/raid1/www/Hosts/bankrupt/CAR_Public/010419.MBX              C L A S S   A C T I O N   R E P O R T E R

              Thursday, April 19, 2001, Vol. 3, No. 77


ASBESTOS LITIGATION: W.R. Grace Can't Keep Homeowners' Suit In Fed. Ct.
BANK OF NY: Ct Dismisses Action By Depositors of Insolvent Russian Bank
BROADVISION INC: Milberg Weiss Files Securities Lawsuit in California
BROADVISION, INC: Kaplan, Kilsheimer Files Securities Suit in California
CLICKSHIP DIRECT: Former Workers Sue E-Commerce Firm in MN over Lay-off

FLEETBOSTON FINANCIAL: CEO Makes Customer-Friendly Vows at Annual Mtg.
FLEETBOSTON FINANCIAL: Group Wages Suit over Mortgageholders' Privacy
GENERAL MOTORS: Truck Owners To Get Compensation For Faulty Fuel Systems
HUMPHREY HOSPITALITY: Wolf Haldenstein Announces Securities Suit in VA
INMATES LITIGATION: Get-Tough Tactics under Fire after Riot at Dartmouth

JOHNSON & JOHNSON: Agrees to Pay up to $860M to Settle Acuvue Lens Suit
NY CITY: Submission of Galvin Stipulation Does Not Obviate Need for Cert
OLD REPUBLIC: CFO Pleads Guilty; Co. Owes Escrow Account Holders $30M
PAN PACIFIC: Contests CA Suit re Acquisition of Western
PARTSBASE.COM, INC: The Rosen Law Firm Files Securities Suit in Florida

PENN TREATY: Sued for Securities Fraud, Berman DeValerio & Pease Says
PG&E CORP: Douglas A. Ames Commences Securities Fraud Suit
RITE AID: Judge Rules Pa Law Firm Ballard, Spahr Can Remain on Suit
TAINTED WATER: Inspection Work in Chaos Before Walkerton E Coli Outbreak
TREATED WOOD: Scientist Hired By Industry Admits Underestimation of Risk

* "Class-action conflicts in U.S. May Come Here" Expert Said in Canada


ASBESTOS LITIGATION: W.R. Grace Can't Keep Homeowners' Suit In Fed. Ct.
A Minnesota federal judge on March 20 remanded to state court a class
action on behalf of homeowners who alleged they suffered property loss
because of the negligence of W.R. Grace Co. The judge found that Grace
failed to meet the burden of proving the diversity issue that each of the
plaintiffs sustained more than $ 75,000 in losses (Adam Chase, et al. v.
W.R. Grace & Co., et al., No. 00-CV-2468-MJD-JDL, D. Minn.; See 2/02/01,
Page 7).

Judge Michael J. Davis of the U.S. District Court for the District of
Minnesota ruled that because the homeowners are seeking relief for each
one of their individualized properties, and not as a collective whole,
each member of the class does not have to meet the federal diversity
requirements and the case should be remanded to Hennepin County Circuit

                     Loss Of Property Value

The case stems from a class action filed last October on behalf of
property owners living around W.R. Grace's Madison Street vermiculite
factory in Minneapolis, which the company operated until 1989. The suit
accused Grace of "abnormally and unreasonably dangerous activities" in
giving away scrap materials to residents surrounding the plant and of
failing to warn the residents "once it became a danger" of the
microscopic asbestos fibers. The suit contended that more than 20,000
property owners in an area close to the Grace plant each have suffered
damages of more than $ 50,000.

The suit alleges strict liability, nuisance, trespass, negligence and
consumer fraud. The homeowners seek to compel Grace to reimburse area
residents for any "stigma value losses" stemming from the spread of
asbestos. A source told Mealey Publications in October that according to
real estate agents in the area, property values in the allegedly
contaminated houses have already dropped as evidenced by recent asking

                        W.R. Grace Answer

Grace answered the complaint, contending that any "alleged injury or
damage" sustained by area residents "was caused by risks that were open,
obvious and known to and voluntarily assumed to them." Grace's reply
included 40 potential defenses, including the assertion that the class's
complaint fails to meet numerous legal requirements.

Grace then faced the burden of keeping the case in federal court by
showing that each of the plaintiffs sustained more than $ 75,000 in

Judge Davis cited Trimble v. Asarco (No. 00-946, 8th Cir.), in which the
Eighth Circuit ruled that a class's claims could not be aggregated to
satisfy the $ 75,000 amount-in-controversy requirement because "the
individual members of the plaintiff class are asserting separate and
distinct claims related to their properties. . . ."

                    Supplemental Jurisdiction

The judge agreed with the Trimble decision, holding that the court could
not find one plaintiff who met the requirement and then exercise
supplemental jurisdiction over the other members of the class. Since the
class seeks damages on a property-by-property basis and since not every
home in the affected neighborhood was contaminated, the judge said, the
class's interests and claims may be common, but are not undivided.

"Defendant has not carried its burden of proving that plaintiffs are
seeking to enforce a single, indivisible right, and aggregation of
damages among the parties to meet the amount in controversy threshold is
therefore not appropriate," the judge said.

Chase is represented by Dan Biersdorf of Biersdorf & Associates in
Minneapolis and William Butler of the Law Offices of William Butler in
Minneapolis. Representing Grace are Delmar R. Ehrich, Bruce Jones and
Steven L. Severson of Faegre & Benson in Minneapolis and R. Bruce Shaw,
Karen Crawford, Bernard F. Hawkins Jr. and J. Drayton Hastie III of
Nelson, Mullins, Riley & Scarborough in Columbia, S.C. (Mealey's
Litigation Report: Asbestos, April 6, 2001)

BANK OF NY: Ct Dismisses Action By Depositors of Insolvent Russian Bank
In a purported class action on behalf of depositors of the now insolvent
Joint Stock Bank Inkombank, a bank formerly engaged in business in the
Russian Federation, plaintiffs claimed that defendants, The Bank of New
York and The Bank of New York Co., facilitated looting and laundering of
assets of several Russian banks, including Inkombank. Plaintiffs sought
damages under the Racketeer Influenced and Corrupt Organizations Act,
theories of conversion and aiding and abetting of conversion. The court
granted defendants' motion to dismiss. Dismissal of the RICO claim was on
the merits. The conversion and aiding and abetting claims were dismissed
for lack of subject matter jurisdiction. The court did not grant leave to
amend as to the subject matter jurisdiction dismissal because conversion
and aiding and abetting claims were dismissed on the alternative ground
of forum non conveniens.

Judge Kaplan

PAVLOV v. BANK OF NEW YORK -- This is a purported class action on behalf
of the depositors of the now insolvent Joint Stock Bank Inkombank
("Inkombank"), a bank formerly engaged in business in the Russian
Federation. Plaintiffs claim that defendants The Bank of New York and The
Bank of New York Co., Inc. (collectively "BNY") facilitated the looting
and laundering of assets of several Russian banks, including Inkombank.
They seek to recover damages here under the Racketeer Influenced and
Corrupt Organizations Act ("RICO") n1 as well as on theories of
conversion and aiding and abetting of conversion. Defendants move to
dismiss the second amended complaint on the grounds that (1) plaintiffs'
claims belong to Inkombank, not to plaintiffs, (2) the RICO claim fails
adequately to allege an "enterprise," (3) the Court lacks subject matter
jurisdiction over the conversion claims, and (4) the alleged fraud is not
pleaded with particularity. Alternatively, they seek forum non conveniens
dismissal in favor of litigation in a Russian forum.

n1 18 U.S.C. @ 1961 et seq.

   I. Plaintiffs allege that defendants violated Section 1962(c) of title
18, which in relevant part makes it unlawful "for any person employed by
or associated with any enterprise... to conduct or participate... in the
conduct of such enterprise's affairs through a pattern of racketeering
activity...." "Enterprise" is defined by the statute to include "any
individual, partnership, corporation, association, or other legal entity,
and any union or group of individuals associated in fact although not a
legal entity." n2

n2 Id. @ 1961(4).

The second amended complaint alleges that the "enterprise" consisted of:

"defendants and certain of its [sic] senior officers, including but not
limited to its Chairman of the Board and Chief Executive Officer Thomas
R. Renyi..., senior vice president Natasha Gurfinkel Kagalovsky...,
senior vice president Vladimir Galitzyne..., and vice president Lucy
Edwards... joined together with corrupt members of Inkombank's senior
management and Russian organized crime factions associated with them to
create a criminal enterprise capable of unlawfully exploiting the
emerging post-Soviet private banking sector in Russia (the 'Global
Custody RICO Enterprise' or the 'Enterprise')." n3

n3 Second Am. Cpt. P2; see also id. PP13, 152.

BNY, its senior officers, and the Inkombank participants in this supposed
enterprise then are alleged to have looted Inkombank and other Russian
banks and industrial companies and to have channeled the converted funds
into a series of offshore accounts under control of the "enterprise." n4
Defendants assert, however, that plaintiffs have failed adequately to
allege the existence of an "enterprise" within the meaning of the

n4 Id. P62.

While RICO applies equally to legitimate and il, it is well in construing
the term "enterprise" to remember the statute's overriding purpose -- to
create a weapon useful in combating organized crime. n5 Congress quite
plainly had in mind organizations with characteristics similar to those
that have been documented in many organized crime trials and become the
stuff of popular culture in movies, books, and even a current television
series. Thus, while an "enterprise" need not exhibit all of the
characteristics of familiar criminal organizations, the Supreme Court
long ago held that a RICO enterprise is a "group of persons associated
together for a common purpose of engaging in a course of conduct" that
"is proved by evidence of an ongoing organization, formal or informal,
and by evidence that the various associates function as a continuing
unit." n6 In other words, it has a "hierarchy, organization and
activities" n7 and it "must exhibit structural continuity" which "exists
where there is an organizational pattern or system of authority that
provides a mechanism for directing the group's affairs on a continuing,
rather than an ad hoc, basis." n8

n5 Pub. L. No. 91-452, 84 Stat. 922-23 (1970); United States v. Turkette,
452 U.S. 576, 588-89 (1981).

n6 Turkette, 452 U.S. at 583.

n7 First Nationwide Bank v. Gelt Funding Corp., 820 F. Supp. 89, 98
(S.D.N.Y. 1993) (quoting United States v. Coonan, 938 F.2d 1553, 1560-61
(2d Cir. 1991)), aff'd, 27 F.3d 763 (2d Cir. 1994), cert. denied, 513
U.S. 1079 (1995).

n8 Schmidt v. Fleet Bank, 16 F. Supp.2d 340, 349 (S.D.N.Y. 1998).

Implicit in these statements is a further proposition: that there must be
more to an "enterprise" than simply an aggregation of predicate acts of
racketeering activity. In other words, an "enterprise" must exhibit more
structure than is inherent simply in the alleged pattern or racketeering
activity. n9 It "'cannot simply be the undertaking of the acts of
racketeering, neither can be the minimal association which surrounds
these acts.'" n10

n9 E.g., Turkette, 452 U.S. at 583; Chang v. Chen, 80 F.3d 1293, 1298
(9th Cir. 1996).

Chang v. Chen identified the Second Circuit as in the minority of
circuits that "[permits] the organization constituting the enterprise to
be no more than the sum of the predicate racketeering acts." Id. at
1297-98. In United States v. Bagaric, 706 F.2d 42, 56 (2d Cir.), cert.
denied, 464 U.S. 840 (1983), overruled on other grounds by National
Organization of Women, Inc. v. Scheidler, 510 U.S. 249, 259-60 (1994),
the Second Circuit did point to previous decisions that had upheld
application of RICO when "the enterprise was, in effect, no more than the
sum of the predicate racketeering acts." However, it went on to
characterize these holdings as common sense recognition that a group can
be identified "in terms of what it does, rather than by abstract analysis
of its structure." Id. at 56; see also Moss v. Morgan Stanley, 719 F.2d
5, 22 (2d Cir. 1983) (recognizing that the evidence offered to prove
racketeering acts and that offered to prove the existence of an
"enterprise" will not always be distinct and that a RICO "enterprise"
does not need an economic goal apart from the commission of the predicate
acts), cert. denied, 465 U.S. 1025 (1984); United States v. Coonan, 938
F.2d 1553, 1559-60 (2d Cir. 1991), cert. denied, 503 U.S. 941 (1992);
Schmidt, 16 F. Supp.2d at 349 n.5. Thus, the statement in Chang appears
to be a somewhat misleading summary of the law of this Circuit, at least
subsequent to Turkette.

n10 Stephens, Inc. v. Geldermann, Inc., 962 F.2d 808, 815 (8th Cir. 1992)
(quoting United States v. Bledsoe, 674 F.2d 647, 664 (8th Cir.), cert.
denied, 459 U.S. 1040 (1982)).

