/raid1/www/Hosts/bankrupt/CAR_Public/010426.MBX               C L A S S   A C T I O N   R E P O R T E R

               Thursday, April 26, 2001, Vol. 3, No. 82


AOL: Consumers May Sue over Distribution of Version 5.0, FL Ct Rules
AVICI SYSTEMS: Decries Merit of Securities Lawsuit in New York
AVICI SYSTEMS: Edward J. Carreiro Announces Securities Lawsuit
BANK ONE: Agrees to Pay $45M to Settle Shareholder Suits re First USA
CREDIT CARD: Suit against Fleet Bank re Interest Rate Can Proceed

DRUG PRICE-FIXING: Fed. Judge Can't Seize Power to Hear, Ap Ct Holds
E-MAIL MARKETING: Four Bills to Eliminate Spam Are Pending in Congress
ENTERTAINMENT COMPANIES: Columbine Suit Accuses of Influence
FLOOD DAMAGE: Suit Blaming Grand River Dam Authority Head For Fall Trial
GLAXO WELLCOME: 7th Cir Dismisses Claims over Zantac 75 and Zantac 150

MARIMBA, INC: Milberg Weiss Announces Securities Suit Filed in New York
NORTEL NETWORKS: Names Khatod New Chief Marketing and Strategy Officer
NORTHWEST AIRLINES: EEOC Files Suit Claiming Disability Discrimination
NSTAR CORP: Lawsuit Draws Calls to Find out Electricity Charges
PREPULSID: Jury at Inquest Called for Changes to Canadian Rules

RAMPART SCANDAL: Judge Says Victims May Hold City Council Members Liable
ROYAL AHOLD: Ct Denies Stockholder’s Motion to Enforce Settlement
STAPLES INC: Stockholders File Suit in DE over Reclassification of Stock
TOBACCO LITIGATION: Money for Lawsuit by Fed Govt Is Drying up


AOL: Consumers May Sue over Distribution of Version 5.0, FL Ct Rules
In In Re America Online, Inc. Version 5.0 Software Litigation, a consumer
class action brought on behalf of millions of persons whose Windows
computers were allegedly damaged by AOL's access software, the United
States District Court for the Southern District of Florida has found that
the plaintiffs may sue under the Computer Fraud and Abuse Act, 18 U.S.C.
s. 1030(a)(5)(A), which prohibits the "transmission of a program . . .
[which] intentionally causes damage without authorization, to a protected
computer . . . " The decision is particularly significant in that AOL
unsuccessfully relied on decisions of other district courts refusing to
apply the Computer Fraud and Abuse Act to consumer claims.

In their complaint, the plaintiffs allege that America Online's version
5.0 software, offered to millions of consumers through free CD-ROMs,
damages the Windows operating systems on which it is installed, impairing
the computer's ability to access the Internet through any non-AOL service
provider. Plaintiffs allege that even though AOL's own beta testers had
complained that the software used an "evil connectoid" to disable the
Windows networking component needed to connect to non-AOL Internet
Service Providers, AOL nonetheless rolled out the software, enticing
millions of consumers through offers of "Free" service to install AOL 5.0
"Without Risk!"

In its ruling, which granted in part and denied in part AOL's motion to
dismiss, the court agreed with the plaintiffs that AOL's alleged conduct
violated the Computer Fraud and Abuse Act: "A plain reading of the
provision and its legislative history demonstrates that s. 1030(a)(5)(A)
applies to the facts of this case." The Court also rejected AOL's
argument that the Act, which requires $5,000 of aggregate damage "to one
or more individuals," was triggered only when that amount of damage was
caused to one computer: "If the court were to interpret 18 U.S.C. s. 1030
as requiring each home user to sustain more than $5,000 in damages, the
home user never would be protected because $5,000 is far more than the
average price of a home computer system." The court instructed plaintiffs
to file an amended complaint alleging with more particularly that the
software caused an aggregate of $5,000 in damages. Plaintiffs counsel
have announced that they will file an amended complaint within days.

In the AOL Version 5.0 Litigation, 45 class actions were transferred by
the Judicial Panel on Multidistrict Litigation to the United States
District Court for the Southern District of Florida. Plaintiffs in these
consolidated class actions are represented by the law firms of Girard &
Green, LLP, Milberg Weiss Bershad Hynes & Lerach LLP, Hagens Berman LLP,
Levin, Middlebrooks, Thomas, Mitchell, Green, Echsner, Proctor &
Papantonio, P.A., and Colson, Hicks, Eidson, Colson, Matthews, Martinez &
Mendoza, P.A., all of which have extensive experience in class actions.

For additional information, please contact attorneys Daniel C. Girard at
415/981-4800, Steve W. Berman at 206/623-7292, or Reed R. Kathrein at
415/288-4545; or contact us by e-mail at the address below.

Contact: Girard & Green, LLP, San Francisco Daniel C. Girard,
415/981-4800 aol@classcounsel.com or Hagens Berman, LLP, Seattle Steve W.
Berman, 206/623-7292 or Milberg Weiss Bershad Hynes & Lerach, San
Francisco Reed R. Kathrein, 415/288-4545

AVICI SYSTEMS: Decries Merit of Securities Lawsuit in New York
Avici Systems Inc. (Nasdaq:AVCI), announced that a shareholder class
action lawsuit was filed against the Company in the United States
District Court Southern District of New York purportedly on behalf of
purchasers of the Company's common stock during the period July 28, 2000
to April 20, 2001. The complaint also names as defendants Morgan Stanley
& Co. Incorporated and certain officers of the Company. The complaint
alleges violations of federal securities laws regarding statements
concerning the underwriting of its shares to the public made in the
Company's initial public offering registration statement.

