CAR_Public/001124.MBX               C L A S S   A C T I O N   R E P O R T E R

             Friday, November 24, 2000, Vol. 2, No. 229

                             Headlines

AMERICAN GARMENT: Fed Judge OKs Mexican American Settlement for Lay-off
ASSOCIATES FINANCIAL: Georgians Accuse of Predatory, Seek Refund
BIOFARMA S.A.: New Rules Give Canadians Access to Diet Drug Complaint
BHP: Victorian Sp Ct Gives PNG Landowners Pollution Suit Green Light
CANADA: Council Says Report Fails to Tell Where Veterans' Money Will Go

CANADA: Disabled War Vets Owed $2 Billion, Economist's Report Says
CHARTER COMMUNICATIONS: Agrees To Settle Suit On Cable TV Late Fees
COOPER TIRE: Vows to Fight Series of Lawsuits over Defective Tires
DAIMLER CHRYSLER: Release Bars Airbag Victim from Joining Class Action
DINUBA MEDICAL: 9th Cir Says EEOC May File Nonclass Representative Suit

ELBIT, ELSCINT: Announces Dismissal of Lawsuit and Mediation of Claims
EMULEX HOAX: Another Suit Filed Against Wire Service Over Fake Release
GERMANY: Court Rejects Claims For Property Seized Under Communism
HOLOCAUST VICTIMS: US Judge Ratifies $1.25B Swiss Bank Distribution Plan
HOUSING AUTHORITY: Injunction Protects Tenants' Privacy

INMATES LITIGATION: Ct Holds PA Liable for Unconstitutional Conditions
INS: 9th Cir Gives Immigrants Go Ahead to Sue for Citizenship
MCKESSON HBO: NY Times Reviews On Questions On Who Knew What In Deal
MISSISSIPPI: offers $400M for College Desegregation Suit; $800M Sought
MITEK SYSTEMS: Milberg Weiss Expands Period for Securities Suit in CA

NX NETWORKS: Abbey, Gardy Files Securities Suit in Virginia
PACIFICARE HEALTH: Shareholders Accuse of Delaying Bad Earnings News
PRESIDENTIAL ELECTION: Legal Times Reports on Varied Lot in Litigation
PRESIDENTIAL ELECTION: NLJ Says Civil Rights Cited As Key Reason
QUINTUS CORP: Kirby McInerney May Expand Period in Securities Suit

ROCHE HOLDING: Kirby McInerney May Appeal in Securities Suit in NJ
SUNBEAM CORP: FL Suit Filed in April Seeks Recission of Warrants
SUNBEAM CORP: Investors File Second Amended Complaint in 1998 FL Suit
SUNBEAM CORP: Investors Sue in TX in 1998 and 2000 over Debentures
SUNBEAM CORP: Removes Year 2000 WI Lawsuit to Federal Court

SUNBEAM CORP: SEC May Enforce Action Re Accounting Practices
TEACHERS RETIREMENT: Teachers Prepare Appeal Of Pension Lawsuit
TOBACCO LITIGATION: B&W Moves To Exclude Documents In Blue Cross Suit
TOBACCO LITIGATION: FL Supreme Ct Reinstates Damages Awarded Ex-Smoker
TOBACCO LITIGATION: OK Liability Law Allows Suits by AG, Not Citizens

TWINLAB CORPORATION: Wechsler Harwood Files Securities Suit in New York

* CA Sp Ct to Rule If Investors Who Didn't Sell Can Sue in State Court
* Consumer Group Says Toys Safer, But Small Parts Still Dangerous

                                 *********

AMERICAN GARMENT: Fed Judge OKs Mexican American Settlement for Lay-off
-----------------------------------------------------------------------
A federal judge in El Paso has approved a settlement in a class action suit
brought by the Mexican American Legal Defense Fund (MALDEF) against
American Garment Finishers Corp. on behalf of almost 400 former employees
who alleged the company failed to give proper notice before laying them
off.

Under terms of the settlement, which was approved Nov. 9 by Judge David
Briones, the company will pay a total of $ 425,000 to 386 workers who were
laid off in November 1998 and February 1999. Each class member will receive
approximately $ 1,100. In addition, the company will pay attorneys' fees.

Carmen Rodriguez, an El Paso solo practitioner and lead attorney for the
workers, says she's pleased with the settlement and the quick resolution of
the case.

"Since it's not a large amount for each individual worker, it made sense to
get them compensation as soon as possible," she says. "A lot of them are
unemployed and in vocational training. It was important to get a prompt
settlement."

Also representing the workers was Leticia Saucedo, a lawyer with MALDEF in
El Paso.

Kenneth Carr, a partner in Carr, Flora & Carroll in El Paso, says American
Garment Finishers denies any wrongdoing. Under the Warren Act, the company
was excused from giving a 60-day notice because it was acting in response
to unforeseen business circumstances, which was a decision by another
company to immediately cut its orders in half, he says.

Jill Sulzberg, an associate at Carr's firm, also represented American
Garment Finishers.

Class members have until Aug. 31, 2001, to claim their money. (Texas
Lawyer, November 20, 2000)


ASSOCIATES FINANCIAL: Georgians Accuse of Being Predatory, Seek Refund
----------------------------------------------------------------------
It appears the new year will bring Citigroup Inc.'s deal to buy Associates
First Capital more attention that the companies would rather not have.

In a class action set to go to trial in state court in late January, about
2,000 Georgians are seeking refunds of premiums and interest paid on
single-premium credit life insurance included in loans they received from
Associates Financial Services of America Inc., an Atlanta subsidiary of
Irving, Tex.-based Associates First. The suit is to be tried under
Georgia's Racketeer Influenced and Corrupt Organizations Act, which means
the plaintiffs are seeking triple damages.

Activists' protests have made the Citi-Associates deal, which was announced
Sept. 6, practically synonymous with "predatory lending." And the watchdogs
find single-premium credit life insurance especially offensive. Sold to
cover a loan in the event the borrower dies, it is characteristic of
subprime loans and is often slipped in unbeknownst to the borrower,
financed at high rates, and not written to cover the entire life of the
loan, they say.

"This insurance is predatory across the board," said Sarah Ludwig,
executive director of the Neighborhood Economic Development Advocacy
Project, New York. "It's used to pad the principle, and the borrower pays
interest on a premium for a product that she probably doesn't need or
understand."

The lead plaintiff in the class action, Winfred L. Wood, says he paid
$5,062 for an insurance premium that was financed over 15 years at 16.5%.
The insurance pushed the loan -- one of two he has with Associates -- from
just over $30,000 to about $36,400 and would have cost him more than
$13,000 over the life of the loan, said Howard D. Rothbloom, the attorney
representing the class members. The insurance was provided by Associates
Financial Life Insurance Co., another Associates First subsidiary.

Mr. Rothbloom said that in addition to its high cost Mr. Wood's insurance
gave erratic and illogical coverage. For the first 10 years coverage was
excessive -- about $75,000 -- and for the last five years it was inadequate
to pay off the loan, he said.

"This product is defective; it does not do what Mr. Wood was told it would
do," Mr. Rothbloom said. "If this product were tires, it would have been
recalled a long time ago."

To bolster his case, which has been in preparation for three years, Mr.
Rothbloom pointed to an action by the Georgia Office of Insurance and
Safety Fire Commissioner in January. The agency fined Associates Financial
Life $147,000 and ordered it to comply with state law prohibiting the sale
of credit life insurance on loans with terms exceeding 10 years. In
addition to selling a prohibited form of the product, Associates could not
prove that it had sold the insurance through licensed agents, the agency
found.

Further, in an order entered Jan. 31, John W. Oxendine, Georgia's
commissioner of insurance, stated that Associates First had been told
specifically by his agency in 1993 and again in 1997 that the product was
prohibited in loans with terms of more than 10 years.

Despite these admonitions, Associates "sold thousands of Georgians the
insurance and collected millions in premiums," Mr. Rothbloom wrote to the
Office of the Comptroller of the Currency and the Federal Deposit Insurance
Corp. in an Oct. 3 letter requesting public hearings on the Citi-Associates
deal.

The agencies extended their deadline for deciding whether to object to the
$31 billion deal, saying the flood of public comments it has stimulated
need more review. Activists have been clamoring for the two federal
regulators to schedule public hearings on the deal ever since it was
announced, and though no hearings have been held, the outcry appears to
have made regulators hesitant to approve the purchase.

The OCC and FDIC said they would use the extra 30 days they have given
themselves to clarify several issues. These include Citigroup's limitations
on points and fees for refinanced and broker-sourced loans and how the
company, through its marketing and branch offices, offers prime as well as
subprime products to low- and moderate-income and minority communities.
Moreover, the two agencies have asked for descriptions of Citigroup's
disclosures for selling and financing single-premium credit life insurance.

Final pretrial motions in the class action are to be considered at a Dec. 5
hearing. One issue to be settled, Mr. Rothbloom said, concerns a move he
said Associates First made the day after the class certification order was
granted: It tried to refinance the class members and required them to sign
a mandatory binding arbitration agreement.

The agreement, a copy of which was obtained by American Banker, prohibits
borrowers from participating in current lawsuits and any claim or dispute
arising from any previous loan, document, or insurance that the borrower
received from Associates.

"If arbitration is demanded," the agreement reads, "you and we agree that
the entire dispute must be arbitrated in accordance with this agreement and
that any lawsuit, counterclaim, or other action must be discontinued."

Yet the class certification order itself prohibits the plaintiffs and
defendants from contacting class members to encourage them to participate
or not participate in the lawsuit. Said Mr. Rothbloom: "Besides the fact
that there are serious problems with contacting class members and getting
them to agree not to participate in the case, it is contrary to the
class-certification order. And they didn't go through me; I'm the counsel
for these people. So basically what they were seeking to do is to ask these
people to settle their case without conferring with counsel."

At the Dec. 5 hearing, Associates will seek to have all class members who
signed the mandatory binding arbitration agreements removed from the case,
Mr. Rothbloom said.

Asked whether its Atlanta subsidiary practices predatory lending, a
spokesman for Associates said the Georgia case stems from a technical legal
issue, not one of predatory lending. All other questions were referred to
Citigroup, which did not return calls from American Banker.

Though it is not clear whether Associates Financial Life is still selling
single-premium credit life insurance, Citigroup clearly is. Its American
Health and Life Insurance Co. subsidiary has sold it, and it is standard
with loans offered through CitiFinancial. In a proposal released Nov. 7,
Citigroup offered to change how the insurance is paid for -- it proposed
giving borrowers a choice but did not say it would stop selling the
product.

Citigroup, which underwrites the policies through its insurance units, said
at the time that it would file for approval of a monthly-premium product
immediately. (The American Banker, November 22, 2000)


BHP: Victorian Sp Ct Gives PNG Landowners Pollution Suit Green Light
------------------------------------------------------------------------
Papua New Guinea landowners won a legal battle over mining giant BHP's bid
to strike out their class action over contamination by the company's Ok
Tedi copper mine.

Victorian Supreme Court Justice John Hedigan dismissed an application by
BHP, giving the go ahead for the class action to proceed on behalf of
30,000 PNG landowners. The landowners, angry the mine is still dumping up
to 100,000 tonnes of waste into the river each day, are seeking unspecified
damages. The case is expected to go ahead next year. (The Canberra Times,
November 23, 2000)


BIOFARMA S.A.: New Rules Give Canadians Access to Diet Drug Complaint
---------------------------------------------------------------------
Access to justice for more than 155,000 Canadians who took the diet pills
Ponderal and Redux which are alleged to cause serious illnesses is now a
reality following an important ruling released from Madam Justice Susan
Gray of the Ontario Divisional Court.

The French pharmaceutical giant, Biofarma S.A. and its Canadian
distributor, Servier Canada Inc., were asking the court to let them appeal
an earlier ruling that allowed Canadians who took the drugs to join a class
action lawsuit. Madam Justice Lang found no grounds for appeal, so now the
class action lawsuit will move forward to a trial.

Because of this ruling, formal notice will now be sent out to newspapers
and magazines across the country to let those affected know about their
rights regarding the lawsuit. The lawsuit is not only on behalf of
Canadians who took the drugs, but also seeks to recover the healthcare
costs on behalf of provincial Ministries of Health which pay to monitor
people who took the drugs to check them on an ongoing basis for symptoms.

Published medical literature has linked Ponderal and Redux with potentially
life-threatening heart and lung diseases, namely primary pulmonary
hypertension (PPH) and valvular heart disease. PPH is a disorder that
claims the lives of 60 per cent of patients just two years after diagnosis.

The class action lawsuit can include anyone who took the drug from across
Canada, excluding Quebec, which has its own procedures. This is the first
time that a lawsuit over these controversial drugs has been permitted to
proceed in Canada. Recently, an American firm agreed to pay as much as $4.5
billion in injury claims over the diet drugs.

Contact: Joel Rochon, 416-363-1867 or 416-822-9750, Web site:
rochongenova.com


CANADA: Council Says Report Fails to Tell Where Veterans' Money Will Go
-----------------------------------------------------------------------
The National Council of Veteran Associations stated that an economist's
report, prepared for the lawyers acting in the class action, which suggests
that disabled veterans are owed up to $3.6 billion, failed to indicate that
the bulk of the money, should the Government settle a class action suit,
would go to relatives rather than the war veterans. The report was prepared
by Michael Charette, a former senior economic analyst with the Government
of Canada.

"We were not impressed with the methods employed by the law firm from the
very beginning, when several partners came to Ottawa with a public
relations representative and asked us to appear with them at a news
conference," Cliff Chadderton , Chairman of the 37-member National Council
stated.

"It looked to us as if the lawyers considered it necessary to use public
opinion in addition to relying on the legal aspects of their claim.

The Government announced November 2, 2000, that it would appeal the
decision. It would seem now that the legal firm has prepared a 52-page
report to support its case.

The report suggests that the taxpayers would have to pay interest going
back to 1920 should the Government's appeal fail.

The 37-member National Council suggested at its annual meeting on November
8, 2000, that, inasmuch as the lawyers seem to prefer to play out their
case in the public forum, Canadians should examine the major issue,"
Chadderton continued.

Chadderton was referring to the "set-off" principle, which has already been
accepted in a Federal Court decision, meaning that, in lieu of paying
interest, Veterans Affairs agreed to look after the funds of these mentally
incompetent patients.

Many have built up large estates over the years, in that they have been in
receipt of 100% pension, allowances and free medical treatment, amounting
to approximately $3,000 a month.

The objections to the lawsuit by veterans organizations are based on four
facts:

  -- practically none of the money would go to veterans themselves;

  -- the taxpayer would be gouged to the tune of billions, much of which
      would end up in the pockets of distant relatives;

  -- a successful decision would undoubtedly make it more difficult to
      achieve some of the worthy objectives of veterans organizations,
      such as benefits for Ferry Command Pilots who flew the Atlantic in
      unarmed aircraft in World War II and received no rehabilitation
      benefits, and

  -- the publicity arising out of the claim is creating unfair criticism
      of the manner in which DVA has looked after these patients. (M2
      Presswire, November 23, 2000)


CANADA: Disabled War Vets Owed $2 Billion, Economist's Report Says
------------------------------------------------------------------
The federal government owes Canada's disabled war veterans at least $2
billion - substantially more than expected - for mismanaging their trust
accounts for 80 years, financial and legal experts say.

Lawyers representing up to 10,000 veterans or their relatives in a class-
action lawsuit against the government released an economist's report to
back their claim.

The report was prepared after Mr. Justice John Brockenshire ruled last
month that Ottawa breached its duty of care to veterans by knowingly
withholding interest payments from their accounts.

The government has appealed the Superior Court of Justice decision to the
Ontario Court of Appeal.

The veterans were declared mentally incompetent after returning home from
the two world wars and other conflicts with shell shock or other cognitive
disabilities.

Many remained in hospital for much of their lives.

While in institutions, their veteran's, old age and Canada pensions, as
well as inheritances and any other money they had, were held in trust by
the federal government. It neglected to invest the money until 1990 - five
years after being warned by the federal auditor-general that this was the
most basic duty of a trustee.

"If they had the bad luck to die while the government was administering
their affairs, the government would keep the principal," David Greenaway,
one lawyer representing the veterans, said.

Greenaway was speaking after a news conference in Windsor, where lawyers
released a report prepared by former federal economist Michael Charette,
now a private consultant.

'If they had the bad luck to die, the government

would keep the principal' Charette studied public records to see how much
of the veterans' money was sitting in government accounts each year from
1920 to 2000 and calculated the interest it would have earned in a variety
of investments.

The year 1920 was picked "arbitrarily" because most disabled World War I
veterans were in care by then, but the group of affected veterans
theoretically goes back to the Riel Rebellion of 1885, Greenaway said.

If invested entirely on the Toronto Stock Exchange and compounded annually,
the interest owed since 1920 would now total $3.5 billion. But if placed in
a variety of investments, including government bonds, it works out to $1.6
billion, the report says.

Based on earlier estimates, lawyers thought veterans should collect between
$1.3 billion and $1.5 billion.

In addition to interest, class-action lawyers will insist vets and their
families be awarded a premium - as much as $400 million - to offset an
expected tax burden, Greenaway said. When added to $1.6 billion, that
brings the total claim to $2 billion.

The interest won't be tax-free and anyone receiving the money in a lump sum
will be taxed at a higher rate than if it had been paid through the years,
he said.

But Cliff Chadderton of the National Council of Veteran Associations
criticized the report in a statement that highlights a split among veterans
over the issue.

Chadderton said the report fails to mention that much of the money could
end up in the pockets of distant relatives of deceased veterans and that
taxpayers will be gouged.

However, a spokesperson for the Royal Canadian Legion's Dominion Command in
Ottawa recently told The Star its position is that interest should be paid
retroactively for the years prior to 1990.

Chadderton said using federal money for interest payments would make it
harder to accomplish such objectives as getting rehabilitation benefits for
Ferry Command pilots who flew unarmed aircraft in World War II. (The
Toronto Star, November 23, 2000)


CHARTER COMMUNICATIONS: Agrees To Settle Suit On Cable TV Late Fees
-------------------------------------------------------------------
Cable television customers who have paid late fees to Charter
Communications would get compensatory benefits from the company under a
proposed settlement of a class action suit that claims those fees were
unreasonable.

The suit was filed in January 1999 in Circuit Court in Madison County; the
proposed settlement applies to Charter customers nationwide, except for
California, Connecticut, Maryland, Oklahoma, Vermont and Washington.

The Des Peres-based company is the nation's No. 4 provider of cable
services. Charter denies wrongdoing and says it wants to settle the suit to
avoid spending the money and time that continuing litigation would require.

The suit alleged that Charter's late fee amounted to a "profit-generating
device." It said customers pay for cable service in advance and thus are
charged late fees for service they have not yet received. The suit said the
company does not sufficiently explain the "due date" on its bills or give
any indication how late fees could be avoided.

"Charter believes it has been fair and honest in dealing with its customers
with respect to the late fee issues and is not admitting any fault," the
company says on a Web site it has established to provide information on the
case.

Stephen B. Higgins, one of Charter's attorneys, said the cost of the
settlement can't be determined now. "We don't know how many of our
customers are class members," he said. "There's no way of knowing how many
people will take advantage of it."

The company also has no way of knowing who has paid late fees, Higgins
said.

The proposed settlement calls for one-time payments of $ 9.95 to former
customers who paid one or more late fees and submit a claim.

Those who are still Charter customers would be allowed to select two free
benefits from Charter - one from each of two lists. One list has such
benefits as a free month of basic digital service, or two free pay-per-view
movies.

The second list offers free installation of basic digital, of a cable modem
or of an additional cable outlet.

Charter has charged late fees of around $ 5 in most of its systems. The
company announced a standard $ 5 late charge in July.

Under the settlement, Charter would reduce its late fee to $ 2.95 during
the first year following court approval. The fee could be assessed a month
(27 to 31 days) after a bill is generated. An additional $ 2 fee could be
charged for bills that remain unpaid for 45 days.

The basic late fee would go up to $ 3.25 for the second year and an
additional fee of $ 1.70 could be charged after 45 days.

Higgins said the proposed settlement was developed in mediation between
attorneys for the companies and the plaintiffs.

The settlement calls for a maximum award of $ 5.525 million in fees and
expenses to lawyers for the plaintiffs. The suit was originally filed by
the firm of Hopkins Goldenberg of Edwardsville, and now involves several
law firms around the U.S. The proposed accord will be the subject of a
hearing before Circuit Judge Phillip J. Kardis at 10 a.m. Dec. 21 in
Edwardsville. (St. Louis Post-Dispatch, November 23, 2000)


COOPER TIRE: Vows to Fight Series of Lawsuits over Defective Tires
------------------------------------------------------------------
Cooper Tire & Rubber vowed to fight a series of class-action lawsuits
accusing the second-largest U.S. tiremaker of selling defective tires that
pose a risk of "life-threatening" accidents. Over the past three weeks,
lawyers have filed complaints in 26 state courts. The suits allege that
Cooper workers used awls to puncture air bubbles that developed in the
inner linings of some steel-belted radials, allowing moisture to seep into
the tires and corrode the steel belts. That, in turn, left the tires
vulnerable to tread separation and roadway accidents, the lawsuits contend.
Cooper, based in Findlay, Ohio, said the awling process was used between
1990 and 1995 at its plant in Tupelo, Miss., and was "a safe and harmless
procedure performed by skilled technicians." (The Washington Post, November
23, 2000)


DAIMLER CHRYSLER: Release Bars Airbag Victim from Joining Class Action
----------------------------------------------------------------------
A woman injured by an airbag may not recover from a class action lawsuit
against an automaker because she signed a general release with a
tortfeasor, even though the car manufacturer was not party to the release,
the Superior Court has ruled. While the opinion in Phifer v. Daimler
Chrysler Corp. is an unpublished memorandum, two of the three judges on the
panel, Judge James R. Cavanaugh and President Judge Stephen McEwen,
concurred. Therefore, Judge Vincent A. Cirillo, the remaining judge,
authored the opinion.

On July 13, 1997, Dolores Phifer was injured in an accident when one of the
airbags opened in her 1990 Dodge Spirit. She received burns on her skin and
clothing and suffered from a fractured left hand and wrist which left her
permanently disabled. The car was designed and manufactured by Daimler
Chrysler Corp.

Phifer settled with the tortfeasor in the accident, Maureen Heffner, for $
25,000 and signed a general release. The release said in part that "the
undersigned hereby releases and forever discharges Maureen Heffner, her
heirs, executors, administrators, agents and assigns and all other persons,
firms or corporations liable or, who might be liable ... from any and all
claims, demands, damages, actions, causes of action or suits of any kind
..."

In March 1990, a class action lawsuit was filed against Daimler Chrysler
alleging that some of its vehicles contained defective airbags that created
the risk of thermal burns to hands and forearms during deployment, even
though a safer and equally effective design was available. In February
1999, a Philadelphia Court of Common Pleas jury found that Daimler Chrysler
"fraudulently concealed" the potential danger of the airbags and rendered a
verdict of $ 730 per class member, the cost of replacing an airbag, and $
3.75 billion in punitive damages. Post-trial motions were denied in that
case, and an appeal is currently pending before the Superior Court.

After the settlement, Phifer and her husband filed suit against Daimler
Chrysler, D'Ambrosio Dodge Inc. and Bergey's Inc. Daimler and Bergey's then
joined Heffner as a third-party defendant. The Phifers moved for partial
summary judgment for the imposition of punitives and reformation of the
release to exclude Daimler Chrysler. The motion was denied, and all three
defendants made motions for summary judgment based on the general release.
The motions were granted in December 1999. The Phifers appealed, arguing
that the general release was not applicable to Daimler Chrysler. "They
claim that the fraud verdict entered in the class action lawsuit allows
them to reform the general release to exclude DCC, thus, the Phifers are
enabled to pursue DCC for damages resulting from the July 13, 1997 motor
vehicle accident," the court wrote. "Furthermore, the Phifers argue that
the general release was based upon the mutual mistake of the Phifers and
Heffner in that the injuries Mrs. Phifer sustained were the results of the
auto collision only and not a defective airbag system." The trial court
found that the fraud verdict in the class action had no correlation to the
general release. The trial court also ruled that because the Phifers did
not know about the class action, they were precluded from relying on the
fraud verdict and therefore the release could not be reformed.

The appeals court agreed with the trial court, ruling that the release was
designed to prevent Heffner from being joined as a defendant in another
lawsuit. "Furthermore, DCC was not a party to the formation or execution of
the general release and cannot be held to have fraudulently induced the
Phifers to execute the release," Cirillo wrote. The court also determined
that Daimler Chrysler was in fact a joint tortfeasor and because the
Phifers signed a general release rather than a joint tortfeasor release,
they were precluded from suing the car maker and the other defendants. The
court therefore concluded that summary judgment was proper. In his
concurring statement, McEwen said he agreed that the decision should be
affirmed but wrote separately "simply to echo [his] long-held view that a
general release resolving a claim between distinct parties should not
benefit a party who is a stranger to the claim." (The Legal Intelligencer,
November 22, 2000)


DINUBA MEDICAL: 9th Cir Says EEOC May File Nonclass Representative Suit
-----------------------------------------------------------------------
The Ninth Circuit, ruling on a previously unanswered question, has held
that the Equal Employment Opportunity Commission (EEOC) may sue for damages
on behalf of more than one individual without filing a class action. The
court upheld a $ 100,000 jury verdict against a California medical clinic
on sexual harassment and retaliation claims of three former employees.

                               Facts

Dinuba Medical Clinic was a rural medical facility with about 40 employees
in Dinuba, California. John Moore was the administrator, and eight of his
family members worked there, including the personnel director.

Former clinic employees Elva Marquez, Maria Montemayor, and Eva Flores
filed claims with the EEOC for hostile work environment sexual harassment,
and Marquez alleged retaliation, all in violation of Title VII of the Civil
Rights Act of 1964. The agency filed a lawsuit on their behalf in federal
court.

