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              Friday, January 26, 2001, Vol. 3, No. 19


AA 1420: Air Crash Plaintiff Denied Prejudgment Interest On $11M Award
ALABAMA: Lawsuit Seeks Tax Refund on Catalytic Converters for Cars
AREBA FOOTBALL: Players and League Settle Antitrust Suit
AT&T: Lovell & Stewart Announces Securities Lawsuit
AUTO FINANCING: Ct Orders Whistleblower's Lips Zipped in FL against Ford

BRIDGESTONE CORP: Monroe Pension Fund and Colorado Investor File Suits
COCA-COLA: Hires Rights Lawyer Deval Patrick Top Counsel
COUNTRY COS.: Insurance Agents Will Share $ 7 Million In Settlement
HCA: Enters $745M Settlement with DOJ over Healthcare Business Practices
HOLOCAUST VICTIMS: Polish Senate Debates Law On Returning Property

HOLOCAUST VICTIMS: Slave Labor Fund Says U.S. Court Holding Up Payments
INDIAN TRUSTS: Some Native Americans Fear Move Could Delay Payment
INTRENET, INC: Schiffrin & Barroway Announces on Securities Suit in Ohio
LEHMAN BROS: Pays School Districts and Municipalities; Faces New Suit
LOUISIANA: Fearful of Another Oyster Suit Due to Freshwater Project

PARK DISTRICT: IL App. Ct. Affirms Dismissal of Museum Tax Levy Case
PAYDAY LENDERS: Target Consumers By Teaming Up With Banks, AP Says
PRE-PAID LEGAL: Dreier Baritz Expands Period for Securities Suit in OK
PRE-PAID LEGAL: Milberg Weiss Expands Period for Securities Suit in OK
PRE-PAID LEGAL: Wolf Haldenstein Commences Securities Fraud Suit inn OK

SCHOOL UNIFORM: 5th Cir allows policy; ACLU Warns of Lawsuit in PA
STATE TRAINING: State Challenges Attorney Fees for D.C. Youth Law Center
TOBACCO LITIGATION: Juror Threatened to Kill; Discord Forces Mistrial
U-M: Test Firm Executive Says Law School Test Favors Wealthy White Males


AA 1420: Air Crash Plaintiff Denied Prejudgment Interest On $11M Award
A plaintiff awarded $11 million in the first trial of an air crash case
after an International Air Transport Association agreement lifted the
Warsaw Convention damages limitation is not entitled to prejudgment
interest, an Arkansas federal court judge has ruled. Maddox v. American
Airlines Inc., No. 400-CV-00135 (E.D. Ark., Sept. 25, 2000).

American Airlines Flight 1420 skidded off the runway during an attempt to
land at Little Rock National Airport during a thunderstorm on June 1, 1999.
The failed landing ended with the jet crashing into a steel walkway. The
plane broke apart and burst into flames. Of the 132 persons on board, the
pilot and 10 passengers were killed. The case has been previously reported
in the CAR.

Kristin Maddox, severely injured in the crash, filed suit in U.S. District
Court for the Eastern District of Arkansas alleging that the flight crew
knowingly flew the plane under dangerous circumstances and should not have
attempted the landing. The airline did not dispute liability.

Under the International Air Transport Association Intercarrier Agreement,
signatory airlines no longer invoke any limitation of liability for
compensatory damages. Plaintiffs do not have to establish willful
misconduct on the part of an airline to avoid the $75,000 per-passenger

There is strict liability up to and including 100,000 "Special Drawing
Rights." This is a term used by the International Monetary Fund, which
publishes exchange rates for conversion of SDRs into the currency of almost
every country in the world. SDR 100,000 currently equals approximately

If a passenger is injured during the course of international
transportation, the carrier is liable up to this amount without the
plaintiff proving liability. No defense is allowed by the carrier. In the
event the damage to a passenger exceeds 100,000 SDR, the burden of proof is
shifted and the carrier must establish that it used "all necessary
measures" to avoid the accident.

American waived this defense; Maddox was awarded $11.015 million.

The plaintiff then moved to amend the judgment to add prejudgment interest.
U.S. District Judge Henry Woods noted that Oklahoma law governed the case
since Maddox was a resident of that state. Arkansas choice-of-law rules
require the application of another state's law only if the relevant law is
substantive rather than procedural. In Oklahoma, the state construes its
prejudgment interest statute as procedural, and the state supreme court has
held that while interest may be added to a personal injury judgment, such
interest is not is an element of damages in such cases.

The judge did reduce the judgment by the $134,453 in Warsaw Convention
damages already paid to Maddox by American Airlines.

The plaintiff sustained permanent damage to her vocal chords; permanent
scarring and disfigurement to both of her arms and hands; and the loss of a
fingertip on her right hand. The joints in her hands and wrists are
damaged; she currently suffers a 50 to 60 percent loss of use in her right
hand and a 20 percent loss of use in her left hand.

Maddox has permanent damage to her pulmonary system from the inhalation of
heat and toxic gases, which destroyed the lining of her bronchial system.
Her physicians testified that she will fight lung infections for an average
of 24 weeks a year for the rest of her life, and that the condition will
worsen and shorten her life span.

Maddox also suffers from post-traumatic stress disorder, having been the
last person to escape the burning wreckage. She was saved by a friend who
died in the fire; another friend lay beside her for several days in the
hospital before dying from burns. (Aviation Litigation Reporter, December
12, 2000)

ALABAMA: Lawsuit Seeks Tax Refund on Catalytic Converters for Cars
Alabamians who have purchased catalytic converters for their cars since
1995 have a stake in a lawsuit that could take $30 million out of school
tax revenue and refund it to consumers.

A group of lawyers is pursuing a class-action lawsuit against the state,
contending the state Revenue Department wrongfully collected sales taxes on
pollution control parts sold for vehicles in the state. "There is $19,000
being collected daily from the people on this illegal tax," attorney
Charles Thompson of Birmingham said.

State Revenue Department attorney Susan Kennedy said the amount involved
for each consumer is tiny, but a ruling against the state could result in a
multimillion dollar legal fee for the winning attorneys. "It's a lawyers'
suit," she said.

In December 1998, Thompson, Stephen Griffis of Hoover and James Anderson of
Montgomery sued the state, citing laws the Legislature passed in 1974 and
1982 to help big corporations by exempting the purchase of pollution
control equipment from the state sales tax. The attorneys contended the tax
breaks also applied to the little guy by covering pollution control
equipment purchased for cars.

Circuit Judge Gene Reese agreed and scheduled a trial for February on how
to remedy the situation, Anderson said.

Thompson estimated that $30 million could be involved if the judge were to
order refunds on purchases back to 1995.

On Wednesday, attorneys for the Alabama Education Association, the
University of Alabama, and Auburn University asked Reese for permission to
intervene in the case because sales tax collections are used to support
public schools and colleges.

Also, Revenue Department attorneys argued the case should be thrown out
because no state officials were named as defendants in the suit and because
the plaintiffs didn't seek refunds through the Revenue Department before
going to court.

Reese did not rule immediately on either request.

Since the case began, the Revenue Department has distributed a pamphlet to
automobile dealerships saying that catalytic converters are exempt from
sales taxes. But Anderson contended the taxes are still being collected
from customers because the state's tax forms give auto shops no way to
exempt pollution control equipment when reporting their sales to the
Revenue Department. (The Associated Press State & Local Wire, January 25,

AREBA FOOTBALL: Players and League Settle Antitrust Suit
The Arena Football League ("AFL") and its players are delighted to announce
that they have agreed to settle the antitrust suit pending against the AFL
and its teams in federal court in Newark. Under this settlement, the AFL
and its players have improved, among other things, free agency, minimum
salaries, league-wide guaranteed player compensation, the salary cap
exceptions for "Franchise Players", and salary protection for players who
are injured. The AFL owners will operate under a hard salary cap that
provides the AFL with labor peace and cost certainty through at least the
2005 AFL season. This settlement is subject to approval by the federal

C. David Baker, Commissioner of the AFL, stated: "This agreement paves the
way for labor peace for at least the next five years. It tells our fans,
sponsors and investors that we have stability and a framework to allow us
to continue to grow the great game of Arena Football."

