CAR_Public/990610.MBX              C L A S S   A C T I O N   R E P O R T E R

              Thursday, June 10, 1999, Vol. 1, No. 90

                            Headlines

AMERICAN HOME: Accused of Destroying Fen-Phen Email
AMSOUTH BANK: Court Denies Class Status in Account Posting Suit
ARTHUR ANDERSEN: Jury Decides Firm Didn't Aid & Abet UDC Fraud
BRE-X MINERALS: Class Status Denied due to Idiosyncratic Claims
CARNEGIE INTERNATIONAL: Sues Surfers for Defamatory Cyber-Smears

COCA-COLA: Judge Orders Company to Release Employee Database
HUGHES AIRCRAFT: Employer Keeps Control of Excess Pension Funds
PROTECTION ONE: Expects Process Server to Arrive Shortly
PROVIDENT COMPANIES: Paul Revere Agents Sue Together & Alone
ROGERS ATHOME: Users Unhappy with Canadian Internet Cable Speed

SUMITOMO CORP.: Dealer Alleges International Copper Cartel
Y2K LITIGATION: Canada Remains Cautious But Unconcerned
Y2K LITIGATION: Silicon Valley Weighs in US Political Battle

                            *********


AMERICAN HOME: Accused of Destroying Fen-Phen Email
---------------------------------------------------
Lawyers for the family of a Massachusetts woman who died after
taking the fen-phen diet drug combination are claiming that
American Home Products (AHP) destroyed and withheld email
potentially important to their case and hundreds of others.
Linnen v. A.H. Robins Co., No 97-2307 (Super. Ct. Middlesex
Co.).

In a May 18 hearing in the pre-Civil War courthouse here,
lawyers for the family of Mary J. Linnen asked for sanctions on
AHP and the disqualification of its national counsel,
Washington, D.C.'s Arnold & Porter, from the suit.

AHP lawyers concede that some email back-up data were destroyed,
but they say that the plaintiffs suffered no real harm.

The case was filed in May 1997, after Mary Linnen died of
primary pulmonary hypertension, an often fatal lung disease.

The plaintiffs' lawyers got an ex parte order requiring AHP to
preserve relevant documents, including emails and computer
backups, having to do with fen-phen. Two weeks later, before
Arnold & Porter came on the scene, Bingham Dana L.L.P. partner
Francis Fox persuaded Judge Raymond Brassard to dissolve the
order.

What happened next is in dispute. Representing the Linnens,
partner Alex H. MacDonald and associate Louise A. Leduc, of
Robinson & Cole L.L.P., argued that the order was dissolved on
the understanding that AHP agreed to preserve any such material.
AHP lawyers say that once the order was dissolved, they were
obligated only to take reasonable care to protect evidence.

Both sides agree that AHP permitted the information on some
backup tapes to be destroyed by failing to suspend normal tape
recycling. In addition, AHP revealed the existence of more than
1,000 backup tapes only in February, after most depositions were
completed.

The plaintiffs' lawyers argued that AHP should pay to extract
the information from the remaining backup tapes, which they said
will cost as much as $ 1.35 million. They also sought $ 1
million in sanctions against AHP and asked Judge Brassard to
revoke Arnold & Porter's right to represent AHP in his court. He
gave no indication when he will rule.

Defense lawyers argued that Robinson & Cole should be satisfied
with AHP's agreement to retrieve information from some of the
tapes in the federal diet-drugs multidistrict litigation.

Emails are often a fertile source of embarrassing revelations
about companies, says Michael R. Overly, an electronic discovery
expert at Foley & Lardner in Los Angeles. "People will often
express thoughts, opinions and emotions in an email that they
wouldn't put in a formal memo," he says.

The Linnen suit is one of several filed before the 1997 recall
of fenfluramine and dexfenfluramine produced a flood of
litigation. At least nine cases have been settled, for amounts
reportedly between $ 500,000 and $ 4.6 million. Class actions
have been certified in six states. On May 17, a Texas judge
declared a mistrial in a fen-phen case after finding that a 62-
member jury panel contained too few impartial members. (The
National Law Journal; May 31, 1999)


AMSOUTH BANK: Court Denies Class Status in Account Posting Suit
---------------------------------------------------------------
Finding that individual circumstances controlled the disposition
of account holders' claims that AmSouth Bank fraudulently
concealed its transaction posting policy in violation of the
Truth in Savings Act, the U.S. District Court for the Southern
District of Alabama recommended that class certification be
denied. This ruling will be of great help to the banking
industry in defeating class certification in other order of
posting cases. Shelley, et al. v. AmSouth, et al., No. 97-1170-
RV-C (S.D. Ala. 4/29/99).

AmSouth required consumers to sign a signature card in order to
open a checking account. The signature card explained that by
using the checking account, the customer was bound by AmSouth's
rules, regulations, customer agreements and pricing schedules.
The pricing schedule set forth the fee for an overdraft item or
nonsufficient funds item as follows:

If you make withdrawal requests which exceed the available funds
in your account, we may honor any, all, or none of the amounts
requested; and if we choose to honor any requests, we may pay
the requests in any order we choose.

Posting Order

AmSouth posted credits and then debits to customers' demand
deposit accounts based on a predetermined hierarchy of
transaction codes called the "transaction posting order." Items
in transaction codes with a higher priority post before items
with a code representing a lower priority. AmSouth assigned
codes to ATM withdrawals, teller cashed checks, debit card
purchases and third-party checks.

Prior to May 1, 1991, AmSouth posted items from the smallest
item to the largest within each transaction code. This policy
changed in May 1991 when the bank began posting items from the
largest to the smallest. Because items were sorted and given
priority based on their codes, often routine types of
transaction were posted before others even if the others were
larger in amount. According to AmSouth, it changed its posting
procedure after customers who experienced overdrafts indicated
that they wanted the bank to pay the largest items first, rather
than paying the smaller first or paying items in a random order.

Overdraft Protection

AmSouth offered overdraft protection to its customers. In
administering that service, the bank withdrew money in 50
increments for a customer's associated account to cover
overdraft items. AmSouth charged 5 per transfer plus an annual
overdraft protection fee.

In 1995, AmSouth began utilizing certain factors to set
individualized overdraft limits. The bank began marking the
amount that it would initially automatically pay to cover
overdrafts and beyond which officers would continue to
scrutinize items individually for pay or return decisions. This
policy allowed officers, who chose to return an item to the
endorser, to pay one or more smaller checks presented without
charging an overdraft fee when a positive balance was left in
the drawer's account by the return.

Class Action

A group of depositors filed a class action challenging AmSouth's
posting policy and its failure to disclose the appropriate fees
and conditions associated with that policy. The consumers
claimed that they incurred and paid overdraft fees they would
not have otherwise incurred because of the bank's undisclosed
policy of posting multiple debt transactions in a sequence of
highest debit item to the lowest debit item within a certain
transaction code. They raised claims for fraud, breach of
contract and actual damages under TISA.

The court examined the proposed class to determine if it
complied with Rule 23. Because the court concluded that the
plaintiffs' fraud, contract and TISA actual damages claims
"hinge[d] on individualized proof regarding representations and
omissions, reliance, causation, materiality, the parties'
understandings, damages, defenses and counterclaims," it ruled
that the class could not satisfy Rule 23's commonality.

In support of Rule 23's typicality requirement, plaintiffs'
counsel argued that customers preferred an alternative order of
posting to the bank's practice of posting multiple transactions
in a sequence of highest debit item to the lowest debit item.
But this theory, said the court, did not coincide with the class
representatives' testimony that larger, more important checks
should be paid first so their rent, mortgage and car payments
would not be jeopardized. The court found that this testimony
along with the fact that the plaintiffs failed to show they were
harmed by AmSouth's nondisclosure defeated typicality.

The court further found that Rule 23's adequacy of
representation requirement was not fulfilled by the plaintiffs.
Not only did the court conclude that the named plaintiffs were
subject to unique defenses, it determined that they had
interests antagonistic to the class, lacked adequate resources
and were unfamiliar with the case.

Writing for the court, Judge William E. Cassady opined that
class certification was inappropriate because individual issues
predominated over those common to the class, particularly in the
areas of suppression and actual damages. The court explained
that the claims would require questioning each customer and
AmSouth representative about the alleged misrepresentation, the
reliance thereon and the injury involved.

Lastly, the court concluded that a class action would not offer
a fair and efficient adjudication of the controversy given the
thousands of transactions, individual conversations, numerous
counterclaims and the laws of different states. Judge Cassady
stated that, "Discovery and resolution of dispositive motions as
to each customer would be tortuous."

For these reasons, the court recommended that the plaintiffs'
motion for class certification be denied with respect to the
claims for fraud, breach of contract and actual damages.
However, it granted certification on the TISA statutory damage
claim after AmSouth stipulated to certification on the issue of
whether its disclosures complied with the statute.

Barre Dumas, Kent McPhail, Ronald Herrington Jr. and Sarah
Steward of Dumas & McPhail LLC in Mobile, Ala., represented the
plaintiffs. Gregory Jordan, Perry Napolitano and Roy Arnold of
Reed, Smith, Shaw & McClay in Pittsburgh and Broox Holmes,
Edward Dean and William Steele Holman of Armbrecht, Jackson,
DeMouy, Crowe, Holmes & Reeves in Mobile, Ala., represented
AmSouth. (Consumer Financial Services Law Report; May 28, 1999)


ARTHUR ANDERSEN: Jury Decides Firm Didn't Aid & Abet UDC Fraud
--------------------------------------------------------------
A Phoenix jury on May 11 rejected a securities fraud class
action filed against Arthur Andersen L.L.P. by shareholders in a
failed home building company who sought $ 95 million in
compensatory damages and $ 1.3 billion in punitives.

The plaintiffs, several thousand shareholders in UDC Homes Inc.,
had accused Arthur Andersen, an accounting firm, of "aiding and
abetting breach of fiduciary duty and fraud" by the directors
and officers of UDC, said plaintiffs' attorney Robert S. Green,
of San Francisco's Girard & Green.

UDC stock had been selling at $ 10 a share at the beginning of
1994, but it plummeted to $ 1 per share at the end of the year
and then became worthless when the company filed for bankruptcy
in 1995, said defense counsel Marshall B. Grossman, of Los
Angeles' Alschuler, Grossman, Stein & Kahan L.L.P. The Phoenix-
based company was sold through bankruptcy to another home
builder, he said. The stockholders "received nothing," he added.

The shareholders filed securities fraud actions against the
directors and officers of UDC, as well as Arthur Andersen and
another accounting firm, Coopers & Lybrand. The officers settled
in 1995 for $ 12.75 million; Coopers settled in early 1999 for $
4 million, Mr. Grossman reported. The plaintiffs were certified
as a class in October 1997. Isco v. Arthur Andersen L.L.P., CV
No. 95-08941 (Super. Ct., Maricopa Co., Ariz.).

The plaintiffs claimed that UDC had issued false and misleading
financial statements for fiscal years 1992, 1993 and 1994 and
that Arthur Andersen had signed off on these statements, said
Mr. Grossman. Mr. Grossman tried the case with Michael Cypers
and Gwyn Quillen, of Alschuler Grossman, and Francis J. Burke
and Floyd Bienstock, of the Phoenix office of Washington, D.C.'s
Steptoe & Johnson L.L.P.

