CAR_Public/990909.MBX                  C L A S S   A C T I O N   R E P O R T E R

                Thursday, September 9, 1999, Vol. 1, No. 152

                                 Headlines

3COM SECURITIES: Milberg Not Ousted By Bernstein Litowitz, Fed Ct Rules
ARONI COLMAN: Partners Of Aussi Law Firm Offer Settlement To Creditors
CANADIAN GOVT: Class Action May Follow Windsor Highway Disaster
DAMSON BIRTCHER: Discussing Settlement Over Partner’s Suit In Phil.
DOT HILL: Continues To Defend Claim In New York Over Box Hill IPO

ELBIT MEDICAL: Will Defend Shareholders’ Claim At Ct Of Tel Aviv-Yafo
ELRON ELECTRONIC: Decries Merit Of Shareholders’ Claim
FEN-PHEN: Portland Firm Also Takes On Manufacturers Of Redux/DHE 45
FIRST UNION: Former Employees Sue Over Pension Plan
FLEMING COMPANIES: Amended Shareholders’ Complaint Pending In Oklahoma

FLEMING COMPANIES: Appeals Customers’ Case In Missouri On Overcharges
FLEMING COMPANIES: Dismissal Of Derivative Suit Awaits Okl. Ct Approval
FLEMING COMPANIES: Tobacco Related Case Moved From Phil To Pennsylvania
HITSGALORE COM: Faces Shareholders’ Suit In California Re Disclosure
HOLOCAUST VICTIMS: Slave Laborers Talks Screeched At Amount Demanded

ILLINOIS: 7th Cir Rap State's Abrupt Switch On Consent Re Child-Support
JOHN D: Weight Policy Did Not Violate ADA, Rehab. Act, Georgia Ct Rules
MICHIGAN: ACLU Suit Seeks To Clean Up Flawed Sex-Offender Registries
PHH US: Sp. Ct. Affirms Holding Of Escrow Money No Violation Of UTPCPL
SHERIFF DORSEY: Inmates Charge Brutality, Denial Of Medical Care

TOBACCO LITIGATION: Korean Maker KTGC Faces Unprecedented Class Action
VITAMINS CARTEL: 6 Companies’ Settlement For Global Conspiracy Near

                              *********

3COM SECURITIES: Milberg Not Ousted By Bernstein Litowitz, Fed Ct Rules
-----------------------------------------------------------------------
A federal judge has turned down a New York firm's novel bid to knock
plaintiffs giant Milberg Weiss Bershad Hynes & Lerach as co-lead counsel
from a lucrative securities class action.

In June, Bernstein Litowitz Berger & Grossmann filed a motion to
disqualify Milberg Weiss serving as co-lead counsel in In re 3Com
Securities Litigation, 97-21083, for allegedly having a conflict of
interest.

Milberg Weiss and a host of other plaintiffs firms first filed suit
against 3Com in March 1997, claiming the company filed false financial
statements that duped investors into buying stock between Sept. 24,
1996, and Feb. 10, 1997.

A second series of suits were filed in December 1997 alleging similar
behavior. That class period ran from April 23, 1997, through Nov. 5,
1997.

Four firms agreed among themselves to serve as co-lead counsel in the
second case: Milberg; the Bernstein firm; Philadelphia's Barrack, Rodos
& Bacine; and New York's Kaplan, Kilsheimer & Fox.

But in May, Milberg filed yet another action, Gaylinn v. 3Com Corp., 99-
1729, alleging similar fraudulent behavior -- but during months not
covered in the original two suits. The new suit also alleges that the
officers have committed continuous fraud and incorporates the dates
alleged in the second complaint -- the class action that has the four
co-lead counsel.

That prompted Bernstein Litowitz to charge Milberg with a conflict of
interest, saying they had competing interests in the different actions.
Furthermore, Bernstein alleged, the new suit caused 3Com lawyers to pull
out of settlement negotiations.

But on Aug. 25, U.S. District Judge James Ware dismissed Bernstein's
motion without much ado. "The court finds that Milberg Weiss' concurrent
representation of the classes . . . does not warrant disqualification at
this time," Ware wrote. "The fact that the defendants allegedly
terminated settlement negotiations because of Milberg Weiss' concurrent
representation is also insufficient to warrant disqualification at this
time." But Ware said he was dismissing the motion "without prejudice, to
be renewed if an actual conflict arises which causes more significant
prejudice to the class members."
(The Recorder 9-7-1999)


ARONI COLMAN: Partners Of Aussi Law Firm Offer Settlement To Creditors
----------------------------------------------------------------------
Four former business partners of murdered Melbourne lawyer Max Green
will offer up to 250 creditors a total of $100,000 in a settlement bid
to avoid bankruptcy. The former partners in law firm Aroni Colman will
put forward the proposal at a meeting of creditors. If accepted, the men
would avoid any future claims against them in regard to the $35 million
lost in a fraudulent tax scheme arranged by Green.

Green was found dead in Cambodia last year, leaving a number of
prominent businessmen and members of his own family victims of an
investment racket.

David Lofthouse, the controlling trustee for partners Benni Aroni,
Adrian Colman, Mark Wollan and Richard Cornish, said they would each
offer creditors a settlement of $25,000 - about .04 to .06 cents in the
dollar. "If creditors accept this arrangement, it will settle out any
claim there is against these four individuals," Mr Lofthouse told
reporters. "It's up to creditors finally to decide whether they wish to
accept it or otherwise and in the circumstances I don't know what will
be the outcome of the meeting. "If they don't accept it, then I expect
that they'll pass a resolution for bankruptcy." He said while the
dividend was low, creditors may receive even less if the debtors were
declared bankrupt.

Mr Lofthouse said each of the former partners had assets ranging from
just $1,100 to around $62,000, despite being partners in a major law
firm. "On the basis of our investigation and what they've told us, they
have very few assets," he said. Mr Lofthouse said the offer could only
be accepted with a vote among the creditors representing more than 75
per cent of the debt.

Green was found strangled with his tie in a Cambodian hotel in March
last year, after which investors discovered they had been duped by him.
They included cardboard king Richard Pratt, an owner of Portmans
clothing, Norman Bloom, and some members of Green's own family.

Dozens of plaintiffs are still waiting for a Supreme Court ruling from a
civil case in which several defendants including accounting firm Horwath
(Vic) Pty Ltd were being sued by 186 plaintiffs over the fraud.

However, out of court settlements left a group of just 48 plaintiffs
suing Horwath, which in turn is seeking to direct blame to others, among
them Aroni Colman.