The litigation that resulted in the settlement was supported by the Arena
Football League Players Association ("AFLPA"), the National Football League
Players Association and the United Food & Commercial Workers International
Union, AFL-CIO.

James Guidry, Jr., President of the AFLPA, said in a statement: "We are
delighted with the settlement. It's a great deal and will make a big
difference to players. It will increase competition for players and help
them in many other ways, but at the same time bring stability to the AFL so
that it can continue to be the fastest-growing and most exciting indoor
sport in the world." As part of the settlement, the AFL owners have agreed
to settle all claims that are currently pending before the National Labor
Relations Board. The Arena Football League Players Organizing Committee
("AFLPOC") has also agreed to the withdrawal of its recognition by the AFL
teams, and all parties have agreed that the AFL players should now decide
whether they want to have a collective bargaining representative, and if so
which organization should be that representative.

Frank Murtha, Executive Director of the AFLPOC, stated: "The AFLPOC has
concluded that it is in the best interests of the players that all pending
litigation be settled whereby the players will be given an opportunity to
express their views about this agreement to the court and decide their
future representative in a manner determined by the NLRB."

The AFL has the right to terminate the settlement if a union is not in
place by the end of the 2001 AFL season.

AT&T: Lovell & Stewart Announces Securities Lawsuit
The law firm of Lovell & Stewart, LLP (www.lovellstewart.com) filed a class
action lawsuit, Robert J. Rodriguex v. AT&T Corp., on behalf of investors
who purchased AT&T Wireless Group tracking stock between May 2 and May 15,

The suit makes allegations that AT&T, specified officers, and specified
underwriters violated the federal securities laws by failing to disclose
material facts to investors in AT&T Wireless Group tracking stock during
the Class Period.

All investors who made purchases of AT&T Wireless Group tracking stock
between May 2 and May 15, 2000 should be aware that their purchases are not
included in any other class action lawsuit of which Lovell & Stewart is
aware but such purchases are included in the Rodriguez v. AT&T Corp. class
action filed by Lovell & Stewart. Therefore, persons who made purchases
between May 2 and May 15, 2000 are eligible to serve as representative
parties in that action.

Contact: Lovell & Stewart, LLP, New York Christopher Lovell/Gary S.
Jacobson/Christopher J. Gray 212/608-1900 sklovell@aol.com

AUTO FINANCING: Ct Orders Whistleblower's Lips Zipped in FL against Ford
Former 20-year car salesman and whistleblower David Stivers of Loxahatchee
probably knows more about the dark side of auto leasing and financing than
any insider. And after 11 years of sharing his expertise from the witness
stand against the auto industry for consumers and lawyers seeking class
actions nationwide, the 4th District Court of Appeal in December ruled his
lips should remain zipped in Florida against Ford Motor Credit Co.

The decision, the first of its kind in Florida, creates a significant
exception to the states 1990 Litigation in the Sunshine Act. The law states
any confidentiality agreement preventing disclosure of a public hazard,
such as a manufacturing defect in tires, may not be enforced. But the
statute is vague. It refers to a public hazard as not only a product, but a
condition, person or procedure that has caused or is likely to cause

So the 4th District stated that whistleblowers such as Stivers may not
publicly discuss his allegations of economic fraud against Ford Motor
Credit because fraud does not constitute a hazard.

The decision, Stivers lawyers fear, may force future litigants to remain
silent about economic fraud allegations after they settle their lawsuits.

Stivers in 1992 filed suit in Palm Beach Circuit Court against Ford Motor
Credit, the former Barnett Bank, and two car dealerships, Holman
Enterprises Inc. in Pompano Beach and Cuillo Enterprises Inc. in West Palm
Beach. Stivers, who worked as a salesman for both dealers, claimed he was
blackballed by the auto industry because he blew the whistle on alleged
deceptive leasing and financing practices.

But a three-judge DCA panel decided that Stivers, 47, is bound by a gag
order he signed as part of the 1996 settlement of his original
whistleblower suit.

In reaching its decision that affirmed Palm Beach Circuit Judge Peter D.
Blancs January 2000 order on Ford Motor Credits 1997 suit against Stivers,
Judge Robert M. Gross wrote that a public hazard connotes a tangible danger
to public health or safety. Economic fraud does not, he added.

We are very surprised at this decision; if this is how you can buy a
persons silence, its too bad, said Rebecca Covey, a solo practitioner in
Fort Lauderdale who represented Stivers during his four-year legal battle.

On Jan. 11, Stivers appellate attorney, Diane H. Tutt, and her associate,
Sharon C. Degnan of Fort Lauderdale, requested a rehearing by the full 4th

Ford Motor Credit in 1997 sued Stivers in Palm Beach Circuit Court to
enforce the gag order after Stivers, who now has his own consulting firm,
was listed as an expert witness against Ford Motor Credit in a Florida
suit, says company attorney Robert K. Tucker of the Miami office of Hinshaw
& Culbertson. Tucker says the DCA ruling is unique and deals only with
Stivers narrow situation and shouldnt dilute the Sunshine in Litigation

According to trial court records, Stivers said he asked Florida Attorney
General Bob Butterworth to investigate deceptive credit practices of the
auto industry.

Those practices included switching purchasers to a lease, secretly raising
the price of vehicles by thousands, laundering defective cars and trucks
across state lines and marking up interest rates and giving dealerships

Butterworth and Stivers appeared in 1995 on the television news program,
Prime Time Live and then before a joint session of lawmakers in
Tallahassee, showing the Prime Time tape.

The same year, the Legislature approved tough new vehicle leasing and
financing disclosure laws.

I saw it as a moral imperative, says Stivers, reflecting on his first legal
encounter with Ford Motor Credit. I didnt think I was signing away my
ability to talk about many of the things that occurred. What if Iím asked
to testify about a safety problem that has caused or is likely to cause
physical injury to someone? Stivers asked. Adds his trial attorney, Covey:
The line between economic fraud and personal injury can be very gray; one
can lead to the other. (Broward Daily Business Review, January 25, 2001)

BRIDGESTONE CORP: Monroe Pension Fund and Colorado Investor File Suits
A $110 million Michigan pension fund and a Colorado woman have filed
shareholder lawsuits against Bridgestone Corp., accusing the Japanese
company of covering up defects in its tires to keep its stock price and
earnings inflated. The suits, filed this month in U.S. District Court in
Nashville, seek class-action status for all stockholders who lost money
because of fallout from the massive tire recall by Bridgestone Corp.'s
Nashville-based subsidiary, Bridgestone/Firestone Inc.

The first lawsuit was filed Jan. 3 by the pension fund for the city of
Monroe, Mich. The second suit was filed Monday on behalf of Patricia
Ziemer, a Colorado woman who owned one share of stock in the company.

Both lawsuits make similar claims, saying shareholders lost millions
because stocks have plunged 50 percent in recent months, "wiping out half
the company's market value." According to the lawsuits, Bridgestone Corp.
has 861 million shares of common stock outstanding, and 10 million American
Depository Receipts, which each represent 10 shares of common stock.

The lawsuits say company officials "schemed and pursued a common course of
conduct and course of business that operated as a fraud or deceit on the
purchasers of Bridgestone common stock and ADR."

In August, Bridgestone/Firestone recalled 6.5 million tires amid
accusations of design and manufacturing defects that caused blowouts and
tread separations leading to thousands of crashes and hundreds of deaths.
Since then, U.S.-traded stock of Bridgestone has fallen to below $ 100 a
share from roughly $ 250.

