/raid1/www/Hosts/bankrupt/CAR_Public/001016.MBX              C L A S S   A C T I O N   R E P O R T E R

             Monday, October 16, 2000, Vol. 2, No. 201


AOL: Supreme Court Refuses to Revive Subscribers' Suit on Fees & Privacy
ASPEON INC: Milberg Weiss Files Suit in CA Alleging Misrepresentations
BASSETT FURNITURE: Defends Remaining Portions of Lawsuit over Mattresses
DER TRAVEL: Alleged of Fixing Travel Agents' Prices with Rail Europe
ECHOSTAR: Retailers File Suit in Denver Alleging Violations of Agreement

EXXON CORP: Fish Processors Entitled to Punitive Damages for Oil Spill
FORD MOTOR: 1.7 Million Vehicle Recall Seen as Coup for Consumers
FORD MOTOR: Nationwide Lawsuit Filed over Placement of Ignition Modules
FORD MOTOR: Professor Talks about Unexpected Heroes in Tire Fiasco
HMOs: PacifiCare's Houston Operation Sued over Provider Network

HOG FARMERS: Neighbors Fail in Attempt to Seek Jury's Award for Odor
ICG COMMUNICATIONS: 2 CEOs Quit This Year Amid Securities Fraud Charges
INTERSPEED, INC: Milberg Weiss Files Securities Suit in Massachusetts
L.A. POLICE: Fed Lawsuit Filed; Union Accuses of Lack of Due Process
TETERBORO AIRPORT: 11 Towns Join to Fight Noise and Pollution

TOBACCO LITIGATION: Former Smoker Battling Alone for $15 Mil in Damages
TOBACCO LITIGATION: Opt-out Awarded $200,000 But No Punitive Damages
UNITED PAN: ISP Chello Draws Fire, UPC to Quell Threat of Fee Boycott
WALTER KONIGSEDER: U.S. Will Charge Former Official of Informix Software

* High Court Elaborates on Standards for Searches and Seizures
* Milberg Teams up with Leeds Morelle to Fight Employment Discrimination


AOL: Supreme Court Refuses to Revive Subscribers' Suit on Fees & Privacy
The Supreme Court refused earlier this month to revive a lawsuit against
America Online by subscribers who accused the Internet company of imposing
unjust charges and failing to protect customer privacy. The Court, without
comment, turned down the subscribers' argument that AOL should be
considered a "common carrier" that can be regulated by the Federal
Communications Commission.

Four AOL customers filed the class-action lawsuit in Los Angeles in March
1997, claiming that AOL set improper charges and failed to protect
subscribers' privacy rights and copyrights in violation of the 1934
Communications Act.

The FCC regulates "common carriers" under the communications law. But a
federal judge dismissed the AOL subscribers' lawsuit, saying Internet
companies are not common carriers and therefore are not covered by the law.
The U.S. Court of Appeals for the Ninth Circuit agreed. The FCC has
repeatedly said Internet companies are not common carriers because they
provide "enhanced" services rather than basic communication services, the
appeals court said.

Further, the appeals court said the 1996 Telecommunications Act specified
that it was not designating interactive computer services as common
carriers. In the appeal, the subscribers' lawyers said the FCC lacked
authority to exempt Internet companies from regulation as common carriers.
"Only Congress may create such an exemption and ... it has not done so,"
the appeal said. The case is Howard v. America Online, 99-2089. (New York
Law Journal, October 3, 2000)

ASPEON INC: Milberg Weiss Files Suit in CA Alleging Misrepresentations
Milberg Weiss (http://www.milberg.com/aspeon/)announced on October 12 that
a class action has been commenced in the United States District Court for
the Central District of California on behalf of purchasers of Aspeon Inc.
(NASDAQ:ASPE) publicly traded securities during the period between Oct. 28,
1999 and Sept. 28, 2000 (the "Class Period").

The complaint charges Aspeon and certain of its officers and directors with
violations of the Securities Exchange Act of 1934. Aspeon designs,
develops, markets, and sells open system touch screen point-of-sale
computers, which are sold primarily to the foodservice and retail
industries. The Company also offers information-systems outsourcing,
including industry-specific integrated application service provider ("ASP")
products and information technology management services.

On Sept. 29, 2000, Aspeon announced that the Company will restate its first
quarter 2000 financial statements as a result of accounting misstatements
that will require an extension of time to file its fiscal 2000 10-K:

"The extension is required so that the company can complete its analysis of
the timing of recording revenues," said Richard Stack, chairman and chief
executive officer. "The focus is on a portion of one domestic subsidiary's
sales where the company is obligated to provide installation services. ...
"The impact of revenue adjustments, if any, on any previously issued or
audited financial statements have not been determined at this time."

"The quarterly pre-tax impact of these adjustments approximates $99,000, $
160,000 and $237,000 for the first, second and third quarters of fiscal
2000, respectively," said (Tim) Feeney (chief financial officer, Aspeon
Inc.). "Finally, the company's net loss per common share will be impacted
by an additional $1.4 million non-cash charge to adjust the previously
recorded beneficial conversion feature associated with the Series A
preferred stock issued by the company in March 2000."

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

BASSETT FURNITURE: Defends Remaining Portions of Lawsuit over Mattresses
As previously reported, a suit was filed in June, 1997, in the Superior
Court of the State of California for the County of Los Angeles (the
"Superior Court") against the Company, two major retailers and certain
current and former employees of the Company. The suit sought certification
of a class consisting of all consumers who purchased certain mattresses and
box springs from the major retailers that were manufactured by a subsidiary
of the Company, The E.B. Malone Corporation, with allegedly different
specifications than those originally manufactured for sale by these

The suit alleged various causes of action, including negligent
misrepresentation, breach of warranty, violations of deceptive practices
laws and fraud. Plaintiffs sought compensatory damages of $100 million and
punitive damages.

In 1998, the Superior Court dismissed the class action allegations in
plaintiffs' complaint and transferred the entire action out of the class
action department. The Court also dismissed many of the individual claims.
Plaintiffs then filed a notice of appeal from the class action ruling.
Plaintiffs also filed a petition for a writ of mandamus or other
extraordinary relief, which was denied. The suit was subsequently
transferred from the Superior Court for the County of Los Angeles to the
Superior Court for Orange County. After the case was transferred to Orange
County, the plaintiffs stipulated to a dismissal with prejudice of all
individual defendants. Additionally, all remaining claims against the
Company were stayed by the Court pending plaintiffs' appeal of the
dismissal of their class action allegations.


On June 13, 2000, the Court of Appeal denied plaintiffs' appeal and entered
an order affirming the dismissal of the class action allegations. With the
dismissal of the class action allegations, the suit now consists of damage
claims by nine named plantiffs (seven individuals and two companies),
together with restitution claims for other purchasers under Business &
Professions Code 17200. The Company intends to vigorously defend the
remaining portions of this suit. Because the Company believes that the two
major retailers were unaware of any alleged changes in specifications, the
Company has agreed to indemnify the two major retailers with respect to the

Legislation has phased out interest deductions on certain policy loans
related to Company owned life insurance (COLI) as of January 1, 1999. The
Company has recorded cumulative reductions to income tax expense of
approximately $8,000 as the result of COLI interest deductions through
1998. The Internal Revenue Service, on a national level, has pursued an
adverse position regarding the deductibility of COLI policy loan interest
for years prior to January 1, 1999. In 1999, the IRS received a favorable
Tax Court ruling on one taxpayer regarding the non-deductibility of COLI
loan interest. Management understands that this ruling and the adverse
position taken by the IRS will be subjected to extensive challenges in
court. In the event that the IRS prevails, the outcome could result in
potential income tax and interest payments which could be material to the
Company's future results of operations.

