CAR_Public/000922.MBX              C L A S S   A C T I O N   R E P O R T E R

             Friday, September 22, 2000, Vol. 2, No. 185

                              Headlines

AMERICAN HOME: Time to Join Schaefer Ambulance Settlement Soon to Expire
CONNECTICUT: State Pays $750,000 to Settle Workplace Harassment Claims
DAIWA BANK: Asahi News Warns of Suits Falling Prey to Their Own Success
DAIWA BANK: Ex-Execs to Pay 83 Bil. Yen for Illegal Dealing by Employee
DYNAMEX INC: Reaches Agreement to Settle Securities Lawsuit

EBT INTERNATIONAL: Settles MA Securities Suit; SEC Investigation Goes on
EBT INTERNATIONAL: Sued Again in MA over Disclosure of Revenues for 2000
EMBRYO DEVELOPMENT: Resolves Litigation in New York over IPO in 1995
HEALTH MANAGEMENT: Settlement for 1997 Securities Suits in NY Finalised
HOLOCAUST VICTIMS: Suit against French Banks Proceeds

INDEPENDENT ENERGY: The Times (London) Tells of KPMG's Study on Plunge
INMATES LITIGATION: Report Blasts New Jersey Prisons
KEELE VALLEY: Supreme Ct of Canada Grants Leave to Appeal Landfill Case
MP3.COM, INC: Cauley & Geller Files Securities Suit in California
NY CITY: AIDS Agency Placed under Federal Authority for Three Years

P&O: Ship Illness Most Likely Influenza, Aussie Health Officials Say
RJR NABISCO: A 401(k) Lesson in the Selection of Annuity Provider
SYKES ENTERPRISES: Stull, Stull Files Securities Lawsuit in New York
TENNESSEE: Lawmakers to Hear Updates on Tax, TennCare, Legal Liability
TOBACCO LITIGATION: Cigarettses Given on Japan's Respect the Elderly Day

* Law Now Exempts Highly Paid Professionals from OT Rules in CA
* Workers' Stock Compensation Is New Legal Battleground

                             *********

AMERICAN HOME: Time to Join Schaefer Ambulance Settlement Soon to Expire
------------------------------------------------------------------------
This week the time limit expires for employers to become part of a class
settlement with an AIG division in a Schaefer Ambulance Case.

A settlement was recently reached in the case Apple One Services Ltd. v.
American Home Assurance Co., and the settlement was approved by the
California Department of Insurance. In the settlement American Home agreed
to pay the class a cash settlement of $600,000. About $75,000 is being
deducted for the cost of notifying potential class members and
administering the settlements.

The two firms handling the case, Roxborough, Pomerance, Gallegos & Nye, and
Shernoff, Bidart, Darras & Dillon will receive $300,000, according to court
documents from Los Angeles County Superior Court.

The settlement was approved by the Department of Insurance this summer. The
case is a replica of the Schaefer Ambulance case and about 20 other class
action cases.

In the cases the plaintiffs allege that carriers misreported to the
California Workers' Compensation Insurance Rating Bureau medical-legal
expenses. These expenses, the cases allege, were recorded as costs
pertaining to individual claims instead of being reported as general
expenses.

Charging these expenses to employers inflated their experience modifiers,
which in turn inflated their premiums, the class has alleged. Eligible
class members are any employers that were insured by American Home between
Jan. 1, 1984 through Dec. 31, 1992.

Schaefer and other employers filed suit against the State Fund in 1994, but
the trial judge ordered the case remanded to the Workers' Compensation
Insurance Rating Bureau, which fields employer complaints about X-Mods and
other rating issues.

The WCIRB sided with Schaefer, and later, a Department of Insurance
administrative law judge issued a proposed decision affirming the WCIRB's
decision.

Insurance Commissioner Chuck Quackenbush adopted the ALJ's decision and
State Fund filed a petition for reconsideration. The DOI urged State Fund
and Schaefer as well as two other employers to enter into mediation.

Just as the parties were preparing to enter the mediation that Quackenbush
had ordered, Quackenbush abruptly denied State Fund's motion for
reconsideration, which gave plaintiffs' counsel a leg up and effectively
ground the ordered mediation to a halt.

Since then the Schaefer case and related cases are proceeding in court or
parties have entered into settlement negotiations. (Workers' Comp
Executive, September 20, 2000)


CONNECTICUT: State Pays $750,000 to Settle Workplace Harassment Claims
----------------------------------------------------------------------
The state has paid $750,000 in recent months to 14 women to settle legal
claims that they were sexually harassed and mistreated in other ways while
working for a state agency that serves the blind from 1996 to 1999.

The settlements stem from the turbulent tenure of Kenneth R. Tripp of
Cheshire as director of the state Board of Education and Services for the
Blind, according to records obtained Wednesday by The Hartford Courant.

Tripp, a friend and political appointee of Gov. John G. Rowland, was forced
by the governor's office to resign in January after an investigation by the
attorney general's office confirmed complaints that Tripp had a romance
with a secretary, created an atmosphere of sexual crudeness at his agency,
and treated blind clients with cruelty and indifference. Tripp did not
return a call to his home Wednesday. A call to his home Thursday morning
went unanswered. In the past he has denied wrongdoing.

The settlement avoided a class-action lawsuit that was threatened after
Tripp left. About half of the claimants still work at the agency, while the
others either left jobs on the state payroll or had formerly worked under
contracts for the agency to provide services such as counseling blind
people.

Carol Gillispie of West Haven, one of the claimants, said she did not
participate in the legal effort only "for the money." She said the $85,105
she received helps, but she remains "devastated" because she is still
unemployed.

Part of the reason the state agreed to the settlement was that a prolonged
lawsuit would "not have been easy for the agency" - with so many claimants
still working there - "or the people they serve," said Brian Clemow, a
lawyer hired by the state to negotiate a settlement.

The state made no admission of wrongdoing in the settlement. (The
Associated Press State & Local Wire, September 21, 2000)


DAIWA BANK: Asahi News Warns of Suits Falling Prey to Their Own Success
-----------------------------------------------------------------------
Asahi Shimbun said in an editorial: Many business managers must have been
astounded by a Sept. 20's court ruling on a class action lawsuit brought
against the management of Daiwa Bank over losses incurred by its New York
office in the 1980s and 1990s.

The court ruled that the bank management failed, by neglecting to adopt
proper auditing procedures, to notice frequent illegal dealing by one of
its employees for as long as 11 years. Even after the employee confessed
his activities to his superiors, Daiwa put off notifying U.S. authorities,
resulting in the bank having to pay a penalty.

The court held the bank's managers at the time accountable for both failing
to notice the irregularities and then ignoring them. By ordering them to
pay 83 billion yen ($0.8 billion) in compensation, the court is in effect
forcing the members of the bank's board at the time into bankruptcy.

There have in the past been cases in which members of a board of directors
played an active role in bribery and illegal exporting, and were
subsequently ordered by a court to pay massive amounts of compensation. But
there have been no instances of top executives being made to pay so much
compensation for failing to properly oversee their employees.

It is true that in not promptly notifying authorities of the illegal
trading in New York, the bank officials violated U.S. laws and regulations.
But the bank's actions were partly based on Finance Ministry "guidance."
According to the so-called convoy system of protection for the banks, the
ministry poked its nose into the minutest details of the banking business.
Given that this was the prevailing practice in the industry at the time,
the court's conclusion that "it is impermissible for the bank management to
be entirely dependent on the Finance Ministry and desist from making any
decision on its own" may be rather harsh, as it is based on today's
standards and values.

Yet one of the basic principles of running a private business has always
been that managers assume responsibility for their acts. Under the
Commercial Code, dependence on government ministries and the use of
ministry action as an excuse cannot be tolerated. As can be seen in the
criminal penalties meted out for the wining and dining of government
officials, conventional wisdom and practices have been undergoing great
change. The latest ruling drives home the fact that such change is under
way.

Managers have to think afresh about who owns their businesses and what
responsibility board members must assume for having been mandated to run a
business.

What we have to fear in the wake of the sentence is that it may be used as
an excuse to defang the system that allows shareholders to file class
action suits against company management. It comes at the same time that the
ruling coalition parties-the Liberal Democratic Party, New Komeito and
Hoshuto (New Conservative Party)-have organized a Commercial Law Project
Team.

The team is looking at revising the law in such a way as to limit the
qualification of shareholders to file class action suits, and to set an
upper limit on compensation payouts. Ruling party lawmakers apparently plan
to have a revision bill passed without the usual deliberation by the
Justice Ministry's Legislative Council, an advisory panel to the justice
minister.

The 83-billion-yen payment ordered in the latest ruling may be cited by
business leaders to bolster their old argument that the fear of class
action suits will hamper executives' ability to make bold decisions.

But this argument is wide of the mark. At issue in the Daiwa Bank case was
the persistent illegal activity of an employee. Managers who try to run a
business honestly and to solve problems as they arise without concealing
them should have no reason to fear lawsuits.

The result of the class action suits filed against management by
shareholders has been a climate in which managers have a keener sense of
responsibility and are deterred from behavior that they cannot explain to
their shareholders, such as colluding with their competitors at the behest
of the government or writing off bad loans easily. As the number of such
class action suits increases-partly as a result of reduced court fees-the
system is still in the process of precedent setting to make itself firm.