Bridgestone/Firestone and Ford Motor Co. already are defendants in hundreds
of lawsuits filed across the nation over deaths and injuries from crashes
involving Firestone tires installed on Ford Explorers. The two Nashville
filings are believed to be the first shareholder lawsuits against the tire

Bridgestone/Firestone has conceded that poor tire design and manufacturing
at its plant in Decatur, Ill., were partially responsible for defects, but
the tire maker also blames Ford for errors in the design of the Explorer
sport utility vehicles.

Bridgestone/Firestone set aside $ 750 million to cover the cost of the tire
recall and potential legal liabilities, a move it said was not an admission
of legal responsibility. Bridgestone slashed its group profit forecast for
the fiscal year through December 2000 to 13 billion yen ($ 111.4 million)
from 67 billion yen ($ 574.1 million). The company will announce earnings
for the period in February.

Bridgestone/Firestone is expected to post a loss of $ 500 million in 2000,
its first loss in eight years. (St. Louis Post-Dispatch, January 25, 2001)

COCA-COLA: Hires Rights Lawyer Deval Patrick Top Counsel
Coca-Cola has hired Deval Patrick, who once served as the nation's top
civil rights enforcer, to lead its worldwide legal operations. As general
counsel, Patrick becomes the first African-American to head the
Atlanta-based beverage giant's legal department in its 115-year history. He
replaces Joseph Gladden, who is retiring in April. The hiring of Patrick,
currently general counsel at Texaco, comes in the wake of Coke's record $
192.5 million settlement of a class-action racial discrimination suit by
African-American employees. The settlement was modeled after a similar one
at Texaco in 1997.

Patrick, in fact, headed an independent task force that oversees
implementation of the Texaco settlement before he joined the oil and gas
company's legal team. Coke's settlement also calls for an outside task
force to oversee company efforts to improve diversity.

"This is a coup for the Coca-Cola Co.," Cyrus Mehri, plaintiffs' attorney
in both discrimination suits, said. "Deval is a gem. He is a unique person
in the entire country. He is just as skilled in the corporate boardroom as
he is in enforcing civil rights laws and working with hate-crime victims."

Harvard-educated Patrick, 44, served as assistant attorney general of the
U. S. Justice Department's Civil Rights Division from 1994 to 1997.

Gladden, 58, has had a 25-year association with Coke and is a member of top
management's powerful six-person executive committee. When Gladden retires
at the company's April 18 annual meeting, Patrick will replace him on the
executive committee, boosting its African-American representation from one
member to two. The other is Carl Ware, executive vice president for global
public affairs.

Analyst Andrew Conway of Morgan Stanley Dean Witter said Patrick's hiring
indicates that Coke Chairman Doug Daft is "recasting the top management
team. ... I think he wants to put in a seasoned general counsel who has had
experience administering and monitoring complex discrimination settlements
like Texaco."

Daft described Patrick's appointment as a "critical step in strengthening
Coca-Cola's world-class management team." The company has about 140 lawyers
on staff, not counting those hired from the outside.

Some company observers wondered whether Gladden, who is well-respected in
the beverage industry, may have paid a price for the highly publicized and
sometimes bitter legal and public relations battle that surrounded the
discrimination suit. An initial agreement to settle the case was reached
last June --- 14 months after the lawsuit was filed and long after some
company observers had expected.

But Coca-Cola spokesman Ben Deutsch said Gladden made a commitment to Daft
about a year ago to continue leading the company's legal operation while it
was dealing with at least two major issues --- the discrimination suit and
a massive reorganization involving 5,000 job cuts.

"Having done that, Joe is retiring and he wants to take some time off and
not do a thing," Deutsch said.

"Joe has led with distinction through both good and challenging times,"
Daft said in a statement. "The progress we've made in fundamentally
changing our company could not have been done without Joe."

Gladden worked on Coke litigation for 10 years at King & Spalding before
joining the company's legal department in 1985. He will continue to serve
on the boards of two of Coke's biggest bottlers.

"Joe Gladden is a gentleman and an excellent lawyer," said John Sicher,
editor and publisher of Beverage Digest. "But based on Deval Patrick's
experience and background, he brings not only good lawyering but also
several added dimensions to the Coca-Cola Co. He worked for a superb
corporate law firm, a multinational corporation and his experience with the
Justice Department and the NAACP are important ingredients in his
background." (The Atlanta Journal and Constitution, January 25, 2001)

COUNTRY COS.: Insurance Agents Will Share $ 7 Million In Settlement
After almost 20 years of litigation, a suit by Country Cos. Insurance
agents over loss of commissions has been settled for $ 7 million. Some
2,000 agents and former agents of Country Cos., of Bloomington, Ill., will
share the class-action settlement.

The agreement was filed in circuit court in Belleville in November. But an
accounting firm hired to contact the agents and handle paperwork is still
seeking missing agents, many of whom changed addresses in two decades.

The suit contended that during a company expansion, commissions were taken
from agents' accounts and given to others in violation of their contract.
The settlement calls for compensation for each such transfer, based on a
schedule that provides a set amount for each type of policy.

Joseph Slimack, now with a different agency in Fairview Heights, was one of
the original 13 Country Cos. agents who filed the suit in 1981. "A lot of
us stayed in the business," he said. "We are happy it has finally been
brought to a conclusion."

Circuit Judge Michael O'Malley also expressed relief, although he still
must decide how much the plaintiff's lawyers will get in fees and expenses.
They have asked for $ 1.95 million. The case has gone through at least two
judges. When Circuit Judge William B. Starnes retired, O'Malley took over.
Lawyer Sam Pessin of Belleville filed the original suit in 1981. He retired
last year and turned the case over to a partner, Robert E. Wells Jr., and

Fees and expenses will be in addition to the $ 7 million the agents are to
receive. O'Malley said he hoped to wrap things up in 60 to 90 days. Amounts
received by each agent will vary.

Wells said agents eligible for a portion of the settlement are being mailed
an official notice and claim form. (St. Louis Post-Dispatch (Reporter
Robert Goodrich), January 25, 2001)

HCA: Enters $745M Settlement with DOJ over Healthcare Business Practices
HCA-The Healthcare Co., former conformed name Columbia HCA Healthcare
Corp., reveals in its SEC filing that the company has been the subject of
several federal investigations into some of its business practices, as well
as governmental investigations by various states.

On December 14, 2000, HCA entered into a civil settlement agreement with
the Civil Division of the Department of Justice and a plea agreement with
the Criminal Division of the Department of Justice. The agreements resolve,
subject to court approval, all federal criminal issues outstanding against
the cmppany and federal civil claims by or on behalf of the government
against HCA relating to DRG coding, outpatient laboratory billing and home
health issues.

In addition, representatives of state attorneys general have agreed to
recommend to state officials that the company be released from criminal and
civil liability related to the matters covered by the settlement and plea
agreements. The civil settlement agreement provides that HCA will pay the
government approximately $745 million with respect to the issues covered by
the civil settlement agreement, with interest accruing from May 18, 2000 to
the payment date at a rate of 6.5%.

The civil issues that are not included as part of the civil settlement
agreement are claims related to cost reports and physician relations
issues. The plea agreement provides that HCA will pay the government
approximately $95 million. The payments will be made upon receipt of court
approval of the agreements which is expected to occur in the first quarter
of 2001. In connection with these agreements, the company recorded a
pre-tax charge of $745 million during the second quarter of 2000 and will
record a charge of $95 million in the fourth quarter of 2000.

HOLOCAUST VICTIMS: Polish Senate Debates Law On Returning Property
Poland's Senate on Thursday debated amendments that could broaden
eligibility for payments under a long-delayed bill to compensate Poles
whose property was seized by the communist regime between 1944 and 1962.

A version approved Jan. 11 in parliament's lower house, the Sejm, drew
objections from some claimants because it would limit compensation to
former property owners or heirs who retained Polish citizenship as of Dec.
31, 1999.

Critics say that would leave out claims by Polish emigres, including many
Jews who fled communist-era prosecution.

