CAR_Public/020129.mbx                C L A S S   A C T I O N   R E P O R T E R
  
                Tuesday, January 29, 2002, Vol. 4, No. 20

                            Headlines

AAMES FINANCIAL: Sued By Employees For Labor Act Violations in CA Court
AAMES FINANCIAL: Consumers File Suit For RESPA Violations in CA Court
BARNES THORNBURG: Judge Approves Settlement Of Firstmark Pyramid Suit
BLOCKBUSTER INC.: Canadian Consumers Sue Over "Exorbitant" Late Fees
CALIFORNIA: Disabled Residents File Suit To Live In Community Homes

CALIFORNIA: Cities Face Suit Seeking Emergency Shelter For Homeless
DAQING LIANYI: Chinese High Court Allows Filing of Securities Suit
DIAL CORPORATION: EEOC Sues For Sexual Harassment of Female Workers
EQUITABLE LIFE: Former Policyholders Mull Suit Over Lost Policy Value
ILLINOIS: Residents To Sue After "Rain Blocker" System Causes Floods

MICROSOFT CORPORATION: Judge Allows Parties To Present Revised Pact
MILBERG WEISS: Confirms CA Jury Probe over Plaintiff Solicitations
NEW YORK: Scott Scott Commences Suit V. Port Jefferson Illegal Scheme
SLAVE LABOR: Slave Labor Lawsuit V. Japanese Cement Company Halted
SOUTH CAROLINA: Retirees Sue Challenging System's Leave Calculation

SOUTH CAROLINA: Federal Retirees Challenge Taxation Policy of Benefits
TEXAS: Ranked #46 Out of 50 in Legal Study About Litigation Fairness
WIRELESS COMPANIES: 22 Cities File Suit Over Taxing Wireless Phones
WISCONSIN: Parties In Supermax Inmates' Suit Agree on Settlement Terms

                        Securities Fraud

APPLIED MICRO: Faces Multiple Securities Suits in California Courts
CROWN CENTRAL: Stockholders File Suit in VA Relating To Rosemore Merger
DIGITAL ISLAND: Chimicles Tikellis Commences Securities Suit in DE
FOCUS ENHANCEMENTS: To Settle Securities Fraud Suit in Massachusetts
GLOBIX CORPORATION: Hoffman Edelson Lodges Securities Suit in S.D. NY

IMCLONE SYSTEMS: Faces Probe From SEC, Justice Department Over Erbitux
IMCLONE SYSTEMS: Spector Roseman Commences Securities Suit in S.D. NY
KMART CORPORATION: Commencing Probe After Letter Questions Practices
MBNA CORPORATION: NY Court Approves $18M Fraud Suit Settlement
MCLEOD USA: Cohen Milstein Commences Securities Suit in N.D. California

PDI INC.: Milberg Weiss Commences Securities Fraud Suit in New Jersey
RHYTHMS NETCONNECTIONS: Wolf Haldenstein Lodges Securities Suit in CO
TIDEL TECHNOLOGIES: Will Vigorously Oppose Securities Suit in S.D. TX
WORLD GAMING: $1.5M Pact Awaiting Delaware Federal Court's Approval
                             
                            *********


AAMES FINANCIAL: Sued By Employees For Labor Act Violations in CA Court
-----------------------------------------------------------------------
Aames Financial Corporation faces a putative class action in the United
States District Court of California filed by former and current loan
executives employed by the Company alleging violations of certain labor
acts.

The suit names the Company and subsidiary Aames Funding Corporation as
defendants. It alleges that the plaintiffs, during their employment,
worked in excess of 8 hours per day or 40 hours per week, but the
Company willfully failed to pay overtime in violation of the federal
Fair Labor Standards Act and, with respect to loan executives employed
in California, in violation of the California Labor Code and Business
& Professional Code 17200.

The Company denied the allegations in the suit, and asserted various
affirmative defenses in September 2001. No trial date has been set.


AAMES FINANCIAL: Consumers File Suit For RESPA Violations in CA Court
---------------------------------------------------------------------
Aames Financial Corporation faces a class action initially commenced in
April 2000 in the Los Angeles County Superior Court against the Company
and subsidiary, Aames Home Loan, on behalf of all persons who applied
for or obtained loans from the Company during the preceding four years.

The suit alleges various state law violations, and their contention
that the Company routinely "upcharges" third party fees and under-
discloses annual prepayment rates. In September 2001, the plaintiffs
amended their complaint to assert claims based upon the payment of a
yield-spread premium to their broker. The amended suit contends that
such yield spread premium payments constitute kickbacks and/or illegal
referrals under Real Estate Settlement Procedures Act (RESPA).

The Company has removed the action to the US District Court for the
Central District of California and has answered the amended complaint,
asserting various affirmative defenses. No trial date has been set.


BARNES THORNBURG: Judge Approves Settlement Of Firstmark Pyramid Suit
---------------------------------------------------------------------
US District Judge Sarah Evans Barker recently approved the settlement
proposed by Indianapolis-based law firm Barnes and Thornburg to settle
a class action filed by as many as 2,500 elderly investors who lost
money when Firstmark Corporation, a financial services holding company,
declared bankruptcy in 1988, Associated Press recently reported.

Barnes and Thornburg was the last of 12 of the Company's advisers or
principals to offer a settlement over the estimated $57 million in
losses that investors suffered.  Under the settlement, the law firm
will pay nearly $4.6 million to as many as 2,500 elderly investors.  
The settlement, combined with others reached over the years, brings the
total amount of money recovered on behalf of the Company's investors to
more than $25 million.

The suit alleges that the defendants contributed to an investment scam,
when Firstmark allegedly paid earlier investors with money from new
investors until the entire operation collapsed.  The now-bankrupt
company was accused of concealing its financial condition by increasing
the margin between the the quantity of notes sold to investors and
those redeemed by investors.

Investors ultimately are expected to receive about 30 percent of the
money they lost, with the rest of the recovered cash going toward
attorney fees.  One-third of the 2500 elderly investors who lost money
died as the case dragged through the courts.

"I'm glad it's over," investor Virginia Brouwer, a widow who has led
the legal battle, told The Indianapolis Star.  "I think we were all
beginning to lose our stamina, and this was the best we could do."
Judge Barker praised Ms. Brouwer efforts in the case and awarded her
$50,000 on top of what other investors would share from the Barnes &
Thornburg settlement.

In all, the suit recovered about $11.7 million for investors, a third
of which will be used to pay attorney fees.  Another $14 million has
been recovered through bankruptcy proceedings and the settlement of a
separate lawsuit.

Attorneys for Barnes & Thornburg declined to answer questions about the
settlement, but said they stood by a written statement the firm issued
in November.  The statement said the lawsuit's allegations of fraud and
deception have no merit.  "However, given the time and expense already
expended in the Firstmark case and the prospect that the litigation
could continue for another decade, it make sense to bring this to an
end," the statement read.

Barnes and Thornburg and another defendant, the investment house
Raffensperger, Hughes, fought all the way to the US Supreme Court to
get Firstmark investors' legal claims dismissed.  However, the Court
let stand an appeals court ruling in June 2000.  The investment house
reached a $1.15 million settlement with the investors last June.


BLOCKBUSTER INC.: Canadian Consumers Sue Over "Exorbitant" Late Fees
--------------------------------------------------------------------
The Canada branch of rental chain Blockbuster, Inc. faces several class
actions in Quebec, Ontario and British Columbia, alleging the Company
charged exorbitant and unlawful late fees on video and DVD rentals.  