It would be wrong to be frightened by the size of compensation ordered in
the latest ruling and therefore rush to tinker with the system of class
action shareholders' suits. (Asahi Shimbun, Sept. 21)


DAIWA BANK: Ex-Execs to Pay 83 Bil. Yen for Illegal Dealing by Employee
-----------------------------------------------------------------------
The Osaka District Court ordered former Daiwa Bank executives Wednesday to
pay a total of 775 million dollars in compensation for losses caused by the
illegal dealing of a former employee in the United States.

This ruling was the first since the Commercial Code was revised in 1993 to
hold managing executives responsible for failure to supervise an employee
although they had no knowledge of the employee's wrongdoing. The amount of
compensation was the largest ever awarded in a class-action lawsuit filed
by shareholders.

Two of Daiwa Bank's shareholders, acting on behalf of all shareholders,
filed the lawsuit to demand that 49 former executives, including President
Takashi Kaiho and two former presidents, pay a total of 1.45 billion
dollars in compensation to the bank.

Daiwa Bank incurred about 1.1 billion dollars in losses and paid penalties
to the U.S. financial authorities over the illegal dealing of U.S. Treasury
bonds by a former employee at its New York branch.

Toshihide Iguchi, then an employee of Daiwa Bank's New York branch, carried
out the illegal dealing for 11 years. He incurred about 1.1 billion dollars
in losses from illegal off-the-books dealing of U.S. Treasury bonds. His
actions were revealed when he sent a letter of confession to the bank
president in July 1995.

The shareholders alleged that the managing executives were responsible for
the losses and penalties because they failed to notice the illegal practice
for 11 years and also failed to notify the U.S. authorities of the crime at
the appropriate time.

Presiding Judge Mitsuhiro Ikeda said the executives neglected their duty to
"pay attention as supervisors acting in good faith." The court ordered
former director Kenji Yasui, who was then branch manager, to pay 530
million dollars, and Kaiho and 10 other executives to pay 245 million
dollars, holding them jointly liable for a portion of the penalties that
were paid. The ruling sets a precedent in urging a company's management to
change its corporate practices at a time when Japanese companies' tendency
to hide important information is coming under scrutiny.

This tendency was brought to light particularly by the food-poisoning case
involving Snow Brand Milk Products Co. and Mitsubishi Motors Corp.'s
concealment of faults in its vehicles.

The defendants said they would appeal the ruling.

Because the ruling also included the issuance of a temporary court order to
force the defendants to pay, the plaintiff shareholders planned to ask the
district court to issue a provisional execution order that would force the
executives to pay the full amount. Therefore, it is highly likely that
Kaiho and other former executives who were ordered to pay compensation will
have their assets seized according to the amount of their liability.

But because the amounts are considerable, the court will likely take into
consideration the state of the defendants' finances, legal experts said.

During court proceedings, it was argued whether the managing executives
could be held liable for the following:

    *  Failure to discover the illegal dealing during in-house
       inspections, despite the fact that the dealing was carried out
       over many years.

    * The bank being forced to pay a huge sum in penalties because the
       managing executives did not report the incident to U.S.
       authorities immediately after the illegality was discovered.

In the ruling, Ikeda said the management of the bank as a whole "cannot be
called inappropriate." But he ruled that the defendants failed to fulfill
their duties sufficiently regarding in-house inspections of the New York
branch. "Former Vice President Yasui conducted in-house inspections, to
ascertain the outstanding amount of securities for example, inappropriately
and therefore did not pinpoint and stop the crime," the presiding judge
said.

Concerning the delay in reporting the crime to U.S. authorities, the
defendants insisted, "If a report had been made without a thorough
investigation, it could have endangered the bank's existence and,
furthermore, caused a financial crisis." (The Daily Yomiuri (Tokyo),
September 21, 2000)


DYNAMEX INC: Reaches Agreement to Settle Securities Lawsuit
-----------------------------------------------------------
Dynamex Inc. (Amex:DDN) announced on September 20 that the Company has
reached an agreement in principle setting forth the essential terms of a
settlement of the pending shareholder class action lawsuit. The preliminary
agreement settles the litigation on behalf of Dynamex, certain current and
former executive officers, and the Company's underwriters. The settlement
does not include Deloitte & Touche LLP.

The proposed settlement includes the following terms:

    *  $2 million cash to be paid by the Company's primary insurer,
       American Home Insurance Company;

    *  $1 million cash plus interest from Dynamex to be paid $350,000
       within three days and $650,000 ten business days prior to the date
       scheduled for the settlement hearing, 1 million shares of Dynamex
       common stock; and

    *  75% of all recoveries, after expenses, obtained from Reliance
       Insurance Company, the Company's excess insurer, and Deloitte &
       Touche LLP and Deloitte & Touche, the Company's former auditors.

The Company will record a fiscal fourth quarter 2000 charge of
approximately $1,000,000 to account for its cash obligation under the
settlement described above. The Company has ample cash and credit
availability to fund its obligations under the settlement.

The settlement is conditioned upon, among other things, execution of a
definitive settlement agreement and related documents, notice to the
Company's shareholders of the settlement, and final approval by the United
States District Court.


EBT INTERNATIONAL: Settles MA Securities Suit; SEC Investigation Goes on
------------------------------------------------------------------------
On February 4, 1999, the Company and certain of its officers were named as
defendants in a purported class action lawsuit filed in the United States
District Court for the District of Massachusetts. Thereafter, six
substantially similar actions were filed in the same Court. On April 5,
1999, the seven class action lawsuits that were filed against the Company
were consolidated into one lawsuit entitled In Re Inso Corporation, Civil
Action No. 99-10193-WGY. These lawsuits were filed following the Company's
announcement on February 1, 1999 that it planned to restate its revenues
for the first three quarters of 1998.

The consolidated lawsuit principally claimed that the defendants violated
federal securities laws allegedly by making false and misleading statements
and by failing to disclose material information concerning the Company's
financial performance during the purported class period of April 23, 1998
through March 31, 1999 and sought unspecified damages. The Company and all
of the individual defendants denied any wrongdoing,

On September 29, 1999, the Company entered into an insurance agreement
pursuant to which the insurance carrier assumed complete financial
responsibly for the ultimate resolution of the lawsuit. A net charge to the
fiscal year 2000 consolidated results of $13,451,000 was taken in
connection with the insurance agreement.

On May 26, 2000, the Company entered into an agreement to settle the
consolidated securities class action. The settlement provides that all
claims against the Company and the individual defendants will be dismissed.
In agreeing to the proposed settlement, the Company and the individual
defendants specifically continue to deny any wrongdoing.

The settlement was preliminarily approved by the Court on May 29, 2000 and
is subject to certain other customary conditions, including notice to the
class and final approval by the Court. The Court has scheduled a final
approval hearing for September 14, 2000.

The company says that as soon as it discovered that it would be necessary
to restate certain of its financial results for the first three quarters of
1998, the Company immediately and voluntarily provided this information to
the U.S. Securities and Exchange Commission. On June 2, 1999, the Company
was informed that the U.S. Securities and Exchange Commission had issued a
Formal Order of Private Investigation in connection with matters relating
to the previously announced restatement of the Company's 1998 financial
results. The Company cannot predict the ultimate resolution of this action
at this time.


EBT INTERNATIONAL: Sued Again in MA over Disclosure of Revenues for 2000
------------------------------------------------------------------------
During February 2000, certain shareholders of the Company filed two
putative class action lawsuits against the Company and certain of the
Company's officers and employees in the United States District Court for
the District of Massachusetts. The lawsuits are captioned as follows: Liz
Lindawati, et al. v. Inso Corp., et al., Civil Action No. 00-CV-10305GAO;
Group One Limited, et al. v. Inso Corp., et al., Civil Action No.
00-CV-10318GAO.

These lawsuits were filed following the company’s preliminary disclosure of
revenues for the fiscal year 2000 fourth quarter on February 1, 2000. Both
complaints assert claims for violations of Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 of the Securities and Exchange
Commission, as well as a claim for violation of Section 20(a) of the
Exchange Act. The plaintiffs allege that the defendants prepared and issued
deceptive and materially false and misleading statements to the investing
public. They seek unspecified damages. EBT believes that the claims are
subject to meritorious defenses, which we plan to assert during the
lawsuit. The company cannot predict the ultimate resolution of these
actions at this time, and there can be no assurance that the litigation
will not have a material adverse impact on our financial condition and
results of operations.


EMBRYO DEVELOPMENT: Resolves Litigation in New York over IPO in 1995
--------------------------------------------------------------------
Embryo Development Corp. has been named as a defendant in a consolidated
class action pending before the U.S. District Court for the Eastern
District of New York. In a consolidated complaint, plaintiffs assert claims
against the Company and others under the Securities Act of 1933, the
Securities Exchange Act of 1934 and New York common and statutory law
arising out of the November 1995 initial public offering of 1 million
shares of the Company's common stock. According to the complaint, the
underwriter of the offering, Sterling Foster & Co., Inc. ("Sterling
Foster"), which is also a defendant, manipulated secondary market trading
in shares of the Company's common stock following the offering and covered
certain short positions it created through such manipulation by purchasing
shares of Company stock from persons who owned such stock prior to the
offering pursuant to an arrangement with such persons that was not
disclosed in the registration statement and prospectus distributed in
connection with the offering. The complaint seeks unspecified damages.

