CAR_Public/990531.MBX              C L A S S   A C T I O N   R E P O R T E R

                Monday, May 31, 1999, Vol. 1, No. 82

                            Headlines

ADVANCED LIGHTING: Finkelstein & Krinsk File Complaint in Ohio
BEAR STEARNS: Firm Accused of Overcharging County for Securities
CANDIE'S INC.: Milberg Weiss Files Complaint in New York
CELLSTAR CORPORATION: Murphy Firm Files Complaint in Florida
CENDANT CORP.: Judge Denies Sirota Penny, Peseta, Sou, Farthing

CORNICHE GROUP: 819,818 Shares of Series A Still Outstanding
DELGRATIA MINING: Settles Nevada and British Columbia Litigation
FIRST ALLIANCE: Milberg Weiss Files Complaint in California
HOLOCAUST SURVIVORS: Swiss Banks Claims Settlement Notice Begins
MAXIM GROUP: Cohen Milstein Files Complaint in Georgia

PATRIOT AMERICAN: Cotchett Pitre Files Complaint in California
PRISON REALTY: Cauley Firm Files Complaint in Tennessee
SOFTWARE AG: Stull Stull Files Complaint in Virginia
SOUTHTRUST NATIONAL: ICM Investors Blame Bank Manager's Advice
STEPHAN CO.: Abbey Gardy Files Complaint in Florida

* Defense Lawyer Criticizes Medical Monitoring Mass Tort Cases


                            *********


ADVANCED LIGHTING: Finkelstein & Krinsk File Complaint in Ohio
--------------------------------------------------------------
Advanced Lighting Technologies (Nasdaq:ADLT) was accused in a
class action lawsuit of violating the federal securities laws by
misrepresenting the Company's financial situation, condition and
rate of expansion. When Advanced Lighting Technologies ("ALT")
revealed its true finances in September of 1998 the share price
plummeted to $4.50 per share from over $29.

According to the complaint, filed by Finkelstein & Krinsk, ALT
and its chief executive officer painted an excessively positive
picture of the Company to public investors by deliberately
withholding facts demonstrating that ALT was not growing by 40
percent per year as represented and that ALT's earnings and
revenues had been computed in violation of GAAP accounting
requirements concerning revenue recognition. ALT was ultimately
forced to restate its results.

The complaint was on behalf of investors from December 30, 1997,
through September 30, 1998. The complaint particularizes how ALT
and management violated the Securities Exchange Act of 1934 and
specifies the company's false statements and omitted material
facts. It was filed in the United States District Court for the
Northern District of Ohio.

"ALT executives knew they were a small player in a shrinking
market but refused to own up to the facts," stated Jeffrey
Krinsk of Finkelstein & Krinsk.

To learn more, contact Arthur L. Shingler, Esq., at 877-493-5366
or write fk@class-action-law.com via email.


BEAR STEARNS: Firm Accused of Overcharging County for Securities
----------------------------------------------------------------
The Bond Buyer reports that in the third yield-burning civil
suit to surface in the Midwest, Bear, Stearns & Co. and Ernst &
Young are accused of overcharging Cook County, Ill., $249,024 on
a $159.8 million general obligation refunding deal in 1992. The
lawsuit was filed by a group of taxpayers on their own and the
county's behalf in federal court late Thursday. The 29-page
complaint seeks class-action status, according to Robert J.
Stein of the Chicago law firm Krislov & Associates, which
represents the taxpayers.

The two firms are accused of overcharging Cook for Treasury
securities purchased for escrow accounts established in
conjunction with the advance refunding. The suit claims the
underwriter intentionally overpriced the securities, and that
the accounting firm failed to detect the markups in its
analysis. Several sources also told The Bond Buyer that
representatives of the Securities and Exchange Commission have
contacted various officials who worked on the deal or are
involved in the lawsuit.

Bear Stearns was lead underwriter on the sale, which was
marketed through a syndicate with 15 other firms. The accounting
firm of Ernst & Young was also named because it reviewed and
signed off on arbitrage calculations.

A spokeswoman for Bear Stearns told The Bond Buyer the firm has
not been served yet, and that it has no comment on the
allegations. Ernst & Young spokesman Don Howarth said, "I can't
see how there can be a legal basis for this action."

The lead managers and accounting firms were similarly named in
the two previous lawsuits filed by Krislov & Associates earlier
this year. Those complaints were both related to Chicago
refundings.

Representatives of the county and the firms did not have an
immediate comment. Cook's chief financial officer Thomas Glaser,
in a previous interview, confirmed that the county had responded
to Freedom of Information Act requests from the law firm.

The deal cited in Thursday's suit was completed under a previous
county administration. Glaser was hired by the current county
board president, John Stroger, in 1995 and the county now makes
a practice of purchasing State and Local Government Series
securities rather than open-market Treasuries to refund its
outstanding debt.

The lawsuits are the result of an investigation launched by
Krislov's firm two years ago into Illinois refundings sold from
1992-1995. Stein said about 100 transactions are still under
review. The firm is using an expert in the public finance field
and in municipal bond pricing to conduct the review, but Stein
refused to name the person.

In the first two cases, Everen Securities Inc. and Prudential
Securities Inc. were accused of overcharging Chicago more than
$700,000.

Prudential was lead manager on a 1993 $232.8 million advance
refunding for Chicago. Altschuler, Melvoin and Glasser was the
accountant. Everen, which at the time was known as Kemper
Securities Group Inc., was the senior manager on a 1992 $48
million refunding deal. Deloitte & Touche provided accounting
services.

The defendants have filed motions seeking to dismiss the
complaints and a hearing is scheduled in July on those requests,
Stein said. The firms contend that the cases have no merit, in
part because the statute of limitations, as applied to federal
and state securities and investment advisory laws, has expired.
(The Bond Buyer; May 28, 1999)


CANDIE'S INC.: Milberg Weiss Files Complaint in New York
--------------------------------------------------------
Milberg Weiss Bershad Hynes & Lerach: filed a class action
lawsuit in the United States District Court for the Southern
District of New York on behalf of all persons who purchased the
common stock of Candie's, Inc. (Nasdaq: CAND) between May 28,
1997, and May 12, 1999.

The complaint charges Candie's, and certain of its officers and
directors with violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 as well as Rule 10b-5
promulgated thereunder. The complaint alleges that defendants
issued a series of materially false and misleading statements
concerning the Company's financial condition and results of
operations. Because of the issuance of a series of false and
misleading statements the price of Candie's common stock was
artificially inflated.

To learn more, call Steven G. Schulman or Samuel Rudman at 800-
320-5081 or write endfraud@mwbhlny.com via email.


CELLSTAR CORPORATION: Murphy Firm Files Complaint in Florida
------------------------------------------------------------
The Law Offices of Bruce G. Murphy. Notice filed a class action
lawsuit in the United States District Court for the Southern
District of Florida on behalf of all persons who purchased the
common stock of CellStar Corporation (Nasdaq: CLST), between
March 19, 1998 and September 21, 1999.

The complaint alleges that defendants issued a series of
materially false and misleading statements concerning the
Company's financial condition and results of operations. Because
of the issuance of a series of false and misleading statements
the price of CellStar common stock was artificially inflated.

To learn more, contact, Bruce G. Murphy at 561-231-4202 or write
brucemurphy@webtv.net via email.


CENDANT CORP.: Judge Denies Sirota Penny, Peseta, Sou, Farthing
---------------------------------------------------------------
It looks like U.S. District Judge William Walls wasn't kidding
when he vowed to keep a lid on plaintiffs' lawyers' compensation
in the Cendant Corp. case, America's largest current class-
action securities fraud litigation. The judge said at hearing in
Newark on Tuesday that New York's Kirby, McInerney & Squire
overreached when it requested an award worth 10 percent of a
$340 million settlement the firm arranged as lead counsel for
the smaller of two classes of shareholders suing Cendant.

Under the settlement, which Walls approved at Tuesday's hearing,
Cendant would repay 100 cents on the dollar, in the form of
stock, to a class of victims of Cendant's dramatic plunge last
year. "I'm appreciative of what you've done and I will not snarl
at you with regard to the fee," Walls told Roger Kirby, name
partner of the plaintiffs' firm. "But you're not getting what
you requested." Walls put off a decision on how much he will
grant.

The judge did snarl at another plaintiffs' lawyer, Howard Sirota
of New York's Sirota & Sirota. Though Sirota wasn't on the lead
counsel's team, he sought to put in a claim for a fee award on
the novel ground that he was, in effect, the co-author of Walls'
strategy for keeping lawyers' compensation within the bounds of
reason. He also sought a bonus for pointing out the flaws in
Kirby's fee request. The judge reacted angrily to both
rationale's calling them "an insult" and "patently frivolous."
Walls then fined Sirota $1,000 for violating a confidentiality
order in the case. Walls' reaction to Sirota's fee request was
clear in a number of languages. "You're not getting one penny,
you're not getting one peseta, you're not getting one sou,
you're not getting one farthing, you're not getting one ruble,
you're not getting one centavo," he said.

It's no surprise, of course, given the nature of class action
litigation, that fee issues dominated the proceeding, the
seeming main purpose of which was to weigh the merits of the
substantive settlement between Cendant and its allegedly wronged
investors. And the requests by Kirby and Sirota show that judges
like Walls, ennobled by the mandate of the Private Securities
Litigation Reform Act of 1995 to be creative in keeping down
fees, are being tested by lawyers with equally creative
arguments to keep the fees flowing.

In the litigation prompted by Cendant's admission of irregular
accounting procedures and a subsequent loss of billions of
dollars in investors' holdings last April, Walls decided in
September to hold an auction to pick the lead plaintiff's
counsel for the two classes of plaintiff stockholders. Kirby,
McInerney won the bidding to represent the smaller class, the
holders of 29.1 million shares of a Merrill Lynch- sponsored
derivative called PRIDES. Under the March 18 settlement arranged
by Kirby, McInerney and Cendant counsel, led by Samuel Kadet of
New York's Skadden, Arps, Slate, Meagher & Flom, PRIDES
shareholders as of April 15, 1998, will receive "rights" to a
new Cendant security with an assumed value of $11.71, roughly
equal to the value of PRIDES before the big plunge. Under the
proposed settlement, Kirby, McInerney's fee would be paid in
rights from litigants who fail to take advantage of the
settlement or opt out of it. The firm also would receive
millions of dollars in the form of rights that Merrill Lynch
can't exercise because it is a defendant in the case. Only if
the rights in those three categories don't add up to the $34
million sought by the firm would Kirby, McInerney's fee start
cutting into the litigants' recovery.

How that compares with the firm's bid to obtain the lead counsel
job can't be determined by outsiders, because the bids remain
secret. Walls doesn't want Cendant's negotiators in the main
case involving the common stock to know what their adversaries'
compensation could be. Kirby, McInerney told Walls that under
its fee proposal, the effect on the shareholders would be equal
to or less than the effect under the bid. Walls signaled no
decision to alter Kirby, McInerney's plan to collect its fee in
the form of unclaimed rights; it was the 10 percent sum he
didn't like, particularly in light of the relative ease of
obtaining a settlement and the advent of the auction method as
"the in thing."

"You see, this is a new day, isn't it," Walls told Kirby. "We
have to keep in mind, Mr. Kirby, that whether it be auction or
anything else, we, that is 'we' meaning the courts, are trying
to implement the purpose of the Private Security Litigation
Reform Act," he added. Walls said that when Kirby accepted the
job on the basis of his Oct. 7 commitment to the bid process,
"you didn't say to me well, this is only, you know, for a fairly
good job. If I go into high gear or I go into overdrive, then we
expect more, did you?" At the time of the auction Walls said he
also would base his fee on other considerations, including such
traditional ones as the so-called lodestar method based on hours
and rates multiplied for degree of difficulty and brilliance.
Walls said he would decide the amount of the fee after Kirby
submits information on rates and hours.