These requirements are not satisfied here. The only part of the alleged
enterprise that even approaches their satisfaction is the Eastern
European division of BNY. But a division of the defendants cannot be an
"enterprise" because the "person" sued under RICO must be separate and
distinct from the enterprise. n11 The addition of the "corrupt members of
Inkombank's senior management and Russian organized crime factions
associated with them" n12 adds nothing because there is nothing in the
complaint to suggest that the members of Inkombank's management,
organized crime factions, and BNY together formed a unit with a
structure, a hierarchy, or a continuity apart from whatever criminal acts
they allegedly committed. To construe the statute to embrace this alleged
enterprise would broaden its scope far beyond anything Congress ever
imagined. Indeed, it would read the enterprise element out of the
statute, or come perilously close to doing so, by making the association
inherent in the commission of any pattern of crimes sufficient to make
out an "enterprise." n13

n11 E.g., Discon, Inc. v. NYNEX Corp., 93 F.3d 1055, 1063-64 (2d Cir.
1996), rev'd in part on other grounds, 525 U.S. 128 (1998); Riverwoods
Chappaqua Corp. v. Marine Midland Bank, N.A., 30 F.3d 339, 344 (2d Cir.
1994). Indeed, the first amended complaint, which the Court dismissed on
this ground, alleged that the RICO enterprise was the Eastern European
division of BNY. Order, Apr. 18, 2000, at 1.

n12 Second Am. Cpt. P2.

n13 These considerations render Sumitomo Corp. v. Chase Manhattan Bank,
No. 99 Civ. 4004 (JSM), 2000 WL 1616960 (S.D.N.Y. Oct. 30, 2000), the
only case relied upon by plaintiffs on this point, unpersuasive. It is
difficult to tell from the opinion precisely what the enterprise
allegations in the complaint in that case were, so it is not entirely
clear whether the decision goes quite as far as plaintiffs suggest. In
any case, however, this Court for the reasons set it forth in the text
respectfully disagrees with any suggestion there that a common purpose to
engage in a fraudulent scheme, coupled with efforts to accomplish that
purpose, is sufficient to make the participants an "enterprise" within
the meaning of the statute.

Accordingly, the Court holds that the RICO count fails to state a claim
upon which relief may be granted.

   II. The alleged bases of subject matter jurisdiction over the
conversion and aiding and abetting claims are diversity of citizenship
and supplemental jurisdiction. As the RICO claim has been dismissed, the
Court is not obliged to exercise supplemental jurisdiction, and it
declines to do so. n14

n14 See, e.g., Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n.7
(1988) (supplemental jurisdiction ordinarily declined where federal claim
dismissed before trial); DiLaura v. Power Auth., 982 F.2d 73, 80 (2d Cir.
1992) (same).

                      Matter in Controversy

In order to exercise jurisdiction based on diversity of citizenship, the
matter in controversy, exclusive of interest and costs, must exceed $
75,000. n15 Only two of the eight plaintiffs allege claims of the
requisite magnitude. Plaintiffs nevertheless offer two theories by which
they claim this requirement is satisfied as to all plaintiffs and the
alleged class.

n15 28 U.S.C. @ 1332.

Plaintiffs contend first that the aggregate of all individual class
members' claims exceeds $ 75,000. Alternatively, they maintain that the
Court has supplemental jurisdiction over the claims of the individual
class members and of the named plaintiffs with claims below $ 75,000
based on the fact that there is diversity jurisdiction over the claims of
the two plaintiffs that exceed $ 75,000.

These contentions, as the Court held in dismissing the first amended
complaint, are without merit. Zahn v. International Paper Co. n16 held
that the claim of each individual plaintiff and class member must meet
the jurisdictional amount requirement. Nor has the enactment of Section
1367 of the Judicial Code n17 overruled Zahn. n18 Accordingly, plaintiffs
may not maintain a class action, and the conversion and aiding and
abetting claims must be dismissed as to all plaintiffs other than Onara
Partners and S&K Trust, the two plaintiffs who allege claims in excess of
$ 75,000, for want of the requisite amount in controversy.

n16 414 U.S. 291, 300-01 (1973).

n17 28 U.S.C. @ 1367.

n18 See Bernard v. Gerber Food Prods., 938 F. Supp. 218, 223-24 (S.D.N.Y.
1996); cf. Harry Winston, Inc. v. Kerr, 72 F. Supp.2d 263, 264 (S.D.N.Y.

B. Diversity

Although the parties have not raised the point, the Court's independent
obligation to inquire into its subject matter jurisdiction n19 requires
it again to raise the question whether complete diversity exists as
between the two remaining plaintiffs and the defendants. n20

n19 E.g., Fed. R. Civ. P. 12(h)(3); Filetech S.A. v. France Telecom S.A.,
157 F.3d 922, 929-30 (2d Cir. 1998) (quoting Great S. Fire Proof Hotel
Co. v. Jones, 177 U.S. 449, 453 (1900) and Mansfield C. & L. M. Ry. Co.,
111 U.S. 379, 382 (1884)).

n20 The Court previously dismissed these claims by these plaintiffs for
want of adequate allegations of citizenship. Order, Apr. 18, 2000, at 2.
The second amended complaint has added allegations.

The second amended complaint alleges that Onara Partners and S&K Trust
both are business trusts organized and existing under the laws of
Bulgaria and that the current trustee of each is a Greek citizen
domiciled in Bulgaria. n21 These allegations, however, are insufficient
to establish diversity of citizenship.

n21 Second Am. Cpt. PP26-27.

As the Supreme Court made clear in Carden v. Arkoma Associates, n22
business entities other than corporations are not treated as citizens.
n23 Rather, such an entity is regarded as a citizen of every state of
which "the several persons composing such association" is a citizen. n24
No exception has been made for business trusts. n25 In consequence, the
allegation of Bulgarian citizenship, to the extent it rests on the
alleged existence of these trusts as business entities under Bulgarian
law, is insufficient.

n22 494 U.S. 185 (1990).

n23 Id. at 188-89.

n24 Id. at 196 (quoting Great S. Fire Proof Hotel Co., 177 U.S. at 456)
(internal quotation marks omitted).

n25 See id. at 191 (rejecting the argument that Navarro Savings Ass'n v.
Lee, 446 U.S. 458 (1980), had established an exception for trusts,
stating that Navarro had not addressed "the question whether a party that
is an artificial entity other than a corporation can be considered a
'citizen' of a State").

There remains the allegation that the trustee of these alleged business
trusts is a Greek citizen domiciled in Bulgaria. In Navarro Savings
Association v. Lee, n26 the Supreme Court confronted the question whether
diversity jurisdiction of a suit by individual trustees of a business
trust might be based upon the individual citizenship of the trustees
without regard to the citizenship of the beneficiaries of the trust.
After noting that the trustees, under the declaration of trust, had the
exclusive authority to deal with trust property, free of any control by
the beneficiaries, it concluded that the trustees were real and
substantial parties to the controversy and thus "entitled to bring
diversity actions in their own names and upon the basis of their own
citizenship." n27 In this case, however, the trustee has not sued in his
own name. In any event, the complaint is devoid of allegations
establishing that he enjoys the powers that led the Supreme Court in
Navarro to conclude that the trustees in that case were entitled to bring
a diversity action on the basis of their own citizenship.

n26 446 U.S. 458 (1980).

n27 Id. at 462.

Accordingly, we are left simply with the allegation that Onara Partners
and S&K Trust are business entities organized under Bulgarian law. There
is no allegation that all of their members or beneficiaries are citizens
of states or countries other than those of which defendants are citizens.
Accordingly, the Court lacks subject matter jurisdiction over their
conversion and aiding and abetting claims.

   III. In ordinary circumstances, the Court would consider granting
these two plaintiffs leave to amend in order permit them to attempt once
again to allege the existence of subject matter jurisdiction. n28 But
there remains defendants' motion to dismiss on the ground of forum non
conveniens which, if granted, would make the existence of subject matter
jurisdiction academic.

n28 Cf. 28 U.S.C. @ 1653.

The analysis of for motions requires consideration of whether there is an
adequate alternative forum n29 and, if so, a balancing of "a series of
private and public interests in determining whether to retain the case or
dismiss it in favor of [the] alternative forum." n30 The parties lock
horns at the outset on the issue whether Russia provides an adequate
alternative forum.

n29 E.g., Piper Aircraft Co. v. Reyno, 454 U.S. 235, 254 n.22 (1981);
DiRienzo v. Philip Servs. Corp., 232 F.3d 49, 56 (2d Cir. 2000); see
American Dredging Co. v. Miller, 510 U.S. 443, 447-48 (1994); Gulf Oil
Corp. v. Gilbert, 330 U.S. 501, 506-07 (1947).

n30 Manela v. Garantia Banking Ltd., 940 F. Supp. 584, 590 (S.D.N.Y.
1996) (quoting Ioannides v. Marika Mar. Corp., 928 F. Supp. 374, 377
(S.D.N.Y. 1996)) (internal quotation marks omitted); accord, e.g.,
American Dredging Co., 510 U.S. at 448-49 (quoting Gilbert, 330 U.S. at

                   Adequacy of Alternative Forum

As the Second Circuit has explained, "[the] requirement of an alternative
forum is ordinarily satisfied if the defendant is amenable to process in
another jurisdiction, except in 'rare circumstances' when 'the remedy
offered by the other forum is clearly unsatisfactory.'" n31 Thus, "[an]
alternative forum is adequate if: (1) the defendants are subject to
service of process there; and (2) the forum permits 'litigation of the
subject matter of the dispute.'" n32

n31 Murray v. British Broad. Corp., 81 F.3d 287, 292 (2d Cir. 1996)
(quoting Piper Aircraft Co., 454 U.S. at 254 n.22)). n32 Alfadda v. Fenn,
159 F.3d 41, 45 (2d Cir. 1998) (quoting Piper Aircraft Co., 454 U.S. at
254 n.22); accord, Younis v. American Univ., 30 F. Supp.2d 390, 394
(S.D.N.Y. 1998).

Defendants' expert has submitted an affidavit explaining that Russian law
permits causes of action for conversion to proceed in Russian
"arbitration" courts -- which in reality are commercial courts -- in
order to "make the victims of such injuries whole." n33 Nevertheless,
plaintiffs contend that Russia would not provide an adequate forum for
their claims for five reasons.

n33 Stephan Decl. PP4-5, 7-9; Supp. Stephan Decl. PP2, 14.

First, they contend in substance that the Russian legal system is corrupt
and riddled with political influence, characteristics that allegedly
would be at their worst given the political sensitivity of the subject
matter of this case. n34 The Second Circuit, however, has made it clear
that " '[it] is not the business of our courts to assume the
responsibility for supervising the integrity of the judicial system of
another sovereign nation.'" n35 In reliance on this principle, it has
rejected an attack on the adequacy of the Venezuelan courts very much
like that made here. n36 Only recently, Judge Sweet on this basis
rejected a contention that the Russian courts are not an adequate
alternative forum. n37 Other district courts have reached similar
conclusions concerning other allegedly corrupt foreign judicial systems.
n38 While this Court "is not entirely unsympathetic to the trials and
tribulations that [plaintiffs] may face should their allegations about
the [Russian] judicial system turn out to be true," n39 it would be
inappropriate for it to pass judgment on that system, particularly on the
basis of the sort of broad brush, hearsay accounts upon which plaintiffs'
attack rests.

n34 Fishkin Aff. PP11-20 & Ex. C.

n35 Chesley v. Union Carbide Corp., 927 F.2d 60, 66 (2d Cir. 1991)
(quoting Jhirad v. Ferrandina, 536 F.2d 478, 484-85 (2d Cir.), cert.
denied, 429 U.S. 833 (1976)). Accord PT United Can Co. v. Crown Cork &
Seal Co., 138 F.3d 65, 73 (2d Cir. 1998).

n36 Blanco v. Banco Indus. de Venezuela, S.A., 997 F.2d 974, 981-82 (2d
Cir. 1993).

n37 Parex Bank v. Russian Sav. Bank, 116 F. Supp.2d 415, 423-24 (S.D.N.Y.

n38 Banco Latino v. Gomez Lopez, 17 F. Supp.2d 1327, 1332 (S.D. Fla.
1998) (Venezuela); Banco Mercantil, S.A. v. Hernandez Arencibia, 927 F.
Supp. 565, 567-68 (D. P.R. 1996) (Dominican Republic).

n39 Banco Mercantil, S.A., 927 F. Supp. at 567.