A Senate committee has proposed restoring the government's original
version, which did not include the citizenship requirement. ''The basis for
restitution should be equality before law,'' Krzysztof Laszkiewicz, a
deputy treasury minister, told the Senate. ''All who were Polish citizens
at the time they lost their property should be eligible.''

Debate continued Thursday evening, and a vote wasn't expected until Friday.
Any changes would have to be approved by the Sejm before the bill goes to
President Aleksander Kwasniewski for his signature.

The government-backed bill also has come under fire from ex-communist
legislators who say Poland can't afford the billions of dollars it would
cost. The proposal allows for the return of 50 percent of any property
seized from Polish citizens or its equivalent value in state-backed bonds
either to the original owners or direct heirs. It has been mired in 1 1/2
years of disagreement over how to limit the government's financial
liability while easing international pressure on Poland finally to
compensate people whose property was seized.

Poland hopes the measure will lift the threat of class-action lawsuits by
Jewish groups in the United States seeking the return of private property.

While a 1997 law governs return of communal Jewish property, this is the
first that in any way addresses the return of businesses, homes and other
property that belonged to individual Jews.

The government estimates that some 170,000 eligible claims will cost about
43 billion zlotys (dlrs 10 billion). (AP Worldstream, January 25, 2001)

HOLOCAUST VICTIMS: Slave Labor Fund Says U.S. Court Holding Up Payments
The chairman of Germany's fund to compensate Nazi-era slave laborers said
Thursday he's disappointed payments to victims will be delayed because a
U.S. court failed to dismiss the last of the class-action lawsuits that had
prompted German companies to address the long-forgotten issue.

Dieter Kastrup, head of the board set up to administer the planned 10
billion mark (dlrs 4.7 billion) fund, said the court decision meant the
German parliament could likely vote to release funds only in March. Fund
president Michael Jansen said he hoped payments could begin ''a few days''

Hopes that lawmakers could consider the matter as early as next month were
dashed Wednesday, when a federal judge in New York said she needed more
time to decide whether to dismiss a class-action lawsuit against German

''In the current situation, parliament is not in a position to do this,''
Kastrup said at a news conference during two days of meetings by the fund's
board. ''We're very disappointed with developments.'' He said he hoped
District Court Judge Shirley Wohl Kram would reject the suit in the next 10

The delay is another setback for efforts to compensate the estimated 1
million surviving victims of Nazi Germany's slave and forced labor
programs, most of them non-Jews from central and eastern Europe used to
keep industry running during World War II. The fund also will compensate
people subjected to Nazi medical experiments and some other
Holocaust-related claims.

Fund officials, who had originally aimed to begin payments last year, say
about 10 percent of those entitled to compensation die annually. Jansen
said they have already received about 650,000 applications. German
officials insist that payments can only begin once the last class action
suits are dismissed and parliament declares it is satisfied that companies
won't face further similar claims.

But Kram said she also wanted to be sure the funds would be distributed
fairly and that any victims who are not part of the lawsuit would still be
able to seek legal justice.

Kastrup said the judge also expressed doubts that German companies would
make good on their pledge to raise half of the fund. Industry could help
sway Kram by transferring now the 3.6 billion marks (dlrs 1.7 billion) they
have collected so far, he said.

Wolfgang Gibowski, spokesman for the initiative collecting corporate
donations, said Kastrup had made an ''interesting suggestion,'' but
cautioned that the initiative had promised not to transfer the funds until
the parliament ruling. ''The money will be there when it is due, and I hope
Judge Kram will also hear this, he said.

It was also unclear whether a handful of other Holocaust-related lawsuits
filed in the United States by individuals could lead parliament to
hesitate. Other U.S. class-action suits were dismissed late last year.
''It's a difficult question which parliament will have to keep in mind,''
Kastrup said. ''I have no recommendation to make.'' (AP Worldstream,
January 25, 2001)

INDIAN TRUSTS: Some Native Americans Fear Move Could Delay Payment
Native Americans who are suing the federal government over mismanagement of
as much as $ 10 billion in Indian trust accounts contended that a
last-minute order by Bruce Babbitt, the outgoing interior secretary, to
conduct a statistical sampling of the trusts to determine how much Indians
are owed was a ruse to avoid full recompense.

In one of his final acts before leaving office, Babbitt said that trust
account records are in such disarray that a statistical sampling is the
most cost-effective way to calculate how much the government owes account
holders. A special trustee charged with overseeing the trusts has estimated
the sampling could cost as much as $ 70 million.

However, Eloise Cobell, the lead plaintiff in a class action lawsuit aimed
at forcing the government to clean up the mismanaged trusts, said the
Interior and Justice departments intend to use Babbitt's order to
"bootstrap" their appeal of a 1999 federal court decision that ordered a
full accounting of the trusts.

"This is another desperate effort to distract the courts and Congress from
their utter inability to complete a full and accurate accounting, as
required by law," Cobell said. "I certainly hope the Bush administration
can get control of the Justice Department, obey the law and the federal
judge's orders and start to restore some integrity to this disgrace."

Dennis Gingold, an attorney for the Indians, said the Interior Department
has notified the U.S. Court of Appeals that the statistical sampling was
ordered to put the department in compliance with the federal court's order
"when, in fact, it is in violation of the court's order."

U.S. District Judge Royce C. Lamberth had ordered the Interior and Treasury
departments to overhaul the trust fund and find out how much account
holders were owed. He said a century of mismanagement and shoddy
record-keeping has left 300,000 Indians with no idea of how much they are
owed in royalties from oil drilling, grazing and logging on Indian-owned

Each year, about $ 500 million in royalties is channeled into the trust
accounts. They are passed down through generations, and many impoverished
Indians rely on them to pay for food and everyday needs.

While plaintiffs in the lawsuit contend that a minimum of $ 10 billion is
owed, Interior officials have said the total is probably less, but at least
in the hundreds of millions.

Lamberth said the accounts had been so badly mismanaged that the system
represented "fiscal and governmental irresponsibility in its purest form."
At one point in the lawsuit, he held Babbitt and Treasury Secretary Robert
E. Rubin in contempt of court for failing to produce records as ordered by
the judge.

Gingold said the proposed sampling would be a waste of money because
account records are so unreliable that a sampling could not produce
accurate information. Instead, Gingold proposed the creation of an
"economic model" of the account system, using hundreds of variables that
would include original data such as oil well production and grazing records
instead of only records from sample accounts. Gingold said such an
accounting could be done for about $ 2 million instead of $ 70 million
because the data is readily available.

Last year, the Interior Department held 80 public hearings around the
country to hear testimony about the sampling plan, which was designed to
study the records of about 350 accounts and make projections for
compensation from those records.

A majority of account holders who commented said the government should
research each account separately to determine just compensation. Kevin
Gover, former assistant secretary for Indian affairs, estimated such an
undertaking would require doubling the Bureau of Indian Affairs's annual $
2 billion budget for an undetermined number of years.

During a six-week trial in 1999, government officials conceded that the
records are in a shambles and that they are unable to provide an
accounting. Congress approved $ 27.6 million in emergency funds to help fix
the problems and urged the government to settle the lawsuit by using
statistical sampling to determine fair compensation. (The Washington Post,
January 25, 2001)

INTRENET, INC: Schiffrin & Barroway Announces on Securities Suit in Ohio
following statement was issued on January 25, 2001 by the law firm of
Schiffrin & Barroway, LLP:

Notice is hereby given that a class action lawsuit was filed in the United
States District Court for the Southern District of Ohio, Western Division,
on behalf of all purchasers of the common stock of Intrenet, Inc. (Nasdaq:
INET, INETE) from February 19, 1999 through October 13, 2000, inclusive
(the "Class Period").

The complaint charges Intrenet and certain of its officers and directors
with issuing false and misleading statements concerning the Company's
business and financial condition. Specifically, the complaint alleges that
Intrenet's statements concerning its 1998 and 1999 financial results were
materially false and misleading since the Company's reported financial
results were based upon improper accounting practices in violation of
Generally Accepted Accounting Principles.