In November 1998, it was announced that Michael Lulkin, a director and
Chairman of the Board of Directors of the Company at the time of the
Company's initial public offering, had plead guilty to, among other things,
conspiracy to commit securities fraud. The charges to which Mr. Lulkin
plead were premised on allegations that Mr. Lulkin, Sterling Foster, and
others had entered into an undisclosed agreement pursuant to which, upon
conclusion of the Company's initial public offering, they would (a) cause
Sterling Foster to release Mr. Lulkin and others who owned Embryo stock
prior to the offering from certain "lock up" agreements restricting them
from selling such stock; and (b) cause Mr. Lulkin and such other persons to
sell their Embryo stock to Sterling Foster at prearranged prices to enable
Sterling Foster to use such stock to cover certain short positions it had
created.

In August 1999, an agreement in principle was entered into providing for
settlement of the consolidated class action against the Company, Mr. Lulkin
and Steven Wasserman, who was also a member of the Company's Board of
Directors at the time of the Company's initial public offering. Under the
agreement in principle, all claims in the action against the Company, and
against Mr. Lulkin and Mr. Wasserman insofar as they were members of the
Company's Board of Directors, would be dismissed in exchange for a payment
of $400,000, of which $100,000 would need to be paid by the Company and
$300,000 would be paid by an insurance company under a directors and
officers liability policy of insurance. The settlement is contingent upon,
among other things, execution of the definitive documentation and approval
by the court. There can be no assurance that the settlement will be
concluded. At April 30, 2000, the Company recorded a reserve of $100,000,
which is included in accounts payable and accrued expenses, for this
obligation.


HEALTH MANAGEMENT: Settlement for 1997 Securities Suits in NY Finalised
-----------------------------------------------------------------------
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 filed in 1997, which was previously
reported in the CAR.

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 argument. 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
settlement.

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. As noted, on August 14, 2000, the Court signed
an Order and Final Judgment approving the proposed settlement.


HOLOCAUST VICTIMS: Suit against French Banks Proceeds
-----------------------------------------------------
Holocaust survivors may continue to press their claims against French banks
for looting assets after an Eastern District judge denied motions to
dismiss two class actions.

Judge Sterling Johnson Jr. said in a 44-page opinion that U.S. federal
courts have jurisdiction to address claims arising under customary
international law, and that the class actions will not deter the French
government's investigation of the banks' role in stealing the assets of
Jews in France during the Nazi occupation and Vichy regime.

Two class actions are consolidated under the caption Bodner v. Banque
Paribas , 97 CV 7433 (SJ), and in them, plaintiffs seek damages, an
accounting and recovery of cash, records, art, jewelry, securities and
other property allegedly wrongfully taken and withheld from them and their
family members. They are also seeking punitive damages for the unlawful
seizure of assets and for the unjust enrichment of the banks in retaining
the assets over the past 50 years.

The plaintiffs in the Bodner action are U.S. citizens, and the plaintiffs
in the consolidated action, Benisti v. Banque Paribas, 98 CV 7851 (SJ), are
foreign nationals pressing their claims under the federal Alien Tort Claims
Act.

The defendants are 10 financial institutions implicated in carrying out the
alleged seizure of assets.

The claims in both class actions arise from identical facts, the court
said. The French banks aided and abetted wholesale violations of
international law during the period of World War II, the plaintiffs allege.
And after the war, the defendants refused to return ill-gotten assets,
enriched themselves with profits and concealed information about the looted
property, the plaintiffs say.

The defendants, which are French banks and successor institutions, sought
dismissal of the class actions, arguing that the plaintiffs lacked standing
to sue, that there was no federal subject matter jurisdiction, since all of
the alleged wrongdoing occurred outside of the United States, that the
court should dismiss the lawsuits to preserve comity with actions of the
French government and that the New York forum was not convenient for the
litigation.

Judge Johnson rejected all of the reasons proffered for dismissal.

Three commissions were set up by the French government to investigate the
role of French banks in unlawfully taking the assets of French Jews during
the occupation and Vichy regime, and defendants said that the U.S. case
should be abandoned in the interest of comity with these investigations.

But Judge Johnson declined to dismiss the case on those grounds, holding
that there is no conflict between the French investigations and that the
commissions are not primarily designed to address individual claims against
the banks.

"There is no pending litigation in France, nor is the Court aware of any
current law or policy of the French government which could either supplant
or fully redress plaintiffs' claims," Judge Johnson said. The French
government has not acted on any recommendations of the commissions, and the
investigating bodies "were never charged with providing comprehensive
remedies to an aggrieved class."

Discovery in the Eastern District class action, Judge Johnson added, can be
a complement to the information-gathering of the French government.

The court also brushed aside defense arguments that the wrongdoing alleged
by the plaintiffs was an "Act of State" which cannot be judged by a U.S.
court.

The acts of the Vichy regime, which authorized the looting of assets held
by French Jews, were rejected and repudiated by the legitimate French
government after the liberation of France.

Moreover, Judge Johnson reasoned, the wrongdoing alleged by the plaintiffs
outlasted the Vichy regime and were in violation of postwar French law
requiring that looted assets be returned to their proper owners.

Defendants also said there was no federal subject matter jurisdiction in
the case, since unlawful taking of assets constitute claims under state
law.

But Judge Johnson concluded that the federal courts had subject matter
jurisdiction in the case because the complaint raised allegations of
violations of longstanding principles of international law. Such
principles, the court said, are part of federal common law.

The court also turned aside defendants' objection to standing. Plaintiffs
have made competent allegations of a vast conspiracy in the French banking
industry to deprive Jews of their assets. They have also alleged that they
are survivors of the period in question, who owned personal property that
was stolen, or whose parents owned such property.

While further discovery may be required to determine standing, the only
objections to standing lodged by the defendants are "anecdotal."

The objections "have not vitiated plaintiffs' standing and, in fact, only
further establish the importance of thorough discovery in the case," Judge
Johnson wrote. "The court concludes that a conspiracy by the defendants has
been pleaded properly and that the individual named plaintiffs have
standing to sue even those banks with which named plaintiffs did not allege
specific transactions."

New York lawyers representing the plaintiffs in the twin cases are: Kenneth
F. McCallion, Thomas A. Dubbs and H. Rajan Sharma of Goodkind Labaton
Rudoff & Sucharow; Roy H. Carlin; Harriet Tamen; Elizabeth Cabraser and
Michael Ratner of Lieff, Cabraser, Heimann & Bernstein; Melvyn Weiss and
Joseph Opper of Milberg Weiss Bershad Hynes & Lerach; the Law Offices of
Curtis Trinko, and Thomas A. Holman of Starr & Holman.

Washington, D.C. lawyers Michael D. Hausfeld and Paul T. Gallagher of Cohen
Milstein Hausfeld & Toll, and Indianapolis-based Irwin Lewin and Richard
Shevitz of Cohen & Malad are also listed as plaintiffs counsel in the
cases.

Defense counsel in the cases are listed as follows: Frederick T. Davis of
Shearman & Sterling for six French banks -- Banque Paribas, Credit
Lyonnais, Societe Generale, Credit Agricole, Banque Indosuez and Natexis;
Owen C. Pell of White & Case for Credit Commercial de France and Chase
Manhattan Bank; Floyd Abrams of Cahill Gordon & Reindel for Barclay's Bank
and J.P. Morgan, and Robert Stephenson of the Chase Manhattan Legal
Department for Chase Manhattan. (New York Law Journal, September 13, 2000)


INDEPENDENT ENERGY: The Times (London) Tells of KPMG's Study on Plunge
----------------------------------------------------------------------
In an articel headlined, "Battle strategy of the Wild West pulled the plug
on Independent", the Times (London) says, "Predatory nature of electricity
supply brought a spectacular fall for Independent Energy."

According to the Times (London), forecsic accountants in the corporate
recovery department of KPMG this week began the complicated task of piecing
together how Independent Energy, the entrepreneurial electricity and gas
supplier, plunged from a capitalisation of Pounds 1.5 billion to
receivership in just six months.

The main reason for the Independent Energy's demise, its inability to
collect payments from its customers, had been evident since the beginning
of this year. Then, the Solihull-based company blithely claimed that "the
problem is only one of timing of billing and does not reflect any problem
in collection".

In mid-February Independent reassured investors that "substantial progress"
had been made in sorting out billing problems and that the company's
prospects remained "more than encouraging".

The following month, the company raised Pounds 90 million through a
fundraising led by the American firms Donaldson Lufkin & Jenrette (DLJ),
Prudential Securities and Johnson Rice. In the offer prospectus Independent
again claimed that the billing problems had been overcome.

Unfortunately for investors, the fundraising, in which investors had paid
an extraordinary Pounds 32.90 a share, proved the turning point for the
company after which it unravelled with astonishing speed.

On the morning of September 8, administrative receivers from KPMG's
Birmingham office were appointed by Barclays, Independent's bankers and the
leader of a syndicate owed Pounds 165 million. DLJ faced losses of about
Pounds 50 million.

Sure enough, the billing problems had turned into a debt collection crisis.

As one banker said: "It seems incredible that anything like this can happen
in such large numbers."

Independent's astonishing collapse, with book debts totalling Pounds 330
million, was the first in the deregulated electricity and gas sector. It
both exposed the Wild West-style fight for customers among suppliers and
put Ofgem, the industry's young and inexperienced regulator, to the test.