At trial, the evidence showed that Moore had created a hostile environment
at the clinic by:

* verbally abusing the three women;
  • groping his private parts in
       their presence;

    * engaging in unwelcome, sexually charged body contact with them; and

    * making offensive sexual remarks.

    The evidence also showed that Marquez had been abruptly fired on the same
    day she had filed a criminal complaint against the administrator.

    After a long trial, the jury ruled in the EEOC's favor and awarded $
    150,000 to Marquez and $ 25,000 each to Montemayor and Flores. If an
    employer has no more than 100 employees, however, federal law limits the
    total amount of damages to $ 50,000 for each employee or former employee.
    So the trial judge reduced Marquez' award to $ 50,000. The court also
    granted back pay to Marquez and ordered the clinic to establish sexual
    harassment policies, procedures, and training and refrain from further
    discrimination.

    The clinic appealed.

                             Ninth Circuit's ruling

    The clinic challenged the trial court's finding that Marquez's filing of a
    criminal complaint against Moore for assault and battery was a sufficient "
    opposition" activity protected from retaliation under Title VII. The
    relevant part of the law states: It shall be an unlawful employment
    practice for an employer to discriminate against any of his employees . . .
    because he has opposed any practice made an unlawful employment practice by
    this subchapter. The court then explained that to establish an initial case
    of retaliation under Title VII, an employee must show that (1) he engaged
    in protected expression, (2) he suffered an adverse employment action, and
    (3) there is a "causal link" between the protected expression and the
    adverse action.

    The clinic contended that Marquez's filing of the criminal complaint wasn't
    protected expression. The clinic argued that physical assault wasn't the
    same as sexual assault. Therefore, according to the clinic, the criminal
    complaint had no relation to the previous pattern of sexual harassment.

    The court of appeals rejected the clinic's arguments and upheld the trial
    court's findings that the physical assault was the "culmination" of the
    discrimination and that Marquez reasonably could have believed that she had
    been subjected to battery because she was female.

    The clinic also argued that the damages awards could not stand either
    because the EEOC hadn't filed its lawsuit as a class action. In other
    words, because the commission qualified as the only complaining party, the
    awards had to be limited to only one $ 50,000 award for the entire lawsuit.

    Under Title VII, as the court explained, the EEOC is authorized to file a
    lawsuit against a private employer reasonably believed to be engaged in
    unlawful employment practices. The court noted that since 1991, the
    commission has had authority to seek monetary damages for employees when it
    sues as their representative.

    Whether the EEOC could file a representative lawsuit that was not a class
    action had never been answered. In a class action, the court "certifies"
    certain individuals to represent a class or group of individuals with
    similar claims. The representatives then pursue the lawsuit on behalf of
    the class.

    To answer the question, the court cited a 20-year-old U.S. Supreme Court
    decision that allowed back pay and injunctive relief (a court order to take
    or not take some action) for four employees represented by the EEOC. In
    that case, the commission had not been certified as a class representative,
    and the Supreme Court had not limited its decision based on the type of
    relief that had been sought. General Telephone Co. v. EEOC.

    As the Ninth Circuit saw it, the Supreme Court had held that the EEOC may
    seek classwide relief without being certified as a class representative.
    The court concluded:
    [T]here is no principled reason to depart
    from General Telephone Company and require class certification . . . simply
    because the EEOC is now author-ized to sue for damages in addition to
    equitable relief [a type of nonmonetary remedy intended to restore the
    party to the position he would have been in if not for the wrongful conduct
    of another]. The court also rejected the clinic's argument that the total
    monetary award should be limited to $ 50,000. The clinic contended that
    since the EEOC was the only named party, it was the only "complaining
    party" and therefore was the only one entitled to an award limited to $
    50,000.

    Because the particular section of the damage caps law was ambiguous,
    however, the court turned to the EEOC's interpretation of the law to
    determine if it was reasonable. The agency had taken the position that the
    damage caps applied to each individual employee and that it could recover
    up to the maximum amount for each individual. The court found that
    interpretation of the law to be "eminently reasonable" and deserving of its
    deference.

    The Ninth Circuit held that each aggrieved employee represented by the EEOC
    in a Title VII lawsuit could receive up to the maximum damages amount
    without filing a separate suit or becoming a named party in the agency's
    case. The appeals court affirmed the trial court's judgment in favor of the
    EEOC in all respects. EEOC v. Dinuba Medical Clinic, -16454, 2000 WL
    1199529 (9th Cir., Aug. 24, 2000).

                                     Lesson

    This decision makes it clear that the EEOC may sue for money damages on
    behalf of more than one employee or former employee without filing a class
    action. The commission also may recover monetary damages for each
    individual, limited to $ 50,000 each when the employer has no more than 100
    employees. (Nevada Employment Law Letter, November, 2000)


    ELBIT, ELSCINT: Announces Dismissal of Lawsuit and Mediation of Claims
    ----------------------------------------------------------------------

    Elbit Medical Imaging Limited (Nasdaq: EMITF) ("EMI") announced that on
    November 16, 2000 the District Court of Tel Aviv Yafo issued an order
    dismissing without costs the Representative (Class Action) Claim submitted
    to that court by Mr. Jonathan Aderet in September 1999 against EMI, Elbit
    Medical Holdings Limited, Elscint Limited, Elron Electronics Industry
    Limited and five former Directors of Elscint Limited.

    The dismissal was made at the request and with the consent of all the
    parties, and follows the mediation of all claims between Elscint Limited
    and Mr. Aderet (a former president of Elscint Limited), including claims
    relating to the termination of Mr. Aderet's employment by Elscint Limited.
    Elscint Limited has informed EMI that the District Labour Court in Haifa
    issued its order giving the Mediation Agreement between Elscint and Mr.
    Aderet the validity of a court judgement on November 12, 2000.

    Elscint Limited (NYSE: ELT), a subsidiary of Elbit Medical Imaging Limited
    (Nasdaq: EMITF) ("EMI") also announced it has reached a Mediation Agreement
    with its former president, Mr. Jonathan Aderet, for the settlement of all
    outstanding claims between Mr. Aderet and the Company, including the
    Representative (Class Action) Claim.

    In 1999, Mr. Aderet claimed for certain compensation arrangements from the
    Company following his termination as president of the Company in a claim
    filed with the District Labor Court in Haifa. Pursuant to the terms of the
    Mediation Agreement, Elscint will pay to Mr. Aderet an agreed sum, in full,
    as final settlement of all claims against the Company. The Mediation
    Agreement was awarded the validity of a judgement of the District Labour
    Court in Haifa on November 12, 2000.

    By agreement between the parties, the Representative (Class Action) Claim
    submitted by Mr. Aderet to the District Court of Tel Aviv against Elscint,
    EMI, Elbit Medical Holdings Ltd., Elron Electronics Industry Limited and
    several former Directors of Elscint, was dismissed without an order for
    costs with the consent of all parties. The court order was given on
    November 16, 2000.


    EMULEX HOAX: Another Suit Filed Against Wire Service Over Fake Release
    ----------------------------------------------------------------------
    An investor filed a lawsuit Tuesday against a press release distributor
    that transmitted phony information that sent a fiber-optic equipment
    company's stock tumbling. Another suit, filed in Manhattan, was previously
    reported in the CAR.

    The suit was filed in Los Angeles County Superior Court on behalf of Steven
    Simon of West Orange, N.J., said Victor Cosentino, one of his attorneys.

    Simon, who is seeking class-action status for the lawsuit, claims he sold
    1,500 shares of Emulex Corp. stock at cut-rate prices because of false
    information distributed by Los Angeles-based Internet Wire. His suit
    contends the company was negligent in sending out the release, which was
    picked up by news outlets including Bloomberg and CBSMarketWatch.

    Internet Wire officials could not be reached for comment. A call to the
    company's office after business hours Tuesday went unanswered.

    A former Internet Wire employee, Mark S. Jakob, 23, of El Segundo, was
    arrested Aug. 31 and later indicted on 11 securities and wire fraud
    charges. Federal authorities claim he created the phony press release and
    made about $ 241,000 from the resulting stock fluctuations. He has pleaded
    innocent.

    Holders of Emulex stock lost a total of about $50 million the morning of
    Aug. 25, after the release went out. It falsely stated that Emulex's
    accounting practices were under federal investigation, that its president
    had resigned and that it would restate earnings to show a big loss.

    The release was found to be a hoax that day, but not before Emulex stock
    plummeted from $113 a share to less than $43 in a seller's panic. The Costa
    Mesa company's stock ultimately recovered, but that was no consolation to
    investors like Simon, who claims he sold his stock at $45 to $75 per share.

    If convicted on all charges, Jakob could be sentenced to a cumulative
    prison term of 100 years, fines of $9.5 million and be ordered to pay
    $600,000 in restitution in a separate lawsuit brought by the Securities and
    Exchange Commission. His trial is set for early next year.

    Simon wants to be reimbursed for his losses and awarded damages. His suit
    also asks that Internet Wire be ordered not to distribute news releases
    without verifying their contents. (The Associated Press State & Local Wire,
    November 22, 2000)


    GERMANY: Court Rejects Claims For Property Seized Under Communism
    -----------------------------------------------------------------Germany's
    highest court refused Wednesday to award further compensation for east
    German property seized by the Nazis or under the communist regime that
    followed, saving the government billions in likely payouts after a bitter
    legal battle.

    The Federal Constitutional Court's ruling is a major setback to more than
    half a million plaintiffs in one of the most complicated disputes arising
    from the collapse of communist East Germany and German unification in 1990.

    "This is a great disappointment," plaintiff Hans-Guenter Marwitz said. "No
    justice was done here."

    Many of the 40 plaintiffs suing the government were descendants of
    Prussia's aristocratic landowner caste known as Junkers, whose property was
    seized by Soviet occupation authorities immediately after World War II.
    They argued that they were unfairly treated under Germany's unification
    treaty compared to other former owners who actually got their property
    back.

    One of the claimants was seeking higher compensation for a piece of eastern
    German real estate owned by his Jewish mother that was taken over by the
    Nazis during World War II, the court said. Communist East Germany never
    compensated people whose property was seized under the Nazi regime.

    But the court said German taxpayers had already paid heavily for
    unification, with massive government aid funneled to former East Germany
    over the past decade. It said the government had the right to limit
    compensation claims.

    The eight justices upheld 1994 legislation challenged by the plaintiffs,
    parts of which cover property seized from east German Jews by the 1933-45
    Nazi dictatorship. Other parts cover expropriations under Soviet occupation
    and during East Germany's 41-year life span.

    The government had said it could face an additional $8.6 billion in
    expropriation claims if the law were overturned - just as it tries to cut
    spending and balance the budget. The Finance Ministry welcomed the verdict,
    noting it has already set aside $5.6 billion for such compensation over the
    last decade. (The Associated Press, November 22, 2000)


    HOLOCAUST VICTIMS: US Judge Ratifies $1.25B Swiss Bank Distribution Plan
    ------------------------------------------------------------------------
    Concluding a long and contentious process, a federal judge approved a plan
    to distribute $ 1.25 billion to Holocaust survivors. The ruling by U.S.
    District Judge Edward R. Korman--which used a complex set of formulas for
    payments--was designed as the final chapter in survivors' lawsuits against
    Swiss banks.

    But some lawyers said they expected an appeal. "I think the decision
    certainly should be reviewed by the court of appeals. It is historic, but
    it is tragically inadequate," said Samuel J. Dubbin, a Miami lawyer who
    filed objections to the settlement. "There are serious questions about the
    fairness of the settlement to begin with, serious questions about the
    adequacy of the sums and serious questions about whether or not it was a
    fair compromise for the victims," he said. Dubbin labeled "paltry" the sum
    agreed upon in the settlement "relative to the theft that is known to have
    taken place."

    Korman presided over an emotional hearing in federal court in Brooklyn,
    during which Jewish survivors rekindled bitter memories and fought over how
    the settlement funds would be allocated.

    But Elan Steinberg, executive director of the World Jewish Congress,
    praised Korman's order. "Hopefully, after two years, the ruling will allow
    for a rapid distribution of funds," Steinberg said. "The concern now is we
    are going to have some frivolous appeals that would only serve to block
    distribution . . . to an aging and dying survivor population," he added.

    In his order, Korman stressed that while the settlement fund is
    "substantial," it was insufficient to do justice to all people who suffered
    and made claims. According to the plan approved by Korman and drafted by
    Judah Gribetz, a former deputy mayor of New York City whom the judge had
    appointed as a special master, priority for payment will be given to the
    persecuted holders of Holocaust-era accounts in Swiss banks.

    Korman praised Gribetz for his "deep understanding of all issues related to
    the Holocaust."

    The first step will be publication of names and identifying information
    connected to about 26,000 World War II-era accounts related to Holocaust
    victims. The largest settlement sum, $ 800 million, was set aside to ensure
    that the owners of these accounts are paid in full, including interest. Any
    unused funds in this category will be distributed to other classes of
    beneficiaries. The additional $ 450 million will be divided among refugees
    who were refused entry to Switzerland, people who were forced into slave
    labor for companies with Swiss accounts and Holocaust victims whose
    possessions were stolen by the Nazis and ended up in Switzerland.

    In the plan he crafted, Gribetz recognized that it would be impossible to
    pay all the heirs of slave laborers who died, because the cost of locating
    them would be too high and the sums distributed would be nominal.

    Thus, the decision was made to primarily pay survivors. It is estimated
    that the survivors will receive about $ 1,000 each.

    Refugees who were denied entry or who were expelled from Switzerland can
    receive up to $ 2,500. Plans call for publishing the names of 4,000 people
    known to have been refused entry because they were Jewish.

    In his court order, Korman said that his decision to appoint Gribetz to
    propose a distribution plan was motivated by a desire to spare Holocaust
    survivors from being forced into an adversarial relationship. "It was hoped
    that a neutral special master, acting with the guidance of the affected
    community, could . . . propose a plan of allocation and distribution that
    would do non-adversarial justice to the claims of all class members," the
    judge said.

    As part of the process, the proposed plan was translated into 21 languages
    and sent to 675,541 people and organizations throughout the world.

    Korman said that more than 99% of the Holocaust victims or their survivors
    did not submit any comments, and presumably had no objection.

    In August 1998, after months of often-bitter negotiations between lawyers
    for the Holocaust victims and their heirs and the banks, Credit Suisse and
    UBS, Korman played a major role in crafting a settlement.

    The agreement ended threats of sanctions against the Swiss banks by about
    20 states and 30 municipalities throughout the United States.

    During the entire process, the pressure of the ticking clock was evident.
    Many of the Holocaust survivors were elderly and frail. Some who filed the
    original suits died before they could see the settlement concluded.

    The clock also apparently was on the judge's mind.

    In his order approving the plan to distribute funds, Korman said he wanted
    to proceed as expeditiously as possible. (Los Angeles Times, November 23,
    2000)


    HOUSING AUTHORITY: Injunction Protects Tenants' Privacy
    -------------------------------------------------------
    A federal judge in Orlando has given four tenants of the Sanford Housing
    authority a preliminary injunction, preventing housing authority employees
    and Sanford police officers from using a clause in tenants' leases to enter
    residences without a warrant.

    Treena Kaye, managing attorney at Central Florida Legal Services Inc., and
    Robert Hornstein, a public interest lawyer with a private practice in
    Gainesville, went to federal court on behalf of tenants Mary Noble, Sabrina
    Conyers, Rosetta Horne and Trumella James.

    Because of the involvement of a legal services attorney, federal
    regulations prevented the lawyers from seeking class-action status.
    However, Kaye said any tenant should be able to easily obtain a similar
    injunction after Tuesday's ruling. The judge ordered the tenants and the
    housing authority to a January mediation hearing.

    The decision comes six months after another tenant was awarded $77,000 from
    the housing authority and its director, Timothy Hudson, in state court. A
    jury concluded Tanisa Comer's rights were violated when Hudson entered her
    apartment without a warrant or her consent. He began eviction proceedings
    after finding drugs in the apartment.

    Hudson's testimony in the Comer case weighed heavily in the decision to
    file the federal court case, Kaye said.

    In the Comer case, Hudson testified that he called police to her apartment
    "to assist me as I inspect alleged allegations that there's drug activity,
    drug usage going on."

    In a deposition given prior to the Comer trial, Hudson said that as
    landlord he did not need a search warrant to enter apartments.

    "If it's believed, OK, or suspected that something happening in that unit
    around that unit is a threat to the head of household or to other
    residents' right for a peaceful enjoyment, I don't need a signed search
    warrant by a magistrate," Hudson said in the sworn testimony.

    Hudson has used an emergency entry clause in tenants' leases to enter
    apartments, Kaye said.

    The clause reads: "The Authority may enter Tenant's dwelling unit at any
    time without advance notification when there is reasonable cause to believe
    that an emergency exists."

    U.S. District Judge Gregory A. Presnell ruled that paragraph cannot be used
    in place of consent or a search warrant. He did not prevent police from
    carrying out legal obligations and duties.

    "We're complying [with] the law and we have been since I took over," said
    Sanford Police Chief Brian Tooley. Tooley said he issued a memo to his
    employees shortly after he took the job in August 1999 telling them they
    were to treat the apartments of tenants living in public housing the same
    as the homes of any other resident. (The Orlando Sentinel, November 23,
    2000)


    INMATES LITIGATION: Ct Holds PA Liable for Unconstitutional Conditions
    ----------------------------------------------------------------------
    On November 21 the Commonwealth Court held the City of Philadelphia
    responsible in the latest round of appeals in Jackson v. Hendrick, a
    30-year-old case over unconstitutional prison conditions. The court ruled
    against the city after reconsidering an appeal it previously quashed and
    was ordered to revisit by the Supreme Court.

    With trial court evidence that the prison system was "disgusting," that
    inmates were doing their laundry in sinks with clogged drains and that the
    city repeatedly opted to pay a fine rather than fix things, Judges James
    Flaherty and Rochelle S. Friedman, along with Senior Judge Emil E. Narick,
    affirmed the $ 1 million fine against the city."Half-hearted measures, or
    sham claims of compliance do not address the problems [or] conditions
    within prisons, and are inadequate to satisfy the agreements which the City
    has made," wrote Friedman, quoting the trial court.David Rudovsky of Kairys
    Rudovsky Epstein Messing & Rau represented the plaintiffs. Richard Feder
    and Marcia Berman of the City Solicitor's Office represented Phildelphia.

                                History

    With 30 years of litigation baggage, the history of Jackson is "tangled,"
    the court said. In 1971, five prisoners in the city's prison system filed a
    class action in equity, seeking injunctive relief from cramped conditions
    at the prison they alleged violated their constitutional and statutory
    rights. Then-Mayor James Tate was a named defendant that's how old the case
    is.A 1972 trial court decision went in favor of the prisoners, and the city
    was ordered to take immediate action to improve prison conditions.
    According to the trial court, conditions at the prison amounted to cruel
    and unusual punishment under both the state and U.S. constitutions. The
    parties later entered into a series of consent decrees, culminating with a
    1991 agreement by which the city is still bound. That consent decree
    imposes obligations on the city with respect to "virtually every aspect of
    prison life," and allows the trial court to impose fines for noncompliance,
    the opinion said.In 1995, the plaintiff-prisoners filed a motion for
    contempt of court against the city for failure to comply with the consent
    decree. After a series of hearings, the trial court found the city in
    violation of the decree and imposed a fine of $ 2,252,500. After a motion
    for reconsideration, that fine was lowered to $ 1,095,000. The city
    appealed to the Commonwealth Court. It was now March 1997.The court quashed
    the city's appeal for lack of jurisdiction in 1998. This February, however,
    the Pennsylvania Supreme Court vacated the Commonwealth Court's order and
    remanded the appeal to Commonwealth Court for reconsideration of the city's
    appeal. While this gave the city a second bite at the apple, it ultimately
    lost the battle over contempt fines.

                            No 'Criminal Contempt'

    The city argued in its appeal that the fine imposed was a criminal contempt
    fine, rather than a civil contempt fine, and that the city was therefore
    entitled to all the safeguards of a criminal proceeding. The court
    disagreed."The courts have always possessed inherent powers to enforce
    their orders and decrees by imposing sanctions," wrote Friedman. "If the
    dominant purpose of the court is remedial, to coerce compliance ... and in
    some cases, to compensate the complainant for losses suffered, the contempt
    proceeding is classified as civil." (Emphasis in original.) Since the trial
    court would place the fine money in its escrow fund for the benefit of the
    prisoners, it was compensatory and remedial and therefore was a civil
    sanction, she said.

                            Arbitrary Maximum Fines

    Another challenge by the city was over the fines imposed under the 1995
    stipulation. It was an abuse of discretion to impose the maximum allowable
    amount $ 1,500 per day without stating the reasons for doing so, the city
    said."The trial court's reason is apparent to us," said Friedman.She quoted
    the trial court's record, which stated that the Philadelphia prisons
    "'remain dangerously overcrowded, while conditions remain, in many
    respects, cruel, disgusting and degrading.'" She noted the trial court has
    also said the city "repeatedly opted to pay a fine for contempt rather than
    comply" with its court-approved agreements."Quite obviously, the trial
    court imposed the maximum penalty because it found that, despite many
    opportunities to satisfy the requirements of the consent decree in the
    areas that concerned the trial court here, the City preferred to pay a fine
    and allow the 'cruel, disgusting and degrading' conditions to continue,"
    said Friedman.

                                Burdens of Proof

    The city argued the trial court's requirement for the city to be in "full
    compliance" rather than "substantial compliance" with the consent decree
    amounted to error. It was clear that the trial court did not err, Friedman
    wrote, because two civil contempt fines had been imposed on the city for
    noncompliance one for failure to provide sufficient social workers, and
    another for failure to provide prisoners with sufficient clothing, supplies
    and laundry access.Friedman said the city agreed in 1995 that it would be
    subject to a noncompliance fine if it were not in "full compliance"
    regarding the social workers. Regarding the clothing and laundry, the court
    acknowledged that the city had agreed to only a "substantial compliance"
    standard, but she said the trial court found that the city had failed to
    meet even that lower burden. "The large majority of inmates did not have
    the required two sets of blues (prison clothing), sheets or pillowcases ...
    [and] the majority of inmates did not have access to adequate laundry
    facilities to wash their clothing, sheets, pillowcases or towels ... the
    City admitted this serious problem," she quoted. If all that was true,
    Friedman said, the city did not substantially comply with the consent
    decree or a subsequent stipulation.The city also challenged how a
    "preponderance of the evidence" burden was met by the plaintiffs, but
    Friedman said there was no error at trial. The testimony of one credible
    social worker was enough to prove by a preponderance of evidence that, in
    addition to other things, the city had failed to ensure a 72-hour response
    time to all social services requests, she said.

                         Consent Decree Interpretation

    The city further contended that the trial court misunderstood several
    provisions of the consent decree, including those related to social
    services, laundry access and vocational training. Laundry and food-service
    positions at the prison did not teach marketable skills to inmates, and
    thus failed to meet the vocational training requirement. Laundry access was
    guaranteed by the consent decree, which required that medical personnel
    work in "safe, clean areas." "The City cannot provide a clean and safe area
    for the medical staff if there are not sufficient laundry facilities to
    clean bloody and infectious linens in the [detention center's] hospital,"
    wrote Friedman, who said a witness testified inmates were doing their
    laundry in sinks and showers with lye soap. Friedman said the trial court
    did not err in imposing a contempt fine on the city with respect to the
    laundry and vocational training issues.On the basis of evidence of social
    service abuses by the city at trial, the Commonwealth Court declined to
    consider allegations the trial court misunderstood provisions in the
    consent decree regarding social service caseloads. (The Legal
    Intelligencer, November 22, 2000)


    INS: 9th Cir Gives Immigrants Go Ahead to Sue for Citizenship
    -------------------------------------------------------------
    With the citizenship of possibly a quarter of a million people hanging in
    the balance, the Ninth Circuit U.S. Court of Appeals gave a class of
    immigrants the go-ahead to sue the Immigration and Naturalization Service.

    In doing so, the divided en banc panel threw open the courthouse door by
    placing statutes of limitation for subsequent classes on ice as long as the
    original complaint remains intact.

    In Catholic Social Services v. Reno, 00 C.D.O.S. 9301, the majority said a
    second class of illegal aliens could challenge an INS ruling that it was
    ineligible for a 1986 amnesty program, even though it filed suit long after
    the six-year statute of limitations had run.

    Plaintiffs lawyers argued that the first suit tolled the statute of
    limitations, while government attorneys argued that it was a new class with
    new claims for which time had run out. But Judge William Fletcher, writing
    for the 7-4 majority, said that since the first class action is still
    viable, a second class did not mean lawyers were taking a second swing at a
    flawed case, and therefore could continue.

    "Plaintiffs in this case are thus in a fundamentally different posture from
    plaintiffs in which subsequent class actions were not allowed," Fletcher
    wrote. "Plaintiffs in this case are not attempting to relitigate an earlier
    denial of class certification, or to correct a procedural deficiency in an
    earlier would-be class."

    Judge Alex Kozinski wrote one of the dissents.

    "I disagree with that characterization of this case," he wrote. "In my
    view, plaintiffs are seeking to relitigate the propriety of their proposed
    class. That is, even if the majority's distinction were theoretically
    valid, it has no application here."

    In 1986, Congress created an amnesty program to grant citizenship to
    illegal aliens living continually in the United States since 1982. The
    program would be unveiled the next year and last for 12 months.

    Congress wanted interpretation of the program to be "generous" and wrote a
    provision into the law clearly stating that brief absences from the country
    would not bar citizenship.

    But Immigration and Naturalization Service officials turned away applicants
    who had left the country, however briefly, after passage of the law but
    before the program began -- unless they had obtained permission to leave,
    or " advance parole," from the INS. As many as 250,000 immigrants were
    denied residency, according to plaintiffs lawyers, and thus began what the
    Ninth Circuit on Tuesday called a case with a "long and unhappy history."

    Seven amended complaints were filed before Eastern District Senior Judge
    Lawrence Karlton. The case has even been to the U.S. Supreme Court, which,
    in part, is where the trouble began.

    The cases now are referred to as CSS I through CSS VI, with an earlier
    Ninth Circuit panel decision in CSS VI overturned with Tuesday's opinion.

    Thousands of applicants were turned away by clerks at the INS before being
    allowed to file an application. The Supreme Court said members of this
    group, so-called "constructive front-deskers," would be able to show their
    case was ripe only after further development of the record.

    In 1996, the seventh amended complaint included claims by plaintiffs who
    said they were "front-desked" without ever being allowed to fill out an
    application. About the same time, Congress enacted the Illegal Immigration
    Reform and Immigrant Responsibility Act, which contained a provision
    attempting to decide the ripeness issue for the courts.

    Specifically, the statute said that no court shall have jurisdiction over
    claims of citizenship under the 1986 amnesty law unless the immigrant
    actually filed, or attempted to file, a completed application.

    That created a second class action, which challenged the constitutionality
    of the IIRIRA provision. Several law professors later joined in that
    challenge, filing an amicus curiae brief after the Ninth Circuit's
    three-judge panel appeared to rule that it had no jurisdiction to decide
    whether the provision was constitutional.

    Judge Fletcher pointed out that members of the second class clearly had
    their individual claims preserved while the first suit was fought at
    virtually every whistle-stop in the federal judiciary.

    "The only question in this case is whether those same plaintiffs should be
    permitted to aggregate their individual actions into a class action,"
    Fletcher wrote. "Strictly speaking, this is not a statute of limitations
    question at all."

    But Kozinski, in a dissent joined by Stephen Trott, Thomas Nelson and
    Ferdinand Fernandez, accused the majority of digging a bottomless well from
    which class action lawyers can draw cases, trying them over and over no
    matter what the statute of limitations says.

    "The majority raises a conflict with the law of every circuit that has
    decided a question of national significance," Kozinski wrote, adding that
    the decision undermines the principles of class litigation.

    "Instead of performing the normal en banc function of clarifying the law,
    the majority leaves it in total disarray," Kozinski later added.

    Judge Susan Graber, writing separately, agreed with the majority that "
    constructive front-deskers" could form a separate class, since their
    claims, she reasoned, arose from the 1996 law that denied them standing.
    But she would deny the claims of litigants whose new claims did not arise
    from IIRIRA. (The Recorder, November 22, 2000)


    MCKESSON HBO: NY Times Reviews On Questions On Who Knew What In Deal
    --------------------------------------------------------------------
    Is it really possible that one company would buy another after learning
    that the company being bought had fudged its accounting to increase profits
    in ways that the Securities and Exchange Commission would never approve if
    it learned of them?

    That is the charge made by one of the country's largest institutional
    investors against the McKesson Corporation, whose acquisition of HBO &
    Company, a software concern, last year ended with allegations of fraudulent
    accounting at HBO. Those allegations caused the stock price of the merged
    company to plunge. Two former officials of HBO have been indicted on fraud
    charges and McKesson HBOC, as the company is now known, has restated its
    earnings to far lower levels. But until now, McKesson has been viewed as a
    victim that had no knowledge of the fraud until after the merger.

    In a statement, McKesson dismissed the latest allegations as
    "preposterous," but the suit filed by the New York State Common Retirement
    Fund, the state pension fund, quotes from what it says are internal
    documents from Bear, Stearns, the McKesson investment banker in the deal,
    detailing the accounting problems said to have been uncovered by Deloitte &
    Touche, McKesson's auditors.

    It turned out that the Deloitte qualms about HBO's accounting practices
    were well justified, although Deloitte did not know of the scope of the
    problem. A few months after the merger was completed in January 1999, the
    company disclosed the need for a major restatement of earnings. The share
    price fell from $65.75, to $34.50, on April 28, the day that announcement
    was made.

    McKesson said that the suit "contains factual inaccuracies, distortions and
    erroneous conclusions," including the "preposterous allegation in the
    complaint that the McKesson Corporation board and its officers conspired
    deliberately to overpay for HBOC and to ignore accounting irregularities."

    Bear, Stearns, whose officials are said to have written the memorandums,
    declined to comment, other than to say the suit's "allegations are
    unsubstantiated." There was also no comment from Deloitte or from Arthur
    Andersen, the firm that had certified HBO's books and that is also named as
    a defendant in the class-action suit.

    Daniel L. Berger, a partner in the firm of Bernstein Litowitz Berger &
    Grossman, which filed the suit on behalf of the pension fund, declined to
    provide copies of the memorandums cited in the suit.

    According to the suit, in July 1998, while a merger of the two companies
    was being considered, McKesson asked Deloitte, which audited its books, to
    review those of HBO. Deloitte did not do its own audit but instead relied
    on the work papers of Arthur Andersen auditors.

    The Deloitte auditors concluded that in 1996 and 1997, HBO had improperly
    recorded sales before customers had approved the transactions. The Bear,
    Stearns memorandum says that "did not accord with G.A.A.P.," as generally
    accepted accounting principles are known. Deloitte was said to have
    concluded that Andersen knew of the incorrect accounting but "apparently
    did not challenge" it on the basis that the amounts involved, $5 million or
    more a year, were not material to the company.

    The Deloitte accountants are also said to have concluded that HBO was
    recognizing too much revenue when it sold software that it was required to
    maintain and that it abused merger reserves to hide costs that should have
    been treated as ordinary expenses. The lead Deloitte accountant on the
    review, Theresa Briggs, is quoted as saying the likelihood of a required
    restatement of profits, if the S.E.C. learned of the details, was "high."

    All of those issues figured in the later restatement of HBO's profits, but
    the amounts were much larger.

    Soon after the memorandums say that Deloitte's conclusions were presented
    to the McKesson board in July 1998, the tentative deal with HBO collapsed
    after it was prematurely disclosed and HBO's share price fell. The Wall
    Street reaction was that HBO was getting the worst deal.

    But in October, McKesson revived the talks and a new deal was quickly
    reached on terms more favorable to McKesson than were those of the earlier
    deal. The McKesson board approved it, and so did shareholders, after
    receiving a favorable opinion from Bear, Stearns.

    The Bear, Stearns statement, as provided to shareholders, concluded that
    the deal was fair to McKesson and included the statement that "McKesson did
    not provide specific instructions to, or place any limitations upon, Bear,
    Stearns with respect to the procedures to be followed or factors to be
    considered by Bear, Stearns" in determining whether the merger agreement
    was fair.

    That would appear to be contradicted by a Bear, Stearns internal memorandum
    quoted in the suit. That memorandum, dated Jan. 29, 1999, reviewed what it
    said were Deloitte's concerns that HBO profits were substantially
    overstated and said that those concerns had been discussed by McKesson's
    board, which decided to go ahead with the transaction. In preparing the
    fairness opinion, according to the memo from Alan Schwartz and Michael
    Offen of Bear, Stearns, "we were instructed by McKesson to rely only on the
    information provided to us by McKesson and HBOC and not to adjust any of
    this information based on questions raised by Deloitte."

    If that is accurate, the question is how and why it could happen. As
    McKesson said in its statement on the suit, "nowhere does the complaint
    suggest any reason" that the board would go ahead with the merger after
    learning of accounting irregularities.

    But the suit does suggest that McKesson, a distributor of health care
    products, believed it badly needed to expand into a more rapidly growing
    field, and thought HBO could provide that.

    If the memorandums prove to be accurate and the suit's quotations from them
    have not been wrenched so far out of context as to distort their meaning,
    there could be an explanation for the behavior -- one that speaks badly
    about prevailing attitudes in corporate America. Perhaps boards and
    managements have grown so used to managing earnings, using methods that are
    sometimes perfectly legal and sometimes go near or even over the lines set
    by accounting rules, that the discovery that another company was doing that
    -- even to the extent of breaking the rules -- was not deemed in itself a
    deal-breaker.

    According to the suit, the Bear, Stearns memorandum said Deloitte told
    McKesson that HBO would need to take a $40 million to $55 million hit to
    earnings to address the problems that Deloitte had found but that McKesson
    had decided instead to take the hit gradually, raising "reserves to a
    proper level over an 18-month period." In that way, the memorandum said,
    McKesson could still meet Wall Street earnings expectations.

    In the end, the merger was done, and nearly everyone involved suffered. A
    much larger write-off left no doubt that earnings estimates could not be
    met. The chief executive and chief financial officers of McKesson departed,
    blamed for arranging a disastrous merger. HBO officials were indicted, and
    now this suit challenges whether McKesson's officers and directors knew
    what was happening before the merger was approved. (The New York Times,
    November 22, 2000)


    MISSISSIPPI: offers $400M for College Desegregation Suit; $800M Sought
    ----------------------------------------------------------------------
    The state of Mississippi has offered a $400 million settlement to
    plaintiffs in a college desegregation lawsuit. A chief plaintiff says they
    can do better.U.S. Rep. Bennie Thompson, D-Miss., confirmed Wednesday that
    the College Board's offer is $400 million, about half of what plaintiffs
    are seeking to improve education at Mississippi's three historically black
    colleges.

    The two sides are scheduled to sit down next Monday in Jackson in a closed
    door meeting to discuss progress toward a settlement.

    The plaintiffs' proposal is $800 million. Attorney General Mike Moore
    called it substantial.

    "The perception that the board is doing all it can to enhance black
    colleges is subject to interpretation," Thompson said. "I think they are
    about halfway there."

    The college desegregation case originated in 1975 when the late Jake Ayers
    Sr. of Glen Allan sued the state, accusing Mississippi of neglecting its
    black universities for decades. Plaintiffs successfully demanded that more
    money be put into the historically black institutions to end
    discrimination.

    In the eight years since the U.S. Supreme Court in 1992 ruled that colleges
    in Mississippi were segregated, new admission policies have been adopted.
    Since 1995, Mississippi has poured $60 million into its historically black
    universities in an effort to respond to court orders. The bulk of the funds
    are for new programs, facilities and other-race scholarships. Gov. Ronnie
    Musgrove has opened settlement discussions among the plaintiffs, the
    College Board and the state.

    Thompson lamented that "facilities on the campuses of the black colleges
    are substantially less or different" than they are on white college
    campuses and that "faculty salaries at most black colleges are
    significantly different than at white colleges."

    Moore said the College Board's offer to improve conditions at Alcorn State,
    Jackson State and Mississippi Valley State universities is a solid effort
    to "correct the wrongs of the past." "This proposal is substantial ... in
    its dollar amount and programs," Moore said.

    Issac Byrd, a Jackson attorney who represents plaintiffs in the suit, said
    the board's offer was less than he had hoped for. "It came in substantially
    below it," Byrd said. "It's not where I think it should be." (The
    Associated Press State & Local Wire, November 23, 2000)


    MITEK SYSTEMS: Milberg Weiss Expands Period for Securities Suit in CA
    ---------------------------------------------------------------------
    Milberg Weiss (http://www.milberg.com/mitek/)announced that a class action
    has been commenced in the United States District Court for the Southern
    District of California on behalf of purchasers of Mitek Systems, Inc.
    ("Mitek") (Nasdaq:MITK) publicly traded securities during the period
    between December 27, 1999 and September 29, 2000 (the "Class Period").

    The complaint charges Mitek and certain of its officers and directors with
    violations of the Securities Exchange Act of 1934. Mitek is involved in
    character recognition technology, products, and services for the document
    imaging markets. The complaint alleges that during the Class Period,
    defendants represented that Mitek recorded revenue in compliance with the
    applicable accounting standard for software revenue recognition, AICPA
    Statement of Position ("SOP") 97-2, and reported favorable but false
    financial results. As a result, Mitek's stock traded at artificially
    inflated levels. Defendants took advantage of these inflated prices,
    selling more than $3.2 million worth of their own Mitek stock. On 9/29/00,
    Mitek announced that the Company will restate its third quarter 2000
    financial statements as a result of accounting misstatements that will
    require eliminating $1.4 million in revenue to be removed from the quarter
    for failing to comply with AICPA Statement of Position 97-2.

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


    NX NETWORKS: Abbey, Gardy Files Securities Suit in Virginia
    -----------------------------------------------------------
    A class action has been commenced in the United States District Court for
    the District of Virginia on behalf of all persons who purchased or acquired
    shares of Nx Networks, Inc. (Nasdaq: NSWX), common stock from July 27, 2000
    through November 2, 2000 and who were damaged thereby. The class action
    Complaint charges that Nx Networks, Inc., and certain of its officers and
    directors violated the federal securities laws.

    The Complaint alleges, among other things, that defendants publicly
    misrepresented the Company's true financial results throughout the Class
    Period and improperly recognized revenue in the second quarter of 2000
    ended June 30, 2000 in violation of Generally Accepted Accounting
    Procedures.

