CAR_Public/010223.MBX               C L A S S   A C T I O N   R E P O R T E R

              Friday, February 23, 2001, Vol. 3, No. 38

                             Headlines

AIR FORCE: Officials in TN Try to Quell Fears over Methane Pocket
AMTRAK, CSX: Railroads Sued for Alleged Negligence in Accident
BEAR STEARNS: Seeks to End Lawsuit Re Insolvent MA Investment Fund
CABLE OPERATORS: L.A. Ct. Denies Cert. in Antitrust Suit By Customers
CANKER PROGRAM: Cities Leave Class Action Portion to Private Attorneys

GERMANY, FRANCE: Lawyers in Nazi Suit Plan to Sue over Mad Cow Crisis
HIP IMPLANT: Krupnick Campbell Announces $500M FL Suit Vs. Sulzer Medica
HMOs: United Healthcare Settles Charges of Overbilling the Elderly in IL
HOLOCAUST VICTIMS: Author of Book about IBM Shrugs off Accusations
HOLOCAUST VICTIMS: IBM Suit Raises Concern About Legal Peace for Germany

INTERSTATE, INTERMODAL: Appeal Planned In Re Truck Drivers’ Earnings
KRAFT FOODS: Milk Producer Can Have Day in Court for Price-Fixing Claims
LIPARI LANDFILL: Settlement Reached over Toxic Waste Dump in NJ Near PA
MATAV CABLE: Israeli Broadband Provider Settles Lawsuit over Connection
MICHAEL HEISLEY: Vancouver Grizzlies Owner Sued for Moving NBA Team

NORTEL NETWORKS: Brokerage Cuts Target on Price to $25 As Suits Filed
NORTEL NETWORKS: Milberg Weiss Extends Period in Securities Suit in N.Y.
NORTEL NETWORKS: Wechlser Harwood Announces Securities Lawsuit
TOBACCO LITIGATION: MA Accused of Medicaid Seizure Despite $7.6 Bil Pact
XCHANGE, INC: Johnson & Perkinson Announces Securities Lawsuit in MA

XEROX CORPORATION: Mark McNair Files Securities Lawsuit
ZONOLITE LITIGATION: W.R. Grace Says Disturbing Insulation Is Hazardous

* Pharmacists' Anti-Abortion 'Conscience' Bill Advances

                          *********

AIR FORCE: Officials in TN Try to Quell Fears over Methane Pocket
-----------------------------------------------------------------Officials
in Coffee County, Tenn., are trying to quell fears that a methane gas
pocket could explode on Coffee County Central High School property, while a
related $ 2.5 billion suit filed in U.S. District Court in Chattanooga
moves forward.

Residents in Franklin and Coffee counties filed the class action suit last
October against the Air Force, Department of Defense and CH2M Hill, a
Denver, Colo.-based contractor reporting over $ 1 billion in revenues last
year. The suit alleges the defendants knowingly released hazardous waste
and methane gas into the community. A landfill on nearby Arnold Airforce
base is the source of the problem, plaintiffs say.

A public meeting was held at the high school in Manchester Jan. 29 during
which Air Force officials and representatives of EPA answered resident's
questions.

                  Independent Study Requested

EPA, the Tennessee Department of Environment and Conservation and the Air
Force maintain there is no danger to students. During the week before the
meeting, the Air Force installed an underground ventilation system to
intercept and capture methane gas, and paid an industrial hygienist to be
on duty at the school to monitor methane.

Coffee County School Superintendent Bobby Cummings asked for an independent
study of the methane gas situation after a plaintiff in the lawsuit,
environmental engineer Roger Painter, presented information to the school
system. As of the beginning of this month, students were still going to
school.

The plaintiffs, calling themselves Citizens Against Pollution, have asked a
federal judge to act to protect the 1,500 students at the high school from
the threat of a methane explosion. The suit seeks $ 2 billion in
compensatory damages and $ 500 million in punitive damages. The suit also
alleges that water consumed by local residents has been poisoned with
dangerous chemicals including trichlorethylene (TCE). Nashville attorney
Tom Nebel is representing the group.

Coffee County government operated the landfill for many years under lease
from the Air Force. Since the landfill closed in 1989, the Air Force has
spent $ 17 million to control methane and groundwater pollution at the
site. "A large part of that work was accomplished by CH2M Hill, the
landfill cap and gas extraction system," said Capt. Tim White, public
affairs officer at the base.

Contractors continue to work at the landfill, and have expanded the methane
extraction system. "We had planned the work long before the suit was
filed," White said. (Solid Waste Report, February 8, 2001)


AMTRAK, CSX: Railroads Sued for Alleged Negligence in Accident
--------------------------------------------------------------
A class-action lawsuit has been filed against Amtrak and CSX Transportation
claiming the two railroads were negligent in an accident that left 61
people injured.

The lawsuit was filed Friday in U.S. District Court on behalf of 15 of the
injured passengers. It seeks $75,000 per passenger from the two railroads,
said attorney Peter Catalano, a partner in one of the two law firms
involved in the lawsuit.

"There's strength in numbers," Catalano said of the decision to file a
class-action suit on behalf of all the passengers on the train.

Lawyers have said anyone injured in the Feb. 5 accident should contact them
to join the lawsuit. They scheduled a news conference Thursday in Syracuse
to discuss the suit.

A preliminary investigation by the National Transportation Safety Board
found the accident occurred when veteran Amtrak engineer Steven R. Gill of
Rensselaer misread a signal that warned him there was an obstruction on the
track ahead and to go slow.

The crash happened just moments after the five-car passenger train left the
Regional Transportation Center in Syracuse. The train was traveling from
Buffalo to Albany with 98 passengers and a crew of four.

Investigators determined that the 92-car CSX freight train was moving 7 mph
as it waited behind another freight train to enter a nearby rail yard.