Whatever the award, Kirby is sure to come away with millions of
dollars. Sirota, the other plaintiffs' lawyer before Walls on
Tuesday, got nothing. To be accurate, he got $1,000 less than
nothing. Sirota was hit with the $1,000 sanction after Walls
found that the lawyer violated the rule against disclosing last
fall's bids in the lead counsel auction. At issue was what
Sirota told New York Times reporter Diana Henriques, the author
of a May 14 article about fees in the case. The article included
Sirota's view that Kirby's fee request would, in fact, be higher
than the bid Kirby agreed to last fall. By Walls' reckoning,
that statement breached the secrecy of the bid proposals. At a
hearing on Wednesday, Sirota argued that his assertion in
pleadings that Kirby's proposal was higher than the bid was no
more a breach of secrecy than Kirby's claim in the settlement
that the fee request was lower than the bid. Sirota insisted
that all the comments attributed to him in the Times article
were from public documents filed with the court, though he did
acknowledge he pointed out the pleadings to the reporter. (In a
phone interview on Thursday, Henriques confirmed Sirota's
statement that the quotes attributed to him were from his
pleadings.)

But Walls brushed aside Sirota's defenses by suggesting that it
was OK for Kirby to bury his discussion of the bidding in a long
settlement proposal but not OK for Sirota to put the discussion
in pleadings that become fodder for news articles. "I don't
believe in litigating through the newspaper," Walls declared.
Sirota says he will appeal the sanction, but Walls refused to
stay the collection in the meantime.

Walls was just as sharp in his rejection of Sirota's notion that
he deserved a piece of the lead counsel's fee for helping keep
down the class' cost of litigation. When Walls first got the
case last year, Sirota sought to disqualify other counsel on
grounds that their campaign contributions to politicians in
charge of pension plans with large Cendant holdings created a
conflict of interest. He also offered to do the work cheaper
than any other firm, if given the opportunity, and in recent
pleadings has argued that he deserves a fee for being the first
firm to suggest the competitive bidding system. But Walls said
he had been thinking of the ways of keeping fees reasonable
before Sirota came upon the scene. "My last year's clerk and I
actually had brooded this idea of an auction long before you
came down the pike," the judge said.

And Walls noted that in a class action case in San Francisco in
1993, U.S. District Judge Vaughn Walker pioneered the bidding
system. "Vaughn Walker is a friend of mine and you are not
Vaughn Walker," Walls said. "Why do you insult the intelligence
of his and the other court thinking that we depend upon you to
know, to think and to be creative?" he asked. At the outset of
Tuesday's hearing, Walls said he toyed with the idea of closing
the proceedings because the details of the auction remain under
seal. Cendant and the lead counsel picked by bid to represent
the other class -- common stock holders -- are still in
litigation over whether fraud made the stock price nosedive. If
he closed the hearing, Walls said wryly, "the next thing I know
the press will be running to the circuit alleging First
Amendment rights and I will have to tell them go fly a kite and
we don't want to do that." (New Jersey Law Journal; May 24,
1999)


CORNICHE GROUP: 819,818 Shares of Series A Still Outstanding
------------------------------------------------------------
In connection with the settlement of the securities class action
litigation in 1994, CORNICHE GROUP INC issued 1,000,000 shares
of Series A $0.07 Convertible Preferred Stock (the "Series A
Preferred Stock") with an aggregate value of $1,000,000.

Until November 30, 1999, the Series A Preferred Stock is
callable by the Company at a price of $1.04 per share, plus
accrued and unpaid dividends, and thereafter at a price of $1.05
per share, plus accrued and unpaid dividends. In addition, if
the closing price of the Company's common stock exceeds $13.80
per share for a period of 20 consecutive trading days, the
Series A Preferred Stock is callable by the Company at a price
equal to $0.01 per share, plus accrued and unpaid dividends. The
Certificate of Designation for the Series A Preferred Stock also
states that, at any time after December 1, 1999, any holder of
the Series A Preferred Stocks may require the Company to redeem
his shares of Series A Preferred Stock (if there are funds with
which the Company may do so) at a price of $1.00 per share.
Notwithstanding any of the foregoing redemption provisions, if
any dividends on the Series A Preferred Stock are past due, no
shares of Series A Preferred Stock may be redeemed by the
Company, unless all outstanding shares of Series A Preferred
Stock are simultaneously redeemed.

During the three months ended March 31, 1999, 8,947 shares of
the Series A Preferred Stock were converted into 1,714 shares of
common stock. At March 31, 1999, 819,818 shares of Series A
Preferred Stock were outstanding.


DELGRATIA MINING: Settles Nevada and British Columbia Litigation
----------------------------------------------------------------
Consolidated Class action litigation is pending in the United
States District Court for the District of Nevada against
Delgratia Mining Corp., certain of its past and present officers
and directors, and other persons and entities. Similar
litigation is pending in the Supreme Court of British Columbia.
A proposed settlement has been reached with Delgratia and
certain of the individual defendants.

With respect to the U.S. Litigation, you are hereby notified,
pursuant to Court order, that a hearing (the "U.S. Settlement
Hearing") will be held on August 6, 1999, at 1:30 p.m., before
the Honorable Philip M. Pro, United States District Judge, at
the United States Courthouse, 300 Las Vegas Boulevard S., Las
Vegas, Nevada, 89101. With respect to the Canadian Litigation,
you are hereby notified, pursuant to Court order, that a hearing
(the "Canadian Settlement Hearing") will be held on August 20,
1999, at 10:00 a.m. before the Honorable Mr. Justice Harvey at
the courthouse at 800 Smithe Street, Vancouver, British
Columbia, V6Z 2E1.

