CAR_Public/001113.MBX              C L A S S   A C T I O N   R E P O R T E R

             Monday, November 13, 2000, Vol. 2, No. 221

                             Headlines

ATCHISON CASTING: Schubert & Reed Investigates Securities Issues
BEAUREGARD PARISH: School board Votes for Student-Led Prayers
BRIDGESTONE/FIRESTONE: Tire Sales Down 40%; Cause Still Being Found
CANADA: Prime Minister Urged to End Appeal Against Disabled Veterans
CHARLES KEATING: No Retrial on Fraud for Savings-and-Loan Figure

CREDIT CARDS: Judge in Antitrust Trial Orders Return of DOJ Web Document
CYLINK CORPORATION: Schubert & Reed Investigates Securities Issues
DEL GLOBAL: Schubert & Reed Investigates Securities Issues
HONOLULU DISPOSAL: 9th Cir OKs Truck Drivers Suit for Wages and Benefits
INMATES LITIGATION: Judge OKs Settlement Notice in Training School Suit

LERNOUT & HAUSPIE: Paper Says Future As Independent Company in Question
MICROSOFT CORP: Supreme Court Rejects Direct Appeal in Antitrust Case
MONROE COUNTY: Judge Certifies Suit Challenging Short-Term Rental Ban
NEUTRAL POSTURE: Texas Lawsuit Alleges Fraud in Stock Transactions
PRESIDENTIAL ELECTION: Several Suits Filed; Quest Faces Huge Hurdles

PRESIDENTIAL ELECTION: Warning Made against Setting Precedent of Suits
SLAVE REPARATION: Demands Are Growing; Way of Resolving May Be Precedent
SPORT-HALEY: Schubert & Reed Investigates Securities Issues
ST. PETERSBURG POLICE: Lawsuit filed over Uhuru Headquarters Tear Gasing
TOBACCO LITIGATION: Lorillard Says Settlement Negotiations Are Suspended

TOBACCO LITIGATION: Medicaid Recipients Denied Share MSA Proceeds in MN
TOBACCO LITIGATION: N.Y. Judge Denies Union Health Funds' Certification

* Japanese Seek More Public Involvement In Trials and More Legal Experts
* Using Daubert to Oppose Class Action Rule 23 Certification

                            *********

ATCHISON CASTING: Schubert & Reed Investigates Securities Issues
----------------------------------------------------------------
(Atchison Casting Corp. NYSE:FDY 8/12/99 -- 11/2/00)

On November 2, 2000, Atchison Casting Corp. president Hugh Aiken announced
that a new chief financial officer at its Pennsylvania Foundry Group unit
had uncovered accounting irregularities affecting the Pennsylvania unit's
receivables, payables, operating expenses and prepaid expenses accounts,
and possibly others. Historically, the Pennsylvania unit accounted for 8%
of all Atchison sales. As a result of the irregularities, Atchison
announced it will delay its first quarter results while it investigates,
and that it may be required to restate earnings for prior fiscal years. On
news of the irregularities, Atchison's stock price fell more than 19% in a
single day's trading.

Contact: Robert C. Schubert, Esq. or Juden Justice Reed, Esq., Schubert &
Reed LLP, Two Embarcadero Center, Suite 1050, San Francisco, CA 94111, Tel.
415/788-4220, Fax 415/788-0161, E-mail: mail@schubert-reed.com. The firm
web site contains additional information about these matters and class
actions generally: http://www.schubert-reed.comor
http://www.classactionlawyers.com.


BEAUREGARD PARISH: School board Votes for Student-Led Prayers
-------------------------------------------------------------
The Beauregard Parish school board voted Thursday to allow student-led
prayers in its schools.  The American Civil Liberties Union has threatened
to file a lawsuit against the district's policy that allows church groups
to pray for children in the parish schools.  Meanwhile, the Natchitoches
Parish school board has agreed to stop student-led prayer before football
games.  The ACLU sent a letter to the Natchitoches school board last month
asking it to cease student-led prayer over the loudspeakers before football
games.

In Beauregard Parish, the ACLU said a complaining parent objected to the
school district's participation in a program known as Partners in Prayer
for Schools. In that program, churches and other groups adopt classrooms
and pray for the students. The district sent home letters to parents asking
for permission for their children to participate.

Joe Cook of the ACLU said the policy is unconstitutional. He said the group
will decide what action to take Friday.

Many residents in Beauregard and Calcasieu parishes favor prayer in public
schools and have protested against the ACLU's attempts to block student-led
prayers at public functions in Beauregard schools.

Over the past four decades, the U.S. Supreme Court has said that public
school prayer violates the Establishment Clause of the First Amendment,
which provides for church-state separation.

The court has rejected arguments that would have allowed voluntary prayer
in classrooms and school-sponsored athletic events, saying, in essence,
that students are not truly in a voluntary position. (The Associated Press,
November 11, 2000)


BRIDGESTONE/FIRESTONE: Tire Sales Down 40%; Cause Still Being Found
-------------------------------------------------------------------
Sales of Firestone replacement tires for cars and light trucks fell about
40 percent in the United States in September and October compared to a year
earlier, the president of Bridgestone Corp. said last Friday.

Bridgestone/Firestone has replaced 5 million tires in the United States,
about 77 percent of those subject to the recall, Kaizaki said Friday. The
company's investigation is still underway, executive vice president
Tadakazu Harada said.

The sales decline followed a massive recall of Firestone tires begun in
August by its U.S. subsidiary, Bridgestone/Firestone, because of crashes in
which its tires are under investigation. Overall, Bridgestone/Firestone's
sales of tires for passenger cars and light trucks posted a single-digit
percentage drop, he said.

Bridgestone president Yoichiro Kaizaki also told reporters the company had
raised the expected cost of the recall by nearly 29 percent. ``Roughly
speaking, we now expect recall costs to reach about $450 million, compared
with our earlier estimate of $350 million,'' Kaizaki said.

But Kaizaki offered no specific sales figures. He said the overall figure
dropped less than the decline at Firestone because of increased sales of
Bridgestone-brand and other non-Firestone brand tires.

Nashville-based Bridgestone/Firestone recalled 6.5 million ATX, ATXII and
Wilderness AT tires in August because of problems with tread separation
cited in crashes, mostly on Ford Explorers. U.S. regulators say Firestone
tires are under investigation in at least 119 deaths in the United States.

The U.S. National Highway Traffic Safety Administration issued a consumer
advisory on an additional 1.4 million tires, and Bridgestone/Firestone
agreed to also replace those tires at no cost for customers who ask.

Bridgestone said it has found that the tire separations, which led to
accidents, occur more when tire pressure is low, tire temperature is high
and the vehicle is moving at a high speed. The problem tires appeared to
have been manufactured mostly at Bridgestone/Firestone's Decatur, Ill.,
plant in 1996. (AP, November 10, 2000)


CANADA: Prime Minister Urged to End Appeal Against Disabled Veterans
--------------------------------------------------------------------
On the eve of Remembrance Day, the son of a decorated veteran has written
to the Prime Minister asking the federal government to reconsider its
notice of appeal, which it launched earlier this month.

The federal government is appealing the fact that the Ontario Superior
Court of Justice ruled in favor of disabled veterans across Canada who are
suing the federal government for mismanaging their financial affairs over a
period of many years. The legal team representing the veterans was
successful in arguing that the federal government was a trustee and failed
to pay interest on the accounts they held in trust. The court ruled in the
veterans' favor on October 11, 2000.

The letter to the Prime Minister was written on behalf of the family of Mr.
George Langen, a veteran of the Second World War, by Mr. Langen's son Roger
who resides in Toronto, Ontario. Mr. Langen's father died in the Veterans'
Wing of Grand Falls Manor (New Brunswick) in 1998. Mr. George Langen is a
member of the Class Action suit due to the fact that the federal government
managed his pension and other personal monies, yet failed to pay interest
on those monies in accordance with the laws governing trustees.

The Class Action lawsuit, certified by Justice Brockenshire in the Superior
Court of Justice in October 1999, asserted that the government failed in
its duty as a trustee on behalf of veterans who were disabled in the
service of their country. As a result of their injuries, these veterans
were subsequently declared incompetent and were unable to manage their
financial affairs. Under legislation provided expressly for that purpose,
the federal government administered these veterans' financial affairs,
amassing their monies in the government's own treasury -- the Consolidated
Revenue Fund.

"Mr. Roger Langen and his mother Monica Langen Pirie contacted us and
shared their father's story - their story -- with us. Their story was so
moving, so compelling, that we asked them to share it with Canadians as
part of the Remembrance Day commemoration and as a means of reminding
people that despite the tremendous sacrifices made by veterans like Mr.
Langen, his family will now have to wait even longer to get their pension
and other monies returned to them because of the government's appeal," said
the lawyers representing the veterans.

The members of the legal team are Raymond Colautti, and David Greenaway,
Partners, Raphael Partners, Barristers and Solicitors, Windsor, Ontario and
Mr. Peter Sengbusch, London, Ontario.

"Like Mr. Langen, and the lead litigant in our lawsuit Mr. Authorson, many
veterans suffered grievous wounds that were unseen - today we would call it
Post Traumatic Stress Syndrome. It was veterans like Mr. Langen whose funds
were managed by the federal government for years, who were denied interest
during that entire time. Writing to the Prime Minister was Mr. Langen's
family's way of sharing their story in the hope that the Prime Minister
would do what the court has already told the government it should do:
rectify this long-standing stain on our country's war contributions, put
aside the groundless appeal and settle this lawsuit so that veterans and
their families can finally get what is owing to them," they added.

