CAR_Public/020618.mbx                C L A S S   A C T I O N   R E P O R T E R
  
                Tuesday, June 18, 2002, Vol. 4, No. 119

                            Headlines

724 SOLUTIONS: Plaintiffs File Amended Securities Fraud Suit in S.D. NY
ALAMOSA INC.: Faces Multiple Suits For Securities Violations in S.D. NY
CABLEVISION: NY Judge Dismisses Yankees Fans' Suit Over Games Broadcast
CALIFORNIA: Judge Declares Parole-Revoking System "Unconstitutional"
CATHOLIC CHURCH: Utilizing Mediators to Help Victims of Sexual Abuse

CATHOLIC CHURCH: Abuse Victim Opposes Church's Release From Liability
CROWN MEDIA: DE Court Approves $1.5M Settlement Of Shareholder Suit
DIGITAS INC.: Faces Multiple Suits For Securities Violations in S.D. NY
ELAN PHARMACEUTICAL: Vice-President Takes New Role in SEC Inquiry
FARMLAND INDUSTRIES: $17M Price-Fixing Suit Settlement Likely

FLAG TELECOM: Faces Suits For Securities Act Violations in S.D. NY
FLAG TELECOM: Officers, Directors Named as Defendants in New York Suit
INFORTE CORPORATION: Plaintiffs File Amended Securities Suit in S.D. NY
IPRINT TECHNOLOGIES: Plaintiffs File Amended Securities Suit in S.D. NY
KNIGHT TRADING: Shareholders Commence "Front Running" Securities Suit

LANTE CORPORATION: Plaintiffs File Amended Securities Suit in S.D. NY
MEDICAL INDUSTRY: Suit Leads To Reduction of Work Week For Residents
MICROSOFT CORP: Antitrust Suit To Proceed Due To Appeals Court Ruling
MUSIC INDUSTRY: Consumers File Suit Over Copy-Protected Compact Discs
NEW JERSEY: African Americans' Race Bias Suit Denied Certification

NORTH CAROLINA: $7.9M Vitamin Antitrust Settlement Payment Pending
ONI SYSTEMS: Plaintiffs File Amended Securities Fraud Suit in S.D. NY
ONI SYSTEMS: Faces Two Suits Seeking To Block CIENA Merger in CA Court
PARTSBASE.COM: Agrees To Settle Securities Suit For $1.5M in S.D. FL
PAYPAL INC.: Plaintiffs Ask To Move Consumer Suit To CA State Court

PAYPAL INC.: Plaintiffs Ask CA Court To Grant Suit Class Certification
PEREGRINE SYSTEMS: Chairman and Padres Owner Named As Defendant in Suit
REGENERATION TECHNOLOGIES: Sued For Federal Securities Violations in FL
SIRENZA MICRODEVICES: Plaintiffs File Amended Securities Suit in NY
SOCCER FEDERATION: Hispanic Fan Sues Over Discriminatory Tickets Policy

STAUFFER CHEMICAL: Former Workers Push For Class Certification of Suit
TOBACCO INDUSTRY: Merchants' Appeal Of Class Certification Denied
TOBACCO LITIGATION: Medicaid Recipients Lose Bid For Part of Settlement

*D&O Liability Insurers Face Challenge Over Rise in Securities Suits

                    New Securities Fraud Cases

APPLIED DIGITAL: Much Shelist Commences Securities Suit in S.D. FL
DYNEGY INC.: Pomerantz Haudek Commences Securities Suit in S.D. TX
FIRST UNION: Grady & Associates Files Amended Securities Suit in FL
MERRILL LYNCH: Pomerantz Haudek Commences Securities Suit in S.D. NY
PEREGRINE SYSTEMS: Much Shelist Investigates Securities Fraud Claims

RAYOVAC CORPORATION: Much Shelist Investigates Securities Fraud Claims
RELIANT ENERGY: Lockridge Grindal Commences Securities Suit in S.D. TX

                             
                              *********


724 SOLUTIONS: Plaintiffs File Amended Securities Fraud Suit in S.D. NY
-----------------------------------------------------------------------
Plaintiffs in the securities class actions against 724 Solutions, Inc.
filed an amended suit in the United States District Court for the
Southern District of New York.  The suits were initially filed in June
2001, on behalf of purported classes of plaintiffs who acquired the
Company's common shares during certain periods.

The amended suit names as defendants, in addition to the Company, some
or all of the current or former directors and officers of the Company
and certain underwriters of the Company's initial public offering of
securities.  In general, the amended complaint alleges that the
underwriter defendants:

     (1) allocated shares of the Company's offering of equity
         securities to certain of their customers, in exchange for
         which these customers agreed to pay the underwriter defendants
         extra commissions on transactions in other securities; and

     (2) allocated shares of the Company's initial public offering to
         certain of the underwriter defendants' customers, in exchange
         for which the customers agreed to purchase additional common
         shares of the Company in the after-market at certain pre-
         determined prices.

The amended complaint also alleges that the Company and the individual
defendants failed to disclose these facts and were aware of, or
disregarded, the underwriter defendants' conduct.

The Company intends to vigorously defend itself and the individual
defendants against these claims.  However, due to the inherent
uncertainties of litigation, and because the suit is at a preliminary
stage, the Company cannot accurately predict the ultimate outcome.


ALAMOSA INC.: Faces Multiple Suits For Securities Violations in S.D. NY
-----------------------------------------------------------------------
Alamosa, Inc. faces several securities class actions pending in the
United States District Court for the Southern District of New York,
arising out of its initial public offering (IPO).  Various underwriters
of the IPO also are named as defendants in the actions.

The suits allege, among other things, that the registration statement
and prospectus filed with the Securities and Exchange Commission for
purposes of the IPO were false and misleading because they failed to
disclose that the underwriters allegedly:

     (1) solicited and received commissions from certain investors in
         exchange for allocating to them shares of common stock in
         connection with the IPO; and

     (2) entered into agreements with their customers to allocate such
         stock to those customers in exchange for the customers
         agreeing to purchase additional Company shares in the
         aftermarket at pre-determined prices.

The court has ordered that these putative class actions against the
Company, along with hundreds of IPO allocation cases against other
issuers, be transferred for coordinated pre-trial proceedings.  At a
status conference held on September 7, 2001, the court adjourned all
defendants' time to respond to the complaints until further order of
the court.  These cases remain at a preliminary stage and no discovery
proceedings have taken place.


CABLEVISION: NY Judge Dismisses Yankees Fans' Suit Over Games Broadcast
-----------------------------------------------------------------------
A federal judge dismissed a class action, filed in April by Cablevision
subscribers - five Yankees fans - who said that Cablevision violated
racketeering and antitrust laws by not showing the New York Yankees
games carried by the YES Network, according to a report by Associated
Press Newswires.

The impasse, if left unresolved, would mean that three million
Cablevision subscribers in the Bronx, Brooklyn, Long Island, the
northern New York suburbs, New Jersey and Connecticut, would miss 130
games this season.

US District Court Judge Thomas Platt Jr. said in his 38-page ruling,
"While they (the fans) did allege a contractual right to receive some
Yankees baseball games from Cablevision this season, they did not plead
any contractual right to receive broadcasts of every Yankees game."  

The Company applauded the judge's decision to dismiss this lawsuit,
saying in a news release that it (the lawsuit) "was entirely without
merit.

In a separate lawsuit pending in Manhattan federal court, YES has
charged Cablevision with antitrust violations based on its refusal to
carry the network "on reasonable, non-discriminatory terms."  The YES
Network accuses Cablevision of locking the network out in order to
limit competition against its own sports networks, including Madison
Square Garden Network and Fox Sports Net New York.

YES has insisted that Cablevision make the new channel part of its
basic service package, which would put it in all subscribers' homes.  
Cablevision, looking for a return on the expense, wants to put YES on a
"premium tier," available only to those customers who pay an extra fee.

YES is scheduled to show 130 of the regular season's 162 games.  
Another 20 games will be carried on WCBS-TV, and the remainder will  
appear on ESPN or FOX.


CALIFORNIA: Judge Declares Parole-Revoking System "Unconstitutional"
-------------------------------------------------------------------
California's system to revoke paroles is unconstitutional because it
does not offer timely opportunity for parolees to give their side of
the story, a federal judge ruled, according to a report by Associated
Press Newswires, in a class action filed on behalf of the parolees.  
The suit names as defendants Governor Gray Davis, various correctional
officials and Steve Green, Assistant Secretary of the California Youth
and Adult Correctional Agency, a Cabinet-level agency.

US District Judge Lawrence Karlton ruled recently that such a system
violates the parolees' 14th Amendment guarantee of due process.  Since
May 2001, 64 percent of parolees in custody, on holds for alleged
violations, had to wait 31 to 45 days for revocation hearings.  That is
not acceptable, he said.