Just a few days after KPMG was appointed, it sold Independent's key asset -
its list of 242,000 customers - for just Pounds 10 million to Innogy, the
UK arm of National Power.

The customers, a mix of business and residential users, are not bound to
stick with Innogy and could move on to another supplier. Indeed, to
highlight the predatory nature of electricity supply, rival suppliers have
been placing substantial newspaper adverstisements seeking to lure
Independent's former customers.

It is not the customer who is king but the number of customers, because of
the suppliers' need to make maximum use of their infrastructure.

Even so, Pounds 10 million might not seem much money for the chief asset of
a company that only months before was valued at Pounds 1.4 billion.

The disposal of the customer list was clearly a fire sale and it was
completed only moments before Ofgem exercised its emergency powers to hand
the customers over to their "supplier of last resort" - their regional
electricity company. The deal included Innogy being incentivised to collect
Independent's unpaid bills, which could be as much as Pounds 200 million.
Whether these debts are collectable is open to question. Independent had
failed and, presumably, had been unable to factor them.

But the biggest question coming from the sale for Pounds 10 million of a
company previously valued at Pounds 1.4 billion is: "How did the City get
the value of the company so spectacularly wrong?''

It is interesting to look back at Independent's origins in the US. As one
analyst says: "It was set up by a stockbroker and there were two MBAs on
the board so the warning signs were there from the start."

Electricity deregulation created a vibrant entrepreneurial industry in the
US and Burt Keenan, an investment banker from Louisiana, felt he could
repeat the magic in the UK.

From his home in New Orleans he created Independent Energy and brought it
to London's Alternative Investment Market in May 1996. He had brought in
John Sulley, a former ScottishPower employee, as managing director and
raised Pounds 3 million, giving a capitalisation of Pounds 13 million.

The company grew quickly and was promoted to the full list last year and
also had a Nasdaq listing in the US, where about three quarters of its
hapless investors are based.

On the surface, the company could not be criticised. Its financial track
record looked impressive and it reported its first pre-tax profit last
year. But there were signs that the stock was being over-hyped.

For example, in its third- quarter results last year Independent announced
that an "agreement has also been drawn up with North Wales Gas". Just two
days later it was forced to put out a statement saying that "no formal
agreement with North Wales Gas has yet been signed".

Similarly, its statements over its billing problems have proved ludicrously
optimistic.

Last May, Sulley, who was promoted to chief executive in 1999, said that
the problems "will be largely resolved within a short period". In the same
breath he talked of expansion overseas.

Independent's problems began when it decided to move into the fiercely
competitive residential electricity supply market.

Vertex, the support services arm of United Utilities, was taken on to run a
billing system but it was unable to send out invoices because of inadequate
information.

Customers were expected to send their money directly to Independent, which
they were reluctant to do. Clearly Independent had a completely inadequate
administration system.

A generous interpretation of the fiasco is that Independent was a small
company that grew too fast.

But this sympathetic view is not shared by investors, who believe that
Independent's directors have consistently misled the market over the
parlous state of the company's finances.

Those investors want Independent's directors brought to book. A class
action was filed in the US District Court in New York just days before the
company went into receivership on behalf of all investors who bought shares
in the March fundraising.

The directors themselves have made vast personal fortunes out of their
hapless shareholders. In the March fundraising alone, Keenan sold 500,000
shares, netting more than Pounds 16 million and reducing his 3.1 per cent
stake in the company to just 1.6 per cent. At the same time, Sulley made
almost Pounds 2 million.

Independent frequently came back to the market to raise more money,
ostensibly so it could maintain a high credit rating, providing the ideal
opportunity for its directors to sell shares and options.

The company was unusual in that it was followed only by US analysts, who
say a Pounds 104 million fundraising last year was simply to refinance the
company. In the fundraising, Keenan sold 1.2 million shares worth Pounds
11.5 million.

One analyst said: "What was not made clear to us in that fundraising was
that outside equity was critical to the working capital requirements of the
company."

He added that the company's directors had been refusing to answer calls for
the past three months. He said: "It is a classic case of analysts in the US
and management in the UK. We have been completely cut off since June but
the company continued to issue statements saying they were making progress,
which was simply not correct.

"I cannot say Wall Street could have done a better job, given the lack of
information we were getting from management."

This damning criticism of Sulley and his finance director, Ian Stewart,
will increase pressure on both the US and UK authorities to carry out a
full investigation into Independent's collapse. (The Times (London),
September 21, 2000)


INMATES LITIGATION: Report Blasts New Jersey Prisons
----------------------------------------------------
Many of the prison cells had no beds, no toilets, no windows. The walls
often were smeared with blood and feces, stains left by deranged inmates
driven even deeper into madness by weeks spent in solitary confinement.

It's a scene that harkens back to the dungeons found in the Middle Ages.
But in reality, these are the 1 conditions that thousands of mentally ill
inmates have been living under in New Jersey prisons in recent years, and
may still endure, according to a report released Tuesday.

A prominent advocacy group, Human Rights Watch, on Tuesday released a
report describing the ghastly treatment of mentally ill inmates at five New
Jersey prisons as late as 1997. The report was commissioned by lawyers
representing the inmates in their class action suit, which was settled in
U.S. District Court in July 1999.

Release of the report was meant to pressure the state Department of
Corrections and Governor Whitman to show proof that conditions really have
improved in the state's prisons, 14 months after the lawsuit was settled.

"These conditions are, quite frankly, deplorable and inhumane," said Jamie
Fellner, an attorney for Human Rights Watch. "The time has come for the
state to show us that things have changed."

Additionally, Human Rights Watch called on Whitman and the DOC to release a
series of progress reports prepared by an independent monitor responsible
for ensuring that the 1999 settlement agreement is being implemented. The
agreement required that New Jersey set up mental health treatment
facilities in all its prisons, and effectively stop criminalizing and
punishing the behavior of mentally ill inmates.

But Whitman, while saying those changes are being implemented, insists that
the progress reports remain confidential.

"The reports are confidential, which is what the plaintiffs agreed to under
under the settlement agreement,"said Jayne O'Connor, a spokeswoman for the
governor's office."If Human Rights Watch and the plaintiffs want to change
that, there is a legal process they will have to go through."

The report that Human Rights Watch released had once been confidential as
well, but the group got a court order to make it public.

The 98-page report was prepared by Dr. Dennis Koson, an expert on mental
health in prison.

Koson interviewed 410 inmates who had sought mental health treatment at
five New Jersey prisons 1996 and 1997. Based on those interviews, Koson
wrote that treatment of mentally ill inmates in New Jersey prisons"is among
the worst I have seen in my 15 years of inspecting correctional systems
nationwide."

That treatment, or lack 1 thereof, contributed to the suicides of two
inmates, Koson noted.

Among the problems Koson found:

   * The state's prison's were"grossly understaffed"and lacking trained
psychiatric staff. In one instance, a corrections officer taunted a
mentally ill inmate by breaking cigarettes in front of his cell. The inmate
hanged himself hours later.

   * Mental health treatment for inmates was infrequent at best.

   * Record-keeping was sporadic, and often non-existent.

   * Inmates whose mental illness caused them to become violent were placed
in solitary confinement, sometimes for weeks at a time, instead of being
treated by a doctor. The procedure, known as administrative segregation,
often caused inmates to go berserk. Once in solitary confinement, inmates
would thrash around in their cells, mutilating themselves or trying to
commit suicide. Koson noted that in solitary confinement, he
encountered"the most grossly and utterly psychotic mentally ill people I
have ever seen."

   * Medications were often sporadically administered. An inmate at the
Albert Wagner Youth Correctional Facility had his medication discontinued
because the pharmacy ran out. The inmate later hanged himself.

   * The opportunity for non-medicinal,"talk"therapy was practically
non-existent.

The class action suit was brought by more than 200 inmates in 1996. Under
the settlement, the DOC areed to completely revamp its mental health
procedures. The DOC is spending $ 16 million this year on the upgrade.
Fourteen months later, lawyers for the inmates are frustrated by the slow
progress of the changes. They blame the DOC and the private company that
provides health care services in New Jersey prisons, Corrections Medical
Services of St. Louis. "We are not satisfied,"said Patricia Perlmutter, an
attorney for the inmates."We feel that some of the underlying problems
continue to persist."

Perlmutter and another attorney, Sandra Cobden, say they are considering
going back to court. The attorneys say they've fielded numerous complaints
from inmates who say that mental health treatment is still lacking. "We
have tried to remain patient,"Cobden said. "We understand that the
settlement agreement 1 required dramatic change. But we're a year into the
process, and we're disappointed."

The DOC on Tuesday released a statement identifying improvements it has
made. Among the changes, the DOC said says it has increased its staff to
210 mental health workers and established mental health units that are
staffed 24 hours a day. The DOC now keeps its mental health records
electronically and all corrections officers receive training in treating
mentally ill inmates. The DOC also said it spent $ 16 million in 2000 and
plans to spend $ 17.7 million on mental health in 2001. (The Record (Bergen
County, NJ), September 21, 2000)


KEELE VALLEY: Supreme Ct of Canada Grants Leave to Appeal Landfill Case
-----------------------------------------------------------------------
Works and Emergency Services --- The Supreme Court of Canada has granted
leave to appeal in a class action lawsuit brought by the plaintiff, John
Hollick, against the City of Toronto regarding its operation of the Keele
Valley Landfill Site. This decision follows unanimous decisions of the
Ontario Divisional Court and the Court of Appeal for Ontario, which have
concluded that the test that lawsuits must pass before they can proceed as
class actions has not been met. The Supreme Court will now examine the
issue. Arguments are expected to be heard later this year or early next
year.