DER TRAVEL: Alleged of Fixing Travel Agents' Prices with Rail Europe
A pair of class action antitrust lawsuits were filed in U.S. District Court
on behalf of travel agents who claim that two firms conspired to fix prices
for the commissions paid to agents in the United States who sell European
Rail Passes.

Named as defendants in both suits are DER Travel of Rosemont, Ill., and
Rail Europe Inc. in White Plains, N.Y. The first suit was filed by
attorneys Leonard Barrack and Steven A. Asher of Barrack Rodos & Bacine in
Philadelphia; Mark R. Cuker of Williams & Cuker in Philadelphia; and
Gregory P. Hansel of Preti Flaherty Believeau Pachios & Haley in Portland,
Maine, on behalf of JLE Travel in Rosemont, Pa. The second suit was filed
by attorneys Joseph C. Kohn and William E. Hoese of Kohn Swift & Graf in
Philadelphia; Richard L. Creighton of Keating Muething & Klekamp in
Cincinnati; and David Pastor of Gilman & Pastor in Sagus, Mass., on behalf
of The Travelin Man Services Inc. in Philadelphia.

The suits, which are nearly identically worded, say that DER and Rail
Europe are companies that distribute passes and tickets for European rail
travel and who pay commissions to travel agents on each such sale. In
mid-1997, the suit says, DER and Rail Europe agreed to "cooperate" on the
rates paid to travel agents and to "fix and reduce commissions" paid to the
agents. When the U.S. Department of Justice began investigating, the suits
allege, the two firms "further agreed and took affirmative steps to conceal
the conspiracy." Officials at both companies agreed to tell investigators
that the two firms had not discussed commissions, the suits say. In May
1999, DER went further, the suits allege, by shredding documents that could
have been used as evidence of the conspiracy.The cases are JLE Travel v.
DER Travel Services, 00-cv-5155 and The Travelin Man Travel Services v. DER
Travel Services, 00-cv-5156. (The Legal Intelligencer, October 13, 2000)

ECHOSTAR: Retailers File Suit in Denver Alleging Violations of Agreement
EchoStar (DISH) disputed allegations by retailers who filed class action
lawsuit Oct. 5 in U.S. Dist. Court, Denver, against DBS company, contending
it reneged on agreements and failed to pay them for sales. As many as
20,000 EchoStar retailers in U.S. could be involved in suit. Action was
initiated by business owners Joe Kelley of Lufkin, Tex., and John Delong
and Jaguar Technologies, both of Jacksonville, on behalf of "themselves and
any retailer" who signed agreement with EchoStar. Each claimed losses of
more than $75,000. Retailers accused EchoStar of requiring them to sign 2
agreements, including "exclusive bounty hunter agreement," in order to sell
products. Suit said EchoStar had been "systematically failing and refusing
to pay sums due the retailers" and "unilaterally changing the terms and
condition of those agreements."

EchoStar spokesman said suit was "without merit." He said company still
hadn't been served with copy of complaint, but "retailers are the core of
our distribution plan." At issue is commissions under bounty hunter
agreement under which EchoStar was to pay $200 for each new primary
activation acquired from PrimeStar if first month's bill was paid, $50 for
each new primary activation if customer kept service 4 months and
additional $100 credit bonus for each new primary activation from
PrimeStar, provided retailer obtained Credit Authorization Number from
EchoStar and customer kept service 4 months.

Suit said company also had circumvented agreement by directing sales to
customer service representatives (CSRs) and CSRs were encouraging
"deactivations" and "inducing" potential buyers to purchase programming
direct from company. Retailers said EchoStar refused to pay commissions on
sales unless customers kept service for 230 days and also breached contract
by refusing to honor commitments under rebate promotions and intentionally
billing customers late so retail commissions would be forfeited. -- Bruce
Branch (Communications Daily, October 13, 2000)

EXXON CORP: Fish Processors Entitled to Punitive Damages for Oil Spill
A federal appeals court ruled that ten Alaskan seafood processing companies
are entitled to $12.4 million out of $5 billion in punitive damages awarded
as compensation for the 1989 Exxon Valdez oil spill.

The 9th U.S. Circuit Court of Appeals overturned a federal judge's decision
to exclude the region's largest seafood processors from the punitive
damages awarded by a jury in the aftermath of the Prince William Sound oil

The processors entitled are Icicle Seafoods Inc.; Seven Seas Corp.; Ocean
Beauty Seafoods Inc.; Ocean Beauty Alaska Inc.; Wards Cove Packing Co.;
Alaska Boat Co.; North Pacific Processors; Trident Seafoods Corp.; North
Coast Seafood Processors Inc. and Aleutian Dragon Fisheries.

Still, the payments are not expected soon. The $5 billion award is on
appeal to the circuit court.

Following the spill, the 10 processors sued Exxon Corp. as part of a
class-action suit, which included dozens of plaintiffs. Exxon settled with
the 10 processors out of court in 1991 for $64 million. As part of the
deal, the processors agreed to give back any damages awarded in what is
known as a "cede back" agreement.

But the processors remained plaintiffs in the class-action suit despite the
out-of-court settlement.

Then, in a new 1996 settlement, Exxon agreed to pay the 10 processors $12.4
million from the $5 billion punitive damages pot.

But U.S. District Court Judge H. Russel Holland said the agreement violated
the original cede back agreement and that the processors were not entitled
to the punitive damages. October 12's ruling overturns Judge Holland's
ruling. (The Associated Press, October 12, 2000)

FORD MOTOR: 1.7 Million Vehicle Recall Seen as Coup for Consumers
Consumers lawyers call it a courageous move. Ford Motor Co. says it's an
abuse of power. Either way, an Alameda County judge's decision to order a
recall of 1.7 million Ford vehicles is an unprecedented step that could
provide consumers with enormous clout in battling the automobile industry.

Judge Michael Ballachey ventured into unchartered legal territory when he
ordered the statewide recall of Ford vehicles to fix a faulty ignition
part. It is the first time a state judge has called for an auto recall.

Ford immediately pledged to appeal the order, protesting that Ballachey
does not have the authority to make such a sweeping decision. The auto
giant claims that only the federal regulatory agency, the National Highway
Traffic Safey Administration, has the jurisdiction to call for a recall.

Legal experts say that if Ballachey's order survives on appeal, it could
expose Ford to huge damages in other states if the automaker fails to
follow up with a national recall of 22 million cars.

Similar class-action suits, which have been held up pending a decision by
Ballachey, are pending in Alabama, Maryland, Illinois, Tennessee and
Washington. "If someone is in an accident elsewhere and Ford doesn't
recall, then the prospect of punitive damages looms," said Steve Sugarman,
a products liability expert at the University of California at Berkeley's
Boalt Hall School of Law.

The decision also could give ordinary citizens enormous new regulatory
muscle, especially when the federal agency fails to police the industry on
its own. "It's a way to have citizen enforcement of the law," said James
McCall, a consumer law expert at the University of California's Hastings
College of the Law in San Francisco. "Who knows, we could be at the start
of a whole new era."

Jim Cain, a spokesman for Ford, warned that allowing any judge in the
nation to come up with his or her own interpretation of safety regulations
"is an invitation to chaos."

