/raid1/www/Hosts/bankrupt/CAR_Public/001027.MBX              C L A S S   A C T I O N   R E P O R T E R

             Friday, October 27, 2000, Vol. 2, No. 210


ARKANSAS: Expert Says State Needs to Spend $400M More on Education
BRIDGESTONE/FIRESTONE INC: 6 Deaths Tied To Tires Not In Recall
BRIDGESTONE/FIRESTONE INC: Indianapolis Judge Is Chosen for Tire Suits
BRIDGESTONE/FIRESTONE INC: Proceedings Are Consolidated In Fd Tire Cases
BROWARD COUNTY: Cities Unite Against State's Tree-Cutting Program

CELLULAR PHONE: Privacy Invasion Suit Mushrooms into One of the Largest
COPPER MOUNTAIN: Milberg Weiss Files Securities Suit in California
COPPER MOUNTATIN: Kirby McInerney to Commence Securities Lawsuit
CORRECTIONS CORPORATION: Reaches Settlement Pact over Securities Suit
GOODYEAR WRANGLER: Tires Under Scrutiny; NHTSA Keeps Watch on Complaints

HMOs: At Least 24 Lawsuits Will Be Consolidated and Sent to One Fd Judge
HOLOCAUST VICTIMS: German Television Says 172 Firms Snub Nazi Labor Fund
HONEYWELL INTERNATIONAL: Retiree's Suit Alleges Insider Trading
LAXTON GROUP: Settle with Condo owners over Alleged Leaks on Buildings
MarchFIRST, INC: Wolf Haldenstein Files Securities Suit in Illinois

MASSACHUSETTS: Judge Puts off Order for Services for Mentally Retarded
McCaffrey: Doctors Can 'Recommend' Marijuana to Patients, Says CA Judge
MORGAN STANLEY: Fires Woman in Sex Bias Case; EEOC Presses to Sue
NORTH CAROLINA: Division of Motor Vehicles Faces Suit on Pay Disparities
ROSENSTOCK: 2nd Cir. Upholds Dismissal of Claims over Freeze-Out Merger

SONIC INNOVATIONS: Milberg Weiss Files Securities Lawsuit in Utah
TRANSPORTATON DISCRIMINATION: Century Long Struggle for End Goes on
U OF CA: Judge sees no proof of age discrimination against Lab Retirees
Y2K LITIGATION: Class Status Denied for Purchasers Of Voice Mail System


ARKANSAS: Expert Says State Needs to Spend $400M More on Education
Arkansas needs to spend up to $400 million more to provide students with
an adequate education, a school funding expert said.

The state's $1.7 billion school budget is "insufficient for Arkansas
schools to convey the set of expectations that the state holds for
students," James W. Guthrie said during a break in his testimony at the
trial of a lawsuit challenging Arkansas' school funding system.

Though factors other than money contribute to Arkansas students' poor
test scores, the state should boost funding by $1,000 to $1,500 per
student to give students a chance to get an adequate education, Guthrie
said. "By constraining the opportunities for Arkansas youth, we are also
constraining their opportunity for economic success," he testified at the
trial. "It's time to recognize the situation and begin to invest in human

He also presented written testimony at the trial in which lawyers for the
Lake View School District contend school money is still being distributed
inequitably - six years after a court order to end disparities between
wealthy school districts and poor ones.

The Lake View district is the lead plaintiff in a class action lawsuit
involving scores of districts. A 1994 court order declared the school
funding formula unconstitutional and gave the state two years to correct
problems. In addition to equity, state courts in this proceeding will
decide for the first time whether school funding is adequate. Guthrie,
president of Management Analysis & Planning Inc., testified for the
Bentonville and Rogers school districts.

The districts are intervenors in a lawsuit that contends the state has
fallen short of a 1994 court order to end wide disparities between
wealthy and poor school districts in resources available to educate

The districts contend current funding is distributed equitably but that
the overall level of funding is inadequate.

Guthrie's company distilled Arkansas education standards for learning and
presented them to a panel of a dozen school superintendents and
principals. The panel was asked to design school systems that would
convey the state's expectations for student learning.

The firm then imputed cost to the models that the educators developed,
which it determined to be roughly $5,500 to $6,000 per student.

The state average was $4,679 per student during the 1998-99 school year,
according to the state Department of Education. The Umpire School
District in Howard County spent the most per student, $9,476, and the
Union district in Union County spent the least, $2,354.

Tim Gauger, an assistant attorney general representing Gov. Mike Huckabee
and other state defendants, said school district patrons had a right to
expect schools to spend tax money efficiently.

James Smith of Management Analysis agreed, but said "no amount of
efficiency is going to make up for inadequate funding."

Guthrie did not say how the state should generate the extra money but
suggested it had "adequate capacity" for taxation that was "not yet fully

Mitch Llewellyn of Fort Smith, lawyer for more than 30 school districts
that have intervened to keep the existing formula, challenged the makeup
of the education panel Guthrie's firm used to base its findings.

The schools they represented had average enrollment of 7,300 students
while two-thirds of Arkansas' 310 districts have fewer than 1,000
students, he noted. Guthrie said the size of the school was immaterial.
The expectations for students should be the same, he said.

Llewellyn also pointed out during cross examination of Guthrie that
Arkansas ranks 12th nationally in tax revenue per capita, 26th in the
amount per $1,000 of personal income spent on public education and 14th
in the amount of the individual tax burden - 60 percent - that goes for

"Arkansas is making an effort that ranks it in a favorable way," Guthrie
surmised. "It continues to have capacity to raise it more."

The Bentonville and Rogers districts are paying Guthrie's firm up to
$100,000 for analyses and testimony, their lawyer, David Matthews of
Lowell, said. Matthews said the districts are paying him $100 per hour,
below his normal rate of $150 or more per hour. He said his September
bill to the districts was $ 16,000. (The Associated Press State & Local
Wire, October 26, 2000)

BRIDGESTONE/FIRESTONE INC: 6 Deaths Tied To Tires Not In Recall
At least six of the 119 people who have died in U.S. accidents linked to
Firestone tires were riding on tires not covered by the current recall,
according to an analysis of 3,700 consumer complaints.

The six deaths involved 15- or 16-inch Wilderness tires made in Wilson,
N.C., a Reuters news service analysis of the National Highway Traffic
Safety Administration data released found.

Wilson-made tires were also mentioned nearly twice as often as Firestone
tires made at other plants, a pattern apparent when NHTSA released 2,700
complaints last month.

Firestone, a unit of Japan's Bridgestone Corp., began recalling 6.5
million tires in August covering only those 15-inch Wilderness tires made
at its plant in Decatur, Ill., as well as all North American-made 15-inch
ATX tires.

Wilson-made tires not covered by the recall account for about 44 percent
of the complaints that list where the tires were made. Decatur-made tires
accounted for 24 percent, while those made in Joliette, Quebec, made up
another 18 percent. Nearly 3,000 of the 3,700 consumer complaints
released by NHTSA do not indicate where the tires were manufactured.

Firestone has admitted it made some bad tires at the Decatur plant. The
company theorizes the problems may be a result of design quirks and
manufacturing problems at Decatur but the data suggest the problem may
extend beyond a single manufacturing plant.

Separately, federal lawsuits filed against Bridgestone/Firestone Inc.
over its recalled tires will be combined before an Indianapolis judge to
make evidence gathering more efficient, a federal judicial panel has

The ruling to consolidate the case before Chief Judge Sarah Evans Barker
of the Southern District of Indiana was applauded on Wednesday by
class-action attorneys and lawyers representing Bridgestone/Firestone and
Ford Motor Co.

A Firestone spokeswoman said the consolidation "will make the
fact-finding more efficient and ultimately lead to a faster resolution."
(Chicago Tribune, October 26, 2000)

BRIDGESTONE/FIRESTONE INC: Indianapolis Judge Is Chosen for Tire Suits
A federal judge in Indianapolis has been assigned the job of overseeing
pretrial proceedings in hundreds of lawsuits arising out of the Firestone
tire recall. Sarah Evans Barker, chief justice for the Southern District
of Indiana and a 1984 appointee of President Ronald Reagan, has been
chosen by a panel of federal judges in Washington to oversee lawsuits
filed against Bridgestone/Firestone Inc. and Ford Motor Co.

In a ruling released Wednesday, the seven-member judicial panel named
Barker, a former U.S. attorney in Indiana, to oversee complex cases that
cross over federal jurisdictions. The panel called her an able jurist
with the "ability and the temperament to steer this complex litigation on
a speedy and expeditious course."

The panel rejected a request by Firestone and Ford to have the federal
cases consolidated in a Chicago court. A spokeswoman for Firestone
praised Barker's selection as a "good choice." A lawyer for Ford did not
return calls seeking comment. The panel also rejected other venues,
including Florida, Texas and other locations that were lobbied for during
a hearing by dozens of lawyers who have filed class-actions or
personal-injury lawsuits.

As many as 300 lawsuits have been filed in state or federal courts
against the two companies in the aftermath of the Aug. 9 recall of 6.5
million Firestone tires, mostly on Ford Explorers. So far, 119 deaths and
more than 500 injuries have been linked to Firestone ATX, ATX II and
Wilderness AT tires with tread separation problems.

The panel did not explain why it had rejected other jurisdictions and
specifically a push by a Miami lawyer to consolidate the cases in Florida
since many of the tire-related deaths and injuries occurred in the South.
"Given the range of locations of parties and witnesses in this docket and
the geographic dispersal of constituent actions, it is clear that no
single district emerges as a nexus," wrote Judge John Nangle, chairman of
the Multidistrict Litigation panel.

Barker will oversee a host of important pretrial issues, including
depositions of company executives, experts and discovery of documents.
Her decisions could greatly impact the evidence juries will review when
the cases return for trial in the federal courts in which they

Victor Diaz, a lawyer handling dozens of personal-injury and
wrongful-death cases, was disappointed the cases would not be heard in
Florida. But he said he was pleased with Barker's selection.

Indiana lawyers who know Barker describe the native of Mishawaka, Ind.,
as a highly organized person able to handle complex litigation because
she is a no-nonsense judge with a sense of humor. "She runs her courtroom
as a pretty tight ship," said Jan Kreuscher, chief counsel of government
litigation for the Indiana Attorney General. "She has a good sense of
humor, a good demeanor and is very friendly. But if you overstep your
bounds, she'll slap you on the knuckle." (Detroit Free Press, October 26,

BRIDGESTONE/FIRESTONE INC: Proceedings Are Consolidated In Fd Tire Cases
A panel of federal judges decided to consolidate in Indianapolis the
pretrial proceedings in all but one of the 64 federal lawsuits against
Bridgestone/Firestone Inc. and the Ford Motor Company involving the
failure of Firestone tires on Ford Explorer sport utility vehicles.

