CAR_Public/001101.MBX               C L A S S   A C T I O N   R E P O R T E R

             Wednesday, November 1, 2000, Vol. 2, No. 213

                             Headlines

AMERICAN BANK: ABNH Announces Court's Preliminary Approval of Settlement
AMERICAN GENERAL: Insurer Faces Employee Gender Discrimination Lawsuit
ARKANSAS: Testimony On School Funding Ends, Ruling Still Months Away
ASBESTOS LITIGATION: NY Judge Refuses to Certify Union Health Suit
BIOMATRIX INC: Reports on NJ Lawsuits over Disclosure on Product Synvisc

CBRL GROUP: Reports on OT Pay Suit against Subsidiary Cracker Barrel
DONALDSON, LUFKIN: 2d Cir. Reinstates 1994 Rickel IPO Class Claims
EDISON INTERNATIONAL: Douglas A. Ames Files Securities Suit Vs. CA Co.
ENVISION DEVELOPMENT: Lowey Dannenberg Files Securities Suit in NY
FIRESTONE, FORD: CA Complaint Charges of Acting in Concert

HOLOCAUST VICTIMS: Smaller German Firms Snub Struggling Slave Labor Fund
INMATES LITIGATION: Halt to Jailing Non-Criminal Mental Patients Ordered
LSU: Judge Sends Parties To Mediation In Gender Equality Case
MICROSTRATEGY INC: Settles Securities Case But Employment Suit Drags On
OFFICE DEPOT: Survives Charges of Misleading Customers about Prices

PENTAGON: Lawyer Wins Class Status For Enlistment Bonus Lawsuit
SOTHEBY'S HOLDINGS: S.D.N.Y. Dismisses Fraud Suit Against Subsidiary
SOTHEBY'S, CHRISTIE'S: NY Times Tells Details of Settlement
SOUTH DAKOTA: Deal May Alter Youth Justice in State Training School
TOBACCO LITIGATION: BAT Investigated Over Alleged Smuggling Ring

* Canadian Judge Proposes Attorneys Pay Fees When Suits Lost
* Journal Says New Bill Allows Terror Victims To Sue In U.S.

                             *********

AMERICAN BANK: ABNH Announces Court's Preliminary Approval of Settlement
------------------------------------------------------------------------
American Bank Note Holographics, Inc. ("ABNH" or the "Company", OTC
Bulletin Board: ABHH) announced on October 30 that the United States
District Court for the Southern District of New York has preliminarily
approved the settlement of the consolidated securities class actions
against the Company and all other defendants, including the Company's
former parent, American Banknote Corporation ("ABN"), certain former
officers and directors of the Company, certain current and former officers
and directors of ABN and the Company's former independent auditors,
Deloitte & Touche LLP, named in the actions entitled, In re American Bank
Note Holographics, Inc. Securities Litigation and In re American Banknote
Corporation Securities Litigation filed in the United States District Court
for the Southern District of New York (the "Court").

The Court directed that notice be given to a conditionally certified class
of stockholders of the Company's common stock. The Court's Order does not
constitute an expression of opinion on the merits of the claims asserted in
the class actions and does not constitute an expression of its opinion as
to the fairness or adequacy of the terms of the settlement. The Court set a
hearing for December 15, 2000 to consider final approval of the proposed
settlement. The settlement remains subject to the approval of the
Bankruptcy Court for the Southern District of New York in which the Chapter
11 case of the Company's former parent, ABN is pending.

The proposed settlement of the class action litigation provides for a
release of all claims that the plaintiffs and class members in each action
have and may have against the Company and the other defendants. The
proposed settlement calls for a cash payment of$14,850,000, of which amount
the Company's and ABN's insurance carrier is funding $12,500,000, and the
remaining $2,350,000 will be contributed by defendant Deloitte & Touche
LLP. The Company will have no cash payment obligation with respect to the
settlement. In connection with the settlement, the Company will issue
1,460,000 shares of the Company's Common Stock, as well as warrants to
purchase 863,647 shares of the Company's Common Stock at an exercise price
of$6.00 per share. The warrants will be exercisable for a 30 month period
commencing with final settlement approval by the Court. ABN will also issue
certain of its securities as part of the settlement.

American Bank Note Holographics is a world leader in the origination,
production and marketing of mass-produced holograms. The Company's products
are used primarily for security applications such as counterfeiting
protection and authentication of transaction cards, identification cards,
documents of value, and consumer and industrial products, as well as for
packaging and promotional applications.

This news release includes forward-looking statements that involve risks
and uncertainties. Although the Company believes such statements are
reasonable, they can make no assurance that such statements will prove to
be correct. Such statements are subject to certain factors which may cause
results to differ materially from the forward-looking statements, including
but not limited to, the outcome of pending shareholder litigation;
competition in the market for holograms; retaining and attracting key
employees; and changes in business conditions which might impact customers
and suppliers. The Company undertakes no obligation to publicly release
results of any of these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unexpected results.


AMERICAN GENERAL: Insurer Faces Employee Gender Discrimination
Lawsuit----------------------------------------------------------------------

A woman has filed a lawsuit against an insurance giant in an Aiken County
court, joining dozens of other blacks in the state suing the company for
allegedly charging higher premiums to minorities for decades.

Beatrice Freeman, of McCormick County, filed the lawsuit, naming the
defendants as American General Life and Accident Insurance Co., and
insurance agent Henry H. Grantham, an Aiken County resident.

The suit claims the company began its unfair trade practices and
discrimination in the 1940s and has continued them to the present.

According to the suit, American General trained insurance agents to go door
to door and market the policies as burial protection. The agents would
''manipulate the emotions of prospective policyholders by playing on a
sense of shame in leaving their loved ones without funds to pay for a
funeral at the time of their death,'' the suit states.

A recent investigation showed that between 1940 and 1980, American General
and several of its subsidiary companies overcharged 1.2 million of its
predominantly poor, black customers, including 62,000 South Carolinians.
But investigators say black policyholders continued to be charged the base
rates on old policies after the insurance industry abandoned racially
discriminatory pricing on new sales.

''These companies were still charging African-Americans the 'Negro' rates
of the '40s and '50s. They never changed the policy,'' said Columbia
attorney J.P. Strom Jr., who is representing Ms. Freeman and dozens of
similar plaintiffs. ''It's illegal, and these companies should be
punished.''

Mr. Strom said the insurance agents commonly collected the premiums on a
weekly or monthly basis. ''They went around door to door collecting
premiums, anywhere from 50 cents to $ 1 a week from these poor,
hard-working people,'' he said. ''It's just outrageous. What happens is
they make so much money off these things, it's all profit. People have
already paid the face value of their insurance policy, and they are
continuing to collect.''

American General has since agreed to pay more than $ 200 million to settle
state investigations and a class-action lawsuit alleging racial
discrimination.

Ms. Freeman's case is being handled outside of the class-action suit, Mr.
Strom said. ''We are going to ask a jury in Aiken County to award the
appropriate damages to her,'' he said.

Mr. Strom's law firm, Strom & Young, is filing 50 similar suits in the
state this year, the attorney said.

A lawsuit represents one point of view. The defendants have 30 days to
respond. (The Augusta Chronicle, October 26, 2000)


ARKANSAS: Testimony On School Funding Ends, Ruling Still Months
Away--------------------------------------------------------------------
Testimony concluded Monday in a lawsuit challenging Arkansas' method for
funding schools, but it may be months before Pulaski County Chancery Judge
Collins Kilgore decides whether the state distributes education money
fairly. He also is to rule on whether the state's $1.7 billion school
budget is enough to provide Arkansas children an adequate education.

Estimates on how much more the state would have to spend on public
education if the state loses the case have ranged from $400 million to
nearly $1 billion. Besides raising taxes, the state would have few options
for raising that kind of money.