Filed in 1996, the lawsuit ruled on by Ballachey challenged Ford's
placement of an ignition device known as the TFI (thick film ignition)
module. Ballachey found that Ford had been warned that placing the module
on the distributor, which heats up quickly, could damage the device and
cause the car to stall abruptly.

Ford lawyers disagreed not only with Ballachey's conclusion, but also with
his remedy. Legally, Ford said, recalls should be ordered only by the
federal agency, which can rely on experts, scientists, trained
investigators and the full regulatory power of the government.

"There's nothing in this law that gives county judges the authority to
impose this sanction," agreed Donald Garner, who teaches products liability
law at the University of Illinois. Garner favors government -- either the
federal agency or the state attorney general -- taking the initiative.
"These large issues of public policy are better left for democratic
management," he said.

But consumers lawyers say the industry has played fast and loose with the
federal agency, hiding documents and covering up incriminating information.
They say consumers should have the legal means to protect themselves in
their own states. After all, their goal in this case, at least, is to get
the problem fixed, not merely pick the deep pockets of the industry by
seeking money damages.

Brian Panish, a Santa Monica lawyer who won a record $4.9 billion verdict
last year against General Motors Corp., said courts need to crack down on
the automakers because federal supervision is so weak. Panish represented
two women and four children severely burned when the fuel tank of their
1979 Chevrolet Malibu exploded in a real-end collision.

Congress has watered down safety standards, he said, and failed to provide
the transportation safety agency with the resources to effectively police
carmakers, thanks to a formidable industry lobby. "I applaud the judge for
taking some action," Panish said, calling his decision "courageous."

Legal experts doubt that Ballachey's order will lead to a flood of
lawsuits, because the situation is unusual. Most plaintiffs sue the auto
industry to recover money damages as compensation for injuries they've
suffered. But in this case, none of the plaintiffs had been injured.
Instead, the lawyers came up with a novel angle -- suing the automaker for
unlawful business practices, a widely used consumer law -- to get them to
fix the defect in the cars. Normally, these suits are for personal injury
or product liability.

"California allows wide-ranging lawsuits on consumers issues," Sugarman
said. "It's not zany to bring a claim against Ford if this is really a
defective car. What's novel is that you can get a remedy like this."

Judges in the state have enormous discretion in coming up with orders to
remedy the situation, but consumer experts say it is anyone's guess whether
Ballachey's order will survive scrutiny in the appeals courts. "We're just
reading tea leaves," Sugarman said.

Ballachey's bold ruling was the nation's first court-ordered vehicle
recall, a process usually handled by automakers or the National Highway
Traffic Safety Administration. If the ruling stands, it could streamline
consumer action against manufacturers of faulty and dangerous vehicles.

Lawyers for Ford Motor Co. say they will appeal, claiming the cars and
trucks in question were not defective and the judge did not have authority
to order a recall.

However, testimony in the big class-action suit indicated an electronic
ignition device known as a TFI module caused stalling when it overheated in
29 different Ford, Lincoln and Mercury models.

The judge said Ford officials knew the vehicles tended to stall when the
engines were hot, but failed to alert consumers. Ford insists the vehicles
are safe and denied liability, yet the company has settled about 15 injury
or death claims alleging TFI failure.

Ford sold some 23 million vehicles with the faulty ignition module, and
similar class-action suits are pending in five other states.

In response to Ford's absurd claim that there was nothing dangerous about
cars stalling, Ballachey said: "Take your car out on the freeway, go 70
miles an hour. Shut your engine down and tell me that's not unsafe."

Ballachey's ruling is a severe blow to Ford, already under assault by
lawsuits and publicity over fatal rollover crashes involving its Explorer
SUVs fitted with Firestone tires.

As the world's second-largest automaker, Ford has a lot at stake. The
company's reputation for making reliable vehicles and dealing honestly with
customers will depend on how it handles these high-profile cases. The
company should fess up, fix the vehicles still on the road and pay for
repairs it should have made voluntarily long ago. (The San Francisco
Chronicle, October 13, 2000)

FORD MOTOR: Nationwide Lawsuit Filed over Placement of Ignition Modules
Kenneth B. Moll & Associates, LTD. on October 13 filed the first nationwide
class action lawsuit against Ford on behalf of all persons that suffered
economic damages, personal injuries and death as a result of a design
defect making Ford cars and trucks likely to stall.

According to the complaint, Ford improperly placed thick film ignition
("TFI") modules near the hottest part of the engine block, causing its cars
to stall. Ford knew that the vehicles were prone to stall, but failed to
alert its consumers of the dangerous condition. Ford's ignition modules
were flawed from the outset. Ford misled regulators, concealed documents
and information of the dangerous condition of their vehicles from NHTSA and
the public.

These TFI modules which are intended to regulate the flow of electric
current to the spark plugs, have demonstrated that they are unreasonably
dangerous due to an increased risk of stalling the engine in approximately
23 million Ford vehicles, 29 makes and 300 different Ford models sold
between 1983 and 1995.

The following models were equipped with distributor-mounted TFI modules:
Aerostar (1986-1990), Bronco (1984-1991), Bronco II (1984-1990), Capri
(1983-1986), Continental (1984-1987), Cougar (1984-1988), Crown Victoria
(1984-1991), E-Series (1984-1991), Escort (1983-1991), EXP (1983-1988),
F-Series (1984-1991), F-Stripped Chassis (1989), Grand Marquis (1984-1991),
LN7 (1983), LTD (1984-1986), Lynx (1983-1987), Mark (1984-1992), Marquis
(1984-1986), Merkur (1985-1989), Mustang (1983-1993), Probe (1990-1992),
Ranger (1983-1992), Sable (1986-1989), Scorpio (1988-1999), Taurus
(1986-1995), Tempo (1984-1994), Thunderbird (1983-1988), Topaz (1984-1994),
Town Car (1984-1990).

Ford's own documents revealed that: "Under the stress conditions of 140* C
and 18 volts TFI-IV (GE3Y level) modules were observed to operate normally
for a few minutes, then begin to miss sparks. The modules would then enter
the stall mode and go into residual current. This leads to a thermal
runaway which within several seconds to a few minutes results in module
failure (i.e., destruction of the darlington output)." "Five out of ten
TFI-PS modules failed P.V. [product validation] testing . . . exposure to
excessive temp caused the output device to operate at temp in excess of
their max. rating causing device failure."

Attorney Kenneth Moll said, "the primary goals of the FORD Class Action are
to (1) ensure a fully inclusive and fully reimbursable recall of all
automobiles that were equipped with distributor-mounted TFI modules and (2)
compensate all persons who suffered economic, personal injury or death as
the result of vehicles equipped with distributor-mounted TFI modules."

Contact: Kenneth B. Moll & Associates Kenneth B. Moll, 312/558-6444 FAX:

FORD MOTOR: Professor Talks about Unexpected Heroes in Tire Fiasco
If corporate stonewallers are the obvious villains in the Firestone tire
fiasco, trial lawyers turn out to be the unexpected heroes. Never thought
you'd appreciate trial lawyers? Put your preconceptions aside and please
keep reading.

By now, everyone knows about the apparently fatal combination of defective
Firestone tires and Ford Explorers. But as recently as Aug. 2, Firestone
adamantly refused to admit that there was any danger. "These are good
tires," their spokeswoman insisted. Ford Motor Co. had its own set of
excuses, blaming everything on Bridgestone/Firestone Inc., even though the
automaker knew about and ignored the exceptionally high incidence of
rollovers involving its Explorer and Mountaineer SUVs.