"We also felt that their compelling story put a human face on the veterans
who comprise our Class Action lawsuit. Mr. Langen's story is unique to him,
yet he shared the fate of so many veterans who returned to Canada forever
marked by the tragedies of war. We thank the Langen family for sharing
their story and we hope it reminds Canadians -- particularly during a
federal election - that governments are elected to make choices about what
is in the best interest citizens. Not only is the government's management
record regarding these veterans miserable, all Canadians should be
concerned with the government's $1.3 B liability in this case as well as
the $1 million per week in interest payments on that liability," they
noted.


CHARLES KEATING: No Retrial on Fraud for Savings-and-Loan Figure
----------------------------------------------------------------
Prosecutors reluctantly said Thursday they will not retry financier Charles
Keating on state fraud charges in a case that made him a symbol of the
savings-and-loan scandals of the 1980s. At their request, Superior Court
Judge Lance Ito dismissed the case in which Keating was convicted but won a
reversal on appeal due to improper jury instructions.  ``We take no
satisfaction in the request we made today,'' Deputy District Attorney Bill
Hodgman told the judge as the case quietly came to an end.

Hodgman said a conviction would have resulted in no more than a six-month
jail sentence. He also said that many witnesses who testified in the 1992
trial overseen by Ito have either died or are in bad health.

The fraud convictions were thrown out because Ito's instructions eight
years ago improperly allowed the jury to convict Keating without deciding
whether he intended to swindle them.

Keating remains convicted of some federal charges involving Lincoln Savings
and Loan, which collapsed at a cost to taxpayers of $3.4 billion, and its
parent, American Continental Corp.

He planned to celebrate anyway. If the government had left him alone,
Keating said outside court, investors ``would all be rich.''

Investors lost nearly $200 million when American Continental's unsecured
``junk'' bonds turned out to be worthless. Many investors were elderly
Lincoln Savings customers who claimed they were duped.

In separate state and federal trials, prosecutors alleged that Keating
looted Lincoln of its assets to prop up American Continental. They claimed
that bond buyers were not told of the risky nature of their investments.

Keating was sentenced to 10 years in prison on the original state charges.
He was then convicted in the federal case and served nearly five years of a
12{-year prison sentence before that conviction was reversed on grounds
that some jurors learned of his state court conviction and discussed it in
the jury room.

Federal prosecutors had said they would retry their case but in 1999
accepted Keating's guilty pleas to three counts of wire fraud and one of
bankruptcy fraud in a deal that allowed him to remain free, with no fines
or restitution required. (Los Angeles AP)


CREDIT CARDS: Judge in Antitrust Trial Orders Return of DOJ Web Document
------------------------------------------------------------------------
The judge in the antitrust trial of Visa International and MasterCard
International has ordered the return of secret company documents that the
Justice Department inadvertently posted on its Web site. In a move one
First Amendment lawyer called unconstitutional, U.S. District Judge Barbara
Jones on last Thursday November 9 directed individuals who downloaded 12
documents posted on a Justice Department site to return or destroy them.
The documents were online from Aug. 4 to Sept. 14, and Jones said at least
''several parties'' downloaded them. Visa and MasterCard had given the
documents to the Justice Department under seal as part of pretrial
discovery. (The Atlanta Journal and Constitution, November 10, 2000)


CYLINK CORPORATION: Schubert & Reed Investigates Securities Issues
------------------------------------------------------------------
(Cylink Corporation Nasdaq:CYLK 2/12/98 -- 11/4/98)

On November 5, 1998, following consultation with its outside auditors,
Cylink announced that its first and second quarters of fiscal 1998 were
materially overstated and that the company will report substantial
operating losses for each of the first three quarters of 1998. On November
4, 1998, the company replaced President and CEO Fernand Sarrat, Vice
President of Sales and Marketing Tom Butler, and John Daws, former CFO and
Vice President of Business Development. On news of the accounting
improprieties and management purge, Cylink's stock price fell from a close
of $4-7/16 on Tuesday, November 3, 1998, to $3-11/16 on November 5, 1998,
losing 17% of its value in two days' trading.

On September 27, 2000, the U.S. Securities and Exchange Commission ("SEC")
issued an Order Instituting Cease and Desist Proceedings, Making Findings
and Issuing a Cease and Desist Order ("the Order"), wherein the SEC ordered
that Cylink cease and desist from causing any violations or future
violations of the federal securities laws. The SEC issued findings that
Cylink had engaged in wide-ranging and pervasive accounting fraud in
connection with its fourth quarter of fiscal year 1997 and the first two
quarters of fiscal year 1998. On that same day, the SEC announced that it
had sued the Company's former Chief Financial Officer and the Vice
President of Sales for violations of the federal securities laws in
connection with improper revenue recognition practices.

Contact: Robert C. Schubert, Esq. or Juden Justice Reed, Esq., Schubert &
Reed LLP, Two Embarcadero Center, Suite 1050, San Francisco, CA 94111, Tel.
415/788-4220, Fax 415/788-0161, E-mail: mail@schubert-reed.com. The firm
web site contains additional information about these matters and class
actions generally: http://www.schubert-reed.comor
http://www.classactionlawyers.com.


DEL GLOBAL: Schubert & Reed Investigates Securities Issues
----------------------------------------------------------
(Del Global Technologies Corp. Nasdaq:DGTC 10/21/99 - 11/6/00)

On November 6, 2000, Del Global announced that that its net income for the
fiscal year ended July 29, 2000 would be substantially lower than its net
income for Fiscal 1999 and that it would delay the filing of its Form 10-K
with the Securities and Exchange Commission. Del Global announced that it
will likely be required to revise its Fiscal 2000 quarterly results and
that it may also be required to restate Fiscal 1999 results. The press
release indicated that a review of revenue recognition and internal control
problems was the cause of the delay filing the Company's annual report. On
the news, Nasdaq trading was suspended and the Nasdaq Stock Market
requested additional information from the Company.

Contact: Robert C. Schubert, Esq. or Juden Justice Reed, Esq., Schubert &
Reed LLP, Two Embarcadero Center, Suite 1050, San Francisco, CA 94111, Tel.
415/788-4220, Fax 415/788-0161, E-mail: mail@schubert-reed.com. The firm
web site contains additional information about these matters and class
actions generally: http://www.schubert-reed.comor
http://www.classactionlawyers.com.


HONOLULU DISPOSAL: 9th Cir OKs Truck Drivers Suit for Wages and Benefits
------------------------------------------------------------------------
Collective bargaining contracts cannot  be modified by oral agreement
between employers and unions, the 9th U.S. Circuit Court of Appeals has
held, allowing a group of truck drivers to proceed with their class action
suit to recover wages and benefits to which they claim they are entitled
(Pace v. Honolulu Disposal Serv., Inc., 9th Cir., No. 99-15796). The ninth
circuit covers Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada,
Oregon, Washington, Guam, and the Northern Mariana Islands.

The Appeals Court overturned the District Court's grant of summary judgment
for Honolulu Disposal Service, Inc. (HDS) and the Laborers' International
Union Local 368, ruling that the District Court erred by admitting
extrinsic, or outside, evidence contradicting the unambiguous terms of a
collective bargaining agreement. The parole evidence rule, the Appeals
Court found, bars admission of such evidence. (Under the parole evidence
rule, a written contract is considered the final expression of an agreement
and may not be varied or contradicted by evidence of prior written or oral
agreement.)

''We cannot sanction the introduction of parole evidence that would
eviscerate the very essence of the contracts. The District Court erred in
admitting evidence of the proffered oral agreement,'' the Appeals Court
said in reaching its conclusion. HDS and Local 368 established a collective
bargaining relationship in 1978. The relationship allegedly was predicated
on the oral understanding that the bargaining unit would be limited to a
''couple'' of HDS drivers. Kaneshiro signed this first of a series of six
agreements that covered the period from 1979 to 1999.

The original agreement's coverage provision stated that the union would
represent HDS ''employees employed in the State of Hawaii in the job
classifications set forth in Exhibit 'A'.'' Exhibit A listed roll-off
drivers as one of seven classifications. The plaintiffs are four former and
current employees who have worked as roll-off drivers for HDS.

The written collective bargaining agreement required that HDS ''participate
in'' the health/welfare, pension, and annuity trust funds by contributing
''for each hour worked by each employee covered by this Agreement, the
following amounts,'' as specified by the agreement. It also had a
''no-oral-modification clause'' and an ''integration clause,'' which stated
that the document contained the entire agreement between the parties.

The five subsequent collective bargaining agreements were substantially
similar to the first. HDS and the union alleged that they applied the 1978
oral agreement to the successive collective bargaining agreements, limiting
the bargaining unit to two or three designated people. However, none of the
subsequent agreements reflected this oral agreement.

The plaintiffs filed a class action in the U.S. District Court for the
District of Hawaii to recover wages and benefits to which they believe they
are entitled under the agreement. The union and HDS moved to have the suit
dismissed for lack of subject matter jurisdiction, arguing that it was a
representational dispute within the primary jurisdiction of the National
Labor Relations Board (NLRB), but the District Court ruled that it had
jurisdiction ''to the extent there is a contractual issue'' and denied the
motion, relying on Cappa v. Wiseman (659 F.2d 957 [9th Cir. 1981]).

The District Court then granted summary judgment in favor of HDS and the
union, finding that Cappa again controlled. The parole evidence rule
permitted extrinsic evidence the oral agreement in this case, the District
Court said, because the written agreements ''appear to have been a
[collective bargaining agreement] form adapted to fit the agreement between
the Union and HDS.'' Since the drivers had not raised any issue of material
fact concerning the oral agreement, summary judgment was appropriate, the
District Court concluded.

On appeal, HDS and the union conceded that the written agreements, on their
face, cover the drivers, but argued that evidence of the oral agreement is
admissible and overrides the written agreements. The 9th Circuit disagreed.

