CAR_Public/990519.MBX              C L A S S   A C T I O N   R E P O R T E R

              Wednesday, May 19, 1999, Vol. 1, No. 74

                            Headlines

3COM CORP.: Stull Stull Files Complaint in California
AMERICAN BANK: Consolidated Complaint Filed In New York
CANDIE'S INC.: Kaplan Kilsheimer Files Complaint in New York
CENDANT CORP.: Updates Calpers, PRIDES, ABI Actions and More
CORRECTIONS CORP.: Cauley Firm Files Complaint in Tennessee

CSB FINANCIAL: Reinhardt & Anderson File Complaint in Delaware
HCB BANCSHARES: Intends Vigorous Contest of Texas Allegations
HITSGALORE.COM: Stull Stull Files Complaint After Disclosure
MICROSOFT CORP.: Seeks Review of Appeal Granting Temps Options
NATIONWIDE LIFE: Updates Contract Owners and Investors Complaint

PHOENIX LEASING: Investors' Complaints Proceed in Marin County
PSS WORLD: Reinhardt & Anderson File Complaint in Florida
SEARS ROEBUCK: Agrees to Pay to Settle Child Labor Allegations
TEXACO INC: Royalty and Severance Tax Claims Settled in Texas
TOBACCO LITIGATION: Supreme Court Declines PA Smokers' Class

TOWNE BANCORP: Account Frozen, Suing Casualty Insurer for Breach
WELFARE BENEFITS: Supreme Court Prohibits CA Residency Period


                            *********


3COM CORP.: Stull Stull Files Complaint in California
-----------------------------------------------------
Stull, Stull & Brody filed a class action lawsuit in the United
States District Court for the Northern District of California on
behalf of all persons who purchased the common stock of 3Com
Corp. (NASDAQ:COMS) during the period from September 22, 1998
through March 2, 1999. The Complaint charges 3Com and certain of
its officers and directors with violation of the Securities
Exchange Act of 1934.

The Complaint alleges that beginning in September, 1998, the
defendants embarked on a scheme to artificially inflate the
stock price of the Company in order to enable them to amass
insider trading proceeds in excess of $189 million. The
Complaint further alleges the defendants artificially inflated
the price of 3Com stock by making false and misleading
statements concerning the demand for 3Com's Systems Products and
Client Access Products and the Company's financial condition,
operational efficiencies, results of operations and improved
channel inventory controls. Moreover, the Complaint alleges that
3Com insiders further artificially inflated 3Com stock by using
$130.4 million of 3Com's cash to repurchase 4.3 million 3Com
shares in the open market allowing them to unload their own
shares at higher prices for greater personal gain.

For more information, contact Patrice L. Bishop at 888-388-4605
or at secfraud@secfraud.com via email.


AMERICAN BANK: Consolidated Complaint Filed In New York
-------------------------------------------------------
American Bank Note Holographics, Inc. (NYSE:ABH) announced that
all of the class-action lawsuits that were commenced on behalf
of purchasers of the common stock of the Company during the
stated period from July 15, 1998 through February 1, 1999 were
consolidated into a single class action complaint filed in the
US District Court for the Southern District of New York.

The consolidated complaint alleges violations of the federal
securities laws and names as defendants the Company, certain
former officers and directors of the Company, American Banknote
Corporation (the Company's prior parent) and other parties. The
lawsuit relates to the Company's previously announced issues
concerning restatement of its financial statements and related
matters. The Company is reviewing the consolidated complaint and
intends to respond to the lawsuit in a timely manner.

As previously reported, the Securities and Exchange Commission
has initiated a formal investigation into the Company's
previously disclosed issues concerning its financial statements.
In addition, the US Attorney for the Southern District of New
York is also conducting an inquiry with respect to the same
matters.

American Bank Note Holographics is a world leader in the
origination, production, and marketing of mass-produced secure
holograms, based on its significant market share. The Company's
holograms are used for security applications, such as
counterfeiting protection for credit and other transaction
cards, identification cards and documents of value; as well as
for tamper resistance and authentication of high-value consumer
and industrial products.


CANDIE'S INC.: Kaplan Kilsheimer Files Complaint in New York
------------------------------------------------------------
Kaplan, Kilsheimer & Fox LLP has filed a Class Action lawsuit
against CANDIE'S INC. (NASDAQ: CAND) and certain of its officers
and directors in the United States District Court for the
Southern District of New York. The suit is brought on behalf of
all persons or entities who purchased or otherwise acquired the
common stock of Candie's between May 28, 1997 and May 12, 1999.
The complaint charges Candie's and certain officers and
directors with violations of the securities laws and regulations
of the United States.

