CAR_Public/020125.mbx                C L A S S   A C T I O N   R E P O R T E R
  
               Friday, January 25, 2002, Vol. 4, No. 18

                            Headlines

ARIZONA: State Rep Sets Aside Proposal Banning Tax Refund Lawsuits
ARTHUR ANDERSEN: Hagens Berman Files RICO Suit Due To Enron Collapse
BAYCOL LITIGATION: British Users To Sue Anti-Cholesterol Drug Maker
BLACK & DECKER: Recalls Lawn Mowers For Defective Blade Control Device
CALIFORNIA: Superior Court Asks Parties To Define "Class" In Tax Suit

CHEMICAL COMPANIES: 69 Families Reach Settlement in Pollution Suit
CSX RAILROAD: Indiana Landowners Settle Railroad "Right-Of-Way" Suit
FORD MOTOR: Sued By Black Workers in Nashville Plant For Racial Bias
HOME-BUILDING FRAUD: Lawyers in Toussie Rights Suit Turn Away Whites
INCO LTD.: Plaintiffs Say Houses Sinking Due To Nickel Contamination

MCM INTERNATIONAL: Recalls 50T Electric Washers For Counterfeit Parts
METROPOLITAN LIFE: Court Orders Firm to pay Interest for Late Benefits
TEXAS: Supreme Court Rejects Racial Bias Charges V. Housing Officials

*Turbulent Market Brings Need For Company Execs' Liability Insurance

                       Securities Fraud

ANALYTICAL SYSTEMS: SEC Starts Accounting Processes Investigation
CAPTEC NET: Grout Firm Initiates Securities Suit in N.D. California
COURTNEY SMITH: Securities, Fraud Claims Proceed Against CNN Analyst
ENRON CORPORATION: Plaintiffs Ask Court To Stop Shredding of Documents
GLOBIX CORPORATION: Cohen Milstein Initiates Securities Suit in S.D. NY

IMCLONE SYSTEMS: Berman DeValerio Lodges Securities Suit in S.D. NY
INFONET SERVICES: Kirby McInerney Lodges Securities Suit in C.D. CA
ORATEC INTERVENTIONS: Charles Piven Lodges Securities Suit in S.D. NY
SUPREMA SPECIALTIES: Milberg Weiss Commences Securities Suit in NJ
TAKE-TWO INTERACTIVE: Cauley Geller Reveals Delay in Earnings Results

XO COMMUNICATIONS: Finkelstein Krinsk Lodges Securities Suit in S.D. CA
XO COMMUNICATIONS: Lionel Glancy Commences Securities Suit in E.D. VA

                             
                            *********


ARIZONA: State Rep Sets Aside Proposal Banning Tax Refund Lawsuits
------------------------------------------------------------------
Legislation which would have prohibited class action lawsuits related
to tax refunds, unless all affected taxpayers had already exhausted
administrative appeals with the State, has been set aside by the
sponsoring legislator, the Associated Press reported recently.

Republican Representative, Steve May, of Paradise Valley, Arizona
sponsored the bill, which was prompted by a State Supreme Court ruling
last year upholding class-action status for a case challenging state
taxation of some stock dividends.  That case, known as Ladewig, may
cost Arizona hundreds of millions of dollars once all claims are
settled.  Mr. May's bill would not have affected the Supreme Court's
ruling or disposition of the Ladewig case.

Critics of the bill told the House Ways and Means Committee at a recent
hearing that requiring all claimants to have exhausted their
administrative appeals would be setting a condition impossible to meet,
because some people would not even know about the case in question.  
The critics said individuals and small businesses that could not afford
to hire their own lawyers would have been prohibited from even going to
court as a group to fight for their taxpayer rights.

"What you're essentially eliminating is the only vehicle the average
person has to pursue an unconstitutional tax claim," said Randall
Wilkins, plaintiffs' attorney in the Ladewig case.  "It penalizes the
very people who need help the most."

Representative May said he will try to come up with new legislation to
protect the State, but this time he would include taxpayer
representatives in his discussions on how to achieve that goal. "That
proposal would have been unfair to taxpayers," the legislator
acknowledged.  "The taxpayer should have an advantage."


ARTHUR ANDERSEN: Hagens Berman Files RICO Suit Due To Enron Collapse
--------------------------------------------------------------------
Hagens Berman filed a class action suit in US Federal Court against
Arthur Andersen LLP and certain officers of Enron Corporation
(NYSE:ENE) alleging violations of the Racketeering Influences and
Corrupt Organizations Act (RICO).  

The suit is the first to charge Arthur Andersen with violations under
the RICO act.  The suit claims they conspired to hide Enron's true
financial condition by withholding critical information, which caused
employees to lose more than $1.3 billion from their retirement funds.
The suit was filed on behalf of more than 100 named plaintiffs and
seeks to represent an estimated 21,000 Enron savings plan participants.

The suit claims Arthur Andersen's chief auditor, David Duncan,
repeatedly certified financial statements he knew were false in an
attempt to cover debts and losses, while Enron CEO Kenneth Lay
knowingly used that false information to promote the overvalued Enron
stock to employees in order to provide "compensation," secure their
loyalty and to have stock holdings available as a tool to fend off any
hostile takeovers.  The suit alleges that Andersen's actions make the
company liable under RICO, which prohibits any person from using the
assets of any employee pension benefit plan for their own use.

Steve Berman, attorney for the plaintiffs, said "We will show that
Enron and Andersen had a dirty little secret: both organizations knew
Enron was in deep trouble a long time ago.The problem is they had an
obligation, both legally and ethically, to share that information.
Instead, we will show that they conspired to propagate a myth that
Enron was doing well, solely to serve their interests."

Several Enron officers are accused of conspiring to defraud Enron
employees by contributing worthless stock to retirement plans as part
of what the suit describes as a "Retirement Plan Conspiracy" run
jointly by Kenneth Lay, other high ranking Enron officials and
Andersen.

According to Mr. Berman, each time Enron officers matched an employee's
contribution with stock, they knowingly contributing stock that was
worth much less that the purported value. "Employees were earnestly
planning for their future, thinking Enron's stock contribution was
putting them further down the road to retirement," he noted. "In fact,
we intend to prove that Enron knew it was matching employees'
contribution with the modern-day equivalent of plugged nickels."

