/raid1/www/Hosts/bankrupt/CAR_Public/010115.MBX               C L A S S   A C T I O N   R E P O R T E R

              Monday, January 15, 2001, Vol. 3, No. 10


ASARCO, INC: 8th Cir Affirms Dismissal of Contamination Complaint
ASBESTOS LITIGATION: Rising Again to Bite Industry
BERLITZ INTERNATIONAL: Acknowledges Lawsuits Re Benesse's Purchase Offer
BRIDGESTONE: Announce Resignation of Three Top Executives
DELTA AIR: Three Airline Workers Pursue Racial Bias Suit

ECONOMY CLASS SYNDROME: Singapore Airlines to Give Warning Before Flying
FIRESTONE, FORD: Business Report Presents Case As Crisis Mgt Lesson
HOLOCAUST VICTIMS: Poland Oks Law Repaying Citizens for Property Seized
MICROSOFT CORP: DOJ Finds No Bias in Judge's Order for Breakup
MTBE CONTAMINATION: Judge Issues Consolidation Orders in Young v. Exxon

PRESIDENTIAL ELECTION: Lawsuits Multiply; Voting Problems Targeted in FL
SOTHEBY'S: Staff Cut Will Come from European and North American Units
TAX ENTITIES: Battle over Attorneys' Fees in 2 Lawsuits Regains Momentum
TICKETMASTER: Credit Card Users Want Cash Discount Suit Back in State
TICKETMASTER: Reminds Investors of Litigation Related to Magazine Sales

TICKETMASTER: Settles Antitrust Suits Before Outcome on Equitable Relief
U-M: Trial On Admissions And Racism Suit Focus On Questions Of Equality
VA LINUX: Milberg Weiss Announces Securities Suit Filed in New York
VA LINUX: SEC Asks Credit Suisse, Bear Stearns, Goldman for Information

* Selection Of Institutional Investors As Lead Plaintiffs under PSLRA


ASARCO, INC: 8th Cir Affirms Dismissal of Contamination Complaint
The Eighth Circuit U.S. Court of Appeals on Nov. 28 affirmed dismissal of
the third amended class action complaint of 30,000 current and future
residents of a geographic area near a former lead smelter and refinery
(Von. R. Trimble, Jr., et al. v. Asarco, Inc., No. 99-2894, 8th Cir.).
(Opinion in Section B. Document # 08-001208-102.)

The class, a group of residents in and around Omaha, Neb., sued Asarco
Inc. in 1997 for contamination from a lead and smelter facility. The U.S.
District Court for the District of Nebraska had previously dismissed the
suit for lack of subject matter jurisdiction.

The Eighth Circuit affirmed the decision, but ruled the court should have
dismissed the claim for failure to state a claim and converted it to a
motion for summary judgment. The court also found that the class's
medical monitoring claim under Nebraska law was not asserted.

                           Class Action

The class members first brought claims against Asarco on Sept. 5, 1997,
alleging their properties had been contaminated by pollutants from the
Asarco site. That complaint was later amended to include CERCLA private
cost-recovery claims, as well as state law claims for trespass, nuisance,
negligence, strict liability, unjust enrichment and medical monitoring.

In its response, Asarco admitted that while from time to time in the past
certain lead particulates were emitted into the air, the particulates did
not have an adverse effect on the public health. Asarco moved to have the
case dismissed for subject matter jurisdiction and the court agreed,
finding that the class had failed to allege facts sufficient to show that
they had incurred response costs consistent with the National Contingency

The court further held that it lacked subject matter jurisdiction over
the class's state law claims, as the individuals of the class, under 28
U.S. Code Section 1332, are required to show that they each meet the $
75,000 amount-in-controversy requirement. The court did, however, grant
the class leave to amend their complaint on a deficiency issue.

Upon review of the third amended complaint, the District Court dismissed
the case entirely, granting Asarco's motion to dismiss for lack of
subject matter jurisdiction by finding that the amount-in-controversy
requirement had not been met. The court ruled that since the class
members' CERCLA claim was dismissed, their only remedy for future medical
monitoring would be a state law claim.

                      Jurisdictional Analysis

On appeal, the Eighth Circuit found that the District Court should not
have dismissed the claim under Federal Rule of Civil Procedure 12(b)(1)
for lack of subject matter jurisdiction but should have instead analyzed
Asarco's motion to dismiss under Federal Rule of Civil Procedure

The court cited Godfrey v. Pulitzer Publishing Co. (No. 98-1137, 8th
Cir.) in addressing this issue. In Godfrey, a lower court's ruling was
reversed and remanded for erroneous jurisdictional analysis because it
granted the defendant's Federal Rule of Civil Procedure 12(b)(1) motion,
which essentially challenged an element of the plaintiffs' cause of
action under the Robinson-Patman Act.

The court found that just as in Godfrey, the lower court misinterpreted
the jurisdictional issues involved in the case and failed to convert the
action to a summary judgment matter. The court also found that the
District Court did not err is dismissing the class's CERCLA claims as no
genuine issue of material fact was raised designating response costs for
the alleged contamination.

In addition to affirming that the class fails to meet the
amount-in-controversy requirements, the court also dismissed claims that
the class has a right to medical monitoring under Nebraska law. Nebraska
state law currently holds no provision, the court said.

Trimble and co-plaintiffs are represented by Richard A. DeWitt and Robert
S. Lannin of Croker, Huck, Kasher, DeWitt, Anderson & Gonderinger in
Omaha, Neb.; David D. Hoff, Loren R. Dunn and Lucy Lee Helm of Graham &
James in Seattle; and Phillip S. Lorenzo, Michael G. Martin and Demetri
E. Munn of Baker & Hostetler in Denver.

Asarco is represented by Stephen M. Bruckner of Fraser Stryker in Omaha,
Neb.; Steven E. Guenzel of Barlow Johnson in Omaha; Peter J. Nickels,
Neil A. Rieman, Lewis Rosman, Emily Leonard and Steven J. Rosenbaum of
Covington Burling in Washington, D.C.; Linda R. Larson of Heller Ehrman
in Seattle; and Lawrence J. Jensen of Fillmore, Bellinston in Provo,
Utah. (Mealey's Pollution Liability Report, December, 2000)

ASBESTOS LITIGATION: Rising Again to Bite Industry
Asbestos liabilities, like a recurring bad dream, are rising again to
haunt a new array of corporate defendants and their insurers.

Defying expectations that they would begin to fade with the arrival of
the new millennium, asbestos claims are proliferating and settlement
demands are rising 34 years after the first asbestos injury lawsuit was
filed in Beaumont, Texas, in 1966.

In 2000, a rising tide of claims pushed five manufacturers and users of
asbestos products into bankruptcy, which is the largest one-year total of
asbestos-related bankruptcies in at least a decade. Those filing include
building products makers Armstrong World Industries Inc., Owens Corning
and Pittsburgh Corning Corp., and engineering firms Babcock & Wilcox Co.
and Burns & Roe Enterprises Inc.

G-I, the privately held successor to GAF Corp., has become the sixth and
latest Chapter 11 casualty after paying more than $1.5 billion in
asbestos claims and expenses since the 1970s.

More ominously, the Chapter 11 filings promise to speed another trend:
Facing smaller recoveries from companies in bankruptcy, plaintiffs'
lawyers are suing a widening array of ''non-traditional'' asbestos
defendants, ranging from IBM Corp. and AT&T Corp. to regional
''mom-and-pop'' installers and distributors of asbestos-containing

Nearly 2,000 companies are now defendants in asbestos lawsuits, which is
an ''exponentially larger'' number than a decade ago, said Scott D.
Gilbert, a lawyer with Gilbert, Heintz & Randolph in Washington who
specializes in mass tort and insurance issues.

''You can't say that someone is just a peripheral defendant and say they
don't have risk,'' said Edward Houff, a lawyer with Church & Houff in
Baltimore. ''In today's climate, they do have risk.''

This is bad news for insurers. They not only face mounting asbestos
losses from a larger number of policyholders, but also face new demands
for coverage under relatively little-used sections of general liability

                          Changing Loss Pattern

Earlier losses from big asbestos producers and manufacturers were
generally paid under product liability sections of general liability
policies, most of which included aggregate limits capping insurers'

A growing number of asbestos claims, though, are ''non-products'' claims,
including, for example, claims by installers of asbestos products under
the premises and operations sections of GL policies. Insurers typically
covered these non-products exposures without aggregate limits, meaning
that primary insurers are confronted with potentially huge liabilities in
any surge of these claims.

''I believe the potential exposure to the insurance industry for these
new defendants on the non-products (claims) is very substantial and could
rival the product liability cost'' over a period of years, Mr. Gilbert

''The insurance industry ought to be getting a wake-up call about now,''
he said. While ''many of them thought this was winding down, they are
going to find that is just not the case.''

The asbestos litigation crisis has often been described as developing in
waves, beginning with personal injury claims of workers at asbestos mines
and asbestos product manufacturing plants and moving on to installers of
asbestos products and--in the 1980s-laims stemming from the presence of
asbestos in buildings.

While these waves were expected to be receding by this year, that hasn't

Christopher Edley Jr., a professor at Harvard Law School, told a
congressional committee in 1999 that the number of asbestos cases then
pending in U.S. courts had doubled to about 200,000 from 100,000 in 1993,
despite the settlement of more than 300,000 cases in the interim.

Asbestos defendants themselves reported jumps last year in the number of
new asbestos cases filed against them. Armstrong, for example, said it
had been named in 45,300 claims during the first nine months of 2000,
compared with 40,500 during the same period in 1999, and faced a total of
173,000 pending claims.

''Many people believed that the cases would begin tailing off around the
year 2000, and what has happened is that they have increased with no
signs of any significant drop-off,'' observed Mr. Houff, a member of the
Defense Research Institute's mass torts task force.

Mass settlement efforts by defendants may paradoxically have contributed
to the problem by attracting questionable claims, he added.

''I think (defendants) have realized that mass settlement has resulted in
two things: more cases and less meritorious cases,'' Mr. Houff said,
noting an increase in claims by plaintiffs claiming exposure but with no
symptoms of asbestos-related disease. By their settlement strategy,
defendants ''have kind of indirectly encouraged that result,'' he said.

Large-scale settlement schemes and other alternatives to case-by-case
litigation in fact have not fared well in many instances.

The U.S. Supreme Court struck down billion-dollar class-action
settlements of claims against Amchem Products Inc. and others in 1997 and
Fibreboard Corp. in 1999, finding the plaintiff classes too large and
varied to meet federal rules governing class actions. In the Fibreboard
ruling, the court wrote that ''the elephantine mass of asbestos cases
defies customary judicial administration and calls for national

Congress, however, failed last year to enact a bill, the Fairness in
Asbestos Compensation Act, that would have created an Asbestos Resolution
Corp. to take over managing compensation of asbestos claimants.

Several companies that filed for bankruptcy in 2000 cited these failed
efforts--along with the rising frequency and severity of claims--in
explaining their decisions to seek court protection from claimants and
other creditors.

''We have been attempting to manage this liability for more than two
decades,'' said Glen H. Hiner, chairman of Owens Corning, which had
established a National Settlement Program with plaintiffs' lawyers to
manage its own claims and those of affiliate Fibreboard. ''However, the
cost of resolving current and future claims, together with a flurry of
recent new filings from plaintiff lawyers not participating in the NSP,
led us to the conclusion that a Chapter 11 reorganization was prudent and

''Recent increases in settlement demands from claimants, coupled with a
lack of legislative relief from the financial burden presented by the
increased demands, have forced us to re-examine our approach,'' Babcock &
Wilcox Chief Executive Officer Roger Tetrault said in announcing the New
Orleans-based company's Chapter 11 filing last February.

Burns & Roe Enterprises, a unit of Oradell, N.J.-based Burns & Roe Group
Inc., sounded the same note in its Chapter 11 announcement last month:
''Over the past 12 months, demands from plaintiffs' lawyers spiked to
levels dramatically above the historic pattern, and the number of cases
brought against the company increased markedly... (E)fforts to negotiate
demands for settlement down to tolerable levels were largely
unsuccessful,'' the company said.

                              New Targets

While the bankruptcy filings may help resolve these companies'
liabilities, they will likely make life tougher for other defendants.
Plaintiffs' lawyers who see a shrinking potential for recoveries against
bankrupt defendants now will increasingly target companies that earlier
were considered peripheral.

''To the extent that many defendants are in bankruptcy or
post-bankruptcy...(claimants) will now seek recoveries from a broader
base,'' Mr. Gilbert said.

''Plaintiffs' counsel are willing to take on product manufacturers and
theories of recovery they were not willing to take on in the past in an
effort to extend the liability,'' Mr. Houff said.

The widening of the litigation net is already well under way, with
lawsuits filed against a variety of ''non-traditional'' defendants. These
have included giants like IBM, AT&T, Ford Motor Co. and Chrysler
Corp.--accused of exposing workers to asbestos-contaminated brake
parts--to small distributors and installers of building materials and
supplies, as well as institutions like hospitals and universities with
small amounts of asbestos in their buildings.

''There is no 'asbestos industry' anymore,'' Harvard's Mr. Edley told the
House Judiciary Committee in 1999. ''And many, perhaps most, of today's
defendants cannot accurately be described as 'asbestos companies.' These
defendants are in every industry and every region, from large companies,
such as AT&T, to smaller companies.''

''We're getting more claims from players that were considered real
peripheral,'' confirmed William Barbagallo, vp and director of claims
with the Transit Casualty Co. receivership in Los Angeles. In the last
six months, Transit--a major liability insurer before its 1985
insolvency--has seen adverse verdicts against three or four companies
that never had asbestos liabilities before. Facing increases in the
frequency and cost of claims, Transit has boosted its reserves, he added.
''Asbestos is our biggest problem,'' he said.

Small companies that made limited use of asbestos in their products are
not immune to escalating settlement demands and jury awards.

In a widely cited case, a jury in Brazoria County, Texas, ordered
Niagara, N.Y.-based Carborundum Corp. in 1998 to pay $115.6 million to 21
plaintiffs claiming injuries from using Carborundum grinding wheels that
contained small amounts of asbestos. The award, the first against a
grinding wheel manufacturer, consisted of $15.6 million in compensatory
damages--much of it future damages for plaintiffs suffering mild to
''asymptomatic'' asbestosis--and $100 million in punitive damages.

                           Reserve Adequacy

This combination of circumstances--more frequent claims for more money
against a widening array of defendants--bodes ill for insurers, many of
which have yet to recognize their exposure in their reserving levels,
insurance industry observers say.

While a handful of the largest property/casualty companies boosted
asbestos reserves in 1999, most did not, and ''it is only a matter of
time before the current asbestos incurred (loss) activity spreads to
additional insurers,'' warned A.M. Best Co. in an October 2000 report.

Insurers are exposed to a new wave of claims in a few different ways,
Best noted.

Claims from peripheral defendants will become more severe as these
defendants are forced to contribute larger shares of settlements in the
wake of the major manufacturers' bankruptcies.

In addition, more suits are targeting property owners with asbestos in
their buildings, and these defendants are increasingly filing claims
under the premises sections of their general liability policies, which
typically had no aggregate limits.

Insurers are also exposed to ''double dipping'' by major asbestos
defendants--including those in bankruptcy--that have exhausted their
product liability limits and are now filing claims for asbestos product
installation activities under the operations section of their GL
policies, Best notes. This coverage, as with premises coverage, typically
included no aggregate limits.

Non-products coverage litigation and settlements ''are going to increase
very substantially'' in coming years, Mr. Gilbert predicted.

Many of the new defendants will be small companies with limited assets
whose insurance claims will be huge in comparison to their asset base, he

The rise in asbestos losses for insurers is being masked by improving
experience on environmental claims, according to Best. Total
calendar-year asbestos and environmental incurred losses were basically
unchanged at $2.8 billion from 1998 to 1999, the rating agency found.

The insurance industry, however, swapped about $600 million in
environmental reserve decreases for a similar amount of asbestos loss
deterioration. In 1999, insurers' net asbestos losses jumped 40% from the
previous year, while calendar-year incurred environmental losses dropped
by 50%, Best reported.

A large part of 1999's incurred asbestos loss, moreover, was concentrated
in just seven large insurance groups that boosted reserves: CNA Financial
Corp., which added $500 million for non-Fibreboard exposures; American
Re-Insurance Co. and Munich Reinsurance Co., which added $387 million;
Allstate Insurance Co., $360 million; Nationwide Insurance Enterprise,
$181 million; Liberty Mutual Insurance Co., $162 million; Fairfax
Financial Group, $141 million; and American International Group Inc.,
$124 million.

''This concentration of activity may signal the need for more groups to
increase current reserve levels in recognition of unfavorable peripheral
defendant and coverage claim trends,'' Best noted.

The rating agency went on to predict that ''significant asbestos reserve
strengthening will take place during the next few years, particularly for
companies involved with (merger and acquisition) activity as buyers
attempt to box in and fund acquired liabilities.''

One insurer that led the way in adding to reserves is London-based
Equitas Ltd., the runoff reinsurer that assumed pre-1993 long-tail
liabilities of Lloyd's of London syndicates. Equitas last year announced
a ''top-to-bottom'' review of its asbestos exposures and boosted net
reserves by 711 million ($1.06 billion), much of it to cover future
asbestos claims that Equitas Chairman Hugh Stevenson said were
''substantially exceeding the group's revised expectations.''

                      Creating Chaos, Opportunity

The specter of asbestos liabilities, meanwhile, continues to create chaos
for defendant companies.

In November, Atlanta-based Georgia-Pacific Corp. was forced to issue a
public statement about its asbestos exposure after speculation about the
liabilities threatened its proposed takeover of paper producer Fort James
Corp. The acquisition was completed later in the month.

Southfield, Mich.-based auto parts maker Federal Mogul Corp. has seen its
debt ratings cut and its stock price slide, in part over concerns about
its management of asbestos liabilities.

Not everyone is put off by the asbestos cloud, though: Warren Buffet's
Berkshire Hathaway Corp. has bought up a 15% stake in USG Corp., a
manufacturer of gypsum wallboard with significant asbestos liabilities.
Berkshire also announced a deal to buy the ongoing building products
business of Johns Manville Corp. from the Manville Personal Injury
Settlement Trust--created to fund the bankrupt company's asbestos
liabilities--and other Manville shareholders.

The possibility of congressional action to deal with the asbestos
litigation morass also may not be dead.

While last year's Fairness in Asbestos Compensation Act may not be
revived in its earlier form--having drawn heavy fire from plaintiffs'
lawyers and only lukewarm support from defendant companies--a new
legislative proposal may emerge in the coming year, said Mr. Gilbert, who
described himself as ''mildly optimistic'' about the possibility.
(Business Insurance, January 8, 2001)

BERLITZ INTERNATIONAL: Acknowledges Lawsuits Re Benesse's Purchase Offer
The following is an announcement of January 11 by Berlitz International,

Berlitz International, Inc. (NYSE:BTZ)("Berlitz" or the "Company")
announced that several lawsuits have been filed against Berlitz and its
directors in connection with the proposal by Benesse Corporation and
Benesse Holdings International, Inc. to purchase all of the outstanding
shares of common stock of Berlitz not held by Benesse. On December 29,
2000, Benesse and Berlitz separately issued press releases in connection
with the proposed transaction.

The lawsuits purport to be class actions on behalf of the public
shareholders of Berlitz. The plaintiffs in these actions have asserted a
variety of claims, including allegations that Benesse's proposed offer
price for the publicly held shares of Berlitz is grossly inadequate; that
the directors of Berlitz have been or will be unduly influenced by
Benesse; and that the directors of Berlitz have breached their fiduciary
duties to the public shareholders. Each of the lawsuits has been filed in
the Supreme Court of New York in New York County. Berlitz does not
believe that these lawsuits state valid claims against Berlitz or any of
its directors.

The press release above is neither an offer to purchase nor a
solicitation of an offer to sell securities of Berlitz. If and when a
tender offer is made for the common stock of Berlitz, Berlitz
shareholders are advised to read the tender offer statement, which would
be filed by Benesse with the U.S. Securities and Exchange Commission, and
the related solicitation/recommendation statement that would be filed by
Berlitz with the Commission at the commencement of any tender offer. The
tender offer statement (which would probably include an offer to
purchase, letter of transmittal and related tender offer documents) and
the solicitation/recommendation statement would contain important
information that should be read carefully before any decision is made
with respect to a tender offer. If a tender offer is commenced, Berlitz
shareholders would be able to obtain a copy of these documents from the
purchasers' information agent, without charge, upon request. These
documents also would be made available at no charge on the SEC's web site
at www.sec.gov.

BRIDGESTONE: Announce Resignation of Three Top Executives
Unable to prevent its Firestone tire problems in the United States from
lapping up onto Japanese shores, Bridgestone earlier this month announced
the resignation of three top executives, including its hard-charging
president, Yoichiro Kaizaki.

It was a tacit admission of how badly Kaizaki and his team handled the
crisis in its early days.

As reports spread in early August of dozens of deaths -- the number would
eventually exceed 100 -- linked to tire separation of Firestone tires on
Ford Explorer vehicles, Bridgestone stonewalled the press and public.
When it was forced to respond in a congressional hearing, it dispatched
an executive who didn't speak English and looked bewildered and confused
by the technical issues.

Ceremonial "head-chopping" in the wake of scandal has a long history in
Japanese corporate and political life. At Bridgestone, however, the cuts
are deeper and more substantive than form alone would dictate.

Three people -- two executive vice presidents on Kaizaki's team are also
out -- are being purged rather than the traditional single scapegoat. In
addition, Masatoshi Ono, the former chief executive of the company's
Nashville, Tenn.-based Bridgestone/Firestone subsidiary, will depart
immediately, without waiting until the end of the fiscal year or keeping
a customary and face-saving advisory role.

To drive home the point, Bridgestone departed from the usual practice of
filling the top spot with a generalist and instead replaced Kaizaki with
the company's longtime head of quality control, Shigeo Watanabe.

The moves were greeted positively in Japan by experts and laymen alike at
a time when a series of scandals in the country's food, nuclear, and
transportation sectors are racking national confidence in its
much-vaunted quality control.

"This is a much more decisive approach than usual," said Junichi
Shinohara, a 61-year-old Japanese security guard. "Usually they cut one
head, which is a bit like cutting a lizard's tail off while the body of
the problem remains."

Bridgestone's sluggish early reaction to the Firestone problem contrasted
with Ford's quick response as feisty President and Chief Executive Jac
Nasser came out swinging and the company worked overtime to tell its side
of the story.

"There was a six-week period when Bridgestone had it's head in the sand,"
said Howard Smith, Tokyo-based auto analyst with ING Barings. "And Ono
didn't even speak the same language," literally or conceptually.

By the time Kaizaki did speak--dispelling rumors that he had been
cowering in a hotel room as the crisis festered--significant damage had
been done to the Bridgestone/Firestone brand. Adding to the resignation
pressure, analysts say, were threats of U.S. class-action lawsuits
against the parent company and the hit to Bridgestone's consolidated

Bridgestone expects earnings for the 12 months ending March 31 to fall
43% below the previous year's levels to around $ 434 million, due largely
to fallout from the scandal.

Bridgestone has admitted to design and manufacturing problems at its
Decatur, Ill., plant, but it also blames Ford for errors in the
Explorer's design. Last month, Bridgestone/Firestone set aside $ 750
million to cover the costs of its recall of 6.5 million tires and
potential legal liabilities, without admitting any.

Moving ahead, the company must work to stem the bleeding.

"Always hanging over Kaizaki's head was the question of accepting
responsibility," said Shigeharu Kimishima, an analyst with Kokusai
Securities. "The change is needed and the company can now begin to
rebuild its image."

While Watanabe has the background to answer technical questions, his
appointment also signals to shareholders and consumers that the company
takes the problem seriously. That said, he arguably has no marketing or
public relations expertise, the lack of which played a big part in the
company's missteps.

Bridgestone's slow initial reaction also underscores a key management
problem for Japanese multinational corporations--a tendency to rely too
much on Japanese managers in overseas subsidiaries who do not fully
understand the local market. Shareholders, government regulators and
consumers are far more supportive in Japan, arguably making Japanese
managers a bit sleepy overseas. Bridgestone replaced Ono with John Lampe,
an American.

Kaizaki ends his career on a sour note after what many regard as a pretty
good eight-year record. Bridgestone has a 45% share of Japan's tire
market. Its Formula One racing links in Europe have boosted its
reputation there and, before the scandal it had turned Firestone around
following U.S. quality problems.

Despite their mutual finger-pointing, Ford and Bridgestone share an
interest in settling individual death and injury lawsuits as quickly as
possible out of court without the negative publicity trials would bring.
(Los Angeles Times, January 12, 2001)

DELTA AIR: Three Airline Workers Pursue Racial Bias Suit
Attorneys for three Delta Air Lines workers said it will be several
months before they know whether they'll expand a racial discrimination
lawsuit against the Atlanta carrier into a class-action case.

Three longtime Delta workers are suing the airline, saying they were
denied promotions and better pay because they are black. The women have
hired the legal team that won a $ 192.5 million judgment against
Coca-Cola Co. for racial discrimination. Delta said it will respond to
the claims in court.

"Delta is firmly committed to the principles of equal opportunity and
nondiscrimination. Not only is it unlawful and wrong, but it is directly
contrary to our core values," spokeswoman Alesia Watson said.

Delta is the fourth major employer in Atlanta involved in a racial
discrimination lawsuit in the last year, following Coke, Lockheed
Martin's Marietta plant and Georgia Power Co.

The suit accuses the airline of systematically discriminating against the
women by blocking them from higher-paying management jobs. It also
alleges they were denied pay raises.

The three women --- Wilma Cordy, an executive account manager; Carolyn
Grillier, a reservations sales agent; and Dorris Dade, a senior analyst
--- have been with the company 20 to 30 years, lawyers said.

"These are longtime, dedicated employees. They've tried to work within
Delta's hierarchy to deal with the problems," said their attorney, Byron
Perkins, a Birmingham attorney who worked on the Coke case.

The women first voiced their concerns in a complaint filed in May with
the U.S. Equal Employment Opportunity Commission. They are among a
half-dozen Delta employees who have filed EEOC complaints. Two months
later, Delta named Belinda Stubblefield vice president of global
diversity. Earlier this month, Delta announced it will give a $ 1.65
million grant over four years to Western Michigan University's College of
Aviation to attract more women and minority pilots, and this year for the
first time the company will close corporate headquarters in observance of
Martin Luther King Jr.'s birthday.

Attorneys for the Delta plaintiffs say they are still gathering evidence
to determine if they will ask the court to certify the case as a class
action. That process could take three to six months. The suit was filed
in federal court in Atlanta in December and seeks compensatory and
punitive damages.

"I don't see it in a different mold than the Coke case," said Cyrus
Mehri, a Washington attorney who worked on the Coke and Texaco cases and
is involved in the Delta suit. "I see similar issues."

"They chose litigation as a last resort, but they hope it triggers a
dialogue," Mehri said.

