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             C L A S S   A C T I O N   R E P O R T E R

              Monday, April 16, 2001, Vol. 3, No. 74

                           Headlines

BEST BUY: Contests Charges over Fixing Min. Prices on Labels of Records
BUSYBOX.COM INC: Announces CA Lawsuit By Investors in Stock in IPO
CALICO, INC: Milberg Weiss Announces Securities Suit Filed in New York
CALIFORNIA: Judge Rebuffs Bid to Put Health & Safety Burden on Schools
CAPITOL POLICE: Face Bias Case; Black Officers Allege 'Rabid Animosity'

CCA: Fight Over Arsenic In Lumber Focuses On Public Awareness
CHICAGO: Suit Challenges Forced Police, Fire Retirements For Age Bias
DWYER: Certification Granted in Case re EMCOR Employee Benefit Plans
HMOs: Disabled Patients Win Sweeping Changes in CA Centers and Policies
INGENUUS CORP: May Settle Securities over IPO in CA v. Former Aspec

MCSi: Faces Shareholder Suit in Maryland over Proposed Acquisition
MICRO CIRSUITS: Milberg Weiss Files Securities Suit in California
NAPSTER, INC: Music Pulishers Appear Likely to Win Certification
SLAVERY REPARATIONS: African-American Lawyers Plan Suit
STANLEY RABNER: Former Owner of Fredmont Pleaded Guilty of Fraud

Tecumsah School: 10th Cir Strikes Down Screening By Drug Testing
TOBACCO LITIGATION: House Passes, Then Recalls Bill To Cap Appeal Bonds
TRAVELERS SEPARATE: Intends to Contest Vigorously RICO Suit in GA

                          *********

BEST BUY: Contests Charges over Fixing Min. Prices on Labels of Records
-----------------------------------------------------------------------
On August 8, 2000, 30 Attorneys General served a complaint against the
Company, five major record distributors and two other music specialty
retailers in the U.S. District Court for the Southern District of New
York, which complaint has been subsequently amended to add additional
states as plaintiffs and to reflect the transfer of the case to the U.S.
District Court in Maine for handling under the Multidistrict Litigation
Rules.

The AG's suit alleges that the distributors and retailers conspired to
violate the anti-trust laws and to fix prices by adopting and/or adhering
to the labels' Minimum Advertised Pricing Policies. The complaint alleges
that consumers were damaged in an unspecified amount and seeks treble
damages and civil penalties.

Following the service of the AG's suit, these same defendants, as well as
certain other retailers, were named as defendants in four private class
action suits, each with similar allegations as in the AG's suit.

The Company has been served with private class actions suits in the U.S.
District Court in the Eastern District of Tennessee, the District of New
Jersey, and the District of Alabama. It has also been named in a suit
filed in the Parish of East Baton Rouge, Louisiana, which the Company
removed to U.S. District Court. These cases and others have been
consolidated in the U.S. District Court in Maine as In RE: Compact Disc
Minimum Advertised Price Antitrust Litigation, MDL DKT. No. 1361, Class
Action.

The Company has filed an Answer denying liability, joined in a motion to
dismiss and plans to undertake a vigorous defense.


BUSYBOX.COM INC: Announces CA Lawsuit By Investors in Stock in IPO
------------------------------------------------------------------
busybox.com inc. (OTCBB:BUSY)(OTCBB:BUSYW) on April 12 announced that on
April 4, 2001, a class action was filed in the Superior Court of the
State of California, case number BC248048, against the Company, its
officers and directors, BarronChase Securities, Inc., and Grant Thornton
LLP.

The action is brought on behalf of shareholders of the company who
acquired the company's stock in its initial public offering, and alleges
violations by the named defendants of California Corporations Code
sections 25400-25403 and 25500-25504.2.

The plaintiffs allege in the complaint that the company disseminated a
misleading prospectus and registration statement together with false
financial statements and other false and misleading statements, and seek
general and special damages, punitive damages, pre-judgment and
post-judgment interest, court costs, attorneys fees and other costs of
litigation. The Company intends to vigorously contest these allegations.

Founded in 1995, busybox is a Los Angeles-based company that develops,
distributes, and sells digital imagery over the Internet, as well as on
videotape and CD-ROM. The BusyboxPro professional product suite offers
thousands of stock video images and allows customers the ability to
immediately buy and download stock cinematography online, royalty-free.


CALICO, INC: Milberg Weiss Announces Securities Suit Filed in New York
----------------------------------------------------------------------
The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a
class action lawsuit was filed on April 12, 2001 on behalf of purchasers
of the securities of Calico Commerce, Inc. ("Calico" or the "Company")
(NASDAQ: CLIC) between October 7, 1999 and June 29, 2000, inclusive. A
copy of the complaint filed in this action is available from the Court,
or can be viewed on Milberg Weiss' website at:
http://www.milberg.com/calico/

The action, numbered, 01 CV 3221, is pending in the United States
District Court for the Southern District of New York, located at 500
Pearl Street, New York, NY 10007, against defendants Calico; Goldman
Sachs & Co. ("Goldman Sachs"); Credit Suisse First Boston Corporation
("Credit Suisse"); Merrill Lynch, Fenner & Smith, Incorporated;
BancBoston Robertson Stephens, Inc.; Alan P. Naumann and Arthur F. Knapp.

The complaint alleges violations of Sections 11, 12(a)(2) and 15 of the
Securities Act of 1933 and Section 10(b) of the Securities Exchange Act
of 1934 and Rule 10b-5 promulgated thereunder. On October 7, 1999, Calico
commenced an initial public offering of 4 million of its shares of common
stock at an offering price of $14 per share (the "Calico IPO"). In
connection therewith, Calico filed a registration statement, which
incorporated a prospectus (the "Prospectus"), with the SEC. The complaint
further alleges that the Prospectus was materially false and misleading
because it failed to disclose, among other things, that: (i) Goldman
Sachs, Credit Suisse, Merrill Lynch and BancBoston had solicited and
received excessive and undisclosed commissions from certain investors in
exchange for which Goldman Sachs, Credit Suisse, Merrill Lynch and
BancBoston allocated to those investors material portions of the
restricted number of Calico shares issued in connection with the Calico
IPO; and (ii) Goldman Sachs, Credit Suisse, Merrill Lynch and BancBoston
had entered into agreements with customers whereby Goldman Sachs, Credit
Suisse, Merrill Lynch and BancBoston agreed to allocate Calico shares to
those customers in the Calico IPO in exchange for which the customers
agreed to purchase additional Calico shares in the aftermarket at
pre-determined prices. As alleged in the complaint, the SEC is
investigating underwriting practices in connection with several other
initial public offerings.

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


CALIFORNIA: Judge Rebuffs Bid to Put Health & Safety Burden on Schools
----------------------------------------------------------------------
A Sacramento judge has delivered a blow to a state legal effort to hold
individual school districts responsible for inadequate health and safety
conditions alleged in a civil rights lawsuit filed last May.

Superior Court Judge Peter Busch ruled that a state cross-complaint will
not be taken up until after the civil rights suit against the state is
decided.

A trial date is expected to be set for later this year or early next
year.

"It will be a showcase trial for the state of California, particularly
for poor children and children of color," said Mark Rosenbaum, legal
director for the American Civil Liberties Union of Southern California,
one of a group of civil rights organizations that filed the case.

"It will be the first trial in the country that will put on a
demonstration that children--hundreds of thousands--lack textbooks,
qualified teachers, seats in classrooms, functioning toilets, basic safe
facilities."

The class-action suit was filed on behalf of students at 18 schools
throughout the state. It alleged that they and thousands of other
predominantly poor and minority students attend schools that fail to meet
"minimal educational standards."

The lawsuit is designed to force the state to ensure that every district
meets those standards.

In its cross-complaint, the state alleged that the 18 school districts,
not the state Department of Education, were responsible for maintaining
school facilities.

"I think the cross-complaint was just a ruse, an attempt to delay the
case and to pass the buck," Rosenbaum said. (Los Angeles Times, April 13,
2001)


CAPITOL POLICE: Face Bias Case; Black Officers Allege 'Rabid Animosity'
-----------------------------------------------------------------------
More than 200 current and retired black officers with the U.S. Capitol
Police filed a complaint alleging that they were denied promotions and
opportunities because of racial discrimination in a workplace that shows
"rabid animosity" toward minorities.

Unless action is taken, the complaint says, "the Capitol Police will
continue to be a modern day version of a 19th Century Southern Plantation
in law enforcement." Among other things, the complaint alleges that black
officers are unfairly disciplined, subjected to racist and sexist remarks
from white officers, and punished if they complain.

"You have basically a renegade police department up here, operating under
Congress," said Charles Jerome Ware, an attorney for the plaintiffs.

The complaint was filed by the U.S. Capitol Black Police Association,
which was created more than a decade ago amid concerns about unfair
treatment. It is the latest in a series of racial discrimination claims
filed in recent years against federal law enforcement agencies. A similar
class-action lawsuit is pending in U.S. District Court against the Secret
Service. The FBI and the Bureau of Alcohol, Tobacco and Firearms settled
class-action racial discrimination cases during the 1990s.

Capitol Police officials would not comment, saying they had not seen the
complaint. A recent government report shows that the department's
percentage of black officers is the second-highest among federal law
enforcement agencies, below the Federal Protective Service. The
department's chief, James J. Varey, has met several times with leaders of
the black officers' group, but they said they didn't believe they were
seeing progress.

"There was no successful resolution, and that's why we're at this point,"
said Sharon Blackmon-Malloy, a sergeant with 18 years' experience and the
association's president.

"While we waited, injustices continued," said Blackmon-Malloy, one of
about 160 active officers and about 50 retired officers who signed the
complaint. "Change is going to come."

More than 75 Capitol Police officers and supporters marched to the Office
of Compliance, an independent administrative agency, to file the
complaint. Before doing so, they held hands and prayed for success. The
Office of Compliance handles disputes involving legislative branch
employees.

"It saddens me that anyone would have to do this to be recognized and
treated fairly," said LaMont Lewis, a technician and 25-year member of
the force.

Attorneys said they hope to win approval to move the case into U.S.
District Court as a class-action matter. The black officers are seeking
promotions, reassignments and an unspecified amount of monetary damages
to cover lost pay and emotional distress, as well as a court order that
would prohibit discrimination.

The Capitol Police force provides security for members of Congress and
their families and protects the Capitol grounds and buildings.

It is part of the legislative branch of government and is run by a board
that consists of the sergeants-at-arms of the Senate and House and the
architect of the Capitol. They were named in the complaint, along with
numerous leaders of Congress and top Capitol Police officials.

The force has 1,220 members, of whom 357, or 29 percent, are black,
according to the complaint. In the higher-ranking positions -- detective
and above -- blacks hold 32 of 244 slots, or 13 percent, the complaint
says. The five top positions in the agency are held by white men. The
highest-ranking black employee is an inspector, a rank that is four
grades below the chief's position.

"White men continue to be at the top of the force and racial minorities
(particularly African-Americans) continue to be clustered at the bottom
of the ranks," a pattern that has gone unchanged for many years, the
complaint states.