The panel's decision is a victory for Firestone and Ford, which had
feared that their executives and lawyers would have to give depositions
in states across the nation. Lawyers who have filed the personal injury
and class-action lawsuits had sought separate pretrial proceedings on the
chance that discrepancies in depositions in one case could be used
against the companies in others. After the pretrial proceedings, cases
are likely to be sent back to the original courts for trial.

Firestone and Ford had asked that the cases be consolidated in Chicago.
The plaintiffs' lawyers had opposed consolidation but contended that if
necessary, it should be done in the South, where most cases had been
filed. The panel chose Chief Judge Sarah Evans Barker of the Southern
District of Indiana, whose courtroom is in Indianapolis, citing her
ability to handle complex litigation.

The lawsuits being consolidated have been filed in 27 different federal
districts. The only federal lawsuit not included in the consolidation
involves a different kind of tire than the rest. Dozens of state
lawsuits, involving numerous deaths and injuries, are not included in the

In a separate development, Safetyforum.com, a research group that works
with lawyers, said that regulators had received many complaints about
Firestone tire models not covered by the company's recall on Aug. 9.
Firestone's recall covers 14.4 million of the 47 million tires under
investigation by regulators. Firestone and Ford have replaced more than
half of 6.5 million recalled tires still in use.

Firestone has said repeatedly that all of the tires that have not been
recalled have failure rates that are no higher than those of other tires
on the road. But C. Tab Turner, a lawyer in Little Rock, Ark., who
handles tire cases and works with Safetyforum, said that the research
group's analysis showed a need for a broader recall. (The New York Times,
October 26, 2000)

BROWARD COUNTY: Cities Unite Against State's Tree-Cutting Program
With furious homeowners demanding relief, several cities in Broward
County are preparing to go to court to halt the state's citrus canker
eradication program.

Leading the fight is Pompano Beach, where officials are trying to
assemble a coalition to file suit in Broward Circuit Court as early as
Friday. They would seek an injunction to stop the tree-cutting
immediately until a hearing could be conducted, Pompano Beach city
attorney Gordon Linn said.

Among the cities considering joining the lawsuit are Deerfield Beach,
Coral Springs, Davie, Lighthouse Point, Cooper City, Coconut Creek and
Pembroke Pines. Late Wednesday, Plantation officials voted to consider
filing a separate injunction against the program.

"Properties are being damaged without due process or just compensation,"
said Larry Deetjen, Deerfield Beach city manager, who said his city was
likely to join the lawsuit. "We are still pleading with the government to
stop the program. In Deerfield alone they are going to cut down 1,500
trees, and there are only six infected with the canker. The program is an
absolute disaster. It needs to be stopped."

It is unclear whether a judge would allow the cities to press such a
lawsuit, according to several city officials. The court may find that
cities lack legal standing because the damage was done not to cities but
to individual tree owners, said Scott Kleiman, a Cooper City commissioner
and practicing lawyer.

"Before we sign on, I want to know the legal basis under which we would
be proceeding," he said. Terry McElroy, spokesman for the Department of
Agriculture, said the department's policy prevented him from commenting
on a lawsuit that had not been filed. But he said that Agriculture
Commissioner Bob Crawford planned to go forward with a program intended
to eliminate a deadly threat to the state's citrus industry.
"Commissioner Crawford is committed to making it as responsive and
sensitive as it can be from the property owner's point of view," he said.

The state has cut down about 800,000 residential and commercial trees so
far in Broward and Miami-Dade counties in an attempt to stop the disease
from reaching the citrus industry's central Florida heartland. Chain
saw-armed workers are cutting down all citrus trees within 1,900 feet of
each infected tree. The work is expected to take another five weeks.

Several other developments took place, as public officials struggled to
respond to a hail of angry calls from residents who have seen healthy
orange and grapefruit trees toppled by the chain saws.

The Broward County delegation of the state Legislature announced a
hearing Nov. 2 to allow tree owners to talk with representatives of the
Department of Agriculture and the citrus industry. The hearing will be at
6 p.m. at Hollywood City Hall, 2600 Hollywood Blvd. "The delegation has a
lot of concerns about the way the Department of Agriculture has handled
this thing," said Debbie Wasserman-Schultz, chairwoman of the delegation.
"This has gotten out of hand."

Under orders from the Broward County Commission, county attorney Ed Dion
flew to Tallahassee to meet with officials from the Department of
Agriculture. Dion could not be reached for comment after the meeting, but
McElroy said the county attorney came away satisfied that the department
was doing as much as it could to handle the program with sensitivity.

The town of Davie scheduled an emergency council meeting for 8 p.m.
tonight to discuss whether to join the lawsuit and what other action to
take. "People are absolutely getting frantic," Councilwoman Judy Paul
said. Wednesday also was the first day that 50 forest rangers hit the
streets to serve as liaisons between homeowners and tree cutters.

In Opa-locka in northwest Miami-Dade County, ranger Jack Gardner said he
found remarkably little anger. "The crews are doing a great job," he
said. "I don't really see what they need me for."

Down the block, however, University of Miami professor Fred Westphal
showed up to confront Department of Agriculture spokesman Mark Fagan in
front of reporters and television cameras. Westphal, who had joined South
Miami and the village of Pinecrest in filing for an injunction against
the program, read Fagan the Fourth Amendment to the U.S. Constitution,
which guarantees the right of citizens to be free of unreasonable
searches and seizures.

In Broward County, anger remained high as the crews worked. In
Plantation, Helen Ackerman passed out questionnaires to residents asking
them to list property damage that would form the basis of a class-action
lawsuit. "They are offering no compensation for some very valuable
citrus," she said. "There's no representation, no compensation. It's an
absolute breakdown of the law." (Sun-Sentinel (Fort Lauderdale, FL),
October 26, 2000)

CELLULAR PHONE: Privacy Invasion Suit Mushrooms into One of the Largest
a relatively minor mobile-phone case in Illinois state court-involving
allegations of privacy invasion and health risk coverup in connection
with an epidemiology study has mushroomed into one of the largest
class-action lawsuits in U.S. history.

Judge Ellis Reid of the Circuit Court of Cook County in Illinois this
month approved the notice of the class action, which covers all
subscribers who received service from more than 100 cellular telephone
companies between Nov. 1, 1993 to Dec. 23, 1998. During that period, the
industry signed up at least 40 million additional subscribers.

The notice of the class-action lawsuit is expected to occupy a half page
in USA Today next month.

Reid certified the class on July 20 in what sources say has been one of
the nastiest and potentially costliest cases confronted by the wireless
industry to date.

For example, if the court were to award even nominal relief to each of 40
million subscribers in the class in the form of a $10 check, the cellular
industry would have to cough up $400 million.

While it has yet to lose any of the handful of health-related lawsuits
brought against it since the early 1990s, when a Florida man alleged his
wife's fatal brain cancer was caused by her cell phone, the wireless
industry has suffered a series of legal defeats leading up to the
certification of the huge class in July and next month's publication of
it in USA Today.

"We see a challenge to the court's order before publication," said
Michael Altschul, vice president and general counsel at the Cellular
Telecommunications Industry Association. CTIA funded the epidemiology
study in question under the auspices of Wireless Technology Research

The wireless industry is especially incensed at the judge for allowing
the class to balloon to such an enormous size.

Indeed, while subscribers of more than 100 cellular carriers are
contained in the class action, the defendants in the case are limited to
Motorola Inc., Ameritech Mobile Communications Inc. (now SBC Wireless
Inc.), CTIA, WTR and Epidemiology Resources Inc.

The number of subscribers in ERI's epidemiology study, which entailed
reviewing phone records without subscriber consent, is said to be between
1 and 2 million.

The lead plaintiff in the case, which dates back to 1995, is Jerald

"We're still trying to get a better hold on what the judge decided and
how it's going to go forward," Norman Sandler, a Motorola spokesman.
Sandler said the class certified by Judge Reid is not justified.

WTR head George Carlo, who at one time was a defendant before being
dismissed because of his role in contracting ERI to conduct the
epidemiology study, insists WTR is innocent of any wrongdoing. Carlo said
the Federal Communications Commission gave WTR clearance to probe phone
records for a study designed to determined whether cell-phone users had a
higher rate of cancer compared to others. Carlo said the study, cut short
by litigation, suggests there is an association between cell-phone usage
and brain cancer. One of the researchers who worked on the project
disputes that interpretation.

Representing Busse in the class-action lawsuit is Chicago attorney Ben
Barnow, a lead attorney in a multi-state class-action lawsuit against
Microsoft Corp. Barnow has successfully litigated against new and old
economy companies.

"Although marketed by Motorola and other industry members as being proven
safe by over 40 years of research and thousands of studies," states the
original Busse complaint, a significant number of persons within the
scientific community have reported that cellular portable telephones have
never been proven safe. This fact is well know to each of the defendants
and other members of the industry."

While many studies have failed to link mobile phones to brain cancer and
other diseases, recent research has found DNA breaks, genetic damage and
increased cancer in rodents exposed to mobile-phone radiation.

New developments in the Busse case come as the wireless faces an $800
million cancer lawsuit in Baltimore (and possibly more by the same
lawyer) and a health-related class-action lawsuit in New Orleans.

Meanwhile, the Supreme Court has before it four petitions seeking to
overturn the FCC's 1996 radiation safety standard for mobile phones and
towers. (Radio Comm. Report, October 23, 2000)

COPPER MOUNTAIN: Milberg Weiss Files Securities Suit in California
Milberg Weiss (http://www.milberg.com/copper/)October 25 announcement
says that a class action has been commenced in the United States District
Court for the Northern District of California on behalf of purchasers of
Copper Mountain Networks, Inc. ("Copper Mountain") (Nasdaq:CMTN) common
stock during the period between April 19, 2000 and October 17, 2000 (the
"Class Period").

The complaint charges Copper Mountain and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. The
complaint alleges that defendants disseminated false and misleading
statements concerning Copper Mountain's business with Lucent
Technologies, Inc. ("Lucent") and its prospects for FY 2000 and beyond.
Copper Mountain's relationship with one of its largest customers, Lucent,
was faltering and because the "appearance" of future growth was so
critical to defendants' plan to inflate the price of Copper Mountain
shares, defendants continued to maintain throughout the Class Period that
Copper Mountain would post FY 2000 revenue and EPS of at least $325
million and $1.00, respectively, when, in reality, defendants knew that
Copper Mountain could not possibly achieve such performance.

