CAR_Public/990304.MBX              C L A S S   A C T I O N   R E P O R T E R

              Thursday, March 4, 1999, Vol. 1, No. 20

                           Headlines

AFRO-AMERICAN FARMERS: Settlement Agreement Comes Under Fire
COMPLETE MANAGEMENT: Stull Stull File Complaint in New York
ELI LILLY: Forsyth Prozac Trail Gets Underway
FIRST MERCHANTS: Working to Document D&O Insurance Settlement
GUN MANUFACTURERS: Insurers Issue Reservation of Rights Notices

INTERNET DOMAINS: Oral Arguments Completed Before D.C. Circuit
MERRILL LYNCH: More than 900 Women Expected to File Claims
OHIO PRISIONERS: Inmates to Receive $1.6 Million in Settlement
OLDE DISCOUNT: March 9 Deadline for Filing Arbitration Claims
OMEGA RESEARCH: All Claims Dismissed; Plaintiffs May Replead

ORBITAL SCIENCES: Lawsuits Don't Alarm Wall Street Analysts
PACIFICARE HEALTH: Motion to Dismiss Sub Judice; Discovery Stayed
PRECISION SYSTEMS: Speer-Related Shareholder Litigation Dismissed
ST. JOHN KNITS: Unable to Predict Outcome of Shareholder Suits
STB SYSTEMS: Company Continues to Deny Shareholder Allegations

TRANSCRYPT INTERNATIONAL: Takes $10MM Charge to Cover Litigation


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AFRO-AMERICAN FARMERS: Settlement Agreement Comes Under Fire
------------------------------------------------------------
>From Washington, Janelle Carter, writing for the Associated
Press, reports that just hours before U.S. District Judge Paul
Friedman was to give final review to a multimillion-dollar
settlement between black farmers and the Agriculture Department,
leaders of two farmer groups said they have problems with the
deal.

"The farmers are having some real issues with what has been
proposed," said Gary Grant, president of the Black Farmers and
Agriculturists Association.  

Attorneys for both sides announced a settlement in January to the  
discrimination lawsuit brought by farmers two years ago because
they were denied access to government loans and subsidies.   The
deal would allow farmers with less documented evidence to take a
$50,000 tax-free payment and have their government debts
forgiven.  Farmers with more evidence could opt to go before an
independent arbitrator and seek larger damages.  The cost of the
settlement is unclear, because neither the number of farmers who
will join the class nor settlement options they will choose is
known.  The cost could reach $400 million.  At the time of the
agreement, many farmers hailed the end of sometimes contentious
negotiations.

But now, many plaintiffs say that after reading the agreement
they're not sure they are getting a fair deal.  The $50,000
payment "does not compensate somebody who has lost their home,  
their farm, their credibility, their credit rating" Grant said.
And farmers will have a hard time proving a preponderance of
evidence to seek larger damages, Grant said. "We're talking about
elderly people who have little formal education, who operated in
an atmosphere of racism and bigotry.  People who did not
necessarily file complaints," he said.  "We feel as though the
burden of proof shouldn't be on the farmer," said John Boyd,
president of the National Black Farmers Association.

Ms. Carter relates that some of the things farmers have mentioned
including in the settlement are a review board to look over the
arbitrator's rulings and the firing of department officials in
the counties that participated in the discrimination.

"We definitely want a settlement," Boyd said, "but we want a
settlement that's going to be fair to the black farmers who have
been victims of the Department of Agriculture."


COMPLETE MANAGEMENT: Stull Stull File Complaint in New York
-----------------------------------------------------------
Stull, Stull & Brody commenced a class action lawsuit in the U.S.
District Court for the Southern District of New York on behalf of
purchasers of Complete Management, Inc. (NYSE:CMI)(OTC:CPMI)
common stock between May 1, 1996 and August 13, 1998.

CMI provides physician practice management services to medical
practices and hospitals in the New York metropolitan area. The
complaint alleges that CMI improperly recognized revenue on
uncollectible receivables from its largest customer, Greater
Metropolitan Medical Services in violation of Generally Accepted
Accounting Principles.  As a result of this conduct, CMI  
announced on August 19, 1998 that it would be writing off $28.9
million in management fees due from GMMS and would be severing
its relationship with them.

