CAR_Public/010201.MBX               C L A S S   A C T I O N   R E P O R T E R

              Thursday, February 1, 2001, Vol. 3, No. 23

                             Headlines

ANDRE AND NICOLE: Judge Dismisses Mobile Home Antitrust Suit
ASBESTOS LITIGATION: WR Grace Considers Filing for Chapter 11 Protection
BASF CORP: Supreme Court Upholds Class-Action Status of Farmers' Suit
CENDANT CORP: 3rd Cir Affirms Extension of Claim Deadline in Prides Suit
CINAR CORP: Announces Proceedings in Quebec against Executives

COCA-COLA: Black workers would get $1,000 to $150,000 Each in Bias Case
GEORGIA DEPT: Illegal Immigrant Files Suit for Driver's License
GOODYEAR TIRE: Auto Safety Group Responds to Sealed Brief
GUESS? INC: Cauley Geller Announces Securities Lawsuit Filed in CA
GUESS?, INC: Charles J. Piven Announces Securities Lawsuit in CA

GUESS? INC: Milberg Weiss Files Securities Suit in California
GUESS? INC: Schiffrin & Barroway Files Securities Suit in California
HEWLETT-PACKARD: Reneges on Pledge for Lifetime Rebates, Retiree Says
HMOs: Aetna Posts 65% Drop in Profits, Tries to Settle Patients' Suits
INDIANA: Attorney Sues to Ban Punch-Card Ballots in Hoosier State

INMATES LITIGATION: Activists Seek Expanded Services for Mentally Ill
LESLIE, SPENCE: 3rd Party Defendants in Maritime Asbestos Cases in Ohio
LOCKFORMER CO: Judge Refuses to Gag Residents' Lawyers in Spill Case
MORGAN STANLEY: Appeals  to Sp Ct Application of Unfair Competition Laws
QUAKER OATS: N.D. Ill. Denies Summary Judgment in Shareholder Suit

REGENTS: Female Employees of Lawrence Livermore Lab Win Class Status
SOTHEBY'S, CHRISTIE'S: Federal Judge Dismisses Three Suits on Auctions
TAINTED WATER: $50M E Coli Deal Not Inked for Possible Long-Term Effects
VANTIVE CORP: Investors Appeal to 9th Cir against Dismissal By CA Ct

                           *********

ANDRE AND NICOLE: Judge Dismisses Mobile Home Antitrust Suit
------------------------------------------------------------
A federal judge dismissed an anti-trust lawsuit against the owners of a
St. Albans mobile home park.

The suit, brought by Vermont Legal Aid on behalf of 34 plaintiffs,
accused Andre and Nicole Lapierre of using their ownership of some of the
few vacant lots at the Town & Country Mobile Home Park to charge inflated
prices for mobile homes.

The class action suit was 3 years in the making was scheduled to last
three weeks. But U.S. District Judge William Sessions dismissed the case
against the Lapierres and their bank, the Peoples Trust Co. of St.
Albans, after a week of testimony.

Lawyer Steve Norman had argued that the Lapierres violated Vermont law
and the federal anti-trust laws, accusing the couple of an "unlawful
tying arrangement." He argued that the Lapierres allowed prospective
tenants into the mobile home park only if they bought a mobile home from
them, or from an approved dealer.

In either case, the price was marked up $12,000 to $15,000.

Lawyers from the Lapierres countered that although the couple had marked
up the mobile homes, the practice was neither unusual nor illegal.

Sessions dismissed the case, saying the plaintiffs failed to show they
were overcharged for the mobile homes the Lapierres sold them, and they
didn't prepare a credible argument regarding the extent of the Lapierres'
"market power."

Based on the scarcity of mobile home lots in the area, the plaintiffs
argued this "market power" gave the couple the leverage to overcharge
their prospective tenants. Although the plaintiffs said they had looked
to settle in Franklin and Chittenden counties, their economic expert
spoke only to the Lapierres' market power in Franklin County.

Norman said he and his clients were disappointed by the dismissal.

"We feel we did the best job we could with the evidence we had," he said.
"We hope that prospective mobile home park tenants will be educated to be
very careful when shopping for homes and to ask a lot of questions."

Ted Hobson, lawyer for the mobile home park owners, said, "the Lapierres
were the victims of a concerted effort to take over their mobile home
park, based on claims and legal theories that never had a factual or
legal basis. To the extent the state-funded agencies were part of this,
public officials should review the decision that led the state to support
this effort."

Larry Osgood, a self-described "highly unpaid advocate for mobile home
owner rights," attended parts of the trial and regarded its dismissal
with sadness.

"Mobile home ownership is the last form of private home ownership for the
low-income person," he said. "Mobile home owners are treated like
third-class citizens." (The Associated Press State & Local Wire, January
31, 2001)


ASBESTOS LITIGATION: WR Grace Considers Filing for Chapter 11 Protection
------------------------------------------------------------------------
In a statement, WR Grace, a US chemical and building products group, said
it was considering filing for Chapter 11 bankruptcy protection. The
company said asbestos litigation had become more complex and more
uncertain after lawsuits against it jumped 81 per cent last year. Its
problems included potential barriers to crucial credit, spiralling
litigation costs and reserves - which precipitated charges and a loss
last quarter, according to the Financial Times (London).

The report says some experts estimate 171,500 people died between 1967
and 1997 from asbestos-related cancer in the US. Even so, it seemed the
problem had slipped from the spotlight - until recently.

A wave of bankruptcies and the seemingly endless stream of new claims has
revived the issue and intensified the battle over the limits of this
litigation. Almost 30 years after litigation first hit asbestos makers
and users, many are again sweating over their liability reserves for the
mineral that causes lung disease and cancer. Some members of Congress
tried to address the asbestos liability problem with two ill-fated bills
introduced last year.

One proposed a federal claims process with medical criteria limiting
claims to those actually sick and a system for quick settlements. Another
bill proposed a cap on personal injury lawyers' contingency fees. The
second bill planned 2 billion dollars in current and retroactive tax
breaks to help companies.

According to the Financial Times, the industry hopes President George W.
Bush may be more sympathetic than Bill Clinton because of his general
belief in tort reform. Mr Bush has suggested one way to keep plaintiffs'
attorneys in check would be to require the loser in a lawsuit to pay the
winner's legal expenses. However, none of the Washington remedies are
likely to succeed in the near term. Mr Bush has pushed tort reform way
down his list of proposed solutions, while any sort of asbestos bill
would be too politically charged in a tight Congress, the report says. "I
don't think Congress will ever touch it," said Barbara Allen, of Arnhold
& S. Bleichroeder, a broker.

Hundreds of thousands of people each year file asbestos-related lawsuits
against companies not yet bankrupt. A recent series of bankruptcies -
G-1, Owens-Corning, Armstrong World Industries, Babcock & Wilcox and
Pittsburgh Corning - put financial pressure on others still afloat. WR
Grace, USG Corp and Federal-Mogul have shored up reserves. Others, such
as Owens-Illinois and Georgia-Pacific, are watching warily. All have seen
their share prices plummet, the Financial Times (London) reports.

So why now the renewed activity? First, asbestosis, a lung disease, and
potential cancers have a long latency period. People often do not become
sick until decades after working around the material. In addition, recent
verdicts have sent settlement amounts skyward, while claims continue to
pour in, helped by the internet. Payouts have grown since the Supreme
Court struck down class actions for asbestos in 1997. Some add that the
recent landmark 240 billion dollars tobacco settlement with a group of
states reignited the asbestos issue, the report says.

Asbestos is the name for a group of minerals formed in deposits of long
silky fibres that shed into microscopic shards. The minerals have been
mined and used in North America since 1880, but more extensively from
1940. So widely has asbestos been used in the US that experts say
everyone has been exposed to some degree.

Litigation volume and dollar claims have surpassed the wildest corporate
estimates. Experts still cannot predict fresh claims, the Financial Times
says.

A Merrill Lynch report estimated recently that companies still have up to
Dollars 30bn in liabilities, far more than what they have on hand to pay.
Some see claims continuing at least another 50 years. G-1 says it adds
50,000 claims per year and Johns Manville's settlement trust expects
500,000 new claims by mid-century.

According to the Financial Times, the litigation is not likely to stop
even if companies currently facing the wave lose their struggle. Bankrupt
asbestos-related companies typically restructure by setting up a trust,
with majority equity in the company, to fund and settle claims.

Meanwhile, asbestos continues to be used as an inexpensive building
material in much of the developing world. Some forecast at least 1m
global deaths from asbestos in the next 30 years. (Financial Times
(London), January 31, 2001)


BASF CORP: Supreme Court Upholds Class-Action Status of Farmers' Suit
---------------------------------------------------------------------
The Minnesota Supreme Court is upholding the class-action status of a
federal lawsuit by farmers against BASF Corporation.

Minneapolis lawyer Douglas Nill, who filed the lawsuit in December 1997
on behalf of farmers around the country, said the ruling reinstates the
case and remands it back to Norman County.

Farmers from around the country contend Mount Olive, N.J.-based BASF used
bogus marketing practices for its Poast and Poast Plus products, which
kill weed grasses.

BASF labeled the more expensive Poast for only minor crops in the
national agriculture market such as sugarbeets, sunflowers, potatoes,
field beans, vegetables and fruits. At the same time, BASF container
labeled cheaper Poast Plus for only a few major crops such as soybeans
and cotton.

The suit accuses BASF of deceiving farmers by selling one herbicide as
two separate products, charging a premium for Poast, the one marketed as
stronger.

Norman County District Court Judge Michael Crocker dismissed the
class-action lawsuit in March, ruling that the company had complied with
state and federal rules.

The three-judge appeals court panel unanimously concluded in November
that "the issues of whether BASF's actions rise to the level of fraud or
an unconscionable commercial practice ... are issues for a jury to
decide."

The case was then appealed to the Supreme Court. (The Associated Press
State & Local Wire, January 31, 2001)


CENDANT CORP: 3rd Cir Affirms Extension of Claim Deadline in Prides Suit
------------------------------------------------------------------------
The District of New Jersey did not err in extending the deadline for
filing claims in the $340 million settlement of the Cendant PRIDES
securities litigation, ruled the Third Circuit. Circuit Judge Carol Los
Mansmann, writing for the panel, concluded that the date change did not
impose on the company a settlement other than the one to which it agreed.
In re Cendant Corp. PRIDES Litigation, No. 00-5199 (3d Cir., Nov. 22,
2000).

The U.S. Court of Appeals for the Third Circuit also affirmed U.S.
District Judge William Walls' use of the "excusable neglect" standard in
permitting the late claims.

In March 1999, the parties presented a proposed settlement agreement
between Cendant and those persons who purchased Income or Growth Prides
(PRIDES) between Feb. 24, 1998, and April 15, 1998. The settlement
resulted from a securities fraud class action alleging that the
investment was overvalued.

The proposed settlement did not contain any specific dates regarding the
deadline for submitting proofs of claim. At the hearing, Judge Walls
selected the date of June 18, 1999, and wrote it in by hand.

When the settlement administrator permitted late claims, or corrective
measures that cured defective claims, Cendant objected to them. The
company argued that, under contract law, these deadlines were part of the
bargain and the court abused its discretion in changing them.

On Oct. 21, 1999, the district court denied Cendant's motion to disallow
approximately 200 claims. It also extended the deadline for the
submission of proofs of claim from June 18, 1999, to Sept. 7, 1999, and
changed the date for the submission of papers to cure certain claims from
Aug. 17, 1999, to Sept. 7, Relying on Fed. R. Civ. P. 6(b)(2), the court
also incorporated the "excusable neglect" standard.

On appeal, the company argued that the rights of late-filing and
late-curing class members were extinguished after June 18, 1999, and 20
days following the any notices to cure.

Judge Mansmann addressed whether the district court had the power to
extend the deadlines, and if the court applied the appropriate standard
for accepting the late claims. She found that the dates had not been
negotiated by the parties, but rather, had been supplied by the district
court in the order approving the settlement.

"Though Cendant argues ... the Stipulation document ascribed to the
District Court only the ministerial responsibilities of interpreting and
enforcing the terms of an ordinary contract, the Stipulation actually
places into the District Court's jurisdiction ongoing authority over the
Settlement, and with that comes the discretion necessary to exercise
jurisdiction," wrote the court.

The court concluded that the district court had the authority to change
the deadlines, and noted that, in a class action settlement, a court
retains special responsibility to see to the administration of justice.

Moreover, the court held that under Fed. R. Civ. P. 6(b)(2), the court
did not err in modifying the terms of the stipulations using the
"excusable neglect" standard. The court interpreted the category broadly
to include: the failure of claimants to receive notice, illness,
intervening company name changes, other system delays, and circumstances
beyond the control of a claimant.

The Cendant appellants were represented by Michael Rosenbaum and Carl
Greenberg of Budd, Larner, Gross, Rosenbaum, Greenberg & Sade in Short
Hills, N.J., and Samuel Kadet of Skadden, Arps, Slate, Meagher & Flom in
New York.

The PRIDES class members were represented by Roger W. Kirby of Kirby,
McInerney & Squire in New York. (Securities Litigation & Regulation
Reporter, December 20, 2000)


CINAR CORP: Announces Proceedings in Quebec against Executives
--------------------------------------------------------------
Troubled film producer Cinar Corp. has sued its former top three
executives, including co-founders Ron Weinberg and Micheline Charest, for
$ 28.6 million.

Cinar announced on January 30 it has begun legal proceedings in Quebec
Superior Court against Weinberg and Charest, the husband-and-wife team
that started the company but were fired as co-chief executives nearly a
year ago.

The company is also suing Hasanain Panju, former chief financial officer
who was fired in 1999 after auditors discovered millions of dollars in
company funds had been invested in offshore accounts without the
knowledge of the board of directors.

Cinar said it is claiming "the net balance owing by the defendants to
Cinar or its subsidiaries in relation to various related-party
transactions.

Cinar is also claiming an accounting of certain profits and other
relief."

The value of the suit is roughly equal to money Cinar owes federal and
provincial film-funding agencies.

The company reached settlements last month with the agencies, agreeing to
repay ill-gotten tax credits, fines and interest for a total of $ 27.5
million.

The Montreal company had been under investigation by the RCMP for more
than a year since it was revealed Cinar fraudulently obtained tax credits
for Canadian productions using scripts written by Americans.

Last Friday, auditors Ernst and Young quit in a dispute with Cinar
management.

Managers wanted to issue financial statements to pave the way for
interested buyers, but a source told the Montreal Gazette the managers
could not guarantee the restated results were free of fraud, illegal
activities or related-party transactions.

Lawyer Paul Unterberg, representing minority shareholders in a
class-action suit against Cinar and its executives, said the fact
Weinberg and Charest are still major shareholders "may be a stumbling
block for future buyers. Maybe by suing they would help get them out."

Charest and Weinberg control 62 per cent of Cinar.

Cinar produces a number of animated children's shows including Arthur,
Caillou, Wimzie's House and The Busy World of Richard Scarry. (The London
Free Press, January 31, 2001)


COCA-COLA: Black workers would get $1,000 to $150,000 Each in Bias Case
-----------------------------------------------------------------------
Coca-Cola Co. will pay black employees from $ 1,000 to about $ 150,000 as
part of its settlement of a race discrimination suit.

The figures are in a class notice on settlement terms that Coke mailed to
employees.

The notice provides eight examples of payments from $ 82.8 million in
cash and stock options set aside for compensatory damages and a back-pay
fund. The allotments will be based on length of employment, pay,
education and any wage disparities that exist between them and their
white counterparts.

U.S. District Judge Richard W. Story approved the notice on Jan. 16 and
told the company to mail it immediately to all African-Americans employed
by Coke from April 22, 1995, to June 14, 2000. Class members may elect to
take some or all of it in 10-year restricted shares of Coca-Cola stock.

The settlement totals $ 192.5 million. It also includes more than $ 20
million in legal fees; an estimated $ 43.5 million to make pay equity
adjustments for African-Americans during the next decade; $ 36 million
for a "diversity task force"; and $ 10 million to be distributed during
the next decade to African-American executives who are promoted and
succeed, comparable to an existing bonus plan.

No one will receive less than $ 1,000, but there is a cap on damages. The
cash award from both funds cannot exceed the lower of two amounts --
either $ 150,000 or three times the class member's annual base salary.

                             Stock options

The notice examples do not indicate how much of each back-pay award will
be issued as 10-year stock options. But attorneys have agreed on a
graduated schedule where employees at grades 10 through 18 must accept
from 18% to 48% of their award in options. Employees at high pay grades
must accept 53% of the back-pay award in stock options. Options may be
exercised at prices ranging from $ 48.87 to $ 65.87, according to the
individual's settlement status. Coke's share price on Jan. 18 was $
57.12.

The notice also does not tell each eligible employee and former employee
how much he or she individually will receive. That information will come
"in due course," the notice said. Meanwhile, those eligible to
participate in the settlement have until March 19 to let Coke know
whether they intend to accept or opt out of the settlement class and
pursue legal action independently.

The number of people who opt out is of particular interest to attorneys
who negotiated the settlement on behalf of four former Coke employees and
who now represent the class.

Florida attorney Willie Gary has made it clear he is waiting in the wings
to represent Coke employees unhappy with the settlement offer. (The
National Law Journal, January 29, 2001)


GEORGIA DEPT: Illegal Immigrant Files Suit for Driver's License
---------------------------------------------------------------
The debate over whether illegal immigrants should get a driver's license
is moving to a Fulton County courtroom.

A lawsuit filed by an illegal immigrant against the Georgia Department of
Public Safety challenges a state law that says only U.S. citizens and
legal residents can get a driver's license. Fifty-four illegal immigrants
plan to join the suit, said Christopher Adams, an Athens lawyer who
represents them.

Advocates say thousands of illegal immigrants a day drive in Georgia and
that it makes sense to license them so they can get auto insurance and
learn the rules of the road. They say a change would reduce wrecks with
uninsured motorists and lower the cost of auto insurance.

Opponents say it makes no sense for the state to recognize someone whose
presence violates federal law. They say illegal immigrants could use a
license to access other government services.

Adams sued in Fulton County Superior Court last week on behalf of a
21-year- old woman whose parents brought her here illegally when she was
8. He said she drives occasionally but worries a routine traffic stop
could get her deported.

The suit says the law keeping illegal immigrants from a license is
unconstitutional because it deprives people of a "fundamental right to
travel. " Adams wants a judge to let the suit proceed as a class-action
suit, which would entitle illegal immigrants across Georgia to a share of
any damages that result. Adams is asking for $ 5,000 per plaintiff.

Gordy Wright, spokesman for the Department of Public Safety, declined to
comment because department lawyers had not yet seen a copy of the suit.

Georgia residents must get a license within 30 days of moving here, but
illegal immigrants do not meet the legal definition of "resident." Wright
said they can drive indefinitely on a valid license from their native
country.

Donna Locke, coordinator of the Georgia Coalition for Immigration Reform,
said her group "will do whatever we can to fight it. It just contributes
to the climate of lawlessness. You're giving legitimacy to people who are
here illegally."

Officials in North Carolina have licensed illegal immigrants for years.
Last year, after meetings with Latino leaders, South Carolina changed its
policy to license illegal immigrants who have a letter saying they can't
get the Social Security number that otherwise would be required. Alabama
and Tennessee passed laws in 1996 and 1998, respectively, requiring
applicants to have a Social Security number, which most illegal
immigrants lack.

In Georgia, a four-member panel appointed by Gov. Roy Barnes, known as
the Latino Forum, recommended last year that the state license illegal
immigrants. Teodoro Maus, Mexican consul general for Georgia and three
other states, said he has pressed the issue in private meetings with
legislators. (The Atlanta Journal and Constitution, January 31, 2001)
(The Calgary Sun, January 31, 2001)


GOODYEAR TIRE: Auto Safety Group Responds to Sealed Brief
---------------------------------------------------------
The public interest group CARS -- Consumers for Auto Reliability and
Safety -- has filed a response in New Jersey state court to a sealed
brief submitted by Goodyear Tire & Rubber Co. in a tire defect case.
Goodyear wants a protective order on internal documents to remain in
force, while CARS contends that the company is merely seeking to "hide
evidence." Frankl v. Goodyear Tire & Rubber Co. (Andrews Publications,
Inc., December 19, 2000)


GUESS? INC: Cauley Geller Announces Securities Lawsuit Filed in CA
------------------------------------------------------------------
The Law Firm of Cauley Geller Bowman & Coates, LLP announced on January
30 that it has filed a class action in the United States District Court
for the Central District of California, on behalf of all individuals and
institutional investors who purchased the common stock of Guess? Inc.
(NYSE:GES) between February 14, 2000 and January 26, 2001, inclusive (the
"Class Period").

The Complaint alleges that defendants violated the federal securities
laws by making false and misleading statements during the Class Period.
Specifically, the complaint charges Guess and certain of its officers and
directors with violations of the Securities Exchange Act of 1934. The
complaint alleges that as Guess' inventory increased during the Class
Period, the price of Guess shares fell from the$28-$33 range to the
$18-$20 range, and it became obvious to defendants that they could not
successfully complete the sale of 4.5 million shares in their planned
secondary offering for expected returns of approximately $120 million (or
approximately $27 per share). Therefore, according to the complaint,
defendants embarked on a campaign to conceal the adverse financial
condition of the Company and thereby avoid a complete collapse in the
price of Guess shares.

On Nov. 9, 2000, after defendants had sold over $2.2 million of their own
Guess shares, they revealed that in the 3rdQ fiscal 2000 ("F00") Guess
would earn only $0.13 per share compared to analysts' revised estimates
of $0.33 per share ($0.45 unrevised), that in the 4thQ F00 the Company
would earn only $0.08 per share compared to an estimated of $0.44 per
share (unrevised), and for F01 $ 0.95 per share compared to $1.85 per
share (unrevised). In addition, and for the first time, defendants also
revealed that Guess would record a loss of over $4.7 million related to
below cost sales of inventory, and an additional charge of $ 5.4 million
to increase reserves for impaired or worthless inventory.

As further alleged in the complaint, the Nov. 9, 2000 press release was
defendants' attempt to effectuate a "soft landing" (i.e., avoid a
complete collapse in Guess stock) and was a precursor of things to come.
On Jan. 26, 2001, the Company issued a press release in which it admitted
that, throughout the Class Period, it had artificially and improperly
inflated its earnings by failing to expense costs or record accruals
relating to the value of its substantially impaired inventory. As a
result of the Company's accounting improprieties, Guess was forced to
restate its financial results for the 1stQ, 2ndQ and 3rdQ of fiscal 2000.

Contact: Cauley Geller Bowman & Coates, LLP, Boca Raton Media: Sue Null
or Charlie Gastineau 888/551-9944 (Toll Free) or Jackie Addison,
888/551-9944 (Toll Free) E-mail: info@classlawyer.com


GUESS?, INC: Charles J. Piven Announces Securities Lawsuit in CA
----------------------------------------------------------------
Law Offices Of Charles J. Piven, P.A. announced on January 31 that a
private securities action requesting class action status has been
initiated on behalf of purchasers of Guess ?, Inc. common stock during
the period between February 14, 2000 through and including November 9,
2000.

No class has yet been certified in the above action. Until a class is
certified, you are not represented by counsel unless you retain one. If
you purchased the stock listed above during the class period, you have
certain rights.

Contact: Law Offices Of Charles J. Piven, P.A., Baltimore Charles J.
Piven, 410/332-0030 pivenlaw1@erols.com


GUESS? INC: Milberg Weiss Files Securities Suit in California
-------------------------------------------------------------
Milberg Weiss (http://www.milberg.com/guess/)announced on January 30
that a class action has been commenced in the United States District
Court for the Central District of California on behalf of purchasers of
Guess? Inc. (NYSE:GES) common stock during the period between Feb. 14,
2000 and Jan. 26, 2001 (the "Class Period").

The complaint charges Guess and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. The complaint
alleges that as Guess' inventory increased during the Class Period, the
price of Guess shares fell from the $28-$33 range to the$18-$20 range,
and it became obvious to defendants that they could not successfully
complete the sale of 4.5 million shares in their planned secondary
offering for expected returns of approximately $120 million (or
approximately $27 per share). Therefore, defendants embarked on a
campaign to conceal the adverse financial condition of the Company and
thereby avoid a complete collapse in the price of Guess shares.

On Nov. 9, 2000, after defendants had sold over $2.2 million of their own
Guess shares, they revealed that in the 3rdQ fiscal 2000 ("F00") Guess
would earn only $0.13 per share compared to analysts' revised estimates
of $0.33 per share ($0.45 unrevised), that in the 4thQ F00 the Company
would earn only $0.08 per share compared to an estimated of $0.44 per
share (unrevised), and for F01 $ 0.95 per share compared to $1.85 per
share (unrevised). In addition, and for the first time, defendants also
revealed that Guess would record a loss of over $4.7 million related to
below cost sales of inventory, and an additional charge of $ 5.4 million
to increase reserves for impaired or worthless inventory.

The Nov. 9, 2000 press release was defendants' attempt to effectuate a
"soft landing" (i.e., avoid a complete collapse in Guess stock) and was a
precursor of things to come. On Jan. 26, 2001, the Company issued a press
release in which it admitted that, throughout the Class Period, it had
artificially and improperly inflated its earnings by failing to expense
costs or record accruals relating to the value of its substantially
impaired inventory. As a result of the Company's accounting
improprieties, Guess was forced to restate its financial results for the
1stQ, 2ndQ and 3rdQ of fiscal 2000.

Contact: Milberg Weiss Bershad Hynes & Lerach LLP William Lerach,
800/449-4900 wsl@mwbhl.com


GUESS? INC: Schiffrin & Barroway Files Securities Suit in California
--------------------------------------------------------------------
The law firm of Schiffrin & Barroway, LLP announced on January 31 that  a
class action lawsuit was filed in the United States District Court for
the Central District of California on behalf of all purchasers of the
common stock of Guess?, Inc. (NYSE: GES) from February 14, through
January 26, 2001, inclusive (the "Class Period").

The complaint charges Guess? 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 as Guess' inventory increased during the Class Period, the price of
Guess shares fell from $28-$33 per share to $18-$20 per share. As a
result, defendants realized that they could not successfully complete the
sale of 4.5 million shares in their planned secondary offering for
expected returns of approximately $120 million (or approximately $27 per
share). The complaint further alleges that defendants attempted to
conceal the adverse financial condition of the Company and thereby avoid
a complete collapse in the price of its shares.

On November 9, 2000, after defendants had sold over $2.2 million of their
own Guess shares, they revealed that Guess would earn only $0.13 per
share in the 3rd Quarter fiscal 2000, compared to analysts' revised
estimates of $0.33 per share ($0.45 unrevised). Furthermore, the Company
would early only $0.08 per share in the 4th Quarter Fiscal 2000 compared
to an estimated $0.44 per share (unrevised), and for Fiscal 2001, $0.95
per share compared to $1.85 per share (unrevised). Defendants also
revealed that Guess would record a loss of over $4.7 million related to
below cost sales of inventory, and an additional charge of $5.4 million
to increase reserves for impaired or worthless inventory.

On January 26, 2001, defendants issued a press release which admitted
that throughout the Class Period, it had artificially and improperly
inflated its earnings by failing to expense costs or record accruals
relating to the value of its substantially impaired inventory. As a
result of the Company's accounting improprieties, Guess was forced to
restate its financial results for the 1stQ, 2ndQ and 3rdQ of Fiscal 2000.

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


HEWLETT-PACKARD: Reneges on Pledge for Lifetime Rebates, Retiree Says
---------------------------------------------------------------------
According to a class action suit filed January 31 against Hewlett-Packard
Company (NYSE: HWP) by one of its Gold Badge retirees, the company has
reneged on a pledge to provide retirees with lifetime rebates on
purchases of HP products.

The class-action suit was filed by Mark G. Leonard, an HP employee of 23
years who is the sole inventor of four patents assigned to HP. Mr.
Leonard is one of more than 3,800 HP retirees who have been informed by
the company that they are no longer eligible for the Employee Purchase
Rebate Program, despite the fact that the company continues to provide
this benefit to other HP retirees.  Mr. Leonard retired from HP in 1998
after accepting the company's voluntary retirement program.

According to Mr. Leonard's complaint, HP in 1999 re-classified him and
others as a retiree of HP's newly spun-off company Agilent, even though
he had always worked for HP. Upon his retirement from HP, Mr. Leonard
became a Gold Badge Retiree (age 55 or older with 15 years of service).
Agilent did not exist at the time of Mr. Leonard's retirement.

"I retired from Hewlett Packard with the agreement that I would enjoy
lifetime use of the product discount program," said Mr. Leonard. "The
voluntary severance package offered included a product discount program,
which was to me an important element of the overall package. The company
has informed me that HP has the right to change the design of its
benefits programs but I do not believe they have the right to
unilaterally change the terms of our contract without my consent or to
say that I retired from Agilent, which did not exist and which I had
never heard of at the time I retired."

Mr. Leonard has corresponded with Carly Fiorina, HP's Chief Executive
Officer as well as other executives of the company and has not received a
response satisfactorily addressing the issue.

Ronald Katz, Mr. Leonard's attorney at the law firm Coudert Brothers in
Palo Alto and San Francisco, stated that HP breached the contract by
failing to fulfill its obligation to allow Mr. Leonard and other retirees
to participate in the Employee Purchase Rebate Program. He said, "Based
upon arbitrary reclassifications of Mr. Leonard and thousands of other HP
retirees, Hewlett Packard believes it can deny the promises it made in
connection with these product related rebates. Saying that someone
retired from a company that did not exist when he retired and that he'd
never heard of is outrageous. We believe that this class action will
require HP to reinstate this policy for all the members of the class."

HP's response to the complaint is due in thirty days.

Contact: Chris Tofalli of Broadgate Consultants, Inc., 212-232-2226, for
Coudert Brothers


HMOs: Aetna Posts 65% Drop in Profits, Tries to Settle Patients' Suits
----------------------------------------------------------------------
Aetna Inc., the parent of Aetna U.S. Healthcare in Blue Bell, reported a
65 percent drop in fourth-quarter profits and confirmed it has had
preliminary settlement talks with class-action lawyers who allege the
company's business policies harmed patients.

Reporting its first earnings as a pure health-care company since selling
its financial services and international businesses last month, Aetna
said it is raising prices, slashing costs and retreating from
unprofitable markets to improve results in 2001.

"We are making progress, but we have a long way to go," said chief
executive John W. Rowe, in a conference call with analysts. "It will take
time for our final performance to reach the level of other industry
leaders."

Rowe said that will take two years but would result in a doubling of
earnings per share.

Meanwhile, Aetna's chairman, William H. Donaldson, confirmed that it had
held "preliminary" talks regarding the settlement of class-action suits
against the company. In more than 50 separate suits, patients allege that
Aetna put its bottom line ahead of their care, such as by unfairly
restricting medical care.

Donaldson said the company is continuing a thorough review of operations
to find ways to be more responsive to patients, doctors and employers. If
this review indicates a policy change that would resolve allegations in a
suit, the company may consider settling, Donaldson said.

The company exited Medicare and other markets in 2000, bringing its
enrollment down 6 percent to 19.3 million members. It expects another 10
percent decline in 2001, including the loss of 1.5 million members
acquired from Prudential Health Care in 1999.

Aetna said it is negotiating price increases of 11 percent to 12 percent
this year in commercial policies, and 4 percent in its Medicare business.

Rowe told analysts the company is working to appoint some key executives.
He said Aetna may announce a new chief medical officer next week, and is
close to selecting a chief information officer and an executive to run
healthcare operations.

He said the company continues to work on finding ways to make it more
"member-centric," including disease management programs, and less
emphasis on certification and referrals that lead to a consumer distaste
for managed care.

He pointed to the company's announcement last month that it would change
a policy despised by doctors that required them to contract for all of
Aetna's products -- such as HMOs as well as other plans -- or none at
all. As a recent example, he said that of 16,000 physicians in Texas,
only about two dozen opted to change their contracts under the new
policy. "The physicians wanted the opportunity to choose," he said.

But the policy change turned to be "much ado about little."

Profit from continuing operations fell from $ 81 million, or 55 cents a
share, in 1999 to 28.7 million, or 20 cents a share last year.

The company also took charges of $ 382 million against continuing
operations and $ 174 million against discontinued operations.

The charges were to cover the exit from markets and the reduction of
5,000 jobs announced last month. The company has not said where it will
make the cuts, but a spokeswoman said Aetna, which is headquartered in
Hartford, plans to maintain a strong presence in Blue Bell where is
healthcare operations are based. (The Philadelphia Inquirer, January 31,
2001)


INDIANA: Attorney Sues to Ban Punch-Card Ballots in Hoosier State
-----------------------------------------------------------------
An attorney filed a class-action lawsuit Tuesday seeking to ban Indiana
from using punch-card voting systems - the problematic voting method that
led to Florida's presidential recount.

The lawsuit filed by Indianapolis attorney Bill Groth makes Indiana the
fourth state facing a challenge to the constitutionality of voting
systems in the wake of last year's presidential election.

The other states are in Florida, Georgia and Illinois.

Groth's lawsuit was filed on behalf of two voters and seeks to force
Indiana to ban and replace all punch-card systems, which are currently
used in 35 Indiana counties, in time for the May 2002 primary elections.

While the Indiana Constitution requires "fair and equal" elections, Groth
said there is nothing "equal" about a voting system proven to have a
higher error rate in recording votes than other types of voting
equipment.

Critics say uncounted votes may have changed the results in the
presidential race that was decided in George W. Bush's favor by 537 votes
in Florida.

Groth's lawsuit was filed in Marion County Superior Court against
Secretary of State Sue Anne Gilroy, the state's chief elections officer;
the co-directors of the state's elections division; and the Indiana
Election Commission.

Groth said he hopes Gilroy, already an advocate for modernizing Indiana's
voting equipment, will simply agree with the lawsuit, putting the state
on line to replace the outdated punch-card systems.

Gilroy said Tuesday she hasn't seen the lawsuit, but agrees with its
goal. In fact, she said bulky lever machines used in some counties can
also be inaccurate and they also need to be replaced.

The cost of replacing both types of voting systems has been estimated at
$30 million.

Gilroy and Gov. Frank O'Bannon are forming a task force to recommend
changes to Indiana's voting system.

And Gilroy is the impetus behind an Indiana Senate bill sponsored by
state Sen. Becky Skillman, R-Bedford, that seeks to create a fund to help
counties purchase modern equipment.

On Wednesday, Gilroy was expected to appear before the Indiana House
Elections Committee to endorse a similar bill sponsored by Rep. Jonathan
Weinzapfel, D-Evansville.

Groth said the plaintiffs in his lawsuit - each a voter in a county that
uses punch-card ballots - endorse both Skillman's and Weinzapfel's bills.
But he said they worry state lawmakers won't include money for voting
system reforms in the next biennial budget.

Charles Toth of Terre Haute, one of the plaintiffs, said it would be an
investment not just in new equipment but in voter confidence.

Toth, a former Terre Haute city council member, said he was involved in a
recount of a 1996 state legislative race and was shocked at problems with
holes incompletely punched, leading to votes being discarded.

But he said it was his sons' reactions to the Florida recount that
prompted him to try to get rid of the punch-card ballots. He said his
sons, ages 20 and 21, were so disillusioned by Florida's recount they say
they won't vote next time.

"We try to convince people their vote counts. This election shows your
vote doesn't count. Not always. It just depends," Toth said. (The
Associated Press State & Local Wire, January 31, 2001)


INMATES LITIGATION: Activists Seek Expanded Services for Mentally Ill
---------------------------------------------------------------------
Mentally ill prison and jail inmates fare poorly in a correctional system
that offers limited mental health services while focusing on security and
punishment, say advocates for the mentally ill.

In a recent report, the National Alliance for the Mentally Ill of Maine
said expensive new treatment services are needed to help the thousands of
inmates in the state with mental health problems.