In addition, defendants sold $15 million worth of their own Copper
Mountain shares at prices as high as $90 per share or 900% higher than
the price to which Copper Mountain shares dropped at the end of the Class
Period, as Copper Mountain's true prospects began to reach the market.

On October 17, 2000, Copper Mountain revealed that, it would post revenue
and EPS declines, despite defendants' repeated assurances of Copper
Mountain's continuing "strong" revenue and EPS growth, including
defendant Gilbert's assurances just five days earlier that the market for
Copper Mountain's products remained strong. This disclosure shocked the
market, causing Copper Mountain's stock to decline to less than $10 per
share on record volume of more than 23 million shares.

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

COPPER MOUNTATIN: Kirby McInerney to Commence Securities Lawsuit
Please take notice that Kirby McInerney & Squire, LLP has been retained
to commence a class action lawsuit on behalf of all purchasers of Copper
Mountain Networks, Inc. (NASDAQ: CMTN) securities between April 18, 2000
and October 17, 2000 (the "Class Period"). The complaint will charge
Copper Mountain and certain of its officers with violations of Sections
10(b) and 20(a) of the Securities Exchange Act of 1934.

Specifically, the complaint will allege that during the class period
Copper Mountain issued materially false and misleading statements
concerning the Company's financial well-being and future business

On October 17, 2000, after the close of the market, Copper Mountain
reported lower-than-expected fourth-quarter and 2001 earnings due to the
financial troubles of its customers. These revelations were in sharp
contrast to the positive statements issued by the Company during the
Class Period.

As a result of the disclosures, Copper Mountain's stock dropped$17 per
share, or 63%, from $26.875 per share to $9.875 per share on a volume of
23 million shares. In just one day, the Company suffered a market
capitalization loss in excess of $867 million.

Contact: KIRBY McINERNEY & SQUIRE, LLP Pamela E. Kulsrud, Esq. Gretchen
Becht, Paralegal 212/317-2300 888/529-4787 (Toll Free) gbecht@kmslaw.com

CORRECTIONS CORPORATION: Reaches Settlement Pact over Securities Suit
Corrections Corporation of America (formerly Prison Realty Trust, Inc.)
(NYSE:CXW) announced that it has entered into definitive settlement
agreements regarding the settlement of all outstanding stockholder
litigation against CCA and certain of its existing and former directors
and executive officers. The stipulations of settlement, which have
received preliminary court approval, provide for the "global" settlement
of a series of class action and derivative lawsuits brought against CCA
by current and former stockholders of the company and its predecessors.
The hearings for final court approval of the settlement are scheduled to
be completed within the next 90 days.

The definitive settlement agreements provide that CCA will pay or issue
the plaintiffs an aggregate of:

* approximately $47.5 million in cash payable solely from the proceeds
   under certain insurance policies; and

* approximately $75.4 million in shares of CCA common stock (or
   17,235,715 shares at an agreed value of $4.375 per share).

The shares of common stock to be issued by CCA in accordance with the
agreements will be subject to a stock price guarantee of $4.375 per
share, which will require CCA to pay or issue, at its option, cash or
additional shares of common stock to the plaintiffs if the trading price
of CCA common stock does not reach $4.375 per share for a specified
number of trading days during the period from the completion of the
settlement through August 31, 2001. In addition, shares issued in the
settlement are subject to certain anti-dilution adjustments if CCA
undertakes certain transactions (generally, raising equity capital in
excess of $110.0 million at less than the stock price guarantee) during
the period from August 31, 2001 through December 31, 2001.

In addition to the payments of amounts specified above, CCA and the
plaintiffs have agreed to certain other matters in connection with the
settlement of the litigation, including:

* a prohibition on payments of any kind by CCA to insiders of the
   company and the company's affiliates in connection with its
   restructuring except as previously disclosed by the CCA;

* restrictions on CCA's ability to reprice stock options previously
   issued to former or current directors or executive officers of the
   company without stockholder approval for a period of 24 months; and

* requirements regarding the composition of CCA's board of directors and
   its committees and the adoption by the board of certain related
   corporate governance policies.

CCA expects to file a Current Report on Form 8-K with the U.S. Securities
and Exchange Commission with respect to the settlement of the litigation
which will include the full text of the stipulations of settlement among
the parties.

                            About the Company

CCA and its affiliated companies are the nation's largest provider of
detention and corrections services to governmental agencies. The company
is the industry leader in private sector corrections with approximately
68,000 beds in 75 facilities under contract or under development and
ownership of 45 facilities in the United States, Puerto Rico and the
United Kingdom. CCA's full range of services includes design,
construction, ownership, renovation and management of new or existing
jails and prisons, as well as long distance inmate transportation

CCA has recently completed a series of previously announced restructuring
transactions which included, among other things, the merger of the
company with its primary tenant. In connection with the merger, the
company, formerly known as Prison Realty Trust, Inc., changed its name to
Corrections Corporation of America.

GOODYEAR WRANGLER: Tires Under Scrutiny; NHTSA Keeps Watch on Complaints
Federal safety regulators said that they are monitoring dozens of
consumer complaints about alleged failures in a wide variety of Goodyear
Wrangler tires, but they have not decided to open an official

Over the past three years, the National Highway Traffic Safety
Administration has received 58 complaints about the tires, used on
sport-utility vehicles and pickup trucks. Two dozen complaints to NHTSA
involved Goodyears on SUVs, including seven on the best-selling Ford

Many of the complaints cited tread separations, the same problem that led
to the August recall of 6.5 million Firestone tires, most of them mounted
on Explorers. The safety agency began the Firestone tire investigation
this spring based on about 90 complaints.

The complaints to NHTSA about Goodyear tires cited one injury and one
fatality; 46 complaints were filed after the Firestone recall was

Goodyear spokesman Chuck Sinclair said that the company was not aware of
the scope of the complaints NHTSA cited. The firm has been studying
heavy-duty tires designed for larger vehicles, often used for business,
because of 25 lawsuits filed against it. He said Goodyear knows of 30
accidents and 15 deaths related to those tires. Five of the 25 cases have
been settled, he added.

Sinclair said the company did not believe the accidents cited in the
lawsuits were the result of any safety defect--which would require the
tiremaker to report to the government. The alleged failures were not
related to the design or manufacture of the tire, he said. "Every single
tire we've had the opportunity to examine has shown an indication of
impact damage, puncture, or was underinflated and on a vehicle that was

NHTSA spokesman Tim Hurd said the agency was not aware of the lawsuits
against Goodyear and is seeking information about them. He said "the 58
complaints are all over the map." The complaints "do not, at this time,
represent a trend" that "warrants a formal defect investigation," NHTSA
said in a statement releasing the complaints. "This is not a Firestone
tire recall situation," Goodyear said in a statement. Goodyear officials
discussed the complaints and the lawsuits with NHTSA.

In 1996, Goodyear modified some of its tires after it concluded vehicles
were becoming larger and heavier. Sinclair said the change--a nylon
overlay--was not to correct any defect but to make the tire more robust.

According to a summary of the lawsuits collated by one lawyer, the cases
filed against Goodyear involve 16-inch Wrangler AT, Wrangler HT and
All-Season Workhorse tires and several models of Kelly-Springfield tires,
which are made by Goodyear. Many of these tires were installed as
replacement tires on such vehicles as Chevrolet pickup trucks, Ford's
Club Wagon and Econoline vans, and the Chevrolet Suburban. "These tires
are on vehicles that carry lots of passengers, so if they fail, there is
a potential for serious injuries," said Arizona lawyer Tom Dasse, who has
filed two suits against Goodyear.

In responding to NHTSA's inquiries in its investigation into the failure
of Firestone tires, Goodyear said, it did not include any data about the
heavy-duty tires cited in the lawsuits because it did not believe the
tires had a higher-than-average incident rate.

Federal class-action and personal-injury cases filed against Ford Motor
Co. and Bridgestone/Firestone Inc. over the recalled tires were
consolidated and assigned to a federal judge in Indianapolis. U.S.
District Judge Sarah Evans Barker, a former prosecutor appointed by
President Ronald Reagan, will oversee the pretrial discovery and motions.
"We believe the consolidation will prove beneficial for all of the
parties in terms of expediency and resources required to complete the
discovery process," said Susan Krusel, a Ford spokeswoman.

Some plaintiffs' lawyers opposed the consolidation on the grounds that
their clients' injury claims would get lost in the shuffle. The court
ruling applies only to the exchange of information. Individual suits
eventually will be sent back to the courts in which they were filed for
trial. (The Washington Post, October 26, 2000)

HMOs: At Least 24 Lawsuits Will Be Consolidated and Sent to One Fd Judge
At least two dozen class-action lawsuits against health maintenance
organizations across the United States will be consolidated and sent to
one federal judge for preliminary examination, a Washington, D.C.,
health-care attorney said.

Stephanie Kanwit, an attorney with the Washington, D.C., firm of Epstein
Becker and Green, said the federal Judicial Panel on Multi-District
Litigation, a mechanism used by the federal courts to sort out and
consolidate multiple lawsuits with similar aims, ruled that Judge
Federico Moreno of the U.S. District Court for the Southern District of
Florida, in Miami, hear legal arguments and decide how to proceed with
the mass of lawsuits against HMOs.

An opening hearing is scheduled for 9 a.m. Oct. 26 in Moreno's courtroom,
Kanwit said. "I don't know what this will mean for the litigants yet,"
said Kanwit, who plans to attend the hearing. Kanwit added she is not
representing any of the defendants in the cases sent to Moreno. "We
really have to wait until the dust settles to figure out what this will
mean to the litigants. It will likely take a while to sort out," she

Kanwit said it is likely that the judge will take several days just to
sort out a series of individual actions, before turning his attention to
major actions, or common themes among the various lawsuits--such as
denial-of-care claims, and claims by physicians that their decisions were
managed by the insurers. Some of the biggest HMOs in the United States
are defendants in some of the cases being sent to Moreno, including Aetna
Inc., Cigna Corp., UnitedHealth Group Inc. and Foundation Health Systems

David Carter, spokesman for Aetna Inc., said the company believes the
consolidation of the cases "makes a lot of sense. It will expedite the
process and help to weed out the frivolous material." However, Aetna is
disappointed in the Florida venue, he said. "We thought Philadelphia made
more sense, since three or four of the cases were already filed
there--you have witnesses there. We're confident we are going to do well
in the preliminary motions."