Avici Systems and its officers deny any liability in the litigation and
intend to vigorously defend the allegations against them.

AVICI SYSTEMS: Edward J. Carreiro Announces Securities Lawsuit
Law Offices of Edward J. Carreiro, of Hatboro, PA, on April 25 announced
that a class action lawsuit has been filed against Autoweb.com, Inc.,
Marketwatch.com, Inc. and Avici Systems, Inc. and its officers resulting
from violation of the federal and/or state securities laws for those
individuals who purchased the above named stock in the following class

             Corporation                      Class Period
             -----------                      ------------
Autoweb.com, Inc.    NASDAQ:AWEB - news     3/22/99 - 4/18/01
Marketwatch.com, Inc.  NASDAQ:MKTW - news   1/15/99 - 4/16/01
Avici Systems, Inc.   NASDAQ:AVCI - news    7/28/00 - 4/20/01

Contact: Law Offices of Edward J. Carreiro, Hatboro Edward J. Carreiro,
215/672-7600 carreirolaw@yahoo.com

BANK ONE: Agrees to Pay $45M to Settle Shareholder Suits re First USA
Bank One Corp. has agreed to pay $ 45 million to settle shareholder suits
alleging that the Chicago-based bank artificially inflated its revenues
through the misdeeds of its First USA credit-card unit. A half-dozen
shareholders had filed suit in federal court in Chicago alleging that
Bank One officials had issued misleading earnings reports. A judge will
decide in June whether to give final approval to the deal. In Re Bank One
Shareholders Class Action, No. 00-CV-880. (The National Law Journal,
April 23, 2001)

CREDIT CARD: Suit against Fleet Bank re Interest Rate Can Proceed
A lawsuit claiming Fleet Bank misled consumers and violated a pledge to
fix interest rates on credit card balances transferred to Fleet accounts
can proceed, according to a state Superior Court ruling.

The suit, filed last year, claims that Fleet Credit Card Services, a
subsidiary of FleetBank, advertised a 7.99 annual percentage rate, then
raised the rate, violating the state Deceptive Trade Practices Act.

Fleet argued the suit should be thrown out, saying banks are exempt from
Rhode Island's Deceptive Trade Practices Act because they are regulated
federally, and that the amounts involved for each plaintiff were less
than $ 5,000 so the Superior Court had no jurisdiction.

The court on April 20 rejected those arguments, ruling "the mere fact
that a business is regulated or 'subject to monitoring' by a governmental
agency is not sufficient, in and of itself, to exempt that business from
the Act." It also retained jurisdiction, ruling "it does not appear with
'legal certainty' that plaintiffs cannot meet the jurisdictional amount

The suit was filed on behalf of Tyler Chavers, of Eagle River, Alaska,
who has asked it be made a class action suit to include thousands of
other credit card holders. A class certification hearing is scheduled for
May 9.

Chavers' attorney, Peter Wasylyk, did not immediately return calls for

According to the suit, Chavers transferred the balance of his three
credit cards to obtain the 7.9 annual percentage rate last April. A month
later, he received a letter from Fleet saying the Federal Reserve had
raised interest rates and the APR would be increased to 9.5 or 10.5
percent, depending on when the cardholder joined.

"Fleet believed it could increase the fixed rate at any time, and in
fact, never intended to provide the fixed rate as advertised," Chavers
said in the lawsuit.

Chavers said when he called a Fleet customer service representative to
complain, he was told, "the fine print will get you every time."

Fleet spokesman Jim Mahoney also did not immediately return calls.

Fleet Credit Card Services, based in Horsham, Pa., provides consumer
credit cards and related services.

Fleet, now known as FleetBoston, is the nation's eighth-largest bank with
$ 181 billion in assets and 1,200 branches throughout New England. (The
Associated Press State & Local Wire, April 25, 2001)

DRUG PRICE-FIXING: Fed. Judge Can't Seize Power to Hear, Ap Ct Holds
A federal judge can't just seize the power to hear any case that a
litigant tries to bring to him, a federal appeals court has held.

Napoleon at his coronation took the imperial crown out of the hands of
the Pope and crowned himself," Judge Richard A. Posner wrote Monday for a
three-member panel of the 7th U.S. Circuit Court of Appeals. Federal
judges do not have a similar prerogative. A court that does not have
jurisdiction cannot assume it, however worthy the cause."

The panel said a federal judge in Chicago should have held an evidentiary
hearing before denying a request to send an antitrust lawsuit back to the
Alabama state court where it initially was filed.

Such a hearing was required because of the possibility that none of the
named plaintiffs would be entitled to $ 50,000 -- the minimum amount in
controversy required for a diversity case at the time the suit was filed
-- if it was proved that the makers of brand-name prescription drugs
illegally colluded to raise prices, according to the panel.