Once a parolee is picked up in connection with a possible violation,
any inconvenience to the state because of a prompt probable cause
hearing, is not "sufficient justification for the potentially
catastrophic consequences of delay," Judge Karlton said in a 21-page
order.


CATHOLIC CHURCH: Utilizing Mediators to Help Victims of Sexual Abuse
--------------------------------------------------------------------
Under a process being developed by the Roman Catholic Diocese of
Manchester, victims of sexual abuse will be able to use independent
mediators to ask the church for counseling, financial relief and other
services to promote healing, Associated Press Newswires reports.

The Diocese has hired the Concord law firm of Orr & Reno to develop and
administer the mediation process, which Bishop John McCormack announced
recently.  The plan would allow victims to enter the process whether or
not they have an attorney or already have filed claims or lawsuits
against the Diocese.

"It allows the church to be pastoral.  It allows for a more timely
resolution than litigation can provide.  It allows the parties, if they
want, to remain anonymous," said Diane Murphy Quinlan, who will be a
liaison between the Diocese and Orr & Reno.  The plan allows alleged
victims to mediate their claims either directly with church officials
or through third-party mediators.  The administrator will provide a
list of 15 neutral mediators.

An attorney representing about 50 plaintiffs who have joined a class
action lawsuit against the Diocese of Manchester, said the plan
provides no guarantees.  "They hold all the cards," said Manchester
attorney Peter Hutchins.  "It is the same piecemeal, confidential type
of settlement that they have been doing on an ad hoc basis for the last
40 years.  They admit nothing and they disclose nothing."

Mr. Hutchins said he would advise clients against entering into
mediation and disclosing information about their cases unless there is
some guarantee of a "fair and final resolution."  Mr. Hutchins
estimated that 100 to 120 alleged victims have filed claims against the
Diocese.  He said the Diocese already has entered into mediation with
several people.


CATHOLIC CHURCH: Abuse Victim Opposes Church's Release From Liability
---------------------------------------------------------------------
A Manchester man, age 22, who says he was molested by the Rev. Francis
Talbot for eight years recently asked a judge to overturn a
confidential document he signed that released the church from liability
for his alleged abuse, the Associated Press Newswires reports.

Mr. Douglas has asked a Hillsborough County Superior Court judge to
rescind the agreement between Mr. Goodwin and the Diocese of
Manchester, saying his client's mental state prevented him from
realizing what he was doing.

According to Cody Goodwin's lawyer, Charles Douglas, Mr. Goodwin was
suicidal, as well as heavily medicated and abusing drugs and alcohol,
when he signed away his legal rights about one and one-half years ago.  
Mr. Douglas said he could not disclose the contents of the agreement,
but he did say that Goodwin, who had no lawyer at the time, thought he
was signing an order allowing the church to pay for counseling.

If allowed to stand, the agreement could hinder a lawsuit Mr. Goodwin
recently filed against Rev. Talbot and the Diocese of Manchester.  
"Given the mental state of Mr. Goodwin at the time he signed it . there
is no way he was competent to understand that he was forever giving up
his legal rights, rather than getting money for counseling."

The lawsuit says that Mr. Goodwin met Rev. Talbot through a relative,
and the priest hired him to do odd jobs at Mr. Talbot's house.  Mr.
Goodwin says that most of the abuse happened at the house from the time
Mr. Goodwin was nine until he was 15.

Rev. Talbot was included on a list of priests Bishop McCormack released
in February, identifying clergymen whose ministries had been revoked
after complaints of sexual misconduct had been made against them.


CROWN MEDIA: DE Court Approves $1.5M Settlement Of Shareholder Suit
-------------------------------------------------------------------
The Delaware Chancery Court granted preliminary approval to the
settlement proposed by Crown Media Holdings, Inc. relating to a
consumer class action filed over the Company's proposal to purchase
Crown Media Library.

The suit was commenced in June 2001, as a class action and derivative
action and alleged, among other things, that the films transaction was
the product of an unfair process designed to advantage Hallmark Cards
as the controlling stockholder and that the price being paid to
Hallmark Entertainment Distribution was not entirely fair.  

In June 2001, the Company, Hallmark Cards and the other defendants and
the plaintiff entered into a memorandum of understanding stating an
agreement in principle on a settlement of the lawsuit concerning the
transaction.  As of February& 20, 2002, the Company and the other
parties to the lawsuit entered into a settlement agreement concerning
the lawsuit, with terms contemplated by the memorandum of
understanding.

The settlement agreement provides, among other things, that:

     (1) the purchase price of the films transaction will be reduced by
         425,000 shares of Class A Common Stock;

     (2) all claims against the Company and related parties that arise
         out of the events alleged in the lawsuit will be released; and

     (3) the Company will pay the fees and disbursements of the
         plaintiff's counsel, without interest.

At a settlement hearing on April 18, 2002, the court determined, among
other things, that:

     (i) the settlement is fair and reasonable, and in the best
         interest of a class consisting of all record owners and
         beneficial owners of the Company's common stock on any day
         from November 6, 2000 (the date that the films transaction was
         publicly announced) to and including September 28, 2001, the
         effective date of closing the films transaction;

     (2) the lawsuit be dismissed such that no plaintiff or class
         member could sue on their claims again;

     (3) the lawsuit be certified as a class action; and

     (4) it should grant the request of the plaintiff's counsel for
         attorneys fees and reimbursement of expenses of $700,000 in
         connection with the lawsuit.


DIGITAS INC.: Faces Multiple Suits For Securities Violations in S.D. NY
-----------------------------------------------------------------------
Digitas, Inc. faces several securities class actions pending in the
United States District Court for the Southern District of New York
against the Company, several of its officers and directors, and five
underwriters of its initial public offering (IPO).  The suits are all
brought on behalf of purchasers of the Company's common stock since
March 13, 2000, the date of the offering.

The plaintiffs allege, among other things, that the Company's
prospectus, incorporated in the Registration Statement on Form S-1
filed with the Securities and Exchange Commission, was materially false
and misleading because it failed to disclose that the underwriters had
engaged in conduct designed to result in undisclosed and excessive
underwriters' compensation in the form of increased brokerage
commissions.  The alleged conduct of the underwriters artificially
inflated the Company's s stock price in the period after the offering.

The plaintiffs claim violations of Sections 11, 12 and 15 of the
Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the
Securities and Exchange Commission and seek, among other things,
damages, statutory compensation and costs of litigation.

The Company believes that the claims against it and its officers and
directors are without merit and intends to defend them vigorously.  
Management currently believes that resolving these matters will not
have a material adverse impact on the Company's financial position or
its results of operations.  However, litigation is inherently uncertain
and there can be no assurances as to the ultimate outcome or effect of
these actions.


ELAN PHARMACEUTICAL: Vice-President Takes New Role in SEC Inquiry
-----------------------------------------------------------------
Tom Lynch, one of the architects of Irish drug manufacturer, Elan
Pharmaceutical, has been relieved of most of his executive duties as
the row over the firm's controversial accounting practices grows, The
Independent (London) reports.

Mr. Lynch, vice-president, will focus instead on dealing with lawsuits
from investors aggrieved at the questions which have been raised about
certain of the Company's accounting practices.  Mr. Lynch also will
handle the US regulatory inquiry by the Securities and Exchange
Commission (SEC) into the complex accounting structure he created.

Analysts expect the SEC's inquiry could last into next year, and Mr.
Lynch's new responsibilities have been interpreted as an admission of
its seriousness.  The SEC probe was launched in February after the
Company issued a profit warning and said the previous year's earnings
would have been substantially lower than they were if it had included
several research funding vehicles on its balance sheet.

The statement sparked renewed concern that the Company had been
recycling its own funds to inflate group sales, by booking license fees
from Company-funded joint ventures.  One analyst said recently that Mr.
Lynch, previously responsible for corporate finance and strategic
planning, was being made to carry the can for the complex financial
structure he had helped create.

The profit warning and the SEC inquiry have sparked more than 30 class
actions in the United States.  The Company declined to comment on the
inquiry, but said it was confident of defeating legal claims that it
had misled investors, according to the Independent.


FARMLAND INDUSTRIES: $17M Price-Fixing Suit Settlement Likely
-------------------------------------------------------------
Farmland Industries Inc. said it expects to receive $17 million from
the settlement of a price-fixing lawsuit against New Jersey-based
chemical giant BASF Corporation, Associated Press Newswires reports.

The proposed settlement was disclosed in court documents filed in US
Bankruptcy Court, in Kansas City, Missouri, by the Company, which has
asked for expedited court approval of the deal.