Contact: Marc A. Topaz, Esq. or Robert B. Weiser, Esq., of Schiffrin &
Barroway, 888-299-7706, or 610-667-7706 or info@sbclasslaw.com

LEHMAN BROS: Pays School Districts and Municipalities; Faces New Suit
Accordingly to AP Online report, in a class-action lawsuit filed Jan. 19 in
Blair County, attorneys for 50 school districts and municipalities that
lost $69.5 million through risky investments assert that national
investment bank Lehman Bros. Inc. helped John Gardner Black by knowingly or
recklessly selling risky mortgage-backed securities in the mid-1990s even
though they were illegal. Black was convicted of persuading the districts
in Pennsylvania and Harford County, Md., to invest school construction
money into the risky securities. He is serving 41 months in a federal
prison, the report says.

The lawsuit, which represents one side of a legal argument, claims Lehman
closed transactions that cost the school districts tens of millions of
dollars. A partial list of the securities included in the lawsuit shows the
Lehman transactions lost $1.1 million to $3.9 million, some in less than a

David Gradwohl, one of the attorneys for the schools, said the districts
would try to get Lehman to pay their lingering losses, now at $20 million
which are expected to fall as money comes in from other settlements.
''Lehman certainly can afford to pay a few million to settle,'' Gradwohl

There has been a series of suits and settlements related to the federal
government's 1997 investigation of Black's investment companies based in
Tyrone, about 100 miles east of Pittsburgh. (AP Online, January 25, 2001)

             New Suit Filed Despite Payment To Schools

According to Pittsburgh Post-Gazette, although attorneys are about to
settle one lawsuit that will return money to shortchanged Pennsylvania
school districts, they have just opened another lawsuit that could prove
much larger.

On Feb. 2, attorneys will gather in Blair County Common Pleas Judge Hiram
Carpenter III's courtroom to approve a $ 600,000 payment from securities
broker Hefren-Tillotson Inc. of Pittsburgh, a payment that the firm will
make without admitting guilt in the Black imbroglio that lost an estimated
$ 69.5 million in clients' money, the report says.

That looked like about the last new cash to flow into the Black settlement
fund, but a class-action lawsuit filed in Blair County Friday brings New
York investment banker Lehman Bros. Inc. into the fray, charging that the
company helped the collapse by selling securities that Lehman
representatives knew were riskier than law allowed school districts to buy,
the Pittsburgh Post-Gazette report adds.

Lehman closed transactions that cost Black clients about $ 60 million,
Gradwohl charges in the lawsuit, filed on behalf of Daniel Boone Area
School District in Berks County, as leader of the class action. "Lehman
certainly can afford to pay a few million to settle," he said.

By 1997, when federal auditors caught up with him, Black's Devon Capital
Management Inc. and Financial Management Sciences Inc. had lost millions of
dollars to risky investments, then had tried to cover the losses by luring
in more investments. His companies, based in Tyrone, Blair County,
collapsed. Public schools and local governments lost money. Black, once a
respected financial manager, is serving a 41-month federal prison sentence.

State law restricts school funds to button-down investments such as
Treasury bills and insured savings accounts.

The lawsuit says that Black, facing competitive pressure to cut his
management costs, looked to increase revenues by sinking clients' money
into riskier, potentially higher-return investments than the law allowed,
but never telling school district business managers or government

The complaint charges that Lehman knew it was wrong but sold the securities
through representative Lisa Vioni, also named in the lawsuit, and stayed
mum. The complaint says Vioni "knew or recklessly disregarded the truth."
"There was a dispute over it internally at Lehman, from what we can tell
... and Vioni prevailed," Gradwohl said.

The lawsuit says attorneys never linked Lehman to wrongdoing until last
January, when they got statements witnesses gave to federal investigators.
That was 27 months after federal auditors uncovered Black's crumbling
investments and set in motion an all-fronts fight by clients to get their
money back.

Before the court takes up the Lehman complaint, though, it will close the
Hefren-Tillotson lawsuit, approving a payout that pales against the single
largest settlement in the Black case, the December 1999 agreement by
Keystone Financial Inc. of Harrisburg -- now part of Buffalo, N.Y.-based
M&T Bank Inc. -- to pay $ 51 million to settle claims that it mishandled

The money will be pooled with funds held under Financial Management's
bankruptcy, with some payout to school districts expected by July.

Lawyers, in turn, will get 25 percent of the settlement, $ 150,000.

For South Butler County School District, for instance, which estimated it
had lost $ 7.6 million in the Black collapse, the Hefren-Tillotson
settlement will add to a payback that has covered about 85 percent of its
losses, district spokesman Todd O'Shell said on January 24. (Pittsburgh
Post-Gazette, January 25, 2001)

LOUISIANA: Fearful of Another Oyster Suit Due to Freshwater Project
Already facing a potential $1 billion pay off from a court judgment in
favor of oyster fishermen, the state could be liable for another huge
settlement from other oyster grounds, a Foster administration official
said. A Plaquemines Parish jury recently awarded fishermen $48 million in a
class action suit claiming damage from the state's freshwater diversion
project in Breton Sound.

Silty river water diverted into marshes is a major way to restore the
fragile coast that is disappearing, victim of too much salt water that
kills vegetation holding the marsh together. Over the short haul, however,
the diversion has damaged the oyster crop.

Natural Resources secretary Jack Caldwell said Wednesday his attorneys read
the ruling as saying all fishermen with leases in the area are to be paid $
21,000 per acre for their leases, which could total $1 billion.

The state is appealing on several fronts, including a specific request that
the higher courts take into account that many of the state leases to the
fishermen have language that holds the state harmless from litigation.

The lower court judge refused to rule on the hold harmless clause, Caldwell
told the House Natural Resources Committee.

Later this year the state will open another diversion project in the
Barataria Bay area, which will impact oyster leases of state owned land.
The Barataria Bay leases have been given options to relocate their leases
or transfer to other leases, Caldwell said. Or, they can sue.

If they sue, the state is looking at another class action, he said, and
perhaps, another big court judgment.

Oyster industry representatives complained to the committee because the
state has refused to renew a number of oyster leases that have expired.
Mike Voisin, of the state oyster task force, said the refusal is a "knee
jerk reaction" to the jury's decision in the Plaquemines suit. "They are
not going to resolve the suit by not renewing oyster leases," he said.

Rep. William Daniel, D-Baton Rouge, said the state is doing no more than
trying to protect its interest. "When you touch a stove and it burns you,
you don't want to touch it again," Daniel said.

Both sides made good points, committee members agreed.

From the industry:

   -- Louisiana's oyster industry is the national leader with more than 250
millions of raw product harvested each year and an economic impact of $260
million a year. Short term, the river water damages the farmer, the crop
and the economy.

From state agencies:

   -- The levee system that dates to almost 100 years ago has prevented
natural diversion, the occasional flooding that freshened the marsh. The
state has lost 1,500 square miles of coast since the levee system was
built. Without diversion projects, the loss will continue until there are
no oyster grounds. (The Associated Press State & Local Wire, January 25,

PARK DISTRICT: IL App. Ct. Affirms Dismissal of Museum Tax Levy Case
The Illinois Appellate Court, 1st District, 5th Division, has affirmed a
ruling by Judge Sidney Jones III. The Appellate Court ruled that Trial
court correctly rejected plaintiff's challenge to use of funds that park
district collected under museum tax levy because plaintiff failed to bring
tax protest in timely manner, thus violating doctrine of laches.

From 1977 until the present, the Oak Lawn Park District has imposed a tax
that is included in property tax bills sent to plaintiff William J.
Sullivan -- and all other taxpayers in the district -- in the amount of .03
percent of the assessed valuation of the property.

The authority on which the district relied for this tax is the Park
District Aquarium and Museum Act, which provides that taxes may be imposed
by the directors of any society organized for the construction or
maintenance and operation of an aquarium or museum. Any funds collected
pursuant to the levy must be kept separate from the general operating funds
of the district or village.