These statements painted a rosier picture of the financial
status of UDC than was accurate, said Mr. Green, leading
shareholders to buy and continue to hold stock in the company.
The plaintiffs charged that Arthur Andersen certified $ 33.5
million in tax assets "that were worthless" and accepted UDC's
inflation of the value of inventory, Mr. Green said.

Coopers was the auditor for UDC until 1992, Mr. Green said.
"Coopers refused to certify the financial statements the company
wanted, so Coopers was fired. Andersen was hired and certified
statements so UDC could raise $ 115 million in public bonds.
This kept the company afloat until it tanked in May 1995," he
said. "The shareholders lost $ 150 million." The primary losses
to the shareholders came after Arthur Andersen took over, Mr.
Green said.

Arthur Andersen contended that neither the accounting firm nor
the managers of UDC were responsible for the company's demise.

"UDC was a victim of the increasing interest rates in 1994,"
said Mr. Grossman. "When interest rates were tightened, UDC
suffered more than most because of its highly leveraged capital
structure. The company's failure had nothing to do with the
audits or the financial statements. The company's failure was
related to market conditions, increased interest rates and the
financial structure of the company." (The National Law Journal;
May 31, 1999)


BRE-X MINERALS: Class Status Denied due to Idiosyncratic Claims
---------------------------------------------------------------
In refusing to certify Bre-X shareholders' class action against
various stock brokerages, Justice Warren Winkler of Ontario's
Superior Court observed that the relationship between each
shareholder and his or her investment adviser is "individual in
nature" and even "idiosyncratic."

On finding insufficient commonality among the shareholders, he
disallowed them from banding together in a class action against
the brokerages, who they claim gave bad advice to invest in what
turned out to be a bogus gold mine.

"The standard of care owed by an investment adviser to a
particular client," said Justice Winkler, "is concordant with
the services that the adviser undertook to provide the client,
that is, whether the client was to be provided with advice as
opposed to mere information or whether the adviser was given
discretion to trade on behalf of the client."

Moreover, he noted that different investors have different goals
and different ways of achieving them. To illustrate the
potential variation, he noted that one plaintiff's adviser was
deliberately seeking volatile stocks to invest in, while
another's was trying to find low-risk stocks.

Because of this diversity, Justice Winkler found no common
issues among the shareholders in their claim that the brokerages
breached their "duty to warn" about Bre-X.

With respect to their claims of fraudulent and negligent
misrepresentation and breach of the Competition Act (s. 52 of
which forbids making "false or misleading representations" about
products or making guarantees "not based on an adequate or
proper test"), Justice Winkler said there are common issues
among the shareholders. However, he ruled that a class action
would not be the "preferable procedure" to resolve them.

He said that even if the common issues (e.g. duty of care,
standard of care, etc.) were resolved in a class trial, each
class member -having a particular relationship with his or her
brokerage - would still require an individual trial to determine
individual issues of reliance, causation and damages. These
would be "complex, lengthy, individualistic inquiries" Justice
Winkler said.

Having a multitude of complex individual trials would defeat the
goals of class actions, namely: "judicial economy, access to
justice and behavior modification of wrongdoers."

For similar reasons, Justice Winkler also denied class
certification of the shareholders' action against engineering
firm SNC-Lavelin and related companies who conducted an
independent analysis of gold resources for Bre-X. He found no
common issues among the plaintiffs, and said that even if he had
found common issues, a class action would not be the preferable
procedure.

However, he did certify a class proceeding against Bre-X itself
and its insiders.

Counsel for the plaintiffs, Harvey Strosberg, told reporters he
will appeal Justice Winkler's ruling. (THE LAWYERS WEEKLY; June
11, 1999)


CARNEGIE INTERNATIONAL: Sues Surfers for Defamatory Cyber-Smears
----------------------------------------------------------------
Carnegie International, a telecommunications holding company,
has accused Internet users of posting defamatory messages about
its executives to drive down the company's stock price and spark
a lawsuit by shareholders.

A Carnegie lawsuit said the messages -- by a Texas businessman,
a Maine lawyer and a California Internet user identified only as
"Indianhead" -- claimed company officials engaged in insider
trading with shares awarded under a bonus program. The messages
also exhorted shareholders to consider "a major class-action
lawsuit," Carnegie alleged.

The Carnegie suit, which was filed in federal court in Baltimore
and seeks more than $1.1 billion in damages, is one of the first
in which a company has struck back at Internet surfers who use
the World Wide Web to question executives' actions. Securities
and Exchange Commission officials wouldn't comment on Carnegie's
suit, although regulators are looking into similar allegations
of stock manipulation through Internet chat rooms and message
groups, said John Reed Stark, head of the SEC's Internet
enforcement unit.

"We haven't brought a pure 'cyber-smear' case as of yet, but we
are very concerned about the issue," Stark said.

Complaints of false Internet messages have increased in the last
year, Stark added. Last month, M.H. Meyerson & Co. filed a
nearly identical suit against Internet users who sent out
messages accusing the brokerage's chief executive of stock
manipulation, insider trading and money laundering. (Los Angeles
Times; June 9, 1999)


COCA-COLA: Judge Orders Company to Release Employee Database
------------------------------------------------------------
A federal judge in Atlanta has given Coca-Cola until July 1 to
turn over to plaintiffs in a racial bias case a detailed
database on its work force.

An order issued by U.S. District Judge Richard Story appears to
expedite the process of deciding whether the lawsuit, filed by
three current African- American employees and one former
staffer, can be expanded into class-action status and include
another 1,500 black, salaried employees who work for the
beverage giant.

The lawsuit accuses Coca-Cola of engaging in a companywide
practice of discriminating against African-American employees.
The company has strongly denied the accusations and late last
month asked Story to dismiss the suit. Story's scheduling order,
issued Friday, did not address the company's motion.

"It's a well-thought-out, no-nonsense order that puts the class-
certification issue on as fast a track as is practical," Cyrus
Mehri, the Washington lawyer representing the plaintiffs, said
Tuesday.

