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             Thursday, December 28, 2000, Vol. 2, No. 250


BRIDGESTONE/FIRESTONE: Attorneys Have to Maneuver Thru Asian Avenues
BRIDGESTONE/FIRESTONE: Jan. 8 Trial in Corpus Christi Draws Attention
EBANKER USA: Online Lender Faces $70 Million Securities Fraud Suit
FEN-PHEN: Objectors to AHP Pact Seek $250,000 Sanction Per Lawyer
FORD MOTOR: Agrees to Settlement in 6 Tire-Related Cases

FORD MOTOR: Judge Who Ordered for Recall of 1.7M Vehicles Stays on Case
GEORGE CRUZ: Man Arrested in eBay Internet Auction Site Case
HMOs: Most Patient Claims Survive In Suit Against Eight Major Providers
HOLOCAUST VICTIMS: German Negotiator Calls For Industry Participation
LOUISIANA: Oyster Bed Lawsuit Decision Could Cost $700 Million

MADGE NETWORKS: Faces Appeal against Dismissal of Securities Suit in CA
MTBE CONTAMINATION: Plaintiffs Served But Did Not File Master Complaint
RUSSIAN ALUMINIUM: Companies Based Elsewhere File $2.7 Bil Suit in U.S.
SAXTON INC: Rabin & Peckel Files Securities Suit in Nevada
SLAVERY REPARATION: Call Builds As Blacks Tally History’s Toll

TOBACCO LITIGATION: Oral Argument Set In Lawsuit By CA Indian Tribes
WYETH-AYERST: Texas Federal Judge Certifies Duract Cost-Recovery Suit

* NYLJ Reports on Developments on Conspiracy, JVs, Bribery, Acquisitions
* Shalala Nixes New Law Aimd at Reimporting Prescription Drugs from Can.


BRIDGESTONE/FIRESTONE: Attorneys Have to Maneuver Thru Asian Avenues
in the Firestone multidistrict litigation would love to be able to drive
over to Ohio to serve process on Bridgestone, unfortunately attorneys are
forced to maneuver through Asian legal avenues.

Plaintiffs have attempted to serve process on the Japanese company, but
Florida attorney Victor Diaz, co-lead counsel for the personal injury
side of the immense litigation, said some cases have been pending in the
Japanese foreign minister's office for four months. Others are in limbo,
he said, as they have not received confirmation that process was served.

Bridgestone did not even have a representative participating in the
litigation until the Dec. 6 status conference, when Robin Weaver, a
partner in the Cleveland, Ohio, firm Squire Sanders & Dempsey, showed up.

During the MDL conference Judge Sarah Evans Barker was clear she will
brook no shenanigans from the foreign company. Cases from all over the
world were transferred to the United States District Court, Southern
District of Indiana, Indianapolis Division, for Judge Barker to shepherd.

"You stand before this court as an officer," Judge Barker said. "If there
are obstacles being placed by Bridgestone, well, we're not going to be
jacked around on it."

Weaver assured Judge Barker that Bridgestone was not trying to duck
service. In fact, he said, Bridgestone has already been served in several

The judge asked why process cannot be served on Weaver's law firm. She
said she trusts the U.S. Postal Service a whole lot more than foreign

"My client is a foreign corporation," Weaver responded. "I am not
authorized by them to accept service. They feel it would be better
organized if everything was received internally."

Weaver supplied the court with the name and address of the manager of the
corporate legal department at Bridgestone in Tokyo. He said the company
will accept service via certified mail and the documents need not be
translated into Japanese.

However, during the course of the proceeding, Judge Barker's crackerjack
staff made a phone call after several attorneys questioned the ability to
send certified mail to Japan and discovered registered, not certified,
mail is allowable.

Rules for international litigation are outlined in the Hague Convention.
Those rules say service can be filed directly to a person involved in the
case or through the designated central authority of the state.

However, the Hague Convention articles are often not the only direction
lawyers need when dealing with foreign states, says Cara LaForge, a
representative with Legal Language Services, a New York-based firm that
assists lawyers with all manner of international litigation. The firm
provides translation, evidence retrieval services, skip tracing, court
reporters verbatim transcripts are not universally required and other

She said all foreign ministries have their little quirks and preferences
and navigating the nuances can be nerve-wracking.

While the judge in the Bridgestone/Firestone case was told Bridgestone
was not trying to be difficult, LaForge said there are any number of ways
proceedings overseas can be delayed.

For example, just an incorrect address can muck things up, she said. Take
the address supplied to the Bridgestone plaintiffs: 10-1, Kyobashi
1-Chome, Chuo-ku, Tokyo 104-8350. That mouthful could easily be mangled.

LaForge said simple mistakes are fodder for any artful attorney to obtain
a quash.

Choosing the formal method of service, under Article 5 of the Hague
Convention, through the designated central authority is the safest bet,
LaForge said. Actually, she said the four-month wait plaintiffs in this
case complained of is not bad.

"Even though American attorneys complain about it taking three or four
months, we in this country are the absolute slowest in the world by far,"
she said. "It can take up to a year here."

The service issue may ultimately be moot anyway, said Bridgestone's
attorney, who said he'll file a motion to dismiss.

"We have only been served with one MDL case, but we have been served with
numerous state cases. We've been added on as an afterthought," Weaver
said. "We don't believe there is jurisdiction over Bridgestone in the
United States. They don't do business here. To find a shareholder liable
for the corporation is highly unlikely. It's called piercing the
corporate veil."

Bridgestone Corp. is not licensed and does not sell tires in the United
States, Weaver said. Bridgestone Corp. is the parent company of
Bridgestone/Firestone Inc., a subsidiary in Nashville, Tenn.

Thus far, according to recent reports from the National Highway Traffic
Safety Administration, 148 people have died in accidents purportedly
caused by the faulty tires and Ford vehicle roll-overs. Bridgestone
Firestone recalled 6.5 million tires.

Court dockets show 164 personal injury/wrongful death and class action
cases are currently involved in the MDL. (The Indiana Lawyer, December
20, 2000)

BRIDGESTONE/FIRESTONE: Jan. 8 Trial in Corpus Christi Draws Attention
A Portland woman's lawsuit over allegedly defective Bridgestone/Firestone
tires on a Ford Explorer could be the first involving the highly
publicized tires to go to trial if it proceeds as planned in a Corpus
Christi courtroom.

A trial is scheduled for Jan. 8 on a lawsuit filed by attorneys
representing Donna Bailey of Portland, who was left paralyzed from the
neck down after the Ford Explorer in which she was a passenger crashed
March 10 on U.S. Highway 181 near Poth. The case is to be heard by Judge
Nanette Hasette of the 28th District Court.

The case is being watched closely by Ford, Firestone and dozens of
plaintiffs around the nation who have similar lawsuits pending against
the companies, said Paul LaValle, one of several attorneys representing
Bailey and her family.

Though similar cases have been settled out of court, none has proceeded
to trial, attorneys on both sides said.

"We have the full attention of the Ford board of directors and Firestone
and all the attorneys (suing the companies)," said LaValle, of Texas
City. "I get calls every day from attorneys about the trial date, because
. . . in essence, we're going to be providing the recipe for other
attorneys to follow."

Darrell Barger, a Corpus Christi attorney representing
Bridgestone/Firestone, declined to discuss details of the case but said
the company was not responsible for the accident that crippled Bailey.
"We don't think the tire failed, and we intend to present evidence in the
case next month, when it goes to trial," Barger said.

Likewise, Doug Seitz, a Phoenix attorney representing the Ford
corporation, said the company did nothing wrong.

Bridgestone/Firestone recalled 6.5 million ATX, ATX II and Wilderness AT
tires. The government has linked at least 148 deaths to tread-separation
accidents involving the tires, mostly on Ford Explorers. National media
organizations including Court TV have indicated interest in covering the
trial, court officials said.

The lawsuit was filed April 24 in Corpus Christi because the Ford
Explorer Bailey was riding in was purchased at Crosstown Ford, a
dealership in the city, according to the lawsuit. The plaintiffs sued
Crosstown Ford too, but LaValle said he does not believe Crosstown acted
with malice or independent knowledge the Explorer was unsafe. "In order
to show chain of custody or how the vehicle was put in the stream of
commerce, we have to include (Crosstown)," LaValle said.

                         'Legal nemesis'

Seitz, the attorney for Ford, is also representing Crosstown in the
matter. "The only claim against Crosstown is the allegation that it sold
a defective vehicle, and Ford stands behind that vehicle, so Ford has
taken over the defense for Crosstown," Seitz said. "Crosstown doesn't
really have any individual exposure."

At least 10 attorneys are involved in the Bailey lawsuit, including Tab
Turner, who recently was profiled in New York Times Magazine, which said
Ford "has no greater legal nemesis" than Turner. Headquartered in North
Little Rock, Ark., Turner is a product-liability lawyer who specializes
in sport utility vehicle rollover cases and has helped congressional
investigators sort out evidence in the Ford-Firestone controversy,
according to the magazine.

Bailey, who just passed his 44th birthday earlier this month, said she
has been hospitalized ever since the accident - except for a one-day
museum outing and on Thanksgiving Day, when she visited a brother near
Houston. She must use a ventilator to breathe.

