/raid1/www/Hosts/bankrupt/CAR_Public/010104.MBX              C L A S S   A C T I O N   R E P O R T E R

             Thursday, January 4, 2001, Vol. 3, No. 3


ADAM'S MARK: Lawsuit Claims Bias Against Black Workers And Patrons
COCA-COLA: Atlanta Judge OKs Agreement with African American Employees
DIESEL FUEL: Qld Company Wants To Take On BP Aust In Class Action
FOUNDRY NETWORKS: Schiffrin & Barroway Files Securities Suit in CA
GRAND CRU: Tenants Certified in Suit Over Electricity Shutoff in Complex

HAYT HAYT: Debt-Collection Law Firm Settles Federal Suit for $ 450,000
HMOs: Law Journal Presents Report on Consolidation of Suits in FL
MICROSOFT CORP: About to Face Another of Employees' Racial Bias Suit
MICROSOFT CORP: FL Lawyer Says Employees' Racism Case May Mean Billions
NEW ERA: Cohen, Milstein Files Securities Suit in Colorado

SAFEWAY CORP: Purchaser Settles with Former Carrs Employees over OT Pay
THQ INC: Announces Dismissal of Securities Suit in California
TOBACCO LITIGATION: SC Court Rejects Certification Citing Legal Trend

* Immigration Legislative Package Restores Eligibility
* New European Regulations Threaten To Abolish Many Traditional Crafts


ADAM'S MARK: Lawsuit Claims Bias Against Black Workers And Patrons
Attorneys have filed a new federal court complaint seeking class-action
status for lawsuits accusing the Adam's Mark hotel chain of
discriminating against black employees and customers.

The court refused to allow attorneys to amend earlier complaints alleging
discrimination by the Adam's Mark Hotel in Philadelphia and the Quincy's
nightclub that the hotel formerly operated, attorney Samuel Dion said.

Dion said the amended complaint seeks to expand the case into a class
action making discrimination claims on behalf of employees and nightclub
patrons at all of Adam's Mark's 21 hotels in 12 states.

It may be a year before the court rules on whether the case qualifies as
a class action, he said.

Adam's Mark officials did not immediately return a call for comment.
Spokeswoman Sharon Harvey Davis termed the earlier lawsuits unfounded.
The chain cited a report in July by the Kansas City-based civil-rights
group Project Equality that said a three-month audit of Adam's Mark found
"no signs of intent to discriminate."

The Philadelphia chapter of the National Association for the Advancement
of Colored People had voiced support in October for the earlier
litigation against the Philadelphia hotel.

Chapter president J. Whyatt Mondesire said Dion had convincing evidence
that the hotel fired black employees and dropped a Motown Mondays feature
at its Quincy's nightclub on corporate orders to cut down on black

The hotel closed Quincy's almost two years ago. Davis said it was closed
because it was unprofitable.

Dion's lawsuit said the president and chief executive of the
privately-held St. Louis-based hotel chain, Fred S. Kummer, "ordered the
elimination of Motown Mondays at Quincy's because he did not want to
attract African-Americans to his hotels, and because Monday was a
check-in day and defendants believed white hotel guests were put off by
the African-American guests who patronized their establishments for
Motown Mondays."

Dion said he sought to expand the lawsuit because Kummer "controlled
everything from top to bottom."

"All this that happened at the Philadelphia Adam's Mark came straight
from the owner in St. Louis," the attorney said.

The new lawsuit included plaintiffs who are present and former Adam's
Mark employees from Kansas City, Mo.; Daphne, Ala.; Mobile, Ala.; Rural
Hall, N.C.; Winston-Salem, N.C.; East St. Louis, Ill.; Denver and

Among them were employees who were either fired, passed over for
promotion in favor of whites or paid less than whites, the lawsuit said.

Adams Mark defended against another discrimination lawsuit last year,
agreeing to an $8 million settlement with five guests who claimed its
Daytona Beach hotel required them, but not white guests, to wear orange
wristbands and charged them more than other guests during a Black College
Reunion weekend in the city. The chain said it had done nothing wrong but
looked forward to putting the lawsuits behind it.

A federal judge ruled in October that the $8 million settlement was
invalidated by U.S. Supreme Court decisions and a federal appeals court
ruling regarding class-action lawsuits, leaving plaintiffs to appeal or
pursue damages individually. The ruling did not affect a separate
settlement with the Justice Department in which Adam's Mark agreed to
take steps to prevent discrimination at its 21 hotels. (The Associated
Press State & Local Wire, January 3, 2001)

COCA-COLA: Atlanta Judge OKs Agreement with African American Employees
Alanta A month late, lawyers representing four former Coca-Cola employees
have secured judicial approval of an agreement containing new details of
how the company would distribute a $ 192.5 million settlement.

On Dec. 22, U.S. District Judge Richard W. Story formally certified the
two-year-old race discrimination suit against Coke as a class action and
approved the still-incomplete agreement, which the plaintiffs' lawyers
had submitted to the court earlier that day. Story also gave the
Atlanta-based soft drink company until Jan. 16 to mail formal notices
containing the terms of the agreement to an estimated 2,000 current and
former African-American salaried employees at Coca-Cola, Coca-Cola
Enterprises and Minute Maid in the United States who are eligible to
participate, according to his court order. The judge also set a fairness
hearing for May 29, 2001, to determine whether the settlement should get
final approval and to allow settlement class members to raise any
objections. No settlement checks will be distributed until after that May

The agreement, which the plaintiffs' attorneys were supposed to present
to Story by Nov. 26, designates 11 lawyers as counsel for the settlement
class and provides for payment of $ 20.7 million in legal fees and $ 1.5
million in expenses.

Class counsel includes:

    Cyrus Mehri, Pamela Coukos and Gouri Bhat of Mehri's Washington firm,

    Mehri Malkin & Ross;

    Jeffrey O. Bramlett, H. Lamar Mixson, Joshua F. Thorpe and Steven J.
    Rosenwasser of Atlanta's Bondurant Mixson & Elmore; James E. Voyles
    of Deville Milholin Voyles & Wales in Marietta, Ga.; and

    Robert L. Wiggins Jr., Samuel Fisher and Byron R. Perkins of Gordon
    Silberman Wiggins & Childs in Birmingham, Ala. Mehri, Mixson and
    Bramlett have been designated as co-lead counsel.

In November, Story formally approved an executive summary of the
agreement that set $ 192. million as the settlement pricetag and
designated how an estimated $ 113 million in cash would be divided among
Coke's African-American employees and their lawyers. The $ 79.5 million
balance includes an estimated $ 43.5 million to make equity adjustments
in pay and promotions at Coke over the next 10 years and $ 36 million to
monitor the implementation of those changes figures that a Coke spokesman
acknowledges are "soft money" but that plaintiffs' attorneys insist are
"highly significant achievements that will create real change at

                     Compensation Details Aired

The preliminary agreement now on file with the court details for the
first time how $ 58.7 million in compensatory damages will be distributed
to eligible Coke and former Coke employees. Four former employees who are
listed as lead plaintiffs in the suit will receive $ 300,000 each (a
total of $ 1.2 million) as designated class representatives. Another 150
Coke and former Coke employees who gave sworn affidavits to the lawyers
regarding allegations of racial discrimination at Coke each will receive
a $ 3,000 bonus a total of $ 450,000.

Plaintiffs attorneys, to whom Coke has agreed to pay $ 20.7 million in
legal fees, will also draw an additional $ 1,541,000 in legal expenses
from the compensation fund, for a total of $ 22,241,000.According to a
motion seeking Story's preliminary approval of the agreement, the lawyers
have invested about $ 1.2 million in expenses during the pendancy of the

The $ 55,509,000 balance will be divided among Coke's eligible employees.
Each will receive $ 374 for every tenth of a year he or she has been
employed by Coke, or $ 3,740 for each year of company service, according
to the settlement agreement.

                          Stock Offering

Each eligible employee may take as much as 100 percent of his or her
payment in 10-year restricted shares of Coca-Cola stock. Although class
members will be taxed on the fair market value of the stock shortly after
the settlement is approved, they will be unable to sell any for 10 years,
even to pay tax obligations incurred by the settlement, according to the
preliminary agreement. How a separate back pay fund, for which an
additional $ 24.1 million has been allotted, will be distributed has not
been finalized.