The panel sent the suit back to U.S. District Judge Charles P. Kocoras
with directions to hold an evidentiary hearing on the question of federal

A group of consumers filed the class-action suit in Alabama state court
alleging that manufacturers violated antitrust law by conspiring to fix
the prices of their drugs. Those inflated prices ultimately were
reflected -- at least in part -- in the prices charged consumers for
prescription drugs, the suit contended.

The consumers brought their claim under Alabama law, which allows
indirect purchasers to seek damages for alleged antitrust violations.
Such purchasers are barred by Illinois Brick Co. v. Illinois, 431 U.S.
720 (1977), from bringing similar claims under federal antitrust law.

The manufacturers named as defendants removed the consumers' suit to a
federal district court in Alabama. That court then transferred the case
to Kocoras in the Northern District of Illinois.

Seven months later, the plaintiffs sought to remand the case to Alabama
state court on the ground that the amount in controversy was less than
the $ 50,000 required under 28 U.S.C. sec1332 when they brought suit. The
jurisdictional minimum currently is $ 75,000.

But Kocoras denied the motion to remand and entered judgment in favor of
the manufacturers after ruling that Alabama antitrust law does not
regulate interstate commerce.

In its opinion, the 7th Circuit panel said it wasn't certain that the
consumers' suit belonged in federal court.

Noting that at least one named plaintiff in a class action must by
himself be entitled to the jurisdictional minimum in damages, the panel
pointed out that the consumers had bought prescription drugs for their
personal use and that they were seeking damages for a two-year period

But a single plaintiff still may have run up $ 50,000 in damages because
Alabama antitrust law imposes a $ 500 penalty for every violation, the
panel continued.

The panel said the uncertainty over whether the jurisdictional minimum
could be met called for an evidentiary hearing on the matter.

The panel did acknowledge that because factual admissions may be used to
establish federal jurisdiction, Kocoras would have had no choice but to
remand the case to Alabama state court if the plaintiffs had stipulated
that they each were seeking less than $ 50,000 in damages.

But the converse -- that jurisdiction can be assumed without further
inquiry if the plaintiffs stipulate that they are seeking more, or don't
stipulate at all -- does not follow," the panel continued. Jurisdiction
cannot be conferred by stipulation or silence."

That means the plaintiffs' seven months of silence before challenging the
removal of their suit does not constitute a ground for keeping the case
in federal court, according to the panel.

It may have been reprehensible of them to delay as long as they did to
raise a jurisdictional objection, and it may even (though this we need
not decide either) have been a sanctionable tactic, but assuming federal
jurisdiction where none exists is not a permissible sanction for
anything," the panel said.

Joining the opinion written by Posner were Judges William J. Bauer and
Frank H. Easterbrook. In re Brand Name Prescription Drugs Antitrust
Litigation, Appeal of William Mack Price, et al., No. 00-4267. (Chicago
Daily Law Bulletin, April 24, 2001)

E-MAIL MARKETING: Four Bills to Eliminate Spam Are Pending in Congress
Credit card issuers are experimenting gingerly with e-mail marketing
techniques, knowing that e-mail is an easy and inexpensive way to reach
customers and prospects, but fearing that unsolicited messages will anger
the people they are trying to court.

Some card companies have begun circulating e-mail "newsletters"
highlighting different promotions and ways to use their products. These
missives, the companies emphasize, are being sent only to customers, and
only to those who explicitly "opt in" in some way.

Some companies are sending notices to online customers warning them when
a bill is about to be due or a credit limit about to be reached. These
are generally met with some gratitude, the companies say.

But there is one line that the issuers know better than to cross. While
most of them have no qualms about sending unsolicited letters to
prospective customers' physical mailboxes, they have not resorted to
cluttering people's electronic mailboxes.

"I think our No. 1 sensitivity is spam," said Colleen Zambole, vice
president of e-commerce at Discover Financial Services, the card-issuing
subsidiary of Morgan Stanley Dean Witter & Co. Ms. Zambole, who is in
charge of e-mail initiatives, said Discover sends messages only to those
cardholders who have explicitly opted in through the Web site.

Four bills that would regulate e-mail marketing to eliminate junk
messages, or spam, are currently pending in Congress. The one that has
advanced the farthest would give consumers the right to remove themselves
from Internet mailing lists, and would penalize companies $500 for each
violation, up to $50,000 per consumer. That bill, HR 718, sponsored by
Rep. Heather A. Wilson, R-N.M., and adopted by the House Energy and
Commerce Committee last month, would also give consumers the right to
sue, but would prohibit class actions. The Federal Trade Commission would
enforce the provisions.

Similar legislation overwhelmingly passed the House last year but was not
acted on by the Senate. Many banking, insurance, and securities firms
have voiced objections to the bill and warned of possible unintended

Discover started e-mailing its customers in fall 1998 and since then has
expanded its e-mail marketing to include "news" updates and merchant

"We're also very sensitive to frequency," Ms. Zambole said. "Just because
someone has opted in, if you start sending them e-mails every week or
twice a week or whatever, they're going to unsubscribe. They are not
going to want to hear from you anymore." Discover sends its e-mail
newsletters once a month.

American Express Co., which also e-mails monthly newsletters to
cardholders, has "definite e-mail policies that govern the kind of
marketing we can do, including how many times and how many different
kinds of messages we send," said Judy Tenzer, an Amex spokeswoman.
Cardholders opt in to the service by submitting their e-mail addresses,
and every subsequent message includes an opt-out notice. "We don't want
to flood customers," Ms. Tenzer said. "We want to communicate in ways
they want to hear from us."