The suits follow several class actions commenced in the United States
over late fees.  The US Company has agreed to settle for $450 million
these suits involving 40-million American customers, but the settlement
has yet to gain a Texas court's final approval.

Lawyers filing the Canadian suits say the Company's late fees in Canada
are similarly excessive as those mentioned in the US suits.  Gordon
Kugler, a Montreal lawyer who filed one of the suits, told the National
Post Online, "The research we've done shows that for all intents and
purposes it's the same fee."  Blockbuster Canada's late fees are:

     (1) $5.74 every day a 24-hour rental is overdue;

     (2) $1.44 for every day a five-day rental is late and

     (3) 56> a day when a seven-day rental is overdue

Mr. Kugler said he hopes the outcome of the US suits will also
translate into a positive outcome for the suits, which label's
Blockbuster Canada's late fees "exorbitant" and "abusive" and says they
violate various Canadian laws, including Quebec's Consumer Protection
Act.

A Blockbuster spokesman in Dallas told the National Post Online that
the company's late fees and rental policies are "very similar" in
Canada and the United States, but dismissed the new actions as
unfounded. "We don't believe these claims are of merit and we're going
to vigorously defend our company," said Randy Hargrove.

No settlement talks are scheduled. The Company has already filed a
notice of intent to defend itself in the Ontario class-action motion,
but has yet to do so in the Quebec action.


CALIFORNIA: Disabled Residents File Suit To Live In Community Homes
-------------------------------------------------------------------
The State of California faces a class action filed in the Alameda
County Superior Court by a group of developmentally disabled residents,
seeking that they be allowed to live in community homes instead of
institutions and alleging violations of Americans with Disabilities
Act.

The suit was filed on behalf of thousands of disabled people who were
allegedly "isolated and unhappy in institutions," according to the San
Francisco Chronicle.  The suit claims that state officials are
violating the Americans with Disabilities Act and other laws by keeping
the disabled from being part of their communities.  The suit also names
as defendants:

     (1) the State Department of Developmental Services,

     (2) other state agencies and

     (3) the 21 private, nonprofit agencies, known as regional centers,
         that contract with the state to provide care for people with
         disabilities including cerebral palsy, mental retardation,
         epilepsy and autism

State officials told the San Francisco Chronicle that they were
reviewing the suit and had no comment. Bob Baldo, Executive Director of
Sacramento's Association of Regional Center Agencies, asserted that the
regional centers are serving the disabled well.  He emphasizes "I think
the data does tend to support the idea that people who live in
community settings are better off.But overall the regional centers have
done a really excellent job in trying to provide resources in an ever-
expanding population that we need to serve."

However, the plaintiffs believe that the State is not moving fast
enough, the San Francisco Chronicle reports.  In a news conference at
the Oakland Marriott Hotel, Ellen Goldblatt, attorney for Protection
and Advocacy Inc. of Oakland, said "Our clients' needs are
urgent.California has not moved forward to reverse the trend of
unnecessary institutionalization."  East Palo Alto lawyer Michael Pyle,
another attorney for the plaintiffs, said he wants the suit certified
as a class action because he believes that more than 6,000 Californians
urgently need community-centered care.

"We hope the state will choose to spend money on getting in compliance
with the law, rather than spending money on lawyers during years of
litigation," Mr. Pyle said. "I look forward to the day that this case
is successfully resolved."


CALIFORNIA: Cities Face Suit Seeking Emergency Shelter For Homeless
-------------------------------------------------------------------
Advocates for the homeless filed a class action against five North
County cities in the San Diego Superior Court, alleging that the cities
did not provide adequate emergency cold-weather shelters for the
homeless, according to a SignOnSanDiego report.

The suit names the counties of Carlsbad, San Marcos, Oceanside, Vista,
Encinitas and San Diego, and alleges that the counties failed to comply
with their own plans for shelters and with state laws that require
cities to develop and implement comprehensive housing plans that
include emergency shelters.

San Diego Attorney Robert Scott Dreher, who has sued cities on behalf
of the homeless, filed the suit, asking the Court to:

     (1) force the cities to implement their general plan housing
         elements;

     (2) identify a site for an emergency winter shelter and open one;

     (3) work cooperatively to address homeless issues in North County;
         and

     (4) pay attorney fees

The suit states "The County and these five cities have a responsibility
under the law to work together toward addressing and remedying this
emergency.They've refused to facilitate the opening of a shelter by
private agencies or churches."

Attorneys for the cities did not issue any comment on the matter,
according to SignOnSanDiego, while San Marcos City Attorney Helen Peak
said she had not seen Mr. Dreher's lawsuit.


DAQING LIANYI: Chinese High Court Allows Filing of Securities Suit
------------------------------------------------------------------
The Harbin Intermediate People's Court in China has accepted the
shareholders suit against Shanghai-listed Daqing Lianyi charging the
Company with releasing false information.  The case is the first of its
kind filed since the Supreme People's Court overturned a decision made
by courts last September to suspend acceptance of cases involving false
information disclosure, according to the China Daily.

Company shareholders, Tang Guirong, Ma Ruizhong and Chu Yuming filed
the suit against the Company, Shenyin and Wanguo Securities
Corporation, Ltd., and a Harbin accounting firm for their roles in the
Company's alleged fraudulent actions. Guo Feng, a lawyer with the
Beijing-based Zhonglun Law Firm, told China Daily that so far more than
400 shareholders have contacted him, wanting to join in the action
against Daqing Lianyi.

The Supreme People's Court decision early last week ruled out the
possibility of a class action, but instead allowed shareholders to file
collective actions in cases involving civil rights violations in the
securities market.  The China Daily says the court stipulated that only
listed companies that have been investigated and punished by the China
Securities Regulatory Commission (CSRC) and its branches for fraud in
information disclosure can be taken to court.

Judge Si Wenjiu, with the Harbin Intermediate People's Court also said
other Daqing Lianyi shareholders can contact the Court and enter their
names in the action.  Mr. Guo expects the hearing for the suit to be
conducted on February 12, 2002.  He added he is confident about the
result of the case, and believed that the victimized shareholders will
be compensated.


DIAL CORPORATION: EEOC Sues For Sexual Harassment of Female Workers
-------------------------------------------------------------------
More than 100 women are prepared to testify about the years-long
pattern of sexual harassment in a sweeping lawsuit which the Equal
Employment Opportunity Commission filed against the Dial Corporation,
The Washington Post reported recently.

One of the plaintiffs, Ruby Martinez, a divorced mother of two sons,
says, in a recent interview, that she knew she faced rough going at
work when she became the first female mechanic at Dial Corporation, a
soap factory in suburban Chicago.  However, she was not prepared for
the hostile reception she received.  Almost immediately, she said, her
male co-workers reacted angrily.

They threatened her, propositioned her, kissed her roughly and even
slapped her when she rebuffed their advances, she said.  She was
subjected to crude practical jokes, including the time a penis,
whittled out of pink soap, was placed on her tool box.  The message,
she recalled, was that the men thought, "If I didn't have that tool, I
couldn't be a mechanic."


EQUITABLE LIFE: Former Policyholders Mull Suit Over Lost Policy Value
---------------------------------------------------------------------
Equitable Life Insurance Company faces a potential class action suit
from a group of former policyholders, seeking to regain the money they
allegedly lost through deductions the Company made to the value of
their policies, according to an Ananova.com report.

Around 200 members of the Equitable Late Joiners Action Group (ELJAG)
are planning to take the Company to court.  ELJAG spokesman Paul Weir
says they plan to encourage other former members to join them in
bringing a class action against the society.