Justice Hartley Hansen late last month reserved his decision. (AAP
Newsfeed 9-7-1999)


CANADIAN GOVT: Class Action May Follow Windsor Highway Disaster
---------------------------------------------------------------
Poorly-designed stretches of highway, like the one near Windsor where
seven people died last week, are a consequence of the Ontario
government's failure to upgrade problem roads One of death's bitter
lessons lies in a quarter-kilometre repaved stretch of Ontario's Highway
401, near Windsor.

This is where seven people died and more than 40 were injured in
fogbound crash of 80 vehicles, and a fire so hot that it melted away the
pavement. Police had to update the number of vehicles involved when on
further investigation they realized a hulk of metal they mistook for one
car, was in fact the fused remains of two separate cars.

While fog and speed were major factors, those who survived are now
telling horrific stories of how the series of crashes unfolded and how,
because of the highway's unforgiving design, even those motorists who
saw the accident ahead, could not escape becoming part of it.

With only tiny, steeply banked gravel shoulders, and a narrow grass
median strip, even those who tried to pull off the road in the main
crash zone -- what police have dubbed the hot zone -- were caught in the
crash. Others were mowed down as they ran up the minimal road shoulder,
hoping to help those who were trapped in the wreckage.

The unforgiving 1960s-era highway, one of the busiest in Canada, leaves
no room for human error. Their deaths, and hundreds of others caused in
part by inadequate roads, are on the heads of federal and provincial
governments, which have collected billions in highway taxes, but
redirected the cash rather than spending it as intended -- on more
modern, safer roads.

The same deception by which they deliberately divert EI premiums,
pension contributions, and environment duties, is used to siphon off gas
tax revenues, earmarked specifically for highways and safety, but piped
instead into the bottomless pit of general revenues.

According to the Canadian Automobile Association, less than a third of
highway taxes collected in Ontario actually go towards highways. The
Ontario government collects $ 3.5 billion in gasoline taxes and auto
license fees annually, but invests less than half, $ 1.5 billion in
highways. The federal government receives $ 2 billion in gas tax from
Ontario alone, and currently spends none of it on Ontario's highway
infrastructure.

Just as our local killer strips, on Hwy. 17 to Renfrew and Hwy. 7 to
Carleton Place, are infamous for antiquated, unsafe design well below
accepted traffic volume guidelines, the 401 stretch from London to
Windsor, inundated with heavy truck traffic from Detroit and the U.S.
Midwest, has been denounced for years.

Proponents of a third lane, aware they were being turned down because of
costs, have repeatedly requested at least a compromise upgrade, with
wider semi-paved road shoulders and median barriers at least approaching
modern standards.

                              Fog Zone

Even modest demands for reflectorized road markings and a warning system
in the fog zone have gone unheeded, as they have in our own Eastern
Ontario equivalent -- fog prone stretches of the 417 near Plantagenet.

The level of government responsibility for the carnage may be settled by
the courts in the Windsor crash and could set a precedent which finally
forces governments to spend the highway taxes they collect. With such a
large number of victims and insurance interests, class action and
individual lawsuits similar to the multi-billion dollar lawsuits which
follow airline tragedies are surely inevitable.

The government's liability, morally and financially, is enormous, given
its level of indifference, if not sheer negligence. (The Ottawa Sun
9-8-1999)


DAMSON BIRTCHER: Discussing Settlement Over Partner’s Suit In Phil.
-------------------------------------------------------------------
Bigelow Diversified Secondary Partnership Fund 1990 litigation

On March 25, 1997, a limited partner named Bigelow/Diversified Secondary
Partnership Fund 1990 filed a purported class action lawsuit in the
Court of Common Pleas of Philadelphia County against Damson/Birtcher
Partners, Birtcher Investors, Birtcher/Liquidity Properties, Birtcher
Investments, L.F. Special Fund II, L.P., L.F. Special Fund I, L.P.,
Arthur Birtcher, Ronald Birtcher, Robert Anderson, Richard G. Wollack
and Brent R. Donaldson alleging breach of fiduciary duty and breach of
contract and seeking to enjoin the Consent Solicitation dated February
18, 1997.

On April 18, 1997, the court denied the plaintiff's motion for a
preliminary injunction. On June 10, 1997, the court dismissed the
plaintiff's complaint on the basis of lack of personal jurisdiction and
forum non conveniens.

On June 13, 1997, the Partnership, its affiliated partnership, Real
Estate Income Partners III, and their general partner,
Birtcher/Liquidity Properties, filed a complaint for declaratory relief
in the Court of Chancery in Delaware against Bigelow/Diversified
Secondary Partnership Fund 1990 L.P. The complaint seeks a declaration
that the vote that the limited partners of the Partnership and Real
Estate Income Partners III took pursuant to the respective consent
solicitations dated February 18, 1997 were effective to dissolve the
respective partnerships and complied with applicable law, that the
actions of the General Partner in utilizing the consent solicitations to
solicit the vote of the limited partners did not breach any fiduciary or
contractual duty to such limited partners, and an award of costs and
fees to the plaintiffs. The defendant has answered the complaint. The
parties have initiated discovery. No motions are pending at this time.

In September 1998, Bigelow/Diversified Secondary Partnership 1990
informed the Partnership that it was filing suit in the Delaware
Chancery Court against Damson/Birtcher Partners, Birtcher Investors,
Birtcher Liquidity Properties, Birtcher Investments, BREICORP, LF
Special Fund I, LP, LF Special Fund II. LP, Arthur Birtcher, Ronald
Birtcher, Robert Anderson, Richard G. Wollack and Brent R. Donaldson
alleging a purported class action on behalf of the limited partners of
Damson/Birtcher Realty Income Fund-I, Damson/Birtcher Realty Income
Fund-II and Real Estate Income Partners III alleging breach of fiduciary
duty and incorporating the allegations set forth in the previously
dismissed March 25, 1997 complaint filed in the Court of Chancery of
Philadelphia County. Plaintiff has engaged in preliminary discovery and
the parties have held settlement discussions. No motions are pending at
this time.


DOT HILL: Continues To Defend Claim In New York Over Box Hill IPO
-----------------------------------------------------------------
On August 16, 1999, the United States District Court for the Southern
District of New York issued an order in connection with the putative
class action entitled Lawrence Milman v. Box Hill Systems Corp., 98 CIV.
8640 (SAS) granting defendants' motion to dismiss in part, and denying
the motion to dismiss in part. Defendants filed the motion to dismiss
pursuant to Federal Rule of Civil Procedure 12(b)(6). As previously
reported, the putative shareholder class action lawsuit was filed
against Box Hill Systems Corp. n/k/a Dot Hill Systems Corp. and certain
officers/directors of Box Hill, as well as the underwriters of Box
Hill's September 16, 1997 initial public offering and alleged that
omissions and misrepresentations were made with respect to the Offering.