Most days, she still is plagued by pain from her injuries, she said in an
interview from her hospital bed at The Institute for Rehabilitation and
Research in Houston.

                              Faulty design

"And I feel rotten I haven't been able to be with my children," Bailey
said. "I missed my daughter's graduation. I missed her prom. My son, you
know, he grew like a foot this year. I missed everything. Only on
weekends - it's the only time I get to see my children."

Bridgestone/Firestone earlier this month announced that problems with its
tires stem from faulty design and a unique manufacturing process, but not
poor workmanship. The company's report was based on a four-month
investigation of tread separation accidents. Bridgestone/Firestone cited
the design of 15-inch ATX tires and a unique way the rubber was processed
at the company's plant in Decatur, Ill. Bridgestone/Firestone also blamed
the lower tire inflation pressure and higher vehicle load limits
recommended by Ford. Ford has said Explorers are not the problem.

                              Tire was an ATX

John Lampe, chairman of Bridgestone/Firestone, said the company is
changing its manufacturing process in Decatur to match the method used at
other plants.

LaValle said the tire that de-treaded in the Bailey case was an ATX, but
that it was manufactured in a North Carolina plant. LaValle said it was
the tire's design that caused the de-treading, not the manufacturing
process or the workmanship.

The Bailey lawsuit alleges that the right rear tire came apart because of
a manufacturing defect that resulted in a lack of a permanent bond in the
tire's components. That tire make was recalled, but not until after
Bailey's accident, LaValle said.

Mikal C. Watts, one of the attorneys representing Bailey's family, said
Ford is being sued in the Corpus Christi case too because the company
helped with the design of the tire. Also, the Explorer is too susceptible
to overturning, said Watts, of Corpus Christi.

Seitz said Ford is not guilty of wrongdoing, but he would not discuss
details of the case because it is in litigation.

Susan Krusel, a spokeswoman for Ford, also would not discuss details but
said, "It's a tragedy anytime one of our customers is injured in our
vehicle, no matter what the circumstances."

Krusel also said federal government statistics on fatal auto accidents
show that the Ford Explorer is involved in 17 to 19 percent fewer
fatalities than the average sports utility vehicle.

Before the accident, Bailey was a full-time student at Texas A&M
University-Corpus Christi, studying kinesiology to become a physical
education teacher. She also spent a lot of time working as a volunteer
with Youth Odyssey, an organization in which Bailey took at-risk
teen-agers camping, rock climbing, backpacking and out on other

Bailey, who regularly jogged, did aerobics and lifted weights, was on her
way to practice some rock climbing at Enchanted Rock, near Austin, when
the accident occurred. She was with two friends but was not on a Youth
Odyssey outing.

Bailey was riding with the friends north on Highway 181 when the accident
happened at 5:30 p.m. about one mile south of Poth. "The tire just - it
made a really funny sound, and then it just popped," Bailey said. "We
thought we were having a flat. ... And she lost control right away and
rolled over."

Bailey said she was wearing a seatbelt, but she still was badly injured.

"The car was upside down, and I was hanging from my seatbelt, and my
friends had gotten out of the car. My friends were kicking in the
windshield. That's all I remember. I couldn't move, and I couldn't

The driver and the other passenger were not injured, Bailey said.

Bailey said she has endured intense pain during her months in several

"I've had days with the worst-ever pain as you could imagine," she said.
"I've had to stay in bed, and my children could not even touch me because
the pain was so bad," said Bailey, who has a 15-year-old son and an
18-year-old daughter.

Bailey said she is learning how to cope with living as a quadriplegic,
operating a wheelchair she controls by blowing or sucking a tube.

LaValle said Bailey and her family will seek more than $100 million for
pain and suffering, mental anguish, disfigurement, loss of ability to
earn wages, past and future medical expenses and other losses.

"It sounds like we're talking big dollars," LaValle said. "But how do you
put a price on the ability to give your kids a hug at night? I mean, what
are your legs worth to you? You use them every day."

                              Safer Products

But Bailey said she mainly wants the lawsuit to result in safer products
for consumers.

"Automobiles - you get in them and think you can trust them, but you
can't," she said. "Maybe Ford and Firestone will make a better product."

Bailey said she eventually wants to move back to the Corpus Christi area.

"I plan to get out of here and finish getting my degree, and I plan to
work with young people," Bailey said. "That's where my heart is. ...
Maybe I won't be able to be rock climbing or do other things, but I
certainly can talk to them and be part of their lives." (Corpus Christi
Caller-Times, December 22, 2000)

EBANKER USA: Online Lender Faces $70 Million Securities Fraud Suit
In a proposed Southern District of New York class action, investors are
charging eBanker USA.COM Inc. and two related companies with securities
fraud arising out of the companies' stock offerings. The suit seeks at
least $70 million in damages. Halperin et al. v. eBanker USA.COM Inc. et
al. , No. 00-CV-6769, complaint filed (S.D.N.Y., Sept. 8, 2000).

The lead defendant in the suit, eBanker, is described as an online
financing company with its headquarters in Denver. The second corporate
defendant, American Fronteer Financial Corp., a Colorado company with
offices in New York City, is eBanker's corporate predecessor. The third
corporate defendant, eVision USA.COM Inc., is a public holding company
located in Denver. American Fronteer is a stock brokerage and eVision
subsidiary, according to the complaint.

The suit also names the following director and officer defendants: Fai
Chan, chairman, president and CEO of eBanker and chairman and president
of eVision; Robert Trapp, president of American Fronteer, director and
secretary of eBanker, and director and managing director of eVision;
David Chen, an eBanker director; Tong Wan Chan, a business manager of
American Fronteer, eBanker and eVision, and an eVision director; Gary L.
Cook, CFO and director of eVision, treasurer of eBanker, and CFO of
American Fronteer; and Jeffrey Busch and Robert Jeffers Jr., both eVision

"The individual defendants, creating a web of domestic and foreign
corporations, used their controlled and interrelated companies and
fraudulent documents and misleading statements to induce the ...
plaintiff classes to invest substantial moneys in certain of the
defendant companies without disclosing such investments were intended to
generate funds for the personal benefit of the individual defendants, to
the detriment of the ... plaintiff classes," according to the complaint
filed by Michael Halperin, M.D., and Donald Kern, D.D.S., on behalf of
all similarly situated investors.

According to the suit, offering materials for eBanker and eVision failed
to disclose that the companies were not being operated as represented in
private stock offering memorandums, and that corporate directors and
officers were receiving allegedly improper stock options.

The 11-count complaint makes claims for securities fraud under Section
10(b) of the Securities Exchange Act, insider trading under Section 20(A)
of the Securities Exchange Act, breach of fiduciary duty and common-law
fraud. The plaintiffs are seeking class certification and at least $70
million in damages.

The investor plaintiffs are represented by Debra J. Guzov of Guzov &
Rella in New York. (Bank & Lender Liability Litigation Reporter, November
2, 2000)

FEN-PHEN: Objectors to AHP Pact Seek $250,000 Sanction Per Lawyer
Lawyers representing the Scuteri Objectors to the American Home Products
Corp. (AHP) national diet drug class settlement filed a motion last month
for sanctions against 12 Class Counsel, saying their earlier motion for
sanctions against the objectors was legally and factually frivolous (In
Re: Diet Drugs [Phentermine/Fenfluramine/Dexfenfluramine] Products
Liability Litigation, MDL Docket No. 1203, Sheila Brown, et al. v.
American Home Products Corp., No. 99-20593, E.D. Pa.; See November 2000,
Page 4).

Class counsel responded Nov. 20, saying the objectors do not dispute the
underlying allegation that they pursued an appeal on behalf of ineligible
clients who had been withdrawn as objectors "to avoid participating in
Fairness Hearing Discovery ..."

(Objectors' Motion in Section E. Document # 35-001214-111. Class
Counsel's Reply in Section F. Document # 35-001214-112.)

                   $ 250,000 Per Lawyer Sought

Napoli, Kaiser & Bern of New York and Kenneth Chesebro of Cambridge,
Mass., petitioned U.S. Senior Judge Louis C. Bechtle of the U.S. District
Court for the Eastern District of Pennsylvania for sanctions against
class counsel in the same amount class counsel sought against the
objectors - $ 250,000 - and to hold the 12 and their firms jointly and
severally liable for the amount.

The original sanctions motion was filed by class counsel Oct. 18 and
alleged that Napoli Kaiser had opted out of the settlement all but a
"minimal" number of clients. Those clients were left in, class counsel
alleged, to "shanghai" the settlement "to achieve private gain." The
goal, according to class counsel, was to extract either side settlements
of case inventories or large counsel fees from class counsel without
court scrutiny.

                   Allegation Was Incorrect

The factual allegation - that lawyers representing the objectors had left
only a small number of cases in the settlement as "pawns" for the sole
purpose of objecting - has been acknowledged as false, according to their
motion. Napoli, Kaiser & Bern says it still has more than 4,500 clients
participating in the settlement and Edward Blizzard of Texas, who also
represents objectors, claims to have more than 2,000 clients who have not
opted out.