The department has 30 Latinos, accounting for less than 3 percent of the
work force, the complaint says. There also are 12 Asians and five Native
Americans. Of the 244 higher-ranking spots, Latinos, Asians and Indians
hold seven positions.

The complaint revives a controversy that dates to 1990, when the Capitol
Police chapter of the National Black Police Association was formed. With
help from some members of Congress, the black officers won some changes,
including the creation of an ombudsman's post and new ways to assess
candidates for promotions. But officers said the changes failed to bring
results, leading to the action.

"Now it's time to go to court," said Ronald Hampton, head of the National
Black Police Association, who took part in the earlier discussions. "It's
mainly been a white boys' club for the whole time,  and it still
continues today." (The Washington Post, April 13, 2001)


CCA: Fight Over Arsenic In Lumber Focuses On Public Awareness
-------------------------------------------------------------
Look out the window at the nearest wooden fence, deck, picnic table or
playground set.

Chances are, it's made from pressure-treated wood, the distinctive, pale
green lumber that's a familiar sight in home improvement stores
nationwide. The green tint comes from a mixture of chemicals embedded in
the wood to ward off termites, rot and fungus.

You've probably been exposed to this kind of wood many times without
encountering any problems. But there's no doubt that handling it, sawing
it or burning it can make you or your family sick. That's because one of
the chemicals in the wood is arsenic -- a poison and known carcinogen.

In all likelihood, you did not know this.

The reason is twofold: The wood-preservative industry, though well aware
of potential hazards to those who work with the wood, hasn't lived up to
its commitment to inform customers of the risks. And the government
hasn't required that it do so, even though it was told more than six
years ago that the word wasn't getting out.

Rick Feutz had no idea he was putting himself at risk when he built a
floating dock for his three children. For a week, as sawdust coated his
body, Feutz became increasingly ill. Finally, he collapsed.

For months, Feutz, then a Seattle-area science teacher, needed assistance
to get around; 15 years later, at age 53, he still suffers from weakness,
partial facial paralysis, slurred speech and impaired thinking. His
doctors' diagnosis: arsenic poisoning.

"There may be a place for this stuff," Feutz said. "But without the
appropriate warnings, few homeowners are likely to treat it as a
hazardous substance. This increases the likelihood that they may have
exposures such as mine."

                3 Miami-Area Parks Affected

Industry officials deny that pressure-treated lumber poses a significant
health risk.

Nevertheless, the safety of pressure-treated wood has become an issue in
Florida, where arsenic levels that the state considers potentially
harmful have been detected in the soil beneath children's wooden
play-scapes and other public structures.

Last month, officials closed parts of three Miami-Dade County parks after
researchers for the University of Miami and the University of Florida
found elevated arsenic levels in the soil there. The findings were from a
study of soil under public decks and walkways in Miami, Tallahassee and
Gainesville that turned up arsenic levels, on average, 35 times higher
than the state's stringent standard for residential areas. And, on March
13, Gov. Jeb Bush ordered a state-owned wood-treatment plant to stop
using arsenic as a preservative.

"There's a lot more arsenic coming out of this wood than anybody ever
realized," said Bill Hinkley, head of solid and hazardous waste for
Florida's Department of Environmental Protection. "Our concern is
significant and growing."

For 25 years or so, most lumber intended for outdoor use has been
pressure-treated with chromated copper arsenate, or CCA, which extends
its life for decades. The wood-preservative industry has boomed during
that period; it now sells 6.5 billion board feet of lumber and brings in
$ 4 billion annually.

Highly concentrated arsenic protects the lumber from termites. The
arsenic and copper combat fungi. The chromium bonds the arsenic and
copper to the wood.

Arsenic is a naturally occurring chemical element found at low levels in
soil everywhere. But it can be fatal when ingested, and chronic exposure
can lead to lung and skin cancer, as well as to nerve, organ and
reproductive damage. Some scientists say health problems from long-term
exposure may not show up for years.

Industry officials say the treated lumber is safe if handled properly.
They say the vacuum and pressure process used to apply the pesticide
fixes it deeply in the wood, preventing harmful amounts of arsenic from
escaping.

Indeed, there are no more than a few dozen reported cases of serious
health problems linked to the handling of CCA-treated wood by consumers.
And there's no evidence that anyone has become ill from exposure to
arsenic that has seeped into the soil at playgrounds or elsewhere.

At the same time, it is impossible to determine the full extent of the
problem. There is no agency that actively tracks and investigates
injuries and illnesses associated with CCA exposure. And most people who
work with the wood don't know it contains arsenic; if they become sick,
they may never suspect the cause.

"You can't report what you don't know," said David McCrea, a Bloomington,
Ind., attorney who has handled personal injury cases involving
pressure-treated wood.

For the average homeowner, CCA does not appear to present a significant
health hazard if precautions are taken when handling the wood. In
addition, some experts recommend periodically sealing or painting
pressure-treated decks or playground sets to reduce leaching. Some also
recommend discouraging children from playing in soil or sand under
elevated decks and making sure they wash well after playing on wooden
equipment.

Some states and foreign nations have restricted use of CCA.

California prohibits using state funds to purchase CCA-treated playground
equipment. Treated lumber in public playgrounds must be sealed upon
installation and resealed every two years to prevent the arsenic from
leaching.

Switzerland has banned CCA, and Japan severely limits its application.
Vietnam and Indonesia prohibit the use of arsenic as a wood preservative.

In 1986, the U.S. Environmental Protection Agency banned most
arsenic-based pesticides. But it made an exception for CCA-treated wood
after concluding that it did "not pose unreasonable risks to children or
adults."

              Program Calls for Prominent Sign

The EPA initially decided to address handling and disposal concerns
through a mandatory safety notice for all purchasers of CCA-treated wood.
But, faced with industry opposition, it agreed to let the wood treaters
voluntarily distribute, through retailers, an EPA-approved "consumer
information sheet" at the time of purchase.

The EPA program called for a sign to be "prominently displayed in the
sales area" of stores, alerting customers to the handouts that were to be
made available at the sales counter, spelling out precautionary measures
people should take. The wood-treatment companies had "primary
responsibility for ensuring" that consumers got the literature.

To monitor the program's effectiveness, the industry was required to
conduct "a yearly survey of member compliance" and report the results to
EPA.

Yet, by most accounts, not many customers carry this information home
with their lumber.

Visits by The Times to five Home Depot stores and Lowe's Home Improvement
Warehouses in California, Texas and Virginia found that only one
displayed a sign about the consumer information sheets and, when asked,
only two stores had any printed information at all.

At a Lowe's store in Manassas, Va., a salesman located a handful of
brochures, after much effort, beneath a pile of wood. Notices at a Home
Depot store in Monrovia told customers to request an information sheet,
but none was available; a manager said they were on order.

In recent interviews, key representatives of the EPA and the
wood-treatment industry acknowledged that the information is not getting
to individuals who are buying the treated wood.

Scott Ramminger, president of the American Wood Preservers Institute,
insisted that member companies are trying to educate consumers through
his group's Internet site and media campaigns, as well as through retail
outlets.

But he said the industry has advised the EPA that the point-of-purchase
program is ineffective. "We've told them it's not working."

Ramminger said the required annual survey repeatedly found that chemical
companies and wood treaters were providing the consumer advisories to
retailers, but the retailers frequently were not getting it to customers.
He said the industry informed the EPA of these results at a Dec. 14,
1994, meeting, and of its intent to end the surveys and focus on
increasing public awareness.

Connie Welch, who heads the EPA pesticide branch responsible for an
ongoing reevaluation of CCA, said officials who attended the 1994 meeting
confirmed that the industry "basically said . . . that they didn't see
where the program was working."

Welch said oversight of the consumer awareness program has changed hands
within the EPA at least twice since then. She could not explain why the
agency had not prodded the wood-treatment industry to step up its buyer
notification efforts.

Welch said the EPA now is "very concerned" that consumers are not
receiving any guidance and that the agency is working with the wood
preservers to improve the buyer notification program. EPA's reassessment
of CCA is expected to be completed in 2003.

Don Harrison, a Home Depot spokesman, said, "Our policy and practice is
to make the information sheets available at the point of picking up the
product." He said the company has made them more prominent in Florida as
a result of the recent controversy.

Chris Ahearn, a Lowe's spokeswoman, said that its stores are supposed to
make the sheets available but that employees don't always do so. She said
Lowe's is taking steps to better educate employees about getting out the
advisories.

Feutz said a consumer advisory might have made all the difference to him.

"Had I known, I could have made an enlightened decision whether I wanted
to use that wood or not," he said. "But, at the very least, I would have
used the precautions." He settled a lawsuit in 1992 against the CCA
manufacturer, wood treater and lumber store where he bought the boards
for a sum his attorney called "substantial."

Mark Dorman said he too had no idea that treated lumber contained arsenic
until he wound up injured from it, according to McCrea, his attorney.

A maintenance worker and part-time contractor in Bloomington, Dorman was
building a deck in 1996 when multiple splinters lodged in his right shin
after he walked into a board. He cleaned up his leg but, six days later,
was hospitalized because it was stinging, swollen and discolored. A large
splinter was then found still in his shin.

Dorman has since had multiple emergency room visits and hospitalizations,
McCrea said. Dorman suffers from decreased mobility, and faces prolonged
treatment, the attorney said. He has sued the CCA manufacturer, wood
treater and retailer; they deny that the chemical caused his medical
problems.

James Sipes, an employee at the Hoosier National Forest in Indiana,
vomited large amounts of blood in 1983 and 1984 after sawing CCA-treated
wood to make picnic tables. He retired in 1985 on total disability and
later won a jury award of $ 100,000 from the chemical manufacturer and a
settlement of $ 667,000 from other wood-related companies.

                 State Toxicologist Downplays Risks

Burning the wood creates toxic smoke and ash. A Wisconsin family reported
muscle cramps, seizures and hair loss after repeatedly using CCA-treated
scraps to fuel the family stove.

Critics contend the industry has not made the information more available
because doing so would create demand for wood treated with alternatives
to CCA.

Manufacturers of ACQ, a nontoxic wood preservative, say it is as
effective as CCA, although slightly more expensive. But larger outlets do
not carry it, and it can be difficult to find.

In Florida, the CCA controversy has been fanned by reports in the St.
Petersburg Times and other media, university research findings and a
lawsuit filed by a Miami-Dade County deck owner seeking class-action
certification on behalf of those exposed to CCA-treated wood.

The Florida Health Department has sought to allay concerns.

"Children are not going to be exposed to enough arsenic for a long enough
period of time to really increase their risk of cancer," said Joe
Sekerke, a state toxicologist. "For acute arsenic poisoning, the children
would have to eat incredible amounts of soil."

There is no national standard for acceptable arsenic levels in soil.
State standards vary widely. Florida's are among the toughest: maximum
allowable levels of 0.8 parts per million in residential areas and 3.7
ppm in industrial areas. California's are much less stringent: 22 ppm for
residential areas, 480 ppm for industrial applications.

The industry says Florida's numbers are so extreme that they fall below
the average arsenic levels found naturally in soils nationwide.

