CAR_Public/011212.mbx              C L A S S   A C T I O N   R E P O R T E R
  
           Wednesday, December 12, 2001, Vol. 3, No. 242

                          Headlines


AETNA INC.: Savett Frutkin Lodges Securities Suit in E.D. Pennsylvania
BASF CORPORATION: Minnesota Jury Awards Farmers $45M In Fraud Suit
BLOCKBUSTER INC.: Proposes $45M Settlement To Texas Late Fees Suit
BRIGHTPOINT INC.: Denies Fraud Charges In Securities Suit in S.D. IN
CHEMICAL COMPANIES: Japanese Firms To Settle Antitrust Suit For $23.2M

CORNING INC.: Fruchter Twersky Commences Securities Suit in W.D. NY
CORNING INC.: Milberg Weiss Commences Securities Suit in W.D. New York
DJ ORTHOPEDICS: Cauley Geller Commences Securities Suit in S.D. CA
ECI TELECOM: Faces Amended Complaint For Securities Violations in VA
ENRON CORPORATION: New York Considers Suit Over Retirement Fund Losses

EQUIVA SERVICES: Sued By Gas Station Operators For Antitrust Violations
INDIAN FUNDS: Interior Secretary Norton To Refute Contempt Charges
MICROSOFT CORPORATION: Maryland Federal Judge Questions $1B Settlement
MICROSOFT CORPORATION: Defends $1B Settlement, Presents Revisions
MICROSOFT CORPORATION: Dissenting States Propose "Stiffer" Settlement

MINNESOTA: School District Asks For Dismissal of Suit For Disabled Kids
NAPOLI KAISER: Charged With Fraud in Fen-Phen Litigation Settlement
REMEC INC.: California Court Dismisses Securities Suit With Prejudice
SCHOLASTIC CORPORATION: Supreme Court Refuses To Stop Securities Suit
SECURITIES LITIGATION: Underwriters Ask Judge To Recuse Self From Suits

WAL-MART INC.: Asks CA Court To Dismiss Gender Discrimination Suit
ZALE CORPORATION: Discovery In Credit Insurance Fraud Suits Drag On
ZALE CORPORATION: Employees File Suit Seeking Overtime Pay in Delaware


                           *********


AETNA INC.: Savett Frutkin Lodges Securities Suit in E.D. Pennsylvania
----------------------------------------------------------------------
Savett Frutkin Podell & Ryan PC initiated a securities class action on
behalf of a class of persons who purchased the common stock of Aetna,
Inc. (NYSE:AET) between December 1, 2000 and April 9, 2001 in the
United States District Court for the Eastern District of Pennsylvania
against the Company, its chief executive officer, John W. Rowe, and its
chairman, William H. Donaldson.

The suit charges defendants with violations of sections 10(b) and 20(a)
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. The suit alleges that during the class period, the
defendants announced that they had reached a definitive agreement to
sell the Company's financial services and international businesses to
ING Group N.V. and, in an integrated transaction, that the Company
planned to spin-off its domestic healthcare and large case pensions
businesses in the form of New Aetna, to its shareholders.

The suit also alleges that defendants misled the investing public by
falsely representing, among other things, that the New Aetna was
implementing a number of strategic and operative initiatives which
addressed among other things rising medical costs and improved the
efficiency of the operations and that the New Aetna had adequate
reserves for its medical expenses.

In truth and in fact, the Company had recorded inadequate reserves for
its medical expenses and was experiencing escalating medical costs due
to a number of factors:

     (1) significant problems in its overpayment of claims or paying
         single claims multiple times;

     (2) inadequate pricing for risk enrollment;

     (3) adverse selection;

     (4) provider reimbursement rates, contracting issues; and

     (5) increased short term utilization.

Then, on April 10, 2001, before the market opened, the Company shocked
the investing community by announcing that its first quarter 2001
results were expected to be significantly lower than estimated as a
result of increased medical costs due to higher utilization of
healthcare services in the fourth quarter 2000 and the first quarter
2001. The Company announced that it expected to record in the first
quarter approximately $90 million before tax of additional medical
costs related to services performed in prior periods, primarily the
fourth quarter 2000.

As a result of this announcement, the price of the Company's common
stock plunged from $36.15 on April 9, 2001 to a low of $28.75 on April
10, 2001, on heavy trading volume.

For more information, contact Robert P. Frutkin or Renee C. Nixon by
Mail: 325 Chestnut Street, Suite 700, Philadelphia, PA 19106 by Phone:
215.923.5400 or 800.993.3233 by E-mail: mail@savettlaw.com or visit the
firm's Website: http://www.savettlaw.com/


BASF CORPORATION: Minnesota Jury Awards Farmers $45M In Fraud Suit
------------------------------------------------------------------
A Minnesota jury awarded recently $45 million to thousand of farmers in
a class action against BASF Corporation alleging the chemical
manufacturer misled and deceived the farmers in their herbicide
purchases from chemical manufacturer BASF Corporation, according to a
recent Associated Press report.

Rob Shelquist, an attorney for the plaintiffs, associated with the
Minneapolis firm Lockridge Grindal Nauen, said the $15 million in
compensatory damages against the Company will be tripled to $45 million
under a New Jersey consumer protection statute. Mr. Shelquist said the
farmers can expect to receive between $2,000 and $10,000 each.