The ruling on the motion to dismiss decreased the number of actionable
omissions or misrepresentations alleged by plaintiffs from eight to
three. In ruling upon a motion filed pursuant to 12(b)(6), a court may
assess only the legal sufficiency of a complaint, and may not consider
the accuracy or merits of a plaintiff's factual allegations. Dot Hill
and the officers/directors named in the lawsuit believe that they have
meritorious defenses to plaintiffs' claims and intend to continue to
defend against those claims.


ELBIT MEDICAL: Will Defend Shareholders’ Claim At Ct Of Tel Aviv-Yafo
---------------------------------------------------------------------
Elbit Medical Imaging Ltd. (NASDAQ: EMITF) announced that it has been
served with a Statement of Claim, as well as a Motion that the Claim be
recognized as a representative claim. The Claim and the Motion were
submitted to the District Court of Tel Aviv-Yafo by Mr. Yonatan Aderet,
the former president of the Elscint Ltd. (a subsidiary of the Company -
hereinafter "Elscint") and a shareholder of Elscint, against the
Company, Elscint, Elbit Medical Holdings Ltd., (a subsidiary of the
Company), Elron Electronic Industry Ltd. and 5 former Directors of the
Elscint.

The Motion was submitted by the applicant on behalf of all existing
shareholders of Elscint who were either shareholders or the holders of
options convertible to Elscint's shares during the period preceeding
November 5, 1998.

The principal subject matter of the Claim is the plaintiff's allegation
that the former Directors of Elscint by their actions, including their
decisions regarding the sale of Elscint's assets, caused damage to be
suffered by Elscint and the discrimination of the minority shareholders
of the Elscint, while acting in a conflict of interests between those of
Elscint and its shareholders and the interests of the Company and the
holders of the controlling interest in Elscint.

In terms of the Motion, the applicant has requested that Elscint be
ordered to purchase from each of the members of the represented group
all shares held by them at a price of not less than US$ 28 per share, or
alternatively, that the Company be directed to publish an acquisition
proposal for the purchase of its shares held by the public at a price of
US$ 28.

The Company is of the opinion that the Claim is groundless, is devoid of
both factual and legal merit, and intends to vigorously oppose and
defend same.


ELRON ELECTRONIC: Decries Merit Of Shareholders’ Claim
------------------------------------------------------
Elron Electronic Industries Ltd. (NASDAQ:ELRNF), a leading multinational
high technology holding company, announced that the Company received a
copy of a claim and a motion to approve the Claim as a class action
submitted by Mr. Yonatan Aderet, the former president of Elscint Ltd.
and a shareholder of Elscint. The Claim names as defendants Elscint
Ltd., Elbit Medical Imaging Ltd., Elbit Medical Holdings Ltd., Elron
Electronic Industries Ltd. and Emmanuel Gill, Uzia Galil, Dov Tadmor,
Micha Angel and Yigal Baruchi former directors of Elscint. The motion
was submitted by the applicant on behalf of all existing shareholders of
Elscint who held Elscint's shares during the period preceding November
5, 1998.

The merits of the Claim is the plaintiff's allegation that the
defendants by their decisions, regarding the sale of Elscint's assets,
caused damage to be suffered by Elscint and the discrimination of the
minority shareholders of Elscint, In terms of the claims the applicant
has requested that Elscint or the other defendants be ordered to
purchase from each of the members of the represented group all shares
held by them at a price of not less than US$ 28 per share.

The Company denies the allegations set forth in the Claim and will
vigorously defend the Claim. Elron Electronic Industries Ltd. is a
multinational high technology holding company based in Israel. Through
affiliates, Elron is engaged with a group of high technology operating
companies in the fields of advanced defense electronics, communication,
semiconductors, networking, software and information technology.


FEN-PHEN: Portland Firm Also Takes On Manufacturers Of Redux/DHE 45
-------------------------------------------------------------------
Williams & Troutwine, a products liability law firm, represents numerous
plaintiffs in Oregon, Hawaii, Montana, Alabama, Mississippi, Florida and
Arizona who allege they suffered permanent heart damage from taking the
diet drugs Redux and fen-phen.

Williams & Troutwine is also investigating actions against the
manufacturers of ergotamine preparations like DHE 45, and its
association of long term use and heart valve lesions caused by
endomyocardial fibrosis, producing aortic and mitral valve
regurgitation. (Chemical Business NewsBase: Press Release 8-12-1999)


FIRST UNION: Former Employees Sue Over Pension Plan
---------------------------------------------------
Eighteen former First Union Corp. workers filed a $300 million class
action lawsuit against the Charlotte, N.C.-based bank, alleging First
Union used their pension plan to boost profits, the plaintiffs' lawyers
said.

The suit, filed in a federal district court in Richmond, Va. on behalf
of about 100,000 current and former First Union 401k plan participants,
alleges the bank forces employees to invest these savings exclusively in
its own and its Evergreen family of mutual funds.

"It allows the company to charge employees investment advisory fees
First Union would not have been able to earn if forced to compete
against more popular, better performing non-First Union funds,"
attorneys for the law firm Sprenger & Lang wrote in a statement.

First Union declined immediate comment. Its stock price was down 1-1/4
at 41-3/4.

The suit also separately challenges an alleged First Union policy of
charging its employees "excessive and hidden fees and expenses" for
investing in First Union funds and participating in the 401k plan.

The Richmond law firm Hirschler, Fleischer, Weinberg, Cox & Allen also
was involved in this suit.

First Union faced a related class action suit from former employees of
Signet Banking Corp., who alleged their retirement plans were mishandled
after First Union acquired Signet in 1997. Sprenger & Lang and
Hirschler, Fleischer, Weinberg, Cox & Allen also represented the
plaintiffs in this suit.

This second suit seeks treble damages for allegedly depriving employees
of the ability to invest in better performing and less expensive funds,
and seeks the permanent removal of First Union as the fiduciary of the
company's 401k plan. (Reuters)


FLEMING COMPANIES: Amended Shareholders’ Complaint Pending In Oklahoma
----------------------------------------------------------------------
In 1996, certain stockholders and one noteholder filed purported class
action suits against the company and certain of its present and former
officers and directors, each in the U.S. District Court for the Western
District of Oklahoma.

In 1997, the court consolidated the stockholder cases as City of
Philadelphia, et al. v. Fleming Companies, Inc., et al. The noteholder
case was also consolidated, but only for pre-trial purposes.