While defending CCA as "a safe, effective product," the wood institute's
Ramminger did not dispute estimates that 10% to 20% of the arsenic in a
treated board will leach out over 25 years.

Hinkley and other experts say treated lumber poses a number of potential
threats: Arsenic could seep into ground water from discarded wood placed
in unlined landfills. It could leach from wood chipped into mulch (which
is prohibited but hard to prevent) or toxic ash could be created by
burning the lumber.

"We make decisions these days if we know a chemical is not a good thing.
We try to minimize its use or its spreading in the environment," said
Timothy Townsend, an environmental engineer and an investigator with the
University of Miami-University of Florida study. "Science tells us that
just increasing the overall burden of arsenic is not a good thing."

                     Handling CCA-Treated Wood

Environmental Protection Agency-Approved Precautions

* Do not use for cutting boards or countertops.

* Do not use where preservatives may become a component of food or
  animal feed.

* Use only wood that is clean and free of residue for patios, decks and
  walkways.

* Do not burn; dispose by ordinary trash collection or burial.

* Wear a dust mask and goggles when sawing or machining. If possible,
  perform these operations outdoors.

* Wear gloves to protect against splinters.

* Wash exposed skin after handling the wood.

* Launder clothing separately if sawdust or preservatives accumulate on
  them.

(Times staff researchers Sunny Kaplan in Washington and Lianne Hart in
Houston contributed to this story, published in Los Angeles Times, April
13, 2001)


CHICAGO: Suit Challenges Forced Police, Fire Retirements For Age Bias
---------------------------------------------------------------------
A lawsuit filed April 12 in federal court challenges the recently enacted
City of Chicago ordinance mandating that police officers and firefighters
retire at age 63.

Three named plaintiffs -- two firefighters and one police officer -- were
forced to retire last Dec. 31 when the ordinance took effect. Their
attorneys will seek class-action status for the suit.

When the ordinance was passed last May, city officials said the mandatory
retirement age was necessary in part to promote public safety, but the
lawsuit contends that was "a subterfuge" to win its passage.

The real purpose, said the plaintiffs' attorney Clint Krislov, was to cut
payroll costs by bringing in younger employees and forcing out older
workers "without respect to whether they can still do the job."

The ordinance violates the Age Discrimination Employment Act by failing
to give police officers or firefighters an opportunity to prove their
fitness for duty, the suit alleges. The three named plaintiffs are James
D. Minch, 64, a former fire battalion chief; Richard A. Graf, 63, a
former fire captain; and Richard Cosentino, 66, a former police officer.

"I'd give my left arm and my right arm to go back [to work]," said
Cosentino, who worked a foot patrol in the Loop for years. "There was
nothing about the Police Department I didn't like. "I'd work until I was
95 or 105," said Cosentino, who was forced out after more than 44 years
on the force.

Jennifer Hoyle, a spokeswoman for the city's Law Department, said
mandatory retirement is permitted under both federal and state law.

"We expect that the city will be successful in fighting this lawsuit,"
she said.

The city mandated that employees of the Police and Fire Departments
retire at 63 as far back as 1935, according to Hoyle.

The retirement age was raised to 70 in 1983 after a U.S. Supreme Court
ruling, she said. A few years later, it was lowered to 63 again. After
the law was repealed in 1993, a mandatory retirement age was dropped
entirely until last year.

Hoyle said the City Council passed the ordinance in part because the fire
and police positions are "both physical jobs."

The mandatory retirement age doesn't apply to paramedics, she said,
because their job doesn't have similar physical requirements.

The ordinance also was passed to give younger employees more promotion
opportunities, Hoyle said.

"That is the very kind of age discrimination the statute prohibits," said
Joan Matlack, another lawyer for the plaintiffs. (Chicago Tribune, April
13, 2001)


DWYER: Certification Granted in Case re EMCOR Employee Benefit Plans
--------------------------------------------------------------------
PLAINTIFF COMMENCED a proposed class action on behalf of current and
former participants in the EMCOR Group Inc. 401(k) Retirement Savings
Plan and current and former participants in the EMCOR Group Inc. Employee
Stock Ownership Plan and their beneficiaries to recover retirement
account losses resulting from multiple breaches of duty including
omissions by the fiduciaries of the plans. Plaintiff now moved for class
certification. The court granted the motion. It said, among other things,
that the proposed class was clearly so numerous that joinder was
impracticable. Plaintiff had pled that there were about 3,400
participants in the two plans during the relevant period. The court
rejected defendant's contention that plaintiff was not an adequate
representative of the class. Defendant had alleged that at the deposition
plaintiff demonstrated an "alarming unfamiliarity with the facts
underlying the litigation."

Judge Patterson

KOCH v. DWYER -- Plaintiff Thomas F. Koch ("Plaintiff") moves pursuant to
Federal Rules of Civil Procedure ("Fed. R. Civ. P.") 23(b)(1) and
23(b)(2) for class certification. Plaintiff also moves pursuant to Fed.
R. Civ. P. 15 and 20 for leave to amend his First Amended Complaint and
to substitute the proposed Third Amended Complaint nunc pro tunc as
subject of Plaintiff's motion for leave to amend. For the following
reasons, Plaintiff's motions are granted.

                         Background

On July 31, 1998, Plaintiff commenced this proposed class action on
behalf of current and former participants in the EMCOR Group, Inc. 401(k)
Retirement Savings Plan ("401(k) Plan") and current and former
participants in the EMCOR Group, Inc. Employee Stock Ownership Plan
("ESOP") (together, "the Plans") and their beneficiaries to recover
retirement account losses resulting from multiple breaches of duty
including omissions by the fiduciaries of the Plans.

I. Plaintiff's Motion for Class Certification

On June 29, 2000, Plaintiff moved pursuant to Fed. R. Civ. P. 23(b)(1)
and 23(b)(2) for class certification with a supporting memorandum of law
and affidavits. On July 31, 2000, Defendant American Express Trust
Company ("AMEX") submitted a memorandum in opposition with a supporting
affidavit. On July 31, 2000, Defendants EMCOR Group, Inc., ("EMCOR"), JWP
INC. 401(k) Retirement Savings Plan Committee, James S. Murphy, Wendy
Bander (now McKinley), Philip McGinn, and Retirement Plan Investment
Committee (the "EMCOR Defendants") submitted a memorandum in opposition.
On August 14, 2000, Plaintiff submitted a reply memorandum of law.

II. Plaintiff's Motion to Amend

On September 15, 2000, Plaintiff moved on behalf of himself and all
others similarly situated pursuant to Fed. R. Civ. P. 15 and 20 for leave
to amend his First Amended Class Action Complaint ("First Amended
Complaint") so that he can: join as a new defendant John J. Mulligan; (2)
add allegations pertaining to the new defendant's conduct; and (3)
clarify that current defendant Retirement Plan Investment Committee is
actually two entities, and hence two defendants. (See Notice of
Plaintiffs' Motion to Amend Complaint, dated Sept. 15, 2000, at On
September 15, 2000, Plaintiff also submitted a Memorandum of Law in
support of his motion to amend his First Amended Complaint.

While Plaintiff's motion was pending, the Court issued an Opinion and
Order, which was dated September 27, 2000, and filed on September 29,
2000. (See Koch v. Dwyer, No. 98 Civ. 5519 (RPP), 2000 WL 1458803
(S.D.N.Y. Sept. 29, 2000).) In that Opinion, the Court held that the
First Amended Complaint failed to allege adequately acts of fraud or
concealment to trigger ERISA's equitable tolling provision as to
Defendants Bander (now McKinley), Murphy, and AMEX and that therefore the
exception for fraud or concealment in 29 U.S.C. @ 1113 did not apply to
those defendants. Id. at *6. The Opinion permitted Plaintiff to cure the
defect by filing a Second Amended Complaint by October 20, 2000. Id.

On September 29, 2000, Defendants responded jointly to Plaintiff's
September 15, 2000, motion, stating that they took no position on whether
Plaintiff should be permitted to amend the First Amended Complaint to
join John J. Mulligan as a new defendant, add allegations pertaining to
Mr. Mulligan's conduct, and clarify that the "Retirement Plan Investment
Committee" is actually two entities. (See Defendants' Joint Response to
Plaintiff's Motion to Amend First Amended Class Action Complaint, dated
Sept. 29, 2000, at 1.) However, Defendants opposed Plaintiff's motion on
the ground that it did not comply with the Court's September 27, 2000,
Opinion and Order. (See id.) Defendants requested that Plaintiff withdraw
the proposed Second Amended Class Action complaint and substitute a new
amended complaint that conforms to the Court's Order. (See id.)

On October 6, 2000, Plaintiff submitted a memorandum in reply to
Defendants' joint response, in which Plaintiff agreed to Defendants'
proposal to substitute a new proposed amended complaint, which Plaintiff
suggested denominating the "Third Amended Complaint," as the subject of
Plaintiff's pending Motion to Amend. (See Plaintiffs' Memorandum in Reply
to Defendants' Joint Response, dated Oct. 6, 2000, at 2.) To insure that
Plaintiff's position on the statute of limitations is not prejudiced by a
withdrawal, Plaintiff requested that the proposed Third Amended Complaint
be deemed substituted nunc pro tunc for the proposed Second Amended
Complaint filed with Plaintiff's Motion to Amend on September 18, 2000.
(See id. at 2-3.)

On October 19, 2000, Plaintiff moved for the substitution, nunc pro tunc,
of a new proposed Third Amended Complaint as subject of Plaintiff's
pending Motion to Amend Complaint, to add allegations of fraud and
concealment as specified in the Court's September 27, 2000, Opinion and
Order. (See Notice of Plaintiffs' Motion to Substitute New Proposed
Complaint, dated Oct. 19, 2000, at 1.) Plaintiff also submitted a
memorandum in support of his motion.

On November 6, 2000, Defendant AMEX submitted a memorandum in opposition
to Plaintiff's motion to substitute a new proposed complaint. (See
Defendant American Express Trust Company's Memorandum in Opposition,
dated Nov. 6, 2000, ("AMEX Mem.").)

On November 17, 2000, Plaintiff submitted a memorandum in reply to AMEX's
memorandum in opposition. (See Plaintiff's Memorandum in Reply to
Defendant America Express Trust Company's Memorandum in Opposition, dated
Nov. 17, 2000 ("Pl. Reply Mem.").)

                           Discussion

Plaintiff's Motion for Class Certification

On June 29, 2000, Plaintiff moved pursuant to Fed. R. Civ. P. 23(b)(1)
and 23(b)(2) for certification of a class defined as:

All participants (or their beneficiaries) in what was formerly known as
the JWP, INC. 401(k) Retirement Savings Plan ("401(k) Plan") and/or the
JWP Employee Stock Ownership Plan ("ESOP") in the period from May 1,
1991, through December 15, 1994, the effective date of the Plan of
Reorganization of JWP, INC.

(Plaintiffs' Motion for Class Certification, dated June 29, 2000, at 1.)