In September 1999, when a number of the vitamin companies, accused of
price-fixing, agreed to pay more than $1.1 billion to settle a class
action involving some 1,000 buyers of bulk vitamins, the Company opted
out of the class action, "because we believed that the settlement did
not reflect our actual damages," said Company attorney Kelly
Schemenauer.  The Company has said that its proposed settlement with
BASF will result in a 400 percent greater payment than it would have
received in the class action settlement.

"We think it is a good settlement," said Mr. Schemenauer.  "What we
want to do is continue prosecuting these claims for the benefit of the
bankruptcy estate."

The settlement with BASF and its parent, BASF AG of Germany, comes atop
$2.6 million that the Company has recovered from other vitamin
defendants in the last 12 months.  It estimates its total damages from
all the defendant vitamin makers at $42 million.  The Company purchased
vitamins A, E and vitamin premix for use in animal feed from the
defendants.

The class action alleged that the defendants orchestrated a vast nine-
year price-fixing conspiracy, leading to artificially high prices for
hundreds of food and beverage makers and harming consumers by inflating
the costs of everything from breakfast cereal to peanut butter.

The Company, North America's largest farmer-owned cooperative, filed
for Chapter 11 bankruptcy protection May 31.  Weak fertilizer sales led
to a cash shortage at the Kansas City-based company, triggering payment
pressures from its lenders and other creditors.


FLAG TELECOM: Faces Suits For Securities Act Violations in S.D. NY
------------------------------------------------------------------
FLAG Telecom Holdings, Inc. faces several securities class actions
pending in the United States District Court for the Southern District
of New York against the Company, three of its current senior officers,
and one of its former senior officers.

The suits, which purports to represent all persons who purchased shares
of the Company's stock between March 23, 2001 and February 13, 2002,
allege:

     (1) that the Company engaged in reciprocal transactions with other
         industry participants which were not reported or disclosed in
         accordance with Generally Accepted Accounting Principles and
         which had the effect of materially inflating the Company's
         reported results;

     (2) that as a result of this alleged improper accounting
         treatment, it was not possible for the Company's foreseeable
         future earnings to be as strong as allegedly represented; and

     (3) that alleged assertions that the Company was still
         experiencing growth despite the downturn in the
         telecommunications market were false and misleading.

The complaint purports to assert claims against the Company and the
individual defendants under section 10(b) of the Securities Exchange
Act of 1934, and against the individual defendants under section 20(a)
of the same statute.

The filing of Chapter 11, however, operates as an automatic stay of all
litigation against the Company.  The Company, however, is confident
that the litigation will not have a material effect on its financial
operations.


FLAG TELECOM: Officers, Directors Named as Defendants in New York Suit
----------------------------------------------------------------------
Several of FLAG Telecom Holdings, Inc.'s past and present officers and
directors were named as defendants in a securities class action filed
in the United States District Court for the Southern District of New
York.  The suit also names as defendants Salomon Smith Barney, Inc. and
Verizon Communications, Inc. The Company is not named as a defendant in
this action.

The suit, filed on behalf of all persons who purchased shares of the
Company's stock between February 16, 2000 and February 13, 2002,
asserts claims for violations of section 10(b) of the Securities
Exchange Act of 1934, and section 20(a) of the same statute.  The suit
also asserts that the prospectus issued in connection with the
Company's February 16, 2000 initial public offering was false and
misleading because it failed to disclose, among other things, that:

     (1) it was unlikely that the Company could attract enough
         customers to enable it to recover the cost of financing the
         FA-1 cable system; and

     (2) existing trans-Atlantic cable lines had a glut of unused
         capacity.


In management's opinion, the litigation will not have a material effect
on the Company's financial position or business operations.


INFORTE CORPORATION: Plaintiffs File Amended Securities Suit in S.D. NY
-----------------------------------------------------------------------
An amended securities class action has been filed against Inforte Corp.
in the United States District Court for the Southern District of New
York.  The suit also names as defendants:

     (1) Philip S. Bligh,

     (2) Stephen C.P. Mack,

     (3) Nick Padgett,

     (4) Goldman, Sachs & Co., and

     (5) Salomon Smith Barney, Inc.

The amended complaint seeks certification of a class of purchasers of
Company stock, unspecified damages, interest, attorneys' and expert
witness fees and other costs.  The amended complaint alleges violations
of federal securities laws in connection with the Company's initial
public offering (IPO) occurring in February 2000.  The complaint does
not allege any claims relating to any alleged misrepresentations or
omissions with respect to the Company's business.

The Company believes that it has defenses to the claims and intends to
vigorously defend the lawsuit.


IPRINT TECHNOLOGIES: Plaintiffs File Amended Securities Suit in S.D. NY
-----------------------------------------------------------------------
Plaintiffs in the consolidated securities suit against IPrint
Technologies, Inc. filed an amended suit in the United States District
Court for the Southern District of New York.  The suit names as
defendants the Company, two of its former officers and/or directors,
and several investment banking firms that served as underwriters of the
Company's March 2000 initial public offering (IPO), and was filed on
behalf of all persons who purchased the Company's common stock between
March 7, 2000 and December 6, 2000.

The amended complaint alleges violations of Sections 11 and 15 of the
Securities Act of 1933, and Section 10(b) of the Securities Exchange
Act of 1934, on the grounds that the prospectus incorporated in the
registration statement for the offering failed to disclose, among other
things, that:

     (1) the underwriters had solicited and received excessive and     
         undisclosed commissions from certain investors in exchange for
         which the underwriters allocated to those investors material
         portions of the shares of Company stock sold in the initial
         public offering; and

     (2) the underwriters had entered into agreements with customers
         whereby the underwriters agreed to allocate shares of Company
         stock sold in the initial public offering to those customers
         in exchange for which the customers agreed to purchase
         additional shares in the aftermarket at pre-determined prices.

The amended complaint also alleges that false analyst reports were
issued following our initial public offering. No specific damages are
claimed.

The Company is aware that similar allegations have been made in
lawsuits relating to more than 300 other initial public offerings
conducted in 1999 and 2000.  Those cases have been consolidated for
pretrial purposes, and defendants' time to respond to the complaints
has been stayed pending a plan for further coordination.

The Company intends to vigorously defend against the suit.  However,
due to the inherent uncertainties of litigation, it cannot accurately
predict the ultimate outcome of the litigation.  


KNIGHT TRADING: Shareholders Commence "Front Running" Securities Suit
---------------------------------------------------------------------
Knight Trading, the largest Nasdaq Stock Market middleman, faces a
shareholder lawsuit stemming from allegations by a former executive
that the Company engaged in improper trading known as front running.

The suit follows recent disclosures that the US Securities and Exchange
Commission and the National Association of Securities Dealers are
reviewing claims that the Company's traders placed their own orders
before customers for the same stock.

These claims were made by Robert Stellato, who oversaw the Company's
trading with money managers.  Mr. Stellato's claims were contained in a
sealed arbitration complaint.  The lawsuit, which seeks class action
status, claims that the Company hurt shareholders by failing to
disclose that traders had fraudulently delayed trades.

The Company and its former executive officer, Kenneth Pasternak, were
named as defendants.  Mr. Pasternak is now a consultant to Knight
Trading.  A spokeswoman for Knight did not immediately return calls.


LANTE CORPORATION: Plaintiffs File Amended Securities Suit in S.D. NY
---------------------------------------------------------------------
Plaintiffs in the consolidated securities class action against Lante
Corporation filed an amended suit in the United States District Court
for the Southern District of New York.  The suit also names as
defendants certain of the Company's present and former officers and
directors and the underwriters of the Company's February 2000 initial
public offering:

     (1) Credit Suisse First Boston Corp.,

     (2) Deutsche Bank Securities, Inc. and

     (3) Thomas Weisel Partners, LLC

The amended suit seeks unspecified damages as a result of various
alleged securities law violations arising from activities purportedly
engaged in by the underwriters in connection with the Company's initial
public offering.

Plaintiffs allege that the underwriter defendants agreed to allocate
stock in the Company's initial public offering to certain investors in
exchange for excessive and undisclosed commissions and agreements by
those investors to make additional purchases of stock in the
aftermarket at pre-determined prices.  Plaintiffs allege that the
prospectus for the Company's initial public offering was false and
misleading in violation of the securities laws because it did not
disclose these arrangements.

The Company believes it has various meritorious defenses to the claim
and will defend itself accordingly.  The action is being coordinated
with over three hundred other nearly identical actions filed against
other companies before one judge in the Southern District of New York.  
No date has been set for any response to the complaint.