''Faced with clear, unambiguous written agreements containing integration
clauses and no-oral-modification clauses, and in the absence of language
acknowledging any supplemental agreements,'' the Appeals Court said, ''we
hold that the parole evidence rule bars introduction of evidence of a
proffered oral agreement that directly contradicts a key term of the
written contracts.''

Citing Pierce County Hotel Employees & Restaurant Employees Health Trust v.
Elks Lodge (827 F.2d 1324 [9th Cir. 1998]), the court explained that,
''although the parole evidence rule is not applied as strictly in the
context of collective bargaining agreements, it still'' bars extrinsic
evidence ''inconsistent with an unambiguous writing.'' In Pierce County,
the 9th Circuit ruled that ''evidence of prior or contemporaneous
agreements is inadmissible to contradict an unambiguous written contract.''

In this case, the oral agreement between HDS and the union clearly
contradicts the ''straightforward and broad coverage provisions'' of the
written contracts, the Appeals Court found. While the written agreements
purport to cover ''all'' employees listed in Exhibit A, the oral agreement
allegedly covers a ''couple'' of drivers, creating a ''gap ... [that] could
hardly be more dramatic,'' it said.

The Appeals Court also ruled that the District Court properly asserted
jurisdiction in the case since it is primarily a contractual dispute that
federal courts have jurisdiction to hear under Section 301 of the
Labor-Management Relations Act, rather than a representational dispute that
first must be decided by the NLRB.

                        PMLL Recommendation

Put it in writing! Once an employer and a union come to a written
agreement, that written agreement can't be changed by evidence of oral
agreements made prior to or at the same time as the writing. And rightly
so: If oral agreement on certain issues came prior to or at the time of the
writing of the contract, why weren't those issues simply addressed in the
written contract?

In the case above, it's possible that the court would have granted the
employer and union more leeway had the plaintiffs been challenging their
first written contract. After all, as the court noted, the parole evidence
rule generally is not applied as strictly to collective bargaining
agreements. But HDS and the union had 20 years and five additional
contracts in which to formally include additional material terms in the
written contract. Even boilerplate collective bargaining agreement forms
containing language contrary to the terms of a specific agreement can
easily be tailored.

Don't think of this as a matter of trust: Don't worry about offending the
other party to the contract by insisting that all the material provisions
of a contract be included in the writing it can protect both of you down
the road. The above case wasn't a matter of one party to a contract
challenging the other HDS and the union shared defendant status in the
plaintiff drivers' class action suit. If your company operates under
written contracts that have been modified by oral agreements, talk to
counsel about redrafting those contracts to make them fully reflective of
your agreements. (Personnel Manager's Legal Letter, November 2000)


INMATES LITIGATION: Judge OKs Settlement Notice in Training School Suit
-----------------------------------------------------------------------
Juveniles at the State Training School can call a toll-free number to
report objections to a settlement proposed in a lawsuit over conditions at
the center. A notice of the settlement, approved by U.S. District Judge
Lawrence, includes the telephone number. The notice will be placed in the
Juvenile Prison and cottages at the Training School. Those who can't read
or understand English will have the notice read to them in a language they
understand. Piersol gave preliminary approval to the agreement earlier this
month.

Mark Soler, president of the Washington, D.C.-based Youth Law Center, said
the notice will be easy for juveniles to understand and gives them a more
convenient way to contact his lawyers. "I'm confident that no one there is
going to stop them," Soler said.

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

Piersol revised the notice to include a summary of the lawsuit to make sure
the inmates understand the settlement. The original version advised them to
read the entire document. "The class members in this action are young and,
as a result, they may be more inclined to read a brief notice than the
actual settlement agreement," Piersol wrote.

On Dec. 11, Piersol will hold a hearing to determine if the settlement
should have final approval.

Among the terms of the proposed agreement:

* The group of juveniles at the State Training School will receive a
   total of 100 hours a week of clinical mental health services.

* Inmates placed in solitary confinement will be given an explanation of
   the reasons for his or her placement and will get a chance to explain
   the behavior. Every 24 hours, the placement will be reviewed and
   authorized by someone not involved in the incident that led to the
   use of this punishment.

* Staff will receive annual training in security procedures, supervision
  of juveniles, suicide precautions, communication skills, counseling
  techniques, reality therapy and crisis prevention.

* General or special education will be provided to all students.

* Staff will videotape all incidents in which youth are placed in
  restraints and will keep such tapes for one year.

* Severely restricted use of restraints on juveniles threatening self
   harm.

* Removal of metal rings on beds used in four-pointing, which is the
   shackling of juveniles arms and legs to their beds.

* Staff will only use pepper spray or cell entry uniforms, such as
  padded vests or helmets, in extreme cases.

* When moving juveniles to and from their cells, staff will not use
  tethers.

* Staff will not keep "less than lethal" devices, such as rubber bullets
  or stinger grenades, inside the facility. They may obtain them during
  a major disturbance or riot.

The settlement also lets representatives of the Youth Law Center visit
juveniles and review records at the State Training School to make sure the
agreement is being followed. This monitoring will continue for one year.
(The Associated Press State & Local Wire, November 10, 2000)


LERNOUT & HAUSPIE: Paper Says Future As Independent Company in Question
-----------------------------------------------------------------------
Lernout & Hauspie's triple whammy leaves its future as an independent
company in question. Its eponymous founders' decision to stand down as
chairmen might, on its own, have been good news; they long ago lost the
market's confidence. But it was coupled with L&H's announcement that it
expects to restate financial statements from 1998 on due to "certain errors
and irregularities", and a second warning on third-quarter profits. And
that sent the shares down 35 per cent before their suspension on Nasdaq and
Easdaq.

Deteriorating trading could leave L&H with cash problems, with Dollars 200m
short-term debt to be repaid by March 31. That, and L&H's damaged
reputation, could tempt staff and customers away to competitors. It already
faces class actions in the US alleging misleading financial statements.
Now, it risks new suits over acquisitions, especially this year's Dollars
1bn purchases of Dragon and Dictaphone, should it become apparent they were
made with shares valued on the basis of erroneous data.

Amid such uncertainties, few would buy L&H as a going concern. But its core
speech recognition technology could entice even Microsoft or IBM, while
other divisions, such as translation technology, could find separate
buyers. The biggest losers may be retail investors, who clung on while
institutions dumped the shares. Perhaps they should have known better. But,
as all too often, the whole market allowed itself to be seduced by L&H's
whizzy technology - without looking hard enough at the company underneath.
(Financial Times (London), November 10, 2000)


MICROSOFT CORP: Supreme Court Rejects Direct Appeal in Antitrust Case
---------------------------------------------------------------------
The U.S. Court of Appeals for the District of Columbia Circuit-- not the
U.S. Supreme Court-- will hear Microsoft Corp.'s appeal of a decision that
it violated federal antitrust laws and should be split into separate
entities as a result. The decision is a victory for Microsoft, which has
twice received favorable rulings in the case from the D.C. appeals court.
Microsoft Corp. v. United States, No. 00-139, direct appeal denied (U.S.,
Sept. 26, 2000), No. 261, cert. denied (U.S., Sept. 26, 2000).

Without comment, an 8--1 majority of the high court voted to deny the
Justice Department's direct appeal, which asked the court to take the
appeal immediately under the Expediting Act, 15 U.S.C. @ 29(b). The act
allows for -- but does not require -- direct Supreme Court review of civil
antitrust cases brought by the federal government when the case is of
"general public importance in the administration of justice."

The same majority denied the petition for writ of certiorari filed by the
state attorneys general who filed suit against Microsoft concurrently with
the federal government.

Justice Stephen Breyer dissented from the rejection of the federal
government's direct appeal, writing:

     I would note probable jurisdiction in this case. 15 U.S.C. @ 29(b).
The case significantly affects an important sector of the economy -- a
sector characterized by rapid technological change. Speed in reaching a
final decision may help create legal certainty. That certainty, in turn,
may further the economic development of that sector so important to our
Nation's prosperity.

     I recognize that there are competing considerations. A court of
appeals proceeding would likely narrow, focus, and initially decide the
legal issues now presented here. It would thereby facilitate any later
deliberation in this Court. Nonetheless, I believe this Court can consider
the issues fully now by taking additional briefs and by granting additional
time for oral argument, if necessary. Consequently, I would hear the
appeal.

Chief Justice William Rehnquist considered recusing himself under 28 U.S.C.
@ @ 455(a) and 455(b) because his son is a partner at Goodwin, Proctor &
Hoar in Boston, which represents Microsoft in private antitrust cases.
However, the Chief Justice ultimately decided to participate in the case,
concluding that the statute should not be given an overly broad
interpretation, as would be the case under the facts in question.

       R.I. Rejects End-User Antitrust Suit Against Microsoft

End-users who did not buy their software directly from manufacturer
Microsoft Corp. lack standing to pursue antitrust claims under Rhode Island
law, a trial court judge has ruled in one of the many state class-action
lawsuits filed against Microsoft Corp. In so holding, the court rejected
the plaintiffs' argument that end-user agreements entered into with
Microsoft are sufficient to establish that they are affected parties in the
context of antitrust litigation. Siena et al. v. Microsoft Corp., No.
00-1647 (R.I. Super. Ct., Aug. 21, 2000).

A physician and a professional corporation sued Microsoft Corp., seeking
damages under the Rhode Island antitrust statute on behalf of purported
class members who own or lease Intel-based personal computers that use
Microsoft's Windows 98 operating system. Neither plaintiff bought the
operating system directly from Microsoft. Instead, Windows 98 had either
been pre-installed by the computer manufacturer, or was contained on a
CD-ROM purchased by the plaintiff from a retailer.