The defendants include CMI, certain of its officers and
directors, underwriters and accountants.  The Complaint charges
that defendants violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10-b(5).



ELI LILLY: Forsyth Prozac Trail Gets Underway
---------------------------------------------
Jury selection began yesterday in the United States District
Court for the District of Hawaii in the civil case Forsyth v. Eli
Lilly.  The case concerns the homicide/suicide of a successful  
businessman, William Forsyth, and his wife June Forsyth.  William
Forsyth had been taking the anti-depressant drug Prozac for ten
days when he stabbed his wife 15 times and then impaled himself
on a kitchen knife.  Plaintiffs, the adult children of the
decedents, claim that Prozac causes a small but important  
percentage of people to become violent and suicidal, and that
Lilly knew about  this risk but failed to warn.

Although there have been over 150 similar cases in the last
decade, this will be only the second time that Lilly has had to
defend Prozac in trial.

Baum, Hedlund, Aristei, Guilford & Downe represents the
Plaintiffs.


FIRST MERCHANTS: Working to Document D&O Insurance Settlement
-------------------------------------------------------------
FIRST MERCHANTS ACCEPTANCE CORP. and certain of its former
directors and officers have been party to several lawsuits in
federal court alleging that the Company published false
consolidated financial statements and other misleading
information in violation of the securities laws. This litigation
has been consolidated into a single  class action amended
complaint in the United States District Court for the Northern
District of Illinois. The complaint in the consolidated class
action alleges various purported causes of action under various
securities and other laws on behalf of persons who purchased
subordinated reset notes and/or common stock of the Company
between September 23, 1994 and April 16, 1997, which class
encompasses nearly all of the existing noteholders and some of
the existing shareholders. The complaint names as defendants
three former officers of the Company who were terminated in April
1997 for cause by the former board of directors of the Company,
as well as the Company's former outside auditors and former
members of the Company's audit committee. The Company has been
released from any action. The Company and the class entered into
a joint prosecution agreement which allows the Company to
participate in any recovery or settlement received (net of the
contingency fee paid to class counsel). The joint prosecution
agreement provides certain directors and officers the benefits of
a covenant not to attach their personal assets. None of the three
officers terminated for cause, the former outside auditors nor
the providers of directors and officer liability insurance were
released.  

FIRST MERCHANTS ACCEPTANCE CORP. is in the process of documenting
a settlement of claims against its director and officer liability
insurers and is examining other potential causes of action
including causes of action against its former auditor.


GUN MANUFACTURERS: Insurers Issue Reservation of Rights Notices
---------------------------------------------------------------
Although Inland Empire handgun manufacturers say they haven't
heard any bad news from their product liability insurers,
carriers of many other firearms companies have moved to take
cover from the recent spate of anti-gun litigation by cities,
reports Business Press Ontario.  Several insurance companies have
notified trade groups and manufacturers they may not cover
damages awarded in the lawsuits, which have been filed by  
municipalities in an attempt to recover medical expenses and law
enforcement costs related to handgun violence.

Hi-Point Firearms, a gun maker in Ohio, reported it was notified
by insurer Sporting Arms Insurance Ltd. that any damages awarded
against it for negligent marketing in the Chicago lawsuit would
not be covered, according to the Wall Street Journal.  

By issuing so-called "reservation-of-rights" notices, BPO
explains, insurers have taken steps to avoid paying jury awards
in cases not clearly covered in the language  of their policies.
Insurance companies sought for comment did not return calls.

Even with the possible loss of insurance coverage, BPO says, the
handgun industry is resolved to fighting the lawsuits rather than
settling.   "It's my intention to fight these lawsuits
vigorously," said Dave Brazeau, president of Phoenix Arms, who
also says he has not received a "reservation-of-rights" notice
from his insurance company.   The industry has created a defense
fund of $15 million, or 1% of gross sales, according to Lorcin's
Waldorf.  Brazeau, who contends that his company has done nothing
wrong, says he is more than willing to pay the legal fees for a
continued fight, even if he somehow loses insurance backing.
"It's 1% now or all of it later," Brazeau said.