According to the suit, every transfer of Enron stock to the class
members' savings plan constituted a violation of the RICO act, which
makes it a crime whenever any person "embezzles, steals, or unlawfully
and willfully abstracts or converts to his own use or to the use of
another, any of the moneys, funds, securities, premiums, credits,
property, or other assets of any employee welfare benefit plan or
employee pension benefit plan, or of any fund connected therewith."

"The RICO act is a powerful tool to punish those who conspire to
defraud, and one we think fits Andersen and Enron like a glove," Mr.
Berman added.

The suit makes several claims of wrongdoing by Andersen, Northern Trust
(Nasdaq: NTRS), and several Enron officers and retirement plan
administrators, including:

     (1) Lockdown of Employee Savings Plans in Violation of ERISA:
         Northern Trust and Enron savings plan administrators breached
         their fiduciary duty to Enron employees by locking down
         employee savings plans from Oct. 17 to Nov. 19 without advance
         notice that the lockdown would begin on Oct. 17, and when they
         knew, or should have known, that Enron was on the brink of
         collapse, according to the suit. Furthermore, Northern Trust
         and the savings plan administrators should not have allowed
         the planned Oct. 29 lockdown to proceed, since Enron's
         financial troubles were already partially disclosed.
  

     (2) Wrongfully Encouraging Employees to Purchase Enron Stock:
         Enron savings plan administrators promoted employee
         contributions to Enron savings and stock option plans when
         they knew, or should have known, that Enron was not a prudent
         investment.

     (3) Using Enron Stock For Matching Contributions in Violation of
         ERISA: Enron savings plan administrators repeatedly breached
         their fiduciary duties by making employer contributions with
         stock they knew, or should have known, was worthless.

    
     (4) Retirement Plan Conspiracy - Violations of RICO: Andersen
         chief Enron auditor David Duncan, Enron CEO Kenneth Lay and
         other Enron officers conspired to save Enron hundreds of
         millions of dollars in savings plan contributions by donating
         what they knew to be worthless Enron stock.

Several accounting principals also demonstrate that Andersen and Enron
officers released intentionally misleading financial statements, the
suit claims. Enron's complete restatement of every financial statement
from 1997 to 2000, rather than a simple change in financials, proves
that both Andersen and Enron officers knew the off-balance sheet
partnerships were being covered up, according to the suit.

For more information, contact Mark Firmani by Phone: 206-443-9357 or by
E-mail: mark@firmani.com or Steve Berman by Phone: 206-623-7292 or by
E-mail: steve@hagens-berman.com


BAYCOL LITIGATION: British Users To Sue Anti-Cholesterol Drug Maker
-------------------------------------------------------------------
British users of Baycol, the anti-cholesterol drug produced by German
pharmaceutical giant Bayer AG, are mulling a class action against the
Company on behalf of 22 Britons who complained of adverse side effects
ranging from liver and kidney problems to heart failure, the Times
reported.

The Company withdrew the drug from the market last year after it was
linked to more than one hundred deaths worldwide.  It was also alleged
that the drug led to a serious muscle-wasting condition known as
rhabdomyolysis that in some cases can lead to life-threatening kidney
failure.  So far, the link between Baycol and the deaths have not been
proven conclusively, but class actions have been filed in the US over
the drug.

The suit is the first multi-party action on behalf of British patients.  
Bringing the suits is John Watkins of Hugh James Ford and Simey, a firm
specializing in litigation against pharmaceutical companies.  According
to The Times, Mr Watkins is currently investigating 492 reports to the
UK's Medicines Control Agency of adverse side effects allegedly caused
by Baycol.

The Company admitted last week that the number of deaths linked to
Baycol had doubled to more than 100.  However, it denied knowledge of
any UK fatalities linked to Baycol.


BLACK & DECKER: Recalls Lawn Mowers For Defective Blade Control Device
----------------------------------------------------------------------
Black and Decker (US) Inc. is cooperating with the US Consumer Product
Safety Commission (CPSC) by voluntarily recalling to repair about 1,300
reconditioned cordless electric lawn mowers.  The clips holding the
control cable to the handle may be missing, which could cause the blade
control device to fail and keep the mower blade running when it should
stop.  If the blade control device fails, consumers could suffer
serious injuries.  The Company has not received any reports of injuries
with these lawn mowers. This recall is being conducted to prevent the
possibility of injury.

The recalled cordless electric lawn mowers have an orange deck
and a charcoal black motor cover.  The reconditioned lawn mowers have
the model number CMM1000R and date codes between 0043 M.N.D.C. and 0121
M.N.D.C., both of which are located on a silver and black label on the
rear door of the mower.  The lawn mower has the words "Black & Decker"
and "Cordless" on top of the motor cover.

Black & Decker factory stores nationwide sold these lawn mowers
from December 2000 through May 2001 for between $145 and $290.

For more information, contact the Company by Phone: 866-229-5570
between 8 am and 4:30 pm ET or visit the firm's Website:
http://www.blackanddecker.com


CALIFORNIA: Superior Court Asks Parties To Define "Class" In Tax Suit
---------------------------------------------------------------------
A property tax class action seems likely in California after Superior
Court Judge John M. Watson asked attorneys from both sides to define
the individuals who could be covered by his ruling.  

According to the Los Angeles Times, the suit revolves around the
"recapturing" method implemented statewide, which Judge Watson found
unconstitutional in December.

Property tax lawyer Rob Pool filed the complaint against Orange County
Assessor Webster J. Guillory, after Mr. Guillory raised the assessed
value of Mr. Pool's property by more than 2%-a-year, a cap set in
Proposition 13, a landmark tax reform measure passed by California
voters in 1978.

The method, according to the report, is used on properties that have
dropped in value and had their assessments lowered.  When the values
rebound, the new assessments routinely exceed the 2% limit.  Mr.
Guillory and county attorneys have defended this practice and for the
past four years taxpayers have been told that the method is legal.  
Judge Watson ruled otherwise.

The report says some US$285 million in refunds and a future reduction
of US$147 million a year in the tax base for school districts, cities
and other agencies that rely on property taxes are ultimately at stake
in this case.

