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              Monday, February 26, 2001, Vol. 3, No. 39


AIMCO INVESTMENT: Mantese Miller Announces Securities Suit Filed in CO
ASCENDANT SOLUTIONS: Spector, Roseman Files Securities Suit in Texas
BONE SCREWS: Ruling in Buckman Case Limits Medical Product Suits
CANADA LIFE: Settles Vanishing Premiums Suit in Ontario
DAIMLERCHRYSLER: Ap Ct Upholds Dismissal of Lawsuit over Noisy Jeep

DANKA BUSINESS: Barrack, Rodos Announces Settlement of Securities Suit
DUPONT: Miami Lawyers Given $ 6.4 Mil Not to Sue over Damage Re Benlate
FORD MOTOR: Argument for Defense Based on East Bay Case V. St. Paul Fire
HOLOCAUST VICTIMS: The Washington Post Takes Scrutiny at Press Release
KANSAS GAS: Wins Chance to Get Evidence to Reduce Liability in Explosion

MASSMUTUAL: Lawyer withdraws support for settlement
NORTEL NETWORKS: Montreal-Based Shareholders' Group Files Canadian Suit
NORTEL NETWORKS: Montreal-Based Shareholders' Group Files Canadian Suit
NORTEL NETWORKS: Refuses To Review Value Of Deal With JDS
NORTEL NETWORKS: Schiffrin & Barroway Files Securities Suit in New York

NORTEL NETWORKS: Wechlser Harwood Extends Period in Securities Suit
NORTEL NETWORKS: Wolf Haldenstein Announces on Securities Suit in N.Y.
SLAVE REPARATIONS: Politicians, Activists Prepare Another Call for Study
SOTHEBY'S, CHRISTIE'S: Judge Approves Settlement in Price-Fixing Suit
TAINTED BLOOD: Ontario Judge Puts Hep-C Deal On Hold

TECH FIRMS: Face Employment Bias Suits As Boom Times Wane
V-ONE CORP: Announces Dismissal of Securities Suit in Maryland
WAMU BANK: Sp Ct Decision Reduces Threat for Financial Firms in Calif.


AIMCO INVESTMENT: Mantese Miller Announces Securities Suit Filed in CO
A class action lawsuit was filed in the United States District Court for
the District of Colorado on behalf of persons who tendered and sold limited
partnership units to Apartment Investment Management Company
("AIMCO")(NYSE:AIV) and AIMCO Properties L.P. between November 11, 1999,
and December 30, 1999.

The complaint alleges that defendants violated Sections 14(e) and 20 of the
Securities Exchange Act of 1934, by failing to pay the consideration
offered or return the securities deposited by or on behalf of security
holders promptly after the termination or withdrawal of a tender offer. The
complaint further alleges that the calculation of fairness of the prices
offered in the tender offer documents were materially false and misleading
and omitted to state material facts as set forth above.

Contact: Mantese Miller & Shea, P.L.L.C., Troy, Michigan Powell Miller,

ASCENDANT SOLUTIONS: Spector, Roseman Files Securities Suit in Texas
The law firm of Spector, Roseman & Kodroff, P.C. has filed a class action
lawsuit in the United States District Court for the Northern District of
Texas on behalf of all persons who purchased the common stock of Ascendant
Solutions, Inc., formerly known as ASD Systems, Inc., (NASDAQ:ASDS) between
November 11, 1999 and January 24, 2000, inclusive (the "Class Period").

The lawsuit alleges that ASD and certain of its officers and directors
violated the Securities Exchange Act of 1934 by issuing false and
misleading statements concerning the Company's business. Specifically, the
complaint alleges that the Prospectus for the Company's November 11, 1999
initial public offering contained materially false and misleading
statements regarding the Company's past performance and ability to provide
reliable outsourced services to online retailers and direct marketing
companies. On January 24, 2000, ASDS' misrepresentations were revealed and
the price of ASDS' common stock collapsed by more than 30%.

Contact: Spector, Roseman & Kodroff, P.C. Robert M. Roseman, 888/844-5862
E-mail: classaction@spectorandroseman.com

BONE SCREWS: Ruling in Buckman Case Limits Medical Product Suits
Medical device and pharmaceutical companies can't be sued by patients
claiming that Food and Drug Administration (FDA) product approval was
secured by fraud, the U.S. Supreme Court ruled last Wednesday February 21.

Resolving a dispute over allegedly defective bone screws, the justices
unanimously said the FDA has the primary authority under federal law to act
when companies mislead the agency about the planned uses for products.

"The federal statutory scheme amply empowers the FDA to punish and deter
fraud against the agency," Chief Justice William Rehnquist wrote for the
court. "The balance sought by the agency can be skewed by allowing
fraud-on-the-FDA claims under state tort law."

The ruling is a triumph for business groups, eliminating one legal avenue
used by patients who claim they were hurt by FDA-approved products. It will
particularly help Fridley-based Medtronic Incorporated's Sofamor Danek
division, which was facing fraud-on-the-FDA claims in about half of almost
1,000 pending lawsuits over the company's bone plates and screws.

Medtronic stock rose after the court issued its ruling, rising 12 cents to
close at $51.50 after earlier hitting $53.

"It's vindication with the capital 'V' for most of the central positions we
have taken in this litigation," said James Beck, a lawyer who represents

Medtronic wasn't a direct party to the case but filed a friend-of-the-court

The high court case involved accusations that regulatory consultant Buckman
Co. deceived the FDA about the intended use for bone screws made by a
Medtronic competitor, Acromed Corp. That company isn't involved in the
litigation and was later acquired by Johnson & Johnson.

Patients complain that the Acromed and Medtronic screws, inserted in their
spines to give post-surgical support, bent and broke, causing a variety of

Buckman twice sought FDA approval of the Acromed devices for use in the
spinal pedicles, the bony archways that flank the spinal cord.

After the FDA rejected both applications, Buckman sought and won clearance
to use the screws and plates in arm and leg bones. Less rigorous review
rules apply to that type of device.

The patients claim Buckman always expected that doctors would use the
product for spinal surgery. Under FDA rules, doctors may prescribe cleared
drugs and devices for non-approved purposes, although the manufacturer may
not promote such use.

Several hundred plaintiffs alleged fraud as part of their lawsuits, which
named more than 300 defendants. Buckman appealed a federal appeals court
decision that let the claims against it advance.

Companies contended that federal law, including the 1976 Medical Device
Amendments, preempts state-law based suits that would second-guess the
FDA's judgment on disclosures made by companies seeking regulatory

A committee appointed to represent the plaintiffs' interests pointed to a
1996 Supreme Court decision permitting a suit that claimed a Medtronic
pacemaker was defective.

Although the judgment of the high court in the latest case was unanimous,
only seven justices signed onto the main opinion. Justice John Paul
Stevens, joined by Justice Clarence Thomas, wrote separately to say that
lawsuits should be permitted if the FDA orders a product removed from the

"In such a case, a plaintiff would be able to establish causation without
second-guessing the FDA's decision-making or overburdening its personnel,"
Stevens wrote.

A lawyer for the plaintiff's committee said the ruling will have the
unintended consequence of invalidating tort-reform laws in Michigan, New
Jersey and other states. Those laws would allow fraud-on-the-FDA claims in
exchange for limitations on other types of suits against drug and medical
device companies, according to attorney Arnold Levin.

"It's a case of 'be careful what you wish for,' " Levin said. "The
industry's position [at the Supreme Court] was very shortsighted." (Star
Tribune (Minneapolis, MN), February 22, 2001)

CANADA LIFE: Settles Vanishing Premiums Suit in Ontario
Canada Life Assurance Co. said it has settled class-action lawsuits started
in Ontario, B.C and Quebec over policies with vanishing premiums issued
from 1980 to 1997.

The suits were started by policyholders who own what are called
participating whole life insurance policies, those sold using the premium
offset concept -- also known as vanishing premiums. (The London Free Press,
February 23, 2001)

DAIMLERCHRYSLER: Ap Ct Upholds Dismissal of Lawsuit over Noisy Jeep
A state appeals court on Thursday upheld dismissal of a class-action
lawsuit seeking repair or replacement of Jeep vehicle engines that
allegedly generate excessive noise.

The 1st District Appellate Court panel found that the trial judge after
hearing evidence in the case correctly held that the plaintiffs had not met
their burden of proof and entered judgment in favor of DaimlerChrysler
Corp. Cook County Circuit Judge Thomas P. Durkin presided over the case
that involved fraud and breach of express warranty counts.

No plaintiff in this case has ever testified that, as a result of this
knocking sound, his Jeep has failed in its essential purpose or that it has
posed an unreasonable danger," Justice Leslie Elaine South wrote for the
three-judge panel. The class plaintiffs' assertion that this noise caused
concern and was an inconvenience is not compensable at law."