The group, whose members all joined Equitable after September 1998,
claim the society knew about its liability to Guaranteed Annuity Rate
(GAR) policyholders when it sold them their policies.  The former
policyholders all left the society at the end of last year to avoid
being forced to give up any claims against the Company if the society's
compromise scheme was approved by members, Ananova.com reports.

An Company spokesman said in a press release, "Our legal advise is that
there are no generic GAR related claims.In the interests of continuing
members we will defend any court action that we see appropriate."


ILLINOIS: Residents To Sue After "Rain Blocker" System Causes Floods
--------------------------------------------------------------------
Organizers of Northwest Side residents whose homes flooded during two
downpours, said recently they would urge other flood victims to join an
existing lawsuit that is seeking thousands of dollars in damages from
the City of Chicago for allegedly installing a faulty anti-flooding
system, the Chicago Tribune recently reported.

Letters will be mailed to about 300 people who have expressed interest
in being part of a class-action lawsuit against the city, after their
homes flooded during rainstorms on August 2 and August 30 of 2001, when
four inches of rain fell on the city in a matter of hours.  The City
maintains that it had no control over the volume of rain and is not
liable under a state statute designed to limit municipal liability.

The letter urges residents to contact the law offices of Reinstein &
Sherman in Northbrook, which filed a civil lawsuit on September 12
2001, in Cook County Circuit Court on behalf of Ronald Costello, owner
of two apartment buildings in north Lakeview that flooded.

The lawsuit charges that the "rain blocker" system installed to retard
flooding was deficient, and the city should have known it would cause
worse flooding.  The system uses devices restricting the flow of
rainwater into sewer drains to help prevent system overloads.  The
concept uses city streets to store rainwater during periods of heavy
runoff.  However, Northwest Side residents contend the system failed,
causing rainwater in the street to overflow yards and gush down
stairwells or through windows into basements.

After a months-long study of the $75 million program last fall, the
city removed fewer than 200 of the 210,000 devices from street catch
basins, where officials had evidence that they may have contributed to
flooding of nearby basements.

City attorneys filed a motion in November 2001, to dismiss the lawsuit
based on the Tort Immunity Act.  Under the Act, the City has to honor a
claim only if it has notice of the defect and fails to make timely
repairs, said Jennifer Hoyle, a spokeswoman for the City's Law
Department.

Some legal experts say residents could do an end run around the state
statute by claiming that when the rain blocker system caused water to
overflow the streets, it used their private property for storm water
storage.  Using that reasoning, residents could claim the City is
liable for the damage, attorney John Hieber said.

"It's like if (the City) decided to do something with the street and
one of the bulldozers tore up a lawn," said Mr. Hieber, a former
assistant US attorney assigned to land condemnation cases, who also
worked for the city's corporation counsel.  "They would have to repair
the lawn."


MICROSOFT CORPORATION: Judge Allows Parties To Present Revised Pact
-------------------------------------------------------------------
Baltimore Federal Judge J. Frederick Motz stated that he would allow
software giant Microsoft Corporation and the group of lawyers that
crafted a controversial $1 billion settlement package to bring a
revised settlement proposal to the Court.

Judge Motz had earlier rejected the settlement to hundreds of private
antitrust suits, under which the Company would donate more than $1
billion worth of software, equipment and technology training to the
nation's poorest schools.  In his ruling, Judge Motz stated the
proposal was "critically under-funded" and gave the Company an edge
over rival Apple Computer in the market for school computers.

The settling lawyers and the Company had pushed the settlement,
claiming it was the best way to bridge the "digital divide" between
schools.  The lawyers who crafted the settlement also said that it was
the best way, since plaintiffs in the suits could most likely receive
$10 as compensation, if they divided the settlement money among
themselves.

However, lawyers, educators and rivals like Apple Computer, criticized
the settlement, saying it was not enough to punish the Company for
overcharging on software and for practicing "anti-competitive"
behavior.  The settlement also allegedly gave the Company an edge in
one of the few sectors where rival Apple Computer still held a
traditional edge

However, even if Judge Motz rejected the plan, he seemed to accept the
proposal's fundamental premise, according to Education Week. Both sides
said they would explore the option offered by the judge.  Thomas Burt,
counsel for the Company, said in a conference call, "The judge's
opinion offers a number of different approaches we are thinking about,
and we are considering those."


MILBERG WEISS: Confirms CA Jury Probe over Plaintiff Solicitations
------------------------------------------------------------------
High-profile law firm Milberg Weiss Bershad Hynes and Lerach confirmed
late last week that it is facing a Los Angeles federal grand jury probe
regarding the firm's solicitations of plaintiffs in securities class
actions.  The firm has said it "will cooperate with any government
inquiry."

An earlier article in the Class Action Reporter stated that the
investigation by the US Attorney's office in Los Angeles commenced over
claims that it is involved in a scheme to solicit investors and
fabricate shareholder plaintiffs in securities suits.  The report also
revealed that the Attorney's office has issued subpoenas to
stockbrokers at major brokerage firms to testify about providing the
firm with investor names.

In a reflection of the "high stakes" in the case, the firm has retained
Washington law firm Williams & Connolly, which represented President
Clinton in the Whitewater case and his impeachment trial, and Iran-
Contra figure Lt. Col. Oliver North, according to an latimes.com
report.

The firm has become "a pariah in corporate America", the report
continued, by filing hundreds of shareholder suits accusing companies
of misleading investors. Presently, it is competing to become lead
counsel for shareholders suing failed energy giant Enron Corporation.
Its best-known partner, William Lerach, who is based in San Diego, has
appeared in court in Houston and on news reports holding what he said
were shredded Enron documents. Lerach declined to be interviewed
Friday.


NEW YORK: Scott Scott Commences Suit V. Port Jefferson Illegal Scheme
---------------------------------------------------------------------
Scott & Scott LLC initiated a class action against Port Jefferson
County in Long Island and its officials in the United States District
Court for the Eastern District of New York for engaging in an "illegal
scheme" to fill municipal coffers with an estimated $1.5 million or
more in ill-gotten gains.

Plaintiff Arthur Heyman was reportedly stopped by an armed constable in
Port Jefferson, a seaside village in Suffolk County, Long Island.  The
constable allegedly gave him a "ticket" for driving an uninspected
vehicle, and directed him to appear in the local Municipal Court.  Mr.
Heyman initially considered contesting the ticket but instead paid a
fine, not knowing that the constable had no right to stop him, let
alone give him a traffic citation that wasn't worth the paper it was
printed on.

The suit is filed on behalf of tens of thousands of motorists who
endured the same fate while driving through Port Jefferson, and seeks
the appointment of a monitor to ensure that Port Jefferson constables
stop impersonating police officers.

"These so-called officers are untrained, unsupervised and out of
control," says Jonathan Scott of th Scott & Scott, attorney for Heyman
and other class action plaintiffs. "What's worse is that officials know
what they're doing is illegal since two appellate courts already have
ruled that Port Jefferson can't create its own police force."  Attorney
Scott says two Port Jefferson mayors, numerous village trustees and
more than 30 constables have infringed on the jurisdiction of the
Suffolk County Police Department. He added traffic and law enforcement
falls under the watch of county police.

The suit alleges that local officials attempted to mislead county
officials, as well as motorists, in order to preserve a substantial but
illegitimate source of income.  Mr. Scott says he's documented at least
25,000 incidents where people have been illegally detained, arrested or
ticketed by Port Jefferson constables since January 25, 1996.