The objectors say the timing is also procedurally flawed. Class counsel
waited until after Judge Bechtle entered final judgment Aug. 28, even
though most of the factual background in support of the motion took place
before that. In addition, the objectors filed their motion the same day
they served them, whereas the objectors say Rule 11, upon which class
counsel is relying, specifies a 21-day waiting period between service and
filing as a "safe harbor," to allow the nonmovant the opportunity to
withdraw the action at issue.

"If paying $ 250,000 in sanctions strikes these attorneys as
objectionable, they have only themselves to blame: they are the attorneys
who sought this very sum in sanctions on a legally and factually
frivolous sanctions motion," the objectors memorandum of law says.
"Imposing sanctions in the very amount that these attorneys requested in
their frivolous sanctions motion will provide a powerful deterrent to the
use of such tactics in the future."

                 Objectors Created Need For Speed

Class counsel responds that the objectors' own behavior, filing their
appeal one day before the deadline, made it impossible to satisfy the
21-day safe harbor provisions. "Simply stated," the reply says, "the
abuse that is the subject of this motion is the improper notice of appeal
filed in this court."

Some of the orders from which "the Napoli lawyers" appeal had no bearing
on their clients, who were therefore not aggrieved parties with standing
to appeal. Others applied only to attorney Paul Napoli or his law firm,
which class counsel argues should not have used their clients as a basis
for appeal. "To attempt to appeal from these orders on behalf of their
clients is a perversion of the ruling of the Third Circuit U.S. Court of
Appeals in State of New Jersey v. Heldor Industries (989 F.2d 702, 710,
[3d Cir. 1993])," class counsel argues.

                          Wrong Precedent

The objectors also rely on the wrong precedent, according to class
counsel, in arguing that District Court sanctions for appealing an
adverse decision could discourage lawyers from pursuing appeals. In this
case, class counsel says, there was no adverse ruling to appeal. "The
class representatives are not presently contesting the merits of their
appeal," the reply states. "Instead, at issue is the procedural
misconduct of the Napoli lawyers for appealing on behalf of 20 persons
that have voluntarily withdrawn their objections to the settlement and
thus forfeited their right to pursue an appeal. ... Their appeal on
behalf of withdrawn parties is [a] blatant and willful a display of bad

Class counsel also says its mistake about the number of Napoli Bern
clients still in the settlement was harmless, and that with 4,500 clients
still participating, it is telling that the lawyers could find only three
legitimate clients on whom to hang their objection.

The objectors are represented by Paul J. Napoli and Marc Jay Bern of
Napoli, Kaiser & Bern in New York and Kenneth Chesebro of Cambridge,

The class counsel is represented by Arnold Levin and Michael D. Fishbein
of Levin, Fishbein, Sedran & Berman in Philadelphia, Gene Locks of
Greitzer & Locks in Philadelphia, Sol H. Weiss of Anapol, Schwartz, Weiss
Cohan, Feldman & Smalley of Philadelphia, Stanley Chesley of Waite,
Schneider, Bayless & Chesley of Cincinnati, Ohio, Charles R. Parker of
Hill & Parker of Houston, Texas, John J. Cummings of Cummings, Cummings &
Dudenhefer of New Orleans, Dianne Nast of Roda & Nast in Lancaster, Pa.,
R. Eric Kennedy of Weisman, Goldberg, Weisman & Kaufman of Cleveland,
Ohio, Richard Lewis of Cohen, Milstein, Hausfeld & Toll of Washington,
D.C., Richard Wayne of Strauss & Troy in Cincinnati, Ohio and Mark W.
Tanner of Feldman, Shepherd & Wohlgelernter in Philadelphia. (Mealey's
Litigation Report: Fen-Phen/Redux, December, 2000)

FORD MOTOR: Agrees to Settlement in 6 Tire-Related Cases
Ford Motor Co. agreed to settle six suits brought on behalf of people
hurt or killed when Explorer sport-utility vehicles rolled after
tire-tread failures, lawyers for the company and accident victims said.
Bruce Kaster, the lawyer for the plaintiffs, and Joel Smith, a lawyer for
Ford, wouldn't say how much Ford will pay to settle the cases. More than
100 similar suits have been brought nationwide against the No. 2 auto
maker and Bridgestone/Firestone Inc., which supplied the AT tires faulted
in most of the crashes. The tire maker was not involved in the
settlement. Ford could not be reached for comment. Of the six cases
settled, four had been filed in court and two claims were about to be
filed, Smith said. All but one of the cases that were settled involved
ATX tires, which Bridgestone/Firestone recalled Aug. 9 in the midst of a
federal safety investigation. Ford shares closed at $ 24, up $ 1.19 in
New York Stock Exchange trading. (Los Angeles Times, December 27, 2000)

FORD MOTOR: Judge Who Ordered for Recall of 1.7M Vehicles Stays on Case
SAN FRANCISCO (AP) - The California judge who ordered the recall of 1.7
million Ford Motor Co. cars and trucks will remain on the case, a court

Ford sought to disqualify Alameda County Superior Court Judge Michael E.
Ballachey after he found the automaker concealed a dangerous design flaw
that can cause some vehicles to stall in traffic. Ford said the ignition
devices are not defective for the 1983 through 1995 model years in

The automaker accused Ballachey of being biased and sought to have him
replaced with a new judge.

Ballachey, when ordering the recall in October as part of an ongoing
lawsuit against the company, told Ford lawyers that they were living in
an "Alice in Wonderland" dreamland for refusing to admit the ignition
devices were faulty.

Sacramento County Superior Court Judge James T. Ford, who was assigned to
hear the automaker's disqualification motion, said removing Ballachey was

"He has expressed the view that the evidence proffered by Ford was in
certain respects not credible," Judge Ford wrote. The Sacramento judge
said Ballachey could have been disqualified had he suppressed evidence
based on a biased viewpoint.

"This Judge Ballachey has not done," Judge Ford ruled.

Before Ford customers in California get their cars repaired under the
recall, a court-appointed expert is expected to suggest how to fix the
vehicles early next year.

Ballachey said Ford sold as many as 23 million vehicles nationwide with
the flaw, but his jurisdiction does not extend beyond California. Similar
class-action suits are pending in Alabama, Maryland, Illinois, Tennessee
and Washington.

The ignition device was put on 29 models between 1983 and 1995, including
the Taurus, LTD, Ranger, Bronco, Mustang and Escort. During that period,
the Taurus was one of the top-selling cars in America.

Ford attorneys did not immediately return phone calls. A lawyer suing
Ford said the automaker's claims against the judge were "baseless." (The
Associated Press, December 26, 2000)

GEORGE CRUZ: Man Arrested in eBay Internet Auction Site Case
Federal authorities arrested one man and were searching for another
suspected of ripping off buyers on eBay, the largest Internet auction
site.  Assistant U.S. Attorney Dorothy L. Shubin said the two unrelated
cases were among the first criminal prosecutions in the booming online
auction business.

George Arthur Cruz of Artesia and Hen Ben Haim of Encino allegedly
offered dozens of computers and other goods on eBay, then took the
winning bidders' money and sent them nothing. More than 240 alleged
victims mailed checks or money orders to the Los Angeles area after
submitting winning bids for items including computers, camera equipment,
musical instruments and replicas of football helmets. U.S. postal
inspectors intercepted checks and money orders totaling $34,000, Shubin
said. According to federal indictments made public buyers have been
defrauded of more than $110,000.

``It's an old-fashioned fraud using new technology: promising products
and not delivering,'' said Shubin. ``But using the Internet gives the
defendants the ability to reach victims all across the country.''

Cruz, 31, and Haim, 27, were indicted by a federal grand jury.
Authorities arrested Cruz, also known as Richard Cortez at his workplace
in Norwalk. Cruz posted $70,000 bail and is set to be arraigned on 13
felony counts of mail fraud and one felony count of money laundering. He
faces up to 75 years in federal prison. According to the indictments Haim
and Cruz used aliases on eBay; Cruz registered under such names as John
Reese, Oscar Gamboa, Jon Wolf, Dean Liu and Thomas K. Connors. In posting
the auction listings, he ``concealed the fact that he either did not
possess the merchandise he was offering for sale, or that he did not
intend to deliver the merchandise to the purchasers,'' the indictment
said.  Authorities have been unable to locate Haim, also known as Shay
Albaz. Haim was indicted on eight counts of mail fraud and faces up to 40
years in prison.

An eBay representative said fraud is rare on the Internet auction site.
Among the safeguards eBay has set up, bidders can read evaluations of
sellers by previous buyers, and an escrow account can be used to hold
payments until the goods are delivered. The company also offers dispute
resolution and up to $200 in free insurance. Market research studies have
estimated that online auction sales will total about $25 billion by 2005.
(The Associated Press, December 27, 2000)

HMOs: Most Patient Claims Survive In Suit Against Eight Major Providers
Doctors and 80 million patients trying to put the nation's managed care
industry on trial have lost some of their ammunition, but core issues
survived a judge's initial review.