In December 1999, the Court of Appeal for Ontario concluded that the
lawsuit did not meet the requirements to have it proceed as a class action.
The Honourable Mr. Justice Carthy, writing for the Court, stated, "My
conclusion is that there are no common issues which can be manageably tried
or will advance the litigation, and thus, in the end, I would deny
certification on this basis."

The lawsuit was initially certified as a class action in 1998. The
certification order was subsequently set aside in December 1998 by the
Ontario Divisional Court. The Divisional Court's decision was upheld by the
Court of Appeal for Ontario.

Angelos Bacopoulos, General Manager of Solid Waste Management Services,
which is responsible for the disposal of residential solid waste generated
within the City of Toronto, York Region and Durham Region, states, "If the
Supreme Court of Canada decides that this is a proper class action, the
city is prepared to show how the Keele Valley Landfill Site is operated and
maintained with the highest environmental and regulatory standards. The
Ministry of the Environment (MOE) monitors the site and has confirmed it
complies with provincial standards."

Based on fill rates approved by City Council, the Keele Valley Landfill
site is expected to reach its volumetric capacity during 2002. The city is
presently engaged in planning for a long-term solution for solid waste
management. Toronto's Integrated Solid Waste Resource Management Process
(TIRM), designed to be flexible enough to incorporate new, environmentally
sustainable technologies, will help the city achieve its target goal of 50
per cent waste diversion from landfill by 2006.


MP3.COM, INC: Cauley & Geller Files Securities Suit in California
-----------------------------------------------------------------
The Law Firm of Cauley & Geller, LLP announced on September 20 that it has
filed a class action in the United States District Court for the Southern
District of California on behalf of all individuals and institutional
investors that purchased the common stock of MP3.com, Inc. (Nasdaq:MPPP)
between January 13, 2000 and September 7, 2000, inclusive (the "Class
Period").

The complaint charges that the Company and certain of its officers and
directors violated the federal securities laws by providing materially
false and misleading information about the Company's financial condition.
Specifically, the complaint alleges that defendants' false and misleading
statements about strong sales and the growth of MP3's existing Internet
services, which generated more than 90% of MP3's revenue, and the strong
continuing growth of its products for the next several quarters, which
would result in 350% revenue growth for MP3 for the 1stQ, 2ndQ, 3rdQ and
4thQ fiscal 2000 over fiscal 1999, artificially inflated MP3's stock to a
Class Period high of $36-1/2. On 9/7/00, it was revealed that, due to MP3's
willful illegal acts, including violations of United States copyright laws,
its financial results were going to be much worse than earlier forecast and
that MP3 would be the subject of a potentially lethal damage award. Upon
this revelation, trading in MP3's stock was halted, last trading at
$5-21/32, a decline of over 85% from the Class Period high.

Contact: Cauley & Geller, LLP, Boca Raton Sue Null, Jackie Addison or
Sharon Jackson Toll Free: 1-888-551-9944 E-mail: Cauleypa@aol.com


NY CITY: AIDS Agency Placed under Federal Authority for Three Years
-------------------------------------------------------------------
When the city, with no warning, canceled the food stamps of a 39-year-old
Bronx father with AIDS in the summer, a lawyer tried two techniques to get
the benefits restored: she wrote a letter to a top official at the Division
of AIDS Services and Income Support, and she made a legal demand for a
hearing on behalf of the man and his teenage son.

The letter went unanswered, the lawyer, Cynthia Knox, recalled, and by the
time of the scheduled hearing date, weeks later, the man had died of his
disease, having had to fight in his final days for something as basic as
food.

This week, a federal judge ruled that the city "chronically and
systematically" delayed and terminated benefits to thousands of people with
AIDS, and he opened a new avenue of redress, placing the city's AIDS agency
under federal authority for three years.

No one knows exactly how the federal monitoring will work. The city, which
is appealing the ruling, contends that the order is "vague" and "confusing"
about the role of the federal magistrate judge appointed to oversee the
city agency.

But advocates like Ms. Knox, who testified during the bench trial in the
class-action lawsuit -- Henrietta D. v. Giuliani -- say that federal
oversight will bring swifter remedies to more AIDS clients, in part because
the city will face stiff penalties if its agency remains unresponsive. And
lawyers in other recent class-action lawsuits against the city's welfare
operation say that monitoring by a federal court has sometimes been helpful
in forcing the city to meet its legal obligations.

Michael Hess, the city's corporation counsel, has criticized the decision,
issued Tuesday by Judge Sterling Johnson Jr. of Federal District Court in
Brooklyn. "New York City provides more money and more services for
AIDS-related people than any other city in the nation," Mr. Hess said.

Leonard Koerner, the chief of appeals for the city's legal department, said
that a conference would be needed "to determine how the magistrate views
her obligations under the opinion." He added, "We believe that the opinion
is vague as to the obligations that both parties have in front of the
magistrate."

Cheryl L. Pollack, the federal magistrate judge appointed by Judge Johnson
to oversee the city agency, declined through her law clerk to say how she
planned to handle the task. But lawyers with experience in such cases said
that typically a court-appointed overseer was instrumental in hammering out
an agreement on what steps the city would take to fix the systemic
problems, and how to verify that the rules were being followed by city
caseworkers.

"This is not rocket science," said Marc Cohan, director of litigation for
the Welfare Law Center, which has been involved in three class-action
lawsuits that won the appointment of special masters or other judicial
oversight. "What it requires is for the city to roll up its sleeves, give
instructions to workers, put quality control and accountability in place:
something the city is loath to do, particularly because it has a philosophy
of deterrence and denial of benefits."

"The judge," Mr. Cohan added, "was basically saying the law requires you to
take certain steps, but you don't have procedures in place to do that."

Judge Johnson's decision is the latest in a series of cases in which
lawyers for the poor have successfully argued in court that the Giuliani
administration illegally denied benefits to those entitled to receive them.
In Reynolds v. Giuliani, for example, a federal judge who found the city
had illegally denied emergency food stamps and Medicaid to needy welfare
applicants recently rejected the city's contention that the problem was
fixed, and demanded better monitoring.

In another case, Morel v. Giuliani, a special master required the city to
put in place procedures to ensure that people continued to receive benefits
until a ruling in a fair hearing. A fair hearing is a state-administered
process required by law to give recipients of benefits a chance to contest
the city's decision to cut them off.

In the current case, the magistrate judge, in addition to levying fines and
ordering fixes, may order any other creative sanction she chooses if she
sees recurrent violations.

AIDS organizations around the city will work out a method of categorizing
complaints and funneling them through the plaintiffs' lawyers to Judge
Pollack, said Armen Merjian, a staff lawyer for Housing Works, which
brought the lawsuit.

"One of the virtues of this decision is that the magistrate judge is
empowered to hand out penalties, without the plaintiffs' lawyers having to
go back to court to file a separate contempt motion," Mr. Merjian said.

Steven Banks, deputy attorney in charge of the Legal Aid Society, has seen
the limitations as well as the benefits of such sanctions, however. The
city has paid more than $5 million in fines for leaving homeless families
to sleep overnight in an office, for example, and has been found in
contempt of court for failing to fix the problem. City officials in the
Dinkins administration even faced a judge's order to spend the night in the
office themselves -- with limited effect.

But, Mr. Banks said, "as a practical matter, relief from the court becomes
a reality for individual class members rather than just rights that remain
on paper when you can seek a monitor's immediate intervention rather than
having to go back to court." (The New York Times, September 21, 2000)


P&O: Ship Illness Most Likely Influenza, Aussie Health Officials Say
--------------------------------------------------------------------
An illness that struck down passengers on board two P&O cruises was most
likely influenza, health officials said. More than 140 passengers who
became ill are considering a class action against the company.

A New South Wales Health Department statement said the available evidence
indicated the cause of the outbreak was likely to be influenza. "The most
likely explanation is influenza (the 'flu) brought onto the ship by people
boarding in Sydney," the statement said.

More than 140 people who became ill on P&O's Fair Princess during separate
cruises to the Pacific from August 14 to August 28 and August 28 to
September 10 have contacted national law firm Maurice Blackburn Cashman
registering their interest in a possible class action. During the second
cruise five people were taken off the ship and hospitalised in Noumea where
one person died. Two others were subsequently diagnosed with legionnaires
disease by doctors in Noumea. Further tests on the two diagnosed with
legionnaires disease would take place, the statement from the NSW Health
Department said. The tests will take several weeks. When the ship returned
to Sydney on September 10 seven passengers were hospitalised, some
suffering chest infections, and eight others were later also admitted to
hospital. One former passenger had since died of heart disease.

The statement said investigations were continuing but an environmental
evaluation of the ship found no likely source or legionnaires disease. "All
water samples taken on board the ship have been negative for the bacteria
that causes legionnaires disease," it said. "So far no person who was on
the ship has tested positive for legionnaires disease ... However, a
significant number of passengers and some crew have tested positive for
influenza virus."

The ship is currently berthed in Sydney and is being used as accommodation
for Sydney Olympics Broadcasting Organisation technical staff.