Spokespeople with the other companies did not return phone calls for
comment Wednesday afternoon. Glen Lanni, of the Washington Legal
Foundation--a nonprofit group dedicated to free-enterprise legal
principles--said the judicial panel is a mechanism used by the federal
courts to decide how to proceed with "massive litigation" issues
involving multiple defendants and plaintiffs in similar cases. "The panel
decides which judge is most knowledgeable in that area, and sends all
related cases to him for review," Lanni said. "Usually the parties
involved will request a ruling by the panel. Sometimes its beneficial for
one side or the other." In its order sending the cases to the Florida
court, the judicial panel wrote, "We are confident in Judge Moreno's
ability to streamline pretrial proceedings in these actions, while
consequently directing the appropriate resolution of all claims."

The order said several of the insurers requested that the panel remand
their cases to regional courts, while the plaintiffs requested
consolidation in the Florida district court. Lanni said the consolidation
move may be beneficial for the HMOs in the end. "Especially in this
instance, it's probably good to bring them all together, in the interests
of justice," he said. "These cases are all frivolous, so they can all be
dismissed as frivolous together." (By David Pilla, associate editor,
BestWeek: David.Pilla@ambest.com)

HOLOCAUST VICTIMS: German Television Says 172 Firms Snub Nazi Labor Fund
After politicians called for companies to be shamed into backing a
national scheme to compensate Nazi-era slave laborers, a television
station Thursday named 172 firms yet to pay into a 10 billion mark (dlrs
4.2 billion) fund set up to help the elderly survivors.

ARD television published the list which included the German divisions of
many leading multinational companies on its Web site late Thursday,
despite protests that the move won't help the fund-raising drive.

Wolfgang Gibowski, a spokesman for the foundation charged with drumming
up corporate donations, said that identifying the no-shows would
undermine what was launched as a ''voluntary campaign of solidarity'' and
distanced himself from the ARD list.

Government and industry have promised to bring 5 billion marks (dlrs 2.1
billion) each to the fund, but firms have put up only about 3.3 billion
marks (dlrs 1.4 billion) so far, drawing flak from political leaders and

Peter Struck, parliamentary leader for Chancellor Gerhard Schroeder's
Social Democrats, told ARD that he was in favor of publishing the list.
''Some people are trying to wriggle out of their responsibility,'' he

Volker Beck, one of the fund's trustees and a member of the Social
Democrats' junior coalition partner, the Greens, said companies refusing
to pay could face a boycott after their names were released.

''The public has a right to know'' which firms haven't yet paid, Beck
said. ''I wouldn't want to be a customer of these companies.''

Gibowski told German radio there was ''no doubt'' the foundation would be
able to make up the deficit, though he declined to set a deadline.

Industry has argued that donations by big government-controlled firms
such as the national railway and postal service should go to the industry
total. The government insists the donations will count for its half.

The foundation has insisted the shortfall won't delay payments to
survivors. More than 1 million people, mostly non-Jews from eastern
Europe, stand to receive compensation for being used as slave and forced
labor to keep Nazi industry running during World War II.

Government and industry are waiting for class-action lawsuits in the
United States which had prompted the creation of the fund last year to be
dismissed before money flows to victims. Payments had originally been
slated to begin by the end of this year, although officials have said it
will likely be delayed to 2001.

More than 4,400 firms have already contributed to the fund, led by
heavyweights such as DaimlerChrysler, Deutsche Bank and Bayer. (AP
Worldstream, October 26, 2000)

HONEYWELL INTERNATIONAL: Retiree's Suit Alleges Insider Trading
A federal lawsuit filed against Honeywell International accuses its top
executives of deliberately withholding news of the company's lackluster
financial performance in an effort to keep stock prices high before
cashing in $ 18 million of their own stock holdings.

A 60-year-old former assembly line worker filed the suit, claiming that
he lost a substantial portion of his retirement savings.

Errol McDonald of Sun Lakes, Ariz., said he was hit hard when Honeywell
executives at the company's Morris Township headquarters announced the
company's poor financial returns this year and the value of the company's
stock dropped by nearly 50 percent.

The suit was filed in U.S. District Court shortly before the General
Electric Co. announced plans to purchase Honeywell, which produces
aerospace systems, chemicals, and power and transportation products.

If approved, the $ 45 billion stock transaction would represent the
largest industrial merger in American history.

The lawsuit claims that Honeywell executives painted an unrealistically
positive picture of the company's financial health following its merger
with AlliedSignal Inc. last year. While executives promised substantial
growth and cost-cutting because of the merger, the new company actually
produced 1 financial returns far below expectations, the suit claims.

"Everything was real rosy, everything you read that was put out by the
management of the company,"McDonald said. "And all of a sudden, the stock
went south... . I was down about $ 200,000 in my stock, so I'm a little
bit upset."

A Honeywell spokesman said the civil suit and other similar class-action
lawsuits filed against the company several months ago have no merit and
lack any factual foundation.

"Basically these lawsuits were filed by firms known to launch similar
baseless suits whenever a company's stock declines,"said the spokesman,
Tom Crane. He declined further comment.

McDonald said he had worked at AlliedSignal for 27 years, building
turbine engines, before he was laid off in 1993. Over that time, he said,
he purchased the company's stock as part of his 401(k) retirement
account, only to have it "almost cut in half"when the stock fell this

McDonald alleges that top Honeywell executives were motivated to mislead
investors about the company's performance because they stood to reap
financial benefits through an incentive program if the newly formed
corporation's stock remained high.

By the time they announced the company's poor results in June, blaming,
in part, rising oil prices and the decline of the euro, several of those
executives had cashed in large portions of their individual stock
holdings, he said.

The suit claims that Michael R. Bonsignore, Honeywell's chairman and
chief executive officer, sold more than 80,000 shares of his company
stock this year, worth $ 4.4 million. Several other top executives made
similar sales before the news of the company's poor performance was
released, McDonald's suit alleges.

This represented illegal insider trading, he maintains.

"They knew, because they cashed in right before. That's my
understanding,"McDonald said. "There was a lot of selling going on."

Honeywell stock had dropped from just over $ 59 a share in early June to
a 12-month low of $ 33.69. After news of the proposed General Electric
purchase was made public, Honeywell's stock price soared, closing at $

Although judges have been quick to toss out spurious stockholder suits,
those held to be valid can penalize corporate 1 wrongdoing quite heavily,
said Harvey J. Goldschmid, a Columbia Law School professor who is an
expert on corporate and securities law.

Most of the successful civil actions are settled out of court, resulting
in cash payouts to stockholders, he said.

"If there's merit, it could be expensive. Some of them bring substantial
settlements,"Goldschmid said."On the balance, these cases have a healthy
deterrent effect and encourage compliance with the law."

It is unlikely that McDonald's suit would affect General Electric's
acquisition of Honeywell, Goldschmid said. However, he believes that the
pending litigation would have been taken into account had it been known
before the deal was struck.

Although it is no consolation, McDonald says he believes he wasn't the
only shareholder duped. Honeywell executives successfully misled
sophisticated financial analysts and professional stock market investors,
he said. "Even the Big Boys were fooled,"he said. (The Record (Bergen
County, NJ), October 26, 2000)

LAXTON GROUP: Settle with Condo owners over Alleged Leaks on Buildings
Coal Harbour condominium owners who sued developer John Laxton's
companies, their contractor and sub-contractors over leaks and other
building deficiencies have accepted an out-of-court settlement totalling
more than $3.2 million.

It is unclear how much of the settlement was paid by Laxton's two firms,
or by 11 other defendants, since a confidentiality agreement prevents the
parties from discussing the deal. ''I can't confirm or deny the amount of
the settlement,'' said Vancouver lawyer Rose-Mary Liu Basham, who acted
for the plaintiffs at Harbourside Park, twin waterfront condo towers at
588 Broughton and 555 Jervis. ''There's a confidentiality provision. I
don't know how much money each defendant put up.''

While neither Basham or John Logan, who defended Laxton's companies,
would disclose the settlement amount, strata council chair Tom Ruzicka
said Wednesday it was ''a little over $3.2 million.''

Basham would only say a mediated settlement was completed after the
lawsuit, launched in July 1997, had dragged through B.C. Supreme Court
for more than three years. A trial had been scheduled to run for six

Meanwhile, Logan -- who represented Laxton's companies, Noel Developments
Ltd. and SPF Properties Inc. -- said: ''I can confirm there has been a
settlement, but I can't confirm the price. It's all confidential.''

Basham said the plaintiffs ''don't care who pays as long as we're getting
some money.''

In their statement of claim, the plaintiffs had alleged deficiencies in
the 382-unit twin towers, including significant water leakage into the
buildings and parkade, poor and ineffective drainage, numerous plumbing
problems, chronic failures in the elevator system, and improperly
installed lighting in common areas. They also alleged the architectural
concrete work was esthetically poor.

The defendants included Noel and SPF, as well as Metro-Can Construction
(HS) Ltd., Metro-Can Construction Ltd., Allan Window Systems Inc., Baker
McGarva Hart Inc., Intertek Testing Services, Levelton Engineering Ltd.,
Broadway Refrigeration & Air Conditioning Co., JR Trory & Company, Golden
City Roofing and Waterproofing Ltd., Westco Contracting Ltd., and
Protection Engineering Inc.

Noel Developments pre-sold the Harbourside Park units in mid-1993 at the
height of Vancouver's condo boom. The project was completed in two
phases, the Broughton tower in late 1995 and the Jervis building in early
1996. The units ranged in price from about $115,000 for a studio to more
than $ 700,000 for a penthouse unit. Since then, resale values have
deteriorated and there has been a litany of lawsuits and countersuits
involving the developer, purchasers, contractors, sub-contractors and
suppliers, with a number of cases still unresolved.

At an extraordinary general meeting in late May, the about 350 individual
owners of Harbourside Park, otherwise known as Strata Plan LMS 2064,
approved a motion to accept the $3.2-million sum ''in full and final
settlement'' of all their claims.