"If the judge does rule in our favor ... it's going to be a substantial
increase in the state's participation in education," said state Sen. Bill
Lewellen, D-Marianna. "Whether that's going to include a tax increase or
whether the Legislature and the governor will find the funds in other
means, that will be their decision."

The parties in the case have 45 days after receiving a transcript of the
six-week proceeding to submit final briefs. The transcript is not expected
to be distributed until mid-December, which could push Kilgore's ruling
into the middle of the 2001 General Assembly. The Legislature convenes Jan.
8.

"What's at stake is the future of where we're going in educating our
children in this state, as to whether or not they're going to get an
education to be able to compete in this world," said Lewellen, who heads a
team of lawyers representing the Lake View School District in eastern
Arkansas.

Lake View is lead plaintiff in a class-action lawsuit that contends the
state has done too little to comply with a 6-year-old court order to
eliminate wide disparities between wealthy and poor school districts in
funding available to educate students.

The 1994 order declared the school funding formula unconstitutional. In
1995, the Legislature created a system that funds schools on a per-student
basis. In the 1995 and 1997 sessions, lawmakers poured at least $130
million more money into public education.

In 1996, voters approved a constitutional amendment requiring a 25-mill
minimum local property tax levy devoted to maintaining and operating
schools.

Lawyers representing the state and more than two dozen individual school
districts argue that, with those changes, the state complied with the 1994
court order.

Lawyers from the attorney general's office asked Kilgore on Monday to throw
out the case, arguing that a ruling against the state would be tantamount
to ordering a tax increase.

Such an action, they said, would violate the separation of powers doctrine
and would amount to judicial intrusion into the sole province of the
Legislature.

The judge denied the motion.

Assistant Attorney General Brian Brooks declined comment after the hearing.
Mitch Llewellyn, a lawyer representing nearly two dozen school districts
seeking to maintain the current funding system, did not immediately return
a message seeking comment.

Kilgore ruled before the trial that he would judge the funding formula
using statistical measures, as well as definitions - established in a
landmark Kentucky education lawsuit - of an efficient education system.

Arkansas law does not define an efficient education system, but the
Kentucky case defined it as one in which the tax leverage is spread evenly,
the necessary resources are available throughout the state to provide an
adequate education and the system is properly managed.

A key issue in the Arkansas case is what authority the judge has to order
changes if he rules the state's education funding system is inequitable,
inadequate or both.

"What can the judge do about it? That's what the fundamental debate is
going to be in the filings," lawyer David Matthews of Lowell said.

The former state House member represents the Bentonville and Rogers school
districts, which argue the existing funding system is equitable but that
overall education spending is inadequate.

Both Lewellen and Matthews contend Kilgore has wide discretion in ordering
the Legislature to create a constitutionally adequate system.

"Implicit in that is going to be an order that they do a for real
investigation into what is adequate," Matthews said. "That's where the rub
may come. That may require the Legislature to deal with qualities of
efficiency that may or may not exist within the 310 school districts."

School officials in many communities have feared the prospect of wholesale
school consolidation since the school funding challenge began in 1992. (The
Associated Press State & Local Wire, October 31, 2000)


ASBESTOS LITIGATION: NY Judge Refuses to Certify Union Health Suit
------------------------------------------------------------------
U.S. District Judge Jack B. Weinstein in the Eastern District of New York
has denied the motion of union health care funds to certify a class action
against the tobacco industry in the funds' lawsuit to recover the costs of
health care for their members. The judge said the plaintiffs had not shown
that the case is manageable as a class action. National Asbestos Workers'
Medical Fund v. Philip Morris Inc. et al., No. 98 CV 1492, (E.D.N.Y., Sept.
20, 2000); see Asbestos LR, Nov. 20. 1998, P. 9.

The ruling allows the plaintiffs to designate one member of the proposed
class to have its contentions tried. At the completion of that trial, the
order says, the parties will be in a better position to address
manageability and other requirements for certification. Judge Weinstein
says that if the plaintiff chosen for trial is included as a plaintiff in
any other tobacco action pending before the Eastern District Court which
has been brought on theories not pressed in the instant case, the court
would entertain a motion for severance and consolidation. "All tobacco
non-punitive damage claims relating to the plaintiff should be tried
together if that is practicable," the court ruled.

The trust funds brought the action on behalf of a proposed class of
approximately 4,000 similarly situated trust funds, all of which provide
health care benefits to union workers in the building trades. They assert
several causes of action, including alleged violations of the federal
Racketeer Influenced and Corrupt Organizations Act, federal common-law
claims for unjust enrichment, indemnity and breach of assumed duty.

The defendants in the case are the major tobacco manufacturers, The Council
for Tobacco Research-U.S.A. and the Tobacco Institute Inc.

The funds are represented by Donald J. Capuano and James R. O'Connell of
O'Donoghue & O'Donoghue in Washington, D.C.; Melvyn I. Weiss of Milberg
Weiss Bershad Hynes & Lerach in New York; and Mary Beth Harmon, Kenneth
David Pack, H. Russell Smouse, John C.M. Angelos, Peter G. Angelos, R.
Bruce McElhone, E. David Hoskins and Joshua J. Kassner of the Law Offices
of Peter G. Angelos in Baltimore.

Philip Morris is represented by Barbara Robbins, Steven M. Barna, Ben
Germana, Peter C. Hein and Stephen R. Blacklochs of Wachtell, Lipton, Rosen
& Katz in New York, and Thomas John Quigley of Winston & Strawn in New
York. R.J. Reynolds Tobacco Co. is represented by Theodore Grossman and
Steven C. Bennett of Jones, Day, Reavis & Pogue in New York. Brown &
Williamson Tobacco Corp. is represented by Michelle H. Browdy, Robert F.
Huff Jr., Elli Liebenstein and Douglas G. Smith of Kirkland & Ellis in
Chicago. British American Tobacco Co. is represented by Steven M. McCormick
of Kirkland & Ellis. Lorillard Tobacco Co. is represented by William L.
Allinder, Donald J. Kemna, Craig E. Proctor and John James Baroni of Shook,
Hardy & Bacon in Kansas City, Mo. The Council for Tobacco Research-U.S.A.
and the Tobacco Institute are represented by Anne E. Cohen and Harry Zirlin
of Debevoise & Plimpton in New York. (Asbestos Litigation Reporter,
September 28, 2000)


BIOMATRIX INC: Reports on NJ Lawsuits over Disclosure on Product Synvisc
------------------------------------------------------------------------
On July 21, and August 7, 15, and 30, 2000, class action lawsuits
requesting unspecified damages were filed in the United States District
Court for the District of New Jersey against Biomatrix and two of its
officers and directors, Endre A. Balazs and Rory B. Riggs. In these
actions, the plaintiffs seek to certify a class of all persons or entities
who purchased or otherwise acquired Biomatrix common stock during the
period between July 20, 1999 and April 25, 2000.

The plaintiffs allege, amongst other things, that the defendants failed to
accurately disclose information related to Biomatrix's product Synvisc
during the period between July 20, 1999 and April 25, 2000, and assert
causes of action under the Securities Exchange Act of 1934 and Rule 10b-5
promulgated under that Act. We disagree with these claims and believe that
information related to Synvisc was properly disclosed. Biomatrix intends to
defend these actions vigorously. Under the certificate of incorporation of
Biomatrix, officers and directors of Biomatrix are entitled to
indemnification for such claims from Biomatrix to the full extent permitted
by Delaware law. The Company is presently unable to predict the ultimate
outcome of these cases or whether they would have a material impact on the
results of operations, financial position or cash flows of Biomatrix.


CBRL GROUP: Reports on OT Pay Suit against Subsidiary Cracker Barrel
--------------------------------------------------------------------
The Company's Cracker Barrel Old Country Store, Inc. subsidiary is involved
in two lawsuits, filed in the U.S. District Court for the Northern District
of Georgia, Rome Division, which are not ordinary routine litigation
incidental to its business. Serena McDermott and Jennifer Gentry v. Cracker
Barrel Old Country Store, Inc., a collective action under the federal Fair
Labor Standards Act ("FLSA"), was served on Cracker Barrel on May 3, 1999.
Kelvis Rhodes, Maria Stokes et al. v. Cracker Barrel Old Country Store,
Inc., filed under Title VII of the Civil Rights Act of 1964 and Section 1
of the Civil Rights Act of 1866, was served on Cracker Barrel on September
15, 1999.

