/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/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. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *