CAR_Public/001214.MBX               C L A S S   A C T I O N   R E P O R T E R

             Thursday, December 14, 2000, Vol. 2, No. 242

                             Headlines

BARR LABORATORIES: Co-Defendant of Bayer in Cipro Antitrust Suit in N.Y.
BARR LABORATORIES: Co-defendant of Zeneca in Tamoxifen Price Suit in NY
BERTRAND & FRERE: Ontario Sp Ct OKs Suit Over Crumbling Foundations
COLORADO: Fed Judge Berated Officials for $18M Mistake Denying Medicaid
DAIMLERCHRYSLER: 3 Firms Handle Kerkorian Suit; Others Jump on Bandwagon

DEUTSCHE TELEKOM: The Law Firm of Harvey Greenfield Announces ADSs Suit
GENERAL MOTORS: Oldsmobile dealers Lash at Marketing Strategy
GREAT-WEST: Improperly Changed Pension Plan Terms, Manitoba Judge Rules
HMOs: Pa. Federal Judge Dismisses ERISA Action against CT General Life
HOLOCAUST VICTIMS: Payments Should Begin Reaching Aging Survivors by Apr

INMATES LITIGATION: New Parole Chairman Cleans House Within Hours
IOWA RURAL: Judge Freezes Assets Of Financier Scott Hinkley's Wife
ISLIP SCHOOL: Will Pay for Alleged Unlawful Relegation of Students
MIAMI CHILDREN'S: Parents Carrying Genes for Fatal Canavan Disease Sue
MICROSOFT CORP: Agrees to Pay $97 Mil to Settle Temporary Workers' Suit

MICROSOFT CORP: Arizona Certifies Class Status for Windows 98 Lawsuit
MIDLAND GROUP: Settles in PA Independently of Similar Suit in GA
PRESIDENTIAL ELECTION: Disabled Say Florida Makes Voting Difficult
PUBLIC UTILITIES: Discounts Denial In Exclusive Area Not Discriminatory
SMITHKLINE BEECHAM: News of FTC Probe Triggers Dual Suits Over Paxil

U.S. BANCORP: Judge approves settlement of U.S. Bancorp privacy lawsuit

                               *********

BARR LABORATORIES: Co-Defendant of Bayer in Cipro Antitrust Suit in N.Y.
------------------------------------------------------------------------
On July 14, 2000, Louisiana Wholesale Drug Co. filed a class action
complaint in the United States District Court for the Southern District of
New York against Bayer Corporation, the Rugby Group and Barr Laboratories.
The complaint alleges that Barr and the Rugby Group agreed with Bayer
Corporation not to compete with a generic version of Cipro, or
Ciprofloxacin, pursuant to an agreement between us and the other defendants
involving a prior patent infringement lawsuit. The plaintiff claims that
this agreement violated antitrust laws. The plaintiff purports to bring
claims on behalf of all direct purchasers of Cipro from 1997 to present.

Currently there are approximately 29 similar putative class actions under
federal law and/or state unfair competition/consumer protection statutes
that have been filed in several Federal District Courts and in several
state courts on behalf of direct and indirect purchasers. Pending
consolidation of these lawsuits in a single district, the company has not
yet filed responses in any of these actions.


BARR LABORATORIES: Co-defendant of Zeneca in Tamoxifen Price Suit in NY
-----------------------------------------------------------------------
On October 6, 2000, a private antitrust class action complaint was filed in
the United States District Court for the Eastern District of New York
against Zeneca, Inc., AstraZeneca Pharmaceuticals L.P. and Barr
Laboratories. The complaint alleges that the 1993 settlement of patent
litigation between Zeneca, Inc. and Barr insulates Zeneca, Inc. and us from
generic competition and enables Zeneca, Inc. and Barr to charge
artificially inflated prices for tamoxifen citrate. The plaintiff purports
to bring claims on behalf of all consumers who purchased Tamoxifen citrate
for personal or family use on or after October 6, 1996. The plaintiff seeks
to recover profits of Zeneca, Inc. and Barr under the 1993 settlement and
treble damages for the alleged antitrust violations.

Two similar class action complaints have been filed in the Eastern District
of New York and a third complaint has been filed in the Federal Court in
Michigan. The Company has not yet filed any responses to these actions.


BERTRAND & FRERE: Ontario Sp Ct OKs Suit Over Crumbling Foundations
-------------------------------------------------------------------
An Ontario Superior Court judge has certified a class action involving
allegations that Eastern Ontario homes built in the 1980s are resting on
defective foundations.

The action, involving nine representative plaintiffs, is similar to one
that led last spring to an award of about $13 million damages to 137
plaintiff homeowners in the Rockland-Hawkesbury area of Ontario and the
Montebello area in Quebec.

Hawkesbury lawyers Bob Smoth and Yves Boucher say the new action involves
homes with allegedly defective foundations built between 1986 and early
1988 in an area between Cumberland, Ont. and the Quebec border. "It is
believed there may be several hundred homeowners affected with this
problem,"they said in a press release.

Commenced in April, 1999, the lawsuit was certified under Ontario's Class
Proceedings Act by Justice A. deLotbiniere Panet, who noted the judge in
the earlier proceeding had commented that it was "unfortunate" class action
proceedings had not been available when individual actions by the
plaintiffs were consolidated into a joint action.

In his decision released April 17, Justice Albert Roy found that Lafarge
Canada Ltd. had supplied flyash to Bertrand & Frere Construction Co. Ltd.,
that caused the crumbling.

The class action, involving the same defendants, has two classes of
plaintiffs, the original homeowners and subsequent owners, who do not have
a contractual link to any defendant.

In deciding to certify the lawsuit as a class action, Justice Panet noted
that the plaintiffs said that if left on their own, individual homeowners
with limited resources would find it impossible to claim for their damages.
"In my view, a class proceeding is the preferable procedure for resolving
the common issues between these parties,"he said, noting that the joint
action involved a multiplicity of insurers and took 16 months. "Although
one would expect that the decision of Justice Roy may be determinative of
some of the common issues, in my view a class proceeding is the preferable
procedure to resolve the common issues." He also found that the nine
proposed representative plaintiffs would fairly and adequately represent
the class. (The Lawyers Weekly, December 15, 2000)


COLORADO: Fed Judge Berated Officials for $18M Mistake Denying Medicaid
-----------------------------------------------------------------------
A federal judge berated state officials for an $18 million mistake that cut
off Medicaid coverage for about 40,000 low-income Coloradans. U.S. District
Judge Wiley Daniel said during a hearing earlier this month that Colorado
officials broke both state and federal laws by not immediately fixing the
computer program they blamed for the mistake.

The state and lawyers for Medicaid recipients are negotiating a settlement
of a class-action lawsuit. "How come the state of Colorado had a computer
system that didn't work right, and how come it couldn't be fixed
immediately and why was a federal lawsuit required in order to get relief
for this group of plaintiffs?" Daniel asked.

Vivianne Chaumont, a lawyer for the state, said the mistake occurred after
Congress changed the laws as part of welfare reform in 1996. The coverage
was cut off for some recipients starting in 1997. Chaumont said other
states had similar problems.

State officials have said rather than reprogramming the old computer
system, they decided to rely on county welfare workers to make sure nobody
mistakenly lost Medicaid coverage even if their other welfare benefits
ended. State welfare reforms transferred management of welfare to the
counties. Officials said they didn't realize the plan failed until about a
year ago when lawyers representing Medicaid recipients submitted a draft
lawsuit. The computer was then reprogrammed, said Diana Maiden of the state
Department of Health Care Policy and Financing, which runs Medicaid. The
federal-state program provides health care for poor and disabled residents.

Daniel scheduled a hearing in February on the proposed settlement of the
lawsuit. The proposal includes an elaborate plan to find all the people who
wrongly lost their Medicaid coverage. (The Associated Press State & Local
Wire, December 13, 2000)


DAIMLERCHRYSLER: 3 Firms Handle Kerkorian Suit; Others Jump on Bandwagon
------------------------------------------------------------------------
Three firms are handling investor Kirk Kerkorian's $ 9 billion suit against
DaimlerChrysler, and others have jumped on the bandwagon to file similar
suits. Kerkorian claims that the German automaker and its chief executive
officer used fraud to win shareholder support for its 1998 acquisition of
Chrysler Corp.

Kerkorian's team includes: From Los Angeles' Christensen, Miller, Fink,
Jacobs, Glaser, Weil & Shapiro, members Terry N. Christensen, Eric N.
Landau and Steven J. Aaronoff; from New York's Fried, Frank, Harris,
Shriver & Jacobson, members Douglas H. Flaum and William G. McGuinness; and
from Wilmington, Del.'s Morris, Nichols, Arsht & Tunnell, members Alan J.
Stone, A. Gilchrist Sparks III and associate Jessica Zeldin.

Within days, two class action complaints followed on the heels of the
Kerkorian suit. One was filed by Jeffrey Smith, of New York's Wolf
Haldenstein Adler Freeman & Herz, with co-counsel Pamela S. Tikellis of
Wilmington's Chimicles & Tikellis; the other, by Steven Schulman and Samuel
H. Rudman of New York's Milberg Weiss Bershad Hynes & Lerach.

The later complaints resemble the one by Mr. Kerkorian, DaimlerChrysler's
third-largest shareholder. They allege that the automaker never intended
its Chrysler acquisition to be the "merger of equals" it said it would be.
Chrysler has been reduced to a division and its management team
eviscerated, say plaintiffs.

DaimlerChrysler declined to officially comment while it reviews the
complaints, but it said that it believes the charges are "completely
without merit."

Filed on Nov. 27 in U.S. district court in Wilmington, the suits are:
Tracinda Corp. v. DaimlerChrysler A. G., No. CV-984; Kops 401(K) v.
DaimlerChrysler A. G., No. CV-993; and Rosenberg v. DaimlerChrysler A. G.
(available at www.milberg.com). (The National Law Journal, December 11,
2000)


DEUTSCHE TELEKOM: The Law Firm of Harvey Greenfield Announces ADSs Suit
-----------------------------------------------------------------------
The Law Firm of Harvey Greenfield announced on December 12, 2000 that a
class action lawsuit was removed from New York State Supreme Court, Nassau
County on December 1, 2000, to the United States District Court for the
Eastern District of New York, which lawsuit was brought on behalf of all
persons and entities who acquired ADSs (American Depository Shares) of
Deutsche Telekom ordinary shares (NYSE: DT) pursuant to the Registration
Statement filed May 22, 2000 and Prospectus dated June 17, 2000, or who
acquired such shares in the aftermarket and were damaged thereby.

The complaint alleges that Deutsche Telekom violated Sections 11 and
12(a)(2) of the Securities Act of 1933 by filing a Registration Statement
for the issuance of stock on May 22, 2000 and a Prospectus dated June 17,
2000 which contained material misrepresentations and/or omissions, causing
damage to class members.

Plaintiff seeks to recover damages and/or seek recission of the acquisition
of Deutsche Telekom stock acquired pursuant to the Registration Statement
filed May 22, 2000 and Prospectus dated June 17, 2000, on behalf of class
members and is represented by the Law Firm of Harvey Greenfield.

If you have any questions or wish to discuss this action or your rights
with regard to this litigation, you may contact Harvey Greenfield, Esq. at
the Law Firm of Harvey Greenfield, 60 East 42nd Street, Suite 2001, New
York, NY 10165, telephone 212-949-5500, or toll free 877-949-5500,
facsimile 212-949-0049, or by e-mail at hgreenf@banet.net


GENERAL MOTORS: Oldsmobile dealers Lash at Marketing Strategy
-------------------------------------------------------------
Oldsmobile dealers lashed out at General Motors Corp. saying the world's
largest automaker killed a valuable vehicle line through its own inept
marketing strategy.

"It's criminal what they are doing," said Leo Jerome, who owns three Olds
dealerships in Warren and Lansing. "We have the best products we have had
in 10 or 15 years but nobody knows about it."

Jerome joined a chorus of dealers who blamed Oldsmobile's demise on the
brand management strategy launched under former GM chairman John Smale and
continued under Ronald Zarrella, president of GM's head of North American
operations and a former Bausch & Lomb Corp. marketing executive.

The announcement that GM was phasing out the Oldsmobile brand stunned its
body of 2,800 dealers. The division has been the unloved middle child in
GM's vehicle lineup for years, but dealers were encouraged by new products
such as the Alero and Aurora. "It's a surprise from the standpoint that I
don't think it's the right decision," said Jim Muir, who owns an Olds-GMC
dealership in Sterling Heights. "My dealership is worth half as much as it
was two hours ago."

GM has attempted to reposition Oldsmobile from a line of comfortable sedans
favored by seniors to a brand that would catch the eye of younger, more
affluent buyers.

Olds has attracted new buyers to the brand in recent years but not in
enough numbers to halt skidding sales. Many dealers said GM's brand
management effort designed to keep its brand images clear and distinct --
was misguided from the start. "They wanted to sell cars like they sell soap
and toothpaste," Jerome said. "(Zarrella) wanted to develop a brand and
what he did was destroy it. This will go down as a classic Harvard case
study of how to destroy a good company."

Dealers have a laundry list of questions about their futures. Will GM
compensate dealers who have invested millions in Oldsmobile stores? Will
dealers be given the option of purchasing a new franchise in the GM family?
Will the automaker continue to support Oldsmobile with advertisements?

Without providing many details, GM promised to address the concerns of the
dealers. "Our intention is to work with every dealer and come up with a
plan that offers a smooth transition," said GM chief executive G. Richard
Wagoner.

The phase-out plan will have a big impact on the Metro Detroit area, where
11 of the 50 largest Olds dealers in the country are located. Three of the
nation's 63 standalone Oldsmobile dealerships reside in the region.

GM would like to avoid class-action lawsuits and any deterioration of its
already shaky relations with their dealers. "They made a whole lot of
promises about dealer relations back in February," Muir said. "This is
going to be a severe acid test to see if they make good." (The Detroit
News, December 13, 2000)


GREAT-WEST: Improperly Changed Pension Plan Terms, Manitoba Judge Rules
-----------------------------------------------------------------------
A judge of the Manitoba Court of Queen's Bench has ruled that Great-West
Life Assurance Company improperly changed the terms of an employee pension
plan to cap its indexing provisions. The ruling by Justice Gerald Jewers
was portrayed by winning counsel Robert Tapper as potentially worth
millions of dollars to about 400 former Great-West Life employees.

The class action was launched by George Dinney, who headed the firm's U.S.
subsidiary before retiring in 1987. (The Lawyers Weekly, December 15, 2000)



HMOs: Pa. Federal Judge Dismisses ERISA Action against CT General Life
----------------------------------------------------------------------
A federal judge has granted a motion to dismiss an ERISA class action
alleging Connecticut General Life Insurance Co. (CGLIC) violated its
fiduciary duty to disclose to its participants its compensation
arrangements with physicians (Joanne Peterson, et al. v. Connecticut
General Life Insurance Co., No. 00-CV-605, E.D. Pa.; See 1/13/00, Page 6).

Judge Robert F. Kelly of the U.S. District Court for the Eastern District
of Pennsylvania concluded Joanne Peterson failed to show that she or anyone
else had ever been refused reimbursement for medically necessary care, was
ever denied medically necessary care or was ever injured due to inadequate
care. The judge added that the fact that Congress is considering whether
ERISA should be amended to impose a broad disclosure duty of financial
incentives upon HMOs strengthens CGLIC's argument that such decisions are
made by the Legislature.

                         Earlier Decisions

This action is yet another blow to a plaintiffs' bar seeking damages from
the managed care industry for failing to disclose all its arrangements with
doctors, including compensation incentives and disincentives, as well as
its use of treatment and hospitalization guidelines.

Earlier this year, the U.S. Supreme Court rejected an ERISA fiduciary duty
action in Pegram v. Herdrich (U.S. 147 L. Ed. 2d 164, 120 S. Ct. 2143
[2000]; See 6/23/00, Page 4), saying such cases are better left for state
courts to decide as negligence and medical malpractice actions. Also, the
Third Circuit U.S. Court of Appeals dismissed a RICO action (Maio v. Aetna,
No. 99-1854, 3rd Cir.; See 9/8/00, Page 19), saying the plaintiffs failed
to show an actual injury as a result of the alleged failure to disclose.

The decision comes on the heels of the Maio decision, which, according to
the judge, offers almost identical facts as the present action. However,
the judge said that the Third Circuit's decision was specifically limited
to causes of action based on RICO violations.

Here, Peterson alleged that disclosure of material information regarding
incentive arrangements and guidelines would have led her to question her
physician's decisions more aggressively.

The judge, however, said that Peterson never showed that she or any other
subscriber ever asked about the incentives information. Also, the judge
said that the proposed subscriber class has failed to show that the failure
to automatically reveal such information resulted in any tangible injury.
The judge rejected Peterson's theory that the failure to disclose physician
incentives renders the scope of "the safety net of coverage" smaller than
promised, and that CGLIC has been unjustly enriched as a result.

                    Previous Disclosure Actions

Peterson admitted to the judge that the Third Circuit has yet to
specifically address this issue, but argued that it has adopted "a vigorous
form of the rule that the ERISA fiduciary duty mandate includes within it a
duty to disclose material information."

Peterson cited three decisions to show that the Third Circuit has said that
the duty to inform is an important aspect of the relationship between
beneficiaries and trustees: Bixler v. Central Pennsylvania Teamsters Health
& Welfare Fund (12 F.3d 1292 [3d. Cir. 1993]), Glaziers & Glassworkers
Union Local No. 252 Annuity Fund v. Newbridge Sec. Inc. (93 F.3d 1171 [3d.
Cit. 1996]) and Harte v. Bethlehem Steel Corp. (214 F.3d 446 [3d. Cir.
2000]).

However, the judge said that he failed to see that these decisions imposed
any universal mandate to HMOs to inform their subscribers of financial
incentive agreements.

                            No Blanket Duty

"We do not agree with Ms. Peterson that the above case law constitutes the
Third Circuit's 'ringing endorsement' of such a universal, automatic duty
upon all HMOs to disclose every aspect of their physician financial
incentives without a request from the participant or without any other
special circumstance," the judge said.

He added that the Third Circuit has only done so where a plan participant
makes a specific inquiry or where the fiduciary knew of the plaintiff's
particular circumstances requiring disclosure and the nondisclosure
resulted in a particular injury.

The judge added that while the Third Circuit may be willing to expand the
protections afforded by ERISA's disclosure provisions, its reluctance to
burden plan administrators with broad disclosure duties suggests ruling
against the imposition of the blanket duty sought by Peterson.

"Because the burden of the duty Ms. Peterson asks us to impose is
staggering without a clear endorsement from the Third Circuit, we are
reluctant to permit this action to go forward and result in an effective
amendment of ERISA to encompass such claims," the judge said.

                             Bills Pending

The judge added that the U.S. House of Representatives and the Senate have
already passed separate bills that would amend ERISA to require the same
disclosure which Peterson seeks, although even those bills would require
disclosure only upon the request of the beneficiary.

"The fact that Congress is currently considering whether ERISA should be
amended to impose a broad disclosure duty of financial incentives upon HMOs
strengthens CGLIC's argument that such decisions are properly made by the
legislature," the judge concluded.

Peterson is represented by H. Laddie Montague, Jonathan Auerbach, Jerome M.
Marcus and David Langer of Berger & Montague in Philadelphia. CGLIC is
represented by Eleanor Morris Illoway and John G. Harkins of Harkins
Cunningham in Philadelphia. (Mealey's Managed Care Liability Report,
November 30, 2000)


HOLOCAUST VICTIMS: Payments Should Begin Reaching Aging Survivors by Apr
------------------------------------------------------------------------
Payments from Germany's fund to compensate Nazi-era slave laborers should
begin reaching aging survivors by April, although a third of company
donations are still lacking, the government's envoy said.

Otto Lambsdorff expressed surprise that German firms were hesitating to
contribute to the 10 billion mark (dlrs 4.4 billion) fund, financed 50-50
by the German government and industry. But 1.6 billion marks (dlrs 704
million) in company donations have yet to be paid. ''I didn't know that it
would be so difficult,'' Lambsdorff said about raising the money. ''I
didn't think that it would take so long and I also didn't think that so
many German companies would hesitate.''

About 1 million victims forced to work for the Nazi war machine mostly
non-Jews from eastern Europe are expected to be eligible for the fund.

Under an international accord signed in July, money from the fund can start
flowing only when the last class-action suit against German companies in
U.S. courts is off the table. Lambsdorff he expected the remaining few
suits to be dismissed by early next year. ''I'm counting on it that the
legal stipulations will be met by February or March,'' he said in a German
radio interview, adding that in that case payments could begin flowing by
March or April, at the latest. ''However, the industries have to come up
with the money,'' he said.

The two ways to do this would either be to try and ''scare'' the delinquent
companies into paying, or for the leading companies in the fund to
contribute extra amounts to close the gap, he said.

They include top German firms such as Bayer, BMW, DaimlerChrysler, Deutsche
Bank, Hoechst, Siemens and Volkswagen, which were sued in U.S. courts
because they have American-based operations.

Thousands of claims have already flooded into the Berlin-based fund and
affiliates in eastern Europe, the United States and Israel. (AP
Worldstream, December 13, 2000)


INMATES LITIGATION: New Parole Chairman Cleans House Within Hours
-----------------------------------------------------------------
The new chairman of the embattled state Parole Board wasted no time
cleaning house, firing two senior officials within hours of taking office.

Mario Paparozzi, an internationally known expert on parole, confirmed that
Deputy Executive Director Michael Carlin and Director of Operations Jule
Docci were no longer working for the board. He refused to go into
specifics. "It's a personnel action,"he said."I'm not at liberty to
comment."

But two highly placed Parole Board sources say both men were given their
walking papers several hours after Paparozzi reported to work. Carlin and
Docci were top lieutenants to former board Chairman Andrew Consovoy, who
resigned in July amid a criminal probe into charges that he helped mobsters
obtain early release from prison. Paparozzi said he is reorganizing the
agency to make sure the board handles parole decisions in a timely and
effective manner. Consovoy had misrepresented to Whitman administration
officials the extent of a backlog of inmates awaiting overdue parole
hearings, maintaining earlier this year that the number was in the hundreds
instead of the actual 4,000-plus backlog.

Prisoners filed a class action suit, which bought to light the extent of
the backlog. A recent proposed settlement of the suit would result in New
Jersey paying $ 17.50 per day to a prisoners advocacy organization for
every day a prisoner's parole hearing was overdue.

But Paparozzi said the backlog is down to a little over 400, and he expects
it to be eliminated by early next year at the latest. While Paparozzi
reforms the Parole Board, the criminal investigation against Consovoy
continues. A joint investigation by the state police, the state Division of
Criminal Justice, 1 and the FBI has been examining a number of cases in
which they believe Consovoy improperly helped members of organized crime
get out of prison early.

Law enforcement sources say Docci and Carlin are not part of that
investigation, though they have been questioned in connection with it.

The probe is also examining two moonlighting jobs Consovoy held, working as
a laborer while serving as board chairman. The sources say they have
established that Consovoy obtained the jobs through organized crime
connections. (The Record (Bergen County, NJ), December 13, 2000)


IOWA RURAL: Judge Freezes Assets Of Financier Scott Hinkley's Wife
------------------------------------------------------------------
A judge has frozen the assets of the wife of a former Quaker minister,
accused of a fraudulent investment scheme.

The judgment prohibits Deanna Hinkley from spending about $200,000 in her
bank accounts or transferring any real estate, said Peter Cannon, a Des
Moines attorney representing 270 investors in a class-action lawsuit

Deanna Hinkley's husband, Scott Hinkley, is in jail and has pleaded
innocent to fraud and money-laundering charges. The financier is accused of
defrauding investors through his businesses, Iowa Rural Housing Inc. and
Missouri Rural Housing Inc., before disappearing to Fort Lauderdale, Fla.
over the Fourth of July weekend.

Investors have filed a lawsuit in an attempt to recover what they say is
their money. The group invested more than $7 million, however some of that
money has been returned to them in dividends and property, Cannon said.

The lawsuit alleges that some of the money in Deanna Hinkley's account came
from inappropriate transfers from corporate accounts.

The judge froze the assets earlier this month.

Scott Hinkley, 52, was arrested in October in the Caribbean aboard his
yacht, The Penny Wise Too, which he bought for $1.3 million in cash.

The judge also ruled earlier that money from the sale of Scott Hinkley's
Lamborghini Diablo could be held until the outcome of the lawsuit, Cannon
said.

The luxury sports car could bring at least $200,000 which will be held in
an account containing about $540,000 from Hinkley's Iowa and Missouri Rural
Housing Inc. until the lawsuit is decided.

Deanna Hinkley's attorney, John Sandre, could not be reached for comment.
During a hearing earlier this month, Sandre asked the judge to dismiss the
request to make Deanna Hinkley's assets inaccessible because there is no
substantial evidence that the property she obtained from her account with
her husband was illegal.

Sandre has also said that Deanna Hinkley knew nothing about her husband's
activities and shared a joint account to pay for household expenses. (The
Associated Press State & Local Wire, December 13, 2000)


ISLIP SCHOOL: Will Pay for Alleged Unlawful Relegation of Students
------------------------------------------------------------------
The Central Islip school district will pay $ 725,000 into an annuity fund
to be distributed to some 959 students who claimed they were unlawfully
relegated to special education classes. The class action lawsuit, settled
in the Eastern District, alleged that the school district in Suffolk County
placed children who were difficult to handle in isolated special education
classes and failed to mainstream them. The settlement, signed by Judge
Leonard D. Wexler, requires a monitor to oversee the district's reduction
of the number of students sent to special education programs and enables
the students to receive $ 1,000 each when they become 21 years old. In
1996, when the action was filed, 24.5 percent of Central Islip students
reportedly were enrolled in special education programs.

The Court of Appeals agreed to resolve an issue of vital importance in the
gay community: Can Yeshiva University prohibit a lesbian medical student's
lover from living with her in school-subsidized housing? Click here for the
details.

Stephen D. Siegfried, an attorney with a Hampton Bays practice, pleaded not
guilty to a charge of first-degree grand larceny for allegedly stealing $ 1
million from the estate of a Southampton woman. According to the Suffolk
County District Attorney, Mr. Siegfried, who was arraigned in Southampton
Town Justice Court, had been hired to prepare the estate of Helene M.
Gibney for probate, but instead drained the estate of more than $ 1 million
in assets between July 1996 and February 1999. If convicted, Mr. Siegfried,
61, could face up to 25 years in prison.

Appellate Division Justice William C. Thompson, who will retire from the
Second Department at the end of the year, leveled a parting blast last
night at Governor Pataki and U.S. Senator Daniel Patrick Moynihan for
failing to appoint more Hispanic and black judges. Justice Thompson was
addressing more than 700 people attending a dinner sponsored by the
Judicial Friends, an organization of 75 minority judges. (New York Law
Journal, December 1, 2000)


MIAMI CHILDREN'S: Parents Carrying Genes for Fatal Canavan Disease Sue
----------------------------------------------------------------------
An unusual trade secret case in Chicago pits a group of parents who carry a
gene for a rare fatal disease against a Miami-based pediatric hospital and
a researcher who used their tissue and histories to develop prenatal and
pre-conception tests for the disease.

The lead plaintiffs are Daniel Greenberg, who practices real estate law in
the Chicago suburb of Homewood, Ill., and his wife, Debbie, the parents of
two children who died of the hereditary degenerative disorder Canavan
disease.

To pass on the disease, which strikes mainly Jews of Askhenazi descent,
both parents must carry the gene. Most victims die in childhood; 500 to
1,000 Americans are afflicted.

Once they knew their children had Canavan, the Greenbergs established the
first registry of afflicted families. The registry was among the alleged
trade secrets appropriated by the researcher.

                       Registry and Researcher

The families gave the registry information, and tissue and blood samples
from their children, to medical researcher Reuben Matalon. He eventually
affiliated with Miami Children's Hospital Research Institute Inc., where he
found the gene.

In 1994 Dr. Matalon applied for a patent for the gene and for methods of
screening for mutations associated with the disease. The '635 patent issued
in 1997 and was assigned to the hospital. The Canavan parents say that they
did not know about the application until after the patent issued.

The hospital turned to Marc A. Golden, president of New York's Golden Group
Intellectual Capital, seeking help in exploiting the patent.

Once the tests were developed, they were licensed to a few labs around the
nation. Mr. Golden, a lawyer formerly with New York's Cravath, Swaine &
Moore, has been quoted in news stories as saying that the number was
limited to encourage a major national lab to take a license and promote the
test widely. He was not available for comment.

The American College of Obstetricians and Gynecologists recommends testing
for all couples of childbearing age if both partners are Ashkenazi Jews.

Mr. Greenberg, the other Canavan parents and several organizations that
focus on genetic diseases and counseling claim licensing fees can make the
test so costly that some potential Canavan carriers will not be tested and
identified. Also, they don't like the fact that the hospital has licensed
only a limited number of labs and has set a ceiling on the number of tests
they can do.

Represented by lawyers associated with the Institute for Science, Law &
Technology at Chicago-Kent College of Law, they sued the hospital and Dr.
Matalon in federal court in Chicago on Oct. 30. Greenberg v. Miami
Children's Hospital, No. 00C 6779.

The suit charges trade secret misappropriation, breach of informed consent,
breach of fiduciary duty, unjust enrichment, conversion and fraudulent
concealment.

Mr. Greenberg declined to comment for publication. However, in previous
news coverage, he has been quoted as saying, "If someone had told me from
Day One that they were going to make money from this, I might very well not
have cooperated."