The named plaintiffs, Terry L. Hasek, Alan Block and Mitchell E. Bianchin,
each purchased a new Jeep with a 4-liter engine during 1993 and 1994.

The complaint alleged that Chrysler's model years 1991-95 Jeeps with a 4.0
liter engine were defective due to an idle knocking noise in the engine.
The plaintiffs ultimately filed a fifth-amended complaint alleged that
Chrysler breached its warranty under the Uniform Commercial Code and under
the federal Magnuson-Moss Warranty Act and committed common law fraud.

Hasek testified at trial that while he paid for a repair warranty when he
bought the Jeep, he didn't receive the benefit of the warranty because
Chrysler never fixed the idle knocking noise in his vehicle and never
contacted him about the engine noise problem.

Block and Bianchin testified that they also requested repair under the
repair warranty but that Chrysler didn't fix the engine noise.

Chrysler created an Idle Knock Task Force" and Diesel Noise Task Force" in
1993 and 1994 to address customer complaints about engine noises, the
opinion added. Chrysler's records showed that of the 1.15 million Jeeps
sold between 1991 and 1995, a total of 1.1 percent of the buyers complained
about any type of engine noise. Some of the customers received an engine
replacement, Thursday's decision said.

At trial, Durkin personally inspected and listened to the Jeep vehicles
owned by the class representatives. At the end of the evidence presentation
phase in the fall of 1999, Durkin ruled in Chrysler's favor on all counts.

The plaintiffs then appealed to the 1st District only on the breach of
express warranty counts under the UCC and Magnuson-Moss.

The plaintiffs asserted on appeal that Durkin's ruling was against the
manifest weight of the evidence because their testimony and the testimony
of their expert witness established that Chrysler had breached its express

Chrysler countered that that an engine noise," in and of itself, doesn't
establish a defect.

The panel agreed with Chrysler's argument.

Based upon the expert testimony, standing alone, the trial court's
determination, that the class plaintiffs had not met their burden of
proving that there was a defect in material, workmanship or factory
preparation in the 4.0 liter Jeep engines, was not against the manifest
weight of the evidence," the panel said.

The panel also rejected the plaintiffs' argument that Durkin erred in
dismissing the Magnuson-Moss claim.

Justices Allen Hartman and Thomas E. Hoffman joined in the 20-page opinion.
Terry L. Hasek, et al. v. DaimlerChrysler Corp., No. 1-99-4079.

Neither the plaintiffs' attorney, Edward T. Joyce, who heads a Chicago law
firm bearing his name, nor attorneys for Chrysler could be reached for
comment early February 22 afternoon. (Chicago Daily Law Bulletin, February
22, 2001)

DANKA BUSINESS: Barrack, Rodos Announces Settlement of Securities Suit
The following was issued by Barrack, Rodos & Bacine:

John E. Thompson, Noel J. Garvin, John L. Hess, Cassius Peacock, Jr.,
Effram Arenstein, Theodore Holstein, David Gestetner, Merton Bohonos and
Wayne Siegel, on Behalf of Themselves and All Others Similarly Situated,


Mark A. Vaughan-Lee, Daniel M. Doyle, Estate of David C. Snell, William T.
Freeman, Martin St. Quinton, Debra A. Taylor, and Danka Business Systems,
PLC, Defendants.

Case No. 97-3007-CIV-T-26E

Summary notice of pendency and settlement of class action, and of
settlement hearing

To: all persons and entities who purchased the common stock (London: dnk.l)
or American depository shares (nasdaq: danky) of danka business systems,
plc ("danka" or the "company") between may 13, 1997 and December 15, 1997,
inclusive (the "class period").

You are hereby notified, pursuant to Rule 23 of the Federal Rules of Civil
Procedure and an Order of the Court dated February 9, 2001, that the
above-captioned action has been conditionally certified as a class action
and that a settlement of two million seven hundred thousand US dollars
(2,700,000.00) has been proposed. A hearing will be held before the
Honorable Richard A. Lazzara of the United States District Court for the
Middle District of Florida, Tampa Division, in Courtroom No. 15B, United
States Courthouse, 801 N. Florida Avenue, Tampa, Florida, 33602, on Friday,
April 27, 2001, at 11:00 a.m., to determine whether the proposed settlement
should be approved by the Court as fair, reasonable and adequate, and to
consider the application of Plaintiffs' Counsel for attorneys' fees and
reimbursement of expenses.

If you are a member of the class described above, your rights will be
affected and you may be entitled to share in the settlement fund.

In order to participate in the distribution of the settlement fund, you
must file a proof of claim form postmarked by June 8, 2001. If you do not
file a claim form you will not receive any funds from this settlement.

If you have not received the full printed Notice of Pendency and Settlement
of Class Action ("Notice"), you may obtain a copy of this document by
identifying yourself as a member of the Class and by writing to: Danka
Business Systems, PLC Securities Litigation, P.O. Box 120, Philadelphia, PA
19105-0120, or by calling 215-665-1124.

Inquiries other than requests for the form of Notice may be made to
Plaintiffs' Counsel:

Frederic S. Fox, Esq. Mark C. Gardy, Esq.
Jonathan K. Levine, Esq. Karin Fisch, Esq.
Janine R. Azriliant, Esq. Abbey, Gardy & Squitieri, LLP
Kaplan, Kilsheimer & Fox LLP 212 East 39th Street
805 Third Avenue New York, New York 10016
New York, New York 10022 +1 212-889-3700
+1 212-687-1980

Gerald J. Rodos, Esq. Sherrie R. Savett, Esq.
Mark R. Rosen, Esq. Ruthanne Gordon, Esq.
Leslie Bornstein Molder, Esq. Phyllis M. Parker, Esq.
Barrack, Rodos & Bacine Berger & Montague, P.C.
3300 Two Commerce Square 1622 Locust Street
Philadelphia, Pennsylvania 19103 Philadelphia, Pennsylvania 19103
+1 215-963-0600 +1 215-875-3000

Plaintiffs' Co-Lead Counsel

Michael J. Pucillo, Esq.
Burt & Pucillo, LLP
515 North Flagler Drive
Suite 1701
West Palm Beach, Florida 33401
+1 561-835-9400

Plaintiffs' liaison counsel

To exclude yourself from the Class you must submit a request for exclusion,
as described in the Notice, postmarked no later than April 6, 2001. If you
remain a Class Member and do not exclude yourself from the Class, you will
be bound by the Final Order and Judgment of the Court. Pease do not contact
the court or the clerk's office for information about the matters described
in this summary notice.

By order of the court

United States district court

Middle district of Florida


Contact: Maxine S. Goldman, Shareholder Relations Manager of Barrack, Rodos
& Bacine, Counsel for Class Plaintiffs, +1 800-417-7305 or +1 215-963-0600,
fax: +1 888-417-7306 or +1 215-963-0838, or e-mail: msgoldman@barrack.com

DUPONT: Miami Lawyers Given $ 6.4 Mil Not to Sue over Damage Re Benlate
If they didn't reach agreement with the plaintiffs' lawyers, a Miami-Dade
circuit judge later that morning would enter a ruling that threatened to
devastate DuPont in other Benlate cases.

The ruling slammed DuPont for deceiving the court. The chemicals company
badly wanted to keep it out of the record by settling first. Finally, the
last settlement papers were signed.

DuPont would pay $ 59 million to the farmers and nurseries to settle the 20
cases. Around 8 a.m. on Aug. 8, 1996, the lawyers from both camps persuaded
Judge Amy Steele Donner to vacate her order and seal it, saying the case
had been resolved.

But the lawyers didn't tell the judge -- or the plaintiffs -- that they had
helped resolve the matter by signing a separate agreement between

It wasn't until three years later that the plaintiffs discovered that
DuPont had agreed to pay their lawyers from Friedman Rodriguez Ferraro and
St. Louis of Miami $ 6.4 million to ensure the law firm would never again
bring a Benlate case against DuPont.

The rationale for this side agreement was that DuPont was compensating the
law firm for lost future business. Friedman Rodriguez would earn $ 13
million as their cut from the larger settlement and had prospects for
earning more in later Benlate cases against DuPont. The plaintiffs' lawyers
say that without the side agreement, the plaintiffs would have lost the $
59 million, the most generous Benlate settlement ever reached.

                            Secret Revealed

This secret agreement was only revealed after some of the same plaintiffs
represented by Friedman Rodriguez in 1996 filed a legal malpractice lawsuit
in Gainesville. That suit accuses the now defunct law firm and DuPont of
fraud and other misconduct in the 1996 settlement.