The projected cost of repairs to the two buildings ranged from a low of
$1.3 million -- as estimated by Trow Consulting Engineers, hired by the
defendants -- to a high of $10 million, plus GST, estimated by RDH
Building Engineering, hired by the plaintiffs. ''The $1.3 million figure
is ridiculously low, but the $10 million figure is not likely to be
awarded by the trial judge,'' Basham said in her May 2 letter. ''The real
figure is in the range of $2.7 to $8 million.'' She noted if the condo
owners choose to undertake the full extent of repairs recommended by RDH,
the cost per unit would be about $29,000. After applying the settlement
sum of $3.2 million, each owner would still be on the hook for about
$20,400. Ruzicka said the strata council has struck a remediation
committee to consider various options. ''The owners must decide what to
fix,'' he said. ''The cost is still to be determined.'' (The Vancouver
Sun, October 26, 2000)

MarchFIRST, INC: Wolf Haldenstein Files Securities Suit in Illinois
Wolf Haldenstein Adler Freeman & Herz LLP is commencing a class action
lawsuit in the United States District Court for the Northern District of
Illinois, Eastern Division on behalf of all purchasers of marchFIRST,
Inc. securities during the period between July 25, and October 23, 2000,
inclusive (the "Class Period"). A copy of the complaint may be viewed on
the Wolf Haldenstein web site located at www.whafh.com.

The complaint charges marchFIRST and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. As
alleged in the Complaint, during the Class Period, defendants, through
the issuance of false and misleading statements published over major news
wires and made to securities industry analysts, endeavored to inflate the
price of the Company's securities. As detailed therein, defendants, while
in possession of information indicating that the Company's third-quarter
2000 would be a disappointment for a variety of reasons, falsely told
analysts that the Company's third-quarter 2000 projections were on track
to meet analysts consensus expectations and the Company's products were
well received by the Company's customers. In fact, as later disclosed by
defendants at the conclusion of the Class Period, the Company's account
receivables had substantially swelled and unrecoverable accounts mandated
a substantial write-down during the third-quarter or, in the alternative,
the creation of a substantial reserve to offset against the potential

On October 24, 2000, the Company shocked the investment community when it
announced that third-quarter earnings of $2 million, or one cent per
share, were far less than the 20 cents a share that analysts expected
from the Company, according to estimates from First Call. The massive
earnings shortfall sent the Company's common stock plummeting, and by the
end of the day, the stock had lost more than half its value, dropping
58.7 percent to close at $4.88.

Contact: Wolf Haldenstein Adler Freeman & Herz LLP Michael Miske, George
Peters, Fred Taylor Isquith, Esq., or Gregory M. Nespole, 800/575-0735
classmember@whafh.com or gnespole@aol.com

MASSACHUSETTS: Judge Puts off Order for Services for Mentally Retarded
A federal judge has put off implementing an order he issued in July to
require the state to provide housing and support services to some 2,600
mentally retarded adults in Massachusetts who are eligible for Medicaid
services and have been languishing on waiting lists.

Lawyers for the state Department of Mental Retardation told US District
Judge Douglas P. Woodlock that his order was too vague and failed to
spell out how to proceed with the task of complying with it by Nov. 3.

Woodlock's July ruling was intended to implement the victory of family
members of mentally retarded adults, who had brought a class-action suit
over the state's failure to provide services as required under the
Medicaid Act. Woodlock directed the state to fulfill its obligation to
the 2,600 people on a waiting list.

However, the state argued that DMR is not clear on just what services
should be provided to whom, and how they should be offered.

A hearing will be held Nov. 3.

Another question that could be determined then is how much the order will
cost taxpayers. Some officials estimate the cost could be as high as $150

McCaffrey: Doctors Can 'Recommend' Marijuana to Patients, Says CA Judge
A federal judge in San Francisco has ruled that free speech rights permit
physicians to discuss -- and even recommend -- the use of medical
marijuana to patients with AIDS and cancer without violating the terms of
the Controlled Substances Act. Conant et al. v. McCaffrey et al. , No. C
97-00139 (N.D. Cal., Sept. 8, 2000).

Ruling on cross-motions for summary judgment in a class-action suit filed
by AIDS patients and physicians who treat them, U.S. District Judge
William Alsup said there was no authority behind a policy threatening the
revocation of federal controlled substances prescription rights for
doctors who did so.

The policy was issued in December 1996 by lead defendant Barry R.
McCaffrey, director of the Office of National Drug Control Policy, in
response to the then-recent passage of the Compassionate Use Act in
California. The state initiative permits "seriously ill" Californians the
right to obtain and use marijuana for medical treatment of AIDS and other
ailments in cases where no other remedy has proven effective.

The federal government has challenged the enactment of the California
initiative on various fronts, elevating one suit over the operation of
medical marijuana buyers' clubs to the U.S. Supreme Court, where it is
now pending. United States v. Oakland Cannabis Buyers' Cooperative, No.
00-151, application for stay granted (U.S., Aug. 29, 2000); see P. 3.

In the instant action, the government has argued that permitting
physicians to recommend or prescribe a Schedule I controlled substance,
such as marijuana, is inconsistent with the "public interest." The United
States echoed McCaffrey's edict that the Drug Enforcement Administration
will move to terminate the federal narcotics registrations of those who

The plaintiff class is led by Dr. Marcus Conant, who has practiced
medicine in San Francisco for more than 30 years and now serves as the
medical director of the Conant Medical Group, a large private AIDS
practice. Other plaintiff class members include the People With HIV/AIDS
Action Coalition Inc. and Keith Vines, an AIDS patient who credits
medical marijuana with helping save his life. Vines says he turned to the
drug after learning he could not tolerate other remedies, such as
Marinol, a synthetic derivative of marijuana's primary active ingredient.

Judge Alsup both granted and denied each party's motion for summary
judgment in part, concluding that a government policy forbidding a
physician from discussing treatment options with a patient violates the
plaintiffs' First Amendment rights. He added that the DEA's threat to
"de-register" physicians who do so exceeded the department's scope of
authority under the Controlled Substances Act, 21 U.S.C. @ 801.

"Significantly, the government admits that revocation is not authorized
where a doctor discusses the pros and cons of marijuana use with a
patient," wrote Judge Alsup. "Yet the government claims the doctor who
crosses a statutory line when the discussion melds into a recommendation.
Also of significance, both sides acknowledge that a doctor may not, under
the statute, actually prescribe or dispense marijuana. Plaintiffs do not
seek to do so. The focus is on 'recommend' and whether a statutory line
can really be drawn between discussions of pros and cons versus

The judge said that contrary to the government's argument, it is not true
that a "mere recommendation" would necessarily lead to the commission of
a federal offense, but instead could lead to "lawful and legitimate

People with AIDS or cancer, based on such a recommendation from their
doctors, could honor the law but work to urge the federal government to
change it by petitioning Congress or federal authorities. Other options
for such persons, Judge Alsup added, could include applying for
participation in a federally approved experimental marijuana therapy
program or traveling to another country where such treatments are legal.

Judge Alsup cautioned that doctors who give insincere recommendations
without a medical basis and with knowledge that they would be use to
illegally obtain marijuana would be subject to DEA revocation. "On the
other hand, doctors are entitled to be confident that their good-faith
recommendations based on honest medical judgments will not be the basis
for DEA revocations when they foresee their recommendations might be used
by the patients to obtain marijuana from sources illegal under federal
law." (AIDS Litigation Reporter, September 25, 2000)

MORGAN STANLEY: Fires Woman in Sex Bias Case; EEOC Presses to Sue
Morgan Stanley Dean Witter has fired Allison Schieffelin, the woman at
the center of a class-action, sex-discrimination case at the Wall Street
investment bank. The action comes as lawyers for the U.S. Equal
Employment Opportunity Commission press to sue Morgan Stanley on behalf
of Schieffelin and scores of other women in Morgan Stanley's
institutional equity division. If EEOC commissioners approve, a lawsuit
will be filed within weeks.

In addition, the EEOC has stepped up efforts in four other bias cases
filed by black women at Morgan Stanley, asking a U.S. District Court
judge to force the firm to comply with two subpoenas and turn over
corporate documents. That request is scheduled to be heard Nov. 14.

Morgan Stanley spokesman Ray O'Rourke said Schieffelin, a senior
saleswoman, was fired for "insubordination and inappropriate behavior."

In documents filed with the EEOC, Schieffelin says she had an argument
with a female supervisor. Schieffelin alleged the supervisor "made
unreasonable, baiting, and insulting remarks" to her and that the two
women "had a brief exchange of words," during which the supervisor
allegedly challenged Schieffelin with the question, "Why don't you just

Elizabeth Grossman, a lawyer for the EEOC, could not comment on the
firing but said, "The commission is very concerned about employers who
retaliate against employees who have filed EEOC charges." The EEOC ruled
in June that Morgan Stanley had discriminated against Schieffelin and
others in her division. Schieffelin filed charges in November 1998
alleging that bias was behind her failure to gain a high-level promotion
at the firm. "There is certainly strong evidence from what we see of a
pattern against women," says Wayne Outten, Schieffelin's attorney.

Several of the allegations regarding pay, promotion and retaliation were
echoed in the complaints filed by the four black women, who also alleged
race discrimination.

Because of the pending EEOC investigations, Morgan Stanley's O'Rourke
said he could not comment on those cases.

Last month, Morgan Stanley settled four discrimination lawsuits,
including a highly publicized race-discrimination case filed by Christian
Curry, a junior financial analyst fired for alleged expense account
abuses. (USA Today, October 26, 2000)

NORTH CAROLINA: Division of Motor Vehicles Faces Suit on Pay Disparities
Seven officers have filed a class-action lawsuit against the North
Carolina Division of Motor Vehicles, claiming the agency does not base
starting salaries and pay increases on experience and education. The
officers, who enforce laws against truck drivers, have asked a Superior
Court judge to order the agency to conduct a pay study to address the
alleged disparities. "I've got guys with degrees and 10 years of
experience getting paid less than guys with two years experience," said
Raleigh lawyer Janet Pueschel.

DMV spokesman John Parks said these same officers benefited from a 1998
pay study, which resulted in $3.6 million being distributed to about 500
officers. Those officers make between $23,194 and $40,944.

Pueschel said agency officials didn't distribute the $3.6 million fairly,
in violation of a state law that requires agencies to lay out a rational
basis for salary decisions.

Parks said DMV officials considered education, experience and
certification when deciding how that money would be divided, and its plan
was approved by personnel officials and a legislative committee.

DMV officials have refused to ask the Office of State Personnel to study
whether these officers' positions should be reclassified and their
salaries brought in line with other state law enforcement officers,
according to the suit.

Another pay study is underway to adjust salaries of all state law
enforcement officials, said Stephen Davis, director of the Office of
State Personnel. (The Associated Press State & Local Wire, October 26,

ROSENSTOCK: 2nd Cir. Upholds Dismissal of Claims over Freeze-Out Merger
The Second Circuit affirmed a Brooklyn federal judge's order dismissing a
securities fraud action brought against a corporate officer by minority
shareholders who alleged that misrepresentations given in a proxy
statement led to the forced sale of their holdings in a freeze-out
merger. The panel stated that the U.S. Supreme Court's holding in
Virginia Bankshares Inc. v. Sandberg applies to claims brought under
Section 10(b), and that the plaintiffs failed to show causation based on
the approval of the merger. Grace et al. v. Rosenstock et al., No.
98-9618 (2d Cir., Aug. 25, 2000).