Mr. Pool says he intends to define the "class" of individuals who can
fall under the ruling as broadly as possible.  He says the tax relief
should not only be limited to taxpayers who appealed past property tax
bills, but also those who "sat on the beach" and thought about
appealing but didn't. Judge Watson has set the next hearing for March
11.


CHEMICAL COMPANIES: 69 Families Reach Settlement in Pollution Suit
------------------------------------------------------------------
Sixty-nine Dover Township families whose children were allegedly
stricken with cancer due to polluted water settled the class action
they brought against Ciba Specialty Chemicals Corporation, Union
Carbide Corporation and United Water Toms River.

From 1979 to 1995, 90 children in Dover Township were diagnosed with
cancer, 23 cases more than researchers would normally expect to find
among the township's population of about 80,000, state officials said,
according to an Associated Press report.  Officials also stated that
leukemia, brain cancers and central nervous system cancer all occurred
at higher-than-normal rates.  A study later linked contaminated well
water and chemical plant emissions with some leukemia cases, although
there was no single environmental cause for the high cancer rates.

The families then sued the three Companies, claiming drinking water
from a Ciba-Geigy chemical plant and a site where Union Carbide dumped
toxic wastes caused the children to get sick.  Both Companies took
responsibility for the contamination but denied liability for the water
pollution that allegedly caused the illnesses.

In mid-December, the 69 families decided to enter the settlement.  A
few have opted out and are seeking class-action status for their
lawsuits.  The exact settlement amount, though likely to reach millions
of dollars, cannot be disclosed due to a confidentiality agreement.

Linda Gillick, a spokeswoman for the families, would not confirm or
deny the dollar amount Wednesday, according to the Associated Press.  
"These families have been through enough. They don't need the general
public finding out what they did or didn't get," Ms. Gillick said.  Her
22-year-old son, Michael, suffers from neuroblastoma, a rare type of
tumor.


CSX RAILROAD: Indiana Landowners Settle Railroad "Right-Of-Way" Suit
--------------------------------------------------------------------
An Indiana court has approved the settlement of a 9-year-old class
action filed by more than 9,000 Indiana landowners against CSX
Railroad, involving fiber optic cable and other unauthorized uses of
abandoned railroad rights-of-way.

The suit was originally filed in Hamilton Superior Court in 1994, and
in the same year, was granted class certification by Judge William J.
Hughes.  In 1995, the Indiana Court of Appeals upheld that decision,
explaining that the case was "based on CSX's unreasonable refusal to
acknowledge the extinguishment of abandoned right-of-ways (easements or
lesser interests) throughout Indiana and CSX's continued course of
conduct in exercising dominion over these extinguished interests which
has clouded the landowners' title to abandoned railroad corridors."

The suit was the first of its kind to be filed in Indiana, and one of
the first in the nation.  As a result of discovering thousands of
documents in the suit, landowners became aware of deals reached between
CSX and certain telecommunications companies, such as AT&T and MCI
WorldCom, to install fiber optic cable on both active and abandoned
railroad corridors, as well as on pipelines and power lines. That
knowledge gave rise to other multi-million dollar class actions against
the major telecommunications companies, railroads, pipeline and power
companies.

According to lawyers for the landowners, the Company has agreed to
"quiet title" in favor of landowners who own portions of 1,200 miles of
abandoned railroad right-of-way in Indiana, and to pay as much as $7
million dollars to the class members.

Nels Ackerson, one of the lead attorneys for the class of landowners,
explained, "This has been a very long and expensive battle for Indiana
landowners. Finally they will be paid for the use of their land. Even
more important to many landowners, the cloud on their title will be
lifted, so they will finally have the full use and enjoyment of their
property."

Lead plaintiff George Clark said, "I am pleased that this lawsuit has
finally been resolved in a way that compensates landowners like myself
for all the trouble the railroad has put us through. At last they are
doing the right thing. This is what we have been waiting for."

For more information, contact Nels Ackerson and Andrew Myers by Mail:
The Ackerson Grou, Chartered 1666 K Street, NW Ste 1010 Washington DC
20006-1217 by Phone: 202-833-8833 by E-mail: nackerson@ackersonlaw.com
or visit the firm's Website: http://www.ackersonlaw.comor contact  
Henry J. Price and Arlene G. Anderson by Mail: 301 Massachusetts
Avenue, Indianapolis, Indiana 46204 by Phone: (317) 633-8787 by E-mail:
hprice@price-law.com or visit the firm's Website:
http://www.price-law.com


FORD MOTOR: Sued By Black Workers in Nashville Plant For Racial Bias
--------------------------------------------------------------------
Ford Motor Company faces a class action filed in the US District Court
in Nashville, by seven black employees working in the Company's
Nashville facility, alleging discriminatory treatment after on-the-job
injuries, harsher punishment for infractions and being passed over for
training and promotions, according to a Tennesseean.com report.

The suit, which also names the plant's owner, Visteon Corporation, as
defendant, includes allegations that the Company turned down black
applicants even though they were qualified for a job.  The complaint
states there are more than 100 affected employees and an unknown number
of unsuccessful job applicants.

The suit states "Racial discrimination is the standard operating
procedure at the Visteon glass plant rather than a sporadic
occurrence."  The discrimination was allegedly "systematic" and
"reaches back many years in time and is continuing in nature."

Two law firms with a record in discrimination cases are representing
the plaintiffs, Gordon, Silberman, Wiggins and Childs, and the
Nashville law firm, Stewart, Estes and Donnell.


HOME-BUILDING FRAUD: Lawyers in Toussie Rights Suit Turn Away Whites
--------------------------------------------------------------------
Some people who bought homes from Robert and Isaac Toussie, one of the
largest developers in Suffolk County, New York, have said they were not
allowed to join a class action which was filed against the developers,
according to a recent Newsday report.  

About 10 white homeowners have said they were turned away from joining
the lawsuit, which was filed, in US District Court in Brooklyn, by five
minority plaintiffs seeking class action status on behalf of hundreds
more minority home buyers.