Rule 23(a)

"In determining whether a class should be certified, a district court
must first consider each of the factors set forth in Fed. R. Civ. P.
23(a)." In re the Drexel Burnham Lambert Group, Inc., 960 F.2d 285, 290
(2d Cir. 1992). Rule 23(a) requires that:

    the class is so numerous that joinder of all members is
impracticable, there are questions of law or fact common to the class,
(3) the claims or defenses of the representative parties are typical of
the claims or defenses of the class, and (4) the representative parties
will fairly and adequately protect the interests of the class.

Fed. R. Civ. P. 23(a).

Impracticability of Joinder

The proposed class is clearly so numerous that joinder is impracticable.
Plaintiff has pled that there were approximately 3,400 participants in
the two Plans during the relevant period. (See Amended Complaint P118;
see also Appendix and Affidavit of Ellen M. Doyle, dated June 29, 2000,
("Doyle Aff.") Ex. 6.) Individual adjudication of each claim would take
many years, and would drastically increase the legal expenses for all the
parties. See In re the Drexel Burnham Lambert Group, Inc., 960 F.2d at
290. Joinder of all the claims into one proceeding would be expensive,
time consuming and logistically unfeasible. See id. Consequently,
numerosity exists in this case.

              Common Questions of Law and Fact

The proposed class involves several questions of law and fact that are
common to each member of the proposed class. The relationships among the
parties at issue here are governed by written plan documents under the
standards set forth in ERISA. n1 Plaintiff was also a participant in both
the 401(k) and the ESOP Plans. There are several common questions of law
and fact: (1) whether the investment of the Plans' assets in JWP stock
was prudent; (2) whether AMEX was a directed trustee, and whether AMEX
acted in accordance with ERISA; and (3) whether the Plan fiduciaries
acted to preserve and protect the Plans' claims in the securities
litigation and bankruptcy proceedings. Accordingly, the commonality
requirement of Rule 23(a)(2) has been met.

n1 The Employee Retirement Income Security Act of 1974 ("ERISA"), 29
U.S.C. @ 1001 et seq.

                         Typicality

"Rule 23(a)(3) is satisfied when each class member's claim arises from
the same course of events, and each class member makes similar legal
arguments to prove the defendant's liability." In re the Drexel Burnham
Lambert Group, Inc., 960 F.2d at 291. In this case, Plaintiff was a
participant of both Plans throughout the class period including through
the bankruptcy. Plaintiff and the class have been subjected to identical
treatment. Accordingly, the typicality requirement of Rule 23(a)(3) has
been met.

                  Adequacy of Representation

"Under Rule 23(a)(4), adequacy of representation is measured by two
standards. First class counsel must be qualified, experienced and
generally able to conduct the litigation. Second, the class members must
not have interests that are antagonistic to one another." Id. (internal
quotations and citations omitted). Here, Plaintiff's counsel have
experience in federal class actions, and specifically in ERISA class
actions. (See Doyle Aff., Ex. 1.) Plaintiff's counsel have also agreed to
advance the costs of litigation. (See Amended Compl. P122.) Consequently,
Plaintiff's counsel are qualified, experienced and will be able to
conduct the litigation, and are therefore adequate.

Defendants contend that Plaintiff is not an adequate representative of
the class because at his deposition he demonstrated an "alarming
unfamiliarity with the facts underlying this litigation." (AMEX
Memorandum in Opposition, dated July 31, 2000, at 5). However, the
Supreme Court has expressly disapproved of attacks on the adequacy of a
class representative based on the representative's ignorance. See
Surowitz v. Hilton Hotels Corp., 383 U.S. 363, 372-74 (1966); see also
Baffa v. Donaldson, Lufkin & Jenrette Sec. Corp., 222 F.3d 52, 60-62 (2d
Cir. 2000) (holding that the district court misapplied the adequacy rules
to block intervention of a class representative on the grounds that he
lacked adequate knowledge of the case). In the case at hand, Plaintiff
demonstrated in his deposition that he understands the purpose the
lawsuit. Plaintiff stated that he was "[suing] [defendants] on behalf of
all the people that didn't get their pension funds, especially a lot of
women who had husbands [who] died and they're by themselves and they have
nothing, and I'm suing for them." (See Affidavit of Steven L. Severson,
dated July 27, 2000, Ex. A (Koch Depositon), at 21-22.) When asked to
describe what defendants did wrong, he replied, "The company essentially
did wrong, I didn't get no pension fund. They didn't well what can I say?
They didn't mind the store. I lost my pension fund. I'm retired, I
haven't got no pension fund from them." (Id. at 22-23.) When asked what
the managers of the Plans should have done, Plaintiff replied, "Managed
it better." (Id. at 25.) While it is true that Plaintiff appears to lack
sophistication, Plaintiff understands that he represents other
participants in the Plans for mismanagement of their retirement funds.
Plaintiff also understands what a class action is and his
responsibilities as class representative. When asked whether he
understood what a class action was, he explained, "I'm representing the
other people that are in the same condition I am," and described his
responsibilities as the lead plaintiff as follows: "To give my lawyers as
much information as I can and to try to do the best we can for the people
that didn't get their pension checks." (Id. at 70-71.) Defendants have
not shown that Plaintiff's interests are antagonistic to the interests of
other members of the class. Consequently, Plaintiff is an adequate class
representative.

Rule 23(b)

"If each element of Rule 23(a) is satisfied, the district court must then
determine whether class certification is appropriate under Fed. R. Civ.
P. 23(b)." In re the Drexel Burnham Lambert Group, Inc., 960 F.2d at 290.
Plaintiff seeks certification pursuant to Fed. R. Civ. P. 23(b)(1) and
23(b)(2). Rule 23(b) provides:

    (1) An action may be maintained as a class action if the
prerequisites of subdivision (a) are satisfied, and in addition:

the prosecution of separate actions by or against individual members of
the class would create a risk of inconsistent or varying adjudications
with respect to individual members of the class which would establish
incompatible standards of conduct for the party opposing the class, or
adjudications with respect to individual members of the class which would
as a practical matter be dispositive of the interests of the other
members not parties to the adjudications or substantially impair or
impede their ability to protect their interests; or

    (2) the party opposing the class has acted or refused to act on
grounds generally applicable to the class, thereby making appropriate
final injunctive relief or corresponding declaratory relief with respect
to the class as a whole.

Fed. R. Civ. P. 23(b). Here, the prerequisites to a class action as
required by Rule 23(a) are present. Plaintiff argues that class
certification is proper under Rule 23(b)(1) and 23(b)(2). Since Plaintiff
is seeking relief on behalf of both Plans as a whole, prosecution of
separate actions by individual members would create a risk of
adjudications which would be dispositive of the interests of the other
members not parties to such adjudications. "Because a plan participant or
beneficiary may bring an action to remedy breaches of fiduciary duty only
in a representative capacity, such an action affects all participants and
beneficiaries, albeit indirectly." Gruby v. Brady, 838 F. Supp. 820, 828
(S.D.N.Y. 1993) (quoting Specialty Cabinets & Fixtures, Inc. v. Am.
Equitable Life Ins. Co., 140 F.R.D. 474, 478 (S.D.Ga. 1991)) (holding
that certification of class seeking relief for violations of ERISA was
proper under Fed. R. Civ. P. 23(b)(1)(B)). Additionally, the Advisory
Committee notes to Rule 23(b)(1)(B) state that this section will apply
"to an action which charges a breach of trust by an indenture trustee or
other fiduciary similarly affecting the members of a large class of
security holders or other beneficiaries, and which requires an accounting
or like measures to restore the subject of the trust." Fed. R. Civ. P.
23(b)(1)(B), Advisory Comm. Notes to 1966 Amendment. Plaintiff's action
charges breach of fiduciary duty affecting the large class of
participants in the Plans and Plaintiff seeks equitable relief on behalf
of those participants and their beneficiaries. Accordingly, class
certification is proper under Rule 23(b)(1)(B). n2

n2 Since class certification is proper under Rule 23(b)(1)(B), it need
not be determined whether Plaintiff has also satisfied the requirements
of Rule 23(b)(1)(A) or 23(b)(2).

                 The Length of the Class Period

Defendants argue that the class period cannot begin prior to July 1992
because: (1) Plaintiff has not adequately alleged fraudulent concealment
sufficient to invoke ERISA's equitable tolling exception; (2) Plaintiff
cannot serve as a class representative prior to July 1992 because he
cannot invoke the fraudulent concealment doctrine or show that he
detrimentally relied on the misrepresentations in the alleged
self-concealing frauds; and (3) there are individualized issues presented
by the fraudulent concealment doctrine. (See AMEX Mem. dated July 31,
2000, at 8-18; EMCOR Defendants' Memorandum dated July 31, 2000, at 1-3.)

First, Plaintiff has adequately alleged fraud during that period as to
EMCOR, Dwyer, Grendi and McGinn, who comprised a majority of the
Retirement Plan Investment Committee, the 401(k) Retirement Savings Plans
Committee, and the Trustees of the Employee Stock Ownership Plan. See
Koch v. Dwyer, 2000 WL 1458803 at *4. Plaintiff has therefore adequately
pled common law fraud and thereby triggered ERISA's equitable tolling
exception as to those defendants. See id. Thus Defendants' motion to
shorten the class period because Plaintiff has not adequately alleged
fraud or concealment is denied.

Second, Defendants' arguments that Plaintiff cannot show he relied to his
detriment on the alleged misstatements, and that, in order to invoke the
equitable tolling doctrine, each member of the class must establish that
he was not on notice of AMEX's alleged breach of fiduciary duties prior
to July 1992, are more properly addressed in opposing the filing of the
Third Amended Complaint. The equitable tolling exception to the three or
six-year statute of limitations contained in 29 U.S.C. @ 1113 n3 provides
that in the case of fraud or concealment the action be commenced not
later than six years after the date of discovery of such breach or
violation. Whether Plaintiff relied on the misstatements or when the
alleged breach of fiduciary duty became evident and should have been
discovered are questions of fact and relate to the merits of Plaintiff's
claims against each defendant. While the merits of a claim may be
considered to the extent they indirectly bear upon the four requirements
of Rule 23(a), it is "improper to resolve substantial questions of fact
going to the merits when deciding the scope or time limits of the class."
Sirota v. Solitron Devices, Inc. 673 F.2d 566, 572 (2d Cir. 1982).
Whether claims falling outside some narrower time window within the class
period are, in fact, groundless on the merits is a question that should
not be answered when the court decides whether to certify a class. See
id. at 570-72. Since Defendants' arguments require resolution of factual
issues that are properly left to a later time, the class period will not
be shortened upon that basis.

n3 29 U.S.C. @ 1113 provides:

    (1) No action may be commenced under this subchapter with respect to
a fiduciary's breach of any responsibility, duty, or obligation under
this part, or with respect to a violation of this part, after the earlier
of -- six years after (A) the date of the last action which constituted a
part of the breach or violation, or (B) in the case of any omission, the
latest date on which the fiduciary could have cured the breach or
violation, or

   (2) three years after the earliest date on which the plaintiff had
actual knowledge of the breach or violation; except that in the case of
fraud or concealment, such action may be commenced not later than six
years after the date of discovery of such breach or violation.