Plaintiffs next claim that it is doubtful that BNY maintains a sufficient
presence in Russia to be subjected to jurisdiction there. n40 This
appears to be incorrect. In any case, however, BNY has offered to consent
to jurisdiction in Moscow with respect to these claims, n41 thus removing
this objection.

n40 Kuznetsov Aff. P7.

n41 Defendants' memorandum in support of their motion to dismiss the
second amended complaint, at 22 (asserting that BNY is subject to service
in Russia and that "[even] if that were not so, the Court could condition
dismissal upon consent to Russian jurisdiction....").

Third, plaintiffs complain that there is no class action or comparable
mechanism available under Russian law and that the filing of a claim
requires payment of a state duty of 6 percent of the amount of damages
sought. n42 But the lack of a class action device is not a basis for
concluding that a foreign forum is inadequate for forum non conveniens
purposes. n43 And the state tax or filing fee, even if it might be an
obstacle to some individual claims, is insufficient to render the forum
inadequate for Onara Partners and S&K Trust, both of which claim to be
business trusts based in Bulgaria with claims in excess of $ 75,000.

n42 Kuznetsov Aff. P8.

n43 E.g., In re Lloyd's Am. Trust Fund Litig., 954 F. Supp. 656, 673
(S.D.N.Y. 1997) ("The absence of a rule providing for class actions in
the alternative forum does not render the forum inadequate.") (citing In
re Union Carbide, 634 F. Supp. 842, 852 (S.D.N.Y. 1986), aff'd as
modified, 809 F.2d 195 (2d Cir. 1987).

Fourth, plaintiffs complain that Russian civil procedure does not provide
for "meaningful" pretrial discovery. n44 But the requirement of an
adequate alternative forum requires only that some remedy exist there,
not that it be equivalent to that available here. n45 In consequence, the
unavailability of pretrial discovery -- a characteristic that Russian
civil procedure, as one of plaintiffs' experts n46 admits, shares with
"many civil code jurisdictions" n47 does not render the forum inadequate.

n44 Kuznetsov Aff. P9; Fishkin Aff. P21.

n45 See, e.g., Piper Aircraft Co., 454 U.S. at 247; PT United Can Co. v.
Crown Cork & Seal Co., 138 F.3d 65, 73 (2d Cir. 1998); Murray, 81 F.3d at
292; Younis, 30 F. Supp.2d at 394.

n46 The "expert" in fact is one of plaintiffs' counsel, hardly an
unbiased source of information.

n47 Kuznetsov Aff. P9.

n48 MLC (Bermuda) Ltd. v. Credit Suisse First Boston Corp., 46 F. Supp.2d
249, 253 (S.D.N.Y. 1999) (citing cases).

Finally, one of plaintiffs' experts expresses concern that plaintiffs,
were they to prevail in Russia, would be forced to "relitigate
substantial portions of their case before a U.S. court would honor a
Russian judgment against a U.S. bank in this matter." n49 But plaintiffs'
expert is a Russian lawyer with no discernable qualifications in U.S.
law. The Uniform Foreign Country Money-Judgments Recognition Act, which
has been adopted in New York, n50 insofar as it is relevant here, would
permit a court to refuse enforcement to a Russian money judgment only if
it concluded that the Russian legal system "does not provide impartial
tribunals or procedures compatible with the requirements of due process
of law..." n51 In view of BNY's staunch assertion here that the Russian
legal system provides an adequate alternative forum, it quite likely
would be estopped to mount such a challenge to a Russian money judgment
in this case. n52 Moreover, at least one U.S. court has recognized and
enforced a Russian custody decree. n53

n49 Kuznetsov Aff. P10.

n50 N.Y. C.P.L.R. @@ 5301-09 (McKinney 1997 & Supp. 2000).

n51 Id. @ 5304(a), subd.1.

The Act contains other grounds for non-recognition such as lack of
jurisdiction. The other grounds, however, are case specfic rather than
related to the nature of the foreign legal system. See generally id. @@
5304(a), subd. 2, 5304(b).

n52 Judicial estoppel arises where a party (1) advances a factual
position inconsistent with a position take by it in a prior proceeding,
and (2) the prior inconsistent position was adopted by the first court in
some manner. Wight v. Bankamerica Corp., 219 F.3d 79, 90 (2d Cir. 2000).
BNY probably would not be heard to resist enforcement of a Russian money
judgment in this matter on the ground that Russia does not provide
impartial tribunals and procedures compatible with due process if it
obtained a forum non conveniens dismissal here on the premise that a
Russian forum would be adequate.

n53 Bliss v. Bliss, 733 A.2d 954 (D.C. App. 1999).

In the end, given the standards that govern the determination, this Court
is persuaded Russia would provide an adequate alternative forum for the
conversion and aiding and abetting claims of Onara Partners and S&K

B. Private Interest Factors

Having concluded that Russia is an adequate alternative forum, the Court
turns to the so-called "private interest factors," first among them being
the oft-stated principle that a plaintiff's choice of forum is entitled
to substantial deference and should not be disturbed lightly. n54

n54 E.g., Koster v. Lumbermens Mut. Cas. Co., 330 U.S. 518, 524 (1947);
Gilbert, 330 U.S. at 508; DiRienzo v. Philip Servs. Co., 232 F.3d 49,
56-57, 60 (2d Cir. 2000).

                  Plaintiff's Choice of Forum

Although a plaintiff ordinarily enjoys a presumption in favor of the
plaintiff's choice of forum, the presumption is substantially weaker
where, as here, foreign plaintiffs choose an American forum. n55 Further,
the Russian courts already have provided a representative to act on
behalf of Inkombank. n56 Accordingly, the fact that a handful of
Inkombank depositors have chosen a U.S. forum in an effort to recover
losses that in the first instance, at least, were inflicted on Inkombank
itself is entitled to little deference. n57

n55 Piper Aircraft Co., 454 U.S. at 255-56; Alfadda, 159 F.3d at 46; PT
United Can Co., 138 F.3d at 74; Ioannides, 928 F. Supp. 374, 378
(S.D.N.Y. 1996).

n56 Stephan Decl. P13.

n57 See, e.g., In re Union Carbide, 809 F.2d 195, 202 (2d Cir. 1987).

               Other Private Interest Factors

The remaining private interest factors include such matters as the
relative ease of access to sources of proof, availability of compulsory
process for attendance of unwilling, and the cost of obtaining the
attendance of willing, witnesses, and other practical considerations that
make trial of a case easy, expeditious and inexpensive. n58

n58 Gilbert, 330 U.S. at 508; Manela v. Garantia Banking Ltd., 940 F.
Supp. 584, 591 (S.D.N.Y. 1996).

The central claim in this case is that Inkombank executives, other
Russian figures, and a few BNY employees systematically looted
Inkombank's assets, transferred the money overseas through BNY, and thus
caused Inkombank to fail and the plaintiffs to lose their deposits. n59
Thus, while records of and a few witnesses knowledgeable about BNY's
alleged activities in transferring money out of Russia will be found
outside Russia, a vast quantity of documents and virtually everyone
knowledgeable about the alleged looting of Inkombank and the reasons for
its collapse are in Russia. This evidence, moreover, presumably is in the
Russian language, and the witnesses, if they testify, probably would do
so in Russian. Further, while plaintiffs claims that they lost their
entire deposits, Inkombank currently is involved in Russian proceedings
similar to bankruptcy in which depositors may be repaid, at least in

n59 Second Am. Cpt. PP2, 11, 13, 43.

The litigation of this case will present difficulties wherever it occurs.
But it seems clear that the degree of difficulty would be substantially
greater here than in Moscow. This Court has no ability whatever to compel
the production of documents or witnesses from Russia, which appears to be
the locus of all or substantially all of the evidence concerning the core
issues in the case -- whether Inkombank was looted and why it collapsed.
Such evidence as it might obtain on that issue presumably would be in
Russian. And while a Russian court too would face difficulties, the
critical difference is that BNY would be subject to compulsory process in
Russia. Thus, a Russian court would have access to evidence concerning
both aspects of this case -- the alleged looting and BNY's alleged
laundering of the money -- whereas this Court would have access to
evidence concerning only the latter. In these circumstances, the private
interest factors weigh decidedly in defendants' favor.

                    Public Interest Factors

As laid out in Gilbert, the public interest factors are as follows:

     "[factors] of public interest also have place in applying the
doctrine. Administrative difficulties follow for courts when litigation
is piled up in congested centers instead of being handled at its origin.
Jury duty is a burden that ought not to be imposed upon the people of a
community which has no relation to the litigation. In cases which touch
the affairs of many persons, there is reason for holding the trial in
their view and reach rather than in remote parts of the country where
they can learn of it by report only. There is a local interest in having
localized controversies decided at home. There is an appropriateness,
too, in having the trial of a diversity case in a forum that is at home
with the state law that must govern the case, rather than having a court
in some other forum untangle problems in conflict of laws, and in law
foreign to itself." n60

n60 Gilbert, 330 U.S. at 508-09.

This at root is predominantly a Russian affair. A few depositors of a
Russian bank, most of them located in Russia, claim that the Russian
principals of the bank, joined by a handful of BNY employees, engaged in
activity in Russia to convert the plaintiffs' deposits and then to ship
the money out of the country. They claim that a key part of this activity
was the infiltration of the bank by Russian organized crime. n61
Moreover, while the United States has an obvious and strong interest in
ensuring the proper functioning of U.S. banks, that interest is being
addressed directly by both the criminal prosecutions and investigation in
this district and, presumably, by U.S. bank regulators. This is a private
dispute about monetary loss allegedly suffered by depositors in a Russian
bank. There is little justification for imposing it on U.S. courts and

n61 Second Am. Cpt. PP13, 46-50.

The fact that there are shareholder derivative actions brought on behalf
of BNY proceeding in this and a New York State court n62 does not alter
this conclusion, as plaintiffs have claimed. BNY is an American company
with no doubt predominantly American shareholders. Its board, the actions
of which are at issue in the derivative suits, functioned here. There is
a strong public interest in the adjudication here of the issues of
corporate responsibility these cases raise. Moreover, while there
certainly is overlap in the issues presented in this case and those, that
fact does not get plaintiffs where they wish to go. The derivative courts
no doubt will have serious difficulty in obtaining and understanding
evidence from Russia. In view of the lack of a better forum for those
suits and the public interest in resolving them here they have no choice
but to do their best in difficult circumstances. But this Court has a
choice, and the public interest at play in the derivative suits is absent

n62 In re Bank of New York Deriv. Litig., Nos. 99 Civ. 9977 & 10616 (DC),
2000 WL 1708173 (S.D.N.Y., Nov. 14, 2000); Katz v. Renyi, N.Y. Co. Index
No. 604465/99.