John Wirenius of Leeds, Morelli & Brown in Carle Place, one of the law
firms handling the case, said that "while there were whites who did buy
homes" from the Toussies, the thrust of the lawsuit is that the
developers took advantage of vulnerable minorities.  Mr. Wirenius said
that he is directing white homeowners to other lawyers.

Maxine Wilson, a Toussie homeowner and an African-American who lives in
Gordon Heights, said the lawsuit should be based on civil rights
violations, saying "There are about 230 [plaintiffs on the suit] who
are minorities.The numbers speak for themselves."

The lawsuit, which alleges that the Toussies sold overpriced, shoddily-
built homes in the Gordon Heights area, is centered around civil rights
violations.  The Toussies deny these charges, and the judge has not yet
made a decision on the class-action certification.

The original lawsuit filed against Robert and Isaac Toussie was amended
to include racketeering charges against the pair and to include more
than 70 other defendants, such as appraisers, construction companies
and a number of lenders.  "We thought that based on the fact that there
is an admitted criminal conspiracy that it was appropriate to file
charges under the RICO statutes (the federal Racketeer Influenced and
Corrupt Organizations Act)," said another lawyer for the plaintiffs,  
Barry Weprin of the Manhattan-based law firm, Milberg, Weiss, Bershad,
Hynes & Lerach.  

Isaac Toussie had pleaded guilty to a federal felony charge in
connection with falsifying homeowners' incomes in order to qualify them
for FHA loans and is awaiting sentencing.  Robert Toussie was not
charged with this offense.  However, the federal government arrested 19
lawyers, appraisers, salesmen and loan officers, of which 13 have
pleaded guilty.


INCO LTD.: Plaintiffs Say Houses Sinking Due To Nickel Contamination
--------------------------------------------------------------------
Residents of a neighborhood in the southern Ontario city of Port
Colborne, who brought a $750-million class action against Inco Ltd.
over the nickel contamination of their properties, now say that their
houses are sinking because of the contamination, The Globe and Mail
recently reported.

A geological study indicates the source of the sinking house problem in
Port Colborne may be the same as the source of the nickel
contamination, one of the residents' lawyers, Eric Gillespie, said.
Contaminant-control wells installed on Inco's property, near the Rodney
Street neighborhood, may be responsible for cracks in the homes'
foundations.  The wells were installed to capture contamination
leaching from an Inco refinery.

Terraprobe Ltd., an environmental engineering firm hired by lawyers
leading the class action against Inco over the nickel contamination,
inspected seven properties near the company.


MCM INTERNATIONAL: Recalls 50T Electric Washers For Counterfeit Parts
---------------------------------------------------------------------
MCM International is cooperating with the US Consumer Product Safety
Commission (CPSC) by voluntarily recalling about 50,000 Black CatTM
electric pressure washers.  MCM International imported the pressure
washers from a manufacturer in China who installed counterfeit ground
fault circuit interrupter (GFCI) plugs on some of the units, without
the Company's approval.

All of the plugs are labeled "WELLONG;" however, the pressure washers
with counterfeit "WELLONG" GFCI plugs appear virtually identical to
those with genuine "WELLONG" GFCIs.  It will require a professional
inspection to identify the counterfeit GFCIs. GFCIs are important
safety devices that are intended to protect consumers against shock or
electrocution.

The Company has not received any reports of incidents in which the GFCI
plugs failed to operate.  This recall is being conducted to prevent the
possibility of injury.

The recalled Black CatTM pressure washers have a sticker with a
cat and the words "Black-Cat" on each side of the unit.  The model
numbers, either BC-2000 or TW-1750, can be found on a label on the
right side of the power station.  The label also reads in part,  "Made
in China," "High Pressure Cleaning Machines," and the "Production Date"
(which should fall between March 2001 and July 2001).  The GFCI plugs
have a green "Reset" button and a blue "Test" button. Some plugs also
have a label that reads "CONNECT TO INDIVIDUAL BRANCH CIRCUIT ONLY."  
On the back of the GFCI plug near the electrical prongs are the words
"WELLONG" and "Rainproof."

Target and Menard's stores nationwide sold these pressure washers
from August 2001 to September 2001 for between $85 and $100. For more
information, contact the Company by Phone: (800) 304-1316 between 8 am
and 5 pm CT Monday.


METROPOLITAN LIFE: Court Orders Firm to pay Interest for Late Benefits
----------------------------------------------------------------------
The 2nd U.S. Circuit Court of Appeals recently ruled that a delay in
the release of disability benefits is a form of "unjust enrichment,"
hence an insurance company must pay interest.

According to the New York Law Journal, the ruling was made on the case
of Helen Dunnigan, an employee of Deloitte & Touche accounting firm,
who is seeking the interest payment from Metropolitan Life Insurance
Company.

The Court, through Justice Pierre N. Leval, said the interest payment
cannot be deemed an "extracontractual, compensatory money damages,
which are generally not recoverable under ERISA."  The insurance giant
had used this defense in successfully asking New York Southern District
Judge Shira Scheindlin to dismiss the claim.

Ms. Dunnigan filed the suit in 1995 when Metropolitan denied her
application for long-term disability benefits, after being diagnosed
with Chronic Fatigue Syndrome.  In 1999, however, the company gave her
a lump-sum payment for 55 months of long-term disability, without
interest.

Ms. Dunnigan questioned this absence of interest, claiming the company
had breached its fiduciary duties and was guilty of unjust enrichment.  
She sought recovery of interest and "other appropriate equitable
relief" under the Employee Retirement Income Security Act of 1974.

Judge Scheindlin, however, denied this claim, saying that while a duty
of good faith and fair dealing applies to ERISA plans, and a claim for
interest might be asserted under ERISA's "equitable relief" provision,
the plaintiff did not allege a breach of that duty in her complaint.

But Justice Leval disagrees. In overruling Judge Scheindlin, he said:
"Where interest is sought to make the plaintiff whole by eliminating
the effect of a defendant's breach of a fiduciary duty, we see no
reason why such interest should not be deemed 'appropriate equitable
relief' within the scope of Section 502(a)(3)(B) [of ERISA]."

"When benefits are paid only after the date on which the beneficiary
was entitled to receive them under the terms of the plan, the
beneficiary has not received the full value of what was promised and,
to the same degree, the plan has realized an unjust enrichment
(assuming the lateness was unjustified).  An award in such
circumstances serves as an equitable make-whole remedy," he added.