The complaint alleges, among other things, that defendants
falsely reported Candie's financial results and for the first,
second, third and fourth fiscal quarters of 1998, fiscal year
1998 ended January 31, 1998, and the first, second, and third
fiscal quarters of 1999 causing Candie's common stock to trade
at artificially inflated prices. Following defendants'
disclosure that Candie's may be required to restate its
financial results, NASDAQ halted trading of the Company's common
stock.

To learn more, contact Fred S. Fox, Esq. or Donald R. Hall, Esq.
at 800-290-1952 or 212-687-1980 or at lawkkf@aol.com via email.


CENDANT CORP.: Updates Calpers, PRIDES, ABI Actions and More
------------------------------------------------------------
Since the April 15, 1998 announcement by CENDANT CORP. of the
discovery of accounting irregularities in the former CUC
business units, more than 70 lawsuits claiming to be class
actions, two lawsuits claiming to be brought derivatively on the
company's behalf and several individual lawsuits have been filed
in various courts against CENDANT CORP. and other defendants.

In re: Cendant Corporation Litigation, Master File No. 98-1664
(WHW) (D.N.J.) (the "Calpers Action"), is a consolidated action
consisting of over sixty constituent class action lawsuits, and
several individual lawsuits, that were originally filed in the
District of New Jersey, the District of Connecticut, and the
Eastern District of Pennsylvania. The Calpers Action is brought
on behalf of all persons who acquired securities of the Company
and CUC, except our PRIDES securities, between May 31, 1995 and
August 28, 1998. The Court granted the plaintiffs' unopposed
motion for class certification on January 27, 1999. Named as
defendants are the Company; twenty-eight current and former
officers and directors of the Company, CUC and HFS Incorporated
("HFS"); and Ernst & Young LLP, CUC's former independent
accounting firm.

The Amended and Consolidated Class Action Complaint in the
Calpers Action alleges that, among other things, the plaintiffs
were damaged when they acquired securities of the Company and
CUC because, as a result of accounting irregularities, the
Company's and CUC's previously issued financial statements were
materially false and misleading, and the allegedly false and
misleading financial statements caused the prices of the
Company's and CUC's securities to be inflated artificially. The
Amended and Consolidated Complaint alleges violations of
Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 (the
"Securities Act") and Sections 10(b), 14(a), 20(a), and 20A of
the Securities Exchange Act of 1934 (the "Exchange Act"). The
Calpers Action seeks damages in unspecified amounts. Actions
making substantially similar allegations have been filed in the
United States District Courts for the Eastern and Central
Districts of California, the Southern District of Florida, the
Eastern District of Louisiana, and the District of Connecticut.
The Company has filed a motion before the Judicial Panel on
Multidistrict Litigation to transfer these actions to the
District of New Jersey for consolidation with the Calpers
Action.

On December 14, 1998, the plaintiffs in the Calpers Action moved
for partial summary judgment, on liability only, against the
Company on the claims under Section 11 of the Securities Act.
The plaintiffs adjourned this motion sine die, however, without
prejudice to the plaintiffs' right to re-notice the motion. In
connection with the plaintiffs' agreement to withdraw their
summary judgment motion, the Company agreed not to assert any
automatic stay of discovery that would otherwise apply to the
Calpers Action if any defendant were to file a motion to dismiss
the Calpers Action.

On January 25, 1999, the Company answered the Amended
Consolidated Complaint and asserted Cross-Claims against Ernst &
Young LLP ("Ernst & Young"). The Company's Cross-Claims allege
that Ernst & Young failed to follow professional standards to
discover, and recklessly disregarded, the accounting
irregularities, and is therefore liable to the Company for
damages. The Cross-Claims assert breaches of Ernst & Young's
audit agreements with the Company, negligence, breaches of
fiduciary duty, fraud, and contribution.

On March 26, 1999, Ernst & Young filed Cross-Claims against
Cendant and certain of the Company's present and former officers
and directors, alleging that any failure to discover the
accounting irregularities was caused by misrepresentations and
omissions made to Ernst & Young in the course of its audits and
other reviews of the Company's financial statements. Ernst &
Young's Cross-Claims assert claims for breach of contract,
fraud, fraudulent inducement, negligent misrepresentation and
contribution. Damages in unspecified amounts are sought for the
costs to Ernst & Young associated with defending the various
shareholder lawsuits and for harm to Ernst & Young's reputation.