Eight major HMOs are accused of stretching the broad powers of federal
law and breaking promises to those on the front lines of the health care

U.S. District Judge Federico Moreno, who has been assigned to consider
the common issues against the industry, earlier this month upheld
mandatory arbitration clauses, which are common and widespread. But he
decided only PacifiCare's broad arbitration contract applied to patients,
and two pivotal allegations - conspiracy and aiding and abetting - still
can be pursued by doctors against all companies. Racketeering allegations
also remain against Aetna and PacifiCare.

"None of the defendants have been dismissed," Adam Moskowitz, an attorney
representing doctors, said. "That's really the important aspect because
having passed this first hurdle, we're going to move on."

Stephen Rash, an attorney for consumers, said: "We believe that the
clients and everybody in the country affected by this would be better
served by a court's determination. We are pleased that we are still

Among the claims, doctors say their bills are routinely and improperly
underpaid, and patients charge insurers are bribing their staffs to
reject claims for financial rather than medical reasons.

Lisa Haines, spokeswoman for Health Net Inc., formerly Foundation Health
Systems, said the company was "certainly pleased" with Moreno's decision
upholding arbitration. Asked about other claims still before the court,
she said, "We're currently assessing our options there."

The next issue before Moreno will be dismissal based on the companies'
argument that the plaintiffs fail to meet the basic requirements for
bringing the lawsuits. If anything survives, Moreno has set a hearing
Feb. 28 to determine whether the complaints can be pursued jointly as a
class-action - the goal of patients and providers intent on spotlighting
what they consider to be industry abuses.

Other managed care companies involved are Cigna, Humana, Prudential,
United and Wellpoint.

An assortment of "tag-along" lawsuits with similar allegations are still
heading to Moreno under a judicial panel's order assigning all federal
cases to him. (The Associated Press, December 26, 2000)

HOLOCAUST VICTIMS: German Negotiator Calls For Industry Participation
Germany's chief negotiator on compensation for former slave laborers
under the Nazis, Otto Graf Lambsdorff, earlier this month called for
public pressure on some companies that refuse to contribute to a victims'

Lambsdorff told a German radio station that companies that have commented
publicly on their decision not to join a 10 billion mark (five billion
euro, 4.5 billion dollar) fund for the former laborers should expect
public criticism.

He cited the example of Haribo confectioneries, makers of the popular
"gummi bears" candy, whose owner has offered the press reasons for his
company's decision not to take part in the fund.

A number of German newspapers and a Jewish organization have published
lists of companies founded before World War II that have declined to lend
support to compensation efforts.

Lambsdorff called such lists "mediaeval" and to be avoided.

Under an agreement with US negotiators, Germany has agreed to provide the
10-billion-mark fund on condition that officials in the US encourage the
judiciary to dismiss class action suits by victims.

The federal government and German industry have each agreed to finance
half the fund but business has only come up with 3.4 billion of their
five billion marks share.

A spokesman for the industry fund, Wolfgang Gibowski, told a German radio
station that about 5,500 companies had agreed to participate and that it
would keep working to raise the full five billion marks in the new year.

The fund has said it hopes to begin making payments to the ageing former
workers by March. (Agence France Presse, December 27, 2000)

LOUISIANA: Oyster Bed Lawsuit Decision Could Cost $700 Million
A jury's decision to give five oyster farmers $48 million for damage to
oyster beds caused by freshwater diversion projects could end up costing
Louisiana hundreds of millions of dollars, officials said. If the
judgment awarded recently by a Plaquemines Parish jury survives an
appeal, and if its logic is applied to the additional 125 claimants in a
class action suit, the state ultimately could be liable for more than
$700 million.

"It's an incredible dilemma facing our state," said Department of Natural
Resources Secretary Jack Caldwell. "It's totally unrealistic to expect
the taxpayers of Louisiana to pay $21,345 for every acre of oyster lease"
that falls in the path of diversion projects, he said, citing the jury's

The jury decided that a wall of fresh water and Mississippi River mud
that gushed 10 years ago from the Caernarvon Diversion ruined prime
oyster grounds in Plaquemines and St. Bernard parishes.

Caldwell said the judgment threatens the Davis Pond diversion, planned to
open next summer. Despite a new program to compensate oyster harvesters
in advance, they could choose to opt out of the program in hopes of suing
later, Caldwell said. "Basically, the state can't afford to go forward
with coastal restoration if this is what's going to happen," said Andrew
Wilson, the state's attorney in the case.

Lawyers for the oyster harvesters say the state is to blame for the

Caernarvon was an experiment on a scale never before attempted, capable
of rerouting unheard of amounts of fresh water and silt through the marsh
in hopes of building land and restoring fisheries.

In general, the oyster industry supports diversions. But state officials
knew of the potential for destroying valuable oyster grounds in the short
run, and did nothing to relocate or compensate oyster farmers in the
path, lawyers for the oyster farmers said.

The state has created a $7.5 million fund to pay oyster harvesters in the
path of the Davis Pond diversion project.

Attorney Phillip Cossich said Caldwell's dire predictions, both for the
astronomical damage award and for the future of diversions, are "just
somebody saying the sky is falling."

Not every oyster leaseholder will get $21,000 per acre. And oyster
harvesters should have no grounds to sue if, as planned with Davis Pond,
the state will pay to relocate leases before the fresh water is let

"This should not harm freshwater diversions statewide," Cossich said.
"The state has plans to compensate people up front now."

Mike Voisin, a member of the state Oyster Task Force, said state
officials could have avoided losing so much money. "In my personal
opinion, the state could have resolved this a long time ago and been able
to deal with a lot less of a challenge than they are now," he said. "This
was the guinea pig project."

The Coalition to Restore Coastal Louisiana agreed. "If the verdict
stands, this a self-inflicted wound." the group said in a statement.

Voisin said the industry now works closely with the state to make sure
diversions get built, but that oyster harvesters stay out of their
immediate paths.

Although the projects can devastate nearby beds, those farther away often
benefit. In the long run, saving the coast saves the oyster industry. But
the oyster fishermen who won the lawsuit "had 10 years of misery as a
result of that structure," Voisin said. "The state never took care of
what it knew was going to be a problem." (The Associated Press State &
Local Wire, December 27, 2000)

MADGE NETWORKS: Faces Appeal against Dismissal of Securities Suit in CA
In August 1996, a class action lawsuit was filed in the U.S. District
Court for the Northern District of California, San Jose Division, naming
Madge, Madge Networks, Inc. and certain of its former and current
executive officers as defendants.

The complaint alleged that the defendants misrepresented or failed to
disclose material facts about the company’s operations, anticipated
financial results and the anticipated success of its products, in
violation of the U.S. federal securities laws. The suit was brought by
two individuals, purportedly as representatives of a class of purchasers
of our stock during the period from October 12, 1995 to June 13, 1996. In
November 1996 and August 1997, the plaintiffs filed amended complaints,
each of which the Court dismissed without prejudice.

On February 6, 1998, the plaintiffs filed another amended complaint. On
April 3, 1998, the company and the individual defendants moved to dismiss
that complaint. A hearing on that motion was held on July 17, 1998.
Before the Court ruled on that motion to dismiss, plaintiffs sought
permission from the Court to file another amended complaint. The Court
granted plaintiffs' request and on February 4, 2000 the plaintiffs filed
a fifth amended complaint. On March 3, 2000, Madge moved to dismiss the
most recent complaint. By Order dated May 25, 2000, the Court granted
Madge’s motion. On May 31, 2000, the Court entered judgment for the
company and the other defendants.

The plaintiffs filed a notice of appeal against this ruling. The
plaintiffs filed their opening appellate brief on November 14, 2000.
Although the Ninth Circuit Court of Appeals has issued a briefing
schedule calling for briefing to be completed in December 2000, that
schedule may be extended in response to requests from Madge or the
plaintiffs. The Court of Appeals has not yet announced a date for its
hearing of the appeal.

MTBE CONTAMINATION: Plaintiffs Served But Did Not File Master Complaint
Plaintiffs in the consolidated discovery for methyl tertiary butyl ether
product liability in the Manhattan south federal courthouse served but
did not file the proposed master complaint for the litigation the first
week of December (In re: MTBE Products Liability Litigation,
1:00-1898(SAS), MDL 1358, S.D. N.Y.; See 12/1/00, Page 12.)

The complaint lists seven theories for recovery and outlines class
allegations. Among other causes of action is the accusation that the
defendants were involved in a conspiracy to market a known unsafe

"These cases are all class actions for injunctive relief arising from the
widespread contamination of groundwater as a result of the defendants'
use of a gasoline additive called methyl tertiary butyl ether," the
complaint says. "Plaintiffs are the owners of private wells who, as a
result of the enhanced risk to their drinking water, now require testing
and monitoring of their wells and aquifers for MTBE."

                           Class Defined

The class is defined in the proposed master complaint as people who have
an interest in real property with water wells that provide domestic
drinking and bathing water in one of 18 states: New York, Florida,
Illinois, Pennsylvania, Virginia, California, Connecticut, Delaware,
Indiana, Kentucky, Maryland, Massachusetts, Missouri, New Hampshire, New
Jersey, Rhode Island, Texas and Wisconsin.

The class would be broken into two groups: those whose wells have not
tested positive for MTBE and those real property owners found to have
been contaminated with MTBE.