The Appellate Court remanded the case to the Southern District Court
for reconsideration of whether the case should be certified as a class
action, the Journal said.

Scott M. Riemer and Michael E. Schoeman of Schoeman, Updike & Kaufman
represented Dunnigan, while Myron D. Rumeld of Proskauer Rose
represented Metropolitan Life Insurance Company, the Journal said.

For more information, contact Schoeman, Updike & Kaufman by Mail: 60
East 42nd Street New York, New York 10165 or by Phone: 212-661-5030


TEXAS: Supreme Court Rejects Racial Bias Charges V. Housing Officials
---------------------------------------------------------------------
Some racial discrimination charges against Dallas housing officials
"died" at the Supreme Court, as it refused to consider letting two
black women sue the city of Dallas and the US Department of Housing and
Urban Development on behalf of black property owners whose homes were
being demolished, the Associated Press reports.

The 5th US Circuit Court of Appeals had said that Irma Jean James and
Terri Lary did not have standing for the discrimination class action
lawsuit.  The Supreme Court Justices, without comment, refused to
review their appeal.  The Bush administration said it agreed with the
court's decision.

Both women's homes have been destroyed as part of the City's
neighborhood cleanup program.  Neither plaintiff received letters
notifying them that their houses were being destroyed, their lawyer
claimed.  Their lawsuit sought an injunction to prevent the City from
destroying repairable structures owned by blacks or in predominantly
black areas.  "Because neither of the named plaintiffs owns un-
demolished property in the city that would be subject to the proposed
injunctions, the named plaintiffs cannot demonstrate that this
requested relief will offer them redress," the Appeals Court said.

"The city continues to classify predominantly African-American
neighborhoods as inherently unstable and not worthy of protection from
decline," the plaintiffs' attorney Michael M. Daniel wrote in court
filings.  Ms. James and Ms. Lary can still pursue other parts of their
lawsuit, but not the racial discrimination part.


*Turbulent Market Brings Need For Company Execs' Liability Insurance
--------------------------------------------------------------------
The stormy equity market has produced a stream of lawsuits and a rise
in the number and severity of claims against company executives,
according to Lloyd's List International.  Most of these suits have been
brought by shareholders, investors highly impatient when companies fall
short of financial expectations and more focused on accountability from
corporate boards.  Numerous high-profile corporate scandals have
required governments, regulators and the companies themselves to take a
closer look at fundamental corporate governance issues.

Directors' and officers' liability insurance (D&O) becomes a critical
issue with the rise in claims against company executives.  The
situation has been lent new urgency following the collapse of energy
giant Enron Corporation.  The number and severity of D&O claims means,
according to Lloyd's Lists, that D&O could be heading for a massive
"shakeup" as tighter corporate governance is required, not only by
regulators and shareholders, but also by the insurance companies, which
will have to place higher qualifications before the corporations in
order to provide the necessary coverage at an affordable price.

D&O was pioneered and developed in the Lloyd's market and has shown
sustained growth over the years.  Recently, however, insurers
underwriting this class of business have taken some big losses,
particularly in the United States, where class actions are a thriving
legal activity.   In the United States alone, more than 250 shareholder
class actions were filed in the first ten months of 2001, up from 201
in the whole of 2000 and 207 in 1999.  The average settlement or
judgment is more than $12 million.  

"We are also seeing more (D&O) claims in Europe and in China and
Japan," says Steven Anderson, a managing director of Marsh Inc., a
megabroker in the D&O field.  Within the European Union, nine of the 15
member countries allow individual investors to sue for damages.  
Consequently, there has been some retrenchment.  Premium rates are
moving sharply upwards, especially as reinsurance costs escalate.

Marsh has warned that the higher standards of corporate governance
being demanded, and which will continue to be demanded, particularly in  
post-Enron times, are impacting D&O anew.  Regulators are demanding
more financial transparency and more responsible management of
organizational risks.  Martin Rayfield, a managing director at MMC
Enterprise Risk in London, says that many companies, perhaps for the
first time, must put on their agenda the issue of governance risk and
how to manage it.  Corporations will be seeking the advice of their
legal counsel over ways of achieving adherence to stricter regulations
and obtaining the necessary D&O that the current market improprieties
and downright illegalities have made so expensive and highly
restrictive in coverage.

In the United States, a major reason for the recent and alarming
increase in litigation and D&O claims is the higher incidence of
financial restatement, often an indicator of improper accounting
practices.  The US Securities and Exchange Commission noted recently
an "alarming" rise in financial reporting improprieties by US-based
public companies.  The growing problems surrounding financial reporting
and other governance issues have resulted in a worldwide focus on all
corporate governance activities.

According to Marsh, the consensus is that while stricter regulation
will ultimately reduce companies' exposure to governance risks,
liability claims will continue to be a problem in the short term.  
Insurers, already battered by the growing number and severity of the
claims, are going to be more demanding when it comes to providing D&O
coverage.

Steven Anderson, a managing director at Marsh Inc., makes these
predictions:

     (1) There will be bigger premiums; also, some pullback in capacity
         and some exclusions starting to be attached on a case-by-case
         basis that were not even discussed a few years ago.  For
         instance, some underwriters are adding a bankruptcy exclusion;

     (2) Underwriters will increase the retentions on D&O policies, and
         are introducing co-insurance for some part of the loss in
         excess of the retained amount;

     (3) In isolated cases, underwriters will assert a right to rescind
         D&O policies based upon material misrepresentation of facts
         resulting from financial restatements.  In particular,
         underwriters want to be assured that financial reporting is
         accurate and falls within appropriate standards and
         regulations;

     (4) If the underwriters believe they have been misled by the same
         financial reports that misled shareholders, when a claim is
         filed they will take the position that no coverage exists for
         it.

Mergers and acquisitions represent another danger area, both for the
corporations, who are liable to the shareholders, and the D&O
underwriters, who, Mr. Anderson points out, have paid some large losses
in recent years because of some very poor acquisitions.  When companies
subsequently take write-downs or write-offs for overvalued acquisition,
the result often is shareholder lawsuits.