According to "event recorders" on the trains and signal mechanisms, Gill
apparently missed a signal indicating "restricted" speed of 15 mph or less.
Investigators said evidence indicated the Amtrak train reached a speed of
58 mph before the engineer applied the emergency brake. Investigators said
the Amtrak train hit the freight train at about 35 mph. Gill, 48, was put
on an unpaid leave until federal authorities issue their final report. (The
Associated Press State & Local Wire, February 22, 2001)


BEAR STEARNS: Seeks to End Lawsuit Re Insolvent MA Investment Fund
------------------------------------------------------------------
The "deep pocket" defendants in a proposed class action brought by
investors who reportedly lost $400 million on the now insolvent Manhattan
Investment Fund have filed motions to dismiss the case.

The motions by defendants Bear Stearns & Co., Deloitte & Touche and Ernst &
Young seek to end the Southern District of New York suit against them by
Tortola-based Cromer Finance Ltd. Columbus, Ohio-based introducing broker
Financial Asset Management Inc. and Fund Administrative Services (Bermuda)
Ltd., an Ernest & Young company, have also filed motions to dismiss.

Cromer alleges in its first amended complaint that the so-called
deep-pocket defendants either facilitated the collapse of the hedge fund
through fraud or negligence, or aided and abetted the fund's demise for
their own gain.

According to the complaint, the fund's operator, Michael W. Berger, began
losing millions of dollars on short sales of Internet and high-tech company
stock in 1996. He allegedly concealed the losses from investors and
continued trading.

By Jan. 18, 2000, the Manhattan Investment Fund had lost $400 million and
investors were dismayed to find the hedge fund had less than $50 million in
assets. Within days, the Securities and Exchange Commission sued Berger,
the fund filed for bankruptcy, and Berger was arrested on criminal charges
by federal authorities in New York.

Bear Stearns acted as the fund's clearing broker. In its motion to dismiss,
the New York broker-dealer asserts it executed Berger's trades, reported
all trading losses to the fund's administrator and auditor, and did nothing
wrong. Its inclusion in the suit, Bear Stearns says, is "simply an effort
to bring another deep pocket defendant into this litigation."

"Plaintiffs attempt to hold Bear Stearns liable for their losses by
claiming it aided and abetted Berger's fraud," the broker-dealer says in a
brief supporting its motion to dismiss. " They argue that Bear Stearns
provided excessive margin credit to the fund, which allegedly extend the
fund's life and Berger's ability to defraud investors  . As a matter of
law, these allegations are not sufficient to satisfy the standard of aiding
and abetting."

Bear Stearns goes on to assert that court precedent holds against the
extension of excessive margin as the sole determinant for an
aiding-and-abetting claim.

By contrast, Financial Asset Management's brief echoes a tone of
incredulity. The company says it is only a small Ohio broker that merited
no mention at all in the SEC's action against Berger. The brief asks the
court to dismiss the company from the suit because the case against it is
made up of "scant and unsubstantiated allegations."

In the suit, Cromer charges Ernst & Young's Fund Administrative Services
with allegedly passing Berger's false information on to Deloitte & Touche
Bermuda, which then made its way to investors. Fund Administrative
Services' motion seeks dismissal for failure to plead fraud adequately, for
lack of subject matter jurisdiction, and for failure to state proper claims
for relief under Rules 9(b), 12(b)(2) and 12(b)(6) of the Federal Rules of
Civil Procedure. Ernst & Young International and Ernst & Young Bermuda,
also defendants, seek dismissal on the same grounds.

Finally, two motions to dismiss were filed by Deloitte & Touche entities,
Deloitte & Touche LLP and Deloitte & Touche Tohmatsu. Both assert that they
are separate legal entities from Deloitte & Touche Bermuda, which acted as
the Manhattan Investment Fund's auditor.

In its brief, DTT asserts that the only reason it was named a defendant in
the suit was because it was "perceived as a deep pocket." (Chapter 11
Update, November 2000)


CABLE OPERATORS: L.A. Ct. Denies Cert. in Antitrust Suit By Customers
---------------------------------------------------------------------
U.S. Dist. Court, L.A., denied class action certification in antitrust suit
against 13 cable operators by 2 customers. Suit alleges that subscribers to
cable high-speed data services must buy content services of affiliated ISPs
at artificially inflated prices.

Arguing that exclusivity agreements between MSOs and Excite@Home and Road
Runner forced cable companies to impose condition on customers, plaintiffs
sought unspecified damages and injunctive relief that would have imposed
open access obligations on cable operators.

Court's denial of class certification was without prejudice, so plaintiffs
could file amended compliant.

In suit, Arthur Simon and John Galley said exclusivity agreements were
contracts, combinations or conspiracies in restraint of trade, and bundling
of transmission services with interface/content services constituted
illegal tying arrangements in violation of Sherman Antitrust Act. As result
of "illegal" tie, cable modem subscribers have been forced to pay
"supracompetitive" prices and/or pay for unwanted service, they said. AT&T,
Adelphia, Cablevision, Comcast, Cox, MediaOne and Time Warner head list of
MSOs cited.

Plaintiffs said issues that lent themselves to classwide action were: (1)
Whether bundle of high-speed Internet transport and content services was
one or 2 services. (2) Whether cable operators actually coerced customers
to accept tie between 2. (3) Whether cable companies had market power. They
said "injury in fact" could be proved on classwide basis.

Cable companies said principal arguments in case related to market power.
which varied greatly by region, precluding common proof. They also
contended that variations in prices and terms argued against common proof
of "injury of fact."

In denying class action certification, court said relevant geographic
market was local cable franchise area because, in analyzing legality of
tying arrangement, focus was on deal between seller and buyer rather than
contract between sellers of tying and tied product. Competition in these
markets clearly was relevant to whether cable companies had requisite
market power to restrain trade and force their purchasers to buy unwanted
product, court said. Court agreed with defendants that to prove injury,
plaintiffs must produce evidence that prices would have been lower without
tie. It ruled that common questions didn't predominate for class action
certification. (Communications Daily, February 22, 2001)


CANKER PROGRAM: Cities Leave Class Action Portion to Private Attorneys
----------------------------------------------------------------------
With legal bills from the citrus canker fight mounting, Plantation is
moving to join other Broward municipalities in dropping out of the
class-action portion of the lawsuit against the state.