During 1998, the noteholder case was dismissed and during the first
quarter of 1999, the consolidated case was also dismissed, each without
prejudice. The court gave the plaintiffs the opportunity to restate
their claims without prejudice and amended complaints were filed in both
cases during the first quarter of 1999. In May 1999, the company filed
motions to dismiss in both cases, and in July 1999, the plaintiffs
responded. The court has not yet ruled on the motions.


FLEMING COMPANIES: Appeals Customers’ Case In Missouri On Overcharges
---------------------------------------------------------------------
In 1998, the company and two retired executives were named in a suit
filed in the United States District Court for the Western District of
Missouri by approximately 20 current and former customers of the company
(Don's United Super, et al. v. Fleming, et al.). Previously, two cases
had been filed in the same court (R&D Foods, Inc., et al. v. Fleming, et
al. and Robandee United Super, Inc., et al. v. Fleming, et al.) by 10
customers, some of whom are plaintiffs in the Don's case. Also in 1998,
a group of 14 retailers (ten of whom had been or are currently
plaintiffs in the Don's case and/or the Robandee case whose claims were
sent to arbitration or stayed pending arbitration) filed a new action
against the company and two former officers, one of whom was a director,
in the Western District of Missouri (Coddington Enterprises, Inc., et
al. v. Dean Werries, et al.).

The Don's suit alleges product overcharges, breach of contract, breach
of fiduciary duty, misrepresentation, fraud, and RICO violations and
seeks recovery of actual, punitive and treble damages and a declaration
that certain contracts are voidable at the option of the plaintiffs.
Damages have not been quantified.

However, with respect to some plaintiffs, the time period during which
the alleged overcharges took place exceeds 25 years and the company
anticipates that the plaintiffs will allege substantial monetary
damages.

Plaintiffs in the Coddington case assert claims virtually identical to
those set forth in the Don's complaint. Plaintiffs have made a
settlement demand in the Don's case for $42 million and in the
Coddington case for $44 million.

In July 1999, the court in the Coddington case (i) granted the company's
motion to compel arbitration as to two of the plaintiffs and denied it
as to the other plaintiffs, (ii) denied the company's motion to
consolidate the Coddington and Robandee cases and (iii) denied the
company's motion for summary judgment as to one of the plaintiffs. The
company has appealed the ruling.

Tru Discount Foods. Fleming brought suit in 1994 on a note and an open
account against its former customer, Tru Discount Foods. The case was
initially referred to arbitration but later restored to the trial court;
Fleming appealed. In 1997, the defendant amended its counter claim
against the company alleging fraud, overcharges for products and
violations of the Oklahoma Deceptive Trade Practices Act. In 1998, the
appellate court reversed the trial court and directed that the matter be
sent again to arbitration. The arbitration hearing resumed and was
concluded in July, 1999. During this hearing, the respondents, Tru
Discount and its former operators, claimed that they were entitled to
recover damages of approximately $13 million on their counterclaims. The
arbitration panel is expected to rule by late September 1999.


FLEMING COMPANIES: Dismissal Of Derivative Suit Awaits Okl. Ct Approval
-----------------------------------------------------------------------
In October 1996, certain of the company's present and former officers
and directors were named as defendants in two purported shareholder
derivative suits in the U.S. District Court for the Western District of
Oklahoma (Cauley, et al. v. Stauth, et al. and Rosenberg et al. v.
Stauth, et al.). Plaintiffs' complaints contain allegations that, among
other matters, the individual defendants breached their respective
fiduciary duties to the company and seek damages from the individual
defendants.

Plaintiffs, the individual defendants and the company, have agreed to a
Stipulation of Compromise and Dismissal that was filed with the court on
May 24, 1999. The Stipulation recognizes that certain changes have been
made at the company since the derivative cases were filed and provides
for payment of plaintiffs' attorneys fees and expenses not exceeding
$860,000. The Stipulation will not be effective unless it is approved by
the court after notice to shareholders and a hearing. If approved by the
court, the derivative cases will be dismissed as to all defendants.
Notice was sent to shareholders in June 1999, and, at the hearing held
August 24, 1999, the Stipulation was approved and the case was
dismissed.


FLEMING COMPANIES: Tobacco Related Case Moved From Phil To Pennsylvania
-----------------------------------------------------------------------
With respect to notices of suit or intention to sue filed by 27
individuals in the Court of Common Pleas of Philadelphia County,
complaints were filed during the first quarter of 1999 in two of the
cases which were then removed to the United States District Court for
the Eastern District of Pennsylvania. During the second quarter, these
cases were remanded to the Court of Common Pleas of Philadelphia County.
No trial date has been set. With respect to each case, the company is
being indemnified and defended by a substantial third-party
co-defendant.


HITSGALORE COM: Faces Shareholders’ Suit In California Re Disclosure
--------------------------------------------------------------------
On May 13, 1999, May 16, 1999 and June 11, 1999, separate class action
suits were filed against the Company, Mr. Steve Bradford and Mr. Dorian
Reed (Case nos.99-05060R, 99-05152R and 99-0203-R, respectively) in the
United States District Court, Central District of California, involving
the purchase of the Company's securities during periods specified in the
complaints. These suits are based primarily on an alleged omission of
disclosure in the Company's report on Form 8-K filed with the Securities
and Exchange Commission regarding Mr. Reed and the action brought
against Mr. Reed by the Federal Trade Commission.

On August 16, 1999, the Court consolidated these three actions and took
under advisement the issues of who will be the lead plaintiff and lead
counsel for the consolidated lawsuits. Because of the early stage of the
proceedings, it is not possible to predict the outcome of these cases or
the likelihood or amount of any losses, if any, in the event of an
adverse outcome in any of these cases. No provision has been made in the
accompanying financial statements related to these matters.


HOLOCAUST VICTIMS: Slave Laborers Talks Screeched At Amount Demanded
--------------------------------------------------------------------
The start of September was to have marked another new beginning for
Germany this century. Sixty years after Hitler's Third Reich marched
into Poland on Sept. 1, 1939, German companies wanted to redress the
consequences of their actions during the World War II.

Specifically, they wanted to compensate those who were forced to work in
their factories without pay and under often horrible conditions that
cost many of them their lives.

In so doing, they would have settled a number of class-action suits
filed against them in the United States and polished the reputation of
companies that consider themselves global players.

Instead, German President Johannes Rau found himself at the beginning of
the month in Poland commemorating the beginning of the war with
German-Polish reconciliation firmly on track, but without a deal to
compensate slave laborers, many of whom were Polish.

The drive for restitution for slave laborers stems from class-action
lawsuits filed in U.S. courts against the biggest names in German
industry - including DaimlerChrysler, Deutsche Bank and Volkswagen.