As of April, minorities made up 22 percent of Delta's workers, 15 percent
of its management and about 5 percent of executives who are directors or

"I don't know if the allegation against Delta is true, but it does
illustrate that even very large companies with very formal personnel
practices and very official statements of nondiscrimination can
potentially be subject to discrimination (suits)," said Marc Bendick, a
Washington economist and co-author of a Rutgers Law School study looking
at employment and discrimination practices.

The study found that large employers in Georgia were engaged in
substantial discrimination against minorities and as a result Georgia
ranked near the bottom in employment of minority workers.

The statistics held true for metro Atlanta as well, Bendick said.

"I don't think racism is unusually present here compared to other
communities, but (the lawsuits) certainly show Atlanta's not immune,"
said Les Hough, director of the W.J. Usery Jr. Center for the Workplace
at Georgia State University.

"It's held itself above this sort of thing. But Atlanta is not much
different from other communities. It's a pervasive climate of
discrimination that exists in this day and age. (The nation has) made
great progress in some ways yet the nature of the problem seems
intractable in some ways. It does add to the increased anxiety in the
business community about the city's image." (The Atlanta Journal and
Constitution, January 12, 2001)

ECONOMY CLASS SYNDROME: Singapore Airlines to Give Warning Before Flying
Due to increased public concern about the effects on health of flying,
Singapore Airlines said it will give all travelers a brochure on healthy
air travel when they buy their tickets.

The announcement came as an Australian law firm prepared to file
compensation claims for about 1,000 people who say they have suffered
''economy class syndrome,'' or deep vein thrombosis, while on flights.
The condition can be caused by sitting still for long periods. ''We
recognize international public concern about the DVT issue,'' said
Singapore Airlines spokesman Yap Kim Wah.

Singapore Airlines is one of the airlines the law firm Slater and Gordon
says it will name in the class action. The airline has said it has not
been notified of any lawsuits related to DVT.

In a statement released last Friday January 12, Singapore Airlines said
it would also display health tips at its airport counters and provide
more information aboard all of its flights.

Australia's two biggest airlines said Wednesday that they would print
health warnings on their tickets about the danger of potentially deadly
blood clots for passengers on long, cramped flights.

The moves follow the death of a British woman who developed a blood clot
during a flight from Sydney to London.

Wah said Singapore Airlines was the only major carrier which provided
health tips in its safety video on board flights and in its magazine. A
separate health card will be placed in every seat pocket, he said. (AP
Worldstream, January 12, 2001)

FIRESTONE, FORD: Business Report Presents Case As Crisis Mgt Lesson
Apart from the tragic consequences of possible  injury or death for your
employees or others, having a wall collapse or a girder give way, or
another significant failure on one of your jobsites often means
additional serious problems for your company, if the incident is not
handled correctly.

For one thing, your superintendents may be anxious to clear away the
debris and return the site to normal. But rushing to do so can cause
further injuries and damage, jeopardize your insurance coverage, and put
your company at risk of being held unfairly responsible for the failure.
(For the right way to do it, see the sidebar, ''Policy for Dealing With
Construction Failure.'')

Other major problems can result from a lack of crisis management
planning. A case in point, which can be applied to the construction
industry, is the ongoing situation involving Firestone tires and Ford
Explorers. Contractors can learn some valuable lessons from the way the
problem was mishandled from the beginning, says Janine Reid, president of
the Janine Reid Group, Inc. (Denver; 303-322-3211; Web: www.janinereid
.com), author of Crisis Management: Planning and Media Relations for the
Design and Construction Industry.

''I believe that the Ford-Firestone crisis presents an interesting case
study for the construction industry, particularly because a crisis
involving two or more parties is not unheard of in this industry,'' says

''When companies engage in crisis management planning, I counsel them to
think of the process as being about much more than their response to a
crisis,'' she says. ''It is also about preventing the crisis from
occurring in the first place and about the need to work together with all
project partners to ensure this outcome.''

Since the majority of construction crises involve work site accidents,
this typically means creating a safer work environment. But accidents are
by no means the only events that can cause a crisis. There are a host of
other things that need to be identified and contained before a problem

A situation that could have been avoided. In the case of Ford and
Firestone, both companies could have avoided costly headaches had either
taken a different path when concerns first arose about tire safety.
Although both organizations had ample warning that something was wrong,
neither wanted to alert the National Highway Transportation Safety
Administration or their customers. This is sure to be one of the central
issues in the class-action lawsuits and criminal charges that have been
filed against the companies.

''There [is] a moment of truth for every company that pass[es] through
the public spanking lines of the media, Congress, and courts, that Ford
and Firestone now face,'' wrote Marianne Jennings, a professor of legal
and ethical studies, in the Wall Street Journal (Sept. 11, 2000). That
moment comes when those within the company realize that something is awry
with their product, practices, earnings statement, or culture. It usually
comes when things are peachy in sales and earnings and the truth is
ignored in the name of saving face and, perhaps, earnings.

In reality, however, the chances are that neglecting the problem will end
up costing the company much, much more than it would to deal with it in
the first place.

This is certainly true for Ford and Firestone. The crisis has forced both
to spend large amounts of time and money on damage control. A look at
Ford's third-quarter earnings shows a 7% drop, primarily due to the cost
of dealing with the tire recall. When all is said and done, the company
estimates the recall will cost it $ 500 million.

Firestone has announced that the recall will cost it approximately $ 450
million and that it has already laid off 450 workers at its Decatur, Ill.
plant, where most of the tires were manufactured. It also idled plants in
Oklahoma and Tennessee for several weeks due to lack of demand.

What went wrong? Firestone's initial response to the crisis was dismal,
at best. Then-CEO Masatoshi Ono initially apologized for the accidents,
but said that improper consumer maintenance of the tires was partially to

Although Firestone has since taken steps to show its concern, Ono's
initial statements may well cause the incident to end up costing
Firestone much more than necessary. In fact, some analysts expect the
100-year-old Firestone brand to go the way of Corvair or Edsel.

On the other hand, the Ford Explorer has not lost market share. This is
largely due to CEO Jacques Nasser, whose efforts at damage control were a
textbook case of the right way to respond to a crisis. In the immediate
aftermath of the recall, Nasser himself served as the company's media
spokesperson, offering statements that showed Ford's sympathy and concern
for its customers, its commitment to ensuring prompt replacements for
customers, and its resolve to fix the problem.

''In the field of crisis management planning, one wrong decision can mean
the difference between a positive outcome and an uncontrollable
outcome,'' says Reid. ''In the example of Ford-Firestone, a number of
mistakes were made. In my book, this was not a crime. The crime was in
making mistakes and failing to take action quickly and responsibly to
correct the situation.''

            Policy for Dealing With Construction Failure

The best way to make sure superintendents react properly to failure on
the construction site is to educate them in advance about what steps to
take should such a failure occur. Below is a model policy, as outlined by
Construction Company Strategist (New York, N.Y.; 800-642-8095):

1. Notify emergency services, if necessary. If anyone is injured or you
need assistance from the police or fire department, contact the
appropriate emergency services immediately. Cooperate fully with any
medical, police, or fire department personnel that come to the site. Find
out the name and affiliation of any persons who request information about
the failure and do not give anyone other than emergency personnel
information about it.

2. Notify the main office. Immediately after notifying any necessary
emergency services, contact the main office. It will, in turn, contact
the company's insurance carrier and attorney to determine if an immediate
investigation is necessary.

3. Preserve the site. If possible, leave the area where the failure
occurred the way it appeared when the failure first occurred. This will
better enable the company to investigate the failure to find out what
caused it. Do not try to remedy or hide the failure.

4. Assess safety and stability. Only if necessary, take immediate safety
steps to prevent any additional injuries or damage. Identify:

Any areas that must be avoided. Any areas where a collapse may be
imminent. The safest route to the failure. Any immediate stabilization
that is needed and what method to use.

5. Document the conditions. Once the situation has been stabilized, take
photographs or make a video of the failure and the area around it. Make
notes of anything you saw or heard before or during the failure, no
matter how unimportant it seems. Also note what was being worked on at
the time of the failure. Just give the facts. Don't offer any opinions or
draw any conclusions about the failure. Complete an accident report if
anyone has been injured. (Contractor's Business Management Report,
January 2001)

HOLOCAUST VICTIMS: Poland Oks Law Repaying Citizens for Property Seized
Parliament approved a long-delayed law last Thursday January 9
compensating Polish citizens whose property was seized under communist
rule from 1944 to 1962, but only those who retain Polish citizenship.

The law was mired in 1 1/2 years of bitter disagreement over how to limit
the government's financial liability while easing international pressure
on Poland to compensate people whose property was seized, including many
Jews who fled communist-era persecution.

The law's sponsor, Solidarity lawmaker Tomasz Wojcik, said he hopes the
law will lift the threat of class action lawsuits by Jewish groups in the
United States seeking the return of private Jewish property.

The government estimates that some 170,000 eligible claims will cost
about $ 10 billion. (The Record (Bergen County, NJ), January 12, 2001)

MICROSOFT CORP: DOJ Finds No Bias in Judge's Order for Breakup
The Justice Department told a federal appeals court that the judge who
ordered the breakup of Microsoft was not biased as the giant computer
software company has alleged.