Defendants owed, the master complaint says, a duty not to market a
product that is unreasonably dangerous for its intended use. The
defendants are strictly liable, the complaint says, for placing a
defective and unreasonably dangerous product into the stream of commerce.

Defendants knew, the complaint says, that the gasoline with MTBE posed a
threat to groundwater and private wells and yet failed to warn
plaintiffs, public officials, downstream handlers of the product and the
general public.

                          Deception Alleged

The complaint also accuses defendants of engaging in deceptive business
practices, of creating a public nuisance by allowing MTBE to contaminate
the plaintiffs' real property and for negligence. The complaint also asks
the court to order the defendants to comply with the Toxic Substances
Control Act and to disclose to the U.S. Environmental Protection Agency
gasoline leak sites that have been remediated but not with methodology
specifically designed for MTBE. Finally, the master complaint alleges the
defendants created a market for MTBE knowing of the hazards it poses and
concealed the dangers while maximizing their profits.

Illinois and New York plaintiffs served addenda to the master complaint
at the same time. The Illinois plaintiffs do not adopt the section
regarding to the states involved in the case.

Illinois plaintiffs would include real property owners in California,
Connecticut, Delaware, Illinois, Indiana, Kentucky, Maryland,
Massachusetts, Missouri, New Hampshire, New Jersey, Pennsylvania, Rhode
Island, Texas, Wisconsin and Virginia - leaving out New York and Florida.
Four of the Illinois plaintiffs seek to represent the subclass of private
well owners not currently known to be contaminated with MTBE.

Two of the named New York plaintiffs in their amended complaint say they
do not wish to represent the class. One plaintiff with a well that has
not tested positive for MTBE asks in the proposed amended complaint to
act as class representative.


David B. Wenstein and Kimberly S. Mello of Bales & Weinstein in Tampa,
Fla., filed the brief with the MDL for Exxon Mobil Corp.

Stephen M. Tillery of Carr, Korein, Tillery, Kunin, Montroy, Cates, Katz
& Glass in Swansea, Ill., and Scott Summy of Cooper & Scully in Dallas
represent the England plaintiffs. Elizabeth J. Cabraser and Morris A.
Ratner of Lieff, Cabraser, Heiman & Bernstein in New York and Joe Whatley
Jr. of Whatley Drake in Birmingham, Ala., represent the Young plaintiffs.
D. Michael Campbell, Gregory L. Denes and Scott D. McKay of Campbell &
Denes in Miami represent the Sutton Farms plaintiffs.

Representing the Berisha plaintiffs are Robert J. Gordon, Mitchell M.
Breit and Perry Weitz of Weitz & Luxenberg in New York; Lewis Saul of
Lewis Saul Associates in Washington, D.C.; Stanley E. Margolies of
Kurzman, Karelson & Frank in New York; Morris Ratner of Lieff, Cabraser
Heiman & Bernstein in New York; and A. Hoyt Rowell of Ness, Motley,
Loadholt, Richardson & Poole in Barnwell, S.C.

J. Andrew Langan of Kirkland & Ellis in Chicago represents Atlantic
Richfield Co., BP Amoco Corp. and Amoco Oil Co. Dan H. Ball and Roman R.
Wuller of Thompson Coburn in St. Louis represent Conoco Inc., Chevron USA
Inc. and Exxon Mobil Corp. John Galvin and Lyndon Sommer of Sandberg,
Phoenix & von Gontard in St. Louis represent Texaco Refining and
Marketing Inc., Shell Oil Co., Phillips Petroleum Co. and Equilon
Enterprises. Nate Eimer of Eimer, Stahl, Klevorn & Solberg in Chicago
represents Citgo Petroleum Corp.

Robert Shulman of Howry & Simon in Washington, D.C., represents Amerada
Hess Corp. Peter John Sacripanti of McDermott, Will & Emery in New York;
Peter C. Condron, Richard E. Wallace Jr. and Anthony F. King of Wallace,
King, Marraro & Branson in Washington, D.C.; and Eric M. Kraus of
Sedgwick, Deter, Moran & Arnold in New York.

Katherine L. Adams, Lisa Meyer and Nathan P. Eimer of Eimer, Stahl,
Klevorn & Solberg in Chicago represent Citgo Petroleum Corp.

Charlotte A. Biblow of Rivkin, Radler & Kremer in Uniondale, N.Y.,
represents Getty Petroleum Corp. Mark E. Tully of Goodwin, Proctor & Hoar
in Boston represents Gulf Oil. Ltd. Robert Brager and John Guttman of
Beveridge & Diamond in Baltimore represent Sunoco Inc. Kenneth Pasquale
of Stroock, Stroock & Laven in New York represents Tosco Corp. Mark G.
O'Connor of Hasbruck Heights, N.J., represents COSTAL Corp. (Mealey's
Emerging Toxic Torts, December 15, 2000)

RUSSIAN ALUMINIUM: Companies Based Elsewhere File $2.7 Bil Suit in U.S.
Three offshore metal trading companies filed a $2.7 billion lawsuit
against metals giant Russian Aluminum in New York earlier this month,
accusing it of fraud, money laundering and attempted murder.

The lawsuit, filed by Base Metal Trading SA, Base Metals Trading Ltd. and
Alucoal Ltd. in the U.S. District Court of New York, accuses Russian
Aluminum, its chief executive Oleg Deripaska and his business partner,
Mikhail Chyorny, of taking over and monopolizing the Russian aluminum

National power grid Unified Energy Systems and its chief Anatoly Chubais
are also named in the filing, a copy of which was obtained by The St.
Petersburg Times.

"Criminal elements have besieged Russian industry with illegal payoffs,
threats and acts of violence," the plaintiffs' attorney Robert Abrams
said in a statement.

Abrams added in a telephone interview that the United States must not
allow Russian organized crime to spill into the U.S. banking and
commercial systems, and that the courts have the power to prevent this
from taking place.

Russian Aluminum, which controls about 75 percent of the Russian aluminum
market, said that the legal action was a smear attempt by opponents
disgruntled over its founding and rapid expansion this year.

"This lawsuit is absurd," said Vla di mir Alexandrov, Russian Aluminum's
spokesperson in a telephone interview. "We suspect this is an attempt to
provoke and discredit Russian Aluminum."

The plaintiffs are protesting Russian Aluminum's takeover of the Kemerovo
region-based Novokuznetsk Aluminum Plant, Russia's fifth-largest producer
of aluminum. The three companies had served as middlemen, buying
Novokuznetsk's aluminum and reselling it abroad, until Siberian Aluminum
stepped into the picture earlier this year, according to court papers.

Novokuznetsk was bankrupt at the time, thanks to a lawsuit initiated by
UES over 2 billion rubles in unpaid electricity bills.

Siberian Aluminum later merged Novokuznetsk and its other assets with
those held by Sibneft shareholders to form Russian Aluminum.

Court papers claim that Deripaska, the former chief of Siberian Aluminum,
conspired with Chorny to oust then-Novokuznetsk head Mikhail Zhivilo,
threatening him with violence and death if he refused to cooperate.
Zhivilo was also a major shareholder in the aluminum plant.

The lawsuit says Deripaska and Chyorny finally ousted Zhivilo with the
help of Kemerovo region Governor Aman Tuleyev, who accused Zhivilo of
attempted murder and forced him to flee the country.

Russia has since issued an international warrant for Zhivilo's arrest.

"Among the most odious tactics used by the defendants were enlisting the
assistance of government and judicial officials in pursuing and winning
falsified bankruptcy proceedings against the plant," the companies said
in a statement.

Abrams said the case is based on the U.S. Racketeer Influenced and
Corrupt Organizations Act, which lets accusers file a lawsuit in the U.S.
courts even if the majority of the alleged violations took place outside
the United States, the Financial Times reported.

The act also provides an opportunity to seek punitive compensation. As a
result, Abrams is asking the courts for $900 million to cover the
plaintiffs' losses since ownership changed at Novokuznetsk and $1.7
million in damages. It was unclear who controls the companies that filed
suit. Base Metal Trading SA is based in Switzerland, Base Metals Trading
Ltd. on the Channel Islands and Alucoal in Cyprus.

Svetlana Smirnova, a metals analyst at Renaissance Capital, said the
lawsuit signals that Siberian Aluminum has made enemies in its bid to
dominate the local aluminum market.

"Some major players are unhappy about the formation of Russian Aluminum
because its strategy is to sell directly, eliminating all middlemen,"
Smirnova said.

Other industry analysts expressed doubts that the plaintiffs would
succeed in winning the court's sympathies.

"This is not the first time they've done this," said Alexander Agibalov,
a metals analyst at the Aton brokerage. "The likelihood of their victory
is very low."

Base Metals and its partners had launched several lawsuits related to
their contracts with Novokuznetsk in Russia, Estonia, Netherlands and the
United States. They have had no success so far. (The St. Petersburg
Times, December 22, 2000)

SLAVERY REPARATION: Call Builds As Blacks Tally History’s Toll
People begin trickling into the ramshackle recreation center an hour
before the program is slated to begin, drawn by a promise that many of
them believe speaks to the core of their existence as African Americans.