P&O general manager, corporate affairs, John Richardson said he welcomed
the health department's confirmation that the illnesses were related to
'flu and not legionnaires disease. "This confirms what our own medical
staff has believed," he said. Mr Richardson said as a precaution the ship
was thoroughly cleaned when it arrived back in Sydney. He said it was
regretted that some passengers boarded the ship with colds and 'flu "but
it's difficult to control that". P&O would also defend any legal action
that might be taken against the company, Mr Richardson said.

Maurice Blackburn Cashman partner Eugene Arocca said in response to the
health department's statement that the firm's independent investigations
were continuing. He said the firm was also waiting for further results in
relation to the two positive legionnaires tests and waiting for tests from
Noumea that were sent to France. "Finally it's indisputable that we've had
over 140 people ring us with this illness," Mr Arocca said. "We're still
investigating it from our point of view." (AAP Newsfeed, September 21,
2000)


RJR NABISCO: A 401(k) Lesson in the Selection of Annuity Provider
-----------------------------------------------------------------
In a case entitled Bussian v. RJR Nabisco, Inc., the 5th Circuit Court of
Appeals recently ruled that R.J.R. Nabisco breached its fiduciary duties
under ERISA when it selected Executive Life Insurance Company as an annuity
provider to facilitate the termination of the company's overfunded defined
benefit pension plan.

The Court noted that price isn't the motivating factor until a fiduciary
reasonably determines, through prudent investigation, that the providers
under consideration are comparable in their ability to promote the interest
of participants and beneficiaries. Without this prior determination,
consideration of price, because it directly benefits the employer, can be
taken as evidence that a fiduciary has placed its interest above the
interest of plan participants.

While talk of Executive Life may seem old hat, the 5th Circuit's ruling in
this case sheds new light on the meaning of fiduciary responsibility
exercised during investment selection. The facts of the case Under the
facts of the case, the Nabisco Board of Directors, in 1986, decided to
terminate several pension plans. Nabisco sought the advice of an
independent outside expert as to which insurance companies were qualified
to provide an annuity in order to fund the benefits for a terminated and
overfunded defined benefit plan.

Since Executive Life was pursuing a non-traditional investment strategy
involving junk bonds, the outside expert did not include the insurance
carrier in his initial list of recommended annuity providers. Nevertheless,
Executive Life was added to the list at the request of a member of
Nabisco's pension asset management department. Although Executive Life
enjoyed high ratings from some rating agencies at this time, other
agencies, such as Moody's Investor's Services, gave the insurance company a
poor rating. Nevertheless, as the lowest cost bidder, Executive Life was
ultimately selected as the annuity provider.

Four years later the Commissioner of California's Insurance Department put
Executive Life into a conservatorship. Ultimately, the company was taken
over by a French firm and, according to the Court, several plan
participants ended up with reduced benefits. In the class action lawsuit
brought by plan participants, the plaintiffs alleged that Nabisco's failure
to investigate before purchasing the Executive Life annuity was a breach of
the fiduciary duty of care. The Department of Labor argued that, under
ERISA, Nabisco's only option was to purchase the safest annuity available.
Today's relevance So what relevance does Nabisco's action from 14 years ago
and the subsequent court case have to do with a 401(k) plan sponsor today?
Upon examination of Nabisco's investigation into Executive Life prior to
purchasing the annuity, the U.S. Court of Appeals concluded that Nabisco
had ''failed to structure, let alone conduct, a thorough impartial
investigation of which provider or providers best serve the interest of the
participants and beneficiaries.'' The Court also noted that one of
Nabisco's executives apparently had a good deal of information about
Executive Life and the emerging problems in the market for low quality
bonds. A clear 401(k) parallel The parallel with 401(k) plans seems clear.
A wise fiduciary will realize that the court uses the same criteria when
applying for the purchase of an annuity and when judging whether a plan
fiduciary made an appropriate choice of plan administrator, bundled
provider, or investment funds.

What is best for the company may not be best for plan participants. Cost is
an issue, but saving the sponsor money will look foolish and may give rise
to liability if, as a result, plan participants are harmed. Steps to take
So, what action should a wise fiduciary take? Use an independent expert to
help in the selection of investments and administration. However, do your
own independent investigation as well.

Be sensitive to cost. In a defined benefit plan, a cheaper annuity may mean
more reversion for the plan sponsor. But unreasonable management and/or
investment fees will reduce the return for 40l(k) plan participants.
Remember, decisions involving the plan must always produce a result that,
no matter what, can be shown to be in the best interest of plan
participants.  (by Jay Adams Knight, a partner is the Los Angeles law firm
of Musick Peeler & Garrett where he specializes in employee benefits law,
published in (Managing 401(k) Plans, October 2000)


SYKES ENTERPRISES: Stull, Stull Files Securities Lawsuit in New York
--------------------------------------------------------------------
A class action lawsuit was filed on September 20, 2000, in the United
States District Court for the Eastern District of New York on behalf all
persons who purchased the securities of Sykes Enterprises, Inc.,
(Nasdaq:SYKE) between February 7, 2000, and September 18, 2000 (the "Class
Period").

The complaint charges that defendants violated Sections 10(b) and 20 (a) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder
by failing to inform investors of the need of the Company to restate its
previously reported financial results for the year ended December 31, 1998.
As a result, the market price of the Company's common stock was
artificially inflated during the Class Period.

Contact: Stull, Stull & Brody, New York Tzivia Brody, Esq., 1-800-337-4983
SSBNY@aol.com


TENNESSEE: Lawmakers to Hear Updates on Tax, TennCare, Legal Liability
----------------------------------------------------------------------Lawmakers
concerned over the state's financial condition will get updates this week
on the state's tax collections, TennCare and potential liability of
hundreds of millions of dollars from lawsuits.

The Fiscal Review Committee, the legislature's watchdog group, has
requested reports from the state's new Finance Commissioner Warren Neel,
from TennCare Director Mark Reynolds, and state Attorney General Paul
Summers. "I think it is good we are looking at that and not coming in there
with blinders on," said state Sen. Jerry Cooper, the committee's vice
chairman.

Reynolds will discuss the state's TennCare program, which now consumes more
than a fourth of the state budget, on Thursday. TennCare is the $ 4
billion-plus managed-care health program that covers 1.3 million mostly
poor and uninsured Tennesseans. It replaced the state's Medicaid program
but includes 500,000 others not eligible for Medicaid.

Summers and Neel were to appear on September 22.

Committee members have asked Summers to brief them on the state's financial
"exposure" if the state is ordered to equalize teacher salaries between
tax-rich and tax-poor counties, provide more early screening and treatment
for children on TennCare, provide more access to treatment for the mentally
ill, and change the way it obtains federal funds for nursing homes.

State Sen. Douglas Henry, D-Nashville, said if a judgment should be
rendered in one of the lawsuits and the state had to pay during the current
fiscal year, that would impact the state's current budget.

"If that might be the case, we need to know about it and be ready to deal
with it in January,"' Henry said.

Neel is expected to tell the committee whether state tax collections
continue at lower levels than expected.

"Apparently revenue is not coming in at the rate we anticipated," Cooper
said. "We are going to be about $ 100 million short, and if one of these
lawsuits was to hit and the state was unsuccessful, there is no doubt about
it something would have to be done and there would have to be some kind of
increase in taxes. You can say whatever you want to, but that is the bottom
line."

Cooper noted that both incumbent legislators and challengers are
campaigning on a pledge of no state income tax. He said that means
lawmakers must look elsewhere for revenue, including raising the state
sales tax, eliminating some sales tax exemptions, a wheel tax on cars, a
state property tax or other approaches.

State Rep. Chris Newton, R-Cleveland, said TennCare is in danger of
imploding if physicians carry through with their threat of dropping out of
the program. "We have a commitment with patients on TennCare to provide
them with doctors they can go see," he said.

Outgoing Finance Commissioner John Ferguson received a letter from the
federal Health Care Financing Administration in June stating that it had
"preliminarily concluded" that the state's use of a nursing home bed tax to
draw down federal dollars for nursing homes is "impermissible."

According to Ferguson's memo, the feds could seek to recover $ 455 million
that HCFA claims the state received improperly as well as force the state
to find a new revenue stream to support the nursing home program in the
future.

Other potential liabilities:

   -- A federal court lawsuit filed recently alleges that the state has
illegally denied hundreds of Tennesseans with mental retardation, autism
and other developmental disabilities access to services that could help
them be more independent. Estimated cost of fixing the problem: $ 150
million.

   -- A lawsuit seeking to equalize the pay of the state's public school
teachers is pending in Davidson County Chancery Court. Estimated cost of
equalization: $ 40 million to $ 200 million.

The state remains under a federal court order to improve conditions at the
state-owned Arlington mental health facility near Memphis. Estimated cost:
$ 214 million.

The plaintiffs in one lawsuit contend that the state has failed to live up
to an agreement reached in 1998 to improve health care for the nearly
half-million poor or uninsurable children in Tennessee's managed
health-care program.

The settlement is intended to fix severe problems under TennCare, including
failure to screen children for health problems, to diagnose them properly
or to ensure they get medically necessary treatment. (The Tennessean,
September 19, 2000)


TOBACCO LITIGATION: Cigarettses Given on Japan's Respect the Elderly Day
------------------------------------------------------------------------
The residents of Japan's nursing homes received a special gift on Respect
the Elderly Day--15 million cigarettes, distributed by the government-owned
Japan Tobacco Co.