Welch & Forbes, Inc. v. Cendant Corp., et al., No. 98-2819 (WHW)
(the "PRIDES Action") is a class action brought on behalf of
purchasers of the Company's PRIDES securities between February
24 and July 15, 1998. Named as defendants are the Company;
Cendant Capital I, a statutory business trust formed by the
Company to participate in the offering of PRIDES securities;
seventeen current and former officers and directors of the
company, CUC and HFS; Ernst & Young; and the underwriters for
the PRIDES offering, Merrill Lynch & Co.; Merrill Lynch, Pierce,
Fenner & Smith Incorporated; and Chase Securities Inc. A
substantially similar action filed in the Superior Court of New
Jersey, entitled First Trust Corp. IRA of Gloria Rosenberg v.
Cendant Corp., et al., No. L-1406-98 (Law Div.), was dismissed
on August 7, 1998, without prejudice to the plaintiff's right to
re-file the case in the United States District Court for the
District of New Jersey.

The allegations in the Amended Consolidated Complaint in the
PRIDES Action are substantially similar to those in the Calpers
Action, and violations of Sections 11, 12(a)(2) and 15 of the
Securities Act and Sections 10(b) and 20(a) of the Exchange Act
are asserted. Damages in unspecified amounts are sought.

On November 11, 1998, the plaintiffs in the PRIDES Action
brought motions for (i) certification of a proposed class of
PRIDES purchasers; (ii) summary judgment against the Company
under Section 11 of the Securities Act; and (iii) an injunction
requiring the Company to place $300 million in a trust account
for the benefit of the PRIDES investors pending final resolution
of their claims. These motions were withdrawn in connection with
a partial settlement of the PRIDES Action.

On April 27, 1998, a purported shareholder derivative action,
Deutch v. Silverman, et al., No. 98-1998 (WHW), was filed in the
District of New Jersey against certain of the Company's current
or former directors and officers; The Bear Stearns Companies,
Inc.; Bear Stearns & Co., Inc.; and, as a nominal party, the
Company. The complaint in the Deutch action, as amended on
December 7, 1998, alleges that certain individual officers and
directors of the Company breached their fiduciary duties by
selling shares of the Company's stock while in possession of
non-public material information concerning the accounting
irregularities. The complaint also alleges various other
breaches of fiduciary duty and gross negligence in connection
with, among other things, the accounting irregularities
discussed above. Damages are sought on behalf of Cendant in
unspecified amounts. The Company and the other defendants have
each moved to dismiss the Deutch Action, which motions are
scheduled to be heard by the Court on June 7, 1999.

Semerenko v. Cendant Corp., et al., Civ. Action No. 98-5384 (D.
N.J.) and P. Schoenfeld Asset Management LLC v. Cendant Corp.,
et al., (Civ. Action No. 98-4734) (D. N.J) (the "ABI Actions")
were initially commenced in October and November of 1998,
respectively, on behalf of a putative class of persons who
purchased securities of American Bankers Insurance Group, Inc.
("ABI") between March 23, 1998 and October 13, 1998. Named as
defendants are the Company, four former CUC officers and
directors, and Ernst & Young. The complaints in the ABI Actions,
as amended on February 8, 1999, assert violations of Sections
10(b), 14(e) and 20(a) of the Exchange Act, and Rule 10b-5
promulgated thereunder, relating to the accounting
irregularities discussed above. Plaintiffs allege, among other
things, that the Company made misrepresentations and omissions
regarding its ability and intent to complete a tender offer and
subsequent merger with ABI. Plaintiffs allege that such
misrepresentations and omissions caused the price of ABI
securities to be artificially inflated. Plaintiffs seek, among
other things, unspecified compensatory damages.

The Company filed a motion to dismiss the ABI Actions on March
10, 1999. The other defendants had also moved to dismiss. The
United States District Court for the District of New Jersey
found that the class action failed to state a claim upon which
relief could be granted and, accordingly, dismissed the class
action by order dated April 30, 1999.

Kennilworth Partners, L.P., et al. v. Cendant Corp., et al., 98
Civ. 8939 (DC) (the "Kennilworth Action") was filed on December
18, 1998 in the Southern District of New York on behalf of three
investment companies. Named as defendants are the Company;
thirty of its present and former officers and directors; HFS;
and Ernst & Young. The complaint in the Kennilworth Action, as
amended on January 26, 1999, alleges that the plaintiffs
purchased convertible notes issued by HFS pursuant to an
indenture dated February 28, 1996 and were damaged because they
converted their notes into shares of common stock in the Company
in the weeks prior to the Company's April 15, 1998 announcement.
The amended complaint also alleges that plaintiffs were damaged
by purchasing in March 1998 additional notes issued by the
Company, whose market value declined as a result of the April
15, 1998 announcement and the subsequent events described above.
The amended complaint asserts violations of Sections 11, 12 and
15 of the Securities Act and Sections 10(b) and 20 of the
Exchange Act; a common-law breach of contract claim is also
asserted. Damages are sought in an amount estimated to be in
excess of $13.6 million. On February 4, 1999, the Court ordered
the Kennilworth Action transferred to the District of New
Jersey, with the consent of the plaintiff and the Company. On
April 29, 1999, the Company moved to dismiss the Securities Act
claims brought against it, which motion is scheduled to be heard
by the Court on June 7, 1999.