The suit asks for royalties from the patent and unspecified relief. In
similar cases, plaintiffs have ultimately asked that the patent be assigned
to them.

Trade secrets expert James Pooley, a partner at Palo Alto, Calif's Gray
Cary Ware & Freidenrich, said, "Once a patent has issued, one allegation
you see in these cases is that the invention was not created in a vacuum
but was built on a platform of information taken from another place."

Mr. Pooley said that he hasn't seen a case involving a registry of families
with a specific genetic trait. He said that the ultimate remedy the
Greenbergs and other families might seek is reassignment of the patent
rights to them. They could also claim that "the material used to come up
with the invention actually constitutes the invention, and the claimed
inventor is not the real inventor at all," he suggested.

The hospital said in a statement that it is "evaluating the merits of the
case and preparing a stringent defense." (The National Law Journal,
December 11, 2000)


MICROSOFT CORP: Agrees to Pay $97 Mil to Settle Temporary Workers' Suit
-----------------------------------------------------------------------
In the biggest settlement of its kind, Microsoft agreed to pay $97 million
to settle a class-action lawsuit by temporary workers who claim they were
improperly denied benefits because the company refused to classify them as
full-time workers.

The settlement, plaintiffs said, is a warning to other companies that
employ ''permatemps,'' a common practice in technology and other
industries. ''This sends a $ 100 million message, signed, sealed and
delivered to other companies in corporate America that says they should end
permatemping,'' said Marcus Courtney, a former Microsoft temporary worker
who helped get the class-action started. Courtney now runs the Washington
Alliance of Technology Workers, a union- affiliated group that's trying to
organize high-tech workers in the Seattle area.

The lawsuit, filed in 1992, covers an estimated 8,000 to 12,000 long-term
temporary Microsoft workers.

Some had worked at Microsoft for as long as 17 years without getting health
care benefits, vacations or stock options, said plaintiffs' attorney David
West. Plaintiffs argued that Microsoft also sought to avoid other
complications and expenses that come with full-time employees, such as
payroll taxes.

In the past several years, Seattle-based Microsoft has significantly
changed its policies toward temporary workers. Now, such employees can work
at Microsoft for only 12 months, and many get benefits through the
temporary help firms they directly work for, said Microsoft spokesman Matt
Pilla.

Last year a federal appeals court ruled that temporary workers and
independent contractors are entitled to participate in Microsoft's employee
stock purchase plan.

''I don't see at any point that we were attempting to get out of paying
employees anything. I know there wasn't a conscientious attempt to do
that,'' Pilla said. ''What happened was that we didn't have the proper
policies in place to see that temporary workers remained just that ---
temporary.''

''Permatemping'' has long been a practice in the technology industry
because many tech businesses start out small, with little money to pay
benefits. Moreover, many high-tech workers like the freedom of not being
contractually obligated to work for a single employer for a long period.
The practice is common in a variety of other businesses. West's Seattle law
firm already has filed similar cases against government entities and
companies in Washington state and California.

West said the Microsoft settlement shouldn't change the ability of
temporary workers to sign on for short stints at companies, nor should it
change the role of private contractors. ''But for employers, it's a message
that they need to be careful who they call a temporary employee and who
they don't,'' he said. ''None of us have a problem with true temporary
workers, those who are there for, say, less than a year,'' West said.
''Where companies get in trouble is when they have the same worker doing
the same job year in and year out.''

The settlement and its size could foster similar suits elsewhere, experts
said. ''I would suppose that people out there working as temporaries at
other places are going to read about this and contact their lawyers, and
you can bet those lawyers will explore everything they possibly can,'' said
Cornelius Peck, professor emeritus of law at the University of Washington.

The settlement covers temporary workers working at Microsoft as far back as
1987. The amount they could receive depends on how long they worked at
Microsoft, the total number of employees who file claims and the final
amount of attorney's fees. (The Atlanta Journal and Constitution, December
13, 2000)


MICROSOFT CORP: Arizona Certifies Class Status for Windows 98 Lawsuit
---------------------------------------------------------------------
The Arizona-based law firm of Goodwin Raup PC recently won two significant
rulings in Arizona Superior Court against Microsoft Corp. These rulings
clear the way for a class action suit that could secure damages from the
software giant for thousands of Arizonans whose computers use the Windows
98 operating system.

In Friedman v. Microsoft Corporation, Goodwin Raup attorneys successfully
argued first that licensees of Windows 98 -- those who either bought the
software as part of a computer system or separately from a retailer --
could sue Microsoft for damages as individual licensees of the product.

The firm also prevailed in a motion establishing that the case could be
pursued as a class action under Arizona law.

Along with similar cases in California, the Arizona decision is one of two
cases nationwide that has been certified to proceed as class action
lawsuits. Microsoft currently is appealing the decision.

"This certification overcomes two significant obstacles, first by
establishing the rights of (Arizona) consumers as Windows 98 licensees and
then by demonstrating Microsoft's liability to these consumers as a whole,"
said Marty Harper, the attorney who headed the litigation for the Goodwin
Raup team. "We're confident that the court's decision will allow us to
proceed with a class action case on behalf of all these consumers."

A class action suit could affect tens of thousands of Arizona "end-user
licensees" who, according to Goodwin Raup, paid almost double what should
have been the competitive market price for Windows 98 as a result of
Microsoft's monopolistic practices. Under Arizona's class action statutes,
Microsoft could be required to pay treble damages to these consumers.

Microsoft, the worldwide leader in software, services and Internet
technologies for personal and business computing, has held a 90 percent or
greater market share for Intel-based personal computer operating systems
for more than a decade.

The company's legal woes began more than a year ago when a federal court
declared the company a monopoly that utilized its technological dominance
to stifle competitors and hurt consumers.

