
the accident on July 31, 2000 involving Pinnacle Entertainment's Miss
Belterra riverboat casino. Pinnacle Entertainment currently anticipates
that repairs to the riverboat will be completed in October 2000 and that
the Belterra Casino Resort will open on October 23, 2000. Other amendments
to the merger agreement implemented in connection with the tentative
settlement include

   (3) a reduction in the amount of the termination fee which Pinnacle
        Entertainment is obligated to pay under certain circumstances
        from $25 million to $20 million;
   (4) extensions of the deadlines set forth in the merger agreement for
        approval of the proposed merger by Pinnacle Entertainment's
        stockholders to October 13, 2000 and for the closing of the sale
        of Pinnacle Entertainment's 97 acres of surplus land in Inglewood,
        California (in which event stockholders may be entitled to
        receive up to an additional $ per share in the proposed merger)
        from December 31, 2001 to March 1, 2002;
   (5) addition of a provision permitting Pinnacle Acquisition
        Corporation ( a subsidiary of PH Casino Resorts), at its option,
        to extend the outside closing date of the proposed merger to
        March 16, 2001 (in which event the two-month and six-month
        extensions of such outside closing date for regulatory approvals
        run from such date); and
   (6) elimination of the requirement that the surviving entity in the
        merger obtain a letter of credit to secure its obligation to pay
        the contingent payment of up to $1.00 per share in connection
        with the sale of the Inglewood land.

PH Casino Resorts has also agreed that the merger consideration payable to
Pinnacle Entertainment stockholders would not be reduced as a result of the
Belterra riverboat accident.

In addition to amending the Merger Agreement, Pinnacle Entertainment also
agreed in the settlement to pay attorney's fees and costs to the
plaintiff's counsel, subject to court approval.

Pinnacle Entertainment intends to mail to stockholders within the next
several days a supplement to its proxy statement describing the amendments
to the merger agreement.

The annual meeting will be convened as scheduled on September 19, 2000 at
9:00 a.m. local time at the Hilton Hotel, 100 West Glenoaks Boulevard,
Glendale, California. However, in order to give stockholders an opportunity
to evaluate the amendments, the only action that will be taken at such
meeting will be to adjourn the meeting until October 10, 2000, on which
date the annual meeting will reconvene at the Hilton Hotel, 100 West
Glenoaks Boulevard, Glendale, California at 9:30 a.m. local time. The
record date for the annual meeting, the reconvened annual meeting on
October 10, 2000 and any further adjournments or postponements remains the
close of business on August 8, 2000. As of September 15, 2000, proxies
representing approximately 64% of the outstanding shares of Pinnacle
Entertainment's common stock had been voted in favor of the proposed

Pinnacle Entertainment is a diversified gaming company that owns and
operates six casinos (three with hotels) in Nevada, Mississippi, Louisiana
and Argentina, and receives lease income from two card club casinos, both
in the Los Angeles metropolitan area. The company is constructing the
Belterra Casino Resort in Southern Indiana, approximately 35 miles
southwest of Cincinnati.

REMEC INC: Underwriters Dismissed after Filing of Securities Suit in CA
On April 19, 1999, a class action lawsuit was filed against REMEC, some of
its officers and directors and the investment banking firms that served as
the representatives of the underwriters of our public offering completed in
February 1998. The lawsuit was filed by the law firm Milberg Weiss Bershad
Hynes and Lerach and others in the United States District Court for the
Southern District of California as counsel for Charles Vezzetti and all
others similarly situated. The lawsuit alleges violations of the Securities
Exchange Act of 1934 by us and the other defendants between December 1,
1997, and June 12, 1998. Specifically, the complaint alleges that REMEC
made falsely positive statements which artificially inflated the price of
REMEC stock prior to a secondary offering completed in February 1998, in
which REMEC and some of its officers and directors sold stock, and that
REMEC's stock price fell on a series of adverse disclosures in late May and
early June 1998. The complaint in the lawsuit does not specify an amount of
claimed damages. Since the lawsuit was filed, the underwriters have been
dismissed without prejudice.

REMEC believes that the lawsuit is without merit and has been defending
against it vigorously through a motion to dismiss and otherwise. REMEC
tells investors the ultimate resolution will not have a material adverse
impact on our business or financial condition. However, if the plaintiffs
are successful in pursuing their claims against REMEC and its officers and
directors, such a result could have a significant negative impact on
REMEC's business and financial condition.

TISSUE MANUFACTURERS: Lead Counsel Announce Settlement over Price-Fixing
Co-Lead Counsel announced on September 18 the settlement of a class action
suit, which had alleged price-fixing by the major producers of commercial
tissue products. The defendants in the case are: Bay West Paper
Corporation; Wisconsin Tissue Mills, Inc.; Encore Paper Company, Inc.; Fort
Howard Corporation; Georgia Pacific Corporation; James River Corporation of
Virginia; Kimberly-Clark Corporation; Marcal Paper Mills, Inc.; Scott Paper
Company; and Cascades Industries, Inc. Since the filing of the suit, Fort
Howard and James River merged to form Fort James Corporation, and in 1995,
Scott Paper Company and Kimberly-Clark merged. The settlement relates to
direct purchasers of commercial tissue products during the period from
January 1, 1993 through July 22, 1998. "Commercial tissue products" include
tissues, toilet paper, paper towels, paper napkins, paper toilet seat
covers and paper-based wipers which defendants manufacture and sell for use
in the commercial or "away from home" sanitary paper market.