Another action, entitled Corwin v. Silverman, et al., No. 16347-
NC (the "Corwin Action"), was filed on April 29, 1998 in the
Court of Chancery for the State of Delaware. The Corwin Action
is purportedly brought derivatively, on behalf of the Company,
and as a class action, on behalf of all shareholders of HFS who
exchanged their HFS shares for CUC shares in connection with the
Merger. The Corwin Action names as defendants HFS and twenty-
eight individuals who are or were directors of the Company and
HFS. The complaint in the Corwin Action, as amended on July 28,
1998, alleges that HFS and its directors breached their
fiduciary duties of loyalty, good faith, care and candor in
connection with the Cendant Merger, in that they failed to
properly investigate the operations and financial statements of
CUC before approving the Merger at an allegedly inadequate
price. The amended complaint also alleges that the Company's
directors breached their fiduciary duties by entering into an
employment agreement with our former Chairman, Walter A. Forbes,
in connection with the Merger that purportedly amounted to
corporate waste. The Corwin Action seeks, among other things,
rescission of the Merger and compensation for all losses and
damages allegedly suffered in connection therewith. On October
7, 1998, Cendant filed a motion to dismiss the Corwin Action or,
in the alternative, for a stay of the Corwin Action pending
determination of the Calpers Action and the Deutch Action. The
plaintiffs in the Corwin Action have moved for leave to file a
second amended complaint, which motion Cendant has opposed. A
decision by the Court is pending.

Kevlin, et al. v. Cendant Corp., No. C-98-12602-B (the "Kevlin
Action"), was commenced in December 1998 in the County Court of
Dallas County, Texas. According to the complaint, plaintiffs are
former shareholders of an entity known as Kevlin Services, Inc.
In 1996, a subsidiary of Cendant acquired all of the assets of
the Kevlin Services, Inc. in exchange for approximately
1,155,733 shares of common stock of CUC International, Inc.
According to the plaintiffs' complaint, plaintiffs were to
receive CUC shares worth $26,370,000 and instead received shares
worth substantially less than that amount. Plaintiffs have
asserted claims against Cendant, its subsidiary and Ernst &
Young LLP for fraud, negligent misrepresentation, breach of duty
of good faith and fair dealing, breach of contract, conspiracy,
negligence and gross negligence. Plaintiffs seek compensatory
and exemplary damages in unspecified amounts. Cendant and its
subsidiary has filed a general denial to the allegations in the
complaint.

On March 17, 1999, the company entered into a stipulation of
settlement with plaintiff's counsel representing the class of
holders of our PRIDES securities who purchased their securities
on or prior to April 15, 1998 ("eligible persons") to settle
their class action lawsuit against us. Under the stipulation of
settlement, eligible persons will receive a new security -- a
Right -- for each PRIDES security held on April 15, 1998.
Current holders of PRIDES will not receive any Rights (unless
they also held PRIDES on April 15, 1998). We had originally
announced a preliminary agreement in principle to settle such
lawsuit on January 7, 1999. The final agreement maintained the
basic structure and accounting treatment as the preliminary
agreement.

Based on the settlement agreement, we recorded an after tax
charge of approximately $228 million, or $0.26 per share ($351
million pre-tax), in the fourth quarter of 1998 associated with
the settlement agreement in principle to settle the PRIDES
securities class action. We recorded an increase in additional
paid-in capital of $350 million offset by a decrease in retained
earnings of $228 million resulting in a net increase in
stockholders' equity of $122 million as a result of the
prospective issuance of the Rights. As a result, the settlement
should not reduce net book value. In addition the settlement is
not expected to reduce 1999 earnings per share unless our common
stock price materially appreciates.

At any time during the life of the Rights, holders may (a) sell
them or (b) exercise them by delivering to us three Rights
together with two PRIDES in exchange for two new PRIDES (the
"New PRIDES"). The terms of the New PRIDES will be the same as
the currently outstanding PRIDES, except that the conversion
rate will be revised so that, at the time the Rights are
distributed, each of the New PRIDES will have a value equal to
$17.57 more than each original PRIDES, based upon a generally
accepted valuation model. Based upon the closing price per share
of $16.6875 of our Common Stock on March 17, 1999, the effect of
the issuance of the New PRIDES will be to distribute
approximately 19 million more shares of our common stock when
the mandatory purchase of our common stock associated with the
PRIDES occurs in February of 2001. This represents approximately
2% more shares of common stock than are currently outstanding.