MEDICAL INDUSTRY: Suit Leads To Reduction of Work Week For Residents
--------------------------------------------------------------------
Many doctors-in-training will see their long work hours cut back under
new standards approved recently by a group that accredits teaching
hospitals. The positive, though not optimum decision, is a result of
the class action filed by approximately 200,000 medical residents in
federal court last month. The suit accused seven medical associations
and 35 teaching hospitals of rigging the system that determines where
medical school graduates train, how much they will be paid and how many
hours they will work.

The move to ease the strain on sleep-deprived residents comes as
concern is growing over medical errors in hospitals.  With no limits
nationwide on residents' schedules, some work 120 hours a week or more.  
Shifts vary from hospital to hospital and often between specialties
within the same hospital.

Under the new rules set by the Accreditation Council for Graduate
Medical Education, residents are to work a maximum of 80 hours a week
with 10 hours off between shifts and one day off per week.  Hospitals'
accreditation, required for federal funding, can be jeopardized if they
break the rules, which will take effect in summer 2003.

Health-care providers agree that there is a correlation between the
number of hours resident physician work and the number of errors they
make.  However, "errors are not being tolerated by consumers any
longer," said Jim Lott, executive vice president of the Healthcare
Association of Southern California.  "Hospitals can pay more upfront
now or pay more later in terms of getting licenses or accreditations
revoked, or lawsuits filed."

The accreditation council said residents were spending too much time
doing work that can be done by others, such as drawing blood or
transferring patients, instead of concentrating on their medical
education.  "More time should be spent with patients, in educational
conferences and learning the craft of being a physician," said Dr.
David Leach, executive director of the organization.  The council
accredits 7,800 residency programs nationwide and guides training for
100,000 residents.

"The system needs to change for two reasons - so physicians can live
somewhat reasonable lives and, we can provide quality care to our
patients," said Daniel Schaefer, a second-year resident in Harbor-
UCLA's family medicine department.


MICROSOFT CORP: Antitrust Suit To Proceed Due To Appeals Court Ruling
---------------------------------------------------------------------
A lawsuit alleging that software giant Microsoft Corporation violated
Minnesota antitrust law can move forward now that the Minnesota Supreme
Court has upheld an appellate court's refusal to review an order
granting the case class action status to the suit, the Associated Press
Newswire reports.

In the complaint filed in 2000, Daniel Gordon alleged that he and
others who purchased the Company's operating system software paid a
higher price than they would have if the Company didn't pursue
anticompetitive practices.

At issue in the Supreme Court decision, written by Justice Paul
Anderson, was whether the state Court of Appeals used the proper method
in deciding whether to review the trial court decision.  Upholding the
Court of Appeals' refusal to review the order granting the case class
action status, Justice Anderson wrote that his court made its decision,
in part, "to avoid `piecemeal appeals' that interrupt and delay
litigation."  He said Microsoft "has effectively placed a hold on the
litigation," with the appeal, and added that at the Supreme Court
"we view this kind of disruption and delay with disfavor."


MUSIC INDUSTRY: Consumers File Suit Over Copy-Protected Compact Discs
---------------------------------------------------------------------
Two consumers filed a class action against five major record companies,
claiming that copy-protected compact discs (CDs) are defective and
should not be available for sale, Associated Press Newswires reports.  
The suit, filed recently in Superior Court, seeks either to block the
CDs' release or require warning labels identifying them as inferior and
hazardous to computers.

"If you use an Apple computer, you can't even get the disc out of the
tray," said Nicholas  Koluncich, who is representing his sister
Elizabeth, in the case.  "At the very least, the labels should make
sure they sell a product that actually works."  Plaintiffs Matthew
Dickey and Elizabeth Koluncich purchased copy-protected discs and
either were unable to make backup copies of the music or had problems
using the discs on their computer.

Named as defendants in the lawsuit are:

     (1) Universal Music Group,

     (2) EMI Music Publishing,

     (3) BMG Entertainment,

     (4) Sony Music Entertainment Inc and

     (5) Warner Music Group.

Copy-protected discs use encryption technology to deter digital
copying.  Some CDs cannot be played on computers, while others try to
confuse the drives so they can't extract the disc's data.  Cary
Sherman, president of the Recording Industry Association of America,
said the music labels have not done anything wrong by applying the new
technology.

"Music creators have the right to protect their property from theft,
just like owners of any other property," said Ms. Sherman.  "Motion
picture studios and software and video game publishers have protected
their works for years, and no one has even thought to claim that doing
so was inappropriate, let alone unlawful."


NEW JERSEY: African Americans' Race Bias Suit Denied Certification
------------------------------------------------------------------
A New Jersey federal judge has denied class action status to a lawsuit
that alleges high-level state officials violated the rights of African
Americans when state police engaged in racial profiling, The
Philadelphia Inquirer reports.

US District Judge Joel A. Pisano, in an opinion filed in Newark, ruled
that lawyers for three African Americans had not shown that handling
the case as a class action would be superior to traditional litigation.  
The court, he wrote, "would still have to conduct a mini-trial for each
individual proposed class member."  Among other objections, Judge
Pisano found the class defined by the lawsuit to be "overly broad,
amorphous and vague."

One effect of the ruling, lawyers said, is that each of the estimated
thousands of motorists subjected to racial profiling in traffic stops
will have to hire his or her own lawyer to seek redress from the state.  
"There are so many people out there, and they are not going to be able
to bring their lawsuits on their own," said Alan L. Yatvin, a
Philadelphia lawyer who is lead counsel in the case.

He complained that Judge Pisano had ruled more than one week before the
deadline for responding to the state's arguments against class action
certification.  "At this point, the judge clearly has made up his mind,
so I guess we will just have to save those arguments for the Court of
Appeals," Mr. Yatvin said.  He said the legal team might consider
adding more people to the lawsuit.

Spokesmen for the state Attorney General's Office, which fought class
action status for the profiling case, did not return calls seeking
comment, according to the Philadelphia Inquirer.


NORTH CAROLINA: $7.9M Vitamin Antitrust Settlement Payment Pending
------------------------------------------------------------------
Community health programs across North Carolina will receive US$7.9
million as part of a court-approved settlement with vitamin
manufacturers, the state attorney general said recently, according to a
report by Associated Press Newswires.  The vitamin manufacturers denied
any wrongdoing, but they agreed to pay the states and companies more
than US$225 million.

The money is the result of lawsuits filed by Attorney General Roy
Cooper and attorneys general from 22 other states, as well as private
class actions, filed against vitamin product manufacturers.  The states
charged that the manufacturers conspired to fix prices and limit
supplies of vitamin products for 10 years until 1999.  Vitamin products
are in daily vitamin tablets and also are used to fortify food,
including cereal, baby food, bread, milk and margarine.

Included among the defendants are:

     (1) BASF Corporation,

     (2) BASF AG,

     (3) Daiichi Pharmaceutical Co. Ltd.,

     (4) Eisai Co. Ltd,

     (5) Aventis Animal Nutrition SA,

     (6) Horrman-La Roche Inc.,

     (7) Roche Vitamins Inc. and

     (8) Takeda Chemical Industries Ltd.

The settlement money allocated to North Carolina will be distributed to
94 organizations, including the March of Dimes' folic acid campaign, in
order to support health and nutrition programs, Attorney General Cooper
said.


ONI SYSTEMS: Plaintiffs File Amended Securities Fraud Suit in S.D. NY
---------------------------------------------------------------------
Plaintiffs in the securities class actions against ONI Systems, Inc.
filed a consolidated amended suit in the, alleging violations of the
federal securities laws in the United States District Court for the
Southern District of New York.  The suit names as defendants the
Company and:

     (1) Hugh C. Martin, chairman, president and chief executive
         officer,

     (2) Chris A. Davis, former executive vice president, chief
         financial and administrative officer, and

     (3) certain underwriters of the Company's initial public offering

The amended complaint alleges, among other things, that the underwriter
defendants violated the securities laws by failing to disclose alleged
compensation arrangements (such as undisclosed commissions or stock
stabilization practices) in the initial public offering's registration
statement and by engaging in manipulative practices to artificially
inflate the price of the Company's common stock after the initial
public offering.

The amended complaint also alleges that the Company and the named
officers violated the securities laws on the basis of an alleged
failure to disclose the underwriters' alleged compensation arrangements
and manipulative practices.

The Company said the suit is similar to other complaints filed against
more than 300 other issuers that have had initial public offerings
since 1998.  All of these actions have been included in a single
coordinated proceeding.  The Company intends to defend against the suit
vigorously.