Contact: Denise Resnik & Associates, Phoenix Denise D. Resnik, 602/956-8834



MIDLAND GROUP: Settles in PA Independently of Similar Suit in GA
----------------------------------------------------------------
When two parallel, overlapping class actions are filed in different federal
courts, one of the suits can settle independently with the approval of one
judge, a U.S. district judge has ruled in Hall v. Midland Group, No.
99-3108. (E.D. Pa.) . The ruling approved a $ 1.75 million settlement and
brushed aside objections lodged by lawyers who had filed a similar suit in
Georgia. The Hall suit involves the alleged "forced placement" of hazard
insurance. Burt M. Rublin was defense counsel. (The National Law Journal,
December 11, 2000)


PRESIDENTIAL ELECTION: Disabled Say Florida Makes Voting Difficult
------------------------------------------------------------------
If Al Gore fails to win the White House, he can add the votes of disabled
Floridians to his list of might-have-beens.

Advocates and lawyers for disabled Floridians plan to sue under the
Americans With Disabilities Act (ADA), claiming that inaccessible polls,
confusing ballots and insensitive poll workers prevented many from voting.

Several polls showed that disabled people tended to support the vice
president, so this alleged failure to enforce the ADA, a law signed by
former President George Bush, could end up swinging the election to his
son, George W. Bush.

According to a Harris poll in September, 56% of disabled Americans backed
Al Gore for president. Only 36% said they planned to vote for Mr. Bush.

                           Barriers to Voting

Largely because of barriers that make registration and voting difficult,
disabled people lag 20 percentage points behind the voting rate of other
Americans, according to the Washington, D.C.-based National Organization on
Disability.

"It's scary," said Thomas J. Schmokel, a Tallahassee expert on ADA
compliance who uses a wheelchair. "I went to one place two years ago that
made you roll 70 feet through the dirt, then go up four steps."

Miami lawyers who file ADA lawsuits say that they have gotten calls from
potential clients and expect to bring lawsuits in the coming months. "Lots
of litigation is being contemplated," said Miami lawyer Miguel de la O, who
is general counsel to Access Now, an advocacy group.

Miami lawyer Stephen Cody said that he plans to file two class actions once
the election has been sorted out. One will be based on the alleged failure
of state and local election officials to make voting accessible to disabled
Floridians, as required by the ADA. The second will allege failure to
follow the 1993 National Voter Registration Act, also called the "motor
voter" act, which requires state agencies that provide services to disabled
people to give them the opportunity to register.

                                 Too Late

The efforts will be too late to help Mr. Gore, though. Immediately after
the election, his campaign contacted lawyers and advocates for the disabled
across the state, looking for stories of disabled voters stymied by
inaccessible polling places and confusing ballots. But Florida lawyers say
that any potential remedy would fix the problem for future elections,
rather than resurrect votes that might have been cast for Mr. Gore.

"Whatever happens in this election, we're going to try to make sure that
the election of 2004 is going to be a whole lot different," said Mr. Cody,
echoing a sentiment heard more than occasionally in Florida these days.

Calls seeking comment were made to the Florida Department of State, which
oversees elections in the state. Calls to the press office and general
counsel's office were not returned. (The National Law Journal, December 11,
2000)


PUBLIC UTILITIES: Discounts Denial In Exclusive Area Not Discriminatory
-----------------------------------------------------------------------
An electric utility company did not engage in "discriminatory pricing" by
offering rate discounts to commercial and industrial customers within a
"competitive" geographic area while denying the same to customers in the
utility's exclusive service area, the Ohio Supreme Court has ruled. Weiss,
d/b/a Center West Realty Co. et al. v. Public Utilities Commission of Ohio
et al., No. 99-444 (Ohio, Sept. 20, 2000).

Mark R. Weiss operates three commercial real estate companies in Rocky
River, Ohio, a western Cleveland suburb. Rocky River is within a
geographical area that receives electric service exclusively from the
Cleveland Electric Illuminating Co.

In 1992, CEI obtained approval from the Public Utilities Commission of Ohio
for a "competitive pilot program." Under that program, certain commercial
and industrial customers within a geographical area serviced by a
competitor, Cleveland Public Power, were eligible for rate discounts from
CEI.

Weiss complained to the PUC that the pilot program violated various
sections of the state utility law relating to discrimination against
customers in regard to pricing or service. In particular, Weiss charged
that CEI's pilot program gave undue or unreasonable preference or advantage
to certain customers with whom his companies competed.

The PUC dismissed the complaint, and a panel for the Ohio Supreme Court
affirmed.

Initially, the court observed that the utility law provisions in question,
R.C. 4905.31, 4905.33 and 4905.35, did not prohibit all discrimination. The
panel noted that discriminatory classifications and preferences are not
prohibited where those are "reasonable." In addition, the court found that
different rates are not proscribed where utility services are different or
rendered under different circumstances or conditions.

The panel next determined that it was reasonable for CEI to distinguish
between small business customers located within the service area of a
competitor and those located where no competitive service is available. In
that regard, the court observed that: every other small business customer
located within the portion of CEI's service territory where competitive
electric service is unavailable is required to pay the same tariff rates as
are payable by Weiss for the same electrical usage. Thus, as the commission
determined, there was no violation.

Weiss further argued that the denial of discounted rates violates the Equal
Protection Clause. The court, however, rejected that claim.

"There was no denial to Weiss of equal protection of the law, because
denial to Weiss of the benefits of the Competitive Pilot Program was based
on a reasonable classification of customers, and CEI's customers in the
same classification as Weiss are treated similarly to Weiss," the court
said.

Lastly, the court rejected Weiss' claim that the PUC improperly refused to
hear his complaint as a class action. "If Weiss had prevailed," the court
stated, "the commission would have been obligated to adjust rates for the
remaining ratepayers, accomplishing the same purpose as a class action."

Weiss is represented by Dennis R. Landsdowne and Mary A. Cavanaugh of
Spangenberg, Shibley & Liber, and Frank E. Piscitelli.

The PUC of Ohio is represented by Attorney General Betty D. Montgomery,
Duane W. Luckey, Tanisha Lyon Brown and William L. Wright, assistant
attorneys general. (Utilities Industry Litigation Reporter, October 2000)


SMITHKLINE BEECHAM: News of FTC Probe Triggers Dual Suits Over Paxil
--------------------------------------------------------------------
SmithKline Beecham Corp. was hit earlier in the month with a pair of class
action antitrust suits brought by consumers who say they are paying
inflated prices for Paxil, a popular anti-depressant drug, because the
pharmaceuticals giant is illegally blocking a Canadian manufacturer from
bringing a generic version of the drug to market.