This view is buttressed by the fact that the burden of this litigation
would be quite substantial. The Court already has noted that a good deal
of the evidence almost undoubtedly is in Russian. But that is not all.
Were this Court to entertain this action, it almost certainly would be
compelled to apply Russian law. n63 As is evident from a comparison of
the conflicting submissions by the parties' experts on the issue of
whether plaintiffs' claims actually belong only to Inkombank, as would be
true if it were an American bank, or may be sued upon by plaintiffs
themselves, n64 the determination of Russian law on the array of legal
questions likely to arise in adjudicating the propriety of the
transactions by which plaintiffs claim that Inkombank was looted would be
a daunting task indeed. To paraphrase this Court's statement in Younis v.
American University, "it would be far more desirable for the courts of
[Russia] to decide the [Russian] law issues presented," which "could
degenerate [in this Court] into little more than swearing contests
between the parties' [Russian] lawyers." n65 n63 This is a diversity
case, so the Court must apply the choice of law rules of New York, the
forum state. Klaxon v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941).
Conversion claims are governed by the law of the state having the most
significant relationship to the tort. E.g., Hoelzer v. City of Stamford,
722 F. Supp. 1106, 1122 (S.D.N.Y. 1989), aff'd, 933 F. 2d 1131 (2d Cir.
1991), cert. denied, 506 U.S. 1035 (1992); see Sofitel, Inc. v. Dragon
Med. & Scientific Communications, Inc., 118 F.3d 955, 967 (2d Cir. 1997),
cert. denied, 523 U.S. 1020 (1998). As Russia has the most significant
relationship with the alleged looting of a Russian bank, Russian law
doubtless would govern at least a substantial part of the case.

n64 Kuznetsov Aff. P3; Fishkin Aff. PP6-7; Supp. Stephan Aff. PP2-9.

n65 30 F. Supp.2d at 396.

In sum, this Court holds that Russia is an adequate alternative forum for
this dispute. It concludes further that public and private factors
favoring litigation in Russia over litigation here overcome the
relatively modest deference due to the choice of this forum by a small
number of foreign depositors of a Russian bank.

   IV. For the foregoing reasons, defendants' motion to dismiss the
complaint is granted. The dismissal of the RICO claim is on the merits.
In view of plaintiffs' two previous opportunities to amend in order to
state a legally sufficient RICO claim, the dismissal is without leave to
amend. The conversion and aiding and abetting claims of all plaintiffs
are dismissed for lack of subject matter jurisdiction. While the Court in
other circumstances would grant Onara Partners and S&K Trust leave to
amend yet again to allege subject matter jurisdiction, leave is denied
here because their conversion and aiding and abetting claims are
dismissed on the alternative ground of forum non conveniens provided that
defendants, on or before March 28, 2001, file a document with the Clerk
(a) consenting to the exercise of personal jurisdiction over them by the
Russian arbitration court in Moscow, and (b) representing that they will
not assert or rely upon the passage of time from the date of commencement
of this action to and including May 28, 2001 by way of defense based in
whole or in part on the timeliness of an action by those plaintiffs, in
each case on the conversion and aiding and abetting claims asserted in
the second amended complaint herein. Upon the filing of said document,
the Clerk shall enter final judgment and close the case. (New York Law
Journal, April 6, 2001)

BROADVISION INC: Milberg Weiss Files Securities Lawsuit in California
Milberg Weiss (http://www.milberg.com/broadvision/)on April 17 announced
that a class action has been commenced in the United States District
Court for the Northern District of California on behalf of purchasers of
BroadVision Inc. ("BroadVision") (NASDAQ:BVSN) common stock during the
period between Jan. 26, 2001 and April 2, 2001 (the "Class Period").

The complaint charges BroadVision and certain of its officers and
directors with violations of the Securities Exchange Act of 1934.
BroadVision develops, markets and supports application software solutions
designed for one-to-one relationship management across extended
enterprises. These solutions are intended to enable businesses to use the
Internet as a platform to conduct electronic commerce, provide online
customer self-service, deliver targeted information to constituents, and
provide online financial services. The complaint alleges that by late
2000, BroadVision's stock price had declined significantly due to reduced
demand for its products and slowing sales. By the time BroadVision
reported its results for the 4thQ 00 on 1/25/01, BroadVision's CEO and
CFO were aware that the Company was suffering from a horrendous
combination of declining demand and out of control expenses. They also
knew BroadVision's new version of its One-to-One Enterprise product
(Version 6.0), due to be released in the 1stQ 01, did not meet most of
the specifications of J2EE standards, which would reduce demand for this
new product and further impact BroadVision's future results. The
complaint further alleges that defendants knew these conditions would
severely impair BroadVision's future revenue growth and impair their
ability to make future stock sales and extract future bonuses which were
tied to the Company's performance. Thus, defendants continued to make
positive but false statements about BroadVision's business and future
revenues when reporting BroadVision's 4thQ 00 results. As a result,
BroadVision's stock traded as high as $15-3/16 during the Class Period.

Then, on 4/2/01, after the close of market, BroadVision announced its
preliminary 1stQ 01 results, the revision of its previously reported 4thQ
00 results and a one-time charge in the 2ndQ 01. This disclosure shocked
the market, causing BroadVision's stock to decline to $2-13/16 per share
before closing at $2-31/32 on 4/3/01, inflicting hundreds of millions of
dollars of damage on plaintiff and the Class.

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

BROADVISION, INC: Kaplan, Kilsheimer Files Securities Suit in California
Kilsheimer & Fox LLP (www.kkf-law.com) has filed a class action against
BroadVision, Inc. and certain of the Company's officers and directors in
the United States District Court for the Northern District of California.
The suit is brought on behalf of all persons or entities who purchased
the common stock of BroadVision, Inc. ("BroadVision") (NASDAQ: BVSN)
between January 26, 2001 and April 2, 2001 inclusive (the "Class

The complaint charges BroadVision and certain of its officers and
directors with violations of the Securities Exchange Act of 1934.
BroadVision develops, markets and supports application software solutions
designed for one-to-one relationship management across extended
enterprises. The complaint alleges that by late 2000, BroadVision's stock
price had declined significantly due to reduced demand for its products
and slowing sales. By the time BroadVision reported its results for the
4thQ 00 on 1/25/01, BroadVision's CEO and CFO were aware that the Company
was suffering from a combination of declining demand and out of control
expenses. Furthermore, they knew that BroadVision's new version of its
One-to-One Enterprise product (Version 6.0), due to be released in the
1stQ 01, did not meet J2EE standards. This would reduce demand for this
new product and further impact BroadVision's future growth and impair
their ability to make future stock sales and extract future bonuses,
which were tied to the Company's performance. Thus, defendants continued
to make positive but false statements about BroadVision's business and
future revenues when reporting the Company's 4thQ 00 results. As a
result, BroadVision's stock traded as high as $ 15 3/16 during the class

On 04/02/01, after the close of market, BroadVision announced its
preliminary 1stQ 01 results, the revision of its previously reported 4thQ
00 results and a one-time charge in the 2ndQ 01. For the fourth quarter,
BroadVision restated downwards its pro-forma earnings per share by 50%,
from $0.02 to $0.01. This disclosure shocked the market, causing
BroadVision's stock to decline to $2 13/16 per share before closing at $2
31/32 on 4/3/01, inflicting hundreds of millions of dollars of damage on
plaintiff and the Class. In addition, BroadVision's CFO sold 30,000
shares of his BroadVision stock before the bad news was revealed to the

Contact: Kaplan, Kilsheimer & Fox LLP, New York Robert Kaplan, Esq. Hae
Sung Nam, Esq. Adam Walsh, Esq. (800) 290-1952 (212) 687-1980

CLICKSHIP DIRECT: Former Workers Sue E-Commerce Firm in MN over Lay-off
Four former employees of ClickShip Direct are suing the e-commerce firm,
saying it improperly laying off about 150 workers. ClickShip Direct is a
subsidiary of Damark International.

In a lawsuit filed Tuesday in Minneapolis federal court, the former
ClickShip employees allege that Brooklyn Park-based Damark broke federal
law by not giving them at least 60 days notice of their layoffs. The
lawsuit, which seeks certification as a class-action case, claims
ClickShip told workers on Jan. 30 they would be laid off on March 31, but
then cut the notice period by nearly five weeks, laying them off
effective Feb. 24.

Damark's chief financial officer, Kim Mageau, said that her company
denies any liability, but wouldn't address specific questions on the
advice of company lawyers. Damark, now known as Provell, said in February
it would be closing ClickShip for the next two years because of financial
troubles and a collapsed dot-com market.

Under the federal Worker Adjustment and Retraining Notification Act,
companies are supposed to give employees 60 days' notice of layoffs. The
so-called WARN Act applies to companies with more than 100 workers and
requires notice for any plant closings or layoffs that affect more than
50 people.

The federal law's notice period is intended to "cushion the shock of mass
layoffs," said Seymour Mansfield, an attorney for the ClickShip workers.
But officials with the Minnesota Dislocated Workers program said workers
are often left to file lawsuits in a bid to enforce the WARN act since no
federal agency is responsible for administering that law.

Paul D. Moe, director of the state Dislocated Workers Program, added that
the WARN Act has several loopholes for employers, including an allowance
that excuses them from giving layoff notices in cases of unforeseen
business circumstances. "The law looks like a crocodile from a distance.
But when it gets closer it gums you," Moe said.

In more and more cases, employers simply don't comply with the WARN Act
even when they don't qualify for an exemption, according to Moe and his
staff. They blamed that trend partly on the nation's low unemployment
rate that has made some companies more prone to keep employees "in a
holding pattern" while deciding if they need to cut their work forces.

In other cases, companies with multiple plant locations may be reluctant
to file a WARN notice about layoffs in one state for fear of agitating
workers at plants at other locations where there are no layoffs, Moe

In the case of ClickShip Direct, employees knew since December they might
face layoffs when the company said it would either sell the online
fulfillment business or close it down.

But Doug Bley, one of the ClickShip plaintiffs, said he and other
employees expected to work through March 31 after the company filed its
WARN notice on Jan. 30. Workers were "stunned and surprised" when they
reported for work on Monday, Feb. 26, and told they had been laid off
effective Saturday, Feb. 24, he said.

"I thought it (the layoffs) would be handled with more dignity and
honor," Bley, 40, a former director of customer care, said in an
interview. "We received no outplacement. No severance. Nothing." Bley and
the other plaintiffs are suing ClickShip to recover lost wages and
benefits for the five weeks they were laid off before the end of the
60-day notice period.

The lawsuit also accuses ClickShip for breach of contract in failing to
pay annual incentive bonuses to employees that came due on Feb. 28. The
suit alleges that employees met two of three performance goals for
bonuses. (Saint Paul Pioneer Press, April 18, 2001)

FLEETBOSTON FINANCIAL: CEO Makes Customer-Friendly Vows at Annual Mtg.
Angry protestors and declining profits could have marred the annual
meeting of FleetBoston Financial Corp. on April 17, the last time
Terrence Murray addressed shareholders as the company's chief executive.

But thanks to a few well-placed, customer-friendly vows by Murray, and
the continued prosperity of some shareholders, the CEO ended up earning a
standing ovation. Murray is expected to retire at the end of the year,
handing the reigns to Charles Gifford, president and chief operating

The meeting didn't start out so upbeat. In the hour before, about 100
consumer advocates and Fleet customers in yellow "loan shark" T-shirts
toted anti-Fleet signs and hurled insults at the doorstep of the meeting
at the World Trade Center. Their claim: that the bank invades customer

The protests stem from a December lawsuit filed by the Minnesota attorney
general. The suit alleges that Fleet Mortgage shared personal customer
information with telemarketers and participated in deceptive programs to
charge fees to consumers. Fleet Mortgage is in the process of being sold
to Washington Mutual of Seattle.

"They set the standard in predatory lending, stealing people's homes.
Then they set the standard with predatory fees, they're the highest fees
in the country. Now they are going to be known as the number-one
predatory privacy invasion bank," said Bruce Marks, chief executive of
Neighborhood Assistance Corporation of America, a consumer watchdog group
and long-time thorn in FleetBoston's side.

The group, also called NACA, is following Minnesota's lead and
considering a class action lawsuit against FleetBoston.

NACA's mission was to be heard inside the annual meeting, and to have
Murray respond to their complaints. They accomplished both. At the
meeting, they served Fleet with a demand letter giving the company 30
days to change its policy and make customers whole. Specifically, they
are seeking $ 1,000 per customer per unauthorized information release.

In the bank's defense, Murray said FleetBoston has not participated in
such programs in almost two years. "In '99 and before, there were sales
of lists. Those sales have stopped," Murray said, drawing applause. "We
have stated that we will not sell or share any information with a third
party without direct authorization from the consumer."

The pledge fit tongue-and-groove with promises by FleetBoston to become
more "customer-centric" and apply lessons learned from the "pitfalls of
integrating two major financial institutions," namely, Fleet and

In that context, the company also said it would not be pursuing major
acquisitions this year. "It's critical that we create an environment in
which we demonstrate that we are easy to do business with," said Gifford.
"That we care about each customer, are responsive to his or her concerns,
and solve problems quickly."