Long term, the corporation can take steps to establish improved
corporate governance, in order to assure appropriate and stable D&O
liability insurance.  Short term, to ensure proper coverage and to get
the most favorable terms, a company should demonstrate to insurers its
familiarity with the changes in laws and regulations affecting D&O
liability, thereby presenting a better risk profile.


                            Securities Fraud

ANALYTICAL SYSTEMS: SEC Starts Accounting Processes Investigation
-----------------------------------------------------------------
The Securities and Exchange Commission commenced a formal investigation
of Analytical Surveys, Inc. (Nasdaq: ANLT), a provider of customized
data conversion and digital mapping services for the geographic
information systems (GIS) and related spatial data markets. The SEC is
looking into the Company's accounting policies, procedures, disclosures
and system of internal controls relating to the period from October
1998 through March 2000.

The SEC is also investigating AS's former officers, directors and
others relating the Company's restatement of its earnings for the
fiscal year ended September 30,1999 in March 2000.

Since March 2000, a new executive management team has implemented
remedial measures to improve accounting procedures and internal
financial control systems, particularly with respect to project cost-
of-completion estimates. In addition, AS has already settled a class
action lawsuit against it and certain of its former officers and
directors for damages sustained by shareholders during the timeframe
under SEC investigation.  Analytical Surveys intends to cooperate fully
with the SEC in this investigation.


CAPTEC NET: Grout Firm Initiates Securities Suit in N.D. California
-------------------------------------------------------------------
The Grout Law Firm commenced a securities class action in the United
States District Court for the Northern District of California on behalf
of all persons or entities who purchased the common stock of Captec Net
Lease Realty, Inc. (Nasdaq:CRRR) between August 9, 2000 and July 2,
2001.

The suit alleges claims against the Company, Commercial Net Lease
Realty, Inc. (NYSE:NNN), and certain of their officers and/or directors
for violations of Sections 10 and 20(a) of the Securities and Exchange
Act of 1934. The suit alleges that defendants made materially false and
misleading statements to the market concerning the value of a note
payable to the Company and the value of its interests in a joint
venture and certain limited partnerships.

For further details, contact Daniel Grout by Mail: 409 13th Street,
17th Floor, Oakland, California 94612 by Phone: 510-832-0300 by E-mail:
dangrout@msn.com or contact William C. Rand by Mail: 19 West 44th
Street, New York, New York 10036 by Phone: 212-609-5058 or by E-mail:
wcrand@wcrand.com


COURTNEY SMITH: Securities, Fraud Claims Proceed Against CNN Analyst
--------------------------------------------------------------------
New York Federal Judge Joanna Seybert refused to throw out claims of
common law fraud and securities law violations against former CNN
analyst Courtney Smith for allegedly misleading investors about a
company's stock he had a stake in.

The suit was commenced last year in the US District Court in the
Eastern District of New York by internet advertising firm Cyber Media,
after Mr. Smith allegedly made favorable comments on air about the
stock of Apponline.com, an Internet mortgage banker that filed for
bankruptcy protection last year. According to a Law.com report, Cyber
Media alleges that it was persuaded to sell the Company in a stock-for-
stock purchase agreement to Apponline.com after Apponline.com
principals directed Company officers to watch a CNN program in which
Mr. Smith said that Apponline.com was a "double your money stock."  The
suit further alleges that Smith was an officer in the venture capital
fund Inculab, whose stock was directly tied to Apponline.com, and that
he benefited from the "double your money stock" statement.

Judge Seybert, however, rejected Cyber Media's claims under the:

     (1) Sections 18(a) and 20(a) of the Securities Exchange Act,

     (2) Racketeer Influenced and Corrupt Organizations Act,

     (3) New York General Business Law,

     (4) the covenant of good faith and fair dealing, and

     (5) unjust enrichment

Mr. Smith also is named as a defendant in several class actions against
GenesisIntermedia Inc. in the Southern District of New York, which
alleges that in 1999 he took a $3 million payment to tout the stock of
a company known as Genesis Intermedia on CNN, CNBC and Bloomberg
Television. The shares reportedly climbed as high as $25 before they
plummeted upon the announcement of an investigation into company
practices.


ENRON CORPORATION: Plaintiffs Ask Court To Stop Shredding of Documents
----------------------------------------------------------------------
Plaintiffs in the securities class actions pending against fallen
energy giant Enron Corporation are asking the US District Court in
Texas to ensure the Company's former accounting firm Arthur Andersen
doesn't destroy anymore documents related to Enron's collapse.

The plaintiffs started discussions on how best to stop further
destruction of the documents, but could not agree on the best way to do
it.  Some plaintiffs want Andersen to agree to protect documents dating
back 15 years to the start of its business with Enron. They also want
AA to open its offices for plaintiffs' inspections in the four cities
where the company has stored Enron-related documents, to ensure
adequate preservation measures, according to an FT.com report.  Some
plaintiffs chose a more urgent solution, proposing to Texas Federal
Court Judge Melinda Harmon to obtain immediate depositions from six
senior Andersen officers.

According to David Scott, one of the plaintiffs' attorneys, it is vital
to get the Court involved in protecting the documents. He says "If
someone is going to flagrantly violate a court order, this is not going
to do anything.You would hope a judge's order would make people think
twice before they destroy documents.Although I am beginning to wonder."

FT.com reports that the plaintiffs are not focusing on Enron
Corporation, because the Company is in bankruptcy and such orders would
get caught in bankruptcy proceedings. Earlier, an Enron executive
testified that massive shredding had occurred in Enron's headquarters
for the past few months, but the Company has denied any knowledge.  
However, Arthur Andersen has admitted to destroying Enron-related
documents, spurring a lawsuit charging Andersen with violations of the
Racketeering Influences and Corrupt Organizations Act (RICO).


GLOBIX CORPORATION: Cohen Milstein Initiates Securities Suit in S.D. NY
-----------------------------------------------------------------------
Cohen Milstein Hausfeld & Toll, PLLC commenced a securities class
action in the United States District Court for the Southern District of
New York, on behalf of those persons who purchased or otherwise
acquired the common stock of Globix Corporation (NASDAQ: GBIX) during
the period of November 16, 2000 through and including December 27,
2001, against the Company and:

     (1) Marc Bell,

     (2) Peter Herzig and

     (3) Brian Reach

The suit alleges that the defendants violated federal and state
securities laws by, among other things, issuing false misleading
statements regarding the Company's financial condition as well as its
present and future business prospects.