Microsoft moved to dismiss the action for lack of standing. In response to
the motion, the plaintiffs argued that they were compelled to accept and
agree to Microsoft's mandatory end-user license as a precondition to using
the software and are, therefore, an affected group.

The court rejected the purchaser's argument based on the end-user license,
relying on Illinois Brick Co. v. State of Illinois, 431 U.S. 720, 97 S. Ct.
2061 (1977). In so holding, the court noted that the plaintiff's paid
nothing directly to Microsoft for the agreement, and consequently could not
put forth a reasonable standing argument in the antitrust context. Only
direct purchasers who paid Microsoft, which would include the computer or
CD-ROM manufacturer, or the computer distributor or wholesaler, were in a
position to demonstrate an interest sufficient to establish standing under
either the federal or state antitrust statutes, noted the court.

The court further noted that the Rhode Island attorney general has
statutory authority to sue on behalf of state residents who are victimized
by antitrust violations.

The court's analysis corresponded with that set forth in a similar action,
decided under the state antitrust statute in Kentucky. Relying on Illinois
Brick, a Kentucky court recently ruled that indirect purchasers cannot file
suit under the state's antitrust law in Arnold v. Microsoft Corp., No.
00-CI-00123 (Ky. Cir. Ct., July 21, 2000). However, a Tennessee court held
otherwise, acknowledging a direct right of consumers to sue Microsoft for
antitrust violations in Sherwood v. Microsoft Corp., No. 99C-3562 (Tenn.
Cir. Ct., July 5, 2000). There, the court reasoned that Tennessee Trade
Practices Act picks up where federal law leaves off, and that end-users of
Microsoft software can, therefore, directly sue the company. (E-Business
Insurance Legal Report, October 4, 2000)


MONROE COUNTY: Judge Certifies Suit Challenging Short-Term Rental Ban
---------------------------------------------------------------------
In a case that could have far-reaching implications, Senior U.S. District
Judge James C. Paine certified a class-action lawsuit on Nov. 2 against
Monroe County on behalf of 4,000 property owners suing for as much as $ 100
million in damages.

The case deals with whether a county can ban short-term rentals and it
could affect other Florida counties that are considering similar laws.

Up and down the coast of Florida, counties and municipalities are
considering passing similar vacation resort laws, said William Pincus, an
associate with Hicks Brams & Scher in West Palm Beach, who represents the
Monroe property owners. I think a smart thing for any government to do
would be to wait and see what happens with our case before taking action.

Karen Cabanas, a lawyer for Monroe County, said the class-action ruling was
expected. It really doesnt have any effect on the substance of the case,
she said. Were still confident.

The law firm of Harold E. Wolfe Jr., P.A. of West Palm Beach and Key West
is handling the case with Hicks Brams.

The case started in May when three Florida Keys homeowners filed suit in
federal court arguing that a county ban on renting houses to tourists for
less than a month was unconstitutional. The Monroe County Commission
enacted the short-term rental ban in 1997 following years of complaints
from Keys residents fed up with living next door to what had become
mini-hotels. The law applies to most houses in Monroes unincorporated
residential neighborhoods. Other property owners had sued the county in
state court and lost.

The federal lawsuit takes a different tack. It doesnt seek to rescind the
law. Instead, it contends the ban essentially allows the county to unjustly
take property by depriving property owners of rental income. The property
owners argue that the county should repay the property owners for that
income -- about $ 20 million a year.

The next step in the case will be a ruling on a plaintiffs motion for
summary judgment. That motion alleges the county started enforcing the
ordinance before it became final. It seeks about $ 50 million in income
lost by property owners between December 1998, when the county began
enforcement, and March 2000.

James Hicks, a partner in Hicks Brams, said he now will concentrate on
notifying property owners of the lawsuit. Twenty property owners have
already signed up for the class, said Hicks, and he will strive to notify
the others through the media and by using the county tax rolls. All rental
property managers in the county are already aware of the case, he said.
(Broward Daily Business Review, November 9, 2000)


NEUTRAL POSTURE: Texas Lawsuit Alleges Fraud in Stock Transactions
------------------------------------------------------------------
Neutral Posture Ergonomics, Inc. (Nasdaq: NTRL) reported that on November
8, 2000 it had been served with a lawsuit filed on October 19, 2000, in the
County Court of Dallas County in Dallas, Texas against Neutral Posture
Ergonomics, Inc., Rebecca Boenigk, Jaye Congleton, David Campbell and
Huberman Financial, Inc. In general, the lawsuit alleges violation of the
Texas Securities Act, fraud in stock transactions under Texas law, common
law fraud and deceit, and negligent misrepresentations. The suit is a
securities class action lawsuit filed on behalf of all persons who
purchased, held or sold the stock of the Company between October 20, 1997
and October 20, 2000. The Company intends to vigorously contest the claims
against it made in the suit.

Neutral Posture Ergonomics, Inc. manufactures, markets and distributes
ergonomic products. Neutral Posture Ergonomics, Inc. is a certified Women
Business Enterprise and its common stock is listed on the Nasdaq Small Cap
Market under the symbol NTRL.


PRESIDENTIAL ELECTION: Several Suits Filed; Quest Faces Huge Hurdles
--------------------------------------------------------------------
A report on the USA Today says Complaints about county's ballot reach
courts A new vote would be unprecedented, and legal experts say that it's
unlikely.

The first legal challenges to the results of the presidential election in
Florida claim that the configuration of Palm Beach County's ballot violated
state election law and was so "misleading and deceptive" that it violated
voters' constitutional rights.

The complaints, brought by two groups of voters and followed by several
more lawsuits from individual voters alleging discrimination and other
grievances, face huge hurdles in their quest to overturn the election
results and force another vote.

"I don't know of any other Florida case where a revote" occurred,
acknowledges Henry Handler, the lead attorney in one of the cases. "But we
think we have the evidence" to prevail.

Florida law says that the general election ballot "shall be in
substantially the form" of a vertical list and, in the recent election,
required that Democrats be in the second position on the ballot. The Palm
Beach ballot that Democrats say confused voters -- and led many to vote for
Reform Party nominee Pat Buchanan -- is of the "butterfly" variety, with
names of various candidates listed on either side of a center column. Vice
President Gore and Sen. Joe Lieberman were listed in the third position, or
second from the top on the left side.

Legal analysts on both sides of the partisan divide say courts generally
allow such procedural mistakes by elections officials and resist
interfering. "I've seen lots of people complain over the years," says Mark
Braden, a Republican election-law expert in Washington. "But I've never
known of a single case where a court has invalidated an election on the
basis of what the ballot looks like."

But Michael Gerhardt, a law professor at the College of William and Mary
law school who has been an adviser to Gore, countered that "there is
genuine cause to doubt the credibility of the electoral process in certain
parts of Florida."

Gerhardt acknowledges, however, that judges typically are loath to disturb
election results and they are highly unlikely to call a new election.

The claims likely would be tested under a standard from a 1998 Florida
Supreme Court case that asked whether there was "substantial unintentional
failure to comply" with state election rules and whether there was
"reasonable doubt" about whether an election "expressed the will of the
voters."

November 9 evening, a Palm Beach County circuit court judge ruled that
ballots there cannot be certified until a court hearing earlier this month.
Judge Kathleen Kroll wrote that it appears two women who filed a lawsuit
would suffer "irreparable injury" if votes are certified before the case is
heard.

"To preserve the electoral process in this presidential election and the
important voters' rights at stake, there is an immediate need for a
resolution in this case," Kroll wrote.

University of Miami law professor Terence Anderson said that although Palm
Beach County voters might have the most valid challenge ever under that
standard, any kind of remedy would be difficult to impose. The complaining
voters want the general election results voided and new voting held for
president and vice president there.

"I think (those challenging the ballot's validity) can satisfy the
standard, but once they do, the question is, what do we do now?" Anderson
said. "There is no remedy that wouldn't offend the constitutional values of
the rest of the electorate."

If a new vote were ordered, he said, Palm Beach would be in the unusual
position of effectively deciding, on its own, the nation's next president.
Analysts agree that no Florida court has ever successfully ordered a new
election, and experts have difficulty finding parallels in other states.

"We've been scrambling all over the last 36 hours to research Florida law,"
says Jan Baran, a Washington, D.C., election law expert who has represented
Republicans. "Now we're looking elsewhere."

The peculiarities of state and local law govern election procedures across
the USA. But in a separate Palm Beach lawsuit, brought by three voters
hoping to establish a class-action case that the ballot violated their
constitutional right to vote, federal law would govern. That presents an
even higher legal hurdle: Judges have ruled that to rise to the level of a
constitutional violation, election officials must have discriminated
intentionally.

           Gore Campaign Says Bush Team Should Drop Suit

Democrat Al Gore's campaign said last Saturday the legal team representing
Republican George W. Bush should withdraw its suit aiming at stopping a
hand recount of votes in certain Florida counties. "We call upon the Bush
campaign to withdraw the litigation they have filed today and to allow a
new and accurate count to be made of all the votes in the state of
Florida," said former Secretary of State Warren Christopher, who has
represented Vice President Gore in the struggle for Florida's 25 electoral
votes.

Earlier last Saturday, Bush's campaign announced it had asked a court to
block a hand recount in Florida that Democrats requested to see if Gore won
the state that holds the key to victory in Tuesday's U.S. presidential
election.

With more than 6 million votes counted, Bush led by only a few hundred
votes with some absentee ballots still to be counted. Both Bush and Gore
need Florida's 25 electoral votes to win the presidency.