Like the other cities, Plantation officials will stay in what they see as
the central legal battle: keeping an injunction in place to halt the state
Department of Agriculture's cutting of fruit trees.

But Plantation's attorney says there is little reason for the city to
represent individual property owners from Broward and Miami-Dade, suing the
state for monetary damages--when there are private attorneys willing to do
it, for no up-front costs.

Private lawyers--who have already begun work on the class-action
suit--would probably collect from any potential damages awarded to citrus
owners, at the end of a lawsuit. "There are lawyers who are willing to do
it on contingency," Plantation City Attorney Donald Lunny Jr., said. "At
this time, it doesn't make much sense to go forward (seeking damages) when
there people out there willing to do it for free."

Broward County and Pompano Beach already have decided to drop out of the
class-action suit, attorneys for the cities said. Like Lunny, their
attorneys questioned the legal standing of the municipalities staying in
the suit, if trees hadn't been cut down from their public property.

The cutting of citrus began as an effort to stop the spread of disease
state officials said threatened Florida's fruit-tree industry. Last year,
Plantation and a number of other Broward cities filed suit against the
state, seeking to halt the cutting of citrus trees they deemed to be
healthy. In October, a Broward judge ordered the program halted, a decision
the state is appealing.

In a separate action, a number of tree owners from Miami-Dade and Broward
filed a class-action suit, demanding more money than the much-criticized, $
100-per-tree voucher offered by the state.

So far, Plantation has spent about $ 24,000 on legal bills from both the
injunction and class-action sides of the lawsuit, Lunny said. Andrew
Meyers, an attorney representing Broward County, estimated his government
had spent around $ 20,000 up to this point.

But those bills are dwarfed by the Department of Agriculture's legal costs.
Through the end of December, the state had spent $ 177,477 on lawyers'
bills in the separate legal battles in Broward, Department of Agriculture
spokeswoman Liz Compton said. The state is represented by the prominent
Greenberg Traurig law firm, among other lawyers, she said.

Lunny asked City Council members two weeks ago if they wished to remain in
the class-action lawsuit, and he discussed the issue with them again in a
closed-door meeting on Wednesday. (Sun-Sentinel (Fort Lauderdale, FL),
February 22, 2001)


GERMANY, FRANCE: Lawyers in Nazi Suit Plan to Sue over Mad Cow Crisis
---------------------------------------------------------------------
Two lawyers best known for their efforts to win compensation for former
Nazi slave laborers said Thursday they will file lawsuits against Germany
and France on behalf of farmers hit by the mad cow crisis.

U.S. lawyer Ed Fagan and Munich-based Michael Witti told a news conference
the governments should shoulder more of the blame and the cost for fighting
the disease that has plunged beef sales as the scare has spread across the
continent. ''The government told the farmers that there was no problem,
you're safe. That was either stupid or lies,'' Fagan said.

Witti said farmers had also suffered from the practices of feed
manufacturers who supplied them with animal feed containing ground animal
carcasses suspected of transmitting the diseases. The European Union banned
animal meal from feed in January.

Before the first German case was detected in November, officials had long
insisted it was free of the disease, known as bovine spongiform
encephalopathy, or BSE, and related to a similar brain-wasting condition in
humans that has killed more than 80 people in Britain and France. Germany's
farm and agriculture ministers reisgned last month amid sharp criticism of
their handling of the crisis.

French consumers took fright last year after possibly infected meat was
found on store shelves.

Witti said he had five farmers from Germany, Austria, Switzerland and
Poland as clients and expected to file first suits within two months. There
are no plans to bundle farmers cases in a Europe-wide class-action, he
said, declining to estimate the size of the claims.

Germany's main farmers group said Thursday it was also weighing legal
action on behalf of its members. Germany Farmers Association President Gerd
Sonnleitner said the association will examine claims for damages from
German farmers who own cattle found to carry the disease a diagnosis that
has lead to whole herds being slaughtered.

Sonnleitner said his group had spoken to Witti but had decided to work
independently.

Fagan, who has recently been involved in Holocaust-related claims against
Austrian and German banks, has also sought to represent families of the
victims of the cable-car fire in the Austria ski resort of Kaprun which
killed 155 people. The cause of the fire is still unknown. (AP Worldstream,
February 22, 2001)


HIP IMPLANT: Krupnick Campbell Announces $500M FL Suit Vs. Sulzer Medica
------------------------------------------------------------------------
Krupnick Campbell Malone Roselli, with offices in Fort Lauderdale, has
filed a nationwide class action lawsuit in the United States District Court
in Miami against Sulzer Medica Corporation (NYSE:SM) (Swiss Stock
Exchange:SMEN), a Swiss based corporation, and its subsidiaries which
develop, manufacture, and market orthopedic products worldwide.

Krupnick Campbell Malone Roselli announced that a Florida woman has filed
this case on behalf of the thousands of patients who have received the
defective hip replacement, estimated to be 17,500 patients.

Michael J. Ryan, lead attorney on the case states, "This class action suit
has been filed to compensate patients with the defective hip for their
injuries and to hold Sulzer Medica accountable for failing to properly
inspect this product. Sulzer was negligent in allowing a defective product
to be distributed. We are bringing this action for patients who have
endured and will endure years of suffering."

After patients went through painful and dangerous surgery for hip
replacement and then extensive rehabilitation, the Company now admits the
product was defective and needs to be removed and replaced.

Sulzer Orthopedics issued a recall on December 5, 2000, alerting surgeons
that patients have implanted a hip prosthesis with a defective shell which
requires replacement. According to the company, an oily residue was
improperly left on the surface of the shell because of a manufacturing
error. In many cases, the residue caused inflammation and pain and
prevented the patients' bones from fusing normally with the hip implant.

Symptoms caused by a loose connection between the implant and the bone
include severe groin pain and an inability for the joint to bear weight.
California, Utah, and Florida have the largest percentage of the defective
hip replacements implanted.