The settlement provides for a settlement fund valued at $56.2 million.
Eighteen million dollars is to be paid in cash, and thirty-eight million
two hundred thousand dollars is to be paid in coupons redeemable for
commercial tissue products over a period of three years. The coupons are
fully transferable among class members and can be used to pay up to fifteen
percent of an invoice. A Notice describing the settlement, which includes
the claim form that direct purchasers need to file in order to share in the
settlement fund, has been mailed to class members. Potential claimants are
urged to file claims. You may obtain a copy of the mailed Notice by writing
to: In Re: Commercial Tissue Products Antitrust Litigation, P.O. Box 240,
Philadelphia, PA 19105-0240.

The settlement is subject to approval by the Court.

Co-Lead Counsel for the class are Berger & Montague, P.C.; Meredith, Cohen,
Greenfogel, & Skirnick, P.C.; Much Shelist Freed Denenberg Ament &
Rubenstein, P.C.; and Sandals, Langer & Taylor, LLP.

Source: Berger & Montague, P.C.; Meredith, Cohen, Greenfogel & Skirnick,

CONTACT: Howard Langer of Sandals, Langer & Taylor, LLP, 215-419-6504, or
Ruthanne Gordon of Berger & Montague, P.C., 215-875-3072, or Michael Freed
of Much Shelist Freed Denenberg Ament & Rubenstein, P.C., 312-621-1429, or
Joel Meredith of Meredith, Cohen, Greenfogel & Skirnick, P.C., 215-564-5182

TOBACCO LITIGATION: Judge Weinstein Considers Cert. Super-class Action
Eastern District Judge Jack B. Weinstein issued an order suggesting he is
considering certifying a super-class action in the cigarette litigation for
the sole purpose of trying punitive damage claims against the tobacco

Responding to a new class action filed on September 6, which consolidated
12 tobacco-related class actions already pending in his courtroom, Judge
Weinstein ordered the lawyers on those cases to discuss why the pending
cases brought against the tobacco industry - by individual smokers, union
trust funds, Blue Cross-Blue Shield plans and funds established under court
orders to pay asbestos victims - should not be consolidated to allow a
trial on punitive damages.

Judge Weinstein suggested in court that a trial on punitive damages could
take precedence over the trial of compensatory damages in the separate
class actions. Such a move would certainly ratchet up pressure on the
industry to engage in settlement talks. (New York Law Journal, September 7,

TOBACCO LITIGATION: Russia Seeks Compensation for Smokers in Miami Court
In search of a sympathetic judge, Russia filed a lawsuit last week in Miami
seeking compensatory and punitive damages from U.S. tobacco companies for a
conspiracy to hide the dangers of smoking from Russian smokers, the Bond
Buyer reports. The filing is the latest credit issue to arise on the
landscape facing tobacco settlement securitizations, according to the

Russia is seeking damages for illnesses related to smoking. The charges in
the suit are similar to those in the Engle "sick smokers" lawsuit, which
was also filed in Miami and in which a district judge certified a
class-action and a jury awarded a staggering $145 billion in damages.

The Engle case now is in federal court, where some legal experts predict
that the class will be decertified and the case will fall apart. In other
states, attempts to certify a class-action against tobacco companies have

The Russian suit is now in federal court, but attorneys want the case
remanded to Miami-Dade Circuit Court, where it was initially filed. "It's a
zoo at this point. Everyone's piling on," said Eric Altman, a managing
director in investment banking at J.P. Morgan Securities Inc.

Altman said financial experts anticipated lawsuit after lawsuit when the
precedent was set in the Engle case. And there's no real surprise that
foreign countries want their day in court. Lawsuits by foreign countries
have previously been reported in the CAR.

As far as other international forays in U.S. courts, Canada filed a lawsuit
in New York regarding tobacco tax issues. It was thrown out for lack of

Lawsuits against U.S. tobacco companies were filed by Guatemala, Nicaragua,
Thailand, Bolivia, and Venezuela and consolidated by a Washington, D.C.,
judge last year.

Similar suits have been filed in France, Germany, Israel, and Brazil
against subsidiary corporations of American tobacco companies in those
countries. Some suits have already been dismissed.

Even so, every suit is a "risk" to be considered when rating agencies
analyze tobacco securitizations and tobacco companies, said James Grady, a
director in structured finance for Fitch.

Fitch currently gives a A rating to the tobacco industry and a stable
outlook which covers one to two years. Grady said, "Historically, these
suits have not been successful."