The McDermott case is styled a collective action and alleges that certain
tipped hourly employees were required to perform non-serving duties without
being paid the minimum wage or overtime compensation for that work. The
McDermott case seeks recovery of unpaid wages and overtime wages related to
those claims. The Rhodes case seeks certification as a class action, a
declaratory judgment to redress an alleged systemic pattern and practice of
racial discrimination in employment opportunities, an order to effect
certain hiring and promotion goals and back pay and other monetary damages.

Cracker Barrel Old Country Store, Inc. believes it has substantial defenses
to the claims made, and it is defending each of these cases vigorously. In
March 2000 the court granted the plaintiffs' motion in the McDermott case
to send notice to a provisional class of plaintiffs (servers and all
second-shift hourly employees). The number of notices to be sent has not
been determined. The parties are engaged in mediation, currently focused on
the FLSA claims, but the mediation process is confidential and the parties
cannot comment on the process or the status of their discussions. Because
only limited discovery has occurred to date, neither the likelihood of an
unfavorable outcome nor the amount of ultimate liability, if any, with
respect to these cases can be determined at this time. Accordingly, no
provision for any potential liability has been made in the consolidated
financial statements of the Company.


DONALDSON, LUFKIN: 2d Cir. Reinstates 1994 Rickel IPO Class Claims
------------------------------------------------------------------
The Second Circuit overturned a New York federal judge's orders dismissing
a securities fraud class action stemming from the 1994 initial public
offering of Rickel Home Centers. In reinstating the suit, the panel found
that the trial judge erred in rejecting the bid of the original plaintiff's
son to intervene as class representative, and by imposing sanctions against
the original plaintiff pursuant to Fed. R. Civ. P. 11 without entering an
order to show cause. Baffa et al. v. Donaldson, Lufkin & Jenrette
Securities Corp. et al. No. 99-7607 (2d Cir., Aug 25, 2000).

Soon after Rickel made its IPO in October 1995, Robert Baffa purchased
shares for his then-minor son Brett and placed them into an account
pursuant to the Uniform Gifts to Minors Act. Baffa sold the shares at a
loss after the stock's subsequent decline in value.

Baffa brought the instant litigation in the Southern District of New York
in January 1996, naming various officers and directors of Rickel, as well
as Donaldson, Lufkin & Jenrette Securities Corp., EOS Partners L.P. and
General Electric Capital Corp., which between them controlled the bulk of
Rickel common stock at the time of the IPO. The gravamen of Baffa's
complaint was that the defendants failed to disclose in the Rickel
prospectus four financial indicators (net sales, gross profit, EBIDTA and
operating income loss after debt expense) that reflected a decline in
business during the third quarter of 1994. Baffa asserted that the factors
indicating Rickel's third quarter performance could be deduced from its
April 1995 Form 10-K filing.

The defendants argued for dismissal, asserting that the figures cited by
Baffa were nowhere to be found in Rickel's 1995 10-K. The defense
propounded interrogatories requesting the source of Baffa's statistics, and
the plaintiff admitted in a September 1997 filing that the figures that he
set forth in the complaint should be modified. In November 1997, U.S.
District Judge Constance Baker Motley refused the defense dismissal motion,
but sua sponte held that Baffa should be sanctioned for the defendants'
attorneys' fees with respect to their efforts to obtain the figures relied
upon by the plaintiff. The parties agreed the following February to a sum
of $45,000.

In April 1998, the judge rejected Baffa's bid for class certification,
finding him an atypical representative because of the sanction and because
of his lack of standing, as his son Brett had by then reached his majority
and was now the shareholder. Brett Baffa then sought to intervene as class
representative, as did Mary Dorflinger, a Dallas broker who had purchased
Rickel shares over 1995 and 1996. Judge Motley denied the motions for
intervention in April 1999.

In its review, the U.S. Court of Appeals for the Second Circuit
preliminarily found that the trial judge had abused her discretion in
imposing the sanctions against Baffa on her own initiative without entering
an order to show cause. The lower court "thus denied Baffa notice and
opportunity to respond," the panel found.

The appellate court did agree with the conclusion that Robert Baffa lacked
standing to act as class representative. " U pon attaining eighteen years
of age, Brett received indefeasibly vested title to the property, and his
father retained no interest in the account," wrote the panel. "We find no
basis in New York law for concluding that the custodian retains any power
to continue administration of the account beyond the time the owner reaches
the age of majority."

The Second Circuit also found that Judge Motley acted within her discretion
in rejecting Dorflinger's intervention bid, noting the movant's "status as
a professional broker and the defenses to which she is subject."

However, the panel rejected the lower court's reasoning in refusing Brett
Baffa's intervention motion because of a perceived lack of knowledge
regarding the suit. "The Supreme Court in Surowitz v. Hilton Hotels Corp.,
383 U.S. 363, 370-374 (1966), expressly disapproved of attacks on the
adequacy of a class representative based on the representative's
ignorance," wrote the Second Circuit. "Although Brett was only eighteen,
and had only recently completed the process of taking over the <>
account, he understood the nature of his proposed role in the litigation
and demonstrated his willingness to carry it forward."

The appellants are represented by I. Stephen Rabin and Jacqueline Sailer of
Rabin & Peckel in New York.

The defendant appellees are represented by Stephen A. Radin and Andrew
Liebhafsky of Weil, Gotshal & Manges; Thomas J. Hall and Brian A. Miller of
Chadbourne & Parker; and William E. Wurtz and Benjamin S. Kaminetzky of
Davis Polk & Wardwell, all in New York. (Securities Litigation & Regulation
Reporter, September 27, 2000)


EDISON INTERNATIONAL: Douglas A. Ames Files Securities Suit Vs. CA Co.
----------------------------------------------------------------------
A securities fraud class-action lawsuit has been commenced on behalf of
purchasers of the publicly-traded common stock of Edison International
(NYSE: EIX) (Edison). Named as defendants in the Complaint are Edison
International and its wholly owned electric utility subsidiary, Southern
California Edison Company. The Complaint charges defendants with violations
of the Securities Act of 1934 and Rule 10(b)(5) promulgated thereunder.

The Complaint alleges securities fraud by Edison by its massive
overreporting, up to the staggering amount of $2.358 billion, of revenue on
Edison's financial statements for the second and third quarters of the year
Its wholly owned subsidiary, So. Cal. Edison, has been purchasing
electricity at double or triple the price it can sell it for under a rate
freeze required under California's electricity deregulation law. Edison
essentially accounted for this $2.358 billion in "undercollections" as
revenue on its income and balance sheets, even though this amount has not
been billed by Edison to its customers and is not billable by Edison under
state law.

Edison reported stronger-than-expected earnings of $606 million ($
606,000,000) for the nine-month period ending September 30, 2000. As
charged in the Complaint, Edison, the parent company, has actually
sustained a nine-month net loss of One Billion, Seven Hundred Fifty-Two
Million ($1.75 billion).

In booking phantom revenue, the Complaint alleges that Edison grossly
deviated from Generally Accepted Accounting Practices ("GAAP") and
applicable Financial Accounting Standards. These standards require, at a
minimum, that to record this $2.358 billion as an asset and revenue, it
must be "probable" that the entirety of the amount be approved by the
California Legislature and regulators. This $2.358 billion would have to be
retroactively charged to its customers for this past summer of 2000.