Contact: Krupnick Campbell Malone Roselli, Fort Lauderdale Tricia Rutsis,
954/763-8181, Ext. 8603 trutsis@krupnicklaw.com 954/592-3209 (cellular)
954/763-8292 (facsimile)


HMOs: United Healthcare Settles Charges of Overbilling the Elderly in IL
------------------------------------------------------------------------
A Chicago-based HMO has agreed to pay the U.S. government $2.9 million to
settle charges that it overbilled for the care of thousands of senior
citizens in six Illinois counties.

United Healthcare of Illinois Inc. denied any wrongdoing, but agreed to
settle with the government to avoid the expense and uncertainty of a False
Claims Act lawsuit. The HMO was accused of falsely listing nearly 30
percent of its Medicare patients as being institutionalized in nursing
homes or other long-term care facilities for a period of two years from
Oct. 1, 1995, to Sept. 30, 1997.

By falsely claiming that the patients were institutionalized, United
Healthcare was able to charge nearly double the amount it would have
received if the patients' level of care was categorized correctly,
according to U.S. Attorney Scott R. Lassar.

In 1996, United Healthcare would have received an average of $583 a month
for each female beneficiary, age 85 and older, who was not
institutionalized, while it would have received $1,019 for a similar
beneficiary who was being cared for in a nursing home, rehabilitation
facility, convalescent home, long-term care hospital or other similar
facility.

The over-billing was discovered when federal auditors selected a random
sample of 100 Medicare beneficiaries from more than 16,000 patients that
United Healthcare listed as institutionalized, and discovered that 29 of
the 100 were incorrectly categorized, thus, resulting in an exceptionally
high 29 percent error rate.

No lawsuit was filed prior to the agreement, and United Healthcare
officials cooperated fully with the U.S. Attorney's Office's investigation
of the matter, according to the agreement. A United Healthcare spokesman
attributed the errors to billing problems it inherited when it acquired
Share Health Plan in 1995.

As part of the settlement, United Healthcare agreed to enter into a
corporate integrity agreement to correct its past billing errors and avoid
future mistakes. As part of that agreement, the HMO must submit to periodic
audits by federal regulators.

If the government filed a false claims act action against United
Healthcare, the HMO would have faced treble damages and civil penalties of
$5,000 to $10,000 for each violation of the act. (Antitrust Litigation
Reporter, January 2001)


HOLOCAUST VICTIMS: Author of Book about IBM Shrugs off Accusations
------------------------------------------------------------------
The author of a book about IBM and the Holocaust on Thursday shrugged off
accusations by the company that its publication was timed to coincide with
a new lawsuit filed by Holocaust survivors.

''I wish all these lawsuits would disappear; I'm not here to help out any
lawsuits,'' Edwin Black said at a Berlin news conference promoting the
German-language version of ''IBM and the Holocaust,'' published earlier
this month in the United States.

In the book, Black cites documents showing IBM's German subsidiary provided
and serviced punch-card machines used to keep records on Nazi prisoners.
The cards kept track of whether they were Jewish, homosexual or communist,
also listing their eventual fate, from escape to ''special handling'' a
euphemism for anything from torture to execution.

The new class-action lawsuit filed earlier this month in New York accuses
IBM of being an accomplice in the Holocaust because it was aware its
machines were used at death camps. It is seeking to force IBM to open its
archives and to pay ''ill-gotten gains.''

But even the lead attorney in the IBM lawsuit, Michael Hausfeld of
Washington, has said that he doesn't yet have the documents proving IBM in
the United States knew its machines were being used in Nazi death camps.

Black acknowledged he hadn't yet found documents directly linking IBM to
participating in the Holocaust, and has also called on the company to open
archives. But he alleges they would have known how the machines were being
used. ''While most people didn't understand the technology behind this, I
think some did,'' he said.

IBM has said the subsidiary, Deutsche Hollerith Maschinen GmbH, was taken
over by the Nazis before World War II, like other companies operating in
Germany, and the use of the machines is well-known. One of the punch-card
counters is on display at the U.S. Holocaust Memorial Museum in Washington.

The company also acknowledges that the head of IBM at the time, Thomas J.
Watson, was awarded a medal by Hitler for his role in global economic
relations, which he later returned.

But Black said documents from archives in Germany and the United States
show IBM maintained further contact with its subsidiary in Germany through
other European branches and didn't lose administrative control of Hollerith
until 1942.

''It was never about anti-Semitism, it was never about Nazis, it was always
about the money,'' Black said. ''We've gone after the men in the camps,
we've gone after the German companies,'' he said. ''The final frontier of
Holocaust accountability is the United States. Yes, German efficiency _
American inventiveness.'' (AP Worldstream, February 22, 2001)


HOLOCAUST VICTIMS: IBM Suit Raises Concern About Legal Peace for Germany
------------------------------------------------------------------------
Concern has been raised in Germany recently that the law suit filed by
class action claimants against IBM in federal court will endanger the legal
peace for German companies sought by last year's Foundation Agreement. The
United States wishes to re-assure the government of Germany and German
companies that the United States will seek legal peace for claims against
German companies in accordance with the Executive Agreement that Germany
and the United States signed on July 17, 2000.

The Foundation covers all Nazi era claims against German companies and the
US will file a statement of interest in all such cases. The Foundation does
not cover claims against U.S. companies for actions unrelated to that of
German companies.

The lawyers who filed the suit against IBM have indicated that they have no
intent to raise claims against German companies.

If it is determined that the IBM suit is a suit against a U.S. company
unrelated to actions of a German company, then it is irrelevant to the
Foundation and to "legal peace" for German companies.

There is no reason why the IBM lawsuit should hold up payments to victims.
It was not a case pending when the Foundation Agreement was signed. New
claims were expected to be filed after the Agreement, and commitment of the
U.S. Government to file Statements of Interest in future cases was designed
to deal with that eventuality. The United States believes that payments to
the victims should begin promptly after the last class actions listed in
the agreement are dismissed. The United States will continue to live up to
its obligations in connection with subsequent litigation.