Reviewing several remarks by U.S. District Judge Thomas Penfield Jackson
that the company has cited, the department's antitrust division last
Friday (January 12) said the comments ''demonstrate neither bias nor the
appearance of bias.'' ''The remarks cited by Microsoft provide no reason
to doubt Judge Jackson's impartiality,'' the government said in a
150-page brief filed with the U.S. Circuit Court of Appeals for the
District of Columbia.

In an interview with The New Yorker magazine, published Jan. 8, Jackson
had compared Microsoft founder Bill Gates to Napoleon and said Microsoft
executives behave like children. ''I think he has a Napoleonic concept of
himself and his company, an arrogance that derives from power and
unalloyed success, with no leavening hard experience, no reverses,''
Jackson said.

That was months after Microsoft's lawyers went to the federal appellate
court here and argued that Jackson had compromised ''the appearance of
impartiality'' in his handling of the case. The federal judge ordered
Microsoft broken into two parts last June 7. Microsoft is appealing
Jackson's decision.

Apart from the arguments about Jackson's judicial demeanor, Microsoft
also contended the judge incorrectly assessed the facts of the case, and
that the company did not engage in anticompetitive behavior. The
government disagreed with this, saying the software giant used its
overwhelming market share to shut out rivals. ''(Microsoft) deliberately
embarked on a multifaceted campaign of anti- competitive conduct to
protect its operating system monopoly,'' the government said, citing
efforts against Netscape Corp. and Sun Microsystems.

The government also went to the heart of the antitrust case, Microsoft's
decision to bundle its Windows operating system and Internet Explorer
software. The Justice brief reiterated its argument that they are two
separate products bundled together, forcing customers who want Windows to
also have the company's Internet browser.

Microsoft has argued that the two products have become intertwined into
one, in order to provide more functions to users, and not to keep
possible competitors out of the browser market.

Microsoft spokesman Vivek Varma said in an interview that the company
believes it will be vindicated. ''We continue to believe that Microsoft's
decision to integrate browser and operating system will be found to be
procompetitive and beneficial to consumers,'' Varma said.

He also cited the merger of America Online and Time Warner as evidence
that Microsoft isn't a sole monopoly power. The merger, he said, is
''simply the latest example of the last three years of this case that the
fierce competition that Microsoft faces in the high-tech industry.''

In the magazine interview, Jackson also said that Microsoft's lead
attorney, William Neukom, is ''not very smart, or at least I don't think
he has any subtlety.'' Neukom, he said, should have advised the company
that '''the time has come for us to be flexible.'''

In the appeal filed late last November, Microsoft said interviews Jackson
granted to news organizations constituted evidence that he is biased
against the company. Jackson had given a newspaper interview rare for a
federal judge immediately after ordering Microsoft's breakup in which he
said he had little choice but to accept the government's breakup

''By repeatedly commenting on the merits of the case in the press,'' the
company's brief argued, ''the district judge has cast himself in the
public's eye as a participant in the controversy, thereby compromising
the appearance of impartiality, if not demonstrating actual bias against

Whereas Microsoft used Jackson's quotes to reporters as a cornerstone of
its brief calling for the appeals court to overturn the breakup decision,
the government used other quotes including ones where Jackson said he
''held no ill will against the company or its co-founder and chairman,
Mr. (Bill) Gates.'' to demonstrate his evenhandedness.

The Justice Department had sought to have the appeal sent directly to the
Supreme Court, but the high court turned that plea aside in late
September, remanding the case to the appellate court. ''This is the
beginning of a new chapter in this case,'' Gates said at the time of
Jackson's ruling. He called the decision inconsistent with past court
decisions and with the realities of the marketplace.

Jackson's ruling forbade the company from entering into ''exclusive
dealing'' that would restrict the development of competitors' products.
''Microsoft, as it is presently organized and led, is unwilling to accept
the notion that it broke the law or accede to an order amending its
conduct,'' wrote Jackson at the time, explaining why he believed the
breakup was necessary.

''Microsoft has proved untrustworthy in the past,'' Jackson said, citing
its failure to comply with a court ruling earlier in the 1990s that
preceded the antitrust case.

The judge had ruled April 3 that Microsoft violated federal antitrust law
by using illegal methods to protect a monopoly in computer operating
systems. He found the company tried illegally to expand its dominance
into the market for Internet browsers.

Also, a federal judge in Baltimore ruled that plaintiffs in 38
class-action lawsuits couldn't sue Microsoft for damages since their
Windows software was preinstalled on personal computers or acquired
through resellers, rather than from Microsoft. The suits were individual
efforts against Microsoft growing out of the antitrust decision. (AP
Online, January 12, 2001)

MTBE CONTAMINATION: Judge Issues Consolidation Orders in Young v. Exxon
             Exxon Files Brief Opposing Consolidation

Exxon Mobil Corp. filed a motion Nov. 29 to vacate the conditional
transfer order in MDL 1358 on the grounds that the goals of economy would
not be served by moving the case to a Manhattan courtroom (In re: MTBE
Products Liability Litigation, MDL No. 1358, No. 1:00-1898[SAS], S.D.
N.Y.; See November 2000, Page 6).

Young v. Exxon Mobil Oil Corp. (No. 8:00-CV-1912T-24C, M.D. Fla.; See
September 2000, Page 8.) was filed, the brief in support of the motion
says, "on behalf of a purported class seeking injunctive relief for
actual or threatened groundwater contamination" only against Exxon Mobil
for the limited claims of trespass and nuisance under Florida law.

Neither of the cases consolidated in MDL No. 1358, Berisha v. Amerada
Hess, et al. (No. 00 CIV 1898, S.D. N.Y.) and England v. Atlantic
Richfield Co., et al. (No.00-370-WDS, 00-371-DRH, S.D. Ill.), involve
claims of trespass and only Berisha involves a nuisance claim, the brief

                         Young Distinguished

"On the contrary, claims of conspiracy, misrepresentation, fraud and
strict liability predominate Berisha and England," the brief says. Young
does not involve the overriding factual issues identified by the Panel
for Multidistrict Litigation in the transfer order. Young is
distinguished from the consolidated cases in that it is not concerned
with "whether the defendant oil companies knew and misrepresented the
nature of MTBE, and conspired to market MTBE without disclosing its risks
to downstream users, the federal government or the public."

Because of the differences, discovery in Young will involve individual
factual issues that predominate the common issues, the brief argues. In
re Asbestos and Asbestos Insulation Material Products Liability
Litigation (431 Supp. 906 [1977]) is the authority, the brief says.

"The panel was unpersuaded that the common thread of asbestos exposure
(to asbestos dust) was enough to grant the motion because of the
predominance of individualized issues including: specific causation, the
actual injuries incurred by each plaintiff and the fact that liability in
the actions would be based on state substantive law."

                    "Not Sufficiently Complex'

Young is predominately a local action, the brief says, and not
sufficiently complex with "discovery so time-consuming that it overcomes
the 'inconvenience to the litigants and their witnesses, as well as the
burden on the judiciary, of having the predominately local ... action
transferred to an out of state forum.'" (In re Brandywine Associates
Antitrust and Mortgage Foreclosure Litigation, 407 F. Supp. 236, 238
[J.P.M.L. 1976]).

Also citing In re Asbestos, the brief argues transfer is not granted when
the questions of common fact relate to readily available scientific and
medical knowledge. "The compelling factor in denying transfer was the
fact that pertinent literature on the subject was readily available," the
brief says.


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. James Andrew Langen and Mark S. Lillie of Kirkland & Ellis in
Chicago represent BP Amoco. 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.

      Judge Issues Consolidation Order on Document Storage

District Judge Shira A. Scheindlin has issued Case Management Order No. 2
and the Practice and Procedure Order establishing guidelines for document
storage and discovery in the Manhattan MTBE consolidated proceeding (In
re: MTBE Products Liability Litigation, MDL No. 1358, No. 1:00-1898[SAS],
S.D. N.Y.; See November 2000, Page 6).

Brief deadlines and procedures established in the orders include setting
Nov. 30 as the date for serving consolidated amended complaints for the
New York and Illinois cases consolidated in Judge Scheindlin's court in
the Southern District of New York and appointing Mitchell M. Breit of
Weitz & Luxenberg in New York as custodian of the document depository.

Defendants' objections to the filing of the proposed amended complaints
are to be submitted by Dec. 10. Plaintiffs will have until Dec. 20 to
respond to objections, which will be heard at a 4:30 p.m. Dec. 27 case
management conference. The next case management conference is scheduled
for Dec. 8.

                            Motions To Dismiss

Absent objections to the proposed amended complaints, defense motions to
dismiss are due Dec. 29, otherwise they are due 30 days after the court
rules on whether amended complaints can be filed. Responses to motions to
dismiss are due no latter than Jan. 29. Defense reply memoranda are due
Feb. 15. Plaintiffs are to move for class certification 60 days after the
court rules on the motions to dismiss. Defense responses to class
certification motions are due within 45 days, and plaintiffs must reply
within 15 days.

Mediation is mentioned in the Practice and Procedure Order.

"It is the general practice of this court to refer all litigants before
it to mediation," the order says. "However the question of when and how
to mediate these cases will be discussed at a regularly scheduled
pre-trial conference."

The Practice and Procedure Order says also that discovery documents will
not be filed with the clerk of court. The document depository under the
supervision of Breit will hold discovery, except confidential
information, which will be maintained in a separate, secure location. The
location of the depository is yet to be determined.