Acquisitions "are quite a different thing than communicating with current
customers," she explained. "We do e-mail newsletters to cardholders to
push different kinds of rewards programs and offers, but we do not
attempt acquisitions through that channel." Nor does American Express
solicit new customers by phone, she added.

Citigroup Inc. does not send unsolicited e-mail, and its privacy policy
dictates that only customers who have activated their accounts online are
contacted by e-mail, spokeswoman Maria Mendler said. It does "some
targeted e-mail marketing to existing customers," she said.

Deborah Pulver, a spokeswoman for Fleet Credit Card Services, said
FleetBoston Financial Corp. has also resisted the temptation to send
e-mail solicitations. "At this time, we are not using outbound e-mail for
account acquisitions," she said.

The peculiar intimacy of e-mail has led to an etiquette system that is
quite unlike other methods of customer contact. Even some companies that
make outbound telemarketing calls and send a lot of snail mail will stop
short of sending out unbidden e-mail solicitations.

"E-mail is different," said Gina Lambert, vice president of marketing and
client services at Quris Inc., a technology and consulting firm in San
Francisco that specializes in marketing by e-mail and other
Internet-connected devices. "It's a very personal way of reaching a
customer. Your message comes up right in front of their face. If they
take offense, you're wasting your time and invading their privacy."

Ms. Lambert said the stakes for financial companies are very high. "If
you do it right, they'll love you," she said. "If you do it wrong,
they'll hate you, and you'll never get them back."

Ms. Lambert, whose company was hired by Discover in February to help with
e-mail marketing strategies, says most companies do not know how to send
a proper e-mail. (Discover is Quris' only financial services client
besides Charles Schwab Corp., which has a majority stake in the company.)

Corporate marketing executives "think they know how to do it because they
know how to market on the Web and through the mail," Ms. Lambert said.
"They think that e-mail is just cheap and easy, but you have to be more
sophisticated than that."

One way some companies err is in overdoing a "personalization" strategy,
targeting messages based on what marketing data tell them about a
consumer's life and identity. There is too much room for mistakes, Ms.
Lambert said, as well as a big risk of spooking people by showing off how
much the company knows.

"Personalization is wonderful," she said, "but it's wrong to send
inappropriate products, or to send too much, or to use information about
the customer that was taken from another Web site." (The American Banker,
April 25, 2001)

ENTERTAINMENT COMPANIES: Columbine Suit Accuses of Influence
Lawsuits claiming that entertainment companies cause murders don't
succeed, an expert in such cases and other First Amendment issues says.

Judges dismiss them.

The family of slain Columbine High School teacher Dave Sanders filed such
a lawsuit in U.S. District Court in Denver last week. The defendants are
25 entertainment companies, including Time Warner Inc., some movie
production companies, several software companies, two "adult" Web sites
and video game giants such as Nintendo, Sega and Sony.

The Sanders family, represented by Nebraska lawyer John DeCamp, wants the
lawsuit to be a class action on behalf of "all other Columbine victims."

The lawsuit seeks $5 billion in damages, claiming that entertainment
companies influenced teen gunmen Eric Harris and Dylan Klebold to open
fire on their classmates and teachers at Columbine on April 20, 1999.

"This is essentially a clone of the suit filed in federal court arising
out of the Paducah school shooting," Denver attorney Tom Kelley said.
"That case was dismissed on common law grounds, without even getting to
the First Amendment issues. "It was dismissed just on the basic notion
that you do not have a duty to foresee criminal conduct on the part of
viewers of entertainment material. One has to think that that same result
is very likely to follow here."

The 1997 Paducah, Ky., school shooting to which he referred resulted in
three students dead and five wounded. The gunman, then-14-year-old
Michael Carneal, pleaded guilty but mentally ill to murder and was
sentenced to life in prison.

The families of the three slain students sued 25 entertainment companies
in federal court for $130 million, but a judge dismissed the case a year

U.S. District Judge Edward Johnston ruled that the entertainment
companies were not liable because they could not foresee what Carneal
would do. His opinion relied heavily on a similar case that arose a
decade ago in which the 6th U.S. Circuit Court of Appeals held that the
makers of Dungeons & Dragons, a popular role-playing game, were not
liable for a teenager's suicide.

In the Dungeons and Dragons case, the court concluded, "The theories of
liability sought to be imposed upon the manufacturer of a role-playing
fantasy game would have a devastatingly broad, chilling effect on
expression of all forms."

Last month, a Louisiana state judge threw out a lawsuit against director
Oliver Stone that claimed his 1994 movie "Natural Born Killers" inspired
a young couple's two-state crime spree that left a Mississippi man dead
and a Louisiana store clerk paralyzed.

Judge Bob Morrison of Amite, La., said the First Amendment protected
Stone and the movie's distributor, Warner Bros, finding no evidence Stone
intended to incite violence. (Scripps Howard News Service, April 25,

FLOOD DAMAGE: Suit Blaming Grand River Dam Authority Head For Fall Trial
A multi-million-dollar class-action lawsuit blaming the Grand River Dam
Authority for floods in Ottawa County appears to be headed for a fall

Ottawa County Associate District Judge Robert Reavis scheduled four
flood-damage cases from the lawsuit for the fall docket.