Financial experts believe a far lesser threat, although a continuing one,
comes from individual lawsuits because they often take a long time to
litigate. Awards in those cases are not expected to create significant
financial problems for tobacco companies. Major cases are now pending in
Tampa and San Francisco.

"The battle is being fought in the domestic front, in my mind," Altman
said. "And if the tobacco companies appear to be holding their own at home,
it's hard to believe foreign entities would have more success attacking
them." (The Bond Buyer, September 18, 2000)

U.S. AGENCY: Pays $5 Mil to Settle Claims over Lay-offs for Age
A federal judge has approved a 5.5 million settlement between the U.S.
Agency for International Development and a group of former employees who
claimed they were laid off because of their age. The settlement, which
resolves a district court case, provides the largest sum ever awarded to
federal employees in an age discrimination claim, according to Raymond Fay,
lead attorney for the plaintiffs.

"This was a very vigorously contested lawsuit," said Fay, a Washington
attorney, in a FEA interview.

                             No Fault Agreement

USAID said in a statement that the settlement is not an admission of guilt.
"The parties entered into the settlement agreement in the interest of
avoiding further expenses and litigation, including any appeals and new
trials," the agency said.

The case stems from a 1996 USAID reduction-in-force. Of 96 foreign service
officers who were laid off, all but one was over 40 and two-thirds were
over 50, Fay said.

According to court documents, the agency defended the RIF by saying that it
anticipated budget cuts and that there happened to be a high concentration
of foreign service jobs.

But the plaintiffs argued that the agency purposely targeted these
positions because they were held by older workers, which violated the Age
in Discrimination in Employment Act. Their evidence included statements
from top agency officials. USAID Director Brian Atwood reportedly said he
planned to "move out" 50 senior foreign service officers to fill their
slots with "younger people." He also testified before Congress that the
agency needed "young blood."

The parties reached a preliminary agreement last December after a
three-week court trial involving more than 30 witnesses, Fay said. The
settlement had to go through a lengthy approval process before becoming
final on Aug. 22.

In addition to the 5.5 million cash payment, the agency will provide a job
package worth 3 million. The class will be given priority consideration for
contract opportunities over the next three years. (Federal EEO Advisor,
September 15, 2000)

WAR VICTIMS: Comfort Women File Suit in Washington against Japanese Govt
Fifteen women who survived Japanese sex slave camps during World War II
filed suit against Japanese Minister of Foreign Affairs Yohei Kono in US
District Court here on Monday.

The class action suit seeking unspecified damages marks the first time
"comfort women" have sought justice in US courts, and the first time Japan
has been named as a defendant, according to the Washington Coalition for
Comfort Women Issues (WCCWI).

"Like their German racist colleagues in the West, the Japanese pursued
racist policies, and policies which treated women in the most demeaning
manner," attorney Michael Hausfeld told a press conference here.

"We're not looking at these offenses because they are just single instances
of rape. We're looking at them because they involve massive, systematic,
premeditated forced rape," said Hausfeld, whose legal team won a 5.2
billion dollar settlement from the German government and industries for
former slave laborers in Nazi Germany.

One of the plaintiffs -- Hwang Geum-Joo, 78, today of Seoul, Korea -- was
drafted to work in a Japanese military factory, or so she was told, in
1941, when she was 19 years old. For five years, she was circulated among
various "comfort stations" in China, where she was raped by 30 to 40
Japanese soldiers a day, according to Hwang's testimony, paraphrased in the

"Many of the women became so sick that they had yellow pus from their pubic
hair to their belly buttons, and their faces turned yellow as well. Women
who got sick three times were taken away by the soldiers and never
returned," the suit said.

Of 20 women brought to the camps with Hwang, she was the only one who
survived. Dressed in a traditional Korean gown and speaking through a
translator, the diminutive, grey-haired Hwang said Monday: "I want (a)
formal apology." "I have never (been) given a formal apology from the
Japanese emperor. I think the Japanese emperor is finally responsible for
what happened and I want apology from Japan."

Six of the plaintiffs are from South Korea, four are from China, four are
from the Philippines and one is from Taiwan.

The suit was filed under the Alien Tort Claims Act, an 18th century US law
that grants foreign citizens the right to sue for abuses of international
law in US courts.

Between 1932 and 1945, some 200,000 women were forced into sex slavery by
the Japanese Imperial Military, according to WCCWI. Throughout the vast
region of the Pacific they controlled during World War II, Japan shipped
"hundreds of thousands of Koreans, Chinese, Filipinos, Indonesians and
other Asians in what was no less than the biggest slave ship operation
since the African black slave trafficking centuries ago," said attorney
Barry Fisher. (Agence France Presse, September 18, 2000)


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

Class Action Reporter is a daily newsletter, co-published by Bankruptcy
Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc.,
Washington, DC. Theresa Cheuk, Managing Editor.

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

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

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

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

                    * * *  End of Transmission  * * *