The January notice to class members will contain specifics on how
settlement proceeds will be allocated, based on education, work
experience, job position and any wage and promotional disparities that
may exist between Coke's African-American staff and their white
counterparts. "The pay disparities under review will include base salary,
bonuses and the value of stock option grants, if applicable," the
agreement says. A portion of the back pay fund will be distributed as
stock options rather than in cash, the settlement agreement says.
Eligible employees whose salary grade as of April 22, 1999, was Grade 10
or above will receive from 18 percent to 53 percent of their back pay
award only in stock options, not in cash. The option price will vary
depending on the individual's position during the past three years.
Employees with options will pay from $ 20.04 a share to $ 26.82 a share
but can only exercise the options at prices ranging from $ 48.875 to $
65.875 a share.

If employees are dissatisfied with the back pay allotment, they may while
remaining eligible for compensatory damages hire their own attorneys and
challenge Coke in court. But they must waive all claims to that back pay
allotment should they lose. That money would be retained by Coca-Cola.

                    Challengers Face Obstacles

Settlement class counsel are not obligated or expected to represent
employees who challenge their back pay award, according to the agreement.

Those who still choose to fight for more back pay remain part of the
settlement class but must agree to have their case heard by a U.S.
magistrate judge will face discovery restrictions and must forego any
appeals. Employees who choose to participate in the settlement give Coke
a broad waiver of all claims, many of which were not part of the
litigation. That claims waiver includes claims arising from libel,
slander, assault, battery or invasion of privacy.

In addition, any eligible class member who accepted an enhanced severance
package after Coke laid off more than 6,000 workers last winter, "has
already waived his or her right to bring an individual legal action
against Coca-Cola," the agreement states. The agreement also discourages
eligible employees from refusing to participate and filing their own
suits instead. "The proposed settlement provides substantial guaranteed
monetary awards without the burden and expense of hiring a lawyer," the
agreement stated. "An individual suit could take three to five additional
years to resolve, including appeals.

Most individual employment discrimination suits are unsuccessful. In
fact, according to the Coca-Cola Co., in the past 10 years, there has
never been a successful individual race discrimination suit against the
Coca-Cola Co." This article previously appeared in Fulton County Daily
Report, an American Lawyer Media publication. (Published in The Legal
Intelligencer, January 3, 2001)

DIESEL FUEL: Qld Company Wants To Take On BP Aust In Class Action
A Queensland company is pursuing the possibility of a class action
against BP Australia over recent diesel-fuel content changes, a subject
that has been covered in recent issues in the CAR.

Mineral and Mine Movers' managing director Peter Schuback said BP's
switch to low sulphur diesel in Queensland and Western Australia could
damage up to 500,000 engines. "Because the diesel is non-lubricating, it
chews your rings and bearings out. That seizes engines," Mr Schuback told
AAP. "I've got four vehicles that are now leaking - a tractor, a
forklift, a truck and a ute. "It's going to cost me about $10,000 ... to
get them fixed."

Mr Schuback, of Rockhampton, in central Queensland, said he had consulted
Brisbane solicitor Rod Hodgson over the issue. "He's looking at the
possibility of taking on BP with a class action," Mr Schuback said. "We
should know within about three or four days. If this solicitor doesn't go
with this, we'll talk to another solicitor."

But Mr Hodgson said it was too early to be talking about a class action
in the case. "We've had calls from a number of people interested in
pursuing BP for damage to their vehicles and consequential damage," he
told AAP.

"Those people are interested in pursuing some legal avenues if BP doesn't
come to the party. "But there's been no decision made to commence any
class action against BP at this stage. "We certainly wouldn't want to be
perceived as pursuing something that ultimately we might not."

Legislation passed last year in federal parliament, but not yet enacted,
will bring the rest of Australia in line with WA's and Queensland's new
low-sulphur diesel standard.

Mr Schuback said consumers should have been better informed about the
changes. "They should never have allowed this fuel onto the roads until
such time as consumers were advised about what's going on," he said.
"That would have given us the opportunity to find another lubricant that
we could have added to our fuels. "Why the hell weren't we warned this
was going on."

Mr Schuback, who will stand as a City Country Alliance candidate in
Rockhampton at the upcoming state election, said the fuel changes had
affected thousands of small business people, farmers and fishermen. "In
cane alone, there are around about 6000 cane harvesters out there," he
said. "This is going to add a cost of between 30 and 50 cents per tonne
to the cost of producing sugar cane." (AAP Newsfeed, January 3, 2001)

FOUNDRY NETWORKS: Schiffrin & Barroway Files Securities Suit in CA
The law firm of Schiffrin & Barroway, LLP announced on January 3 that a
class action lawsuit was filed in the United States District Court for
the Northern District of California on behalf of all purchasers of the
common stock of Foundry Networks, Inc. (Nasdaq: FDRY) from October 18,
2000, through December 19, 2000, inclusive (the "Class Period").

The complaint charges Foundry Networks and certain of its officers and
directors with issuing false and misleading statements regarding its
business and financial condition. Specifically, the complaint alleges
that Foundry concealed and misrepresented the difficulties it was
experiencing due to the problems many of its customers were having
raising money. Furthermore, the complaint alleges that Foundry concealed
this information so that the individual defendants could sell additional
shares of their Foundry stock before the bottom fell out of Foundry's
stock price.

Contact: Marc A. Topaz, Esq., or Robert B. Weiser, Esq., both of
Schiffrin & Barroway, 888-299-7706, or 610-667-7706, or email,

GRAND CRU: Tenants Certified in Suit Over Electricity Shutoff in Complex
A Montgomery County judge has certified a class of former and current
tenants of an Elkins Park apartment complex who claim they suffered
damages when their electrical power was turned off in April 1998 due to
nonpayment of service. Joanna Johnson, a former tenant of Lynnewood
Gardens Apartments in Cheltenham Township, leads the class.

Johnson claims that a Cheltenham Township ordinance prohibits electrical
shutoff for nonpayment. She also relies on the lease, which states that
electrical service can only be stopped "because of accident, emergency,
repairs or changes until the work is complete." The suit accuses Grand
Cru Property One Limited Partnership, the owner of the building, of
wrongfully discontinuing electrical service to tenants. The suit also
names as defendants the manager of the apartment complex, NHP Management
Co., and Energy Management Systems Inc., which oversaw the provision of
the electrical service under a contract with Grand Cru.

On behalf of Johnson, Thomas More Marrone of Feldman Shepherd
Wohlgelernter & Tanner filed a fourth amended complaint for claims
including breach of contract, breach of warranty of habitability,
negligence, violations of Pennsylvania Consumer Protection law and breach
of the property management agreement. The tenants' electrical service was
charged as added rent pursuant to their lease agreements. Johnson
submitted sufficient evidence showing that the entire class had their
electrical service shut off or discontinued, the court held.

In granting Johnson's motion for class certification, Judge William R.
Carpenter found Johnson submitted sufficient evidence establishing that
common issues of law or fact predominate, thereby satisfying the
prerequisites to a class action set out in Rule 1702 of the Pennsylvania
Rules of Civil Procedure." To begin, the plaintiffs' claim is based on
the defendant's act of shutting off all their electric service in April
1998, and the demand of payment thereafter," the court noted. "Further,
the claim is based on the misrepresentation by the defendants that they
were legally entitled to discontinue service, and charge late fees and
penalties to have it reinstated when a Cheltenham township ordinance
expressly states the contrary." The court noted the lease does not give
the defendants the right to shut off electrical service to tenants except
in the case of accidents, emergency, repairs or changes. Moreover, the
Cheltenham Township code states that no owners or operator may shut off
or discontinue any utility required by the code except for temporary
interruption caused by repairs, alterations or emergencies (Chapter 167,
Section 167-5.E).

Further, Johnson cites 23 issues in her motion that if proved for one
member of the class, they are proved to all members of the class, the
court added.