In many other states, the report noted, lack of treatment has placed
prisons under class-action lawsuits for violations of federal law.

Two recent incidents in Maine point up the need for changes, said Carol
Carothers, executive director of the National Alliance for the Mentally
Ill of Maine.

In one, a 19-year-old man was transferred from the Lincoln County jail
and committed suicide after being segregated at the state's Supermax
prison because he showed signs of depression and possible suicide.

Another incident involved a 22-year-old man housed at the Supermax, who
bit off pieces of his fingers.

Mentally ill people often arrive at the state's jails and prisons after
running into problems with law enforcement officials because of their
illnesses, Carothers said, and the treatment they receive in jails often
makes their illnesses worse.

She cited national statistics which suggest that 15 percent of jail
admissions require specialized placements because of serious mental
illnesses.

Carothers said her group's proposals will be large, complex and
expensive.

"This will have a huge bill and it will be very controversial," she said.

Rep. Edward J. Povich, D-Ellsworth, House chairman of the Legislature's
Criminal Justice Committee, said he will sponsor legislation derived from
Carothers' study.

But he made it plain he will alter her group's proposals after consulting
with county and state corrections officials.

"I said if you want me to hang onto all of them, then I'm the wrong
sponsor. But if you want me to lead a discussion, that's what I'll do,"
Povich said.

Povich and Department of Corrections spokeswoman Denise Lord criticized
Carothers' report for superimposing national percentages on Maine
statistics.

"I think the Maine situation is different," Lord said. "A lot of this
criticism, I haven't seen the documentation for. I suspect it is
anecdotal."

While acknowledging that any system can be improved, Lord defended the
state's actions.

"For prisoners with mental-health issues, I think we provide
comprehensive treatment. I think we can do better, you always can. But
we're not a hospital and we're not set up to be a hospital," she said.
(The Associated Press State & Local Wire, January 31, 2001)


LESLIE, SPENCE: 3rd Party Defendants in Maritime Asbestos Cases in Ohio
-----------------------------------------------------------------------
Circor International Inc. reports to the SEC that two of the company’s
subsidiaries, Leslie Controls and Spence, are third-party defendants in
over 300 civil product liability actions filed against ship owner
defendants in the U.S. District Court, Northern District of Ohio
(Cleveland) between the 1980s and 1996.

These cases are part of tens of thousands of maritime asbestos cases
filed in this court against multiple defendants. The ship owner
defendants' third-party claims in the Leslie Controls and Spence cases
typically involve 20-30 third-party defendants.

The claims against Leslie Controls and Spence assert that the packing in
metal pumps and the gaskets in metal valves supplied by Leslie Controls
and Spence contained asbestos which contributed to the asbestos exposure
of plaintiffs who worked on the defendants' ships.

Only two cases involving Leslie Controls have settled in a way that
required a payment from Leslie Controls. One case settled in 1995 with a
$2,000 payment from Leslie Controls; another settled in 1989 with a $500
payment from Leslie Controls. These thousands of cases are subject to
court ordered moratoriums on answers and motion practice, and the very
small percentage of these cases that have come to trial since 1996 have
not involved Leslie Controls or Spence.


LOCKFORMER CO: Judge Refuses to Gag Residents' Lawyers in Spill Case
--------------------------------------------------------------------
A federal judge Tuesday refused to gag lawyers in the ongoing legal
dispute between residents of a Lisle neighborhood and Lockformer Co.

The company this month asked U.S. district Judge Harry D. Lienenweber to
muzzle attorney Shawn Collins, claiming the lawyer for area residents who
are suing the company had "crossed the line" in comments to the media and
was "tarnishing the integrity" of the judicial process,

Collins responded he was following the metal fabricating company's lead
in dealing with the spills of a chemical solvent on its site. Lockformer
had "sought a public, media-concentrated forum," when it appeared before
the Lisle Village Board last summer, he claimed.

During that meeting, where the company asked the village to create an
ordinance to prohibit drilling any wells near its site, Lockformer
offered its "own views on the dimensions of the contamination," Collins
asserts, and made a commitment to "assume full responsibility" for
chemical spills on its Ogden Avenue site.

In denying Lockformer's motion, Collins said, the judge basically told
all the attorneys that they should be prepared to prove in court whatever
they say to the press.

"That's what I believe the standard was and I'm perfectly comfortable
with that," Collins said after the judge's decision.

Collins' firm represents a group of Lisle homeowners living south of the
company's plant, who filed a seven-count lawsuit in November claiming the
manmade solvent used for nearly 30 years by Lockformer contaminated their
private wells, damaged their property and permanently diminished their
property values. The degreaser, containing the possible carcinogen
tricholorethene, or TCE, spilled onto the ground near the plant. The firm
also is seeking class-action status for its lawsuit. A study done for the
homeowners found traces of TCE in 21 of 33 homes, including six above the
federal guidelines.

This month, Illinois Atty. Gen. Jim Ryan and the DuPage County state's
attorney's office filed a four-count lawsuit against Lockformer, its
parent, Met-Coil Systems Corp. and Delaware-based Honeywell
International, which now owns the company that delivered the chemical to
Lockformer's plant. The suit alleges the companies created a substantial
danger by allowing hazardous chemicals to spill and contaminate soil and
groundwater.

Without admitting any responsibility, Lockformer agreed last week to pay
for an alternate water supply for residents in the affected area and to
define the extent of contamination resulting from the chemical spills. As
part of that agreement, on Monday it provided a list of 17 other
businesses in the area that could be sources of the contamination found
in the wells, including one it alleges commonly dumped drums of TCE into
a storm drain from 1978 to 1981.

In testing conducted last month of 48 other homes on private wells in an
area south of the plant, the Illinois Environmental Protection Agency
south of Lockformer's plant, TCE was found in 34 private wells and in
amounts that exceeded federal standards for TCE at nine homes. This week,
the IEPA has begun testing additional wells within the affected area in
Lisle, which the state has defined to be from Front Street south to
Gamble Drive and from Kingston Avenue east to Westview Lane. (Chicago
Tribune, January 31, 2001)


MORGAN STANLEY: Appeals  to Sp Ct Application of Unfair Competition Laws
------------------------------------------------------------------------
Morgan Stanley Dean Witter & Co. has asked the U. S. Supreme Court to
hear its challenge to the application of California state unfair
competition laws to investment brokers. The California Supreme Court
recently denied review of a similar petition and, according to Morgan
Stanley, potentially subjected the industry to a torrent of new
litigation. Roskind v. Morgan Stanley Dean Witter & Co. (Securities
Litigation & Regulation Reporter, December 20, 2000)


QUAKER OATS: N.D. Ill. Denies Summary Judgment in Shareholder Suit
------------------------------------------------------------------
The Northern District of Illinois has refused to dismiss the shareholder
class action against the Quaker Oats Co. for its alleged failure to
update forward-looking statements regarding its acquisition of Snapple
Beverage Co. in The shareholders claim that the company violated the
antifraud provisions of federal securities law by not revising statements
made regarding its debt-to-capitalization ratio prior to the merger.
Weiner et al. v. Quaker Oats Co. et al., No. 98-3123 (N.D. Ill., Nov. 13,
2000).

The court concluded that reasonable investors could have considered the
debt-to-capitalization ratio (or leverage ratio) important enough to be
material to their overall perception of the company.