Coca-Cola spokesman Ben Deutsch said the company declined to
comment.

So long as Coca-Cola hands over by July 1 its computerized
employee database -- and provided it is in "complete, readable
and useable form" -- plaintiffs then have 90 days to file their
motion for class-action certification of their lawsuit, Story
said.

The database must include basic employee information, including
the names of employees; their race; dates of service at Coca-
Cola; educational background; the date they left the company and
the reason they gave for leaving; job evaluations; any
disciplinary actions they received; and each position they held
during employment, the order said.

The database should include U.S. employees who worked since Jan.
1, 1993, for Coca-Cola corporate, Coca-Cola USA, Coca-Cola
International or Minute Maid, the judge said.

The plaintiffs will hire a statistical expert to analyze the
database. Once he or she has completed the evaluation, the
plaintiffs must make this person available to Coca-Cola
attorneys for sworn testimony, Story said.

Story noted that a "dispute" has arisen about alleged attempts
by Coca-Cola to "correct errors" in its database before turning
it over to the plaintiffs. Coca-Cola has contended that it
introduced a new computer system in 1996 that may cause some of
its data to be confusing. Plaintiffs express concern the company
may manipulate some of the data, the order said.

To preserve the evidence, Story said, Coca-Cola must provide a
copy of the database as it existed at the time the lawsuit was
filed or as it existed no later than when his order was issued
Friday.

Story also directed Coca-Cola to turn over to the plaintiffs by
June 16 any computerized data or documents concerning efforts by
the company to analyze human resources practices that refer to
the race of employees. This should include, if available,
information about salaries, transfers, promotions, demotions and
firings.

Story said pretrial discovery can now begin, provided it is
limited to addressing the class-action allegations in the
lawsuit. During the discovery process, both sides turn over
documents to each other and take sworn testimony from witnesses.
(The Atlanta Journal and Constitution; June 9, 1999)


HUGHES AIRCRAFT: Employer Keeps Control of Excess Pension Funds
---------------------------------------------------------------
Judge Kenneth Starr recently quarterbacked a high-stakes,
billion-dollar legal drama with repercussions for millions of
Americans -- and it had nothing to do with Whitewater, Monica
Lewinsky, or President Clinton. In this high-profile case, Judge
Starr represented an employer before the U.S. Supreme Court in a
feud waged over the management of employee pension plan funds.

The Supreme Court's January decision may affect every American
worker and retiree who participates in defined pension plans --
a total of about 33 million, according to the Associated Press.

The crux of the Supreme Court's decision is that it is the
employer that manages a pension fund -- not the employees who
contribute to it -- that retains control over any surpluses the
plan accrues. As the stock market continues to churn at its
staggering pace, this decision will place billions of dollars
back into employers' hands.

The law under which this case was brought, the Employee
Retirement Income Security Act of 1974 (ERISA), is relatively
complicated. For our purposes, it is enough to understand that
ERISA is the federal law governing the management of all
employee benefits plans. It provides a plan management framework
and requires employers to provide certain documents and annual
reports to participants and/or the federal government.

In addition, ERISA imposes a fiduciary duty on those who
exercise discretionary control over the plan's management,
administration, or assets or who render investment advice about
the plan. If a participant believes the fiduciary mismanaged the
plan or committed fraud, he may sue, either on behalf of himself
or on behalf of the plan, for breach of fiduciary duty.

It is generally only after a benefits plan is terminated that a
fiduciary duty may be imposed on an employer. In fact, a 1996
Supreme Court decision held that employers that alter the terms
of a plan are, without exception, not considered fiduciaries.
The distinction between amending and terminating a pension plan
was a pivotal issue in this case.

Like many employers, Hughes Aircraft Company sponsored a pension
plan guaranteeing participants a fixed level of benefits at
retirement, regardless of the plan's success or failure. Until
1991, the plan was funded by both the employer's contributions
and mandatory contributions by the employees who participated in
it. Because the plan guaranteed a prespecified level of
benefits, Hughes was required to make contributions to the plan
as necessary to ensure that return. It had the right to suspend
its contributions at any time, so long as doing so did not
create a fund deficiency.

By all accounts, the pension plan was quite successful.
Employee/employer contributions and remarkable investment growth
resulted in a plan surplus of nearly $ 1 billion by 1986. In
light of the surplus, the employer decided to suspend its
contributions, which it did not resume.

After about five years of continued growth and prosperity, the
employer decided to change the pension plan:

  *First, an early retirement program was established to provide
   significant additional benefits to certain key employees.

  *Second, Hughes switched to a two-tiered pension system under
which new participants would no longer make any
   contributions to the plan and would be entitled to lesser
   benefits upon retirement.

Under the two-tiered system, employees who retired before 1991
continued to receive the previously higher level of benefits,
and current employees who were with the company before 1991
could choose between the contributory and noncontributory
options.

The revised pension plan wasn't met with resounding employee
approval, to say the least. Employees who had contributed to the
plan objected heatedly that they had a right to benefit from the
surplus and that Hughes had, in essence, stolen the surplus from
them to fund a separate pension plan for noncontributing
employees. The employees claimed that as a result of the
changes, the original pension plan had ceased to exist
altogether.

Litigious leprechauns?

The contributing employees filed a class-action lawsuit against
Hughes, claiming that:

  *the changes had terminated the original plan;

  *ERISA prevented the employer from using the terminated plan's
   funds to support a second, separate fund;

  *the employer had breached its fiduciary duty to plan
   participants; and

  *the contributing employees were entitled to their "cut" of
   the plan's considerable surplus.

The district court dismissed the case, but the Ninth U.S.
Circuit Court of Appeals reversed the decision, concluding that
the 1991 amendments may have in fact terminated the existing
plan and created two plans: one consisting of preexisting
members and the other consisting of new participants.