29 U.S.C. @ 1113.

Since the requirements of Rule 23(a) and Rule 23 (b)(1)(B) are satisfied,
Plaintiff's motion for class certification is granted.

II. Plaintiff's Motion to Amend

Fed. R. Civ. P. 15(a) provides that leave to amend "shall be freely given
when justice so requires." "If the underlying facts or circumstances
relied upon by a plaintiff may be a proper subject of relief, he ought to
be afforded an opportunity to test his claim on the merits." Foman v.
Davis, 371 U.S. 178, 182 (1962). This liberality in granting leave to
amend also applies to amending a complaint to add new parties. Staggers
v. Otto Gerdau Co., 359 F.2d 292, 296-97 (2d Cir. 1966). "The rule in
this Circuit has been to allow a party to amend its pleadings in the
absence of a showing by the nonmovant of prejudice or bad faith." Block
v. First Blood Associates, 988 F.2d 344, 350 (2d Cir. 1993).

Here, Plaintiff seeks to amend his complaint to achieve permissive
joinder of an additional defendant, John J. Mulligan, pursuant to Fed. R.
Civ. P. 20(a), which provides in pertinent part:

All persons may join in one action as plaintiffs if they assert any right
to relief jointly, severally, or in the alternative in respect of or
arising out of the same transaction, occurrence, or series of
transactions or occurrences and if any question of law or fact common to
all these persons will arise in the action.

Fed. R. Civ. P. 20(a).

Plaintiff has met the requirements of Fed. R. Civ. P. 20(a). Plaintiff
has alleged that Mulligan was a member of the Retirement Savings Plan
Investment Committee and the ESOP Investment Committee. These committees
were named fiduciaries of the Plans. Mulligan's membership on these
committees makes him an ERISA fiduciary of the Plans. Plaintiff's claims
against Mulligan pertain to his breach of fiduciary duty in failing to
protect, in the JWP bankruptcy and elsewhere, the Plans' claims against
previous fiduciaries. This is the same claim that Plaintiff asserts
against the other defendants in his First Amended Complaint. Thus
Plaintiff has alleged a right to relief arising out of the same
transaction, occurrence, or series of transactions involving common
questions of law and fact.

Defendants do not oppose Plaintiff's motion to amend based on the joinder
of Mulligan or Plaintiff's attempt to clarify that the entity referred to
in the First Amended Complaint as "Retirement Plan Investment Committee"
was actually two committees composed of the same persons. Rather, AMEX
argues in opposition to Plaintiff's motion to amend that: (1) Plaintiff's
motion should be denied because the proposed Third Amended Complaint
violates the September 27, 2000, Order in that it: (a) fails to eliminate
the allegations of fraud and concealment against AMEX; (b) does not
allege fraudulent concealment with particularity as to each defendant;
and (c) does not allege when Plaintiff discovered each defendant's
alleged breaches of fiduciary duty; and (2) due to Plaintiff's failure to
comply with the Court's order, Plaintiff should be ordered to file a new
complaint that removes any allegations of fraud or concealment against
AMEX. (See AMEX Mem. at 5-11.) However, Defendant AMEX's argument that
the Court's September 2000 Opinion and Order required Plaintiff to
eliminate allegations concerning AMEX, Murphy and McKinley is rejected.
That Order allowed Plaintiff to cure the failure to properly plead fraud
or concealment by those defendants by filing an amended complaint. See
Koch v. Dwyer, 2000 WL 1458803 at *6. The Court has reviewed the Third
Amended Complaint. Although it still has doubts that Plaintiff has
properly pleaded fraud or concealment by those defendants, it concludes
that all parties would be best served by allowing the Third Amended
Complaint to be filed without prejudice to AMEX, Murphy and McKinley's
raising the statute of limitations defense in in limine motions.
Furthermore, pursuant to the Court's September 2000, Opinion and Order,
Plaintiff has now pled that he lacked actual knowledge of the fiduciary
breaches of any defendant prior to the filing of the original Complaint.
(See Third Amended Complaint P169.) Accordingly, Plaintiff's motion for
leave to amend his complaint, and to substitute the Third Amended
Complaint nunc pro tunc as subject of Plaintiff's motion for leave to
amend, are granted.

                        Conclusion

For the foregoing reasons, Plaintiff's motion for class certification is
granted. Plaintiff's motion for leave to amend his complaint, and to
substitute the Third Amended Complaint nunc pro tunc as subject of
Plaintiff's motion for leave to amend, are also granted. (New York Law
Journal, April 4, 2001)


HMOs: Disabled Patients Win Sweeping Changes in CA Centers and Policies
-----------------------------------------------------------------------
The nation's largest nonprofit H.M.O. agreed on April 12 to revamp all
its California health centers and policies to ensure that people with
disabilities have access to the full range of health care.

The agreement will settle a class-action lawsuit, the first of its kind
in the nation, that was filed last year against the health maintenance
organization, Kaiser Permanente, on behalf of all its California members
with disabilities. The lawsuit argued that Kaiser discriminated against
disabled patients by giving them inferior medical care.

Part of the problem, the lawsuit said, is inaccessible medical equipment,
like examination tables that do not lower and scales and mammography
machines that cannot be used by people in wheelchairs.

The three named plaintiffs are all Kaiser members who use wheelchairs.
One of them, John Metzler, had pressure sores on his buttocks for a year,
but his doctor had not visually examined them because the examination
table was inaccessible. Another, Johnnie Lacy, had not had a
gynecological examination in more than 15 years because of the same
problem. The third, John Lonberg, was not weighed for 15 years because
there was no scale accessible to a wheelchair at his Kaiser doctors'
office.

"My first reaction was, 'Oh, my God, we have a lawsuit,' " said Richard
Pettingill, president of Kaiser's California division, "but it only took
about five minutes before it was apparent to me that we needed to step up
and provide some leadership."

The settlement Kaiser agreed to is far-reaching, covering not only the
installation of accessible medical equipment and the removal of
architectural barriers, but also a broad commitment to develop training
programs, handbooks and a complaint system to meet the needs of the
disabled. Kaiser also agreed to consider developing specialized clinical
programs in disability care and to review all its policies to ensure that
they meet the needs of people with vision, hearing, cognitive, speech and
mobility disabilities.

"We believe this will be revolutionary in terms of its impact on health
care for people with disabilities," said Sid Wolinsky, litigation
director of Disability Rights Advocates, the Oakland group that brought
the lawsuit. "The agreement with Kaiser provides a comprehensive
blueprint that could be used by any health provider anywhere in the
country. We intend to use this as a template to present to other major
health-care providers, to urge that they, too, adopt this approach."

While the settlement covers only Kaiser's California operation, Mr.
Pettingill said that whatever Kaiser found to work well in improving
health care for the disabled in California would be shared with its
operations nationwide and other health care providers. Kaiser has six
million members, 28 hospitals and 7,000 doctors in California, and a
smaller number in nine other states.

"This is a learning experience," said Dr. Michael Meri, medical director
of Kaiser's Riverside hospital. "We're talking to the manufacturers of
equipment.

"I'd like to see X-rays and all the diagnostic machines more accessible
for people with disabilities. I'd like electronically operated scales
where patients get on in their wheelchair, and get a printout we can put
in the chart. Right now, it's all a big surprise: 'Mr. X is here and he's
in a wheelchair.' We need to be aware of those needs, and ready, before
they arrive."

Neither Kaiser nor the advocates for the disabled had an estimate of how
much the new programs would cost.

"The money issue never came up," said Terry Lightfoot, a Kaiser
spokesman.

Mr. Wolinsky said that while some pieces of the settlement, like
training, could be accomplished without additional expenditures, others,
like removing architectural barriers, would be expensive. An examination
table that lowers, he said, is about $1,000 more than the regular cost of
$3,000.

The legal complaint against Kaiser ticked off a litany of problems:
too-small examination rooms, doors too heavy to be opened from a
wheelchair, too-high counters, inaccessible restrooms, lack of nearby
parking.

Such inconveniences can contribute to serious problems.

Mr. Lonberg, a 53-year old Riverside man who was paralyzed from the chest
down in 1983, said he was struck by how much his health care had changed
since his injury.

"It took a while," he said, "but I gradually realized that I wasn't
getting the same level of care I had received when I could walk, and get
on the scale, and climb up on the examination table. Doctors were
prescribing dosages based on what they guessed I weighed, so I began
thinking maybe I should be weighed. And doctors stopped routinely
examining the back of my body, because it's so difficult to get clothes
on and off when you can't stand up that they took the easy way out."

Without such examinations, Mr. Lonberg finally developed a pressure sore,
which, because his paralysis prevented him from feeling it, was not
discovered until it had become a serious problem, requiring major surgery
and months in bed.

Several studies have shown that people with disabilities are less likely
than others to have Pap smears, mammograms, gynecological exams,
immunizations or counseling about tobacco, drugs or alcohol.

For the most part, the medical world has not addressed the issue.

"I don't know of anything but a few isolated clinics and a few isolated
practitioners who identified it as a problem," Mr. Wolinsky said. "I
think it was a new issue for Kaiser, and when they began to look into it,
the medical directors quite readily agreed that these were issues they
need to address."

Kaiser put some elements of the settlement in place even before the
agreement was final: it hired specialists in architectural access and
appointed an access coordinator. It has chosen its hospitals in Riverside
and San Francisco as models where the new policies will be worked out.
(The New York Times, April 13, 2001)


INGENUUS CORP: May Settle Securities over IPO in CA v. Former Aspec
-------------------------------------------------------------------
On July 1, 1998, a class action lawsuit, Howard Jonas, et al. v. Aspec
Technology, Inc., et al., No. CV-775037 ("the Jonas Complaint"), was
filed in the Superior Court for the State of California, County of Santa
Clara.

The Jonas Complaint alleged that Aspec Technology, Inc. (now know as
Ingenuus Corporation) and certain of its officers, directors and the
underwriters of the Company's initial public offering, violated
California Corporations Code Sections 25400 and 25500, and California
Business and Professions Code Sections 17200 and 17500 by making false
and misleading statements about the Company's financial condition. The
action was purportedly brought on behalf of all persons who purchased the
Company's stock during the period from April 28, 1998 through June 25,
1998.

On July 2, 1998, July 27, 1998, and August 17, 1998, three additional
complaints were filed in state court against the Company and certain of
its officers, directors, entitled respectively, William Neuman, et al. v.
Aspec Technology, Inc., et al., No. CV-775089 ("the Neuman Complaint");
Martin L. Klotz, on behalf of the Martin Klotz Defined Benefit Profit
Sharing Plan, et al. v. Aspec Technology, Inc., et al., No. CV-775591
("the Klotz Complaint"); Glen O. Ressler and Thelma M. Ressler, et al.,
v. Aspec Technology, Inc., et al.,. No. CV-776065 ("the Ressler
Complaint"). In addition to alleging the same violations of the
Corporations Code as the three other complaints, the Klotz Complaint also
alleged violations of Sections 11, 12, and 15 of the Securities Act of
1933, and a class period of April 28, 1998 through June 30, 1998.