Admitting that the Gore camp was looking into other options, Christopher
said, "Until today the Bush campaign has argued every minute counts. We
have constantly maintained however as we continue today that every vote
must count." (USA Today, November 10, 2000)


PRESIDENTIAL ELECTION: Warning Made against Setting Precedent of Suits
----------------------------------------------------------------------
Supporters of Vice President Al Gore last Friday November 10 warned against
setting a dangerous precedent by backing or filing lawsuits seeking a
revote in parts of Florida, the state on which the US election hinges.

Legal experts, meanwhile, noted that such suits rarely succeed as judges
generally view them as interference in the voting process.

Two Democratic senators, John Breaux of Louisiana and Robert Torricelli of
New Jersey, led the calls for Gore to accept the election tallies once they
are complete and not seek another round of voting even if Texas Governor
George W. Bush is the eventual winner.

"The right thing is to count the votes, respect the decision without
lengthy litigation," said Breaux, who, like Torricelli, was a strong backer
of Gore's campaign.

"I want Al Gore to win the election, but more than that, I want somebody to
win the election," Torricelli said.

With only several thousand overseas absentee ballots left to be counted,
Gore trails Bush by only 327 votes, according to preliminary counts
reported by television networks citing an unofficial Associated Press
canvass of voting precincts.

But Gore campaign chairman William Daley has spoken of possible legal
challenges to the election and one such civil suit has already been filed
on behalf of three voters in Palm Beach County who claim the controversial
"butterfly ballot" used there was illegal.

Some 19,000 ballots in Palm Beach have been invalidated because they
registered votes for multiple candidates and the plaintiffs argue that
their rejection has disenfranchised them.

In addition to Breaux and Torricelli, though, caution was urged by two
leading US newspapers, the New York Times and Washington Post, both of
which supported Gore's candidacy and both of which urged the vice president
not to drag the election out in court.

Alarmed at the "fateful step toward court," the Times said Gore had
"escalated the atmosphere of combat surrounding the presidential election
results with his decision to go to a court in Florida."

The daily said it took concerns about the Palm Beach ballots "very
seriously," but said potential remedies, including a revote in the county
-- "seem politically unsound and legally questionable."

The Post echoed that call, offering support for a recount of ballots but
urging prudence on lawsuits.

"We say yes to counting a little more, but the legal action about which Mr.
Daley spoke elliptically should be approached with enormous caution and
restraint," the Post said.

One of Gore's top advisors, former secretary of state Warren Christopher,
said that the campaign itself would not take legal action over the Palm
Beach but would support "the lawsuits that have been filed or will be filed
by citizens of Florida from that county."

Campaign chairman Daley, interviewed by CBS television, defended the Palm
Beach suit, saying "the people of Florida have a right, if they believe
they were wronged in this election, to go into court and seek redress."

Many legal experts, however, said such lawsuits have a high failure rate as
judges fear opening a Pandora's Box of ills by intervening in elections,
even partially.

Seeking legal remedies, even though the Supreme Court opened the door to
revotes in 1998, could undermine a US consensus that the loser should
concede regardless of questions about the fairness of the polls and drag on
for months, possibly leaving the country without a president.

"Revoting has not traditionally be the American system and judges usually
faced with that type of question have upheld the election," said Binny
Miller, a law professor at Georgetown University and former voting rights
attorney.

"Judges in this country are very reluctant, very conservative," she noted,
adding that proving fraud or illegality in the election was extremely
difficult. (Agence France Presse, November 10, 2000)


SLAVE REPARATION: Demands Are Growing; Way of Resolving May Be Precedent
------------------------------------------------------------------------
For years, Gwendolyn Midlo Hall pored over handwritten French, Spanish and
English slave documents in a massive effort to document Afro-Louisiana
history.

With stunning authority, she untangled a history of African slave names,
genders, ages, occupations, illnesses, family relationships, ethnicity,
places of origin, prices paid by slave owners, slaves' testimony and
emancipations.

A few mouse clicks provide computer access to the product of Hall's work,
Databases for the Study of Afro-Louisiana History and Genealogy 1699-1860.
The CD-ROM from Louisiana State University Press, which she edited, offers
insight into the inhumanity of slavery.

"Look, this is unique and it shows which masters owned which slaves and how
much they cost," says Hall, a former Rutgers University history professor
who is now a researcher and writer in New Orleans. "And there is a way of
calculating precisely which fortunes were made by which families."

As she worked compiling the records, Hall came to the realization that her
work could have implications far beyond adding to the historical portrait
of slavery. The documents also provide a factual basis that may give rise
to legal claims for reparations by the descendants of Louisiana's African
slaves.

"I started it for my own purposes as a historian," Hall says. "As time went
by, I realized that this does have implications for the reparations issue."

In the growing debate over whether African-Americans are entitled to some
form of redress for the wrongs committed against their ancestors who were
brought to America as slaves, Hall's databases will figure prominently. The
issue gains added urgency as time goes by and the documents become more
scarce. To the activists, lawyers and politicians who are laying the moral,
legal and political groundwork on the issue, reparations can mean many
things. Some want an apology for the 246-year practice of slavery in
America. Some propose a presidential commission to inquire into the need
and extent of possible monetary relief, while others want corporations to
make restitution for helping to maintain slavery.

Those waging the campaign for reparations or restitution, depending upon
what is being sought, have been documenting, strategizing and promoting the
cause on a national basis.

Earlier this year, Chicago became the fifth major U.S. city to endorse
federal hearings on reparations. Other cities are considering or have paid
reparations in connection with race riots in the past. In Africa last year,
Benin and Ghana apologized for their nations' historic roles in the slave
trade.

A simple resolution of the reparations question is not expected. Those who
press the issue build on black efforts for recompense that began soon after
the Civil War ended. They also look to the precedents of legislative
recompense and legal settlements for other ethnic, religious and racial
minorities around the world.

                         Setting a Precedent

The activists point to the example of Japanese-Americans, interned during
World War II, who received an apology and compensation from the U.S.
government in 1988. They note that Holocaust survivors will receive
billions of dollars in settlements paid by the Germans and the Swiss.

They argue that the United States owes African-Americans for their
ancestors' vast contributions to building the nation's public and private
wealth, as well as for the legacy of discrimination that persists despite
constitutional and legislative attempts to eliminate it.

But can the Holocaust settlements be a model for African-American
reparations?

"Yes and no," says Michael Hausfeld, a Washington, D.C., lawyer who has
handled Holocaust litigation. "Yes, with respect to part of what was sought
was a historical reckoning and acknowledgment that an offense against
humanity was committed, and that there were victims of that offense who
received no justice."

No, he says, in that Holocaust settlements were brought on behalf of direct
survivors--the actual victims.

"To that extent, there is a greater proximity of the wrong to the
individual," Hausfeld says. "When you have many generations from the
offense it becomes almost impossible to fashion an appropriate remedy as a
relief."

Hausfeld says that the challenge with African-Americans' reparations claims
is the inability to translate the true nature of the injury into damages
suffered.

"In my judgment, you can never equate a precise calculated amount for being
enslaved," he says. "To say, 'Here's $ 4.20 that you would have earned,'
100 years later, it really diminishes what had occurred."

But that does not necessarily make the moral wrong any less real, even for
those who cannot trace their ancestry directly back to slaves.

Moreover, Hausfeld says, sources like Hall's databases confront those who
have yet to acknowledge their roles in contributing to the system of
slavery.

"Even if it can't be reduced to a calculable form of compensation,"
Hausfeld says, "the fact that you have such a large body of identifiable
entities that have escaped any accountability is a poor message for
morality and inhumanity in the future."

To Randall Robinson, the impact of slavery persists to this day. In a book
published earlier this year, The Debt: What America Owes to Blacks, he
writes that Europe and America inflicted unimaginable horrors on Africa and
its people. Europe not only paid no compensation to Africa but went on to
remap the continent for economic exploitation.

"It is a human rights crime without parallel in the modern world," writes
Robinson, founder and president of TransAfrica, a lobbying group based in
Washington, D.C. "For it produces its victims ad infinitum, long after the
active stage of the crime has ended."

Robinson, whose book has informed the dialogue on African-American
reparations, writes that he knows of no statute of limitations--either
legal or moral--that would extinguish claims.

"Until America's white ruling class accepts the fact that the book never
closes on massive, unredressed social wrongs, America can have no future as
one people," he writes. "Questions must be raised to American private, as
well as public, institutions. Which American families and institutions, for
instance, were endowed in perpetuity by the commerce of slavery? What is a
fair measure of restitution for this, the most important of all American
human rights abuses?"

Like other reparations proponents, Robinson advances the legal theory of
unjust enrichment to seek recovery for the benefits slave laborers bestowed
on the nation. That theory is upheld by international law, he says.

Robinson notes in his book that President Lincoln supported a plan during
the Civil War to compensate slave owners for their loss of "property." But
his successor, President Andrew Johnson, vetoed legislation that would have
compensated ex-slaves, as well. There would be no 40 acres and no mule.

                          Troubling Trail

Tracing the harm to individuals may be impossible for many
African-Americans outside of Hall's databases. Still, some succeed.

Building a case for reparations was not Percy Pierre's intent when he set
out to trace his ancestry 20 years ago. Coming from a close-knit family, he
says, it was important to rediscover his history.

Pierre of East Lansing, Mich., used Hall's databases to discover an
ancestor who hailed from Mozambique. She was the grandmother of a
great-great-grandfather, a slave in Louisiana who took the surname Pierre.

"I could lay it out as a legal argument," says Pierre, a professor of
electrical engineering at Michigan State University who grew up in
Louisiana. "If I want to go back and document unpaid labor by my ancestors,
I can."