                           Web Site Ordered

Liaison counsel is instructed in Case Management Order No. 2 to build a
Web site at www.mdl1358.com to be available to the judges, counsel and
parties in the case. E-mail notice of new posts on the site will be sent
to subscribers. Court notices and orders will be posted in ".pdf" format
on the site.

Among the other issues considered in the orders are rules for depositions
as established in Federal Rules of Civil Procedure 30(b)(2) and (3).
Audio, video and telephone depositions are permitted.


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.

Richard C. Godfrey, J. Andrew Langan and Mark S. Lillie of Kirkland &
Ellis in Chicago represent 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 ExxonMobil 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.

Robert Shulman and Mindy G. Davis of Howry & Simon in Washington, D.C.,
and Christopher S. Colman of Amerada Hess Corp. represent Amerada Hess
Corp and Coastal Corp.

Peter John Sacripanti of McDermott, Will & Emery in New York; Peter C.
Condron and Richard E. Wallace Jr. of Wallace, King, Marraro & Branson in
Washington, D.C.; and Dan H. Ball of Thompson Coburn in St. Louis
represent Chevron USA Inc., Equilon Enterprises, Exxon Corp., Mobil Oil
Corp., Motiva Enterprises, Shell Oil Products Co. and Texaco

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

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., and Mindy G. Davies and Brent H.
Allen of Howrey, Simon, Arnold & White in Washington, D.C., represent
COSTAL Corp. (Mealey's MTBE, December, 2000)

PRESIDENTIAL ELECTION: Lawsuits Multiply; Voting Problems Targeted in FL
The fallout from Florida's election mess continues, with pressure
building in the courts, in state legislatures and in Congress to address
the problems and pitfalls exposed during the presidential race.

Lawsuits are multiplying rapidly, demanding improvements from state
voting machines, alleging civil rights violations of black voters, even
targeting the companies who make and service punch-card voting machines.

State and national task forces are working to find ways to fix what many
say is broken. And governors, legislatures and members of Congress are
taking aim at every imaginable facet of elections _ from machines to
training to recount rules.

''It unfortunately was going to take a Florida and the situation that
happened there to really focus in and find solutions to the problems,''
said Tom Wilkey, New York's elections director.

Wilkey spent the week in Washington meeting with different commissions
all trying to make recommendations for improvement. On Saturday, he joins
a task force of secretaries of state for a weekend-long meeting.

Earlier this month, he met with two groups of state, county and local
officials. All want to give guidance to Congress, where at least a dozen
bills are in various stages of preparation aimed at improving elections
whether granting money for new machines, examining the effects of
broadcasting exit poll information, or tightening voter registration.

State lawmakers aren't sitting by, either. Some 300 bills already have
been filed so far, according to the National Conference of State
Legislatures. With most legislatures just getting started, the numbers
will surely grow in the months to come.

The latest proposals hit every question raised during the election, and
then some: military ballots, recount standards, voting machines, the
rights of felons to vote.

A Kentucky measure would lengthen polling hours. Illinois and California
proposals would change the way those states divide their electoral
college votes. A Maine legislator wants to more tightly restrict exit

If there were any chance the nation's legislators might neglect the
issue, the arguments brought to the courts won't.

Civil rights worries are driving lawsuits in Florida, Georgia and
Illinois, and an inquiry earlier this month by the U.S. Commission on
Civil Rights that put Florida's Gov. Jeb Bush and Secretary of State
Katherine Harris on the stand.

All three of the lawsuits question the use of the punch-card voting
machines that left thousands of votes uncounted, alleging they
disproportionately damaged black efforts to cast votes.

A class-action suit in Illinois brought by voters in 28 states targets
the Votomatic machine itself, naming as defendants companies that make,
sell and service the punch-card machines blamed for the infamous chads.

''They've known about these problems for at least 15 or 20 years,'' said
Stanley M. Chesley, an attorney working on the suit. ''It's all coming

State election officials, who long have urged Congress and legislatures
to help modernize the voting systems, say they welcome the attention. But
they also want to ensure state authority over elections.

''We don't have federal elections, we have state elections for federal
office,'' Wilkey said. ''That responsiblity was given to the states when
this country was founded.''

And secretaries of state and election officials worry that federal
efforts might be too narrowly focused.

Simply buying new machines won't prevent all future problems, said Gary
McIntosh, elections director in Washington state. Look at the chad
problems in Florida when the punch-card machines weren't cleaned, he

''People operate these systems, they don't operate themselves,'' McIntosh
said. ''If you've got 80,000 things going on in your office, and only two
people helping you out ... sometimes cleaning out the machine falls kind
of low on the priority list.''

While it may be four years until the next vote for president, the
problems so glaringly apparent in November are just as damaging right

''That's one thing about elections there are always more,'' McIntosh
said. ''We've got school measures coming up next month.'' (AP Online,
January 12, 2001)

SOTHEBY'S: Staff Cut Will Come from European and North American Units
Sotheby's, the world's leading auction house, is to trim its workforce by
about 8 per cent this year, leading to a Dollars 14m restructuring charge
during the fourth quarter.

The staff reductions will come from Sotheby's European and North American
live auction businesses, and its internet operations, it said, leaving it
with about 1,900 employees.

The company also said it would raise the buyer's commission on its
website from 10 per cent to 15 per cent on goods worth Dollars 15,000 or

The moves are part of a broader restructuring plan that it hopes will
reap Dollars 20m in annualised cost savings in its live auction business,
and Dollars 25m in its internet division.

The changes come as Sotheby's seeks to emerge from a costly price-fixing
scandal that has decimated its profits and cut its share price in half.

Sotheby's pleaded guilty in October to colluding with rival Christie's to
fix prices. The companies agreed to jointly pay Dollars 512m to former
customers to settle a class action lawsuit. Sotheby's is also awaiting a
judge's approval of a Dollars 45m fine it has agreed to pay the

The company took most of the pain from those settlements in the third
quarter, recording a Dollars 184.2m loss.

Sotheby's, which revealed its intention to overhaul its operations last
August, intends to focus more resources on the profitable, high-end goods
it sells while limiting the costs associated with lower-priced items.
(Financial Times (London), January 12, 2001)

TAX ENTITIES: Battle over Attorneys' Fees in 2 Lawsuits Regains Momentum
legal battle over attorneys' fees levied in two class-action lawsuits
regained momentum at the beginning of the year as the administration of
tax refunds awarded in the cases slowed to a crawl. Clerks working with
deputy assessor Lee Ann Kizzar continue to wade through the names of more
than 21,000 taxpayers who filed claims for refunds. They're searching for
people who changed their minds. Fourteen cities and school districts
within and including Washington County agreed to refund up to $ 18.6
million to taxpayers and attorneys in the settlement of two lawsuits.

The lawsuits claimed the taxing entities collected more property taxes
from 1994 to 1999 than allowed by Amendment 59 of the Arkansas
Constitution. Taxpayers were able to make a claim for a refund until Nov.
30. Since then, Kizzar and her helpers have been culling the names of
people who opted out of the lawsuit when it was first filed and those who
changed their mind about collecting a refund after they filed a claim for
one. That is a tedious job that involves searching for names in the sea
of claimants. In addition to culling out names, workers also are adding
the refund for the 1999 taxes to the totals.

The 1999 taxes were collected in 2000. The county is just now closing the
books on that tax year and is finally able to add that portion of the
refund to the total. "The numbers have all been estimates so far," County
Attorney George Butler said of the refund totals already released. Once
the culling is complete and the 1999 tax refund is included, the county,
cities and school districts will finally know how much they owe the
taxpayers. They're not the only people waiting on the refund totals.

Circuit Judge Paul Danielson has requested the totals. Danielson is
presiding over the legal battle over attorneys' fees in the lawsuits. The
settlement included $ 6.2 million to be paid to the plaintiffs' three
attorneys. A group of attorneys led by Fayetteville attorney Jack Butt
intervened in September, challenging the fees as excessive. The courtroom
arguments drew to a close in early December, with Danielson asking for
closing briefs to be filed after the refunds were finalized.

Tim Fox, a Little Rock attorney representing the plaintiffs' attorneys,
said that timeline was accelerated in mid-December when Danielson set a
new schedule for closing briefs. The new schedule was set after the first
refund total estimate was released. Fox's brief landed on Butler's desk
and in Butt's office. It had not yet been filed with the Washington
County circuit clerk. The brief is a bound document of 92 pages with
attached filings of conclusions of law. It recaps Fox's courtroom
arguments that attorneys' fees equaling one-third of the settlement
amount is common and fair.