After a four-week trial and about four hours of deliberations, the jury
found that the Company engaged in "unconscionable commercial practice,
deception, fraud, false pretense, false promise, or misrepresentation"
relating to the Company's marketing and pricing for Poast and Poast
Plus herbicides from 1992 to 1996.  The farmers had claimed that the
Company engaged in fraud by marketing the same thing as two different
products, selling one at a premium price and leading farmers to believe
the less expensive product was not registered with the EPA for use on
certain crops.  

The Company labeled the more expensive Poast for crops such as
sugarbeets, sunflowers, potatoes, and other vegetables and fruit.  At
the same time, it labeled cheaper Poast Plus for crops such as soybeans
and cotton. The cost difference was about $4 per acre.

The lawsuit was filed in 1997 by farmers in North Dakota, Minnesota and
Montana and achieved nationwide class action status in 1999.  Mr.
Shelquist said the case ultimately excluded North Dakota farmers who
purchased Poast in North Dakota because these farmers reached an out-
of-court settlement with the Company four years ago.

The Company had maintained that it sold "a good product at a fair
price" and that farmers made money using its product.  The company
believes the verdict was unfair and plans to appeal, said Brian
O'Neill, a lawyer with Faegre and Benson of Minneapolis, who
represented the Company.  


BLOCKBUSTER INC.: Proposes $45M Settlement To Texas Late Fees Suit
------------------------------------------------------------------
Video rental chain Blockbuster, Inc. proposed a settlement worth $500
million in the consumer class action pending in Beaumont, Texas federal
court relating to late fees charged to customers who returned their
videos late between Jan. 1, 1992, and April 1 of this year.

Geoffrey Miller, a professor at New York University Law School, vouched
for the settlement's fairness in his testimony before the Court Monday,
saying the settlement would provide customers valuable relief.  He said
"It is probably a better deal since the certificates represent the same
amount or more than the amount of extended viewing fees the customers
are disputing." Under the settlement, the Company would provide an
estimated 40 million customers with certificates for free or discounted
videos. According to Mr. Miller, such a plan would offer those
customers more value and convenience than cash would.

According to an Associated Press report, part of the proposed
settlement would be $9.25 million in cash for attorneys' fees. Beaumont
Judge Milton Gunn Shuffield had given preliminary approval to the
settlement in April, but he required the Company to notify possible
class action participants before any final approval.  Company attorney
Allan Jones told Associated Press that the Company would admit no
wrongdoing, but would settle because of the number of customers
involved.


BRIGHTPOINT INC.: Denies Fraud Charges In Securities Suit in S.D. IN
---------------------------------------------------------------------
Brightpoint, Inc. vehemently denied that it violated federal securities
laws as alleged in the securities class action pending in the United
States District Court for the Southern District of Indiana,
Indianapolis Division on behalf of all purchasers of public traded
Company securities between January 28,1999 and November 14,2001.

The suit, which names the Company and directors Robert J. Laikin and J.
Mark Howell as defendants, alleges violations of Section 10(b) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder and of Section 20(a) of the Exchange Act. The suit alleges,
among other things, that the defendants concealed
adverse material information and made or participated in the making of
untrue statements of material facts and omitted to state material facts
concerning the business, finances, financial condition, performance,
operations, products and future prospects of the Company.



CHEMICAL COMPANIES: Japanese Firms To Settle Antitrust Suit For $23.2M
----------------------------------------------------------------------
Two Japanese chemical companies agreed to pay a combined $23.2 million
to settle out-of-court a class action suit charging them with fixing
the price of sorbates, chemical preservatives used primarily in high-
moisture and high-sugar foods such as cheese and baked goods.
Japan's Daicel Chemical Industries Ltd. and Nippon Synthetic Chemical
Industry Co. revealed in separate statements that they would pay $16
million and $7.2 million, respectively to US food firms that accused
them of price fixing, according to a Xinhua News Agency report.

The antitrust suit was commenced in October 1999 by a group of US food
companies against a number of foreign chemical firms, alleging
violations of US antitrust law by manipulating the prices of sorbates
to maintain their shares in the market.


CORNING INC.: Fruchter Twersky Commences Securities Suit in W.D. NY
-------------------------------------------------------------------
Fruchter and Twersky LLP initiated a securities class action in the
United States District Court, Western District of New York on behalf of
purchasers of the common stock or zero coupon convertible debentures of
Corning, Inc. pursuant to a prospectus dated November 2, 2000, against
the Company and:

     (1) Roger A. Ackerman,

     (2) Katherin A. Asbeck, and

     (3) James B. Flaws

The suit charges that the defendants violated Sections 11, 12(a)(2) and
15 of the Securities Act of 1933. Specifically, the complaint charges
that the registration statement and prospectus for the November 2000
offering contained material misrepresentations and omissions regarding
demand for the Company's products and because it failed to disclose
that it would have to write-off hundreds of millions of dollars in
obsolete inventory.

On July 10, 2001, the Company announced that it was taking a $5.1
billion charge related to two recent acquisitions and that it would
write-off $300 million in excess and obsolete inventory. Subsequently,
the Company reported a second quarter loss of $4.76 billion.

For further details, contact Jack G. Fruchter by Mail: One Penn
Pennsylvania Plaza, 19th Floor, New York, New York 10119 by Phone: 800.
484.5102 or 212.279.5050 by Fax: 212.279.3655 or by E-mail:
JFruchter@FandT.org.