The purpose of the settlement hearings will be to determine: (1)
whether the settlement of claims in the litigation in the amount
of 2.5 million shares of Delgratia common stock ("Settlement
Fund") plus payment by Delgratia of litigation and settlement
costs and expenses not to exceed $500,000 U.S., should be
approved as fair, just, reasonable and adequate to all the
Settling Parties; (2) whether the proposed Plan of Allocation is
fair, just, reasonable, and adequate; (3) whether the
application of Plaintiffs' Counsel for an award of attorneys'
fees and expenses should be approved; and (4) whether the
Litigation should be dismissed with prejudice as to the Settling
Defendants as set forth in the Stipulation of Settlement filed
with the Court and dated as of April 14, 1999.

If you purchased or otherwise acquired Delgratia common stock
during the period from November 18, 1996 through and including
May 19, 1997, your rights may be affected by the settlement of
this Litigation. To share in the distribution of the Settlement
Fund, you must establish your rights by filing a Proof of Claim
and Release form on or before August 23, 1999. If you desire to
be excluded from the Class, you must file a request for
exclusion by July 16, 1999. If you are a Member of the Class and
have not received a detailed printed Notice of Pendency and
Proposed Partial Settlement of Class Action and a Proof of Claim
and Release form, you may obtain copies by writing to: Delgratia
Mining Corp. Securities Litigation, P.O. Box 4390, Portland,
Oregon, 97208-4390.

Litigation is continuing as to the non-settling Defendants.


FIRST ALLIANCE: Milberg Weiss Files Complaint in California
-----------------------------------------------------------
Milberg Weiss filed a class action in the United States District
Court for the Central District of California on behalf of
purchasers of First Alliance Corporation (NASDAQ:FACO) Class A
common stock during the period between April 24, 1997 and May
27, 1998. The complaint charges First Alliance and certain of
its officers and directors with violations of the Securities
Exchange Act of 1934.

The complaint alleges that the directors and officers of First
Alliance and its subsidiaries pursued a fraudulent scheme and
course of business that operated as a fraud or deceit on
purchasers of First Alliance stock. Defendants' scheme was
designed to and did enable First Alliance's controlling
shareholders Brian Chisick and Sarah Chisick to sell nearly
5.088 million shares in a secondary stock offering for proceeds
exceeding $90.2 million. These stock sales were successfully
accomplished in significant part because of the reported
apparent growth in First Alliance's earnings per share ("EPS"),
and defendants' statements about First Alliance achieving
significant net income and EPS growth in 1998 and 1999,
resulting in its stock price trading at a significantly higher
price/earnings ratio than was the case with First Alliance's
competitors. However, just months after the secondary offering,
First Alliance was forced to reveal that it would report lower
than expected results in the second quarter of 1998, in part due
to the fact that it would no longer rely upon the improper
assumptions it had previously used to calculate its earnings. As
a result, First Alliance's stock price declined from its high of
$24-1/8 per share in October 1997 to as low as $3-$4 per share.

To learn more, call William Lerach, Alan Schulman, or Darren
Robbins at 800-449-4900 or write wsl@mwbhl.com via email.


HOLOCAUST SURVIVORS: Swiss Banks Claims Settlement Notice Begins
----------------------------------------------------------------
The Jerusalem Post reported from New York on a venture that will
cost some $25 million: nearly 900,000 potential beneficiaries of
the $1.25 billion Swiss banks settlement are expected to begin
receiving notice next month, by mail and in newspaper ads, about
their possible eligibility for some of the money.

The Post explained that the notification is expected to cost so
much because of the price of translating, publishing, and
mailing a brief outline of the settlement terms and a
questionnaire to Nazi victims, according to Burt Neuborne, the
lead counsel in the case. Potential claimants live in dozens of
countries and speak as many languages.

"Every person who can possibly be thought of as a survivor is
going to get one," Neuborne told the Jerusalem Post. This
notification also is intended to give potential beneficiaries a
legally mandated opportunity to comment on and to withdraw from
being part of the settlement, which is being administered by US
District Court Judge Edward Korman in Brooklyn.

Advocates for victims are concerned that an official court
document, in sterile legal language, arriving without warning,
would agitate survivors. They also worry that the questionnaire
may create the false impression all survivors will be
compensated for material losses.

The cost of the notification, as well as the lawyers' fees -
estimated to be another $25 million - will be taken out of the
settlement. No date has been set for any distribution of the
settlement funds, the Jerusalem Post wrote. Nor was it certain
how the $1.25 billion would be allocated among the five
categories of beneficiaries, or the amounts that eligible
claimants could expect to recover.

The Swiss settlement calls for the funds to be divided up among
classes of Nazi victims, and these are, for the most part,
limited to Jews, Jehovah's Witnesses, Romanis (Gypsies),
homosexuals, and the disabled. The classes are: depositors and
heirs of the hoarded or unclaimed Swiss bank accounts; those who
assets were looted and then laundered through the Swiss banks;
two categories of slave laborers; and refugees who were turned
away by Switzerland during World War II.

The two major Swiss banks, Credit Suisse and UBS, reached an
agreement last year to pay $1.25 billion to settle class action
lawsuits against them for hoarding Jewish Holocaust-era
accounts. In turn, the beneficiaries would forgo all future
claims against the banks, the Swiss National Bank, Swiss
industry, and the Swiss government.

The questionnaire will provide the special master appointed by
the court, Judah Gribetz, with data that will help him work out
the fairest plan of allocation, such as how many people suffered
from plunder and how many were in slave labor, Neuborne said.
(Jerusalem Post; 05/27/99)


MAXIM GROUP: Cohen Milstein Files Complaint in Georgia
------------------------------------------------------
The law firm of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. on
May 27, 1999, filed a lawsuit in the United States District
Court for the Northern District of Georgia, on behalf of those
persons who purchased or acquired The Maxim Group, Inc.
(NYSE:MXG) common stock during the period between August 31,
1998 and May 19, 1999.