That few here find the gesture misplaced--even in a country where cancer is
the biggest killer--is a clue to why tobacco companies worldwide have
targeted Asia as the biggest prize in the high-stakes market for cigarette
sales.

But even in a region where up to two-thirds of men smoke and restaurants
can be foggy with cigarette haze, tobacco companies are facing an
unexpectedly agile anti-smoking movement that is using tools and strategies
employed in the American anti-tobacco fight.

In South Korea and Japan, for example, opponents have filed lawsuits
against tobacco companies, taking a page from successful litigation in the
United States and using research gathered in U.S. courts.

Smoking opponents have pushed Asian authorities for tougher laws. In
Thailand recently, the government banned smoking scenes on television.
India this month tightened rules on tobacco sales to minors; Vietnam last
month barred advertising and "cigarette girls" who hand out samples; while
the Pacific Islands have passed strong tobacco control laws.

Even in China, home to a third of the world's smokers, the government has
imposed tobacco advertising restrictions, created an Office of Smoking and
Health, banned smoking in public places in 11 cities and been unexpectedly
cooperative in helping draft an international anti-smoking plan.

"We don't underestimate the battle here; it's huge," said Stephen A.
Tamplin, who coordinates much of the Asian anti-smoking efforts of the
World Health Organization (WHO) from Manila. "But we're encouraged. We
think there's renewed interest in tobacco control."

Stages of the anti-tobacco campaign that took so long in the West--such as
marshaling proof of the health consequences of smoking--are moving here
more quickly as smoking opponents busily translate the U.S. evidence for
use in local campaigns.

"We have tried to overcome some of the awareness issues that took so long
to overcome in the West," Tamplin said. Smoking opponents are becoming
media savvy and are nurturing activism in non-smokers, techniques that
helped sway the battle in the West.

"We have evidence on what strategies work and what works well" from the
anti-tobacco campaigns in the West, said Annette David, a WHO technical
adviser. Smoking opponents, for example, are demanding strong warnings on
cigarette packs. In Thailand, one arresting label warns that "smoking
reduces sexual ability." In Singapore, officials are considering putting
gruesome pictures of diseased lungs and gums on cigarette packs.

Still, the trend is in favor of the tobacco companies. While cigarette use
is dropping in the West, smoking is still on the rise in Asia, increasing
faster than anywhere else in the world, according to the WHO.

Smoking rates for women are quite low--a national average of about 8
percent. In many Asian countries, the habit still is considered a stigma of
"bad girls," but that is changing, and smoking rates among young women are
skyrocketing. The prevalence of smoking among adult men has long been
alarming--as high as 75 percent in Vietnam, 66 percent in China and South
Korea, 54 percent in Japan and 40 percent in Thailand.

China's annual consumption of 1.7 trillion cigarettes makes it the world's
largest tobacco market. "If the war is lost in China, it's lost in the
world," said David. American, British and Japanese tobacco companies are
jockeying with domestic producers for that market. Philip Morris is
building a $ 300 million cigarette plant in the Philippines, while Japan
Tobacco recently trumped American encroachment by paying $ 7.8 billion for
the RJR Tobacco International Division, which sells Winston, Camel and
Salem cigarettes in 70 countries.

"We see a good overseas market," said Japan Tobacco corporate spokesman
Ryosuke Tsuji. "In some developed countries, sales may not grow
dramatically, but we see good potential in undeveloped and underdeveloped
countries."

Japan Tobacco, officially privatized in 1985, still is two-thirds owned by
the Japan Finance Ministry, which earned $ 102 million in dividends last
year--and another $ 8.5 billion in national tax revenues on Japan Tobacco
product sales. (Excise taxes on tobacco in the United States generated an
estimated $ 5.2 billion last year.)

Government involvement in the tobacco business in Japan, South Korea, China
and elsewhere in Asia presents smoking opponents with special headaches.
"Tobacco brings a lot of money to the government," said Lee Jakyoung, an
environmental health activist in Seoul. "The Ministry of Health wants to
promote anti-smoking education in Korea, but they are opposed by the other
agencies because of the revenues."

Bae Keum Ja had to name the South Korean government in the lawsuit she and
other volunteer lawyers brought on behalf of 31 cancer patients or their
kin against the Korea Tobacco and Ginseng Corp., the majority owner of
which is the government.

She saw the U.S. litigation unfold while she studied at Harvard Law School,
and she got her degree in 1998 with a thesis on how to use American legal
theories in her country. "American tobacco companies lied to smokers until
1994; the same thing happened in Korea," Bae contends.

The defendants say they are not worried. The plaintiffs must prove that
smoking caused their cancer and that the company concealed known health
risks, both of which it denies, said Park Ghyo Sun, one of the lawyers for
Korea Tobacco. "And in the U.S., litigation is decided by a jury," Park
noted. "Here it is decided by professional judges, who will determine the
case on law, not emotions."

Cultural differences often complicate a direct transfer of of American
legal tactics. The health advocates who brought suits in South Korea and
Japan say it was difficult to recruit plaintiffs because litigation is
frowned on in their countries and smokers are loath to face criticism for
seeking damages for their decision to smoke.

"In Japan, smoking is still considered a matter of personal habit, not
something that kills people. Families still put cigarettes in the coffin of
a loved one so he has something to smoke," said Fumisato Watanabe, who
helped launch a nationwide hot line to find seven cancer patients who would
agree to sue Japan Tobacco two years ago.

Two of the plaintiffs have died since the suit was filed. There are no
class-action suits to represent victims and no concept of punitive damages,
so even if the plaintiffs persevere through the many years the case is
expected to take, the potential reward is low. "We aren't filing for money.
We want the Japanese people to know about smoking and the government to
change the status quo," Watanabe said.

Even changing smoking etiquette requires cultural delicacy in a region
where individual "rights" are valued less than avoiding offense. In Manila,
for example, the WHO has launched a pilot program that it hopes to export
elsewhere in Asia entitled "It's okay to say you mind."

"The logic is, it is not okay to confront people. But it's okay in a kind,
Asian, polite way to ask someone not to smoke," said Tamplin. "It sounds
silly, but the distinction is important."

It seems to work, he said. "Despite the cultural fears that saying
something will break a relationship, if you say, 'Would you please not
smoke' in a polite way, the response you get will not be anger or
resentment, but more one of embarrassment, [such as] 'I'm sorry I bothered
you.' "

No-smoking areas like those that have proliferated in the West are slowly
gaining favor here. Many of the fancier restaurants have such areas, and in
South Korea and Japan, even some coffee shops are starting to restrict
smoking among patrons who sit elbow-to-elbow in small, crowded spaces. Work
spaces, however, remain thick with smoke in many Asian countries.

"I think we're at the point the U.S. was many years ago," said Lee Jakyoung
in Seoul. "Sooner or later this all will come."

But it is one thing to have rules, another to enforce them. In Japan, for
example, the legal age to buy cigarettes is 20, but with a half-million
vending machines on the streets of the country, the law is almost
meaningless.

"There are not many people around Asia that are working on tobacco control;
there's not the political will," said Varaborn Bhumiswasdi, a public health
official in Thailand, which has been an Asian standout in enacting tough
anti-smoking laws. This battle still has a long way to go." (The Washington
Post, September 21, 2000)


TOBACCO LITIGATION: N.Y. Counties Sell to Investment Firms for Lump Sums
------------------------------------------------------------------------
About 20 small and medium-sized counties are opting for lump-sum payments
of the tobacco settlement money by jointly selling the right to 25 years in
annual installments to private investment firms. Some of the state's larger
counties like Erie, Monroe, Westchester and Nassau, as well as New York
City, have already sold their rights to Wall Street bonders, but each did
it independently.

The pool effort organized by the state Association of Counties reduced the
legal and procedural costs associated with "securitization," making it an
affordable option for smaller counties, NYSAC Executive Director Robert
Gregory said. "These costs are being shared by participants rather than by
individual counties," Gregory said. "They're very significant savings."

New York state is scheduled to receive $25 billion over the first 25 years
of the tobacco settlement, with the state and local governments sharing the
money almost evenly.

Many of the state's 62 counties are choosing lump-sum options because they
fear that yearly payments, adjusted according to national sales of
cigarettes, may dwindle over the years due to declining tobacco revenue. In
addition, counties cite the possibility of potential class-action lawsuits
in the United States and by other nations that may lead tobacco companies
to file for bankruptcy and dry up the settlement fund. By opting for the
lump-sum option, Gregory said counties that join the NYSAC pool will
receive a total of about $250 million - about 40 percent of the projected
25-year payment.

Under securitization, counties would create nonprofit local development
corporations (LDC) that would handle only the tobacco payments. The
counties would sell their rights to the yearly tobacco payments to the LDCs
in exchange for an upfront lump sum. The LDC would then sell the rights on
the bond market. Annual tobacco payments would go to LDCs, which would use
the money to pay off bondholders. The LDC would be responsible for all
payments, and counties would not be liable if tobacco payments dwindle
because of declining sales, Gregory said.

"The counties have in effect gotten out from under any risk associated with
the payment stream by transferring that liability to the bondholders," he
said.