The judge in that case forced disclosure of the $ 6.4 million payment,
which the plaintiffs, in court papers, call a "secret bribe."

A hidden payment to keep lawyers from bringing more cases violates several
standards of attorney conduct, according to legal ethics experts.

"One has to ask whether the inducement to the lawyer was so great that the
lawyer can no longer exercise independent judgment,'' said Stephen Gillers,
professor and vice dean at New York University law school. "The idea that
you don't tell the clients is a breach of trust."

The plaintiffs' lawyers acknowledge they may have stepped into an ethical
gray area but say they acted in their clients' best interests. "By any
measure, we absolutely, unequivocally did that," said attorney Frank
Rodriguez in an interview.

DuPont, the world's largest chemical company, defends the payment to the
lawyers but not the secrecy.

"I'd be hard put to see what ethical problems there'd be" if the plaintiffs
lawyers had told their clients immediately that they were being compensated
separately, said Evan Chesler, a partner in the New York firm Cravath
Swaine & Moore who represents DuPont in other Benlate-related litigation.

The disclosure of a secret agreement between lawyers on opposite sides of a
case is the latest twist in a decade of litigation over a version of
Benlate accused of causing widespread damage to crops and ornamental trees
and plants before DuPont withdrew the product in 1991.

DuPont, which denies Benlate caused any damages, has paid out $ 1 billion
because of settlements or jury verdicts to the owners of roughly 1,000
farms and nurseries. More than 140 suits are pending.

Revelation of DuPont's payment to the plaintiffs' lawyers has hurt the
company in at least one other pending malpractice case and has become an
issue in other litigation. Miami-Dade Circuit Judge Thomas Wilson Jr.,
presiding over another Benlate-related legal malpractice suit, made his
view of the side payment plain.

"Something stinks here," he said at a hearing in October, according to a
transcript. "An attorney cannot have two masters, especially two
antagonistic masters," he wrote in a December order.

The question is whether the agreement with DuPont created a conflict
between the plaintiffs' interests and that of their lawyers.

DuPont would have withdrawn the $ 6.4 million offer if the larger
settlement collapsed, according to the terms of the agreement. The
combination of conditions in the two agreements left the plaintiffs with
little choice except to settle, some of those plaintiffs say in court
filings. That is disputed, too.


"Friedman Rodriguez had a six and a half million dollar incentive to force
this settlement down the throats of their clients,'' lawyer William Custer
of Atlanta, said at a November court hearing in the Gainesville case, a
transcript shows. He represents one of the families who brought the
Gainesville suit.

Custer notes in court papers that at the time Friedman Rodriguez accepted
the money, the Miami firm was "in significant financial distress."

Rodriguez and his former partner, Roland St. Louis, now say their firm's
finances weren't that precarious. They say the payment was neither a
conflict nor an incentive to do anything, except turn down future cases.
The sum was so modest compared with what future Benlate litigation would
bring that "this was a sacrifice to us," St. Louis said.

He and his partners reluctantly went along so their clients could reap the
"lavish" and "extravagant" offers DuPont had made them, said St. Louis. He
and Rodriguez said the clients should be thanking them, not suing them.

For example, the attorneys got a $ 1.1 million settlement for a family that
had previously agreed to settle for $ 750,000, court papers show. That
family is now suing the firm in Gainesville.

DuPont says the terms of the side arrangement, and certainly the insistence
that it be kept secret, came from the plaintiffs' attorney.

"DuPont did not make them do it," a company lawyer, Edward Moss, of Shook
Hardy & Bacon in Miami, told a judge at a hearing in Gainesville last

'Very bad on both sides'

Both sides agree the payment to the lawyers evolved from DuPont's
determination to prevent them from using their client fees from the case as
a war chest to finance more Benlate suits.

Ethicists say it barely matters who played the leading role in designing
the $ 6.4 million arrangement. "It's very bad on both sides," said Monroe
Freedman, legal ethics professor at Hofstra University in New York, when
told of the arrangement.

Rules governing attorney conduct in most states, including Florida, ban
settlements that contain lawyer promises to restrict their practice. Such
promises shrink the pool of experienced lawyers and unfairly inflate those
settlements, say American Bar Association guidelines.

A $ 6.4 million payment for not taking more cases "is very worrisome" and
"could get them in trouble with disciplinary authorities," said legal
ethics professor Geoffrey Hazard of the University of Pennsylvania,
referring to both sets of lawyers.

Secrecy made it worse. "The clients are entitled to be fully consulted" on
all terms of the settlement, said Freedman.

St. Louis said the experts might reach a different conclusion if they knew
all the facts. Several clients were in dire financial straits and had so
little evidence to back their Benlate claims that "we shuddered at the
thought of going to trial," he said.

He and Rodriguez say the pending Donner order in the summer of 1996 gave
them more bargaining leverage their clients could ever hope for again. That
leverage would have disappeared unless they met DuPont's settlement
demands, they say.

As for the secrecy, DuPont and the plaintiffs' lawyers each say the other
side insisted on it. The Gainesville plaintiffs say the blame is shared.

                             Unpaid Lawyers

The circumstances that led to DuPont's hidden agreement are spelled out in
court papers, in interviews with Bloomberg News and in testimony at
Friday's hearing.

By the summer 1996, the Friedman, Rodriguez firm owed its lawyers more than
$ 2 million in salary, the documents show. While St. Louis called the
figure misleading, he confirmed that none of the firm's four
shareholder-partners were paid for most of the previous 18 months.

The firm's biggest Benlate client was Davis Tree Farms with some 300 acres
of ornamental trees, mostly in South Florida, St. Louis said. The firm
focused most of its efforts on the Davis case, but would later link the
other 19 claims to it.

                        Gold in Costa Rica

The potential value of the Davis case surged in 1996 when the law firm
accused DuPont of growing plants in Costa Rica, dipping them in Benlate
and, when the plants turned black and died, destroying them.

The lawyers sensed a cover-up because DuPont, already sanctioned for
misconduct in other Benlate cases, had denied that any Benlate-related
field trials occurred outside the U.S. The Costa Rica project was not a
field trial, DuPont said, denying the company had lied or hid evidence.
Judge Donner disagreed.

DuPont and its lawyers "continue to participate in utter disregard for
orders of court," Donner said at the close of a June 21, 1996, hearing.
"This is a pattern. It is willful, it is deliberate."

Donner invoked what's known as "the death penalty" in civil trials, meaning
she took away DuPont's chance to defend Benlate as uncontaminated. A jury
no longer would have to decide whether DuPont must pay Davis Tree Farms,
only how much.

The judge promised a "very detailed" written order soon.

The timing couldn't have been worse for DuPont.

A federal judge in Georgia the previous year found DuPont had defrauded the
court in another Benlate case and ordered the company to pay a $ 115
million penalty, later settled for $ 11.25 million.

That same year, a state judge in Hawaii slapped a $ 1.5 million penalty on
DuPont. In both courts, the sanctions stemmed from an alleged cover-up of
California tests seeming to show soil contamination on Benlate-treated

The orders in Georgia and Hawaii provided ammunition for other Benlate
plaintiffs nationwide. Now DuPont faced the threat of new damning evidence
in the form of Donner's order -- if it failed to settle the Davis case

DuPont lawyers told Friedman, Rodriguez that a settlement had to be reached
before Donner issued her written order, according to a deposition last year
by James Shomper, then senior counsel at DuPont.

As part of the agreement, the plaintiffs lawyers would have to agree that
they would never again sue DuPont over Benlate, said Shomper. The lawyers
balked. "If they were going to forgo those kind of future opportunities,
they wanted a premium" in the form of extra compensation, Shomper said.

Meanwhile, DuPont's attorneys had told the Miami lawyers they were
concerned about enforcing such a pledge.

Shomper said it was St. Louis who found the answer: If DuPont retained the
plaintiffs' firm for post-settlement work, the lawyers automatically would
have a conflict barring them from suing their new client. They put off the
details for the time being.

The lawyers were still nailing down settlement terms when, on Aug. 5, 1996,
Donner signed the written order DuPont had been dreading. "DuPont has
destroyed evidence; it has delayed discovery,'' the order said.

The company's conduct was so "atrocious" it "shocks the conscience of the
court," the judge wrote. She sent the order to the lawyers, but not yet to
the court clerk.

Deep into negotiations, the lawyers saw the order Aug. 7 when it arrived by
mail. On a lunch break, Rodriguez found it at his office and worried the
order might kill the emerging settlement by removing DuPont's chief
incentive to settle.

It didn't. But DuPont's lawyers insisted negotiations would continue only
if the plaintiffs' lawyers asked Donner to overturn her order and seal it.
"The order couldn't see the light of day," Rodriguez said in his

Negotiations intensified. Sometime around 10 on that Wednesday night, St.
Louis typed a nine-page agreement.