Butt has 15 days to respond to Fox's closing statements. He wrote a
letter to Fox asking for a continuance. Butt said he would prefer to wait
for the refund figures to be complete, with accurate refund totals. Fox
said he is not open to a continuance. The final brief in the case is
scheduled to be filed in the last week in January. Fox said he fully
expects the refund totals to be completed by then. "It's in the best
interest of the class to get this submitted to the judge as soon as
possible," Fox said. (The Arkansas Democrat-Gazette, January 05, 2001)

TICKETMASTER: Credit Card Users Want Cash Discount Suit Back in State
In the case Adriana Garza Et Al. V. Southwest Ticketing, Inc., D/B/A
Ticketron, Ticketmaster And Rainbow Ticketmaster, Ticketmaster Texas
Management, Ticketmaster Llc, Ticketmaster Group, Inc., Ticketmaster
Online-Citysearch, Inc. And The May Department Stores Company, the
plaintiff filed an amended class action petition in state court on June
20, 2000, which claims that Ticketmaster's practice of offering cash
discounts against the amount of its service charges at outlets violated
various state laws, and asserting an additional claim that the cash
discount program in question violates a provision in a Merchant Services
Bankcard Agreement between Ticketmaster and Chase Merchant Services
L.L.C. and First Financial Bank. Plaintiff claims all consumers using
VISA and MasterCard to purchase tickets from Ticketmaster are third-party
beneficiaries of this contract. Plaintiff also filed on July 14, 2000 an
amended class certification motion. In addition to the nine-state class
sought by Plaintiff's original class certification request, the amended
motion seeks the certification of a nationwide class of VISA and
MasterCard customers since approximately April 1998 to prosecute the
alleged third-party beneficiary claim.

Ticketmaster filed a summary judgment motion on May 1, 2000 and Plaintiff
filed a second amended motion for partial summary judgment on May 24,
2000. Currently, no hearing is set on any of these motions. On July 20,
2000, Ticketmaster removed the case to federal court in McAllen, Texas on
the grounds that the newly added third-party beneficiary claim raises a
federal question under the Truth-in-Lending Act. On August 1, 2000,
Plaintiff filed a motion to remand the case to state court. Hearing on
the motion to remand has been continued in the United States District
Court. Ticketmaster denies the allegations.

TICKETMASTER: Reminds Investors of Litigation Related to Magazine Sales
In its report to the SEC, Ticketmaster Online Citysearch Inc. reminds
investors of a lawsuit that was previously reported in the CAR. On or
about December 18, 2000, Ticketmaster Corporation and Time, Inc. were
named as defendants in a purported class action lawsuit filed in the
Florida Circuit Court of the Thirteenth Judicial Circuit in Hillsborough
County. The lawsuit is entitled Victoria Mclean V. Ticketmaster
Corporation And Time, Inc., Case No. G0009564. Ticketmaster has not yet
been served in the lawsuit. The lawsuit alleges that the offering for
sale by Ticketmaster Corporation of subscriptions to Entertainment Weekly
magazine, a publication of Time, Inc., as an agent of Time, Inc.,
involves a pattern of criminal activity, conspiracy and unfair and
deceptive trade practices by allegedly disclosing credit card account
information to third parties without express written consent and
unauthorized posting to credit card accounts. As the prayer for relief in
the lawsuit, the plaintiff seeks to have the Court enjoin the business
practices of which the plaintiff has complained. In addition, the
plaintiff seeks treble monetary damages, as well as attorneys' fees and
the costs for pursuing the action. Ticketmaster has not yet filed a
response to the lawsuit. However, Ticketmaster believes the lawsuit is
without merit and expects to vigorously defend against the lawsuit.

TICKETMASTER: Settles Antitrust Suits Before Outcome on Equitable Relief
During 1994, Ticketmaster Corporation was named as a defendant in 16
federal class action lawsuits filed in United States District Courts
purportedly on behalf of consumers who were alleged to have purchased
tickets to various events through Ticketmaster Corporation.

These lawsuits alleged that Ticketmaster Corporation's activities
violated antitrust laws. On December 7, 1994, the Judicial Panel on
Multidistrict Litigation transferred all of the lawsuits to the United
States District Court for the Eastern District of Missouri for
coordinated and consolidated pretrial proceedings. After an amended and
consolidated complaint was filed by the plaintiffs, Ticketmaster
Corporation filed a motion to dismiss and, on May 31, 1996, the District
Court granted that motion, ruling that the plaintiffs had failed to state
a claim upon which relief could be granted.

On April 10, 1998, the United States Court of Appeals for the Eighth
Circuit issued an opinion affirming the district court's ruling that the
plaintiffs lacked standing to pursue their claims for damages under the
antitrust laws, but holding that the plaintiffs' status as indirect
purchasers of Ticketmaster Corporation's services did not bar them from
seeking equitable relief against Ticketmaster Corporation.

On July 9, 1998, the plaintiffs filed a petition for writ of certiorari
to the United States Supreme Court seeking review of the decision
dismissing their damage claims. Plaintiff's petition for writ of
certiorari in the United States Supreme Court was denied on January 19,

In November 2000, counsel for the purported class of plaintiffs and
Ticketmaster Corporation reached an agreement in principle pursuant to
which this litigation would be settled. The District Court approved the
settlement agreement and will enter an order concluding the litigation
upon receipt of an executed copy of the settlement agreement.

U-M: Trial On Admissions And Racism Suit Focus On Questions Of Equality
Marcela Sanchez doesn't know whether she got into the University of
Michigan Law School because of the affirmative action admissions policy.

And the 25-year-old Hispanic student -- the first minority
editor-in-chief of the prestigious Law Review -- doesn't care.

The policy didn't get her the top Law Review position or a clerkship next
year with a federal judge. But, she says, it may have given her and other
minority students a spot at one of the nation's top law schools -- and a
chance to succeed.

As a witness in a federal class-action lawsuit against the Law School
that began last Tuesday January 9 and will determine whether U-M can
consider race in admissions decisions, Sanchez and other students will
testify about the importance of classroom diversity, about difficulties
minorities face at U-M, and about barriers that many minority students
must overcome before applying to law school.

But another witness and the woman who brought the lawsuit, 47-year-old
Barbara Grutter, will tell a federal judge that she could have been a
success, too, if she had been admitted to the selective school. She says
she also would have brought diversity to the class, even if it's not the
racial diversity U-M seeks.

"Affirmative action isn't letting unqualified minorities into a law
school. It's making sure everyone has opportunities and access," Sanchez
said from her Law Review office at the start of a 10-hour day of reading
and editing article submissions. "The law school has crafted an
admissions policy to let in people who will be smashing successes."

Grutter, who was rejected when she applied in 1996, doesn't believe
that's the only goal of the admissions policy. She thinks the Law School
unconstitutionally favors minority applicants -- African Americans,
Native Americans, and Hispanics -- to get a diverse student body.

"You could never look at my application and have any doubt that I not
only would have done well, I would have done extremely well,"

Grutter said at her Plymouth Township home, where she runs a health care
information consulting firm and home-schools her two children. "There is
no way to look at it and not think that I would have made a real

In a separate trial against the U-M undergraduate program, a different
federal judge ruled last month that race could be considered in
admissions decisions, but he struck down the school's previous policy
that set aside spots for minorities. But the plaintiffs in the Law School
case continue to maintain that the school illegally uses different
standards for different races, effectively operating a dual admissions
system. U-M lawyers say race is one of many factors it uses to get a
diverse student body, which they say is essential to a legal education.

U.S. District Judge Bernard Friedman has set aside about a month to hear
testimony on three issues: how much weight the school gives to an
applicant's race, whether the law school uses a double standard that
favors minority applicants and whether race should be considered to
offset disadvantages minority students face in test scores and grades.

The two lawsuits, filed more than three years ago, are widely expected to
eventually reach the U.S. Supreme Court.

                            Biggest Perks

Sanchez is one of 16 Hispanics in her law school class. She grew up in
Las Cruces, N.M., and graduated from New Mexico State University in 1997,
where Hispanic students are not in the minority. Both of her parents are

She started law school in 1998 and has maintained grades that put her in
the middle of her class. She was accepted to the Law Review after her
first year and was later elected editor-in-chief, becoming the first
minority student to lead the 99-year-old publication that is put together
by a distinguished group of students. Being editor-in-chief is among the
biggest perks of on a law student's resume.

In classes and at the Law Review offices, Sanchez says she has often
found herself speaking for Hispanics as a group since there are so few in
the class. She believes U-M needs affirmative action to get a critical
mass of minority students so that those students don't feel singled out.
Opponents argue that a critical mass is too broad and ill-defined to
warrant giving minorities extra consideration when they apply.

"I feel like there is an extra burden being a minority editor-in-chief.
If I make a mistake, it seems like people will attribute my failures or
successes as being representative of the Hispanic population or all
minorities," she said.

The plaintiff, represented by the conservative Center for Individual
Rights law firm, points to lower standardized test scores and grades to
show that U-M discriminates against white students in favor of minority

In 1999, white and Asian applicants had an average of 167 out of 180 on
the LSAT standardized test used for law school admission. Native
Americans scored an average of 160, African Americans 159, Mexican
Americans 162 and other Hispanic Americans 164.

"We are saying that they use two different standards for determining what
qualified means," said Terry Pell, executive director of the Center for
Individual Rights based in Washington, D.C.

A group of minority students who have intervened in the case contend that
grades and test scores are poor indicators of academic success and
shouldn't be emphasized in admissions decisions. They will argue that the
difference is caused by a culturally and racially biased test and that
affirmative action helps offsets that bias.

"Because of the questions the court is considering, it will become an
accepted fact that racism impacts grades, standardized tests are biased
and race should be taken into account in admissions decisions," said
Connie Escobar, a 29-year-old Hispanic first-year Law student who will
testify at the trial.