On behalf of the defendants, attorney Mark J. Hill argued that Johnson's
claim for fraud and violations of the consumer protection laws are not
common to the class. Specific questions regarding reliance issues exist
for each plaintiff that require individualized testimony, the defendants

The court disagreed, finding reliance does not need to be proved in this
case because it is implicit in the fiduciary relationship that existed
between Johnson and the defendants. "The class members and defendants
were bound by a lease agreement that provided for electric services as
added rent. As beneficiaries of the agreement, defendants were bound by
law to provide electrical service regardless of default on payment,"
Judge Carpenter held. "[T]his relationship implicitly establishes the
plaintiff's reliance." (The Legal Intelligencer Suburban Edition, January
3, 2001)

HAYT HAYT: Debt-Collection Law Firm Settles Federal Suit for $ 450,000
A Philadelphia law firm has agreed to pay more than $ 450,000 to settle a
federal class action suit brought by consumers who said the firm used
unfair and deceptive practices in collecting debts including sending out
letters from non-lawyers that threaten the filing of a lawsuit.

U.S. District Judge Eduardo C. Robreno has preliminarily approved the
proposed settlement between Hayt Hayt & Landau and a class of about
52,000 plaintiffs. Robreno found that the settlement is "fair and
reasonable" partly because the defendant firm's insurance company,
Lexington Insurance Co., was defending the case under a reservation of
rights and would have refused to pay any larger sum awarded at trial.
"Because the defendant's insurance company has agreed to settle this case
for $ 453,500, this settlement agreement provides the best opportunity to
resolve these claims efficiently and provide legitimate recovery for all
members of the class," Robreno wrote in his 38-page opinion in Fry v.
Hayt Hayt & Landau.

And since the Fair Debt Collection Practices Act caps damages at $
500,000 or 1 percent of a company's net worth, the settlement is close to
the maximum that the class could have won at trial, Robreno found.

Each plaintiff will receive a pro-rata share of the settlement after $
80,000 in notification costs and $ 150,000 in attorney fees are
subtracted.But the exact amount of each plaintiff's share will not be
known until the deadline for filing claims since awards will be paid only
to those class members who do not opt out and who submit claim forms. The
suit was filed by attorneys James A. Francis and Mark D. Mailman of
Francis & Mailman and Michael D. Donovan and David A. Searles of Donovan
Miller on behalf of anyone who received one of the allegedly deceptive
form letters from the Hayt firm within the past six years.

The suit accused the Hayt firm of violating the federal Fair Debt
Collection Practices Act, as well as Pennsylvania's Unfair Trade
Practices and Consumer Protection Law and the deceptive acts and
practices statutes of other states.

The lead plaintiff in the suit, Robert F. Fry Jr. of Philadelphia, was
the subject of collection efforts by Chrysler Financial which in turn
hired the Hayt firm to collect the $ 9,511 debt. Fry claims that the
first letter he received from the Hayt firm used threatening language and
a tone that "was obviously intended to evoke immediate payment from the

The suit alleged that the letter violated federal law because it failed
to effectively advise Fry that he had the right to dispute the validity
of the alleged debt. Although the letter contained the validation
language mandated by the law, the suit said the language was
"contradicted, overshadowed and obscured ... so as to confuse or make
uncertain what the least sophisticated consumer's rights are under the
law." The first paragraph of the letter said that the firm had been
instructed to secure payment of the outstanding balance and demanded in
all capital letters that Fry make "payment in full at this time or
contact our office immediately." "The least sophisticated consumer would
never proceed to the validation language further down the page," the suit
alleged. An unsophisticated consumer would also interpret the letter as
being authorized or issued by an attorney, the suit said, when, in fact,
the only individual's name on the letter was "Shawn Fox," identified as
an "account representative."

The suit alleged that the Hayt firm "acted in a false, deceptive and
unethical manner when it designed, compiled and furnished the letter
knowing that it would be used to create the false belief in consumers
that an attorney in a large, established law firm was personally
participating in the collection of a debt when in fact no such attorney
was so participating."

                         Class Certified

Robreno found that the proposed class meets all of the requirements of
Rule 23 of the Federal Rules of Civil Procedure because the same letter
was sent to thousands of debtors."The superiority of a class action,
rather than several individual lawsuits, is apparent in this case, in
which tens of thousands of individuals seek relief for violations of
federal and state law regarding a nearly identical debt collection
letter," Robreno wrote. Robreno also ruled that the lead plaintiff,
Robert F. Fry, is entitled to an award of up to $ 1,300 in damages and
may receive an "incentive award" of $ 1,000 for his work in bringing the
case on behalf of the class. To be eligible for the incentive award,
Robreno ruled that Fry must submit an affidavit showing the time he spent
on the case and the tasks he performed "with particularity," along with a
suggested hourly rate of compensation.Jonathan Justin Greystone, Samantha
L. Miller and Anita J. Murray of Margolis Edelstein represented the Hayt
firm. (The Legal Intelligencer, January 3, 2001)

HMOs: Law Journal Presents Report on Consolidation of Suits in FL
Information on the consolidation of lawsuits against health care
providers is available in previous issues of the CAR.

According to the Managed Care Litigation Reporter, the Judicial Panel on
Multidistrict Litigation has transferred and consolidated 18 lawsuits
filed by health care providers or HMO members to the Southern District of
Florida where it had previously transferred several suits against Humana
Inc. The panel ordered that the four actions pending before it be
combined under the caption In re Managed Care Litigation and that they
all be renumbered as MDL No. 1334. In re Managed Care Litigation, MDL No.
1334, order issued (J.P.M.L., Oct. 23, 2000).

The four actions that have been combined are:

-- MDL No. 1334 -- In re Humana Inc. Managed Care Litigation;

-- MDL No. 1364 -- In re Health Care Providers/ Managed Care Companies
    Litigation (eight individual lawsuits);

-- MDL No. 1366 -- In re Prudential Insurance Co. of America Inc.
    Managed Care Litigation (four individual lawsuits); and

-- MDL No. 1367 -- In re Aetna Inc. Managed Care Litigation .

The suits have all been assigned to U.S. District Judge Federico A.
Moreno who has been presiding over the Humana cases for several months

Those actions filed by HMO members all allege violations of the federal
Racketeer Influence and Corrupt Organizations Act and/or the Employee
Retirement Income Security Act, the federal law that regulates
employer-provided health and welfare plans, including health insurance

The complaints against Humana, Prudential and Aetna allege that the HMOs
committed fraud and violated their fiduciary duty under ERISA by
concealing from subscribers that they provide financial incentives to
their physician contractors to cut costs by limiting tests and referrals
for patients.

The suits filed by health care providers in MDL No. 1364 allege that the
defendant HMOs intentionally delay payment of valid medical claims so as
to earn income from interest on the funds (the slow-pay suits).

Since both kinds of allegations have been filed against Humana in the
Southern District of Florida cases, Judge Moreno has already divided the
plaintiffs in those cases into two tracks, the provider track and the
subscriber track.

According to the JPML's transfer order, the panel was influenced in its
decision by the fact that Judge Moreno has created the two tracks and set
schedules for briefing and oral arguments on various motions on a
company-by-company basis.

Various parties had sought transfer and consolidation in other courts,
but the panel found that consolidation in the Florida federal court would
best serve the convenience of the parties and witnesses and promote the
just and efficient conduct of the litigation.

The court said it was not persuaded by arguments that individual
questions of fact would make the centralization of the cases unwieldy.

"Indeed, we point out that the transfer to a single district has the
salutary effect of placing all the related actions before a single judge
who can formulate a pretrial program that: 1) allows pretrial proceedings
with respect to non-common issues to proceed concurrently with pretrial
proceedings on common issues and 2) ensures that pretrial proceedings
will be conducted in a manner leading to the just and expeditious
resolution of all actions to the overall benefit of the parties," the
panel said.

                      The REPAIR Team's Cases

Many of the subscriber suits were filed by a coalition of plaintiffs'
attorneys called "the REPAIR Team," which stands for "RICO and ERISA
Prosecutors Advocating for Insurance Industry Reform." The team has filed
dozens of federal class-action lawsuits within the last year, accusing
managed care organizations of fraudu lently scheming to boost profits by
denying and limiting medically necessary care.

The team suffered a setback in August when the U.S. Court of Appeals for
the Third Circuit held that the plaintiffs in a similar class-action RICO
suit alleging that Aetna had sold them an inferior product had no
standing to bring a claim because they could not show t hat they had
actually been harmed. Maio v. Aetna Inc., No. 99-1854 (3d Cir., Aug. 11,
2000); see Managed Care LR, Aug. 28, 2000, P. 3.