But the talks, not yet a year old, have broken down, with the German
companies standing firm in their rejection of the multibillion-dollar
settlement demanded by lawyers for the plaintiffs. They will resume Oct.
6-7 in Washington. "We hoped for more from the latest round of
negotiations, but we barely made any progress," said Wolfgang Gibowski,
spokesman for the German companies.

The German government official in the negotiations, former Economics
Minister Otto Graf Lambsdorff, warned of negative consequences for
U.S.-German relations if the stalemate is not broken and urged all
parties to rethink their approach. "We will have the best possible
result when everyone is moderately unhappy," Mr. Lambsdorff told the
German newspaper Die Welt.

The U.S. point man in the negotiations, Deputy Treasury Secretary Stuart
Eizenstat, warned of the "weight imposed by history" to complete the
negotiations. Each year brings the death of about 10 percent of
slave-labor victims.

Until last week, the process of reaching a settlement had been moving,
however slowly, toward success.

The American lawsuits, in particular one filed by New York lawyer Ed
Fagan, brought the issue to a head last year by posing a threat to
German firms in their most important market.

German Chancellor Gerhard Schroeder responded by proposing the creation
of government and industry foundations into which the Germans would pay
and which would compensate slave-labor victims, some of whom also worked
directly for the Nazi government.

Sixteen German firms went ahead and established their foundation -
"Remembrance, Responsibility and the Future" - in Bonn. Mr. Eizenstat
then made clear that a negotiated settlement would have to include the
lawyers, and the stage was set for a grand deal.

But the numbers intervened. The outstanding issues in the negotiations
have to do with how much restitution the German firms will pay and how
many people will receive payments.

The talks screeched to a halt last week when the victims' lawyers
presented proposals for payments reaching $20 billion. Both Mr.
Eizenstat and Mr. Lambsdorff called the sum "entirely unrealistic."
Industry spokesman Gibowski has hinted that German firms believe an
acceptable figure would be significantly less than $2 billion.

There are also questions as to how many still-living slave laborers
would receive compensation. German firms calculate there are about
500,000, mostly living in the United States and Eastern Europe, and want
to compensate only those who have a demonstrable financial need.

The lawyers say more than 2 million should be compensated, and reject
any sort of means testing for the victims.

The two issues are closely linked. The more individuals who fall into
the category of slave laborer, the larger the overall dollar figure will
have to be. Otherwise, German firms risk being ridiculed for offering
only symbolic sums to the victims.

A solution may involve German companies that used slave labor but have
chosen not to join the industry foundation that will provide
compensation. "If these companies were to participate, the financial
situation would look very different than it does now," Mr. Lambsdorff
said.

Mr. Gibowski said efforts are under way to bring these firms into the
fold, but noted that it was the threat of action in U.S. courts that
forced the issue last year. Many of the nonparticipants do not have
operations in the United States that would be vulnerable to U.S.
lawsuits.

U.S. and German government negotiators have already agreed that the
current negotiations should permanently settle all slave-labor claims.

To ensure that future class-action suits in U.S. courts do not tear
apart the settlement, the U.S. Justice Department plans to provide a
"statement of interest" declaring that the matter has been resolved and
that any further lawsuits should be dismissed. (The Washington Times
9-7-1999)


ILLINOIS: 7th Cir Rap State's Abrupt Switch On Consent Re Child-Support
-----------------------------------------------------------------------
While scolding Illinois officials for trying to back out of a settlement
agreement at the last minute, a federal appeals court panel has
reluctantly concluded that it must give the officials a chance to argue
their case.

A panel of the 7th U.S. Circuit Court of Appeals said officials must be
allowed to explain why they believe the state never really agreed to
enter into a consent decree with parents who had challenged the way
Illinois runs its child-support collection program.

The panel sent the parents' lawsuit back to the trial judge who had
rejected the state's 11th-hour attempt to repudiate a settlement worked
out in the long-running case.

But panel members made it clear they weren't pleased with the way
Illinois officials handled the case. The state's behavior is this case
was certainly troublesome, and we do not fault the district judge for
reacting with frustration to its tactics," Judge Diane P. Wood wrote for
the panel.

The panel said those tactics included announcing an abrupt change in
position" on Nov. 19, 1997, the day before the plaintiffs and state
officials were to appear in court to present a consent decree to U.S.
District Judge George W. Lindberg.

That decree had been reached following years of on-again, off-again
negotiations in the class-action lawsuit.

The suit, filed in 1992, claimed that the state had failed to establish
child-support enforcement programs that complied with the requirements
of Title IV-D of the Social Security Act.

Plaintiffs in the suit were the beneficiaries of child-support orders
and their custodial parents who were living in Cook County and who were
not receiving the total amount of support due them nor the services that
the state was required to provide under Title IV-D.

Defendants in the suit were Joan Walters, the director of the Illinois
Department of Public Aid, and Dianna Durham-McLoud, then the
administrator of the department's Division of Child Support Enforcement.

The 7th Circuit panel said that while settlement negotiations were
dragging along" in the suit, the U.S. Supreme Court decided Blessing v.
Freestone, 520 U.S. 329 (1997).

The panel said the court in that case held that Title IV-D does not give
individuals a privately enforceable right to state child-custody
enforcement programs that substantially comply with Title IV-D's
requirements.

But the high court went on to acknowledge that specific provisions of
Title IV-D may convey individual rights that could be vindicated under a
civil rights action, according to the panel.

The panel said that while the parties on both sides of the lawsuit
before Lindberg believed that Blessing should be interpreted in their
favor, that ruling did not stop negotiations because both sides also
feared that litigating the case could lead to a precedent in favor of
their opponents' position.

The parties finally hammered out a consent decree and arranged to appear
before Lindberg on Nov. 20, 1997, the panel said.

But two days before the hearing, the panel said, the governor's office
-- which said it had just become aware of the nearly six-year-old case
-- contacted the assistant attorney general handling the case and said
it did not support the settlement. Republican Jim Edgar then was
governor of Illinois.

But Lindberg at the Nov. 20 hearing rejected the argument by William
Ghesquiere, associate counsel to the governor, that only the governor
and the attorney general had the authority to consent to the settlement,
the panel said.

The panel said Lindberg held Illinois to the consent decree it had
negotiated after noting that the state previously had represented that
Robert Lyons, then deputy administrator of the Department of Public
Aid's Division of Child Support Enforcement, had the authority to bind
the state.

The panel said Lindberg in entering the consent decree also cited the
age of the suit, the state's agreement to remove the case from the
court's docket in anticipation of settlement and concerns that private
parties involved in litigation with state agencies would be vulnerable
to last-minute surprises whenever the governor did not personally
participate in negotiations or appear before the court." The panel said
Lindberg erred in entering the consent decree.