For more details, contact Jonathan Scott by Phone: 631-271-6448 or Mark
Annick by Phone: 800-559-4534 or by Pager: 214-967-2299.


SLAVE LABOR: Slave Labor Lawsuit V. Japanese Cement Company Halted
------------------------------------------------------------------
A state appellate court has halted a lawsuit by a Korean-American man
who claims he was forced to work for a Japanese cement company during
World War II, Associated Press recently reported.  The court scheduled
an April 30 hearing on whether the lawsuit by Jae Wong Jeong, 79, can
proceed.

Mr. Jeong, a retired teacher who is now a citizen of the United States,
is suing under the state's slave labor law, which was nullified by a
federal court decision.  He is seeking class action status for his
lawsuit, in addition to compensation for his labor and injuries, as
well as an apology and a trust to benefit former forced laborers.  

In 1943, Mr. Jeong was studying economics at a Tokyo university when he
was taken to a slave labor camp for refusing to serve in the Japanese
army.  As a result, he was forced to break limestone for the Onoda
Cement Manufacturing Company (Onoda) for more than a year without pay.

US District Judge Vaughan Walker in San Francisco ruled in September
2001, that thousands of Filipino, Chinese and Korean prisoners who
claimed they were enslaved by Japanese companies, had no legal redress
for damages in US courts.  Judge Walker grounded his decision in the
the peace treaty between the United States and Japan ending World War
II which bars compensation to victims of wartime atrocities.  That
ruling would nullify a 1999 California law allowing victims of World
War II slave labor to sue multinational corporations operating in the
state.

In November 2001, however, a Los Angeles Superior Court Judge Peter D.
Lichtman allowed Mr. Jeong's case to move forward, saying he was
concerned the federal government was acting in an "uneven manner" by
allowing claims made by Holocaust survivors to go forward, while
preventing Asian victims from seeking reparations from Japanese
companies.  Judge Lichtman also noted that the Federal Court
erroneously concluded that California's slave labor law intruded on the
federal government's authority over foreign affairs.  Judge Lichtman
pointed out that the California law does not target any particular
country, only businesses, and does not implicate any foreign policy
between the United States and Japan.  He added that while state courts
are bound to follow the US Supreme Court decisions on federal
questions, decisions in lower federal courts are not binding.  

Onoda Cement, the defendant in the suit, has appealed to the State's
2nd District Court of Appeal, citing the Federal Court's September
decision.


SOUTH CAROLINA: Retirees Sue Challenging System's Leave Calculation
-------------------------------------------------------------------
The South Retirement System and South Carolina Budget and Control Board
faces a class action filed by a group of retired participants in the
Systems, challenging the State's retirement policies.

The first suit was originally commenced in South Carolina Circuit
Court, questioning the retirement system's treatment of annual leave
calculation of participants' retirement payments.  The Circuit Court
determined that the State has been providing retirement benefits to its
members in accordance with the law. The plaintiffs then appealed the
decision to the State Supreme Court, who reversed the decision in May
2000 and ruled in favor of the plaintiffs.

The State has filed a petition for rehearing with the Supreme Court,
which was granted.  On Rehearing, the Supreme Court reversed its prior
decision and ruled in favor of the State. The plaintiffs have asked for
an extension of time in which to file a petition for rehearing.  The
State expects that, should the plaintiffs ultimately prevail in the
suit, the current actuarial liability of the State for this new benefit
is estimated to be in excess of one billion dollars.


SOUTH CAROLINA: Federal Retirees Challenge Taxation Policy of Benefits
----------------------------------------------------------------------
The state of South Carolina faces two class action lawsuits brought in
the South Carolina State Court relating to the taxation of
retirement benefits.  One challenges the taxation of federal retirees'
income (Federal Retirees Case), and the other challenges a state
statute imposing income taxes upon benefits paid to retired state
employees (State Retirees Case) by the South Carolina Retirement
Systems.

In the Federal Retirees Case, the State filed a motion to dismiss,
which was granted by the State Court.  The plaintiffs then appealed the
decision to the State Supreme Court, which reversed the decision and
remanded the case to the State Court to determine the constitutionality
of a state statute.

The State moved to dismiss the State Retirees Case, which was granted
in part and denied in part by the State Court. The decision was
appealed to the State Supreme Court which reversed and vacated the
state Court's decision, stating that the state retirees should have
first filed their claim with the Department of Revenue as an
administrative matter. The State Retirees Case is presently pending
before the Department of Revenue.

While South Carolina is uncertain as to the ultimate outcome of any of
the above-described lawsuits, it is vigorously defending its position
in each case. In the event of unfavorable outcomes in both suits, the
State's liability is not expected to exceed $475 million for
retroactive relief with an estimated unfavorable impact on future
year's revenues of an additional $47.5 million per year.


TEXAS: Ranked #46 Out of 50 in Legal Study About Litigation Fairness
--------------------------------------------------------------------
A poll has put Texas close to the bottom of a list ranking states in
terms of perceived fairness or reasonableness for their litigation
environments, the Austin Business Journal reports.

The US Chamber of Commerce-commissioned poll, conducted by research
company Harris Interactive, measured the liability systems of all 50
states, based on several criteria, namely:

     (1) treatment of class action suits,

     (2) punitive damages,

     (3) timeliness of summary judgment/dismissal,

     (4) discovery,

     (5) scientific and technical evidence,

     (6) judges' impartiality and competence, and

     (7) juries' fairness

The survey requested senior attorneys at companies with annual revenue
of at least $100 million to give letter grades to all 50 states based
on the criteria.  More than 800 corporate general counsels and senior
litigators participated in the suit.

According to the Austin Business Journal, 78% of the respondents say a
state's litigation environment affects important business decisions,
such as where to locate a company. "It should come as no surprise that
most businesses take into account a state's liability climate when
making decisions," says Thomas Donohue, president and CEO of the U.S.
Chamber. "The degree to which a state is willing to protect business
owners from money-hungry, class-action lawyers is the degree to which
they'll find business eager to work there."

Texas ranked No. 46 in the survey, followed only by Mississippi, West
Virginia, Alabama, and Louisiana.  Topping the list were Delaware,
Virginia, Washington, Kansas and Iowa.

Frank Hill, an attorney in the Austin office of Thompson & Knight LLP,
told the Business Journal that in the past 10 years, the Texas Supreme
Court has done a lot, such as limiting class-action suits and boosting
levels of scientific proof for personal injury cases, to improve the
image of Texas courts.  However, he added that there are several venues
in Texas "where a large corporate defendant has two strikes against
them before they step up to the plate."

Mr. Hill gave examples of two major decisions issued by Texas juries: a
$10.73 billion verdict against Texaco Inc. in favor of what now is
Pennzoil-Quaker State Co., and an asbestos verdict that led to
bankruptcy filings for Pittsburgh Corning Corp., Owens Corning and
North American Refractories Co. Inc, according to the Austin Business
Journal.


WIRELESS COMPANIES: 22 Cities File Suit Over Taxing Wireless Phones
-------------------------------------------------------------------
A group of 22 municipalities in Missouri, including 15 in St. Louis
County, have filed a class action against a group of wireless telephone
companies in an attempt to force the companies to turn over gross-
receipts taxes.  The lawsuit, which had been discussed as a possibility
for more than a year, was filed in St. Louis County Circuit Court
before Judge Kenneth Romines, the St. Louis Post-Dispatch recently
reported.  

The municipalities are looking include many more Missouri cities.  As
many as 90 percent of Missouri cities with a population of 1,000 or
more might be eligible under their laws to be a part of the lawsuit.  
No trial date has been set.