After the meeting, Murray said FleetBoston would take NACA'S demand
letter seriously "to the extent that there are any valid issues raised,
we are obligated to look into it."

The Minnesota suit charges that Fleet Mortgage and telemarketers led
customers to believe they were receiving free trial memberships to clubs
that offered discounts on services such as lawyer fees and auto services.
Customers' mortgage accounts were charged if they did not opt out of the
programs in 30 days.

One Fleet Mortgage customer at the meeting held up her monthly mortgage
statement, which included a $ 12.95 charge for "optional products." "I
have no idea what the services are for," said the customer, Angela Perry,
of Roxbury, Mass.

The hubbub might have overshadowed a cloudy earnings report.

New England's largest bank delivered on earlier warnings of lower profits
and said its first quarter net earnings fell to $ 142 million, or 12
cents a share, from almost $ 1.1 billion, or 97 cents a share, in the
previous year's quarter.

The recent quarter includes $ 725 million in charges related to corporate
restructuring, including merger costs stemming from the acquisition of
Summit Bancorp and a loss from the sale of Fleet Mortgage. The 2000
quarter included $ 150 million in gains from the sale of properties to
Sovereign Bancorp.

Excluding the charges and gains, FleetBoston's earnings were $ 870
million, or 79 cents a share, compared with $ 927 million, or 84 cents a
share, a year before.

The bank saw a $ 400 million decline in its investment banking
businesses. "Clearly the halcyon days of the 1990s are over," said Chief
Financial Officer Eugene McQuade. But, he added, "The balanced,
diversified franchise that we put together did a good job in weathering
the storm."

Shares in FleetBoston declined 79 cents on April 17, to close at $ 38.21.

After the meeting, Marks and his associates seemed more diplomatic about
FleetBoston's intentions. "It really does not sound like there's a need
to move toward litigation if the words out of Mr. Murray's mouth were in
fact genuine," said the Rev. Graylan Hagler, development director of

But NACA is not about to hang up its gloves. If Fleet does not respond,
Marks said the group will pursue class action status.

They might not stop there. NACA said it has also gathered personal
information on Murray, including Social Security, boat license and gun
registration numbers. They are keeping the information private for now,
but will "reconsider" Marks said, if FleetBoston does not change its
practices. (Providence Journal-Bulletin, April 18, 2001)

FLEETBOSTON FINANCIAL: Group Wages Suit over Mortgageholders' Privacy
Neighborhood Assistance Corp. of America, a consumer watchdog group,
threatened during FleetBoston Financial Corp.'s annual shareholder
meeting Tuesday to sue it, asserting that its mortgage unit deceived
borrowers. then gave FleetBoston officials a letter of demand saying that
Fleet Mortgage had violated the privacy of its mortgageholders by selling
information such as mortgage account numbers and loan balances to

The telemarketers, NACA asserts, then induced borrowers to buy services
they had not had explained to them or charged for services without their

The Boston law firm Adkins, Kelston & Zavez is representing five
plaintiffs named in NACA's letter, which states that if Fleet fails to
change its consumer privacy policies and make restitution within 30 days,
the plaintiffs will file a class action.

"We're initiating legal action today, setting forth the allegations as to
the wrongdoing and establishing the relief," said attorney Jason Adkins.
"We're looking forward to getting expedited resolution, and if not, we're
ready for a prolonged class-action litigation battle."

The threatened action comes after Minnesota Attorney General Mike Hatch
sued Fleet on behalf of mortgageholders in his state. Mr. Marks said the
New England suit is being developed because the Minnesota lawsuit does
not cover Fleet mortgageholders outside the state.

A Fleet spokeswoman said, however, that soon after Mr. Hatch's suit was
filed, a separate suit was filed in Minnesota covering borrowers
nationwide. The NACA protest is "a typical tactic that Bruce uses -- he
likes publicity," she said. "Every year it's a different issue, but his
aim is the same. He is looking for money for his program." (The American
Banker, April 18, 2001)

GENERAL MOTORS: Truck Owners To Get Compensation For Faulty Fuel Systems
Ending years of legal stalemate, General Motors Corp. said it will begin
mailing notices today to current and former owners of 5.8 million older
pickups who quality for discounts of $ 250 to $ 1,000 on new GM vehicles
as part of a massive class-action settlement.

The coupon offer is the centerpiece of a long-delayed settlement of suits
filed in 1992 that claimed defective fuel systems made millions of GM
trucks more prone to catching fire or exploding in collisions.

Instructions on ordering discount coupons are being sent to owners of GM
C/K pickups, model years 1973-86, and R and V model pickups built from
1987-91. Only those who owned the trucks in July 1996, when the agreement
was completed, are eligible.

The settlement, approved by a Louisiana state court, is believed to be
the largest in an automotive case in terms of the number of class-action
members. But the cost to GM of honoring the discounts could range from
less than $ 100 million to over $ 1 billion, depending on how many
coupons are redeemed.

GM, which did not admit liability, also is required to provide $ 4.1
million for research on reducing the risk of vehicle fires.

The agreement allows class-action members to claim a discount of $ 1,000
on a new GM car or truck on top of other rebates or incentives. However,
if the coupon is transferred to a third party, its value will drop to $
250, or to $ 500 when no other discount is offered on a vehicle.

Although the basic terms of the settlement were set five years ago,
bickering over transferability of the coupons continued until recently.
The transfer rules are crucial because they determine how many
class-action members will benefit as well as the total value of
certificates GM will have to redeem.

Such coupon settlements have come under criticism in the past, in part
because relatively few class-action members have been in a position to
take advantage of a coupon offer. In this case, probably only a fraction
of those who qualify will purchase a new GM vehicle for a $ 1,000 cut in

As a result, plaintiffs' lawyers and consumer groups have sought to
create a secondary market for the certificates, sparking a conflict with
GM and delaying implementation of the deal.

A new business, Certificate Redemption Group, has been established to buy
and resell the coupons of class-action members who can't use them and
have no other market. James Dawley, a former insurance man who runs CRG,
says the firm will pay $ 100 for coupons, with the intention of offering
them for $ 150 to $ 200 apiece to buyers such as fleet operators, leasing
firms and dealers, who may be able to use the coupons as incentives to
close a sale.

Dawley said a new Web site explaining the offer will start up Thursday at
http://www.certificatedepot.com,adding that information also will be
available to those calling (800) 317-4997.

How many class-action members take advantage will depend on "how many
hoops they have to jump through," said Fabrice Vincent of Leiff,
Cabraser, Heimann & Bernstein, one of the plaintiffs' law firms.

Plaintiffs' attorneys had hoped to simplify the process by allowing
class-action members to call an 800 number to have their certificates
transferred to CRG. But GM insisted on following to the letter the
agreement that the discount coupons be issued to class-action members.

This means that those wishing to transfer their coupons must go through
some red tape. First, they will have to mail in claim forms to get their
certificate. Then they will have to send a request to transfer ownership
of their coupon to a third party, such as an individual or CRG. The
certificates were meant "to encourage and provide consideration for
people who actually own these trucks to be able to get $ 1,000 toward a
new vehicle," said GM lawyer Lee Schutzman. The purpose was not "to get
someone else to use the coupons so they can derive money" from them.

A series of class-action suits were filed after claims that the placement
of the fuel tanks outside the protective frame rails of the trucks had
resulted in scores of serious injuries and deaths from post-collision
fires. GM built more than 9 million of the full-size pickups with the
side-saddle fuel tank design from 1973-87 and used the design on a much
smaller number of R and V model trucks through the '91 model year.

The lawsuits coincided with a major investigation by the National Highway
Traffic Safety Administration of the fuel system design. The NHTSA
concluded in 1994 that the trucks did have an elevated fire risk, but
rather than recall them, it reached a $ 51 million settlement with GM.
(os Angeles Times, April 18, 2001)

HUMPHREY HOSPITALITY: Wolf Haldenstein Announces Securities Suit in VA
Wolf Haldenstein Adler Freeman & Herz LLP commenced a class action
lawsuit in the United States District Court for the Eastern District of
Virginia on behalf of all purchasers of Humphrey Hospitality Trust, Inc.
(NASDAQ: HUMP) securities during the period from November 14, 2000
through March 29, 2001 ("Class Period") against Humphrey, Paul J. Schulte
(Chairman, Chief Executive Officer, and a Director of the Company), James
I. Humphrey, Jr. (Vice-Chairman, President/Chief Operating Officer,
Treasurer and a Director of the Company), and Steven H. Borgmann
(Executive Vice President, Secretary, and a Director of the Company). The
case is styled Gaines v. Humphrey Hospitality Trust, and is numbered
01-588-A. If you would like to view a copy of the complaint filed in this
action, please visit the Wolf Haldenstein web site located at

The complaint alleges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market during the Class Period, thereby
artificially inflating the price of Humphrey securities. According to the
complaint, Humphrey is a self-administered real estate investment trust
("REIT"). As of December 31, 2000 owned 92 existing limited service
hotels (the "Hotels") and one office building. The Hotels (containing
approximately 6,400 rooms in 19 states) and office building are leased to
Humphrey Hospitality Management, Inc. and its subsidiary Supertel
Hospitality Management, Inc. (the "Lessee").

Specifically, the complaint alleges that defendants conditioned the
market to believe in the strength of Humphrey's financial condition, and
that Humphrey's conservative fiscal policies meant that its dividend was
secure. The complaint further alleges that on March 29, 2001, the Company
shocked the market by announcing that its Lessee advised that, without a
substantial reduction in the rent, it would be unable to lease and
operate the hotels; and that the Board of Directors had established "a
committee of independent directors" to "explore alternatives available to
the (Company)". Humphrey also announced that it's dividend would be
reduced for monthly payments subsequent to those payable to shareholders
of record on March 30, 2001. Humphrey common stock opened at $ 7.0938 per
share on March 29, 2001 and closed that day at $4.7812 that day on volume
of 217,200 shares, approximately seven times its average volume.

Contact: Wolf Haldenstein Adler Freeman & Herz LLP Michael Miske/George
Peters/Lawrence P. Kolker, Esq. 800/575-0735 classmember@whafh.com

INMATES LITIGATION: Get-Tough Tactics under Fire after Riot at Dartmouth
Bristol County Sheriff Thomas Hodgson's get-tough tactics are under fire
again after an Easter riot at the Dartmouth House of Correction.

"I think his taking away of all privileges - exercise, reading
privileges, library privileges, telephone privileges ... is lighting the
fuse to a bomb," said Greta Janusz, a lawyer who represents inmates suing
Hodgson for conditions at the jail.

Officials at the medium-security jail on Monday said they are still
uncertain what started the melee. But by the time it was over, three
guards were hurt, nearly 300 inmates had been transferred to other
facilities and a four-cellblock area of the jail was heavily damaged.

Hodgson said the rioting inmates will face criminal charges. "They are
going to be dealt with swiftly, and we are going to bring charges as
quickly as possible," he told the Boston Herald, adding that the he'll
also seek restitution for destroyed property.

Hodgson, who was appointed in 1997 after the resignation of David Nelson,
won election to the post in 1998 on a platform of hard-line reforms,
including banning smoking and weightlifting, and removing televisions
from cells. But he raised the ire of civil rights groups when he
reinstituted chain gangs, prison work crews with shackles and chains.

Inmates and their families have complained bitterly about Hodgson. In
1998, conditions at the Dartmouth House of Correction and the Ash Street
jail in New Bedford prompted a class-action lawsuit by inmates who said
they were denied showers, exercise, access to visitors and their lawyers.

The lawsuit is pending in Suffolk Superior Court.

Hodgson has also been sued by five corrections officers who claim that
Hodgson has harassed and retaliated against them because of union
activities, or for backing other candidates for sheriff. The five, all
active in the Massachusetts Corrections Officers Federated Union, claim
they were suspended following Nov. 24 picketing in protest of Hodgson's
treatment of officers. Hodgdon has denied the allegations and said the
suspensions have nothing to do with union activities. Corrections
officers have about 50 complaints pending against Hodgson, mostly related
to collective bargaining issues.