Judge Starr and his private law firm appealed the decision to
the Supreme Court. Judge Starr accused the employees of pursuing
"a 'single pot of gold' to which they [weren't] entitled." The
contributing employees countered that the employer's argument
was "similar to the 'folklore of leprechauns' who broke into
other people's houses at night and took their money to put a
crock of gold together." The U.S. Supreme Court agreed to settle
the debate.

The Supreme Court agreed with Hughes that the employees were
seeking funds to which they were simply not entitled. The Court
held that an amendment to a preexisting plan that did not affect
the availability of the plan's pool of assets for funding
preexisting obligations could not be characterized as a
"termination" of the plan. The Court reiterated its 1996
decision that only the termination of a plan -- not the act of
amending a plan -- creates a fiduciary duty for an employer.
Based on its finding that Hughes was not a fiduciary, the Court
dismissed the counts that alleged breach of fiduciary duty.

The Court also concluded that contributing participants to a
defined benefits plan do not have an interest in that plan's
surplus -- so long as the employer provides the amount of
benefits guaranteed to participants under the plan. To clarify
its decision, the court compared a defined contribution plan to
the defined benefits plan at issue in this case.

In a defined contribution plan, both the employee and the
employer contribute, and each employee receives whatever level
of benefits the investments from the amount contributed on his
or her behalf actually provide. This type of plan provides an
individual account for each participant, and the benefits
received are dependent on the amount contributed. By definition,
there can never be a shortfall of funds in this type of plan to
cover the promised benefits.

A defined benefits plan, on the other hand, consists of a
general pool of assets rather than individual accounts. Under
this type of plan, an employee is guaranteed a fixed level of
benefits upon retirement. Although the plan may be funded by
both employer and employee contributions, the employer bears the
entire risk and must cover any shortfalls in the fund because of
poor investments. Regardless of the fund's success or failure,
the employee receives the same benefits.

The Court concluded that since the contributing employees
received the full, fixed amount guaranteed under the plan,
Hughes could not have violated ERISA by using assets from the
surplus for other plan participants. Further, the Court held
that since the surplus was used for the sole purpose of paying
pension benefits to plan participants, it did not "inure to the
benefit" of the employer and thus was not a violation of the
law's provisions against inurement.

Interestingly, the Court found that the use of the surplus did
not inure to Hughes's benefit even though the two-tiered system
spared it from having to fund the noncontributing participants'
portion of the plan. Although Hughes had changed the plan to
offset its own obligations as well as those of noncontributing
participants, the Court found that the original plan had not
been terminated and reversed the Ninth Circuit's decision.
Hughes Aircraft Co., et al. v. Jackson, et al. (97-1287) (Jan.
25, 1999).

At a time when it seems like U.S. Supreme Court decisions
favoring employers are rare, this decision is a welcome relief.
The ruling preserves your managerial control to amend your
defined employee pension plans without entitling your employees
to funds to which they would not otherwise be entitled.

Simply put, the Court's decision recognizes that defined
benefits plans that guarantee a predetermined level of benefits
can be dangerous business for employers. Based on the high
court's ruling, an employer that assumes the risk that it may
have to cover a deficiency in its fund because of poor
investment returns may also enjoy an eased future burden in the
event the plan's investments do well.

Please keep in mind that the Supreme Court's decision does not
mean you can simply pocket the plan's surplus (that would "inure
to the employer's benefit"). However, it does permit you to
retain your plan's surplus to offset your own contributions to
the fund.

Since every dollar you do not have to contribute to an employee
pension fund is a dollar working for your company's bottom line,
this decision is worth literally billions of dollars to American
employers. When it comes right down to it, maybe Ken Starr
hasn't had such a bad year after all!

This article was written by Jennifer L. Hamilton of Pepe &
Hazard, LLP. (NEW HAMPSHIRE EMPLOYMENT LAW LETTER; JUNE, 1999)


PROTECTION ONE: Expects Process Server to Arrive Shortly
--------------------------------------------------------
Based on public releases, PROTECTION ONE INC. announced that it
understands that purported class action lawsuits have been filed
against it and certain of its officers and directors alleging
violations of federal securities laws arising from the Company's
announcement to restate financial statements for the year ended
December 31, 1997 and each of the first three quarters of 1998.

The Company has not been served with process and, therefore,
cannot provide more details with respect to these or any other
claims alleged in these actions.


PROVIDENT COMPANIES: Paul Revere Agents Sue Together & Alone
------------------------------------------------------------
Two alleged class action lawsuits have been filed in Superior
Court in Worcester, Massachusetts against PROVIDENT COMPANIES
INC. -- one purporting to represent all career agents of Paul
Revere whose employment relationships ended on June 30, 1997 and
were offered contracts to sell insurance policies as independent
producers, and the other purporting to represent independent
brokers who sold certain Paul Revere individual disability
income policies with benefit riders.

Motions filed by the Company to dismiss most of the counts in
the complaints, which allege various breach of contract and
statutory claims, have been denied, but the cases remain at a
preliminary stage. To date, no class has been certified in
either lawsuit.

The Company has filed a conditional counterclaim in each action
which requests a substantial return of commissions should the
Court agree with the plaintiff's interpretation of the contract.
The Company has strong defenses to both lawsuits and will
vigorously defend its position and resist certification of the
classes.

In addition, the same plaintiff's attorney who has filed the
purported class action lawsuits has filed 42 individual lawsuits
on behalf of current and former Paul Revere sales managers
alleging various breach of contract claims. The Company has
filed a motion in federal court to compel arbitration for 16 of
the plaintiffs who are licensed by the National Association of
Securities Dealers and have executed the Uniform Application for
Registration or Transfer in the Securities Industry (Form U-4).

The Company has strong defenses and will vigorously defend its
position in these cases as well.