For two years, he devoted two days a week to tracing his ancestry to his
great-great-grandfather. "I can document who owned him, how long he was a
slave," Pierre says. "I can produce papers where a value was put on him as
a slave. I can do that for probably 20 of my ancestors, and I can identify
the families who owned them. I can identify their descendants. I can trace
their property, what happened to their plantation. It's doable. I'm
absolutely sure."

Building a link to his family past remains key to Pierre's efforts. "On a
personal level, that's what it's about," he says. "It's about family." But
the legal dimension exists. "It's there."

Tracing the money is key for Richard America, a professor at Georgetown
University in Washington, D.C., who says there should be an accounting of
what was taken from African-Americans.

"Slavery and discrimination were mechanisms for transferring money
wrongfully" from blacks to whites, says America, author of a forthcoming
book, Solving the Race Problem. "So reparations are a way of capturing the
unjust enrichment that whites have today."

He advocates public policies redirecting that wealth to blacks in the form
of grants for housing, businesses and education. "Money was taken away,"
America says. "That's the heart of the problem in a nutshell."

Many in the pro-reparations camp believe the United States is a country
willing to make amends.

"Many of us work hard to make it clear that we do not deny that reparations
should have been paid to Japanese-Americans," says Adjoa Aiyetoro, legal
counsel for the National Coalition of Blacks for Reparations in America.
Based in Washington, D.C., N'COBRA is an umbrella for more than two dozen
groups seeking to advance the campaign for reparations.

"We don't want to get into a competitive thing--'Why them and not us?'"
Aiyetoro says. "It underscores that reparations are a legitimate form of
remedy. It shows the United States recognizes the issue."

Aiyetoro notes that N'COBRA helped move the reparations issue into the
mainstream in the early 1990s.

Among those advancing the cause are black intellectuals, including Harvard
law professor Charles J. Ogletree, who admits to publicly joining an effort
only recently that grassroots activists initiated decades ago.

Ogletree is coordinating a national effort to study legal strategies and
legislative alternatives to support reparations. Specifically, he wants to
address "the consistent and deep-seated problems we have in terms of health
care, employment and housing."

But he adds that the inquiry is in its early stages and must consider many
points of view on the issue.

                      International Approach

Robert Brock, a Washington, D.C., legal activist for 45 years and president
of the Self Determination Committee, a reparations lobbying group, has been
thinking about the issue for a long time. He argues that international law
provides a basis for claims to reparations because blacks were brought to
these shores in captivity, and that their legal claims survive the passage
of time.

"I trace it all the way to the first act," he says. "You have to have a war
before you capture me. War is an international act, isn't it? Slavery is an
international act, isn't it? Captivity is an international act over the
high seas three miles out of African territory.

"Blacks touched the United States by being brought here without a passport,
immigration papers and consent," Brock says. "But they were brought over
the ocean, which is admiralty law. Admiralty law is international law.
Blacks' rights lie in international law."

Brock argues that the war against African slaves and their descendants
ended with passage of the 13th Amendment in 1865. So before the 100-year
anniversary of the amendment, he filed a class action complaint against the
United States in Los Angeles federal court. He sought reparations and $
500,000 in damages, plus interest, for each African-American.

"I did that with the effect of stopping the statute of limitations," Brock
maintains. "How many people know about that? Very few. Now their right to
get reparations for slave labor is continued." The government never
responded, he says.

Rep. John Conyers, D-Mich., has introduced a bill in the House each year
since 1989 calling for the president to appoint a commission to study
reparations.

"We're not trying to strike a 'who had slaves and who did not'" inquiry,
Conyers says. "You have a problem that cries out across history for some
kind of enlightened and compassionate resolution. What I'm trying to do is
make this a healing, to get the past behind us. This matter is not going to
be whisked away."

If created, the commission would seek answers to fundamental questions: Is
an apology due? Should reparations be paid? To whom and in what form? The
bill, H.R. 40, which has limited bipartisan support, languishes in the
House Judiciary Committee.

"People say it's too late or costs too much," Conyers says. "Some suggest
that we're taking the victims' approach. But, of course, we already are
victims. We're not approaching it as victims. We seek justice, and we're
trying to figure out how to do it."

He says the Holocaust settlements are proof that the African-American
appeal is backed by legal and moral authority, that reparations aren't some
extralegal remedy that belongs to the past but a process that is the usual
means to resolve harms done by a nation against a people.

When Rep. Tony P. Hall, D-Ohio introduced in June the Apology for Slavery
Resolution of 2000, H. Con. Res. 356, he told reporters that apologizing is
humbling. "These three words--'I am sorry'--are a foundation for beginning
again, a small price to pay for restoring lost trust, and a necessary first
step in moving forward constructively."

Hall says the apology would build on the precedents that Congress set when
it apologized to Japanese-Americans and to Native Hawaiians for the role
the United States played in the overthrow of the Kingdom of Hawaii in the
1890s. An apology would constitute official government policy.

Like Conyers' bill, Hall's calls for a commission to study slavery's
legacy, and it supports a national museum and memorial, which are included
in similar proposals by Reps. John Lewis, D-Ga., and Cliff Stearns, R-Fla.

And, also like Conyers' bill, Hall's resolution sits in the House Judiciary
Committee. "No hearings, No vote, No nothing," says Max Finberg, Hall's
legislative assistant. "That tells us it's probably not going anywhere."

Deadria Farmer-Paellmann of New York City also has encountered frustrations
in a campaign for justice. Her efforts rest on the theory that some
corporations should make restitution to African-Americans for their roles
in maintaining slave labor.

Farmer-Paellmann, a graduate of New England School of Law in Boston, began
her law studies with the intention of finding a case for reparations. She
says she is close. In the meantime, she is targeting companies that
benefited from slavery. An economy supported by slave labor helped
companies prosper, and restitution can be claimed based on unjust
enrichment, she says.

"Once all is said and done, you will see a list of companies that touch on
every aspect of corporate life in America," she says. "Americans of all
races will be more educated about what slaves did for this country. We were
there in every aspect of American business life."

Farmer-Paellmann has so far approached Aetna, the Hartford, Conn.-based
insurance giant, and asked for an apology for its role in helping to
maintain slavery by writing life insurance policies on slaves with their
owners as beneficiaries.

Aetna apologized for writing what it says were five slave policies just
after the company's 1853 founding, says spokesman Fred Laberge. The
policies covered short periods of time, such as planting season. "In the
year 2000, it sounds terrible to have done something like that," Laberge
says. "Today we express our regret at being a part of this."

But Aetna plans no further action, he says. The company addresses today's
needs, he says, with a minority internship program, corporate scholarship
funding and diversity initiatives. "The company has a track record of being
a very diverse, open place today."

But Farmer-Paellmann is not satisfied. "Their diversity policy has a lot to
do with the fact that they needed one, and the charitable programs still do
not address the debts that they owe," she says. "They're giving gifts;
they're not paying a debt."

She would like to see, for instance, the creation of a trust to help
descendants of African slaves establish their own businesses. "The idea is
to become a part of the business world in America," she says. "I'm looking
for us to not have to rely on programs and to become more economically
independent."

Ambivalence that cuts across racial lines hovers over the reparations
issue.

Reaction from the white community, according to legislative assistant
Finberg, includes views that the civil rights movement and desegregation
resolved issues of inequality. A common refrain is that many blacks are
successful in business, entertainment and sports.

Rep. Henry Hyde, R-Ill., chairman of the House Judiciary Committee, did not
return phone calls seeking comment on the reparations issue. But several
years ago, he said, "I never owned a slave. I never oppressed anybody. I
don't know that I should have to pay for someone who did [own slaves]
generations before I was born."

                        Ambivalent Attitudes

Many in the African-American community have not taken a position on
reparations. They wonder whether an apology would be enough and whether it
would be meaningless without reparations. Many refuse to get their hopes up
for either.

The Rev. Carl Baldwin of Godian Fellowship Mission in New York City is the
grandson of a slave. He has been an activist since his days in Birmingham,
Ala., where he took part in some of the early civil rights sit-ins. He
supports reparations but doesn't expect to see them in his lifetime. "There
are those who say we should get millions," Baldwin says of his
parishioners. "There are those who say we should let it drop."

Finberg says he has heard from various sides in the debate and believes
some members of the black community are not ready to forgive whites for
slavery. "And letting them off for all the offenses that have been heaped
upon [the black community] with a simple apology" doesn't cut it, Finberg
says. Meanwhile, many black members of Congress have shied away from the
idea of an apology, he says. "They have a lot of battles to fight in
overcoming racial discrimination, and it's not one that they choose to
invest their energy in."

Pierre wants acknowledgment for contributions blacks made during slavery.
He points to Southern plantations that inform tourists about the lives of
the owners but fail to reveal the stories of the slaves who built and
supported the estates. "My attitude is that we should not forget that," he
says. "We ought to tell that story."

Finberg says Rep. Hall does not support government-paid cash reparations
for every African-American "at this stage." Instead, he supports building a
museum to address the historical record and developing school curriculums
to more accurately discuss slavery.

To Ogletree, "The idea is not to build a monument or get a check but to
change the quality of care of those who are still suffering from
centuries-old problems of segregation, bigotry and lack of meaningful
opportunity."

He finds the idea of individual monetary restitution in the form of checks
sent to African-Americans "a cheap form of forgiveness and an insult to
those millions of Africans who lost their lives to the slave trade."

But whatever final form reparations might take, conviction is growing that
the campaign cannot let up.