CORNING INC.: Milberg Weiss Commences Securities Suit in W.D. New York
----------------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP filed a securities class
action on behalf of purchasers of the common stock or zero coupon
convertible debentures of Corning, Inc. (NYSE:GLW) pursuant to a
prospectus dated November 2, 2000 in the United States District Court,
Western District of New York against the Company and:

     (1) Roger A. Ackerman,

     (2) Katherine A. Asbeck and

     (3) James B. Flaws

The suit alleges that defendants violated Sections 11, 12(a)(2) and 15
of the Securities Act of 1933 by issuing a materially false and
misleading registration statement and prospectus in connection with the
Company's offering of common stock and debentures in November 2000.
Specifically, the complaint alleges that the prospectus was materially
false and misleading, among other reasons, because:

     (i) it stated that demand for the Company's products was robust;

    (ii) because it omitted to disclose that the Company was amassing
         hundreds of millions of dollars of obsolete inventory that
         would have to be written-off; and

   (iii) given the foregoing, the projection of 25% earnings growth in
         2001, contained in the prospectus, was lacking in a reasonable
         basis at all times.

On July 10, 2001, the Company announced it was taking a $5.1 billion
charge primarily related to two recent acquisitions, that it would also
write-off $300 million in excess and obsolete inventory, and that it
would cut 1,000 jobs and close three plants. On July 25, 2001, the
Company reported a massive second-quarter loss of $4.76 billion, or
$5.13 per share. Company shares closed that day at $13.77, down 80%
from the offering price.

For further details, contact Steven G. Schulman or Samuel H. Rudman by
Mail: One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 by
Phone: 800.320.5081 by Email: corningcase@milbergNY.com or visit the
firm's Website: http://www.milberg.com/corning/


DJ ORTHOPEDICS: Cauley Geller Commences Securities Suit in S.D. CA
------------------------------------------------------------------
Cauley Geller Bowman & Coates LLP initiated a securities class action
in the United States District Court for the Southern District of
California on behalf of purchasers of DJ Orthopedics, Inc. (NYSE:DJO)
common stock pursuant to the November 15, 2001 initial public offering
against the Company, certain of its officers and directors and its
underwriters.

The complaint charges the defendants with violations of the Securities
Act of 1933. On November 15, 2001, the Company completed an IPO of 9
million shares of stock pursuant to a registration statement/
prospectus. The offering was priced at $17 per share for total proceeds
of $153 million. In the prospectus, the defendants represented that the
Company was dependent, in part, on international sales to fuel its
revenue growth and profitability.

The complaint alleges that the statements in the prospectus regarding
the Company's international sales and the accompanying risk disclosures
regarding its ability to generate such growth were false and misleading
and contained material omissions when made. In actuality, by the time
of the IPO, the Company had known that its stock price of $17 reflected
the defendants' contention that it would achieve its 4th Quarter 2001
earnings estimates. The complaint charges that prior to the IPO,
defendants knew that the Company would not achieve its 4th Quarter
earnings estimates. Moreover, this information was disclosed to certain
of the underwriting defendants' sales people who, as a result of the
change in the Company's projections, declined to support or otherwise
purchase the shares in the "after market."

Thus, contrary to the representations in the prospectus and obligations
of the defendants, the prospectus omitted material facts, rendering the
it false and misleading. Public investors who purchased shares
traceable to the IPO based on the Company's representations, paying $17
per share for stock, have suffered damages.

For more information contact Jackie Addison, Sue Null or Shelly
Nicholson by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone:
1.888.551.9944 by E-mail: info@classlawyer.com or visit the firm's
Website: http://www.classlawyer.com


ECI TELECOM: Faces Amended Complaint For Securities Violations in VA
--------------------------------------------------------------------
An amended securities class action has been filed against ECI Telecom
Ltd. (NASDAQ:ECIL) in the United States District Court for the District
of Virginia, according to a Company press statement. ECI Telecom Ltd.
is a provider of integrated network solutions for digital
communications and data transmission systems.

The amended complaint, which also names directors Doron Inbar and Avi
Ben-Assayag as defendants, alleges violations of Sections 10(b) and
20(a) of the Securities Exchange Act of 1934.  The suit further alleges
that a fraudulent scheme, a deceptive course of business and the
dissemination of false and misleading financial statements injured
Company shareholders who purchased stock from May 2, 2000 through
February 14, 2001.

The court had dismissed the prior complaint filed by the same
plaintiffs against the Company, Doron Inbar, Avi Ben-Assayag and
Jonathan Kolber without prejudice, saying the plaintiffs failed to
prove the defendants "possessed the requisite state of mind for a
securities fraud action."  The defendants said in a press statement
that they intend to vigorously defend the action and expect to file a
motion to dismiss. Pursuant to the Private Securities Litigation Reform
Act of 1995, all discovery is stayed pending a decision on the
defendants' motion to dismiss.



ENRON CORPORATION: New York Considers Suit Over Retirement Fund Losses
----------------------------------------------------------------------
New York State's common retirement fund, which lost $58 million due to
the plunge in Enron Corporation stock, may file a federal class action
against the failed energy giant, the New York Daily News recently
reported.  "We're considering it," a spokesman for state controller
Carl McCall said.  Mr. McCall is sole Trustee of the $112 billion
pension fund.

The state's retirement fund is but one of the many retirement funds
that took a substantial "hit" when the Company's stock plunged from a
high of $85 a share to a recent 66 cents.  Representatives of several
states' pension funds met early last week and estimated the country's
public pension funds lost $250 million when the Company plunged.  
Enron's stock was widely held by many state pension funds because it
was included in the Standard & Poor 500 index (S&P).