ONI SYSTEMS: Faces Two Suits Seeking To Block CIENA Merger in CA Court
----------------------------------------------------------------------
ONI Systems, Inc. faces two class actions filed on behalf of a
purported class of Company security holders in the Superior Court of
the State of California, County of San Mateo, seeking an injunction to
prevent the consummation of the proposed merger with CIENA Corporation.  
The suit names as defendants the Company and:

     (1) Matthew Bross,

     (2) Kevin Compton,

     (3) Jonathan Feiber,

     (4) Gregory Maffei and

     (5) Hugh Martin

The suit alleges that the defendants, in connection with the approval
of the proposed merger with CIENA, breached their fiduciary duties,
including duties of loyalty and good faith, to Company stockholders by,
among other things:

     (i) allegedly failing to obtain the highest value for Company
         stockholders;

    (ii) engaging in self-dealing; and

   (iii) unjustly enriching themselves and other insiders or affiliates
         of the Company.

The Company believes that these lawsuits are without merit and intends
to defend these actions vigorously.


PARTSBASE.COM: Agrees To Settle Securities Suit For $1.5M in S.D. FL
--------------------------------------------------------------------
Partsbase.com, Inc. agreed to settle for US$1.5 million the
consolidated securities class action pending in the United States
District Court for the Southern District of Florida.

The consolidated suit names as defendants the Company, certain of its
current and former officers and directors, and the underwriters of its
initial public offering of securities.  The consolidated suit alleges
violations of Sections 11, 12(a)(2) and 15 of the Securities Act of
1933 and alleges the Company's March 2000 registration statement
misrepresented and failed to disclose matters related to the Company's
business operations and membership sales.  The complaint alleges
damages of nearly $42 million.

The court recently certified a class consisting of purchasers of the
Company's common stock in the offering during the period from March 22,
2000 through April 25, 2000.

In May 2002, the Company reached an agreement in principle for the
settlement of the consolidated suit.  The plaintiffs in the case and
the defendants, entered into a memorandum of understanding outlining
the general terms of the proposed settlement.  The memorandum of
understanding provides for, among other things, a settlement amount of
$1.5 million in cash, plus interest, payable to the class under an
insurance policy and for the plaintiffs' dismissal of the class action
with prejudice as well as a broad form of release in favor of the
Company and the other defendants in the class action.  This will have
the effect of barring all claims by the plaintiffs and the members of
the class other than those who opt out, arising out of the purchase and
sale of the Company's common stock in its initial public offering of
securities.

The final settlement of the suit is subject to the preparation and
execution of definitive settlement documents and court approval.  The
settlement also applies to the directors, management personnel,
underwriters and securities firms named as defendants in the
litigation.


PAYPAL INC.: Plaintiffs Ask To Move Consumer Suit To CA State Court
-------------------------------------------------------------------
Plaintiffs in the consumer class action against Paypal, Inc. have asked
that the suit be remanded to the Superior Court of the State of
California in Santa Clara County, where it was originally commenced in
February 2002.

The suit is currently pending in the United States District Court for
the Northern District of California, on behalf of a purported class of
users whose accounts have been restricted by the Company.

The suit claims that the Company has restricted funds or user accounts
in a manner that breaches our User Agreement provisions on account
restrictions, that constitutes an unlawful, unfair or fraudulent
business practice under California law, and that constitutes a
conversion of the users' funds.  

On March 18, 2002, the Company removed the case from Superior Court in
Santa Clara County to the United States District Court for the Northern
District of California.  On April 1, 2002, plaintiffs filed a motion to
remand the case back to Superior Court.  The Company is opposing the
motion.

The Company also filed an answer to the suit, denying each substantive
element of the plaintiffs' claim.  The Company reiterated that its
policies and procedures regarding account restrictions are appropriate
and are an important part of its risk management system.  The Company
intends to vigorously oppose the suit.


PAYPAL INC.: Plaintiffs Ask CA Court To Grant Suit Class Certification
----------------------------------------------------------------------
Plaintiffs in the consumer class action against Paypal, Inc. asked the
United States District Court for the Northern District of California,
San Jose Division, to grant class certification to the suit.

The suit was commenced in March 2002, on behalf of all persons who, at
any time since the launch of the PayPal service in October 1999, have
opened an account with the Company or had money electronically
transferred from or to an account with another financial institution in
connection with a Company transaction.  The suit claims that the
Company:

     (1) violated the Electronic Fund Transfer Act by, among other
         things, failing to conduct a good faith and timely
         investigation of errors reported by customers, failing to
         provisionally credit amounts alleged to be in error within ten
         business days, and failing to provide a telephone number and
         address readily available to the consumer for reporting
         unauthorized transactions;

     (2) converted funds of class members to our own use through
         unlawful conduct;

     (3) transferred or retained from class members monies that the
         Company had no right to retain;

     (4) unjustly retained monies belonging to the class members; and

     (5) been negligent in not making dispute resolution information
         readily available for customers, making it difficult for
         customers to resolve disputes with the Company in an efficient
         and appropriate manner, and failing to establish and maintain
         adequate procedures concerning the transfer of funds.

The suit also claims that these alleged actions constitute unlawful,
unfair, fraudulent and deceptive business practices under California
law.

On May 1, 2002, the plaintiffs filed an amended complaint, dropping one
of the three named plaintiffs and added in causes of action under the
California Consumers Legal Remedies Act.  The plaintiffs then filed a
motion for certification of their proposed plaintiff class.

The Company believes it has meritorious defenses to these lawsuits and
will contest the suits vigorously.  However, the ultimate resolution of
these matters could have a material adverse effect on its financial
condition and results of operations.


PEREGRINE SYSTEMS: Chairman and Padres Owner Named As Defendant in Suit
-----------------------------------------------------------------------
San Diego Padres owner and Peregrine Systems, Inc.'s Chairman John
Moores and his investment firms allegedly manipulated the Company's
stock price and walked away with $611 million in insider trades,
according to a new lawsuit, the Associated Press Newswires reports.

Peregrine, a business-software company, is the target of dozens of
class actions and a Securities and Exchange Commission (SEC)
investigation, as it admitted it may have overstated as much as US$100
million in revenue.  The Company says it will restate three years of
earnings.

The new suit filed recently in Superior Court, targets Mr. Moores and
two of his investment companies, JMI Services and JMI Equity Fund, and
their dealings with the Company.  Four law firms are co-plaintiffs in
the suit, including one headed by Mr. Moores' former colleague Michael
Aguirre.  Mr. Moores and Mr. Aguirre campaigned for the Padres' $1
billion downtown baseball stadium and redevelopment project.

The Company fired Arthur Andersen as its auditor, April 2, and fired
its replacement auditor, KPMG, LLP at the end of May.  KPMG sent the
SEC a letter, alleging possible fraud at the company.  After the
auditing firms were fired, Steve Gardner stepped down as Board Chairman
and Chief Executive, while Matt Gless resigned as Chief Financial
Officer and Executive Vice President of Finance.  The news wiped out
two-thirds of the value of the Company's shares and prompted more
shareholder lawsuits against it.


Mr. Moores, a longtime Company Board member, assumed the duties of
Chairman.  Another Padres executive, Fred Gerson, stepped in as acting
Chief Financial Officer.  Mr. Moores, who served as the Company's
Chairman during the 1990s, made more than $500 million unloading
Company shares as it headed toward collapse.


REGENERATION TECHNOLOGIES: Sued For Federal Securities Violations in FL
-----------------------------------------------------------------------
Regeneration Technologies, Inc. faces several securities class actions
filed in the United States District Court, Northern District of Florida
Gainesville Division, against the Company and certain of its current
and former officers and directors.

The suits, filed on behalf of all persons who purchased the Company's
common stock between July 25, 2001 and January 31, 2002, generally
allege that the Company's inventory was overvalued and, as a result,
public statements made by the Company during the class time period
about its net income and earnings per share were false and misleading.  
The plaintiffs assert that the defendants' conduct violated Sections
10(b) and 20(a) of the Securities Exchange Act of 1934, and SEC Rule
10b-5 thereunder.

Since these lawsuits were filed recently, the Company has not yet filed
its responses and no discovery has occurred.  No provision has been
made in the accompanying consolidated financial statements for losses,
if any, that may result from the outcome of these cases because such
amount is not estimable. The Company also expects that these suits will
eventually be consolidated.


SIRENZA MICRODEVICES: Plaintiffs File Amended Securities Suit in NY
-------------------------------------------------------------------
Plaintiffs in the securities class action pending against Sirenza
Microdevices, Inc. filed an amended suit in the United States District
Court for the Southern District of New York.  The suit names as
defendants the Company, various of its officers and certain
underwriters of its initial public offering of securities.

The suit alleges that various underwriters engaged in improper and
undisclosed activities related to the allocation of shares in the
Company's initial public offering, including obtaining commitments from
investors to purchase shares in the aftermarket at pre-arranged prices.
The plaintiffs bring claims for violation of several provisions of the
federal securities laws and seek an unspecified amount of damages.