                                The Agreement

DuPont would pay $ 59 million to settle the firm's 20 cases. Friedman,
Rodriguez would take no more Benlate cases and would turn over all Benlate
documents to DuPont's lawyers. Settlement depended on Donner vacating her

Negotiations now focused on what DuPont would pay the lawyers and how to
bind them not to sue. The plaintiffs' lawyers say they never wanted to link
the side deal to their clients' settlement.

But DuPont's lawyers were adamant, say Rodriguez and St. Louis.

DuPont's Shomper, in his deposition, said the retainer arrangement was
forged by the plaintiffs' lawyers. "It was their idea," he said. "They
drafted it, they presented it; they were hardly reluctant."

In any event, the document typed by St. Louis was clear: "We have agreed to
accept your offer of engagement," he wrote, "for the agreed fee of $
6,445,000," a fee "fully earned."

St. Louis wrote in the agreement that after his firm finished the 20
Benlate cases, DuPont would retain the firm for unspecified Benlate-related
work at the firm's standard hourly rates.

The agreement would collapse if the larger settlement falls through, the
document says. "This agreement shall be maintained in strictest
confidence," it concludes.

The following morning, Donner agreed to vacate and seal her order.

                             To the Clients

Next, the plaintiffs' lawyers went about persuading their clients to accept
the offers. "Most of our clients were ecstatic," said Rodriguez.

A few balked. Jerry Gilley and his mother, Doris, who had a small farm
northeast of Tampa, demanded to see all settlement documents. Their lawyers
told them they had no business knowing what the other plaintiffs had

To persuade the Gilleys to settle, St. Louis told them they'd never get
more money than DuPont was offering, and if they turned down the offer,
they'd have to find new lawyers. They'd also have to start all over
building their case, because the Friedman Rodriguez lawyers had agreed to
return all documents to DuPont.

Facing creditors and a fast-approaching trial date, Gilley accepted. He
said in his deposition he had no choice.

Friedman Rodriguez lawyers say the Gilleys could have found new lawyers and
gone to trial. As for themselves, they had no obligation to keep
representing clients who'd turned down substantially more money than they
could ever get any other time.

It was the Gilleys who in 1994 had said they'd take $ 750,000 but hesitated
at the 1996 offer of $ 1.1 million, court documents show.

After they settled, the Gilleys and other plaintiffs remained suspicious of
their lawyers' conduct and complained to the Florida Bar, which disciplines
attorneys, that St. Louis and Rodriguez had coerced them into settling.

The upshot was a mild admonition in 1998 for not keeping clients fully
informed. But the Bar staff lawyer who investigated the complaints, Joan
Fowler, didn't know about the $ 6.4 million payment until last year, long
after the investigation had ended.

Rodriguez denies his firm withheld the side agreement from the Bar but
wouldn't discuss the matter in detail, saying the investigation of the
plaintiffs' lawyers has been revived.

As for the clients themselves, it was only in 1999, after the Gilleys and
others sued in Gainesville and won a court order forcing disclosure, that
they learned of the $ 6.4 million arrangement.

Two masters?

The Friedman Rodriguez lawyers said in court papers they never worked for
DuPont and their clients at the same time.

However, they were still working for the clients when DuPont agreed to hire
them. The agreement was "nothing less than a payment to compromise their
clients' interests,'' said the ex-clients new lawyer, Custer of Atlanta's
Powell Goldstein Frazer & Murphy, in a brief in the Gainesville case.

As for DuPont, Chesler said the company was willing to pay the $ 6.4
million because, "They felt the Friedman Rodriguez people had been
extremely aggressive, had cost them a lot of money to defend these cases,
and they didn't want to go through that again."

The Friedman Rodriguez firm broke up in the fall of 1996.

Before it did, the 10-lawyer firm distributed $ 20.3 million from the case
to lawyers and staff, with St. Louis getting the largest chunk, more than $
6 million.

If the plaintiffs in the Gainesville malpractice case succeed, the firm
would have to give up all $ 20.3 million, plus interest. The lawyers and
DuPont also may face punitive damages.

The firm's other ex-clients, almost all of whom have filed their own
malpractice suits, could be wrapped into the Gainesville case, which is
months away from trial.

As Benlate litigation enters its second decade, these new disclosures
promise to keep the charges and countercharges flying, not only in
Gainesville but beyond.

The Gainesville plaintiffs are seeking information on any similar
agreements DuPont may have cut, although DuPont says there are none quite
like this one. Meanwhile, pleadings in the Gainesville case are circulating
among Benlate plaintiffs lawyers elsewhere.

Already, the disclosure in Gainesville has hurt DuPont in an Orlando case,
where another of the 1996 plaintiffs is suing Friedman Rodriguez and

The company had asked for the claims against it to be dismissed, but in
January, Orange Circuit Judge James Stroker refused, citing the $ 6.4
million transaction.

The problem for DuPont was that the larger, 20-case settlement document
stated that the company and the plaintiffs' lawyers had acted as
adversaries throughout and that they had no "partnership" or "special

And even though both sides still say the legal battle could not have been
more adversarial, they have to explain that piece of paper they signed
after midnight more than four years ago.

In court last Friday, St. Louis said: "I struggled with my conscience every
day." (Broward Daily Business Review, February 22, 2001)

FORD MOTOR: Argument for Defense Based on East Bay Case V. St. Paul Fire
The latest pothole in what has been a bumpy ride for Ford's defense in a
class action could be an East Bay case called Arntz Contracting Co. v. St.
Paul Fire and Marine Insurance Co.

It will be the first in limine motion the plaintiffs will make when both
sides return to court in March to submit pretrial motions for Howard v.
Ford, 763785-2 - which has already led to a bench recall of nearly 2
million cars and trucks. If the motion is successful, retired Alameda
County Superior Court Judge Michael Ballachey's blistering statement of
decision from the bench - that the automaker failed to tell consumers about
an ignition flaw that caused some models to stall on the road - would
become binding on the jury in a related trial this fall.

The motion "could have a significant impact, to say the least," said lead
plaintiff attorney Jeffrey Fazio, because it would take away Ford's chance
to dispute liability, and jurors would be left to decide damages.

The two-phase suit has already led to a historic bench recall, and
Ballachey has ruled that Ford violated the unfair competition law and the
Consumer Legal Remedies Act. Now that the bench trial for equitable issues
is over, the attorneys are preparing for the retrial of the jury phase,
which will determine damages. The first jury hung in 1999 after 10 days of

Fazio's argument is based on 1996's Arntz Contracting Co. v. St. Paul Fire
and Marine Insurance Co., 47 Cal.App. 4th 464.

"Ford will want to retry the liability issue," said Fazio of Hancock
Rothert & Bunshoft. "Our position is a jury can't second-guess a trial

Ford attorneys, while downplaying the motion's implications, said that such
an argument would violate the firm's rights.

"Arntz does not apply here," said Donald Lough, Ford's Dearborn, Mich.-
based in-house counsel. "We agree with Judge Ballachey's original ruling
that the motion would run roughshod over our constitutional right to a jury
trial," referring to the judge's first reaction when plaintiff attorneys
broached the subject in court.

Ford attorneys acknowledged that Ballachey may have changed his mind about
the motion but declined to speculate how the judge will eventually rule.

Arntz stems from a dispute between a contractor who was terminated from a
Richmond Housing Authority project and its insurance company. The case was
litigated in two bench trials and a jury trial. Both sides challenged lower
court rulings on several grounds, with insurance company attorneys arguing
that the court should not have read statements of decision from earlier
bench trials to the jury. The justices unanimously ruled that using the
decisions as evidence was not prejudicial.

"Issues adjudicated in earlier phases of a bifurcated trial are binding in
later phases of that trial and need not be re-litigated," wrote First
District Court of Appeal Presiding Justice Gary Strankman, with William
Stein and now-retired Justice Robert Dossee concurring.

"While we do not endorse the wholesale introduction of statements of
decision from one phase of a bifurcated trial into another... T he court
was entitled to prepare its own statement of the case and craft it from its
statements of decision that had passed through the crucible of the parties'
objections and proposed modifications," Strankman wrote.

That doesn't apply to the Ford case, the carmaker's attorneys say.

"Arntz deals with a situation where the parties stipulated to certain
procedures," said Lough.

The litigants in Artnz agreed to try the case in phases, whereas Ford --
anticipating that Arntz would be an issue -- has always objected that the
bench trial happened before a jury could resolve the claims for damages, he

Originally, Ballachey wanted the jury trial to conclude before the bench
trial started. After the first jury hung, Ballachey changed his mind and
moved forward with the bench trial. Ford unsuccessfully tried to prevent
Ballachey from proceeding with the bench trial until a jury retrial was

Ford's case has "a totally different set of facts" than the Arntz case,
Lough said.