While it is natural to be outraged by the companies' evasive tactics, such
behavior should hardly come as a surprise. Stonewalling, after all, is what
corporations do when they're faced with potentially huge liability --
except that they call it "crisis management."

There is even a certain logic to it. Accidents, including fatal ones, are
to be expected in the automotive industries. At one level, they are
regarded as an accounting problem -- risk assessment, they call it --
requiring only that an adequate reserve fund be set up to handle the
anticipated injury claims. No one expects a company to recall 6.5 million
tires because of a handful of accidents.

Devastating as they might be to the victims and their families, deadly
blowouts are part of doing business for vast enterprises such as Ford and
Firestone. Or, as a Ford spokeswoman rationalized, "Every accident involves
three factors: the vehicle, the driver and the environment." So why rush to
take responsibility?

But seemingly unrelated incidents may turn out to be tragically linked,
perhaps by tires produced in a single factory or perhaps because of a
vehicle's defective design. In large corporations, however, every incentive
operates against the early recognition of such connections. Isolated
accidents can be blamed on drivers or road conditions -- and individual
lawsuits can be quietly settled -- but the acknowledgment of a defective
product can lead to a corporate calamity. Denial becomes the automatic

In the Ford/Firestone case, the National Highway Traffic Safety
Administration was in no position to move quickly. Although the NHTSA
received early reports of fatalities due to tread separation and subsequent
rollovers, it was years before the underfunded and overburdened agency
began a comprehensive investigation. While the NHTSA has no incentive to
suppress bad news, it faces the herculean task of assembling and
interpreting data from literally tens of thousands of accidents each year.
Thus, reports of separate accidents tend be pigeon-holed, at least until a
pattern becomes inescapably evident.

So how did the whole story finally come out, with Ford and Firestone in
deep denial and the NHTSA overwhelmed and short-staffed? The answer is that
a group of personal-injury lawyers began filing lawsuits -- and eventually
succeeded in bringing the problem to public attention.

Of course, they didn't do it out of altruism or public spiritedness, but
they did have all the right incentives necessary to blow the whistle on a
hazardous situation.

A single automobile fatality is nothing more than a statistic to a
corporate troubleshooter or a government bureaucrat. But to a lawyer, it's
a case -- maybe even a big one. So the lawyer has ample reason to
investigate each accident, and to search out causes that might make the
potential award bigger (or easier to get), with a lucrative class-action as
the ultimate prize.

To strengthen their cases, trial lawyers collect, share and publicize
information, despite the automakers' best efforts to keep these things
under wraps. Plaintiffs' lawyers also provide the funding for research
groups -- such as the Center for Auto Safety and Safety Forum -- which in
this case first drew the necessary connections and branded the SUV tires

Indeed, it was a series of personal injury lawsuits -- beginning in 1996 --
that finally spurred the NHTSA to begin its own investigation in May.

In other words, the much-maligned litigation system works pretty well.
Individual lawyers, working on behalf of injured clients, actually do seek
out and expose dangerous conditions. Without the work of trial lawyers,
there is no telling how much longer Firestone tires would have remained on
the road, causing further rollovers and endangering lives. Of course, the
lawyers only do it to make a buck.

But the desire to make a buck turns out to be an extraordinarily powerful
engine for the exposure of harmful products. Just as the profit motive can
cause corporations to overlook potential safety hazards, it also inspires
trial lawyers to uncover them.

So the next time someone complains to you about the "litigation explosion,"
take a look at the tires on the nearest SUV. Then ask yourself how much
longer Ford and Firestone might have stalled if no lawsuits had ever been

Steven Lubet is a professor of law at Northwestern University and owns a
Ford Explorer. (The San Francisco Chronicle, October 13, 2000)

HMOs: PacifiCare's Houston Operation Sued over Provider Network
PacifiCare's Houston operation last week was hit with a class-action
lawsuit over its Secure Horizons provider network. The suit charges that
PacifiCare promised enrollees they would be able to keep physicians on a
provider list circulated during the enrollment period (Ishmael v.
PacifiCare of Texas Inc. (00-CV-0950) 212th D.C.). Instead, many
Houston-area Medicare+Choice members have allegedly been forced to switch
physicians, sometimes to ones located one to three hours away.

"People were understandably upset," says Sam Finegan, a lawyer with
Galveston, Texas-based Simpson, Beeton, Finegan and Jaworski, the firm that
filed the suit. "A lot of them don't have access to transportation." The
two sides should reach an agreement this week on a temporary injunction
allowing enrollees better access to care.

           Turnaround Cures Plan But Makes Some MDs Sick

Since PacifiCare Health Systems, Inc. took over Arlington, Texas-based
Harris Methodist Health Plan last spring, it has focused on turning the
financially troubled insurer around. PacifiCare started with layoffs,
market exits and termination of some product lines to right-size its
operations and offerings (MCW 2/7/00, p. 4). But its latest efforts --
aimed at rationalizing its provider network -- have some providers calling

PacifiCare is restricting its contracts to just a handful of local IPAs,
leaving other physicians a choice: either join one of the IPAs, or take an
individual contract at 110% of 1997 Medicare rates -- way below
market-level reimbursement, says Dallas area family practice physician
Robert Cook, M.D.

"They think they have the leverage now that they've got a bigger book of
business, but they don't have that much leverage," Cook says. The result:
primary care physicians are following many specialists who left the Dallas
area network during contract negotiations this summer, he says.

"We understand the proposals we're making are not appetizing to people,"
acknowledges spokesperson Ben Singer. "The economics of the game are really
rough and tumble right now." He says the health plan is working to flush
excess network capacity, taking into account the mix of geographic
locations, risk levels and other criteria to reconfigure the network.
"Through the process, some people are going to be frustrated. It's a
byproduct of these kinds of activities, mergers and acquisitions."

The plan faces a challenge in introducing the Harris Methodist enrollee and
provider base to the finer points of managed care. Harris Methodist was
known for its broad network, generous benefits and low premiums -- leading
to a precarious financial situation that had seriously deteriorated by the
time it was taken over.

PacifiCare is looking to avoid that situation. "Unlike the folks at Harris,
we're not sitting there losing money every year," Singer says. "It might be
in the better long-term interests" of providers and enrollees to have a
stable health plan.

The question is how the enrollee base will weather the turbulence. Cook
says he's also heard frustration from patients who can't find network
providers. "The problem is that until their companies can switch plans, a
lot of the patients are up in the air for three months trying to find
people to treat them, because the network is so drastically changed."
(Managed Care Week, October 2, 2000)

HOG FARMERS: Neighbors Fail in Attempt to Seek Jury's Award for Odor
Jurors who listened to more than a week of testimony about hog waste ruled
against 19 homeowners who filed suit claiming odor from a huge livestock
operation hurt their property values. DeKalb County jurors on October 12
sided with commercial hog farmers Marty and Jeffrey Wootten and the company
that buys their animals, Gold Kist Inc.

Neighbors lost in their attempt to collect monetary damages from the
Woottens, who are cousins, and the company.

But an attorney who filed the suit said his clients could still win an
injunction from Judge David A. Rains to close the hog operations, located
in extreme northeast Alabama. "We're trying to shut this thing down," said
Clay Ragsdale.

The Woottens raise about 8,000 hogs in eight barns on their farms, located
a half-mile apart. The cousins are fourth-generation hog farmers. "We just
want to go home and go back to work. It's all we've ever done," Jeffrey
Wootten said after the verdict.