Edison has already been rejected in its attempts to recover these funds
from the California Legislature and the California Public Utilities
Commission. Further, Edison would not be able to recover this $2.358
billion from its customers under the most basic principles of contract law
and the free marketplace under deregulation. Edison could not retroactively
add to its customers' bills up to $2.4 billion for the past summer's
electricity use, when the customers were charged a stated rate and paid on
a stated rate. Also, the customers would have conserved electricity, if it
had been known that the effective rates were double or triple that shown on
Edison's invoices.

Contact: Douglas A. Ames, or Jacqui Parry, 714-536-7244, both of Law
Offices of Douglas A. Ames


ENVISION DEVELOPMENT: Lowey Dannenberg Files Securities Suit in NY
------------------------------------------------------------------
Syed Abbas Ali Shah, Ronald Keusch, and Alan Nathan have filed a complaint
against Envision Development Corp. ("Envision")(AMEX:EDV) in the United
States District Court for the Southern District of New York on behalf of a
class consisting of all former shareholders of LiQ, Inc. ("LiQ"), whose
shares of LiQ common stock were exchanged for shares of Envision common
stock, pursuant to an Agreement and Plan of Merger on May 8, 2000. The
complaint charges Envision, Andrew L. Evans, Evan's investment vehicle, San
Francisco-based Zero.net, certain other companies affiliated with Evans,
and certain officers and directors of LiQ with making material
misrepresentations and omitting to disclose material facts to the former
LiQ shareholders in connection with their exchange of LiQ shares for shares
of Envision in violation of sections 10(b) and 20(a) of the Securities
Exchange Act of 1934. Plaintiffs seek to rescind the exchange of LiQ stock,
and/or recover damages.

Plaintiffs allege that Envision was a public company in name only, in that
it was secretly controlled and manipulated by Andrew Evans, a convicted
felon and securities law recidivist, whose name never appeared in any SEC
report filed by Envision. Shortly after the Merger, plaintiffs learned that
Evans, personally and through his subordinates at Zero.net, personally
controlled every facet of Envision's operations. Among other allegations,
in April 2000, Evans, through Zero.net, issued a sham "commitment" of
funding for Envision's operations through May 2000, solely to obtain an
unqualified opinion from Envision's auditors for Envision's Form 10-K due
the next day. Envision disclosed the valueless commitment in its 10-K to
maintain it$70 per share stock price which enabled it to acquire LiQ for
stock with a market value of $45 million. The market price of that stock
these days, in less than six months after the closing, has dropped less
than $4 per share, giving LiQ shareholders less than $2.5 million in value.
Furthermore, that stock will soon be de-listed by the American Stock
Exchange, and Envision will be a "bulletin-board" company.

The class period is a single day, May 8, 2000.

Contact: Lowey Dannenberg Bemporad & Selinger, P.C., White Plains Richard
W. Cohen, Esq. Telephone: (914) 997-0500 Fax: (914) 997-0035 e-mail:
ldbs@westnet.com


FIRESTONE, FORD: CA Complaint Charges of Acting in Concert
----------------------------------------------------------
In a personal injury complaint filed in California state court, plaintiff
Jeffrey Albom contends that Bridgestone/Firestone Inc. and Ford Motor Co.
acted in concert in putting the Explorer sport-utility vehicle on the road
with defective Firestone tires. Albom's wife and three-week-old daughter
were injured in a tread-separation accident. Albom et al. v.
Bridgestone/Firestone Inc. et al., No. 414052, complaint filed (Cal. Super.
Ct., San Mateo County, Aug. 29, 2000).

"The defendants' concern for profits has created a public safety nightmare
because of product defects in Ford Explorers with Bridgestone-Firestone
tires which causes tires to blow out and the Explorers to roll over and
kill and injure hundreds of people," the plaintiff maintains.

Albom says Ford knew the Explorer was prone to rollover and that Firestone
knew its ATX, ATX II and Wilderness tires were defective. The plaintiff's
family was riding in a 1998 Explorer with Wilderness tires when the
accident occurred.

Firestone and Ford are charged with strict liability, failure to warn,
breach of express and implied warranties, and negligence. The complaint
also mentions the production problems at Firestone's plant in Decatur, Ill.
"Ford has released data indicating that the highest rates of defects in
Bridgestone/Firestone tires were those of the Wilderness tires produced at
the Decatur plant in the mid-1990s. 'In almost every model year, Decatur
showed up having incidents of separation higher than other plants,'" the
plaintiff quotes a Ford engineering executive as having recently told The
Chicago Tribune.

The complaint also states, "A former supervisor at Firestone has told the
press that rubber stock may have dried out because of strikes during the
1990s and then been used by replacement workers."

Albom says Ford is also to blame for his family's injuries because the
automaker's recommended tire pressure of 26 pounds per square inch -- a
figure allegedly arrived at to reduce the vehicle's propensity to roll over
-- results in overheating of the tires and eventual failure. Firestone
recommended 30 pounds of pressure.

The complaint observes that while Ford recommended a lower pressure than
the tire maker, the Explorer owner's manual warned drivers to follow the
auto maker's recommendation and stated, "Driving on tires with too little
air pressure is dangerous. Your tires will get overheated. This can cause a
sudden tire failure that could lead to serious personal injury or death."

Albom is represented by Frank M. Pitre of Cotchett, Pitre & Simon in
Burlingame, Calif. (Tire Defect Report: Special Supplement To Automotive
Litigation, Reporter, September 26, 2000)


HOLOCAUST VICTIMS: Smaller German Firms Snub Struggling Slave Labor Fund
------------------------------------------------------------------------
The smaller companies that form the backbone of Germany's economy are not
prepared to pitch in the 1.7 billion marks (dlrs 730 million) still to be
raised for a national foundation to compensate Nazi-era slave laborers, an
industry group warned.

Large companies such as DaimlerChrysler and Deutsche Bank set up the fund
with government backing earlier this year, but corporate donations have
slowed to a trickle with the total well short of the promised 5 billion
marks (dlrs 2.2 billion).

According to the 150,000-member federal association that represents small-
and medium-sized businesses, appeals to smaller firms to pay more will
continue to fall on deaf ears.

Many companies are concerned that legal experts and administrators will
siphon off too much of the money, the association said. Others insist
working conditions in their firms were better than in the large factories
marshaled to keep the Nazi war machine running in World War II.

Some firms maintain good relations with former forced laborers, the
association argued, saying ''so-called victims get a tear in their eye when
they think about the good old days as a worker in a Germany family firm.''

Firms snubbing the fund which Chancellor Gerhard Schroeder's government has
pledged to back with a further 5 billion marks (dlrs 2.2 billion) have said
international companies keen to end the threat of class-action suits in the
United States must make up the gap.

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 this year, although officials have said it will likely be
delayed.

The industry foundation has insisted it will reach its target and that the
current shortfall won't delay payments to survivors. More than 1 million
people, mostly non-Jews from eastern Europe, stand to receive compensation.
(AP Worldstream, October 30, 2000)


INMATES LITIGATION: Halt to Jailing Non-Criminal Mental Patients Ordered
------------------------------------------------------------------------
A federal judge has ordered state law enforcement officials to stop jailing
former Hawaii State Hospital patients when they are arrested for violating
conditions of their release.

Chief U.S. District Judge David Ezra said people acquitted of crimes by
reason of insanity can't be jailed for non-criminal indiscretions after
they are treated at the mental hospital and released.

Ezra oversaw nearly a decade of federal supervision of the Kaneohe
facility.

A new class-action lawsuit said the state, over the past decade, has
routinely arrested people for violating conditions of their release.
Instead of returning them to the hospital, the lawsuit alleges, the former
patients are thrown into the general prison population at Oahu Community
Correctional Center.

Ezra said unless there are new allegations of violence, former patients
can't be held in lockup longer than 48 hours.

His temporary restraining order remains in effect until a Nov. 9 hearing.