Hodgson has repeatedly defended his tough tactics, saying jail should not
be a comfortable place. On Monday, he scoffed at the suggestion that his
approach may have frustrated inmates to the point of rioting. "Things
have been running great here," he said. "I made these changes almost 2
1/2 years ago, and to suggest that on a given day that a group of inmates
decided to make a statement ... I think is absolutely ridiculous."

Hodgson, a Republican in heavily Democratic Massachusetts, has indicated
he has higher political aspirations.

His critics accuse him of using his tough stance on inmates for political
purposes. "He seems to be running (the jail) to make political points
rather than to rehabilitate inmates and to make it a safe place for staff
and for inmates," said Doug Salvesen, a lawyer for the inmates suing

But Hodgson's supporters say his no-nonsense approach may be responsible
for quickly bringing Sunday's disturbance under control.

One guard suffered a back injury when he was taken hostage by an inmate
armed with a screwdriver and was tied to a bunk in the cell. Several of
the approximately 70 inmates holding the guard demanded to speak to the
media, but Hodgson said he refused to negotiate. He sent in a tactical
team armed with shields, clubs and eight police dogs to restore order.
Two other guards received minor injuries. About 270 inmates who were in
the area of the uprising were transferred to other jails as soon as the
disturbance was quelled. "I think he has taken a situation that could
have turned into a disaster, and he stopped it without (serious) injury
or loss of life in about an hour, which is remarkable," said Ian Bayne,
chairman of the Massachusetts Republican Society. HUD, COUNTY: To Pay
Residents' Lawyers $550,000 in Sanders Bias Case (The Associated Press
State & Local Wire, April 17, 2001)

JOHNSON & JOHNSON: Agrees to Pay up to $860M to Settle Acuvue Lens Suit
Johnson & Johnson, maker of Acuvue contact lenses, has agreed to pay up
to $ 860 million to settle complaints that the New Brunswick health-care
company instructed consumers to throw away one-day lenses that could have
been worn up to 14 days.

Company documents included in the suit indicate that Acuvue and 1-Day
Acuvue lenses are the same product.

An estimated six million contact lens wearers unnecessarily spent $ 1.1
billion since 1994 because of misleading advertising and packaging,
according to a suit filed by consumers in 1996 in New Jersey Superior
Court in Camden.

A preliminary hearing on the proposed settlement is scheduled for Friday
before New Jersey Superior Court Judge John Fratto. If approved, the
settlement would require the company to set up toll-free telephone
numbers and Internet sites to advertise how consumers could apply for

A Johnson & Johnson spokesman, Jeff Leebaw, said the company had agreed
to settle the suit only to put the issue behind it.

He said company officials did not think that the number of claims would
approach the maximum estimate. And whatever settlements are paid out are
expected to be immaterial to the company, which last year had sales of $
29 billion, Leebaw said.

Product labeling said Acuvue lenses could be worn for two weeks, while
the Day version needed to be thrown out at the end of the day. The 1-Day
lenses cost one-fifth as much as the Acuvue lenses, according to court

"Johnson & Johnson, despite having one of the most prestigious names in
the consumer products business, went far astray in this situation and
allowed marketing people to get the better of the organization's ethical
creed," said Jay Eisenhofer, a Wilmington lawyer who represented
consumers in the class-action lawsuit.

Meanwhile, Johnson & Johnson announced yesterday a better-than-expected
earnings increase of 14 percent over the first quarter last year, driven
by sales of its anemia drug, Procrit. Revenue rose 6.5 percent in the
quarter to $ 7.8 billion.

Shares of Johnson & Johnson closed up $ 1.85 at $ 94.45 yesterday on the
New York Stock Exchange.

According to terms of the proposed Acuvue settlement, the average
consumer had bought 20 boxes of the lenses since 1994, and would be
eligible for compensation of $ 140: $ 60 in cash, $ 60 worth of coupons
for more lenses, and a $ 20 payment toward the patient's next eye

Because they paid more for the same product, only users of Acuvue lenses,
not Day Acuvue, would be eligible to participate in the settlement. To
receive compensation, consumers would have to provide proof that they had
purchased the lenses.

Johnson & Johnson also agreed to remove the words "disposable" and "for
single use" from the 1-Day Acuvue box.

In addition, the settlement includes attorneys' fees of up to $ 20
million. (The Philadelphia Inquirer, April 18, 2001)

NY CITY: Submission of Galvin Stipulation Does Not Obviate Need for Cert
In a suit brought by alleged victims of unlawful police stops against the
City of New York, the Mayor, New York City Police Commissioner and named
police officers, defendants moved for reconsideration of an Opinion and
Order dated Jan. 25, 2001, certifying a Rule 23(b)(2) class. In support
of their motion, defendants submitted a "Galvan Stipulation," indicating
that they would apply the court's declaratory and injunctive rulings "to
all persons similarly situated to the named plaintiffs." The court denied
the motion. It said that class certification was still necessary. The
court explained that discovery would be arguably more limited in the
absence of a class and that plaintiffs' counsel would not be able to
conduct privileged communications with class members. Also, legitimate
concerns over the scope of relief that could be awarded in the absence of
class certification were noted.

Judge Scheindlin

DANIELS v. CITY OF NEW YORK -- Defendants have moved for reconsideration
of an Opinion and Order dated January 25, 2001 certifying a Rule 23(b)(2)
class in the above captioned case. See Daniels v. City of New York, 198
F.R.D. 409 (S.D.N.Y. 2001). In support of this motion, defendants have
submitted a so-called "Galvan Stipulation" stating that "[defendants] the
City of New York, Mayor Rudolph Giuliani, New York City Police
Commissioner Bernard B. Kerik and Detective Anthony Curtin will apply the
Court's declaratory and injunctive rulings in the above-captioned action,
to all persons similarly situated to the named plaintiffs." See January
31, 2001 Stipulation of Defendants the City of New York, Mayor Rudolph
Giuliani, New York City Police Commissioner Bernard B. Kerik and
Detective Anthony Curtin, Ex. A to the Declaration of Heidi Grossman,
Assistant Corporation Counsel, in Further Support of Defendants' Motion
for Reconsideration ("Grossman Decl."), P1. For the following reasons,
which became apparent during a February 8, 2001 court conference, this
Stipulation does not obviate the need for class certification.
Accordingly, defendants' motion for reconsideration is denied.

The Stipulation does not render class certification a mere formality for
three main reasons. First, discovery would be arguably more limited in
the absence of a class. In the past, defendants have resisted redacting
the names of nonparty Street Crime Unit officers, in part, because there
was no class certification. See Transcript of August 15, 2000 Court
Conference, Ex. C to the Affirmation of Jennifer R. Cowan, plaintiffs'
attorney ("Cowan Aff."), at 18. Until recently, defendants have also
objected to unredacting the names of potential plaintiffs. See Transcript
of February 8, 2001 Court Conference, Ex. B to the Grossman Decl., at 23
(defendants objected to giving plaintiffs an unredacted UF-250 database
because this motion for reconsideration was pending). Second, in the
absence of a class, plaintiffs' counsel would not be able to conduct
privileged communications with class members. The Second Circuit has held
that "[a] certification under Rule 23(c) makes the Class the attorney's
client for all practical purposes." Van Gemert v. Boeing Co., 590 F.2d
433, 440 n.15 (2d Cir. 1978) (absentee class members treated as parties,
and therefore as clients, for purposes of assessing attorney's fees),
aff'd, 444 U.S. 473 (1980) (cited in Inmates of New York State With Human
Immune Deficiency Virus v. Cuomo, 90-CV-252, 1991 WL 16032, at *2
(N.D.N.Y. Feb. 7, 1991)). As it stands, the entire class is counsel's
client for all practical purposes. If the class is decertified,
communications would only be privileged if other alleged victims of
unlawful stops became named plaintiffs in this action or in a separate
action. This would unnecessarily complicate and prolong this litigation.
Third, there are concerns over the nature and scope of relief. Although I
previously stated that the "distinction between prohibitory and
affirmative relief is somewhat illusory," see Daniels, 198 F.R.D. at 421,
there are legitimate concerns over the scope of relief that can be
awarded in the absence of class certification. n1 Defendants may very
well argue that the type of complex, affirmative relief sought by
plaintiffs is less appropriate for ten individual plaintiffs than it
might be for a class of hundreds, if not thousands.

n1 Plaintiffs point out that they "seek broad injunctive relief,
including changes in the training, monitoring and supervision of police
officers." Plaintiffs' Memorandum of Law in Opposition to Defendants'
Motion for Reconsideration of Class Certification at 10. Such complex
relief may be less appropriate in the absence of a certified class.
Furthermore, "[defendants] may also argue that relief should be limited
in other ways, such as geographically, because of the specific
characteristics of the named plaintiffs." Id.

These concerns sufficiently distinguish this case from Galvan v. Levine,
490 F.2d 1255 (2d Cir. 1973), where denial of class certification would
not have had such serious collateral consequences. n2 Here, for example,
defendants have not withdrawn the challenged policy as they deny that
there is any inappropriate policy to withdraw. These concerns have not
been ameliorated by any actions taken by the defendants. On the contrary,
defendants have stated that they are not prepared to "stipulate to
additional conditions other than those which defendants set forth in
their proposed stipulation dated January 31, 2001." See February 13, 2001
Letter from Heidi Grossman, Ex. A to the Cowan Aff., at 2. Accordingly,
defendants' motion for reconsideration is denied and the class remains

n2 In Galvan, discovery was complete and the defendant had already
withdrawn the challenged policy prior to any judgment. Accordingly,
"[the] practical significance of the denial of class action designation
was thus limited to the claim for a mandatory injunction ordering
monetary restitution." 490 F.2d at 1261. This, too, was of little
significance as the court properly declined any monetary relief. Id. at
1262. (New York Law Journal, April 9, 2001)

OLD REPUBLIC: CFO Pleads Guilty; Co. Owes Escrow Account Holders $30M
When executives of Old Republic Title Co. asked the San Francisco
district attorney to investigate their chief financial officer for
embezzlement, little did they know the probe would eventually lead to
their door and cost them millions of dollars.

Although CFO Donald Barr would plead guilty to tax fraud charges, he was
able to trim his prison sentence to 16 months by laying out for
prosecutors Old Republic's alleged scheme for keeping the interest from
escrow accounts deposited with banks that should have gone to homeowners.

On Monday, after a two-week trial, San Francisco Superior Court Judge
Stuart Pollak found Barr's road map convincing and ruled that secret
interest accrued from the escrow accounts belongs to consumers and not
the title company. "The retention of these amounts therefore was unlawful
within the meaning of Business and Professions Code Section 17200,"
Pollak ruled in State of California v Old Republic Title Co., 993507.

Pollak's decision means that Old Republic owes refunds of $30 million
plus interest to 400,000 customers who entrusted their escrow accounts to
it. "From the beginning, we have contended that when Old Republic
deposited consumers' funds into the banks, the interest that was obtained
of these accounts belonged to consumers," said Assistant District
Attorney June Cravett of the consumer fraud unit. "Old Republic has used
various different methods of trying to make it appear as though that
money was not in fact interest. The judge said it was."

Cravett said a second phase of the case opens Wednesday, when city
attorneys seek civil penalties against the company. Each violation could
cost Old Republic $2,500, Cravett said. In the unusual prosecution of the
case, the DA's office was joined by the city attorney's office in
pursuing restitution from Old Republic.

Also, plaintiffs attorneys from Burlingame's Cotchett, Pitre & Simon
filed a class action seeking to recover the interest money. The cases
were consolidated by Pollak. Deputy City Attorney Matthew Davis, who did
most of the heavy lifting in presenting the case to the court, said that
Pollak also found that Old Republics illegal practice extends beyond the
title and escrow industries. And, he said, other trust companies may also
be illegally pocketing interest money. Davis said that District Attorney
Terence Hallinan and City Attorney Louise Renne calculate that each of
the 400,000 homeowners may have refunds of $75 due them. Those who
qualify would have to have opened an escrow account between July 24,
1994, and Feb. 7, 2001, the class period. "The judge has ruled that all
the practices where Old Republic has received payment from the banks
were, in effect, interest payments that were owed to consumers," he said.

Cotchett partner Niall McCarthy, who worked with both the DA's and city
attorney's offices, said his firm would probably handle the mechanism for
finding the homeowners due a refund and paying it to them. Pollak will
also determine the firm's fees.