The settlement agreement also requires the company to offer to
sell 4 million additional PRIDES (having identical terms to
currently outstanding PRIDES) (the "Additional PRIDES") at
"theoretical value" to holders of Rights for cash. Theoretical
value will be based on the same valuation model utilized to set
the conversion rate of the New PRIDES. Based on that valuation
model, the currently outstanding PRIDES have a theoretical value
of $28.07 based on the closing price for our common stock on
March 17, 1999, which is less than their current trading price.
The offering of Additional PRIDES will be made only pursuant to
a prospectus filed with the SEC. We currently expect to use the
proceeds of such an offering to repurchase our common stock and
for other general corporate purposes. The arrangement to offer
Additional PRIDES is designed to enhance the trading value of
the Rights by removing up to 6 million Rights from circulation
via exchanges associated with the offering and to enhance the
open market liquidity of New PRIDES by creating 4 million New
PRIDES via exchanges associated with the offering. If holders of
Rights do not acquire all such PRIDES, they will be offered to
the public.

Under the settlement agreement, the company has agreed to file a
shelf registration statement for an additional 15 million
PRIDES, which could be issued by us at any time for cash.
However, during the last 30 days prior to the expiration of the
Rights in February 2001, we will be required to make these
additional PRIDES available to holders of Rights at a price in
cash equal to 105% of the theoretical value of the additional
PRIDES as of a specified date. The PRIDES, if issued, would have
the same terms as the currently outstanding PRIDES and could be
used to exercise Rights.

The Rights will be distributed following final court approval of
the settlement and after the effectiveness of the registration
statement filed with the SEC covering the New PRIDES. It is
presently expected that if the court approves the settlement and
such conditions are fulfilled, the Rights will be distributed in
August or September 1999.


CORRECTIONS CORP.: Cauley Firm Files Complaint in Tennessee
-----------------------------------------------------------
A securities fraud lawsuit has been filed by the Law Offices of
Steven E. Cauley, P.A. in the Chancery Court of Davidson County
in Nashville, Tennessee on behalf of all purchasers of the
common stock and other securities of Corrections Corporation of
America (NYSE: PZN) (formerly NYSE: CCA) between April 24, 1997
and April 20, 1998. The lawsuit alleges that Corrections and
certain of its officers and directors issued false and
misleading statements regarding Corrections, which caused the
price of Corrections' common stock and securities to trade at
artificially inflated prices.

The lawsuit alleges that the defendants stated that the
formation of CCA Prison Realty Trust would be "accretive" to
Corrections's near-term earnings, that Corrections would benefit
by that transaction and that Corrections would be able to
continue to grow its earnings at 40-50 percent annually. After
these statements inflated Corrections's stock price, the
defendants sold $19.1 million in Corrections common stock, at
prices ranging from $35-$44 per share. However, on April 20,
1998, the defendants announced that Corrections would merge into
CCA Prison Realty Trust, thereby becoming PZN, and as a result,
that Corrections's earnings would only grow at 17-25 percent.
Upon this revelation, Corrections stock and securities collapsed
in price, and currently trade at approximately $15 per share.
Analysts stated: "(a)nalysts thought Corrections Corp. was
growing at 50 percent, and now growth is diluted to 25 percent,"
and Corrections was "not a growth story anymore."

For more information, contact Steven E. Cauley, Scott E.
Poynter, or Gina M. Cothern at CauleyPA@aol.com or 888-551-9944.


CSB FINANCIAL: Reinhardt & Anderson File Complaint in Delaware
--------------------------------------------------------------
A derivative and class action has been commenced in the Court of
Chancery in the State of Delaware on behalf of all stockholders
of CSB Financial Group (Nasdaq:CSBF) common stock. The complaint
charges the defendants with breach of fiduciary alleging that
the defendants failed to act in good faith in maximizing
stockholder value in the sale of CSB and neglecting and
summarily rejecting an offer from an acquirer.

The complaint alleges that in March of 1999, the defendant
directors received a written acquisition offer from a third-
party at a price of $14.75 per share to acquire the shares of
CSB. The offer described in the complaint represented a premium
of approximately 64% over CSB's closing price the preceding
trading day and a premium above any price CSB's stock had ever
traded. Despite the offer and the premium its stockholders would
reap, the defendants are alleged to have concealed the offer
from the stockholders and to date have failed to disclose the
offer.

The complaint charges that the defendants failed to act in good
faith in maximizing stockholder value in the sale of CSB and
neglecting and summarily rejecting the offer from the acquirer
without taking the time or effort to discuss it with an
investment banker or to give informed consideration or any
negotiation despite the fact that the offer was a cash offer, a
friendly offer and was at a 64% premium.