In that case, the plaintiffs claim they were induced into buying health
insurance policies that were worth less than they had paid because Aetna
failed to inform them that it offered doctors cost-cutting incentive

The REPAIR Team nonetheless argues that its allegations of wrongdoing are
broader than the claims in Maio and that the plaintiffs will be able to
show actual harm.

The team includes Richard Scruggs and Sidney A. Backstom of Scruggs,
Millette Bozeman & Dent in Pascagoula, Miss; John E. Williams Jr. and
Herbert Schwartz of the Williams Bailey Law Firm in Houston; Hiram
Eastland of the Eastland Law Offices in Greenwood, Miss.; Walter Umphrey
and Keith Kebodeaux of the Provost Umphrey Law Firm in Beaumont, Texas;
Blair Hahn and Hoyt Rowell III of Ness, Motley, Loadholt, Richardson &
Poole in Charleston, S.C.; Joey Langston of Langston, Langston, Michael
Bowen & Tucker in Boonesville, Miss.; Paul S. Minor of Minor & Associates
in Biloxi, Miss.; Fred Furth of Furth, Fahner and Mason in San Francisco;
and Harry Potter of Austin, Texas. (Managed Care Litigation Reporter,
November 6, 2000)

MICROSOFT CORP: About to Face Another of Employees' Racial Bias Suit
Seven current and former Microsoft Corp. employees are planning to sue
the computer software maker for discrimination, citing racial bias, the
plaintiffs' lawyers said. The suit, anticipated to be filed in U.S.
District Court for the District of Columbia on Wednesday, asks for $5
billion, the lawyers said in a statement.

This is the second bias suit against the Redmond, Wash.-based company in
the past three months. The plaintiffs include four employees based in
Washington and three more in Washington state. The complaint alleges
discrimination in evaluations, compensation, promotions, wrongful
termination and retaliation.

Microsoft's last notable case in the Washington federal court was the
antitrust lawsuit filed by the Justice Department and several states in
which District Judge Thomas Penfield Jackson ordered the company split in
two. That case is under appeal.

Microsoft spokesman Dean Katz said that he had not seen the lawsuit, but
that his company was committed to diversity. ''Microsoft does not
tolerate discrimination in any of its employment practices, and we are
committed to treating all of our employees fairly,'' Katz said. ''We take
these kinds of issues very seriously.''

Katz said blacks make up 2.7 percent of Microsoft's domestic work force,
but all minorities comprise 22.7 percent of the company's workers, he
said. ''We're pleased with the progress we've made in increasing the
number of minorities working at Microsoft. That said, there are still a
number of things we can do to stimulate interest among minorities in the
technical fields,'' he said, citing the nearly $100 million in grants
Microsoft has given to organizations to stimulate interest in tech jobs
among women and minorities.

In October, a lawyer representing a black female plaintiff filed a suit
against Microsoft claiming racial and gender bias. That suit, which also
requested an injunction against further discrimination by Microsoft, is
still pending and is seeking class-action status. (AP Online, January 3,

MICROSOFT CORP: FL Lawyer Says Employees' Racism Case May Mean Billions
Microsoft Corp., which has battled federal antitrust charges and
persistent complaints from temporary workers, now is fending off fresh
attacks on its management policies from some African American employees.

In the past several months, former workers have filed three race
discrimination cases in federal courts around the country. Today a D.C.
suit will get a boost as a prominent lawyer and several more disgruntled
employees enter the fray.

Willie E. Gary, a Florida lawyer who has mounted successful attacks on
such corporate icons as Coca-Cola Co. and Walt Disney Co., has stepped in
to represent Rahn Jackson, a former account executive at Microsoft, and
six other African Americans once or currently employed at Microsoft's
offices in the District and Washington state.

The workers allege that because of their race they were not evaluated,
promoted or paid as highly as white employees, in violation of federal
civil rights law. They also allege unequal treatment under legal
provisions that would allow them to recover punitive damages.

"African Americans just don't move up the ladder -- and they're
qualified," Gary said in an interview. "They don't get evaluated fairly.
It's based on race. And the compensation they do get is not comparable."

Gary cited 1999 figures showing that Microsoft employed 21,429 people, of
whom 553, or about 2.6 percent, were African American. He said of the
firm's 5,155 managers in 1999, 83 -- or about 1.6 percent -- were black.

Ginny Terzano, a Microsoft spokeswoman, said she could not confirm those
numbers. She maintained, however, that the company has hired more African
Americans in recent years and has donated more than $ 100 million to
foster interest in technology among young women and minorities.
"Microsoft does not tolerate discrimination in any of its employment
practices," Terzano said. "We do not believe there is a pattern or
practice of discrimination at Microsoft. We cannot comment on specific
complaints or lawsuits because they involve personnel matters and
litigation, but we are actively committed to diversity."

The issue of diversity at technology companies has attracted renewed
attention as high-tech firms begin to play a larger role in the American
economy. Women -- who constitute about 46 percent of the national
workforce -- make up about 19 percent of those employed in science,
engineering and technology, according to a July 2000 report by a federal
commission examining the technology workforce. African Americans make up
just 3.2 percent of those in the same fields, according to the
commission. They make up about 11 percent of the workforce overall.

Jackson, 36, worked for Microsoft for 41/2 years, selling its products to
the Army before quitting last October. He said in an interview that he
was repeatedly passed over for promotions despite 17 years of sales
experience and that he contacted several company executives, including
President Steve Ballmer, about his concerns. "I was absolutely ignored,"
Jackson said.

Peter Browne, formerly senior director of information technology at
Microsoft and at one time the highest-ranking African American at the
company, said he was often approached by blacks worried about their
treatment. "I found soon enough I couldn't help them," said Browne, 58,
whose own age and race discrimination case against the company is slated
for trial later this year. "I couldn't help myself."

Jackson initially filed suit last June, although his new attorneys will
ask a federal judge to amend the case to include six other African
Americans with similar complaints. Gary said he will request class-action
status for the case, to encompass all blacks who worked at Microsoft as
far back as April 1992. That's a move that may set the stage for a turf
dispute between him and attorneys at Cohen, Milstein, Hausfeld & Toll, a
D.C. law firm that's filed suit in Washington state on behalf of another
former Microsoft worker.

Meanwhile, the judge assigned to hear the D.C. case is Thomas Penfield
Jackson -- the same jurist who presided over a mammoth, 78-day trial
after which he found Microsoft had used its monopoly power in the
personal computing industry to prevent rivals from entering the market
for operating systems and Internet browsers. Jackson eventually ordered
that the company be split into two parts. That ruling is being appealed.
(The Washington Times, January 3, 2000)

NEW ERA: Cohen, Milstein Files Securities Suit in Colorado
The following notice is issued by the law firm of Cohen, Milstein,
Hausfeld & Toll, P.L.L.C., on behalf of its client, who filed a lawsuit
January 2, 2001 in the United States District Court for the District of
Colorado, on behalf of purchasers of the securities of New Era of
Networks, Inc. (Nasdaq:NEON) during the period of October 18, 2000
through and including November 21, 2000 (the "Class Period").

The complaint alleges that on October 18, 2000, NEON announced record
revenues and earnings for the third quarter 2000 ended September 30,
2000. Those purported record revenues, however, were a sham. In a
subsequent filing with the SEC in November, NEON acknowledged that the
record revenues and earnings for NEON's third quarter 2000 were
significantly based upon the Company's practice of selling software to
companies in exchange for equity and then booking the sales as non-cash
revenue. The disclosure that NEON's "record" revenues and earnings were
largely comprised of speculative equities caused the Company's common
stock on November 21, 2000, to plummet over 50%.

Contact: Cohen, Milstein, Hausfeld & Toll, P.L.L.C. 888/240-0775 or
202/408-4600 Andrew N. Friedman, Esq. afriedman@cmht.com Robert Smits

SAFEWAY CORP: Purchaser Settles with Former Carrs Employees over OT Pay
Thousands of former Carrs employees could be in line for portions of a $1
million court settlement. The deal stems from claims they weren't paid
for overtime and work done off the clock in the late 1980s and 1990s.