    Contact: Nicholas Gilbo, ngilbo@a-g-s.com, or Maria Criscitiello,
    mcrisciti@a-g-s.com, both of ABBEY, GARDY & SQUITIERI, LLP, 800-889-3701
    (toll free) or 212-889-3700


    PACIFICARE HEALTH: Shareholders Accuse of Delaying Bad Earnings News
    --------------------------------------------------------------------
    A shareholder has sued PacifiCare Health Systems Inc., alleging that the
    biggest operator of Medicare health plans delayed disclosing bad earnings
    news so that officials could sell shares at a premium.

    The shareholder lawsuit, which seeks class-action status, accuses
    PacifiCare of misleading investors between Oct. 27, 1999, and last Oct. 10,
    when the company said it would report a surprise third-quarter loss and
    miss its per-share earnings target for 2000. The shareholder claims that
    officials issued false positive statements about company finances and sold
    $ 5.73 million in shares between December 1999 and last August.
    PacifiCare shares fell 52% to $ 15.69 after the company's warning. The
    shares hit a 52-week high of $ 72.31 on June 16.

    The Santa Ana-based company "knowingly, or with conscious and deliberate
    recklessness, failed to disclose adverse material information," shareholder
    Michael Russ claims in the suit filed Tuesday in U.S. District Court in Los
    Angeles. The lawsuit alleges that the company and its officials were aware
    that PacifiCare's earnings would be hurt as it shifted its business away
    from capitation. Under that practice, the company paid doctors and
    hospitals a fixed fee per patient, allowing them to keep any amount
    remaining after treatment costs. The shift led to a rise in the use of
    medical services, causing companies such as PacifiCare to lose much of
    their control over costs.

    PacifiCare officials said they were served with the lawsuit Wednesday and
    had not fully examined it. "Until we get a closer look at it, we really
    won't have much to say," said spokesman Ben Singer.

    PacifiCare's stock fell 50 cents to $ 14.63 a share Wednesday in Nasdaq
    trading. The shares have lost more than 72% of their value this year.

                                Ailing Stock

    PacifiCare Health Systems' stock has tumbled since hitting a 52-week high
    in June. Daily closing prices:

          JUNE 16 -- Rating agency upgrades outlook

          OCT. 10 -- PacifiCare warns of surprise quarterly loss

          Wednesday's close: $ 14.63

    Source: Bloomberg News (published in Los Angeles Times, November 23, 2000)


    PRESIDENTIAL ELECTION: Legal Times Reports on Varied Lot in Litigation
    ------------------------------------------------------------------------
    Palm Beach County has been one of the hottest litigation spots in the
    country this week. As of last Friday afternoon, 13 different lawsuits had
    been filed in the County Courthouse stemming from the presidential
    election. The cases, the citizens who brought them, and the lawyers
    representing these citizens are a varied lot.

    Many of the cases fall into one category: Palm Beach voters asking for the
    court to declare the Palm Beach ballot illegal and confusing, and call for
    a revote in the county. Those cases, so far, are: Fladell v. Palm Beach
    County Canvassing Board; Horowitz v. LePore; Elkin v. LePore; Rogers v. The
    Elections Canvassing Commission of the State of Florida; HABIL v. Palm
    Beach County Canvassing Board; Lichtman v. Bush; and Green v. LePore.

    Each case has a different set of lawyers, makes subtly different arguments,
    and relies on slightly different evidence. Rogers, for one, has relied the
    most on statistical data to demonstrate problems with the Palm Beach
    ballots. The team of Fort Lauderdale lawyers working on that case have six
    statisticians they hope to bring as witnesses.

    The HABIL case is also fairly unique because it is brought on behalf of a
    number of Haitian Americans who say they were particularly impacted by the
    confusing design of the ballot because many of them are first-time voters.
    The HABIL case asks that if a revote is not possible, that the court
    instead direct the Florida electoral college members to vote for Gore.

    Gibbs v. Palm Beach County Canvassing Board and Adrien v. Department of
    Elections are both cases in which the citizens bringing the suits are
    representing themselves. Both suits seek revotes in Palm Beach County.
    Gibbs is a class action filing, and in addition to seeking a new vote, the
    group of voters filing the case are asking for $ 250,000 in declaratory and
    injunctive relief.

    Crum v. Palm Beach County Canvassing Board and Gottfried v. LePorte (sic)
    are pro se cases seeking to stop hand recounts in Palm Beach county and
    have the results of the machine vote certified.

    The Florida Democratic Party v. Palm Beach County Canvassing Board was one
    case that actually got resolved early in the week. The Democrats were
    asking that "voters' intent" be considered in counting ballots in Palm
    Beach County, and as such, that dimpled chads be counted in the hand
    recounts.

    Judge Jorge Labarga found that the Palm Beach regulations refusing to count
    dimpled ballots appeared to violate the law and that the canvassing board
    had the right to assess these ballots.

    Rhodes v. Harris is another Palm Beach voter case, but the case asks only
    that a hand recount be conducted and that those results count for the final
    tally of the county's election results. It does not seek a revote or a
    declaration that the ballots are illegal.

    Boswell v. Bush was filed earlier this month. Brought pro se by a resident
    of Texas and West Palm Beach, the suit also seeks a Palm Beach revote. But
    the suit is pretty wide-ranging, accusing George Bush of misconduct in
    several matters not related to the Florida recount, such as retaliating
    against a whistleblower on the state of Texas' payroll. (Legal Times,
    November 20, 2000)


    PRESIDENTIAL ELECTION: NLJ Says Civil Rights Cited As Key Reason
    ----------------------------------------------------------------
    The most contentious presidential election in modern history may come down
    to the interpretation of Florida statutes governing -- of all things -- the
    design of paper election ballots.

    As the campaigns of Vice President Al Gore and Texas Governor George W.
    Bush exchanged volleys over voting irregularities, attention turned to a
    handful of state lawsuits filed in Palm Beach County.

    The first suit, Fladell v. Palm Beach County Canvassing Board, filed Nov. 8
    on behalf of three Palm Beach County voters who claim that they voted for
    Reform Party candidate Patrick J. Buchanan by mistake, is similar to five
    others also filed in Palm Beach County's 15th Judicial Circuit Court. The
    suits, seeking a new election, allege that state laws governing ballot
    design invalidate the ones used by Palm Beach County on Nov. 7.

    In the election, Mr. Gore lost Florida by less than half of a percentage
    point, triggering a recount. Lawyers took notice when poll results showed
    that, despite its entrenched elderly Jewish Democratic residents, Palm
    Beach County gave Mr. Buchanan 3,704 of his 17,356 Florida votes. Another
    19,120 ballots were disqualified because voters punched their ballots for
    two candidates. That was 4% of the ballots cast in the county and double
    the average ballot disqualification rate in neighboring counties.

    Palm Beach County was the only county to use paper "butterfly" ballots.
    Candidates were listed on facing pages, and between their names was a
    vertical row of circles meant to be punched by the voter. Small arrows
    directed voters to each candidate's circle.

    Florida statutes @ 101.151(4) and @ 101.191 require that "the names of the
    candidates of the party which received the second highest vote for Governor
    shall be second under the heading for each office."

    The plaintiffs in the suits, and Mr. Gore's supporters, claim that the
    layout of the ballot led many would-be Gore voters to punch the circle
    actually intended for Mr. Buchanan. Republicans have countered that the
    ballots were approved by a Democratic appointee before Nov. 7.

    The lawsuit, however, says that since the Democratic Party came in second
    behind the Republicans when Governor Jeb Bush was last elected governor,
    the county violated the law simply by placing the circle for Mr. Buchanan
    higher than that reserved for Mr. Gore.

    Supervisor of Elections and Canvassing board member Theresa LePore "had no
    discretion to change the statutorily mandated position of the Democratic
    candidates on the ballot," the Fladell complaint says. "As a result, many
    voters, and in particular, many senior citizens, intending to vote for Al
    Gore and Joe Lieberman, mistakenly punched the punch hole on the ballot
    card designated for Pat Buchanan."

    A second lawsuit, filed on Nov. 9, seeks class action status for the
    600,000 Palm Beach County residents who voted on Nov. 7. Horowitz v. LePore
    alleges federal and state civil rights violations caused by the confusing
    ballot. Attorney Mark A. Cullen of Boca Raton, Fla.'s Szymoniak Firm, who
    brought the Horowitz suit, claims that "the balloting promulgated by the
    defendant was in violation of Florida law in that it failed to allow the
    voter to mark an 'X' or to utilize a punch strip to the right of the
    candidates name," a reference to the requirements of state statute @
    101.011(1).

    Some legal experts have predicted that state court judges are unlikely to
    overturn a presidential election based on ballot design flaws. But Patrick
    W. Lawlor, of Deerfield Beach, Fla.'s Young & Lawlor, points to the 1974
    Florida Court of Appeals ruling in Nelson v. Robinson, 301 S.2d. 508. It
    says that a court is justified in voiding an election if there exists a
    "reasonable probability that the results of said election would have been
    changed except for such irregularities." Mr. Lawlor, who represents three
    plaintiffs in another voter suit, Elkin v. LePore, declares, "We have met
    our burden."

    Nova Southeastern University law professor Robert M. Jarvis adds that a
    temporary injunction issued on Nov. 9 by judge Kathleen Kroll in another
    voter suit is a good sign for the plaintiffs and may result in the
    consolidation of all of the cases before a Nov. 14 hearing.

                                The legal test

    Fladell lawyer Howard Weiss of Boca Raton's Weiss & Handler says that the
    test is "whether reasonable doubt has been created as to whether the
    results reflect the will of the voters." Mr. Weiss adds that his firm is
    seeking an expedited trial where experts may testify as to the ballot's
    poor design. "It's not an IQ test -- a lot of people were confused," he
    said.

    Ronald G. Meyer of Tallahassee, Fla.'s Meyer and Brooks, a Democratic
    election lawyer attempting to coordinate the voter suits, says that he
    persuaded one plaintiff to drop a federal suit Nov. 9 after it was assigned
    to a "conservative" judge. He claims that the suits will likely be unified
    into one class action but warns there is limited time to litigate because
    once electoral votes are counted Dec. 18 and sent to Congress, "you'll get
    into separation-of-powers problems." (The National Law Journal, November
    20, 2000)


    QUINTUS CORP: Kirby McInerney May Expand Period in Securities Suit
    ------------------------------------------------------------------
    Kirby McInerney & Squire LLP intends to expand the class action lawsuit it
    previously commenced against Quintus Corporation (NASDAQ:QNTS) and certain
    of its officers.

    In light of new revelations and admissions concerning the scope and nature
    of accounting irregularities at Quintus, first announced on November 22,
    2000, the Class Period will be extended to include those who purchased or
    otherwise acquired Quintus shares between and including January 19, 2000
    through November 14, 2000.

    The previous complaint charged Quintus and certain of its officers and
    directors with violations of the Securities Act of 1934. Specifically, the
    complaint alleged that Quintus issued materially false and misleading
    financial information concerning the Company's revenues and earnings.

    On November 15, 2000, Quintus issued a press release announcing: (i) that a
    special committee of the Company's Board, after discussions with auditors,
    had been formed to investigate the Company's accounting practices for the
    quarter ending September 30, 2000 and for earlier quarters, specifically
    focusing on a receivable apparently collected from an outsourcing company;
    (ii) that the Board placed Chairman and Chief Executive Officer Alan
    Andersen on administrative leave and designated Paul Bartlett, the
    Company's Chief Operating Officer, as the acting Chief Executive Officer of
    Quintus; and (iii) that the Company could not "now determine the
    quantitative affects" of the investigation. As a result of the
    announcement, Quintus shares fell over 50 percent from $6.00 to as low as
    $2-7/8, before trading was halted by NASDAQ. Following the November 15
    announcement, Kirby McInerney & Squire filed a complaint against the
    Company in the U.S. District Court for the Northern District of California,
    on behalf of purchasers of Quintus securities.

    On November 22, 2000 Quintus announced that the Company fired Chief
    executive and Chairman Alan Anderson after the accounting investigation
    "uncovered sufficient evidence to warrant his termination." The Company
    also announced that it will restate $13.5 million in revenue reported
    earlier on January 19,2000, after an audit showed that the previously
    reported figures were predicated upon "falsified documents".

    If you wish to discuss the claims described above, or have any questions
    concerning this notice or your rights, please contact: Ira Press, Esq.
    Gretchen Becht, Paralegal KIRBY McINERNEY & SQUIRE, LLP 830 Third Avenue,
    10th Floor New York, New York 10022 Telephone: (212) 317-2300 or Toll Free
    (888) 529-4787 E-Mail: gbecht@kmslaw.com


    ROCHE HOLDING: Kirby McInerney May Appeal in Securities Suit in NJ
    ------------------------------------------------------------------
    Kirby McInerney & Squire had filed a class action lawsuit complaint in the
    District of New Jersey, asserting claims against Roche Holding Ltd.
    ("Roche") for violations of the federal securities laws, on behalf of all
    persons who purchased the American Depositary Receipts ("ADRs") of Roche
    from November 15, 1996 through May 20, 1999 (the "class"). The complaint
    asserted that Roche's ADRs traded at artificially inflated prices
    throughout the period described above, due to Roche's engaging in illegal
    price-fixing and anti-competitive practices in violation of U.S. anti-trust
    laws, which artificially inflated Roche's earnings and the prices of the
    ADRs. On May 19, 1999, it was announced that Roche's primary operating
    subsidiary and certain of Roche's officers had pled guilty to violating
    Unites States antitrust laws; Roche's operating subsidiary paid $500
    million in fines.