To learn more, contact Randall H. Steinmeyer at 888-253-5139 or
write to r.steinmeyer@ralawfirm.com via email.


HCB BANCSHARES: Intends Vigorous Contest of Texas Allegations
-------------------------------------------------------------
On May 13, 1999, HCB Bancshares, Inc. announced that a complaint
against it has been filed in the United States District Court
for the Eastern District of Texas, Texarkana Division. Also
named as defendants were Vida H. Lampkin, the Chairman of the
Board, President and Chief Executive Officer of the Company,
Cameron D. McKeel, the Executive Vice President and a Director
of the Company, and Marcie Ainsworth, the former Vice President
and Chief Financial Officer of the Company. The plaintiff, James
E. Keever, filed the case on April 28, 1999 as a class action on
behalf of himself and all other persons who purchased or
otherwise acquired the Company's common stock between September
28, 1997 and February 2, 1999.

The complaint alleges that the defendants violated Sections
10(b) and 20(a) of the Securities Exchange Act of 1934, as
amended, and Rule 10b-5 thereunder, and that the defendants
defrauded the plaintiff and the other class members, in
connection with various public statements and reports
disseminated by the defendants with respect to the Company
during the period described above. The complaint alleges that
these acts and statements artificially inflated the market price
of the Company's common stock, thereby causing the plaintiff and
other class members to purchase the Company's common stock at
inflated prices. The plaintiff seeks damages suffered in
connection with the purchase of Company common stock during the
specified period by the plaintiff and other class members. The
plaintiff also asked the court to determine that the suit is
properly maintainable as a class action pursuant to Rule 23 of
the Federal Rules of Civil Procedure and to certify the
plaintiff as the class representative and his counsel as class
counsel.

The Company is reviewing the complaint and intends to contest
the allegations vigorously.


HITSGALORE.COM: Stull Stull Files Complaint After Disclosure
------------------------------------------------------------
Stull, Stull & Brody filed a securities fraud class action
complaint against Hitsgalore.com Inc. (OTC:HITT) on behalf of
shareholders who purchased or otherwise acquired shares of HITT
between February 17, 1999 and May 13, 1999.

The complaint names as defendants Hitsgalore and its CEO and
president, and alleges that the company knew and failed to
disclose that its founder, Dorian Reed, along with two other
individuals, had been ordered to pay over $600,000 to 100
customers for "false claims made by Internet Business
Broadcasting, a failed online advertising company they worked
for." As a result of this disclosure, the company's stock price,
which had recently skyrocketed from $1.88 a share to a high of
$20.69, tumbled to $9.38 a share, for a loss of over 50% of its
value in one day. Recently, Reed tendered his resignation as a
director of the company.

To learn more, contact Patrice L. Bishop at 888-388-4605 or at
secfraud@secfraud.com via email.


MICROSOFT CORP.: Seeks Review of Appeal Granting Temps Options
--------------------------------------------------------------
The Roanoke Times & World News reported that Microsoft Corp.
will ask an appeals court in San Francisco to review a ruling by
a panel of appellate judges that expanded the number of
temporary workers who can participate in a class-action lawsuit
against the software giant. The lawsuit seeks millions of
dollars in gains from plans that offer workers - but not temps -
a 15 percent discount on stock purchases.


NATIONWIDE LIFE: Updates Contract Owners and Investors Complaint
----------------------------------------------------------------
In November 1997, two plaintiffs, one who was the owner of a
variable life insurance contract and the other who was the owner
of a variable annuity contract, commenced a lawsuit in a federal
court in Texas against Nationwide Life and the American Century
group of defendants (Robert Young and David D. Distad v.
Nationwide Life Insurance Company et al.). In this lawsuit,
plaintiffs sought to represent a class of variable life
insurance contract owners and variable annuity contract owners
whom they claim were allegedly misled when purchasing these
variable contracts into believing that the performance of their
underlying mutual fund option managed by American Century, whose
shares may only be purchased by insurance companies, would track
the performance of a mutual fund, also managed by American
Century, whose shares are publicly traded. The amended complaint
seeks unspecified compensatory and punitive damages.

On April 27, 1998, the district court denied, in part, and
granted, in part, motions to dismiss the complaint filed by
Nationwide Life and American Century. The remaining claims
against Nationwide Life allege securities fraud, common law
fraud, civil conspiracy, and breach of contract. On December 2,
1998, the district court issued an order denying plaintiffs'
motion for class certification. On December 10, 1998, the
district court stayed the lawsuit pending plaintiffs' petition
to the federal appeals court for interlocutory review of the
order denying class certification. On March 26, 1999, the
appeals court denied plaintiffs' petition for interlocutory
review of the order. On April 28, 1999, the court denied
plaintiffs' motion for reconsideration of the denial of
interlocutory review.