State officials said it will take time to get word of the order to all
sheriffs and county prosecutors, but authorities will try. (The Associated
Press State & Local Wire, October 31, 2000)


LSU: Judge Sends Parties To Mediation In Gender Equality Case
-------------------------------------------------------------
A U.S. district court judge has sent LSU and the five plaintiffs' attorneys
in a gender equality case to mediation to see if the two parties can settle
out of court and end the six-year litigation.

"We're trying to expedite this case to an end," said Tom Krebs, a
Birmingham-based lawyer representing the plaintiffs.

In January, the U.S. 5th Circuit Court unanimously ruled that LSU was
"motivated by chauvinist notions" and "fashioned a grossly discriminatory
athletics system." The ruling was the result of complaints from three
women's soccer players and two softball players about the unavailability of
their sports at the state's largest university. The suit was filed in 1994
before LSU started both programs.

Because the circuit court found that LSU discriminated with intent, the
plaintiffs were allowed to seek damages.

The appellate court's decision was upheld on appeal in June, and the case
was sent back to district court so the complaint could be certified as a
class-action lawsuit. Certification of the class would open LSU up to
hundreds more complaints and a much larger financial punishment.

During a recent status conference with U.S. District Judge Rebecca Doherty,
the two parties and the judge agreed to explore mediation.

"That's about where we're at," said Nancy Rafuse, an Atlanta-based lawyer
and Krebs' co-counsel.

Doherty set February as a deadline for selecting a mediator.

This will be the second mediation the parties have attempted. The 5th
Circuit Court also forced the parties to attempt mediation, which was
unsuccessful. LSU attorney Mike Pharis said the parties previously had an
informal attempt to settle out of court.

The lawsuit accuses LSU of violating 1972's Title IX of the Education
Amendment Act. Title IX guarantees equal access and opportunity to
participate in the benefits of intercollegiate athletics, specifically
scholarships. Three soccer players filed a complaint against LSU and two
softball players were added in 1995. (The Associated Press State & Local
Wire, October 31, 2000)


MICROSTRATEGY INC: Settles Securities Case But Employment Suit Drags On
-----------------------------------------------------------------------
With the $ 113.7 million settlement of a securities fraud class action last
week, the leaders of MicroStrategy Inc. hope they have put a heap of
trouble behind them.

But the company's legal woes are far from settled.

The unusual accord, announced Oct. 24, postpones the payout of cash and
stock to plaintiffs until 2005. So while the deal may have spared Vienna-
based MicroStrategy some short-term pain, it assures that the case will
shadow the business software company for years to come.

The class action is also not the only hard-fought case facing
MicroStrategy, which has seen its stock value fall far in the past few
months.

An executive's discrimination complaint, filed around the same time the
stock troubles surfaced, has quickly cost the company around $ 500,000 in
attorney fees. While the case involving former MicroStrategy human
resources executive Betty Lauricia may not prove as central to the
company's long-term health, it has already led to litigation in three
different courts.

Between the class action and the employment case, it may be a while before
MicroStrategy puts a tumultuous and litigious 2000 behind it.

                           Five-Year Plan

The stock fraud litigation began in March, when the company announced it
had overstated quarterly revenues and profits over the past three years.
Stockholder suits quickly followed in the U.S. District Court for the
Eastern District of Virginia as well as a derivatives complaint in
Delaware, as the company's shares plummeted to one-tenth their previous
value. In addition, the Securities and Exchange Commission launched an
investigation following the restatement of earnings.

Last week, the company announced an unusual settlement of the two civil
matters. It will issue notes to shareholders for $ 80.5 million in cash and
distribute shares of company stock, some of it coming directly from company
executives, guaranteed to be worth $ 16.5 million. While the money won't be
paid out completely until 2005, the company will make interim payments of $
3 million every six months.

The lead plaintiffs counsel, from New York's Milberg, Weiss, Bershad, Hynes
& Lerach, declined comment on the settlement.

But veterans of securities class actions say the company's saga is far from
over. Several issues remain to be resolved, including court approval of the
settlement and attorney fees. Counsel have not submitted the terms of the
deal or their fee requests to the courts in Delaware or Alexandria. In
addition, the class action litigation is still continuing against
PricewaterhouseCoopers, which served as MicroStrategy's outside adviser on
its accounting practices.

The issue that has caught the attention of class action lawyers, though, is
the delayed payment schedule.

"It is relatively unusual to see payments stretched over such a protracted
period of time," says Joseph Grundfest, a former Securities and Exchange
Commission member who is now a professor at Stanford Law School. "But the
company is in a difficult financial position, and you can't get blood from
a stone."

MicroStrategy General Counsel Jonathan Klein looks at the settlement in a
positive light, saying the class members "have a strong incentive for us to
do well and for our stock to go up."

But Grundfest characterizes the class members' position as a "gamble,"
noting that the deal essentially makes them creditors of the company.

Grundfest also says that "a wide variety of legal and ethical issues" could
surface if the plaintiffs' lawyers are paid earlier-or with a different mix
of promissory notes and stock-than the stockholders they represent.

In most stock fraud suits resolved with both cash and stock, attorney fees
are paid out in the same proportion as the total settlement, says a local
lawyer who specializes in stock fraud suits and who is not involved in this
case.

Typically, this attorney says, legal fees comprise about 20 to 30 percent
of the total settlement. Other class action lawyers say it would be highly
unusual if the attorneys agreed to wait five years to receive all their
fees.

                        Trouble on the Job

On the employment front, Betty Lauricia's case against MicroStrategy does
not appear close to a resolution.

Lauricia, 47, alleged in a complaint before the Equal Employment
Opportunity Commission that MicroStrategy discriminated against her on the
basis of sex and age when the company passed her by and chose someone
younger for a promotion. She also claims MicroStrategy gave her only a
fraction of the stock options offered to a male employee in a similar job.

According to court files, Lauricia gave notice to MicroStrategy of the EEOC
complaint on March 13. The next day, she was put on administrative leave
after a meeting with Klein and MicroStrategy's outside employment counsel,
David Shaffer, a partner in the D.C office of Thelen Reid & Priest.

Then, on March 16, MicroStrategy sued Lauricia and her lawyer, Alexandria
solo Claude Convisser. The complaint sought a declaratory judgment that
MicroStrategy did not act illegally when it put Lauricia on administrative
leave and asked for an emergency injunction blocking release of what the
company termed trade secrets in her possession.

While Klein refused to comment on what Lauricia allegedly took, in
technology circles plans for future growth, new products and even employee
salaries are often closely held.

On April 24, Judge Leonie Brinkema dismissed MicroStrategy's suit.
Brinkema's dismissal is on appeal to the 4th Circuit. MicroStrategy has
since filed a motion to withdraw the appeal, as it filed similar claims in
federal court in June.

A few days after Brinkema ruled, MicroStrategy's lawyers went to Circuit
Court in Alexandria with the trade secret claims. Chief Judge Donald
Haddock ruled that the documents in question could not be made public and
ordered a sheriff to retrieve them from Convisser's office. That case is on
hold pending action on the 4th Circuit appeal.

In May, the EEOC sent Lauricia a right-to-sue letter stating that the
commission found it reasonable to conclude that MicroStrategy put her on
leave and "filed suit against (Lauricia) in retaliation . . . in an attempt
to produce a chilling effect to deter future allegations of employment
discrimination."

She filed a federal retaliation complaint in June, but not before
MicroStrategy filed a second case in the Eastern District seeking a finding
that it had not violated federal employment statutes in the Lauricia
matter. The company added new allegations against Lauricia and Convisser of
conspiracy to injure MicroStrategy's business reputation. Convisser is no
longer a defendant to those claims, but they are still pending against
Lauricia.

Brinkema consolidated the cases, and on Sept. 13, U.S. District Judge T.S.
Ellis III ruled on several elements of the case.

From his comments, it is clear that MicroStrategy's litigation plan has not
gone over well at the Rocket Docket.