The plaintiffs here owned a 1.25 percent stake in Briggs Leasing Corp., a
publicly held auto leasing concern. The three defendant officers named to
the action owned an aggregate 72 percent of the outstanding stock. In
1985, the individual defendants opted to take Briggs private in a
freeze-out merger; to that end, they incorporated the defendant Briggs
Acquisition Corp. with the intent to merge Briggs and BAC and buy out
Briggs' minority shareholders.

The challenged proxy statement was issued in January 1985. Shareholders
were informed that due to the majority interest held by BAC, approval of
the merger was guaranteed irrespective of the minority shareholders'
votes, and that the minority shareholders would be forced to sell at
$1.50 a share. The proxy statement also informed dissenting shareholders
of their right to sue for appraisal. The merger was consummated the
following month.

The instant litigation was filed in June 1985, certified as a class
action the following year, and then essentially was allowed to languish
until 1993. The complaint alleged multiple material omissions and false
representations in the proxy statement, including understatement of the
compensation paid by Briggs to the individual defendants, and a better
than 50 percent undervaluation of the real estate owned by Briggs.

In 1993, default judgments were entered against the corporate defendants;
four years later, all but one defendant -- officer Robert Genser --
settled for an aggregate $10.9 million. The Eastern District of New York
also mooted the appraisal action that the plaintiffs pursued concurrently
in state court.

The district judge granted Genser's dismissal motion in October 1998,
applying the rationale of Virginia Bankshares, 501 U.S. 1083 (1991),
which concerned claims under Section 14(a) of the Securities Exchange
Act, to the plaintiffs' Section 10(b) claims. The lower court concluded
that the plaintiffs could not make out the causation element of their
claims because their votes were not needed for approval of the Briggs-BAC

In its affirmance, the U.S. Court of Appeals for the Second Circuit found
that the claimants "have advanced no logical rationale -- and we see none
-- for allowing a claimant to prevail on a misleading-proxy-statement
claim under Sec. 10(b) and Rule 10b-5 without proving causation, when
causation is required with respect to such a claim under Sec. 14(a) and
Rule 14a-9, which deal expressly with misleading proxy statements."

The panel held that Virginia Bankshares applied to misleading proxy
statement claims brought under Section 10(b), and found that the
plaintiffs are obliged to "present nonspeculative evidence of loss
causation and transaction causation."

The Second Circuit observed that at all relevant times, the individual
defendants controlled enough shares to approve the merger, "and there is
no suggestion tha they acquired those shares by means of fraud."
(Corporate Officers and Directors Liability Litigation Reporter,
September 25, 2000)

SONIC INNOVATIONS: Milberg Weiss Files Securities Lawsuit in Utah
Milberg Weiss (http://www.milberg.com/sonic/)announced on October 25
that a class action has been commenced in the United States District
Court for the District of Utah on behalf of purchasers of Sonic
Innovations, Inc. ("Sonic Innovations") (NASDAQ:SNCI) securities during
the period between May 2, 2000 and October 24, 2000 (the "Class Period").

The complaint charges Sonic Innovations and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. Sonic
Innovations designs, manufacturers and markets digital hearing aids and
hearing aid components. The complaint alleges that from May 2, 2000
through October 24, 2000, Sonic Innovations saw its stock price soar from
its IPO price of $14 per share to as high as $25 per share as Sonic
Innovations misrepresented the true status of its relationship with
Starkey Laboratories, Inc. ("Starkey"), concealing the fact that Starkey,
one of Sonic Innovations's largest customers: had millions of dollars
worth of Sonic Innovations's product in its inventory that it could not
sell; (b) was refusing to pay for product previously shipped to it by
Sonic Innovations; and (c) considered the April 19, 1999 OEM Agreement to
be void as Sonic Innovations had materially breached the OEM Agreement
due to, among other things, materially breaching the quality control
provisions. The complaint further alleges that the defendants knowingly
concealed the fact that they were informed prior to the IPO that the IC-1
chips the company was shipping to Starkey were defective which would
jeopardize its contract with Starkey but would allow defendants to
complete the IPO and artificially inflate Sonic Innovation's Q2
projections, its Q2 results and its Q3 projections/results.

As a result of defendants' alleged false statements/omissions, Sonic
Innovations's stock traded at inflated levels during the Class Period,
increasing to as high as $25 on June 20, 2000 and tumbled to$5-1/2 on
October 25, 2000 as defendants began to partially reveal the true status
of the Company's relationship with Starkey.

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

TRANSPORTATON DISCRIMINATION: Century Long Struggle for End Goes on
America transportation policies, at least in the figurative sense, still
relegate people of color to the back of the bus. For more than a century,
people of color have struggled to end transportation discrimination in
the form of unequal treatment on buses and trains. This form of
apartheid, which clearly violates constitutionally guaranteed civil
rights, was decreed in 1896 by Plessy v. Ferguson, a U.S. Supreme Court
decision that upheld Louisiana's segregated "white" and "colored" seating
on railroad cars. This decision ushered in the infamous doctrine of
separate but equal." Plessy not only decreed apartheid in transportation
facilities but also served as the legal basis for racial segregation in
education until the Supreme Court's Brown v. Board of Education of Topeka
decision overturned it in 1954.

The modern civil rights movement has its roots in transportation. [1] In
1953, over half a century after Plessy vs. Ferguson relegated blacks to
the back of the bus, African Americans in Baton Rouge, Louisiana, staged
the nation's first successful bus boycott. Two years later, on December
1, 1955, Rosa Parks refused to give up her seat at the front of a
Montgomery, Alabama, city bus to a white man. In so doing, Parks ignited
the modern civil rights movement. By the early 1960s, young "freedom
riders" risked death by riding Greyhound buses into the deep South. This
was their way of fighting transportation apartheid and segregation in
interstate travel.

Today, despite those heroic efforts, transportation remains a
civil-rights and quality-of-life issue. All communities are still not
created equal. Indeed, some communities accrue benefits from
transportation development projects, while others bear a disproportionate
burden in paying the costs. Generally, benefits are more widely dispersed
among the many travelers who use new roads, while costs or burdens are
more localized. Having a seven-lane freeway next door, for instance, is
not a benefit to someone who does not own a car.

Lest anyone dismiss transportation as a tangential racial issue, consider
that Americans spend more on transportation than any other household
expense except housing. The average American household spends a fifth of
its income--or about $ 6,000 a year--for each car it owns and operates.
Americans also spend more than 2 billion hours a year in their cars.
According to the latest figures published in the Federal Highway
Administration's Highway Statistics, total vehicle miles traveled in the
United States increased by 59 percent from 1980 to 1995. [2]

Federal tax dollars subsidized many of the roads, freeways, and public
transit systems in our nation. Many of these transportation projects had
the unintended consequences of dividing, isolating, and disrupting some
communities while imposing inequitable economic, environmental, and
health burdens on them.

                          Clinton Weighs in

On February 11, 1994, President Clinton signed Executive Order 12898,
"Federal Actions to Address Environmental Justice in Minority Populations
and Low-Income Populations." This executive order reinforces what has
been law for three decades. Indeed, the Civil Rights Act of 1964
prohibits discriminatory practices in programs receiving federal funds.

Environmental requirements also reinforce a number of regulatory laws and
statutes, including Title VI of the Civil Rights Act of 1964, the
National Environmental Policy Act of 1969 (NEPA), and the Federal-Aid
Highway Act of 1970. Title VI of the Civil Rights Act states,

No person in the United States shall, on the grounds of race, color, or
national origin, be excluded from participation in, be denied the
benefits of, or subjected to discrimination under any program or activity
receiving Federal financial assistance. [3]

The 1994 executive order also focuses on NEPA, a law that established
policy goals for the protection, maintenance, and enhancement of the
environment. NEPA's goal is "to ensure for all Americans a safe,
healthful, productive, and aesthetically and culturally pleasing
environment. NEPA requires federal agencies to prepare a detailed
statement on the environmental effects of proposed federal actions that
significantly affect the quality of human health.

The executive order calls for improved methodologies for assessing and
mitigating health effects from multiple and cumulative exposure. It
provides for collection of data on low-income and minority populations
that may be disproportionately at risk. It calls for environmental health
impact studies on people who subsist on fish and wildlife, and it
encourages those affected populations to participate in the various
phases of assessment and mitigation.

On April 15, 1997, the U.S. Department of Transportation issued its Order
on Environmental Justice, requiring the U.S. DOT to comply with the
executive order within the framework of existing laws, regulations, and
guidance. [4] In December 1998, the Federal Highway Administration issued
an order requiring the agency to incorporate environmental justice in all
its programs, policies, and activities.

                              Achieving Equality

Transportation is a key component in addressing poverty, unemployment,
and equal opportunity goals while ensuring equal access to education,
employment, and other public services. Many poor people and people of
color who are concentrated in central cities are demanding better
transportation that will take them to the job-rich suburbs. It would be
ideal if job centers were closer to the inner-city residents' homes, but
few urban core neighborhoods have experienced an economic revitalization
that can rival the current jobs found in the suburbs.

In the real world, costs and benefits associated with transportation
developments are not randomly distributed. The inequitable effects of
transportation projects can be subsumed under three broad categories:
procedural, geographic, and social inequity.

Procedural inequity results when transportation decisions are not carried
out in a uniform, fair, and consistent manner with involvement of diverse
public stakeholders.

Geographic inequity results from the geographic and spatial impacts--both
positive and negative--of transportation decisions. These impacts affect
rural, urban, and central-city neighborhoods differently. Some
communities are physically located on the wrong side of the tracks and
often receive substandard services. Environmental justice concerns arise
when transportation systems disproportionately favor one geographic area
or spatial location over another.

Social inequity results when transportation benefits and burdens are not
randomly distributed across population groups. Generally, transportation
benefits accrue to the wealthier and better educated segments of society,
while transportation burdens fall disproportionately on people of color
and individuals at the lower end of the socioeconomic spectrum.

How transportation is defined and measured can often determine how equity
is evaluated. [5] The use of vehicle mileage, as a measure of travel and
traffic congestion, tends to favor more spending on infrastructure
improvements and less on other transportation alternatives. [6] Also,
transportation planners use other variables in their transportation
modeling such as vehicle miles traveled, which favors people who drive
their automobile more miles than average, or passenger miles traveled,
which favors people who travel more than average.