Much of the testimony concerned methods the farmers use for disposing of
animal wastes: Hogs are confined to barns, and their waste falls into
channels in the floor. Wastes are then mixed with water and piped to the
lagoons. Natural processes break down the waste, and the liquid is drawn
off and applied to fields as fertilizer.

Neighbors who filed suit claim the farms stink and have diminished their
property values. They were shocked by the verdict. "I think it's very
unfair, and we will fight on," said Brenda Ivey, a lead plaintiff.

But witnesses testified the $1 million operation more than complied with
state environmental regulations. Gold Kist and other farmers described the
case as an attack on the state's agricultural interests. "This is not just
a victory for the Woottens," poultry farmer Rayford Brown said. "If the
verdict had gone the other way, it could have been very bad for all
farmers." (The Associated Press State & Local Wire, October 13, 2000)

ICG COMMUNICATIONS: 2 CEOs Quit This Year Amid Securities Fraud Charges
The Chief Executive Officer of ICG Communications, Inc. Nasdaq: ICGX)
unexpectedly quit the Company on September 19, 2000, along with two of the
Company's Board Members, amid allegations of securities fraud. Earlier on
August 22, 2000, the prior CEO of ICG announced his resignation

According to allegations in a securities class-action lawsuit filed by
Pomerantz Haudek Block Grossman & Gross LLP (http://www.pomerantzlaw.com),
on behalf of all those shareholders who purchased the common stock of ICG
during the period between December 20, 1999 and September 18, 2000,
inclusive (the "Class Period"), ICG issued a series of false and misleading
statements and/or failed to disclose information concerning the Company's
equipment failures, technical problems and revenue growth. It is further
alleged that throughout the Class Period, the Company falsely portrayed
itself as a rapidly growing provider of communications services which had
developed a stable and substantial customer base on the basis of its
purportedly superior customer service.

On September 18, 2000, ICG revealed to the market the Company's true
financial condition, in sharp contrast to the Company's prior
representations. Following this revelation, the price of ICG's common stock
fell dramatically from its Class Period high.

Contact: Andrew G. Tolan, Esq. of Pomerantz Haudek Block Grossman & Gross
LLP, 888-476-6529 or 888-4-POMLAW, agtolan@pomlaw.com

INTERSPEED, INC: Milberg Weiss Files Securities Suit in Massachusetts
The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a
class action lawsuit was filed on October 12, 2000, on behalf of purchasers
of the securities of Interspeed, Inc. (NASDAQ:ISPD) between February 4,
2000 and October 6, 2000, inclusive.

A copy of the complaint filed in this action is available from the Court,
or can be viewed on Milberg Weiss' website at:

The action, numbered 00-CV-12113EFH, is pending in the United States
District Court, District of Massachusetts, located at 1 Courthouse Way,
Boston, MA 02210, against defendants Interspeed, Stephen A. Ide ("Ide") and
William J. Burke. The Honorable Edward F. Harrington is the Judge presiding
over the case.

The complaint alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder,
by issuing a series of material misrepresentations to the market between
February 4, 2000 and October 6, 2000, thereby artificially inflating the
price of Interspeed common stock. On October 6, 2000, Interspeed announced
that it is considering restating its first, second and third quarter 2000
financial statements because of accounting misstatements and the Company
further announced the resignation of defendant Ide together with the
termination of several of its key employees. On this news, Interspeed's
shares plummeted to as low as $1.00 - more than 97% off its Class Period
high of $37.

Contact: Milberg Weiss Bershad Hynes & Lerach LLP Steven G. Schulman or
Samuel H. Rudman One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165
Phone number: (800) 320-5081 Email: interspeedcase@milbergNY.com Website:

L.A. POLICE: Fed Lawsuit Filed; Union Accuses of Lack of Due Process
The Los Angeles police officers' union is accusing Chief Bernard C. Parks
of illegally demoting officers who are the subject of past or pending
disciplinary actions.

In a federal lawsuit filed last Tuesday October 10, the Police Protective
League charges Parks with violating officers' constitutional rights to due
process. At issue is the LAPD's issuance of so-called Brady letters.

Under a 1963 U.S. Supreme Court ruling known as Brady vs. Maryland,
prosecutors must give defense lawyers any evidence that might impeach a
government witness' credibility. That includes information about a police
officer's disciplinary history.

In its lawsuit, the league contends that Parks has been abusing officers'
rights by placing Brady letters in their personnel files and reassigning
them to less desirable jobs. Officers who receive Brady letters are told
they are being removed from field duties because the police chief believes
they would no longer make credible witnesses, according to the lawsuits.

"These punitive reassignments generally result in a reduction in pay,
professional embarrassment and loss of career advancement for the affected
officers," the suit alleges.

Lt. Horace Frank, a department spokesman, defended the policy of
reassigning officers with credibility problems. "In the big scheme of
things, we owe it to the community," he said. "If we have police officers
who have been found guilty of lying, how can we allow them to remain in
positions where they have to make arrests and testify in court? What
happens when their disciplinary record comes out and their credibility is
challenged? We lose the case, and the victim and the community are deprived
of justice."

Frank said Brady letters are issued only for administrative offenses
involving moral turpitude, which includes lying.

Dennis Zine, a league vice president, said that even if an officer is
acquitted by a departmental disciplinary board, "the Brady letter stays in
his file." Moreover, he said, the officer must reapply for his old job,
with no guarantee that he will get it. Zine said the league has identified
about 75 officers who have received Brady letters since Parks embarked on
the policy about two years ago.

The union official said he knows of a motorcycle cop with 29 years'
experience who was reassigned to a desk job because of a three-day
suspension he received 2O years earlier for an administrative infraction.
"LAPD management has scoured the personnel files of rank and file officers
for any disciplinary actions which they believe warrant a Brady letter, no
matter how remote," the lawsuit charges.

The league, which represents more than 9,000 officers through the rank of
lieutenant, also accused Parks of "insulating officers within LAPD
management from the same career-shattering consequence of receiving Brady
letters and their punitive reassignments."

Under Parks' express direction, the suit says, department managers have
also taken the liberty of disseminating Brady letters to prosecutors and to
criminal defense lawyers before being ordered to do so by a judge. This
practice violates police officers' rights under the U.S. Constitution and
the California Public Safety Officers' Procedural Bill of Rights, the
lawsuit says. The league is seeking to have the suit declared a class
action on behalf of all affected members. It is also asking for injunctive
relief, unspecified general and punitive damages and compensation to
officers whose salaries were cut because of demotions and reassignments.
(Los Angeles Times, October 13, 2000)

TETERBORO AIRPORT: 11 Towns Join to Fight Noise and Pollution
Teterboro Airport has a new foe. Officials from 11 towns decided last
Thursday October 12 to form a committee to fight airplane noise and
pollution. The meeting, which drew about 40 people, was called by Carlstadt
officials who have fielded dozens of noise and pollution complaints from
residents. The officials said they did not want to take on the airport
alone. "We're not asking them to close up and move out,"said Carlstadt
Councilman Craig Lahullier."We need some concessions from these people.
It's no way to live."

The officials included mayors, council members, and town managers. Besides
forming the committee, the officials said they will ask for federal and
state environmental studies and will meet again next month after their
governing bodies consider funding the fight. Lahullier said he hopes the
committee will get at least $ 50,000 (about $ 5,000 each from 10 towns) to
pay for lawyers and independent environmental studies.

Carlstadt residents are complaining about soot on awnings and automobiles,
which some believe comes from aircraft fuel.