Leaning over the mismatched folding chairs, they buzz about the upcoming
lecture. The speaker is Robert L. Brock, 75, a legal activist who for
decades has been barnstorming the country spreading the word on
reparations. He contends that black people are eligible for special tax
rebates and, if they pay him $50 to fill out a claim form, they will one
day collect a half-million dollars in compensation for all that slavery
and state-sanctioned discrimination stole from African Americans.

The people eagerly awaiting Brock's message can hardly be called
radicals. They labor on farms, in factories and at store counters, united
in their belief that nothing shaped their often dour circumstances so
much as the nation's history of slavery and racial discrimination. And
although there is no assurance they will ever collect the promised
$500,000, those who come to hear Brock deeply believe in the reparations

"We're glad to be in America," said Gary Grant, a Pentecostal minister
who helped arrange Brock's visit here. "But the white man has been taking
advantage of the black man all our lives. Now, we want to get paid."

It is a refrain being sounded increasingly across the country, from this
small city nestled amid the pine forests and cotton farms of southern
Georgia to the Ivy-covered walls of Harvard University. The idea is
catching on not just among those who could most use a financial windfall
but also among civil rights groups, intellectuals and others who see
reparations as the only way to get to the root of America's enduring
racial problems.

For many years, any discussion of reparations to compensate the
descendants of African slaves for 246 years of bondage and another
century of legalized discrimination was dismissed. Many whites and blacks
alike scoffed at the idea, reasoning that slavery is part of the nation's
past that would only unleash new demons if it were resurrected.

But that attitude is slowly changing. At least 10 cities, including
Chicago, Detroit and Washington, have passed resolutions in the past two
years urging federal hearings into the impact of slavery. Mainstream
civil rights groups such as the NAACP, the National Urban League and the
Southern Christian Leadership Conference regularly raise the issue. And
last summer, the Democratic Party for the first time adopted a plank
endorsing the idea of establishing a federal commission to study the
lingering effects of slavery.

                       Legal Team Gathers

A high-powered group of lawyers, including Harvard law professor Charles
J. OgeltreeJr., Alexander J. Pires Jr., who won a $1 billion
discrimination suit on behalf of black farmers, and Johnnie L. Cochran
Jr., have been meeting to plot strategy for a possible class-action
lawsuit seeking reparations.

"There is a lot more happening around this issue now than ever," said
Greg Moore, chief of staff for Rep. John Conyers Jr. (D-Mich.), who since
1989 repeatedly has sponsored legislation urging a federal study of
slavery and its contemporary impact. "This used to be talked about only
in isolated, black nationalist meetings. But that is not the case any

The surging interest in reparations parallels a heightened sensitivity to
the horrors of slavery, in which as many as 6 million Africans perished
in the journey to the Americas alone. There also is growing attention
being paid to the huge economic bounty that slavery created for private
companies and the nation as a whole.

Earlier this year, Aetna Inc. apologized for selling insurance policies
that reimbursed slave owners for financial losses when their slaves died.
Last summer, the Hartford Courant printed a front-page apology for the
profits it made from running ads for the sale of slaves and the capture
of runaways. Next month, a new California law will require insurance
companies to disclose any slave insurance policies they may have issued.
The state also is requiring University of California officials to
assemblea team of scholars to research the history of slavery and report
how current California businesses benefited.

"As a result of the ravages of slavery and the racial strictures that
followed it, blacks in America were consigned to this nation's economic
bottom," TransAfrica president Randall Robinson said at a recent
reparations conference held by the Washington lobbying group. "A yawning
gap was opened. It has been a static gap since the Emancipation
Proclamation. This condition can no longer be tolerated."

                      Slaves' Contributions

Proponents of reparations argue that the nation owes African Americans
for their contributions to the nation's wealth and for the widespread
discrimination they endured after slavery was abolished.

Black slaves helped to build white wealth as they toiled as unpaid
stevedores, servants, craftsmen and farm hands across the South, and for
many years, in the North as well. Slaves also built some of the nation's
most hallowed symbols of freedom: They cut stone for the U.S. Capitol,
cleared trees for the National Mall and laid the foundation for the White

The exploitation did not end with emancipation in 1865. For nearly a
century after that, blacks legally were excluded from many opportunities
that became the cornerstones for today's white middle-class. Segregated
schools limited their educational choices, restrictive covenants barred
them from many neighborhoods and rampant loan discrimination prevented
them from financing houses and businesses.

In a book published this year, "The Debt: What America Owes to Blacks,"
Robinson argues that slavery "produces its victims ad infinitum, long
after the active stage of the crime has ended." The disproportionate
numbers of blacks who are in prison, undereducated or living in poverty
are all today's victims of slavery, he says.

                          40 Acres and a Mule

Reparations for slavery have been discussed since the conclusion of the
Civil War, when President Andrew Johnson reneged on Union Army Gen.
William T. Sherman's promise to furnish former slaves with 40 acres and a
mule. In the early 1900s, several bills were introduced in Congress to
provide former slaves small payments and a pension, but they all failed.

Ironically, the movement is beginning to gain mainstream credibility even
as there seems to be a growing sentiment that the nation has gone too far
in extending opportunities to African Americans.

In ballot initiatives that won overwhelming white majorities, voters in
California and Washington state have outlawed government-sponsored
affirmative action programs that gave an edge to minorities when it came
to public contracting, university admissions and government employment.
Likewise, Florida last year ended many of its affirmative action
programs. Liberal mayors in cities such as Atlanta and Baltimore have
restructured programs that set aside small portions of government
business for minority-run firms.

Opponents of reparations contend that the fledgling movement overlooks
many important facts. First, they argue, reparations usually are paid to
direct victims, as was the case when the U.S. government apologized and
paid compensation to Japanese Americans interned during World War II.
Similarly, Holocaust survivors have received payments from the Germans.
In addition, not all blacks were slaves, and an estimated 3,000 were
slave owners.

Also, many immigrants not only came to the United States long after
slavery ended, but they also were confronted with discrimination. Should
they pay reparations, too? Or should they receive them?

And regardless of how much slave labor contributed to the nation's
wealth, opponents say, blacks benefit from that wealth today. As a group,
African Americans are the best educated, wealthiest blacks on the planet.

"This movement is counterproductive because it fixates African Americans
on their victim status," says Myron Magnet, whose book "The Dream and the
Nightmare" argues that poor minorities suffer more from cultural problems
than societal ones. "I think that what blacks most need now is not to be
shackled to the past, but to recognize that this is a society and an
economy which is filled with opportunity for them and for everybody."

None of this dissuades reparations advocates. "The point is that there
has been a series of arrangements, slavery, Jim Crow, discrimination, all
of which were mechanisms that had the effect of transferring money from
blacks as a class to whites as a class," said Richard America, a
Georgetown University economist who has written two books calling for
reparations. "Even folks who came to this country in the last 100 years
or so had an advantage in that their whiteness was an asset in the
marketplace." Although there is no agreement among proponents, America
suggests that reparations take the form of grants for education, homes
and black businesses. "This should go on for about two generations," he
said. "If done right, this should just about do it."

As he has traveled the country, Brock has been promoting a compensation
idea that is apparently striking a chord: a $500,000 check from the
federal government. The figure is drawn from an unsuccessful lawsuit
Brock filed against the U.S. government in 1965.

In the past couple of months alone, several thousand people have come to
churches and community centers in places such as Waycross, Ga., and Lake
Wales, Fla., to hear Brock's lectures. Many of them have paid $50 to fill
out his claim forms, which other reparations advocates, including
Conyers, have condemned as an obvious scam because there is no settlement
to claim. Similarly, the IRS in October issued a statement cautioning
African Americans against being "misled" by offers related to
reparations. The statement said that the IRS has received "a growing
number" of reparations claims this year, even though there is no such
provision in tax law.

Brock is elusive about where he would file his claim forms or precisely
what happens to the money he collects. In his talk, he indirectly
addresses the charge, telling people that "slavery was the scam."

That is enough for the people who come to hear Brock, often by the
hundreds. Here in Fitzgerald, the turnout is smaller than most, no more
than 75 people, but the audience is enthusiastic.

"We all deserve reparations," offered April Wilson, 38, a homemaker, as
she waited for the talk to begin. "There was something to this years ago.
We just didn't know anything about it."

After he takes the stage, Brock goes on for two hours. He offers angry
lines about white and Jewish slave traders and chilling stories about the
rape and torture endured by slaves. When he turns to his decades-long
battle for reparations, the crowd is riveted. Before he finishes
speaking, people are filtering to a table in the back of the room, where
they can pay their $50 and fill out his claim forms. No one seems
particularly concerned that Brock has nowhere to file them or that the
tax rebate he talks about does not exist.

"I have been hearing about this thing for a long time," Harold Coney, 50,
a farm worker and logger said after buying a claim form. "I've been
through hell making the white man rich. Now I want my money, interest and
everything." (The Washington Post, December 26, 2000)

SAXTON INC: Rabin & Peckel Files Securities Suit in Nevada
A class action complaint has been filed in the United States District
Court for the District of Nevada on behalf of all persons or entities who
purchased Saxton Inc. ("Saxton" or the "Company") common stock
(Nasdaq:SXTN) between May 15, 1998 and May 15, 2000, inclusive (the
"Class Period").