The Company states that the suit is similar to other lawsuits
concerning more than 300 other companies' initial public offerings
(IPO) that were filed during 2001.  The Company believes that the
allegations against it are without merit and intends to defend the
litigation vigorously.  However, there can be no assurance as to the
ultimate outcome of this lawsuit and an adverse outcome to this
litigation could have a material adverse effect on the Company's
consolidated balance sheet, statement of operations or cash flows.


SOCCER FEDERATION: Hispanic Fan Sues Over Discriminatory Tickets Policy
-----------------------------------------------------------------------
A Hispanic-American man filed a class action against the United States
Soccer Federation  (USSF), claiming discrimination in ticket sales for
a World Cup qualifier against Honduras last September, at RFK Stadium.

Humberto Martinez of Sterling, Virginia, claims he suffered "pain,
humiliation and embarrassment" when he was not allowed to buy tickets
in the lower half of the stadium for the September 1 game, a 3-2
Honduras victory.  His suit seeks $2 million in damages per plaintiff
and an injunction against similar ticket policies in the future.

Because of the large Hispanic population in the Washington area, US
national team games against Central American teams at RFK, often have
seemed like road games.  For the Honduras game, the USSF attempted to
create a more pro-American crowd by limiting sales of the best seats to
members of the so-called "US soccer family."

As it turned out, the sellout crowd of 54,282 persons was
overwhelmingly pro-Honduran, prompting coach Bruce Arena to say at the
time,  "Only in America, I guess, we are fighting for a home-field
advantage."

The suit, filed in the US District Court for the District of Columbia,
said the ticket policy violated the DC Human Rights Act and federal law
by denying Hispanic fans equal enjoyment of the game on the basis of
national origin.  The lawsuit says that Mr. Martinez, an American
citizen who regularly attends DC United games, received an invitation
in the mail to buy tickets for the Honduras game.  The lawsuit says he
tried to buy seven VIP tickets at $55 each, but his check was returned.

"No one asked my client whom he was going to root for," said lawyer for
the plaintiffs, Tom Simeone.  "If they had asked, they would have found
out he was from El Salvador and not Honduras, and he didn't care who
won."

The lawsuit says that even the Honduran ambassador to the United
States, Hugo Noe Pino, was not allowed to buy tickets in the lower
deck.  However, an aide to Pino's wife, using her American name, later
sent in the same application and received 50 tickets with no problems,
according to the suit.


STAUFFER CHEMICAL: Former Workers Push For Class Certification of Suit
----------------------------------------------------------------------
On the first day of a four-day hearing in the class action against
Stauffer Chemical Company, former employee Daniel Giddens testified
before Judge Bruce Boyer of the Pinellas-Pasco Circuit Court, in
Florida, to help determine whether as many as 1,700 former employees
should be certified as a class, the St. Petersburg Times reports.

The lawsuit was filed by three former workers who wish to represent all
former, living, non-management employees who worked at Stauffer or
Victor Chemical Works, as it was previously known.  They are Ivan
Hoyte, 76, of St. Petersburg, his son, Norman Hoyte, 52, of Clearwater
and Stanley Malcolm, 63, of Clearwater.

One of their attorneys, J. Hoke "Trey" Peacock III, argued that workers
in the phosphorus processing company were repeatedly exposed to a
variety of toxic substances.  The lawsuit claims the Company knowingly
exposed workers to unsafe conditions, failed to provide proper safety
equipment and failed to notify workers of the hazards.  The workers'
goal is to force the Company to pay for medical monitoring, which will
allow workers to learn, as quickly as possible, whether they have
contracted dangerous diseases.

The case will die before reaching a jury if class action status is not
granted, said one of their attorneys, Wil Florin.  "Help us get these
men medically monitored," Mr. Florin asked Judge Boyer in his opening
statement, ".so that some of them will be able to get some advantage
for their own future health in staving off problems."

Mr. Giddens, the former employee, with a 29-year employment history at
the Company, testified that work clothes were left at work lest the
phosphorus dust that collected on them would dry and ignite.  He told
how each day, with a face as black as charcoal, he would scrub the dust
that collected daily in his nose and ears and in the corners of his
eyes.  He also told Judge Boyer that workers never knew that the dust
and gases they were exposed to daily could cause long-term health
problems.

Another former employee, Harland Kingsley, 74, showed the court a
small, blackened dust mask saved from his days at Stauffer.  Because it
was so hot working at the furnace, he said, workers would wear the mask
as little as possible.

Chris S. Coutroulis, one of a team of attorneys representing the
Company, noted that a health assessment performed by the state did not
conclude that former workers were at risk of contracting serious
disease and did not call for medical monitoring.

Mr. Coutroulis also argued that class action status was not suitable
because workers were subjected to widely different levels of exposure
to harmful chemicals depending on the job they performed and how long
they worked there.  Employee turnover was high, and more than half
worked at the Company less than two months, most workers were subjected
to medically insignificant amounts of exposure, he said.  Working at an
elemental phosphorus plant is "not a desk job," Mr. Coutroulis said,
and the workers' relatively high pay reflected that.

In 1994, the US Environmental Protection Agency placed the former
Tarpon Springs phosphorus plant on its Superfund list of most polluted
places.  Hazardous waste byproducts left behind include, among others,
radium-226, radon and carcinogenic polyaromatic hydrocarbons.


TOBACCO INDUSTRY: Merchants' Appeal Of Class Certification Denied
-----------------------------------------------------------------
Tobacco and lumber company Universal Corporation said recently that the
petition by it and other defendants seeking the appeal of class action
status in a tobacco auction antitrust has been denied, Reuters English
News Service reports.

A three-judge panel of the US Court of Appeals for the Fourth Circuit
recently denied the petition, the Company said in a filing with the
Securities and Exchange Commission (SEC).  The Richmond, Virginia-based
Company did not give a reason for the denial in the filing.  

Three Company subsidiaries are named, along with other leaf tobacco
merchants, as defendants in the lawsuit known as DeLoach, et al. v.
Philip Morris Inc., et al.  The subsidiaries are:

     (1) Universal Leaf Tobacco Co. Inc.,

     (2) JP Taylor Co. Inc. and

     (3) Southwestern Tobacco Co. Inc.

The lawsuit, brought on behalf of United States tobacco growers and
quota holders, alleges that the defendants violated antitrust laws by
bid rigging at tobacco auctions as well as conspiring to undermine the
tobacco quota and price support program administered by the federal
government.

Plaintiffs in the case, which was certified as a class action on April
3, are seeking injunctive relief, trebled damages in an unspecified
amount, pre-and post-judgment interest, attorneys' fees and costs of
litigation.

The Company said its subsidiaries plan to "vigorously defend" the
lawsuit, which is still in its initial stages, and that it could not
estimate the impact that could result from an unfavorable outcome at
trial.


TOBACCO LITIGATION: Medicaid Recipients Lose Bid For Part of Settlement
-----------------------------------------------------------------------
Medicaid recipients who were trying to intercept billions of dollars in
tobacco settlement money in Kentucky and Tennessee lost their case
recently before the Sixth US Circuit Court of Appeals in Cincinnati,
The Lexington Herald Leader reports.

The appeals court upheld earlier decisions by US District Court Judges
Joseph Hood of Kentucky and Todd Campbell of Nashville, who both ruled
the states were protected from the suits by sovereign immunity, and
because the plaintiffs incorrectly claimed that the states had
initially sued tobacco companies on their behalf.

"We resisted them because the tobacco settlements were not for smokers
but for state costs associated with smoking," said Assistant Deputy
Attorney General Scott White, director of Kentucky's Civil &
Environmental Law Division.  "They had no right of action."

In an opinion written by Appellate Judge Danny Boggs, two members of
the three-judge panel ruled that the Medicaid patient who had hoped to
press on with a class action were barred from doing so by the 11th
Amendment, which has been interpreted as meaning that states have
sovereign immunity and are immune from private lawsuits, with few
exceptions.  Justice Boggs wrote, "This case poses the question of
whether the plaintiffs can escape the Eleventh Amendment bar blocking
suits for money damages . by phrasing their requests for monetary
relief as requests for future payments. We hold that they cannot."

The firm of Johnson, Judy, True & Guarnieri filed the Kentucky lawsuit
on behalf of two Medicaid patients, Harshell and Kathleen Downs, and
had hoped to obtain class action status that would have allowed the
addition of hundreds of other Medicaid patients.  However, Judge Hood
dismissed the case in the District Court.

Several similar lawsuits have been tossed out of state and federal
courts in Kentucky and around the country, Mr. White said.  Kentucky's
share of the tobacco fund settlement is about $130 million a year,
$3.45 billion over 25 years.  The money is funneled through the General
Fund to agricultural and early-childhood programs.  Payments began
after the $206 billion settlement was hammered out between tobacco
companies and 46 states in 1998.