We have been fully implementing our commitments under the Agreement and we
will continue to do so. We have every confidence that the last few cases
will soon be dismissed; that the German companies will fulfill their
obligation to contribute to the Foundation; and - most importantly - that
the victims who have waited so long for some measure of justice will soon
receive payments. A measure of justice for the victims should remain the
primary focus of all parties. (M2 Presswire, February 22, 2001)


INTERSTATE, INTERMODAL: Appeal Planned In Re Truck Drivers’ Earnings
--------------------------------------------------------------------
Two subsidiaries of Pacer Logistics, Interstate Consolidation, Inc. and
Intermodal Container Service, Inc., are named defendants in a class action
filed by Irwin Albillo in July, 1997 in the State of California, Los
Angeles Superior Court, Central District, alleging, among other things,
breach of fiduciary duty, unfair business practices, conversion and money
had and received in connection with monies allegedly wrongfully deducted
from truck drivers' earnings.

Defendants have entered into a Judge Pro Tempore Submission Agreement dated
as of October 9, 1998 pursuant to which the plaintiffs and defendants have
waived their rights to a jury trial, stipulated to a certified class and
agreed to a minimum judgment of $250,000 and a maximum judgment of $1.75
million.

On August 11, 2000, the court issued its Statement of Decision, in which
Interstate and Intermodal prevailed on all issues except one. The court
found that Interstate failed to issue certificates of insurance to the
owner-operators and therefore failed to disclose that in 1998, the
company’s retention on its liability policy was $250,000. The court has
ordered that restitution of $488,978 be paid for this omission.

Plaintiff's counsel has indicated he intends to appeal the entire ruling
and the company intends to appeal the restitution issue. Based upon
information presently available and in light of legal and other defenses
and insurance coverage, management does not expect these legal proceedings,
claims and assessments, individually or in the aggregate, to have a
material adverse effect on our financial position or results of operations.



KRAFT FOODS: Milk Producer Can Have Day in Court for Price-Fixing Claims
------------------------------------------------------------------------
Calif. Milk Producer Can Press Claim Against Cheese Makers, 9th Cir. Rules.
Knevelbaard Dairies, a California milk producer, will get its day in court
to pursue its price-fixing claims against cheese makers, now that the Ninth
Circuit has reversed a district court's dismissal of the case and remanded
the matter for further proceedings. Knevelbaard Dairies v. Kraft Foods.
(Antitrust Litigation Reporter, January 2001)


LIPARI LANDFILL: Settlement Reached over Toxic Waste Dump in NJ Near PA
-----------------------------------------------------------------------
A settlement has been reached in a lawsuit involving more than 1,600 people
who said they were exposed to poisons from a toxic waste dump that was once
dubbed the nation's worst, The Philadelphia Inquirer reported Thursday.

The settlement, which is still being finalized, would provide $2.5 million
to $3 million to pay for the plaintiffs' medical monitoring. The money
would be paid by about a dozen companies that dumped hazardous waste at the
Lipari landfill in Mantua, N.J., near Philadelphia.

The settlement would not provide for treatment costs or preclude plaintiffs
from individually suing the companies should any medical problems be
detected.

''The goal of this was to get everybody monitored who was exposed and we
have done that,'' Harris Pogust, a lawyer for the plaintiffs, told the
newspaper.

A spokesman for Rohm & Haas Inc., a defendant in the suit, said the
chemical manufacturer was pleased that the class-action suit was close to
being resolved.

The 16-acre landfill was a dumping site for hazardous chemicals, and drums
were dumped in open trenches. The state closed Lipari in 1971 after
residents complained about respiratory problems, nausea, dying vegetation
and odors. It was so bad that when the federal Superfund program was
created to clean up waste sites, Lipari was ranked No. 1 in eligibility for
money.

Cleanup of the site, which is largely complete, has cost about $130
million, with the Environmental Protection Agency recouping most of the
money from defendants in the class-action suit. Those companies include
Owens-Illinois, CBS, AT&T Technologies and Firestone Tire & Rubber Co.

Through the years, several studies of the landfill's health effects have
been conducted, but none has been conclusive. (AP Online, February 22,
2001)


MATAV CABLE: Israeli Broadband Provider Settles Lawsuit over Connection
-----------------------------------------------------------------------
Matav Cable Systems Media Ltd. (Nasdaq: MATV), a leading Israeli provider
of broadband cable TV services, announced on February 21 that following a
press release issued by the Company on September 27, 1999 with respect to a
class action that was filed against it (the "Class Action"), it has reached
a settlement agreement (the "Agreement"), which was approved by the Israeli
court on February 18, 2001, with respect to the Class Action.

The Class Action was first filed against the Company on behalf of residents
of certain municipalities in northern Israel (the "Relevant Residents")
regarding the Relevant Residents' claim that the Company did not connect
them to its CATV network. According to the Agreement, the Company shall pay
a total sum of $820,000, of which $719,000 shall be allocated to the
relevant municipalities, in which the Relevant Residents live, for the
development of education, sports and culture in those municipalities.

The Agreement will settle all of the disputes, upon which the Class Action
was based. However, if within a period of 45 days from the date of the
official publication in the media of the Agreement, 1,500 or more Relevant
Residents give notice that they do not wish to be a party to the Agreement,
the Company will have the right to cancel the Agreement and will then
continue the legal proceedings of the Class Action in court.

Matav is one of Israel's three cable television providers, serving roughly
25 percent of the population in a government-mandated monopoly market.
Matav's investments include 15 percent of Partner Communications Ltd., a
GSM mobile phone company, 10 percent of Barak Ltd., Israel's second-largest
provider of international long distance and Internet telephony, and 100
percent of Non-Stop, a new company preparing to offer broadband Internet
services.


MICHAEL HEISLEY: Vancouver Grizzlies Owner Sued for Moving NBA Team
-------------------------------------------------------------------
Saying they were betrayed by a "savvy takeover artist," two separate
class-action lawsuits have been filed against Vancouver Grizzlies owner
Michael Heisley, arguing his decision to move the NBA team breaks a
contract with fans. At the same time, a group trying to keep the franchise
in Vancouver has arranged a March 16 meeting in New York with NBA
commissioner David Stern to argue that professional basketball can work in
the city. Meanwhile, Heisley met with officials in New Orleans on Wednesday
to discuss relocating the franchise in the Big Easy. The meeting followed
similar sitdowns in Louisville, Ky., and St. Louis. (The London Free Press,
February 22, 2001)


NORTEL NETWORKS: Brokerage Cuts Target on Price to $25 As Suits Filed
---------------------------------------------------------------------
Wall Street brokerage Lazard Freres & Co. slashed its 12-month target price
on Nortel Networks Corp. shares to US$25 from US$45 on February 21, as new
class-action lawsuits were filed in the United States and speculation grew
Nortel may have had concerns it would not meet the Street's earnings
estimates days before it issued a Feb. 15 profit warning, according to
National Post (formerly The Financial Post).