In his opinion denying MicroStrategy's motion to dismiss Lauricia's suit on
the grounds that she is bound by an arbitration agreement, Ellis wrote that
" MicroStrategy has been remarkably aggressive in pursuing litigation
against plaintiff, resulting in the discovery of information unobtainable
in arbitration and causing unnecessary delay and expense."

Ellis concluded that MicroStrategy itself "waived its right to invoke
arbitration" and rejected a related argument that Lauricia had failed to
exhaust her administrative remedies with the EEOC.

Immediately following Ellis' decision, MicroStrategy filed an interlocutory
appeal to the 4th Circuit. That appeal is pending and no briefing schedule
has been set.

But it appears that after all this, including approximately $ 400,000 in
fees paid to Thelen Reid and $ 70,000 to Alexandria's Young, Goldman & Van
Beek, MicroStrategy would like to resolve the matter out of court.

"We certainly believe that the questions involving Lauricia's employment
and termination can be resolved through arbitration," says Klein.

But Convisser says he has never seen indications that his opponent is ready
to negotiate. "In seven months, I have briefed 52 separate motions and made
25 separate court appearances," he says. "MicroStrategy has never made any
kind of settlement offer." (Legal Times, October 30, 2000)


OFFICE DEPOT: Survives Charges of Misleading Customers about Prices
-------------------------------------------------------------------
Office Depot has won the final round of a lawsuit that had charged the
office-supply giant of misleading customers about the prices for its
catalog merchandise.

The U.S. Supreme Court struck down a class-action suit filed by a Miami
woman that centered on a $ 2.30 price dispute and sought $ 10 million in
punitive damages.

The justices upheld a lower court's decision that the claim, filed on
behalf of 39,000 customers, fell short of the $ 75,000 per-plaintiff
minimum required for many lawsuits in federal court.

Office Depot, based in Delray Beach, urged the justices to reject the
appeal without a hearing. A spokeswoman for Office Depot said the company
has a policy of not commenting on litigation.

The lawsuit was filed in 1997 by Cheryl Cohen, a Miami customer who claimed
she was deceived by catalog advertisements touting its prices as the lowest
available. Cohen said the ads misled her into assuming the catalog prices
were as low as those charged in the chain's retail stores.

Cohen, who bought a printer cartridge and a package of file folder labels
from the catalog for $ 28.98, said she discovered later that she would have
paid $ 2.30 less had she bought the supplies from an Office Depot store.

Office Depot publishes a catalog once or twice a year and guarantees free
delivery. It also offers a 155 percent "low price" guarantee, meaning it
will match a lower price found elsewhere, plus credit the customer with 55
percent of the difference. (The Miami Herald, October 31, 2000)


PENTAGON: Lawyer Wins Class Status For Enlistment Bonus Lawsuit
---------------------------------------------------------------
A lawsuit that accuses the Pentagon of illegally taking back enlistment
bonuses from people kicked out for being overweight or failing fitness
standards is now a federal class-action lawsuit.

The decision by a federal judge in Washington expands the scope of a
lawsuit originally filed on behalf of three plaintiffs in 1998 in Maine.

Lawyer Michael Feldman said that he expects thousands of military personnel
who were forced out of the military to qualify for the lawsuit.

Between 1992 and 1995, 20,000 people were discharged for obesity from the
Army, Navy, Marines and Air Force, he said. Many of those people lost all
or part of their signing bonuses, Feldman said.

"I know there are thousands of people in the United States and abroad who
will be involved," Feldman said from his Brunswick office.

The lawsuit does not take the military to task for booting personnel for
being overweight or failing fitness standards, even when the standards were
changed after someone entered the service.

But those who were dismissed should not have to pay back enlistment or
re-enlistment bonuses, the lawyer contends.

"The military can discharge these people anytime they want. That's none of
our business. But they can't recoup bonuses," he said.

Judge Eric Bruggink from the U.S Court of Federal Claims granted the
class-action request after plaintiffs agreed that Coast Guard personnel or
military personnel dismissed for misconduct would not be part of the
lawsuit.

None of the original plaintiffs were dismissed for misconduct. All left the
military with honorable discharges.

The money at stake can be significant - upward of $15,000 or $20,000 for
many of the plaintiffs, Feldman said.

In the past, the Pentagon has declined to comment, deferring questions to
the Justice Department. The lawyer handling the case for the government did
not immediately return a message left at his office.

Each branch of the military has its own weight requirements and fitness
guidelines. For example, the Navy has the right to discharge sailors who
fail fitness tests three times in a four-year period.

One of the plaintiffs, Roger Sablone Jr., joined the Navy when there was no
weight requirement. Later, a 225-pound standard was put in effect for
someone 6-foot-2; later, it dropped to 215, then 211, he said.

After a five-year stint aboard a nuclear submarine, he failed physical
training tests in 1996 and 1997 before being dismissed at 240 pounds.

Sablone, of Homestead, Fla., expected to receive a severance package that
included money from unused leave. But he ended up receiving a check for
$1,700 after the Navy subtracted $9,200 in bonus money.

Feldman and lawyers for the government must now come to an agreement on how
to notify potential members of the class. In his ruling dated Oct. 25,
Bruggink gave both parties a month to file a report. (The Associated Press
State & Local Wire, October 30, 2000)


SOTHEBY'S HOLDINGS: S.D.N.Y. Dismisses Fraud Suit Against Subsidiary
--------------------------------------------------------------------Federal
court in New York has dismissed the securities fraud class action against
Sotheby's Inc., a subsidiary of Sotheby's Holdings Inc., and certain
financial officers of the renowned auction house. However, the court
refused to dismiss the charges that the parent company, its chairman and
CEO failed to disclose the alleged antitrust conspiracy that led to the
litigation. In re Sotheby's Holdings Inc. Securities Litigation, No.
00-1041 (S.D.N.Y., Aug. 21, 2000); see Securities Litigation & Regulation
Reporter, March 22, 2000, P. 8.

Sotheby's is one of the world's largest auction houses selling fine arts,
antiques and collectibles. In 1999, the company had aggregate sales of
approximately $2.259 billion. The shareholder plaintiffs alleged that the
Sotheby's, along with current and former executives, misrepresented
material facts in their public filings regarding "intense" competition in
the industry and its commission rates, which affected the bottom line.

The suit followed charges by the U.S. Department of Justice that Sotheby's
had conspired with its main competitor, Christie's International, to fix
rates charged both buyers and sellers. In February of this year, the
government disclosed that Christie's was given "conditional amnesty" for
its cooperation in the investigation.

Sotheby's and Christie's allegedly agreed to increase the buyer's premium
charges for their services in the early 1990s. A few years later, the two
houses instituted identical changes to their seller's commission policy,
changing from a flat commission to a variable one based on the sale price
of the items.

The shareholder complaint alleges that Sotheby's touted the positive impact
of the new commission structure based on its higher auction sales and
increased revenues. However, the real cause of the increased profits was
the illegal collusion, say the shareholders, which was not revealed by the
auction house.

The defendants moved for dismissal, asserting they did not have a duty to
disclose the uncharged illegal conduct. In addition, Sotheby's argued that
the plaintiffs did not allege any misleading statements made by the
subsidiary, and that the charges against it should be dismissed because
federal securities law does not allow for aiding and abetting liability.

The plaintiffs countered that the financial information included in the SEC
filings was available to those in senior positions who are presumed to be
knowledgeable about the practices of the company, and that Sotheby's
endorsed the reports.

U.S. District Judge Denise Cote disagreed, concluding that the shareholders
had failed to allege any act or omission on the part of the subsidiary
itself because the complaint treated the two organizations as one.

The court also held that the allegations against the financial officers
were insufficient to satisfy the requirements of a Section 10b-5 action,
and dismissed the claims against them without prejudice. "There are no
allegations of the scienter of the Financial Officer Defendants apart from
conclusory allegations regarding the individual Defendants as a group,"
stated the court.