Adam Zellner, district director for Rep. Steven R. Rothman, D-Fair Lawn,
said legislation is pending that could fund the environmental studies.
While supporting the effort, Moonachie Mayor Fred Dressel added a voice of
caution. He said the group needs a written mission statement and a
realistic plan. "There's no sense in running into a wall,"he said."We need
to know where we can be effective."

Dressel is a founding member of another 1 committee formed to address some
of the same objectives. But many say that panel, the Teterboro Aircraft
Noise Abatement and Advisory Committee, has been ineffective. Dressel said
meaningful change will happen only if aviation rules are changed at the
federal level.

Hackensack Mayor John Zisa invited the officials to an Oct. 24 meeting that
will be attended by state elected officials.

After the meeting, some said it was too soon to say if they would join in a
class action lawsuit against the Port Authority of New York and New Jersey,
owner of the airport. Teterboro is considered one of the nation's busiest
small, or so-called general aviation, airports.

Hasbrouck Heights Mayor William Torre raised concerns about safety and
reminded the audience about a December accident in which a plane bound for
Teterboro plummeted into a back yard of a Hasbrouck Heights home, killing
the four people on the plane. "We were very lucky that no one on the ground
was killed,"Torre said.

A Port Authority spokesman has said the agency is willing to work with
local officials and with aircraft manufacturers to make quieter planes. The
spokesman said the Port Authority also is funding soundproofing projects at
73 schools in New York and New Jersey. As for the concerns about the fuel,
the spokesman said he could not comment because it could be part of a
lawsuit. (The Record (Bergen County, NJ), October 13, 2000)

TOBACCO LITIGATION: Former Smoker Battling Alone for $15 Mil in Damages
Larry Williamson sold Bibles and dictionaries door to door. He's hawked
eyeglass frames, cash registers and televisions. But now the Fort
Lauderdale man faces the biggest sales pitch of his life: selling a jury
his claim that cigarettes ruined his life and he deserves $ 15 million in

And he plans to do it all without the help of a lawyer.

"I've got the truth on my side, and the good book says the truth will set
you free," said Williamson, 62, who smoked for 51 years. He pulled a
tattered burgundy leather-bound booklet out of his briefcase. The title on
its cover, printed in gold, reads: God's Promises for Your Every Need. The
pages inside, selections of Scripture, are dog-eared and torn. "I've been
carrying the book with me for 30 years," Williamson said.

He quit smoking two years ago, but had already developed a lung ailment
called chronic obstructive pulmonary disease, which leaves him gasping for
breath if he talks too fast.

Williamson, dressed in a plaid button-down shirt and blue polyester slacks
held up with suspenders, faced off with three suit-clad tobacco lawyers
during a pretrial hearing in Broward County Circuit Court. "Last time we
were here, they had 15 lawyers," Williamson commented to Judge George

Williamson was in court requesting a speedy trial, a 12-person jury to hear
his case, and the home addresses and telephone numbers of all current
tobacco company chief financial officers, chief executive officers and
chief operating officers, as well as the same information for the company
chiefs who appeared before Congress several years ago and swore that
cigarettes did not cause cancer.

The judge gave the tobacco attorneys 30 days to fulfill Williamson's
request. Then he explained to Williamson that the state constitution only
allows for him to have a six-person jury.

In 1997, after he was diagnosed with lung disease, Williamson decided to
sue the makers of the cigarettes that he said he has been addicted to since
he was 9.

He could have joined the class-action lawsuit that Miami attorneys Stanley
and Susan Rosenblatt had filed against Big Tobacco on behalf of all
Floridians who claimed to have been sickened by smoking. But in July 1997,
Fort Lauderdale attorney Sheldon Schlesinger convinced Williamson, and at
least 80 other people, to opt out of the class action and allow him to
represent them in a separate case against Big Tobacco, Williamson told the

Schlesinger was one of the attorneys who obtained an $ 11.3 billion
settlement from Big Tobacco for the state of Florida.

Williamson was confident he was signing on with a good attorney. And he was
more comfortable being one of about 80 people represented in a lawsuit,
rather than one in the hundreds of thousands of class members in the
Rosenblatts' case.

In 1998, after several weeks in the hospital with pneumonia, Williamson
returned home to about a dozen urgent telephone messages from an associate
of Schlesinger.

"There was an urgency in his voice, and I knew right there that they were
going to drop my case," Williamson said.

"Schlesinger got paid $ 220 million for his work for the state and decided
then to drop us all. He dropped all 80 of us," he said.

Like Schlesinger's other smoking clients, Williamson was given 90 days to
find another attorney. He said he called several attorneys around the state
who have taken tobacco cases before, but none of them wanted his case.

Meanwhile, other Schlesinger clients sought to join the Rosenblatts' case.
Judge Robert Kaye, who presided over that case in Miami-Dade Circuit Court,
eventually allowed them to do so.

Williamson said he wrote to Rosenblatt seeking to join, but never received
a response. So he figured he had been rejected and left to pursue the case

On July 14, a jury awarded the Rosenblatts' clients a record $ 145 billion
in punitive damages. Tobacco is appealing the award and trying to move the
case to federal court.

On October 12, William Geraghty, an attorney representing Brown &
Williamson Tobacco Corp., offered to check with the cigarette makers to see
if they would agree to let Williamson join the Rosenblatts' case.
Williamson also is Philip Morris and RJ Reynolds Tobacco.

Judge Kaye in Miami would have the final decision on whether Williamson
could join the class action, Geraghty said.

At first, Williamson seemed not to understand the offer. He kept switching
the conversation back to his request for the tobacco executives' telephone

Finally, Williamson said he wants no part of the class action. "I'm ready
to proceed with this for as long as my health allows," he told the judge.
"I've got three years invested in this. Why would I want to turn it over to
some Miami lawyer?" Williamson said. As he walked slowly through the halls
of the courthouse, Williamson revealed his strategy. "As an individual, I'm
a thorn in their side. They'd be more willing to settle with me to make me
go away. That (class action) is going to be tied up in appeals court for
years," he said. (Sun-Sentinel (Fort Lauderdale, FL), October 13, 2000)

TOBACCO LITIGATION: Opt-out Awarded $200,000 But No Punitive Damages
A bay area retiree wins more than $ 200,000 but no punitive damages in the
death of his spouse, in what he calls a "canoe versus a battleship" case.

Temple Terrace retiree Robert R. Jones won his one-man crusade against big
tobacco last Thursday, October 12, when a jury decided that the R.J.
Reynolds Tobacco Co. was responsible for the death of his wife, Suzanne M.
Jones, who died of cancer after smoking cigarettes for 43 years.

In what is believed to be the first smoker's lawsuit tried in the Tampa Bay
area, jurors heard testimony for nearly six weeks, then deliberated a day
and half before returning two verdicts against R.J. Reynolds and awarding
Jones compensatory damages totaling $ 200,028.57.

The five-man, one-woman jury held that negligence on the part of R.J.
Reynolds and a defective cigarette design by the Winston-Salem, N.C.,
company both contributed to Mrs. Jones' death.

The jury said, however, that R.J. Reynolds was not guilty of a conspiracy
to defraud Mrs. Jones, and determined that awarding punitive damages, which
might run into the millions of dollars, was unwarranted.

Robert Jones had opted out of a class action lawsuit that led to a $
145-billion punitive damages award by a Miami jury against five tobacco
companies in July. After the verdict, he said the case was not about money,
but truth.