At issue is whether the wireless, or cellular, companies are to be
legally considered telephone companies.  Currently, the companies claim
that they should not be considered telephone companies.  By not being
classified in that manner, the companies avoid paying the taxes that
most municipalities impose on traditional phone companies.

Most municipalities charge a tax on the traditional phone companies,
usually between five and seven percent of the total revenue a company
receives from subscribers within the municipality, called the
gross receipts tax.  Similar taxes generally exist for all utilities.

Cellular-phone companies have avoided that tax so far in Missouri.  As
more and more people have obtained cellular phones, municipalities have
become worried that one of their tax bases is eroding.  University City
Attorney John Mulligan, who has served as a point man on the lawsuit,
said that according to the Federal Communication Commission, there were
more than 1.7 million cellular-phone customers in Missouri with an
average monthly bill of $45.27 by the end of 2000.  

Mr. Mulligan said the main wireless companies named in the lawsuit are:

     (1) AT&T Wireless,

     (2) Nextel,

     (3) Sprint,

     (4) Verizon Wireless,

     (5) Voicestream Wireless, and

     (6) Cingular Wireless

Mr. Mulligan also said that the impetus for the lawsuit came from a
court case that started in 1999 between Sunset Hills and Southwestern
Bell Mobile.  In that instance, Sunset Hills enacted an ordinance
taxing Southwestern Bell's cellular tower in Sunset Hills.  
Southwestern Bell refused to pay the tax and said that since it was not
a traditional phone company, Sunset Hills did not have the authority to
tax it in that manner.  Sunset Hills won the opening round of the court
case, and in April 2000, the Missouri Supreme Court decided not to
review the case, in effect, finalizing the decision of the Court of
first instance.

Generally speaking, Mr. Mulligan and the municipalities see that case
as setting a precedent in Missouri.  They say, wireless companies are
subject to the same municipal laws as telephone companies.  The
wireless companies disagree, says David Clevenger, Verizon's executive
director for public affairs.  

If the lawsuit stays with just the original 22 cities, Mr. Mulligan
says the cities will be seeking somewhere in the neighborhood of $30 to
$40 million.  That would cover the past five years of estimated gross-
receipt taxes, the farthest back the cities legally can go, plus
interest.

Mr. Mulligan, however, does not expect a decision any time soon, saying
that if the case went to trial, negotiations are taking place between
the two parties, it probably would take a minimum of one or two years,
not including the appeals process.  "It's fair to say this could be in
the courts for years," he said.

Currently, the area cities involved in the lawsuit are:

     (i) Chesterfield,

    (ii) Ellisville,

   (iii) Ferguson,

    (iv) Florissant,

     (v) Jennings,

    (vi) Kirkwood,

   (vii) Manchester,

  (viii) Maplewood,

    (ix) Maryland Heights,

     (x) Northwoods,

    (xi) University City,

   (xii) Vinita Park,

  (xiii) Warson Woods,

   (xiv) Wellston and

    (xv) Winchester

Outside of St. Louis County, Blue Springs, Cape Girardeau, Dexter,
Gladstone, O'Fallon, St. Joseph and Independence are involved.


WISCONSIN: Parties In Supermax Inmates' Suit Agree on Settlement Terms
----------------------------------------------------------------------
Lawyers for the State and inmates at Wisconsin's Supermax prison
recently put together a new agreement on improving living conditions
there, minus some provisions Governor Scott McCallum refused to
approve, the Associated Press recently reported.  The new agreement to
settle the inmates' class action still requires the state to change the
prison's name and bars Department of Corrections officials from
referring to the inmates housed there as the "worst of the worst."

Those provisions were also part of a tentative agreement the State and
inmates reached earlier this month.  However, the Governor refused to
approve the deal last week, saying prisoners' attorneys made demands
that were a "slap in the face."  Those demands, he said, included TVs
in every cell, sleep masks to shield inmates from the constant lighting
in cells and a service to bus visitors to see inmates at the prison in
southwest Wisconsin.

The Governor said in a statement he would support the new agreement
because it did not include those provisions.  Governor spokesman Tim
Roby said the deal-breaker for the Governor was the bus service, which
would cost $60,000 a year.  "In tough times, he wanted the flexibility
to be able to make reductions that are in the best interest of the
Department rather than dictated by a judge or an agreement," Mr. Roby
said.

Attorney Ed Garvey, who represents the inmates, said he was still
baffled by the Governor's opposition to the original deal.  He said
inmate attorneys requested things such as the sleeping masks for
inmates, but never demanded them and made it clear to the State the
requests were not necessary for both sides to reach an agreement.  "I
think he (the Governor) was misinformed about the earlier agreement."

The settlement needs to be approved by inmates, Governor McCallum and
US District Judge Barbara Crabb to end the lawsuit.  Other provisions
of the new agreement are:

     (1) Requirements to build an outdoor recreation area for inmates;

     (2) At least five hours a week of exercise for inmates outside of
         their cells; and

     (3) Access to religious materials

Attorney Garvey said the inmates will have 30 days to review the new
Agreement, while Judge Crabb has scheduled a March 8 hearing to review
the agreement.   

The $47 million, 509-bed prison in Boscobel opened in 1999 to house the
State's most unruly, violent prisoners.  The inmates spend 23 hours a
day in their cells and exercise in tall, stark concrete chambers with
fenced windows near the ceiling.


                            Securities Fraud


APPLIED MICRO: Faces Multiple Securities Suits in California Courts
-------------------------------------------------------------------
Applied Micro Circuits Corporation has asked the United States District
Court for the Southern District of California to dismiss several
securities class actions commenced in April 2001 against the Company,
its Chief Executive Officer, Chief Financial Officer and certain other
officers and directors, alleging violations of federal securities laws.

The suits identically allege violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 Act and Rule 10b-5 promulgated
Thereunder.  In general, the complaints allege that the Company and the
individual defendants misrepresented the Company's financial prospects
for the fourth quarter of fiscal 2001 to inflate the value of the
Company's stock. The suits have been consolidated into a single
proceeding, and an amended consolidated complaint will likely be filed
in the fourth fiscal quarter of fiscal 2002.

The Company intends to file several motions seeking a dismissal of the
suits on various grounds. A briefing and hearing schedule has been set
for these motions, which the Company expects will be heard and decided
in the first or second quarter of fiscal 2003.

In May 2001, certain individuals filed derivative actions against the
directors and certain executive officers in the California state
courts. These state court derivative complaints allege:

     (1) overstatement of the financial prospects of the Company,

     (2) mismanagement,

     (3) inflation of stock value, and

     (4) sale of stock at inflated prices for personal gain during the
         period from November 7, 2000 until February 5, 2001.

The three state court derivative actions have been consolidated and
assigned to the San Diego Superior Court and a consolidated derivative
complaint was filed in December 2001.

The Company has filed several motions seeking a dismissal of the state
action on various grounds. In the alternative, the Company is also
seeking to stay the state action pending resolution of the federal
action. A hearing and decision on the Company's motions is expected to
occur in the fourth quarter of fiscal 2002.

No discovery has been conducted in either the federal action or the
state action. The Company believes that the allegations in these
actions are without merit and intends to defend the actions vigorously.
The Company cannot predict the likely outcome of these actions, and an
adverse result in either action could have a materially adverse effect
on the Company.


CROWN CENTRAL: Stockholders File Suit in VA Relating To Rosemore Merger
-----------------------------------------------------------------------
Crown Central Petroleum Corporation faces a class action pending in the
United States District Court for the Eastern District of Virginia,
Alexandria Division alleging violations of federal securities acts
relating to its freeze-out merger with Rosemore, Inc.