ROGERS ATHOME: Users Unhappy with Canadian Internet Cable Speed
---------------------------------------------------------------
After months of waiting for his high-speed Internet service to
actually reach high speeds, Chris Weisdorf got a case of Net
rage. The 23-year-old Toronto computer consultant and Rogers
AtHome Internet subscriber is leading a campaign aimed at
getting executives at the cable giant to fix what he calls
nagging problems with the service's speed, stability and
support.

"I've been angry about this for some time," said Weisdorf, who
signed on with Rogers last year. "Tech support is disgustingly
bad and there is a chronic speed problem that has to be
addressed."

Weisdorf said he has spent hours waiting on hold for Rogers
technicians to help him invigorate his plodding Net connection,
all to no avail.

Then he shared his frustration with other disgruntled
subscribers on the Rogers AtHome Users Association Web site
(www.rhua.org), an online forum for Net surfers who say they're
paying a high-end price for a low-end service.

That's when Rogers Communications Inc. officials paid attention,
he said.

Last week, Weisdorf carried the torch for about 300 members of
the online association, meeting with management to get some
answers on why the service continues to sputter despite company
advertisements promising transmission speeds 100 times faster
than a dial-up Internet connection.

"The only time the service is 100 faster is maybe at 3 a.m.,"
said Weisdorf, who first met with Rogers officials three months
ago.

"They've been co-operative, they've listened to me when I
presented the issues and were in accordance with many things I
said they should change. But there is still a lot of
improvements needed."

The AtHome service costs about $40 a month, about double the
price of telephone dial-up Net access, along with an initial
installation fee of between $50 and $200.

Still, hundreds of thousands of Canadian Net surfers weary of
slow transmission rates have been willing to pay it.

Rogers has more than 90,000 subscribers on its AtHome service,
up 14,000 from March, said Taanta Gupta, a company spokesperson.

"This whole industry is in such a growth mode, there are always
technical issues. But we've done a lot of work on them and we
think we've made a lot of progress this spring."

But Rob Mitzel, a Rogers AtHome subscriber in Langley, B.C., who
launched the Rogers AtHome Users Association Web site six months
ago, said his expectations of high-speed Net access have turned
into teeth grinding.

"There's a lack of speed and people are fed up. They're talking
about class- action lawsuits and cancellations."

But even Mitzel acknowledged that at least some of the problems
are beyond Rogers' control.

'There's a lack of speed and people are fed up'

Rogers, like a host of other cable companies across North
America, relies on AtHome Corp., a California-based Internet
firm, to provide packaged online content, including news,
weather, sports, multimedia, video and audio.

And with stunning subscriber growth across the continent,
insiders say, the traffic jam in Rogers' high-speed network has
been partly rooted in California.

"There's been issues with the AtHome aspect of service with
Email servers that were overloaded," said Brad Davies, president
of Cancable Inc., a Burlington company that hooks up new AtHome
subscribers for Rogers. "But from what we see, those issues have
been resolved."

Still, a steady chorus of subscribers say they continue to tap
their fingers waiting for Internet content to squeeze through
AtHome cable wires.

"I laugh when I see the Rogers commercials on television saying
they offer high-speed service," said David Wilson, an 18-year-
old AtHome subscriber in Cambridge. "It's not there. For every
two weeks of relative normalcy, I get two weeks of inadequate
service where the connection is slow or non-existent. " (The
Toronto Star; June 9, 1999)


SUMITOMO CORP.: Dealer Alleges International Copper Cartel
----------------------------------------------------------
The Associated Press reports that a Wisconsin metal dealer sued
a Japanese company Tuesday, claiming it formed a cartel with
other companies to inflate copper prices worldwide. Watertown-
based Loeb Industries, along with a Los Angeles Scrap Iron &
Metal Corp, filed the lawsuit against Tokyo-based Sumitomo
Corp., claiming it engaged in price-fixing.

The class-action lawsuit also names New York-based Global
Minerals and Metals Corp., a copper merchant firm that entered
into a series of contracts with Sumitomo from 1994-1996.

"The cartel drove up copper prices by hoarding supplies of
physical copper and entering into paper transactions among the
members of the group designed to appear as trading activity and
to provide price support for the spot copper market," the
lawsuit said. Physical copper includes primary and scrap copper.

Loeb and Los Angeles Scrap Iron & Metal, who both purchase
physical copper, claim they were harmed by the increase in
prices. The plaintiffs also said the lawsuit should cover all
U.S. copper or metals dealers who purchased copper from June
1994 to June 15, 1996.

A message left with an attorney for Loeb was not immediately
returned Tuesday.

Peter Haveles, an attorney for Global Minerals and Metals, said
the price increase in physical copper had nothing to do with the
company's actions. "The company believes that the allegations
made against it have no merit and wholly ignore that the price
of copper rose during the mid-1990s solely as a result of the
well-recognized substantial deficit of physical copper due
solely to a dramatic increase in worldwide economic activity and
copper consumption during that time period," Haveles said.

In September 1996, Sumitomo said it lost $2.6 billion from the
unauthorized trading by one of its traders, Yasuo Hamanaka. It
has since paid millions of dollars in class action lawsuits
filed by copper traders and others over trading in Japan and
abroad. Hamanaka was sentenced to eight years in prison in March
1998 by the Tokyo District Court on forgery and fraud
convictions. Sumitomo has filed a separate civil lawsuit against
Hamanaka.