The plaintiff testified that around 1980, he began to suspect that the
funds being collected under the park district levy were being used
improperly in that they were being spent for purposes other than those for
which the statute provides. He said he began to question the validity of
the tax at park district meetings and was always assured that the tax was
validly imposed and that the district needed the money to buy a museum

At the time the plaintiff raised these issues, he held various village
positions and at one time was president of the Oak Lawn Historical Society,
which the village hired to do some work for the park district. The
historical society prepared a feasibility study on the possible use of
schools as museums. The plaintiff testified that he was not paid by the
park district, although the majority of the society's funds came from the
district and the society paid the plaintiff a salary. He also admitted that
that he received funds from the park district's museum fund and that he
agreed to assist the district with its museum plans.

The plaintiff sued the park district in 1994, alleging that no museum was
created pursuant to the statute and that the funds for the levy were being
spent improperly. He also sought class certification. The defendants filed
a motion to dismiss, alleging that they had a museum and that the
plaintiff's claims were barred by the voluntary payment doctrine."

The trial judge denied the motion for class certification, reasoning that
the plaintiff had waited too long to file suit. The judge ruled that the
claim was barred by the doctrine of laches and that the plaintiff therefore
was an inadequate individual to represent the class.

The defendants then moved for summary judgment, contending that the
doctrines of voluntary payment and laches barred the plaintiff's claim. The
trial judge agreed and entered summary judgment, saying that the plaintiff
failed to protest when he paid his property taxes.

The appeals court affirmed. The court agreed that the voluntary payment
doctrine barred the plaintiff's claim. Under that doctrine, money
voluntarily paid under a claim of right to the payment and with knowledge
of the facts by the person making the payment cannot be recovered by the
payor solely because the claim was illegal, the appeals court said. The
defendants argued that if the plaintiff had wanted to challenge the tax, he
should have paid it under protest and filed an objection in court.

In this case, the appeals court said, the plaintiff did not file a written
objection of any sort.

Because the voluntary payment doctrine is to apply to all real estate tax
objections save for a few well-established exceptions, because plaintiff
has failed to demonstrate that he should fit under one of those exceptions
which enable a party to receive equitable relief and because he failed to
comply with the protest requirement, we affirm the trial court's order,"
the court said.

William J. Sullivan v. Board of Commissioners of Oak Lawn Park District, et
al., No. 1-99-3744. Justice Alan J. Greiman wrote the court's opinion with
Justices Patrick J. Quinn and Ellis Reid concurring. Released Jan. 19,
2001. (Chicago Daily Law Bulletin, January 24, 2001)

PAYDAY LENDERS: Target Consumers By Teaming Up With Banks, AP Says
With her next paycheck still two weeks away, Leticia Ortega was running
short on cash and running out of options. Ortega, a cashier in a San
Antonio computer store, didn't have the money to pay overdue electric and
phone bills, and she was worried her service might be cut off - until she
spotted a solution while thumbing through the weekly Thrifty Nickel. She
found National Money Service Inc., which offered her a $300 loan over the
phone at $90 interest for two weeks.

But Ortega had trouble pulling together the money to retire the debt, so
every two weeks for nearly a year, she says, National Money took $90 from
her bank account as interest and rolled over the loan. In all, she says she
paid $1,800 - an annual interest rate of nearly 800 percent - and still
owed every penny of her original loan. "If I had the money to pay, I
would've paid it," Ortega said. "But I never had it."

When Ortega finally filed a complaint with the state, she found that Texas
has a usury law restricting lending charges. But National Money and other
so-called "payday lenders" have found a route around consumer protection

The lenders are forging alliances with tiny national banks to take
advantage of a federal law granting banks the right to "export" high
interest rates. Customers walk into a payday loan store and walk out with
high-interest money borrowed, at least on paper, from a faraway bank.

National Money, whose lawyer did not return repeated phone calls, does
business with County Bank of Rehoboth Beach, Del. Dollar Financial Group
has teamed up with Eagle National Bank in Upper Darby, Pa., and Ace Cash
Express with Goleta National Bank of Goleta, Calif. Pawnship chain Cash
America International is also in the game through a venture with First
National Bank in Brookings, S.D.

Payday lending through banks riles consumer advocates, who disparage it as
legal loan-sharking. And it frustrates some state regulators who say if the
practice known as "charter-renting" continues, they may be powerless to
rein in payday lending. "Quite frankly, these figures would make (legendary
Chicago mob boss) Sam Giancana blush," said J. Philip Goddard, deputy
director of the Indiana Department of Financial Institutions. "I don't
think people in the racketeering business would, in good faith, make loans
at these rates."

The critics also say the arrangements are often a legal sham because some
payday firms immediately buy the loans back from their partners. "The
practice of renting a charter merely to collect a fee to allow a high-cost
payday lender to circumvent state law is inappropriate," FDIC Chairman
Donna Tannoue said in a speech last June. "It may be legal, but I don't
like it."

Payday industry executives point out that the National Bank Act clearly
gives banks the right to charge interest rates allowed in the state where a
bank is based, even when a consumer lives in another state. That power is
the basis for the modern credit-card business.

But federal lawmakers, who were trying to encourage interstate competition
to benefit consumers, didn't intend to create an avenue for abusive payday
lending, regulators say. "I don't think anybody ever envisioned that...we'd
be seeing this type of activity - with consumers not understanding when
they walk into their local (payday) storefront, that they're not doing
business with their local storefront," said Leslie Pettijohn, Texas'
consumer credit commissioner.

Advocates have long complained about practices they consider predatory. But
some payday customers say the lenders' new partnerships with banks have
made the situation worse. "I was stupid and I kind of set myself up, but I
do feel like a victim," says Jennafer Long, an aviation electronics
technician at Jacksonville Naval Air Station in Florida.

Last May Long and her husband, Jeromie Skinner, each borrowed $500 at an
Ace outlet in Orange Park, Fla. to pay household bills.

It wasn't until the couple went to renew their loans two weeks later that
they realized the difficulty of paying them off, Long said. Each paid $100,
but just $25 went toward the principal. Long responded by filing a
class-action lawsuit accusing Ace of violating Florida's usury law. "It's a
flytrap and you get in and there's no way to get out of it," she said.

Payday lenders and their partner banks defend themselves by saying they
provide a valuable service to people temporarily short of cash. They say
their average customer has a full-time job and a household income of about
$33,000 a year, and just needs temporary help.

"You can come in on your lunch hour to one of our stores and in a matter of
20 minutes, you can apply for a loan with Goleta, get a decision back from
the bank and get access to those funds," said Eric Norrington, vice
president of Ace, an Irving, Texas firm with 1,200 check-cashing stores in
33 states. "That's really what Americans want is convenience, and that's
why this product is so successful."

Interest on the loans - typically around $15 per $100, but sometimes up to
$ 30, payable every two weeks - are necessary to make a profit, lenders
say. Operating storefronts and evaluating loan applications costs money,
and many borrowers end up defaulting on their payments.

For consumers, they say, the key is using the loans as they're intended.
"It can really help you if you use it as a quick, short-term loan you can
pay back in your next pay period, and that's what it's for," said Murray
Gorson, president of Eagle National Bank, a two-branch institution that
makes loans through 250 Dollar Financial stores in 13 states.

The number of outlets nationwide whose primary service is payday loans has
risen from fewer than 500 in 1995 to about 7,000 today, according to
Stephens Inc., which tracks the industry. Those storefronts loaned an
estimated $9 billion last year.

A would-be borrower contacts a lender, who quickly checks that he has a
regular job and a checking account. If so, he walks out with the two-week
loan, usually between $100 and $500. When the loan period is up, the
consumer must pay off principal and interest. If he doesn't have the full
amount, he can pay only the interest. Two weeks later, the principal and
interest again come due.