The fund serves a million retired and current public employees.  It
held 4.6 million shares of the Company's stock in both index funds and
separately.  All the stock was sold on November 29, when the Company
was dropped from  S&P's 500 index because its value had fallen so
low.  New York City's $80 billion public employee pension fund,
however, still holds approximately 2.8 million shares, said spokesman
David Neustadt, for City Controller, Alan Hevesi.  "We're still
trying to figure out the losses, and we're studying our options."

Enron filed for bankruptcy about a week ago, the largest Chapter 11
filing in history.  Just weeks earlier, the company revealed it had
overstated profits and sharply understated its total debt burden.  This
led to a downgrade of its debt to junk status, which, in turn, led to
the withdrawal by its smaller rival, Dynegy, from a $9 billion merger
deal.  

The US Department of Labor said that it was looking into the company's
own retirement funds.  Employees, whose retirement accounts were made
up almost entirely of the Company's stock, reportedly have lost 80% to
90% of their funds' value due to the stock's precipitous fall.  Adding
to the mix, a company spokesman confirmed that just days before filing
bankruptcy, the Company paid $55 million in incentives to 500 key
employees to keep them on staff.

Securities and Exchange Commission Chief Robert Herdman said the
Company's rapid demise and a recent string of accounting irregularities
at other big companies indicated "a threat to the confidence in our
system of financial and our capital markets."


EQUIVA SERVICES: Sued By Gas Station Operators For Antitrust Violations
-----------------------------------------------------------------------
Equiva Services LLC, the joint venture set up oil giants Shell Oil
Company, Texaco, Inc. and Saudi Refining Inc. to refine and market
their products, faces an antitrust class action filed in Los Angeles
federal court by 39 independent service station operators.

The suit took its first major step forward this week as lawyers for
both sides presented their depositions. Plaintiffs told the court that
that the three major oil companies have conspired to fix prices and
raised rents in a bid to drive them out of business since 1998.  

The plaintiffs, who rent their gas stations but own their businesses,
claim the joint venture violates antitrust law and is forcing dealers
out of business across the country.  Texaco has since left the venture,
after it acquired regulatory approval to merge with Chevron
Corporation.

Los Angeles gas station operator Fred Dagher says in an interview with
Associated Press, "Fix the price, raise the rent, and you get rid of
the dealers. Then you can control the price of gas with one phone
call."  He asserted that before the joint venture, there were 2,500
independent dealers across the country. Today, only 1,100 exist.  "What
hurt these stations is the gas companies, not the economy," he added.
He also said average monthly rents for independent service station
operators have increased to $8,900 from $2,500 in 1998.

Joseph Alioto, the attorney representing the independent dealers, said
outside court that the members of Equiva increased prices they charged
independent dealers between 25 cents and 40 cents per gallon in 1998.
At the time, crude oil cost about $10 a barrel, the lowest price since
the Depression, he said. "Damages will be quite substantial," he said.
Cameron Smyth, a spokesman for Equiva, said the joint venture was
formed to improve marketing efficiencies, and the alliance is confident
the judge will rule in its favor, according to an Associated Press
report.


INDIAN FUNDS: Interior Secretary Norton To Refute Contempt Charges
------------------------------------------------------------------
Defense lawyers are facing an uphill battle to keep Interior Secretary
Gale Norton from being cited with contempt of court in a class action
launched by 300,000 Indians seeking an accounting for billions of
dollars in a federally-run Indian trust fund, the Individual Indian
Monies Trust, The Wall Street Journal recently reported.

Government lawyers, at a federal-court hearing, in Washington, DC,
will bear the burden of proving that Ms. Norton has not acted in
contempt by failing to comply with prior court orders to reform the
accounting system that has failed to "account" for what seems to be the
loss or theft of the royalties and rents derived from use of
Indian-owned lands for such activities as farming, grazing, mining and
logging. The trust-fund system dates from the 1880s when Congress
divided remaining Indian lands into individual plots, which they
assigned to individual Indians under pre-Second World War policies of
the US government.

The task of presenting the Secretary's case has been complicated by
last week's events, which angered US District Court Judge Royce C.
Lamberth.  Norton was facing four charges of contempt for not making
reform efforts that would place her in compliance with the judge's
orders, now she is facing five.  Judge Lamberth tacked on the fifth
charge after a day of conflicting government testimony about actions
taken by Ms. Norton, her aides and her lawyers to assure computer
security for the Indian trust fund. Accusing Ms. Norton, her aides and
her lawyers of "committing a fraud on the court," Judge Lamberth
ordered the Interior Department to disconnect from the Internet "all
information technology systems that house or provide access to
individual trust Indian trust data" until the system is secured.

Previously a court-appointed investigator, in order to test the system,
was able to hack into the trust-fund accounting system at the
Department and manipulate financial data, thus proving to Judge
Lamberth that hundreds of millions of dollars of American Indians'
monies were at risk to security breaches via the Internet.  In other
arms of the Interior, sites weren't penetrable, such as the US Fish and
Wildlife Service, the US Geological Survey and the Bureau of Land
Management, among others.

Eric Ruff, Director of Communications for the Interior said Ms.
Norton's lawyers will stress that she is proposing an effective reform
of the system by creating a new office at Interior called the Bureau of
Indian Trust Assets Management.  It would take control of the trust
fund, which operates as a banking system for 285,000 individual
American Indians and processes $300 million a year.  "There has been a
lot of history of motion and no progress in this case, and it has
created a lot of frustration.  We understand this, and we're trying to
change history," Mr. Ruff explained. Next week, Mr. Ruff said, Ms.
Norton will be going to Albuquerque, New Mexico, to hold the first of a
series of meetings to explain the proposal to tribal leaders.  Some of
them object to having trust fund management removed from the Bureau of
Indian Affairs, which is largely run by reservation managers, most of
whom are Indians.