A spokesman for Sumitomo Corp. refused to comment on the
lawsuit. "We have not seen the details of the complaint and
can't make any comments until we do," Sumitomo spokesman
Masahito Teramoto said. (AP Online; 06/08/99)


Y2K LITIGATION: Canada Remains Cautious But Unconcerned
-------------------------------------------------------
Paul Douglas knows all about the Pandora's box of liability the
Y2K computer glitch could open for the Canadian construction
industry. "If you've built an air-traffic control tower, what
are the implications if that's not working right?" says Douglas,
president of PCL Constructors Canada Ltd. in Edmonton. "If
you've built a hospital, with all the high-tech operating
equipment and those types of things? As you start to dream about
these types of things, water treatment plants, anything with
elevating devices in them, all these places with embedded chips,
you can dream up a pretty scary story."

According to The Edmonton Sun, it's a scary story with a $ 1-
trillion punch line, say analysts at the Gartner Group of
Stamford, Conn., who have tried to calculate the potential for
lawsuits.

THINGS GO AWRY

It's not surprising that the construction industry and others
are starting to stop worrying about their in-house accounting
programs and focusing instead on their legal exposure should
things go awry.

"The focus has somewhat shifted from the technical fix to
looking at your legal liability," agrees Libby Gillman with the
Toronto law firm of Donahue and Partners.

As chairman of a national task force created by his industry to
examine the problem, Douglas says he was relieved to learn
worst-case scenarios are unlikely.

"We were able to feel fairly comfortable that everything that we
were able to investigate so far and do testing on across the
country seems to indicate that if there is failure it's been
designed to fail safe.

"We haven't yet uncovered what would be considered a life-
threatening situation, which is comforting, I guess."

Very comforting if you're boarding an elevator on the 25th floor
at 12:01 a.m. on Jan. 1.

But how well businesses prepare for the crunch and how well they
document that work are critical factors in measuring liability
should something go wrong, says Gillman.

"Obviously, fix that which you can fix and do some triage," she
suggests.

"Secondly, do some effective contingency planning so you can
keep your business running and ensure some continuity and
thirdly, make some preparations in the unhappy event that you
are party to some litigation.

"Part of that would be proving that you did your due diligence
and you did all the things that you should have done as a
reasonable thing in the circumstances."

It's a particular concern for the directors of a corporation who
hold the ultimate responsibility, she says.

A law that would limit liability in the United States has been
drafted although it is still hanging under the cloud of a
possible presidential veto.

The White House is concerned it may make companies feel less
pressure to prepare thoroughly. No such law is even planned in
Canada.

The executive director of the Canadian Bar Association says
Industry Canada asked for their opinion on the need for a so-
called good-Samaritan law.

"A good-Samaritan bill did not make sense in Canada for several
reasons," says John Hoyles.

First, he says, there were the usual constitutional and possible
Charter problems so many pieces of legislation can run into when
jurisdiction is not clearly federal.

But there was also the different legal framework in Canada as
compared with the more litigious United States, with its greater
potential for class action suits and huge damage awards.

"There was really a belief that there was no need to (pass such
a law.) The law as it currently stood was just fine."

But that doesn't mean Canadian companies should not be concerned
and do all they can to minimize their exposure, he adds.

EXPOSURE RISKS

In a presentation she made to CIBC recently, Gillman cited
research from the Organization for Economic Co-operation and
Development that ranked businesses according to their Y2K
exposure risks.

Douglas might be happy to know the OECD placed the construction
industry at the bottom with a low exposure rating, below
agriculture.

The bad news is that just about everyone else was given a high
risk rating. The list was topped by the financial and banking
sectors.

Douglas says all the testing in the world can't catch all the
possible systems failures that could be caused by the Y2K
problem.

"The fact is, no matter how much testing you do, it is the
belief of the industry there will still be failures.

"Readiness is, do all the testing you can do and have a
contingency plan in place to deal with the failures as quickly
and as responsibly as possible." (The Edmonton Sun; June 9,
1999)


Y2K LITIGATION: Silicon Valley Weighs in US Political Battle
------------------------------------------------------------
A coveted ally of both political parties, Silicon Valley looked
ready to steamroll its way through just about any battle on
Capitol Hill this year.

Democrats have been working overtime to court the titans of high
tech. Not only are Silicon Valley wallets flush with campaign
cash, but Democrats are desperate to burnish their image as
friends of the New Economy.

Republicans, for their part, are aghast at the inroads Democrats
have made into the GOP's pro-business constituency and are
determined to reverse the trend.

But despite what appear to be ideal circumstances, Silicon
Valley has been stymied on its No. 1 priority: protection from
lawsuits stemming from the Y2K problem, a programming error that
could cause computers to misread 2000 as 1900 in computations
involving dates.

Today, supporters of such protection will try for a third time
to break South Carolina Democrat Fritz Hollings' Senate
filibuster on a Y2K bill. With the help of California Senator
Dianne Feinstein and 12 other Democrats, they may succeed, but
the outlook for final passage remains murky, with the White
House continuing to threaten a veto.

The battle over Y2K liability pins Democrats between their
historic alliance with trial lawyers and their newfound desire
to woo the high-tech industry. With Democratic presidential
contender Al Gore claiming to be the Father of the Internet,
it's an uncomfortable spot, and one that Republicans are in no
hurry to relieve.

Now, instead of scoring an easy legislative victory, the high-
tech industry is trapped in no-man's land between two of
Washington's oldest, bitterest and most powerful enemies: the
U.S. Chamber of Commerce and the American Trial Lawyers
Association.

It's war.

The chamber "wants to hurt trial lawyers and advance a right-
wing Republican agenda," charged trial lawyer association
president Mark Mandell. "This is a complete political
machination to save money for some businesses at the expense of
other businesses and individuals just to mutate an already
fragile system of justice, which they are constantly assaulting.
They don't want justice in this country, except and unless it's
for them."

Chief chamber lobbyist Lonnie Taylor retorted that frivolous
litigation is how trial lawyers "make their money. They're using
the White House, they're using a number of their friends in the
Senate, they're pulling out all the stops" to stop the Y2K bill.