The Complaint alleges that defendants violated Section 10(b) and
20(a) of the Securities Exchange Act of 1934 by issuing a series
of materially false and misleading statements regarding The
Maxim Group's financial results for fiscal 1999 and for certain
quarters therein. On May 19, 1999, The Maxim Group announced
that it would "record certain adjustments" to previously
reported results due to its improper recognition of revenue in
prior quarters. As a result of these adjustments, The Maxim
Group is revising downward its reported results of operations
for the second, third and fourth quarter of fiscal 1999 and for
the fiscal year ended January 31, 1999.

To learn more, contact Andrew N. Friedman or Robert Smits at
888-240-0775 or 202-408-4600 or at afriedman@cmht.com or
rsmits@cmht.com via email.


PATRIOT AMERICAN: Cotchett Pitre Files Complaint in California
--------------------------------------------------------------
Cotchett, Pitre & Simon filed a class action lawsuit in the
United States District Court for the Northern District of
California on behalf of all former shareholders of California
Jockey Club and Bay Meadows Operating Company who, as a result
of the July 1, 1997 merger between California Jockey Club, Bay
Meadows Operating Company and Patriot American Hospitality Inc.,
became shareholders in the successor companies, Patriot American
Hospitality Inc. and Patriot American Hospitality Operating
Company, subsequently called Wyndham International Inc. The
class period is from June 2, 1997 to May 7, 1999.

The complaint alleges that defendants, including Patriot's
financial advisor, Paine Webber Group Inc., participated in the
issuance of materially false and misleading statements and
omissions regarding the true value, scope and strategy of
Patriot's business, defendants' use of debt instruments to
finance Patriot's hotel expansion, and Paine Webber's conflicts
of interest with Patriot. As alleged, this was done, in part, to
induce approval of the merger.


PRISON REALTY: Cauley Firm Files Complaint in Tennessee
-------------------------------------------------------
The Law Offices of Steven E. Cauley filed a securities fraud
lawsuit in the United States District Court in Nashville,
Tennessee on behalf of all shareholders of Prison Realty Trust
(NYSE: PZN) who exchanged their shares of PZN for shares of
Prison Realty Corporation in the January 1, 1999 merger between
Corrections Corporation of America and/or purchased New PZN
shares on or before May 17, 1999.

According to the lawsuit, the defendants retroactively agreed to
pay $18 million more in rental payments and higher annual
payments to an entity certain of the defendants controlled. When
this information was disclosed to the securities markets, the
price of PZN securities collapsed.

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


SOFTWARE AG: Stull Stull Files Complaint in Virginia
----------------------------------------------------
Stull, Stull & Brody filed a class action lawsuit on April 8,
1999, in the United States District Court for the Eastern
District of Virginia on behalf of all persons who purchased the
common stock of Software AG Systems, Inc. (NYSE:AGS) between
Nov. 18, 1997 and April 2, 1999.

The complaint alleges that defendants Software AG Systems,
certain of its officers and directors and its largest
shareholder, Thayer Equity Investors, III, L.P., violated
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
by issuing a series of materially false and misleading financial
statements and failing to reveal that the Company was employing
accounting methods which artificially inflated Software AG
Systems' revenues and earnings. On April 5, 1999, the Company
announced that preliminary first quarter results would be below
analysts' expectations.

The Complaint alleges that this shortfall in revenues and
earnings was a direct result of defendants' deceptive practice
of prematurely recognizing revenue which artificially boosted
the Company's financial results during the class period. The
Complaint further alleges that defendants utilized their inside
information regarding the artificial inflation of the Company's
stock price to sell massive amounts of their Company stock
holdings, for proceeds of approximately $195 million. As a
result of defendants' false and misleading statements and
omissions, the price of AGS stock was artificially inflated.

For additional details, contact Tzivia Brody, Esq. at 800-337-
4983, or at SSBNY@aol.com via email.


SOUTHTRUST NATIONAL: ICM Investors Blame Bank Manager's Advice
--------------------------------------------------------------
Banks could be held responsible for the fraudulent actions of
account holders if a group of South Florida investors who lost
hundreds of thousands of dollars has its way. Four investors
from Lake Worth, Boca Raton and Naples, who say they suffered a
combined loss of $680,000 at the hands of Pompano Beach-based
International Capital Management, filed a federal suit earlier
this month against SouthTrust National Bank, where ICM kept its
accounts. The investors also sued the manager of SouthTrust's
Boca Raton branch, Carroll Richardson, who they say touted ICM
to them.

The investors were among more than 1,500 people nationwide,
according to the Securities and Exchange Commission, who were
bilked out of $ 18 million by ICM, a foreign currency trader.
ICM sent investors account statements that showed profits when
they actually lost money, the SEC claims. The South Florida
suit, before U.S. District Judge William Dimitrouleas, seeks
class-action status for other investors who put money in ICM.

Banking officials say it's unheard of for banks to be sued to
recoup investments with another party or to be held accountable
for the acts of a customer. "This would be the first I would be
aware of something like this," said Peter Soraparu, an official
with the Bank Administration Institute, a national banking
industry education and research organization in Chicago.
Officials at the American Bankers Association in Washington also
said the case was unprecedented.

SouthTrust's attorney, John Eubanks of Moyle, Flanigan, Katz,
Kolins, Raymond & Sheehan in West Palm Beach, said the bank
should not be liable for losses sustained by people who were not
even customers of the bank. And, a bank cannot be expected to
investigate every account holder, he said. "If anytime you got a
hot stock tip you could hold that person and whoever she worked
for liable, that would be totally unreasonable," Eubanks said.