The Complaint alleges that Saxton and certain of its officers and
directors violated the Securities Exchange Act of 1934 by making a series
of materially false and misleading statements concerning the Company's
financial results during the Class Period. In particular, it is alleged
that the Company's reported financial results during the Class Period
which were materially inflated by the capitalization of interest expenses
when such expenses should have been capitalized and the premature
recognition of revenue. The Complaint alleges that as a result of these
false and misleading statements the price of Saxton common stock was
artificially inflated throughout the Class Period causing plaintiff and
the other members of the Class to suffer damages.

Contact: RABIN & PECKEL LLP, New York Joseph V. McBride, 800/497-8076 or
212/682-1818 email@rabinlaw.com

TOBACCO LITIGATION: Oral Argument Set In Lawsuit By CA Indian Tribes
A California trial court will hear oral arguments on Dec. 15 on whether
or not a proposed class action involving California Indian tribes who
were allegedly deceived about the harmful effects of tobacco products
should be certified (In re: Tobacco Cases II and Pechanga Band of Luiseno
Mission Indians, et al. v. Philip Morris Inc., et al., Nos. JCCP 4042 and
725419, Calif. Super., San Diego Co.; See 11/27/00, Page 8).

The Utu Utu Gwaitu Pauite Tribe and the Redwood Valley Little River Band
of Pomo Indians bring this action on behalf of federally recognized
California Indian tribes to recover money spent on tobacco products. The
tribes seek disgorgement of money earned by tobacco defendants from
tribal members as a result of wrongful conduct, and appropriate
injunctive relief against the tobacco companies.

The proposed class action includes approximately 107 different
Californian Indian tribes.

Named defendants include Philip Morris Inc., R.J. Reynolds Tobacco Co.,
Brown & Williamson Tobacco Corp., The American Tobacco Co., Lorillard
Tobacco Co., The Tobacco Institute Inc., The Council for Tobacco Research
- USA Inc., British American Tobacco Ltd., United States Tobacco Co.,
Smokeless Tobacco Council Inc., and Hill and Knowlton Inc. (collectively,

In a class certification motion, the tribes maintain that joinder is
impracticable and that predominant issues are common to all tribes. The
tribes further aver that the proposed class representatives will
adequately represent the class and that proceeding as a class action is
superior to trying individual claims.

                           Opposition Filed

In a Nov. 7 opposition, RJR counters that plaintiffs' purported class of
representatives who seek remedies on behalf of non-class members is
unprecedented and inappropriate.

"Plaintiffs seek to represent a class of federally recognized California
Indian tribes, each of which, in turn, would be a representative
plaintiff under Business and Professions Code Section 17204 asserting the
restitution claims of each of its members. To defendants' knowledge, this
is the first time a two-tiered structure - a class composed of
representative actions - has been proposed," RJR notes. "Such a procedure
is not only unprecedented, it is also inappropriate."

RJR continues that even if such a class could be certified, the Kraus v.
Trinity Management Services Inc. (23 Cal. 4th 116 [2000]) would limit the
monetary relief available in such an action to restitution directly to
those identified individuals who timely appear to collect restitution.
RJR adds that disgorgement into a fund administered by the tribes would
not be an available remedy.


Additionally, RJR argues that the issue of deception is not susceptible
of class-wide proof.

"Plaintiffs' claim of deception is largely based on allegedly misleading
cigarette advertising. It is undisputed that the messages, themes and
images used in defendants' advertisements have varied greatly over time
and across different brands," RJR notes. "The evidence presented by the
named plaintiffs on these subjective issues cannot possibly be used to
establish that tribal members or other putative class members were
deceived by defendants' conduct. Indeed, the evidence to date indicates
that plaintiffs and their members were not deceived by any conduct of

RJR further argues that the tribes fail to satisfy the requirements of
typicality and adequacy because it is apparent that these two tribes and
their members have long been aware of the health risks of smoking. RJR
adds that the tribes were not deceived by defendants' conduct and were
not affected by that conduct in their decision to purchase cigarettes.


In a Nov. 30 reply, the plaintiffs maintain that class certification will
not invade sovereign immunity because each California tribe will be
provided with notice and the ability to opt out. The tribes continue that
class certification is a proven method to further their sovereign
interests and will allow California tribes to seek relief against the
unfair business practices of the tobacco industry.

The tribes further argue that, contrary to the defense arguments,
individual injury is not a prerequisite to obtaining monetary relief
under California Unfair Competition Law.

"Class-wide restitution figures will be established though expert
testimony based on routinely-gathered statistical evidence," the
plaintiffs assert. "In short, differences in damages among individual
class members and damage documentation and distribution issues are no bar
to class certification."

The plaintiffs add that class representatives satisfy the adequacy of
representation requirement.

"Defendants claim that their assertion of a statute of limitations
defense, as well as certain equitable defenses, destroys any ability to
certify the class," the tribes note. "Defendants are wrong. Defendants'
statute of limitations defense involves common questions. In addition,
defendants' equitable defenses can only go to the scope of remedy, which
. . . will be established without the need for any individual testimony.
Accordingly, the class should be certified."

Defense counsel includes Curtis M. Canton, Christopher F. Stoll and Robb
C. Adkins of Heller Ehrman White & McAuliffe in San Francisco and John W.
Phillips of Heller Ehrman White & McAuliffe in Seattle.

The tribes are represented by Jonah H. Goldstein, William S. Lerach,
Frank J. Janecek Jr., Michael J. Dowd, Jonathan E. Behar and Denise M.
Douglas of Milberg Weiss Bershad Hynes & Lerach in San Diego, Patrick J.
Coughlin of Milberg Weiss in San Francisco, Michael S. Pfeffer, Stephen
V. Quesenberry and John A. Maier of California Indian Legal Services in
Oakland, Calif., and Lawrence R. Stidham and Lisa C. Oshiro of California
Indian Legal Services in Escondido, Calif. (Mealey's Litigation Report:
Tobacco, December 11, 2000)

WYETH-AYERST: Texas Federal Judge Certifies Duract Cost-Recovery Suit
A national cost-recovery class for people who bought the withdrawn
prescription pain drug Duract and insurers was certified Nov. 29 by a
Texas federal judge (Elizabeth Rivera, et al. v. Wyeth-Ayerst
Laboratories, et al., No. G-00-345, S.D. Texas, Galveston Div.) .

The class is for recovery of economic damages only and specifically
excludes claims for personal injuries or claims against corporate
officers and directors of defendants Wyeth-Ayerst Laboratories and its
parent, American Home Products Corp.

Duract was a non-steroidal anti-inflammatory drug that was introduced in
It was withdrawn about 11 months later after reports of liver damage.
Several personal injury suits have been filed across the country and at
least one suit was reported settled.

In the class action complaint, plaintiff Elizabeth Rivera and the
Arkansas Carpenters Health and Welfare Fund claim that Wyeth and AHP were
aware of alleged life-threatening side effects before introducing Duract
and did not disclose those alleged risks to physicians and patients.

The complaint seeks to recover economic damages, claiming violations of
the Texas Deceptive Trade Practices Act (DTPA), breach of implied
warranty and merchantability under Texas laws and unjust enrichment. The
plaintiffs stipulated to dismiss claims of breach of implied warranty and
private right of action under the Food, Drug and Cosmetic Act. A RICO
complaint added to the first amendment complaint was omitted from the
second amended complaint. (Mealey's Litigation Report: Insurance,
December 12, 2000)

* NYLJ Reports on Developments on Conspiracy, JVs, Bribery, Acquisitions
IN RECENT weeks, an appellate court indicated that an antitrust
conspiracy may exist although only one party to the conspiracy has a
direct interest in precluding competition and the remaining parties are
coerced into participation. The Justice Department approved a limited
information exchange among competitors to identify customers who had
defaulted on payment obligations.

Other interesting antitrust developments reported recently include a
district court decision that a firm did not violate the Robinson-Patman
Act by bribing a competitor's employee to reveal trade secrets and an
appellate ruling that the FTC was entitled to an injunction pending
appeal from a district court's decision that a proposed merger had not
been shown to be unlawful in the circumstances.


The Fifth Circuit reversed the dismissal of antitrust claims made by an
on-site broadcaster of golf tournaments. The broadcasts were transmitted
to spectators through special low-frequency radios that were available
only on the golf course. The plaintiff broadcaster charged that the
Professional Golf Association had organized a boycott of tournament
sponsors to prevent plaintiff from covering various matches. In response
to the claim that the sponsors would have no reason to participate in any
such boycott, the appellate court ruled that there could be an actionable
conspiracy where one conspirator coerces others to participate despite
their lack of a direct interest in precluding competition. The appellate
court also ruled that the alleged boycott, being vertical, could not be
judged by a per se rule but had to be evaluated under the rule of reason.
Finding that plaintiff had preserved the issue in its briefing below, the
court remanded for a determination on whether the plaintiff had produced
adequate evidence of an antitrust violation under the rule of reason.