The National Post also reports that more details emerged about the
controversial deal that saw Nortel buy a Swiss optical plant from JDS
Uniphase Corp. for up to US$3-billion in Nortel shares. About US$1-billion
was wiped off the value of the deal two days after it closed, when Nortel
disclosed it would miss first-quarter sales numbers by 50%, sending its
stock price down by 33%, the report says.

According to the National Post, a source close to the transaction said the
sale was designed as a share swap so that JDS could defer a hefty capital
gains tax bill. 'It was always contemplated as a share deal,' he said,
adding that was likely at the insistence of JDS, which would have owed
substantial tax in a cash transaction since it bought the Zurich plant from
IBM Corp. in 1997 for just US$ 45-million. At a 30% tax rate, the capital
gains liability would have been about US$ 750-million. Under the terms of
the deal, Nortel tendered 65.7 million of its shares to JDS, with another
US$500-million payable in stock in 2004 if Nortel fails to meet purchase
commitments, the National Post report says.

The source, who spoke on condition of anonymity, acknowledged the deal did
not contain a clause guaranteeing a floor value of the shares but said it
is not unusual to not have an after-close collar.
'It's 20-20 hindsight,' he said when asked if JDS would have been better
off taking cash, the report adds.

The Post also reports that Paul Sagawa, a telecommunications analyst with
Sanford C. Bernstein in New York, said the sudden and extreme nature of the
Nortel warning means JDS 'has been aggrieved,' but he expects the sides
will work out a compromise that could see Nortel guarantee additional
purchases from JDS.

JDS designs and makes products for the fibre-optic networking industry and
includes Brampton, Ont.-based Nortel as one of its major customers.

After rattling markets with its warning after previously affirming guidance
on several occasions, Nortel maintained its outlook in a meeting with
clients of RBC Dominion Securities Inc. on Feb. 12, according to a report
by the Financial Post on Monday.

According to observation reported by the National Post, at least one money
manager was troubled by assurances given by Frank Dunn, Nortel's chief
financial officer, at a Toronto luncheon for institutional investors almost
a week before that. It was observed that Mr. Dunn 'stuck to the script' but
his body language at the Feb. 6 lunch seemed peculiar: 'When the guy's eyes
start darting around, you get worried.'

The institutional investor, who spoke on condition of anonymity, said his
firm was also concerned about prospects for the entire sector but that 'a
huge amount of discomfort' was sensed coming from Mr. Dunn as he spoke
about Nortel's outlook. The source said his company -- which manages tens
of billions of dollars in assets -- decided to lighten its position in
Nortel as a result.

John Roth, Nortel chief executive, says the company learned of a
precipitous drop in sales only after a regular review with sales staff last
week, well after the Feb. 6 luncheon. That leaves a narrow window -- after
the Monday investors' meeting and after the purchase of the laser plant
sale closed Tuesday -- during which Mr. Roth became aware of the company's
deteriorating revenue picture and disclosed the information to markets, the
National Post says. 'It seems like they've had their heads in the sand,'
said Nick Majendie, a telecommunications analyst at Canaccord Capital Corp.

Meanwhile, two more class-action lawsuits were filed against Nortel on
February 21 in New York. (National Post (formerly The Financial Post),
February 22, 2001)


NORTEL NETWORKS: Milberg Weiss Extends Period in Securities Suit in N.Y.
------------------------------------------------------------------------
The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a
class action lawsuit was filed on February 21, 2001, on behalf of
purchasers of the securities of Nortel Networks Corp. (NYSE:NT; TSE:NT)
between November 1, 2000 and February 15, 2001, inclusive (the "Class
Period"). A copy of the complaint filed in this action is available from
the Court, or can be viewed on Milberg Weiss' website at:
http://www.milberg.com/nortel/

The action, numbered 01-CV-1033, is pending in the United States District
Court for the Eastern District of New York, located at 225 Cadman Plaza
East, Brooklyn NY, 11201, against defendants Nortel, John Andrew Roth (CEO,
President and Director), William F. Conner (President of Nortel's
E-Business Solutions), Chahram Bolouri (President of Nortel's Global
Operations) and Frank Dunn (Chief Financial Officer).

The complaint charges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder,
by issuing a series of material misrepresentations to the market between
November 1, 2000 and February 15, 2001 concerning the demand for its
products. Specifically, the complaint alleges that defendants issued
several press releases in which they provided revenue and earnings guidance
to Wall Street and the investing public for the first quarter and full year
2001. Defendants knew at the time they made these statements that, in fact,
Nortel was experiencing a substantial shortfall in first quarter sales and
earnings due to decreased orders from its customers.

Specifically, in one of its press releases, dated January 18, 2001,
defendants represented that Nortel's "global reach and industry leading
portfolio" would allow it to "continue to outpace the market and gain
profitable market share" even in the face of the "tightening of capital
within the telecom sector." The announcement sent its stock price soaring
10% in one day. The complaint alleges that the statement was materially
false and misleading when made because the Company had no basis for
reassuring the market that demand for its products would remain robust,
given the economic slowdown that was impacting companies in general and the
telecommunications sector -- upon which Nortel relies -- in particular.