As alleged in the suit, in November 2000, in an effort to stabilize the
price of Company stock and to assuage investor concerns over the
Company continuing as going concern, defendants set forth Globix's
business plan which stated that it would be fully funded to fiscal 2003
and thereafter cash flow positive. This sentiment was repeated in the
Company's annual report filed on Form 10-K with the Securities Exchange
Commission and numerous times thereafter in Company press releases and
conference calls.

Despite such assurances, on December 27, 2001, defendants shocked the
investing community by announcing that management had been secretly
negotiating with its bond holders and preferred stock holders to
effectuate a pre-packaged bankruptcy that would result in a near total
dilution of the existing common stockholders' interest in the Company.

For more information, contact Steven J. Toll or Mary Ann Fink by Mail:
1100 New York Avenue, NW West Tower, Suite 500 Washington, DC 20005 by
Phone: 888-240-0775 or 202-408-4600 or by E-mail: stoll@cmht.com or
mfink@cmht.com


IMCLONE SYSTEMS: Berman DeValerio Lodges Securities Suit in S.D. NY
-------------------------------------------------------------------
Berman DeValerio Pease Tabacco Burt and Pucillio initiated a securities
class action against ImClone Systems, Inc. (Nasdaq:IMCL) and two of its
top officers, claiming they misled investors about an experimental
cancer drug.  The suit was filed in the U.S. District Court for the
Southern District of New York on behalf of all investors who bought
ImClone stock between April 26, 2001 and January 7, 2002.

The suit accuses ImClone, a biopharmaceutical company headquartered in
New York, of artificially inflating its stock price by making false and
misleading statements about Erbitux, a cancer treatment the company was
developing.  During the class period, the company publicly and
repeatedly touted Erbitux as a breakthrough drug that would become "one
of the important new drugs in the history of oncology."  

According to the complaint, the defendants conditioned the market to
believe that Erbitux was effective in reducing cancer and that its
application for regulatory approval was progressing smoothly. Getting
the US Food and Drug Administration (FDA) to approve Erbitux quickly
was vital to the company because several competitors were racing to
develop rival treatments.

In fact, the complaint maintains the defendants made the positive
statements about Erbitux knowing or recklessly disregarding that they
had failed to submit documentation that the FDA had previously told
them was necessary for it to accept the application.

Finally, on December 28, 2001, ImCLone announced that the FDA had
refused to even review its application for approval.  The company's
announcement and the emergence of other details about its deception
sent the Company share price tumbling, according to the lawsuit.

For more information, contact Alicia M. Duff or Michael G. Lange by
Mail: One Liberty Square, Boston, MA 02109 by Phone: 800-516-9926 by E-
mail: law@bermanesq.com or visit the firm's Website: http://
www.bermanesq.com.


INFONET SERVICES: Kirby McInerney Lodges Securities Suit in C.D. CA
-------------------------------------------------------------------
Kirby McInerney & Squire LLP filed a securities class action in the
United States District Court for the Central District of California on
behalf of all purchasers of Infonet Services Corporation (NYSE: IN)
stock during the period from December 16, 1999 and July 31, 2001,
including investors who purchased Company shares in its December 1999
IPO. The suit charges the Company, as well as certain of its senior
officers and directors, with violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934.

The suit further alleges:

     (1) that the Company misled the investing public during the class
         period by making false or misleading statements concerning the
         company's business operations and financial condition; and
         that

     (2) as a result of such statements, Company shares traded at
         artificially inflated prices during the class period, to the
detriment of those investors who purchased them.

Specifically, the suit alleges that defendants portrayed Infonet as a
company that was experiencing, and would continue to experience,
rapidly rising sales and profits from core products and from its AUCS
sales channel (AUCS refers to business arising out of its participation
in an AT&T-Unisource Communications Services agreement).  As a result
of such statements, Company stock price rose as high as $32.9375 per
share.

However, in July 2001, the company began to reveal the truth about its
operations, and announced financial results would fall below market
expectations due to disappointing results from its European operations
and its AUCS sales channel. The next day, Infonet's share price fell by
nearly 50% to close at $3.55 per share.

For more information, contact Ira M. Press by Mail: 830 Third Avenue
10th Floor New York, New York 10022  by Phone: 212-317-2300 or visit
the firm's Website: http://www.kmslaw.com


ORATEC INTERVENTIONS: Charles Piven Lodges Securities Suit in S.D. NY
---------------------------------------------------------------------
Chales J. Piven, PA initiated a securities class action against ORATEC
Interventions, Inc. (Nasdaq:OTEC) in the United States District Court
for the Southern District of New York, alleging violations of federal
securities laws.

The suit 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. In April 2000, the
Company commenced an initial public offering of 4 million of its shares
of common stock at an offering price of $14 per share.  In connection
therewith, Oratec filed a registration statement, which incorporated a
prospectus with the SEC.

The suit further alleges that the prospectus was materially false and
misleading because it failed to disclose, among other things, that:

     (i) the underwriters had solicited and received excessive and
         undisclosed commissions from certain investors in exchange for
         which those underwriters allocated to those investors material
         portions of the restricted number of IPO shares issued in
         connection with the IPO; and

    (ii) the underwriters had entered into agreements with customers
         whereby the underwriters agreed to allocate shares to those
         customers in the IPO in exchange for which the customers
         agreed to purchase additional shares in the aftermarket at
         pre-determined prices.

For more information, contact Charles J. Piven by Mail: The World Trade
Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore,
Maryland 21202 By Phone: 410-332-0030 by E-mail: piven@pivenlaw.com


SUPREMA SPECIALTIES: Milberg Weiss Commences Securities Suit in NJ
------------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class
action on behalf of purchasers of the securities of Suprema Specialties
Inc. (NASDAQ: CHEZ) between August 8, 2001 and December 21, 2001
inclusive, in the United States District Court for the District of New
Jersey against the Company and officers Mark Cocchiola (CEO and
President) and Steven Venechanos (CFO).