INTERNET DOMAINS: Oral Arguments Completed Before D.C. Circuit
--------------------------------------------------------------
Nebraska Representative Lee Terry has introduced the Home Page
Tax Repeal Act, to require the federal government to refund $30
of each $100 domain name registered from September 1995 through
March 1998.  Network Solutions Inc., the sole company authorized
to issue Internet addresses and collect the fees, would be
allowed to keep its 70 percent stake.

Terry credits Karnes - his friend, fellow Republican and campaign  
contributor - for piquing his interest in the issue, according to
an article appearing in the Omaha World-Herald.  Karnes, an
attorney at Kutak Rock in Omaha, is working on Capitol Hill for a
group of Internet registrants seeking to win back the $60
million.

A Washington-based attorney, William Bode, is arguing the case in
federal court.  Bode says nine Internet registrants are the main
plaintiffs in his case, but about 2 million individuals and
businesses would be eligible to receive part of any judgment.
Bode said his nine clients -- made up of individuals and
Internet  providers -- hold about 40 domain names and are
motivated more by principle than  money.

Perhaps more important than the $60 million, Karnes said, is that
the lawsuit has forced federal officials to tread more lightly
when it comes to levying fees on the freewheeling, fast-growing
culture of the Internet.  "By raising the issue, we have forced
the government to scale back its charge for Internet registration
by 30 percent across the board," Karnes said.

For each name assigned, Network Solutions received $70, and $30
was transferred to the "Internet Intellectual Infrastructure
Fund" - set up by the National Science Foundation to fund future
improvements to the Internet.  As of Sept. 30, 1997, the federal
fund contained $37 million.  For Network Solutions, the fees have
translated to big money.  The company has registered 3.4 million
domain names, the vast majority since the registration fee was
approved.  The influx of fees helped Network Solutions' annual
revenues soar from about $6.5 million in 1995 to just under $93.7
million last year.  And since going public in 1997, the company's
stock price has risen from $19 per share to as high as $240 last
month.

In October 1997, Bode's group of Internet users filed suit in
federal court, arguing the fee was an unconstitutional tax
because it had never been approved by Congress.  A U.S. District
Court in Washington partially agreed, ruling that the  
federal government's 30 percent cut of each Internet address was  
unconstitutional. Network Solutions' part of the fee, however,
was allowed to stand.  In **court** papers filed by Network
Solutions, the company said that its portion of the registration
fees does not raise revenue for the government and therefore
should not be regarded as a tax.  Further, the company said, the
fees are paid through a "voluntary contract" in which the company
provides services and receives payment to cover its "costs and
profits."

On Thursday, oral arguments were held before the U.S. Court of
Appeals in Washington.  Bode said he expects a decision within
weeks.  On Capitol Hill, Terry has taken up the fight to repeal
the provision that ratified the fee.  Karnes said Terry's
predecessor, former Nebraska Rep. Jon Christensen, backed similar
legislation last year.  Terry's bill would send the money still
in the account back to Internet registrants and require the
National Science Foundation to come up with $23 million already
spent.


MERRILL LYNCH: More than 900 Women Expected to File Claims
----------------------------------------------------------
Yesterday's deadline drew more than 900 current and former  
female employees of Merrill Lynch to file claims of
discrimination against the securities firm.  The claims are part
of the widely-reports settlement of a class-action lawsuit.  Most
complaints in the case involve economic discrimination by the
funneling of tips, clients and business to male brokers, the
plaintiffs' lawyers said.  The number of claimants is three to
four times what plaintiffs' lawyers had expected when Merrill
settled the suit last June.


OHIO PRISIONERS: Inmates to Receive $1.6 Million in Settlement
--------------------------------------------------------------
>From Akron, Ohio, the Associated Press reports that inmates of
Ohio's first private prison will share $1.6 million under a
proposed settlement of a class-action lawsuit alleging unsafe  
conditions behind bars.  