"I was never under any illusion that I would come out of this with a dime,"
he said. "I just wanted to create a situation where the tobacco companies
would have to tell the truth.

"If the truth was disseminated to the American public, it wouldn't be a
question of banning cigarettes. If you put the truth out there, people will
quit on their own."

A former Air Force fighter pilot and retired trust officer for Barnett
Bank, Jones, 70, quit smoking himself, but not until after he watched
cancer ravage his wife's lungs, then spread to her colon.

Jones now suffers from emphysema. He lugged an oxygen tank into the
courtroom for shortness of breath.

His lawsuit was filed in Hillsborough Circuit Court on July 7, 1997, two
years after the death of his wife, a 62-year-old homemaker and mother of
one son. The suit contended Mrs. Jones was addicted to nicotine and that
her decades-long smoking habit caused the cancer leading to her death.

Mrs. Jones began smoking in 1952 and smoked more than a pack a day of Pall
Mall, Winston, Vantage or Carlton cigarettes. She smoked even after being
diagnosed with an aggressive form of lung cancer - evidence, her husband
believes, that she was addicted to nicotine.

A particularly defining moment for Jones occurred October 11, after the
jury had deliberated nearly four hours. One of the jurors asked Judge Ralph
Steinberg if jurors could take a recess because she needed a cigarette
break. Jones shook his head and laughed. "That's what I mean about the
power of addiction," he said.

R.J. Reynolds' team of attorneys argued that Mrs. Jones was fully aware of
the risks associated with smoking but lit up during her entire adult life
anyway. The company, the second-largest manufacturer of cigarettes in the
nation, disputed that smoking caused Mrs. Jones' cancer, contending instead
that colon cancer, not lung cancer, killed her.

Paul Crist, one of R.J. Reynolds' attorneys, said the company planned to
appeal October 12's verdicts. He added that he was gratified that jurors
found no conspiracy and allowed no punitive damages.

Before October 12, Crist had tried three other smokers' cases for R.J.
Reynolds and prevailed in all three.

The Hillsborough jury awarded $ 141,028.57 for Mrs. Jones' medical costs
and burial expenses and $ 59,000 for Robert Jones' loss of his wife's
companionship. "We were obviously disappointed in those two verdicts," said
Crist. "Though it is clear to me that even with those verdicts, the damages
are so low as to discourage people from going to court like this."

Indeed, Jones' attorney, Howard Acosta of St. Petersburg, said he had spent
five years and about $ 1-million preparing for this case. He has about 20
other cases involving elderly smokers yet to be tried in Hillsborough,
Pinellas and Orange counties, and said he must now re-evaluate the time and
money expended on Jones' case to determine how he will handle the remaining
smokers' suits. "I think this case was not about making anybody rich," said
Acosta. "We set out to make these companies accountable. "This shows they
can be beat."

Acosta said the verdict concerning R.J. Reynolds' production of a defective
product demonstrated that the company misled consumers about the safety of
Winston cigarettes.

"They told people the filter would filter out nicotine, but the nicotine
was actually boosted," said Acosta. "That part was never told."

The jury's refusal to allow punitive damages, Crist said, was "telling
evidence" that a jury that socked R.J. Reynolds and four other tobacco
companies with $ 145-billion in punitive damages in July was an aberration.

The Miami award involved the first class action case by smokers to go to
trial in the United States. Jurors took just 41/2 hours to agree that
tobacco's big five companies should pay $ 145-billion for harming 700,000
smokers in Florida. The award, the largest in American history, is being

Jones declined to participate in the class action suit in Miami, electing
to pursue his wife's wrongful death case on his own.

Thursday, October 12, he admitted he was surprised that Acosta, a sole
proprietor, could beat R.J. Reynolds' team of six lawyers and a large
support staff, which included audio and video professionals stationed in
the courtroom to present court exhibits.

"They have tremendous resources," said Jones. "It was like a canoe versus a
battleship. "But they didn't know we had a torpedo aboard - Howard Acosta."
(St. Petersburg Times, October 13, 2000)

UNITED PAN: ISP Chello Draws Fire, UPC to Quell Threat of Fee Boycott
    Amsterdam --- United Pan Europe Communications (UPC) has moved to quell
criticism and threats of a payment boycott over increasingly bad service in
its home territory.

Most of the complaints center around UPC's highly publicized broadband
Internet provider Chello. In recent months, company help lines have
received over 10,000 calls a day. Several consumer orgs, including the
national Consumers Union, have urged subscribers to withhold payment;
there's even talk of a class-action suit.

Three consumer-interest programs --- public broadcaster KRO's "Ook Dat Nog"
(That Too), TROS' "Radar" and "The Consumer Man" from regional station TV
Gelderland --- are urging a subscription payments boycott.

                             Pledge to serve

Last Thursday October 12, UPC said it was introducing the UPC Guarantee
Plan, pledging "clear and unambiguous customers service levels" as of Nov.
1 and saying that rebates would be offered to dissatisfied customers.

But some analysts describe the move as too little, too late.

Henk Slotboom, general manager at Swiss investment bank Julius Baer
Netherlands, said the ruckus over the bad service in its home territory has
done irreparable damage to the UPC brand name. "The damage won't be limited
to Holland. This will backfire, in all possible ways, on how investors look
at UPC, and at potential acquisitions," he said, referring to recent
reports that UPC plans to make additional acquisitions in Germany.

UPC plans to roll out its much vaunted triple play of telephony, video and
ISP services across Europe over the next year, but Slotboom pointed out
that most of UPC's customer base is still in Holland.

"If it can't deliver in its own home base, it doesn't send a convincing
message to investors or local public officials responsible for these
services that it can deliver in other territories," he said. (Daily
Variety, October 13, 2000)

WALTER KONIGSEDER: U.S. Will Charge Former Official of Informix Software
In the second high-profile securities fraud indictment in a week, the U.S.
attorney's office announced it will charge a former top official of
Informix Software Inc. with 11 counts of wire fraud and criminal securities

Walter Konigseder was in charge of Informix's European sales when the
company announced in 1997 it would restate three years of earnings, causing
the stock to drop 60 percent, a market loss of $1.5 billion.

He is accused of approving "sham" transactions that inflated the company's
earnings and then lying to company auditors.

Last year, Menlo Park-based Informix agreed to a $140 million settlement in
a private securities class action. In January, it settled a related case
brought by the Securities and Exchange Commission and agreed to cooperate
with prosecutors investigating former company officials.

The announcement comes on the heels of the news that two former top
officials at Georgia-based HBO & Co., which was acquired by San Francisco-
based McKesson Corp., were indicted for securities fraud. The SEC also
filed a concurrent suit against the two officials, and has filed an action
against Konigseder. "This and other recent indictments should bring home to
officers of public companies that intentional manipulation of a company's
financial performance to meet expectations will result in criminal as well
as civil prosecution," U. S. Attorney Robert Mueller III said in a
statement. Jason Hoppin (The Recorder, October 6, 2000)

* High Court Elaborates on Standards for Searches and Seizures
Author: Kathryn R. Urbonya; Kathryn R. Urbonya is a law professor at the
College of William and Mary in Williamsburg, Va.

The U.S. Supreme Court will shed more light on the Fourth Amendment when it
resolves four cases this term involving a soccer mom, Indianapolis
motorists, 10 pregnant women and a trailer park resident.

In these cases, the Court will decide whether police violated the
amendment's ban on unreasonable searches and seizures when they:

   * Arrested the soccer mom for not wearing a seat belt. Atwater v.
      Lago Vista, No. 99-1408.