The suit charges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of materially false and misleading
statements to the market between August 8, 2001 and December 21, 2001.
During the class period, defendants issued quarterly and annual press
releases, and filed reports with the Securities and Exchange Commission
(SEC) which favorably portrayed Suprema's business and financial
performance.

The representations in the press release were, according to the
allegations of the complaint, materially false and misleading because
the Company was using questionable accounting practices in reporting
its financial performance, which distorted its reported financial
statements.

In November 2001, the Company commenced a secondary offering of common
stock, pursuant to a prospectus and registration statement filed with
the SEC and containing allegedly misleading financial statements. In
the secondary offering, the Company, defendants Cocchiola and
Venechanos, and others, sold a total of 4,050,000 shares at a price of
$12.75 per share.

Subsequently, in December 2001, only weeks after the secondary
offering, the Company issued a press release announcing that it is
conducting an internal investigation into its previously filed
financial statements, and that defendant Venechanos has resigned from
his position as its CFO. Immediately after this announcement, the
Nasdaq Stock Market halted trading in Company stock, pending its
receipt of additional information on the matter. The Company's stock
has not resumed trading over the Nasdaq Stock Market.

For more information, contact Steven G. Schulman or Samuel H. Rudman by
Phone: 800/320-5081 by E-mail: supremaspecialtiescase@milbergNY.com or
visit the firm's Website: http://www.milberg.com


TAKE-TWO INTERACTIVE: Cauley Geller Reveals Delay in Earnings Results
---------------------------------------------------------------------
Cauley Geller Bowman & Coates LLP revealed that Take-Two Interactive
Software, Inc. (Nasdaq: TTWO) issued a press release announcing that it
is postponing the release of its fourth quarter and fiscal year end
2001 financial results indefinitely, due to the lack of cooperation by
its auditors. Failing to do so has caused the halt in all trading of
the companies stock.

This information comes soon after the firm announced that it had filed
a complaint in the United States District Court for the Southern
District of New York on behalf of purchasers of the Company's publicly
traded securities during the period between February 24, 2000 and
December 17, 2001, inclusive.

The suit charges Take-Two and certain of its officers and directors
with issuing a series of material misrepresentations to the market
between February 24, 2000 and December 17, 2001, concerning its
financial performance for the Company's fiscal year 2000 and the first
three quarters of Take-Two's fiscal year 2001.

Throughout the class period, defendants issued press releases reporting
Take-Two's quarterly and year-end financial performance, and filed
reports confirming such performance with the United States Securities
and Exchange Commission.  These reports positively portrayed Take-Two's
performance during the Class Period and discussed several quarters of
supposedly "record" results.  These statements, as alleged in the
complaint, were materially false and misleading because the Company
had, throughout the class period, improperly recognized revenues,
thereby inflating its reported sales and earnings.

In December 2001, Take-Two's stock price plunged 31%, falling from
$15.05 to $10.33, as news leaked that it will likely restate previously
filed financial reports. On December 17, 2001, the Company issued a
press release announcing that the Company will restate its financial
results for its fiscal year 2000 and the first three quarters of its
fiscal year 2001.

According to the press release, the Company had improperly recognized
revenue on products that were subsequently returned to the Company. For
fiscal year 2000, the restatement will have the effect of decreasing
net sales by $12-15 million and decreasing net income by $3.1-$3.7
million. For the three quarters of 2001, the restatement will have the
effect of decreasing net sales by approximately $9.5 million and
increasing net income by $0.3 million.

For more information, contact Jackie Addison, Sue Null or Shelly
Nicholson by Mail: P.O. Box 25438, Little Rock, AR 72221-5438 by Phone:
888-551-9944 by E-mail: info@classlawyer.com or visit the firm's
Website: http://www.classlawyer.com  


XO COMMUNICATIONS: Finkelstein Krinsk Lodges Securities Suit in S.D. CA
-----------------------------------------------------------------------
Finkelstein & Krinsk filed the first California-based class action
securities lawsuit against XO Communications, Inc. (formerly NextLink
Communications) along with certain of its officers and directors,
including Craig McCaw.  The suit was filed in the United States
District Court for the Southern District of California, on behalf of
all purchasers of the Company's securities from at least April 4, 2001,
through November 29, 2001.

The suit alleges that XO and certain of its directors and officers
issued a series of materially false and misleading statements
concerning its financial condition and cash reserves. Specifically, the
complaint alleges that in order to promote its stock, the defendants
misrepresented the Company's cash reserves, capital requirements and
the Company's ability to survive until such time that it would be cash
flow positive.

The public investors were misled through the defendants'
misrepresentations and deserve a "level playing field" instrumental to
investor confidence in today's markets. As an investor, you need not
have relied on the misinformation.

For more information, contact Jeffrey R. Krinsk by Phone: 877-493-5366
(toll-free) or 619-238-1333 by Fax: 619/238-5425 or by E-mail:
fk@class-action-law.com  


XO COMMUNICATIONS: Lionel Glancy Commences Securities Suit in E.D. VA
---------------------------------------------------------------------
The Law Offices of Lionel Z. Glancy initiated a securities class action
in the United States District Court for the Eastern District of
Virginia on behalf of all persons who purchased securities of XO
Communications, Inc. (Nasdaq:XOXO.OB) between April 4, 2001 and
November 29, 2001, inclusive.

The suit charges XO and certain of its officers and directors with
violations of federal securities laws. Among other things, plaintiff
claims that defendants' material omissions and the dissemination of
materially false and misleading statements regarding the nature of the
Company's financial condition as well as its present and future
business prospects caused its stock price to become artificially
inflated, inflicting enormous damages on investors.

For more information, contact Michael Goldberg by Mail: 1801 Avenue of
the Stars, Suite 311, Los Angeles, Calif. 90067 by Phone: 310-201-9150
or 888-773-9224 or by E-mail: info@glancylaw.com.


                              *********


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
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Beard Group, Inc., Washington, D.C.  Enid Sterling, Aurora Fatima
Antonio and Lyndsey Resnick, Editors.

Copyright 2002.  All rights reserved.  ISSN 1525-2272.

This material is copyrighted and any commercial use, resale or
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