On February 15, 2001, less than a month after issuing its latest market
moving representations, Nortel issued a press release announcing that it
was drastically lowering its guidance for Nortel's 2001 fiscal year because
of decreased demand for its products due, in large part, to spending cuts
by telecommunications companies. Following the announcement, Nortel's stock
price plunged by 34% in one day, from $29.75 per share to $19.50 per share
(erasing $ 33 billion of Nortel's market capitalization). Prior to the
disclosure of the true state of its business, individual defendants Bolouri
and Conner collectively sold over $7 million of their personally held
Nortel stock. Additionally, during the Class Period, Nortel used $2.5
billion of its artificially inflated stock price to complete its purchase
of JDS Uniphase's Zurich, Switzerland-based subsidiary and related assets
in Poughkeepsie, New York.

Contact: Milberg Weiss Bershad Hynes & Lerach LLP, New York Steven G.
Schulman or Samuel H. Rudman, 800/320-5081 Nortelcase@milbergNY.com
http://www.milberg.com


NORTEL NETWORKS: Wechlser Harwood Announces Securities Lawsuit
--------------------------------------------------------------
The law firm of Wechsler Harwood Halebian & Feffer LLP announces that a
class action lawsuit was filed on February 21, 2001, on behalf of
purchasers of the securities of Nortel Networks Corp.,("Nortel" or the
"Company") (NYSE: NT; TSE: NT) between January 19, 2001 and February 15,
2001, inclusive (the "Class Period").

The complaint charges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder,
by issuing a series of material misrepresentations to the market between
January 18, 2001 and February 15, 2001 concerning the demand for its
products. Specifically, the complaint alleges that defendants issued a
press release on January 18, 2001, (after the close of the securities
markets) announcing record operating results for the year 2000, and
especially strong fourth quarter of 2000 performance. In the press release,
defendants represented that Nortel's "global reach and industry leading
portfolio" would allow it to "continue to outpace the market and gain
profitable market share" even in the face of the "tightening of capital
within the telecom sector." The announcement sent its stock price soaring
10% in one day.

The complaint alleges that the statement was materially false and
misleading when made because the Company had no basis for reassuring the
market that demand for its products would remain robust, given the economic
slowdown that was impacting companies in general and the telecommunications
sector -- upon which Nortel relies -- in particular. On February 15, 2001,
less than a month after issuing its market moving representations, Nortel
issued a press release announcing that it was drastically lowering its
guidance for Nortel's 2001 fiscal year because of decreased demand for its
products due, in large part, to spending cuts by telecommunications
companies. Following the announcement, Nortel's stock price plunged by 34%
in one day, from $29.75 per share to $19.50 per share (erasing $ 33 billion
of Nortel's market capitalization). Prior to the disclosure of the true
state of its business, individual defendants Bolouri and Conner
collectively sold over $7 million of their personally held Nortel stock.

Contact: Ramon Pinon, Shareholder Relations Department of Wechlser Harwood
Halebian & Feffer, rpinoniv@whhf.com


TOBACCO LITIGATION: MA Accused of Medicaid Seizure Despite $7.6 Bil Pact
------------------------------------------------------------------------
Despite a $7.6 billion settlement with tobacco companies to cover the cost
of treating indigent smokers, Massachusetts has continued to seize the
meager assets of Medicaid recipients who died from years of smoking -
including their homes - according to a class action lawsuit filed on
February 21 in federal court.

The first-in-the-nation suit accuses the state's Division of Medical
Assistance, in effect, of double-dipping by taking the property of Medicaid
recipients after the state has already been reimbursed for their care by
the historic 1998 settlement with the tobacco industry.

The lawsuit was filed in the name of the estate of Mary Watkins, an elderly
woman from New Bedford who smoked Chesterfields for 25 years and died three
years ago from coronary thrombosis and chronic lung disease.

The administrators of her estate paid the state $16,000 in reimbursement
for her medical care after they sold her home last year.

"The people who really ought to benefit from this recovery from the tobacco
companies are people who have smoking-related illnesses and who have
Medicaid benefits," said Louis Massery, one of the lawyers who filed the
suit. "It seems very unfair for these individuals to be reimbursing the
state when the state's got their money, and an extraordinary amount of
money."

In a legal memorandum filed last year in another case, a lawyer for the
state defended the practice of recovering assets from the estates of
deceased Medicaid recipients. In that case, which also involved a woman who
died of a smoking-related illness, Mark Miller, assistant general counsel
for the Division of Medical Assistance, quoted the state law that allows
such reimbursement. The law allows the state to sue for reimbursement
within one year of the Medicaid patient's death.

Miller also pointed to a 1979 case where the state Supreme Judicial Court
recognized the state's right to recover assets.

The agency collects about $20 million a year through its Estate Recovery
Program, which takes assets from deceased Medicaid recipients for
reimbursement, according to the lawsuit. Massery and his cocounsel, Albert
Farrah, say about $3 million of that money comes from the estates of people
who died from smoking-related illnesses. "Typically, the home is their only
asset," Massery said. "It is the only asset they have to bequeath to their
children. If they are low-income, the homes are not likely to be
substantial homes."

In 1993, Congress required states to seek reimbursement for Medicaid
benefits. People who apply for Medicaid agree that reimbursement can be
collected from their estates.

But Massery argues that once the tobacco companies began reimbursing states
for the cost of treating smoking-related illnesses, it became illegal for
them to continue collecting from the estates of people who died from
smoking. "It's very clear under common law that you can't collect for the
same damages twice," he said.

The suit asks that the practice be stopped and that Medicaid recipients
whose estates were forced to repay the state be reimbursed. This is
apparently the first lawsuit filed in an attempt to end the practice,
carried out in every state. But Massachusetts seizes assets more
aggressively than most states, Massery contends.

In fiscal year 1998, for instance, the state collected about $20 million
from estates for Medicaid reimbursements. New York, a much larger state,
collected $ 28 million, Massery said, quoting from federal statistics. That
same year, Florida seized $6 million; Illinois, $15 million; New Jersey, $3
million, he said.