But the panel also indicated that the judge had erred only in failing to
make a factual finding as to whether Lyons had the actual authority to
bind the state to the settlement or was communicating an agreement to
settle made by an official who had that authority.

And the panel pointedly suggested that if the case must be litigated,
Lindberg should sanction the state for flouting his order to send to
court someone with the authority to settle the suit. Joining in
Wednesday's opinion were Judges Richard D. Cudahy and John L. Coffey.

Mollie King, et al. v. Joan Walters, et al., No. 98-2086.

On Friday, an attorney for the parents who brought the suit said he was
pleased with the 7th Circuit panel's opinion. Hopefully, this is a
signal that we, the plaintiffs and the state, should get to work and
improve child-support collection in this state," said John M. Bouman,
deputy director for advocacy at the National Center on Poverty Law Inc.

Bouman described the state's attempt to repudiate the consent decree as
extremely unique." I've always been able to assume the people we were
negotiating with were negotiating in good faith and had the authority to
negotiate," he said of his dealings with Illinois officials.

Bouman emphasized that he has no complaints about the officials -- Lyons
and Assistant Attorney General Karen E. Konieczny -- with whom he
negotiated in the current case. Bouman said he believes Konieczny and
Lyons acted in good faith and kind of had the rug pulled out from under
them" by others.

Joyce Jackson of the Department of Public Aid and Lori Corral of the
Illinois attorney general's office said officials were reviewing the
appeals court opinion. Both women declined to comment further. (Chicago
Daily Law Bulletin 9-3-1999)


JOHN D: Weight Policy Did Not Violate ADA, Rehab. Act, Georgia Ct Rules
-----------------------------------------------------------------------
A federal District Court in Georgia found that a hospital did not
violate the ADA or Section 504 when it instituted a weight policy that
had the effect of excluding job applicants whose weight exceeded certain
limits from employment. Murray v. John D. Archbold Memorial Hospital,
Inc., 15 NDLR 200 (M.D. Ga. 1999) (No. 6:96-CV-67).

The plaintiffs filed a class action suit alleging that a hospital and
its affiliates violated the ADA and Section 504 of the Rehabilitation
Act by making improper and illegal pre-employment medical inquiries and
by refusing to offer them employment because of their weight. The
plaintiffs also alleged violations under Title VII of the Civil Rights
Act of 1964. Both sides moved for summary judgment.

The ADA and Section 504 claims failed because the plaintiffs were unable
to show that they were regarded as having the type of physical or mental
impairment contemplated under the statutes. While the defendants
excluded the plaintiffs from employment because their weights exceeded
permissible height-to-weight ratios under the defendants' weight policy,
the court found that this was "no disability at all because the policy
drew the line at figures which would exceed the maximum desirable weight
of large-framed men and women plus 30% of that weight, figures that are
well below the measures for morbid obesity." Further, the plaintiffs
failed to establish that they were substantially limited in any major
life activities.

In addition, the court found that inquiries made in an effort to enforce
the weight policy were not unlawful since the defendants inquired as to
an applicant's weight and not as to any disability as defined under the
ADA. Therefore, the court granted summary judgment in favor of the
defendants and denied summary judgment in favor of the plaintiffs as to
the ADA and Section 504 claims. The plaintiffs were barred from
prosecuting their Title VII claim on procedural grounds.
(Disability Compliance Bulletin 8-30-1999)


MICHIGAN: ACLU Suit Seeks To Clean Up Flawed Sex-Offender Registries
--------------------------------------------------------------------
Viswanath Akella was happy with his new home in Ann Arbor, Mich., until
he got a phone call last November from the American Civil Liberties
Union. "We were told that our address was on a sex-offender registry
list," said Akella, explaining how an ACLU researcher had made the
discovery while looking into complaints that federally mandated lists of
the names and whereabouts of convicted sex offenders were riddled with
inaccuracies. "The son of the person we bought the house from was
registered," Akella explained. "They never removed the address from the
registry when they moved. My wife works with small children, and so this
was a serious problem."

Akella joined an ACLU class-action lawsuit that sought to have the state
of Michigan clean up errors in its sex-offender registries. Akella's
address was removed from the list in December. A federal judge threw out
the ACLU suit. "I understand people's concerns," Akella said of the
registration and notification process, "but this is not the way to deal
with the problem."

Some critics say that mistakes like the one that occurred with the
Akellas are common, and represent an example of just one of the flaws in
state laws dealing with sex offenders after they are released from
prison. All 50 states have some form of registration and notification
provision mandated by so-called Megan's Laws, named after Megan Kanka,
the New Jersey girl assaulted and murdered by a convicted sex offender
who lived near her home.

Although the registration requirement is widely hailed as an important
resource for law-enforcement officials, the added requirements that
lists be made available to the public and in some cases that residents
be notified if a convicted offender moves into their neighborhood, can
lead to unintended consequences.

Kim English, director of research at the Colorado State Division of
Criminal Justice, said registration and notification give the public a
false sense of security. "In doing this we are presuming that sex
offenders are people hiding behind a bush," she said. "But they are not.
They are our uncles, our scoutmasters, our priests."

She also expressed concern about the impact public notification has on
those close to offenders. "I don't care about the privacy rights of
these individuals, but I do care about the privacy rights of their
families. It is bad enough that the families have to deal with this
stigma within the family, but think about what it does to the children
with the same (last) name who go to school where everyone knows."

In addition to mistakes like the one that affected the Akellas, the
public availability of the names, addresses and photographs of sex
offenders has even led to vigilante attacks.

Furthermore, many law-enforcement officials and experts who have studied
the laws say that making the public aware that a sex offender is living
near them has few practical consequences because the majority of sexual
assaults are carried out by individuals closely acquainted with their
victims.

Moreover, regulations in some states extend registration requirements to
people convicted of minor offenses that don't involve assaults, such as
urinating in public. A man in Massachusetts, for example, was required
to register after he entered a no-contest plea after being caught
changing clothes in his car.

"It (the registration and notification process) is built on the model of
a predator who hides out in a community and strikes," said Eric Janus, a
professor at the William Mitchell College of Law in St. Paul who studied
the impact of Minnesota's version of Megan's Law. "Of course that
happens, but this is not the risk."

Statistics from the National Institute of Justice indicate that the
pattern in sexual assaults is clear.

According to the institute, 76 percent of victims of sexual assault are
"intimate" with their attacker, while only 14 percent of victims are
attacked by strangers. The remainder are attacked by a relative other
than a spouse, or by a close acquaintance.

Courts have repeatedly ruled that the public notification process does
not impose undue punishment on offenders once they are released from
jail, but some argue the process goes against the basic sense of justice
in the U.S.