Guthrie True of Frankfort, who represented the Kentucky plaintiffs,
said he was not surprised by the decision.  He said that when the case
was filed in 2000, the federal law was clear that the state could
recover what it spent to care for Medicaid patients with tobacco-
related health problems, but that whatever "overage" remained must go
to the patients themselves.  The $3.45 billion (the amount that will
have been paid to Kentucky at the end of 25 years from the first
payment) far exceeded the state's costs, Mr. True said.

Justice Boggs' decision appears to address this issue. He wrote that
the original state lawsuits that led to the massive tobacco settlement
covered much more than just the states' own Medicaid expenses.  They
also included, "for example, counts alleging violation of consumer
protection laws, misrepresentation and deceptive practices targeting
youth, restraint of trade, unjust enrichment, and more," he wrote.


*D&O Liability Insurers Face Challenge Over Rise in Securities Suits
--------------------------------------------------------------------
Shareholders of a number of financially troubled companies are hoping
that payments from what is known as "directors and officers (D&O)
liability insurance" will help soften their losses.  However the
financial losses of a big insurer could spell bad news for them, The
Wall Street Journal reports.

Reliance Group Holdings Inc., formerly controlled by financier Saul
Steinberg, as recently as 1999 was the sixth-largest writer of D&O
insurance.  Such insurance covers, among other things, the directors
and officers of a company when they are alleged to have been negligent
in fulfilling their duties, paying legal fees, settlements and
judgments.

Late last year, however, Reliance's financially strapped insurance
operations liquidated by regulators, a move that means claims on its
policies may go unpaid or take years to resolve.  The Company, which
offered a wide range of property-and-casualty insurance, had filed
for bankruptcy-court protection in June of last year, hobbled by steep
losses.

Now, companies holding Reliance policies are discovering big gaps in
their coverage.  Reliance, for example, had a 20 percent share of the
directors and officers coverage for Finova Group Inc., which emerged
from its own bankruptcy proceedings in August.  Pending court approval,
Finova shareholders are supposed to receive $38 million in insurance
money to settle a class action against the Company in federal court in
Phoenix.

However, the $7.6 million portion owed by Reliance will be hard to
collect.  "It left a black hole for the plaintiffs in the case," said
James K. Thurson, an attorney with Wilson Elser Moskowitz Edelman &
Dicker LLP of Chicago, which represented other insurers in the matter.  
Mr. Thurston says the plaintiffs have agreed to pursue Reliance's share
through the insurer's liquidation proceedings, which could yield few
assets for creditors and other parties owed money.  "They may get 100
cents on the dollar or 2 cents on the dollar," he added.

The likely lost claims payments from Reliance's failure are another
harsh result of a decade-long insurance price war in the 1990s.
Reliance helped drive that price competition, undercutting rivals in an
effort to bring in more premium dollars.  For a time, companies such as
Reliance were able to survive despite the inadequate premiums because
the raging bull market in stocks enabled insurers to make healthy
returns on their investments.  However, in the past two years, the
underpriced policies have come back to haunt the insurers, leaving
dozens insolvent and resulting in rate increases in recent months that
have averaged better than 30 percent.  In some lines, such as D&O
coverage, premiums have increased more than 100 percent.

Reliance's downfall also will be costly for Bank of America Corp.  In
February, the bank said it would use insurance and litigation reserves
to pay $490 million to settle various class actions filed in federal
court, alleging that it did not fully reveal a bad-loan problem prior
to the merger of NationsBank and Bank America in 1998.  In court
filings, Bank of America noted that Reliance would have to pay as much
as $25 million of any decision or settlement against the bank.

The way things stand now for Reliance, however, any such payment would
have to come from the Reliance liquidation, according to an attorney
familiar with the case.  Given the uncertainty surrounding Reliance's
liquidation, Bank of America itself may have to foot the bill.

John Keogh, president of National Union Fire Insurance Co., a
Pittsburgh unit of American International Group Inc. that writes D&O
coverage, says Reliance may not be the last insurer to become insolvent
and thus put claims on such coverage in jeopardy.  "There are a lot of
insurers out there who have little room for error in their balance
sheets right now," he notes.  

In addition to the 1990s price war that weakened some property and
casualty insurers, the estimated $50 billion in insured losses from
September 11 have contributed to the problems of some insurers.

Directors and officers insurance rates have risen rapidly in the past
year.  One big reason is a jump in the number of securities fraud
lawsuits.  Last year, there were a record 487 federal securities fraud
class actions filed, up from 216 in 2000, and more than double the
previous high of 236 in 1998, according to Stanford Law School in
Stanford, California.  The average payment made to shareholder
claimants last year was $17.2 million, up from $9.6 million in 2000,
according to consulting firm Tillinghast-Towers Perrin.

A recent report on directors and officers coverage by Willis Group
Holdings Ltd. concludes that companies with healthy balance sheets are
experiencing increases of 25 percent to 40 percent.  For companies with
financial troubles, rate increases of 300 percent and 400 percent are
not uncommon.

                     New Securities Fraud Cases

APPLIED DIGITAL: Much Shelist Commences Securities Suit in S.D. FL
------------------------------------------------------------------
Much Shelist Freed Denenberg Ament & Rubenstein, PC initiated a
securities class action in the United States District Court for the
Southern District of Florida on behalf of purchasers of the securities
of Applied Digital Solutions, Inc. (Nasdaq:ADSXE) between February 11,
2000 and May 10, 2002, inclusive.

It has been alleged that the Company and Richard J. Sullivan, its Chief
Executive Officer, 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.

It has also been alleged that defendants were in possession of
materially adverse information concerning the lack of proper accounting
controls and improper revenue recognition practices at certain of the
Company's subsidiaries, but failed to disclose the information to
investors for more than two years.

According to the allegations, on April 18, 2002, the Company disclosed
that during the year ending December 31, 2001, one of its subsidiaries
had been booking revenue without "evidence of customer acceptance prior
to the recognition of certain revenue."  The Company also disclosed
that the subsidiary "did not have proper restrictions to vendor access
within its accounts payable system."

Additionally, the Company disclosed that during the year ended December
31, 2000, a second subsidiary of the Company "lacked monitoring
controls over its accounts receivable and was unable to provide certain
detailed inventory listings for certain general ledger balances."  The
disclosure of improper accounting practices at the Company's
subsidiaries drove Company stock down 40%.

Approximately three weeks later, on May 9, 2002, defendants claimed
that nearly every major hospital in the West Palm Beach, Florida area
would be equipped with VeriChip scanners, an indispensable component of
the Company's Verichip technology. However, not one hospital in West
Palm Beach or anywhere else had accepted or agreed to use a scanner, an
essential device for retrieving the VeriChip's information. One day
later, on May 10, 2002, when the truth was disclosed that no hospital
had accepted a scanner, Company stock fell sharply, dropping nearly 30%
in one day.

For more details, contact Carol V. Gilden by Phone: 800-470-6824 or by
E-mail: investorhelp@muchshelist.com


DYNEGY INC.: Pomerantz Haudek Commences Securities Suit in S.D. TX
------------------------------------------------------------------
Pomerantz Haudek Block Grossman & Gross LLP initiated a securities
class action in the United States District Court for the Southern
District of Texas against Dynegy, Inc. (NYSE:DYN) and four of its
senior officers on behalf of investors who purchased the Company's
common stock during the period between April 1, 2001 and April 24,
2002, inclusive.

The suit alleges that defendants issued materially false and misleading
financial statements concerning the Company's cash flow from
operations.  As alleged in the suit, the defendants entered into a
series of secret financial transactions with shell corporations,
referred to as "Project Alpha," which were actually disguised loan
transactions, and which were used to artificially inflate the Company's
reported cash flow operations by $300 million for the year 2001.

Defendants' misuse of these transactions to inflate its reported cash
flow from operations was a serious violation of Generally Accepted
Accounting Principles.

On April 25, 2002, prior to the market's opening, the Company shocked
the investing community by announcing that after consultation with the
staff of the Securities and Exchange Commission (SEC), the Company
would file an amended Form 10-K for the year ended December 31, 2001,
reducing operating cash flow from $811 million to $511 million, a
decrease of approximately 37%.  These disclosures caused the Company's
stock to plummet nearly 30% by the end of trading on April 25, 2002.

For more details, contact Andrew G. Tolan by Phone: 888-476-6529
(888-4-POMLAW) by E-mail: agtolan@pomlaw.com or visit the firm's
Website: http://www.pomlaw.com


FIRST UNION: Grady & Associates Files Amended Securities Suit in FL
-------------------------------------------------------------------
Grady & Associates, LPA filed an amended securities class action
against First Union Securities, Inc., in the United States District
Court for the Middle District of Florida.  The amended suit was filed
on behalf of all persons who purchased Ask Jeeves, Inc. stock between
November 18, 1999 and December 31, 2000, and who were damaged thereby.