The complaint did not allege that the officers had any specific knowledge
of the conspiracy or that documents were made available to them, which
could show a failure to disclose on their part. The boilerplate allegations
that they knew or should have known of the fraud based on their executive
position is insufficient to prove intent, Judge Cote held.

Nevertheless, the court ruled that the allegations against Chairman A.
Alfred Taubman and President and CEO Diana D. Brooks are sufficient to
withstand dismissal, in part, because they signed the SEC filings at issue.
In addition, the complaint alleges that they were both directly involved in
arranging the illegal price-fixing agreement.

Both Taubman and Brooks resigned their respective positions soon after the
government's investigation into Sotheby's business practices became public.

(Editor's Note: After this case was decided, Sotheby's Holdings agreed to
pay $70 million to settle the class action suit. )

The shareholder plaintiffs are represented by Sherrie R. Savett and Gary E.
Cantor of Berger & Montague in Philadelphia; Daniel W. Krasner, Fred Taylor
Isquith and Michael Jaffe of Wolf Haldenstein Adler Freeman & Herz in New
York.

Sotheby's Holdings Inc., Sotheby's Inc. and the financial officer
defendants are represented by Greg A. Danilow, Timothy E. Hoeffner,
Jonathan Margolis and Timothy A. Greensfelder of Weil, Gotshal & Manges in
New York. (Securities Litigation & Regulation Reporter, September 27, 2000)



SOTHEBY'S, CHRISTIE'S: NY Times Tells Details of Settlement
-----------------------------------------------------------
A $512 million formal settlement of the class-action lawsuit against
Sotheby's and Christie's lays out for the first time how the proceeds are
to be divided among the more than 100,000 customers who said they were
cheated by price-fixing and other collusion by the auction houses,
according to Sotheby's court papers.

The settlement, awaited since Sept. 22 and filed in Federal District Court
in Manhattan, provides for the money -- minus unspecified lawyers' fees and
administrative expenses -- to be distributed "pro rata based upon each
class member's alleged overcharges" on domestic transactions. The
calculations would take into account sellers' commissions paid on auction
sales from Sept. 1, 1997, through Feb. 7, 2000, and purchase fees paid by
buyers from Jan. 1, 1993, through Feb. 7, 2000.

About 80 percent of the disbursements would be in cash, the agreement
specifies, with the remaining 20 percent in the form of discount
certificates to offset the price of seller's commissions and certain other
charges. The certificates will be good for at least five years and could be
turned into other credits.

Under the settlement, $100 million of each company's $256 million will be
distributed within 30 days of preliminary approval of the settlement by
Judge Lewis A. Kaplan, and an additional $106 million will be distributed
within 30 days of the judge's final approval. Also within 30 days of final
approval, each company will offer customers covered by the case $50 million
in the form of the seller's discount certificates.

Customers covered under the class action can still opt out of the
settlement, and if too many do so -- the number is not being made public --
Sotheby's and Christie's could pull out of the agreement.

A Christie's spokesman said the Christie's settlement had also been given
to the judge, but the auction house declined to make the papers available.
Lawyers said that both sets of papers were generally comparable, although
in Sotheby's case, $156 million of the $256 million is to be contributed by
its former chairman, A. Alfred Taubman, as part of his settlement with the
company. (The New York Times, October 31, 2000)


SOUTH DAKOTA: Deal May Alter Youth Justice in State Training School
-------------------------------------------------------------------
Lawyers for the state and a Washington, D.C.-based advocacy group told a
federal judge they are discussing a settlement in a lawsuit to change
practices at the State Training School.

It was the first time either side has publicly acknowledged the chances of
a settlement, the Sioux Falls Argus Leader reported.

The details of the possible settlement are confidential. The lawyers and
U.S. District Judge Lawrence Piersol talked about it in a telephone
conference call.

The Youth Law Center sued State Training School Superintendent Owen
Spurrell and Corrections Secretary Jeff Bloomberg in February over
conditions at the training school in Plankinton, claiming the school's
practices were abusive.

The lawsuit was filed on behalf of six juveniles. The judge later made it a
class action case, meaning all current and future inmates at the school and
prison are covered.

"Our hope is we will be able to work out a final agreement on this by the
end of the week," said Mark Soler, Youth Law Center president.

During Monday's brief hearing, the state's lawyers, James McMahon and James
Moore of Sioux Falls, agreed they have engaged in serious settlement talks
this past week. Another hearing will be held Nov. 6.

They said Gov. Bill Janklow is aware of the talks.

It was not clear Monday whether terms of a South Dakota settlement would be
public.

The agency likely will not accept any settlement that doesn't reflect major
change, said Debra Vargas of the Center for Juvenile and Criminal Justice
in San Francisco. The law center wouldn't even discuss settling unless the
state was admitting wrongdoing, she said.

"They will not drop the ball and concede. They're for the kids," Vargas
said. "They will not settle if they're not getting what they want, and what
they want is real change."

The suit asked Piersol for an injunction to change practices at the school,
such as the use of restraints, pepper spray and solitary confinement for
teen-agers in the juvenile prison and training school. The lawyers are not
seeking monetary damages.

In other states, the law center has won settlements including significant
changes, including:

The award of damages to nine juveniles and a limit on the use of restraints
and drugs in South Carolina.

100 new teachers and educational administrators and improved education in
the California system.

The closing of a training school and major changes in two others in
Florida.

In South Dakota, the Youth Law Center lawsuit was filed seven months after
Gina Score, 14, of Canton, died after a forced run at the girls' boot camp,
which was at the State Training School at the time.

"I do have faith in the executive branch that they will enter into the
negotiations for settlement based on all of the facts and exercise good
judgment," said state Rep. Roger Hunt, R-Brandon.

The state didn't wait for a lawsuit to make changes after Score's death, he
said. "We're going to have to wait for time to pass and have a better
understanding of the real impact of those changes," Hunt said.

State Rep. Pat Haley, D-Huron, said he supports the Youth Law Center yet
hopes a settlement won't prevent the public from learning more about the
corrections system. (The Associated Press State & Local Wire, October 31,
2000)


TOBACCO LITIGATION: BAT Investigated Over Alleged Smuggling Ring
----------------------------------------------------------------
THE Department of Trade and Industry launched an inquiry into an alleged
Pounds 500 million smuggling ring within British American Tobacco (BAT),
the cigarette company.

Stephen Byers, the Secretary of State for Trade and Industry, ordered the
investigation after the findings of a Department of Health select committee
inquiry into the tobacco industry. Mr Byers said: "I have given careful
consideration to the unanimous recommendation of the select committee that
the DTI should investigate the allegations of BAT's involvement in
smuggling.

"I have decided to appoint investigators to look into this and to report
back to me as soon as possible."

Three DTI staff raided Globe House, BAT's London headquarters, where they
served the company with a section 447 notice, which allows the Secretary of
State access to all company documents. The order permits the removal and
interrogation of all company directors by the Secretary of State and his
staff, which would include Kenneth Clarke, the former Chancellor, who is
non executive deputy chairman of BAT.

BAT is accused of encouraging the trade in smuggled cigarettes by exporting
huge volumes to small markets. In Andorra, for example, UK tobacco exports
rose from 13 million cigarettes in 1993 to 1.5 billion in 1997 - vastly
more than Andorra's population of 63,000 could conceivably consume.

It is estimated that the UK loses more than Pounds 2.5 billion a year in
tax revenues because of tobacco smuggling.

ASH, the British anti-smoking lobby, suggests that between Pounds 300
million and Pounds 500 million of BAT's revenue is derived from smuggled
tobacco. Yesterday, the association called for the resignation of the
company's entire board. The lobby claims to have documents suggesting that
two BAT executives discussed revenues from sales described as DNP - duty
not paid - which it is alleged they knew came from the black market.

If evidence of smuggling is found by the DTI, ASH will campaign for BAT to
be prosecuted under the Criminal Justice (Terrorism and Conspiracy) Act
1998. The law enables UK organisations to be prosecuted for conspiring to
break the law in other jurisdictions.