    By order dated November 13, 2000, the Court dismissed the complaint. The
    dismissal was without prejudice.

    Kirby McInerney & Squire is currently reviewing possible courses of action
    to take with respect to the litigation - including appeals, motions for
    reconsideration, and/or amendment of the complaint.

    If you have any questions concerning this notice or this action, please
    contact: Kirby McInerney & Squire, LLP, New York Ira Press, Esq., Alaina
    Colon, 212/317-2300, 888/529-4787


    SUNBEAM CORP: FL Suit Filed in April Seeks Recission of Warrants
    ----------------------------------------------------------------
    In April 2000, a complaint was filed in the U.S. District Court for the
    Southern District of Florida against the Company, certain current and
    former directors, Messrs. Dunlap and Kersh and MacAndrews & Forbes
    alleging, among other things, that certain of the defendants breached their
    fiduciary duty when the Company entered into a settlement agreement with
    MacAndrews & Forbes, and certain of the defendants breached their fiduciary
    duty and wasted corporate assets by, among other things, issuing materially
    false and misleading statements regarding the Company's financial
    condition. The plaintiff in this action seeks, among other things,
    recission of the warrants issued to MacAndrews & Forbes and an injunction
    preventing the issuance of warrants and damages. Each of the defendants has
    filed a motion to dismiss this complaint.


    SUNBEAM CORP: Investors File Second Amended Complaint in 1998 FL Suit
    ---------------------------------------------------------------------
    On April 23, 1998, two class action lawsuits were filed on behalf of
    purchasers of the Company's common stock in the U.S. District Court for the
    Southern District of Florida against the Company and some of its present
    and former directors and former officers alleging violations of the federal
    securities laws as discussed below. After that date, approximately fifteen
    similar class actions were filed in the same court. One of the lawsuits
    also named as defendant Arthur Andersen LLP, the Company's independent
    accountants for the period covered by the lawsuit.

    On June 16, 1998, the court entered an order consolidating all these suits
    and all similar class actions subsequently filed (collectively, the
    "Consolidated Federal Actions"). On January 6, 1999, plaintiffs filed a
    consolidated amended class action complaint against the Company, some of
    its present and former directors and former officers, and Arthur Andersen.

    The consolidated amended class action complaint alleges, among other
    things, that defendants made material misrepresentations and omissions
    regarding the Company's business operations and future prospects in an
    effort to artificially inflate the price of the Company's common stock and
    call options, and that, in violation of section 20(a) of the Exchange Act,
    the individual defendants exercised influence and control over the Company,
    causing the Company to make material misrepresentations and omissions.

    The consolidated amended complaint seeks an unspecified award of money
    damages. In February 1999, plaintiffs moved for an order certifying a class
    consisting of all persons and entities who purchased the Company's common
    stock or who purchased call options or sold put options with respect to the
    Company's common stock during the period April 23, 1997 through June 30,
    1998, excluding the defendants, their affiliates, and employees of the
    Company.

    Defendants have opposed that motion. In March 1999, all defendants who had
    been served with the consolidated amended class action complaint moved to
    dismiss it and the court granted the motion only as to certain non-employee
    current and former directors and a former officer, and denied it as to the
    other defendants. Arthur Andersen has filed counterclaims against the
    Company, and a third-party complaint against a former director of the
    Company and against unnamed third party corporations. On July 31, 2000, the
    court dismissed the former director from Arthur Anderson's counterclaims.

    On June 30, 2000, the plaintiffs filed a second amended complaint against
    most of the same defendants (although two of the Company's former outside
    directors were not included as defendants in the second amended complaint)
    alleging the same principal claims as the prior amended complaint described
    above.

                        Texas Action Transferred to Florida

    In September 1998, an action was filed in the 56th Judicial District Court
    of Galveston County, Texas alleging various claims in violation of the
    Texas Securities Act and Texas Business & Commercial Code as well as common
    law fraud as a result of the Company's alleged misstatements and omissions
    regarding the Company's financial condition and prospects during a period
    beginning May 1, 1998 and ending June 16, 1998, in which the U.S. National
    Bank of Galveston, Kempner Capital Management, Inc. and Legacy Trust
    Company engaged in transactions in the Company's common stock on their own
    behalf and on behalf of their respective clients. The Company is the only
    named defendant in this action. The complaint requests recovery of
    compensatory damages, punitive damages and expenses in an unspecified
    amount. This action was subsequently transferred to the U.S. District Court
    for the Southern District of Florida and consolidated with the Consolidated
    Federal Actions.

             Lawsuit over Debentures Coordinated with Federal Action

    In October 1998, a class action lawsuit was filed in the U.S. District
    Court for the Southern District of Florida on behalf of certain purchasers
    of the Debentures against the Company and certain of the Company's former
    officers and directors. In April 1999, a class action lawsuit was filed in
    the U.S. District Court for the Southern District of Florida on behalf of
    persons who purchased Debentures during the period of March 20, 1998
    through June 30, 1998, inclusive, but after the initial offering of such
    Debentures against the Company, Arthur Andersen, the Company's former
    auditor, and certain former officers and directors. The court consolidated
    the two cases and the plaintiffs have filed a consolidated class action on
    behalf of persons who purchased Debentures in the initial offering and in
    the market during the period March 20, 1998 through June 30, 1998. The
    amended complaint alleges, among other things, violations of the federal
    and state securities laws and common law fraud. The plaintiffs seek, among
    other things, either unspecified monetary damages or rescission of their
    purchase of the Debentures. This action is coordinated with the
    Consolidated Federal Actions.

                  Action Filed in 1999 in AL Transferred to FL

    On September 13, 1999, an action naming the Company and Arthur Andersen as
    defendants was filed in the Circuit Court for Montgomery County, Alabama.
    The plaintiffs in this action are purchasers of the Company's common stock
    during the period March 19, 1998 through May 6, 1998. The plaintiffs
    allege, among other things, that the defendants violated the Alabama
    Securities Laws. The plaintiffs seek compensatory and punitive damages in
    an unspecified amount. Arthur Andersen has filed a cross claim against the
    Company for contribution and indemnity. The Company has filed a motion to
    dismiss.

    In May 2000, the plaintiffs in this action filed an amended complaint,
    which added allegations of violations of the federal securities laws. This
    action was transferred to and consolidated with the Consolidated Federal
    Actions.


    SUNBEAM CORP: Investors Sue in TX in 1998 and 2000 over Debentures
    ------------------------------------------------------------------
    The Company has been named as a defendant in an action filed in the
    District Court of Tarrant County, Texas, 48th Judicial District, on
    November 20, 1998. The plaintiffs in this action are purchasers of the
    debentures. The plaintiffs allege that the Company violated the Texas
    Securities Act and the Texas Business & Commercial Code and committed state
    common law fraud by materially misstating the financial position of the
    Company in connection with the offering and sale of the Debentures. The
    complaint seeks rescission, as well as compensatory and exemplary damages
    in an unspecified amount. The Company specially appeared to assert an
    objection to the Texas court's exercise of personal jurisdiction over the
    Company, and a hearing on this objection took place in April 1999.
    Following the hearing, the court entered an order granting the Company's
    special appearance and dismissing the case without prejudice. The
    plaintiffs appealed, which appeal was denied. The plaintiffs have appealed
    to the Texas Supreme Court.

    In October 2000, the plaintiffs also filed a complaint against the
    Company's subsidiary Sunbeam Products, Inc. in the District Court for
    Dallas County alleging substantially the same allegations as the complaint
    filed against the Company in Tarrant County.

    Messrs. Dunlap and Kersh have commenced an action against the Company in
    the Chancery Court for the State of Delaware seeking advancement from the
    Company of their alleged expenses incurred in connection with defending
    themselves in the various actions described above in which they are
    defendants and the investigation by the SEC described below. The Company
    has denied their claims. Discovery has commenced, and no trial date has
    been set.


    SUNBEAM CORP: Removes Year 2000 WI Lawsuit to Federal Court
    -----------------------------------------------------------
    Sunbeam Corp reports in its SEC filing that in September 2000, an action
    naming the Company as a defendant was filed in the Circuit Court for
    Ozaukee County, Wisconsin. The plaintiffs allege that the Company violated
    the federal securities laws in connection with the offering and sale of the
    Debentures. The plaintiffs seek recission and damages. The Company has
    removed the action to Federal Court.


    SUNBEAM CORP: SEC May Enforce Action Re Accounting Practices
    ------------------------------------------------------------
    By letter dated June 17, 1998, the staff of the Division of Enforcement of
    the SEC advised the Company that it was conducting an informal inquiry into
    the Company's accounting policies and procedures and requested that the
    Company produce certain documents. In July 1998, the SEC issued a Formal
    Order of Private Investigation, designating SEC officers to take testimony
    and pursuant to which a subpoena was served on the Company requiring the
    production of certain documents. In November 1998, another SEC subpoena
    requiring the production of additional documents was received by the
    Company. The Company says it has provided numerous documents to the SEC
    staff and continues to cooperate with the SEC staff. The Company has,
    however, declined to provide the SEC with material that the Company
    believes is subject to the attorney-client privilege and the work product
    immunity. The staff of the SEC has informed the Company that its has
    completed its investigation, and intends to recommend to the SEC that
    enforcement action be taken against the Company. The Company and the staff
    of the SEC are in discussions regarding the foregoing. The Company cannot
    predict at this time the outcome of these discussions.


    TEACHERS RETIREMENT: Teachers Prepare Appeal Of Pension Lawsuit
    ---------------------------------------------------------------
    An attorney for 11 active and retired teachers said that he would appeal a
    Ramsey County judge's dismissal of a lawsuit against the Teachers
    Retirement Association over their pension plans. Judge John Van de North
    ruled that the statute of limitations had expired and dismissed the lawsuit
    challenging the constitutionality of changes to teacher pension law. St.
    Paul attorney Joe O'Neill said he wants the Minnesota Court of Appeals to
    hear the case so it can be decided on its merits, not on a technical issue.
    The appeal was to be filed by November 24.

    The lawsuit, which sought class-action status for several thousand of the
    plaintiffs' co-workers, stems from a 1969 law that required teachers to
    make an irrevocable choice between five pension plans, including some that
    allowed investment in the stock market.

    Previously, teachers had only one retirement plan option, called the
    Improved Money Purchase (IMP) program. Teachers who didn't return a ballot
    selecting one of the other four plans were left in the old IMP plan.

    Later, all plans but the IMP were automatically rolled into a program -
    without the teachers' consent - that has made less money over the years for
    those enrolled in it.

    The law was last amended in 1989. Van de North ruled that the change
    started the clock on the six-year statute of limitations, which would have
    required the plaintiffs to sue before 1995. "We couldn't sue then because
    we didn't qualify for retirement," O'Neill said of his clients, who needed
    30 years of service to retire. (The Associated Press State & Local Wire,
    November 22, 2000)


    TOBACCO LITIGATION: B&W Moves To Exclude Documents In Blue Cross Suit
    ---------------------------------------------------------------------
    Brown & Williamson Tobacco Corp. filed three motions in September seeking
    to exclude allegations of death threats, the admittance of certain stolen
    documents and congressional testimony offered by certain tobacco executives
    from the New York health plan action (Blue Cross and Blue Shield of New
    Jersey Inc., et al. v. Philip Morris Inc., et al., No. 98CV3287 [JBW], E.D.
    N.Y.; See previous and next stories).

    In a Sept. 8 motion, B&W moved in limine to exclude any testimony, argument
    or reference to the alleged death threats to Dr. Jeffrey Wigand. B&W argues
    that such allegations are unsupported and immaterial to any issue in the
    case, cannot be fairly cross-examined, and are unfairly prejudicial and
    misleading.

    (Wigand motion available. Document # 04-001030-029. 4 pages. Stolen
    document motion available. Document # 04-001030-030. 25 pages. Motion on
    congressional testimony available. Document # 04-001030-031. 13 pages.)

    B&W notes that although Wigand alleges that he received threats from B&W,
    there has never been a charge, information or indictment against B&W or any
    of its employees or agents relating to such alleged threats.

                               Stolen Documents

    B&W also filed a motion in limine and support memorandum to exclude the
    stolen B&W documents.

    B&W maintains that the plaintiffs are in possession of several hundred B&W
    documents, many of which are privileged, stolen from the offices of B&W's
    counsel and then disseminated.

    "Despite the fact that plaintiffs have access to millions of pages of
    documents that Brown & Williamson has produced in this case, it may attempt
    to utilize the documents stolen from Brown & Williamson's attorneys.
    Because the plaintiffs have possession of those documents only as a result
    of numerous unlawful and unethical acts, this Court should not sanction
    those acts by allowing the plaintiffs to use the fruits of that conduct at
    trial," B&W asserts.