It alleges damage occurred between November 1992 and June 1995, when the
Grand River Dam Authority didn't release water through the Pensacola Dam,
causing backwater flooding on the Neosho River and Tar Creek.

The authority says the dam could not influence flooding as far upstream
as Miami and maintains it should be immune from such a lawsuit.

The lawsuit has 111 plaintiffs, including local and tribal governments
and businesses.

Reavis ruled in the November 1999 liability portion of the first trial
phase that the authority was liable for damages.

The authority appealed the ruling to the Oklahoma Supreme Court, which
declined to address the issue of damages and sent it back to the lower
courts. (The Associated Press State & Local Wire, April 25, 2001)

GLAXO WELLCOME: 7th Cir Dismisses Claims over Zantac 75 and Zantac 150
Class Action Plaintiffs failed to establish that makers of Zantac
provided false information about the substitutability of two forms of the
drug, the U.S. Court of Appeals for the 7th Circuit held on April 5.
Bober v. Glaxo Wellcome, No. 99-3440.

The appeals court, in an opinion by Judge Ann C. Williams, upheld a
district court decision dismissing the class action filed against the
firms that manufacture and market the gastrointestinal drug Zantac. The
complaint alleged that the defendants provided false and misleading
information by denying that Zantac 75, the over-the-counter form of the
drug, could be substituted for Zantac 150, a more expensive form of the
drug that is available only by prescription. In affirming the dismissal
of the suit, the court held that none of the three statements cited by
plaintiffs to support their claims was deceptive as a matter of law.
According to the court, the statements at issue could not be reasonably
read as falsely claiming either that Zantac 75 and Zantac 150 did not
contain the same medicine or that the two drugs were not therapeutically
equivalent in equal doses. The court further held that the three
statements were exempt from liability under the Illinois Consumer Fraud
and Deceptive Business Practices Act because they fell within the
boundaries established by federal law. (The National Law Journal, April
23, 2001)

MARIMBA, INC: Milberg Weiss Announces Securities Suit Filed in New York
The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a
class action lawsuit was filed on April 24, 2001 on behalf of purchasers
of the securities of Marimba, Inc. (NASDAQ: MRBA) between April 30, 1999
and March 27, 2000, inclusive. A copy of the complaint filed in this
action is available from the Court, or can be viewed on Milberg Weiss'
website at: http://www.milberg.com/marimba/

The action is pending in the United States District Court for the
Southern District of New York, located at 500 Pearl Street, New York, NY
10007, against defendants Marimba, Morgan Stanley & Co. Incorporated
("Morgan Stanley"), Credit Suisse First Boston Corporation ("Credit
Suisse"), Bear Stearns & Co., Inc. ("Bear Stearns"), Kim K. Polese, Fred
M. Gerson and Arthur A. Van Hoff.

The complaint alleges violations of Sections 11, 12(a)(2) and 15 of the
Securities Act of 1933 and Section 10(b) of the Securities Exchange Act
of 1934 and Rule 10b-5 promulgated thereunder. On April 30, 1999, Marimba
commenced an initial public offering of 4 million of its shares of common
stock at an offering price of $20 per share (the "Marimba IPO"). In
connection therewith, Marimba filed a registration statement, which
incorporated a prospectus (the "Prospectus"), with the SEC. The complaint
further alleges that the Prospectus was materially false and misleading
because it failed to disclose, among other things, that: (i) Morgan
Stanley, Credit Suisse and Bear Stearns had solicited and received
excessive and undisclosed commissions from certain investors in exchange
for which Morgan Stanley, Credit Suisse, and Bear Stearns allocated to
those investors material portions of the restricted number of Marimba
shares issued in connection with the Marimba IPO; and (ii) Morgan
Stanley, Credit Suisse and Bear Stearns had entered into agreements with
customers whereby Morgan Stanley, Credit Suisse and Bear Stearns agreed
to allocate Marimba shares to those customers in the Marimba IPO in
exchange for which the customers agreed to purchase additional Marimba
shares in the aftermarket at pre-determined prices. As alleged in the
complaint, the SEC is investigating underwriting practices in connection
with several other initial public offerings.

Contact: Milberg Weiss Steven G. Schulman or Samuel H. Rudman, (800)
320-5081 Email: marimbacase@milbergNY.com Website: http://www.milberg.com

NORTEL NETWORKS: Names Khatod New Chief Marketing and Strategy Officer
Nortel Networks Corp. has an opportunity to outshine its major rivals
during the current slump in the telecommunications equipment market, the
company's new chief marketing and strategy officer says.

"In a rising market, everybody benefits," Anil Khatod said in an
interview on April 24. "When the market is contracting or stagnant, then
you really can identify winners from the also-rans."

Khatod, who reports directly to Nortel boss John Roth, was appointed to
the newly created position, a promotion from his former job as president
of Nortel's global Internet division.

His duties are far-reaching. Khatod will oversee mergers and
acquisitions, global marketing, technology strategy, advertising and
corporate communications.

He said his top challenge over the coming months will be to clearly
articulate Nortel's priorities - of selling high-growth, high-margin
products - and to execute that strategy flawlessly.

"All the major competitors are struggling far worse than Nortel is," he
said. "Here is the opportunity for Nortel, because our relationships with
our service-provider customers are so deep that we can differentiate on
execution. "

An economic downturn in the United States and a funding crunch among many
buyers of fibre-optics and wireless products have left network equipment
makers such as Nortel in the lurch.