According to the lawsuit, six inmates who were receiving medical
care at the Northeast Ohio Correctional Center have died since
the $40 million facility  opened in May 1997.  At least 20
inmates have been stabbed at the prison at Youngstown, about 60
miles southeast of Cleveland.  Two inmates were murdered after
the lawsuit was filed, and a Justice Department report said staff
members used "unnecessarily harsh and humiliating  procedures"
during inmate searches after the killings.  

Most inmates of the prison, owned by the Corrections Corporation
of America of Nashville, Tenn., were sent by the District of
Columbia.

Under the proposal, announced Monday in federal court, the money
would be divided among about 1,000 inmates according to injuries,
lack of medical care and other standards.  A hearing on the
proposal is set for April 20.  The settlement also calls for
hiring an independent monitor to check conditions at the prison,
said Al Gerhardstein, a Cincinnati attorney who represents the
inmates.  "The suit was brought primarily to improve conditions
at the facility, and that has been accomplished," he said.

There was no comment from Corrections Corporation of America to
the AP, nor was there any response to messages left at the prison
and at company offices in Nashville.   


OLDE DISCOUNT: March 9 Deadline for Filing Arbitration Claims
-------------------------------------------------------------
The St. Petersburg Times reminds its readers that March 9 is the
deadline for filing arbitration claims against Olde Discount
Corp. if they were victims of abusive sales practices between
1992 and 1995.  The Securities and Exchange Commission is giving
a second chance to investors who otherwise might lose their cases
because they waited so long to file a claim.  The March 9
deadline grew out of the SEC case against Olde for fraud,
unauthorized trading and other abuses.  In September, the SEC
fined the company and its senior executives $7-million.


OMEGA RESEARCH: All Claims Dismissed; Plaintiffs May Replead
------------------------------------------------------------
Omega Research, Inc. (Nasdaq:OMGA) announced the dismissal of the
class action securities lawsuit filed against it January 28, 1998
in federal district court in Miami.

Most of the claims in the suit, styled RICHARD M. RHODES,
individually and on behalf of all others similarly situated,
Plaintiffs, vs. WILLIAM R. CRUZ; RALPH  L. CRUZ; OMEGA RESEARCH,
INC.; BANCBOSTON ROBERTSON STEPHENS; LEHMAN BROTHERS; and
HAMBRECHT & QUIST, Defendants, Case No. 98-0174-CIV-LENARD, were
dismissed with prejudice.

The plaintiffs have ten days from the date of the order to  
replead, in accordance with the requirements stated in the
court's order and applicable law, the claims in the suit that
were dismissed without prejudice.

Marc J. Stone, Vice President of Corporate Development and
General Counsel, commented, "We are pleased with the court's
order dismissing this action, which we have maintained from the
beginning was without merit, and we will vigorously oppose any
effort by the plaintiffs to replead any of the claims or issues
that were dismissed without prejudice."


ORBITAL SCIENCES: Lawsuits Don't Alarm Wall Street Analysts
-----------------------------------------------------------
One-time accounting charges that hurt the fourth quarter earnings
of Orbital Sciences Corp. and led to the filing of class action
shareholder suits are not alarming Wall Street analysts,
according to Communications Today.

The most eye-catching claim in the lawsuit is that two top
Orbital executives  sold company stock late last year before the
charges were announced in  February, said Armand Musey, a
satellite analyst with New York-based C.E. Unterberg, Towbin.  
However, Orbital officials counter that their top 22 executives
added roughly 13 percent to their holdings in the company during
the past year.

"I would have been shocked if someone did not file a lawsuit,"
Musey said.  Indeed, analysts we talked with weren't changing
their assessments of the company.  Vijay Jayant, a satellite
analyst with Bear, Stearns, told us this week that he continues
to recommend the stock.

Baron Beneski, a spokesman for Orbital Sciences, reiterated to
Communications Today that the company "think[s] the lawsuit is
without merit.  We plan to rigorously defend the company and its
officers."