Plus, said Richard Warmer, Ford's local counsel from O'Melveny & Myers, the
jury must hear evidence about liability.

"You are not entitled to damages until you prove liability," said Warmer.

Fazio disagrees.

"We have to show that they defrauded consumers, we don't have to try every
little thing," the attorney said. If the Arntz motion is not granted, Ford
would have another shot at proving that the automaker is not liable, he

The yet-to-be filed motion has been debated extensively and even surfaced
during Ford's ill-fated attempt to disqualify Ballachey from presiding over
the retrial. Ballachey's attorneys argued that Arntz was the real motive
behind Ford's attempt to boot the retired judge.

"What Ford seeks in this challenge is to keep Ballachey's determination of
evidence in the first proceeding from being admitted in the second trial,"
wrote Alameda County Counsel Richard Winnie in a January appellate
argument. Then, Winnie was responding to Ford's writ, which challenged a
Sacramento County Superior Court judge's ruling that kept Ballachey on the
Ford case.

"In effect Ford seeks to avoid the potential result of Arntz through
disqualification of Judge Ballachey ... If the Arntz motion is decided
unfavorably to Ford, it has an adequate remedy at law: appeal," he wrote.

The disqualification motion was not tied to Arntz, Lough said, but he
acknowledged that the Ballachey ruling on the motion could be fodder for

"It depends on how the court rules and how the ruling fits in with the rest
of the case, but we think that if the court denies us a right to a trial,
that would be reversible error," he said.

In California courts, it's preferred that bench trials go before jury
trials to narrow the issues that jurors must weigh, said Fazio.

"Even if they won the jury trial ," he said, "Ballachey could have found
them liable for the equitable issues." (The Recorder, February 23, 2001)

HOLOCAUST VICTIMS: The Washington Post Takes Scrutiny at Press Release
Stop the presses: IBM Corp. has turned against the Holocaust. No, really,
it says so right here in this recent press release: "IBM and its employees
around the world find the atrocities committed by the Nazi regime abhorrent
and categorically condemn any actions which aided their unspeakable acts."

This sentence deserves close study as a hilarious example of the corporate
public relations mentality in action. By denying -- in stilted, phony
language an accusation no one has made, it rises above meaninglessness only
to raise the very doubt it was meant to suppress. The press release was
issued in response to a book and (naturally) a lawsuit raising questions
about IBM's dealings with Nazi Germany 60 years ago. The book doesn't
allege that IBM actually favored Nazi atrocities even at the time.

However, IBM's earnest revelation that it has gone to the trouble of
"finding" the Nazis objectionable suggests that the company took the
question seriously and had to stop and think before reaching this
conclusion. Perhaps it did a few computer runs to determine that, yes, the
Nazis were bad, bad, bad. Furthermore, the company is obviously lying when
it asserts that its vast army of "employees around the world" all share
this corporate finding. How does it know? Did it interview each of them?
Not one closet Naziphile in the bunch? None even who find Nazis
"disgusting" but not quite "abhorrent"?

In short, IBM sounds like it has its fingers crossed. This is the same way
it would talk if it were rebutting an actual and valid accusation. In the
political world this mode of discourse is known as "spin" and has been
recognized long since as a language operating far above petty concepts of
truth and falsehood. But as with so many other great American achievements,
the private-sector contribution to the creation of spin is
underappreciated. Companies like IBM do it darned well.

Unfortunately, a morally universal language that makes truth and falsehood
sound the same isn't so wonderful on occasions when you are actually
telling the truth. This still doesn't give us cause to worry that IBM
harbors any sympathy now for Nazis long ago. But the reflexive recourse to
spin, among politicians and corporations alike, does give us cause to
wonder if they'll get it right the next time a moral dilemma comes along.

In a way, moral neutrality is built into the corporate form. Although
corporations like to exploit the pathetic fallacy -- the tendency to
attribute human emotions to inanimate objects -- by portraying themselves
as devoted primarily to curing homeless orphans of cancer, they are almost
required to avoid extravagant moral sensitivity and do whatever they can,
within the law, to maximize value for their shareholders. Even corporate
good works must be justified as good for business. There is a certain
circularity here: It's good for business for the company to look as if it
cares about more than just what's good for business. The puzzle is that if
people came to believe this, it would no longer be true. The business
justification for corporate high-mindedness depends on the perception that
there is no business justification.

The conceit that corporations are human beings is why today's IBM is being
held morally and legally responsible for what the company may have done
two-thirds of a century ago. A class-action lawsuit demands that IBM
"disgorge" lovely word -- its wrongful profits from that time. Plus
interest. IBM, famous for stockholder loyalty, probably has more continuous
owners since the 1930s than any large company other than AT&T. But this
group surely represents a small fraction of IBM's current ownership. Why
should the rest bear responsibility for the company's ancient wrongs?

The answer is: That's the deal when you buy a share. In exchange for
limited liability -- the most you can lose is the value of your share --
you assume your fraction of responsibility for anything the company has
done or will do in its perpetual life. Still, it's odd. Even if the
company's current value reflects whatever profits it made from its dealings
with the Nazis, those profits presumably were reflected in the price you
had to pay for your shares, so any payout now means you are disgorging
twice for sins not your own.

A human being can be justly prosecuted for a crime he committed long ago,
even though every cell in his body has been replaced many times. But that's
because everyone recognizes that human beings, not cells, are the moral
agents. Humans remain the moral agents in a corporation, even though in
that case they are the building blocks rather than the resulting structure.

Punishing shareholders for past corporate wrongs is even odder when you
reflect on who gets punished. It's not the shareholder when the sin was
committed or even the shareholder when the punishment is inflicted; it's
the shareholder when the suit is announced. At that point, the stock price
presumably adjusts itself to reflect the likelihood and likely cost of any
punishment. After that, buying or selling the stock is merely a gamble on
changing expectations about how the process will turn out.

But share price aside, it's good to know that IBM abhors the Holocaust.
(The Washington Post, February 23, 2001)

KANSAS GAS: Wins Chance to Get Evidence to Reduce Liability in Explosion
Kansas Gas Service has been granted conditional permission to gather
evidence that could reduce its liability in a natural gas explosion that
killed a Hutchinson couple in their mobile home.

An apparently severed well cap that was discovered several blocks from the
mobile home park matches the casing in a well found under the couple's
trailer. John and Mary Ann Hahn died from injuries sustained in the Jan. 18

A Reno County District Court judge gave Kansas Gas Service conditional
permission Thursday to gather evidence in the trailer park.

But the judge told the company to preserve all portions of the pipe and to
delay testing the evidence until all sides in two class-action suits can
agree to testing protocol. The judge also ordered that any pipe work should
be witnessed by an independent observer and videotaped.

The issue ended up in court after owners of the mobile home park attempted
to block crews from seizing sections of the park's brine wells.

Leawood attorney Doug Patterson, who represents Big Chief Mobile Home Park
owner Bob Kinder, said he will file an appeal Friday with the Kansas Court
of Appeals. He calls the gas company's move an attempt to improperly
confiscate Kinder's property.

"We discovered a brine well plug, a piece of casing with apparently a cap
on top," Hutchinson attorney Eric Steinle, representing Kansas Gas, told
the Reno County judge. "It appears someone may have approached a well with
a torch, cut off this piece flush with the surface of the ground and
discarded it."

The foot-long section of apparent well casing with plug attached was
discovered earlier this month in a vacant field about four blocks from the
trailer park.

The order also grants gas crews access to begin constructing a system to
vent gas away from the mobile home park. The system is required by the
Kansas Department of Health and Environment before the mobile home park can
be reopened next month.

Meanwhile, the effort to vent gas from beneath the city is working, Kansas
Gas Service officials said.

Flames went out from two gas flares and almost no gas was venting from
them, including the site of the first gas explosion that destroyed two
downtown businesses Jan. 17.

"There may be a little bit of gas coming out of them, but not much," KGS
spokesman Conrad Koehler said.

Flames continue to burn at some other vent wells and several others were
venting gas, although not enough to support a flame.

Koehler also corrected a misstatement made by KGS officials about the size
of the Yaggy gas storage field northwest of Hutchinson.

Shortly after the gas crisis began, KGS officials said the Yaggy field
contained 160 salt caverns used to store natural gas. Koehler said
Wednesday the correct number is 70 salt caverns.

Koehler said the Yaggy gas field has been shut down.

"We can withdraw gas from it, but we can't put any in," he said. (The
Associated Press State & Local Wire, February 23, 2001)

MASSMUTUAL: Lawyer withdraws support for settlement
An attorney who filed a national class-action lawsuit against a
life-insurance company has withdrawn his support of a proposed settlement
that would have paid him millions of dollars in legal fees.