But Khatod said Nortel is faring comparatively well. He said long-time
rival Lucent Technologies Inc. is struggling to overcome internal
problems. Meanwhile, Cisco Systems Inc. continues to lose its shine and
still hasn't proved it can create lasting partnerships.

"In other words, (Cisco's) success in the carrier and service-provider
space has been limited."

Iain Grant, managing director of the Yankee Group in Canada, said
Khatod's job won't be that difficult - despite appearances.

"I think it's a good time to be a marketing guy, because if what you do
doesn't work, you can blame the environment. If you make it better, you
can take all the credit," Grant said.

Grant said Nortel must show some change and inject some "new flare" into
the organization if it wants to regain some of the confidence in lost in
recent months.

Lawrence Surtees, a telecommunications analyst with IDC Canada Ltd.,
echoed that view.

"I think the marketing challenge now is to restore faith that it's a
strong and growing corporation," said Surtees. "Slogans and jingles and
ads can be no substitute for having the best products at the right place
and at the right time."

Nortel, like many of its peers, is going through some tough times. The
company plans to cut a total of 20,000 jobs by mid-year to realign costs
with shrinking revenues and margins.

On Feb. 15, the company blind-sided investors by slashing growth
forecasts for 2001, leading to a series of class-action lawsuits and an
outpouring of criticism from financial analysts.

Nortel will hold its annual meeting in Calgary, when shareholders will be
given the chance to voice their concerns with CEO and president Roth and
other top executives. (The Toronto Star, April 25, 2001)

NORTHWEST AIRLINES: EEOC Files Suit Claiming Disability Discrimination
The U.S. Equal Employment Opportunity Commission filed a lawsuit against
Northwest Airlines on Wednesday accusing the carrier of refusing to hire
people with seizure disorders as airplane cleaners and baggage handlers.

The class action lawsuit, filed on behalf of three individuals and others
nationwide who were denied employment, seeks compensatory and punitive
damages of up to $300,000 per claimant.

The EEOC also asks that the court order an end to any discriminatory
employment practices by Northwest.

Northwest spokeswoman Kathy Peach said she couldn't comment specifically
on the lawsuit because airline officials had not yet received a copy.

"Our policies and procedures are consistent with Northwest's obligation
to provide the flying public with the highest possible safety standards
while meeting the Americans with Disabilities Act requirements," Peach
added. (The Associated Press State & Local Wire, April 25, 2001)

NSTAR CORP: Lawsuit Draws Calls to Find out Electricity Charges
More than 200 customers of NStar Corp. on April 24 scrambled to find out
whether they were being overcharged for electricity in the wake of a
lawsuit alleging the utility improperly assigned thousands of customers
to higher-priced default service.

NStar said it received approximately 200 calls from customers, while the
law firm bringing the lawsuit said it received around 25.

NStar spokesman Michael Monahan, who has called the lawsuit "ridiculous,"
said a story in The Boston Globe prompted customers to start asking
questions. "I think that's good. That's the way it should work," he said.

John Roddy, an attorney with Grant & Roddy, which filed the class-action
suit in Suffolk Superior Court against NStar, said the calls to his
office reinforce his belief that at least 5,000 customers may have been
improperly assigned higher-priced default service.

Under the state's electric deregulation law, two tiers of customers were
created, each paying different rates for power beginning in January. Many
customers are uncertain about which tier they belong in. State
eligibility rules cover some situations, but there are lots of gray

Those who have remained customers of their utility since March 1998, the
start of deregulation, are defined as standard service customers paying a
lower rate for power. Those who have initiated new service since March
1998 are classified as default customers.

People moving into the state or a utility's service area after March 1998
should be on default service, as should customers who tried an
alternative power supplier and then resumed with the utility.

But someone who moves within the utility service territory (within
NStar's Boston Edison, Commonwealth Electric, or Cambridge Electric
territories) should remain on standard service. Roddy said he believes as
many as 5,000 customers who moved within the three territories were
improperly placed on default service.

Several people who contacted the Globe said that's what happened to them.
They said Edison corrected the problem when they called the company.
Others, however, had more difficulty. A number said they moved from one
house or apartment to another within the same service territory, but for
a time had electric service at both locations. Utilities maintain that a
customer cannot have standard service at two places. (The Boston Globe,
April 25, 2001)

PREPULSID: Jury at Inquest Called for Changes to Canadian Rules
A jury at an inquest probing the death of a teenage girl who had been
taking a prescribed heartburn medication called for substantial changes
to Canadian rules on prescription drugs.

The jury's recommendations would make it easier for people to get drug
warnings and would alter the way drugs are labelled and administered.

Key among the 50 recommendations was one making it mandatory for doctors
and pharmacists to report to Health Canada a patient's adverse reactions
to a drug within 48 hours. That procedure is now voluntary.

The inquest had been probing the heart-seizure death in March 2000 of
Vanessa Young, the 15-year-old daughter of former Ontario Conservative
backbencher Terence Young.

The girl, who had been bulimic, was taking the stomach drug Prepulsid,
also known as Cisapride, for three months before her death to treat a
bloating feeling and vomiting.