The complaints sought unspecified damages.

A fifth similar complaint, filed in federal court, was later dismissed.

On January 29, 1999, the plaintiffs consolidated the pending class action
cases and filed a Consolidated Amended Complaint, styled Howard Jonas, et
al. v. Aspec Technology, Inc., et al., No. CV-775037. The Consolidated
Amended Complaint, purportedly brought on behalf of all persons who
purchased the Company's stock between April 27, 1998 and June 30, 1998,
alleges that the Company and certain of its officers and directors, as
well as its underwriters, violated Sections 25400 and 25500 of the
California Corporations Code, and Sections 11 and 15 of the Securities
Act of 1933 (except as to the underwriters). On June 7, 1999, the Company
and certain of the individual defendants ("the Aspec Defendants") filed
demurrers to the Consolidated Complaint. On June 9, 1999, the plaintiffs
filed a motion for summary adjudication of their claims against the
Company under Section 11 of the Securities Act. The plaintiffs also moved
to certify a plaintiff class.

On August 26, 1999, the court heard argument on the defendants'
demurrers. The court sustained the demurrers in part and overruled them
in part. Specifically, the court held that the plaintiffs had not pleaded
their claims under California Corporations Code Section 25400 with
sufficient particularity and granted plaintiffs leave to amend this
claim. The court overruled the defendants' demurrers to the Section 11
claim. Thereafter, plaintiffs withdrew their motion for summary
adjudication. Plaintiffs filed their First Amended Class Action
Complaint, under seal, on October 18, 1999.

On January 11, 2000, the defendants filed demurrers to Count I of the
First Amended Complaint which alleged claims under California
Corporations Code Sections 25400 and 25500. The Aspec Defendants demurred
to Count I on the basis that plaintiffs had not pleaded facts
demonstrating that the defendants had acted with scienter. The Aspec
Defendants also moved to strike certain allegations in the complaint. The
motions were fully briefed, and the court heard oral arguments on
defendants' demurrers and motion to strike, and plaintiffs' motion for
class certification on February 24, 2000. The court overruled the
defendants' demurrers, denied the motion to strike and took the motion
for class certification under submission. Thereafter, on March 13, 2000,
the Aspec Defendants answered the plaintiffs' unverified complaint,
generally denying all allegations and asserting affirmative defense.

On March 16, 2000, the court certified a plaintiff class and appointed
Representative Plaintiffs. On that same date, the court found, sua
sponte, that the case is complex, and pursuant to a pilot program
implemented in the Superior Court for Santa Clara County, assigned it to
a single judge for all purposes. The Representative Plaintiffs thereafter
re-noticed their motion for summary adjudication of the Section 11 claim:
however, that motion has not been heard.

On or about December 1, 2000, the Aspec Defendants, the underwriter,
Representative Plaintiffs and non-party Deloitte & Touche LLP, the
Company's former auditor, executed a Memorandum of Understanding, with
the objective of settling the class action litigation. Although the
settlement is not final, and is subject to preliminary and final court
approval, the agreement calls for the Company to pay $1.4 million into
the settlement fund and upon final approval of the settlement by the
court, to issue 1.75 million shares of Company common stock to the
plaintiff class.

As of November 30, 2000, the settlement cost has been accrued, including
the stock element, using a price of $0.50 per share, the fair market
value of the Company's common stock at November 30, 2000.

                   Derivative Action

Certain of the Company's current and former officers, directors and
shareholder entities were also named as defendants in a derivative
lawsuit styled Linda Willinger, IRA, et al. v. Conrad Dell'Oca et al.,
No. CV-778007, filed on November 12, 1998, in the Superior Court of Santa
Clara County.

The derivative action alleges facts similar to those in the class action
and also alleges that certain of the directors caused the Company to
conduct the initial public offering in order to redeem certain preferred
stock. The Company filed a demurrer to that Complaint on June 8, 1999 on
behalf of certain of the officer and director defendants and the Company,
which has been named as nominal defendant ("the Aspec Derivative
Defendants"). Thereafter, the Derivative Plaintiffs requested that the
Aspec Derivative Defendants' assent to the dismissal of their complaint
and the filing of an amended complaint. Derivative Plaintiffs filed their
First Amended Shareholders' Derivative Complaint on September 2, 1999.

The Aspec Derivative Defendants demurred to that complaint on November
12, 1999, on the basis that the nominal plaintiffs had failed to make a
demand on the Board of Directors before filing the derivative lawsuit,
and that they had also failed to plead sufficient facts to excuse a
pre-suit demand. After the matter was fully briefed, the court heard
argument on January 25, 2000. On January 27, 2000, the court sustained
the Aspec Derivative Defendants' demurrers with sixty days' leave to
amend.

The parties later stipulated that the plaintiffs would have additional
time in which to file an amended complaint, as well as to re-notice a
motion to compel the production of electronically-stored documents and
records from the Company and to notice the deposition of a witness from
the Company to testify concerning the storage of such documents and
records.

On or about December 1, 2000, certain of the Aspec Derivative Defendants,
including nominal defendant, the Company, the plaintiffs, and non-party
Deloitte & Touche LLP, the Company's former auditor, executed a
Memorandum of Understanding, with the objective of settling the
derivative litigation. Although the settlement is not final, and is
subject to preliminary and final court approval, the Company has agreed
to make certain changes to its Audit Committee Charter, and to pay
$395,000 in plaintiffs' legal fees and expenses. As of November 30, 2000,
the settlement cost has been accrued. As of March 13, 2001, the
settlement has been paid.

On February 23, 2001, at a hearing before Judge Conrad Rushing, the
parties advised the Court that they had reached agreement on a
Stipulation of Settlement, which they provided to the Court. The
settlement would fully and finally settle and resolve the derivative
litigation, including a dismissal of the action with prejudice as to all
defendants. The Stipulation requires the Company to pay the derivative
plaintiffs' attorneys' fees in the amount of $395,000, as well as to make
certain changes to the Company's audit committee charter. Upon the
effective date, which includes the occurrence of the effective date of a
separate Stipulation of Settlement to be agreed upon and approved by the
Court in the Class Action, the parties to the Stipulation in the
derivative litigation will release one another from claims arising from
or relating to the derivative action, as set forth in the Stipulation.
Thereafter, on March 6, 2001, the Court entered an Order approving the
Stipulation of Settlement and dismissing the matter with prejudice as to
all defendants.

                       SEC Inquiry

In January 1999, the Company received an informal inquiry from the
Securities and Exchange Commission ("SEC") Staff that the Company
believes relates to the restatement of the Company's financial statements
in 1998. The Company provided information in response to the SEC requests
through March 1999 and has received no inquiries from the SEC since that
time.

                    NASDAQ Staff Determination

On September 4, 1998, the Company received an informal request for
information from the NASDAQ Listing Investigations Staff. NASDAQ
requested information concerning the Company's financial accounting and
internal controls. The Company has provided information in response to
the informal inquiry. NASDAQ held a de-listing inquiry on December 17,
1998 at which the Company appeared through counsel and provided
information. As of February 25, 1999, NASDAQ determined that the Company
would remain listed on the NASDAQ.

On December 19, 2000, the Company received notice from NASDAQ that the
Company's common stock had failed to maintain a minimum bid price of
$1.00 over the prior thirty (30) consecutive trading days as required by
the Market Place Rule 4450(a)(5)(the "Rule"). The Company had until March
19, 2001 to regain compliance with the Rule or the Company's common stock
would be subject to delisting from NASDAQ. Regaining compliance required,
in part, that the Company's common stock trade at of above the $1.00
minimum price for ten (10) consecutive trading days.

On March 20, 2001, the Company received a NASDAQ Staff Determination
letter (the "Staff Determination") indicating that the Company failed to
regain compliance with the Rule and that the Company's common stock is,
therefore, subject to delisting from NASDAQ. The Company has requested a
hearing before a NASDAQ Listing Qualifications Panel (the "Panel") to
review the Staff Determination.

There can be no assurance that the Panel will grant the Company's request
for continued listing on NASDAQ.


MCSi: Faces Shareholder Suit in Maryland over Proposed Acquisition
------------------------------------------------------------------
On January 26, 2001, the Company, together with its Board of Directors
and Mr. Anthony Liberati ("Mr. Liberati") was sued in a purported
shareholder class action titled Phillips v. MCSi, Inc. and Anthony W.
Liberati, Michael Peppel, Robert G. Hecht, Richard Posen, Thomas C.
Winstel and Harry F. Radcliffe, Circuit Court for Baltimore City,
Maryland, Case No. 24-C-01-000394.

The complaint alleges that the Board of Directors breached its fiduciary
duties to the shareholders of MCSi in connection with a proposal by Mr.
Liberati to acquire a majority of MCSi's outstanding shares. The Company
believes that the claim is totally without merit and intends to
vigorously defend against this claim. No substantive proceedings in the
case have occurred thus far.

In addition, certain other legal proceedings have resulted from
activities of sales representatives while working for other computer and
office supply and audio-visual presentation product companies, and prior
to their hiring by the Company. In the opinion of management, none of the
matters pending at December 31, 2000 are likely to have a material
adverse effect on the Company's financial condition or results of
operations.


MICRO CIRSUITS: Milberg Weiss Files Securities Suit in California
-----------------------------------------------------------------
Milberg Weiss (http://www.milberg.com/amcc/)on April 12 announced that a
class action has been commenced in the United States District Court for
the Southern District of California on behalf of purchasers of Applied
Micro Circuits Corporation ("AMCC" or "Applied Micro Circuits")
(NASDAQ:AMCC) publicly traded securities during the period between Nov.
30, 2000 and Feb. 5, 2001 (the "Class Period").

The complaint charges AMCC and certain of its officers and directors with
violations of the Securities Exchange Act of 1934. The complaint alleges
that defendants disseminated false and misleading statements concerning
the Company's operations and prospects for Q4 2001 and beyond, including
that:

Applied Micro Circuits was on track to achieve 16% to 20% sequential
growth for Q4 2001.

Applied Micro Circuits had $133 million in backlog which was equal to 77%
of its forecast for its March quarter.

The increase in its Q3 DSOs (days sales outstanding) was not attributable
to the financial problems many of Applied Micro Circuits' customers were
having but rather due to the MMC acquisition and back-end loading due to
foundry issues.

The Company's $133 million of backlog was solid.

MMC, AMCC's new subsidiary, had not been notified of any material order
push-outs or cancellations.

AMCC's demand was so strong that its only real restraint on its future
financial prospects was its ability to have enough supply.

The Company would conservatively report Q4 EPS of $0.17 and fiscal 2001
EPS of $0.57.

The Company would post growth of 16%-20% compared to the 13% analysts had
previously forecast, in spite of all the recent concerns regarding
carrier Capex spending and telecom equipment slowdowns.

Taking advantage of the inflation in AMCC's stock caused by their
statements, the AMCC insiders sold almost $100 million worth of their own
AMCC stock at artificially inflated prices of as much as $87 per share.