"At the heart of our system is that once you have paid for your crime
you are like any other citizen. This is kind of the scarlet letter,"
said Myrna Raeder, a professor at Southwest University School of Law in
Los Angeles

English and others also noted that enforcement of rules is difficult
because it depends on offenders to register and to inform authorities
when they move. "People are now going underground," said Elizabeth
Schroeder, assistant director of the ACLU of Southern California. "They
are moving and not registering with the police. That is a portion of
this law that was not thought through." She said this has the effect of
forcing offenders away from steady jobs, a normal life and above all,
professional counseling. "This lack of integration leads to higher rates
of recidivism," Schroeder said.

Advocacy groups working to combat sexual assaults on children agree the
registration and notification process is flawed. "The problem is that
the (individuals on the lists) that they are looking at are not the ones
likely to hurt them," said Jenni Thompson, hot line director for the
Polly Klaas Foundation, named after a girl from northern California who
was murdered by a sex offender. Thompson agreed that the stigmatization
of sex offenders probably works against their chances of recovering from
past mistakes and living successful lives. And she said community
notification does little to protect people. "It gives (the community) a
false sense of security," she said. "We let murderers out after seven
years and nobody says anything about them living in your neighborhood."
(Chicago Tribune 9-7-1999)


PHH US: Sp. Ct. Affirms Holding Of Escrow Money No Violation Of UTPCPL
----------------------------------------------------------------------
Wiernik v. PHH US Mortgage Corp., PICS Case No. 99-1514 (Pa. Super. Aug.
2, 1999) Olszewski, J.; Cavanaugh, J., concurring in result (14 pages).

Because 21 Pa.C.S. @ 705 allows a lending institution holding a
residential mortgage to return funds in a mortgagor's escrow account
within 30 days of receipt of full payment of the mortgage, mortgagors
who had received their escrow money within 20 days of payment could not
maintain a suit for breach of the mortgage agreement, unjust enrichment,
breach of fiduciary duty or violation of the Unfair Trade Practices and
Consumer Protection Law. Affirmed.

Plaintiff mortgagors brought a class action on behalf of themselves and
others who had entered into mortgage agreements as borrowers with
defendants. Plaintiffs claimed that defendants breached the promise in
the mortgage agreement to "promptly refund" escrow money upon full
payment of the mortgage. Defendants had returned the escrow money to
plaintiffs 20 days after receiving full payment. Plaintiffs sued for
breach of contract, unjust enrichment, breach of fiduciary duty, and
violation of Pennsylvania's Unfair Trade Practices and Consumer
Protection Law (UTPCPL).

After the trial court granted defendants' preliminary objections in the
nature of a demurrer, dismissed the complaint and denied plaintiffs'
motion for leave to amend, plaintiffs appealed. The Superior Court
affirmed. The court held that 21 Pa.C.S. @ 705 barred plaintiffs' breach
of contract action. That statute allows a "lending institution holding a
residential mortgage" to refund money in a mortgagor's escrow account
"within 30 days." Because the mortgage agreement specifically stated
that both Pennsylvania and federal law governed its terms, Section 705
applied here. Because they refunded the escrow money within 20 days of
full payment, defendants did not breach the mortgage agreement. The
court rejected plaintiffs' argument that Section 705 did not apply
because definitions found in other statutes excluded defendants as
"lending institutions" and the mortgages at issue as "residential
mortgages." The court noted the definitions cited did not arise from the
same title, let alone the same statute or act as Section 705.
Plaintiffs' claim for unjust enrichment likewise failed.

Plaintiffs argued that defendants were unjustly enriched because they
did not pay plaintiffs any interest earned on the escrow money between
the time defendants received full payment and the time defendants
returned the funds to plaintiffs. The court noted that defendants could
not be unjustly enriched by exercising their statutory rights under 21
Pa. C.S. @ 705 and that the escrow money was always kept in a
non-interest bearing account. Nor did defendants breach any fiduciary
duty. Unlike the parties in Buchanan v. Brentwood Federal Savings and
Loan Ass'n, 320 A.2d 117 (Pa. 1974), the parties here did not evidence
an intent to create a trust relationship with the escrow account.
Furthermore, the court found that defendants did not violate the UTPCPL
by claiming that the escrow monies would be promptly refunded. Finally,
the court held that the trial court properly denied plaintiffs' motion
to amend because plaintiffs did not indicate how they intended to amend
their complaint so as to overcome the legal impediments to their case.
(Pennsylvania Law Weekly 9-6-1999)


SHERIFF DORSEY: Inmates Charge Brutality, Denial Of Medical Care
----------------------------------------------------------------
Citing a laundry list of complaints --- including brutality, poor
medical care and inedible food --- 14 DeKalb County Jail inmates filed a
class-action suit Tuesday against Sheriff Sidney Dorsey.

The Superior Court suit alleges that inmates are beaten often by a "goon
squad," made up of guards who single out prisoners in need of "special
attention." The same inmates also are attached to a restraining device
called "the black chair" and left for hours, the suit alleges.

Dorsey did not return two phone calls. Sheriff's Lt. Roy Baker said
Dorsey was out of town and would not be back until noon today.

The suit also alleges that inmates with medical conditions ranging from
diabetes to AIDS often are denied basic treatment.
Trevor Lamb, one of the 14 named plaintiffs, alleges he was not given
anti- viral medicine for treatment of AIDS for four weeks even though he
notified authorities six times that he needed it.

Decatur lawyer Robert McGlasson filed the class-action suit after
Superior Court Judge Hilton Fuller asked McGlasson in August to
represent one of the plaintiffs, Ernest Adams. Adams had complained that
he had not received adequate care for his diabetes. McGlasson said more
jail problems came to light as he looked into Adams' allegations. "It
was like opening Pandora's box," McGlasson said Tuesday. "The one
complaint ended up snowballing into something much more."

A hearing to discuss Adams' case is scheduled for today at 1 p.m.
(The Atlanta Journal and Constitution 9-8-1999)


TOBACCO LITIGATION: Korean Maker KTGC Faces Unprecedented Class Action
----------------------------------------------------------------------
A South Korean with lung cancer has filed an unprecedented lawsuit,
seeking compensation from Korea Tobacco and Ginseng Corporation (KTGC),
the nation's primary cigarette maker. The man, 56, a chief engineer on
an ocean liner, identified simply as Kim, alleges the KTGC, which is
controlled by the Government, deliberately sold him addictive drugs
which have the potential to cause death.