The lawsuits, both filed in U.S. District Court in Philadelphia, allege
that SmithKline attempted to monopolize the Paxil market by filing "sham"
patent litigation against Apotex Inc. and TorPharm Inc., both of Weston,
Ontario, soon after the generic manufacturers notified SmithKline that they
were seeking approval from the Food & Drug Administration to copy Paxil.
The private lawsuits come on the heels of news reports that said the
Federal Trade Commission was investigating SmithKline for possible
antitrust violations. They allege that consumers would be paying 35 percent
less for the drug in generic form and that the average current price for
the brand name is $ 2.34 per day.

Stakes are high in the litigation because Paxil is the third-best selling
drug in the burgeoning category of anti-depressants that affect the
"re-uptake" of serotonin, a neurotransmitter. Since its discovery in the
1950s, researchers have found mounting evidence that one of serotonin's
roles is to mediate emotions and judgment. With sales of $ 1.4 billion last
year, Paxil is outsold only by Prozac, made by Eli Lilly, and Zoloft, made
by Pfizer.

Reports in the Wall Street Journal and The New York Times said the
existence of the FTC probe was revealed in court papers filed by Apotex in
U.S. District Court in Chicago. SmithKline is reported to be cooperating in
the probe and said it did nothing illegal. Instead, a company spokesman
said, it was simply acting to protect its rights to Paxil which the company
believes are still covered by valid patents.

But the consumer lawsuits allege that SmithKline is using sham lawsuits and
bogus patents filings to delay the debut of generic Paxil by months or even
years. The pair of nearly identically worded lawsuits was filed by teams of
lawyers from the Philadelphia area, New York, Washington, Chicago and
Minneapolis.

The first, Nichols v. SmithKline Beecham Corp., 00-cv-6222, was assigned to
U.S. District Judge John R. Padova and was filed by Mark H. Edelson of
Edelson & Hoffman in Doylestown, Pa.; Jonathan Shub of Sheller Ludwig &
Beatty in Philadelphia; Kenneth A. Wexler of Wexler & Associates in
Chicago; and Daniel Gustafson of Heinz Mills & Olson in Minneapolis.

The second, Tyminski-Porter v. SmithKline Beecham Corp., 00-cv-6231, was
assigned to U.S. District Judge Herbert J. Hutton and was filed by J.
Dennis Faucher and Bryan L. Kobes of Miller Faucher & Cafferty in
Philadelphia; Nicholas E. Chimicles of Chimicles & Tikellis in Haverford,
Pa.; Bernard Persky, Barbara J. Hart and Vaishali S. Shetty of Goddking
Labaton Rudoff & Sucharow in New York; Robert S. Schacter of Zwerling
Schacter & Zwerling in New York; L. Kendall Satterfield and Richard M.
Volin of Finkelstein Thompson & Loughran in Washington, D.C.; and Mark S.
Shane of Edison, N.J.

According to the suits, the patent for Paxil was granted on Jan. 26, 1988,
for an invention called "anti-depressant crystalline paroxetine
hydrochloride hemihydrate." The patent was assigned to Beecham Group p.l.c.
in February 1987 and re-assigned to SmithKline in November 1995. The patent
is set to expire in 2006. Apotex and TorPharm filed an "abbreviated new
drug application" with the FDA for "paroxetine HCl tablets" and notified
SmithKline in May 1998 that it was seeking approval to market "anhydrous
paroxetine HCl," relying on SmithKline's safety and efficacy data. But the
suits say the letter explicitly stated that Apotex's product did not
infringe on SmithKline's patent. In response to the letter, the suits
allege, SmithKline filed sham patent litigation in the Northern District of
Illinois and numerous additional patents relating to Paxil with the FDA.
Each of the patent filings could add 30 months delay to Apotex's efforts to
get the generic version to the market, the suits allege. In February 2000,
the suits allege, Apotex filed a petition with the FDA that said SmithKline
had "systematically and unlawfully used the statutory and FDA patent
listings procedures to stifle generic competition."


U.S. BANCORP: Judge approves settlement of U.S. Bancorp privacy lawsuit
-----------------------------------------------------------------------
In September, the CAR reported on the Court's preliminary approval of a
class action in Minnesota and that of an action brought by the Minnesota
Attorney General over alleged violation of the privacy of customers.

According to a report on the Associated Press, a difficult 18 months ended
for U.S. Bancorp earlier in the month with a federal judge's approval of a
$3.5 million settlement of a class-action lawsuit that accused the bank of
violating the privacy of its customers.

The 1999 lawsuit accused U.S. Bancorp of sharing customer data with outside
marketing firms. The Minnesota Attorney General made a similar accusation
in June of that year.

In approving the settlement, U.S. District Judge Jonathan Lebedoff agreed
the original five plaintiffs will receive $2,000 each besides the amount of
their claims.

Attorneys for the class were awarded $1.25 million in fees and $40,000 in
expenses. The remaining amount will be used to pay other class members and
Bancorp customers who file claims with the bank before Dec. 31.

Settlements for individuals are expected to range from $25 to $400. The
actual amounts paid will depend on the number of valid claims received and
on customer responses to questions from the claims administrator.

U.S. Bancorp officials said they expect to mail checks to customers after
March 2001 and that they won't know how many claimants they have until
then.

But if any of the $3.5 million is left over after the claims are paid, the
bank will donate that amount to the University of Minnesota law school and
nonprofit human service agencies. The settlement effectively ends a
difficult year and a half for the bank.

In June 1999, Minnesota Attorney General Mike Hatch accused the bank of
violating customer privacy rights by sharing customer account information
with marketing firms in exchange for commissions.

The bank denied wrongdoing, but agreed to settle the lawsuit and to
terminate its relationships with all nonfinancial, third-party marketing
firms. (The Associated Press State & Local Wire, December 13, 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
Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc.,
Washington, DC. Theresa Cheuk, Managing Editor.

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

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