The second amended suit asserts a cause of action for violations of
Sections 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder.  The suit alleges that the Company omitted from
the reports and recommendations issued by its analysts on Ask Jeeves
information regarding conflicts of interest caused by First Union
Securities' inconsistent roles as an investment banker competing for
Ask Jeeves; business and as a investment advisor and retail securities
broker rendering allegedly unbiased advice and opinions on Ask Jeeves
for the use and benefit of investors.

As alleged in the suit, this conflict resulted in the issuance of false
and misleading analyst reports, which resulted in a fraud on the market
and on class members.

For more details, contact Thomas R. Grady or Susan Healy by Mail: 720
Fifth Avenue South, Suite 200, Naples, FL 34102 by Phone: 941-261-6555
by Fax: 941-261-1192 by E-Mail: gradylaw@Gradylaw.com or
shealy@gradylaw.com


MERRILL LYNCH: Pomerantz Haudek Commences Securities Suit in S.D. NY
--------------------------------------------------------------------
Pomerantz Haudek Block Grossman & Gross LLP initiated a securities
class action charging Merrill Lynch & Co., Inc. (NYSE:MER) and its
former Internet research analyst Henry M. Blodget with issuing false
and misleading analyst reports about Internet Capital Group, Inc.
(Nasdaq:ICGE).  The case was filed on behalf of investors who purchased
the common stock of Internet Capital during the period between August
30, 1999 and November 8, 2000, inclusive, in the United States District
Court for the Southern District of New York.

The lawsuit charges that during the class period, defendants'
initiation of coverage and its rating and reports on Internet Capital
were not based on independent, objective analyses but instead were
biased and tilted in the Company's favor to enable Merrill Lynch to
maintain and enhance its lucrative investment banking business
relationship with this important client.

The suit charges that defendants' positive public statements about
Internet Capital were inconsistent with their own contemporaneous,
private negative assessments. For example, while repeatedly reiterating
an Accumulate/Buy (2-1) rating, defendants internally labeled Internet
Capital stock "a disaster."  Furthermore, defendants concealed from the
public that although Merrill Lynch technically had five ratings, it had
a policy and practice of issuing only its top three ratings. During the
relevant time herein, defendant never issued a "reduce" or "sell"
rating on any Internet company.

Indeed, during the class period, even as market conditions changed,
defendants repeatedly reissued an Accumulate/Buy rating on Internet
Capital, thus reassuring investors about their continued confidence in
the Company.

As a result of defendants' false and misleading statements, the market
price of Internet Capital common stock was artificially inflated during
the class period.

For more details, contact Andrew G. Tolan by Phone: 888-476-6529
(888-4-POMLAW) by E-mail: agtolan@pomlaw.com or visit the firm's
Website: http://www.pomlaw.com


PEREGRINE SYSTEMS: Much Shelist Investigates Securities Fraud Claims
--------------------------------------------------------------------
Much Shelist Freed Denenberg Ament & Rubenstein, PC is investigating
possible securities violations against Peregrine Systems, Inc.
(NASDAQ:PRGN) on behalf of purchasers of the Company's securities
between July 21, 1999 and May 22, 2002, inclusive.

It has been alleged that the Company, certain of its officers and
directors and Arthur Andersen, LLP, violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder by issuing false and misleading statements concerning the
Company's business and financial condition during the class period.

According to the allegations, Company stock began its decline on May 1,
2002 following its April 30, 2002 announcement that the release of the
fiscal fourth quarter and year-end financial results would be delayed
pending the completion of an audit by new outside auditor KPMG.  Upon
this announcement, Company stock fell nearly 50% to close at $3.45.

On May 6, 2002, the true facts regarding the Company's financial
condition, which were previously concealed or hidden, were revealed to
the public.  The Company shocked the market by announcing that its
board of directors had authorized an internal investigation into
accounting inaccuracies, totaling as much as $100 million, which KPMG
had brought to the audit committee's attention.

Simultaneously, the board of directors announced that the Company's
Chairman of the Board and Chief Executive Officer and its Chief
Financial Officer had both resigned all of their positions with the
Company. Following this announcement, Company stock fell an additional
61% to close at $1.01.

For more details, contact Carol V. Gilden by Phone: 800-470-6824 or by
E-mail: investorhelp@muchshelist.com


RAYOVAC CORPORATION: Much Shelist Investigates Securities Fraud Claims
----------------------------------------------------------------------
Much Shelist Freed Denenberg Ament & Rubenstein, PC is investigating
claims against Rayovac Corporation (NYSE:ROV) on behalf of purchasers
of the Company's securities between April 26, 2001 and September 19,
2001, inclusive.  

It has been alleged that the Company and certain of its officers and
directors violated Sections 11, 12(a)(2) and 15 of the Securities Act
of 1933 and 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, including a materially false and misleading
registration statement and prospectus issued in connection with its
secondary offering of shares to the public, regarding the demand for
the Company's products and its future prospects.

According to the allegations, these statements were materially false
and misleading because they failed to disclose and/or misrepresented
the following adverse facts, among others:

     (1) that the Company was experiencing declining demand for its
         products and in order to stimulate demand and create the
         impression that the Company was performing according to
         analyst expectations, the Company was extending generous
         credit terms to customers in order to induce them to purchase
         additional products, thereby pulling sales in from the future.
         Consequently, the Company created the appearance of earnings
         growth, when defendants knew, or recklessly disregarded that
         future sales would be negatively impacted by the
         aforementioned practices;

     (2) that the Company's expansion in Latin America was the result
         of aggressive sales practices whereby the Company extended
         generous payment terms and induced customers to take
         additional unneeded inventory; and

     (3) based on the foregoing, defendants lacked a reasonable basis
         for their statements that the Company would grow by 8-9% in
         the third and fourth quarter of 2001.

On September 20, 2001, before the market opened for trading, the
Company issued a press release announcing that its fiscal fourth
quarter results would be negatively impacted by a purported slowdown in
battery sales in its US and Latin American markets.  As a result,
contrary to defendants' bullish class period statements, the Company's
earnings for the quarter would be flat to down slightly from the same
period for the previous year.

The market's reaction to this announcement was immediate and punitive,
with shares of its common stock falling more than 23% to a class period
low of $12.74 per share on almost eight times the normal trading
volume.

For more details, contact Carol V. Gilden by Phone: 800-470-6824 or by
E-mail: investorhelp@muchshelist.com


RELIANT ENERGY: Lockridge Grindal Commences Securities Suit in S.D. TX
----------------------------------------------------------------------
Lockridge Grindal Nauen PLLP initiated a securities class action in the
United States District Court for the Southern District of Texas,
Houston Division, on behalf of purchasers of Reliant Energy, Inc.
(NYSE:REI) stock during the period between August 2, 1999 and May 10,
2002.

The suit charges that the Company and certain of its senior officers
and directors made materially false and misleading statements to the
market, in violation of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, and Rule 10b-5 promulgated thereunder.

The complaint alleges that the Company is the owner of approximately 82
percent of the stock of Reliant Resources, Inc., an energy services
company, marketing power and natural gas in North America and Western
Europe and that in December of 2000, the Company transferred
substantially all of its unregulated businesses to Reliant Resources,
including the operations formerly conducted by its Wholesale Energy
business segment.

It further alleges that Reliant Resources had engaged in transactions
with other power traders during the class period to buy and sell power
to each other simultaneously, at the same price (trades known as
"Roundtrip Transactions"), and that such trades were designed to cancel
each other out, so that Reliant Resources would not have to report a
gain or a loss in net income, but could still report the trading volume
and revenue generated by the sale.

The complaint further alleges that the Roundtrip Transactions were used
to set benchmark contract prices for energy trades, allowing Reliant
Resources to set higher general contract prices for energy through
Roundtrip Transactions which cost it nothing.

The complaint also alleges that the Roundtrip Transactions had the
effect of improperly increasing revenues by 10 percent from 1999-2001
and improperly inflating trading volume by 20 percent in 2001 and that
the trades represented some 78 million megawatt hours and 45 billion
cubic feet of gas during 2001.

Defendants' class period financial statements and press releases were
therefore materially false and misleading and, the complaint alleges,
failed to comply with Generally Accepted Accounting Principles (GAAP).

For more details, contact Karen M. Hanson or Gregory J. Myers by Mail:
100 Washington Avenue South Suite 2200 Minneapolis, MN 55401 by Phone:
612-339-6900 or by E-mail: kmhanson@locklaw.com or gjmyers@locklaw.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
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
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Information contained herein is obtained from sources believed to be
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