The plaintiffs contend that, when negotiations between Quaker (NYSE: OAT)
and Snapple escalated around August 1994, Quaker must have known that its
previously stated leverage ratio in the upper-60-percent range was no
longer a realistic possibility.

A corporation's leverage ratio is a calculation equal to the amount of a
corporation's total debt (short-term and long-term) as a percentage of
its total debt plus preferred and common shareholders' equity.

In 1994, Quaker decided Snapple was the type of high-growth,
high-profit-margin product that would compliment Quaker's Gatorade line;
and, in early August, Quaker's management formally announced its desire
to acquire Snapple. About the same time, the company issued an analyst's
report that did not alter its previously announced leverage ratio
guideline.

On Oct. 31, 1994, Quaker announced an agreement to acquire Snapple in an
all-cash transaction at $14 per share for a total of $1.7 billion. To do
so, Quaker borrowed about $1.5 billion, which increased its leverage
ratio to 86 percent. That same day, the price of Quaker stock fell by
more than $7 per share, and plaintiffs attribute this drop to the
increase in Quaker's debt.

Initially, the U.S. District Court for the District of New Jersey granted
the defendants' motion to dismiss. However, the U.S. Court of Appeals for
the Third Circuit reversed, and the case was subsequently transferred to
the Illinois district court.

In part, Quaker Oats asserted that the omitted information regarding the
company's intention to exceed the 60 percent leverage ratio guideline was
immaterial, because no reasonable investor would have assumed that the
guideline was a ceiling that the company could never exceed. Moreover,
the defendants said the shareholders had not met the pleading standards
regarding the level of intent, or scienter, of the company or its CEO,
William D. Smithburg.

U.S. District Judge Rebecca R. Pallmeyer found the defen dants' arguments
"unconvincing." Quaker's public filings discuss the "prudent" use of
leverage, said the court, and do not support its position that the upper-
60-percent range was a temporary ceiling.

In refusing to grant summary judgment for the defendants, the court also
said there is sufficient evidence to raise a genuine issue of fact
regarding the defendants' intent. The court noted that the evidence
suggests "a gradual but constant progression toward a plan for a
highly-leveraged acquisition."

However, the court also recognized that "the Snapple acquisition may have
disappointed Quaker shareholders for reasons unrelated to the company's
debt-to-capitalization ratio, and that a federal securities action may
not be an appropriate avenue for challenging defendant's business
judgment." Two years after the acquisition, Quaker sold Snapple for less
than its acquisition price.

The plaintiffs are represented by Marvin Alan Miller and Jennifer Winter
Sprengel of Miller Faucher and Cafferty in Chicago; David J. Bershad and
Robert Wallner of Milberg Weiss Bershad Hynes & Lerach in New York;
Lawrence G. Soicher of New York; and M. Richard Komins, Leonard Barrack,
Samuel Robbins Simon and Daniel E. Bacine of Barrack, Rodos & Bacine in
Philadelphia.

The defendants are represented by Jerold Sherwin Solovy and Avidan Joel
Stern of Jenner & Block in Chicago; Dennis J. Block and Jason M. Halper
of Cadwalader, Wickersham and Taft in New York; and Frederic K. Becker of
Wilentz, Goodman & Spitzer in Woodbridge, N.J. (Securities Litigation &
Regulation Reporter, December 20, 2000)


REGENTS: Female Employees of Lawrence Livermore Lab Win Class Status
--------------------------------------------------------------------
The Sturdevant Law Firm, and the law firm of Gwilliam, Ivary, Chiosso,
Cavalli & Brewer, attorneys for a group of female scientists,
professional and technical women employees of the Lawrence Livermore
National Laboratory, (Singleton v. Regents, Alameda Superior Court No.
807233-1), announce a major victory in their two-year old lawsuit against
the Regents of the University of California for employment discrimination
against women.

Several women who will be plaintiffs and class members will attend a
press conference on February 1, 2001 to comment on their reactions to
this key ruling. Their attorneys will discuss the future implications of
Judge Ronald Sabraw's ruling. The ruling granted the plaintiffs' motion
to certify the case as a class action, giving them the right to represent
all current, past and future women employees at the Lab who have been
subject to discrimination in pay or promotions from October 1, 1998
onward.

It is estimated that the number of women in the class may well exceed
10,000, all of whom will now be able to seek money damages and injunctive
relief for the discrimination they suffered at the Lab without having to
file separate lawsuits.

The Livermore Lab is a national research facility within the purview of
the U.S. Department of Energy. The Regents manage the Laboratory pursuant
to a contract with the federal government, currently employing in excess
of 6,000 scientists and other employees, approximately one third of whom
are women.

The lawsuit was originally filed in December of 1998 by six current and
former women employees of the Lab. It alleges that the Regents and the
directors of the Lab have engaged in a long-standing pattern and practice
of paying women employees less than the salaries paid to their male
counterparts and of discriminating against women in promotions. The
lawsuit also alleges that the Regents and Lab management refused to
eliminate the discriminatory practices despite strong evidence of their
existence and the sustained efforts of women employees to get them to do
so for more than a decade.

Commenting on the recent ruling, attorney James Sturdevant stated that
"(t)here are two critical events in the life of a class action lawsuit:
the certification of the class and the trial. Our clients have
successfully crossed the first of these thresholds".

Contact: James C. Sturdevant, Esq., of The Sturdevant Law Firm,
415-477-2410, or Gary Gwilliam, Esq., of Gwilliam, Ivary, Chiosso,
Cavalli & Brewer, 510-832-5411


SOTHEBY'S, CHRISTIE'S: Federal Judge Dismisses Three Suits on Auctions
----------------------------------------------------------------------
A federal judge has dismissed three lawsuits against Sotheby's and
Christie's by buyers at foreign auctions who said they had been cheated
in a price-fixing scheme dating back to 1992.

Judge Lewis A. Kaplan of Federal District Court in Manhattan ruled that
because the auctions took place abroad without any direct or substantial
impact in the United States they could not be tried under domestic
antitrust laws. "Unless the court is to impute to Congress an intention
to establish an antitrust regime to cover the world, the answer must be
no," he wrote.

The lawsuits were filed on the heels of a $512 million settlement last
fall of a class-action lawsuit brought by more than 100,000 customers who
say they were defrauded in a price-fixing scheme involving commissions
between Sotheby's and Christie's. Judge Kaplan is considering a request
for final approval of the settlement and has set a hearing for Friday to
consider objections.

The J. Paul Getty Trust, which runs the J. Paul Getty Museum in Los
Angeles, will be among those objecting. Officials said the trust opposed
the settlement because it offers no compensation for the oversees
transactions. (Over the years, the Getty has bought millions of dollars
of fine art at Sotheby's and Christie's in London.) "It also
discriminates against purchases in excess of $50,000," said Deborah
Gribbon, vice president of the trust and director of the museum.

The settlement stipulates that auction buyers will receive 5 percent of
the sales price on each purchase of $50,000 or less and a flat $2,500 for
each purchase above $50,000.

Judge Kaplan's decision follows a pattern of courts dismissing similar
claims involving foreign transactions, including a case on behalf of
foreign customers trying to sue Microsoft under United States antitrust
laws.

Sotheby's and Christie's applauded the judge's decision. "We have said
all along that it was inappropriate for this lawsuit to be filed in the
U.S. courts and we are very pleased that this case has been dismissed,"
said Sotheby's in a written statement. Christie's issued a statement that
said in part, "The court's decision brings us closer to the day when we
can put this matter behind us."