Judge Lamberth held Ms. Norton's predecessor, former Secretary Bruce
Babbitt, in contempt of court in 1999 for providing misleading
information in the same case and for ignoring court orders.  The
government was fined $625,000 as a result, and could face more fines
depending on the outcome of the hearing.  Ms. Norton also could be
jailed, but that is not likely.

The heart of the case, to be threshed out next year, involves
determining how much money Indian account-holders are entitled to.   
The plaintiffs argue it amounts to billions of dollars.  Interior
officials have said there is no evidence of major misallocations.  
Attempts to settle the case have failed.



MICROSOFT CORPORATION: Maryland Federal Judge Questions $1B Settlement
----------------------------------------------------------------------
Federal judge J. Frederick Motz examined the controversial $1 billion
agreement proposed by software giant Microsoft Corporation to settle
hundreds of antitrust class actions, raising concerns over its actual
dollar value, and addressing claims that the settlement favored the
Company over rival Apple Corporation.

Under the settlement, the Company would donate $1 billion in cash,
software, computers and training to some of the nation's poorest
schools, a deal that has been criticized by many.  Some critics allege
that the $1 billion settlement was a paltry sum to pay for the
Company's monopolistic practices, while others believe that the deal
was a legal ruse to further the Company's market share in a sector
controlled by rival Apple Computers.

Judge Motz said that he might have to subtract the value of donated
software as well as the value of goodwill the settlement generates for
Microsoft.  He told Robert Hall, an economist testifying in favor of
the settlement, "If Microsoft is generating goodwill out of this, it
should put more into this."

Judge Motz also considered objections posed by Apple Computers that the
agreement would flood schools with refurbished personal computers
running Microsoft's Windows operating system and other software.  He
said, "If in the solution there are structural biases, however good the
intention, then that's something that's got to be of concern."

According to a Reuters report, Judge Motz is trying to weigh the value
of the proposed settlement against the probability the Company could
lose and pay more if the class action suits were allowed to proceed in
court. The judge asked the Company why it did not just distribute the
money and let schools spend it on whatever software they liked.

Microsoft Deputy General Counsel Tom Burt said the software giant could
help more schools under the proposed settlement, distributing more
software at a lower cost than if the same schools went out and bought
programs on the open market, according to Reuters. He accused Apple of
trying to take Microsoft's settlement money and get it spent on Apple
products. "Microsoft believes this settlement fully maximizes the value
of this case," he said.


MICROSOFT CORPORATION: Defends $1B Settlement, Presents Revisions
-----------------------------------------------------------------
Microsoft Corporation presented several changes to the $1 billion
settlement providing cash, computers, software and training to the
nation's poorest schools in a hearing with Baltimore Judge J. Frederick
Motz after the proposed agreement drew criticism from various sectors.

Critics of the controversial settlement, forged to settle hundreds of
private antitrust class actions, fear that it was not a severe enough
punishment for the Company's abuse of its monopoly power.  Others
opined that providing Microsoft computers and software to schools would
only enhance its monopoly and hold on the market. During the hearing,
the Company defended the settlement saying it would "close the digital
divide" by helping poor schools get used computers and free software.  
Company lawyer Tom Burt said the settlement is "very fair and even
generous."

According to the Orlando Sentinel, the Company responded to criticism
by proposing changes to the settlement, which are:

     (1) Changing the way the foundation that will oversee the money
         will pick its board members. Microsoft said two software
         makers would join the foundation: Connectix, which makes a
         program that lets Windows software work on rival Apple
         computers, and education software maker Key Curriculum Press;

     (2) Allowing the foundation, not Microsoft, to oversee the
         distribution of $90 million in teacher training funds that are
         part of the settlement.

In response to Apple's contention that the settlement might encroach on
one of the markets where Apple still holds a big share, Mr. Burt said
that schools would be able to make their own technology choices. "This
is going to be a platform-neutral settlement that is not going to be
influenced by Microsoft." The Company also said the settlement has the
support of the National Education Association, the United Negro College
Fund and other education groups.

Mr. Burt said he hopes more companies will join the foundation and
stressed that schools will be able to make their own technology
choices, according to the Orlando Sentinel. He told the Sentinel, "This
is not a settlement that imposes any solutions on local schools.The
eligible schools are enabled to implement local technology plans."


MICROSOFT CORPORATION: Dissenting States Propose "Stiffer" Settlement
---------------------------------------------------------------------
Nine states who opted out of the settlement agreement between Microsoft
Corporation and the Justice Department in the federal class action
against the Company have proposed a "stiffer" settlement package.

The federal suit accused the Company of several illegal business
practices, including:

     (1) commingling middleware and operating system software code;

     (2) discriminatory licensing;

     (3) failure to make timely disclosure of interfaces rivals need to
         market software compatible with Windows; and

     (4) actual or threatened retaliation against customers and rivals
         to discourage development and use of competing software

Last month, the Company reached an agreement with the Justice
Department that gives computer makers more freedom to load software
from its competitors. Nine states signed on to the settlement, however
the other states and the District of Columbia rejected the settlement,
saying it did not go far enough in preventing the Company from
committing further antitrust violations in the future in other markets.

Under their own proposal, the dissenting states, California, Iowa,
Connecticut, Kansas, Florida, Massachusetts, West Virginia, Utah,
Minnesota and the District of Columbia asked for:

     (i) timely and broad-based computer code sharing;

    (ii) mandatory distribution of Java;

   (iii) a version of Microsoft's Internet Explorer browser available
         as open source; and

    (iv) tougher enforcement, including naming a special master with
         substantial authority.