Nationwide Life intends to defend the case vigorously.

On October 29, 1998, the Company was named in a lawsuit filed in
Ohio state court related to the sale of deferred annuity
products for use as investments in tax-deferred contributory
retirement plans (Mercedes Castillo v. Nationwide Financial
Services, Inc., Nationwide Life Insurance Company and Nationwide
Life and Annuity Insurance Company). The plaintiff in such
lawsuit seeks to represent a national class of the Company's
customers and seeks unspecified compensatory and punitive
damages.

The Company is currently evaluating this lawsuit, which has not
been certified as a class. The Company intends to defend this
lawsuit vigorously.


PHOENIX LEASING: Investors' Complaints Proceed in Marin County
--------------------------------------------------------------
On October 28, 1997, a Class Action Complaint was filed against
Phoenix Leasing Incorporated, Phoenix Leasing Associates, II and
III LP., Phoenix Securities Inc. and Phoenix American
Incorporated (the "Companies") in California Superior Court for
the County of Sacramento by eleven individuals on behalf of
investors in Phoenix Leasing Cash Distribution Funds I through V
(the "Partnerships"). The Companies were served with the
Complaint on December 9, 1997. The Complaint sought declaratory
and other relief including accounting, receivership, imposition
of a constructive trust and judicial dissolution and winding up
of the Partnerships, and damages based on fraud, breach of
fiduciary duty and breach of contract by the Companies as
general partners of the Partnerships.

Plaintiffs severed one cause of action from the Complaint, a
claim related to the marketing and sale of CDF V, and
transferred it to Marin County Superior Court (the "Marin
Action"). Plaintiffs then dismissed the remaining claims in
Sacramento Superior Court and refiled them in a separate lawsuit
making similar allegations (the "Sacramento Action").

Plaintiffs have amended the Marin Action twice. Defendants have
not yet answered the complaint and may file a demurrer to
dismiss the claims. Discovery has not commenced. The Companies
intend to vigorously defend the Complaint.

In February 1999, plaintiffs requested a transfer of the
Sacramento Action to Marin County. The Court granted that
request, and the case was transferred in March 1999. Defendants
have not yet responded to the Complaint. Discovery has not
commenced. The Companies intend to vigorously defend the
Complaint.

During the three months ended March 31, 1999, the Partnership
recorded legal expenses of approximately $25,000 in connection
with the above litigation as indemnification to the General
Partner.


PSS WORLD: Reinhardt & Anderson File Complaint in Florida
---------------------------------------------------------
Reinhardt & Anderson filed a class action lawsuit alleging
violations of the federal securities laws in the United States
District Court for the Middle District of Florida, Jacksonville
Division, by a shareholder against PSS World Medical Inc.
(Nasdaq:PSSI) , Patrick C. Kelly and David A. Smith. The action
is brought on behalf persons who purchased the common stock of
PSSI during the period from June 16, 1998 through March 10,
1999.

The Complaint in this action alleges that purchasers of PSSI
common stock were damaged by reason of the defendants' conduct
in violation of Sections 10(b) and 20(a) of the Exchange Act.
Specifically, the Complaint alleges that the company, under the
direction of the individual defendants, issued financial
statements that overstated revenues from acquired entities by
improperly using the pooling of interest method of accounting.
The complaint further alleges that this resulted in overstated
earnings.

To learn more, call Randall H. Steinmeyer at 888-253-5139 or
651-227-9990 or write A.hogan@ralawfirm.com via email.


SEARS ROEBUCK: Agrees to Pay to Settle Child Labor Allegations
--------------------------------------------------------------
The Roanoke Times & World News reports that Sears, Roebuck & Co.
has agreed to pay a $325,000 penalty to settle allegations it
violated child labor laws by letting teen-agers operate heavy
machinery or work too many hours. A U.S. Labor Department
investigation found 227 children working at Sears in violation
of child labor law, according to department spokeswoman Susan
King. Sears also agreed to audit its more than 800 major stores
for problems each year. According to The Roanoke Times & World
News, Sears did not admit any wrongdoing.


TEXACO INC: Royalty and Severance Tax Claims Settled in Texas
-------------------------------------------------------------
On April 7, 1999, the federal court in Texas approved a
settlement agreement with most of the plaintiffs in the
seventeen purported class actions pending in Texas and six other
states. The plaintiffs alleged that Texaco and approximately
fifty other oil companies underpaid royalties and severance
taxes to them. Similar claims by the federal and various state
governments remain unresolved.