Company stockholders James J. Hayes and Thomas filed the suit, on
behalf of other stockholders, against the Company, its directors,
Rosemore, Inc., and Credit Suisse First Boston Corporation (CSFB).  The
suit asserts claims arising under Sections 14(a) and 20(a) of the
Exchange Act, 15 U.S.C. Sections 78n(a) and 78t(a), and Rule 14a-9
promulgated by the Securities & Exchange Commission, 17 C.F.R. Section
240.14a-9 and breaches of fiduciary duty by the Company's directors
arising under state law.

The suit alleges that the defendants caused the Company to enter into a
freeze-out merger with Rosemore, Inc. pursuant to which Rosemore
acquired Company stock owned by public stockholders at an unfair price.  
Pursuant to a merger agreement dated December 17, 2001 between the two
Companies, a proxy statement dated January 31, 2001 was issued by Crown
which violated Section 14(a) of the Exchange Act, 15 USC Section 78n(a)
and Rule 14a-9, 17 CFR Section 240.14a-9, because it contained
misrepresentations of material facts and omissions of material facts.

The suit further alleges that the directors of the Company breached
their fiduciary duties under state law, and that CSFB assisted and
abetted the Company's directors in a breach of their fiduciary
obligations to its public stockholders.  The complaint also alleges
that Rosemore, Inc., and Henry A. Rosenberg, Jr., were controlling
persons of the Company, and, as such, are liable for the damages
incurred by the class.

The proxy statement was mailed to the Company stockholders of record on
January 17, 2001, which was the record date for a special meeting of
Crown stockholders to be held on March 7, 2001, at which the
shareholder vote on the merger was taken. The plaintiffs, James J.
Hayes and Thomas Boots, brought this action as a class action pursuant
to Rule 23(a) and Rule 23(b)(3) of the Federal Rules of Civil Procedure
on behalf of all persons or entities who were Company stockholders or
beneficial owners of common stock on January 17, 2001, the persons or
entities who were the recipients of the proxy statement.

For more information, contact Mark Schirmer of Straus & Boies LLP by
Phone: 1-205-324-3800 by Fax: 1-205-324-3996 or Edward M. Selfe of
Bradley Arant Rose & White LLP by Phone: 1-205-521-8280 or by Fax:
205-521-8800.


DIGITAL ISLAND: Chimicles Tikellis Commences Securities Suit in DE
------------------------------------------------------------------
Chimicles & Tikellis LLP initiated a securities class action in the
United States District Court for the District of Delaware on behalf of
holders of Digital Island, Inc. (NASDQ: ISLD) common stock between May
14, 2001 and August 30, 2001, inclusive, against the Company and:

     (1) Cable & Wireless PLC,

     (2) Dali Acquisition Corporation,

     (3) Ruan F. Ernst, CEO and

     (4) the members of the Company's board of directors during the
         class period

The suit alleges that defendants violated sections 14(a), 14(e),
14(d)(7) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule
14d-10 promulgated thereunder, by failing to disclose material
information to those Company shareholders who had received an offer to
purchase from defendant Cable & Wireless in May and June 2001, and to
those Company shareholders who received a proxy statement in connection
with the merger between the Company and Cable & Wireless, which was
consummated on August 30, 2001.  In particular, defendants failed to
disclose important contracts between the Company and Bloomberg, LLP,
and Digital Island and Major League Baseball's Internet media. Those
contracts were not disclosed either in the offer to purchase or the
proxy statement.

Defendants also violated the all-holders provision of the Williams Act
by giving additional consideration to the Company's directors and
officers, who were also shareholders, in excess of that given to other
Company shareholders as an inducement to support Cable & Wireless'
offer to purchase.

For more information, contact Pamela Tikellis or Robert J. Kriner by
Mail: One Rodney Square, Wilmington, DE 19899 by Phone: (302) 656-2500
or visit the firm's Website: http://www.chimicles.com.


FOCUS ENHANCEMENTS: To Settle Securities Fraud Suit in Massachusetts
--------------------------------------------------------------------
Focus Enhancements, Inc. has agreed to settle for an undisclosed amount
the securities class action pending against it and one of its directors
in United States District Court for the District of Massachusetts, on
behalf of shareholders who purchased the Company's shares during the
July 17, 1997 to February 19, 1999 period.  The suit, initially filed
in November 1999 and amended several times, alleges violations of
federal securities laws and seeks unspecified monetary damages.  

The Company has moved to dismiss the suit.  The Court granted certain
portions of the Company's motion to dismiss and denied other portions,
allowing the case to go forward into pretrial discovery as to certain
matters.

Parties in the suit reached a settlement in December 2001, subject to
the preparation of a settlement stipulation, which is mutually
satisfactory to all parties, and Court approval, after notice to
shareholders and a hearing.  The settlement will be funded entirely
with proceeds from the Defendants' insurance carrier.  The Company,
however, stated in a disclosure to the Securities and Exchange
Commission that there are no assurances that the parties will
eventually reach a settlement acceptable to all sides.


GLOBIX CORPORATION: Hoffman Edelson Lodges Securities Suit in S.D. NY
---------------------------------------------------------------------
Hoffman & Edelson LLC initiated a securities class action 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, in the United States District
Court for the Southern District of New York against the Company and:

     (1) Marc Bell,

     (2) Peter Herzig and

     (3) Brian Reach

The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder by, among other things, issuing false and 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 the Company's stock and to assuage investor concerns over the
company continuing as a going concern, defendants set forth the
Company's business plan which stated that it would be fully funded to
fiscal 2003 and thereafter cash flow positive. This sentiment was
echoed in the Company's annual report filed on Form 10-K with the
Securities Exchange Commission and thereafter in Company press releases
and conference calls.

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

For further details, contact Jerold B. Hoffman by Mail: 45 W. Court
Street, Doylestown, PA 18901 by Phone: 877-537-6532 (toll free) by Fax:
215-230-8735 or by E-mail: jhoffman@hofedlaw.com.


IMCLONE SYSTEMS: Faces Probe From SEC, Justice Department Over Erbitux
----------------------------------------------------------------------
ImClone Systems, Inc. (Nasdaq: IMCL) faces two other inquiries from
securities regulators and the Justice Department relating to possible
federal securities violations relating to misleading statements the
Company allegedly made to investors about its highly touted colon
cancer drug Erbitux.  The House of Representatives Energy and Commerce
Committee is currently investigating allegations ImClone hid negative
information about its research, according to Reuters report.

The Company's troubles started when its stock dropped from a high of
$73.83 to $55.25 by the end of December 2001, after it revealed that
the US Food and Drug Administration had rejected their "Fast-Track"
application for approval of IMC-C225, its blockbuster drug used for the
treatment of colorectal cancer and also known as Erbitux.  The Company
had earlier represented to investors that it was confident Erbitux
would be approved by February and had touted the positive effects that
the drug's approval could have on its financial position.

The Company's troubles were exacerbated when on January 4, 2002, The
Cancer Letter reported that it had obtained a copy of the FDA's letter
to the Company dated December 28, 2001. According to that FDA letter,
the FDA had repeatedly warned the Company and the individual defendants
about the problems with ImClone's clinical trials. This disclosure
resulted in a further drop in share price to $35.83 per share.

Angry investors filed multiple class actions in the United States
District Court for the Southern District of New York, alleging
violations Sections 10(b) and 20(a) of the Securities Exchange Act of
1934 and Rule 10b-5 promulgated thereunder, because of the Company's
misleading statements.  The suits also alleged certain of the Company's
officers benefited from the fraud during the class period by selling or
filing to sell approximately 2.3 million shares of stock for gross
proceeds of approximately $160 million.