The restrictions would run for 10 years. The unbundled version of
Windows would come without a media player and other middleware.

Iowa Attorney General Tom Miller told TechWeb that the restrictions
were "strong but fair," and that the remedies would achieve the
objectives of the appellate court decision "to prohibit Microsoft's
illegal conduct and prevent similar acts in the future, to spark fair
competition, and to take away some of the illegal gains achieved by
Microsoft."

Microsoft spokesman Jim Desler called the dissident states' proposed
remedies "extreme and not commensurate with what is left of the
case..The settlement we reached with the Department of Justice and nine
of the plaintiff states is a fair and reasonable compromise that is
good for consumers and will be good for the economy." Microsoft will
file a legal response to the states' proposal on Dec. 12. US District
Judge Colleen Kollar-Kotelly is conducting hearings to decide if the
Justice Department settlement is in the public interest while at the
same time continuing litigation, with remedy hearings tentatively to
begin March 11, according to a TechWeb report.


MINNESOTA: School District Asks For Dismissal of Suit For Disabled Kids
-----------------------------------------------------------------------
The Anoka-Hennepin School District has asked the US District Court in
St. Paul, Minnesota to dismiss a class action filed against it alleging
that it has not exerted enough effort to ensure quality education for
disabled kids. Kerr Law Office, Inver Grove Heights, with the
assistance of Judith Gran of the Public Interest Law Center of
Philadelphia, filed the suit on behalf of nine children and their
parents.  The suit names as defendants the district and:

     (1) the Minnesota Department of Children Family and Learning,

     (2) Superintendent Roger Giroux and

     (3) Susan Butler, director of special education

The suit alleges alleges that the district failed to:

     (i) ensure children are educated in the least restrictive
         environment;

    (ii) ensure there is adequate staff development, and

   (iii) ensure parents are provided notice of their rights under the
         IDEA (Individuals with Disabilities Education Act).

According to the Blaine Spring Lake Park Life, the suit asserts that
the students named in the suit have a right to:

     (a) a free appropriate public education in the least restrictive
         environment that is reasonably calculated to result in a
         meaningful education;

     (b) an individualized education program tailored to the unique
         needs of the child;

     (c) a comprehensive system of personnel development for
         administrators, regular education teachers, special education
         teachers, related services personnel, and paraprofessionals;

     (d) inclusive education to the maximum extent appropriate; and

     (e) the procedural safeguards outlined in the IDEA and state law.

The suit claims that the district has more than 5,000 children in its
special education system and has been the subject of numerous
complaints and special education hearings.  Attorney for the plaintiffs
Sonja Kerr of The Public Interest Law Center of Philadelphia asserts
"Anoka-Hennepin has previously resisted efforts at a systemic solution
of the situation."

Negotiation, advocacy, complaint filings with the Minnesota Department
of Children, Family and Learning, due process hearings and informal
discussions failed to bring results and the school board allegedly
refused to mediate the concerns of all plaintiffs as a group, according
to the lawsuit.

Judge John Mason will preside in a hearing today to consider the school
district's motion to dismiss the suit, according to Paul Cady, District
11 legal counsel.  He emphasized that the issues raised by the families
of the special education children have been dealt with through due
process at the district and state levels. The plaintiffs had until Nov.
30 to file a response, and the school district had until Dec. 7 to
submit a final reply, he said.


NAPOLI KAISER: Charged With Fraud in Fen-Phen Litigation Settlement
-------------------------------------------------------------------
Law firm Napoli, Kaiser and Bern (NKB) faces a class action suit filed
in United States District Court for the Southern District of New York,
alleging that the Firm defrauded an estimated 5,600 people involved in
litigation surrounding the popular diet drug Fen-Phen of hundreds of
millions of dollars. The suit accuses the Firm's partners Paul Napoli,
Gerald Kaiser and Marc Jay Bern of violations of the Racketeer
Influence and Corrupt Organizations Statute (RICO). The suit also
accuses them of conspiracy as well as numerous violations of the
Lawyers Code of Professional Responsibility.

The suit contends that the Firm convinced thousands of plaintiffs who
suffered medical damages from Fen-Phen to opt out of the national class
action settlement with promises that the firm would return higher
damage awards by filing individual cases. Instead, the Firm secretly
settled all the suits en masse with drug manufacturer American Home
Products (NYSE:AHP), and then presented plaintiffs with settlement
offers allegedly from American Home that were below what the firm had
promised to deliver.  The suit seeks to represent all those plaintiffs
who were represented by the Firm.

According to Steve Berman of Hagens Berman, the law firm filing the
action, the Firm began a national recruitment program in 1999 that
included advertising and the development of a referral network of law
firms across the country. The campaign was designed to convince those
entitled to settlements under the Fen-Phen national class action to opt
out and allow the Firm to file individual suits on their behalf. NKB
promised these clients that the firm would take on each of their cases
on an individual basis. "Their campaign led people to believe that the
national class-action settlement was horribly under-funded, and that
they would recover larger sums of money if they would allow NKB to
represent them," Mr. Berman said.

The suit claims that the Firm neither had the intention nor the ability
to try thousands of individual cases. From the outset, the suit
alleges, the Firm secretly planned to settle the individual cases with
American Home Products in a single, consolidated settlement. "We intend
to prove that NKB never intended to set one foot in a courtroom for any
of these cases," Mr. Berman added. "We know, for instance, that they
filed one single complaint on behalf of 1,600 unrelated plaintiffs.
Their goal was to convince AHP that NKB could prolong the Fen-Phen
issue for years, convincing the company to make a quick settlement."