The drug, now banned in Canada and the U.S., had been prescribed by her

Janssen-Ortho, the company that makes Prepulsid, faces three class-action
lawsuits. (The Calgary Sun, April 25, 2001)

RAMPART SCANDAL: Judge Says Victims May Hold City Council Members Liable
In two stunning rulings last week, a federal judge said that when the Los
Angeles Police Department behaves like the mob, it can be sued as though
it is the mob. And like mob kingpins, the mayor, the city attorney and
council members can be taken down with the police.

Judge Gary Allen Feess, who presides over all Rampart scandal cases and
the consent decree, held that, under the federal anti-racketeering law,
Rampart victims may hold City Attorney James K. Hahn, Mayor Richard
Riordan and past and current city council members liable for LAPD
corruption and brutality. The rulings could cost the city hundreds of
millions of dollars and expose Hahn, Riordan and the council members
personally; the Racketeer Influenced and Corrupt Organizations law, known
as RICO, provides for tripling of damages awarded by a jury.

Ironically, just before the rulings were made public, Riordan said that
"the best way to stop police corruption in its tracks is to punish the
command staff, because they should know who the bad apples are and if
they don't, they should be fired for that." For eight years, Hahn,
Riordan, and the City Council members all knew who the bad apples were,
but were in public denial.

In the racketeering ruling, Feess tossed aside the city's argument that
it would be unfair to permit victims of the LAPD to use the federal
anti-mob law, because the law was meant to be used against organized
crime. Feess ruled that the LAPD, as well as its facilitators in city
government, fit the criteria for organized crime. Those criteria include
conduct of an enterprise through a pattern of racketeering activity. A
pattern of racketeering activity is at least two acts within a 10-year
period indictable as obstruction of justice, tampering with witnesses,
fraud or attempted murder.

With more than 110 overturned Rampart convictions because of obstruction
of justice, witness tampering and attempted murders, 135 Rampart civil
cases pending and 250 more Rampart cases in the pipeline--and more than
300 civil jury verdicts against LAPD officers over just the past 10
years--proving a RICO case will not be difficult.

With the LAPD, its chief and its civilian bosses and lawyers now exposed
to racketeering charges, it remains to be seen what will happen. For many
years, the party line has been for both the LAPD and the city's politicos
to tough it out, no matter how bad it got. So far, they have succeeded.
Reform was called for in the July 1991 Christopher Commission Report.
Healing was called for after the April 1992 riots. During the ensuing
decade, no elected official with power over the LAPD took any significant
action to address the reasons the reforms were called for.

If city officials have learned anything from years of defending bad cops
or from Feess' rulings, not only will police abuse victims be
compensated, but the LAPD's 50-year reign of terror, which victimized the
population and cost taxpayers hundreds of millions of dollars, will end.
(Los Angeles Times, April 25, 2001)

ROYAL AHOLD: Ct Denies Stockholder’s Motion to Enforce Settlement
The company is currently involved in two litigation matters arising out
of an Agreement and Plan of Merger, dated March 9, 1999 between Royal
Ahold, its subsidiary Ahold Acquisition, and SMG-II Holdings Corp., the
indirect parent of the entity owning the Pathmark chain of supermarkets.

Pursuant to the Merger Agreement, Ahold Acquisition was to acquire the
Pathmark stores by merging with SMG-II. In accordance with the terms of
the Merger Agreement, Royal Ahold terminated the Merger Agreement on
December 16, 1999 because the company did not obtain the necessary
governmental antitrust approvals for the merger. Prior to our
termination, SMG-II alleged that Royal Ahold had breached the Merger
Agreement by failing to use "best efforts" to obtain all necessary

Royal Ahold filed a complaint, and later an amended complaint, in New
York State court seeking a declaratory judgment that (1) the "best
efforts" provisions are unenforceable, (2) the company did not breach any
provision of the Merger Agreement, including the "best efforts"
provisions, and (3) the company properly terminated the Merger Agreement.

SMG-II filed counterclaims seeking damages for (1) alleged breaches of
the "best efforts" provisions (2) alleged breach of the implied covenant
of good faith and fair dealing, and (3) unfair competition. The damages
sought by SMG-II are not quantified. The parties have taken some written
discovery and have produced documents.

In April 2000, SMG-II brought a motion for partial summary judgment,
seeking to dismiss our claim that the "best efforts" provisions in the
merger agreement are unenforceable.

Royal Ahold brought a cross-motion for summary judgment, claiming that
the "best efforts" provisions are unenforceable as a matter of law, or
have been satisfied. On December 5, 2000, the court granted Royal Ahold’s
cross-motion for summary judgment, finding that the "best efforts"
provisions were satisfied and dismissing SMG-II's claim that the breached
the Merger Agreement. SMG-II has appealed this decision. On January 16,
2001, SMG-II also filed a motion to reargue or renew its motion for
summary judgment. On January 16, 2001, Royal Ahold filed a motion to
dismiss or for summary judgment on SMG-II's remaining causes of action
under the implied covenant of good faith and fair dealing and unfair
competition. The company awaiting the court's decision on these two

The company believes that it has good defenses to this claim and that any
damages awarded against it would not be material.

         Lawsuit By Shareholder of Supermarkets General

In a separate matter, a holder of preferred stock in Supermarkets General
Holding Corporation (SMG), a subsidiary of SMG-II, commenced a class
action in a Delaware state court challenging the terms of the transaction
contemplated by the Merger Agreement, essentially claiming that the
consideration offered by Ahold Acquisition was unfairly allocated between
SMG's preferred shareholders and its common shareholders.