Massery and Farrah decided to file the suit after their double-dipping
argument got a suit against the estate of a former Medicaid patient
dismissed. In that case, the state was seeking $58,000 from the estate of
Rita Fillon, 76, of Weymouth, who died in 1997 of lung cancer after a
lifetime of smoking Pall Mall cigarettes. Fillon often smoked at least two
packs a day. It was Fillon's adult son, Charles, who first questioned
whether the state should be reimbursed by his mother's estate, in light of
the tobacco settlement. (The Boston Globe, February 22, 2001)


XCHANGE, INC: Johnson & Perkinson Announces Securities Lawsuit in MA
--------------------------------------------------------------------
Johnson & Perkinson announce that a class action lawsuit has been commenced
in the United States District Court for the District of Massachusetts on
behalf of purchasers of the common stock of Xchange, Inc., formerly Xchange
Applications, Inc. (NASD: EXAP) between July 24, 2000 through and including
September 29, 2000 (the "Class Period").

The Complaint alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder,
by issuing a series of material misrepresentations to the market during the
Class Period. As alleged in the Complaint, Defendants issued numerous
statements touting the contracts it entered into even though the nature of
these contracts required that revenue be recognized over an extended period
of time, rather than in the third quarter. As a result, the price of the
Company's shares was artificially inflated throughout the Class Period.

Contact: Johnson & Perkinson Dennis J. Johnson, Esquire or Jacob B.
Perkinson, Esquire 1-888-459-7855 LODJJ@aol.com


XEROX CORPORATION: Mark McNair Files Securities Lawsuit
-------------------------------------------------------
The Law Office of Mark McNair announced that it has filed class action
lawsuit against Xerox Corporation.

Class Period: February. 15, 1998 to February 6, 2001

The complaint alleges that Xerox and several of its top officers reported
false financial results during the class period, failing to adhere to the
standard accounting practices the company claimed to follow. Xerox issued a
statement about the "irregularities" in Mexico on June 16, 2000, falsely
portraying them as an aberration perpetrated by rogue executives. But on
February 6, 2001, a Wall Street Journal article reported allegations of
accounting fraud that went far beyond Mexico. Meanwhile, Xerox shares fell
from as high as $124 a share during the Class Period to just $4.43 a share.
The company's accounting practices are now the subject of a Securities and
Exchange Commission investigation.

Contact: Mark McNair, Esq., of The Law Office of Mark McNair, 877-511-4717,
or wmmcnair@justice4investors


* Pharmacists' Anti-Abortion 'Conscience' Bill Advances
-------------------------------------------------------
A "conscience" bill to protect pharmacists who refuse to fill prescriptions
for abortion drugs advanced toward the Kentucky Senate on Thursday.

A physician can refuse on moral grounds to perform an abortion. A
pharmacist should have an equal right, Sen. Elizabeth Tori, the bill
sponsor, said in testimony to the Senate Health and Welfare Committee.

She said the bill was aimed primarily at pharmacists who are employees, not
owners, of a pharmacy. They could not be fired or otherwise punished for
refusing to fill an abortion prescription if they had stated a
conscientious objection.

"It simply balances conscience with authority," Tori, R-Radcliff, said.

The bill had one opponent on the committee - Democratic Sen. Joey Pendleton
of Hopkinsville, who said people in rural areas might not have a second
pharmacist to fall back on.

The only real debate was between some committee members and a retired
Methodist clergyman, the Rev. Gilbert Schroerlucke of Louisville, who said
a pharmacist was "obligated to respond to a patient's needs." "Can one
person's conscience be allowed to control free trade and the rights of
others?" Schroerlucke said.

He then attempted to draw historical parallels that irked some senators.

Schroerlucke said Hitler's extermination of Jews, George Wallace's defense
of segregation and Pope John Paul II's denial of a woman's "basic human
right" to be a pastor all were matters of conscience.

Schroerlucke also said pharmacists who object to filling abortion
prescriptions should find another line of work, prompting Sen. Charlie
Borders, R-Russell, to suggest that Schroerlucke do the same.

Sen. Dick Roeding, himself a pharmacist and former lobbyist for
pharmaceutical companies, told Schroerlucke he had at times refused to fill
prescriptions in his own practice.

Tori's bill originally would have forbidden a pharmacist to be denied a
promotion. One of her supporters, Sen. David Karem of Louisville, persuaded
her to remove it, lest it create a class of plaintiffs.

"It sets up someone who may never have been pro-life, and now they're
pro-life because they didn't get promoted," Karem said. (The Associated
Press State & Local Wire, February 22, 2001)


ZONOLITE LITIGATION: W.R. Grace Says Disturbing Insulation Is Hazardous
-----------------------------------------------------------------------
W.R. Grace & Co. has answered the first amended complaint in a proposed
class-action suit filed on behalf of homeowners who claim the company knew
its Zonolite attic insulation was hazardous. Grace admits that the
insulation contains a form of asbestos but denies that its users were
exposed to sufficient quantities to cause harm. Lindholm et al. v. W.R.
Grace & Co. et al., No. 00CV10323, answer filed (D. Mass., Aug. 28, 2000).

The complaint alleges that the company aggressively promoted and sold
hundreds of millions of cubic feet of Zonolite from 1963 through 1984, even
though it had information indicating that the insulation contained
tremolite asbestos. Homeowner Edward Lindholm and a class of Zonolite
purchasers assert claims of fraud, negligence, breach of implied
warranties, violations of deceptive trade practices statutes, nuisance,
strict liability for ultrahazardous activity, and unjust enrichment.

They seek compensatory and punitive damages and prejudgment interest. They
also seek equitable relief, asking the U.S. District Court for the District
of Massachusetts to order Grace to remove and abate existing Zonolite from
all residences containing the insulation.

In its answer to the amended complaint, Grace stated that disturbing
Zonolite attic insulation would expose individuals to dangerous levels of
asbestos. The company denied that the product had contaminated any real
property. Grace also argues that the plaintiffs are not entitled to
maintain the suit as a class action.

The answer raises 24 defenses, including that the plaintiffs lack standing
to bring suit on behalf of putative class members who reside outside of
Massachusetts. Grace also asserts that its product complied with all the
applicable codes, standards and regulations.

W.R. Grace & Co. is represented by Robert A. Murphy and Douglas K.
Mansfield of Casner & Edwards in Boston.

The plaintiffs are represented by Kenneth G. Gilman of Gilman & Pastor in
Boston. (Mass Tort Litigation Reporter, November 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  * * *