According to the suit, American Home Products and Napoli Kaiser met and
agreed to a wholesale settlement that required the Firm to stop
soliciting new clients and stop prosecuting the cases of existing
clients. The settlement left the issue of individual settlement amounts
and manner of payment to the Firm, the suit states. However, NKB never
disclosed to its clients that the firm had reached a lump-sum
settlement and that its clients would be competing with each other for
a portion of an agreed fee. "This placed the firm in a conflict; they
were pitting one client against another for settlement dollars.NKB
never disclosed to the plaintiffs; instead the firm pretended that they
were continuing to negotiate for each client with AHP, when in reality
the firm was not," Mr. Berman asserted.

According to the complaint, the Firm typically opened these individual
settlement negotiations with a $10,000 offer, purportedly made by AHP,
knowing that similar injuries were getting much larger settlements and
jury verdicts when their claims were pursued zealously.

Mr. Berman also said it was standard practice for the firm to tell a
client they had a "new offer from AHP" or "AHP would not accept" an
amount the client wanted, when in fact there was no negotiation with
American Home. Mr. Berman noted that the exact amount of the settlement
is yet unknown, but he estimates it to be in the hundreds of millions
of dollars. Under the agreements signed with plaintiffs, the Firm was
entitled to a contingency fee of one third, compared to nine percent
awarded under the national settlement.

Once they achieved the mass settlement, the suit claims, the Firm then
began compelling plaintiffs to accept offers purported to be from AHP.
Mr. Berman asserts, "We have evidence that shows partners with NKB had
a scripted program in place that browbeat plaintiffs into accepting
low-ball settlements.They used their position of trust to convince
plaintiffs that they were fighting for their interests, when in fact
they were not. They had secretly settled their cases and were instead
working to get the clients' cases wrapped up as quickly as possible."

According to court documents, the Firm developed a program known within
the firm as "Bern's Road Show," in which partner Marc Bern would
intimidate plaintiffs into accepting the offer, often berating the
plaintiff's case, telling them their injury claims were groundless and
they were lucky that the Firm had brought them such a generous
settlement.  If the plaintiffs balked at the amount of the settlement,
the suit contends, Bern threatened to withdraw from the case and
abandon the client.

For more information, contact Mark Firmani by Phone: 206.443.9357 or by
E-mail: mark@firmani.com.  Interested parties can also visit the firm's
Website: http://www.hagens-berman.com


REMEC INC.: California Court Dismisses Securities Suit With Prejudice
---------------------------------------------------------------------
The United States District Court for the Southern District of
California has dismissed with prejudice the securities class action
filed against REMEC, Inc. (NASDAQ:REMC), certain of its officers and
directors, and its underwriters. Law firm Milberg Weiss Bershad Hynes &
Lerach LLP commenced the suit for Charles Vezzetti and all purchasers
of Company Securities between December 1,1997 and June 12,1998,
alleging violations of the Securities Exchange Act of 1934.

Last October 2001, the court granted the Company's motion to dismiss
the complaint, but gave the plaintiffs the opportunity to file an
amended complaint. The plaintiffs did not file an amended complaint,
therefore, on December 7, 2001, at the parties' request, the court
signed an order dismissing the case in its entirety with prejudice.

REMEC, Inc. is a designer and manufacturer of high frequency subsystems
used in the transmission of voice, video and data traffic over wireless
communications networks and in space and defense electronics
applications.


SCHOLASTIC CORPORATION: Supreme Court Refuses To Stop Securities Suit
---------------------------------------------------------------------
The Supreme Court refused to block a class action against Scholastic
Corporation, alleging the Company violated federal securities laws by
concealing from investors the slowing sales of its Goosebump books.  
The suit was commenced in 1997, after the Company announced that
investors should expect share losses.

The suit also charged Company Vice President Raymond Marchuk with
selling about $1.2 million in company stock, or 80 percent of his
holdings.  Lawyer for the plaintiffs Stephen A. Whinston told the court
that Mr. Marchuk had not sold any stock for 20 months until the first
week of January 1997 and the final day of 1996. The sales came shortly
after he participated in a conference call in which he assured
investors that sales were not declining, according to an Associated
Press report. Mr. Whinston added that the company had been told by a
toy store chain that Goosebumps books were not selling well because of
the "scary nature" of the series.

The suit was initially filed in Federal Court.  The court dismissed the
suit, using as a basis the Private Securities Litigation Reform Act
passed by Congress in 1995 to protect companies from frivolous fraud
lawsuits.  Undaunted, the plaintiffs filed an appeal with the 2nd US
Circuit Court of Appeals, who reinstated the case, saying the federal
court wrongly interpreted the 1995 law. By refusing to hear the appeal,
the Supreme Court missed a chance to define when investors can sue a
company.  According to Company attorney Michael J. Chepiga, the case
was important because the 2nd Circuit jurisdiction includes the
business district of New York. In court documents, Mr. Chepiga wrote
"Virtually any securities fraud suit involving a publicly traded
company can be filed in the 2nd Circuit. And the court's decisions have
created the most lenient pleading standards in the nation."

He added appeals courts have adopted different standards for securities
fraud lawsuits.  "The longer this conflict goes unresolved, the greater
the impact will be on securities lawsuits and on the courts that have
to deal with them." Lawyers for the stockholders said they have
adequate evidence that the company was painting a "rosy picture" when
internally company executives knew there were problems, according to an
Associated Press report.