The parties to this litigation reached a class settlement dated June 9,
1999 and, as a result, Ahold Acquisition revised the tender offer.
Following the company’s termination of the Merger Agreement, the
preferred shareholder filed a motion to enforce the Settlement. The
company opposed the motion to enforce the Settlement and also moved for a
stay of this action pending resolution of the New York action.

In a decision dated January 23, 2001, the court agreed with the company’s
position that Ahold Acquisition had complied with Settlement and denied
the motion to enforce the Settlement.

The company believes that it has good defenses to this claim and that any
damages awarded against it would not be material to it.

STAPLES INC: Stockholders File Suit in DE over Reclassification of Stock
On March 23, 2001, eight lawsuits were filed by Staples stockholders
against Staples and each of its directors. On March 28, 2001, a ninth
lawsuit was filed in a purported class action entitled Gebhardt v.
Staples, Inc., et al. (C.A. No. 18784) against Staples and each of its

The lawsuits allege that the defendants breached their fiduciary duties
to Staples' stockholders in connection with the proposed reclassification
of Staples common stock. The Gebhardt lawsuit also alleges that the
defendants allegedly violated Delaware law and various stock purchase
agreements in connection with the proposed reclassification.

The lawsuits were filed in the Chancery Court of the State of Delaware in
and for New Castle County and seek injunctive relief against the
reclassification and unspecified monetary damages. The lawsuit also seeks
immediate discovery and immediate preliminary injunctive relief against
the reclassification. Staples believes that the lawsuits are without
merit and intends to vigorously defend against the claims.

TOBACCO LITIGATION: Money for Lawsuit by Fed Govt Is Drying up
Justice Department lawyers have warned that they may soon be forced to
abandon the federal government's landmark lawsuit against the tobacco
industry because the Bush administration has not proposed enough funding
to keep the litigation alive, according to a confidential memo reviewed
by The Washington Post.

Justice lawyers have estimated they need $ 57.6 million in the coming
fiscal year to continue the government's lawsuit, which seeks more than $
100 billion in damages from tobacco companies for allegedly engaging in a
45-year pattern of racketeering.

But the budget proposed by President Bush holds the budget at $ 1.8
million for a staff of 31, Justice officials said, and a hiring freeze
has hampered the department's ability to keep up with the lawsuit.

A March 12 memo to Attorney General John Ashcroft from the Justice
Department's Tobacco Litigation Team said that without sufficient funding
"we cannot maintain the action" and "there are no realistic prospects for
a settlement" in the case.

"The uncertainties surrounding the future of the case ... threaten to
cripple our litigation efforts and our ability to achieve a successful
resolution," the memo said.

The lack of a statement from Ashcroft endorsing the case and efforts to
find money to fund the litigation in fiscal 2002 "would, in all
likelihood, require us seriously to consider seeking authority to dismiss
the case," the memo added.

Taken together, the memo and the limited funding for a case that is
entering the crucial, expensive "discovery" phase, are the clearest
indications yet of how the Bush administration may proceed on the
lawsuit. As a senator, Ashcroft was a staunch foe of the litigation. Bush
expressed skepticism about the suit during the presidential campaign.

However, Justice Department spokeswoman Mindy Tucker said the agency's
budget is "neutral" on whether to continue the lawsuit. She said Ashcroft
has not seen the memo or reviewed the issue of whether to proceed with
tobacco litigation.

The government filed its far-reaching lawsuit against Philip Morris Cos.
and other tobacco companies in September 1999, alleging fraudulent
marketing practices. The suit sought billions of dollars to cover the
cost of treating sick smokers through federal health insurance programs.

U.S. District Judge Gladys Keller last year threw out portions of the
lawsuit that covered health care payments, arguing that the government
should have acted sooner if it wanted to recoup those costs. But she said
the government could pursue claims under the Racketeer Influenced and
Corrupt Organizations Act that the companies "have made countless false
and deceptive statements" about the addictive properties and health
effects of their products.

The lawsuit has been beset with budget troubles, and it was nearly
derailed last year by GOP congressional leaders and tobacco state
lawmakers who opposed it. Last year, about $ 12 million from the Veterans
Administration, the Defense Department and the Department of Health and
Human Services was transferred to the Justice Department to help pay for
the suit.

Bush administration officials said it is up to Congress to craft a
similar arrangement for the coming year, but the agencies involved are
balking at providing more help.

A dismissal in the federal tobacco lawsuit would be welcome news to the
tobacco industry, which has been battered by court challenges in the
United States and Europe in recent years. The industry settled lawsuits
in 1998 filed by 46 state governments at a cost of $ 240 billion over 25
years, and last year a Miami jury ordered it to pay $ 145 billion in
punitive damages in a class action suit covering sick Florida smokers.

Defendants in the case include Philip Morris; R.J. Reynolds Tobacco Co.;
Brown & Williamson Tobacco Corp.; Lorillard Tobacco Co. and American
Tobacco Co. (The News and Observer (Raleigh, NC), April 25, 2001)


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

Class Action Reporter is a daily newsletter, co-published by Bankruptcy
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Washington, DC. Theresa Cheuk, Managing Editor.

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

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