The proposed settlement came under fire from hundreds of current and past
MassMutual policyholders. Some argued the lawsuit was frivolous, while
others objected to Santa Fe attorney Gary Duncan getting millions of
dollars while only two policyholders got money.

Duncan filed a court notice that he was withdrawing his support for the
proposed settlement in the lawsuit he filed against Massachusetts Mutual
Life Insurance Co. of Springfield, Mass.

The lawsuit accuses MassMutual of failing to disclose installment charges
that it levies on policyholders who pay annual premiums over time rather
than in one lump sum.

The proposed settlement called for Duncan to receive $5 million in cash, a
$3 million life-insurance policy and annual payments of $250,000 for life.

The two MassMutual policyholders named as plaintiffs in the lawsuit would
have shared $400,000, but 6 million other current and past policyholders
represented by Duncan would have received nothing.

Duncan said in the court notice that the proposed settlement wasn't fair to
previous policyholders of MassMutual because of the lack of money damages.

After Duncan filed his notice, state District Judge Art Encinias in Santa
Fe canceled a hearing set on whether to approve the proposed settlement.

Encinias said Thursday that the case is now scheduled for trial in early
December. He added that Duncan and MassMutual continue settlement

Duncan and MassMutual declined to comment on the collapse of the proposed

The insurance company has acknowledged not expressly stating installment
charges in policies, but it has said policyholders could easily calculate
such charges from payment schedules.

In the proposed settlement, the insurance company agreed to disclose
installment charges to policyholders in both dollar amounts and interest

Duncan said the disclosures agreed to by MassMutual, if adopted
industrywide, could have resulted in policyholders saving billions of
dollars. But the lack of monetary damages for former policyholders had
become a major sticking point with the proposed settlement. (The Associated
Press State & Local Wire, February 23, 2001)

NORTEL NETWORKS: Faruqi & Faruqi Announces on Securities Lawsuit in NY
On February 22, 2001 a class action lawsuit was commenced in the United
States District Court for the Eastern District of New York on behalf of all
purchasers of Nortel Networks Corp. (NYSE: NT) ("Nortel" or the "Company")
common stock between November 1, 2000, and February 15, 2001, inclusive
(the "Class Period").

The Complaint charges Nortel and certain of its executive officers with
violations of the federal securities laws, including Sections 10(b) and
20(a) of the Securities Exchange Act of 1934 and Rule 10b-5. Among other
things, plaintiff claims that defendants issued a series of materially
false and misleading statements in press releases and SEC filings
concerning Nortel's revenues and business prospects.

Specifically, the complaint alleges that on January 18, 2001 defendants
issued a press release to the investing public announcing record operating
results for the year 2000, and especially strong fourth quarter 2000
performance. Besides boasting that Nortel's "industry leading portfolio"
would allow it to "continue to outpace the market and gain profitable
market share" despite the tightening of capital within the telecom sector,
defendant Dunn projected that Nortel would achieve 30% growth in revenues
and EPS in 2001. The complaint alleges that defendant's guidance concerning
revenue and earnings for the full year 2001 was materially false and
misleading because at the time they made these statements, defendants were
aware that the economy in the United States had slowed down dramatically.
As a result, defendants' misrepresentations caused the price of Nortel's
securities to be inflated throughout the Class Period, allowing certain
defendants to collectively sell over $7 million of personally held Nortel

On February 15, 2001, Nortel shocked the market when it announced that it
was drastically reducing guidance for the 2001 fiscal year because of
decreased demand for its products due, in large part, to spending cuts by
telecommunications companies. Instead of the previously announced growth
rate of 30%, Nortel now projected growth rates of 15% and 10% for 2001
revenues and EPS respectively. As a result of this disclosure, the
Company's common stock plummeted approximately 34% from its closing price
of $29.75 per share on February 15, 2001 to as low as $19.50 on February
16, 2001, erasing more than $ 33 billion in market capitalization in the

Contact: Faruqi & Faruqi, LLP, New York Anthony Vozzolo, ESQ. Tel:
877/247-4292 or 212/983-9330 Fax: 212/983-9331 FaruqiLawAV@aol.com

NORTEL NETWORKS: Montreal-Based Shareholders' Group Files Canadian Suit
A Montreal-based shareholders' group filed the first Canadian class-action
lawsuit against fibre-optic giant Nortel Networks.

The Quebec Association for the Protection of Shareholders claims the
company knew its growth targets would have to be revised prior to a profit
warning that battered Canadian stock markets.

President Paul Lussier said the suit was filed with the Superior Court of
Quebec for all those who bought Nortel shares between Jan. 19 and Feb. 15.

Well-known class-action lawyer Harvey Strosberg, in Windsor, Ont., is also
considering a lawsuit against Nortel.

The telecom equipment provider is already facing three class-action
lawsuits in the United States which also accuse two company executives of
insider trading.

After the close of markets on Jan. 18, Nortel released its fourth-quarter

The telecommunications company reaffirmed, for at least the third time,
that it expected revenue and operating earnings growth for the year of 30%
and a first-quarter operating profit of 16 cents a share.

But after the close of markets Feb. 15, Nortel cut the revenue growth
figure for the year in half and said it expected a per-share loss from
operations of four cents US for the first quarter of 2001.

That bombshell evaporated a third of the company's market value the next
day and sent the Toronto Stock Exchange into a downward spiral.

However, Nortel's shares began a rebound on February 22, gaining 4% on the
TSE. Although far from their 52-week high of $ 124.50, Nortel's shares rose
$ 1.22 to $ 30.70 as 24.6 million shares traded on Canada's dominant

On the New York Stock Exchange, Nortel shares rose 77 cents to $ 19.92 US
on trading of 34.6 million shares.

Market watchers have questioned how Nortel executives could be so
blindsided by such rapidly slowing growth after they repeatedly confirmed
their outlook.

Nortel claims it immediately released information after a meeting with
sales staff indicated sales were dropping off. (The Edmonton Sun, February
23, 2001)

NORTEL NETWORKS: Refuses To Review Value Of Deal With JDS
Nortel Networks last Thursday February 22 it would not reopen a deal to buy
a components plant from supplier JDS Uniphase, in spite of pressure from
JDS to review the terms. The plunge in Nortel's share price after its
profits warning has cut the value of the deal from Dollars 3bn to about
Dollars 2bn, angering JDS. Nortel is paying with its own stock. "The deal
closed on February 13. That's all we have to say," said Nortel, the world's
biggest supplier of networking equipment.

However, Jozef Strauss, JDS chief executive, said the company was
discussing the issue with Nortel and examining its options, though he ruled
out legal action.

Nortel is still feeling the effects of the profits warning, in which it
said revenues would grow at half the previously forecast rate and that it
would probably report an operating loss in its first quarter.

UBS Warburg on February 22 cut its earnings forecast for Nortel for this
fiscal year to 72 cents a share from 81 cents, and reduced its share price
target for the company to Dollars 27 from Dollars 30. Nortel is forecasting
earnings of about 80 cents a share in its revised guidance.

The Ontario Securities Commission is also examining the timing of last
Thursday's announcement, which came just two days after the deal with JDS
closed. It followed bullish guidance to investors just weeks earlier.

OSC investigations focus largely on disclosure issues. The investigation is
expected to examine allegations that Nortel gave a foretaste of its lowered
expectations in a webcast to clients of the investment house RBC Dominion
Securities three days before the formal warning.

The company is also facing a series of class-action suits from US investors
over the profits downgrade, with some Canadian investors also considering
the possibility of legal action.

John Roth, Nortel chief executive, blamed the reduced profits and sales
outlook on the sharper-than-expected slowdown in the US economy, which had
prompted the company's customers to scale back their capital expenditure

Mr Roth, who vigorously defended Nortel and his four years as chief
executive, said the company issued its revised guidance as quickly as

JDS agreed to sell its Zurich components plant to Nortel as a condition of
US Justice Department approval of its purchase of rival SDL.

Nortel was up 63 cents at Dollars 19.78 in New York trading. (Financial
Times (London), February 23, 2001)

NORTEL NETWORKS: Schiffrin & Barroway Files Securities Suit in New York
The following statement was issued February 23 by the law firm of Schiffrin
& Barroway, LLP:

Notice is hereby given that a class action lawsuit was filed in the United
States District Court for the Eastern District of New York on behalf of all
purchasers of the common stock of Nortel Networks Corporation (NYSE: NT;
Toronto) from January 19, 2001 through February 15, 2001, inclusive (the
"Class Period").