The stakes are high. No one knows how severe a Y2K breakdown --
which could affect everything from financial markets to cash
registers -- might be. Some predict a global meltdown, others
dismiss such dire forecasts as consultant-generated hype.

But with computers embedded in everything from elevators to
airplanes, the potential clearly exists for mass Y2K product
liability and a trial lawyer bonanza. By some estimates, even if
only 5 percent of computer systems fail, liability costs could
reach a staggering $1 trillion.

Lawsuits could ripple through the economy: A supplier's system
malfunctions, disrupting distributors, who disrupt retailers, on
down the line, with each suing the other for treble damages.

Computer and software manufacturers would be at ground zero in
such lawsuits. Little surprise then, that huge Palo Alto
chipmaker Intel, whose semiconductors run millions of computers,
has been pushing hard for the bill, including personal emails
and calls to lawmakers from chairman Andy Grove.

LITIGATION COULD BE BIGGEST YET

An American Bar Association panel predicted last August that Y2K
litigation could be the biggest mass tort ever, exceeding the
combined cost of tobacco, asbestos, breast implant and Superfund
litigation. Trial attorney fees usually come to one-third of
successful lawsuits, making for some big numbers.

"There at least is the potential for widespread failures --
everything from billing software to transportation," said Rob
Atkinson, director of the Technology and New Economy Project for
the Progressive Policy Institute, the "New Democrat" policy arm.
"This could be a fairly widespread and systematic phenomenon
where everybody starts suing everybody, and while we're at it,
why not ask for $5 million in damages."

So when high-tech lobbyists turned to Congress to limit their
legal exposure, Republicans, long-standing enemies of the trial
bar, were happy to oblige.

But the GOP also spotted an even sweeter benefit: the perfect
"wedge" issue to split Democrats between their desire to align
themselves with Silicon Valley and preserve their relationship
with trial attorneys.

"You have to choose between friends," Representative Tom Davis,
sponsor of the House Y2K bill and chairman of the Republican
Congressional Campaign Committee, openly gloated to reporters
last month. "This one wedges them."

Democrats are as close to the trial bar as Republicans are to
the Chamber of Commerce. Nearly 90 percent of the $2.8 million
in campaign contributions from the trial lawyers association
during the last election went to Democrats, according to the
nonpartisan Center for Responsive Politics.

The computer industry gave more than $8.8 million, the center
reported, but 57 percent went to Republicans.

BILL WOULD CAP LAWYER'S FEES

Davis eventually pushed a very business-friendly Y2K bill
through the House on May 12, backed by the chamber and the
National Association of Manufacturers. The business lobby has
been pushing tort reform unsuccessfully for more than a decade,
and saw Y2K as an opening. The high-tech industry, eager to get
protection, joined the coalition.

Portions of the House bill come straight from the chamber's tort
reform wish list. It would cap attorney's fees at $1,000 an hour
and require plaintiffs seeking punitive damages to prove that a
company willfully intended to do harm, rather than just acted
negligently.

The House bill also includes a broad $250,000 cap on Y2K
punitive damages and requires all Y2K class action suits over $1
million to go to federal court, making sure they don't wind up
in state courts, such as Alabama's, that have proven very
friendly to plaintiffs in class-action product liability suits.

House Republicans rebuffed efforts by tech-friendly moderates
such as California's Anna Eshoo, D-Atherton, to make the bill
more palatable to Democrats. President Clinton, a trial bar
ally, promised a veto.

The Senate responded with a compromise backed by 13 Democrats,
and one that Eshoo said would win House support as well. But
South Carolina's Hollings, a former trial lawyer, is
filibustering the bill. The White House has signaled some
willingness to bend but maintains its veto threat.

"Hollings is putting a lot of his colleagues in a very, very
difficult situation with high tech," said William Morley, the
chamber's director of congressional affairs. In regions such as
Northern California and northern Virginia, Morley said, "high
tech is the engine driving growth. This legislation is
absolutely needed, and we can't wait until January 1."

GOP ENJOYING DEMOCRATIC DILEMMA

Republicans, meanwhile, are in no mood to let Democrats off the
hook.

Democrats have "got to make a choice," said Eric Ueland, a top
GOP leadership aide. "Either they stand with Silicon Valley or
they stand with trial lawyers, and that's a hard decision for
them to make."

Eshoo countered that it is "more than obvious that (the House
bill) was used as a fund-raising tool and as political tool."

The biggest stake for Silicon Valley is the provision, still
alive in the Senate compromise, that would restrict "joint and
several liability" in Y2K lawsuits. Right now, a company
responsible for only 1 percent of damages can be held 100
percent liable. That exposes large "deep pocket" companies like
Intel to huge damages even if their responsibility is
tangential.

Intel's Grove told Congress that any Y2K bill must contain a
"proportional liability" provision that would hold a company
liable only for the losses it caused, not for damages caused by
suppliers or others.

The Senate compromise keeps proportionate liability, but it
limits the punitive damage caps to businesses with fewer than 50
employees. It also retains less controversial provisions,
including a 90-day cooling off period before a suit can be filed
that gives defendants time to remedy the problem.

Feinstein called the bill "a significant compromise."

Whether that compromise will hold is another question. Even if
Hollings is beaten back, the bill still has to go to a House-
Senate conference committee. Moderate Democrats fear that House
Republicans may push the bill too far in favor of defendants,
dare the White House to veto it, and then blame Democrats for
skewering high tech. Final passage is still a long way off.

The legislation "needs be targeted and focused on this issue and
this only," Eshoo said. "It won't serve anyone if it's put into
place in the year 2000. That's not good enough." (The San
Francisco Chronicle; JUNE 9, 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.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers. Information
contained herein is obtained from sources believed to be
reliable, but is not guaranteed.

The CAR subscription rate is $575 for six months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 301/951-6400.

                 * * *  End of Transmission  * * *