                         Congressional Testimony

    B&W also filed a motion to exclude the congressional testimony offered into
    evidence by the plaintiffs.

    "The defendants move to exclude all statements made by the tobacco
    executives before Congress including 'statements of fact' that in other
    circumstances might constitute an admission. The manner in which
    Congressional testimony is obtained lacks the safeguards afforded a
    judicial proceeding," B&W maintains. "By offering these transcripts,
    plaintiffs attempt to undermine the adjudicative process and shatter the
    constitutional separation of legislative and judicial powers."

    B&W is represented by Kimberly S. Penner of Sedgwick, Detert, Moran &
    Arnold in New York. (Mealey's Managed Care Liability Report, November 10,
    2000)


    TOBACCO LITIGATION: FL Supreme Ct Reinstates Damages Awarded Ex-Smoker
    ----------------------------------------------------------------------
    The Florida Supreme Court ruled that a lower court had erred in overturning
    a $750,000 award for a former smoker against the nation's No. 3 cigarette
    maker.

    The decision reinstates the award against the Brown & Williamson Tobacco
    Corporation won by the former smoker, Grady Carter, his lawyer, Floyd
    Matthews, said.

    The award was only the second in 40 years of antismoking litigation in
    which a tobacco company was ordered to pay damages. The first, $400,000 to
    the family of Rose Cipollone of New Jersey in 1988, was overturned on
    appeal, and the lawsuit was later dropped.

    Mr. Carter, 70, sued Brown & Williamson in 1995, blaming the company for
    the lung cancer he developed after smoking for 44 years. A jury ruled that
    cigarettes were a defective product and that their makers were negligent
    for not warning of the danger.

    An appeals court reversed the award nearly two years later, saying Mr.
    Carter had waited too long to go to court. It also said that a 1969 federal
    law barred lawsuits that claim the wording of the warning on cigarette
    packs is inadequate.

    In a 5-to-0 ruling, the Florida Supreme Court disagreed with both
    conclusions and said the district court had overstepped its role.

    "Accordingly, we quash the district court's decision in this case," Justice
    Major B. Harding wrote for the court.

    Mr. Carter, a retired air traffic controller who lives in the Jacksonville
    suburb of Orange Park, called the ruling a "great decision."

    "I felt all along it was a good case," Mr. Carter said. "I'm thankful that
    it came out today, the day before Thanksgiving.".

    Mr. Carter started smoking Lucky Strikes when he was 16 and smoked them for
    25 years before he switched brands in 1972. Several efforts to quit smoking
    failed, until he coughed up blood in January 1991.

    A few weeks later, he learned he had cancer. So far his health has remained
    good.

    A Brown & Williamson lawyer said the company was considering whether to ask
    the court to reconsider. The company, based in Louisville, Ky., could also
    go directly to the United States Supreme Court.

    The lawyer, John Finley, said in a statement that the ruling was "in direct
    conflict with the United States Supreme Court decision in the Cipollone
    case."

    Brown & Williamson is a subsidiary of British American Tobacco P.L.C. Its
    brands include Kool, Capri, Raleigh, Viceroy, Carlton, Lucky Strike and
    Pall Mall.

    Two years ago, a jury ordered Brown & Williamson to pay nearly $1 million
    to the family of a dead smoker. It was the first time a jury awarded
    punitive damages in a tobacco liability case. That verdict also was
    overturned. The decision was appealed.

    Last summer, a class-action lawsuit in Miami produced a record $145 billion
    verdict, which a judge upheld two weeks ago. The case still faces appeals
    in state courts by Brown & Williamson and the four other largest cigarette
    companies. (The New York Times, November 23, 2000)


    TOBACCO LITIGATION: OK Liability Law Allows Suits by AG, Not Citizens
    ---------------------------------------------------------------------
    Oklahoma's Consumer Protection Act provides for lawsuits by the state's
    attorney general, but not private citizens, the Oklahoma Supreme Court
    says. The ruling by the state high court was in response to an attempt by a
    group of cigarette smokers to sue the tobacco industry in the U.S. District
    Court for the Northern District of Oklahoma, which asked the state supreme
    court for an interpretation of Oklahoma's law. Walls et al. v. American
    Tobacco Co. et al. , No. 99,324 (Okla., Sept. 19, 2000).

    The district court certified four questions to the state court, finding
    that the unresolved issues involving Oklahoma law could be dispositive in
    the federal court's ruling on class certification of the plaintiffs in the
    underlying suit against the tobacco industry. The federal court asked for a
    resolution of the following ques tions about the Oklahoma Consumer
    Protection Act, 10 Okla. Stat. @ 1601 et seq.:

    1. Assuming arguendo that a product was sold in violation of other
    provisions of the OCPA, may a party bring an action as an "aggrieved
    consumer" under 15 Okla. Stat. @ 761.1A solely as a result of his or her
    payment of the purchase price for that product

    2. May an individual person bring a claim for liability under 15 Okla.
    Stat. @ 761.1C against an entity based on a violation of the OCPA

    3. If an action is brought under either both 15 Okla. Stat. @ 761.1A or 15
    Okla. Stat. @ 761.1C, is that action limited to conduct that occurred since
    1988

    4. If the answer to question 1 is yes, if a class is certified under the
    OCPA consisting of all persons who have purchased such an OCPA violating
    product in Oklahoma solely on the basis of the purchasing price, will the
    members of such a class be precluded from bringing any separate actions
    sounding either in tort or contract by virtue of any Oklahoma law
    prohibiting split causes of action

    The Oklahoma Supreme Court answered no to questions one and two and yes to
    question three. The court said it did not reach the fourth question because
    the answer to the first question was negative.

    In looking at the OCPA, the state court found that the law expressly vests
    authority in the state attorney general to enforce the OCPA. Language in an
    amendment from 1980 states, " T he Attorney General, acting in the name of
    the state, or a district attorney may petition for recover of civil
    penalties" under the act. A 1988 amendment provided for a private right of
    action by aggrieved consumers. This amendment allows a consumer to sue for
    damages, but the court pointed out that it must be a situation where actual
    damages occur. Simply being a consumer in an unlawful transaction is not a
    sufficient cause of action under this law, the panel found. The "aggrieved
    consumer" contemplated by Oklahoma's statute, must have suffered some
    detriment in order to pursue a private right of action, the high court
    said.

    Even though amendments to the OCPA provided for a private right of action
    to recover damages, the statute does not permit private individuals to seek
    the penalty referred to in the law, the court reasoned in answering the
    second question. The legislature expressly finds that civil penalties are
    to be collected by the state, the panel found.

    The amendment which allowed private actions does not apply retroactively,
    so it cannot apply to activity that occurred before 1988, the high court
    said in response to the third question. Statutes that effect changes in
    substantive rights are presumed to operate prospectively, absent an express
    declaration from the legislature that it intends otherwise, the panel held.

    The case now goes back to the U.S. district court, where the plaintiffs are
    seeking damages against six tobacco companies and The Council for Tobacco
    Research.

    The plaintiffs are represented by Derek S. Casey of Hutton & Hutton in
    Wichita, Kan.

    The defendants are represented by Richard C. Ford, Leanne Burnett and
    Victor E. Morgan of Crowe & Dunlevy in Oklahoma City. (Tobacco Industry
    Litigation Reporter, October 20, 2000)


    TWINLAB CORPORATION: Wechsler Harwood Files Securities Suit in New York
    -----------------------------------------------------------------------
    A class action lawsuit was filed in the United States District Court for
    the Eastern District of New York on behalf of all persons who purchased the
    common stock of Twinlab Corporation (Nasdaq: TWLB) between April 27, 1999
    and November 15, 2000, inclusive (the "Class Period"). The Complaint
    charges Twinlab and certain of it officers and directors with violations of
    Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as
    amended, and Rule 10b-5 promulgated thereunder.

    The complaint alleges that defendants violated the federal securities laws
    by making false and misleading statements contained in press releases and
    filings with the Securities and Exchange Commission concerning, among other
    things, the Company's business, financial condition, earnings and
    prospects. Specifically, the Complaint alleges that Twinlab, by overstating
    its inventory through recording nonexistent and obsolete inventory,
    inflated its reported financial condition and results of operations during
    the Class Period by at least $16 million. The Complaint also alleges that
    defendants continued to tout the Company's ability to achieve expected
    sales results despite continued declining demand and the obsolescence of
    certain of its products.

    On November 15, 2000, after the close of trading, defendants announced that
    it was unable to timely file its Form 10-Q for the quarter ended September
    30, 2000 with the SEC. It was also disclosed that Twinlab would adjust its
    inventory down by approximately $16 million for "missing" and "obsolete"
    inventory, and that it was discontinuing the sale of certain staple product
    lines and "significantly reduc[ing] its projection of herbal sales for the
    year ended December 31, 2000," as a result of weak demand. It was further
    reported that the Company had to obtain waivers of breaches of its debt
    covenants as a result of the foregoing.

    On November 16, 2000, the price of Twinlab's stock plummeted by more than
    35 percent from its previous day's close of $5.00 per share to close at
    $3.250 per share. The stock traded as high as $11.00 per share during the
    Class Period.

    Contact: Patricia Guiteau, Shareholder Relations Department of Wechsler
    Harwood Halebian & Feffer LLP, pguiteau@whhf.com, 877-935-7400 (toll free),
    or fax, 212-753-3630


    * CA Sp Ct to Rule If Investors Who Didn't Sell Can Sue in State Court
    ----------------------------------------------------------------------
    The California Supreme Court agreed to decide whether investors given
    misleading financial forecasts can sue for securities fraud in state court
    even if they didn't sell their shares.

    Four months ago, the First District Court of Appeal ruled that though such
    suits cannot be brought under securities statutes, they can be brought
    under common law.

    But defense lawyer William Alderman said that the appellate court's ruling
    overextended the common law -- and could augur a wave of vexatious
    securities litigation. "The risk of a rush to California's courts is
    especially acute," the Orrick, Herrington & Sutcliffe lawyer wrote in his
    petition for review on behalf of Fritz Companies Inc.

    The case stems from Fritz's May 1995 acquisition of fellow transportation
    giant Intertrans Corp. -- a merger viewed by Fritz analysts as a move in
    the right direction to boost fiscal health. And a financial report issued
    the following April reflected the company's optimism.

    But by the following July, the company announced it was making adjustments,
    explaining that it had underestimated the costs of the merger.

    New York lawyer Harvey Greenfield filed a securities class action on his
    own behalf and on behalf of everyone who held Fritz common stock between
    April 1996 and July 1996.

    San Francisco Superior Court Judge David Garcia sustained a demurrer based
    on Greenfield's failure to allege specific facts showing actual and
    individual reliance on the faulty report -- as well as his failure to show
    that people who did nothing to either buy or sell stocks should be able to
    assert claims for fraud.

    But the First District, in an opinion authored by Justice Marcel Poch,
    ruled that damages for fraud can be recovered even when the
    misrepresentation prompts the investor to sit tight. The court acknowledged
    that the question is rather novel for California but ultimately concluded
    that, "We are not blazing a new trail, but merely extending a trail already
    started."

    Just four of the justices -- Ronald George, Marvin Baxter, Kathryn Mickle
    Werdegar and Janice Rogers Brown -- voted to review Greenfield v. Fritz
    Cos. Inc., S091297.

    The same justices plus Stanley Mosk also granted review in another First
    District case, San Remo Hotel v. City and County of San Francisco, S091757.
    That case stems from the hotel's 7-year-old challenge of the city's
    Residential Hotel Unit Conversion and Demolition Ordinance as a taking. The
    ordinance requires residential hotel owners to build or pay for new housing
    when they convert their hotels to tourist use.

    The First District reversed a trial judge and said the owners of the San
    Remo hotel in North Beach could move forward on its claim that the city's
    ordinance -- restricting the conversion of residential hotel rooms to
    tourist use -- constitutes a taking. (The Recorder, November 22, 2000)


    * Consumer Group Says Toys Safer, But Small Parts Still Dangerous
    -----------------------------------------------------------------
    The big holiday shopping season is upon us, and a consumer group says that
    toys are safer than in previous years, though hazardous toys still can be
    found on store shelves. Among the playthings that the U.S. Public Interest
    Research Group says are dangerous are erasers, jigsaw puzzles, balloons,
    plastic insects and salamanders, small plastic balls and marbles that too
    often wind up in the wrong hands and can result in choking accidents.
    Sixteen children died playing with toys in 1999, and nine of them choked,
    says the annual PIRG "Trouble in Toyland" report (www.toysafety.net).

    The report also notes that there were 152,600 emergency room visits for
    toy-related injuries in 1999. Industry representatives dispute the report,
    noting that a person who was injured after tripping over a toy left on the
    floor is counted as a toy-related injury. "Any toy used improperly can be
    dangerous," says Pamela Johnston, spokeswoman for the Toy Manufacturers of
    America. (USA TODAY, November 22, 2000)


                                 *********


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

    Class Action Reporter is a daily newsletter, co-published by Bankruptcy
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    Copyright 1999.  All rights reserved.  ISSN 1525-2272.

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