On Feb. 5, 2001, after the close of the market, the truth concerning
AMCC's operations and the sudden filings by AMCC's officers to sell their
personal holdings in AMCC came under fire from analysts as they
questioned AMCC about its claimed unique position in the optical space.
Defendants were forced to disclose that in fact AMCC was experiencing
large order cancellations and push-outs with its OC-12, OC-48 and OC-192
products. This news sent AMCC's shares plummeting from $70 where they had
traded days before when defendants were selling their own shares to as
low as $53 on Feb. 6, 2001.

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


NAPSTER, INC: Music Pulishers Appear Likely to Win Certification
----------------------------------------------------------------
By Brenda Sandburg, Recorder Staff Writer

Music publishers appear likely to gain certification of a class action
against Napster Inc. for copyright infringement. But independent artists
seem unlikely to win a similar battle as court action in the ongoing
Napster legal fracas continued. U.S. District Judge Marilyn Hall Patel
did not rule on motions by either party, but she made it clear she was
leaning toward giving publishers a shot at their class action. While she
may tweak wording on who can participate in the class, Patel concluded
that it "may be appropriate to have class certification for certain
issues." The motions were heard during an afternoon status conference
that was a grab bag of Napster-related issues.

Patel also heard arguments to dismiss five defendants in Napster-related
suits. And attorneys for Napster and the recording industry presented
arguments on each other's compliance with Patel's March 5 modified
preliminary injunction against the music-swapping site.

Patel's first challenge was to try to sort out the class certification
fight. Songwriters Jerry Leiber and Mike Stoller, who filed suit against
Napster last January, are seeking class certification of the more than
26,000 music publishers that employ the Harry Fox Agency Inc. as their
licensing agent. Napster attorney Laurence Pulgram, a partner at Fenwick
& West, argued that class certification was unnecessary to protect music
composers. He said that as presently defined, the proposed class would
include all music publishers who use Harry Fox whether or not they have
notified Napster that their works were being infringed on the company's
music-swapping service.

But Patel seemed inclined to tinker with the publisher's definition of
the class rather than throw it out. Class certification might be
appropriate for some issues such as claims for statutory damages rather
than others, she said.

Independent artists, however, did not fare as well. Patel questioned
whether it would be possible to define such a broad class. Attorneys
Hannah Bentley, of the Internet Lawyers Group, and Reed Kathrein, a
partner in Milberg Weiss Bershad Hynes & Lerach 's San Francisco office,
are seeking worldwide class certification of independent artists whose
works have been included on Napster's service without their
authorization. Kathrein said this would include perhaps tens of thousands
of people not already represented by other plaintiffs in Napster
litigation. "We're talking of performers and songwriters as well," Patel
said. "How manageable a group do you think that really is?" Patel said
the difficulty was observed in the fact that the original name plaintiff
had dropped out of the case and the current lead plaintiff has come in
and out of the case.

The named lead plaintiff, Casanova Records has become a featured artist
on Napster's Web site. She also said it's questionable whether copyrights
obtained in England, France, Japan and Brazil are enforceable under U.S.
copyright law. "This has endless possibilities for mutation," Patel said.
"I'm not going to supervise the whole world." Kathrein suggested that the
class could be restricted to those who hold U.S. copyrights or whose work
was registered by the U.S. Copyright Office.

Patel also heard arguments to dismiss five individuals named in separate
suits by music producer Matthew Katz. The individuals are Napster CEO
Hank Barry, Napster investor Hummer Winblad, Napster developer Shawn
Fanning and company co-founder John Fanning, Fred Durst, lead singer of
the bank Limp Bizkit, and Napster investor Bob Bozeman.

Napster is a defendant in a separate suit brought by Katz. Katz claimed
the conduct of the defendants aided Napster's contributory and vicarious
infringement of his copyrighted works. But Annette Hurst, a partner at
Howard, Rice, Nemerovski, Canady, Falk & Rabkin and attorney for Shawn
Fanning, argued that no court has ever imposed tertiary liability on
someone for such infringement. Patel said she may decide there is no
tertiary liability. If so, she said she would give Katz, who is
representing himself, the opportunity to amend his complaint. She said
she didn't see how any allegation could be made against Durst, but
perhaps an argument could be made with respect to the others. However,
Patel questioned Katz's rationale for filing complaints against so many
individuals. "Do you have any idea what you're doing?" she asked Katz.
"Somebody ought to put a limit on it. I will."

The third issue presented before Patel was whether Napster and the
recording industry are abiding by her March 5 modified preliminary
injunction against Napster. The two sides have contended in reports to
the court that the other is not living up to the terms of the injunction.
Retired federal Judge Eugene Lynch, who was appointed to mediate the case
in January, has been unable to get the parties to come to an agreement.
To break the logjam, he recently advised Patel to appoint a neutral
technical expert to look at compliance issues. She did so, naming A.J.
Nichols, president of the computer systems consulting company Probitas
Corp. in Mountain View, as technical expert. Napster attorneys had
recommended Nichols for the job. "He has prior experience being a neutral
expert for various judges in the Northern District, " said Napster
attorney Pulgram. Most notably, he provided advice in Sun Microsystems
Inc. v. Microsoft Corp.

A key question Nichols will address is whether Napster's filtering
methods can adequately exclude copyrighted music from its system. (The
Recorder, April 11, 2001)


SLAVERY REPARATIONS: African-American Lawyers Plan Suit
-------------------------------------------------------
In a controversial push for reparations for the descendants of slaves, a
group of prominent African-American lawyers says it will file suit by
early next year against the US government and several corporations that
profited from slavery.

The lawyers will assemble on Tuesday in Washington to plot out an
ambitious strategy for the class action lawsuit, which would be the first
aimed at seeking "remedies" to redress 246 years of slavery.

"We're moving along at a very brisk pace," said Charles J. Ogletree, a
Harvard University law professor who is cochairman of the Reparations
Coordinating Committee, a team of powerful lawyers that includes Johnnie
Cochran, former counsel for O.J. Simpson, and Willie E. Gary, who has
sued Walt Disney and Microsoft Corp.

"Right now, we are developing our arguments," Ogletree said. "We have a
little more work to do." Among the corporations that could be targeted is
Aetna Life & Casualty Co., which provided slave owners insurance policies
for their "property."

Recently, conservative author David Horowitz has triggered widespread
controversy by placing advertisements in college newspapers condemning
the reparations movement.

Supporters of reparations argue that slavery has left an immoral legacy,
creating a wide and onerous wealth disparity between blacks and whites.
And many corporations reaped the benefits of forced free labor and bear
some responsibility for abetting a horrific institution, some activists
argue.

Following emancipation, they note, America never made good on its promise
to provide every freed slave "40 acres and a mule."

A source close to the lawyers, who are volunteering their time, said they
probably will employ tactics similar to those used to argue the landmark
Brown v. Board of Education case before the US Supreme Court in 1954.
That ruling ultimately led to the desegregation of public schools across
the country.

Nevertheless, some are wary that a test of the country's potential debt
for slavery can be successfully settled in the courts.

"I have mixed feelings about it," said James F. Blumstein, a law
professor at Vanderbilt University. "We all want to right the wrongs of
the past, but I wonder whether the courts can do that."

By seeking financial compensation, supporters of reparations could run
the risk of "trivializing their complaint," Blumstein said. He also is
concerned that individuals might have to go through a very difficult
process to prove that they are descended from slaves.

But Robert Belton, who also teaches at Vanderbilt Law School, said the
lawsuit is a "novel approach to seek redress for past injustices."

"This will be a daunting task, but it certainly is not impossible to be
successful," he said, noting the legal challenges civil rights lawyers
faced as they sought to overturn racially discriminatory laws in the
1950s and '60s.

Ogletree would not provide detailed information about the litigation,
saying only that "we will be considering a number of public and private
defendants in the case, without committing at this point to specific
defendants, public or private."

But the source close to the attorneys said: "This is going to be bigger
than Brown. This is not just going to be one lawsuit against the
government, but other private corporations will be sued, in the way that
Jews sued IBM for their participation in the Holocaust."

Randall Robinson, president of TransAfrica, a think tank focusing on US
policy related to Africa and the Caribbean, sparked a new debate on
reparations last year with his book "The Debt: What America Owes Blacks."

Robinson, who is convening the meeting in Washington and cochairs the
Reparations Coordinating Committee with Ogletree, said in an interview
that a lawsuit will be ready to be filed at the end of this year.

"There will be a core lawsuit against the federal government," said
Robinson, "but there will be other lawsuits filed as well."

Over the past year, a chorus of civil rights leaders, including the Rev.
Jesse L. Jackson, has called on insurers to compensate descendants of
slaves.

But as the reparations debate rages on, few have been willing to talk in
terms of dollars, with some arguing that blacks would be better served if
the federal government or corporations provided scholarships for black
youth or housing subsidies for low-income African-Americans.

"Right now we're looking at what the remedy should look like and are
planning for a lawsuit," said Robinson. "We are making out a case of
action to show how slavery was objectionable to the court of law, and was
a crime to humanity."

Other groups such as Japanese-Americans, interned during World War II,
have successfully turned to the courts in seeking compensation to right
historical wrongs.

And in a predominantly black neighborhood in Tulsa, Okla., about 120
elderly blacks may finally get reparations for a riot that led to the
deaths of 40 blacks and destroyed 35 homes in 1921.

The Tulsa Race Riot Commission recently recommended that the Oklahoma
Legislature provide blacks with reparations after it was revealed that
police officers at the time did little to protect black citizens from
angry whites trying to burn down their neighborhood.

Many black activists have long argued that America should be made to pay
for the injustice it inflicted on people who were taken from their
homelands.

But until now, the issue has largely remained on the margins, championed
by a small band of politicians and liberal activists.

"There's a great deal of enthusiasm for what we're doing," said Robinson,
adding that US Representative John Conyers, a Michigan Democrat, and
Harvard professor Cornel West are among dozens of blacks advising the
reparations committee. (The Boston Globe, April 13, 2001)


STANLEY RABNER: Former Owner of Fredmont Pleaded Guilty of Fraud
----------------------------------------------------------------
Before it went out of business, Fredmont Builders of Wilkinsburg was a
"home improvement" outfit in name only.

Workers installed cracked toilets that leaked. They put up replacement
windows that let the wind rush in. They did lousy roofing work, installed
furnaces improperly, used substandard materials.

And, federal authorities say, they helped perpetuate one of the largest
federal loan insurance fraud schemes in the United States, triggering a
class-action lawsuit in Philadelphia, another suit by the attorney
general and ultimately a federal criminal investigation.

On April 12 in U.S. District Court, that criminal probe ended when the
U.S. Attorney's office charged Fredmont's former owner, Stanley Rabner,
with wire fraud and filing false tax returns for 1995 in connection with
defrauding the U.S. Department of Housing and Urban Development.

Rabner pleaded guilty before U.S. District Judge Donald Ziegler and will
be sentenced July 20.

Agents say Rabner, 58, of Point Breeze, who described himself in court as
a self-employed home improvement contractor, abused HUD's Title I
Property Improvement Loan Insurance Program for low-income home repair
loans in Pittsburgh, Philadelphia and other counties and in several other
states in the early and mid-1990s.