But Paul T. Gallagher, a partner at Cohen Milstein Hausfeld & Toll, one
of the law firms representing the foreign buyers and sellers disagreed.
"It's the old adage the defendants may have gotten what they wish, and it
may be to their detriment," he said. "This decision only increases the
likelihood that both Christie's and Sotheby's will have to address legal
claims outside the United States, most particularly the U.K." He added
that he was preparing lawsuits that would be filed in the British courts.

Had the lawsuit by foreign buyers been allowed to proceed it could have
cost Sotheby's and Christie's millions of dollars more. As it is, both
auction houses have agreed to pay $256 million to settle the claim. A.
Alfred Taubman, Sotheby's former chairman, has agreed to pay $156 million
of Sotheby's portion. As part of the settlement, agreed to in October,
the two auction houses have the option of paying $100 million of the
settlement in the form of coupons to future sellers that can be put
toward commission fees.

But Judge Kaplan, skeptical that the coupons were worth the same as cash,
hired economists to evaluate them. Under pressure from the plaintiffs'
lawyers, Sotheby's and Christie's sweetened the deal earlier this month,
agreeing to pay cash for unredeemed certificates at face value five years
after their issuance.

Now they have gone one step further, according to people familiar with
the negotiations. Amid concerns that the coupons would not be worth as
much as cash, the houses have agreed to issue $125 million in coupons
rather than $100 million, without reducing their cash payments. The
result, they said, would be to increase the value of the coupons to
sellers by 25 percent. This implies that the coupons are expected to
trade at 80 cents on the dollar. Also, the houses would allow customers
to redeem the coupons after four years at face value, even though they
would still be accepted for five years. A spokesman for Sotheby's
confirmed these details. (The New York Times, January 31, 2001)


TAINTED WATER: $50M E Coli Deal Not Inked for Possible Long-Term Effects
------------------------------------------------------------------------
Too many unanswered questions stand in the way of Walkerton residents
signing off on a proposed settlement and accepting $ 2,000 cheques,
critics say.

Ron Leavoy, of Concerned Walkerton Citizens, said the reported $
50-million deal in a giant, class-action suit falls short because the
long-term effects of the tainted-water scandal on the town's health and
economy remain unknown.

"There's still a lot of health issues that are outstanding. There's still
a lot of children sick," said Leavoy, whose graphics company saw a 40%
drop in business in the E.coli outbreak.

"I lost a lot more money than that. I'm afraid of what's going to happen
in the future. "

While the "artificial economy" created by the continuing inquiry has
boosted his business, Leavoy said he fears little will be left in
Walkerton when the lawyers and investigators leave.

                       Need Investment

Leavoy said he'd like to see a financial investment in the community to
reinvigorate the economy. "We have an awfully tainted image. We were
struggling before," Leavoy said.

Lawyers for the plaintiffs would not comment on reports of the tentative
deal, and local residents learned of the details only through the media.

According to reports, the cost of the proposed deal is split -- $ 33
million from the province, without admitting liabililty, and $ 17 million
from the municipality's insurers.

Any settlement would need approval by a Superior Court judge, who would
also supervise larger claims involving deaths or serious illness.

Last May's tragedy killed seven people and sickened 2,300.

"The psychological trauma -- it's extremely real in this community," said
Bruce Davidson, who is with the 500-member citizens' group. "There are
people who can't bring themselves to drink from the tap." (The Toronto
Sun, January 31, 2001)


VANTIVE CORP: Investors Appeal to 9th Cir against Dismissal By CA Ct
--------------------------------------------------------------------
Investors in Vantive Corporation are appealing dismissal of their
securities class action against the company, asserting that the Northern
District of California erred when it held the timing of the insider
trading rebutted any inference of scienter. According to the investors,
top executives sold more than $36 million of their personal holdings
after making false earnings announcements in a "pump and dump" scheme. In
re Vantive Corporation Securities Litigation, No. 00-16136, appellants'
opening brief filed (9th Cir., Nov. 6, 2000).

In their opening brief to the U.S. Court of Appeals for the Ninth
Circuit, the appellants contend the officers' misleading statements
concealed that Vantive's flagship product suffered from serious flaws,
its sales force was in disarray and a contract with an important reseller
was incomplete.

During the class period, Vantive also used the artificially inflated
stock to acquire two companies, Innovative Computer Concepts and Wayfarer
Communications, and issued convertible debentures for $60 million, the
shareholders say. Moreover, seven top officials allegedly sold 46 percent
of their stock before it fell by more than a third.

In response to U.S. District Judge William H. Orrick Jr.'s dismissal of
the complaint in May, the investors argue that the court overlooked many
crucial facts, and they should have been permitted to amend their
complaint.

From the mid-1990s, Vantive produced "front-office" software that helped
businesses respond to customer complaints and inquiries. The company went
public in 1995, and its stock price rose to $35 per share by late 1996.

Due to growing competition from software giants such as Oracle and
PeopleSoft, Vantive was forced to combine its call-center/help desk
software with sales-force automation software, typically in an integrated
package.

According to the appellants, Vantive's attempt to use its own sales-force
automation software was known inside the company as a disaster, and the
product was pulled in the fall of 1997. The technical problems with the
program also meant trouble for resellers trying to relicense it to end
users, they add.

Nevertheless, the company prematurely recognized millions in license
revenue that really amounted to nothing more than contingent sales, the
investors argue. They also charge the company with recognizing $19
million in revenue from a contract that contained undefined performance
requirements.

Vantive exceeded analysts' expectations through these accounting
manipulations, the investors say, throughout the class period of April
23, 1997, to July 6, 1998. The stock eventually fell to just $5 per
share, and PeopleSoft acquired the company.

Although the district court acknowledged that the individual defendants'
insider trading was "undoubtedly substantial," it said that the
allegations failed to raise a strong inference of conscious recklessness
-- the required state of mind.

Citing Howard v. Everex Systems, No. 98-17324 (9th Cir., Sept. 29, 2000),
the appellants argue that "knowledge or recklessness is required for a
finding of scienter" under the antifraud provisions of federal securities
laws. In Howard , the circuit court concluded a desire to raise corporate
financing is circumstantial evidence of the required state of mind, the
investors say.

Judge Orrick's dismissal cannot be reconciled with Howard, the
shareholders argue, and Vantive's use of stock to fund its acquisitions
along with its sale of the debentures raise an even more compelling
inference of scienter than the facts in that case.

Relying on Provenz v. Miller, 102 F.3d 1478 (9th Cir., 1996), the
appellants also argue that insider sales of 20 percent of stock holdings
are sufficient to infer motive and that Judge Orrick showed little regard
for Ninth Circuit precedent on this point.

The plaintiff-appellants are represented by Leonard B. Simon, Eric A.
Isaacson, Edward P. Dietrich and Kevin K. Green of Milberg Weiss Bershad
Hynes & Lerach in San Diego; Sanford Svetcov of its San Francisco office;
and Paul J. Geller of Cauley & Geller in Baca Raton, Fla. (Corporate
Officers and Directors Liability Litigation Reporter, December 18, 2000)


                             *********


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

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

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

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
subscription information, contact Christopher Beard at 301/951-6400.


                    * * *  End of Transmission  * * *