While 29-year-old Escobar -- who had a 3.43 grade point average and 158
LSAT score -- may have been accepted to U-M without affirmative action,
she said the policy is needed to help minority students who face societal
obstacles. She grew up in a high-poverty area of Chicago, the daughter of
a Mexican mother and American Indian father who were both factory workers
and didn't have more than a first grade education.

Her father died when she was 9 years old.

"The first step is access to the means that will enable you to do things
in the future," Sanchez said.

                            Felt confident

Grutter lives in a Plymouth Township subdivision, one built in the 1980s
and already considered old for that area. She lives with her husband, an
automotive engineer, and two sons, 15 and 11 years old, whose basketballs
are the only clutter in the pristine house.

The daughter of a minister and the middle of nine children, Grutter went
to high school in the Toronto area. She married her high school
sweetheart at 19 and they moved to Michigan. She graduated from Michigan
State University in 1976 with a 3.81 grade point average. She scored a
161 on the LSAT.

When she applied to U-M and Wayne State University in 1996, she already
had been running a health care business for 14 years. She hoped to study
health law and says she turned down the opportunity to go to Wayne State
because it didn't have a specialized health law program.

She felt confident about getting into U-M: She had strong grades and
years of work and life experiences that set her apart from other

When she got put on a waiting list and later was denied admission, she
felt she had to do something about it.

"We have always taught our children that discrimination is wrong. We take
that seriously in practice and discussion," she said.

"We have taught them the law has protections for that," Grutter
continued. "Do I want them to see myself be apathetic about that? No. ...
I don't want them to think that discrimination is ideologically wrong,
but in practice it is OK."

Three years after filing the lawsuit, she still runs a profitable
business but hopes one day to reapply to U-M.

"What is important to me is to have the right to go through an admissions
process that is free from discrimination," she said.

                             Two cases

The status of lawsuits against the University of Michigan:

   -- A suit against the undergraduate program was decided in December
without a trial. U.S. District Judge Patrick Duggan upheld the current
admissions policy, which considers an applicant's race. An appeal is

   -- A separate suit challenges the U-M Law School, which uses a
different admissions policy. U.S. District Judge Bernard Friedman is
seeking testimony on three issues at a trial set to begin Tuesday: the
weight given to race, whether there are different standards based on race
and whether race should be considered to offset bias in grades and test
scores. (The Detroit News, January 12, 2001)

VA LINUX: Milberg Weiss Announces Securities Suit Filed in New York
The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a
class action lawsuit was filed on January 11, 2001, on behalf of
purchasers of the securities of VA Linux Systems, Inc. ("Linux" or the
"Company") (NASDAQ: LNUX) between December 9, 1999 and December 6, 2000
inclusive. A copy of the complaint filed in this action is available from
the Court, or can be viewed on Milberg Weiss' website at:

The action, numbered 01 CV 242 (MGC), is pending in the United States
District Court for the Southern District of New York, located at 500
Pearl Street, New York, NY 10007, against defendants Linux, Credit Suisse
First Boston Corporation ("Credit Suisse"), Larry M. Augustin and Todd B.
Schull. The Honorable Miriam G. Cedarbaum is the Judge presiding over the

The complaint alleges violations of Sections 11, 12(a)(2) and 15 of the
Securities Act of 1933 and Section 10(b) of the Securities Exchange Act
of 1934 and Rule 10b-5 promulgated thereunder. On December 9, 1999, Linux
completed an initial public offering of 4.4 million of its shares of
common stock at an offering price of $30 per share (the "Linux IPO"). In
connection therewith, Linux filed a registration statement, which
incorporated a prospectus (the "Prospectus"), with the SEC. The complaint
further alleges that the Prospectus was materially false and misleading
because it failed to disclose, among other things, that: (i) Credit
Suisse had solicited and received excessive and undisclosed commissions
from certain investors in exchange for which Credit Suisse allocated to
those investors material portions of the restricted number of Linux
shares issued in connection with the Linux IPO; and (ii) Credit Suisse
had entered into agreements with customers whereby Credit Suisse agreed
to allocate Linux shares to those customers in the Linux IPO in exchange
for which the customers agreed to purchase additional Linux shares in the
aftermarket at pre-determined prices. As alleged in the complaint, the
SEC is investigating underwriting practices in connection with several
other initial public offerings, including the Linux offering and the
offerings of Ariba Inc. and United Parcel Service, Inc.

Contact: Milberg Weiss Bershad Hynes & Lerach LLP Steven G. Schulman or
Samuel H. Rudman 800/320-5081 valinuxcase@milbergNY.com

VA LINUX: SEC Asks Credit Suisse, Bear Stearns, Goldman for Information
The first legal domino fell amid a regulatory investigation into how
investment banks allocated shares of hot IPOs during the bull market

In a complaint filed in U.S. District Court for New York's southern
district, an investor who bought shares of VA Linux Systems Inc. has sued
the software services company, two of its top executives as well as
Credit Suisse First Boston, the New York-based investment banking firm
that brought the company public. The suit was filed by the well-known
plaintiff legal firm Milberg Weiss Bershad Hynes & Lerach and is seeking
class-action status.

The 22-page complaint alleges that investors were not informed that
Credit Suisse, in deciding who got highly coveted shares of the IPO,
allegedly received improper compensation or made undisclosed agreements
with other investors that artificially inflated the price of the stock
once it started trading.

Neither VA Linux nor Credit Suisse would comment on the filing. In the
past, Credit Suisse First Boston has maintained that its actions have
been standard industry practice, but has not elaborated.

The lawsuit is the first to respond to revelations in recent weeks that
investigators including the Securities and Exchange Commission are
looking into whether certain investment banks improperly accepted extra
compensation in exchange for handing out shares of hot IPOs. The
regulators apparently are asking whether certain investors volunteered or
were asked to pay extra-large commissions on future trades of stock as
hidden payment for getting more than their normal share of an IPO
allocation. If so, it could violate securities laws requiring that all
IPO-related compensation be disclosed.

Regulators also are asking whether certain investment bankers improperly
required investors who got IPO shares to commit ahead of time to buying
more shares once the IPO shares started trading. Such so-called "tie-ins"
violate securities regulations because they create an artificial demand
for the shares in after-market trading, which inflates the price.

Three investment banks -- Credit Suisse First Boston, Bear Stearns Cos.,
and Goldman Sachs Group Inc. -- have confirmed receiving requests for
information from the SEC and have said they are cooperating. VA Linux has
also previously confirmed receiving requests for information, but said it
didn't believe VA Linux was the focus on the suit. Another firm, Morgan
Stanley Dean Witter, was also identified by the Wall Street Journal as a
target for questions, but the firm has declined to comment.

Neither the SEC nor other authorities investigating the matter, which the
Wall Street Journal said includes the U.S. attorney's office in
Manhattan, have taken any public enforcement actions stemming from the
inquiry. It is unclear whether the questions will turn into an official
probe by the SEC.

The suit focuses on the IPO of Fremont-based VA Linux, whose $ 30-a-share
IPO rocketed nearly 700 percent in its first day of trading, a record at
the time. The suit alleged that countless investors lost money buying
after-market shares, because they allege bankers were "deceptively
manipulating the market in Linux shares."

The plaintiff, Alexander Malakon, "wasn't given all the information,
bought at too high a price, and he suffered a loss," alleged Steven
Schulman, an attorney with Milberg Weiss. The suit said it seeks to
represent investors who bought shares of VA Linux from Dec. 9, 1999, to
Dec. 6, 2000. "We believe there are many investors who've been injured"
similarly, Schulman said.

The suit said that authorities are asking the same questions about the
IPOs of Atlanta-based United Parcel Service Inc. and Mountain View-based
Ariba Inc., both underwritten by Morgan Stanley.

A spokesman for UPS said the company had no comment, and wouldn't say
whether it had received requests for information from regulators. A
spokesperson for Ariba didn't return a call for comment.

Schulman hinted that this won't be the last suit filed over alleged
losses in IPO allocations. "It's reasonable to anticipate that there will
be other suits growing out of similar situations with other issuers," he
said. "We're looking at a number of those situations right now." (San
Jose Mercury News, January 12, 2001)

* Selection Of Institutional Investors As Lead Plaintiffs under PSLRA
With the enactment of the lead plaintiff provisions of the Private
Securities Litigation Reform Act, Congress hoped to encourage large
institutional investors to assume the role of lead plaintiffs in
securities class actions. However, since the Act's passage in 1995, large
institutional investors have shown only sporadic interest in serving as
lead plaintiffs in these actions, leaving their control largely in the
hands of the plaintiff's bar. The lead plaintiff selection process and
the courts' willingness to select an institutional investor to serve as
lead plaintiff over aggregations of unrelated plaintiffs is examined.
(Securities Regulation Law Journal, Winter 2001)


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

Class Action Reporter is a daily newsletter, co-published by Bankruptcy
Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc.,
Washington, DC. Theresa Cheuk, Managing Editor.

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

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to be
reliable, but is not guaranteed.

The CAR subscription rate is $575 for six months delivered via e-mail.
Additional e-mail subscriptions for members of the same firm for the
term of the initial subscription or balance thereof are $25 each.  For
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