Besides the one-time lump sum, counties would also be entitled to annual
residual payments, money that remains after the LDCs pay off their
investors. Gregory said NYSAC plans to begin selling bonds in the fall. The
association is also considering a second offering in the future to give
counties with a wait-and-see attitude a chance at joining the pool later.
He added that because a couple of counties have yet to confirm whether to
join the pool, a complete list of counties in NYSAC's pool would not be
available until next week.

Critics of the plan say the money was intended by the framers of the
settlement to go to public health care programs and should be used for that
purpose. Under securitization, counties could only use their money for
either debt refinancing or capital improvement projects.

But Oneida County Comptroller Joseph Timpano countered that once debt and
capital projects are paid off with the lump sum amount, county money would
be available for use in tobacco-related programs. "What critics don't see
is that by using these proceeds to fund capital programs, you're freeing up
the current cash to be used for things such as Medicaid relief and
education programs," Timpano said.

Oneida County, the largest county to join the NYSAC pool, will receive
about a fifth of the total payment, or about $50 million. The county could
have chosen to take a projected $136 million over 25 years.

Timpano said the Oneida County decided to securitize because it would
eliminate the risk of "not getting anything at all or getting a lot less"
if tobacco revenues falter. He added that joining the pool saved the county
between $200,000 to $300,000 in processing costs.

Not all the smaller counties are opting into NYSAC's plan, however. Orleans
County, which would receive $6.5 million in a lump sum payment option,
plans to stick with receiving $800,000 dollars each year for an estimated
$22 million in 25 years. Stanley Dudek, chief administrative officer of
Orleans County, said he's concerned that bondholders are "not going to just
go away" if LDCs go bankrupt. "This could lead to legal issues and they
might have a future negative impact on the county's credit rating," Dudek
said. "Long-term, we think we're better off by not being tempted to have a
cash balance payment." (The Associated Press State & Local Wire, September
21, 2000)


* Law Now Exempts Highly Paid Professionals from OT Rules in CA
---------------------------------------------------------------
Highly paid computer software analysts, programmers and engineers who are
paid by the hour are now exempt from the state's overtime laws under
legislation that took effect Tuesday.

One of Silicon Valley's highest-priority bills, the measure by Sen. Byron
Sher, D-Redwood City, carves out an exception to existing law for computer
software professionals who make $41 or more an hour. The bill, unanimously
passed by the legislature, was signed by Gov. Gray Davis on Saturday and
was officially written into the state statutes on Tuesday.

The compromise bill was the result of intense negotiations between labor
representatives, who fought fiercely to protect the state's worker-friendly
overtime law, and Silicon Valley CEOs, who said it was too costly.

Art Pulaski, executive secretary/treasurer of the California Labor
Federation, said the final bill was acceptable. ``At $41 per hour, you've
got sufficient income that you can still live comfortably with losing the
overtime protections,'' Pulaski said.

The bill was co-written by Sen. John Vasconcellos, D-San Jose, and
Assemblymen Mike Honda, D-San Jose, and Jim Cunneen, R-Campbell, a roster
that illustrates the measure's popularity in the valley.

``It's a very important bill to Silicon Valley and the high-tech
industry,'' Sher said. ``And it's a win-win situation when we can go back
and look at a law and make it work.''

California's daily overtime law, which requires that anyone working more
than eight hours a day be paid time and a half for the additional time,
differs from most states, which only require employers to pay overtime
after an employee works more than 40 hours in a week.

The daily overtime law, in effect for 87 years, was repealed Jan. 1, 1998,
under Gov. Pete Wilson's Republican administration. In a nod to his labor
allies, Davis reinstated the law in 1999, his first year in office. That
change went into effect Jan. 1, 2000, but only after Silicon Valley
executives lobbied to exempt some employees who already were working
flexible schedules, such as four 10-hour days.

The law also added a requirement that anyone who was exempt from overtime
be paid a salary, not by the hour. This meant that even highly paid
computer consultants were entitled to overtime.

Sher's bill, SB 88, allows highly paid computer professionals to be paid by
the hour and still be exempt from overtime. High-tech executives had pushed
for the bill, saying they could not afford to pay overtime to well-paid
software designers who often work long hours trying to finish a project.
Some consultants also complained that the overtime requirements limited
their ability to work long hours.

A lot of computer consultants were seeking work in different states, where
they could work the hours they wanted, said Bob Jones, an attorney with
Jones Law Group in Lafayette, who represents the National Association of
Computer Consultant Businesses.

Under federal law, temporary computer programmers and certain other
computer professionals are exempt from overtime if they make at least
$27.63 an hour. But because California's law is more stringent, workers
earning between $27.63 and $41 an hour will still be eligible for overtime.
In addition, the Sher bill also provides exemptions for some nursing
professionals, including certified nurse midwives, anesthetists and
practitioners. (The Mercury, September 19, 2000)


* Workers' Stock Compensation Is New Legal Battleground
-------------------------------------------------------
The job offer to executive Todd Kenner came with a seductive pitch: Join us
and we'll make you a millionaire.

That offer was premised on a compensation package laden with potentially
lucrative stock options. But when Kenner and two other executives were
fired from their jobs at Internet startup iVillage without being able to
cash in those options, they went to court.

"These folks believed what they had been told . . . that these options were
as good as money in the bank," said Paul Yetter, a Houston attorney who
represented the three in lawsuits filed last year against iVillage, a Web
site catering to women.

Those suits and a growing number of others like them point to the downside
of the decade-long boom in stock-option plans that have allowed as many as
10 million Americans to share their employers' wealth.

But with many workers now counting on such programs to secure personal
fortunes, some have decided options are worth fighting for. They're
pursuing claims to their options in court when relationships with employers
turn sour.

Such suits are likely to multiply, lawyers and compensation experts say,
because so many people now have stock options that in some cases are
potentially worth millions of dollars.

Those dollar amounts "attract lawyers like ourselves to litigate because
there's more at stake," said Alan Exelrod, the attorney for a former Oracle
Inc. executive recently awarded $ 2.7 million in a wrongful termination
case. Of that award, $ 2 million was based on the potential value of her
options.

Most of the recent attention on stock options has centered on Internet
startup employees who became instant millionaires when their companies went
public and their shares soared in value.

Such success stories have made options the currency for New Economy
companies and their workers, who often are willing to settle for lower pay
in exchange for a piece of the company.

Options give workers the right to buy their employer's shares at a set
price and time once they have become vested, or stayed with the company for
a specified period.

Employers -- both fledgling technology companies and long-established
public firms -- have embraced such programs as tools for recruiting workers
and holding on to them, at least until they reach their vesting date, said
Corey Rosen, director of the National Center for Employee Ownership.

A decade ago, 1 million U.S. workers were eligible for options; today, it
is between 7 million and 10 million, the NCEO estimates.

"There are a lot of people out there who are gambling on their options,"
said Kaye Thomas, author of "Consider Your Options," a guide on the
subject. "They're gambling every time they take a new job on what the
prospects of that company are going to be."

The democratization of options and a rapid runup in stock prices have given
many people a chance at a windfall, although workers usually lose their
eligibility for options if they are fired or leave a firm. But now some
companies standing between former workers and stock options are finding
they do so at their own risk.

A pair of programmers sued former employer DoubleClick in New York last
year, seeking $ 6.3 million in damages to recoup options they lost when
they were fired by the Internet ad company.

Another programmer sued electronic data system company Internet Commerce
Corp. in August, claiming that after he left for another job, the company
denied him options worth as much as $ 2 million by purposely withholding
information that would have allowed him to cash in.

And a group of employees sued Qualcomm Inc., alleging the wireless phone
company deprived them of millions of dollars in options when it sold their
business unit to Ericsson last year.

Yetter, who is bound by a confidentiality agreement not to discuss details
of the iVillage dispute or subsequent settlement, said he has fielded calls
from former workers at other companies considering options-related claims.

For the most part, though, such lawsuits are only an avenue for
high-ranking executives with options worth enough to justify the costs of a
lengthy court battle, attorneys say. The exception may be cases such as the
Qualcomm suit, when there are enough employees to justify a class action.

Most of the companies named in the aforementioned suits either declined to
comment or did not return calls seeking comment. A spokeswoman for Oracle
rejected all claims made in the lawsuit and said the company intends to
appeal, and vigorously defend its interests.

But an executive at credit reporting agency Equifax Inc., which offers
options to employees throughout its ranks, said he is not worried about an
increased threat of lawsuits.

"An employee can sue. We're a very litigious society and there's not much
we can do if they want to pursue that avenue," said Earl Crew, vice
president of compensation at Equifax.

Crew said the company has revised its options agreements over the years,
trying to make provisions clearer and easier to understand. The company has
not faced a suit revolving around options, he said.

It's not clear yet just how courts will treat the subject of stock options.

"It's kind of uncharted water," said Michael McCann, who represented a
former executive at Johnson Controls Inc. in a wrongful termination suit
that demanded compensation for stock options he would've earned had he
spent the rest of his career with the company.

A jury awarded the executive $ 600,000, based on the value of current and
future options. But there is little precedent for such awards, and many
small Internet startups will likely argue to judges that their options may
never be worth anything at all, McCann said.

For most jilted workers, the best advice is probably to put aside thoughts
of a suit and move on, said Steve Patchell, a compensation consultant with
Watson Wyatt Worldwide.

"This is what the New Economy is like," Patchell said. "If this (job)
doesn't work out, I'll go on to the next one - and there is a next one."
(St. Louis Post-Dispatch, September 21, 2000)


                              *********


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