"You have to plug along and make it an issue that people cannot ignore,"
says activist Aiyetoro. "Until and unless this country and its leadership
and its people deal straight up with actually making reparations, we're not
going to have racial healing." (ABA Journal, November, 2000)


SPORT-HALEY: Schubert & Reed Investigates Securities Issues
-----------------------------------------------------------
(Sport-Haley, Inc. Nasdaq:SPOR 8/5/98 -- 10/16/00)

On October 16, 2000, Sport-Haley, Inc. announced that it would restate its
financial results for fiscal years 1998 and 1999 and delay filing its
annual report for fiscal 2000. The company said that a management review
showed that "certain accounting errors" may exist in the fiscal years ended
June 30, 1998, and 1999. Sport-Haley is restating the results. "The
restatement is expected to result in a ... reduction of net income in at
least one of the two prior years' financial statements," the company said.
The Company has announced that it will delay filing its annual report with
the Securities and Exchange Commission for fiscal 2000. The announcement
follows Sport-Haley's July announcement that its audit committee had
recommended that the Company's prior independent auditors be discharged.

Contact: Robert C. Schubert, Esq. or Juden Justice Reed, Esq., Schubert &
Reed LLP, Two Embarcadero Center, Suite 1050, San Francisco, CA 94111, Tel.
415/788-4220, Fax 415/788-0161, E-mail: mail@schubert-reed.com. The firm
web site contains additional information about these matters and class
actions generally: http://www.schubert-reed.comor
http://www.classactionlawyers.com.


ST. PETERSBURG POLICE: Lawsuit filed over Uhuru Headquarters Tear Gasing
------------------------------------------------------------------------
In 1996, police gassed the Uhuru headquarters building. Those inside have
filed a class action suit. ST. PETERSBURG - Thirty-nine people who say they
were harmed when St. Petersburg police tear gassed a building in which they
gathered four years ago, filed a lawsuit earlier this month against the
city.

The police action was one scene in a tense chapter of St. Petersburg race
relations in the fall of 1996: A black motorist had been killed by a white
police officer. Civil disturbances erupted.

As a grand jury deliberated whether the shooting was justified, several
members of the National People's Democratic Uhuru Movement made incendiary
public statements, including one about "pigs" who would go back across
Central Avenue "in body bags."

Police were attempting to neutralize what they thought would be a violent
reaction to the grand jury decision, which found the shooting justified.
They went to the Uhuru headquarters as 70 to 100 people gathered. Officers
used a bullhorn to order people to leave the building, at 1245 18th Ave. S.
Then, they fired canisters of tear gas inside, according to the lawsuit
filed in Pinellas-Pasco Circuit Court.

"We were to learn later there were literally hundreds of police officers
outside," said Omali Yeshitela, local leader of the Uhuru movement. "We
decided to file this suit because it was very clear that the city of St.
Petersburg was making an assault on the African community's attempt to
exercise its right to assemble and free speech."

The plaintiffs, including Yeshitela, Chimurenga Waller, Alvelita Donaldson,
the Rev. Manuel Sykes and Marva Dennard, filed the action as a class action
lawsuit.

Assistant City Attorney Mark Winn said he could not comment because the
city had not received the lawsuit, which also names former police chief
Darrel Stephens. It seeks attorney's fees, and punitive and compensatory
damages for physical and psychological effects of the tear gassing.

The defendants are represented by Guy Burns, a Clearwater lawyer, and Mark
Brown, a Stetson University law professor.

The lawsuit comes as the statute of limitations to file suit is about to
expire.

Yeshitela said it appears as though city officials would like to forget the
whole tear gassing incident. No one has ever apologized for it, he said.

"It's just like it didn't happen," Yeshitela said. "The fact is it had a
chilling effect on the community's willingness to come out and speak for
fear that it could happen again." (St. Petersburg Times, November 10, 2000)



TOBACCO LITIGATION: Lorillard Says Settlement Negotiations Are Suspended
------------------------------------------------------------------------
Lorillard Tobacco Co. said its negotiations to reach a nationwide
settlement that would protect it against punitive damage claims from sick
smokers have been suspended.

"We have not been able to resolve the differences we have with the
plaintiffs' group," said Ronald S. Milstein, general counsel for Lorillard,
the nation's fourth biggest cigarette maker, whose brands include Newport
and Kent.

He said in a telephone interview the differences involved major issues but
declined to specify what they were. The negotiations were suspended earlier
this month, he said.

Lorillard, a division of Loews Corp., and Liggett Group, the nation's fifth
biggest tobacco company, have been in separate talks to settle numerous
class-action lawsuits pending before U.S. District Judge Jack B. Weinstein
in New York.

The cases against the tobacco companies have been brought on behalf of sick
smokers and health insurers and union heath funds seeking reimbursement for
their treatment.

The status of the talks involving Liggett, whose brands include Eve
cigarettes, could not be determined. Calls to lawyers for the plaintiffs
were not returned.

Lorillard and Liggett collectively account for about 10 percent of the U.S.
market. Industry leader Philip Morris and No. 2 tobacco concern R.J.
Reynolds Tobacco had refused to enter the settlement talks.

Lorillard was discussing the possibility of paying $7.5 billion over 30 to
40 years into a fund that would be used for public benefit, rather than
payments to individuals, in exchange for being shielded from punitive
damage claims.

Under that plan, individuals with claims against the industry would be able
to seek compensatory damages from Lorillard, but could not seek punitive
damages, Milstein said.

Milstein said one factor driving the talks was the $145 billion punitive
damage award in Florida against Lorillard and the four other major
cigarette makers. Earlier this month, a federal judge formally upheld the
jury award reached in July. The case is being appealed, and tobacco
companies are keeping alive hopes they could transfer the case to a federal
court where the verdict might be lowered.

Milstein said the decision to uphold the award wasn't the only factor in
Lorillard's decision to suspend the settlement talks for the federal cases
in New York.

He said he still feels a national settlement for individual punitive
damages "could be accomplished" but declined to speculate on chances the
talks could resume.

A settlement of individual damage claims would be separate from the
industry's settlement with the states two years ago under which it agreed
to pay $246 billion over 25 years. (The Associated Press, November 10,
2000)


TOBACCO LITIGATION: Medicaid Recipients Denied Share MSA Proceeds in MN
-----------------------------------------------------------------------
The Minnesota Court of Appeals has affirmed a lower court ruling which held
that Medicaid recipients had no right to share in the proceeds from the
state's settlement agreement with the tobacco industry. The plaintiffs had
asserted a class action to recover what they claimed was their statutory
share in any third-party liability claim filed on their behalf. Brown et
al. v. The State of Minnesota, No. C6-00-587, (Minn. Ct. App., Sept. 19,
2000).

Jesses Lee Brown and Ronald J. Bergeron filed a suit in Minnesota District
Court in January 1998, purporting to represent approximately 70,000
Minnesota residents who allegedly suffered smoking-related diseases for
which the state paid medical expenses under the medical assistance and
general assistance programs. The plaintiffs acknowledged that they did not
pay the expenses themselves but contended that state law provides a formula
for allocating recoveries from third parties between the state and
individual recipients for claims brought relating to those statutes.

The state successfully moved to dismiss the complaint for failure to state
a claim upon which relief could be granted. The court also granted the
state's motion to impose sanctions on the three law firms representing the
plaintiffs and fined them each $5,000, finding that the premise of the
lawsuit was "monumentally" wrong and that there was not a "shred of
evidence to support bringing it."

The court of appeals first acknowledged that district court's judgment
should have declared the rights of the parties. However, the court's
findings operated as an adjudication upon the merits, and the appeals court
found that the failure to declare the rights of the parties is without
prejudice and not reversible error.

                          Recovery Theory

The plaintiffs asserted their right to recovery under Minnesota's medical
assistance and general assistance laws. The state's lawsuit against the
tobacco industry, which resulted in a settlement worth $6.1 billion to
Minnesota, was outside the scope of those statutes, the panel ruled. The
claims that resulted in the Master Settlement Agreement did not implicate
the medical and general assistance statutes, but rather the state brought a
direct action against the tobacco defendants for damages sustained by the
state.

The court of appeals noted that the parties agree on several things,
including that the plaintiffs would have been entitled to at least one
third of the recovery had the state not brought a suit and the class
members made recoveries from the tobacco industry on their own. The parties
also agree that the MSA does not prevent individual Medicaid recipients
from pursuing claims against the tobacco defendants for damages not related
to the cost of their treatment, such as pain and suffering or lost wages.

The issue in the immediate case, however, is whether the individual smokers
have a right to distribution of the state's recovery pursuant to the
formula in the medical and general assistance statutes, the panel said. It
agreed with the district court that the plaintiffs had no basis to proceed
with their claim.

The court appeal disagreed with the district court on the sanctions for
filing a "frivolous" claim. The panel found that the recovery-allocation
statutes are not absolutely clear and there are no Minnesota cases barring
Medicaid recipients from pursuing part of the state's recovery. For these
reasons, the appellate court reversed the imposition of sanctions.

The plaintiffs/appellants were represented by John A. Cochrane of Cochrane
& Bresnahan in St. Paul, Minn.; Hugh V. Plunkett III and Robert K.
Shelquist of Plunkett, Schwartz & Peterson in Minneapolis; and Ronald I.
Meshbesher and Anthony J. Nemo of Meshbesher & Spence in Minneapolis.

The defendant/respondent was represented by Attorney General Mike Hatch and
Patricia A. Sonnenberg, assistant attorney general, in St. Paul, Minn.;
Michael V. Ciresi, Roberta B. Walburn and Gary L. Wilson of Robins, Kaplan,
Miller & Ciresi in Minneapolis. (Tobacco Industry Litigation Reporter,
October 6, 2000)


TOBACCO LITIGATION: N.Y. Judge Denies Union Health Funds' Certification
-----------------------------------------------------------------------
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. The National Asbestos
Workers' Medical Fund v. Philip Morris Inc. et al., No. 98 CV 1492,
(E.D.N.Y., Sept. 20, 2000).