Title I, part of the National Housing Act of 1934, is designed to make
loans available to people who can't qualify for conventional loans
because of poor credit history or low income.

Under the program, private lenders make loans at market interest rates.
If a borrower defaults on the loan, the bank or finance company collects
90 percent of the principal from a fund administered by HUD. The money
for the fund comes from fees paid by lenders, who pass the cost on to the
borrowers.

Title I lending increased in the 1990s when finance companies began
lending at high interest rates to borrowers with bad credit. Many of the
loans were made through home repair contractors acting as dealers for
national lenders. Some contractors took advantage of low-income and
elderly homeowners by deceiving them about interest rates, inflating
prices and doing poor work.

Fredmont was one of the prime offenders, according to HUD, arranging more
than 1,000 Title I loans and often doctoring financial papers to make
borrowers with incomes too low to qualify appear eligible for a loan.

"They created bad paper. They went into a lot of areas where the people
had low incomes, were older or naive, and that's what we've seen around
the country with these kinds of cases," said Robert Brickley, head of
HUD's Inspector General's office in Philadelphia, which investigated the
Rabner case with the Criminal Investigation Division of the Internal
Revenue Service.

Attorney General Mike Fisher says home-improvement fraud is the No. 1
complaint among senior citizens in Pennsylvania. After his office sued
Fredmont in 1997, Fisher testified before Congress about Title I fraud
and used Fredmont as the chief example of how unscrupulous contractors
and lenders undermined faith in the loan program.

The attorney general's suit accused Fredmont of performing unacceptable
work, falsely advertising an affiliation with a government loan program
and other violations of the state's consumer protection law. The case
involved customers in 10 counties, including Allegheny, Lawrence,
Washington and Westmoreland counties.

In January, Allegheny County Judge David Cercone ordered the company to
pay $480,000 in restitution to 74 customers and $95,000 in civil
penalties and costs.

Fredmont's legal troubles actually started before the attorney general
got involved.

In February 1997, three homeowners in Delaware County filed a federal
suit against Fredmont, three other contractors and Green Tree Financial
Corp. of Minnesota. The suit was part of a nationwide class-action
against Green Tree Financial, charging that the finance company recruited
contractors as dealers in a racketeering scheme aimed at the poor and
elderly.

The suit said homeowners were assured by contractors that work would be
guaranteed and no payment would be necessary until it was done. The
contractors then either didn't do the work or did it badly, while the
homeowners were required to pay thousands of dollars to Green Tree to
keep their homes from foreclosure.

In 1998, a federal judge in Philadelphia granted two judgments against
Rabner and Fredmont. Court records indicate a damage amount has yet to be
determined. (Pittsburgh Post-Gazette, April 13, 2001)


Tecumsah School: 10th Cir Strikes Down Screening By Drug Testing
----------------------------------------------------------------
A federal circuit court has declined to go further than the U.S. Supreme
Court has specifically authorized concerning random drug testing of high
school students.

The 10th U.S. Circuit Court of Appeals said the drug testing policy of
the Tecumseh Public School District in Oklahoma violated the Fourth
Amendment. The appellate court reversed the decision of the federal
district court, which had concluded the policy was not an unreasonable
search in violation of the U.S. Constitution.

The Tecumseh policy went into effect in 1998, and covered all
extracurricular activities, including athletics. Students electing to be
involved in such activities -- which included the "vast majority" of
students attending the school -- would have to agree to submit to random
drug testing while engaged in band, cheerleading and other activities.
They also were subject to reasonable suspicion drug testing at any time
during the school year.

The school tested students for amphetamines, marijuana, cocaine, opiates,
barbiturates and benzodiazepines.

                 Law Enforcement Not Involved

Students to be tested would be called out of class in small groups of two
or three and directed to a restroom, with a faculty member waiting
outside the closed restroom stalls while students produced samples.

Students would observe the faculty members sealing the specimen
containers and students would then sign a form. During the testing,
students also would have the opportunity to list any medications they
were taking.

Test results were kept separate from academic records, were confidential
and were disclosed only to those school employees who the school said
would "need to know." The results were not shared with law enforcement
officers.

The lead plaintiff, Lindsay Earls, challenged the requirement that she
submit to drug testing in order to participate in choir, the marching
band and the academic team.

The 10th Circuit, in reviewing the constitutionality of the program,
observed at the outset that the Constitution requires that a search
should involve "some quantum of individualized suspicion." The court also
noted that it starts its review from the standpoint that students are
subject to greater supervision and control than are "free adults."

The Oklahoma school based its program on the so-called "special needs
doctrine." The Supreme Court developed this doctrine through its review
of random drug tests to recognize exceptions to the requirement of
individualized suspicion "when special needs, beyond the normal need for
law enforcement, make the warrant and probable cause requirement
impracticable." The doctrine then balances the special need and the
government's interest in conducting the particular search against
individual privacy rights.

The plaintiffs in the Tecumseh case argued the school failed to prove a
special need exists because it did not show there is a drug problem in
the tested group.

                    Special Need Examined

The 10th Circuit concluded that it is not necessary for the school to
document drug use among the tested population to show a special need. "We
think a school concerned about drug abuse among its students has
adequately demonstrated the existence of a special need."

Of course, the court continued, "once a special need has been
demonstrated, we must then balance the government's ... interest in
conducting the particular search in question against the privacy
interests of those subject to the search."

The 10th Circuit then proceeded to review the record concerning the drug
problem at the school. The court concluded that "while there was clearly
some drug use at the Tecumseh schools, such use among students subject to
the testing policy was negligible." The court also noted the problem was
"vastly different" from the drug abuse problem pre sent in the high
school on which the U.S. Supreme Court based its decision to allow random
drug testing of student athletes (Vernonia School District v. Acton).

The appellate court then turned to the privacy interest at issue. The
school argued that students involved in extracurricular activities have a
reduced expectation of privacy because they are voluntary participants in
the activities who are often traveling together or in other communal
settings and who have agreed to abide by a higher degree of rules and
regulations.

The court addressed specifically the voluntary nature of the student
participation, noting at the outset that "we do not believe that
voluntary participation in an activity, without more, should reduce a
student's expectation of privacy in his or her own body."

Students in these voluntary activities do agree to adhere to certain
rules and this "inevitably requires that their personal freedom to
conduct them selves is, in some small way, constrained at least some of
the time," the court conceded. "We therefore conclude that, like
athletes, participants in other extracurricular activities have a
somewhat lesser privacy expectation than other students."

Because the testing regime was similar to that in Vernonia, the court
also concluded that the invasion of privacy based on the manner of
testing "was not significant."

                Efficacy of Solution Considered

Finally, the court considered how pressing the special need is and
whether drug testing is an efficient way to meet that need. The school
raised the safety risk involved if students are under the influence of
drugs and are engaged in certain extracurricular activities, such as
carrying heavy instruments in the school band.

But the court said safety alone would not justify the program because
there was no safety risk associated with some extracurricular activities
while, at the same time, students engaged in certain regular courses,
such as working in science laboratories, would be exposed to far greater
risks.

The court also concluded that because there is so little evidence of a
drug problem at the school, the efficacy of the school's solution to the
perceived problem is greatly diminished.

Lindsay Earls v. Board of Education of Tecumsah School District, No.
06128. (Drug Detection Report, April 5, 2001)


TOBACCO LITIGATION: House Passes, Then Recalls Bill To Cap Appeal Bonds
-----------------------------------------------------------------------
A proposal that would cap appeal bonds for tobacco companies provides
more protection for the tobacco industry than the state's $1.8 billion
tobacco settlement award, Attorney General Darrell McGraw said.

"This is a lobbyist bill, an anti-injured citizen bill. This is a
statement by the state that the tobacco merchandising is more important
than the public's health," McGraw said.

The bill, SB661, passed the Senate 33-0 with one absent. The House
suspended its rules on April 12 and passed it on a voice vote. It was to
decide April 13 whether to recall the measure for further consideration.

Delegate Randolph McGraw II, D-Raleigh, had requested the
reconsideration.

Before the original House vote, Randolph McGraw echoed his uncle's
concerns by saying the bill "does a great favor to the tobacco industry
of this country."

"This bill goes much further than what was explained to you today," he
said. "This would have a great impact on current litigation" such as
medical monitoring cases.

A class-action lawsuit being heard in Ohio County pits about 250,000 West
Virginia smokers against the tobacco industry. The smokers are trying to
win free annual medical tests.

As written, the bill would cap the bond required from tobacco companies
in any future case to $100 million in actual damages and $100 million in
punitive damages.

Typically, judges require the entire amount to be placed in bond during
an appeal process. The proposed bill would only apply to tobacco
companies that are part of West Virginia's $1.8 billion master settlement
award.

House Judiciary Chairman Jon Amores said the bill's intent was to make
sure that funds owed to the state flow in into the agreement and don't
get caught up in other appeal bonds.

"Litigation may yet drive tobacco companies out of business, but until
that day happens, this is a bill to preserve as much money from these
companies as we can under the master settlement agreement," said Amores,
D-Kanawha.

But, the attorney general said capping the appeal bond would do nothing
to protect the money owed to the state.

"It has nothing to do with the settlement we entered into," he said.
"That is only a ruse to get a cap on the bond. "If the idea is that they
want to protect the state's revenue, then they ought to require that (the
tobacco industry) post a $1.8 billion bond and allow the judicial system
to work," he said.

West Virginia and 45 other states agreed to a $206 billion settlement of
lawsuits against tobacco companies to recover costs for treating
smoking-related illnesses.

West Virginia currently receives between $50 million and $70 million a
year, which expected to total $1.8 billion over 25 years - unless the
companies go bankrupt.

At least six other states have established bond caps ranging from $25
million to $100 million in order to protect their settlement, said Jim
Casey, a lobbyist for the Trial Lawyers Association.

"I think that the amount that we have is reasonable to protect the
victims," he said. "A couple hundred million, that's a significant bond."

The attorney general said "only six states have been suckers." He said he
was surprised no one in the Legislature contacted his office about the
bill considering his role in the tobacco industry case. (The Associated
Press State & Local Wire, April 13, 2001)


TRAVELERS SEPARATE: Intends to Contest Vigorously RICO Suit in GA
-----------------------------------------------------------------
In March 1997, a purported class action entitled Patterman v. The
Travelers, Inc., et al. was commenced in the Superior Court of Richmond
County, Georgia, alleging, among other things, violations of the Georgia
RICO statute and other state laws by an affiliate of the Company,
Primerica Financial Services, Inc. and certain of its affiliates.
Plaintiffs seek unspecified compensatory and punitive damages and other
relief. From February 1998 through April 2000, various motions for
transfer of the lawsuit were heard and appealed. In April 2000, the
matter was remanded to the Superior Court of Richmond County by the
Georgia Supreme Court. Also, in April 2000 defendants moved for summary
judgement on all counts of the complaint. Discovery commenced in May
2000. Defendants intend to vigorously contest the litigation.


                             *********


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

Class Action Reporter is a daily newsletter, co-published by Bankruptcy
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Copyright 1999.  All rights reserved.  ISSN 1525-2272.

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