Safeway Corp., the California grocer that bought Carrs Gottstein Foods
Co. in 1999, agreed to settle the class-action lawsuit. The settlement is
pending final state court approval next month.

Safeway settled a similar suit in federal court last fall for $675,000.

That case affected 35- to 40 former Carrs employees - far fewer than the
number of people who might be eligible to receive money in the state
case, said John Casperson, the Seattle lawyer representing the workers.

Notices have been mailed to about 13,000 people who might be eligible for
some of the money, said Cynthia Ducey, who represents Carrs-Safeway in
the case.

They worked as hourly union employees between Dec. 9, 1992, and April 15,
1999, or as hourly nonunion employees between Dec. 9, 1988, and April 15,
1999, she said.

Besides being employed during these dates, qualifying individuals must
have worked off the clock, which means they didn't stamp in, or were
unpaid for work because their time records were adjusted by Carrs

Carrs was the state's largest retailer and largest private employer until
it was purchased by rival Safeway. The chain was the dominant grocer in
the Anchorage and Mat-Su areas and had stores from Fairbanks to

Casperson said he has heard a number of stories about Carrs supervisors
not paying employees for their time. That includes some workers who
apparently were expected to put in unpaid time, he said.

"I found that there were employees who would walk into the store and,
before they clocked in, be told to go work the cash registers," he told
the Anchorage Daily News. "On other occasions, they would be told to
clock out after the customers left even though they still had to clean

Safeway did not own Carrs during the time of the allegations and has not
admitted any wrongdoing. Safeway assumed the liability of the lawsuit
when it bought Carrs and will pay the $1 million, Ducey said.

THQ INC: Announces Dismissal of Securities Suit in California
THQ Inc. (Nasdaq NMS: THQI) announced on January 3 that the class action
lawsuit filed against it and several of its officers and directors
asserting certain securities law violations has been dismissed with

The decision from the United States District Court for the Central
District of California held that the complaint did not satisfy the
pleading requirements of the federal securities laws.

THQ Inc. develops, publishes and distributes interactive entertainment
software for a variety of hardware platforms including PC CD-ROM, and
those manufactured by Sega, Microsoft, Nintendo and Sony.

TOBACCO LITIGATION: SC Court Rejects Certification Citing Legal Trend
A federal judge's decision to reject a South Carolina class action in a
tobacco case is consistent with the law and is significant for its
recognition of the problems such classes could create for the judicial
system. Every federal court to consider a proposed class in a smoking
case has rejected certification, as have the overwhelming majority of
state courts.

The decision, which was issued on the last Friday of 2000, came in the
Aksamit case, which sought class-action status for all state residents
who were addicted and had become ill as a result of their smoking.

"The court reached its decision by recognizing that these cases are truly
individual in nature," said William S. Ohlemeyer, Philip Morris vice
president and associate general counsel. "Everyone, every smoker, is
unique and all of these claims simply cannot be resolved in a single case
or a single trial."

"The record reveals that the deposed plaintiffs smoked different brands
of cigarettes, commenced smoking for different reasons, smoked varying
amounts and became aware of information about the harmful effects of
smoking at different times," said Judge Seymour in explaining why the
proposed class action would actually require the jury to determine
liability on a smoker-by-smoker basis.

* Immigration Legislative Package Restores Eligibility
Congress and the President finally reached agreement on Dec. 15 on a
major immigration legislative package entitled the Legal Immigration and
Family Equity Act Amendments of 2000 (LIFE Act). While not as broad as
many immigrants' rights advocates desired, the final provisions offer
various benefits to hundreds of thousands of immigrants.

One of these provisions temporarily restores an expired measure that
permits certain out-of-status immigrants to become lawful permanent
residents here in the United States.

Another restores eligibility under the 1986 legalization law to the
beneficiaries of certain class-action lawsuits that challenged its

Still others address the hardship faced by spouses and children of U.S.
citizens and lawful residents when visa backlogs delay them from
completing the immigration process.

Congress passed the LIFE Act as part of the omnibus budget bill that
wrapped up Congress' lame duck session. President Clinton is expected to
sign the bill, including the immigration provisions, shortly. This
article summarizes the key immigration provisions in the budget bill.

                   Section 245(i) Extension

Section 245(i) of the Immigration and Nationality Act (INA) temporarily
allowed certain noncitizens to become permanent residents without having
to leave the United States. As background, people are generally barred
from adjusting their status in the United States if they: (1) entered
without being inspected by an Immigration and Naturalization Service
(INS) officer; (2) ever worked illegally in the United States; or (3)
ever failed to maintain lawful status in this country. Instead, they must
return to their home country to process a green card application. In some
cases, however, by leaving the United States they trigger a three- or
ten-year bar to their return if they were unlawfully present in the
United States for more than six months or a year, respectively. See
generally Charles Gordon, Stanley Mailman & Stephen Yale-Loehr,
Immigration Law and Procedure @@ 51.01[2], 63.10 (2000).

Congress added INA @ 245(i) in 1994 to allow people who otherwise
qualified for permanent residence, but not for adjustment of status, to
be able to adjust their status in the United States by paying a surcharge
of $ 1,000. Congress ended @ 245(i) in late 1997, but grandfathered those
who started the green card process by January 14, 1998, even if they
couldn't complete it until later. Restoring @ 245(i) has been a top
priority of many immigration advocates.

The LIFE Act extends INA @ 245(i) from Jan. 14, 1998 until April 30,
2001. This means that any beneficiary of an immigrant visa petition or
labor certification application filed before April 30, 2001 will be able
to stay in the United States and apply for adjustment of status under INA
@ 245(i) as long as they pay the penalty fee of $ 1,000. However, for any
application filed after Jan. 14, 1998 but before April 30, 2001,
applicants must prove they were physically in the United States on the
date the LIFE Act was enacted. Documentation of that fact will be
critical. Immigration experts estimate that as many as 200,000 people may
be able to take advantage of @ 245(i)'s extension, many of them otherwise
"trapped" in the United States by the prospect of a 10-year exile if they

A four-month revival of INA @ 245(i) is a typical legislative compromise.
It satisfies neither those who wanted to make it a permanent part of the
immigration law nor those who opposed it as a kind of amnesty program.
The prior January 14, 1998 cut-off date for @ 245(i) eligibility resulted
in a flood of hastily prepared visa petitions and labor certifications.
In some states the Department of Labor has still failed to catch up with
some of the labor certification applications filed to beat the Jan. 14,
1998 deadline for grandfathering. Moreover, four months is not enough
time for the INS to issue any implementing regulations. Attorneys and
others will have to rely on informal INS memos and prior @ 245(i)
guidance, and hope that those interpretations are followed.

                     New 'V' Temporary Visa

New V Visa for Permanent Residents' Family Members. Under current law,
permanent residents may apply for green cards for their spouses and minor
children in the family 2A immigrant visa category. While almost 90,000
people immigrate to the United States each year in the family 2A
category, the backlog of applications in this category continues to grow.
People from most countries have waited over four years to immigrate in
this category. The wait for Mexicans has been six years, and new
applicants will wait longer. Because these relatives are intending
immigrants they can't qualify to come to the United States as visitors
even for a short time while awaiting their green cards. And if they are
already here they run the risk of removal.

The LIFE Act creates a new "V" temporary visa category designed to remedy
this problem. To qualify for a V visa, the sponsoring permanent resident
must already have filed a green card petition for his or her spouse or
minor child with the INS as of the date the LIFE Act was enacted. The
petition must either have been pending with the INS for three years or
more or, if it was approved, the spouse or minor child must have been
waiting their turn in the green card line at least three years.

The new law does not set a time limit for people in V nonimmigrant
status. The thinking appears to be that they may remain in the United
States until their immigrant visa petition is approved. During that time
they may work. If the INS denies the green card petition or adjustment of
status, the spouse or minor child has 30 days to leave the United States.

The LIFE Act waives certain grounds of inadmissibility for V
nonimmigrants, including periods of unlawful presence in the United
States. And they should be able to adjust their status to permanent
residence under the newly reinstated @ 245(i).