The complaint charges Nortel Networks and certain of its officers and
directors with issuing false and misleading statements concerning the
Company's business and prospects. Specifically, the complaint alleges that
during the Class Period, defendants repeatedly issued statements that
overstated sales growth and revenues for the Company's services and
products. Before the truth was revealed to the market, certain Nortel
insiders sold $7 million of their Nortel common stock. On February 15,
2001, the Company announced that it was drastically lowering its guidance
for its 2001 fiscal year. On news of this disclosure, the Company's stock
dropped 34% in one day, wiping out billions in market capitalization.

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

NORTEL NETWORKS: Wechlser Harwood Extends Period in Securities Suit
The law firm of Wechsler Harwood Halebian & Feffer LLP announces that an
amended complaint has been filed on behalf of purchasers of the securities
of Nortel Networks Corp., (NYSE: NT) between November 1, 2000 and February
15, 2001, inclusive (the "Class Period").

The Amended 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 Amended Complaint alleges that defendants issued press
releases announcing record operating results for the year 2000, and
expected financial growth for fiscal 2001. In a press release on January
18, 2001, defendants represented that Nortel's "global reach and industry
leading portfolio" would allow Nortel 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 Amended Complaint alleges that these statements
were materially false and misleading. On February 15, 2001, 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, and it
would report a loss for the first quarter of fiscal 2001. Following the
announcement, Nortel's stock price plunged by 34% in one day, from $29.75
per share to $19.50 per share. 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: Wechsler Harwood Halebian & Feffer LLP Ramon Pinon, 877/935-7400

NORTEL NETWORKS: Wolf Haldenstein Announces on Securities Suit in N.Y.
Wolf Haldenstein Adler Freeman & Herz LLP announces that it filed a class
action lawsuit in the United States District Court for the Eastern District
of New York, on behalf of purchasers of the securities of Nortel Networks
Corporation (NYSE: NT - News) who purchased the Company's common stock
between November 1, 2000, and January 18, 2001, inclusive, against
defendants Nortel and certain of its officers and directors.

The case name and index number are Krishnan and Givner v. Nortel (CV
01-1083). A copy of the complaint filed in this action is available from
the Court, or can be viewed on the Wolf Haldenstein Adler Freeman & Herz
LLP website at http://www.whafh.com.

The complaint alleges that Nortel, and certain of its officers and
directors, violated federal securities laws by issuing materially false and
misleading statements during the class period and selling $7 million in
personally held inflated Nortel stock.

Contact: Gregory M. Nespole, Esq., George Peters and Fred Taylor Isquith,
Esq., all of Wolf Haldenstein Adler Freeman & Herz LLP, 800-575-0735 or

SLAVE REPARATIONS: Politicians, Activists Prepare Another Call for Study
From the campus of one of the nation's oldest historically black
universities, politicians and activists are preparing another call for a
government study on what the country should do to make amends for slavery.

Fisk University's Race Relations Institute is holding a conference that is
part of an ongoing effort to get Congress to study the impact slavery has
had on generations of blacks.

''Some believe the institution of slavery is long gone, and we shouldn't be
considering reparation for it,'' said Melvin Black, a Nashville city
councilman and panelist at the conference, which starts Friday. ''It's an
uncomfortable issue when it's centered around African-Americans even more
so than when the same issue is raised by other races like American-Indians
and the Japanese.''

The government issued formal letters of apology and $20,000 in reparations
to Japanese-Americans interred during World War II, but Congress has
repeatedly balked at proposals for reparations to blacks whose ancestors
were kept in slavery.

Rep. John Conyers, D-Mich. has called for a commission to examine slavery's
legacy and possible compensation during each of the last 12 congressional

Nashville is among about a dozen cities, including Chicago, Detroit,
Cleveland, Dallas, Washington and Baltimore, that have urged Congress to
pass Conyers' bill this year.

''We're certainly not putting forth any dollar amount,'' said Black.
''We're asking for a study. And if the results of that proposed study
indicate the necessity of some form of reparation _ those reparations could
possibly come not in dollar amounts, but through some other program.''

The Fisk conference follows the first National Reparations Convention that
was held two weeks ago in Chicago.

Some activists there called for reparations in the form of free financial
aid, education and medical care with no taxes for the next half century.
One suggested million-dollar payments for blacks who want to leave the
country. A high-powered group of attorneys also discussed plans for a
class-action lawsuit in pursuit of reparations.

Enslavement of Africans in America began in the early 1600s and continued
until the 13th Amendment was ratified in 1865. Newly freed slaves were
promised 40-acre parcels and the loan of a federal mule in 1865, but
President Andrew Johnson went back on the pledge.

Theeda Murphy, a spokeswoman for the Fisk University Race Relations
Institute, said monetary compensation wouldn't be the only positive thing
to come of a reparations study.

''Even if there is never a cent paid, if the discussion is undertaken
seriously and thoroughly it will play a large part in the healing this
nation needs,'' Murphy said. ''Don't get me wrong, I would like to be paid
as much as any other African-American, but the healing is much more
important than any money.'' (AP Online, February 23, 2001)

SOTHEBY'S, CHRISTIE'S: Judge Approves Settlement in Price-Fixing Suit
A US federal judge has approved a US$512 million civil settlement reached
by Sotheby's Holdings and Christie's International to resolve price-fixing
litigation brought by art buyers and sellers.

The judge approved the settlement with a provision that maximises the value
of certificates which sellers can apply towards future auction commissions.

The consolidated class actions were brought by more than 130,000 clients,
who accused the two firms of colluding on commission fees.

Sotheby's has pleaded guilty to related criminal price-fixing charges and
was fined US$45 million. Rival Christie's cooperated with a government
investigation into the scheme and was not named in criminal charges.
(Channel NewsAsia, February 23, 2001)

TAINTED BLOOD: Ontario Judge Puts Hep-C Deal On Hold
An Ontario judge has withheld approval of a $ 79-million Red Cross-led
compensation offer for victims of tainted blood, saying more information is
needed to determine if the offer is fair. Justice Warren Winkler says he
needs to know more about the legal risks faced by insurance companies,
pharmaceutical companies, hospitals and doctors who have joined the Red
Cross proposal. In his ruling, Winkler said he isn't satisfied those
parties have put enough money into the package to be let off the hook for
further liability, as they would be if the deal is approved.

The 5,000 to 7,000 eligible victims -- including people infected with
hepatitis C before 1986 or after 1990 -- were excluded from a $ 1.5-billion
federal-provincial compensation package because their infection occurred
outside the period for which governments admit liability. The compensation
package will be extended nationally if it is approved in Ontario, Quebec
and B.C., the provinces where class action suits have been mounted. (The
London Free Press, February 23, 2001)

TECH FIRMS: Face Employment Bias Suits As Boom Times Wane
The technology industry's record for promoting African Americans and other
minorities, long criticized as lackluster, is fast becoming the focus of a
new round of legal battles over whether workers were adequately compensated
during the tech boom.

In recent months, fresh lawsuits alleging bias have been filed against
Microsoft Corp. by such high-profile plaintiffs lawyers as Johnnie Cochran
Jr. and Willie E. Gary, making it one of the chief targets. Other suits
have been filed against companies such as 3Com Corp. and NEC Electronics

Close to home, Reston telecommunications firm Nextel Communications Inc.
was hit with more than 600 complaints by minority employees who said they
faced verbal harassment and difficulty in advancing in the company's U.S.
offices. Nextel has denied the allegations, which were made to the Equal
Employment Opportunity Commission and eventually settled under undisclosed
terms. A Nextel official attributed many of the claims not to racial
animus, but to management failings during a period of fast growth.

The rapid expansion of the tech sector during the 1990s helped focus
attention on the employment practices of many companies, legal experts say.
Some workers began to give voice to their complaints in recent months as
the economy soured, and company prospects waned.

The lawsuits targeting tech companies come as more and more businesses of
all kinds face complaints of racial bias in the promotion process. In 1990,
workers filed 3,208 such claims with the EEOC, said agency spokesman David
Grinberg. By 2000, that number had shot up to 5,078 -- a 58 percent

Allegations of bias have resulted in some huge settlements. Coca-Cola Co.
paid a record $ 192.5 million last November to end a bias case; Texaco Inc.
shelled out $ 176.1 million in 1997. Should the workers prevail in the
latest round of high-tech cases, the payouts could rival those settlements,
in part because employees are seeking compensation for the stock options
they claim they should have received when the sector was red hot.

"I think it has the potential to be the largest in terms of damages and
recovery," said Steven Toll, a D.C. lawyer who filed suit on behalf of
African American and female employees at Microsoft in October. The suit is
one of at least five filed against the Seattle software giant in recent

Microsoft has aggressively responded to the suits in court and out. At a
routine scheduling conference in a D.C. courtroom last month, the company
brought four lawyers and three spokesmen.