But Scott Link, a partner at West Palm Beach's Ackerman, Link &
Sartory, one of the investors' attorneys, said SouthTrust branch
manager Richardson went beyond confirming that ICM had accounts
at her branch -- she acted as a reference and recommended the
investment. The investors claim they would never have put money
in ICM if Richardson hadn't vouched for the company. The SEC
shut down ICM last September, and the company is in
receivership. "People would call ICM and they would say, 'Check
us out, call Carroll Richardson,' " Link said. "She told them it
was a great investment, the bank invests its money that way. ICM
was the bank's biggest customer."

One of Link's clients, Lake Worth Buick salesman Forrest Ball,
said Richardson gave ICM credibility. Ball said he visited ICM's
office in person and called Richardson eight times to make sure
the foreign currency trading company was on the up and up before
he made any investments. At stake was $100,000 that Ball, 47,
had been saving since age 12, and $75,000 that his 81-year-old
widowed mother was hoping would grow enough to allow her to
retire from her job as a customer service representative at The
Palm Beach Post. Richardson was "the one who gave me the feeling
that it was a good solid account," Ball said. "She's the one who
gave me the gumption to invest in ICM."

Attorneys for Richardson and the bank dispute that she
recommended ICM. Even if she did, they contend, there is no
legal liability -- for her or for SouthTrust -- for handing out
bad investment advice. "Anyone can promote a stock, there has to
be a financial benefit. Otherwise, it's a bad tip," said
Richardson's attorney, Steven A. Mayans of FitzGerald, Hawkins,
Mayans & Cook in West Palm Beach. Link alleges Richardson stood
to earn more money if ICM's accounts at the bank grew because
her pay and bonuses were tied to the deposits at her branch. The
suit does not go into specifics.

Richardson still works for SouthTrust, but is no longer at the
Boca branch. She did not return telephone messages to her new
office in West Palm Beach.

Link estimates almost a hundred investors decided to put money
into ICM because of Richardson. Even the investors who did not
talk with Richardson were affected by her alleged conduct
because she created a market for ICM's securities as its assets
grew, he said.

The case was originally filed in state court, but voluntarily
dismissed because the state's Securities and Investor Protection
Act regulates only security sellers. Federal jurisdiction
extends to anyone who manipulates stock, Link said.

Meanwhile, investors may still recover some of their money
directly from ICM. Miami lawyer Daniel S. Gelber of Holland &
Knight, the court-appointed receiver for ICM, said he has
recovered a little over $5 million of the $18 million that ICM
is accused of bilking from about 1,500 investors nationwide. The
last day to file a claim against ICM is today. Gelber declined
to comment on the investors' suit against SouthTrust. Link said
his clients already know there will be shortfall in the
receiver's collections. "It'll be pennies on the dollar," he
said. (BROWARD DAILY BUSINESS REVIEW; May 27, 1999)


STEPHAN CO.: Abbey Gardy Files Complaint in Florida
---------------------------------------------------
A Class Action has been commenced by Abbey, Gardy & Squitieri,
LLP, in the United States District Court for the Southern
District of Florida, on behalf of all purchasers of The Stephan
Co. (Amex: TSC) common stock between August 4, 1998 and April 1,
1999. The Complaint charges The Stephan Co. and certain of its
officers and directors with violations of the federal securities
laws.

Among other things, plaintiff claims that defendants issued a
series of materially false and misleading statements regarding
The Stephan Co.'s financial results for the second and third
quarter of 1998. On March 31, 1999, The Stephan Group disclosed
that earnings for the second and third quarters of 1998 had been
overstated. The overstatement caused the company to miss the
deadline for filing its annual report with the Securities and
Exchange Commission and ultimately to restate its previously
reported results.

For more information, call Mark C. Gardy, Esq. or Karin E.
Fisch, Esq. at 800-889-3701 or 212-889-3700 or write to them at
kfisch@a-g-s.com via email.


* Defense Lawyer Criticizes Medical Monitoring Mass Tort Cases
--------------------------------------------------------------
The Legal Backgrounder published the following piece by Brian
Anderson and Paul Horwitz. Brian Anderson is a partner in the
Washington, D.C. office of O'Melveny & Myers LLP who specializes
in defending against class actions and other complex litigation.
Paul Horwitz was a 1998 summer associate.

Once upon a time, the court system was viewed as the place where
people who had suffered tangible injury could seek compensation
from those whose wrongful conduct caused it. But we now live in
an era in which the plaintiffs' bar files lawsuits not just to
compensate real people for real injuries, but also to promote
policy agendas previously viewed as within the exclusive
province of legislatures and regulatory agencies. Driven by a
desire to exercise power and make money, these self-appointed
"private attorneys' general" file mass-tort lawsuits that seek
to hold various entities (or even entire industries) financially
responsible for everyday risks and inconveniences once thought
too speculative or inconsequential to justify litigation.

This trend is illustrated by recent headline-grabbing lawsuits:
class actions against the tobacco companies that seek to shift
responsibility for smoking-related illnesses from those who
smoke to those who make cigarettes; class actions against gun
manufacturers that seek to shift responsibility for violent
crime from those who pull the trigger to those who make the gun;
class actions against product manufacturers that ask untrained
jurors to decide for society as a whole whether the "risks"
associated with certain products exceeds their "benefits," and
hence should be taken off the market.

Our ultra-litigious environment has nurtured the growth of the
"medical monitoring class action," which seeks to dispense with
the traditional rule that a litigant must prove that he has
incurred actual injury before the courts will award him
compensation. Medical monitoring class actions are lawsuits
that, rather than seeking money to compensate class members for
injuries already incurred, seek money to provide class members
with periodic medical examinations to detect the possible future
onset of physical injury. For example, if a defendant that
allegedly released potentially cancer-causing chemicals into the
water supply is sued, a medical monitoring lawsuit might seek to
force that defendant to finance periodic medical examinations
for all water supply users in order to detect and treat the
potential cancer. See, e.g., Ayers v. Jackson Township, 525 A.2d
287 (N.J. 1987) (medical monitoring for town residents exposed
to contaminated water authorized where "reasonable and
necessary" to monitor effects of exposure).