Payday-bank partnerships have faced legal challenges. Josh Phanco, a
Fresno, Calif., payday customer, brought a class-action suit against Dollar
Financial and Eagle National, accusing them of systematic "subterfuge for
no other purpose than to cover their usury and to frustrate other
laws...designed to protect valuable consumers."

Dollar and Eagle agreed last October to pay up to $5.5 million in
compensation - much of it in the form of discount coupons for future
transactions - but they didn't admit wrongdoing. As part of the agreement,
all parties agreed not to discuss the case.

Some payday lenders say they've taken steps to ensure that consumers aren't
trapped under loans they can't repay. Both Eagle and Goleta now limit
lenders to three renewals after the initial loan period, executives say.
Industry critics, however, say lenders can easily sidestep their own rules
by labeling rollovers as "new" loans.

"There's so many ways to get around this," said Jean Ann Fox, director of
consumer protection for the Consumer Federation of America.

Billy Webster, president of the Community Financial Services Association, a
payday industry group, says his members have adopted a code of conduct
limiting rollovers to no more than four. CFSA also agreed last fall to
require banks, rather than the payday chains, to set lending criteria and
to approve and fund each loan.

"Responsible industry self-regulation is critical to the development of any
regulated business," said Webster, chief executive at Advance America, a
1,300-store payday chain based in Spartanburg, S.C. But some large payday
lenders, notably Ace and Dollar Financial, have since withdrawn from the
industry group.

Meanwhile, criticism of the partnerships between banks and payday firms led
the Office of the Comptroller of the Currency and the Office of Thrift
Supervision to issue new guidelines designed to ensure that banks do "not
engage in abusive practices that would increase the compliance, legal, and
reputation risks associated with payday lending and could harm the bank's
customers," according to a letter to bankers.

Some state regulators say the new federal intervention could provide a
solution, while others are less optimistic. "I mean, who's in charge of
these (lenders)?" asked Mary Louise Preis, Maryland's commissioner of
financial regulation. "If (federal regulators) are going to be in charge of
them, then the OCC and the OTS have a lot of work to do."

Consumers advocates, meanwhile, say the new guidelines are only a small
step, albeit one in the right direction. "I think clearly, federal
regulators have to go farther," said Rob Schneider, senior staff attorney
for Consumers Union in Texas. "When it comes to payday loans, there's just
no ignoring the abuses." (The Associated Press, January 25, 2001)

PRE-PAID LEGAL: Dreier Baritz Expands Period for Securities Suit in OK
Dreier Baritz & Federman announced that it filed a second class action in
the United States District Court for the Eastern District of Oklahoma on
behalf of purchasers of Pre-Paid Legal Services, Inc. (NYSE: PPD) common
stock between the period April 19, 1999 and January 16, 2001 (the "Class

The Complaint charges Pre-Paid Legal Services, Inc. and certain of its
officers and directors with violations of the Securities Exchange Act of
1934. If you wish to serve as lead plaintiff, you must move the Court no
later than 60 days from January 22, 2001. If you wish to discuss this
action or have any questions concerning this notice or your rights or
interests, please contact plaintiff's counsel, William B. Federman at
wfederman@aol.com or call (405) 235-1560.

Contact: William B. Federman of Dreier Baritz & Federman, 405-235-1560, or

PRE-PAID LEGAL: Milberg Weiss Expands Period for Securities Suit in OK
Milberg Weiss (http://www.milberg.com/prepaid/)announced on January 25
that a class action has been commenced in the United States District Court
for the Eastern District of Oklahoma on behalf of purchasers of Pre-Paid
Legal Services, Inc. ("Pre-Paid") (NYSE: PPD) common stock during the
period between April 19, 1999 and January 16, 2001 (the "Class Period").

The complaint charges Pre-Paid and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. Pre-Paid
underwrites and markets legal service plans which provide for or reimburse
a portion of legal fees incurred by members in connection with specified
matters. The Company's legal expense plans provide for or reimburse a
portion of the legal fees associated with a variety of legal services in a
manner similar to medical reimbursement plans. Pre-Paid utilized a
multi-level marketing system to sell its policies.

The complaint alleges that during the Class Period, Pre-Paid continually
announced favorable earnings and growth in the number of "associates" who
sold its policies, when, in fact, many of its associates were no longer
generating new business and were not repaying advances from the Company and
the Company's earnings were manipulated and overstated by improperly
capitalizing commission expenses and failing to write off uncollectible
advances. As a result, Pre-Paid's stock traded at inflated levels during
the Class Period, increasing to as high as $48.75 per share.

Then on 1/17/01, The Wall Street Journal published a story on Pre-Paid's
accounting which began to expose the scheme. Upon these disclosures,
Pre-Paid stock dropped to $20 per share.

Contact: William Lerach or Darren Robbins, both of Milberg Weiss Bershad
Hynes & Lerach LLP, 800-449-4900, wsl@milberg.com

PRE-PAID LEGAL: Wolf Haldenstein Commences Securities Fraud Suit inn OK
The law firms of Wolf Haldenstein Adler Freeman & Herz LLP and Lytle Soule
& Curlee are commencing a class action lawsuit in the United States
District Court for the Western District of Oklahoma on behalf of all
persons or entities who purchased or otherwise acquired the securities of
Pre-Paid Legal Services, Inc. (NYSE:PPD) between February 10, 1999 and
January 16, 2001, inclusive (the "Class Period").

The complaint charges that from at least as early as April 1999, the
Company improperly classified commission expenses as assets in violation of
accepted accounting practices. On January 17, 2001, following a long period
of misleading statements and omissions, the fraudulent nature of the
Company's accounting practices were disclosed fully to investors in an
article published in the Wall Street Journal.

According to the article and at least two experts in the field of financial
accounting, the Company improperly records commissions expenses to its
sales associates as assets and allegedly capitalizes them over three-year
periods. Under standard accounting principals, however, the Company should
immediately recognize the commission payments to its associates as
"expenses," not assets, thereby lowering its reported net income. The
result of this concerted accounting rouse was to inflate the Company's
reported earnings during the Class Period.

Contact: Wolf Haldenstein Adler Freeman & Herz LLP, New York Michael Miske,
George Peters, Fred Taylor Isquith, Esq., or Gregory M. Nespole, Esq. (800)
575-0735 e-mail: classmember@whafh.com or gnespole@aol.com web site:

SCHOOL UNIFORM: 5th Cir allows policy; ACLU Warns of Lawsuit in PA
The growing movement toward public-school uniforms has scored an important
victory with a federal appeals court ruling that allows school boards to
require uniforms if educators believe they improve discipline and learning.

"It is not the job of federal courts to determine the most effective way to
educate our nation's youth," the 5th U.S. Circuit Court of Appeals said in
rebuffing claims by 39 parents that the policy did not reduce disciplinary
problems or increase test scores, as the school board has contended.

The New Orleans-based court rejected arguments that uniforms do not improve
the teaching environment, are too expensive, stifle expression, and violate
religious rights.

The 3-0 decision Tuesday approved a countywide 34-school program in the
northwest Louisiana county of Bossier Parish, where 18,600 students from
kindergarten through high school must wear white golf shirts or button-down
dress shirts with slacks, skirts, walking shorts or "skorts." Schools may
choose navy blue or khaki for the pants and skirts and are permitted to
allow a shirt with the school color.

"It's been a long fight," school Superintendent Kenneth N. Kruithot said in
an interview, pleased at the support for a mandatory policy with no
provision to opt out. "We're pleased they saw our point and that we want to
provide the best environment for youngsters to get an education."

"Before we did this, we had all kinds of problems, fights and kids that
were stealing other kids blue jeans, for instance. We've not had that
since. There seems to be a different demeanor, a calmness, for kids in
uniform and they start their day without a confrontation at home about what
they want to wear," Mr. Kruithot said.

"We're not going to roll over and play dead," said lead plaintiff Diana
Canady, a computer programmer and mother of three teen-agers who she says
have been excellent scholars without the benefit of uniforms.