According to a Reuters report, the Company disclosed the federal
agencies' requests for information but did not say what information the
authorities wanted. A company official would not comment.  The Company
also revealed in a disclosure to the Securities and Exchange
Commission, that a recently appointed board member, Peter Peterson, had
left the Board of Directors citing "time constraints."  The Company
says it will cooperate fully with the two agencies.

"Things will get worse for ImClone before they get better. The more
(investigating) parties you get involved, the more bad news and more
headlines we'll see," Prudential Securities analyst Tim Anderson told
Reuters, referring to the addition of the SEC and Justice Department in
the ImClone probe.  In a conference call Thursday with investors,
officials of Bristol-Myers, who signed a deal with the Company to earn
a right to market Erbitux, said they were considering unspecified
actions to protect its shareholders.

Tim Anderson added that Bristol-Myers, having already invested $1.2
billion in its ImClone partnership, will not walk away from the deal
unless the Erbitux trial data is shown to be fraudulent. He asserts,
"If Bristol-Myers walks away, they basically get nothing for their
investment. And if they abandon Erbitux and the drug is eventually
approved, they would look doubly bad. So they'll just stick it out and
try to help ImClone get the drug approved."

Bristol-Myers could not be immediately reached for comment on ImClone's
disclosure regarding the inquiries, according to a Reuters report.


IMCLONE SYSTEMS: Spector Roseman Commences Securities Suit in S.D. NY
---------------------------------------------------------------------
Spector, Roseman & Kodroff, PC lodged a securities class action suit
against ImClone Systems, Inc. (Nasdaq: IMCL) and certain Company
insiders on behalf of shareholders who purchased ImClone securities
between June 28, 2001 and January 4, 2002, inclusive, in the United
States District Court for the Southern District of New York.

The suit alleges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder, by issuing materially false and misleading statements to
the market. Throughout the class period, defendants made many
statements touting the progress of its "Fast-Track" application to the
US Food and Drug Administration (FDA) for approval of IMC-C225
(commonly known as Erbitux), its potentially blockbuster drug used for
the treatment of colorectal cancer, and the substantial revenues the
Company would achieve once the drug was approved by the FDA.

As alleged in the Complaint, these statements were materially false and
misleading because, among other things:

     (1) defendants failed to comply with the FDA's requirements for
         filing the "Fast-Track" application for approval of Erbitux;

     (2) defendants knew, or should have known, that their deficient
         application would be rejected and would thus negatively impact
         the Company's future earnings; and

     (3) defendants knew, or should have known, of the potentially
         serious flaws in their prior test results and testing
         procedures, which would prevent or delay Erbitux's approval by
         the FDA.

The suit further alleges that high-ranking Company insiders, including
the Chairman of the Board, CEO and COO, sold almost $150 million worth
of their own Company holdings during the class period.

On December 28, 2001, the Company disclosed that the FDA had refused to
accept its flawed application for approval of Erbitux. The basis for
the FDA's rejection was not fully known until January 4, 2002, when a
third party newsletter revealed that the FDA had serious concerns about
the Company's prior test results. These disclosures drove down the
Company's stock from a class period high of $73.83 per share on
December 5, 2001 to $50 per share after the December 28 revelation to
$35.83 at the close of trading on January 7, 2002, the next trading day
after the January 4, 2002 revelations.

For more information, contact Robert M. Roseman by Phone: 888-844-5862
by E-mail: classaction@srk-law.com or visit the firm's Website:
www.srk-law.com.


KMART CORPORATION: Commencing Probe After Letter Questions Practices
--------------------------------------------------------------------
Discount retail giant Kmart Corporation commenced an investigation on
its accounting practices after receiving an anonymous letter claiming
to be from employees that expressed concern over unspecified accounting
matters, according to an Associated Press report.

The Company, which filed for bankruptcy protection last week, has
contacted the Securities and Exchange Commission about the letter and
its own investigation and is cooperating with the regulatory agency.  
The letter was allegedly addressed to the SEC, the Company's auditors
and board of directors.

In a news release, the Company stated "The letter has been referred to
the audit committee of the board of directors, which promptly engaged
outside counsel and accounting consultants to conduct an independent
investigation."  

According to Associated Press, the disclosure comes amid heightened
sensitivity about accounting issues in the wake of the collapse of the
energy trader Enron Corporation amid questionable accounting practices.  
An SEC spokesman said Friday that the agency had no immediate comment
on the matter.


MBNA CORPORATION: NY Court Approves $18M Fraud Suit Settlement
--------------------------------------------------------------
The Supreme Court of New York, County of New York granted preliminary
approval to an estimated $18 million settlement proposed by MBNA
Corporation and MBNA America Bank, NA to settle a class action
commenced in October 1998 by plaintiff Gerald D. Broder.

The suit alleges that the defendants' advertising of its cash
promotional annual percentage rate program was fraudulent and
deceptive, and seeks unspecified damages including actual, treble and
punitive damages and attorneys' fees for an alleged breach of contract,
common law fraud and violation of New York consumer protection
statutes.


MCLEOD USA: Cohen Milstein Commences Securities Suit in N.D. California
-----------------------------------------------------------------------
Cohen Milstein Hausfeld & Toll, PLLC initiated a securities class
action in the United States District Court for the Northern District of
Iowa, on behalf of those persons who purchased or otherwise acquired
the common stock of McLeodUSA (NASDAQ:MCLD) during the period of
January 30, 2001 through and including December 3, 2001.

The suit charges that defendants violated Sections 11, 12(a)(2) and 15
of the Securities Act of 1933, 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 January 30, 2001 and December 3, 2001.

The suit alleges that the Company issued a series of materially false
and misleading statements regarding its business, operations and
financial statements that failed to disclose:

     (1) that the Company was failing to timely and properly recognize
         hundreds of millions of dollars in impairment losses in
         connection with certain acquisitions, such as Splitrock
         Services, Inc. and Caprock Communications Corporation;

     (2) that the Company did not have the funds necessary to complete
         its National network and that it would soon have to abandon
         its plans to finish the network; and

     (3) that the Company was unable to service its substantial debt
         and lacked the financial flexibility necessary to avoid a
         restructuring.

During the class period, prior to the disclosure of the true facts
about the Company, the Company purchased Intelispan for $40 million in
stock.

For more details, contact Andrew N. Friedman or Katrina Jurgill by
Mail: 1100 New York Avenue, NW West Tower, Suite 500 Washington, DC
20005 by Phone: 888/240-0775 or 202/408-4600 by E-mail:
afriedman@cmht.com or kjurgill@cmht.com visit the firm's Website:
http://www.cmht.com


PDI INC.: Milberg Weiss Commences Securities Fraud Suit in New Jersey
---------------------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach LLP initiated a securities class
action on behalf of purchasers of the securities of PDI Inc. (NASDAQ:
PDII) between May 22, 2001 and November 12, 2001 inclusive in the
United States District Court for the District of New Jersey against the
Company and:

     (1) Charles C. Saldarini, CEO and Co-Chairman and

     (2) Bernard C. Boyle, 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 May 22, 2001 and November 12, 2001.
For example, as alleged in the complaint, on May 22, 2001 the Company
held a conference call regarding a previously announced agreement with
Novartis AG, under which the Company would market and sell Novartis'
Lotensin and Lotrel, two hypertension medications. During the
conference call, defendants represented that they expect the Novartis
contract to add $0.25 per share to the Company's fourth quarter of 2001
results.