Claims for medical monitoring usually arise in the context of
toxic-tort actions. Courts authorize this remedy based on the
following logic: if a defendant wrongly exposed large numbers of
people to a toxic substance, thereby significantly threatening
their long-term health, the defendant should pay for medically
necessary physical examinations so that the illness can be
detected early and treated before it becomes fatal (and/or more
expensive to cure). Courts offer the following analogy to
justify this remedy: if someone is hit by a car and lands on his
head, medical testing will be necessary to ensure that he has
not suffered any internal head injuries. Even if the accident
victim ultimately is found to be in perfect health, the cost of
such tests should be imposed on the reckless driver (and not the
victim). See, e.g., Friends for All Children, Inc. v. Lockheed
Aircraft Corp., 746 F.2d 816, 825 (D.C. Cir. 1984).

The Rise of the Medical Monitoring Class Action

If medical monitoring actions were confined to instances in
which injury to all class members was shown to be both highly
likely and attributable to the same allegedly wrongful act,
there would be little controversy about them. But some litigants
(and judges) have exploited the class action device to stretch
the concept far beyond its proper role. In recent years, it has
become commonplace for plaintiffs' lawyers to file medical
monitoring class actions in which the risk of physical injury to
class members is remote and, in any event, difficult to trace to
the defendant's allegedly wrongful act. Indeed, the request for
medical monitoring often is designed to obfuscate two basic
flaws in the underlying action: (1) the fact that few class
members have actually suffered (or ever will suffer) injury and
hence are not, under traditional legal principles, entitled to
any relief; and (2) the fact that the putative class members'
individual legal claims turn on claimant-specific facts and
legal issues, rendering them inherently unsuited to en masse
litigation. Consider the following examples of medical
monitoring lawsuits that flout these basic principles:

* In an Arizona case involving alleged exposure to toxic
substances, a judge certified a medical monitoring class action
consisting of an estimated 700,000 people who lived in a large
geographical area at any time between 1955 and 1989, even though
the record showed that the risk of any class member actually
incurring physical injury was infinitesimal. See Brent Whiting,
Broad Status for Suit Over Groundwater; Thousands Could Seek
Damages Over Pollution, Ariz. Republic, Aug. 26, 1994, at B1;

* Another case of accidental exposure to toxic substances
resulted in an action seeking medical monitoring for a class
where, of the 4,500 people who visited the hospital emergency
room in the days after the spill, less than one percent had
shown any symptoms graver than minor eye, nose or throat
irritation. In this case, the plaintiffs' lawyers themselves
later conceded that any adverse latent health effects as a
result of the accident were highly unlikely. See Susan Hansen,
Why People Hate the System, Am. Law., Jan. 1996, at 60;

* Another action sought to certify a nationwide medical
monitoring class action on behalf of consumers who bought
Hostess and Dolly Madison snack cases over a 25 year period on
the grounds that the plant where they were made contained
asbestos. See Robert A. Davis, Hostess Plant Target of Suit;
Alleges Widespread Asbestos Risk for 25 Years, Chi. Sun-Times,
Feb. 18, 1998, at 3.

The standards used to determine whether medical monitoring
relief is appropriate vary from state to state. Some courts hold
that plaintiffs need only establish that they have been exposed
to the substance in question in order to state a claim for
medical monitoring. See, e.g., Miranda v. Shell Oil Co., 26 Cal.
Rptr. 2d 655 (Ct. App. 1993). Other courts require plaintiffs to
establish an "increased risk" of suffering an injury as a result
of the defendant's conduct. See, e.g., In re Paoli R.R. Yard PCB
Litig., 916 F.2d 829 (3d Cir. 1990), cert. denied, 499 U.S. 961
(1991). Still others strictly adhere to the traditional
requirement that plaintiffs must actually suffer physical injury
in order to obtain medical monitoring. See, e.g., Ball v. Joy
Technologies, Inc., 755 F. Supp. 1344 (S.D. W.Va. 1990), aff'd,
958 F.2d 36 (4th Cir. 1991), cert. denied, 112 S. Ct. 876
(1992).

Such variations in the applicable standards (and the prospect
that a given judge will apply a low standard in a given case)
have given rise to many medical monitoring class actions in
which the likelihood that large numbers of product purchasers
have, or will, experience injury is exceedingly remote. The
plaintiffs' bar (correctly) perceives that some courts might
nevertheless order the defendant-manufacturer to establish a
sizable fund to pay for future medical examinations for large
numbers of people. Of course, the bigger the fund, the bigger
the amount plaintiffs' counsel will claim from it in attorneys'
fees. It is not at all unusual for lawyers who successfully
bring medical monitoring suits to request (and obtain) tens of
millions of dollars in attorneys' fees.

The Partial Crackdown on Medical Monitoring Class Actions

Some courts have expressed serious reservations about the
legitimacy of medical monitoring class actions, particularly as
their use has grown. Increasingly, courts at both the state and
federal level are refusing to certify medical monitoring
classes, holding that they are inherently ill-suited for class-
wide adjudication because the risk of injury to each putative
class member turns on individualized circumstances. See, e.g.,
Castano v. American Tobacco Co., 84 F.3d 734 (5th Cir. 1996); In
re American Med. Sys. Inc., 75 F.3d 1069 (6th Cir. 1996);
Georgine v. Amchem Prods., Inc., 83 F.3d 610 (3d Cir. 1996),
aff'd sub nom. Amchem Prods., Inc. v. Windsor, 521 U.S. 591
(1997). Indeed, claimant-specific issues in medical monitoring
lawsuits often abound: Was a particular plaintiff actually
exposed to a substance? When and for how long? What other
factors might contribute to the plaintiff becoming ill in the
future? Does the plaintiff have pre-existing illnesses that
would require additional medical attention in any case? And
would a given plaintiff actually benefit from medical
monitoring? All of these questions demand individual
determination, and class actions for medical monitoring in such
circumstances would either be unfair to the defendants or
devolve into a vast number of unmanageable mini-trials.