Researchers at the University of Iowa, among others, have identified a
dearth of data measuring the impacts of transportation investments on
environmental justice. [7] The researchers call for, among other things,
improved baseline assessments that estimate current levels of
inaccessibility and adverse impacts, improved methods for assessing the
mobility of various population segments, air pollution and noise models
capable of analysis on the neighborhood scale, more-effective methods of
gathering information from affected populations and gauging neighborhood
needs for historic preservation, better approaches for assessing travel
needs of low-income populations and minority populations, and improved
techniques for communicating probable impacts of proposed changes to
transportation systems.

                        Old War, New Battles

Rosa Parks' now-famous challenge to the practice of segregated seating on
buses, the Montgomery bus boycott, and the freedom riders constituted a
frontal attack on discriminatory transportation policies and practices.
Nevertheless, today, millions of Americans are fighting to just get on
the bus. They are also struggling to get public transit systems linked to
jobs and economic activity centers.

Currently, only about 5.3 percent of all Americans use public transit to
get to work. [8] Most American workers opt for private automobiles, which
provide speed and convenience, and most of them forgo car pooling.
Indeed, nationally, 79.6 percent of commuters drive alone to work. [9]
Generally, people who commute using public transit spend twice as much
time traveling as those who travel by car. Consider, for instance, that
the average commute takes about 20 minutes in a car, 38 minutes on a bus,
and 45 minutes on a train. People of color are twice as likely as their
white counterparts to use non-auto modes of travel-- public transit,
walking, bicycles-- to get to work.

From New York City to Los Angeles, grassroots leaders are demanding an
end to unjust and unequal transportation policies and practices. They are
demanding an end to the kind of transit racism that, for example, killed
17-year-old Cynthia Wiggins of Buffalo, New York. Wiggins, an African
American, was crushed by a dump truck while crossing a seven-lane highway
because Buffalo's Number Six bus, an innercity bus used mostly by African
Americans, was not allowed to stop at the suburban Walden Galleria Mall.
Cynthia had not been able to find a job in Buffalo but was able to secure
work at a fast-food restaurant in the suburban mall. The bus stopped
about 300 yards short of the mall.

The Wiggins family and other members of the African American community
charged the Walden Galleria Mall with using the highway as a racial
barrier to exclude some city residents. The high-profile trial, argued by
Johnnie L. Cochran Jr., who had also represented O.J. Simpson, began on
November 8, 1999. The lawsuit was settled 10 days later when the mall
owners, Pyramid Companies of Syracuse, agreed to pay $ 2 million of the $
2.55 million settlement to Wiggins' four-year old son. The bus company,
Niagra Frontier Transportation Authority, agreed to pay $ 300,000, and
the truck driver, John P. Bunch, agreed to pay $ 250,000. [10]

The Buffalo case is not an isolated incident. Residents in Los Angeles
also led a successful frontal assault on transit racism. In
Labor/Community Strategy Center v. Los Angeles Metropolitan
Transportation Authority, a class action lawsuit filed on behalf of
350,000 bus riders, the plaintiffs argued that the Los Angeles
Metropolitan Transit Authority had used federal funds to pursue a policy
of raising costs for bus riders--mostly the poor and people of color--and
reducing quality of service in order to fund rail and other projects in
predominately white, suburban areas (see "Mean Streets" in this issue of

In 1996, the Labor/Community Strategy Center won an historic out-of-court
settlement against the Los Angeles MTA." In the process, the group was
able to win major fare and bus pass concessions. They also forced MTA to
spend $ 89 million on 278 new buses that run on clean-burning compressed
natural gas. The struggle epitomizes grassroots groups' challenges to
transit racism.

Transit racism is also under siege in Macon, Georgia, a city whose
population is evenly divided between blacks and whites. [12] Over 90
percent of the bus riders in Macon are African Americans, and more than
28 percent of Macon's African Americans do not own cars, compared with
only 6 percent of the city's whites.

A disproportionate share of transportation dollars in Macon and Bibb
County, however, have gone to road construction and maintenance at the
expense of the bus system. In 1993, Macon and Bibb County devoted more
than $ 33 million of federal, state, and local funds for roads, streets,
and highways, of which some $ 10 million came from federal funds. During
the same year, local officials accepted no federal funds for the
Macon-Bibb County Transit Authority and budgeted only $ 1.4 million for
public transportation. Overall, the bulk of federal transportation monies
received by Macon and Bibb County have been accepted to support road
construction in mostly white suburban areas outside the reach of many
African Americans. [13]

In 1994, African Americans in Macon filed a class action lawsuit
challenging Macon and Bibb County's use of federal funds under the
Intermodal Surface Transportation Efficiency Act. In 1998, the lawsuit
was settled out of court, with the city of Macon and Bibb County agreeing
to accept federal funds for the first time to support their bus system.

                               Metro Atlanta

Racism has kept the Atlanta region geographically divided. Indeed, race
is at the heart of Atlanta's regional transportation dilemma. For years,
1-20 served as the racial demarcation line in the region, with blacks
located largely to the south and whites to the north. The bulk of the
region's growth in the 1990s occurred in Atlanta's northern suburbs-areas
where public transit is almost nonexistent. Between 1990 and 1997, the
Atlanta region added 475,600 persons.

Population growth was slow in the city of Atlanta, increasing by only
2,647 or less than one percent of the total population gain. On the other
hand, the northern portion of the region gained 325,939 residents or 68.5
percent of the region's population growth; the southern part of the
region gained 147,014 persons or 30.9 percent of the population gain
during the period.

In just one 12-month span--from April 1998 to April 1999--metro Atlanta
grew by 94,300 people. This was the second-largest increase in the
region's history. On the other hand, the city of Atlanta grew by only 900
people during this same period. [14] In 1998, population growth was 100
times greater in Atlanta's suburbs than in Atlanta's urban core.

Although the Atlanta Regional Commission predicts some population
slowdown in the coming years, Gwinnett, Cobb, and Fulton counties added
large numbers of people in the later 1990s. [15] Gwinnett County's
population of 499,200 grew by 6.6 percent, Cobb County's population of
550,000 grew by 2.7 percent, and Fulton County's population of 773,000
grew by 1.7 percent during 1997 and 1998. Experts forecast the region to
grow by a million more people by 2025. Most of this population increase
is expected in Atlanta's sprawling suburbs.


The 10-county Atlanta metropolitan area has a regional public transit
system only in name. In the 1960s, the Metropolitan Atlanta Rapid Transit
Authority was hailed as the solution to the region's growing traffic and
pollution problems; but today, MARTA serves just two counties, Fulton and

The first referendum to create a five-county rapid rail system failed in
1968, and the vote was largely along racial lines. In 1971, the city of
Atlanta, with a minority population of 68 percent, and Fulton and DeKalb
counties, with about 50-percent minority populations each, approved a
referendum for a percent sales tax to support a rapid rail and feeder bus
system, but voters in the mostly white suburban Cobb County, with a
13-percent minority population, and Gwinnett County, with a 10-percent
minority population, rejected the MARTA system.

Nevertheless, MARTA has since grown from 13 rail stations in 1979 to 36
rail stations in 1999, and two additional stations--Sandy Springs and
North Springs--along the north line are under construction and are
expected to open in December 2000. [16] These two northern rail stations
are the only MARTA lines currently under construction.

With its $ 270.4 million annual budget, MARTA operates 700 buses and 240
rail cars, and the system handles over 534,000 passengers on an average
weekday. MARTA's 154 bus routes cover 1,531 miles and carry 275,000
passengers on an average weekday, while its rail lines cover 100 miles
and carry 259,000 passengers.

Just how far MARTA lines extend has proved to be a thorny issue. Talk of
expanding the MARTA system into the northern, mostly white, suburbs
raises a red flag among many suburbanites. Many suburbanites object to
MARTA for fear it would lower their property values, increase crime, and
bring "undesirable" elements into their communities, parks, and shopping
centers. For years, MARTA's acronym was jokingly referred to as "Moving
Africans Rapidly through Atlanta."

Even who pays the tab for MARTA's budget is debatable. MARTA's operating
budget comes from sales tax (46 percent), fares (34 percent), and the
Federal Transit Administration and other sources (20 percent). But only
Fulton and DeKalb county residents pay for the upkeep and expansion of
the system with a one-cent MARTA sales tax.

A recent rider survey revealed that 78 percent of MARTA's rail and bus
riders are African Americans and other people of color. [17] Whites make
up 22 percent of MARTA riders. More than 45 percent of MARTA riders live
in the city of Atlanta, 14 percent live in the remainder of Fulton
County, 25 percent live in DeKalb County outside the city, and 16 percent
live in outlying counties. MARTA provides nearly 21,000 parking spaces at
23 of its 36 transit stations, and parking at MARTA lots is free except
for the 1,342 overnight parking slots that cost $ 3 per day. All of the
overnight lots are located on MARTA's North Line, where they serve
affluent, mostly white, suburban communities. For example, the far-north
stops on the orange lines--Doraville and Dunwoody stations--have proven
to be popular among suburban air travelers. It is becoming increasingly
difficult to find a parking space in some MARTA lots.

A license tag survey from 1988 through 1997, revealed that 44 percent of
the cars parked at MARTA lots were from outside the Fulton/DeKalb county
service area. [18] It appears that Fulton and DeKalb county taxpayers are
subsidizing people who live in outlying counties and who park their cars
at the park-and-ride lots and ride on MARTA trains into the city and to
Hartsfield Atlanta International Airport, the busiest airport in the

Both the Doraville and Dunwoody stations provide fast, comfortable,
traffic- free rides to Hartsfield Airport. By paying only $ 1.50 for the
train ride--but not the MARTA sales tax--many suburbanites who live
outside Fulton and DeKalb counties get an added bonus since they don't
have to park in airport satellite parking lots, which have fees that
range from $ 6 dollars up.

On the other hand, poor blacks who live in Atlanta pay the MARTA sales
tax, as well as the $ 1.50 MARTA fare, and help subsidize MARTA's
operation for riders who live outside the service area.

Between 1990 and 1997, Atlanta's northern suburbs reaped the lion's share
of new jobs and economic development. During that period, Atlanta's
northern suburbs added 273,000 jobs. This accounted for 78.4 percent of
all jobs added in the region. Another 70,500 jobs or 20.3 percent were
added in the southern part of the region. Only 4,500 jobs were added in
the region's central core of Atlanta, representing only 1.3 percent of
all jobs created during the height of the region's booming economy.