Allegations of smuggling at BAT go back to 1995 when a broker's note
circulating in the City highlighted positive earnings growth for BAT
despite anti-smoking lobbies in Britain and America damaging domestic
sales. The note suggested that BAT sales would remain strong thanks to
"unconventional" markets in the Far East. The latest allegations came to
light during a class action against a division of BAT in Minnesota. The US
Court ordered that documents relating to BAT's global trading network be
deposited for public scrutiny in 1998.

ASH has called for the investigation to be extended to Gallaher and
Imperial Tobacco, BAT's two UK rivals.

BAT, which denies all the allegations against it, said the company is
disappointed that the information about a supposedly confidential inquiry
has been made public by the Secretary of State. "It is unfortunate that
this matter has been made public but the company still intends to
co-operate fully with the DTI and any other agency involved in the matter."
(The Times (London), October 31, 2000)


* Canadian Judge Proposes Attorneys Pay Fees When Suits Lost
------------------------------------------------------------
One of Canada's top judges has proposed that the same lawyers who make
large amounts of money when they win class action lawsuits should also have
to pay when they lose.

"If you lose, why shouldn't you have to pay the costs?" Justice Warren
Winkler of the Ontario Superior Court wondered during a panel discussion at
the Canadian Bar Association's annual convention.

"The other side had to go there and defend themselves. You're the one who's
going to get $ 15 million at the end of the day if you win," Justice
Winkler said, referring to Vancouver lawyer J.J. Camp, who recently
received $ 15 million in legal fees for representing hepatitis C victims in
a British Columbia class action.

                         $ 20 Million Payment

Justice Winkler himself in June approved $ 20 million in payments to
Ontario attorneys involved in negotiating a $ 1.2 billion deal with the
federal and provincial governments for their clients who contracted the
liver disease through tainted blood in the country's supply during the late
1980s.

It was his colleague, Justice Kerry Smith of the British Columbia Supreme
Court, who awarded the $ 15 million to Camp the same month.

The fees amounted to 4.6 percent of the total compensation package.

Camp challenged Justice Winkler at the convention, strongly suggesting that
Ontario adopt a class action law similar to that in British Columbia.

Losing lawyers there are only required to pay when their lawsuits are found
to be frivolous, while in Ontario, they pay regardless.

                             Ontario 'Wrong'

"I feel very strongly about this, I think Ontario has got it absolutely
wrong," Camp said, asserting that punishing the losing lawyers could
develop "a huge obstacle and potentially a barrier" to class actions since
attorneys would be reluctant to take the risk.

Rodney Haley, another British Columbia attorney, presented a paper at the
convention on developments in class actions which estimates that most
result in settlements for the victims while few have been struck down by
the courts.

To date, class actions are only allowed in British Columbia, Ontario and
Quebec.

Halifax lawyer Dawna Ring criticized the other provinces for not allowing
class actions. "Most people can't afford to gamble their mortgage for a
case they don't know if they will win," Ring said. "Before class actions,
people couldn't get into the court system." (Mealey's Attorney Fees,
September, 2000)


* Journal Says New Bill Allows Terror Victims To Sue In U.S.
------------------------------------------------------------
Daily What's a fair price for seven years in hell? How about $ 41.2
million, plus interest? That's what Terry Anderson will get.

In 1985, Hezbollah thugs, acting for Iran, grabbed him in Beirut. His
captors seized 18 Americans in all. They killed one. The new Justice for
Victims of Terrorism Act will give some comfort. The Beirut captives will
share $ 213 million. The kin of 20-year-old Alisa Flatow, killed by a 1995
Hezbollah bomb in Israel, will get $ 22 million. The families of three
Cuban-American pilots shot down near Cuba will share $ 50 million. The cash
will come from rogue-state assets seized by the U.S. Treasury.

The new law augments the 1996 Anti-Terrorism Act. That older law gave
American victims the right to sue terrorist-sponsoring nations in U.S.
courts, but left no way to collect. The new law lets plaintiffs go after
defendants' funds frozen by the U.S. Worthy as the new law is, it sends a
wake-up call not only to tyrants but to corporate boardrooms in the U.S.
and abroad.

What's the connection? American law is trending toward punishment of
tyranny and those who support or profit from it. That includes U.S. and
foreign companies, human-rights lawyers say. Related U.S. laws are forcing
major companies - foreign and domestic - into American courtrooms to
account for their treatment of prisoners, peasants and dissidents. One is
the Alien Tort Claims Act. Passed in 1789 by the first Congress, it lets
foreigners sue in U.S. federal courts for crimes committed abroad. These
crimes must be seen as violating international law.

Nigerians have launched a class action in California against Chevron,
alleging that the company conspired with their country's army and police.
The suit charges Chevron with complicity in "summary execution, torture and
unlawful arrest and detention" to suppress "peaceful protests about
Chevron's environmental practices on plaintiffs' land." Nigerians also are
suing Royal Dutch Shell for similar charges. Burmese citizens are suing
Unocal. They claim the oil company and Burma's ruling junta enslaved
workers to build a pipeline.

Human-rights lawyers say U.S. courts are moving from punishing tyrants to
punishing firms that work with tyrants. They say such cases send a warning
to the boardroom: don't buddy up to corrupt, brutal regimes.

A newer law has rattled Japanese companies in the U.S. California passed a
law in 1999 that gives World War II slave laborers until 2010 to sue Axis
companies that exploited them. Since Germany and Austria have negotiated $
7 billion settlements, the law hits Japan. Two classes of people are suing
Japanese giants Mitsui, Mitsubishi, Nippon Steel, Ishihara, Sumitomo, Daiwa
and others in U.S. courts. Americans who were prisoner-of-war slaves of
these firms are invoking the California law. Chinese, Koreans, Filipinos
and other non-Americans are applying the Alien Tort Claims Act as well as
the California law.

The Japanese firms say California lacks jurisdiction. Human-rights lawyers
say the companies' large holdings in the state bring them under California
law. The Japanese firms also argue that a 1951 treaty absolves them.
Lawyers for U.S. POWs say the treaty may shield Japan's government but not
the companies that profited from enslaved and abused Americans.

The cases are embroiled in complex appeals. Dave Casey, a San Diego lawyer
representing POWs, believes the Japanese firms will settle rather than go
to trial. "If an American jury heard about these atrocities, there would be
heavy penalties," he said.

Japanese officials have made veiled threats over laws such as California's.
Rhode Island has a similar bill awaiting passage. In May, Yuzo Yoshioka,
Japanese consul in Boston, sent a warning to the state's senate finance
committee. He said that Japanese companies "might be forced to withdraw
from this country." But legal experts say Japanese companies are too
heavily invested in the U.S. to make good on the threat.

Another law, the 1991 U.S. Torture Victims Protection Act, gives victims or
kin the right to sue not just the perpetrators but also those who gave the
orders or failed to stop the crime. The New York-based Lawyers Committee
for Human Rights is suing two former El Salvadoran generals in Florida. The
committee says that the pair should pay for the murders of four U.S. nuns
by Salvadoran troops in 1980.

The four laws are linked, said Rob Varenick of the committee, by enforcing
the principle that "people up the chain of command in institutions may be
held liable for acts on which they may not have left their fingerprints."
He said, "This derives from some basic considerations: in the country of
origin the act cannot be properly tried because governments or courts are
unwilling or unable to act." He said pushing American legal jurisdiction
beyond U.S. borders is "consistent with the way the business world is
working."

In the case of rogue-state defendants, the U.S. government can use seized
assets to compensate some victims. And lawyers expect foreign corporations
to pay rather than leave the U.S. But what about international criminals?
The record is not good. Robert Swift, a Philadelphia human-rights lawyer,
won a $ 2 billion judgment against the estate of Ferdinand Marcos, the late
Philippine dictator. "It took over a decade. We litigated every issue,"
Swift said. (Investor's Business Daily, October 31, 2000)


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