PACIFICARE HEALTH: Motion to Dismiss Sub Judice; Discovery Stayed
-----------------------------------------------------------------
As previously reported, a securities class action lawsuit,
Madruga et al. v. PacifiCare Health Systems, Inc., et al. (No.
SAVC-97-974 LHM, Central District of California) was brought on
behalf of all purchasers of stock in PACIFICARE HEALTH SYSTEMS,
INC., between February 14, 1997 and November 24, 1997. The
complaint accuses PacifiCare and certain of its officers and
directors of making false and misleading statements about the
cost savings and synergies resulting from the FHP acquisition.
Plaintiffs also claim PACIFICARE made fraudulent earnings
forecasts for 1997 and 1998 and misstated financial results for
the first, second and third quarters of 1997. The complaint
alleges violations of certain sections of the Securities Exchange
Act of 1934. On May 11, 1998, PACIFICARE filed a motion to
dismiss the entire complaint under the Private Securities
Litigation Reform Act of 1995.  No discovery has been taken and
all discovery has been stayed pending the resolution of the
motion to dismiss.  PACIFICARE believes it has good defenses to
these claims and is contesting the claims vigorously.


PRECISION SYSTEMS: Speer-Related Shareholder Litigation Dismissed
-----------------------------------------------------------------
Precision Systems, Inc. (Nasdaq:PSYS) announced that the class
action suit pending against it and its Directors in the Court of
Chancery of the State of Delaware has been dismissed by the
plaintiff without prejudice.

On March 11, 1998, Rachael Lefkovits sued Hector Acalde, Bert
Kolde, Kwang-I Yu, Willem Huisman, Ian Dalziel, Francis R.
Santangelo, and Precision Systems, Inc., initiating a class
action lawsuit before the Court of Chancery of the State of
Delaware in and for New Castle County, alleging breach of
fiduciary duty by the Directors of Precision Systems, Inc. in
regard to the Exchange Transaction proposed by Speer
Communication Limited Partnership and Speer Virtual Media Limited
Partnership.  The Complaint alleged, in part, that because the
majority shareholders of the Company (RMS, Alta, and Vulcan) will
benefit from the proposed transaction, and that because the
proposal indicates that Directors would be assured of
continuation in office, that the Directors cannot, therefore,
fairly and independently act upon the proposal in the best
interests of all public shareholders.  The Complaint sought
preliminary and permanent injunctive relief, as well as
compensatory damages.


ST. JOHN KNITS: Unable to Predict Outcome of Shareholder Suits
--------------------------------------------------------------
On October 13, 1998, Binary Traders, Inc. filed a complaint on
behalf of purchasers of publicly traded securities of ST. JOHN
KNITS, INC., during the period of February 25, 1998 to August 25,
1998 against the Company, Robert E. Gray and Kelly A. Gray in the
United States District Court, Central District of California,
Southern Division (Binary Traders, Inc. v. St. John Knits, Inc.,
et al.). In this action, Binary Traders claims that the
defendants violated federal securities laws by allegedly making
fraudulent statements to cover up management's mistakes and
certain material adverse conditions affecting the Company's
business.  In addition, the complaint alleges that Mr. Gray
traded shares of the Company's common stock while in possession
of allegedly material non-public information.  Binary Traders
seeks class action certification and an unspecified amount of
compensatory damages.

The Company is also party to six lawsuits that allege claims
against certain of the Company's directors for breach of
fiduciary duty alleged to have arisen from a proposed transaction
wherein Robert E. Gray, Chairman and Chief Executive Officer of
the Company, along with Vestar Capital Partners III, L.P.,
offered to acquire substantially all of the outstanding common
stock of the Company through a buy-out transaction. All of these
lawsuits were filed in the Superior Court of the State of
California for the County of Orange.

The dates the lawsuits were instituted, as well as the principal
parties to the lawsuits, are as follows:

     (i) Tehrani v. St. John Knits, Inc., et al., filed on
         December 9, 1998, by Mishel S. Tehrani, as
         representative for a putative class of unidentified
         members, against the Company, Robert E. Gray, Marie St.
         John Gray, Kelly A. Gray, Roger G. Ruppert, Richard A.
         Gadbois III, David A. Krinsky and Rick Rozar,