While enactment of the V visa recognizes the need to provide relief to
people in long immigration backlogs, it is available only to family
members for whom an application has been filed as of the date of
enactment. Future applicants are ineligible. Further, the V visa is only
available to beneficiaries in the family 2A category. It is unavailable
to all other family members, including unmarried sons and daughters of
U.S. citizens (family 1st category) or unmarried sons and daughters (21
years of age and older) of green card holders (family 2B category), many
of whom have "aged-out" of the family 2A category because of processing
delays. Married sons and daughters (family 3rd category) and brothers and
sisters of U.S. citizens (family 4th category) also are not covered.

                              'K' Visa

Expanded K Visa for Spouses and Children of U.S. Citizens. The current
INA allows U.S. citizens to petition to bring their spouses, children and
parents to the United States in the "immediate relative" category. Unlike
other family-sponsored immigrant visa categories, the immediate relative
category has no annual cap on the number of people who can immigrate this
way. But it can still take up to a year to enter the country in this
category because of processing delays. During that time, those relatives,
because they are intending immigrants, may find it hard to gain admission
to the United States even for short visits.

To remedy this problem the LIFE Act expands the existing K nonimmigrant
visa category. Until now that category has been limited to fiance(e)s of
U.S. citizens who enter the country and get married within 90 days. The
LIFE Act expands the K category to spouses of U.S. citizens who are
already married and are waiting outside of the United States for the
approval of their immigrant visa petitions. Any minor children who are
accompanying the spouse can be included in the K petition.

To qualify for the revised K visa category, the U.S. citizen spouse must
have filed a K visa petition in the United States. The K visa must be
issued by a U.S. consular officer overseas. There is no provision to
adjust status for someone already in the United States in an unlawful
status. If the marriage to the U.S. citizen occurred outside of the
United States, the K visa recipient must have a valid nonimmigrant visa
issued by the consulate where the marriage occurred.

The changes mean that spouses and minor children of U.S. citizens will be
able to wait in the United States while their green card applications are
pending. They may also work while they are waiting.

This change may not be as beneficial as it may appear at first glance.
The INS must still approve a K visa petition and a consular officer must
issue the visa before a spouse or child(ren) may enter the United States.
That can take several months. Moreover, K visa processing may slow down
considerably if many people apply to take advantage of this new
provision. It remains to be seen if this provision significantly helps to
remedy the current problem.


The Immigration Reform and Control Act of 1986 (IRCA) allowed certain
undocumented noncitizens in the United States to apply to become
legalized permanent residents. See generally Gordon, Mailman and
Yale-Loehr, Immigration Law and Procedure @ 52.03. Due to restrictive
interpretations by the INS, several hundred thousand immigrants were
excluded from the legalization program. Various class actions have been
pending in the courts for almost 15 years. Congress stepped into the
controversy in 1996 by enacting a provision limiting judicial review of
these cases and apparently intended to moot some of the lawsuits.
Nevertheless, some of the cases have continued.

The LIFE Act restores legalization eligibility to certain IRCA applicants
who entered the United States illegally before 1982. To qualify a person
must prove that he or she filed a written claim before October 1, 2000
for class membership in Catholic Social Services v. Reno, 509 U.S. 43
(1993), League of United Latin American Citizens v. INS, 509 U.S. 43
(1993), or INS v. Zambrano, 509 U.S. 918 (1993), three of the various
class action lawsuits filed against the INS for their improper handling
of the 1egalization program. Applicants must also meet the general
legalization requirements, with certain modifications. People who qualify
may apply directly for permanent residence, rather than for temporary
resident status. Applicants who submit a prima facie application under
this provision are entitled to a stay of deportation, work authorization,
and permission to travel while their application is pending.

The LIFE Act also protects their spouses and children from deportation,
as long as they entered the United States before December 1, 1998. The
new law also grants them work authorization.

An estimated 150,000 legalization applicants are expected to benefit from
this provision.

                         Provisions Left Out

Immigrants' rights advocates, Democrats, and the White House had sought a
much broader immigration relief package. They seemed poised to achieve
most of what they wanted at the end of October, when President Clinton
threatened to veto any appropriations bill that did not contain the
immigration provisions he wanted. But by coming back after the elections,
which showed no clear trend on immigration issues, Republicans, led by
Senator Orrin Hatch of Utah, were able to water down the immigration

Left out of the final LIFE Act were the following:

  -- NACARA parity. In 1997 Congress enacted a law allowing certain
people from Nicaragua and Cuba to obtain permanent resident status in the
United States. The Nicaraguan Adjustment and Central American Relief Act,
enacted as Title II of the District of Columbia Appropriations Act, 1998,
Pub. L. No. 105-100, 111 Stat. 2160 (1997). That law, however, failed to
benefit approximately 450,000 similarly situated immigrants in other
Central American countries and other countries torn by civil strife, such
as Liberia. Immigrants' rights advocates and the Clinton administration
fought without success to remedy this unequal treatment in the LIFE Act.

  -- Due process relief for permanent residents who are now being
deported for minor offenses committed long ago because of changes made in
1996 and applied retroactively. This bill, H.R. 5062, passed the House of
Representatives without a single dissenting vote, but was blocked in the
Senate by Senator Phil Gramm (R-Tex.).

  -- Foreign farm workers. Senators Bob Graham (D-Fla.) and Gordon Smith
(R-Ore.) and Representative Howard Berman (D-Cal.) worked to revise the
current H-2A nonimmigrant visa category for foreign agricultural workers
that would have benefited both farm workers and growers. In the end,
however, the tentative compromise proved too controversial to be added to
the omnibus budget bill.

  -- Updating the INA's registry provisions. Registry is a kind of
legalization, in that it allows noncitizens who have been in this country
illegally a long time to become permanent residents. Currently, INA @ 249
only allows people who have been here since before 1972 to apply for
registry. Immigration advocates sought unsuccessfully to move the
registry date forward to 1986.

Immigration advocates are gearing up to tackle these and other issues in
2001. But the ups and downs of immigration legislation are sometimes as
hard to call as the stock market. Four years of experience with the harsh
provisions of the 1996 law have generated sympathy and concern with
members of Congress and constituents, who have seen close up the
devastating effects of having long-time friends, relatives, employees,
and fellow workers removed from this country. Whether that sensibility
will continue next year will depend as much on the economy and the new
President's outlook on immigration issues as on the congressional agenda.
(New York Law Journal, December 21, 2000)

* New European Regulations Threaten To Abolish Many Traditional Crafts
As the back-to-the-future American food movement implores U.S. food
policymakers to look to Old World models of local and artisanal
production, the Old World itself is changing beyond recognition. Europe
has ended the decade much as it began it--buffeted by food scares. In the
wake of the storm comes a stark sanitize-or-perish ultimatum for food
producers that could spell the end for many small farmers, butchers and
cheese makers.

The latest panic was sparked when a new diagnostic test revealed cases of
bovine spongiform encephalopathy (BSE), the lethal mad cow disease, in
slaughterhouses in Spain, France and Germany. Continental beef
consumption plummeted by 40%, cattle markets emptied, sweetbreads were
scrubbed from menus and the world's press bore down on even the tiniest
Bavarian bratwurst stalls.

Ten years before that, charges over listeria in French cheese and
salmonella in British eggs sparked a cross-Channel trade dispute likened
in the right-wing French press to the Hundred Years' War.

If the paroxysms have become familiar over the years, government
reactions to them could scarcely have changed more radically. When the
era of food scares first dawned in the 1980s, the stock official response
was to deny or downplay the danger. This French disclaimer about listeria
in 1989 was typical: "It would take a lot to convince a Frenchman that
his beloved Camembert, which he had been eating since childhood, was
poisonous, even if it was--which it isn't."

Today, the requisite response is calls for accelerated testing programs,
ever-tighter hygiene protocols and the formation of tough new watchdog

It took an unprecedented disaster involving a deadly new peril to
precipitate the shift. In 1996, the deaths of 10 young people from the
human form of mad cow disease forced the terrifying realization: Cattle
products were in such universal use in food, pharmaceuticals and
cosmetics that 59 million Britons had potentially been exposed to an
incurable, mind-rotting disease.

The following year, when Tony Blair's Labor Party swept to power in the
U.K. on the back of the crisis, the first day in office it unveiled plans
for a new Food Standards Agency. Elsewhere in Europe, Ireland and France
also created new agencies. To top it off, last month in France, leaders
of the 15 member states of the European Union just approved plans for an
overarching European Food Authority.