Jon Tigar, a partner in Keker & Van Nest, said his client asked him to
withhold comment on the ruling at this time. Pollak's decision turned on
California Insurance Code Section 12413.5, which states that "any
interest on funds deposited in connection with any escrow ... shall be
paid over by the escrow to the depositing party ... and shall not be
transferred over to the account of title insurance company." In his court
papers, Tigar argued that the arrangements the title company had with
banks did not constitute interest as it is generally defined. "Even if
the benefits received by Old Republic are deemed to constitute interest,
plaintiffs' damages must be limited to the portion of those benefits
earned prior to the close of escrow at best only 28 percent" of the title
company's bank arrangements, Tigar said. Pollak disagreed, saying
"viewing the matter prospectively, the court cannot escape the conclusion
that Section 12413.5, as it now reads, does not permit escrow companies
to retain the net interest on instruments required to be purchased with
the proceeds of below-market rate loans extended in exchange for
depositing escrow funds in demand accounts at the bank making the loan."
(The Recorder, April 17, 2001)

PAN PACIFIC: Contests CA Suit re Acquisition of Western
On November 8, 2000, Bryant M. Bennett, as Trustee of the Bryant M.
Bennett and Inga A. Bennett Trust U/A October 25, 1990, known as The
Bennett Family Trust, filed a complaint in the Superior Court of the
State of California, County of Alameda, on behalf of himself and all
others similarly situated, against Pan Pacific Retail Properties Inc;
Western; WPT; Bradley N. Blake; L. Gerald Hunt; Dennis D. Ryan; James L.
Stell; Reginald B. Oliver; L. Michael Foley; Joseph P. Colmery; Revenue
Properties (U.S.), Inc.; and Stuart A. Tanz. Pursuant to the terms of the
merger agreement between Pan Pacific and Western, Pan is obligated to
indemnify and hold harmless Western, WPT and the officers and directors
of Western from any losses, judgments or fines, including attorneys' fees
and costs, that arise out of this action.

The allegations of the complaint arise from our November 2000 acquisition
of Western. Plaintiff's complaint alleges that the merger terms between
Pan and Western were unfair and violated the defendants' fiduciary
obligations to Western's shareholders. The complaint alleges that Pan and
Western issued a joint proxy statement/prospectus that was false and
misleading and failed to present material information known to the
defendants. The complaint further alleges that the board of trustees of
Western improperly rejected higher and better offers from other potential
bidders. The complaint's causes of action include breach of fiduciary
duty, abuse of control in breach of fiduciary duty, fraud and deceit,
negligent misrepresentation, constructive fraud, violation of California
Corporations Code Sections 25400, 25401, and 25402, and unjust

Although the complaint seeks certification as a class action on behalf of
a class consisting of all shareholders of Western as of September 29,
2000 and shareholders of WPT as of November 9, 2000, the court has not
yet considered and accordingly has not ordered the certification of the
proposed class as of the date of this prospectus supplement. The
complaint seeks a judgment awarding compensatory, general, special, and
punitive damages, costs and attorney's fees. The company filed an answer
to the complaint on or about January 8, 2001.

The company believes it has meritorious defenses against each of the
plaintiffs' claims and intends to vigorously and effectively defend
against them.

PARTSBASE.COM, INC: The Rosen Law Firm Files Securities Suit in Florida
The Rosen Law Firm P.A. (http://www.rosenlegal.com)on April 18 announced
that the firm has commenced a class action in the United States District
Court for the Southern District of Florida on behalf of purchasers of
PartsBase.com, Inc. (NASDAQ:PRTS) publicly traded common stock during the
period from the Initial Public Offering on March 22, 2000 through April
25, 2000.

The Complaint alleges that the IPO prospectus filed by PartsBase with the
Securities and Exchange Commission and distributed to investors was false
and misleading and failed to disclose, among other things, the fact that
the Company had approximately 3,000 paying members. The complaint alleges
that the Company misled investors by representing in the prospectus that
it had more than 13,000 paying members. The complaint alleges that this
misrepresentation, along with others specified in the complaint, allowed
the Company to inflate the price of the stock in the IPO well beyond its
true value.

Contact: The Rosen Law Firm P.A. Laurence Rosen, Esq. Toll Free:
1-866-rosenlegal (866-767-3653) lrosen@rosenlegal.com www.rosenlegal.com

PENN TREATY: Sued for Securities Fraud, Berman DeValerio & Pease Says
A shareholder sued Penn Treaty American Corporation (NYSE: PTA) on April
17, accusing the company and two top officers of illegally misleading
investors, the law firm of Berman DeValerio & Pease LLP said.

The class action, captioned Sullivan v. Penn Treaty American Corp., seeks
damages under federal securities laws for anyone who bought Penn Treaty
stock between November 7, 2000 and March 29, 2001 (the "Class Period").
Berman DeValerio & Pease filed the lawsuit in U.S. District Court for the
Eastern District of Pennsylvania.

Berman DeValerio & Pease has represented defrauded investors in class
actions for nearly two decades. To review the complaint and learn more
about becoming a lead plaintiff, visit our Website at www.bermanesq.com.

The complaint charges Penn Treaty, which underwrites and sells insurance
products through its subsidiaries, with defrauding investors by issuing
false and misleading statements about the company's financial health.

According to the lawsuit, the defendants reported during the class period
that Penn Treaty was experiencing a tremendous growth in sales.
Furthermore, they repeatedly said that the growth was not jeopardizing
the company's health, and that it had adequate reserve for the increased
level of business.

In fact, the company continued selling policies during its fourth quarter
of 2000 despite an ability to maintain adequate reserve levels, and
despite the fact that the company's growth put its solvency at risk. In
effect, Penn Treaty sold itself out of existence. Premiums grew by 22%
during the fourth quarter of But instead of the $40 million in reserves
required by regulators, the company had just $17.2 million in capital by
the end of the year.

On March 30, 2001, Penn Treaty issued a news release saying that, among
other things, its reserves had sunk so far below the statutory minimum
that it faced possible liquidation and that its independent accountants
were questioning the company's ability to remain a viable entity. After
the announcement, Penn Treaty stock fell from a closing price of $17.46
on March 29, 2001 to $10.17 the next day - a 42% decline. Further
revelations about the company's inadequate reserves and financial
problems drove down the stock price to nearly $3 a share by April 2,

Contact: Alicia Duff, Esq., of Berman DeValerio & Pease LLP,
800-516-9926, or bdplaw@bermanesq.com

PENN TREATEY: Shareholder Suit Filed By Schiffrin & Barroway in PA
A statement issued April 18 by the law firm of Schiffrin & Barroway, LLP
says that a class action lawsuit was filed in the United States District
Court for the Eastern District of Pennsylvania on behalf of all
purchasers of the common stock of Penn Treaty American Corp. (NYSE: PTA)
from November 7, 2000 through March 29, 2001, inclusive (the "Class

The complaint charges Penn Treaty American Corp. and certain of its
officers and directors with issuing false and misleading statements
concerning its business and financial condition. Specifically, the
complaint alleges that defendants issued statements reporting that the
Company was experiencing a tremendous growth in sales throughout the
Class Period. Furthermore, defendants repeatedly stated that the growth
was not jeopardizing the Company's health, and that it had adequate
reserve for the increased level of business.

In fact, the Company continued to sell so many policies that its reserves
were at risk. Instead of disclosing this information, the defendants
choose to conceal it from the market. Defendants' scheme ended on March
30, 2001, when Penn Treaty was forced to announce that, among other
things, its reserves had sunk so far below the statutory minimum that it
faced possible liquidation and that its independent accountants were
questioning the company's ability to remain a viable entity. Following
this announcement, the Company's common stock price fell 42% in one day.

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

PG&E CORP: Douglas A. Ames Commences Securities Fraud Suit
A securities fraud class-action lawsuit has been commenced on behalf of
purchasers of the publicly-traded common stock of PG&E Corporation (NYSE:
PCG). Also named as a defendant in the Complaint is PG&E Corp.'s utility
subsidiary, Pacific Gas & Electricity Company ("Pacific Gas"). It is
expected that the portion of the complaint concerning Pacific Gas, which
filed for Chapter 11 bankruptcy on April 6, 2001, will be stayed.

The Complaint charges Defendants with securities fraud violations of the
Securities Act of 1934 and Rule 10(b)(5) promulgated thereunder. The
false representations are contained in PG&E Corp.'s financial statements
which it published for the second and third quarters of 2000, including a
net income for the parent of $753 million for the nine month period
ending September 30, 2000.

However, PG&E Corp. has now admitted in filings with the Securities and
Exchange Commission and in the press that it will be taking a $4.1
billion dollar write-off for the fourth quarter and full year 2000. At
the same time that it was reporting huge earnings, it was in fact
incurring massive multibillion dollar operating losses due to the fact
that it was buying power for billions of dollars more than it could sell
it. PG&E Corp. knew that its second and third quarter financial results
were false when issued, and its officers and directors continue to know
that these financial representations are false. Nevertheless, it did
nothing to correct the statements, with the result that financial
analysts, until very recently, continued to report large profits for PG&E
Corp.'s year 2000. Through its loses of every major regulatory and
judicial proceeding, PG&E Corp. now harbors no realistic hope that it
will somehow be able to retroactively collect from its customers the $2.9
billion in "undercollections" which it capitalized as of September 30,
2000 on its financial statements. As alleged in the Complaint, if PG&E
Corp. had issued non-fraudulent statements in the second and third
quarters of 2000, investors would have been fully apprised of the
financial catastrophe during the alleged class period, from June 1, 2000
to March 26, 2001. Instead, PG&E Corp. went ahead with borrowing billions
of dollars in November 2000 and continued to suck hundreds of millions of
dollars out of the subsidiary, Pacific Gas. PG&E managed to maintain its
lofty share price of the upper $20 per share during This constitutes a
pure financial fraud and charade that Defendants have perpetrated on its
shareholders, investors, and the public stock market.

A "Notice of Related Case" was filed with the PG&E Complaint to
Stubblefield v. Edison International et.al., Case No. 00-11516 AHM (RZx)
(C.D. Cal., originally filed on October 30, 2000). Edison International's
ticker symbol is "EIX." Both the PG&E and Edison actions allege knowing,
intentional falsification of financial statements issued in the second
and third quarters In both PG&E and Edison, the Defendants fraudulently
capitalized billions of dollars into an artifice known as the Transition
Revenue Account ("TRA"). This TRA was used to capitalize billions of
dollars in operating losses which the corporations had suffered as a
result of the difference between the enormous run up in wholesale
electricity prices and the fixed retail rates which the utilities could
charge to their customers. Both lawsuits were filed by Law Offices of
Douglas A. Ames on behalf of named and unnamed class members.

Contact: Douglas Ames or Kelly Zucha, both of Law Offices of Douglas A.
Ames, 714-536-7244

RITE AID: Judge Rules Pa Law Firm Ballard, Spahr Can Remain on Suit
A federal judge ruled Tuesday that a Philadelphia law firm may continue
to represent Rite Aid Corp. in class-action lawsuits filed by
shareholders against the drugstore company and former officers.

Judge Stewart Dalzell of U.S. Eastern District Court in Philadelphia
rejected the contention of former Rite Aid executive Martin L. Grass that
Ballard, Spahr, Andrews & Ingersoll should be disqualified because it
failed to represent him in a settlement that has been reached between
Rite Aid and the shareholders.

Rite Aid has agreed to pay shareholders $ 200 million in cash and stock
to settle complaints that the company's former management improperly
inflated earnings through accounting maneuvers.

The settlement does not cover Grass, the former chairman and chief
executive officer who was ousted by the company in October 1999, as well
as two other former corporate officers and the company's former auditor,

Grass argued that the law firm should not be permitted to continue
representing Rite Aid because it had taken a position adverse to him
without his consent.

In his 25-page opinion, Dalzell said that "upon a close examination of
the circumstances surrounding Ballard Spahr's representation of Rite Aid
and Grass, we conclude that Ballard Spahr did not engage in unethical or
inappropriate conduct with respect to Grass and that disqualification is
therefore not warranted."

Ballard Spahr was hired by Rite Aid in March 1999, soon after
shareholders started filing class-action lawsuits against the East
Pennsboro Twp.-based company. Many of the suits were filed after Rite Aid
warned that fourth-quarter earnings would be less than expected.