    (ii) Hill v. St. John Knits, Inc., et al., filed on December
         9, 1998, by Kenneth O. Hill, as representative for a
         putative class of unidentified members, against the  
         Company, Robert E. Gray, Marie St. John Gray, Kelly A.
         Gray, Roger G. Ruppert, Richard A. Gadbois III and David
         A. Krinsky,

   (iii) Silverman v. St. John Knits, Inc., et al., filed
         on December 23, 1998, by Shirley Silverman, as
         representative for a putative class of unidentified
         members, against the Company, Robert E. Gray, Marie St.
         John Gray, Kelly A. Gray, Roger G. Ruppert, Richard A.
         Gadbois III and David A. Krinsky,

    (iv) Vinikow v. St. John Knits, Inc., et al., filed on
         January 8, 1999, by Larry Vinikow as representative for
         a putative class of unidentified members, against the
         Company, Robert E. Gray, Marie St. John Gray, Kelly A.
         Gray, Roger G. Ruppert, Richard A. Gadbois III and David
         A. Krinsky,

    (v) Howden v. St. John Knits, Inc., et al., filed on January
        15, 1999, by Richard Howden, Jr. as representative for a
        putative class of unidentified members, against the
        Company, Robert E. Gray, Marie St. John Gray, Kelly A.   
        Gray, Roger G. Ruppert, Richard A. Gadbois III and David
        A. Krinsky, and

   (vi) The Parnassus Fund v. St. John Knits, Inc., et al., filed   
        on February 12, 1999, by The Parnassus Fund, as
        representative for a punitive class of unidientified
        members, against the Company, Robert E. Gray, Marie St.
        John Gray, Kelly A. Gray, Roger G. Ruppert, Richard A.
        Gadbois III and David A. Krinsky.

The principal relief sought in the six actions is certification
of the putative class, an injunction of the proposed buy-out
transaction from proceeding or, to the extent the transaction is
concluded, a rescission of the buy-out transaction and damages
and attorneys' fees in an unspecified amount.  

The Company tells investors in its latest annual report filed
with the SEC that it is unable to estimate the outcome of these
matters or any potential liabilities it may incur. The Company
expects to incur legal and other defense costs as a result of
such proceedings in an amount which it can not currently
estimate. These proceedings could involve a substantial
diversion of the time of some of the members of management, and
an adverse determination in, or settlement of, such litigation
could involve payment of significant amounts, which could have an
adverse impact on the Company's business, financial condition,
results of operations and cash flows.


STB SYSTEMS: Company Continues to Deny Shareholder Allegations
--------------------------------------------------------------
>From the latest annual report filed with the SEC by STB SYSTEMS,
INC.:

     A securities class action lawsuit was filed on October 9,
1998 in Dallas County, Texas against us and certain of our
officers and directors, along with the underwriters who
participated in our secondary public offering on March 20,
1998. The petition alleges that the registration statement for
our secondary public offering contained false and misleading
statements of material facts and omitted to state material facts,
alleging that the registration statement failed to disclose
certain alleged product defects, alleged difficulties with some
of our major customers and our allegedly deteriorating financial
performance. The petition asserts claims under Sections 11,
12(a)(2), and 15 of the Securities Act of 1933, as amended, and
Sections 581-33A and 581-33F of the Texas Securities Act on
behalf of a purported class of persons who purchased or otherwise
acquired STB Common Stock in the public offering. The petition
seeks recission and/or unspecified damages. We deny the
allegations in the petition and intend to vigorously defend the
lawsuit. In the event the plaintiffs in the lawsuit prevail in
connection with any of their claims, then, depending upon the
magnitude of damages and expenses incurred by us and the extent
to which such damages and expenses are covered by insurance, the
lawsuit could materially harm us.


TRANSCRYPT INTERNATIONAL: Takes $10MM Charge to Cover Litigation
----------------------------------------------------------------
Transcrypt International Inc. posted a $14.7 million fourth
quarter loss on $11.9 million in revenues.  The loss for the
quarter includes a $10 million provision relating to federal
and state class action lawsuits proceeding against the company.
Transcrypt delayed the reporting of its 1997 year totals, and
amended the filing of its financial reports for 1995 and 1996.



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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
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Copyright 1999.  All rights reserved.  ISSN XXXX-XXXX.

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