                              Safety Rules

For the reformers, uncompromising regulation is the only way to safeguard
food and buoy consumer confidence in a globalized industry. This
galvanized new safety movement has also fired a series of warning shots
toward Europe's American trading partners, expressing fear and loathing
of genetic modification of crops and hormone-treated beef.

"We have to regain public confidence in the capacity of the food industry
and in public authorities to ensure that food is safe," insists EU Health
and Consumer Commissioner David Byrne.

But to the minds of an array of Europe's most traditional food
handlers--butchers, cheese makers, chefs, cookery writers and even safety
experts--U.S. genetically modified crops and drug-enhanced beef are far
from the only threat to consumer confidence. They charge that the new
European safety movement itself is also wreaking irreparable damage.
Holding local artisans to the same standards as global companies, they
say, is a death sentence for small producers and timeless regional

Their objections come in the face of a formidable PR blitz. Byrne, a
lawyer by training, has spent much of the last year flying from European
capital to capital promoting the benefits of the new "farm to fork"
regulation, "rapid alert system" and "critical hazard control checks."
The party line: "Safety is the most important ingredient in our food."

Sources close to Byrne are, if anything, even more enthusiastic. "It is
only positive and not negative," insists one spokesperson. "I don't see
how anyone could possibly be against safe food."

But among Byrne's most passionate critics are his own countrymen in
Ireland. "David Byrne needs to come back over here and meet real people
who are trying to produce safe, quality food," says Darina Allen,
proprietor of the Ballymaloe Cooking School in Cork County and a
best-selling cookbook author.

"He needs to follow them around and find out what their lives are really
like. Quality food producers are being hassled out of existence."

                       A Butcher's Tale

She points to Ed Hick, a fourth-generation Irish butcher. "Quality is a
word I wouldn't use anymore," says Hick. "It doesn't necessarily mean
good; it means clean or spotless."

Hick, who used to supply his Dublin butcher shop with pork that he and
his brother processed at a tiny nearby slaughterhouse, no longer
slaughters his own pigs. The silky caul he used to produce for terrines,
the chitterlings, the kidneys that used to come with the loins are all

According to Hick, it's not any one rule that forced his family to close
the slaughterhouse where they killed at most 25 pigs a week, but a
succession of them. First, the local pig-keepers began to disappear.
"We've seen pretty much all the small guys we used to deal with go out of
business," he says. "There was a coal man and a bus driver and just local
people for whom it was a tradition to keep pigs on the side. These guys
would have six or eight pigs at a time. They fed them on vegetable waste
that they collected from the hotels. But then there was legislation
requiring these guys to tool up with thousands and thousands of pounds'
worth of equipment just to cook swill for the pigs."

Then came the 1992 structural requirements of the European Union Fresh
Meat Directive that would condemn thousands of slaughterhouses across
Europe. "Nobody came out and told us to close," he says. "It just became
more and more apparent. We had people asking us to open up doorways
through walls and others asking us to close them. There was quite
considerable cost, as well. I think we figured out it was costing us $
7,000 to $ 10,000 a year."

If he found it hard to comply with regulations, he admits that he was
also hard to regulate. Toward the end, he says, it was not uncommon for
three inspectors--a veterinarian, a meat inspector and a hygiene
inspector--to be dispatched to supervise him and his brother at work. "If
we had taken them on in football, we would have lost," he says. "We were
seen as a huge waste of veterinary time and manpower."

The meat Hick now sells comes from massive EU-approved slaughterhouses
that process more than a thousand pigs a day. While he does not question
the hygiene in large plants, Hick is not impressed by the animal
husbandry or quality of the meat. "I don't get as long a shelf life out
of my product," he says. "Bad handling of the animal while it's alive,
bad handling when it's killed and after it's killed all reduces the
quality of the meat. A sympathetic hand probably tacks another two day's
shelf life onto your meat. It's to do with the animals being rested and
not too stressed."

His craft, he says, is dying. "Because of the way things have gone and
this policy of centralization and intensification, basically the trade
aspect of slaughtering has gone by the board," he says. "There isn't a
huge amount of training. One person works one section of a line only."

When it comes to traceability of foods--a hot topic in the wake of
massive recalls sparked by both BSE and a 1999 Belgian dioxin in poultry
and pork scare--Hick is unimpressed by the new systems. "To be honest, I
think we offered more traceability in the old days than all these new
tattoo export animals. My brother and I slaughtered animals that we
bought from local people then sold the meat back to local people," he

                    Death of the Slaughterhouse

British food safety advisor Richard North chronicled the death of the
local slaughterhouse in the United Kingdom in the 1993 pamphlet "Death by
Regulation" for the London-based Institute of Economic Affairs. Since
1980, by his count, the number of slaughterhouses has fallen from 1,500
to 350. "The net effect of scares is always to concentrate the industry
into fewer and fewer hands," he says.

EU officials counter that concentration of food industries is an
international trend, not a result of their policies.

Whatever the cause, nobody disputes that food production is intensifying
at a fierce pace. When Britain joined the European Union in 1972, it had
more than 100,000 dairy farms. Today it has an estimated 30,000. While
farm numbers plummet, herd sizes rise and animals once given names like
Daisy and Dewdrop are now more likely to be called Cow 133 and 134.

Among its shopkeepers, a network of 35,000 butcher shops is now down to
fewer than 14,000, with closures since the 1996 BSE crisis estimated at
seven a week. Meanwhile, in the country Napoleon derided as a "nation of
shopkeepers," six major supermarkets now control sale of more than 75% of
the food.

Worst are the farm failures. December figures released by the British
Ministry of Agriculture show that in the last year, more than 450 farmers
and farm workers were driven out of business every week in what is now
being described in the British press as "the worst collapse in farm
incomes for 60 years."

North, a confessed Europhobe and now a research director in Brussels for
the policy group Europe of Democracies and Diversity, argues that the new
regulations can only speed the collapse. He points to the egg farmers
whom he consulted during the 1989 salmonella scare. Having only just paid
off the sizing machines to grade "legal" eggs, they must now buy
identification machines to comply with new tracing regulations. "These
can cost about $ 100,000 apiece," he says. "Farm incomes are so marginal,
this could effectively wipe out small producers."

                        Modernizing Craftsmen

In Spain, these are the village traders. Alastair Brown is an Englishman
who bottles organic chestnuts near Seville. His business is new, and he
had no choice but to tool up to meet the latest requirements. He says
while at first he resented the stringent protocols, now he respects them.
"However," he adds, "where the regulations can become a nonsense is for
the smaller artisanal producers."

These, he says, have been disappearing before his eyes at the local
market. "The local market used to be a thriving, boisterous place with
half a dozen fish stalls, a handful of butchers and various fruit and veg
people. It has been completely neutered by having all sorts of remodeling
done to comply with new regulations. The result is that rents have gone
up and less than a third of the stall holders are back. So it has pushed
what was a pretty marginal activity for people beyond the point of

Andrea Petrini, a French food writer in Lyons, reports that a now
constant feature of the city's famous La Croix-Rousse organic food market
are fluttering petitions complaining about the same sort of new
refrigeration, plumbing and structural requirements. "These cost lots of
money," he says.

But again, the EU objects. "The standards that are set are very basic,"
retorts an official from Brussels. "They consist of temperature control
for milk or meat and things, like in a market you have to have hot water
and soap. It's really very basic stuff." France and Italy, they add, have
been actively assisting traditional food businesses cope with the
regulatory burdens.

The most unpopular aspect of the new regulations is the paperwork. Every
food handling establishment, from farm to restaurant, must now abide by a
process called HACCP, an acronym for Hazard Analysis Critical Control
Point. This requires that crucial actions are routinely logged. Local
inspectors will then check the records, and their scrutiny will be
double-checked periodically by the new European authority.

Irish butcher Hick describes the burden of having to log one's every move
as the equivalent of "having to do a written test on the rules of the
road while you are driving."