Deborah Willingham, vice president for human resources at Microsoft, said
in an interview that the company had not discriminated against workers
because of their race or gender. She said Microsoft has hired more
recruiters focused on diversity, revamped a mentoring program, and made
more than $ 80 million in cash and software donations to minority
educational groups within the past two years.

"We don't tolerate discrimination in any of our employment practices," she
said. "We just have not found any pattern of discrimination."

Microsoft employs 27,720 workers in the United States, said spokesman Dean
Katz. Of those, 725, or 2.7 percent, are African American. About 100 out of
Microsoft's 6,314 officials and managers are black, Katz said, calling
diversity "a challenge for the entire industry."

Just 3.2 percent of the technology workforce is African American, according
to a September report by a congressionally appointed commission studying
the issue. Women constitute about 19 percent of those employed in science,
engineering and technology, the report said.

Industry leaders say the shallow pool of qualified minority candidates
remains the greatest challenge in making the technology sector more
diverse. But groups such as the National Society of Black Engineers and the
Black Data Processing Associates have questioned tech companies' commitment
to developing talent when they spend so much energy lobbying Congress so
more skilled labor can enter the United States from other countries.

Those who have followed Microsoft's efforts in the African American and
Latino communities say the lawsuits against the company should cause alarm
among other technology firms.

"The ominous thing for the industry is, most people would consider
Microsoft to be one of the better performers in a very bad industry in
terms of fair employment," said John Templeton, a founder of the Coalition
for Fair Employment in Silicon Valley, which works on behalf of minorities
in the technology sector. "If I were a class-action lawyer, I'd just come
down to Silicon Valley and throw darts at the phone book."

Templeton's group helped to organize a rally in San Jose last year. Nearly
100 technology workers who said they had been mistreated because of their
race showed up at the event. Since then, Templeton and others have worked
to find lawyers to bring the claims to court. Many of those complaints will
brew into lawsuits over the next several months, according to Templeton.
Paul Igasaki, the EEOC's vice chairman, said technology workers may now
realize that litigation can spur corporate action when other avenues have

"The biggest response, and this is not just the tech industry, comes when
people are worried about cost and injury to the company," said Igasaki.
"That results when people file lawsuits."

3Com spokesman Brian Johnson said the Santa Clara, Calif., company cannot
comment on the suit it faces because the matter is currently being
litigated. Mark Pearce, a spokesman for NEC Electronics, said the company
does not talk about pending litigation.

"We intend to vigorously defend ourselves in court and we are confident we
will be vindicated," Pearce said.

The litigation comes as high-tech businesses try to expand their sales base
in minority communities. Microsoft, for instance, kicked off a 14-city tour
to introduce its software to African American and Latino small business
owners earlier this month.

"Companies often seem to have a far greater grasp of the world of their
customers than they do of . . . their work environments," said Karen
Trader-Leigh, an Alexandria diversity consultant who has worked with
International Business Machines Corp. and other high-tech firms.

Microsoft may be one of the chief targets because it remains a thriving
company in a period when much of the tech sector is suffering from the
slowing economy. The company took in $ 6.59 billion in revenue last quarter
-- a fact not lost on some of the plaintiffs' attorneys.

Gary, who has taken on such business icons as Walt Disney Co. and
Coca-Cola, decried racial bias in corporate America in a news conference
last month and signaled that companies' promises would not be sufficient.

"They just can't get off the hook for not having done it much earlier," he
said. "You've got to pay the price. I mean, that's just America. That's the
way it is." (The Washington Post, February 23, 2001)

V-ONE CORP: Announces Dismissal of Securities Suit in Maryland
V-ONE Corporation (NASDAQ:VONE) announced on February 23 that the class
action lawsuit previously filed against the Company and certain of its
current and former officers in the United States District Court for the
District of Maryland was dismissed in its entirety, with prejudice, on
February 20, 2001.

In granting the Company's motion to dismiss, United States District Judge
Marvin J. Garbis ruled that plaintiffs had failed to state a cause of
action for violations of the securities laws and awarded costs to

WAMU BANK: Sp Ct Decision Reduces Threat for Financial Firms in Calif.
As mortgage banking has become a nationwide business, mortgage bankers have
increasingly struggled to ensure that their origination and servicing
practices comply with local law.

The mortgage banking community was therefore understandably dismayed when a
California trial court -- with the blessing of an intermediate appellate
court certified nationwide class-action status for a lawsuit involving a
mortgage servicer's alleged failure to comply with California law. The
court asserted that the law is applicable even to customers who live in
states where the alleged conduct was perfectly lawful.

A unanimous California Supreme Court recently reversed the lower court's
certification of a nationwide class action challenging the forced-placement
insurance practices of Washington Mutual Bank.

The lower court had held that Wamu would be required not only to defend its
conduct in a class action involving 25,000 customers living in nearly every
state but also to justify its treatment of all these people under
California law, without regard to the location of the mortgaged property or
of the mortgagor.

The claims were based on the California unfair competition law, one of the
state's consumer protection statutes. The law has been a subject of growing
concern to banks and other businesses because of court decisions
interpreting broadly what is an unfair practice.

Moreover, some courts have interpreted the law as authorizing private
litigants to serve as "private attorneys general." Effectively, these
decisions have licensed individuals with no connection to a controversy to
sue on behalf of all people supposedly affected by an act or practice, and
to recover attorney's fees for their efforts.

This feature makes it difficult for corporate defendants to deal with class
litigation on a customer-relations basis, since the person bringing suit
may not even be a customer.

The Wamu case began as a simple dispute about a mortgage servicer's
decision to "force place" hazard insurance on property securing a home

That is, the servicer obtained insurance protecting the lender's security
interest at the borrower's expense after the borrower failed to maintain
coverage as required in her mortgage contract.

Forced-placement activities have increasingly generated consumer class
actions in recent years, litigation that commonly asserts the coverage
amount should be limited to the outstanding loan balance, instead of the
replacement cost of improvements; that premiums are inflated; or that the
servicer has somehow derived undisclosed profits from the practice.

These allegations are generally brought under state law, nearly always the
law of the state where the borrower lives or where the mortgaged property
is located (or, in some cases, under the law of a state agreed to by the
parties to the mortgage contract).

The unique feature of the Wamu case was the lower California courts'
decision that Wamu would have to defend its forced-placement practices not
under the laws of the individual states where the class members lived, or
where the mortgaged properties were located, or where specified in the
mortgage contracts but under California law.

This prospect was understandably chilling, both because California has a
reputation as a hotbed of class actions and large punitive damage awards
and because California case law tends to favor defaulting borrowers over
lenders to a higher degree than in other states.

California law reflects a policy decision to protect defaulting borrowers
at the risk of increasing the overall cost of borrowing, but other states
have decided to reduce overall borrowing costs by scrupulously permitting
lenders to enforce the terms of their contracts without risking
consumer-fraud liability.

Some such states (Alabama and Florida are examples) exempt banks and other
regulated financial institutions from state consumer protection statutes.

Others (like Illinois and Oregon) expressly permit the forced placement of
hazard insurance at an increased premium -- the very practice alleged to be
unlawful in California.

Yet notwithstanding such variance, the lower California courts proposed to
decide even the claims of class members living in other states as if their
claims had arisen in California. Not only did this contradict Wamu's
reasonable expectation, but also, in the long run, it would have tended to
subvert the public policy objectives of other states.

The California Supreme Court's decision not to permit the case to go
forward as a nationwide class action under California law puts strict new
limits on financial services class actions and clarifies that mortgage
servicers must comply with the laws of states where mortgages are
originated and the collateral is located.

In reversing the lower courts, the state Supreme Court ruled that courts
cannot simply presume that the law of the state where the lawsuit was filed
will govern the claims of all class members. Instead, the court held: "The
burden rests upon the party seeking nationwide class certification to
identify any variations of applicable state law and to meaningfully
demonstrate how a trial on the class causes of action can be conducted
fairly and efficiently in light of those variations."

Putting this burden on class-action plaintiffs should effectively preclude
class certification in many cases, since state laws often vary in decisive
ways as the forced-placement example shows.

Mortgage servicers and other financial services companies have been handed
a new weapon in the continuing class-action war. When they can demonstrate
that their activities in particular states are lawful under the laws and
regulations applicable in those states, companies will have a strong
argument that they should not face class-action litigation brought under
the law of some other state.

That might seem like a common-sense principle, but until recently it was an
open legal question in California. The California Supreme Court's recent
Wamu decision changes all this and should substantially reduce at least one
major litigation risk faced by financial services companies. (The American
Banker, February 23, 2001)


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

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

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

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