Unfortunately, not all courts have joined the trend to reject
medical monitoring class actions that turn on claimant-specific
issues. For example, just last year the Louisiana Court of
Appeal affirmed certification of a medical monitoring class
action on behalf of cigarette smokers that was (except for its
scope) a carbon copy of the Castano class action that the Fifth
Circuit had previously decertified. See Scott v. American
Tobacco Co., 1998 WL 802260 (La. Ct. App. 1998). Nevertheless,
the fact remains that medical monitoring class actions are
ultimately a poor way to address the problem of potential future
injuries.

The Policy Arguments Against Medical Monitoring Class Actions

The United States Supreme Court addressed many of the problems
with medical monitoring class actions in Metro-North Commuter
R.R. Co. v. Buckley, 521 U.S. 424 (1997). In the course of
holding that a railroad employee could not sue under the Federal
Employers' Liability Act to recover his medical monitoring costs
for exposure to asbestos, Justice Breyer addressed many of the
policy arguments against the medical monitoring class action:

First, medical monitoring actions are supposed to recover only
the extra medical costs associated with monitoring the
plaintiff's health as a result of the defendant's conduct. But
as the Court pointed out, medical experts disagree over when a
particular course of testing or treatment should be considered
"extra," and when it should have been performed as part of the
normal course of medical care.

Second, when a medical monitoring fund gives money for doctors'
visits to people who may not be injured, it takes money away
from people who have more serious injuries. The Court pointed
out that the annual costs of medical monitoring per plaintiff
over a number of years may dwarf the amount that has been won by
plaintiffs who were actually injured.

Third, medical monitoring class actions threaten to waste the
scarce resources of our nation's health care system itself.
Medical care is not available in infinite supply and does not
come cheap. But medical monitoring funds end up spending money
and resources on people who may not even need additional care.
Consider the Arizona case mentioned above, which involved a
class of individuals who had lived in a neighborhood at any time
between 1955 and 1989. What health care goals are served by
siphoning off a defendant's resources and a doctor's time to
conduct regular tests on a person who lived in that neighborhood
forty years ago and still has not manifested any injury? Surely
the medical resources devoted to that person would be better
spent elsewhere.

Financial waste is not the only reason why medical monitoring
funds may be bad medicine. Given most peoples' natural
reluctance to go to a doctor unless absolutely necessary, it is
not clear that setting aside a medical monitoring fund will
actually result in extra medical testing. And even if plaintiffs
do make use of these funds, it may not be for their own good. In
many cases, medical professionals debate whether any good is
served by having people discover that they are in the early
stages of an illness, or may become sick in the future, when no
meaningful treatment for these ailments is available. Moreover,
testing itself may be harmful. Some medical testing is painful
and could even present separate health risks. In other cases, an
individual may receive a false positive test, leading to
unnecessary and dangerous medical procedures, considerable
anxiety and other unfortunate consequences. Or the reverse may
happen: a plaintiff may receive a false negative test, and delay
medical testing if real symptoms do appear later. In short,
medical monitoring classes may be as unwise from a medical
perspective as they are from a legal one.

Of course, that does not mean it is never a good idea for
individuals to seek additional medical testing. Where persons
exposed to dangerous substances and/or products have a
reasonable apprehension that they will inevitably suffer from an
illness, and they would benefit from early detection of that
illness, medical monitoring may be quite reasonable. But that
does not mean that a class action is the best way to ensure that
medical monitoring becomes available to them. In too many cases,
such actions simply lead to an inefficient and wasteful
allocation of resources. This is one good reason why the
traditional requirements of tort law demand that the plaintiff
show that he has actually been injured by the defendant's
conduct.

Conclusion

In the end, whatever arguments plaintiffs may advance for the
medical monitoring class action, there is serious doubt whether
the proliferation of these claims, and their inclusion of tens
of thousands of plaintiffs in all manner of circumstances, can
possibly be justified by any reasonable cost-benefit analysis.
If only a few of the plaintiff class ultimately become ill, then
funding a medical monitoring class forces defendant companies
and the health-care system as a whole to waste limited resources
searching for needles in haystacks.

It is worth wondering, too, where this trend will end if the
courts do not step in and resist the certification of medical
monitoring class actions. A cause of action that originally
arose in the limited circumstance of clear and identifiable
exposure to serious pollution could never have been meant to
subsidize trips to the doctor for everyone who ever snacked on a
Twinkie. We are all occasionally exposed to trace chemicals and
pollutants in the atmosphere, or secondhand smoke, or other
largely negligible health risks. Will we all end up one day as
plaintiffs strapped to a machine, waiting for the latest update
on a physical collapse that is always imminent but never quite
comes? Or will we become so panicked or so indifferent about
notices in the mail informing us that we may be part of some new
class of individuals with potential injuries that we avoid the
doctor's office altogether?

These are not attractive alternatives. We would do far better to
convince the courts to approach the medical monitoring class
action with increased caution. Whatever the good intentions
behind it, this is a far-reaching and potentially harmful legal
device. If we think the national health-care system has problems
now, imagine what would happen if our judiciary becomes the
country's largest HMO. (Legal Backgrounder; May 28, 1999)


                            *********

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., Princeton, NJ, and Beard
Group, Inc., Washington, DC. Peter A. Chapman, Editor. Kent L.
Mannis, Project Editor.

Copyright 1999. All rights reserved. ISSN 1525-2272.

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