Scottish chef Jeremy Lee agrees. He runs the Blueprint Cafe in London, a
120-seat restaurant above the Design Museum that is part of a larger
chain owned by Sir Terence Conran. Lee estimates that logging fridge
temperatures, cleaning schedules, training and risk assessment takes 15
hours a week. "We're lucky to be part of a large organization," he says.
"You'd be running ragged to keep up with it if you were a wee

But the new policies also have determined supporters. David Hicks--no
relation to the butcher--runs a 15-year-old restaurant meat supply
business in Dublin. "We have benefited tremendously from the EC European
Commission ," he says. At his newly revamped factory, meat arrives by the
ton already boned, shrink-wrapped and boxed. Hicks likes it that way.
"The meat factories have got to get it right in the farms, the abattoirs,
the factories--the whole lot--so that the consumer can be assured that
the product leaving Ireland is coming from the best conditions," he says.

Representatives of Europe's most powerful cooperatives also welcome the
plan. David Biltchik, U.S. representative for the Consortium of
Prosciutto di Parma argues that the new rules provide "equivalency" of
safety measures in the world market. He says that since the 1970s, the
200 ham producers belonging to his consortium have "spent millions" on
upgrades and safety research that has protected, not destroyed, a
traditional product. "I do not accept for a minute that the quality or
the tastiness of Italian food is being destroyed by all this regulation.

French officials, once so skilled at denying risk in eating their soft,
raw milk cheeses, also now concur. In 1999, seven years after an EU
directive instructed it to adopt a zero-tolerance standard for listeria
in soft cheese, France has finally complied, causing a storm among
producers of Epoisses, Maroilles, Saint-Felicien and Camembert.

At the same time, the Wall Street Journal reported the rise of
pasteurized "vrai faux" cheeses: industrial cheese in rustic packaging.

French officials are unrepentant. "It would be very difficult to say to
the consumers that the rules should not be the same because of the size
of the company," says a delegate to the EU. "Food safety is food safety."

                        Effectiveness Unknown

Whether or not harmonization of food safety standards will check the
impact of bacterial pathogens such as salmonella, listeria and
campylobacter is not only unknown, it may be unknowable. The EU's
Scientific Committee on Veterinary Measures relating to Public Health
reported in May that existing food poisoning statistics from member
states are too inconsistent to be reliable.

But safety expert North, who charted the British salmonella-in-eggs scare
for his doctoral thesis, argues that we had long lived with these bugs
quite peaceably, that the dangers have been grossly overblown and public
fear cynically manipulated, not least by the media. " . . . in the night
imagining some fear, how easy is a bush supposed a bear," he says,
quoting Shakespeare.

Yet North also acknowledges that in the shadow of the BSE crisis, the
scale of the impact of these old, largely gastrointestinal scourges now
hardly matters. Since the first 10 of now almost 90 human deaths linked
to mad cow disease were announced in 1996, the argument has not been just
over consumer welfare, but liability when something goes wrong. Who is to
blame in case of another food catastrophe?

                            Dodging Blame

BSE forever changed old notions of risk and responsibility. Multinational
rendering and livestock feed companies may have recycled the lethal
pathogen in contaminated feed, but last October a public inquiry into BSE
by the British government could not find fault with their behavior.
Technically, they had behaved legally, even when they had knowingly
exported suspect rations for almost a decade after feed was determined to
be the cause of BSE in Britain.

The inquiry did, however, censure U.K. officials for dozens of regulatory
failures and "sedating" consumers with unfounded reassurances. Last
October, in the wake of the inquiry, the British government only managed
to preempt a class action lawsuit brought by families of the now almost
90 human victims by promising a no-fault compensation package. The cost,
now estimated in millions of dollars, could rise to billions, depending
on the final human toll.

Under the new European Food Authority, the diligence of complying member
states may well be unassailable. Bang up front in the hygiene section of
the new legislation is the warning: "The leitmotif throughout the recast
of the hygiene rules is that food operators bear full responsibility for
the safety of the food they produce."

But to the mind of North, while the mandatory implementation of HACCP
might prove a death sentence for small producers, it could serve as the
ultimate get-out-of-jail-free card for businesses big enough to devote
the time to it.

"Failures in food safety will be legally defendable provided the
paperwork has been maintained," he says. "Strict adherence to HACCP makes
it legally impossible to prosecute anybody for causing food poisoning."
(Los Angeles Times, January 3, 2001)

* John Jackson of the Times library contributed to this report.

                      European Food Scares

1981, SPAIN: Adulterated olive oil is recorded as the cause of more than
         600 deaths and more than 25,000 illnesses, though arguments
         persist that the actual cause might be pesticide poisoning.

1988-93, UNITED KINGDOM: A junior health minister remarks on a TV news
         show, "We do warn people now that most of the egg production in
         this country, sadly, is now infected with salmonella." Panic
         ensues. The minister is sacked. Egg consumption plummets; 3.5
         million hens are killed, 9,000 producers go out of business and
         the incidence of salmonellosis continues to rise. The sacked
         minister writes a romance novel.

1983-89, EUROPE: Hundreds die across Europe from listeriosis. Soft
         cheese made on the French-Swiss border, known to have killed 31,

         is blamed. British health authorities warn pregnant women
         against eating French soft cheeses. French editorials retort
         that Britain's petits pois are not petits, its milk products are

         adulterated with vegetable fats and its sausages short on meat,
         and that it is flooding France with bad eggs. Germany and Sweden

         also ban some French cheeses. The main culprit behind many of
         the deaths proves to be Belgian pa^te.

1990, EUROPE: Discovery of benzene in Perrier causes withdrawal of 160
         million bottles throughout Europe.

1990, NORTHERN IRELAND: Cattle carcasses held back by butchers because
         of "unusual characteristics" lead to exposure of widespread
         abuse of Clembuterol, a hormone banned by the EU since 1988. By
         the time a detection test is developed in 1993, two farmers are
         dead from inhaling it, customs officials have made dozens of
         seizures of the drug and Irish beef livers are recalled from
         more than 200 supermarkets in the Republic of Ireland and Great

1991-94, ITALY: The country's Istituto Superiore di Sanita (its National
         Institute of Health) reports that the most frequently implicated

         dish in food-borne salmonellosis cases is tiramisu.

1992, FRANCE: At least 29 people die in France from a Listeria outbreak
         traced to cured meat products.

1993, GERMANY: More than 1,000 people, mainly children, contract
         salmonellosis from contaminated paprika and paprika-powdered
         potato chips.

1994, SPAIN: 48 cases of salmonellosis in 14 regions traced to powdered
         infant formula.

1995, UNITED KINGDOM: The first of now more than 80 deaths among young
         people from the human form of bovine spongiform encephalopathy,
         or mad cow disease. By 1996, the scare is global. The European
         Union bans British cattle products from the world market,
         Britain begins destroying more than 4 million cattle. In 1997,
         the Conservative government, in power for the duration of the
         BSE epidemic, falls.

1996, SCOTLAND: More than 300 are sickened and more than 10 senior
         citizens die from E. coli O157 infections contracted from food
         served at a church social.

1997, SWEDEN: Swedes charge that their salmonella-free status is
         threatened by contaminated foods, including turkey kebabs, which

         had been approved by the EU and imported from France, Denmark
         and Belgium.

1999, BELGIUM: Oil containing PCBs and dioxins is criminally dumped into
         cooking fats awaiting pickup for recycling into chicken and pig
         rations. Deformities noticed in chickens are determined to be
         due to dioxin poisoning. Belgian egg and meat products are swept

         from shops and banned from the world market. "Chickengate" costs

         the ruling prime minister his office. No human illness or death
         is noted, but a venerable and theoretically safe practice of
         recycling cooking fat in animal feed is banned and fat disposal
         quickly becomes an environmental issue.

1999, FRANCE: Classic soft cheeses Epoisses, Maroilles, Saint-Felicien
         and Camembert are recalled when France finally adopts a 1992 EU
         zero-tolerance directive for listeria detection in any 1-ounce
         sample of cheese.

2000, EUROPE--Beef consumption plummets by 40% across the continent when
         it is revealed that meat from a herd with a case of BSE has been

         sold in French supermarkets, and new cases are discovered in
         German and Spanish herds. A ban on the suspected carrier of BSE,

         meat and bone meal, is extended to rations for pigs and poultry.

         Europeans consider replacing the MBM protein constituent with
         dreaded imports of genetically modified soy beans from the U.S.
         (Los Angeles Times, January 3, 2001)


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