"It's forcing mass conformity on these children and teaching them that's a
good thing, and I don't think it is," Mrs. Canady said, complaining that
some schools go far beyond the rules and govern the color of socks,
hairbands and belts.

Unlike the Louisiana system, high schools are usually not included in
school-uniform policies.

Edwin Darden, senior staff attorney for the National School Boards
Association in Alexandria, was excited that the court stated so strongly
the role for school boards. "This is consistent with how courts have looked
at school boards' power on other questions to make sure the education
environment is sound. It's the natural next step," Mr. Darden said.

One passage in particular made a point of great interest to educators:

    "School boards, not federal courts, have the authority to decide what
constitutes appropriate behavior and dress in public schools," the federal
panel said.

    "Uniforms are gaining some favor among public schools, particularly in
light of all that has happened in the last several years, such as the
shootings at Columbine, bomb threats, controversy over zero-tolerance
policies," Mr. Darden said. "School officials ask, 'What else can we do to
make sure children are orderly and safe?' "

The ruling marks the highest court action on an issue that until now
generally has been resolved by making a program voluntary or allowing
exceptions. In 1995, a Maricopa County judge upheld a one-school program in

The American Civil Liberties Union has warned it may sue when Philadelphia
implements countywide uniform requirement this fall.

In 1996, the ACLU settled a lawsuit out of court with Long Beach, Calif.,
the district credited for originating the public-school uniform trend. That
settlement allows parents to opt out of the uniform policy. "Once you have
an opt-out provisions, and it's enforced, it takes away the coercion, and
there's not much of a legal leg to stand on," ACLU Foundation President
Nadine Strossen said at the time.

A recent survey by the Education Commission on the States shows two dozen
states have laws allowing local school boards to encourage or require the
wearing of uniforms at public schools. A significant percentage of schools
in Miami, Chicago and New York have policies on uniforms, but they vary
from one school to the next within the same school district. As of 1997,
federal statistics show 3 percent of public schools used uniforms. They
were found more often at schools where more than 75 percent of students
receive free or reduced-price lunches, or with minority enrollments higher
than 50 percent. Many programs provide new or donated used uniforms to
children who can't afford them.

The federal appeals court on January 24 said cost is not much of a factor
because the uniforms used in the Louisiana program cost no more than other
suitable school clothes. (The Washington Times, January 25, 2001)

STATE TRAINING: State Challenges Attorney Fees for D.C. Youth Law Center
The state is fighting the $468,900 in attorney fees sought by a Washington,
D.C., group that sued to force changes at the State Training School.

The Youth Law Center says its class-action lawsuit against the state led to
changes in use-of-force policies at the school and so it is entitled to
have the state pay the fees.

The Youth Law Center filed its lawsuit nearly a year ago against
Corrections Secretary Jeff Bloomberg and State Training School
Superintendent Owen Spurrell. The case initially involved six juveniles but
was expanded into a class action lawsuit representing all the young inmates
of the training school and juvenile prison.

The case ended with a negotiated settlement approved by a federal judge.

Three Youth Law Center lawyers who handled the case billed at rates ranging
from $160 to $340 an hour, far more than local lawyers would have charged,
the state contends.

Lawyers for the state say the opposing lawyers charged too much and that
the agreement ratifies policy and practice already in place.

"There was nothing uniquely complicated about this case," James McMahon, a
lawyer for the state, said in a filed affidavit. "I think there are many
lawyers throughout the state of South Dakota that could have represented
the plaintiffs in this action as well as the plaintiffs did."

Youth Law Center President Mark Soler said state prison officials could
have avoided any major expense by making changes right away. "The number of
changes that were made in regards to restraints and isolation could have
been made immediately when the case was filed, but they were only agreed to
when we were on the verge of trial," Soler said. Soler said the case was
settled quickly because of the specialized experience of the lawyers in his
office in cases involving prison conditions.

U.S. District Judge Lawrence Piersol approved a settlement that increased
mental-health treatment and educational programs at the State Training
School, placed restrictions on the use of restraints and solitary
confinement and required staff training.

The state is asking Piersol to deny the Youth Law Center's fee request. If
fees are awarded, it asks that the amount be reduced. (The Associated Press
State & Local Wire, January 25, 2001)

TOBACCO LITIGATION: Juror Threatened to Kill; Discord Forces Mistrial
A judge declared a mistrial Thursday in a high-stakes tobacco trial after
being warned that deliberations were so strained that one juror had
threatened to kill another. "I have an obligation to jurors to protect
them," U.S. District Judge Jack Weinstein told lawyers.

The last of three notes sent to Weinstein on the fifth day of deliberations
read, "Juror has made threat against other juror to kill" if they have to
be "here much longer."

The two-month trial pitted a trust representing blue-collar workers - many
of them with lung cancer - and their heirs against R.J. Reynolds Tobacco
Holdings Inc., Philip Morris Cos., Brown & Williamson Tobacco Corp., and
other cigarette makers.

The trust accused the companies of conspiring to mislead workers about a
"lethal synergy" of cigarette smoke and asbestos.

The trust has paid $1.4 billion in claims from a bankrupt, one-time
asbestos maker, Johns-Manville Corp, as part of earlier settlement. The
plaintiffs argue that tobacco companies should be forced to "pay its fair
share" - up to $135 million - of the liability.

The plaintiffs had predicted a verdict in their favor would improve chances
for a far-reaching settlement of similar lawsuits brought by insurers and
other third parties who want the tobacco industry to share the cost of
treating patients with cigarette-related illnesses.

The defense said the case has no legal basis, noting that federal courts
have ruled that third-party plaintiffs are too remote to seek damages.

In closing arguments last week, trust attorney Ed Westbrook said internal
memos and testimony by industry insiders had proven the defendants knew for
decades that asbestos workers who smoked were five times more likely to get
lung disease than the average smoker.

The evidence also showed manufacturers conspired to hide the findings from
the workers, he said.

"We're never going to know the full story, because the full story has been
destroyed," Westbrook said. "But what we do know tells a very, very sad

Defense attorney David Bernick argued that the trust was plagued by
mismanagement and dwindling funds - not fraud by the tobacco industry. "We
never misled the trust," he said. "The trust knew all along about tobacco
and synergy. ... They're asking the defendant to help them out with their

During seven weeks of testimony, the jury also heard from several industry
executives and researchers, including whistleblower Jeffrey Wigand, whose
story inspired the movie "The Insider." Wigand testified that while head of
research at Brown & Williamson in the early 1990s, company lawyers censored
any internal document that contradicted the industry's public "mantra" that
cigarettes had not been proven to cause cancer.

Nicholas Brookes, chairman and chief executive officer of Brown &
Williamson, denied accusations that his company targeted asbestos workers
with cigarette advertising. (The Associated Press, January 25, 2001)

U-M: Test Firm Executive Says Law School Test Favors Wealthy White Males
The standardized test for law school admissions favors white male students,
according to testimony Wednesday in a trial on the constitutionality of
University of Michigan Law School's admissions policy.

Jay Rosner, an executive for a test-preparation firm and a witness for a
group of minorities in the case, said that the questions are flawed and the
method used to pick them is biased against minorities.

The questions are pretested so the test-maker can predict the percentage of
students who will answer correctly. The chosen questions favor whites over
blacks, men over women and wealthy over poor students. They are not changed
so as to avoid major disparities in average scores from year to year,
Rosner said.

That explains test-score gaps between white and minority students and shows
the need for affirmative action to offset bias, Rosner said.

The plaintiff in the federal class-action lawsuit contends U-M
discriminates against whites in favor of less-qualified minority students.
Minority defendants who intervened in the case claim that race preference
in admissions is necessary to offset societal bias.

An attorney for the plaintiff said that Rosner's testimony called into
question the school's reliance on tests, but didn't prove a need for
considering an applicants race. (The Detroit News, January 25, 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
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Washington, DC. Theresa Cheuk, Managing Editor.

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

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