   * Established roadblocks to find illegal drugs. City of Indianapolis
      v. Edmond, No. 99-1030.

   * Tested the pregnant women to detect cocaine. Ferguson v. Charleston,
      No. 99-936.

   * Barred the trailer park resident from entering his home while
      waiting for a search warrant. Illinois v. McArthur, No. 99-1132.

In these cases, the Court must reconcile conflicting decisions addressing
whether courts should consider police intentions and the common law when
determining whether a search is reasonable.

With a reasonableness inquiry, the Court has to balance interests. During
the past two terms, it has frequently struck the balance in favor of police
officers--with some important exceptions.

The Court generally has expanded officers' ability to seize and search
vehicles, and purses in vehicles, without warrants. It has limited a
person's ability to even raise the Fourth Amendment in a case involving a
brief visitor in an apartment. It also allowed police to stop a person who
fled upon seeing an officer in a high-crime area.

The balance did tip the other way at times. For example, the Court held it
is unreasonable when an officer searches a vehicle incident only to a
traffic citation. It rejected a "homicide exception" to the warrant
requirement and refused to create a "firearm exception," which would have
allowed officers greater latitude in frisking citizens. And it held that
squeezing soft-sided luggage is a search.

The lineup of new cases invites us to watch again how the justices value
different sides of the balance.

                          Buckle Up or Be Arrested

In Texas, police may arrest drivers for failing to wear a seat belt. An
officer stopped Gail Atwater for this offense as she drove her two children
home from soccer practice in Lago Vista, near Austin. The officer had
recently mistakenly stopped Atwater for not wearing a seat belt, but he got
her this time.

Under Texas law, she committed a misdemeanor. She alleged that the officer
yelled at her and frightened her children, ages 4 and 6. A friend took the
kids home, but the officer handcuffed Atwater and took her to the station.
She was there for an hour while her mug shot was taken.

Atwater sued the officer, the police chief and the city. The trial court
granted summary judgment for the defendants. On appeal, the en banc 5th
U.S. Circuit Court of Appeals based in New Orleans split 11-6 and held the
actions reasonable.

The majority's brief opinion noted other violations to justify the
arrest--Atwater was driving without a license and lacked proof of
insurance. It did not mention the police officer's intent in arresting
Atwater. The court cited Whren v. United States, 517 U.S. 806 (1996), which
held the presence of probable cause to stop a driver for a traffic offense
generally means the stop was reasonable.

A dissent considered the officer's annoyance and anger. A jury could find
an intent to "threaten, frighten and humiliate" Atwater.

The 5th Circuit also disagreed as to the role of the common law. The
majority held that Atwater had waived this as an issue. Dissenters raised
Wyoming v. Houghton, 119 S. Ct. 1297 (1999).

Houghton had outlined the process for determining whether an action was
reasonable under the Fourth Amendment: If the common law authorized the
search or seizure, then the action was reasonable; if the common law did
not address the action, then courts were to balance interests.

Dissenters stated that the common law would have barred the arrest because
Atwater's traffic violation was not a breach of the peace. They said that
under a balancing test, the arrest was unreasonable.

                    A Search for Drugs, Not Drunks

Without any suspicion of wrongdoing, officers in Indianapolis used
roadblocks to stop drivers. The city admitted its purpose was to find
drugs, not to catch drunk drivers and make the roads safer.

Officers stopped motorists for no longer than five minutes, and asked for
their licenses and car registrations. They looked into the cars while a
drug-sniffing dog walked around the vehicles.

A class action lawsuit filed on behalf of the delayed drivers sought
injunctive relief. A majority of the 7th U.S. Circuit Court of Appeals
based in Chicago said that the city's purpose made the roadblocks
unconstitutional. For the dissent, purpose was not an issue.

The Supreme Court's resolution of the case will probably center on Michigan
Department of State Police v. Sitz, 496 U.S. 444 (1990), which upheld
suspicionless roadblocks to detect drunk drivers. In that case, the state
of Michigan had asserted an interest in public safety to support its stops.

The constitutionality of roadblocks aimed at finding drugs rather than
impaired drivers has split the lower courts. (See "A Question of
Substance," July 2000 ABA Journal, page 22.)

                     Drug Testing During Pregnancy

Officials at the Medical University of South Carolina created a policy of
testing pregnant women for cocaine after talking to a local prosecutor,
Charleston police and social service agencies.

Physicians tested women who had failed to seek prenatal care or otherwise
aroused suspicions of drug use. Those testing positive had two choices:
drug treatment or criminal prosecution for possession and delivery of
cocaine to the fetus, if after the 24th week of pregnancy.

If they chose counseling and tested positive again, police could arrest
them. If they again chose treatment, no prosecution would occur. Crystal
Ferguson and nine other women sued after they were tested under the policy.

The trial court concluded that the policy had a medical, not criminal,
purpose--substance abuse counseling. But because doctors worked with
police, the women's consent was needed, the court held. A jury determined
that they had consented.

On appeal, the 4th U.S. Circuit Court of Appeals at Richmond, Va.,
affirmed, but it applied the "special need" doctrine from National Treasury
Employees Union v. Von Raab, 489 U.S. 656 (1989).

Under this doctrine, even suspicionless searches may be reasonable if they
serve "special governmental needs, beyond the normal need for law
enforcement." When a search does not have a criminal purpose, courts should
simply balance interests to determine reasonableness.

Noting the finding that the drug tests were for medical purposes, the
majority applied the doctrine and found the tests reasonable.

The court said government had important interests in safeguarding the
fetus's health and minimizing the costs of caring for babies exposed to
cocaine. Testing effectively furthered these interests. And the women had
minimal privacy interests arising from the testing.

The dissent, however, discerned a prosecutorial, not medical, goal for the
policy. Thus, the special need doctrine did not apply. The dissent also
contended that the women did not consent to the tests.

                        Unreasonable Home Seizure

After Tera McArthur moved all of her possessions out of her husband's
trailer, she told a police officer that her spouse had pot under the couch.

The officer, John Love, knocked on the door and told Charles McArthur what
his wife had said. He denied having drugs and refused to consent to a
search. Tera McArthur then accompanied another officer to the police
station to get a warrant.

During the two hours it took to get a warrant, Love refused to allow
McArthur to enter his home alone. The officer briefly entered the trailer
when McArthur got cigarettes and used the telephone.

When police got their warrant, they found 2.5 grams of cannabis and drug
paraphernalia. McArthur moved to suppress this evidence.

The Illinois appeals court held that Love had unreasonably seized
McArthur's home and probably conducted an unreasonable search.

The Supreme Court's resolution of these four cases may help stake out how
far police can go in a search for evidence. What will we see? A roadblock
safeguarding individual liberty, a thoroughfare for police, or fog? (ABA
Journal, October, 2000)

* Milberg Teams up with Leeds Morelle to Fight Employment Discrimination
Milberg Weiss Bershad Hynes & Lerach LLP, the nation's largest class-action
law firm, announced that it is teaming up with Leeds Morelli & Brown PC,
the Long Island-based anti-discrimination specialists that Newsday (July
10) called "the leading civil rights law firm on Long Island and probably
in the country."

Contact: Melvyn I. Weiss of Milberg Weiss Bershad Hynes & Lerach,
212-594-5300 (after hours, David Rosenstein, 212-534-5879), or, for: Leeds
Morelli & Brown PC, Robert Zimmerman of Zimmerman/Edelson Public Relations,


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