Mr Kim's lawyer, Choi Jae-chun, said the landmark suit, seeking 100
million won (HK$ 660,000), would be followed by a class-action suit
against the industry. Mr Choi said Mr Kim was diagnosed with terminal
lung cancer on August 3 in Pusan after 36 years of smoking two packs a
day.

The suit alleges KTGC was motivated by greed to cover up scientific
results demonstrating that carcinogens, nicotine and tar in the
cigarettes can lead to lung cancer. Cigarette packets in Korea were not
labelled with explicit warnings of the dangers of smoking until 1989.

"I think there is a small likelihood of this suit succeeding," said Kim
Joongi, professor of law at Yonsei University. "Proving deliberate
intent is going to be very difficult."

Given that KTGC is run by the Government and generates huge revenues,
analysts said Mr Kim's suit would meet stiff resistance. "The Government
has many ways to prevent damaging evidence from finding the light of
day," an official said. "It pulls all the strings in this case and will
have no problem making sure this suit goes nowhere."

Legal experts said that without a whistle-blower, Mr Kim's suit would
sputter without sufficient evidence. "Unlike places like the United
States, whistle-blowing is not a common practice. The law doesn't
protect them so there is nothing to gain," one expert said. (South China
Morning Post 9-8-1999)


VITAMINS CARTEL: 6 Companies’ Settlement For Global Conspiracy Near
-------------------------------------------------------------------
Six of the world's largest vitamin makers have agreed to pay about $1.1
billion to resolve a class-action lawsuit that accused them of
participating in a conspiracy to fix vitamin prices over the past
decade, people close to the talks said yesterday.

The settlement would be one of the largest antitrust payments made in a
private class-action suit in United States history, lawyers close to the
case said.

There are still some tense negotiations under way, but if the case is
resolved, the six companies would all but admit that for much of the
last decade they artificially raised the prices of vitamins that went
into everything from breakfast cereal and orange juice to animal feed.

The lawsuit, which was brought by some of the world's largest food,
beverage and animal feed companies, accused the vitamin makers of
forming an international cartel that met regularly in hotel rooms,
sometimes under the fictional name "Vitamins Inc.," to divide up the
global market and artificially raise the prices of a wide range of
vitamins, including vitamins A, C and E, as well as beta-carotene,
essential in the diet of virtually every American.

"There's an oral agreement on most material terms," said Michael
Hausfeld, one of the lead attorneys in the class-action suit, which he
said could be settled in the next few weeks. "It's a significant
recovery as well as a demonstration of the effectiveness of the
anti-trust laws."

The class-action suit was brought by direct purchasers of vitamins for
consumers, like Coca-Cola, Kellogg and Kraft Foods Inc., as well as
animal feed companies, which supply vitamin-supplemented rations for
poultry and livestock. Those companies would then have to decide whether
to pass on the settlement proceeds to consumers but are not obligated to
do so. Consumers, who are indirect purchasers of vitamins, are pursuing
their own settlement in a number of class-action suits at the state
level.

If a final agreement is reached in the next few weeks, it would come
just months after two European pharmaceutical and chemical giants --
Hoffman LaRoche, part of Roche Holding A.G. in Switzerland, and BASF
A.G. of Germany -- agreed to pay $725 million, the largest anti-trust
fine in history, to settle similar price-fixing charges brought by the
Justice Department. Roche paid $500 million of that sum, with BASF
paying the rest. A third big European company, Rhone-Poulenc S.A. of
France, was accused of being part of the conspiracy but the company
avoided paying a fine because it cooperated with the Justice Department
investigation. All three European companies - which produce more than 80
percent of the world's vitamins -- have been negotiating to settle the
private class-action suits, and will pay the bulk of the $1.1 billion
settlement, which was first reported yesterday in The Washington Post.

Three other Japanese companies, Daiichi Pharmaceutical Company, the
Eisai Company and Takeda Chemical Industries Ltd., are also part of the
settlement talks.

A spokesman for Rhone-Poulenc declined comment on the settlement
negotiations. But an official at Hoffman-LaRoche said the company had
already set aside $640 million to settle civil class-action suits.
"Negotiations are under way, and we think it will be settled soon," said
Martin Hirsch, a spokesman at Hoffman-LaRoche.

John Gilardi, a BASF spokesman, said in a telephone interview yesterday
that the company was also moving toward an agreement. "It is our desire
to reach a comprehensive settlement and to put this matter behind us,"
he said. "We are in negotiations but it is premature to discuss the
likelihood of success." People close to the talks said the six companies
would pay more than $1.1 billion to settle the lawsuits, with about $125
million being set aside for attorney fees an issue that has not yet been
resolved. The three European companies would pay most of that money.

Officials at Daiichi, Eisai and Takeda were unavailable for comment.

People who are familiar with the case say the big European companies are
eager to end the lawsuits, and resolve a case that has already generated
a spate of bad publicity. But individual participants in the
class-action suit will have the opportunity to opt out of the case, and
pursue an independent settlement.

At least one attorney is already considering such a move. Kenneth L.
Adams, who represents 63 companies, including Quaker Oats, Tyson Foods
Inc. and the former Continental Grain Company, as well as smaller animal
feed operations, said that a proposed $1.1 billion settlement would be
far too small.

Mr. Adams said yesterday that the damages could easily push that $1.1
billion figure 50 percent higher. "I represent a group of companies
looking to get full compensation," he said. "I would be surprised if
large purchasers participated in a settlement that returns less than
single damages, particularly when the defendants have admitted to
criminal liability." Lawyers involved in the case are expected to give
Federal District Judge Thomas F. Hogan an update on the class-action
suit at a hearing today in Washington.

For Roche, the largest player in the vitamins market and a company which
has a long history of price-fixing in the United States and Europe, the
Justice Department investigation also led to an executive shakeup. Two
executives who ran the vitamins operation, Kuno Sommer and Roland
Bronnimann, were dismissed by Roche in May. Both men plead guilty to
criminal charges and agreed to serve jail terms in the United States,
the first time foreign citizens have been sentenced to prison in a
Federal anti-trust case.

Roche is also the only company that has spoken out publicly about the
vitamin price-fixing conspiracy, but top executives suggested they were
blameless and clueless.

"You will understand that this was not part of our responsibility,"
Franz B. Humer, the chief executive, said at a press conference last
May, after the company settled Justice Department accusations. "It is
certainly not easy to understand the reasons for actions of employees
who in secrecy organized a conspiracy of this kind."

Roche and other vitamin makers are now facing similar accusations and
investigations in Europe and Canada, as well as class-action suits in a
number of American states. (The New York Times 9-8-1999)


                               *********


S U B S C R I P T I O N  I N F O R M A T I O N

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Washington, DC.  Theresa Cheuk and Peter A. Chapman, editors.

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

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