The law firm initially represented both Rite Aid and officers such as
Grass, but attorneys for the firm made it clear that individual
executives would have to retain their own legal counsel should any
potential conflicts materialize, Dalzell noted.

By October 1999, when Grass resigned, conflicts were apparent, Dalzell
said. Yet, the judge added, Grass did not seek Ballard Spahr's
disqualification until last December, a month after the announcement of
Rite Aid's partial settlement with shareholders.

Dalzell said the circumstances of Grass' departure should have told him
that his interests were adverse to Rite Aid. He noted that Grass left
without any compensation or retirement benefits, "and none has been paid
to him since."

In a detailed footnote, Dalzell said the "factual adversity between Grass
and Rite Aid, and when that adversity ripened, is not a close one." He
said an Oct. 15, 1999, meeting with most of Rite Aid's directors brought
issues to a head.

According to Dalzell's footnote, the directors were talking about
amending the company's credit line with a consortium of banks when one
director suggested using stock in recently acquired PCS Health Systems
Inc. as collateral. However, Rite Aid's general counsel, Elliot S.
Gerson, said PCS stock already had been pledged for a short-term loan to
pay off commercial paper.

Shocked at that news, director Leonard Stern asked who allowed that to
happen. "According to Gerson," Dalzell's footnote said, "Grass responded
by leaving the conference room 'with his tail between his legs.' "

Grass' resignation was announced three days later.

"We have no doubt that Grass was on notice of Rite Aid's adversity long
before he received the announcement of the partial settlement between the
plaintiffs and Rite Aid on Nov. 9," Dalzell wrote. "In the circumstances
of this case, this delay of at least nine months (and more like 13) in
seeking to disqualify Ballard Spahr was undue and constituted waiver."

Dalzell noted that Ballard Spahr had informed Grass' attorneys of the
conflicts as early as Oct. 29, 1999.

One of Grass' lawyers, James J. Rodgers of Dilworth Paxson in
Philadelphia, said he was not surprised by the ruling. But, he added, "we
are not pleased with it."

He said Grass and other officers, such as former Chief Financial Officer
Frank M. Bergonzi, believed "up until Nov. 9 that there would be a
coordinated defense against the plaintiffs" in the lawsuits.

On the instructions of Rite Aid's new management, Ballard Spahr initiated
settlement negotiations with the shareholders' attorneys last April.

Dalzell has yet to rule on the overall $ 200 million settlement, which
was the subject of a fairness hearing on April 6. The judge did reject
Grass' motion to overturn the settlement because of Ballard Spahr's
participation in the negotiations. (The Patriot-News, April 18, 2001)

TAINTED WATER: Inspection Work in Chaos Before Walkerton E Coli Outbreak
Ten months before E. coli and other bacteria poisoned Walkerton's
drinking water, the environment ministry's waterworks inspection system
was in chaos, a judicial inquiry has heard.

A July, 1999, environment ministry internal report on its own inspection
program found that inspections were being conducted too infrequently and
identified a lack of clarity as to which violations of drinking water
standards would trigger an inspection priority.

The report, prepared by senior ministry staff and released at the
Walkerton inquiry yesterday, also said compliance guidelines used by
field officers were "silent" on what to do when waterworks operators
didn't conform to standards.

Only three inspections were conducted on Walkerton's water system in the
decade leading up to last May's tragedy, when seven people died and 2,300
became sick after drinking contaminated water.

Former water manager Stan Koebel repeatedly promised to correct
deficiencies including not taking vital samples. But the ministry took no
action when he failed do so, the inquiry has heard.

Robert Shaw, the ministry's regional director, told the inquiry yesterday
that while annual waterworks inspections were recommended, they were
scaled back following cutbacks in 1996. By 1998-99, only 24 per cent of
the 630 municipal waterworks were inspected.

'Action should have been taken'

Shaw testified that the importance of annual inspections was identified
as long ago as 1990. The next year, all 607 active systems were checked.

But it wasn't just Tory cuts that led to slacking-off on inspections. In
1992- 94, when Bob Rae's NDP government was in power, only 86 per cent of
the systems were inspected. That number dropped to 60 per cent the next

All of Ontario's current 659 municipal systems were inspected last year,
after the Walkerton crisis, and 367 had significant deficiencies.

In August, 1997, Walkerton was taken off a list of municipalities not
complying with ministry guidelines after Koebel assured staff at the Owen
Sound office that he would change his ways, the inquiry heard yesterday
from Jim Mahoney, the ministry's regional program co-ordinator.

Seven months later, a ministry inspection found the operation of the
Walkerton plant was still woefully inadequate.

Inquiry lawyer Paul Cavaluzzo asked Mahoney if that should have "waved a
red flag" to ministry staff.

"Some action should have been taken, yes," Mahoney said.

Meanwhile, Walkerton residents are greeting with skepticism news that
$2,000 compensation cheques in their class-action suit will begin to
arrive May 19, the first anniversary of the outbreak.

"When I see that date, it makes me feel very uncomfortable," said retired
teacher John Finlay. "It feels like they are capitalizing on the
anniversary." (The Toronto Star, April 18, 2001)

TREATED WOOD: Scientist Hired By Industry Admits Underestimation of Risk
A scientist hired by the pressure-treated wood industry has admitted
making a major mathematical error in a study that claims children face
little risk from arsenic in the wood.

The mistake underestimated the exposure that children face from arsenic
in the wood by 1,000 times.

"It was one of those math errors, transposing one number for another, and
it was off by a thousand-fold," said Mel Pine, a spokesman for the
American Wood Preservers Institute, an industry trade group. "We did
correct the mistake within a week of the time we were informed of it."

The scientist, Florida State University toxicologist Christopher Teaf,
was hired by the industry's Florida lobbyists, the Hopping, Green, Sams &
Smith firm. Teaf's study went out late last year and was posted on the
American Wood Preservers Institute Web site and handed out to Florida
lawmakers, regulators and legislative researchers to allay fears about
the risk posed by arsenic in pressure-treated lumber.

Teaf said this week that the error doesn't change his opinion that
children face no unacceptable health risks from arsenic in
pressure-treated lumber - a conclusion that the state is now disputing.

Teaf's mistake was discovered by Florida Department of Environmental
Protection scientists.

"It's remarkable that you could make a mistake that was a thousand-fold
difference," said DEP Secretary David Struhs. "I'm really pleased that
the system worked and one of our hard-working technical people was able
to discover it."

Teaf's error raises new questions about the wood-treatment industry's
facts and figures. For years, they have funded dozens of industry studies
that say the wood doesn't pose any risk, even though arsenic leaks out of

And now the industry is facing a federal class-action lawsuit in Miami,
which accuses pressure-treated wood manufacturers of "negligence" and
"intentional disregard" for knowingly allowing arsenic-laced wood into
the marketplace without informing consumers of the risk.

The wood-treatment industry's admission about its flawed figures also
follows news that a vice president from Arch Wood Treatment, an
international company, claimed under oath in federal court in Atlanta
last June that the wood doesn't contain arsenic, even though company
documents clearly list arsenic as an ingredient.

The executive, William J. Baldwin, is vice president of operations and
industry relations for Arch Wood Treatment, formerly the Hickson Corp. He
testified that he has been involved in the industry since 1974, often
preparing documents to submit to the U.S. Environmental Protection

Pine, of the American Wood Preserver's Institute, said he couldn't
explain why a wood-treatment executive would claim under oath that the
wood doesn't contain arsenic.

"We've never said, as far as I know, that the wood doesn't contain
arsenic," Pine said. (St. Petersburg Times, April 18, 2001)

* "Class-action Conflicts in U.S. May Come Here" Expert Said in Canada
A single U.S. disaster can produce a "multi-district litigation
phenomenon"that an expert in class actions says has led Congress to
conclude that states certify too many cases and to call for a
"federalization"of all class actions.

Elizabeth Cabraser, co-chair of the Mass Torts Committee of the American
Bar Association, was a guest speaker at the Canadian Bar Association -
Ontario's recent seminar, "Class Actions: Exploding on to the Scene."

In her view, "it is most fitting that plaintiffs have increasingly
resorted to state courts as their battlegrounds of choice for their
claims against corporate defendants."

However, she said courts in different states can produce different
results. In conflicting class actions, a settlement in one jurisdiction
may be completely out of whack with the court's ruling in another. And
plaintiffs can be tempted to go "forum shopping"for the one with the
easiest laws and the lowest thresholds.

Although class actions in Canada are currently found only in Ontario and
B.C., she said the problems may start surfacing here. Alberta and
Manitoba have class action laws in the works, as does the Federal Court
for certain kinds of claims, and the other provinces will likely follow

Cabraser said the U.S. Supreme Court started to get interested only in
1985, when Phillips Petroleum v. Shutts, 472 U.S. 797, recognized the
propriety of nationwide class certification by a state court. (In
Phillips, a Kansas court certified a national class regarding oil
leases.) Then overlapping and competing class actions emerged as a
phenomenon as state courts began to certify and settle nationwide class

Cabraser said the U.S. jurisprudence "seems to be moving in all
directions at once,"as state and federal courts and legislatures seek
ways to co-ordinate class actions.

Many state courts, such as those in Alabama and Louisiana, which were
perceived as "plaintiff-oriented havens for quick and easy class
certification,"have imposed restrictive statutory limitations on

As the U.S. Supreme Court hears class action cases, some issues, such as
opt-out provisions and the use of certification to obtain settlements
rather than trials, are becoming clarified. In its 1997 landmark
decision, Amchem Prods. Inc. v. Windsor, 521 U.S. 591, the Supreme Court
resolved the question of settlement-only clauses "in favour of the
utilization of settlement classes."In 1999, Ortiz v. Fiberboard Corp.,
527 U.S. 815, disapproved a mandatory (non opt-out) "limited

Both cases dealt with the settlement of asbestos claims, and together
they produced voluminous commentary.

"The settlement procedures utilized in Amchem and Ortiz attracted the
attention and condemnation of numerous academics and practitioners, and
contributed to the unprecedented high profile of these cases at the
district and appellate court levels,"Cabraser said. "No class action
settlements have been dissected so assiduously, or with such
single-minded condescension or condemnation, by the uninvolved. No class
actions seminar or lecture since 1995 has been complete without a
discussion of Amchem and Ortiz, often to the exclusion of all else." But
the purview of these cases was limited. "The fundamental distinction
between the two settlements was that Amchem was [an] 'opt out'settlement,
and Ortiz utilized a mandatory 'limited fund'settlement class ... from
which no opt-outs were allowed."

She concluded that by taking a position of absolute due process -a strict
interpretation -the Supreme Court in Amchem and Ortiz failed to deal with
universal issues. Both settlements possessed fatal flaws and, in the
aftermath, many asbestos companies went bankrupt because of the large
number of claims against them.

However, in August 1999, the Fen/Phen Diet Drug case preserved the choice
of individual adjudication or the class action settlement. In re Diet
Drugs (Phentermine/Fenfluramine/Dexfenfluramine) Products Liability
Litigation, MDL No. 1203, was "a notable example of the interplay among
medical monitoring classes and individual injury claims, and between
federal and state courts with related cases."A Pennsylvania judge
co-ordinated the class action process of eight different courts. Cabraser
calls this ad hoc handling of class actions a "success story."

She contrasted the Exxon Valdez litigation, in which a state court
granted certification and a federal court denied it, The $5 billion
(U.S.) outcome is still in question because of appeals.

State courts have been certifying actions since the mid-19th century, and
the corporate community likes this approach because it thinks there will
be fewer cases to deal with.

"State courts early recognized -and have steadfastly remembered -what the
federal courts appear frequently to forget: that modern society
increasingly pits mortal humans, of limited means, against large
corporations of multi-national influence and perpetual existence."she

"Unassisted by procedures that allow individuals to effectively aggregate
their claims, and to try or resolve common issues in a unitary fashion,
the battle remains fatally unequal."

She submitted that even the right to a jury trial "is a cruel joke to
those who will be worn down and worn out, in pocket book and in spirit,
by the endless pitched battles of a war of attrition funded by corporate
defendants who can afford to expend millions for defence and not a penny
for compensation." (The Lawyers Weekly, April 20, 2001)


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