That statement was, according to the complaint, materially false and
misleading because defendants knew, or were reckless in not knowing,
that the Company's marketing program would not be fully underway until
well into the fourth quarter and that therefore, the agreement could
not contribute materially to its fourth quarter of 2001 performance.

In addition, according to the suit, the Company materially misled the
investing public to the true impact that the introduction of generic
competition for Ceftin, a drug which the Company was distributing under
contract with GlaxoSmithKline PLC (Glaxo), would have on its business.

In particular, the suit alleges that defendants represented, in an
August 2001 conference call, that the Company expected Ceftin to
contribute $0.30-$0.40 earnings per share to the fourth quarter of
2001, even if a generic form of Ceftin was introduced during that time.

According to the complaint, the statements were materially false and
misleading because defendants knew, or were reckless in not knowing,
that Ceftin could not contribute $0.30 per share to fourth quarter 2001
earnings. On November 12, 2001, the Company issued a press release
announcing a net loss of $17.3 million, or $1.24 for the third quarter
of 2001, including a $24 million charge as reserves for expenses
associated with the Ceftin contract, which the Company announced would
be terminated shortly. In addition, the Company announced that the
Lotensin program will be completed late in the fourth quarter and would
not contribute materially to PDI's 2001 earnings. On November 13, 2001,
defendants held a conference call revealing that Ceftin would not
contribute any profit to the fourth quarter of 2001. In reaction to the
news, the price of PDI common stock plummeted from a $29 per share
close on November 12, 2001 to close at $18.35 per share, a drop of 35%.

For more 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 E-mail: pdicase@milbergNY.com or visit the
firm's Website: http://www.milberg.com  


RHYTHMS NETCONNECTIONS: Wolf Haldenstein Lodges Securities Suit in CO
---------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities class
action in the United States District Court for the District of
Colorado, on behalf of purchasers of Rhythms NetConnections Inc.
(formerly Nasdaq: RTHM; now OTC: RTHMQ) between January 6, 2000 and
April 2, 2001, inclusive against certain officers and directors of the
Company. The Company has filed for bankruptcy protection and is
therefore not named as a defendant.

The suit alleges that defendants violated the federal securities laws
by issuing materially false and misleading statements during the class
period.  Specifically, the complaint alleges that throughout the class
period, the Company portrayed itself as a fast-growing and expanding
provider of DSL services and repeatedly represented that it could
continue to expand its broadband network throughout the United States
and reassured investors that it was financially able to continue this
expansion.

As alleged in the Complaint, defendants' statements issued throughout
the class period were materially false and misleading when made as they
failed to disclose the following adverse facts which were then known to
defendants or recklessly disregarded by them:

     (1) that the Company lacked the financial resources necessary to
         execute its business plan of a full national network
         expansion;

     (2) that the Company's efforts to scale back its expansion plans
         were not meeting with success as the Company was unable to
         generate the necessary financing;

     (3) that the Company was not well-funded or well-positioned to
         continue its growth, as the Company's expenses, including its
         ongoing debt payment obligations, were far outpacing its
         revenues and rapidly depleting the Company's cash reserves;

     (4) that the Company did not have adequate cash reserves and was
         not sufficiently "stable" and "financially strong" that it
         would be able to fund its operational needs into the first
         quarter of 2002, as defendants repeatedly promised investors -
         defendants were not even able to keep the Company running
         though 2001, as it had earlier guaranteed; and

     (5) that without the influx of additional capital, the Company
         would be forced to seek bankruptcy protection, which would
         render the Company's common stock worthless.

While in possession of these undisclosed facts about the Company and
its business, defendants and other insiders collectively sold 600,000
shares of their common stock for gross proceeds in excess of $16
million.

For further information, contact Fred Taylor Isquith, Gustavo Bruckner,
George Peters or Derek Behnke by Mail: 270 Madison Avenue, New York,
New York 10016 by Phone: (800) 575-0735 by E-mail:
classmember@whafh.com or visit the firm's Website:
http://www.whafh.com.All e-mail correspondence should make reference  
to Rhythms.


TIDEL TECHNOLOGIES: Will Vigorously Oppose Securities Suit in S.D. TX
---------------------------------------------------------------------
Tidel Technologies, Inc. vehemently denies the allegations in several
securities suits pending in the United States District Court for the
Southern District of Texas, on behalf of purchasers of the Company's
common stock from April 6, 2000 to February 8, 2001.

The suits allege violations of Sections 10 and 20 of the Securities
Exchange Act of 1934 and names as defendants, the Company and:

     (1) James T. Rash, Chief Executive Officer, Chief Financial
         Officer and Chairman of Board of Directors;

     (2) Mark K. Levenick, Chief Operating Officer and Director;

     (3) James L. Britton III, Director; and

     (4) Jerrell G. Clay, Director

The suits charge the defendants with issuing false and misleading
statements concerning its business and financial condition.  
Specifically, the complaint alleges that during the class period, the
Company falsely touted its sales of automated teller machines, or ATMs,
at a "record" pace.  These materially false and misleading statements
allowed the Company to begin trading on the Nasdaq national trading
system, which would have been impossible without the Company's false
and misleading statements and the consequent artificial inflation of
the Company's stock price.

When the Company finally disclosed that its largest customer's orders
would be at "substantially reduced levels for the quarter ending March
31, 200l," Company stock price declined precipitously.  The lawsuit
alleges that the Company knew during the time period but did not
disclose that its largest customer was in the process of switching to a
competitor and reducing orders.

These cases have not yet been consolidated, nor has the court appointed
a lead plaintiff. In a disclosure to the Securities and Exchange
Commission, the Company stated its intent to defend itself vigorously.


WORLD GAMING: $1.5M Pact Awaiting Delaware Federal Court's Approval
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The United States District Court for the District of Delaware has yet
to approve the settlement to the consolidated securities class action
against World Gaming PLC and some of its directors and officers for
federal securities violations.

The consolidated suit sprang from ten class actions commenced between
October 15, 1999 and December 9, 1999, alleging that material
misrepresentations regarding the nature and inherent risks of the
Company's business were knowingly made in filings to the United States
Securities and Exchange Commission, press releases and other public
statements.

In June 2001, the parties signed a memorandum of understanding (MOU)
containing the essential terms of a settlement between the Company and
the plaintiffs.  Under the MOU, the class will receive 1,050,000 shares
of the Company's American Depositary Receipts with a minimum value of
$1,050,000.  If in the 10 trading days preceding the effective date of
the settlement the weighted mean trading price (as calculated by a
formula in the MOU) of the shares of the Company's ADRs is less than
$1.00 per share, the class will receive additional shares so that the
value of the settlement shares equals $1,050,000.  Additionally, the
Company will pay certain administrative expenses, up to $50,000, and
certain expenses incurred by plaintiffs' co-lead counsel, up to
$50,000.

For the settlement to proceed, the parties must draft a mutually
acceptable stipulation of settlement to be filed with the court.  The
Court must give preliminary approval to the terms of the settlement.  
Notice must also be sent to the class members advising them of the
terms of the settlement and of their right to opt out or object to it.  

In addition, the settlement is conditioned on the issuance of the
ordinary shares of the Company underlying the settlement shares.  The
Company has the right under the MOU to withdraw from the settlement in
the event that members of the class holding more than 3% of the
outstanding shares of ADRs of the Company outstanding as of the date
the settlement is filed determine to opt out of the settlement.


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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 2002.  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-
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Information contained herein is obtained from sources believed to be
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