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 of New York
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 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. (Tobacco Industry Litigation Reporter,
October 6, 2000)


* Using Daubert to Oppose Class Action Rule 23 Certification
------------------------------------------------------------
Litigants' use of scientific and other technical evidence has long been
commonplace in complex tort and product liability litigation at trial.
Utilizing such evidence as a tool to meet the requirements of Rule 23 at
the class action certification stage is, however, comparatively new and
unexplored. Increasingly, parties are attempting to introduce expert
testimony at the certification stage as a way to establish common or
general causation in highly technical cases featuring issues that may often
be difficult to explain and/or understand.

In turn, opponents are using Daubert v. Merrell Dow Pharmaceuticals Inc. ,
509 U.S. 579 (1993), and its progeny to challenge expert testimony offered
in support of class certification in the hope of having it excluded from
consideration. Even if unsuccessful, a Daubert motion at the certification
stage may help to highlight the inadequacy of the proffered expert
testimony (and the suitability/non-suitability of certifying a class),
information which can often be lost in the morass of briefing typically
associated with class certification.

Federal Rule of Evidence 702 (or its state court equivalent) gives the
trial court discretion to determine the admissibility of scientific
evidence in light of the particular facts and circumstances of each case.
Rule 703 further requires that the proposed testimony be based upon the
type of information reasonably relied upon by experts in the field.

In Daubert, the Supreme Court held that Rule 702 requires the trial court
to act as the "gate-keeper" of scientific evidence. Trial judges must
fulfill this function by making an initial determination of the reliability
of proffered expert's underlying methodology. While Daubert enumerated
several non-exclusive factors to guide the trial court's inquiry, the main
thrust of the decision is that the proffered testimony must be (1) reliable
and (2) relevant.

In recent decisions, the Supreme Court has attempted to clarify, or expand
upon, the teachings of Daubert. For example, in Kumho Tire v. Carmichael,
119 S. Ct. 1167 (1999), the Court expanded Daubert's reliability analysis
beyond strictly scientific issues to apply to testimony in technical and
other specialized matters.

State court litigation is often more complicated since different
jurisdictions may apply Daubert, the standards of its predecessor Frye v.
United States , 293 F. 1013 (D.C. Cir. 1923),1 some variation of one or
both of the two, or neither, in determining the admissibility of scientific
evidence. 2

In the class action context, courts have offered little clarity on how
judges would analyze issues surrounding the admis sibility of scientific
evidence during certification proceedings, and whether an in-depth
evidentiary hearing is appropriate at this phase.3 The recent decision by
the United States District Court for the Eastern District of New York in
the case of In re Visa Check/Mastermoney Antitrust Litigation, 192 F.R.D.
68 (E.D.N.Y. 2000), held that the role of Daubert in class certification
proceedings is a limited one. How other courts will treat the issue, in
light of Visa Check and evolving jurisprudence on the admissibility of
scientific evidence, remains an open question. A subsequent decision by the
United States District Court for the Eastern District of Pennsylvania
illustrates that even if its pre-trial role is limited, Daubert provides a
legitimate basis for denying class certification. Sanneman v.
DaimlerChrysler Corp. , 191 F.R.D. 441 (E.D. Pa. 2000).

         In Re Visa Check/Mastermoney Antitrust Litigation

Plaintiffs, a putative class of individuals and businesses that accepted
Visa and/or MasterCard credit cards and were thus required to accept debit
cards, sued defendants for alleged violations of the Sherman Antitrust Act.
Both sides introduced expert reports to support their respective positions
in favor of and in opposition to class certification. Defendants moved to
strike the testimony of the plaintiffs' expert based on Rule 702 and
Daubert and its progeny. They contended that the proffered expert opinion
was "legally irrelevant and not rationally based on the pertinent facts or
on any analysis." Visa Check, 192 F.R.D. at 76. More specifically, they
argued that the plaintiffs' expert based his opinion on supposition rather
than empirical proof, and that he had failed to analyze or account for
other potentially causal factors. Id. at 77.

   Analysis of Daubert's Role in the Class Certification Context

The United States District Court for the Eastern District of New York
recognized that trial courts are not permitted to "delve into the merits of
an expert's opinion, or indulge 'dueling' between opposing experts" at the
class certification stage. A court determining class certification "is far
from the 'trier of fact' contemplated in Rule 702." Thus, even if defects
in the proffered expert testimony "may prove fatal at the merits stage,"
expert evidence is sufficient at the class certification stage so long as
it meets the requirements of Rule 23. The court reasoned that this is true
because class plaintiffs need not demonstrate at the certification stage
that they will prevail on the merits. Id. at 76--77, 79.

Still, the court found that "there is a role for a Daubert inquiry at the
class certification stage." This role is limited, however, and "tailored to
the purpose for which the expert opinion is offered. The question is not,
therefore, whether a jury at trial should be permitted to rely on the
expert opinion , but rather whether the court may utilize it in deciding
whether the requisites of Rule 23 have been met."

The court found that the flaws pointed out by defendants "might or might
not have force at a later stage if the defendants challenge the
admissibility" of plaintiffs' expert. That expert's opinion was found
admissible for the limited purpose of supporting plaintiffs' motion for
class certification. The fact that the expert's report was "based
principally on economic theory, not exhaustive empirical or quantitative
analysis, is no bar to its admission at this stage." The court also noted
that the defendants could not demonstrate that the plaintiffs' expert
"failed to 'rely upon the type of methodology and data typically used and
accepted' in cases such as this one. The gravamen of defendants' motion is
that they (and their expert) disagree with the conclusions of plaintiffs'
expert ; that is not a basis for exclusion. In sum, defendants have fallen
short of showing that plaintiffs' expert's opinion is the kind of 'junk
science' that a Daubert inquiry at this preliminary stage ought to screen."
Id. at 78 (internal citation omitted).

Daubert as a Basis For Denial Of Class Certification:

Sanneman v. DaimlerChrysler Corporation

In Sanneman v. DaimlerChrysler, 191 F.R.D. 441 (E.D. Pa. 2000), the U.S.
District Court for the Eastern District of Pennsylvania denied
certification of a putative statewide class action involving allegations of
paint delamination. Plaintiffs' expert proffered a theory of universal
causation that would allegedly eliminate the need for an individualized
inquiry for each class member. DaimlerChrysler challenged the plaintiffs'
proffered testimony under Daubert (as interpreted by the Third Circuit
Court of Appeals in In re Paoli R.R. Yard PCB Litig., 35 F.3d 717 (3d Cir.
1994) ("Paoli II")). DaimlerChrysler's motion in limine was ultimately
denied. But in its decision denying class certification, the court relied
heavily upon the issues raised by the Daubert challenge to determine that
the superiority and predominance prongs of Rule 23(b) had not been met.

Analysis of Daubert in Defeating Class Certification

In Sanneman, plaintiffs' expert, Dr. Norman Roobol, opined that there is a
universal cause for paint delamination. DaimlerChrysler challenged the
admissibility of Dr. Roobol's testimony, arguing that his theory and
methodology (or lack thereof) were unreliable and should therefore be
excluded. In the opinion denying class certification, the court noted that
it had "already determined that Roobol's proffered testimony meets the
Daubert standards for scientific testimony<>." However, the court
pointed out that surviving the Daubert challenge did not mean Roobol's
causation theory was irre futable or infallible. Id. at 451. Ultimately,
DaimlerChrysler's motion was successful to the extent that it demonstrated
to the court that Roobol's testimony was not credible and ignored the
realities of certifying the proposed class.

The court clearly rejected Roobol's theory, as is reflected in its Rule
23(b) analysis. Specifically, the court determined that individual issues
of injury and causation would predominate over class-wide issues. The court
found the concept of such a detailed factual inquiry, including a physical
examination for each class member, to be "mind-boggling." Id. at 449. It
refused to certify a class it believed would "result in an administrative
process lasting untold years, where individual threshold questions will
overshadow common issues regarding Defendant's alleged conduct." Id.

Although denied, the Daubert motion in Sanneman served its purpose by
highlighting to the court that class certification was not appropriate. The
motion also identified problems with and inaccuracies in Roobol's
testimony. For these reasons, the court also found that a class action
would not be a superior method for adjudicating the claims at issue.

                             Conclusion

Visa Check and Sanneman suggest that a court considering a Daubert (or
Frye) challenge to expert testimony at the class certification stage may
not exercise its "gatekeeping" functions with the same vigor it does when
the proffered testimony addresses the merits of the case. Whether this
comports with Daubert and its progeny is beyond the scope of this Legal
Backgrounder. It is the opinion of the authors, nonetheless, that a Daubert
motion is a necessary and important part of any class certification
proceeding in which an expert's opinion is offered on issues relevant to
the plaintiffs' burden of meeting Rule 23's prerequisites. A motion
challenging the opposing party's expert provides a unique opportunity to
highlight the problems associated with certifying a class. Courts that
entertain Daubert motions at the class certification stage have thus far
declined to engage in a merits inquiry. Nevertheless, class action
defendants should utilize this heretofore untapped legal tactic because it
forces the court to examine -- and the proponent to defend -- the
reliability of the methodology at the early, yet critical, class
certification determination stage. (Toxic Chemicals Litigation Reporter,
October 6, 2000)


* Japanese Seek More Public Involvement In Trials and More Legal Experts
------------------------------------------------------------------------
Japan should maintain the quality and increase the number of legal experts
and allow the public to participate in trials in efforts to improve the
country's judicial system, according to a draft interim report compiled by
a government panel on judicial reform. The Judicial Reform Council's
report, obtained by Kyodo News, says the public finds it difficult to
understand the judicial system, run primarily by the public sector, and
that the number of judges, prosecutors and attorneys is too small. (Public
AP/Dow Jones)


                             *********


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

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

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

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