Spectators' Communication Network, Inc. v. Colonial Country Club, 2000-2
CCH Trade Cas. P73,087

                          Joint Ventures

In a business review letter, the Department of Justice indicated that it
did not intend to bring antitrust charges against a proposed information
exchange among a number of ocean carriers in the U.S.-Puerto Rico trade.
A common agent for the carriers would notify all carriers if a customer
failed to pay required demurrage charges. The agent would report the
amount of the delinquency and the number of days payment was past due.
The agent was not to act as a conduit for the exchange of competitively
sensitive information. Each carrier was to independently determine its
own credit and collection policies. The information with respect to
delinquencies would not indicate how much was owed to any particular
carrier and no information would be exchanged about open accounts or
general credit terms or practices.

The department stated that so long as the information exchanged was
restricted to payment delinquencies as described, and the carriers
continued to determine unilaterally how they would deal with delinquent
firms, and the agent did not urge concerted adoption of credit policies,
the agent's activity should not reduce carrier rivalry.

Carrier Credit Services, Inc., Letter 00-15, CCH Trade Reg. Rep. P44,100


A district court dismissed a Robinson-Patman claim brought by a firm that
charged a competitor with bribing plaintiff's employee to obtain
confidential information, including engineering drawings. Plaintiff
asserted that the alleged conduct was similar to commercial bribery held
to be reached by the Robinson-Patman Act. Stating that the common thread
of such cases was the "passing of illegal payments from seller to buyer
or vice versa," the court stated that to be actionable the payments must
"cross the seller-buyer line." The court added that the Robinson-Patman
Act allowed payment of compensation for services, and that the alleged
payment to plaintiff's agent was for the service of "the theft and
delivery" of the plaintiff's plans.

Hix Corp. v. National Screen Printing Equipment Inc., 2000-2 CCH Trade
Cas. P73,086 (D.-Kan.)


After a district court had ruled that the Federal Trade Commission was
not entitled to an injunction pending completion of administrative
proceedings to ban a proposed merger of manufacturers of baby food, the
D.C. Circuit granted the FTC a stay pending appeal. The appellate court
stated that the FTC had demonstrated a substantial probability of success
on the merits. The court said that to rebut the FTC's statistical
evidence as to anticompetitive effects of the proposed merger, the
parties had argued that the effects would be offset by efficiencies
resulting from the merger. The court stated that while there was much to
be said for recognizing this defense in principle, it was nonetheless
novel and the determination as to the existence of the defense was
complicated by the high concentration levels present in the case. The
court also noted that if the merger were allowed to proceed without a
stay pending appeal, subsequent FTC administrative proceedings would be
fruitless since one party's manufacturing facility and distribution
channels would have already been closed.

FTC v. H.J. Heinz Co., 2000-2 CCH Trade Cas. P73,090


A district court refused to dismiss as untimely an antitrust class action
charging major manufacturers of linerboard with a continuing conspiracy
in restraint of trade. The defendants moved to dismiss on the ground that
all the overt acts alleged in the complaint occurred in 1993 and the
complaints were filed more than four years later. The district court
stated that the complaints alleged a "class period" and continuing injury
to the class during that period, and all complaints were filed within
four years of the end of the respective class periods. The court stated
that the complaints effectively alleged a price-fixing conspiracy that
resulted in high-priced sales over a number of years and each such sale
started the statutory period running again regardless of plaintiffs'
knowledge of the alleged illegality at earlier times.

Linerboard Antitrust Litigation, 2000-2 CCH Trade Cas. P73,089 (E.D. Pa.)


A district court declined to recognize so-called "umbrella standing" in
an antitrust case brought by a firm of surgeons practicing laser eye
surgery. The complaint challenged the merger of two suppliers of
equipment for such surgery. The surgeons alleged that as a result of the
merger they paid higher prices for equipment, although the equipment they
purchased was manufactured by a competitor of the merging parties, and
the competitor was not charged with participation in any antitrust
conspiracy. Plaintiff's theory was that the merger created a "price
umbrella" that enabled the competing firm to increase price.

The court stated that it was only conjecture whether any price increase
by the competitor was a result of the merger. The court also observed
that under the Supreme Court's 1983 Associated General Contractors case,
there were other factors, including directness of injury, complexity and
potential for duplicative recovery, which argued against plaintiff's
standing. The court also ruled that the surgeons were barred from
equitable relief by the doctrine of laches, as they did not file suit
until consummation of the challenged merger.

Garrabet v. Autonomous Technologies Corp., 2000-2 CCH Trade Cas. P73,085
(C.D. Calif.)


Following a Justice Department proceeding against two manufacturers of
abrasives, a private suit was instituted against the manufacturers.
Documents were sought from a third party not charged by the government.

After the third party insisted upon a confidentiality agreement, as to
which no agreement was reached, the plaintiffs filed an amended complaint
naming the third party as a defendant.

The third party sought a more definite statement or dismissal for failure
to set forth particularized allegations as to the alleged conspiracy and
fraudulent concealment.

A magistrate recommended denial and the district court agreed. The
district court commented that the third party was essentially arguing
that it should not be sued since it was willing to supply documents
pursuant to a confidentiality agreement, and that a more stringent
standard should apply to the complaint against it since it was not
prosecuted by the Department of Justice. The court ruled that these
arguments were irrelevant to the motion to dismiss and stated that the
complaint was not so vague or ambiguous that the third party was unable
to prepare an answer.

Arden Architectural Specialties v. Washington Mills Electro Minerals,
2000-2 CCH Trade Cas. P73,083 (W.D.N.Y.)

                       Noncompete Covenants

An Oklahoma appellate court set aside an injunction enforcing a postterm
noncompete covenant against the manager of a funeral home.

The owner of the home contended that the manager had violated the
covenant by taking steps to open his own funeral home within three miles
of one of the owner's properties. The appellate court ruled that the
state law invalidating contracts restraining exercise of a lawful
profession, while permitting reasonable restraints that protect against
"unfair competition," did not permit restricting competition making no
use of skills or information of the employer.

The court observed that the enjoined manager had acquired his skills
while working for a predecessor owner, rather than the plaintiff, and
concluded that enforcing the covenant would prevent fair competition.

Loewen Group Acquisition Corp. v. Randy L. Matthews, 2000-2 CCH Trade
Cas. P73,082


The validity of employee post-term restrictive covenants is generally
judged under state law, as marketwide impact is rarely found in cases
involving individual employers or employees.

The case reported immediately above seems to distinguish between initial
employers - under whom the employee learned his trade and who would be
entitled to enforce limited post-term covenants - and later employers
purchasing the business of the initial employer, who may not be entitled
to enforce such agreements.

This decision may reflect some judicial reluctance to enforce post-term
covenants where trade secrets of the business are not misappropriated.
Persons acquiring such businesses may be wise to assume that
enforceability, which is already problematic in some states, will become
more so in the future. (New York Law Journal, December 15, 2000)

* Shalala Nixes New Law Aimd at Reimporting Prescription Drugs from Can.
A new law aimed at cutting prescription drug prices by allowing them to
be reimported from Canada won't be implemented by Health and Human
Services Secretary Donna Shalala. In a letter to President Clinton,
Shalala said the law had ``serious flaws and loopholes.''  Those concerns
``make it impossible for me to demonstrate that it is safe and cost
effective,'' she wrote. ``As such, I cannot sanction the allocation of
taxpayer dollars to implement such a system.''

Signed by President Clinton before Election Day, the law was an attempt
to address the clamor for cheaper prescription drugs _ particularly among
the elderly. Lawmakers were unable to agree on a more sweeping plan to
add prescription drug coverage to Medicare.

Drugs manufactured in the United States can be purchased for much less in
Canada, principally because the government regulates prices, a solution
fiercely resisted here. For example, the allergy-sinus medication Flonase
Nasal costs $46 in the United States, but just $23 in Canada. Likewise,
45 pills of the anti-depressant Prozac can cost about $106 in the United
States and $43 in Canada.

The law was vigorously opposed by the pharmaceutical industry and
Democratic critics called it a Band-Aid fix for the country's troubles
with prescription drug prices, manufactured to give political cover to
those who opposed broader solutions.

Shalala was directed by the legislation to review the law and determine
whether it was cost effective and safe. Shalala said she would not
request $23 million available to establish a system for overseeing the
importation of drugs from Canada. She argued that the law raises safety
issues because there's no guarantee that imported drugs will carry labels
approved by the Food and Drug Administration. And she complained that the
law did nothing to keep drug manufacturers from strong-arming
distributors into raising prices on imported drugs.

But Sen. Byron Dorgan, D-N.D., a co-author of the legislation, said the
administration simply ``chickened out.'' ``The best approach would have
been to say, we'll pass a law that does something and then we will wait
and see how the drug companies react,'' Dorgan said. ``If they start
playing games then at least we'll all know who the villain is. But this
makes no sense at all. Now we know the drug companies will do nothing
because we're doing nothing.''

Chris Jennings, Clinton's top health policy aide, said Shalala's stinging
assessment was on target. ``We have an obligation not to raise hopes with
false promises,'' he said. ``There are loopholes that allow the intent of
the legislation to be completely thwarted.'' (The Associated Press,
December 27, 2000)


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

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