Clearly, Atlanta's people of color and the poor could benefit by having
public transit extended into the job-rich suburbs. Public transit,
however, does not go where most of the region's jobs are located.

                            Driving and Air Quality

The Atlanta metropolitan area is in violation of the Clean Air Act. The
region exceeds the National Ambient Air Quality Standards for ozone by 33
to 50 percent. Cars, trucks, and buses are the largest source of this
pollution. After making some progress in reducing nitrogen-oxide
emissions in the early 1990s, as a result of cleaner-running cars and
tighter emission inspections, the region is now experiencing reversals in
air quality. Nevertheless, in the summer of 1999, the Atlanta region
experienced 37 consecutive ozone alert days.

On average, people in the Atlanta region drive 34 miles per day--50
percent farther than residents in the Los Angeles area. The Atlanta
region had more than 2.5 million registered vehicles in 1995, up from 1.9
million in 1986. The largest increase in registered vehicles during this
period came in the northern suburban counties of Gwinnett and Cobb. These
two counties alone added more than 261,000 vehicles to the region's
crowded roads between 1986 and 1995. [19]

The Atlanta Regional Commission is the metropolitan planning organization
responsible for land-use and transportation planning in the region. To
receive federal transportation funds, the commission was required to
develop a transportation-improvement plan that would conform to federal
standards. Because of the regions severe ozone nonattainment, the
commission developed an interim transportation improvement plan, which
the federal government criticized, claiming that the plan concentrated
too heavily on roads and failed to show how it would improve the region's
poor air quality. [20] Federal officials have also identified public
participation as a major problem in the Atlanta Regional Commission's
planning and decision making. [21]

In 1998, two coalitions of citizens' groups challenged the Atlanta
Regional Commission's leadership, planning, and decision making, which is
tilted toward building new roads rather than expanding public
transportation services. Several environmental organizations and a
coalition of African American environmental justice groups, along with
neighborhood and civic groups, filed a notice to sue the commission and
state and federal governments under the Clean Air Act for approving 61
new road projects funded under the interim transportation improvement
plan. The groups contended that the new roads, which were grandfathered
under recent Clean Air Act amendments, would exacerbate the region's
already severe problems with air quality. [22]

In addition to challenging the illegal exemption of these grandfathered
road projects, the coalition charged that the highway-dominated Atlanta
Regional Commission plan would disproportionately and adversely affect
the health and safety of African Americans and other people of color.
More roads translates into more cars, more congestion, more pollution,
and more respiratory illnesses such as asthma.

The environmental groups followed through with a lawsuit that resulted in
a settlement that eliminated 44 of the 61 grandfathered road projects.
[23] The remaining 17 projects were allowed to proceed because the
Georgia Department of Transportation had already awarded contracts to
construct the roads. The 1999 settlement freed up millions of dollars for
transportation alternatives that could improve air quality and enhance
mobility in the region.

The settlement restricts projects from proceeding until the state
includes them in a regional transportation plan that meets federal
clean-air standards and boasts several requirements. First, it requires
the Atlanta Regional Commission to make its computer traffic modeling
public. Second, it requires the Georgia DOT to conduct a major study of
transportation and congestion in the northern suburbs. And third, it
requires the U.S. DOT to study the social equity impacts of
transportation investments in the region.

                             Moving beyond Race

Shortly after settlement of the environmental groups' lawsuit against the
Atlanta Regional Commission, the environmental justice coalition entered
into informal negotiations with the U.S. DOT, the state of Georgia, and
local agencies, including the Atlanta Regional Commission, to begin
addressing transportation equity, environmental justice, and Title VI of
the Civil Rights Act of 1964. The transportation equity concerns revolve
around the way environmental justice issues are addressed in the planning
process as well as the way the benefits and burdens of transportation
investments are distributed across various populations.

Preliminary negotiations called for a two-phase analysis of
transportation equity in the Atlanta region. Phase one consists primarily
of addressing the "procedural aspect of the planning process, focusing on
how public participation of low-income and minority communities can be
enhanced and how the concerns of these communities can be better
identified and addressed in the planning process. " [24] Phase two will
focus on the "substantive outcomes of the planning process, examining the
distribution of transportation burdens and benefits to low income and
minority communities and expanding effective participation by low-income
and minority communities in the planning process." [25]

Beyond seeking equal transportation opportunities, environmental justice
efforts also strive to improve safety. Sidewalks, for instance, could
greatly improve pedestrian safety. This is not a small issue, because
people of color generally have higher pedestrian fatality rates than
whites. The differences in fatalities by ethnicity may be due in part to
differences in walking patterns. For example, national studies show that
African Americans walk 82 percent more than whites, and Hispanics walk 58
percent more than non-Hispanic whites. [26]

In a study conducted by the CDC, the Atlanta metropolitan region ranked
third, just behind Fort Lauderdale and Miami, Florida, for pedestrian
fatalities. Over 300 pedestrians were killed in Cobb, DeKalb, Fulton, and
Gwinnett counties from 1994 through 1998. [27]

People of color account for less than a third of the Atlanta region's
population and nearly two-thirds of all the pedestrian fatalities in the
region. Rates for non-Hispanic blacks and Hispanics were two and six
times greater, respectively, than for non-Hispanic whites. These
statistics clearly point to safety issues that, once again, seem to
disproportionately burden African Americans and Hispanics.

Transportation is a key component of building economically viable and
sustainable communities, and the federal government has a major
responsibility in ensuring that publicly funded transportation programs
do not discriminate against or adversely affect the poor and people of

Transportation concerns raised by environmental justice groups revolve
around fairness and equity, and these concerns are well-founded.
Historically, racial bias has worked against developing unified,
coordinated regional transportation systems, and transportation apartheid
has relegated millions of Americans to impoverished and poorly served

Past transportation policies have hit people of color especially hard
because of their heavy dependence on public transit. Indeed, these
policies have subsidized, reinforced, and exacerbated residential
segregation and economic isolation while they have concentrated areas of
poverty. They have also played a major role in shaping low-density
suburban developments, creating congested freeways, and contributing
significantly to poor urban air quality.

Citizen's groups have responded by challenging governmental agencies to
open up their planning processes, to diversify their boards, and to begin
addressing land-use, air quality, and equity issues that
disproportionately and adversely affect the region's low-income
communities and communities of color. Community leaders are also calling
for transportation agencies to identify and address inequitable
distribution of transportation benefits and burdens.

The process of bringing equity to transit policies began with an end to
separate-but-equal apartheid. America still has a long way to go,
however, before it finds true equity for all who travel on the nations
transportation networks. (Forum for Applied Research and Public Policy,
September 22, 2000)

U OF CA: Judge sees no proof of age discrimination against Lab Retirees
The University of California did not discriminate against employees
denied benefits from an early retirement program offered to national
laboratory workers, a federal appeals court ruled.

The U.S. Court of Appeals in San Francisco, upholding a decision by U.S.
District Judge Charles Breyer, said the discrepancy was not on the basis
of age but rather in the distinct differences between two retirement

The decision ends a legal battle that pitted the University of California
against some of its most senior staff scientists at the Lawrence Berkeley
and Lawrence Livermore national laboratories, who filed a class-action
lawsuit in 1996 after they were denied eligibility for the early
retirement program, which they claimed paid more. "I'm disappointed,"
said Joseph Katz, 66, of Berkeley, a named plaintiff who retired in 1995
as an electronics engineer at the Lawrence Berkeley lab, which is managed
by UC. "During my long course of employment, the university would always
consider and extend equal treatment to all its employees except in this

Gary Olimpia, a San Jose attorney for the plaintiffs, said he could not
comment on the ruling because he had not seen it. W. Daniel Clinton, a
San Francisco attorney representing UC, did not return a phone call.

At issue were two different membership plans. The plaintiffs were members
of the California Public Employees Retirement System, or CalPERS. A
second system, the University of California Retirement Plan, or UCRP, was
offered to new employees beginning in 1961.

The university concluded that the average age of UCRP members eligible
for early retirement was 55, with about 19 years of service, while
CalPERS members averaged 60 years old and 34 years of service.

In 1994, UC announced that members of CalPERS would not be eligible for a
third wave of early retirements under its program. Three separate waves
of faculty and staff retirements were offered by UC in response to state
budget cuts, causing fears of a brain drain at the university.

Charles Meier, 64, of Pleasanton, a plaintiff who retired in 1996, said
the lawsuit was filed in response to an "egregious injustice" threatening
some of the university's oldest employees.

Meier said the early retirement plan offered benefits worth 35 percent
more than the other plan's.

In a ruling written by Judge Mary Schroeder, the appeals court said the
negative effect on lab employees ages 60 and older was "minimal." The
court denied the plaintiffs' request to transfer the case to state court
on the grounds that employees could not sue a state agency for age
discrimination in federal court. (The San Francisco Chronicle, October
26, 2000)

Y2K LITIGATION: Class Status Denied for Purchasers Of Voice Mail System
A Massachusetts court has denied class certification to the H. Levenbaum
Insurance Agency Inc. in its lawsuit against Active Voice Corp. Levenbaum
claims it suffered damages because the voice mail system it purchased
from Active Voice was not Y2K-compliant. H. Levenbaum Insurance Agency
Inc. v. Active Voice Corp., No. 98-3864H (Mass. Super. Ct., June 13,
2000). Levenbaum purchased the voice mail system sometime prior to
February 1998, which was when Active Voice notified its customers that
earlier versions of its systems would not be Y2K-compliant. The company
offered no correction and advised Levenbaum that it would have to buy a
new system. Levenbaum filed a lawsuit against Active Voice, claiming
damages and seeking class certification.

In spite of representations by Levenbaum that Active Voice had 500
customers in Massachusetts, Judge Nonnie S. Burnes was not satisfied that
they were similarly situated to the plaintiff. Even if there were 500
users, the judge noted that they may not have been using non-compliant
systems or may not have suffered damages as Levenbaum had. Some users may
have already upgraded their systems to accommodate the need of growing
businesses, or may have been under maintenance contracts under which they
would have received upgrades.

The judge rejected Levenbaum's claim that Active Voice's unfair and
deceptive practices defined a class by itself. In order to obtain class
status, Levenbaum first had to satisfy the requirements of numerosity and

Judge Burnes denied Levenbaum's motion for class certification without
prejudice, leaving the door open for the company to refile. (Year 2000
Law Bulletin, September 2000)


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

Class Action Reporter is a daily newsletter, co-published by Bankruptcy
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Washington, DC. Theresa Cheuk, Managing Editor.

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

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