SECURITIES LITIGATION: Underwriters Ask Judge To Recuse Self From Suits
-----------------------------------------------------------------------
US District Judge Shira Scheindlin refused several investment banks'
petition asking her to recuse herself from handling thousands of
securities class actions pending in the Southern District of New York,
alleging the investment banks fraudulently handled hot initial public
offerings in Wall Street in the late 1990s.

A Reuters report states that forty-two Wall Street firms and 263
companies have been named as defendants in lawsuits that allege the
investment banks and the companies they brought public artificially
pumped up prices of newly issued shares.  The plaintiffs in these
suits, mainly individual investors, accuse the Wall Street firms of
requiring institutional clients to buy more IPO shares on the first day
of trading to guarantee a rise in the stock price, in a practice known
as "laddering."  The Wall Street firms have denied wrongdoing.

Some of the investment banks mentioned in the suits filed a motion in
October asking that Judge Scheindlin step down because she and members
of her family bought shares in some of the IPOs named in the suits.  
Among the defendants, all the underwriters except two, Morgan Stanley
and Dain Rauscher, joined the petition.  In their recusal motion,
lawyers for the defendant firms said their clients feared Scheindlin
would show partiality to the plaintiffs since she is among those
"allegedly damaged by the scheme."

Scheindlin refuted these claims in a 67-page opinion last week, saying
she and her family sold the stocks and waived "any interest in pursuing
any claims with respect to these purchases." Goldman Sachs Group, Inc.
lawyer Vince DiBlasi said they will seek an order from an appeals court
requiring Judge Scheindlin to recuse herself from the case.  He told
Reuters "We filed the letter the other day." Judge Scheindlin has set
another hearing for January.


WAL-MART INC.: Asks CA Court To Dismiss Gender Discrimination Suit
------------------------------------------------------------------
Wal-Mart Inc. asked the California Federal Court to dismiss, or
transfer to Arkansas Federal Court, a gender discrimination class
action filed against the company dismissed, the Dow Jones Business News
recently reported.  

Six current and former employees filed the suit in June, alleging that
the Company discriminates against women in areas of pay, compensation
and promotions.  The plaintiffs, who are from California, Texas, Ohio,
Illinois and Florida, claim that the retail giant:

     (1) advances male employees more quickly than females;

     (2) denies females equal job assignments, promotions, training and
         compensation; and

     (3) retaliates against women who have spoken out against the
         alleged practices.

Alleging a pattern of discrimination, the suit points out that 72
percent of the Company's hourly workers are female, but only a third of
the managers and supervisors in the company are women.  Meanwhile, at
the Company's top 20 competitors, women make up 56 percent of the
supervisory and managerial ranks, according to U.S. Labor Department
statistics cited in the lawsuit.  The Company "emphatically" denied the
allegations. The potential class, which the plaintiff attorneys claim
could be as high as 500,000 women, includes all present and former
female employees of WalMart's retail outlets, including Wal-Mart
discount stores, supercenters, neighborhood markets and Sam's Clubs.  

The Company argued in its motion to dismiss, that the suit fails to
follow procedures outlined in the 1964 Civil Rights Act. The Company
contends that when plaintiffs are from several different states, the
law requires the lawsuit to be filed in the federal court district
where the company is headquartered.


ZALE CORPORATION: Discovery In Credit Insurance Fraud Suits Drag On
-------------------------------------------------------------------
Jewelry retailer Zale Corporation faces two class actions charging that
it marketed credit insurance to customers in violation of state
statutory and common laws.  The suits include claims based on fraud,
breach of contract, and consumer protection laws. Both actions are in
the discovery stage, and neither has been certified as a class action.
The Company has vowed to vigorously defend against the alleged claims.

The first suit was commenced in November 3, 1999 in the Circuit
Court for Colbert County, State of Alabama against the Company and
entities:

     (1) Jewelers National Bank,

     (2) Zale Indemnity Company,

     (3) Zale Life Insurance Company,

     (4) Jewelers Financial Services,

     (5) Jewel Re-Insurance, Ltd., and

     (6) certain employees of the Company.

Another suit was commenced in July 2000 in the United States District
Court for the Eastern District of Texas, Texarkana Division charging
the above defendants, except for Jewelers Financial Services, with
violating federal anti-racketeering laws.



ZALE CORPORATION: Employees File Suit Seeking Overtime Pay in Delaware
----------------------------------------------------------------------
Zale Corporation and its Delaware branch faces a class action pending
in the Superior Court of California, County of Los Angeles, Central
District on behalf of current and former salaried store managers and
assistant store managers of the Company in California. The suit alleges
that these individuals were entitled to overtime pay and should not
have been classified as exempt employees under California law and seeks
recovery of overtime pay, declaratory relief and attorneys' fees.

The Company vehemently denied the charges in the action and stated its
intent to vigorously defend against the charges in a regulatory filing
with the Securities and Exchange Commission.

                              *********


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

Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and
Beard Group, Inc., Washington, D.C.  Enid Sterling, Aurora Fatima
Antonio and Lyndsey Resnick, Editors.

Copyright 2001.  All rights reserved.  ISSN 1525-2272.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic re-
mailing and photocopying) is strictly prohibited without prior written
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Information contained herein is obtained from sources believed to be
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The CAR subscription rate is $575 for six months delivered via e-mail.  
Additional e-mail subscriptions for members of the same firm for the
term of the initial subscription or balance thereof are $25 each.  For
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                  * * *  End of Transmission  * * *