TOBACCO LITIGATION: Supreme Court Declines PA Smokers' Class
------------------------------------------------------------
The Associated Press reports that the Supreme Court refused to
revive a lawsuit against the tobacco industry by six smokers
from Pennsylvania. The court, without comment, turned away the
smokers' argument that their case should be certified as a class
action on behalf of all smokers in the state. A federal judge
threw out the case and an appeals court upheld the dismissal.

According to AP, the 1996 lawsuit had sought to represent the
claims of about 1 million Pennsylvania smokers who began
lighting up as teen-agers. Instead of asking for money, the
lawsuit demanded that the tobacco companies provide medical
monitoring for the smokers.

Although U.S. District Judge Clarence Newcomer certified the
case as a class action in August 1997, AP reports that just
weeks before the trial was to begin the following October, the
judge decertified the class action on grounds there were too
many individual issues. He also granted judgment to the tobacco
companies against five of the plaintiffs, saying they missed the
deadline to sue because they smoked for years despite knowledge
of the danger. AP wrote that the judge also barred the claims of
the sixth, younger plaintiff on grounds she would not need any
more medical monitoring than a non-smoker. The 3rd U.S. Circuit
Court of Appeals upheld the ruling last November.

In the current appeal, the smokers' lawyers said the case should
be made a class action. They said the six smokers had legal
standing to appeal the denial of class certification even though
they were dismissed from the case. The Associated Press reported
that the lawyers said a seventh plaintiff had not been dismissed
from the case and therefore had legal standing to appeal.
However, a 1997 ruling by Newcomer said the smokers' group had
decided to withdraw that man as a plaintiff. According to AP,
the case is Barnes vs. American Tobacco Co., 98-1489.


TOWNE BANCORP: Account Frozen, Suing Casualty Insurer for Breach
----------------------------------------------------------------
Two class action lawsuits, filed in the U.S. District Court for
the Northern District of Ohio, Western Division, exist against
TOWNE BANCORP INC, its directors, its corporate stock transfer
agent, and (in one suit) its Directors' and Officers' insurer.
The suits allege violation of various Federal and State laws in
connection with the Company's offering of common stock. The
suits request unspecified damages and costs.

In one of the class action lawsuits, the presiding judge ordered
the freezing of the Company's bank account, with $125,000
allocated to Huntington Trust Co., N.A. (a defendant in the
suit), on an indicated claim. After obtaining court approval,
monies from the frozen account can be withdrawn to pay current
operating expenses.

Also in connection with one of the class action lawsuits, the
Company filed a cross claim against its casualty insurance
carries for breach of contract for denying the voiding
directors' and officers' liability insurance and tail coverage.
The Company seeks reinstatement of coverage, and compensatory
and punitive damages of $100,000 and $10,000,000, respectively.
The insurance carrier refunded the Company approximately
$100,000 of premiums paid to it by the Company, however, the
Company returned the money to the insurance carrier and intends
to vigorously pursue the cross claim.

The Company has agreed to indemnify its directors and officers
for costs assumed by them in connection with such lawsuits. The
Company intends to vigorously defend itself in connection with
these lawsuits.


WELFARE BENEFITS: Supreme Court Prohibits CA Residency Period
-------------------------------------------------------------
The United Press International reports that the US Supreme Court
decided a California law limiting welfare payments for new
residents is unconstitutional. The challenge to the California
welfare law came in a class action suit by two women identified
by pseudonyms.

According to UPI, "Brenda Roe" and her husband moved from
Oklahoma, where welfare recipients get 307 dollars a month to
Long Beach, California, where recipients receive 565 dollars a
month. "Anna Doe" moved from Washington, D-C, where she received
330 dollars a month to Los Angeles, where the payment for
pregnant mothers is 456 dollars a month.

The UPI story explained that California wanted to keep people
from coming to the state just to enjoy the higher welfare
payments. Its law limited those payments to the amount people
received in their former states - until they'd lived in
California for a year.

By a 7-2 vote, the justices affirmed a lower-court ruling that
says the welfare regulation unconstitutionally limits travel
from state to state. UPI reports that Justice David Souter wrote
the opinion for the court majority and cited the 14th Amendment
saying that US citizens "whether rich or poor, have the right to
choose to be citizens of the state wherein they reside." He
added "the states, however, do not have the right to select
their citizens." He continued: "The 14th Amendment, like the
Constitution itself, was, as (the late) Justice (Benjamin
Nathan) Cardozo put it, 'framed upon the theory that the peoples
of the several states must sink or swim together, and that in
the long run prosperity and salvation are in the union and not
division.'"

According to the United Press International, Chief Justice
William Rehnquist and Justice Clarence Thomas dissented
separately, both saying the majority overreached itself.



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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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